Liberals’ $25B Gamble, U.S. Trade Drama, and Poilievre’s Next Move | Brian Lilley

It is Economic Update Day for Mark Carney's Liberal government, and while the deficit is lower than expected, the big news from the update was revealed on Monday.With more on this and other national issues is our BCN contributor and political commentator for the Toronto Sun, Brian Lilly.Brian, good to have you with us as always.

Thanks for having me, Rod.

OK, the big news yesterday was this $25 billion Sovereign Wealth Fund.You've written that the fund is not like other funds, but the PM says not so fast.So I guess first question, do we already have funds like this?

Yeah, we do.I mean, we've got the Canada Infrastructure Bank and Prime Minister Carney was asked directly about that on Monday.And he said, oh, no, no, no.The Canada Infrastructure Bank is different.They offer loans, which is debt.It's not an equity or ownership position.

But you go through the filings of the Canada Infrastructure Bank, you look at how they've structured, they're often taking equity positions.So this $25 billion fund is going on top of a $45 billion fund for the Canada Infrastructure Bank.It was $35 billion.The Carney government upped it to $45 billion in last fall's budget, in November's budget.You've also got the $15 billion Canada Growth Fund.which sounds very similar to what the Canada Strong Fund is supposed to do.

You've got the Strategic Innovation Fund, and you go on and on.Then you look at the fact that we've got all of these regional economic development agencies, whether it's Western Economic Diversification, the Atlantic Canada Opportunities Fund, they've even got ones for Northern Canada, they've got ones for Southwestern Ontario, you know, the government has a ton of funds.So I'm not sure what the big difference is with this one.It's going to be a government going in with a lot of money,and deciding to pick political winners and losers on where to invest.So, you know, is this needed?

Well, other countries are doing it, although it is structured very differently than how the Carney government is going to structure this one.

Yeah, the most common reference I think I've heard is Norway's Sovereign Wealth Fund, which invests only outside of the country.The Canada Strong Fund will only invest in Canada.So, is there potential here with the funds being politicized, do you think?

Oh, in a very big way.And that's something that should concern everyone.You know, is this a fund to make money for the taxpayers of Canada?Or is it a fund to have the government decide, well, we like these businesses, but not those businesses, which has happened before.So the Norway's sovereign wealth fund is actually a wealth fund.This isn't.

There's another big difference.Norway has never shied away from the fact that they have oil and gas.They have not tried to diminish their industry the way that we have, whether we're talking about the oil sands in Alberta or conventional oil across southern Alberta and into Saskatchewan, to a degree into Manitoba as well around the Bakken Basin.We have really tried to downplay that.I guess the Alberta Heritage Fund is there as a provincial version of this, but the Norway Sovereign Wealth Fund is all paid for with funds from their oil industry.Their idea was, one day the oil will be gone, we need to diversify, so let's take the profits from this and invest around the world.

We're saying, let's take money that we don't have, So this is not money that we have because of the oil industry or any other industry in Canada.This is money the federal government is going to borrow to then invest in Canada in projects that are politically astute for the government of the day.Massive red flags on this one.

Okay, let's change subjects.You broke a story this week about how liberal lobbyists convinced the Carney government to end a decades -old practice with the commissionaires, Canada's biggest employer of veterans, in favour of a company that has ties to the Trump administration and ICE deportations.I can reference even here in southern Alberta, we've got like 1 ,800 security professionals, 500 of them are veterans who are working as commissionaires.So this doesn't sound much like the Mark Carney elbows up, Canada strong rhetoric.This sounds quite different.

Yeah, it doesn't really sound like what the government is trying to sell to us on a daily basis.So, the Commission Eris was founded in 1925.It was built upon an idea that came from England, probably about 50 years earlier, to try and help veterans of their wars.And so, you know, we're talking about, you know, seven years after.the First World War, a lot of veterans were struggling to find meaningful work.Well, we can form this core of commissionaires to provide security services.

Well, you know, it started there.It's grown across the country.We've got, since shortly after the Second World War, a practice that kind of said, OK, for federal departments, you guys get the first right of refusal for providing security services.And so when I was an army cadet, when I was a reservist, when I've gone to visit government departments, I mean, the commissioners are huge in Ottawa, because of all the federal government buildings there and departmental buildings, you would find people who had served in the Canadian armyForces.When I was an Army cadet, these were mostly guys from the Korean War or UN peacekeeping missions.

Of course, now we've got a whole, you know, plenty of veterans created through our, you know, experience in Afghanistan.And, you know, is it the number one choice of every veteran to go and be a commissioner?No.Is it useful?Is it good?Yes.

And so they've had this special relationship with the federal government for years.But there's a company out of Montreal called Guarda World.And it's a company that got $300 million from the Quebec government to expand internationally.One of their biggest expansions internationally is into the US.They're providing the security for Alligator Alcatraz.Maybe you've heard of that deportation facility in Florida.

They've just been given a contract minimum 313 million U .S.dollars, up to 704 million U .S.dollars for an ICE deportation facility in Surprise, Arizona.They're getting tons of contracts with the Trump administration to help with ICE deportations.

