FidelityConnects: New world order: What does it mean for Canada and investors?
Join us for a timely conversation with Richard Fadden, Former Canadian National Security Advisor to Prime Ministers, about the New World Order and geopolitical risks facing Canada. Richard will also explore opportunities for the Canadian economy, shifting global trade and developments in Canada’s political relationships and alliances.
Transcript
00:08.441 --> 00:10.176
Hello and welcome to Fidelity Connects.
00:10.176 --> 00:13.780
I'm Pamela Ritchie. Canada finds itself at a pinnacle.
00:13.780 --> 00:18.184
Trade, defence, industrial capacity, intelligence sharing,
00:18.184 --> 00:22.555
and national unity, each of these essential pillars must align with
00:22.555 --> 00:26.659
a strong and forward-looking national defence strategy.
00:26.659 --> 00:28.728
Time really is of the essence.
00:28.728 --> 00:32.899
With the Prime Minister referring in his Davos remarks to a new world order
00:32.899 --> 00:37.137
taking shape the question becomes how does Canada bring together
00:37.137 --> 00:41.341
its human, technological and geographic strengths to move
00:41.341 --> 00:45.745
confidently into this next era with a unified crystal clear
00:45.745 --> 00:50.016
vision. What might today's industrial shifts mean for Canada
00:50.016 --> 00:54.454
operating in a transformed global landscape, navigating new diplomatic
00:54.454 --> 00:58.391
challenges abroad while still striving for cohesion at
00:58.391 --> 01:02.429
home. Our guest today has rolled up his sleeves tackling these issues
01:02.429 --> 01:06.800
for decades as head of Canada's intelligence agency, overseeing
01:06.800 --> 01:10.970
the national security apparatus, serving as deputy minister across
01:10.970 --> 01:15.041
several federal departments, and acting as a key advisor to both
01:15.041 --> 01:18.378
prime ministers and to the civil service leadership.
01:18.378 --> 01:22.782
We welcome Dick Fadden to the studio today who is currently senior advisor
01:22.782 --> 01:24.617
at Capitol Hill Group.
01:24.617 --> 01:28.121
A reminder that today's webcast features live French audio interpretation.
01:28.121 --> 01:31.124
Please join us in either of our official languages.
01:31.124 --> 01:33.593
A warm welcome to you, Dick. Thank you very much for being here.
01:33.593 --> 01:34.727
Thank you. It's great to be with you.
01:34.727 --> 01:37.864
Absolutely delighted us by showing up here today.
01:37.864 --> 01:40.934
You have a storied career resume.
01:40.934 --> 01:44.571
You have met with everyone that we've ever read about and lots of people that
01:44.571 --> 01:48.708
we haven't read about. Tell us a little bit about how you're interpreting this
01:48.708 --> 01:51.744
moment in time for our country.
01:51.744 --> 01:54.614
I think we're coming to a turning point, to use a phrase that the Prime
01:54.614 --> 01:56.483
Minister hasn't used yet.
01:56.483 --> 02:00.487
Turning point, though, implies that not absolutely everything from the past
02:00.487 --> 02:02.755
needs to be thrown away.
02:02.755 --> 02:06.860
I do think the Prime Minster in his Davos speech hit the mark
02:06.860 --> 02:10.096
when he said that we are facing a brave new world.
02:10.096 --> 02:14.033
It's not just because of the United States, which are causing a
02:14.033 --> 02:18.505
great deal of instability in the world, but China is increasingly assertive,
02:18.505 --> 02:22.075
in particular in Asia and a few other parts of the world, Russia is causing
02:22.075 --> 02:24.444
problems in many places.
02:24.444 --> 02:28.014
We tend to forget about terrorism. It remains a significant issue in large
02:28.014 --> 02:29.883
parts of the world.
02:29.883 --> 02:33.953
Fundamentally, it's left Canada for the first time relatively isolated
02:33.953 --> 02:37.624
because we're not under the umbrella of the United States which, whether we
02:37.624 --> 02:41.728
like to admit it or not, I think allowed us to not make a lot of decisions
02:41.728 --> 02:45.632
because we were so closely attuned to the US we sort of followed along.
02:45.632 --> 02:50.103
We did take some independent paths in the past
02:50.103 --> 02:53.873
but I think now we're going to have to try and decide what kind of country we
02:53.873 --> 02:58.344
want to be. How are we going to prioritize that path
02:58.344 --> 03:02.448
and forge new relationships, both with other countries, international
03:02.448 --> 03:06.386
institutions but I also think forge a new relationship with the United
03:06.386 --> 03:09.956
States because whether we like it or not we cannot ignore the United States.
03:09.956 --> 03:14.294
No, certainly. We need to know what the United States'
03:14.294 --> 03:18.598
goals, end game plan is first before we
03:18.598 --> 03:22.635
either create a plan for ourselves that somewhat reacts
03:22.635 --> 03:26.406
but also offsets and complements.
03:26.406 --> 03:28.341
I think that's right.
03:28.341 --> 03:31.644
Having said that, I don't think we can do that with absolute certainty because
03:31.644 --> 03:35.748
the current US administration is rather inclined to shifts in
03:35.748 --> 03:37.984
policy in the very short term.
03:37.984 --> 03:41.421
I think we have to accommodate the idea that there are a number of scenarios
03:41.421 --> 03:45.525
that are possible and we have to build those scenarios so that we're ready to
03:45.525 --> 03:49.529
react to them. Having said that, I don't
03:49.529 --> 03:53.533
care if it's Mr. Trump or somebody else, we have stuff that the
03:53.533 --> 03:57.604
US wants both geopolitically and practically and we have stuff that
03:57.604 --> 04:01.040
we want from them geopolitically and practically.
04:01.040 --> 04:05.378
We're going to have to find some way of working amidst all of this.
04:05.378 --> 04:09.182
I think, if anything, the Prime Minister and the government are going to have
04:09.182 --> 04:13.119
to be fleet of foot and fleet of mind because instability, I
04:13.119 --> 04:16.422
think, is certainly with us for 2026.
04:16.422 --> 04:19.525
You mentioned that for a long time we didn't need to think about some of these
04:19.525 --> 04:23.329
priorities and to prioritize because we essentially followed American foreign
04:23.329 --> 04:28.034
policy which was neither good nor bad, necessarily, it just was.
04:28.034 --> 04:32.105
I wonder if one of the things that comes from this
04:32.105 --> 04:35.942
new moment where we are not protected by the British Empire, which we were
04:35.942 --> 04:40.647
leading up to the Second World War, for instance, again,
04:40.647 --> 04:44.917
tell us about this isolation because it does sound a little bit frightening.
04:44.917 --> 04:47.787
Do we go back to pre-something?
04:47.787 --> 04:51.758
It's a very good question. I think we have always been under somebody's
04:51.758 --> 04:54.160
umbrella.
04:54.160 --> 04:58.164
In both the United States case and the British case they had a world view.
04:58.164 --> 05:01.034
To some degree we shared that world view.
05:01.034 --> 05:05.038
I think today the United State is inclining back to a somewhat different
05:05.038 --> 05:10.410
era where they were more inward-looking than they have been of late.
05:10.410 --> 05:14.547
I'm not a great, keen supporter of many of Mr.
05:14.547 --> 05:17.984
Trump's policies but I think we have to be honest.
05:17.984 --> 05:22.088
This trend towards inward-looking and quasi-isolation started
05:22.088 --> 05:25.325
a while ago. Mr. Biden did a bit of it.
05:25.325 --> 05:27.760
Certainly, the Bushes did and Obama.
05:27.760 --> 05:30.997
They have been criticizing us, for example, about not pulling our own weight on
05:30.997 --> 05:33.933
defence for quite a number of decades.
05:33.933 --> 05:37.937
I think it's worrisome, in particular because we don't know how
05:37.937 --> 05:40.039
far back they want to go.
05:40.039 --> 05:43.476
I don't think it's practical from the United States' perspective for them to
05:43.476 --> 05:45.478
isolate themselves entirely.
05:45.478 --> 05:49.615
There are some stuff from around the world that they absolutely need, including
05:49.615 --> 05:53.820
from Canada, and also, if they are going to take advantage
05:53.820 --> 05:57.924
of what they ... the United States president is currently saying he wants to
05:57.924 --> 06:01.127
bring peace to the world. He cannot do it alone.
06:01.127 --> 06:04.564
One of the strengths of the United States for decades has been their ability to
06:04.564 --> 06:08.735
leverage alliances. Well, those alliances are rupturing because we don't
06:08.735 --> 06:12.739
quite know where Mr. Trump is going and the extent to which he will
06:12.739 --> 06:16.376
stick with a particular path or policy.
