Canada’s Role in a Shifting Global Order — with Mark Carney

24:56And then the third thing is we are caught in the auto tariffs, as people probably know, but I'll just personalize it. Well, they wouldn't know this fact. There was something called the AutoPAC, which was signed the year I was born, you know, 60 years ago. And we have had an increasingly integrated auto system with the United States for 60 years. It got tighter with the Canada-U.S. free trade agreement 40 years ago and then with NAFTA and the successor. So literally, you know, these companies and the supply chains, the main parts suppliers, they are virtually fully integrated. And now into the middle of this is coming 25 percent U.S.

25:32tariffs, which are, you know, in an industry, as you know, that has, you know, five, seven percent margins. I mean, this is this is absolutely damaging. So we have three sets of tariffs. We are not subject yet to the so-called reciprocal tariffs to the U.S. So the state of the relationship is strained, to say the least, because all of these tariffs are in violation of what you call USMCA. We call KUSMA, the same trade agreement. The good news or the better news is that three weeks ago or so, President Trump and I spoke and we agreed that following the Canadian election, there would be the beginning of a negotiation of a new comprehensive relationship, economic security.

26:18So we are in the queue, so to speak, for those discussions. It strikes me that these actions are about to inspire what they envision, that is a tremendous amount of dealmaking, but dealmaking around us. It just seems logical. This is a thesis, and I want you to validate or nullify it. But if I'm a G7 nation and I have a trading partner that I used to be able to count on that was mutually very prosperous, and now I just not only can't count on them but have no idea who I'm waking up next to. that it's incredible motivation to start establishing dialogue with other nations. Respond to that thesis.

27:00Is Canada aggressively and actively trying to reroute around America right now? Well, I would say, you know, trade is a world of and. So, you know, it's a positive sum game, as you know. You do it right, both sides win. It's not a zero sum game. So I might not choose the phrase around America, but obviously, you know, look, if we're, If we've got excess capacity or we have things we're going to develop, I'll use the example of critical minerals where we're a big player. With whom are we going to trade? Who can we rely on? We're sitting here, we supply 70 % of the potash to the United States, one of the most important components of fertilizer, 70%.

27:46And there is a 25 % tariff being put on potash. So when you think about it, well, geez, maybe I might want to take another, I'll call it a commodity, even though critical metals and minerals are more than that. If we're going to develop those, maybe we want to develop them with a supply chain to someone who's not going to slap a tariff like that on. So that in validating your thesis, we, yeah, we have begun to intensify discussions with other countries, other trading blocks. We have a pretty good set of trading, trade deals in place. We have a free trade deal with Europe. We have a free trade.

28:18We're part of what was called the Trans-Pacific Partnership in Asia. So we have a number of those, but we're looking to reinforce them. And look, we are hopeful, maybe hopeful isn't the right word, but we're open to, open is a better way to put it, to a restart of the U.S. trading relationship, provided there's willingness on the other side, and we can come to one of those positive sum deals. So I would imagine you speak to a lot of other G7 leaders or G20 leaders. What's the general consensus around American leadership right now? And I realize that you have more restraint and are a bit more or tangibly more diplomatic, but what is the thesis among this group of world leaders around what is going on here?

29:12how do they explain it how do you explain it to each other or can you explain it to each other because quite frankly here in the u.s a lot of this doesn't even make sense to us and and this is our leadership well i think the first thing is to recognize as as i have said and a number of those other leaders have said including g7 leaders is that the system as we knew it is over right When the anchor of the system has done a series of measures that the U.S. has done, but also set out a series of objectives, and I'll come back to that, but set out a series of objectives that are just inconsistent with the way the system has been operating for decades, right?

29:52Basically, since the fall of the Berlin Wall, intensified since then. So you recognize that that system anchored on the U.S. is over. That then leads to how do you react to it? There's partly the negotiation with the U.S., which you've been focused on, but then it's also how do we deal with each other, which we've also touched on. In terms of what the U.S. is trying to accomplish, I think it's, you know, I take, go back to Peter Thiel of 10 years ago saying, take Donald Trump literally and seriously, but take him literally and seriously. And, you know, they're looking to balance, to the extent possible, to balance trade, which is not the way we think about things, but is the way the U.S.

