Comeback Kid: Mark Carney Wins Canada Election

Summary

WSJ What’s News: Episode Summary – "Comeback Kid: Mark Carney Wins Canada Election"

Release Date: April 29, 2025
Host: The Wall Street Journal

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Introduction

In this episode of WSJ What’s News, hosted by Luke Vargas, listeners are brought up to speed with pivotal developments in global politics, trade policies, technological advancements, and significant business moves. The episode delves into Canadian politics with Mark Carney’s electoral victory, the shifting landscape of US-Canada trade relations, the evolving trust and adoption of Artificial Intelligence (AI) in the workplace, and noteworthy updates from major corporations and financial institutions.

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Mark Carney’s Electoral Victory and Its Implications

Mark Carney's Comeback

At the heart of today's discussion is Canadian Prime Minister Mark Carney's remarkable electoral victory. As reported by Luke Vargas at [00:26], Carney secured his position as Prime Minister by leading the Liberal Party to a fourth consecutive term. This success came after his party faced near-defeat earlier in the year. Carney, known for his pragmatic approach, positioned himself as a strong counterbalance to President Trump's trade policies, aiming to reshape Canada's economy that heavily relies on US demand.

Economic Challenges Ahead

Vipal Manga, a reporter based in Ottawa, provides an in-depth analysis of Canada’s economic hurdles. At [01:40], Manga outlines that Canada is grappling with rising inflation, cost of living issues, housing shortages, and declining productivity. The country’s growth has been traditionally fueled by its resource sector and housing market, both of which are now stalling. Carney has been candid about the tough times ahead, advising Canadians to brace for more economic challenges.

US-Canada Trade Relations and Tariffs

The episode highlights the strained US-Canada relationship, particularly in the context of President Trump's trade war. Carney has signaled a priority to mend ties with the United States, recognizing the impracticality of Canada severing its extensive economic relationship with its neighbor. At [02:23], Manga notes that Carney warned against underestimating the interconnectedness with the US, emphasizing the need for negotiation despite uncertainties surrounding Trump's reliability as a trade partner.

Impact on the Automotive Sector

The automotive industry, a significant employer in Canada, faces potential relocations to the US due to tariffs. Vargas reports at [03:45] that despite Carney's victory, the Liberal Party may not achieve a parliamentary majority, making it essential to seek support from rival parties to implement its agenda. This political maneuvering is critical as it sets the stage for upcoming negotiations with the Trump administration.

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US Tariff Adjustments and the Automotive Industry

Trump’s Tariff Softening

In a pivotal development, President Trump is anticipated to ease automotive tariffs, a move expected to relieve the automotive sector from overlapping levies, including duties on steel and aluminum. This policy shift, reported at [03:45], will also be retroactive, allowing companies to reclaim tariffs previously paid. This relief is timely for an industry that has been significantly impacted by recent trade policies.

Industry Reactions and Market Impact

Stephen Wilmot, the Journal Autos reporter, provides insights at [04:29] on how the tariff adjustments are being received. Major manufacturers like GM and Ford welcome the changes, as it alleviates the burden of expensive input materials and supports US-based manufacturing. European carmakers such as Porsche and Volvo, however, may not benefit directly from these concessions, reflecting a mixed impact across the sector. Wilmot adds, “The industry certainly has been rattled,” highlighting the volatile response in the stock market with shares fluctuating based on company affiliations with US manufacturing.

Upcoming Announcements and Market Expectations

Vargas mentions at [05:26] that Trump is set to announce the tariff changes ahead of a rally in Detroit, signaling further adjustments to trade policies that could influence market dynamics and manufacturing strategies.

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The Duality of AI Adoption and Trust in the Workplace

Study Overview

A significant portion of the episode is dedicated to exploring the paradoxical relationship between declining public trust in AI and its increasing utilization in workplaces. This analysis is based on a comprehensive study conducted by the University of Melbourne and KPMG, encompassing over 48,000 individuals across various countries.

Insights from KPMG’s David Rowlands

At [06:20], David Rowlands, KPMG's Global Head of AI, elaborates on the study's findings:

• High Usage Amidst Low Trust: “66% of people use it regularly and people are expecting great things from AI” ([06:48]). Despite growing anxieties about AI’s reliability and ethical implications, its prevalence in daily tasks continues to rise.

