Sunday Scrum | Carney speaks with Trump ahead of budget day

I want to note something that's just into our newsroom, that the Prime Minister, Mark Carney, says he had a good conversation with President Trump on the future of Canada-U.S. trade. This comes amid some... With acceleration in trade talks, it is possible that that is what they were discussing, but no outline of a trade deal at this point. Though they do say that their recent constructive discussions on a mutually beneficial trade deal that would create jobs does note that those are continuing. Mark Carney saying our teams will now be working in the coming weeks to deliver on that outcome. And so this is a development when it comes to what had been stalled trade talks now. A new, and with the possibility, Mark Carney's saying, of an actual outcome. Mr. Carney, we cannot afford you. Canadians cannot afford the extra costs you've added to groceries, gas, and homes. Enough is enough. Workers and families and seniors are paying too much for Mark Carney's inflation and taxes. Interest is eating up their money on their mortgages, and the next generation is inheriting his debt. That is the opposition leader, Pierre Poilievre, speaking earlier this morning about affordability issues facing Canadians. He, of course, taking aim at the upcoming federal budget. Also... Planning to talk more about Prime Minister Carney speaking with President Trump, and that's where we will turn first with our Sunday Scrum. Erin Wherry, senior writer with CBC News. Rob Russo is the Canada correspondent for The Economist. Both of them are joining us from Ottawa. And Kerry Tait, a reporter for the Globe and Mail, joining us from Calgary. Erin, let me throw to you, first of all, and I'll quote from what the Prime Minister is saying. He says he had a good conversation with President Trump. Thank Building discussions on the outlines of a mutually beneficial trade deal and that officials are now working you in the coming weeks to deliver on that outcome. very It seems like a bit of news to me. Yeah, it's something. much, I guess it remains to be seen exactly what it amounts to. It would suggest, I think. Trump. You know, if he's talking about the prime minister that is talking about a positive discussion, then perhaps there's been some movement one way or the other towards the terms that sort of broke down the last time there were discussions. The fact that he says in the coming weeks there will be work suggests that this briefly floated idea of a deal before the midterms is seemingly not going to come to fruition necessarily. But the fact that he is talking about officials working on things, that suggests a certain, to me at least, it suggests a certain seriousness of engagement that perhaps hasn't been there since negotiations broke off. We knew for all the sort of talk of the midterms, we knew there was a kind of a deadline hanging over this in terms of the president's threat to impose new auto tariffs January 1st. And so that was kind of seen, I think, as the next moment for maybe negotiations to kickstart again. This would suggest that maybe those negotiations are starting up a bit sooner than that. But, you know, we've kind of been down this road before where it seems like there's positive momentum and maybe even the outlines of a deal. And then it's fallen apart at the finish line. So I think, as always, you have to wait to see what this looks like in practice. Could it all just fall apart on us, Rob? Yes. Listen, if you were to take the president at his word, something that the prime minister says is a perilous thing to do, you might be leaving a footprint in the carpet because we have been repeatedly assured by Donald Trump that he has very little interest in a trade deal with Canada because he has very little that he needs from Canada. And yet. As we get closer and closer to Tuesday and a midterm verdict, it appears that there's an intensification in the willingness of the American administration to discuss things on a profound level. I have more questions than answers. I mean, the first question I have is, are these discussions that are going on, obviously now, about alleviating the 232 tariffs, the tariffs on aluminum, steel, autos, forestry, mining products that That the Canadian side, say, has to be resolved. Those have to come down substantially before we can get on to broader talks. Or is this part and parcel of a global comprehensive discussion along the lines of what the prime minister used to call a prosperity and security agreement with the United States? If it's the first, we still have months ahead of us of discussion. If it's the second, then that opens up an interesting... political dilemma for the prime minister, who has repeatedly poured scorn on the notion of coming to any kind of agreement with Donald Trump in the United States. How is he going to sell it to Canadians who are outraged and whose vexation is widespread across the country and whose suspicion the prime minister has helped sort of augment over the last year and a half? So there's There's a political opportunity and there's a political problem as well. Kerry, I'll turn to you and I'm going to try to make the turn to the budget here because it is coming up just days away now. Tariffs, of course, have hammered the Canadian economy. That limits the degree to which the federal government can do anything without borrowing a ton more money and increasing the debt and, of course, the deficit as well. What are the pressures the finance minister will be feeling? The pressures are still always going to be coming from the United States. Right now, we're having this conversation about should we trust Donald