30:34thinks about things. And, you know, you do get into odd situations like Canada where we actually run a, America has a trade surplus with Canada in goods. The only reason there's an overall deficit with Canada is because of basically oil imports. Well, if you don't want our oil imports, that will be a bit of a problem for a period of time because, you know, the only other option for the refineries that take Canadian oil is Venezuela. And that's, you know, they've just banned those imports as well. So the logic isn't entirely consistent, let's put it that way. But I think at the core, recognizing this desire for more balanced trade.

31:13And so from the U.S. administration, the question I think in our mind is there are some industries, autos particularly, aerospace would have another element of this. And then a number of commodity. There are a couple of industries that are so integrated that it's hard to see why for U.S. competitiveness, let alone North American competitiveness, it makes sense to pull them apart. That would be our argument. And then there's other industries, forest products, steel, aluminum, as three big examples, where we're agriculture, potash, I gave that example, nickel, I could go on, where we're such huge suppliers and such a safe, secure supplier.

31:56Again, it doesn't really, to us, make sense that that would be displaced or tariffed. So, you know, we've seen that this, the trade policy is evolving as some of these choke points become more evident. And, you know, I suspect, I suspect we will see more. Maybe I'll say one other thing if I could, which is, it strikes me a bit in the, in the consistencies of US policy is a desire to have some minimum tariff if possible, which has a revenue raising element to it. and I think tied into U.S. tax policy. That is also a possibility here. My understanding is about 99 % of our trade is tariff-free and that 1 % is around things like dairy.

32:40Haven't we largely been kind of a trade-free zone between Canada and the U.S. today? Yeah, yeah, we have. And then we have, like any trading partners, you get the odd trade irritant and trade dispute, but we have processes to deal with those. And so we had a, you know, we have a on ongoing things around forest products, sometimes steel and aluminum and, you know, that's handled. But yeah, trade is basically a tariff free. And, you know, when it, when it's your biggest trading partner, pulling that apart is, is, is quite costly. It's costly for both, you know, from a Canadian perspective and, you know, I'm out on the road, I'm, I'm running for office.

33:19I'm talking to lots of Canadians up and down. There is a very strong sense of, yeah, this is going to cost us. But we're willing to take the price to restructure our economy in a different direction. It's been such a sense of, I mean, the word that's used is betrayal. So, you know, we signed a deal. We've had this partnership. We observe it in good faith. We set up businesses. We, you know, we know lots of Americans. We like Americans. We listen to American podcasts. You know, there's such a thing. And all of a sudden, you know, we get these, you know, these attacks, which is the way this is viewed.

33:54is, okay, so it's going to cost us for a period of time and we'll build out and build with others. We'll be right back after a quick break.

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36:33You were the first non-Brit to serve to run the Bank of England. You're sort of the Bo Jackson of global economic leadership. I've compared this, and it might be a crude analogy, but I want you to add some color or fill in the blanks here. I've described these tariffs as the biggest own goal since Brexit. What similarities do you see, and how does that inform how you respond to this and be what you think ultimately the outcome is? Well, I think there are a lot of similarities. And it starts with the economics of what's happening. actually briefly describe Brexit because just give us the headline news on Brexit.

37:16So the headline on Brexit is for a variety of reasons, and many of them not to do with economics, although it was sold as an economic, you know, win. But a lot of people, you know, because of reasons of identity and others voted in 2018, if I'll get my dates right, 2016, I guess. No, for the UK to leave the European Union. And the UK was even more tightly bound in trade and economic relationships with the European Union than Canada is with the United States, including free movement of labor, easy movement of capital, huge trade going both ways. And you never had to get your product. If your product met the product standard in the UK, you didn't have to worry about it.

