Host: We are in the midst of a rupture, not a transition. That was Mark Carney last week during a speech at the World Economic Forum in Davos, Switzerland. He went on to call on middle powers like Canada to build a new order and gave examples of how Canada is navigating this increasingly uncertain global landscape. He spoke of new alliances and new partnerships and the need to pursue diversification internationally. To help solve global problems, we're pursuing variable geometry. In other words, different coalitions for different issues based on common values and interests. So, where does this all leave one of Canada's most important economic relationships, the Canada, United States, Mexico agreement or KUSMA, which is up for review this year. We look at its chances of survival and how it fits or doesn't fit in this new world order. And then as part of that diversification Carney was talking about, Canada and China just struck a deal that'll see a reduced tariff on up to 49,000 Chinese-made electric vehicles. Will consumers be eager to get behind the wheel? This is the rundown.

Host: The Canada, United States, Mexico agreement has been in effect for almost six years now, but relations have been rocky to say the least since President Donald Trump started his trade war. Just recently, he warned he'd slap a 100% tariff on Canada if it made a trade deal with China. And he doesn't seem convinced that Canada and Mexico have much to offer.

Trump: You know, we don't need cars made in Canada. We don't need cars made in Mexico. We want to make him here.

Host: So, does he want to keep Kuzzma or not? With the three countries heading back to the table to review it, we're going to find out in the coming months whether the largest free trade region in the world has a future. To help break this down, I spoke with Colin Robertson, senior adviser and fellow at the Canadian Global Affairs Institute. He also served on the NAFTA implementation team and Martha Hall Finley, director of the school of public policy at the University of Calgary and former Liberal MP for the writing of Toronto Willowdale. They are both members of Carlton University's expert group on Canada US relations.

Colin Martha, great to have you on the show. How are you both doing?

Colin Robertson: Oh, great. Good to be with you today.

Martha Hall Finley: Thank you. And it's great to be here.

Host: Awesome. Well, let's start off. As we know, the upcoming KUSMA joint review are talks about changes to the agreement and possibly extending it to 202. Colin, how does Canada approach these talks if it suspects that the US is negotiating perhaps in bad faith?

Colin Robertson: Well, you have to take them seriously even if we think they're negotiating in bad faith because this agreement accounts for 75% of our exports to the world and about 60% of our imports. It is our preponderant trading relationship and as you know we're trying to diversify trade but this is still the most important market for us and you can't change geography and whatever happens it's still going to be a major market for Canada.

Martha Hall Finley: um a slightly different perspective I think one I think it's worth remembering that this was not ever supposed to be a renegotiation. This was just supposed to be a review to determine whether to extend it even further than it otherwise would. Um, of course, you know, that would open the opportunity to have discussions, but Donald Trump has been treating this as if it isn't the law and it isn't the law of our two two countries, and it is. And so, the very fact that we're all now accepting that this is going to be renegotiation feels a little bit like we've fallen into their trap. Um, and I would argue this was the deal that Donald Trump the last time around said was the best deal ever, right? So I think there's a massive challenge in terms of trust. I don't know how much uh so-called renegotiation is going to get us anything that we can count on. So we have to just be really really careful. I think you know Colin you and I have both heard this. Um we must take Donald Trump seriously but we can't take him literally.

Colin Robertson: um but the other part of where I might differ a little bit is yeah it's the relationship with the United States 75% of our exports but you know we had a pretty decent economy before the free trade agreement was signed. We had a pretty good um uh we have great relationships with an awful lot of Americans in different parts of the country if you recog recognize that this isn't just an Ottawa DC thing. Um, yeah, it's important. It's a really important deal for us, but it's not the end of the world. And I think we have to be really conscious of the fact that Canada, you know, we're not we're not going to live or die um on this. And I think if we keep saying that, we're almost going to be giving Trump more

Host: well with that more leeway, if you will. With that being said, Colin, I am curious, you know, if these are just reviews and perhaps not negotiations, some people might feel that is the case and are curious, what are the changes or adjustments that uh you suspect the US might be looking at?

Colin Robertson: Oh, I think the Americans are going to come at us. We we pretty much know from the hearings they've held and the United States trade representative comes publish a list every year of the irritants. So, it's our supply management for dairy products. It's uh they may go after our banking services. They may go after culture. Uh they may want to put they're certainly going to go after the auto trade. They've already begun this. Keep in mind, we're already engaged in negotiations as a result of tariffs already imposed on forest products, steel, aluminum, and auto parts. So, we know where they're coming from. And I think I would agree with Martha. I think for now they're playing us. But I think what we're seeing as Martha says, uh this is all part of a game. And I think the best playbook that we can look at is the art of the deal, Trump's art of the deal. It's it's to use leverage, intimidate, bully, harass, and that's what we're seeing. So, but we on our part because it is so important for us, keep calm, carry on, be patient, but keep in mind this may not work out. And so, we should be planning on a plan B. I think the prime minister's already put that forward in terms of trade diversification, building at home, and particularly doing it work at home. The premier are meeting today. I think they need to take on internal trade barriers. That's still unfinished business at Confederation, but we still have to have some kind of an arrangement with the United States if we can, but we may not get it.

