Latest / Balance of Power / BONUS: Canadian Prime Minister Mark Carney Talks US Trade, AI Guardrails

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BONUS: Canadian Prime Minister Mark Carney Talks US Trade, AI Guardrails · Balance of Power

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts.
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  Speaker 1: Radio.
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  Speaker 2: News.
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  Speaker 1: Prime Minister Carney, thank you for taking the time to
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  Speaker 1: sit down with us.
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  Speaker 2: Thanks for doing this, Brian.
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  Speaker 1: So we're in Toronto for the first ever Canada Investment Summit.
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  Speaker 1: You've got many of the biggest names in the world
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  Speaker 1: in terms of money management here, sovereign wealth funds, investment firms,
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  Speaker 1: asset managers. And you've got a deal book for them
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  Speaker 1: to look through. Canadian infrastructure, mines, oil, gas, clean technology,
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  Speaker 1: data centres. I'm told you were quite involved in the
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  Speaker 1: planning of this. Give us your pitch. Why was this
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  Speaker 1: a big priority for you?
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  Speaker 2: Well, look, I think Canada is one of the most
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  Speaker 2: connected economies in the world. We have trade deals covering
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  Speaker 2: one and a half billion consumers. Our pension funds, our
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  Speaker 2: financial institutions are very involved in investing in other countries.
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  Speaker 2: We want reciprocity. We want to welcome foreign capital here
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  Speaker 2: in a bigger scale, bringing energy ideas. Capital, yes, we
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  Speaker 2: do have capital here, but there's different perspectives. So And
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  Speaker 2: we also have been making some big changes over the
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  Speaker 2: course of the last year and a half. Now's the
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  Speaker 2: time to look at Canada fresh. And one of the
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  Speaker 2: things that we've discovered over the course of the last
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  Speaker 2: year is that foreign capital is under-allocated to Canada. It's not,
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  Speaker 2: I mean, we're on Bloomberg, so I can say that.
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  Speaker 2: It's not market weight to Canada. So even a shift
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  Speaker 2: to market weight to Canada will create a tremendous inflow
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  Speaker 2: of capital. And it's going to help us realize what
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  Speaker 2: we think this economy needs, which is to catalyze about
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  Speaker 2: a trillion dollars of investment over the next five years.
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  Speaker 1: So why is Canada underweight? What's your diagnosis?
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  Speaker 2: Well, I think there's been a few factors. One of
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  Speaker 2: them has been some major pools of capital have allocated
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  Speaker 2: to America, if I can put it that way. So
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  Speaker 2: US and Canada lump together and they end up overweight
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  Speaker 2: the US, underweight Canada. That's just the way it's worked.
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  Speaker 2: And that works in a seamless global environment. The world's changing,
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  Speaker 2: so it makes less sense now. So they're looking afresh.
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  Speaker 2: So that's the first thing. Secondly, we've been slow on
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  Speaker 2: moving on a series of areas with respect to regulatory
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  Speaker 2: approvals and other factors would be one classic example. That's
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  Speaker 2: why the first legislation that my government put in place
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  Speaker 2: last spring was the Build Canada Act. One Canadian economy,
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  Speaker 2: speeding approvals for major projects, key elements of that. We're
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  Speaker 2: going to double down on that strategy. You'll see in
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  Speaker 2: the coming weeks with additional measures that spread that across
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  Speaker 2: the economy. So that's another reason to come in. Third
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  Speaker 2: issue is around the overall competitiveness, tax competitiveness. We're pretty good.
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  Speaker 2: We accelerated or we deepened that tax competitiveness in the
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  Speaker 2: budget of 2025. We will look at other ways of
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  Speaker 2: doing that again in the coming weeks. So it's a
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  Speaker 2: good story. It's becoming a great story at exactly the
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  Speaker 2: time when global capital is looking for opportunity, but also reliability.
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  Speaker 2: That's becoming a fundamental driver of competitiveness and of course
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  Speaker 2: that's something that Canadians are justifiably proud of.
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  Speaker 1: You mentioned some of these as essentially structural problems around
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  Speaker 1: regulation or taxes. Do you think, is any of this
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  Speaker 1: an attitude problem or is our business sector not ambitious
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  Speaker 1: enough when it comes to attracting these kinds of, this
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  Speaker 1: kind of global capital?