37:56You could sell to any country in Europe. And so the decision taken, as I say, for a variety of reasons, narrowly, but taken to leave the European Union. And I remember when it happened, in our view at the time, and remember, this was during a period where it was interest rates were at rock bottom, inflation was too low, people were worried about deflation, blah, blah. Our view was, okay, what's going to happen is the economy is going to slow, unemployment is going to go up, inflation is going to go up, and we at the Bank of England are going to have to raise interest rates when this happens. And by the way, the currency will also go down.

38:27The currency went down by 20, 25%. It's still on the floor relative to where it was, still on the floor because you had a big negative trade shock, a big loss of wealth, basically, future wealth, and the currency market priced it first. And exactly what we expected to happen, happened. I mean, it happened to happen roughly at the same time as COVID was finishing, but you had a big, again, I'm relying on your audience, a big negative supply shock to the economy because you ripped up trading relationships and the productive capacity went down relative to where demand was. So that was inflationary.

39:03and combination of that meant UK rates are higher and it's got a bigger inflation problem it has had than other economies. When you look at what's happening in the US, the friction put into its trading relationships is going to cause the same thing. It is going to slow the rate of growth of that economy. It is going to affect the dollar. It has affected the dollar negatively, as we've seen. It's going to push up prices on the margin. And so slower economy, higher inflation, higher interest rates, all things being equal. Now, there's a big caveat with what I did, or there's a qualifier is a better way to put it.

39:40The UK was a much more open economy, much more dependent on Europe. The US is more of a closed economy. It depends on the world, but it's different orders of magnitude. So it's same direction, different orders of magnitude. So I think there are a lot of parallels here. And I guess maybe the other parallel, if I can add one more, which remains to be seen. But the UK, I would say, and you'll get, I'll get hate mail from UK, some UK listeners, but I would say based on the polling, it's pretty well understood that the economic impact of Brexit has been negative in the UK. Let's say two thirds of the people now understand that.

40:18But the path back to being closer to Europe is very difficult politically. It's hard to build, rebuild that consensus. They move very slowly. And you think about the situation in the world right now for the UK, boy, there's a lot of logic being closer to Europe from a trade perspective. And even from a security perspective, they built this sort of what's called a coalition of the willing with respect to Ukraine, because the UK, the US is pulling back from support for Ukraine. By the way, Canada has stepped up and is part of that largely European coalition of the willing alongside Australia. So there's a logic to going back to that, but it's hard to go back once you've broken up these relationships.

40:59And, you know, so the next six, 12 months, in my judgment, are going to be quite important for the United States and for the global trading system, because the question is, okay, we understand that there is a big change, a big break with the old system, but how much of a break is it going to be? And is there going to be a relatively open trading system for, I'm using quotations here for those listening, like-minded countries, broadly like-minded countries. You know, I think of the G7 as being pretty like-minded countries, not surprisingly. You know, we value liberty, free speech, open markets in general.

41:35So are we going to have a relatively open system amongst ourselves? Or is it only going to be with a few countries? Or is it going to be with no countries? I mean, that's kind of what to play for here. But the system won't, it won't revert to what it was previously. When we're talking about these tariffs, there's a general sense that, or Alyssa, a talk track from the Trump administration that the U.S. has been taken advantage of by its trading partners, including Canada, that they've just got the better end of the deal and that tariffs will help restore some sort of parity or equity in the relationship.

42:15respond to that? Well, I mean, we don't, obviously we don't see it. We don't see it in the following respects because really, again, the way the Trump administration has defined being, quote, taken advantage of is, do you run a trade deficit? And we can argue about that definition. I wouldn't, if I lead on my economic training and my experience, I would say, well, that isn't being taken advantage of its mutual exchange. But the U.S. runs the surplus with us. The U.S. sells more to us. If anyone's being taken advantage of, we're being taken advantage of, right? Because, I mean, by that definition.