You know, if you're on the progressive side in Canada, which is where the current government is, you don't like these things.And yet a couple of well -connected liberal lobbyists were able to go in and say, You have to end this so that our client can bid on those.This could end up costing the commissionaires up to $330 million a year.Not everyone that works for the commissionaires is a veteran, but they are still the largest employer of veterans in this country.So a bit of a bad look for the Kearney government.

There's been a lot of discussion around Canada -U .S.trade talks ever since the Prime Minister released that video about a week ago.CBC reporting that the Americans were demanding an entry fee for negotiations.something you say is false.We've even heard from American officials that they may need to retaliate against Canada for the booze ban that most provinces, but not Alberta, have invoked.

What's your impression of where things stand right now with trade negotiations?

I think they're really tense at the moment.And I think part of the tension is being ratcheted up by the posturing of the Carney government.I mean that that video, yeah okay, I do want to point out that Prime Minister Carney twice now, both with the the video about the state of Canada -U .S.relations and the video announcing the Canada Strong Fund, they were produced and uploaded not to a Canadian outlet, they weren't given to Canadian media, they were all uploaded to YouTube and then Mark Carney went on Facebook, Instagram and LinkedIn all American platforms and said, here's a teaser, now go watch the full video on YouTube.These are all American big tech platforms.

The liberals are constantly talking about fighting American big tech, and yet this is how they're communicating now.But I digress.The fact is, the Americans are looking for a deal with us, much like they're looking for a deal with Mexico.And our political leaders, whether it's Mark Carney or Ontario Premier Doug Ford, there's too many of them that are looking to pick fights with the Americans because it's good for them politically.It's not good for us economically, whether you're talking about steel workers in Edmonton or Regina or Hamilton or Sault Ste.Marie or just outside of Montreal.

These steelworkers are all feeling it.Tool and die makers.This has become the big thing lately.They're feeling it.You know, people are losing their jobs and the Kearney government appears to be trying to ratchet things up.So the Americans, the booze ban, as you say, doesn't apply in Alberta, doesn't apply in Saskatchewan.

but applies to some degree in every other province.I think B .C.buys wine from Democrat -controlled states, but not Republican -controlled states, because I don't know.That's just bizarre.So they, you know, the Americans are saying, look, We tariffed your steel, your aluminum, your autos, and you tariffed our steel, aluminum, and autos in retaliation.

But then you've got this extra layer of retaliation that we haven't done to you.So this will be an unfair trade practice.We're likely going to end up with extra tariffs as a result of this.Based on what US Trade Representative Jameson Greer told Congress last week, it's called Section 301 tariffs.We will likely see those in the coming weeks if that booze ban isn't lifted.Rod, I think we should just throw everything in together and have a massive agreement on trade and security, put in critical minerals, put in energy security, whether it's oil and gas, whether it's electricity from Ontario, Quebec, and BC.

Put it all on the table, negotiate a good deal, and get back to normal relations.But unfortunately, our politicians like to fight with the Americans because it helps them in the polls.So many Canadians are reflexively anti -American.

OK, let's talk a little bit about the House of Commons.We've got an NDP MP resigning to seek provincial office in Ontario, or rather in Quebec, rather.Ontario, you have a Liberal MP in Toronto looking to leave for provincial politics.Of course, does that impact Mark Carney's sudden majority?And how does this tie into Pierre Polyev's leadership?

You know, Liberal MP leaving.I mean, Mark Carney has 174 seats.You need 172 for a majority.Nathaniel Erskine -Smith is the Toronto MP who wants to leave.and run to be leader of the Ontario Liberal Party, which he ran for the Ontario Liberal leadership a couple of years ago and lost, but came in second place.He wants to try again.

That would take Mark Carney down to 173 seats.Ooh, that's a very close majority at that point.Well, this is a seat that they may not win back because there's a big push to have the newly elected NDP leader, Avi Lewis, run there.So the NDP could pick that one up.Now, Alexandre Boularis, who was part of the orange wave that swept Quebec in 2011, he's leaving to go for provincial politics in Quebec.That's a seat that the Liberals might actually pick up.

And so you might end up with the two parties trading.I'm not sure that it's going to have much of an impact, but I mean, if the Liberals don't pick up that Quebec seat, then that's a razor thin majority for Mark Carney, makes life more difficult for him.How this all plays out for Pierre Paulieff and the Conservatives, look, Paulia's polling numbers are down.He has lost four MPs over the last year because, you know, we're talking on the anniversary of the last federal election.He had 144 MPs at the end of that election.He has 140 now.

There's no way to get around the fact that he is in a weaker position now than he was a year ago.Polling numbers keep going down.He's got to figure something out over the summer.If he doesn't figure out something by Labor Day, he could be in trouble in terms of the leadership.I know he just survived the review in Calgary, but because of the way the conservatives are, how they operate, he is under a almost daily review.by his MPs and any of them could decide they're going to organize against them, force a vote and force him out, which is what he did.

his friends did to Erin O'Toole after the 2021 election.

Well, we'll watch to see how that plays out.Brian, as always, good to chat with you.Thanks for joining us.Thanks for having me.Brian Lilly is a political commentator for the Toronto Sun and a regular contributor here on Bridge City News.