The West Block, Episode 40, Season 7
THE WEST BLOCK
Episode 40, Season 7
Sunday, June 10, 2018
Host: Mike Le Couteur
Guest Interviews: David Akin, Minister Bill Morneau, MPP Lisa MacLeod,
On this Sunday, progressive agenda trumped. The G7 summit gets sidetracked with world leaders trying to prevent the U.S. president from starting a global trade war.
Then, Ontario is now Ford Nation. Doug Ford has been handed a majority government. Now where will the brash businessman take Canada’s most populist province?
And, the summit in Singapore: President Trump will be meeting North Korean leader Kim Jong-Un. Is it all just a show? We’ll look ahead.
It’s Sunday, June the 10th. I’m Mike Le Couteur, and this is The West Block.
Well this weekend was supposed to be all about the environment, gender equality, global growth and prosperity for the middle class, important issues in each of the G7 countries, or at least six of them. But the G7 leaders’ agenda in Charlevoix, Quebec was quickly hijacked by punitive tariffs imposed by the U.S. on countries that are supposed to be allies. It was the first time the leaders were all in the same room since the tariffs were imposed.
Our chief political correspondent David Akin is covering the G7 summit. How much did this conversation overshadow the original agenda?
David Akin: Absolutely overshadowed things, Mike. You know, Trump just did not seem interested in the topics Trudeau chose for this summit. We know that Trump left early. He had to go to Singapore for the North Korean meeting, but that meant he missed the discussions about Trudeau’s favourite subjects: climate change, clean energy, ocean health. All Trump wanted to do here was talk about his own favourite topic, trade. And on trade, Trump was as defiant as I’ve seen him. Trump threatened that any country that does not do what Trump wants on trade, Trump is ready to cut that country off completely from trade with America.
Now, Trump, Trudeau and the other G7 leaders all say their relationships are as strong as ever, but on key economic and policy issues, it’s pretty clear this is now the G6 +1, Mike.
Mike Le Couteur: Well thanks very much for that, David.
And joining me right now from Charlevoix, Quebec is Finance Minister Bill Morneau. Thanks so much for joining us. Let’s get right into it. You’ve just spent the weekend meeting with your international counterparts. Has there been any progress in terms of trying to convince the U.S. to drop the tariffs on steel and aluminum?
Minister Bill Morneau: Well Mike, what I can tell you is that any time we get together, having discussions is an important step. I can’t say that we’ve made progress but I think we’ve clearly communicated our point of view to the president as well as the point of view from the other G7 countries and we hope that through that we’ve not only defended Canadians interests but made some progress against our goal of getting this tariff rolled back.
Mike Le Couteur: Another way that you were fighting against this is the tariffs, the reciprocal tariffs. You met with representatives from Canadian steel and aluminum industry last week. They told you they wanted those dollar-for-dollar tariffs on American metals, now. Why aren’t we doing that? Why are we waiting a full month before imposing our own tariffs?
Minister Bill Morneau: We want to make sure that we get this right. As you know, our tariffs have been on steel but also on other products. We need to ensure that we have the desired impact. We were, as you saw, very ready in terms of what we wanted to do, but we need a couple of week’s consultation process. That’s important. So getting this right is critical for a responsible way to move forward.
Mike Le Couteur: But with respect, Minister, I mean you had the representatives from steel and aluminum in Ottawa saying there is absolutely no reason not to do the tariffs on steel and aluminum right away, match them dollar for dollar. How they hit us, we hit them. Why not do that?
Minister Bill Morneau: I was very clear with the steel industry folks that we saw that we very seriously looked at what we’re going to do. We are taking this extremely seriously from their perspective, and we’re working to make sure that we not only get the tariffs right but that we actually get to the broader goal, which is to move back into a reasonable trading position with our largest trading partner. This is the approach that we have taken because we believe it’s the right way to actually try and negotiate that come down for them.
Mike Le Couteur: Minister, conventional wisdom would say that bullies respond to people pushing back. Are you worried that if you push back too hard that it’ll just escalate into an all-out trade war?