42:53And the only place where they run a deficit is, yes, we do ship oil to the United States. Now, we happen to ship oil to the United States at a big discount to global prices. So we're being taken advantage of, again, on that definition, on the goods trade side. And we're getting taken advantage because we're selling oil at below good prices. So we want our money back. No, we don't. We still see the broader benefits of the relationship. And I don't think that, I'll go back to the auto sector, it's not going to feel taken advantage of as if these tariffs stay in place. And as you say, you got to check your phone every once in a while just to see where things stand, there's a possible exemption on the auto parts side that's coming in in the United States, which we would have said right, well, we did say right from the start would have to happen because the whole system will grind to a halt without it.

43:53So some of the mutual advantages will become more, are becoming more apparent and hopefully the U.S. administration can continue to be nimble. My understanding is that you ship us cheap energy or cheap oil, You're obviously a very resource-abundant nation. We apply our IP and refining capability, and then we sell it at three times the cost. It sounds like it's been pretty mutually beneficial. Yeah, no, that's absolutely right. How do you see this playing out? If you were tempted to speculate what the relationship is around global trade and tariffs on a macro level, and then specifically with Canada and the U.S.

44:32When you try to plan an economy similar to the way the CEO tries to plan a business, what are you expecting? You have to do scenario planning. Nobody knows. But what do you think are the most likely scenarios for how this plays out? Because I mean this sincerely, Prime Minister, we're all befuddled by this. The majority of people who understand economics are having a difficult time seeing how this is a big win for the U.S. We're having a difficult time understanding how we win here. Maybe more people come to the table. They claim there's 75 nations lining up to cut deals with them. Is that the sense you get, that nations are lining up to cut a deal with us right now?

45:15Well, short answer, I don't know on that second question. There's a few things that happen here. One is that there's a risk premium in USSR. sense that wasn't there before. Uh, and the question is how big is that risk premium going to set? Where is it going to sell? Um, and, uh, and that in part is going to depend on how coherent the new system is, you know, and, and is there, does the U S credibly commit to a new system or a series of deals? Remember we're, you know, we have a, we have a trading deal with the U.S. that was signed by the current president, which isn't being observed. So I think that's one thing is there's a risk premium on U.S.

46:03assets. And if there's a risk premium on U.S. assets, then the cost of all other assets around the world is greater, right? Like since we're still priced off of U.S. treasuries, for example. So that's one thing. I think second is I do believe that there are a series of like-minded countries. We very much like the U.S. to be part of that group, but like-minded countries who will develop deeper trading and security relationships as a consequence of this. It's the world of second best. It's not what we would all want, but it's the logical thing to do. Third thing that's going to happen is that there is going to be much greater focus.

46:39And I know this for a fact, well, this will be a fact if my party is successful in the elections, a much greater focus on domestic drivers of demand. So building at home, building big infrastructure, building millions of houses, building, you know, building out our own economies, um, more, more, uh, domestic procurement, right. In a world where we've got excess steel and aluminum capacity, which we will, uh, if the U S doesn't change on trade, well, guess who's steel and aluminum. We're going to buy, um, uh, for a variety of things. Uh, guess what defense procurement we're going to do. Uh, you know, right now we spend about 75 % of our defense dollars go to the United States.

47:21That, you know, doesn't make a lot of sense, uh, if we settle out in a, in a more, um, arm's length relationship with the U S and that's true. If it's true for us, it's true for Europe. It's true for the UK. Um, and so we'll all move more domestic and more with each other and the degree to which that happens. So this is a world just to be clear, and I think you intuitively understand what you get this from the start. We've got a world where we have higher risk premia, right? It's cost of capital is more expensive. And we've got a world where people are doing second best things. Countries are doing second best things.