06:16.376 --> 06:20.480
Is it fair to think that Mr. Trump in this spheres of influence
06:20.480 --> 06:24.650
sort of theory of things definitely wants fortress North America and
06:24.650 --> 06:29.355
South America or the Americas to be under
06:29.355 --> 06:32.525
American hegemonic control? I mean, that just sort of seems logical
06:32.525 --> 06:33.659
geographically.
06:33.659 --> 06:37.697
No, I think it does. I mean, having said that, I don't think he wants to take
06:37.697 --> 06:41.834
over any countries but he wants a
06:41.834 --> 06:43.736
continent that--
06:43.736 --> 06:45.104
Phew, I'm glad to hear that.
06:45.104 --> 06:49.375
--broadly speaking is responsive to the United States geopolitical
06:49.375 --> 06:53.446
view of the world, which currently means pushing back a bit on China,
06:53.446 --> 06:58.418
worrying about Russia and a few other things.
06:58.418 --> 07:02.455
In a strange sort of way it's similar to the Chinese view of the world.
07:02.455 --> 07:05.391
They like influence but they don't necessarily want to take over other
07:05.391 --> 07:08.728
countries, possible exception being Taiwan.
07:08.728 --> 07:12.498
The Russians, on the other hand, if we go back in their history, their view of
07:12.498 --> 07:15.468
hegemonic control is taking over.
07:15.468 --> 07:19.439
I don't think he's about to invade Canada or Mexico
07:19.439 --> 07:23.543
but there are any number of levers that he can
07:23.543 --> 07:28.481
utilize to bring to bear United States pressure, United States influence.
07:28.481 --> 07:32.652
I think that's bad. I mean, the basis of
07:32.652 --> 07:36.589
national sovereignty is that countries should be able to make their own choice.
07:36.589 --> 07:40.493
Mr. Trump has recently said that he's going to heavily tariff any country that
07:40.493 --> 07:43.396
sells oil to Cuba.
07:43.396 --> 07:47.500
I don't think that is a good thing. It's clearly a violation of how
07:47.500 --> 07:51.037
we've been thinking about international law for many, many decades.
07:51.037 --> 07:55.274
The people of Cuba don't deserve this nor do other countries
07:55.274 --> 07:59.545
deserve to be told they can't sell oil to Cuba, in particular.
07:59.545 --> 08:02.982
Now, I happen to agree that we shouldn't sell oil to Iran because there are
08:02.982 --> 08:08.888
United Nations sanctions but there's a judgement to be made in every case
08:08.888 --> 08:12.892
and hegemonic control, hegemonic influence I think may be
08:12.892 --> 08:16.829
the better way of putting it, but he sure as heck
08:16.829 --> 08:20.500
wants to have a lot of influence and he wants to make sure that no country goes
08:20.500 --> 08:23.636
off entirely on its own.
08:23.636 --> 08:28.174
We, Canada, have been worried over the years, the last two decades, about
08:28.174 --> 08:30.810
Chinese and Russian influence in Latin America.
08:30.810 --> 08:33.412
That's not something to be neglected.
08:33.412 --> 08:36.249
No, absolutely. You can see that that's moving very quickly.
08:36.249 --> 08:40.486
I mean, you've seen Scott Bessent, the head of Treasury, very
08:40.520 --> 08:44.290
involved with Argentina and making sure that that has come under the influence
08:44.290 --> 08:49.362
and, you know, debts are paid, basically, by American backing and so on.
08:49.362 --> 08:54.000
Let's come back to the Davos speech but really how it worked
08:54.000 --> 08:58.304
... I mean, I would say it was an opening salvo to the CUSMA negotiations.
08:58.304 --> 09:02.241
I don't know if you'd go that far but it seemed like a bit of
09:02.241 --> 09:06.245
a standing up for yourself as you march into what looks like
09:06.245 --> 09:08.881
it's going to be a very difficult negotiation coming up in July.
09:08.881 --> 09:12.051
I think it had a two-pronged plug, if I can put it that way.
09:12.051 --> 09:16.289
I do think at one level it was signalling to the
09:16.289 --> 09:20.226
negotiating team in the United States that when we go into CUSMA we're going
09:20.226 --> 09:24.163
in with our eyes open, recognizing that the world has changed
09:24.163 --> 09:28.167
and that we are diversifying, we are doing a whole bunch of things so
09:28.167 --> 09:33.105
don't assume that we're just going to act like deer in headlights.
09:33.105 --> 09:37.610
The other prong would be I think he was signalling to the rest of the world
09:37.610 --> 09:41.247
the world is changing, we need to make different kinds of ties, some
09:41.247 --> 09:45.318
geopolitical, some trade, some economic, some people-based.
09:45.318 --> 09:49.355
I'd say there were two equally important but
09:49.355 --> 09:53.926
in both cases they were, to use your expression, I guess launching
09:53.926 --> 09:59.265
pads to two totally different geopolitical
09:59.265 --> 10:03.869
realities that we're going to have to deal with this year.
10:03.869 --> 10:07.807
It's sort of becoming a cohesive country of industries, of
10:07.807 --> 10:11.944
companies. For instance, you've worked over the years through your capacity
10:11.944 --> 10:17.049
with CSIS on various aspects of foreign intervention, interference.
10:17.049 --> 10:21.287
If you look back at Huawei which was the telecom operator
10:21.287 --> 10:26.025
for China and we through US relations
10:26.025 --> 10:30.129
and so on decided that we were not going to play that game and going to make
10:30.129 --> 10:34.133
sure that Chinese technology of that calibre was not
10:34.133 --> 10:38.804
in Canada and that was sort of how that all worked.
10:38.804 --> 10:42.875
Just speak to the difficulty of Canada being on its own, trying
10:42.875 --> 10:47.179
to broach its own course and actually genuinely having all
10:47.179 --> 10:51.584
of these different international voices in their heads.
10:51.584 --> 10:55.521
How possibly could we do it to
10:55.521 --> 10:59.325
stand on our own or have alliances on our terms?
10:59.325 --> 11:02.161
That's the $64,000 question, I think.
11:02.161 --> 11:06.599
Let me back up just a tiny little bit and say, if you have a
11:06.599 --> 11:10.670
spectrum of relations I think there's a chunk of these at one level
11:10.670 --> 11:14.106
where we actually are on the same wavelength as the United States.
11:14.106 --> 11:18.144
We should not be saying that we're rejecting everything the US government
11:18.144 --> 11:22.314
is standing for. I think people in Canada are saying that
11:22.314 --> 11:25.785
the United State's administration is currently the personification of evil,
11:25.785 --> 11:29.188
that's not true. There are a lot of things I disagree with both internally and
11:29.188 --> 11:33.259
externally but there's a whole bunch of geopolitical stuff we
11:33.259 --> 11:36.429
have to share with them, for example, in the defence of North America.
11:36.429 --> 11:40.433
We're now spending billions of dollars on an over-the-horizon radar up
11:40.433 --> 11:43.202
north and we have to do a bunch of other things.
11:43.202 --> 11:47.039
There ain't much disagreement there except on details.
11:47.039 --> 11:51.310
Same thing with the acquisition of a fighter, the F-35
11:51.310 --> 11:53.045
or the Gripen.
11:53.045 --> 11:57.149
I think they're holding off deciding what to do as a bargaining tool for CUSMA,
11:57.149 --> 12:00.386
to go back to your earlier point.
12:00.386 --> 12:04.657
There's a whole raft of other areas on my spectrum which we
12:04.657 --> 12:08.828
probably share with NATO, with the Baltic
12:08.828 --> 12:10.896
countries and the EU.
12:10.896 --> 12:14.366
I think there we're going to have to push a little bit harder because there are
12:14.366 --> 12:16.235
issues of disagreement with the United States.
12:16.235 --> 12:20.072
On the other hand, Europe is beginning to push back as well.
12:20.072 --> 12:24.477
There is a limit to how much I think the United States can actually force
12:24.477 --> 12:28.547
Europe to do something they really, really don't want to do because it's
12:28.547 --> 12:30.416
not in their mutual interest.
12:30.416 --> 12:33.285
There's a raft of other areas where we might want to take a slightly different
12:33.285 --> 12:34.286
view.
12:34.286 --> 12:35.254
Like the Middle East?
12:35.254 --> 12:39.125
The Middle East is one. China, we'd like to be slightly more open to China.
12:39.125 --> 12:42.294
The PM went to China, I thought it was the right thing to do.
12:42.294 --> 12:46.599
People who are worried that we want a strategic relationship with China
12:46.599 --> 12:48.868
I think are dreaming in technicolour. There is no way at this point...
12:48.868 --> 12:50.102
Strategic meaning?
12:50.102 --> 12:53.806
Meaning an all-encompassing relationship as opposed to one that is focused on
12:53.806 --> 12:57.309
trade or tourism or something else.