Minister Bill Morneau: This is, we think, a calibrated approach to responding that will, in our estimation, have an impact that can get us back to the table. I’ve seen from the other G7 countries, similar sorts of approaches. Not all of them have worked through exactly what they’re going to do but we are seeing that others are taking approaches that are equally appropriate in our mind, ensuring that the Americans can see how seriously we take this and that, you know, this is just not a state of affairs that makes any sense for citizens in the United States, or in Canada, or for that matter, in other countries. We’re going to keep working on this. We think dialogue’s important but we’ve been very clear that we’re going to respond in kind.
Mike Le Couteur: Now you also mentioned that we do have our own self-imposed consultations on these tariffs. They end at the end of this week. What is the next step after that?
Minister Bill Morneau: From here, we’re doing these consultations in order to make sure we get it right so that we can move forward and get these tariffs done appropriately. What we’re also doing in the background is trying to convince the American administration to move back from these tariffs. So that’s going on, not only here, but obviously with anybody that we can meet within the administration. I had the opportunity to meet with Larry Kudlow to express our point of view. And I’m in regular communication with my counterpart Steven Mnuchin, the treasury secretary. We’re going to keep pushing on all fronts and the tariffs are of course, an integral part of that. That’s a way we hope to move forward and express to the Americans that this approach, which is to target their own allies with tariffs is not constructive. And, you know, Mike, that’s the only way we believe that we can move forward at this stage.
Mike Le Couteur: Okay, I just want to switch to pipelines. That’s a little more in your wheelhouse. We are buying that pipeline. It is Plan B. Plan A, though, was to sell the pipeline before August. Have you found a new buyer yet?
Minister Bill Morneau: You don’t actually have Plan A and Plan B in the right order. What I’ll tell you, our key issue here, is that we want to ensure that this pipeline gets built. That’s been our goal from day one. The reason we find ourselves here is frankly, because the proponent, Kinder Morgan, couldn’t resolve political discourse between two provinces, it was going in a bad direction. So we’ve said for us, what we need to do to ensure the project goes forward, is to de-risk it. Now we’re at a stage where first goal is to make sure the project gets built. We are interested in moving it back into the private sector. We’ll do that only as long as we can meet that first goal: getting it de-risked, ensuring that it actually gets done. Our goal, of course, is to have that happen as soon as possible but not so soon that we don’t actually meet that goal.
Mike Le Couteur: And speaking of getting it done, you did indicate in that press conference last week that you wanted construction to resume in June. Has it started yet or are we getting to the point that shovels are back in the ground?
Minister Bill Morneau: We actually, literally, the day we announced that, we got back to the table with all of the firms that are intended to be doing that construction. So I’m not up to date on whether there’s actually people working in the field, but what I can tell you is we started that very first day to get it all prepared, to get whether it’s the contracts or to get the actual materials so we can actually get back to work. So what I can assure you is that that is now happening that this summer is seeing the work. If it’s not already started, it’s starting very shortly.
Mike Le Couteur: And so, just in closing, I want to know who is paying for that phase of the construction this summer and how much will it be costing because I know that’s one of the difficult issues here. The government, your government has never said how much the construction of the new pipeline is going to cost.
Minister Bill Morneau: The approach we took was we recognized that while we agreed to the transaction last week that it takes a little while for these transactions to close, a few months. Obviously, Kinder Morgan has to go through a shareholder vote. There’s approvals that need to happen, so what we did was we guaranteed the construction season. So it’s actually the company that’s moving forward on the construction with our guarantee, and in terms of the long-term construction costs, we looked at a range of construction costs in our due diligence to make sure that it was a good deal for Canadians. The proponent had actually updated those construction costs so that’s something that we’re not yet ready to talk about. What I can tell you is that on all the review that we did through the due diligence, we’re confident this is not only a good deal for the Canadian economy and a good deal for jobs but also actually a good deal for Canada, in terms of creating value. So we’re looking forward to being able to share that over time, but now is not the time.
Mike Le Couteur: Well we are going to have to leave it there. Thank you so much for joining us, Minister Morneau.