47:58So it's a world that's more expensive and it's more, it's not autarkic to use a fancy word. Like it's not totally in and of yourself, but it's, you're putting a much greater emphasis on taking care of yourself. We'll do that. and we'll do it with like-minded countries and move forward. The surveys I've read said that two-thirds of Americans still think of Canada as an ally. We're sort of like, oh, you know, Trump, boys will be boys. We still love Canadians. But two-thirds plus of Canadians no longer see the U.S. as an ally. I mean, quite frankly, it feels like Canadians are just pissed off that they feel the term used was betrayed and that even if we're able to establish, go back to normal, hasn't the knife, you know, isn't it the knife gets pulled halfway out of the back, but this injury takes years or decades to fail?

48:50I mean, what is the vibe, if you will, around how Canadians feel about Americans? And how long do you think it takes us to repair this relationship? I certainly recognize those figures. there is a feeling here that it's the actions of the U.S. There's several things. One is the trade actions. Secondly, was this long period. And I'm not going to repeat the phrases that were used, but these threats to our sovereignty, our very sovereignty, which, you know, kind of unique. There's us in Denmark who've suffered actual threats to sovereignty. I guess Panama, we roll ourselves in with that. And that's, you know, on your hierarchy of betrayals, threatening somebody else's sovereignty is pretty much the top.

49:37I guess the top is acting on that threat. So that's all mixed in. I think secondly, what has been striking has been the relatively muted response in the broader U.S. to these steps, right? you know the ceo class if i can put it that way the other major influencers stakeholders and the uh that's changing a bit but it was pretty quiet for a long period of time um so you know and when you look at that from this side of the border you think oh okay well this is more deeply held or the friendship is less firmly rooted it's like any relationship i think if it's uh when you have a lost of trust it you know it can be repaired to a degree it It takes a period of time and it takes action to replace it.

50:29But, you know, it's more than more than fine words. I think that that action can start with in May, the prime minister of Canada at that point will meet with with President Trump. I want to be the prime minister of Canada at that point. I'm working hard to get there. But and they'll sit down and start a process of redefining that relationship and building trust out from that. We'll be right back.

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52:54we're back with more from prime minister carney so just as a means of not or taking advantage of the fact that we have you on this podcast we have real problems in the u.s around income inequality for the first time in our nation's history a 30 year old isn't doing as well as his or her parents was at 30 tremendous polarization politically people just don't like each other I mean, I would argue that comparatively the nation's actually done quite well, but what ails us, the call is coming from inside of the house. We don't like each other within America. You're asked to be a journeyman and come be Treasury Secretary or head of the Fed.

53:37What policy plans do you think the U.S. should adopt? And then I want to use that as a jumping off point to what are the biggest economic challenges that Canada faces and how you plan to address them. Well, I think the, okay, you go to the heart of, I mean, that's a big, big question. I guess the way I look at it as follows. I'm going to come at this from an odd angle maybe, but when I look at what's going to drive economic prosperity, productivity, growth for the next 25 years, what are the big drivers of that? I put down three big drivers, AI, no insight. I put at the top of the list, probably the life sciences revolution where I'm less, less expert.

54:18And, and I would put carbon, I would put drive towards lower carbon. The U S has taken a step back from that for the moment, but it's going to come back because the underlying issues around are there. and so okay if those are some of the big things that are going to drive economies going forward and the u.s can have mastery in all of those but the question is how broadly that's going to be shared within the u.s across various social strata and how ready people are going to be to take advantage of it right so you know is ai going to be you know purely an elite or largely in a lead operation, or is AI going to be used to train a lot of people to do a number of things?

55:01I mean, I know that sounds very Panglossian or, you know, techno-optimistic, but it is, the question is whether it's a deliberate policy that's steered by the federal and local governments in a way that are going to ensure that, you know, in Appalachia, you're learning skills that are consistent with that. And or, you know, the energy transition over time, but it's not a term that's used anymore in the U S as far as I can tell. Uh, but it will come back. If I can flip it back, Scott, to us, we have the same set of issues, uh, or set of drivers. Those are global drivers. On top of that, we have a series of things such as I mentioned, critical minerals, we have large conventional energy.

