← Bulwark Takes
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- [00:00]
Andrew Egger
When you think about businesses that are selling through the roof, Allbirds or skims, sure you think about a great product, a cool brand and brilliant marketing. But an often overlooked secret is actually the businesses behind the business making, selling and for the shoppers buying simple. For millions of businesses, that business is Shopify. Nobody does selling better than Shopify, home of the number one checkout on the planet. And the not so secret secret with shop pay that boosts conversions up to 50%, meaning way less carts going abandoned and way more sales going. So if you're into growing your business, your commerce platform better be ready to sell wherever your customers are scrolling or strolling on the web, in your store, in their feed and everywhere in between. Businesses that sell more sell on Shopify. Upgrade your business and get the same checkout, skims uses. Sign up for your $1 per month trial period at shopify.com audioboom all lowercase go to shopify.com audioboom to upgrade your selling today. Shopify.com audioboom hello, this is Andrew Egger with the bulwark.
- [01:13]
Mark Carney
Total reversal in fortunes for Canada's Liberal Party. They had their elections, parliamentary elections this morning and Mark Carney, the new prime Minister of Canada as of a month or so ago, he and his Liberal Party triumph over the Conservatives who had been just mashing them in the polls prior to all of this trade war nonsense. Mark Carney gives his triumphant victory speech, talks again, reiterates again his point about how basically the old era of mutual collaboration and cooperation with the United States in an increasingly close way, that's all over. We're going into a kind of a brave new world. Nobody's quite sure exactly what's going to happen. Fortunately, Justin Ling, excellent. Basically become our roving Canada politics correspondent at this point. Back to back to talk with me about it. Thanks for coming on, Justin.
- [02:03]
Justin Ling
Thanks for having me.
- [02:04]
Mark Carney
Okay, so let's just do, let's just go from the top. I mean, people had stuck a fork in the Liberals basically. Weren't they like kind of tied for third in the kind of Canada parliamentary power rankings like what, two months ago? How quickly has all of this fallen apart for the Conservatives and how quickly has this resurgence happened for the Liberals here?
- [02:26]
Justin Ling
Yeah, so prior to the new year, right. Justin Trudeau was still our prime minister. He was extraordinarily unpopular. I mean, you're talking about like some polls had them 15, 20% in total rankings and it could have led to basically a total drubbing of them in the election. Trump comes in the first tariff gets announced, the 51st state rhetoric happens right around then is when Trudeau decides to take a walk in the snow, decides he's not gonna run again. Very lightning fast leadership race. Mark Carney gets selected, and his numbers just rebound immediately. I mean, it's one of the most immediate and severe sort of changes of political fortune I think we've ever seen in this country. And it mostly maintained to last night. I think you'll probably see a little analysis of this election suggesting that the Marty's Liberals didn't do as well as they anticipated. And that's partly true, but their actual popular vote, just put aside the seat count. The actual popular vote is extraordinary for both parties. But for the Liberal Party, you know, you'd have to go back about 45 years to find an example of his party doing this. Well, on the national level, it's basically unheard of in Canada for one party to get nearly 45% of the popular vote, but that's where we're at. So it was a pretty big resounding win on kind of the top line. It's going to leave a minority Parliament on the bottom, which is going to be maybe difficult, at least we think so. They're still counting some votes, but yeah, I mean, it was. Reversal of fortune is exactly right. I mean, it would have been difficult to do better, I think, for him last night.
- [04:08]
Mark Carney
Yeah. So my kind of lay understanding of the way all of this went down is basically you had this kind of broad sense in Canada under Trudeau. After about a decade of Trudeau where the Liberals were just kind of like a party without a lot of vision of where to go from here, it's kind of this sense of exhaustion. And that was part of why the Conservatives seemed to be cruising toward victory. Obviously, Trump comes in with this insane trade war and galvanizes a lot of opposition. Now, of course, you know, the elections happened, the sprint to the election's over, and, you know, the Liberals need to figure out how to, like, govern. Obviously, part of that is, is continuing to channel this sort of nationalistic reaction against, against the Trump trade war. What is that going to look like in policy? And then I guess beyond that, like, what else, what else is driving kind of this, this coalition as they, as they try to make a new government.