12:57.309 --> 13:01.280
We have a strategic relationship with England, we have a strategy relationship
13:01.280 --> 13:05.317
with Australia. It would be a big step for anybody to
13:05.317 --> 13:09.555
honestly think we want a strategic relationship with China,
13:09.555 --> 13:13.559
but we do want to be a little closer with China than Trump wants us to be.
13:13.559 --> 13:16.562
I don't know what the current Canadian government's thinking is but we've
13:16.562 --> 13:19.565
always tried to be supportive of Cuba, for example.
13:19.565 --> 13:22.802
Now, I don't think we're going to load up tankers and take them to Cuba but I'd
13:22.802 --> 13:26.839
like to think we might gently push back and say, this should not add to the
13:26.839 --> 13:29.675
suffering of the Cuban people.
13:29.675 --> 13:33.646
So we're going to have to be, to use a medical term, and I don't mean
13:33.646 --> 13:36.081
this in a nasty way, schizophrenic.
13:36.081 --> 13:40.352
We're going have to hold a whole bunch of things in our mind at the same time
13:40.352 --> 13:44.356
and be prepared I think also to bring the country along.
13:44.356 --> 13:48.861
Everybody in Canada, by and large, likes Mr. Carney's speech.
13:48.861 --> 13:52.932
Well, some people think that it actually alienates the United States and that's
13:52.932 --> 13:53.899
not good for trade.
13:53.899 --> 13:58.103
I think it did. I think I did to some degree and I think it's almost impossible
13:58.103 --> 14:01.941
to not alienate the United States today unless you're being flattering.
14:01.941 --> 14:06.412
I don't think that is a sustainable view.
14:06.412 --> 14:10.683
The United States these days seem to be very keen on receiving kudos
14:10.683 --> 14:14.687
across the board. I think they deserve some on a whole raft of things but we
14:14.687 --> 14:18.057
just don't agree on some of the things they're doing.
14:18.090 --> 14:20.659
It's a balancing act.
14:20.659 --> 14:24.830
I think Carney's speech overall probably was useful,
14:24.830 --> 14:28.834
to go back to your question, as part of the package of tools that
14:28.834 --> 14:32.638
we have available to deal with CUSMA.
14:32.638 --> 14:35.674
We'll see how CUSMA comes out. I don't think anybody knows right now.
14:35.674 --> 14:39.712
Do we in advance of that, this is sort of a timeline question
14:39.712 --> 14:43.649
but the idea of a cohesive national security,
14:43.649 --> 14:47.820
I don't know if you've put defence in there as well but that the industries,
14:47.820 --> 14:53.425
the actual companies themselves and the government funding to help with growth,
14:53.425 --> 14:56.395
your term was joined at the hip. Thet were all moving in the same direction.
14:56.395 --> 14:59.031
Do we have to wait till the end of the trade negotiations to figure out what
14:59.031 --> 15:02.067
that is or should we actually signal what our identity is first?
15:02.067 --> 15:05.504
Oh, I think we have to start now because it will help us in the negotiations.
15:05.504 --> 15:07.406
Are we going to get there before July?
15:07.406 --> 15:11.043
That's a good question. I think a lot of negotiations take a while.
15:11.043 --> 15:15.014
You can start off with, I'm making a joke but
15:15.014 --> 15:16.882
arguing about the shape of the table.
15:16.882 --> 15:20.352
It takes a while to get going.
15:20.352 --> 15:24.523
When I say worry about national security I really think about our capacity to
15:24.523 --> 15:28.027
protect our national sovereignty, which means our capacity to make our own
15:28.027 --> 15:32.064
decisions. As a middle power I think that if
15:32.064 --> 15:36.635
we combine and integrate and mutually reinforce
15:36.635 --> 15:41.307
foreign defence, economic trade, security,
15:41.307 --> 15:45.544
border control, and a few other things into a coherent whole
15:45.544 --> 15:49.448
it reinforces our ability not just to deal with CUSMA but to deal with the
15:49.448 --> 15:53.485
world. For example, we have an Indo-Pacific strategy
15:53.485 --> 15:55.521
which Mr. Trudeau's government developed.
15:55.521 --> 15:59.692
I think it's a pretty decent strategy although it required
15:59.692 --> 16:02.061
more resources than I think it got in the end.
16:02.061 --> 16:05.831
We developed this in the absence of a broader foreign policy.
16:05.831 --> 16:07.466
That's interesting. So it was more piecemeal.
16:07.466 --> 16:11.503
Yeah, and I don't think in this world at the strategic level you can
16:11.503 --> 16:14.940
go piecemeal. I think you have to be as coherent as you can, particularly
16:14.940 --> 16:16.709
because we're not a superpower.
16:16.709 --> 16:21.080
That's really interesting because at the same time it's the exact opposite,
16:21.080 --> 16:25.384
how can it be coherent when it's suddenly going to be diversifying across,
16:25.384 --> 16:28.187
I mean, many handfuls of nations, it sounds like.
16:28.220 --> 16:32.191
It is not going to America first in terms of a trade, or
16:32.191 --> 16:36.395
it might not be so, in fact, it needs to hold so many other
16:36.395 --> 16:39.765
things at the same time, meaning countries and alliances and friendships,
16:39.765 --> 16:42.968
essentially. I think he talked about it as a web, Mr. Carney.
16:42.968 --> 16:47.673
I think what we need to do, when I'm talking about a coherent set of policies
16:47.673 --> 16:52.144
it's that coherent set up prioritizations that will enable us to say,
16:52.144 --> 16:56.181
well, on foreign policy we're going to pick three or four countries in Asia,
16:56.181 --> 17:00.419
a couple in South America and maybe one or two
17:00.419 --> 17:03.322
in the Middle East, which we should not ignore.
17:03.322 --> 17:05.758
I think if in the absence of that...
17:05.758 --> 17:06.158
And Europe.
17:06.158 --> 17:08.027
And Europe, of course, sorry.
17:08.027 --> 17:12.664
In the absence of a coherent
17:12.664 --> 17:16.769
worldview, for lack of a better way, it doesn't have to be 6,000 pages
17:16.769 --> 17:21.340
but it needs to be a coherent view. You then start extracting, well, on defence
17:21.340 --> 17:25.344
we really, really should, for example, develop our relationships with the
17:25.344 --> 17:29.081
Nordic countries. They're worried about Russia, they're very developed from a
17:29.081 --> 17:30.849
defence sense.
17:30.849 --> 17:32.651
From trade we might say, well, maybe it's Indonesia.
17:32.651 --> 17:37.423
You pick and choose and prioritize the
17:37.423 --> 17:41.026
extent to which you want to deal.
17:41.026 --> 17:43.962
To go back to the beginnings of your question, I think this is something the
17:43.962 --> 17:48.100
government can do but we are not going to be successful in developing
17:48.100 --> 17:52.037
a fully effective national security policy if the
17:52.037 --> 17:56.175
government isn't able to bring along parliament, the private sector and
17:56.175 --> 17:58.310
civil society.
17:58.310 --> 18:00.913
Government can do one heck of a lot in order to promote trade.
18:00.913 --> 18:04.049
They can have trade deals, they can have tax packages, they could do a whole
18:04.049 --> 18:07.986
bunch things but if the private sector isn't saying, yes,
18:07.986 --> 18:12.124
I see an opportunity here and pursue it, it's all for naught.
18:12.124 --> 18:15.327
It has to be, I think, a symbiotic relationship.
18:15.327 --> 18:19.031
It exists in some sectors of the economy, I'm not a trade expert but it exists
18:19.031 --> 18:22.367
in some of the sectors of economy. In others, not so much.
18:22.367 --> 18:26.205
We need to build that if we're going to develop that relative independence you
18:26.205 --> 18:27.239
were asking about.
18:27.239 --> 18:31.243
It comes out of the ground, it then possibly gets refined, whatever it is, then
18:31.243 --> 18:33.979
gets used to build ...
18:33.979 --> 18:37.049
if it's copper it's going to get used in pretty much everything but something
18:37.049 --> 18:42.287
technological, if it's steel maybe it goes to cars, maybe we develop
18:42.287 --> 18:46.391
... there have been various discussions about EVs, this is part of the
18:46.391 --> 18:50.362
trade talks that Mr. Carney held with China, we're going to buy a
18:50.362 --> 18:54.933
certain number, 49,000 EVs from China, sell them.
18:54.933 --> 18:58.403
In one point of view, I think it was in the Globe and Mail, said to see whether
18:58.403 --> 19:02.508
Canadians buy them up, whether we care, whether we want them, and
19:02.508 --> 19:06.178
then maybe we'll build our own if there seems to be an appetite for it.
19:06.178 --> 19:09.481
It's sort of this chain, creating our own supply chains to some extent.
19:09.481 --> 19:12.851
I think that's right but I would argue that we didn't agree to bring in, is it
19:12.851 --> 19:13.552
50,000 Chinese...