55:41Um, so how are we balancing all that in a way that builds the jobs as, as we move out? One of the things, I'll say two other things, which are related, but distinct. We got to sort out our housing issues in this country. We have a massive economic, we have an absolute social need, but we have a massive economic opportunity to create a new industry, new way of building houses and at scale and driving that. And we're going to, we're going to shoot on that. And I guess the last thing I'd say, which candidly worries me a bit about the United States, uh, and gives me greater comfort or strength in Canada is a word I'm not sure you'd like to use anymore, which is around diversity.

56:20We have a huge, huge opportunity here because we're one of the most diverse countries in the world. We value diversity. We get a very strong sense of equal rights in a broad sense. We can be a magnet for talent. And as the U.S. is pushing out brains, if you will, and, you know, it's quite a hostile environment in the academic world in the United States now, we can take advantage of that. And then that cascades down through the AI revolution, life sciences, other elements. Podcasters, creative class. Scott, come up here. It's now above zero. Creative is doing a lot of work in that sentence, Prime Minister.

56:59So, look, you have a housing crisis, we have a housing crisis. And it seems like leaders have agreed that it's a crisis for the last 10 years. Now, I read that housing in Vancouver is a percentage of the average salary as the third most expensive city in the world. And that so much of it is in zoning and nimbyism. And the previous prime minister, you know, they wanted to address the housing crisis. What's the friction point? Is it capital? Is it labor? Is it zoning? What is different about what you're proposing that is going to register any more progress than previous administrations? So it's all of the above.

57:38And so you attack it in a comprehensive way. I'm going to simplify in terms of restriction zoning development charges. And we work at multiple levels of government. It's part of the reason why those costs are there. They come from the municipal side. And so in effect, we put up a bunch of money, just put up a bunch of money to commit to cut the development charges in half. And that's subject to a series of other restrictions being removed, but we at the federal level will pay for that to be cut in half. The second thing, I mean, we believe very strongly that productivity in the Canadian housing sector, construction sector, basically is flatlined for the last 20 years.

58:21Okay. We're still building houses like we did before. And given the scale of what we need to do, you know, we got to move much more rapidly, particularly in urban density and other things. So, you know, modular prefab housing, mass timber, other innovations that are there, they exist. And so one of the things we're going to do to kickstart that industry, and this is Canada's, not the United States, we have a different attitude toward these things. We have a problem with, uh, deeply affordable housing, right? Social, certain countries you might call social housing. Uh, we've, we just have not built that for decades, basically in effect.

58:58And so we need to, we need to catch up. And so what we're doing, part of what we're doing is we're going to build huge amount at that level and set the, the, the, the specs, if you will, for that. We're going to build and we're going to build by, you know, on our balance sheet, as a developer. And we'll set the specs for that, which drive the industry upstream in prefab, mass timber, et cetera, which gets the economies to scale there. But by and large, we will rely on private sector build. We'll make a bunch of land available. We'll make cheap capital, 25 billion for developers in this case, which is bigger money up here.

59:35Cut those development charges in half, drive that. And then we will give tax breaks to people buying their first time home. So basically they're getting 5 % off their first time home, which, you know, from a down payment perspective starts to add up. So attacking it both on the supply demand side. The way we look at it is this is generational. Like the scale of the problem is generational such that we are building out a huge pipeline of apprentices in the skilled trades. and one of the core messages I give virtually every time I speak, so I'm going to do it now, is this is going to be a great time for a career in the skilled trades in Canada because we're going to build for the next 25, 30 years.

1:00:17Like we are going to add, if we get this right and we intend to, three to four points of GDP of investment. That's a huge number, right? It's possible. We used to invest at that scale relative to GDP in the early 70s. We can do it again. You know, we can finance it. We got all the pension funds. We've got lots of money to finance it, but we need to, we need to kickstart it. And of course it's not, it's housing is we start with housing. It's not just housing, it's energy, it's other, other elements, but that's what we're going to do. So we want to get young people into the skilled trades at scale.