- [05:01]
Justin Ling
Yes. So really there was, there was two ballot box questions happening in election last night, and depending on what question you were voting on, you were voted either Liberal or Conservative. That's generally how this race shook out. Right. If you cared about Trump, if you were anxious about the trade war. If you had genuine anxieties about the prospect of becoming the 51st state under the threat of economic or military force, you voted for Mark Carney. That is generally what all the polls suggest is generally based on conversations I've had. The deciding factor in voting Liberal. On the flip side, if you were worried about cost of living, if you're worried about worsening government services, health care, whatever, you. You almost certainly voted for Pierre Poliev. So let's put aside the Trump stuff just for a minute, because I think this is really interesting, and this will be one of the pressures on Marconi going forward for the next months or years, depending on kind of what happens. Because, I mean, over the last decade, things in Canada have generally gotten worse. We're not a failed state like you occasionally hear the Conservative Party talk about. We're not a third world country. But things went from being really good, heading the right direction to getting worse. Right. Our immigration system was wildly mismanaged, led to a lot of kind of weird externalities, complete inability from governments to permit new housing construction. There was a real decline in the quality of government services. Our health care system is constantly in crisis. I basically made the case in a column a few months ago that this has been the hollow core of Justin Trudeau's liberalism. It's been this ambitious, sort of vaunted progressivism that ultimately didn't do all the things it promised to do. We did not become a world leader. We did not deliver better services. We did not fight poverty in a grand sense. We did not, you know, expand economic opportunity. So people were pissed off about this. Right? And that's why people not only are voting for Pierre Poliev, but are flying fuck Carney flags, you know, who are joining the freedom convoy, who are, you know, just generally angry at the state of things. For them, there really is no space to be anxious about Donald Trump because you're anxious about your own economic security and your children's place in the world and everything else. So one of the big pressures on Marconi is going to be regulating that stuff, right? And he's already talked about this. People don't believe him. And I think there's some good reason for that. But he's already talked about addressing these things, right? Unleashing housing construction, you know, ramping up energy production, you know, incentivizing more business creation, a whole bunch of other stuff, improving government services. So we'll see how that works, frankly. Frankly, if it doesn't work, I think he's going to face Rising polarization that is going to severely curtail his ability to fight that trade war. Okay, so that is a big sort of caveat to all this stuff. On the other side of things, people are so genuinely freaked out about Donald Trump that many of them are sort of willing to go along with kind of whatever it takes to respond. I mean, we are talking about an extraordinary decoupling from our biggest trading partner, with whom we share about 80% of our domestic trade. We are talking about, you know, erecting trade barriers and cultural barriers and economic barriers with a country that we kind of always thought of as a, as a bigger brother to some degree. And to do that is going to be painful. It's going to be difficult. It's going to take a long, long time, and it's going to put us in some really uncharted waters. And Mark Carney thus far has the mandate to do so. But when he actually kind of puts that to the test and when we start facing what is the prospect of a really bruising trade war, it will be interesting to see if he can kind of manage the pressures that come with that.
- [08:35]
Mark Carney
Yeah. And it seems like those two pressures are really going to push in opposite directions for him, at least in the medium term. Right. I mean, if you have this, this large coalition that's like, all right, you know, we've been grinning and bearing this kind of pain before. We think that, you know, you're going to try to, to fix things in the housing supply. I mean, like, some of these are things you can nibble away at irrespective of the trade war. Stuff like housing supply is probably a pretty good example. But on the one, I mean, fundamentally, you basically have one big group that's like, we are hurting economically and how are we going to fix that? And another big group that's like, we really need to push back against this trade war. But obviously that includes a whole bunch of at least short term economic pain. So I mean, like, how do you see him basically triaging, like, is it, is it, I won? So we're focusing on that side of things in the short term, the trade war side of things in the short term. But I mean, is there a danger that as the trade war grinds on and that kind of pain becomes more and more manifest, more and more concrete, that he ends up losing some of that kind of like broad fervor for this course that has motivated his win today?
