May you live in interesting times: Assessing the state of US-Canadian relations in the lead up to the US election

Lisa Raitt: Thank you for tuning in to The Raitt Stuff. I’m your host Lisa Raitt and in this podcast I’m going to share insights on current hot topics in the areas of public policy, politics and business, with some guests along the way. Welcome back to The Raitt Stuff. Today I have the great pleasure of having a friend of mine on, as well as the President and Chief Executive Officer of the Business Council of Canada, and that’s Goldy Hyder. Now, you may know a little bit about Business Council of Canada, but it’s been around for a long time, 1976. It’s nonprofit, it’s nonpartizan, but it represents the chief executives and the heads of 170 leading Canadian businesses composed of every major industry across the country. And, Goldy, oftentimes represents the voice of business on the world stage and in the United States. So I thought today would be a great opportunity to get his perspective, what he’s hearing from his members and what he’s hearing from counterparts around the world. Goldy is also a member of the board of directors of OpenText. Goldy, welcome. Thanks very muchfor joining me here today.

Goldy Hyder: So good to be with you. Thanks for having me.

Lisa Raitt: I think you’re a repeat guest. I think you’re one of the first ones.

Goldy Hyder: What do I get if I complete the hat trick?

Lisa Raitt: We’ll have to figure that out. I appreciate the intention to come back. Let’s just jump right in. Every day there’s more news in the world and not all of it necessarily good. There’s a lot of change happening right now. And as you know, more than 50% the world’s population is going to an election this year. And there’s a lot of discussion now about where does Canada fit in the world? What’s your assessment?

Goldy Hyder: Well, I mean, there’s that old Chinese proverb, may you live in interesting times. What people forget, it’s meant as a curse. And we’re certainly in the middle of that. I think when the president of the United States called the current global environment as an inflection point, I don’t think he was in any way exaggerating. This is a very serious time in the world from an economic perspective, from a geopolitical perspective, from the state of democracies around the world, from the attack on trade, from the erosion of trust in our institutions. This is serious stuff. And so we need to, as businesses and as Canadians and our governments need to read the room and each recognize that we’re in 2024, not in 2015, that we’ve got to figure out a way to navigate what is very choppy waters. And I think we can do it. I think we have the tools to do it from our natural resources perspective, from a human resources perspective, we’ve got to work better together as a country, as a people.

Lisa Raitt: You said something interesting there. You talked about trade issues with respect to attacks on trade, and I agree with that analysis. But the U.S. and Canada have traditionally, as you know, had these policy friction points. You can talk about software, lumber, you can talk about energy, you can talk about climate change. More recently, you talk about defense. How can Canada lead from a position of strength when we have these irritations that will always be part of our relationship?

Goldy Hyder: But you raise valid points, Lisa. But let’s be clear, Canada is not unique in having these irritants. I mean, they exist in different parts of different countries, more than often driven by effective lobbyist and or political considerations. What we need to do is recognize that Canada is a country that absolutely needs to be a champion of free trade, needs to champion multilateralism, needs to ensure that the agreements we make, we honor them and others honor them as well. Part of the confidence that business gets from trade agreements is the dispute mechanism resolution, right? The clarity on tariff policies. So we’ve got to make sure that we continue to be a champion. Canada, as the head of the so-called Ottawa Group in the WTO, a chance to use that position to bring about more confidence. What we’re seeing instead is even the United States of America, irrespective of red or blue, is heading in the direction of protectionism. And that is of tremendous risk for us. So, you know, we talk about what happened under President Trump’s administration with, you know, sort of being a national security threat and the issues around steel. And they may come back in different forms. But let’s be clear, the Democrats have been no friend of Canada either. I mean, the Buy America provisions and the things that they’ve done, the launch of the IRA without any notice or notification to its number one partner is an indication that America is looking out for America. What we’ve got to do is try and change that frame, to say, let’s focus on North America. Let’s strengthen the neighborhood, because the neighborhood is not whom we’re competing with. We need to compete with the rest of the world. And so I think it’s an opportunity for Canada if we leverage our strengths on human resources and natural resources, but we’ve got to be able to deliver those goods too, Lisa, and that’s something that the world is looking to us and wondering, did we build the infrastructure to get them the stuff that they want?