1:00:49We're going to pay for all their apprenticeships. We're going to work with the unions to pull them through. We're adding a bunch of capacity at post-secondary education so they can get these trades at a scale. So we're getting the hundreds of thousands, which again, in the U S doesn't seem like a lot, but in Canada, these are big numbers. Let's talk a little bit about climate and energy. You've evolved from being a climate finance advocate to scrapping the consumer carbon tax and calling for Canada to be an energy superpower. How have your views changed on this? I wouldn't say my views have changed, to be honest.

1:01:23So, I mean, it's very results oriented. So the consumer carbon tax in Canada was responsible for about 6 % of our emissions reductions. So 94 % of the work was being done elsewhere. Now it sent a signal to households, but it, it, it just wasn't that important. Um, but it was quite divisive because people, you know, viewed it as a tax and they, they saw the tax with the tax. They didn't all give credit to the rebates that they were getting. So it politically, it was unhelpful, was undercutting the overall message. So we got rid of that, um, uh, a few months ago. um this first thing i did actually when i got into office um but what we what we are doing is making sure that the carbon market for large emitters works well so and that um and and we're large emitters work well and as a consequence of that we're getting them in effect to pay people for this is what will happen if we're elected to pay people for you know driving evs retrofitting their homes, uh, uh, the other, you know, climate smart choices.

1:02:32And then on top of that, there is a big element, uh, uh, big IRA type element to our climate strategy, uh, investment tax and credits and others. So we're looking basically and having reasonable success with this, where we're putting out, you know, a dollar federally, and we're getting four to$5 of private investment on top of that. And, you know, what's really relevant to us, aside from caring about the climate, and people up here do care about the climate as a whole, is that we think that this is going to be a fundamental driver of competitiveness. And if you look at who we're going to be trading with more over time, Europeans, the Brits, others, guess what?

1:03:13They care about this. In fact, as you know, the carbon border adjustment mechanism is coming in Europe. And so we take a view that okay, we've got to do this medium-long term for competitiveness, because that's where the world's going. Secondly, the Europeans and others are going to want us to do this. Thirdly, actually, we've got a lot of the technology. So part of being an energy superpower is around small modular reactors. I mean, we're a big hydropower. We're decent on hydrogen. We could get better carbon capture and storage, all these things we can do. And I guess the last point, which goes back to the U.S., is, you know, right now, and I'm going to grossly generalize, the U.S.

1:03:50doesn't care about climate. Six months ago, we cared about climate. Guess what? You're going to care about climate again down the road. And when you care about climate down the road again, we want to be in a position where we're much more competitive and maybe have leapfrogged a number of U.S. companies. So I just want to do a quick lightning round. Advice to your 25-year-old self. You got 10, 15 seconds with your 25-year-old self. What would you say to yourself? you know relax it's and and and stay focused on what you like i mean i've probably spent more time doing things i didn't really love than uh i should have uh you got a chance to go back and meet with someone who you've lost or who's no longer around who would that person be and what would you say to them well i think with i you know be my i'd be my father i'd say i love him you're at the end of your life not going to walk on the beach again not going to get to hang out with your wife your kids what does success look like for you?

1:04:46When you look back, what is the box you want to have checked? I think strongly the answer to that is that you're proud of the values of your children and people who've worked with you. I mean, I think that is the only real legacy, the extent to which you have influenced how others treat others in the world and how they react in the world. So that's, I wrote a book and that was the conclusion of that. Mark Carney is Canada's 24th prime minister and leader of the Liberal Party sworn in this march. As an economist, Prime Minister Carney steered the Bank of Canada through the financial crisis and later became the first non-Brit to run the Bank of England.

1:05:31Between those roles, he served as UN Special Envoy to Climate Action and Finance and as Vice Chair of Brookfield Asset Management. I trust a lot of Canadians are listening, and I feel comfortable speaking for a lot of people. And that is, Americans understand the largest undefended border in the world is the U.S.-Canadian border. That's for a reason. I love that question that Warren Buffett's friend, who's a Holocaust survivor, said. The way I judge my friends is, I ask one question, who would hide me? A lot of Americans remember that Canadians hit Americans in the Iran hostage crisis. And I hope that your listeners and your voters recognize there is a huge swath of Americans that think of you not as not even as a friend, but as siblings.