19:13.552 --> 19:16.021
I think it was 49, just under 50,000.
19:16.021 --> 19:17.756
I don't think we did it for that reason.
19:17.756 --> 19:20.592
I think we did it because if we didn't agree to that we weren't going to get an
19:20.592 --> 19:24.496
agreement with the Chinese. The Chinese are very tough bargainers.
19:24.496 --> 19:28.100
They're very good at what they do.
19:28.100 --> 19:33.105
We're letting in some 50,000 EVs and then we're going to have to decide ...
19:33.105 --> 19:36.842
they're going to be, I understand, quite a bit less expensive than some that we
19:36.842 --> 19:40.379
have now so individuals will have to make their own choices.
19:40.379 --> 19:43.749
A lot of people in this country don't have a surfeit of money so some of them
19:43.749 --> 19:47.419
are going to buy Chinese EVs.
19:47.419 --> 19:51.456
If they're all sold, not overnight, but over a period of time we're going to
19:51.490 --> 19:55.427
to decide what to do because this is annoying to
19:55.427 --> 20:00.299
the United States, to put it mildly, that we're sort of breaking the
20:00.299 --> 20:05.804
barrier that they're trying to construct between the West and China.
20:05.804 --> 20:09.808
But then, to your point, there's nothing on this
20:09.808 --> 20:13.111
planet that prevents us from building our own EVs.
20:13.111 --> 20:17.182
If you listen to Ontario's Premier, Doug Ford, he's ready to
20:17.182 --> 20:19.818
do it with his colleagues in the private sector now.
20:19.818 --> 20:21.220
We have...
20:21.220 --> 20:22.888
With the Ring of Fire and it becomes the whole chain.
20:22.888 --> 20:26.758
Yeah, and all of that. We certainly have the technological capacity to produce
20:26.758 --> 20:30.929
all we need and if we're lucky and entrepreneurial eventually start
20:30.929 --> 20:33.332
exporting them elsewhere.
20:33.332 --> 20:37.402
One of the issues I think that we've been sort of dancing around a little
20:37.402 --> 20:41.006
bit in our conversation is that none of this is going to happen tomorrow.
20:41.006 --> 20:43.208
These things take time.
20:43.208 --> 20:47.145
I think part of the issue is going to be for 2026 is
20:47.145 --> 20:51.183
that people are going to have to accept it takes a bit of time and some of
20:51.183 --> 20:53.352
this timeframe may involve a little bit of pain.
20:53.352 --> 20:57.189
I don't think it's going to destroy the country or people in it but you cannot
20:57.189 --> 21:01.293
turn 180 degrees in most sectors
21:01.293 --> 21:04.896
of the economy overnight.
21:04.896 --> 21:09.735
But what you could do is draft up the national security
21:09.735 --> 21:14.306
policy that would then direct actually putting that all together and
21:14.339 --> 21:17.209
have that framework in a shorter period of time.
21:17.209 --> 21:18.176
Absolutely.
21:18.176 --> 21:20.279
Is that happening or...
21:20.279 --> 21:23.315
I'd like to think it is. There's been a rumour around Ottawa for some months
21:23.315 --> 21:27.419
now that they have a national security policy sitting on somebody's
21:27.419 --> 21:31.657
desk somewhere and they haven't been quite relaxed about putting it out, in
21:31.657 --> 21:35.594
part, I think, because of Mr. Trump's ability
21:35.594 --> 21:38.230
to move around very quickly.
21:38.230 --> 21:41.099
I think it's absolutely possible. If the government decided tomorrow, the
21:41.099 --> 21:45.003
federal government decided tomorrow that it wanted a comprehensive national
21:45.003 --> 21:48.240
security policy of the type we were talking about it could be done in six
21:48.240 --> 21:49.941
months. It really could be.
21:49.941 --> 21:53.545
You'd want to have a few consultations with the provinces at a fairly high
21:53.545 --> 21:55.647
level, maybe get a...
21:55.647 --> 21:57.015
Maybe that happened last week.
21:57.015 --> 21:59.951
Could be, I don't know, but it's doable.
21:59.951 --> 22:04.489
I think once you've done that you then decide, you know,
22:04.489 --> 22:08.527
when I was still working I think we identified 13 critical sectors of the
22:08.527 --> 22:10.195
economy for a variety of purposes.
22:10.195 --> 22:11.963
Can you name them? Don't worry.
22:11.963 --> 22:14.266
I'll name some of them because I won't remember them all.
22:14.299 --> 22:18.270
I mean, nuclear was one, electrical, oil, gas, financial,
22:18.270 --> 22:22.541
there are a number of others that were judged to be critical to the country.
22:22.541 --> 22:25.844
Most of them are pretty obvious.
22:25.844 --> 22:28.280
You then say to yourself, if you've got these, I don't know if there's still
22:28.280 --> 22:32.517
13, there may be more, there may be fewer, are we doing enough in those sectors
22:32.517 --> 22:36.555
of the economy to push the national security framework?
22:36.555 --> 22:38.724
I'm making it sound simple. It's not easy.
22:38.724 --> 22:41.960
There's a lot of discussion, there's lot of detailed work.
22:41.960 --> 22:45.897
But it needs to happen and in your view, if I've got this right, it
22:45.897 --> 22:46.998
has not happened.
22:46.998 --> 22:50.969
Not entirely. I mean, over the years the government has, for
22:50.969 --> 22:54.940
example, on the cyber side they've talked to and pushed the financial
22:54.940 --> 22:58.944
sector, the nuclear sector and a few other sectors to do a variety of
22:58.944 --> 23:02.381
things that needed to be done. In some cases they've given them help, in other
23:02.381 --> 23:06.051
cases they haven't. Some sectors are further ahead than others and they
23:06.051 --> 23:09.621
reflect, I think, the priorities that we probably would have today.
23:09.621 --> 23:13.558
Whether it's true across the 13 and beyond those 13, I
23:13.558 --> 23:14.960
honestly don't know.
23:14.960 --> 23:18.163
Hello, investors. We'll be back to the show in just a moment.
23:18.163 --> 23:21.733
I wanted to share that here at Fidelity, we value your opinion.
23:21.733 --> 23:24.035
Please take a few minutes to help us shape the future of Fidelity Connects
23:24.035 --> 23:29.141
podcasts. Complete our listener survey by visiting fidelity.ca/survey,
23:29.141 --> 23:31.109
and you could win one of our branded tumblers.
23:31.109 --> 23:34.179
Periodic draws ending by March 30th, 2026.
23:34.179 --> 23:37.783
And don't forget to listen to Fidelity Connects, the Upside, and French
23:37.783 --> 23:41.820
DialoguesFidelity podcasts available on Apple, Spotify, YouTube, or wherever
23:41.820 --> 23:46.591
else you get your podcasts. Now back to today's show.
23:46.591 --> 23:51.029
Do you think that Canadians are at a point, or will this be part of the policy
23:51.029 --> 23:55.066
... you'll read in Europe that in
23:55.066 --> 23:59.037
order to increase defence spending they've had to sacrifice
23:59.037 --> 24:02.574
an entire other piece of the national budget and in some cases it's almost
24:02.574 --> 24:05.844
shocking, it seems like a very serious ...
24:05.844 --> 24:08.380
it's not an entitlement, it's a big piece of the budget.
24:08.380 --> 24:10.982
Are we ready to do that here?
24:10.982 --> 24:14.352
Well, I think we're going to have to whether we like it or not.
24:14.352 --> 24:18.557
The government has identified a clear policy intention
24:18.557 --> 24:22.894
to reach 5.5% in a few years, some of which is for R&D
24:22.894 --> 24:26.731
which is good for everybody in the private sector and in academe.
24:26.731 --> 24:32.137
We have been underspending in defence for a long, long time.
24:32.137 --> 24:35.507
I was the Deputy Minister of Defence for a little while and we had something
24:35.507 --> 24:37.476
like 19 or 20 billion.
24:37.476 --> 24:40.812
I think we're closer to 30 now and we want to get to 60.
24:40.812 --> 24:43.515
That's a big jump.
24:43.515 --> 24:45.517
How do you spend it all?
24:45.517 --> 24:49.855
You buy 12 submarines, 78
24:49.855 --> 24:53.792
fighters and then, in fact, you have a problem that if you
24:53.792 --> 24:57.829
spend on these huge, huge purchases, which are necessary,
24:57.829 --> 25:01.933
what do you do to provide the Army with trucks and jeeps, or the Air
25:01.933 --> 25:03.702
Force with tactical helicopters?
25:03.702 --> 25:06.304
And raises.
25:06.304 --> 25:10.375
It's a lot of money. If I read the polling correctly I think Canadians have
25:10.375 --> 25:14.846
been prepared to say, yes, we need to do this.