Trump on trade? Well, nobody, I think, particularly on this panel or across the country, is ready to say, well, if Trump's willing to come to the table, we should bank on that. So you have a pressure of trying to create a budget and forecasts when you're most Um, Stable or what has traditionally been your most stable trading partner is now your most volatile and unpredictable. And you have to try to create something to that you're telling Canadians like this is where our future is going, except we can't predict and can't control a lot of our future. And I think that's got to be an incredible pressure for the federal government as they As they try to deal with. Affordability, building major projects, nation building, and keeping various provinces and their respective grievances, trying to alleviate those. That's a lot of things, Erin, trying to achieve all at once. How do you deal with the person pushing their cart down the grocery aisle, looking at the price of beef and getting back into the car that costs them so much more to fuel up, while also trying to back multi-billion dollar huge projects? Yeah, I don't think you have much choice with the federal government, but to try to do both things at once. I guess I'm looking at this budget on a few fronts, but the two main ones being the long-term sort of investment agenda, the larger economic agenda, we've seen bits and pieces of that already. The mega deduction, the investment tax deduction that has already been rolled out, but what else might be in this budget that fits into that? And then Going to your previous guest, what, if anything, can the government do to offer short-term relief in the immediate for cost of living concerns, for housing, for those kinds of issues? What can it do, if anything, to alleviate some of those concerns? Kerry, Pierre Poilievre speaking this morning, also releasing a letter calling on the federal government to suspend all federal taxes on diesel, suspend the GST on fuel until Canada Day, permanently scrap the fuel standard tax. What are the odds that he gets what he wants? I'm not sure he, you know, Mark Carney is waiting around for Pierre Polyak to put slips of paper in the suggestion box, but even if they were to jump on something like that, it isn't something that makes a dent in the problems. And when people are shopping in the grocery store, the suspended diesel fuel isn't necessarily getting. passed along or making a substantial savings in the way that people can then afford braces like your your guest was speaking. So first of all, not likely that Mr. Carney is going to be taking those suggestions. And even if he did, it doesn't provide the type of relief that I think people are begging for. Kerry Tate, Rob Russo, Erin Wherry. Thank you very much for making time for for us on this Sunday. Thanks for having us. Mark Carney wants, as he says, the deepest possible partnership with Europe. What does that mean? And with some European countries pushing back, can he reach a fast deal by the self-imposed June deadline? Let's bring in our Sunday scrum. Erin Wherry is a senior writer with CBC News. Rob Russo, the Canada correspondent for The Economist, both of them in the nation's capital. And Kerry Tate, a reporter from the Globe and Mail, joining us today from Calgary. Good morning to all three of you. Aaron, I do want to start with you. We have associate member. It's been on again, off again, on again, off again. What is your takeaway now that they are using it, all of them? Well, it was a bit of a surprise that it came out at the end because I think we had. Many of us had sort of concluded that the associate membership, whatever that was going to mean, was sort of off the table. I think the naming of it, the nomenclature, as Mark Carney likes to say, is sort of caught up in some internal European politics. And I think there may be some kind of political... Emotional, psychological value to the term or whatever term we use, but I think the term is probably less important than what we do with this emerging, to use Mark Carney's terms, alliance for the future. I think the sort of last. You know, 20 years of Canada, European history, even further back, maybe to Mitchell Sharp and the third option, demonstrates that, you know, you can sign agreements between Canada and Europe. You can have the intention of building stronger ties between Canada and Europe and diversifying away from the United States. But it's going to take concerted effort over a number of years to really build something out that matters, something that is maybe. You know, a counterpoint to what's going on with the United States, because you're working against sort of natural economic gravity and at this point, inertia. And so I do think, you know, I understand the fascination with the name and the potential significance of it. But I think it's really down now to what they kind of actually do over the next several months to really put this into action. And then looking forward, even what this government and maybe successive governments do to really build this relationship out. And Rob, I want to turn to the timeline because it is ambitious to say the least between the Davos speech, which seems to have kicked some of this off anyway, and the self-imposed June deadline. This is very fast for something that is much bigger than even a trade deal. Yes, but I think as Aaron was hinting there, this is really going to be a pyramid project. No matter what they agree to in June, this is not something that's going to really manifest results for 5, 10, 15 years away. And Mark Carney is building up a lot of these pyramid projects, but let's look at this one. Go on. It could serve a