- [09:43]
Justin Ling
Yeah, let me give you the really wonky answer that. I'll give you the fun answer. So vegetables and then we'll have dessert. The really wonky answer. Well, there we go. It's all great for you. The really wonky answer is that Canada has always sort of been an extractor of natural resources. There's a line, I think it's line from the Bible, but that we often use to describe our economy is that we often see ourselves as jars of water and hewers of wood. We are often just extracting natural resources and then shipping them previously to the UK and then increasingly over the last century to the US for finishing and for marketing. Right. So we, you know, have a massive softwood lumber industry, largely goes to the States states for processing. We extract a massive amount of oil and gas. And Alberta largely goes to the States to be refined. Both Mark Carney and Pierre Poliev have talked extensively about the need to onshore more of that processing. And this actually makes a tremendous amount of sense. So Mark Carney, for example, tries to tie the housing crisis to the trade war by saying, we're not going to ship so much softwood lumber south anymore. We're going to process it here and build homes with it here. Right. To avoid not only the tariffs on softwood lumber that we're more likely to see, I don't think we're currently in effect, but also to just keep more of that light manufacturing here at home and to reduce the cost of housing. That's actually a really smart thing. Both leaders have talked about refining more oil here at home and also shipping more of it west, likely to Japan, maybe China, South Korea and others. Those sort of things will be both positive economic drivers here at home while also contributing to our decoupling from the US So that is kind of how you're threading the needle there. Now the question is, is that going to be enough? Because we're not just talking about some natural resources. We're talking about a service economy, an information economy, a technological economy that is going to make this a little more difficult. And there is going to be this force acting upon Mark Carney. He's already kind of hinted at this a little bit that's going to want us to be protectionist in response to American protectionism. And the problem with protectionism is that not every country should be doing everything right. Canada can't make fighter jets. We've tried. I'll get. I know I'll get angry comments from Canadians about this, but we shouldn't go back to that. We used to be rather good at making nuclear reactors. Maybe that's something we could do again. We are really good at making warships. That is probably something we should double down on. But it will not make sense for us to try and stand up our own Amazon. It will not make sense for us to try and become a, you know, a fighter jet, you know, country. So do we risk building a bunch of white elephants in the name of this economic nationalism? Yes, that's a serious risk. Trying to manage all this is going to be really difficult. I think a lot of people look at Mark Carney, a guy who, you know, spent his whole life in economics and banking, and think to themselves, if I, if anyone's going to be able to manage this, it's going to be him. Now here's the fun bit. The degree to which there is a genuine Canadian patriotism the likes of which I have not seen. I was talking about this on the Bulwark last week, but I've not seen this level of patriotism in this country in a very long time, probably ever. That is not just going to dissipate. And I think it does suggest that Canadians are willing to accept a level of pain if it means long term gain. And you've even heard our leaders start to talk a little bit about this. And the cultural aspect of this I think will be really important. The fact that you're going to have Mike Myers on TV going like, elbows up, right? Like, the fact that you're going to have a kind of a national identity built around resilience in the face of this increasingly kind of autocratic leader down south, I think that is going to be a really powerful thing that pushes people to accept a little bit of, a little bit of decline in the name of, you know, a fundamentally remade country that is standing for something principled?
- [13:36]
Mark Carney
Yeah, yeah. And you talk a lot just, I mean, you talked just now about. I talked a lot more and more. Let's have you on more and more. The more talking the better. No, I mean, when you talk about kind of fundamentally remaking the way that Canada is approaching its economy, obviously Mark Carney talks about this a lot himself. This was, I mentioned his victory speech earlier today. He reiterated that point that, that really this era of, of, of kind of no amount of cooperation with America being too much, being over. And I just wanted to ask, I mean, do you think that's basically bedrock for, for how Canada and the U.S. are going to approach one another in the near term? I mean, is there, is there any on ramp that, any that either of these leaders could take back toward a greater amount of cooperation and coupling or is this going to be like even if this moment passes, even if Donald Trump tears up his fentanyl tariffs tomorrow and throws the border back open, that there's just going to be this new reorganization that we're kind of just going to have to deal with from now on.