25:14.846 --> 25:18.416
I think one of our challenges is going to be, we have this agreement with
25:18.416 --> 25:22.420
Europe that our companies can sell things in Europe
25:22.420 --> 25:24.122
and vice versa.
25:24.122 --> 25:27.492
Part of the challenge right now is simply the availability of the industrial
25:27.492 --> 25:30.829
capacity to provide defence equipment because the Europeans are going through
25:30.829 --> 25:31.863
exactly the same thing.
25:31.863 --> 25:33.765
The factories aren't built to build the things.
25:33.765 --> 25:36.668
Or if they are they're way too small.
25:36.668 --> 25:40.472
Again, all of this fixable, it really is fixable, it's just it takes a little
25:40.472 --> 25:43.041
while and a little bit of money.
25:43.041 --> 25:46.177
Maybe they should issue, finally, a Eurobond.
25:46.177 --> 25:48.113
Who knows?
25:48.113 --> 25:51.917
It's only taken them ... they find ways not to issue Eurobonds daily but maybe
25:51.917 --> 25:53.385
this is the moment.
25:53.385 --> 25:57.322
Sometimes you take advantage of crises. There are a
25:57.322 --> 26:01.726
lot of things that we might have done over the years and we wait
26:01.726 --> 26:05.764
... to give you a small example, 9-11 seems a long time ago,
26:05.764 --> 26:09.801
we fundamentally changed Canada's national security law because we had to
26:09.801 --> 26:13.104
do it, and we'd been talking about it for 10 years beforehand.
26:13.104 --> 26:17.742
If you have a real crisis, not that I'm arguing that we need crises,
26:17.742 --> 26:21.246
but you should take advantage of every component of that crisis, including
26:21.246 --> 26:25.984
dealing with the crisis, to move a variety of files, and your Eurobond may
26:25.984 --> 26:26.751
well be one of them.
26:26.751 --> 26:30.288
Maybe they'll finally issue one. Probably much of the world would take a look
26:30.288 --> 26:33.658
at buying it. Tell us a little bit something that all of us don't know.
26:33.658 --> 26:36.761
You're speaking to financial advisors and we all are interested.
26:36.761 --> 26:40.699
The Five Eyes are the countries that we
26:40.699 --> 26:44.836
share intelligence and we take their intelligence and it's a tight-knit group.
26:44.836 --> 26:48.807
Does it shift at all with the discussion of alliances
26:48.807 --> 26:52.377
in the world shifting? Are you concerned that it'll be the Four Eyes or
26:52.377 --> 26:53.578
something else?
26:53.578 --> 26:57.582
I think everybody believes and hopes the Five Eyes will survive.
26:57.582 --> 27:03.588
Which are Australia, Canada, New Zealand, UK and the US.
27:03.588 --> 27:09.694
The US being the senior partner followed I think quickly by the United Kingdom.
27:09.694 --> 27:13.665
I think one of the things about the Five Eyes is that it's almost
27:13.665 --> 27:17.602
in our DNA. It developed during World War II and a lot of it I think
27:17.602 --> 27:21.339
will survive virtually anything.
27:21.339 --> 27:24.743
You'll remember some years ago we had a big disagreement with the United States
27:24.743 --> 27:28.079
about Canada joining them on the war in Iraq.
27:28.079 --> 27:31.783
People were really worried whether that would have the impact of breaking the
27:31.783 --> 27:35.820
Five Eyes, and it did not because a lot of the stuff, the sharing that
27:35.820 --> 27:39.557
takes place takes place beneath the political level.
27:39.557 --> 27:42.394
I would argue that aside from that ...
27:42.394 --> 27:44.629
you get all sorts of information from the Five Eyes.
27:44.629 --> 27:48.800
You get economic information, intelligence, political intelligence, the
27:48.800 --> 27:51.970
intelligence that's really important from a nation state's perspective is
27:51.970 --> 27:55.974
threat intelligence. Is there a threat being directed at Canada or Australia or
27:55.974 --> 27:59.978
the United Kingdom, I have great deal of difficulty are
27:59.978 --> 28:03.281
ever declining to give the United States threat information and vice versa.
28:03.281 --> 28:07.285
If that chunk continues as is,
28:07.285 --> 28:11.456
and beneath the political level stuff continues, I mean the UK has
28:11.456 --> 28:14.759
said the other day that they were reluctant to share intelligence with the
28:14.759 --> 28:17.262
Americans because of what they were doing with Venezuela.
28:17.262 --> 28:19.297
I don't think we've got to that point.
28:19.297 --> 28:23.401
I rather think the Five Eyes will survive but there might be
28:23.401 --> 28:26.971
little carve-outs because of particular concerns.
28:26.971 --> 28:28.640
I think it's been very, very valuable.
28:28.640 --> 28:32.644
The other thing people forget, there's that Five Eyes, there's also an
28:32.644 --> 28:35.780
immigration Five Eyes and a customs Five Eyes.
28:35.780 --> 28:39.784
They really do serve everybody's benefit not just the United States.
28:39.784 --> 28:43.888
In the case of the traditional Five Eyes that you were talking about,
28:43.888 --> 28:45.957
the United States is the major contributor.
28:45.957 --> 28:50.028
On customs and immigrations and things like that it's more
28:50.028 --> 28:52.397
of an equal sharing of information from around the world.
28:52.397 --> 28:56.801
I hope, I think there's a general agreement that it's worthwhile.
28:56.801 --> 29:00.805
So here's a question coming in about AUKUS which is the intelligence
29:00.805 --> 29:04.309
organization. This is back during the pandemic.
29:04.309 --> 29:06.077
Why was Canada not invited?
29:06.077 --> 29:08.213
Because we didn't have anything to offer, basically?
29:08.213 --> 29:10.348
We seemed to take that as a blow.
29:10.348 --> 29:15.386
Well, I think it was a realistic assessment of where the then government was.
29:15.386 --> 29:20.058
Mr. Trudeau's government made a number of significant investments in defence
29:20.058 --> 29:24.229
but, generally speaking, I don't think his government accorded
29:24.229 --> 29:27.198
defence a great deal of priority.
29:27.198 --> 29:29.134
Maybe because it didn't have to.
29:29.134 --> 29:32.403
Possibly, you may well be right, but in the end they didn't.
29:32.403 --> 29:36.608
It would have required us to invest in a variety of things that
29:36.608 --> 29:40.211
we probably didn't want to spend the money on.
29:40.211 --> 29:43.114
I think in the end ...
29:43.114 --> 29:47.218
people were going on about the Australians
29:47.218 --> 29:48.920
acquiring nuclear-powered submarines.
29:48.920 --> 29:52.657
I don't think we're going to go that route.
29:52.657 --> 29:55.527
We seem to have decided as a country this is not a good thing.
29:55.527 --> 29:57.395
That sort of took over everything.
29:57.395 --> 30:00.298
But there's a component to that agreement dealing with R&D.
30:00.298 --> 30:05.136
I don't see why we couldn't deal with R&D in a few other specialized area.
30:05.136 --> 30:07.872
I wasn't insulted when this happened, it would have been nice to have been
30:07.872 --> 30:11.976
invited, but honestly, at that time our government wasn't very
30:11.976 --> 30:14.512
keen on that kind of defence activity.
30:14.512 --> 30:17.382
I think our allies read that.
30:17.382 --> 30:20.885
And now would it be changed?
30:20.885 --> 30:24.022
I was going to ask you actually broadly about sort of the international
30:24.022 --> 30:28.626
organizations that may shift around, I mean, the WTO, these
30:28.626 --> 30:32.764
organizations have piles of cash in them that maybe even if
30:32.764 --> 30:36.534
hegemonic powers change around they still want to keep that as an organization,
30:36.534 --> 30:40.305
and maybe some they want to throw right out the window.
30:40.305 --> 30:43.007
We could talk about AUKUS and then sort of spread out from there.
30:43.007 --> 30:44.475
Do you think we're more interested in it now?
30:44.509 --> 30:47.979
I think we would be because I think we've indicated clearly we want our own
30:47.979 --> 30:52.083
defence policy and we're prepared to spend the money.
30:52.083 --> 30:56.054
Now, in order for us to join that trilateral group we would need
30:56.054 --> 31:00.124
the United States agreement. I don't see why they would not agree,
31:00.124 --> 31:04.562
off the top of my head, but you never know.
31:04.562 --> 31:08.466
We've changed our attitude towards defence, I really think we have.
31:08.466 --> 31:12.403
By signalling the amount of money that we're spared to spend we've been putting
31:12.403 --> 31:15.907
our, what's the expression, our money where our mouths are, is.