Host: Uh, well, we'll get to the premers, but Colin, I do want to stick with you. You are you is it fair to say that you believe this deal won't go through

Colin Robertson: right now? I'm doubtful.

Host: Why?

Colin Robertson: Because I think we don't settle for a bad deal. And I think the way the Americans are pressuring us today, it would be a bad deal. The Europeans experienced this after tariff day in April and they're all have got bears remorse today. We responded with retaliatory tariffs. So we and the Chinese we've since lifted them in part to stay at the table and that hasn't really done us a lot of good. We pulled back the digital services tax again. I think he's playing us.

Host: Martha say does Kuzma survive here?

Martha Hall Finley: I think the relationship between the two countries absolutely survives what it ultimately looks like. As I said, we we had we had a a a very very close relationship before the free trade agreement was signed in the 80s. Um has that and then NAFTA and then now the USMCA koozma been been good for both economies. Yes. So yeah, it'd be great to keep it. There are two aspects to this. I think uh time is is Canada's ally. I think by far our biggest allies are in fact the Americans, the American businesses. If if you know we say 75% of our exports go to the United States, well that means we there are a whole lot of people relying on Canadian supplies of various things and in some cases really important things like potach and uranium and um uh cars is a bit of a separate thing because of the auto pack and of course our energy and oil and gas

Colin Robertson: but that's that's an important source of supply for so many Americans. Americans ans American businesses um when they have to buy aluminum or steel at an inflated price because of tariffs that hurts their business. So my view is um our our our be our biggest allies in this whole ne I hate to use the word negotiation because it's not supposed to be one but in this whole discussion um uh time is on our side and uh Americans and American businesses are on our side because it's beneficial to them and I I you know the prime minister has said we're we're not going to we're not going to sign a bad deal. Better to have no deal than have a bad deal. And I have to agree with that. All right, Martha, I want to stick with you. Uh Colin had brought up uh the premier's meeting with Mark Carney today. What role I mean we've heard uh the premier here in Ontario be quite vocal. We have heard the premier in Ottawa be uh in in Alberta rather be quite vocal. What role do the provinces and the premers play in these talks?

Martha Hall Finley: Well, what role they shouldn't play is oneoffs? Um this is a this is a challenge and we do occasionally have different premers going out and you know speaking about things international when really it should be a collaborative effort to support whatever we say but with one voice. Um I would say the biggest role the premers have here is there's there are two big roles. One is to continue to work those relationships that we already have where we're a supplier where we're customer. um the western states for example the egg the energy the you know working with the governors their counterparts in the states working with you know but this doesn't have to be a political rahrah it just means continue to work with the people who understand the importance of this arrangement and continue to maintain those good relations not all Americans are supportive of what Donald Trump is doing so we need to continue to maintain those relationships and I think the other key role for the pro provinces and the provincial premers is to Let's get our own house in order. I mean, we still have interprovincial trade barriers. I mean, without naming names, we did have one premier get up and say, "We're just going to get rid of all of our, you know, internal trade barriers and within a few weeks passed a budget that gave preferential uh tax treatment to the local breweries." I mean, the the you just can't say and then not do. So I really think the provinces have a role to play here in you know a bit of water in their wine little bit of you know less politics and more can we just figure this out and it's a moment in time like if we don't take this opportunity now to address some of these internal problems then shame on us.

Host: Colin, there has been a lot of focus on what happens if the US, pardon my language, negotiations, walk away from these negotiations, but what is there is there a situation where Canada uh decides, you know what, this is not for us. We're going to take a step away from the table.

Colin Robertson: Yes, we did that in the very first negotiations with Simon Ree as our chief negotiator really around dispute settlement. So we walked away and at the clock stopped. We had to stop the clock on the very last day because again it came down to dispute settlement and it ended up with Derek Bernie and Mike Wilson saying, "Well, we're going to walk away." And James Baker, then Secretary of the Treasury, being told that they were going to phone Brian Maloney and have him phone Ronald Reagan in California where he was spending the weekend. And Baker came back and said, "Okay, but you got to get this through Congress." Which we did. So, no, it's going to be difficult and it it'll probably go extra innings. The NAFTA was much easier to do, but certainly the Canada US free trade agreement, as I say, we walked out for several weeks and then at the end of the day, we had to stop the clock.