• Unregulated Use and Risks: Rowlands points out a worrying trend where “66% of the time, people are relying on the AI output without evaluating the accuracy” ([07:40]), and over half of employees admit to concealing their AI usage from employers, representing breaches in company policies.

• Leadership and Governance: Emphasizing the need for clear organizational guidelines, Rowlands states, “We need to be much clearer about what our expectations are” ([09:52]). Effective leadership is crucial to align AI usage with company standards, ensuring data protection, cybersecurity, and robust governance frameworks.

Global Adoption Trends

Interestingly, emerging economies are outpacing developed nations in AI adoption. At [08:51], Rowlands explains that the disparity arises because AI offers solutions where traditional resources are lacking, such as high-quality healthcare, thereby driving its rapid integration in these regions.

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Additional Business Highlights

Financial Sector Movements

Vargas reports exclusively that major Wall Street banks, including Morgan Stanley and Bank of America, have successfully extricated themselves from a $13 billion debt incurred from Elon Musk’s 2022 acquisition of Twitter (now X). The loans, originally valued at $1.2 billion, were sold at a slight discount of $0.98 on the dollar, signaling a strategic financial maneuver within the banking sector.

Energy Sector Developments

Woodside Energy has greenlit a substantial $17.5 billion LNG gas export project in Louisiana. This move underscores the company’s confidence in sustained global demand for traditional fuels and positions the US as a pivotal supplier of natural gas to regions like Asia and Europe, which are keen to reduce dependence on Russian energy sources.

Pharmaceutical Investments

In a strategic investment, Merck is establishing a $1 billion plant in Delaware to ensure a steady supply of its flagship cancer drug, Keytruda. This facility aims to mitigate potential impacts from anticipated tariffs on the pharmaceutical industry, securing Merck’s production capabilities for critical medications treating various cancers.

Upcoming Market Data and Earnings Reports

The episode concludes with a preview of the day’s financial landscape. Finance editor Ale Frangos highlights that upcoming economic reports and earnings from major corporations such as Altria, Coca-Cola, General Motors, Pfizer, and Spotify will be pivotal in gauging the economic impact of Trump’s tariff adjustments. Additionally, a bonus episode focusing on defense contractors and their outlook amid changing geopolitical conditions is scheduled for midday.

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Conclusion

This episode of WSJ What’s News provides a comprehensive overview of significant geopolitical shifts, trade policy adjustments, technological advancements, and strategic corporate initiatives shaping the global economy. From Mark Carney’s leadership in Canada to the intricate dynamics of AI adoption in the workplace, listeners are equipped with critical insights into the factors driving today’s market and political landscapes.

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Produced by Kate Bullivant and Daniel Bach. Supervising Producer: Sandra Kilhoff.

Transcript

[Luke Vargas]

The spirit of innovation is deeply ingrained.

[David Rowlands]

In America, and Google is helping Americans innovate in ways both big and small.

[Luke Vargas]

The Air Force Research Laboratory is partnering.

[David Rowlands]

With Google Cloud, using AI to accelerate defense research for air, space and cyberspace forces. This is a new era of American innovation. Find out more at G Co AmericanInnovation.

[Luke Vargas]

Liberal Mark Carney wins election in Canada on an agenda designed to contain fallout from President Trump's trade war. Our old relationship with the United States.

[David Rowlands]

A relationship based on steadily increasing integration.

[Luke Vargas]

Is over, plus relief in Detroit. As we report, President Trump plans to soften his auto tariffs, and a new study sheds light on the risks and rewards of AI as it becomes firmly embedded in our lives. It's Tuesday, April 29th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of what's News, the top head and business stories moving your world today. Canada's Mark Carney has capped a dramatic electoral turnaround, holding on as the country's prime minister after voters returned his Liberal Party to power for a fourth consecutive term. Carney's party had been headed for defeat earlier this year, before the former central bank chief positioned himself as the best candidate to stand up to President Trump and reshape an economy dependent on US Demand. However, Journal reporter Vipal Manga in Ottawa said the road ahead won't be easy.

[Vipal Manga]

Canada's economy has been struggling with many of the same trends that the US had been rising inflation, cost of living, housing shortages. The problem for Canada under the Trudeau government was also falling productivity and trying to find an engine for growth for an economy whose manufacturing sector wasn't growing very much had become very much reliant on a resources sector and housing market to propel growth. Those engines were stall falling, and it's unclear where more growth is going to come from. Carney, being a realist, basically told Canadians that they should expect more pain going forward. And I talked to one analyst who suggested that last night might be the best night of his entire tenure.