31:15.907 --> 31:19.611
I think that message is there so I think we would be more likely to be invited
31:19.611 --> 31:23.548
today. But then we're going to have to ask ourselves, going back
31:23.548 --> 31:28.052
to our earlier conversation and our prioritization exercise, do we want to do
31:28.052 --> 31:32.223
this particular alliance or do we want to really ratchet up
31:32.223 --> 31:34.726
NATO or do we want to do something else?
31:34.726 --> 31:38.763
Is the glue for NATO going forward in 2026 and beyond
31:38.763 --> 31:40.198
the Arctic?
31:40.198 --> 31:43.034
I think it's the Arctic/Russia.
31:43.034 --> 31:43.935
Which is the Arctic.
31:43.935 --> 31:45.670
Yes, absolutely.
31:45.670 --> 31:51.943
We tend to forget that our issue with the Arctic is that it's a border.
31:51.943 --> 31:55.413
The Nordic countries have all reinstated conscription because they're so
31:55.413 --> 31:58.316
worried about Russia. I think...
31:58.316 --> 31:59.550
That's my next question.
31:59.550 --> 32:03.655
We tend to forget that actually the Canadian Arctic is part
32:03.655 --> 32:07.892
of NATO. When we defend NATO or we ask the Swedes
32:07.892 --> 32:12.263
to come and help us defend NATO we're defending NATO.
32:12.263 --> 32:16.434
As worrisome, I think, as is China
32:16.434 --> 32:21.039
from a variety of perspective our close my strategic
32:21.039 --> 32:22.974
adversary is Russia.
32:22.974 --> 32:24.075
Because we border it.
32:24.075 --> 32:25.810
Yeah, exactly, exactly.
32:25.810 --> 32:26.344
We border it across that piece of water, ice.
32:26.344 --> 32:30.915
I think they've demonstrated by what they're doing in Ukraine that they're not
32:30.915 --> 32:33.217
particularly friendly to the West.
32:33.217 --> 32:37.422
Hoing back to my earlier point, there's no doubt that China pushes its
32:37.422 --> 32:41.626
influence and it pushes its view of the world but they tend not
32:41.626 --> 32:45.596
to take over countries like Ukraine.
32:45.596 --> 32:48.967
One of the things we have to do if we develop this you know umbrella national
32:48.967 --> 32:51.869
security policy is I think decide is the...
32:51.869 --> 32:55.907
Is that called the Golden Dome, or is that not necessarily...
32:55.907 --> 32:59.744
No, no, no. No, that's another one. We have to decide, going back to my point
32:59.744 --> 33:04.349
about Indo-Pacific, is that going to be a priority or are we going to say,
33:04.349 --> 33:08.119
Europe is more important than Indo-Pacific what do we do with Latin America and
33:08.119 --> 33:11.589
what do we do with the Middle East? We cannot act at the same level in all of
33:11.589 --> 33:15.560
them. In the absence of deciding that there's this
33:15.560 --> 33:19.564
package the government of the day, and this isn't a criticism
33:19.564 --> 33:22.266
it's just reality, they're going to have to decide if there's a crisis in the
33:22.266 --> 33:26.904
Middle East what are we gonna do? Will we have allocated
33:26.904 --> 33:30.908
time, money, intellectual power and resources to thinking about
33:30.908 --> 33:33.978
the Middle East as much as Russia.
33:33.978 --> 33:37.849
We have limited resources. We can do a whole bunch of things but we can't do
33:37.849 --> 33:42.320
everything to the tune of 120%, I think.
33:42.320 --> 33:46.557
Unless I've got this wrong, for instance, taking a look at Indonesia
33:46.557 --> 33:50.528
and other ASEAN countries and the Middle East, I think
33:50.528 --> 33:54.899
are a trading discussion which is more about do we build a great big
33:54.899 --> 33:59.303
port so our companies can ship things like canola better
33:59.303 --> 34:03.541
and do that more, whereas the
34:03.541 --> 34:06.244
protection and the defence story is NATO.
34:06.244 --> 34:08.212
I mean, that's where [crosstalk].
34:08.212 --> 34:12.417
I think that's right. There's real trade and economic potential
34:12.417 --> 34:15.720
in Asia, there really is.
34:15.720 --> 34:19.690
I think the fact that the PM has visited these countries proves that.
34:19.690 --> 34:23.094
One of the things that I found when I was still working ...
34:23.094 --> 34:25.329
I travelled in these countries.
34:25.329 --> 34:28.066
I bet you did. You've done all kinds of things.
34:28.066 --> 34:32.136
Most of them, though, didn't want just one
34:32.136 --> 34:35.606
chunk of a relationship. They were happy to trade with us.
34:35.606 --> 34:39.477
They wanted to be treated like a big country that had a range of relationships
34:39.477 --> 34:43.381
that we talk to them about what's going on at the UN, that we talk to them if
34:43.381 --> 34:46.984
we were going to have a major crisis in the WHO.
34:46.984 --> 34:50.288
I think if we do what you're suggesting, and I think we should, we should build
34:50.288 --> 34:54.659
those ports, we should develop a capacity to export towards Asia,
34:54.659 --> 34:58.596
I think that we have to accept that we will be more successful with those
34:58.596 --> 35:02.867
countries if we broaden our perspective of them, in particular
35:02.867 --> 35:06.871
because a lot of them are not full democracies in the same way
35:06.871 --> 35:11.008
that we think of and they tend to be more demanding in terms of what they
35:11.008 --> 35:12.710
want from their partners.
35:12.710 --> 35:15.713
That's really interesting. As you say, if you're having a conversation that has
35:15.713 --> 35:19.450
to do with trade you want the dinner party to be able to talk about other
35:19.450 --> 35:23.054
things as well and not have sort of a curtain come down, oh, nope, that goes
35:23.054 --> 35:28.292
over into national defence or that sort of thing.
35:28.292 --> 35:31.629
This is sort of what you're talking about, this question coming in, what's your
35:31.629 --> 35:35.633
level of optimism that the middle power, so-called, will heed the
35:35.633 --> 35:39.737
call, be coherent,
35:39.737 --> 35:41.339
that web will form.
35:41.339 --> 35:45.843
I think it's going to have to, and it will, the question is the degree.
35:45.843 --> 35:49.347
I think most of the world has now accepted that the United States is
35:49.347 --> 35:53.618
withdrawing a little bit and they will see their interests
35:53.618 --> 35:55.353
in developing alternatives.
35:55.353 --> 35:59.390
Now, I don't think that will mean necessarily a rupture with the United States
35:59.390 --> 36:03.394
but it will mean, I think like we have done, we Canada have
36:03.394 --> 36:07.598
done, talking to China. The British Prime Minister was just in Beijing last
36:07.598 --> 36:10.301
week, I think it was, or this week.
36:10.301 --> 36:14.238
I think we're going to see more of that. To go to your point
36:14.238 --> 36:19.043
earlier about international institutions, the
36:19.043 --> 36:23.047
Security Council has been gridlocked for a long time because of the vetoes but
36:23.047 --> 36:27.018
a lot of the specialized institutions, the WHO, the World
36:27.018 --> 36:30.621
Food Program have made real contributions to the planet.
36:30.621 --> 36:34.659
The United States last week or the week before withdrew from
36:34.659 --> 36:39.363
the WHO. That is a significant and I think--
36:39.363 --> 36:41.566
That's an interesting warning shot.
36:41.566 --> 36:44.969
--that's a bad thing because they provide a lot of funding.
36:44.969 --> 36:49.140
I think the rest of the world is going to want the WHO to survive but if we
36:49.140 --> 36:53.110
want it to survive even closely to the way that it has we're going
36:53.110 --> 36:57.014
to have to up our contributions. So even in the...
36:57.014 --> 36:58.316
And China could step into the vacuum.
36:58.316 --> 37:00.918
They could. They're already a member and maybe they'll do more.
37:00.918 --> 37:04.889
I think in all of these cases if we have an international institution
37:04.889 --> 37:09.093
that's doing good, generally speaking, and it's not geopolitical
37:09.093 --> 37:11.629
I think it's in everybody's interest to maintain it.
37:11.629 --> 37:15.633
In fact, if China becomes more active in some of these
37:15.633 --> 37:19.737
institutions and we start engaging them in dialogue there's
37:19.737 --> 37:22.106
nothing wrong with that. There's an advantage to doing that.
37:22.106 --> 37:26.177
The World Food Program, the WHO,
37:26.177 --> 37:30.114
something as nutty as the World Meteorological Organization, knowing about the
37:30.114 --> 37:36.254
weather worldwide is not unhelpful.
37:36.254 --> 37:36.821
No kidding. As we sit in minus whatever and shivering away.
37:36.821 --> 37:40.224
All of these institutions, I think the middle powers will pull together.
37:40.224 --> 37:44.161
To our earlier point, not necessarily next week but I'm really
37:44.161 --> 37:45.663
quite encouraged.