Lisa Raitt: You wrote a piece recently talking about the importance of the US, Canada, Mexico Agreement. And you know a lot about this stuff because you actually play a pivotal role in bringing the three countries together and talking about issues and trade. You talked about the importance of the USMCA. You also mentioned Donald Trump about how his tack when he was president was very much to utilize security issues and turn them into trade protectionist measures as well. So tell us a little bit more about how you think about the importance of trade and how would you communicate that to people in the United States?

Goldy Hyder: Well, here’s where the facts are on our side. And this is why I think it’s really important that we learn from our last exercise where Team Canada did come together, governments, provincial, federal, big business, small business, labor and others were at the table to say, we’ve got to do this together. And it worked. We were able to navigate through a very difficult time to the full credit of the government, but also of the fact that the opposition and many others played ball when it came to putting our national interests above any political or partizan interests. We need to ensure that we replicate that model irrespective of what happens in November and what happens in Canada in the in the coming years. This agreement’s not coming up until 2026. We’ve got time. But what we need to do in the in the intermediate time and what we’re trying to do as business leaders is we’re going to go out and enact a sort of a commercial diplomacy vertical, if you will, being more the voice of business, a Canadian business not just in America, but beyond America in and of itself. We’ve opened an office in Washington. I’m on my way to Houston now in the middle of March for a full week for the energy conference there. We’re going to really try and get to the states in the United States as opposed to Washington, which is very different than the rest of the country. We’re going to be speaking to governors. We’re going to be speaking to congressmen and women and to help them understand that Canadian businesses employ, tens of thousands, hundreds of thousands of Americans in their state and in their region and in the country, millions in the case of the country. Plus, we’re your number one trading partner for your number one consumer in over 32 states of the products that you sell, it’s not known. I think we’re a little too Canadian in our lack of promoting the importance of who we are and what we mean to the Americans. But I think we have to go down there and do a better job of communicating and marketing to some extent every day. Don’t wait for a trade agreement to be brought about, but every day remind them that those Canadian companies, which by the way, when you operate in a different market, you become local. So whether you’re in Mexico or you’re in Canada or in the U.S., it’s not uncommon for companies to say, I want to be American when I’m in America, I want to be Mexican when I’m in Mexico, even though I’m Canadian. And so we have to recognize that they don’t know. I mean, I’ll tell you a great story that the ambassador shared with us once, where somebody from the United States came into Canada and had a visit for the first time. And when she saw her again and said, what would you think of the trip to Toronto, she said, you know, what struck me is you guys have TD up there as well. What a great story, right? It’s a reminder. We’ve got to let them know that these are Canadian companies investing in your economy.

Lisa Raitt: Goldy, when you represent the leading businesses in Canada and you have conversations with CEOs, they’re very much aware of what’s happening in Canada politically. They’re very much aware of the fact that it’s not necessarily a comfortable time to be a big business in Canada. You seem to be attacked all the time from every political party out there because of what Canadians are feeling in terms of anxiety over cost of living and affordability. Big business is an easy target to be blamed. But you wrote a really interesting piece about talking about the importance of big business. Tell us a little bit about what your point of view is on the importance of the larger leading businesses in this country.