[Luke Vargas]

US Tariffs could heap further economic pressure on Carney, with Canada's auto sector one of the country's largest employers pressured to relocate south. That sets up closely watched talks with President Trump, who's repeatedly said that Canada would be better off as America's 51st state. And while Vipal said that Carney pledged to enter economic and security negotiations with the knowledge that Ottawa has other relationships it can turn to patching up the relationship with Washington is priority number one.

[Vipal Manga]

He fired some sort of warning shot at the US Saying that the Canadians are over the shock of American betrayal, as he called it, and have learned the lessons from that betrayal. But he's very clear eyed about the fact that for all intents and purposes, Canada cannot walk away from United States. They share a 5,000 mile border with the largest economy in the world. It makes no sense for Canada to walk away from the US Even if it were possible. So I do think that they want to negotiate and Carney wants to negotiate a deal. The framework of that deal, I think, is very much up in the air. And they're also very conscious of the fact that it's unclear if Trump can be a reliable partner in any deal that they sign, given the fact that the last trade deal they did with Trump himself, the usmca, is the same deal that he just ripped up when he came into power the second time.

[Luke Vargas]

Despite last night's victory, Carney's Liberals are likely to fall short of a parliamentary majority, potentially forcing him to seek help from rival politicians in order to execute his agenda. Well, speaking of trade, we exclusively report that President Trump is expected to soften his automotive tariffs in an effort to stop carmakers from being hit by overlapping levies such as duties on steel and aluminum. We report that the policy shift would also be retroactive, allowing companies to be reimbursed for tariffs that they've already paid. A useful bit of relief for an industry that Journal Autos reporter Stephen Wilmot told me has been battered by recent trade moves.

[Stephen Wilmot]

The industry certainly has been rattled and we got fresh reports this morning, for example, from Porsche and also Volvo, which are heavily affected by the tariffs because they manufacture predominantly in Europe. Both of them, their shares are off heavily today. We've seen GM and Ford respond appreciatively to the softening of the tariffs from the Trump administration. It's a very big deal for them if they don't have to pay steel and aluminium tariffs in particular. And it goes along with the logic of the Trump administration so far as they want to reward manufacturing in the US which is difficult if you have to pay huge tariffs on your inputs. So it's good for GM and Ford, Stellantis too, which owns Chrysler. The shares are up in European trading this morning. As for everyone else, it's going to be a range of outcomes. If you're a pure import brand like Porsche, you won't benefit from this concession at all. But if you're a company like Toyota that also manufactures a lot in the US Then clearly this is also a big win.

[Luke Vargas]

Trump is expected to announce the tariff shift ahead of a Rally outside of Detroit this evening. Coming up, even as trust in AI declines, more of us are experimenting with new tools in the workplace, even without the permission of our employers. We have got that story and more after drop the break.

[Vipal Manga]

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[Luke Vargas]

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[Vipal Manga]

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[Luke Vargas]

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[Luke Vargas]

Public trust in AI is declining, but that is not stopping people from using it more and more, including for sensitive tasks at work. That's one of the findings of a brand new study of more than 48,000 people conducted across dozens of countries and carried out by the University of Melbourne and KPMG. And here to talk about that study is KPMG's global head of AI, David Rowlands. David, trust down, use up. Explain that to me.

[David Rowlands]

The vast majority of people are using it regularly and in the workplace. So 66% of people use it regularly and people are expecting great things from AI. But at the same time, whilst people are really excited about what AI can do, they're expressing an amount of anxiety and concerns about trust in the technology and trusting what it might do for them. The other thing is that the report shows that often the way that people are using the technology themselves are creating new risks. So in this example, we expected people to review what the AI is coming out with. But 66% of the time, people are relying on the AI output without evaluating the accuracy. People admit that they've made mistakes and over half of employees say that they hide their use of AI from their employers and pass it off as their own work.

[Luke Vargas]

I want to get to that point in a second. But there's clearly something here that people find valuable. Enjoyable is the benefit that people are describing in this study mostly around, I don't know, being more efficient, making more money, saving time. What explains this uptick in use?