37:45.663 --> 37:50.201
What are the trade routes
37:50.201 --> 37:54.739
that get opened up with something that goes on in Iran?
37:54.739 --> 37:56.774
There are an awful lot of American ships there.
37:56.774 --> 37:59.310
It looks like there could be something that happens.
37:59.310 --> 38:01.612
We don't know what it'll all mean.
38:01.612 --> 38:05.650
There's an entryway into sort of Central Asia, essentially, south of Europe
38:05.650 --> 38:09.787
that's is at stake for trade, has been discussed for
38:09.787 --> 38:13.524
a long, long time, whether it actually becomes an alliance and the Stans all
38:13.524 --> 38:17.828
link up and can go from the Arabian Sea to the Black Sea to the Mediterranean
38:17.828 --> 38:20.598
and there's routes.
38:20.598 --> 38:22.733
Tell us what we're watching on that front.
38:22.733 --> 38:26.537
I know there's political discussions but there's other stuff at stake.
38:26.537 --> 38:29.573
I think the first thing to remember from that part of the world is that to move
38:29.573 --> 38:33.611
things, goods, you need
38:33.611 --> 38:35.313
land routes and sea routes.
38:35.313 --> 38:39.250
The minute you need both it becomes more complicated.
38:39.250 --> 38:43.587
If you want to get something shipped across the black sea to
38:43.587 --> 38:46.857
Europe, which is the objective of a lot of people because Europe is a huge
38:46.857 --> 38:51.629
market, in many cases you've got to go through or around
38:51.629 --> 38:55.399
Iran. Iran these days I don't think is particularly amenable to anybody going
38:55.399 --> 39:00.504
near them. If the United States does anything in a kinetic sense against
39:00.504 --> 39:03.007
Iran I think there's a real chance that part of the world's going to blow up.
39:03.007 --> 39:06.744
I don't mean in a nuclear sense but I think there is a real possibility of a
39:06.744 --> 39:06.811
problem.
39:06.811 --> 39:12.350
It's very intertwined. If you pull on the string too hard...
39:12.350 --> 39:15.986
The Stans vary as well in, not that I'm an expert in that part of the world but
39:15.986 --> 39:19.490
some are relatively developed, some have a lot of oil and whatnot, others quite
39:19.490 --> 39:23.928
a bit less so. If they are going to prosper
39:23.928 --> 39:27.898
they have to find a way of not irritating
39:27.898 --> 39:31.135
Russia too much as well because the Stans used to be part of Soviet Union so
39:31.135 --> 39:34.672
they have to maneuver their independence as well.
39:34.672 --> 39:39.477
They have to find routes. They have to find ways of selling things.
39:39.477 --> 39:42.913
I think they should try and to the extent the West can help them we should but
39:42.913 --> 39:45.783
the fact that they need land routes and sea routes to get to where they want to
39:45.783 --> 39:50.187
go, it's complicated particularly because the Black Sea borders Ukraine
39:50.187 --> 39:52.823
and all the trouble that's going on there.
39:52.823 --> 39:57.228
The shipping routes could be very difficult to protect, essentially.
39:57.228 --> 39:57.395
Indeed.
39:57.395 --> 40:00.398
Let's talk a little bit about shipping routes here across Great Lakes.
40:00.398 --> 40:04.902
Do you see anything in a national security thing happening there?
40:04.902 --> 40:08.873
I really don't. There's a long, longstanding treaty with the
40:08.873 --> 40:13.844
United States which basically demilitarizes the Great Lakes.
40:13.844 --> 40:17.982
I've heard nothing to suggest that the mutual benefits,
40:17.982 --> 40:22.820
and it really is mutual, the movement of goods across.
40:22.820 --> 40:27.491
To use bad English, it isn't just one way it's both ways.
40:27.491 --> 40:31.495
I would be honestly surprised if something affecting the Great
40:31.495 --> 40:32.229
Lakes occurred.
40:32.229 --> 40:34.165
That's really interesting.
40:34.165 --> 40:36.066
Are we going to have an election in this country?
40:36.066 --> 40:38.836
We have a minority government.
40:38.836 --> 40:42.940
Pierre Poilievre has just been overwhelmingly
40:42.940 --> 40:47.778
given huge confidence to take the Conservative Party forward, what
40:47.778 --> 40:49.246
do you think?
40:49.246 --> 40:52.049
Well, I'm not a politician but I've hung around prime ministers and ministers
40:52.049 --> 40:56.053
for most of my career. I would say there's a decent chance of it
40:56.053 --> 41:00.357
because a minority parliament, even if Mr. Carney's government acquire
41:00.357 --> 41:06.096
another one or two MPs from the Conservatives, it is inherently unstable.
41:06.096 --> 41:10.167
Given everything that we've been talking about, if I were prime
41:10.167 --> 41:13.671
minister, and I will never be, I would look at my numbers in April and May.
41:13.671 --> 41:16.273
Maybe you will be. Maybe you're just exactly what we need.
41:16.273 --> 41:18.042
I don't think so. I think the country's safe.
41:18.042 --> 41:22.246
If I were the Liberal Party I would look at the polling
41:22.246 --> 41:26.217
numbers in April and May and if Mr. Carney is as far ahead
41:26.217 --> 41:32.323
as he is now I think we'll have an election.
41:32.323 --> 41:38.195
It is particularly likely because I see with
41:38.195 --> 41:41.999
a lot of difficulty the NDP resurrecting itself.
41:41.999 --> 41:46.103
Yes, Mr. Poilievre has received resounding support
41:46.103 --> 41:50.241
from his convention but all of the pundits are saying he
41:50.241 --> 41:54.278
still hasn't demonstrated yet that he can broaden his base.
41:54.278 --> 41:59.350
If he continues along that path I
41:59.350 --> 42:02.586
would argue ... and I'm not partisan, I've had that beaten out of me after 40
42:02.586 --> 42:06.624
years as a public servant, both sides, I
42:06.624 --> 42:10.928
would say it is in the national interest to have a majority government.
42:10.928 --> 42:13.297
Because there's a lot of projects to push through.
42:13.297 --> 42:16.467
If every time you want to get a statute through parliament you have to, you
42:16.467 --> 42:18.736
know, there's always some negotiation.
42:18.736 --> 42:22.706
I don't mean to suggest that it's quite that black and white but
42:22.706 --> 42:27.278
given the difficulties of dealing with Mr. Trump, to
42:27.278 --> 42:33.417
just paint a simplistic scenario we're negotiating something with Trump
42:33.417 --> 42:37.187
and he says, well, you can have CUSMA but you've got to do these two things and
42:37.187 --> 42:40.891
both things require legislative change and we have a minority parliament.
42:40.891 --> 42:43.861
May well get there but it could take a long, long time.
42:43.861 --> 42:47.765
I'm not suggesting just because there's a majority the government should get
42:47.765 --> 42:51.802
everything that it wants but at least it provides it and our
42:51.802 --> 42:56.307
allies and negotiating partners with a measure of certainty that
42:56.307 --> 42:57.975
they can move the file.
42:57.975 --> 43:01.312
You were at Natural Resources for a long time, the Department of Natural
43:01.312 --> 43:05.115
Resources. You've seen us through a different super cycle.
43:05.115 --> 43:08.485
Do you think we're entering another super cycle?
43:08.485 --> 43:11.388
What do you mean by super cycle just so I make sure I understand.
43:11.388 --> 43:15.426
That the insatiable demand for commodities out of the ground that we
43:15.459 --> 43:18.095
have to sell to various places.
43:18.095 --> 43:23.801
I think so. Mostly because China
43:23.801 --> 43:25.736
has a lot of the same things we have.
43:25.736 --> 43:29.073
Not forestry but a lot of other things.
43:29.073 --> 43:32.610
They are being very parsimonious in deciding to whom they're going to sell
43:32.610 --> 43:34.778
them.
43:34.778 --> 43:38.749
I think we have more mineral resources than virtually any other
43:38.749 --> 43:41.752
country in the world. Our problem is, of course, none of them are easily
43:41.752 --> 43:45.255
accessible. I think, yes, there will be a demand.
43:45.255 --> 43:49.360
Mr. Ford's Ring of Fire efforts,
43:49.360 --> 43:53.564
there is gold, there are any number of things, including oil
43:53.564 --> 43:57.568
and gas, which we can meet, I think, a
43:57.568 --> 44:01.672
world demand. The way the world is going right now I think
44:01.672 --> 44:05.876
demand is going to continue increasing. It's not going to diminish at all.
44:05.876 --> 44:10.080
Just as a slight aside, everybody is applauding AI, I'm
44:10.080 --> 44:14.418
sure you and I do, but the energy and the water demands
44:14.418 --> 44:19.023
to support AI are going through the roof.