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  Speaker 2: Well, I think, look, my experience over time is when
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  Speaker 2: you have big change, whether it's a financial crisis, whether
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  Speaker 2: it's the rupture at present, whether it's a big technological change,
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  Speaker 2: fortune favours the bold. These are the times when you
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  Speaker 2: should be ambitious, you should take big steps, and you
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  Speaker 2: will get outsized rewards. What we're seeing now, I'm not
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  Speaker 2: going to comment necessarily on the past, but what we're
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  Speaker 2: seeing now is Canadian business, Canadian financial institutions, really beginning
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  Speaker 2: to step up for Canada. A series of announcements today
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  Speaker 2: We're recording this at a certain point, so I don't
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  Speaker 2: want to front run some things that are coming, but
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  Speaker 2: we're talking hundreds of billions of dollars of additional Canadian capital,
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  Speaker 2: incremental capital, being allocated to Canada because they see that
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  Speaker 2: ambition level of our private sector really starting to ramp up.
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  Speaker 1: But part of your message here is you want to
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  Speaker 1: see corporate Canada get more bold, get more ambitious? Is
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  Speaker 1: that part of the message that you have?
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  Speaker 2: Well, I think one of the messages that is there
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  Speaker 2: across the country, and it's not corporate candidates, it's Canadians.
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  Speaker 2: You go to anywhere in the country, as in PEI,
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  Speaker 2: Gros Morne, rural Alberta, British Columbia, across the country, Canadians
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  Speaker 2: are uniting. They have a positive attitude. They want to
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  Speaker 2: take matters into our own hands. and build this country.
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  Speaker 2: And I think that's infectious. And we're starting to get
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  Speaker 2: that positive dynamic, that flywheel, if you will. Yes, it
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  Speaker 2: extends to corporate Canada. We, as the federal government, have
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  Speaker 2: a job to do to make that easier, make it clearer,
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  Speaker 2: to make those connections internationally. I mentioned at the start
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  Speaker 2: of this interview, one and a half billion consumers that
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  Speaker 2: we have access through free trade agreements. We intend to
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  Speaker 2: double that number within the next six months. The connections
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  Speaker 2: that are happening because of this investment summit or being
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  Speaker 2: renewed because of this investment summit, they're all part of that.
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  Speaker 2: So it's a great time for corporate Canada to step
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  Speaker 2: up and we're starting to see that.
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  Speaker 1: One criticism I've heard about some of what you've done
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  Speaker 1: so far since you came in is that your government
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  Speaker 1: is too involved in picking winners. You know, the major
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  Speaker 1: projects office is one example, right? The state is getting
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  Speaker 1: very involved in picking which projects should get special treatment essentially.
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  Speaker 1: What's your response to that? Is there a danger you're
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  Speaker 1: crowding out the private sector a little bit?
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  Speaker 2: I don't think there's a danger we're crowding out the
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  Speaker 2: private sector. What we're seeing, in fact, with hundreds of
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  Speaker 2: billions of additional allocations of Canadian institutions is there's a
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  Speaker 2: lot of Canadian capital that's available, first point. Second, a
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  Speaker 2: lot of what we're doing in major projects is these
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  Speaker 2: are nation-building projects. In other words, they're projects that unlock
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  Speaker 2: other opportunities, doubling the electricity grid. I mean, Mastering energy,
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  Speaker 2: you master your destiny. So things like inter-ties between different
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  Speaker 2: bits of electricity. The federal government getting involved in Churchill Falls,
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  Speaker 2: 14 gigawatts of clean power, low-cost clean power, would not
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  Speaker 2: have happened without the federal government getting involved. That unlocks
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  Speaker 2: enormous opportunity for Quebec, for Newfoundland and Labrador, for Canada.
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  Speaker 2: the Western Canadian oil pipeline linked to the Pacific Gateway.
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  Speaker 2: Huge opportunities are created. Yes, upstream in Alberta, new carbon
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  Speaker 2: capture industry, which will be driven by the private sector.
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  Speaker 2: And of course, expanding our largest port in a responsible way.
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  Speaker 2: All of that creates new opportunities. So we're very disciplined
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  Speaker 2: about that. And if I can make a third point,
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  Speaker 2: we are going to extend that approach. One project, one review,
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  Speaker 2: one year across all federal projects. That's what we've been
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  Speaker 2: consulting on. That will be a priority for legislation in
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  Speaker 2: the fall. And that's not picking winners. That's changing the
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  Speaker 2: playing field. Okay.
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  Speaker 1: One of the projects or the sectors we'll be talking
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  Speaker 1: about at the summit is data centers. I wanted to
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  Speaker 1: ask you more broadly about AI. In the past couple
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  Speaker 1: of days, we've seen some of the leaders in artificial
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  Speaker 1: intelligence development talk about slowing the pace down. concerns over
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  Speaker 1: the safety of frontier models. What's your reaction to that?