Minister Bill Morneau: Okay, thank you. Thanks very much, Mike.
Mike Le Couteur: Up next: Doug Ford’s Progressive Conservative Party wins big in Ontario. He promised to get the province back on track, but just how will he do it?
Mike Le Couteur: Welcome back. A big win for Ford Nation in Ontario late last week as Doug Ford’s Progressive Conservative Party now holds the majority, with the NDP as the official opposition. What does this mean for Canada’s most populist province, and the new direction it’s about to take?
And joining me now is the re-elected PC MPP member Lisa MacLeod. Thanks very much for joining us.
MPP Lisa MacLeod: Thanks for having me.
Mike Le Couteur: So 12 years now as the MPP for that area here in the suburbs of Ottawa. Many people say you’re going to be in cabinet. So, the question is: Any preference? And have you heard anything yet?
MPP Lisa MacLeod: Well, you know what? There’s a transition team that’s been appointed and my predecessor John Baird happens to be on that team and his former Chief of Staff Chris Froggatt is leading that. So they’ll take the time over the next 21 days, to put in place the transition plans, including what the cabinet will look like. And Doug Ford will make those determinations, decisions, and of course, make those announcements. So, you know, it’s all above my pay grade at this point.
Mike Le Couteur: Something that unfortunately the party was criticized a lot for during the campaign was not releasing a costed platform. What do you say to people who thought that you guys were hiding something?
MPP Lisa MacLeod: Look, as a former Finance Critic and Treasury Board Critic and somebody who used to sit on the Public Accounts Committee, I can tell you full well that the Auditor General and the independent financial accountability officer, both independent officers of the Ontario Legislatures said that the numbers that the Liberals have been presenting weren’t true. Meaning that the Liberals had said there was a $6 million deficit when in actuality there was a $12 billion deficit. So we decided that we would make some modest commitments, roll them out throughout the campaign, and wait until we saw what the actual books were. So we feel confident that we can deliver the modest proposals that we put forward. And in the next couple of days, we’re going to be able to look at those books, bring in a team of outside auditors as well to go line by line, to make sure we can look at where there has been any waste, mismanagement or scandal.
Mike Le Couteur: But as a former Finance Critic and Treasury Board Critic, wouldn’t you also have some insight into that and at least have an idea? Because we went through a whole campaign having no idea how much all the promises you guys made would cost.
MPP Lisa MacLeod: Yeah, we’re going to have to see those books. And only the Liberals know the true value of those books.
Mike Le Couteur: But those are your promises, though. Forget about the Liberals’ books. These are you promises.
MPP Lisa MacLeod: Yeah, in order for us to pay for those commitments and to put forward any other platform commitments. We would have to know what the true financial state of the province is. We simply don’t know and you don’t have to take my word for it. The Auditor General and the financial accountability officer have also disputed the government’s numbers, so we have to get in there over the next 21 days. We have to bring some change to Ontario and we made some modest commitments that we plan on delivering.
Mike Le Couteur: And one of those commitments was also to run deficits for possibly two years. No clear timeline on returning back to balanced budgets. Why not?
MPP Lisa MacLeod: Doug Ford has made it clear that he hopes that will be in year three, and if not, year four. But we will put forward a credible plan back to balance once we get a sense of what the books actually look like in the province of Ontario. Liberals have been cooking them for some time now and we believe that there are probably some systemic deficit areas—structural deficit areas. So we’re going to have to look at those and get a true sense. And that’s why we want to bring in a team of auditors. In addition, you know, he’ll have an opportunity in the next couple of weeks to appointment a treasury board minister and a finance minister, and those individuals will have a department to back up the work that they’re doing.
Mike Le Couteur: You know how this looks a little bit, because the Conservatives on the federal side have been criticizing Justin Trudeau for no exact timeline on returning to balanced books. Now these same people who have either been running for you or helping you in your campaign, are seemingly fine with no real deadline on returning back to balance?