44:19.023 --> 44:22.960
The world is going to have to find a way to provide the power for all of these
44:22.960 --> 44:27.097
AI innovations and we can provide a lot of the base materials
44:27.097 --> 44:28.966
needed to provide that power.
44:28.966 --> 44:33.003
Many people say that the AI story for the next whatever amount of time
44:33.003 --> 44:34.705
is energy.
44:34.705 --> 44:36.974
I think there's a lot of truth in that.
44:36.974 --> 44:41.011
We're going to have to work our way through dealing with AI much like we've
44:41.011 --> 44:43.147
worked our way to trying to deal with social media.
44:43.147 --> 44:46.583
I don't think we're there yet but people talk about it and understand it a
44:46.583 --> 44:48.052
little bit better.
44:48.052 --> 44:51.789
As an intelligence side of things what is the threat of AI?
44:51.789 --> 44:53.424
What is the benefit?
44:53.424 --> 44:57.895
Well, the benefit of AI is it allows you to marshal vast,
44:57.895 --> 45:02.599
vast amount of information in a much more rapid way.
45:02.599 --> 45:06.837
The downside, just to give one example, is the ability that AI has
45:06.837 --> 45:11.075
provided to create absolutely picture-perfect,
45:11.075 --> 45:16.013
say, videos of world leaders, of corporate leaders.
45:16.013 --> 45:19.383
We were chatting earlier, and I'll just repeat my example, let's just imagine
45:19.383 --> 45:23.387
somebody with totally ill intent generates a
45:23.387 --> 45:27.458
video through AI that shows the Supreme Leader of
45:27.458 --> 45:32.930
Iran being assassinated and then that is shown in Iran as
45:32.930 --> 45:38.268
truth. Can you just imagine the reaction?
45:38.268 --> 45:42.272
Or the CEO of this company or any company with which the company deals,
45:42.272 --> 45:46.210
there's a video, an AI, that says
45:46.210 --> 45:49.079
X, Y and Z and there's a run on the stock.
45:49.079 --> 45:53.016
The number of things that could happen today because of AI in the
45:53.016 --> 45:55.119
negative sense I think are almost unlimited.
45:55.119 --> 45:59.423
A lot of it is derived I think from what we broadly call mis-dis
45:59.423 --> 46:03.227
information and I don't think we've quite come to grips with it yet and we have
46:03.227 --> 46:05.696
to try a little bit harder. I don't think the world's going to come to an end
46:05.696 --> 46:09.767
because of this but it's a new thing and all new things bring both
46:09.767 --> 46:13.537
positive, I think, and negative and we have to work our way through them.
46:13.537 --> 46:16.874
It's been fascinating to talk to you. I feel like we could go on for a very
46:16.874 --> 46:21.712
long time. How would you like to sort of wrap up as investors
46:21.712 --> 46:23.814
walk into this new world?
46:23.814 --> 46:28.385
There's obviously opportunity and opportunity to invest in Canada, do
46:28.385 --> 46:31.855
you think this is actually a pretty interesting moment to invest in this
46:31.855 --> 46:33.357
country?
46:33.357 --> 46:37.394
I do because I think we retain all of the advantages
46:37.394 --> 46:41.698
we've always had. We're stable, we have an independent judiciary,
46:41.698 --> 46:47.137
we have stable contract law, we have an educated population, we
46:47.137 --> 46:51.308
have all those things that we've always had, and I think we have them
46:51.308 --> 46:55.746
relatively speaking today more than we used to because they're more problematic
46:55.746 --> 46:58.415
in a whole raft of other countries.
46:58.415 --> 47:02.352
I used to do a little bit of trade when I was at NRCan and elsewhere
47:02.352 --> 47:06.290
and people tended to forget, it's all very well and fine to say, we are
47:06.290 --> 47:11.929
going to export forestry products to country X and
47:11.929 --> 47:15.265
that country doesn't have established contract law.
47:15.265 --> 47:19.570
The courts are corrupt, we're never paid.
47:19.570 --> 47:23.507
We forget about that. That's one of the challenges of dealing
47:23.507 --> 47:27.611
with Russia. Some things go there perfectly well but if it doesn't
47:27.611 --> 47:31.748
suit the government of the day a contract is not anywhere near as
47:31.748 --> 47:35.786
valid as it would be here. Both intrinsically because of the things we already
47:35.786 --> 47:39.756
have and because in relative terms we're in better
47:39.756 --> 47:42.960
shape. Just in closing I would say, I mean, we've talked about a number of
47:42.960 --> 47:45.095
negative things, and there are negative things.
47:45.095 --> 47:48.866
I think one of the things that we have to be is clear-eyed.
47:48.866 --> 47:52.169
We've gone through the Cold War, we've gone through COVID, we've gone through a
47:52.169 --> 47:55.339
whole raft of crises while I was alive.
47:55.339 --> 47:59.243
Not a young person like you but all these things and we've gotten through them
47:59.243 --> 48:03.380
in one piece. It doesn't mean we're not going to have a tough year
48:03.380 --> 48:06.049
or two but I think we also have to put it in perspective.
48:06.049 --> 48:10.120
The last point i want to make is,
48:10.120 --> 48:14.258
yes, the United States is causing a migraine right now but we still
48:14.258 --> 48:18.295
share a vast number of interest and values and we need to keep
48:18.328 --> 48:22.933
working at them while we try and fix those parts that are problematic.
48:22.933 --> 48:25.502
I'm asking one more question even though you just wrapped up, are we going to
48:25.502 --> 48:29.339
have some version of conscription in this country?
48:29.339 --> 48:33.543
I don't think so. I think the history of this country is very, very
48:33.543 --> 48:37.247
anti-conscription. We were almost through World War II before the government
48:37.247 --> 48:40.217
imposed conscription.
48:40.217 --> 48:43.921
That was a problem in particular with Quebec which wasn't very keen.
48:43.921 --> 48:47.557
I think the current generation would be less enthusiastic unless we were
48:47.557 --> 48:51.695
actually attacked. As a preemptive policy I would
48:51.695 --> 48:55.465
say no. I think it would be more likely that either a provincial government or
48:55.465 --> 48:58.902
the federal government might develop some form of national service.
48:58.902 --> 49:03.206
You help out with disaster
49:03.206 --> 49:07.344
relief or you help out in far north communities, a bit like
49:07.344 --> 49:12.616
a domestic peace corps if I can put it that way, but it's compulsory, you
49:12.616 --> 49:14.851
get paid something and you go where you're told.
49:14.851 --> 49:16.186
You have to do your service [crosstalk].
49:16.186 --> 49:20.524
You do your service but not in a military sense would be my guess.
49:20.524 --> 49:23.293
Fascinating. We really owe you a great debt.
49:23.293 --> 49:26.263
Thank you, Dick Fadden, for being here today on Fidelity Connects.
49:26.263 --> 49:27.898
We hope you will come back again soon.
49:27.898 --> 49:29.366
I'd be glad to. Pleasure.
49:29.366 --> 49:33.303
Thanks for watching or listening to the Fidelity Connects
49:33.303 --> 49:37.441
podcast. Now if you haven't done so already, please subscribe to Fidelity
49:37.441 --> 49:40.243
Connects on your podcast platform of choice.
49:40.243 --> 49:43.080
And if you like what you're hearing, please leave a review or a five-star
49:43.080 --> 49:47.050
rating. Fidelity Mutual Funds and ETFs are available by working with
49:47.050 --> 49:50.420
a financial advisor or through an online brokerage account.
49:50.420 --> 49:54.124
Visit fidelity.ca/howtobuy for more information.
49:54.124 --> 49:57.961
While on Fidelity.ca, you can also find more information on future live
49:57.961 --> 50:02.099
webcasts. And don't forget to follow Fidelity Canada on YouTube, LinkedIn,
50:02.099 --> 50:04.101
and Instagram.
50:04.101 --> 50:06.970
We'll end today's show with a short disclaimer.
50:06.970 --> 50:10.807
The views and opinions expressed on this podcast are those of the participants,
50:10.807 --> 50:14.745
and do not necessarily reflect those of Fidelity Investments Canada ULC or
50:14.745 --> 50:18.749
its affiliates. This podcast is for informational purposes only, and should not
50:18.749 --> 50:21.284
be construed as investment, tax, or legal advice.
50:21.284 --> 50:23.587
It is not an offer to sell or buy.
50:23.587 --> 50:27.924
Or an endorsement, recommendation, or sponsorship of any entity or securities
50:27.924 --> 50:32.729
cited. Read a fund's prospectus before investing, funds are not guaranteed.
50:32.729 --> 50:36.299
Their values change frequently, and past performance may not be repeated.
50:36.299 --> 50:40.137
Fees, expenses, and commissions are all associated with fund investments.
50:40.137 --> 50:42.439
Thanks again. We'll see you next time.