Goldy Hyder: Well, look, there’s no question it’s open season on big business. And some things they’re saying about it are true. We need to do better as big businesses as well, including telling our stories, but also making sure that we’re continuing to work to really advance the national interest. The thing about capital, though, we say is it’s mobile. It will go to where it’s welcome. And what we want to see is policies that support that, whether they’re from red government, blue government or some combination of any other stripe. We want to see a regulatory framework that’s predictable and stable. We want to be competitive on tax policy. You know, I can give you the half glass full version of Canada, but the half glass empty is also true. This is becoming a difficult place to do business, in part because of populism of the left and the right. And what I’m trying to do on behalf of the members that I work for and represent, which by the way, we’re now 2 million employees directly related to them, another multiple of probably 3 to 4 X of that, they’re 50% of the Toronto Stock Exchange. In many cases, they’re your pension funds, they’re your banks. You know, they’re your energy companies that you’re relying on their success. And I believe that the Canadian people are way smarter than we give them credit for as politicians. We need to recognize that Canadians know that they benefit when Canadian companies do well, when they do well in Canada, and when they do well abroad. Those profits that come that everybody target, they’re formed after employee taxes are paid, employer taxes are paid, philanthropy is done, innovation is done, R&D is done, the community investments are made. And then yes, they make profits. It should not be criminal to make profits. We should encourage that. We want more of that because that money belongs in many ways to Canadians who are shareholders of those companies. And it positions us to be able to compete outside of Canada as well. So, look, I’m going to leave the politics to the politicians. I think the thing that we’re trying to do here is be constructive, be engaged. We’ve had success in a number of areas. What we try and do is keep the facts on the table, Lisa. That’s one of the things that I think we’re getting away from in our politics in the coverage of our politics. The facts don’t change. They are what they are. And we’re trying to be that voice of common sense and reason and pragmatism to be able to say, look, you’re not entitled to your own facts. You know, you want to reduce emissions globally? Understand that emissions don’t respect borders. So should we be exporting more LNG to get countries off coal? Yes, we should. That’s not me shilling for a sector. That’s me saying you want to bring down emissions? We agree with you, let’s do it. And yes, we can also do carbon capture and renewables and SMRs and all of the other things that hydrogen that we’re going to need to do. It’s an and not an or.

Lisa Raitt: Last question, Goldy. Should the Canadian playbook Canada, U.S. relations change depending upon if it’s a Biden administration or a Trump administration?

Goldy Hyder: Let me say two things about that. First of all, the American people will decide who they elect, and that’s up for them to decide, not us. We have to work with whomever wins and we need to be ready to work with whomever wins. It is in our interest to do so. The second thing I will say is that Canada’s standing in the world is largely proportionate to how America perceives Canada and how America uses Canada. My concern is, is that on too many things now, we are finding ourselves outside of the room and or just being called out bluntly. And I take no pleasure in saying this. But again, the facts are here. It was an American Ambassador of NATO, who recently called out one country, Canada, for its lack of progress on the 2% spending that we’ve made for NATO, while other countries are making not just two but three and more. And they have an urgency behind this. When you see what’s going on in Europe. Today, Europe, tomorrow, you. You have to do your part on that when you know we’re outside of the room, when the Americans are talking to the Koreans and the Japanese on the North Pacific, over North Pacific country, that Arctic you’re talking about is ours. We should be at that table. We were left out of quiet. We weren’t included in the Indo-Pacific economic framework, which thankfully to Minister Joly and her efforts with Secretary Blinken, we’re at least being considered now. But we will join hopefully soon, but more likely after they’ve all decided what it’s going to be all about. So our influence and our voice, if it diminishes, it means the rest of the world says, look, if America’s not taking Canada seriously, we don’t need to either. And that’s what we’re fighting for here, is we need to make sure that Americans realize when Canada does well, you do well. You don’t benefit by having Canada suffer. You need to bring us with you. So integrating the supply chain, leveraging the near shoring, French shoring that’s being spoken about, but in a way consistent with free trade, not protectionism. That’s what we’re trying to show here. And we have a lot to build off our people to people ties. Brian Mulroney is the poster child of what it means to have relationships with Americans. When Ronald Reagan said we need to do something, he didn’t say we need to do something for Canada. He said we need to do something for Brian. That personal relationship served us well. Where are we today without free trade? And so we need to not only protect that relationship, we need to nurture it, grow it, develop it. And it’s companies like CIBC and others that are doing that. We’re just trying to do our part in the business community. But governments ultimately provide that leadership, and the courage of that leadership that Mr. Mulroney had is what we need today.

Lisa Raitt:Always illuminating and always interesting to talk to you. Goldy, thank you so very much for joining us today.

Goldy Hyder: Thanks for having me.

Lisa Raitt: Thanks so much for tuning in. Now, if you have any questions or comments or even requests on topics to discuss, drop me a line at lisa.raitt@cibc.com. Your interactions actually will make this better. I’m your host, Lisa Raitt, and this has been The Raitt Stuff.

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