MPP Lisa MacLeod: Yeah, we’ve said hopefully year three that will happen. Let us—it’s only been a couple of days since we’ve been elected. Doug Ford’s not yet been sworn in yet. We don’t yet have a cabinet appointed. Give us some time to take a look at those books. Let us bring in those outside auditors. Let us work with the independent Auditor General. Let’s restore some of her powers and get a true sense of what the books are of the largest province in Canada.
Mike Le Couteur: I wanted to move towards the environment because at some point in this campaign, a lot of people have thought, well Doug Ford doesn’t seem like a friend of the environment: undoing the carbon tax, undoing the cap and trade system will reduce gas prices in the province by 10 cents a litre, so one would think that gas consumption will only go up. What is the plan to battle climate change in this province?
MPP Lisa MacLeod: Yeah, well Doug’s acknowledged that climate change is manmade, but we reject the notion that a carbon tax imposed by Ottawa, the federal government—I have to be careful there because I live in Ottawa—but imposed by the federal government and that goes into only general revenues, not into specific environmental programs, does nothing to help clean up the environment. What we have said instead is we’ll have stiffer penalties for polluters. We’ll make sure that those who are polluting are held to account, and that’s not always the case right now. So, we do have mechanisms in Ontario in order to do that and that’s what we’d like to do. In terms of the cost of gas—
Mike Le Couteur: But what about people who are saying that’s not hard enough, that’s not tough enough on the environment because we’re in a day and age where we need to be acting on this.
MPP Lisa MacLeod: Well look, this is a Liberal government that brought in the single largest sales tax increase of Ontario’s history with the HST.
Mike Le Couteur: I know, but I’m talking about the environment, though. What about your plan on the environment?
MPP Lisa MacLeod: Yeah, but I just want to finish with this point because I think it’s important to see where the money goes. Rather than it going into environmental programs, it’s the Liberals were doing exactly what they did with the health tax which was the single largest income tax increase in the province’s history. It didn’t go into hospitals, it went into general revenues. The same thing with the HST, it went into general revenues. The same thing happened with their cap and trade program and the carbon tax, going into general revenues. Kathleen Wynne admitted herself that the carbon tax or the cap and trade program in Ontario was actually paying for political institutions rather than fighting for a cleaner environment. So, we’ve been pretty clear, we’re going to stiffen the penalties. We’ll have more to say on it in the days and weeks ahead, as we have somebody appointed to the environment ministry. But these are early days and we remain committed to making sure that life is more affordable for the people of Ontario.
Mike Le Couteur: Okay, thank you very much, Lisa MacLeod.
MPP Lisa MacLeod: Thank you.
Mike Le Couteur: Unfortunately, we have to go. Lisa MacLeod, MPP for the Progressive Conservative Party.
Up next: Singapore summit. President Trump is set to meet with North Korean Leader Kim Jong-Un on Tuesday. Are expectations too high?
President Donald Trump: “I think I’m very well-prepared. I don’t think I have to prepare very much. It’s about attitude. It’s about willingness to get things done but I think I’ve been preparing for this summit for a long time, as has the other side.”
Mike Le Couteur: Welcome back. That was President Trump late last week on his upcoming trip to Singapore when he will meet with the North Korean Leader Kim Jong-Un. Now this is the first time a sitting American president has met with the North Korean leader and a lot is on the table as the leaders set the stage for talks to denuclearize the Korean Peninsula. Expectations are high but, are they too high?
Joining me now from Washington is someone who has sat at the negotiating table with the North Koreans, Mickey Bergman Vice President of the Richardson Center. Mr. Bergman thanks very much for joining us.
Mickey Bergman: Thank you for having me.
Mike Le Couteur: Well you’ve successfully negotiated the release of prisoners from North Korea. But back in March, you said, “You understand the thinking process in North Korea better than you understand how the White House comes to decisions.” What did you mean by that? And also, how frightening is that just days before this summit in Singapore?
Mickey Bergman: Well it is part of—it was frightening for me to realize it. I think what I said and what I meant by it and it still stands true, the North Koreans and the North Korean leader, even though we like to call them irrational and crazy, are extremely rational people, all the way from the leader down to the whole chain of command over there. The way they view reality is a little different than ours, so what goes into their calculation is different than what we assume but the calculation is very, very rational and it’s very, very processed, something that is a little harder to claim about the White House these days.