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  Speaker 2: Well, I'm not surprised. I've had a number of conversations,
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  Speaker 2: whether it's with Demis Hassabis, Derry Amadai, Sam Altman, specifically
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  Speaker 2: about these issues and how to balance innovation with a
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  Speaker 2: form of governance that takes safety into account. It is very,
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  Speaker 2: very difficult for individual companies, incredible as some of these
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  Speaker 2: companies are, individual companies, in an industry, a competitive industry,
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  Speaker 2: to do that themselves. So there's a need for coordination.
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  Speaker 2: I think it's interesting that the industry is calling out,
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  Speaker 2: the leaders in the industry, including Elon Musk, calling out
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  Speaker 2: for that, some level of coordination. We've had initial discussions
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  Speaker 2: at the G7 of how that might be done. Demis
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  Speaker 2: has put forward some interesting ideas on that. Ultimately, a
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  Speaker 2: technology stability board, in our view, along the lines of
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  Speaker 2: the financial stability board, would make sense. But we need
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  Speaker 2: some level of it. It's an opportunity, and I think
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  Speaker 2: ultimately what it's going to mean is greater value creation
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  Speaker 2: and greater value delivery to people.
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  Speaker 1: These are primarily American companies, and we're talking about the
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  Speaker 1: biggest ones. Do you think the U.S., do you want
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  Speaker 1: to see them legislate? Do you want to see the U.S.
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  Speaker 1: put in some guardrails?
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  Speaker 2: Well, I think we have to be careful in this
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  Speaker 2: situation that the best is not the enemy of the good.
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  Speaker 2: In other words, we need practical steps in the immediate term.
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  Speaker 2: There's proposals. Again, we discussed it at the G7 back
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  Speaker 2: in June with a U.S.-led FINRA. Again, I'm on Bloomberg,
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  Speaker 2: so I can say this, a FINRA-type organization for tech,
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  Speaker 2: which would be a stepping stone to something more broad.
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  Speaker 2: Legislation takes time, so a level of coordination being there,
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  Speaker 2: that is what the industry is looking for. But it
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  Speaker 2: goes to a broader question, if I can pivot a bit,
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  Speaker 2: where you rightly say U.S.-led. Of course, there's Chinese expertise.
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  Speaker 2: There's also Canadians. expertise, companies like Cohere, expertise in AI.
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  Speaker 2: In fact, a lot of the foundation ideas in AI
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  Speaker 2: came right here in Toronto from Canada. And we have
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  Speaker 2: an ability to play a role, particularly when combining with
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  Speaker 2: other countries, France, Germany, would be obvious examples, the UK,
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  Speaker 2: that expertise. It doesn't mean we're at the frontier, but
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  Speaker 2: we're providing a layer that works for our citizens, that
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  Speaker 2: is sovereign and safe.
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  Speaker 1: Okay, you may not be surprised I have some President
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  Speaker 1: Trump questions for you. Over the weekend, the President said
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  Speaker 1: he thinks they can reach a deal fairly soon with Canada.
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  Speaker 1: Sometimes it's hard to tell if he's just riffing or
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  Speaker 1: referring to something specific. Do you have any reason to
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  Speaker 1: think that's true? What's the latest?
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  Speaker 2: I'd say what we've been saying all along, which is
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  Speaker 2: that there is a mutually... advantageous agreement that's possible between
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  Speaker 2: Canada and the United States, one that respects our sovereignty,
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  Speaker 2: respects obviously the U.S. 's sovereignty, respects our cultural institutions.
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  Speaker 2: And that is a possibility. We're ready to sit down
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  Speaker 2: and negotiate that and move it forward. So I welcome
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  Speaker 2: the President's comments.
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  Speaker 1: Is there a question of who moves first here?
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  Speaker 2: No, there's not a pride thing from our perspective. We're
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  Speaker 2: practical people. that know what our bottom lines are, what
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  Speaker 2: our red lines are for sovereignty, for culture, not being
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  Speaker 2: restricted on our ability to sign other trade deals. I referenced,
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  Speaker 2: you know, we are on a path to double our
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  Speaker 2: trade access to 3 billion consumers around the world. We
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  Speaker 2: are not going to slow down on that. But within that,
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  Speaker 2: with understanding those, and I think our American colleagues perhaps
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  Speaker 2: understand those red lines a little more clearly now, given
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  Speaker 2: what's happened, we're ready to sit down. There's no pride
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  Speaker 2: in this. We're going to do what's right for the
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  Speaker 2: Canadian people.