- [14:38]
Justin Ling
Yeah. There's a line that Mark Carney says often, which is basically, we're never going back to the way things were. And Pierre Poliev has echoed that in a different sense. And I think that's right. The fundamental reality is, for decades, for generations there have been Canadians saying that our over reliance on America, both the refining capacity, also their cultural institutions, also their technology, also the defensive industry and their security apparatus, is just wrong. It is a strategic mistake to be this integrated, even if they're your closest neighbor, even if they're your closest sort of societal cousin, it just does not make sense. It is a strategic mistake and it's a risk. And we're now seeing how true that is. This conversation began in 2016, but really it didn't go anywhere. We all, I think Canadians all thought, well, that was so chaotic and terrible, there's no way the Americans would ever elect this guy again. Again, strategic mistake. And again, Carney has this line about saying we have to think of the worst case scenario. And thinking of the worst case scenario has never dominated Canadian kind of political thought. And it's starting to get introduced and I really hope it never leaves because it's is really important to sort of beat to death this innate Canadian optimism that is really, I think, adorable, but is fundamentally dangerous. Sorry for the violent metaphor there, but I cannot underscore enough how important that is. But here's the caveat to this. Going back, declining that share of economic cooperation, security cooperation, everything else does not mean it goes to zero. Where does that end up on the spectrum? We don't really know. It's going to depend a lot on America. It's going to depend a lot on Trump. It's going to depend a lot on who succeeds him, if someone ever does. It's going to depend on what Europe and what Japan and South Korea. Everyone else does. Right. If it becomes practical and feasible for us to integrate into the European security apparatus, if we consider joining the eu, which is a thing we're now seriously putting on the table, if we start shipping more goods westward to Japan or we manage to turn the Northwest Passage into, into a year long shipping route, all those things will start bringing that level of cooperation and trade and economic opportunity and collaboration with the US down, down, down. It still probably won't go to zero, but it will decrease. If Trump continues pushing tariffs, if he continues trying to use economic coercion, potentially security coercion, to make us the 51st state, I think that drives it down aggressively. I cannot imagine anybody replacing Trump and managing to get that relationship back up to 80% or whatever the figure may be. But I think you're gonna have to watch kind of issue by issue, the things that drive it down and the things that push it up. There will have to be a point, I think, where Trump does abandon or scale down this trade war and declare a sort of Pyrrhic victory so that he can stop punishing American consumers and citizens and voters. But I don't know where or when that is. And so the reality is the decoupling is happening. The extent to which we're going to decouple is going to depend a lot on Trump, and it's going to depend a lot on how much our allies are interested in joining us.
- [17:55]
Mark Carney
Yeah. Yeah. Well, it's all very fresh elections just this morning, and we'll keep covering it as it all rolls out, but I think we can leave it there for now. Justin, thanks for coming on and talking to us about all this stuff. I'm sure we'll have you back soon.
- [18:06]
Justin Ling
Thanks for having me.
- [18:07]
Mark Carney
And thanks to you all for watching, for liking, for subscribing, for doing all the things that good YouTube patrons of our content do. You can head over to thebullwork.com to read upon a lot of this stuff as well in our Morning Shots newsletter and elsewhere. Thanks to everyone for watching and we'll see you next time.
- [18:24]
Andrew Egger
When you think about businesses that are selling through the roof, Allbirds or Skims. Sure you think about a great product, a cool brand and brilliant marketing. But an often overlooked secret is actually the businesses behind the business making selling and for the shoppers buying. Simple. For millions of businesses, that business is Shopify. Nobody does selling better than Shopify, home of the number one checkout on the planet and the not so secret secret with Shop Pay that boosts conversions up to 50%, meaning way less carts going abandoned and way more sales going. So if you're into growing your business, your commerce platform better be ready to sell wherever your custom are scrolling or strolling on the web, in your store, in their feed and everywhere in between. Businesses that sell more sell on Shopify, upgrade your business and get the same checkout skims uses. Sign up for your $1 per month trial period at shopify.com audioboom all lowercase go to shopify.com audioboom to upgrade your selling today. Shopify.com audioboom.