Mike Le Couteur: Okay, so we know what the West wants and what the White House is looking for in all of this. What does Kim Jong-Un want from this meeting?
Mickey Bergman: Well I think, first of all, Kim Jong-Un already got a lot of what he wanted before the meeting even took place. And it’s important to realize even though it feels like a roller coaster to all of us: we have a meeting, we don’t have a meeting. He’s a little rocket man or he’s a respectable leader. All that roller coaster, if we tune that out of our ears, the fundamentals have not changed in decades. The North Korean proposal that is on the table now is the same one that they had before in front of previous American presidents and they always wanted to meet the American president. As you mentioned before, former American presidents said no. They said we will meet if we have a deal. President Clinton sent Secretary Albright over there, but the president himself in the past has never accepted it. Donald Trump did. Now I have to admit, personally, I think it’s a good idea to meet. I think that establishing the personal relations between the two of them is going to be very, very significant. What I worry about is whether Donald Trump actually is willing to sit and dive into the substance of this because the North Koreans have not moved an inch in what the proposition they have on the table is.
Mike Le Couteur: And to that end, your colleague and well-known North Korean negotiator, Governor Bill Richardson has said people in North Korean always think that they are right. Now is that a recipe for disaster ahead of this meeting with a president who also thinks that he’s always right?
Mickey Bergman: Well it depends. It depends on what the goals of the two leaders are. I think the summit will be successful in all likelihood because both leaders need it. On Kim’s side, he’s proven to his people, look, I’ve achieved nuclear deterrents against the United States and against the rest of the world, and this is why I have the president of the United States willing to meet with me. If you want evidence of what happened to him, he met with the South Korean leader twice. He met with the Chinese premier twice. The Russian prime minister came to visit. He is now on the global stage as a leader of a nuclear power, and not only that, in the position of the peace seeker. So Kim Jong-Un is very, very happy already with the results that he’s gotten.
Now, President Trump, on his end, has showed multiple times how he’s passionate about this. He needs this, whether it’s a noble price or whether it’s a president of doing something that no other president has done. Now, all these are good, in my opinion, because let them meet. The question again, becomes after that meeting, and I can talk to you about if we think about what a successful meeting with be for both of these leaders, it will have three components: 1) A lofty joint statement about denuclearization of the peninsula and the world. Whatever it is, it will be a feel good one. It will have no legs, no timeframe, no mechanism for implementation but it’s important. It establishes an intention. 2) Is the key one. It’s going to be that one of substance. They will announce, probably, hopefully, two or three year length of process or framed negotiations that President Trump can call, and probably will call, denuclearization. In fact, it will be freeze for freeze to begin with and potentially a medium term, long term relation—agreement that the two sides can agree. But, make no mistake about it. The North Koreans are not going to disarm their existing arsenal. They might be willing to give up the further proliferation, a development testing of nuclear and ballistic missiles but they will not disarm. This is the reason why they believe the president has met with them, having that nuclear capability. And the third part of a successful summit will be tangible humanitarian gestures of goodwill, whether it’s unification of families or what I hope to do, to have—I work with Governor Richardson, is the return of American remains. There are 5,300 sets of remains of American soldiers still in North Korea from the war.
Mike Le Couteur: We have very little time now, so I just wanted to ask if you had one piece of advice to give President Trump ahead of this meeting. What would it be?
Mickey Bergman: I would say, and it’s hard, be patient. The formal parts of these negotiations are always hard. Therefore, for the record, let that roll over your head. Say your peace, but establish a relationship out of the formalities. Go on a walk. Go have a meal. Go play golf if that’s something that Kim might be willing to do. Establish that personal relation. That’s where the deals will be made.
Mike Le Couteur: Okay, thanks very much for that. Mickey Bergman from the Richardson Center, joining us from Washington.
Mike Le Couteur: And that is our show for today. Thank you so much for joining us. I’m Mike Le Couteur. Have yourself a great week.
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