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  Speaker 1: This did, over the past few weeks, get a little
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  Speaker 1: bit ugly, even, this trade fight. You had Trump cabinet
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  Speaker 1: members kind of mocking and trolling Canada at times. Do
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  Speaker 1: you expect that's going to affect the atmosphere at the
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  Speaker 1: summit here, the nastiness that happened once trade talks broke
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  Speaker 1: down with the U.S.? No.
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  Speaker 2: Short answer, no. These are all professionals. One of the
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  Speaker 2: things at the summit, which is why it's important, is
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  Speaker 2: it's not just the headline assets that are are managed
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  Speaker 2: by these institutions, the 120 trillion Canadian that are managed,
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  Speaker 2: but it's the fact that it's the decision makers who
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  Speaker 2: are coming to the summit. And, you know, they know
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  Speaker 2: their responsibilities. In many cases, they're managing money for doctors, nurses, firefighters,
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  Speaker 2: their pensioners, families, future generations in their countries. They take
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  Speaker 2: these decisions very clearly. And look, I think you can
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  Speaker 2: see how I hope the federal government has reacted to
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  Speaker 2: this calm, professional. We're looking in terms of the best
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  Speaker 2: interests of Canada. As I just said, we'll sit down
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  Speaker 2: when it makes sense. Canada and the U.S. have a
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  Speaker 2: very long relationship. We sometimes go through periods where there
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  Speaker 2: are tensions in that relationship. Provided we continue this approach,
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  Speaker 2: we'll come to some agreement at some point.
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  Speaker 1: Okay, I want to ask you about Europe as well.
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  Speaker 1: What you said yesterday was you're not looking for membership
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  Speaker 1: in the EU, but a unique alliance with the EU.
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  Speaker 1: We already have a trade deal, a free trade deal.
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  Speaker 1: So what more are you looking for? What's an example
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  Speaker 1: of where this can go deeper?
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  Speaker 2: Well, there are multiple examples of where this can go deeper.
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  Speaker 2: So above and beyond the trade deal, in fact, we
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  Speaker 2: moved last June towards a deeper strategic partnership with Europe.
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  Speaker 2: One of the manifestations of that strategic partnership is Canada
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  Speaker 2: becoming the only non-European member of SAFE, which is the
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  Speaker 2: defense procurement arrangement. It's a 150 billion euro procurement arrangement.
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  Speaker 2: In effect, to simplify, we're treated as European for the
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  Speaker 2: purposes of that. And that means we can build linkages
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  Speaker 2: with European firms and develop. And that's already happening. You're
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  Speaker 2: seeing that in subs. You're seeing that in aircraft and others.
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  Speaker 2: So that's one example. But that opens up a broader
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  Speaker 2: set of issues where, and this is the point we've
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  Speaker 2: been making, sovereignty is determined by where you stand in
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  Speaker 2: a series of strategic capabilities in space, obviously in AI,
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  Speaker 2: in sovereign compute, in critical minerals, in energy, clean and conventional,
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  Speaker 2: and beyond. And so in those areas, can you deepen
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  Speaker 2: cooperation with like-minded partners so you have sovereignty, so you
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  Speaker 2: have resilience, so you have independence. No country can do
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  Speaker 2: that alone. Those interconnections, that integration, we saw the example
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  Speaker 2: earlier with critical minerals, we see it sometimes in financial payments.
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  Speaker 2: Those integrations, those can be used as leverage against you.
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  Speaker 2: With a like-minded partner like Europe, where we have very
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  Speaker 2: strong complementarities, Canada and Europe, there's a huge opportunity for
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  Speaker 2: both of us to build our sovereignty and build our
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  Speaker 2: prosperity for all.
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  Speaker 1: Could this get into things like labor mobility, the ability
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  Speaker 1: to live and work visa-free in each other's jurisdictions?
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  Speaker 2: You could see enhanced labor mobility, elements of enhanced labor mobility. Obviously,
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  Speaker 2: the four freedoms in Europe are tied together. So there's
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  Speaker 2: limits to that, but you could see enhanced that. Certainly
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  Speaker 2: enhanced educational opportunities, enhanced research cooperation. There is a huge
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  Speaker 2: host of areas where we can work together. It's an
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  Speaker 2: exciting time. Look, it's not going to be solved this
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  Speaker 2: week in Strasbourg, just to be clear. It's the start
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  Speaker 2: of a process, but it's the start of a high-ambition process.
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  Speaker 1: Okay, Prime Minister, I think we're out of time. Thank
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  Speaker 1: you very much for doing this. I appreciate it.
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  Speaker 2: Thank you.