1:06:15And that we we hope and are committed to maintaining what is arguably one of the strongest alliances in history that I don't want to say don't take what's going on seriously. You have to. But there are a lot of Americans down here who are who are brothers and sisters in arms in Canada. We really do think of you as a sibling. Thank you, Scott.

1:06:54Algebra of happiness. Porn. It's something there's not a lot of research on because no one wants to be known as the porn professor. or I spoke with Dr. Anna Lemke, I believe on this podcast, and it strikes me I'm meeting more and more people who are struggling with an addiction to porn. And what I would suggest is to tell people not to engage in porn is a little bit unrealistic. That's like telling someone to go stop drinking, which my doctor told me when I had high blood pressure a few months ago. And I'm like, yeah, that's gonna happen. I'll reduce my drinking. Why don't we stop there? Anyways, it's not about my high blood pressure, which by the way is under control now.

1:07:29That's good news. Hard to imagine me with high blood pressure at the age of 40, 60. Anyways, I think sexual desire and that want and that hunger, if channeled correctly, can make you a much better man. And the last thing you want to do is reduce that fire and that hunger. And that is wanting to mate, wanting to be attractive such that you can find a partner to have a relationship and ultimately possibly have sex with. I think if channeled correctly, and it usually, in my opinion, usually is channeled correctly, can make you want to be and become a better man. And so anything that dampens those fires, whether it's additional porn consumption or depression, that's just a bad idea because life is about taking risks.

1:08:11And because women pay a much greater downside or have much greater downside risk from sex, specifically pregnancy, than men, I mean, they're in it for 25 years if they get pregnant. We're in it for at least seven seconds, right? And I'm not suggesting anyone engage in male abandonment. But the downside risk for women are just much greater. So as a result, they have a much finer filter, meaning they are choosier than men. Okay, fine. But there's an upside to that. And that is if you want to have a relationship with somebody, it forces you or inspires you to be a better man. Maybe you work out a little bit more.

1:08:43Maybe you have a plan. You articulate a plan around economic viability. Maybe you learn how to open. You learn how to take risks. The most frightening piece of data I've seen recently is that 51 % of men, 18 to 24, have never asked a woman out in person. That is so upsetting for me. I think a lot of the skills you develop and the characteristics you develop around trying to find a mate make you a better man across a number of dimensions. You develop a sense of resilience. If you want to ask a lot of women out, get used to rejection. And if you want to be successful in the world of mating, much less professionally, get used to rejection.

1:09:22That is a skill. Learn how to talk to strangers. Learn how to open. Learn how to smell nice. Learn how to not have bad breath. Learn how to groom yourself. Be able to articulate a plan for why you might someday be able to take care of children. Show that you're disciplined and you work out, which means you show up. These things make you a better man. And anything that reduces the hunger, the desire, the drive, the fire to make you a better man, you want to modulate it. In sum, I'm not going to tell you not to consume porn, but my brothers, you want that fire to stay alive. I think a big part of the reason I graduated from college, quite frankly, is I used to go on campus every day because I wanted to see my friends at North Campus UCLA.

1:10:07And also there was a nonzero probability that I might meet someone that ultimately I might have a romantic relationship with. And that was very motivating. And had I had on-demand porn on my phone and my computer, I don't know if I would have gone on campus as much. And with a 2.27 GPA, it wouldn't have taken a lot of less campus presence for me not to have graduated from college. So what's the bottom line? Porn, okay. But modulate. That fire, that desire can be channeled and should be channeled into making you a better man.

1:10:44This episode was produced by Jennifer Sanchez. Our intern is Dan Chalon. Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn. And please follow our Prof G Markets pod wherever you get your pods for new episodes every Monday and Thursday.

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