purpose and we could see results in dire circumstances before that. Is this potentially one of those break this glass in case of emergency projects? And it could serve a very useful purpose that way. All you got to do is look at who was invited to the G20 foreign ministers meeting in Atlanta. Marco Rubio hosting. Sergei Lavrov was there. If that doesn't alarm everybody else in the G20, it should, and it should alarm Canada. So is this one of those backup redundancy systems to make sure that we have options beyond the United States in case things get very, very grim? Yes, in that instance. Look at what happened with Elon Musk in Ukraine. We have a lot of our systems, fiber for internet, for data, all these sorts of things, telephone, telecommunications that go through the United States. Great. Elon Musk throttled his system for Ukraine. Is that the kind of position we want to be in in Canada? No. So let's hope we never have to use the EU option, but let's build towards something that we might see results in for 5, 10, 15 years. A lot of the people in business that you speak to, though, say the future really is across the Pacific and not across the Atlantic because of the suffocating kind of red tape and bureaucracy and slow growth that the EU has right now. Well, Kiran, I want to turn the conversation to you, picking up on what Rob's saying. There are some countries in Europe that don't want this associate membership. They think it should be reserved only for those looking to accede to the EU itself. But there is opposition in this country as well. How does that play out? Oh, there's absolutely opposition, particularly, I think, coming from the West. And I think part of that is a lack of understanding of what. What benefits would flow to Canada? What the deals would be? But also, as much as this is designed to show the United States and the White House that Canada has other options, we have other friends out there. There is nervousness about snubbing the United States, particularly we see that in Alberta that the United States is the number one customer of its most valuable product. And as much as Alberta and Western Canada want to diversify its markets, there is a fear of what happens if Donald Trump completely turns on Canada as we sort of have this more open And, um, Push for greater relations, because greater relations right now with the EU is largely, it feels like fueled by questions of the relationship status with the United States. Yeah, and Rob, I'll turn back to you on that question, because whether it's Europe or, China with EVs looking to get closer to the American market or even with the EU. If we can't resolve our trade differences with the United States, does any country really want to do greater business with Canada? Yes, in certain areas of our economy. I think that the Pacific countries in the... Well, there you go. Critical minerals is one. And I think that that's already probably got the attention of the Americans. And I think it's one of those cards that Donald Trump keeps insisting we don't have. That's one of the cards that the prime minister does have. Energy is another one. We will continue to see the United States probably be the largest customer for Canadian energy. energy. But if you're sitting in Washington right now and you want to project power, Around the world, getting that energy from Canada allows you to export your energy abroad, making you, the United States, the largest exporter of energy in the world and projecting American might, economic might around the world. You want that to continue. And if you don't have that from Canada, if critical minerals of energy are going to the EU or more importantly for the Americans, if it's going across the Pacific, that begins to. affect your geopolitical standing, your ability to project power around the world. So those are the cards that Canada has. And those are the cards that Canada, up until now, seems to be playing rather, rather wisely. Aaron, Pierre Poilievre asking a key question here. How much is this association with the EU going to cost? We don't know. Yeah, I think that's sort of part of the problem the government has at this point is that it's hard to exactly describe what this is going to look like. And as soon as you start throwing around terms like membership, people start wondering about immigration policy, about regulation, about to what degree Canada is going to have to harmonize its policies with Europe. I don't know that that's necessarily what's really on the table. The federal government, the Carney government has insisted Canadian sovereignty is not on the table. And that this is really about improving Canadian sovereignty. I think, you know, to Rob's point, it's about trying to get a path to not necessarily being subject to American power, so to speak. But I do think it's going to have to, you know, be sort of fleshed out in the months ahead in terms of what exactly this means. You know, the current government's struggle is going to be to explain what this means for Canadians in a positive way and how this improves our international... Standing our situation in the world without necessarily signing away or signing up for some of the things that maybe you don't want to be associated with in Europe. Kerry, I've only got 30 seconds. They're all yours. Kerry, over to you. Sorry, I missed your throw there. I do completely agree that this is going to be something that the Carney government will have to message to Canadians of why this is good and not necessarily a reaction to the United States, that this can be building on multiple relationships at once. All right. Kerry, Erin, Rob, sit tight. We'll be right back to you.