[David Rowlands]

Yeah, and it is like no other technology before. It does so many things in so many different situations. It's giving us greater insight, it's driving for greater quality. KPMG's, for instance, moved its audit capability away from a sample basis of checking to taking on all of the transactions and using the AI to analyze the most likely fraudulent transactions or the ones that need further investigation. That in itself is creating huge amounts of insight for the organizations that we audit. It's driving greater quality it is driving efficiency. And when you go beyond that, we know that service interactions enabled by AI are higher quality and can offer greater empathy. And so when you train, the AI on specific databases becomes expert and it can give you advice, it can recommend your next best action and it becomes a great partner. I use it as a coach, you know, I get it to ask me questions or to challenge the sorts of things that I'm doing.

[Luke Vargas]

The study found that the emerging economies are seeing greater AI adoption than more developed ones. How would you explain that?

[David Rowlands]

Yeah, and it's quite stark. The gap between the capability that AI provides and the legacy experience is at its greatest in developing economies. And you can think about that, you know, if you find it hard to get access to high quality, let's say, healthcare or a doctor, and yet you're getting pretty good advice from an AI capability, then you're going to use it.

[Luke Vargas]

Big opportunities here in everything from public health to efficiency within corporations. And yet a few things jumped out to me, one that I imagine folks in legal departments will not be too pleased to hear, which is that you found that almost half of employees admit that they've used AI in ways that violate company policies. This is things like uploading sensitive company information into free AI tools and that they've been relying on AI outputs at work without evaluating the accuracy of those results. These don't sound good.

[David Rowlands]

The report is an eye opener. This is a set of 48,000 people creating a cry for help. And I think there has been an underestimation of this topic of how are people going to react, what are their attitudes going to be, what are the tools and capabilities that they need if they're going to use AI safely? There's a crisis of leadership here and I think that we've underestimated it. We need to be much clearer about what our expectations are. And then just prosaically, let's put these capabilities in place. Let's make sure that we're protecting the data and that we're cybersecure. Let's make sure that we understand the provenance of the models and that we have good governance over them. Let's make sure that we're giving people all of the skills, but most of all is clarity. What people are crying out for in this report is what am I supposed to do with AI and what are the behaviors that you are expecting? And so the key word here is leadership. And how do you align your organization's direction so that you can articulate what people should and should not do with AI?

[Luke Vargas]

David Rowlands, global head of AI at kpmg, thank you so much for being with us on what's news.

[David Rowlands]

Thank you. Thank you very much. I've enjoyed it.

[Luke Vargas]

We are exclusively reporting that a group of Wall Street's biggest banks, including Morgan Stanley, bank of America and five others, have finally dug themselves out of the $13 billion debt that they lent to Elon Musk for his takeover of Twitter Now X in 2022. The $1.2 billion of unloved loans sold at $0.98 on the dollar. Woodside Energy has given the go ahead to the $17.5 billion development of an LNG gas export project in Louisiana. The Australian company is betting on strong ongoing demand for traditional fuels and the US As a key supplier of natural gas to the global market. This includes customers in Asia and Europe who've been buying US Gas to counter dependence on Russia. In a move to ensure that cancer drugs are available to U.S. consumers, drugmaker Merck is investing in a $1 billion plant in Delaware ahead of potential tariffs targeting the industry. The facility will produce Merck's blockbuster cancer drug Keytruda, which treats lung cancer, melanoma and other tumors and accounts for roughly half of the company's revenue. And finally, it's going to be another busy day for markets with a slew of earnings and data out later this morning. Finance editor Ale Frangos says these are the first economic readings following Trump's tariff announcements and will be closely watched for any indications of a US Downturn. We're starting to see hard data about the economy that reflects what happened at the beginning of the month. So we have things like home prices and job openings and then just a ton of earnings from the biggest American companies. Today is Altria, Coca Cola, General Motors, Pfizer, Spotify, ups. These are all core economic bellwethers. And we're going to hear a little bit about how those companies were doing, obviously the beginning of the year, but really the outlook from the CEOs and the CFOs about what they experienced this month in April and what they're forecasting and what they're guiding going forward. And if you can't get enough earnings, check out the bonus episode we've got coming later today in the next what's news in earnings? We'll be looking at defense contractors and how they expect the US Tariffs and a changing geopolitical environment to affect their business. That'll be in this feed around midday before our usual PM show tonight. And that's it for what's news for this Tuesday morning. Today's show was produced by Kate Bullivant and Daniel Bach. Our supervising producer is Sandra Kilhoff. I'm Luke Vargas for the Wall Street Journal. And as always, thanks for listening.