Host: Martha had sort of touched on uh how important uh KUSMA is to the Canadian economy. You had mentioned the 75%, the 65%. just give us a sense if if this deal does not stand uh does not get picked up, what does it mean for the Canadian economy, Colin?

Colin Robertson: Well, it means we're going to pay tariffs. We may be paying tariffs in any event. uh probably 10 to 15% depending on the capricciousness of Donald Trump in any day but we so that means uh we're we still have the advantage of proximity and geography and existing supply chains but it means attacks on American consumers and attacks on Canadians.

Martha Hall Finley: uh totally agree but to put things into perspective even with the tariffs that we have now there are some sectors that are clearly suffering steel aluminum you know who knows that auto stuff is so up in the air I mean that industry is so integrated a car given all of its components ultimately goes across the border a number of times so that's complicated but um it it it it's it's complicated But for our benefit and for the American benefit, we can't change geography. And even though some industries are have been hit harder, like I said, um overall the economists are saying that overall the tariff hit for the overall Canadian economy is less than 5%. Um and we've actually been picking up steam in terms of our economic activity. I think you know having a having a confidence in oneself is also really important that sends very strong messages. I go back to we need to work with the governors. We need to work with the the the business interests. Guaranteed there are significant business interests right now that are not happy with what Donald Trump is doing. And at some point he's going to have to recognize that that includes a lot of voters.

Host: Martha, you mentioned complicated. Um I help me understand how does Canada as we've seen with you know the deals it is striking as as Mark Carney is traveling uh making a deal with China. How does how does the prime minister balance making these deals while knowing full well that there are threats uh that are probably looming when he touches back uh into North America from Donald Trump with you know 100% tariff threats. Uh how do you make those deals while while trying to diversify?

Martha Hall Finley: Well, this is, you know, take Trump Trump seriously, but not literally. If he were if he were to impose 100% tariffs, uh the American businesses would be up in arms. I mean, it's just not going to happen. And notice he hasn't actually fallen uh uh followed through.

Host: Um and and it and to stress the diversification thing, there are two aspects to that. One is a political positioning to basically say, look, we are confident in Canada. We're going to work with other partners. we're going to expand our economic uh alternatives. There will never be a day when we only trade with China instead of the United States. The geography is there. The interconnectedness of our businesses. We're going to continue to have massive trade between our two countries. Um for me, the diversification effort is it's not a replacement. It's an add-on because frankly, our economy could do with more activity and we could do with not relying on one customer or one supplier. So these are these efforts are actually in addition to what we already have with the United States. They're not to uh um uh they're not to they're not to replace it.

Martha Hall Finley: Um and and frankly I think this has been as a wakeup call to Canadians and Canadian businesses and Canadian politicians. um forcing us to look at other alternatives to diversify um not to replace the American arrangement but to add to it I think is a very important thing for us to do.

Host: Colin, what can Canada learn uh from the trade deal that was reached by the European Union and the US uh just last year?

Colin Robertson: Well, don't jump when you don't have to. I think they they left and they have buyers remorse. But I think what we really have to do and so would be to first of all deal with the internal trade barriers in Canada and secondly find out get our resources out of the ground, process them and then sell them abroad. So I think we've got a lot of work to do at home. I think that the game starts with ourselves and then we can deal with the rest. The diversification of trade is fine, but as Martha says, this this is a shakeup of our complacency, but also a reminder that we can do an awful lot at home ourselves to make ourselves more productive.

Martha Hall Finley: Martha, why? Yeah. Why buyers facing Canada right now? I think the biggest challenge facing us right now is um a slide back into complacency. This is this the state of attitude right now in the in in Canada is a huge opportunity. we have alignment and all across political parties um that we need to diversify that we need to build our trade infrastructure that we need to get rid of interprovincial trade barriers we need to deal with the regulatory overburden and I say that on purpose I'm not going to say some regulation is actually really good and really important but we have too much we have overlap we have an incredible time of political um agreement on some of these things the worst thing that we could do is to slide back into complacency without actually taking this opportunity.

Host: Colin, we have uh one minute left. Last question to you. Martha had mentioned a little bit of sort of where Canada needs to go or who to look to uh in terms of our allies here. If Canada wants Koosma to continue, who are the allies in the US?

Colin Robertson: Oh, it's anybody who's doing business with Canada. It's both those who buy from us and those who sell to us. We our reckoning is there's about 8 million jobs. We don't can't lobby and give to campaigns. What we can do is go in and see each legislator by district and point out here are here's the Canadian investment in your district that creates jobs. Here are the companies in your district that are selling to Canada or buying parts from Canada which we then further manufacture. So, as Martha said, we've got all sorts of allies and that's what we have to do is have a full all court press and it's more than the embassy, more than the prime minister, it's the premers, the legislators, it's business people. Anybody doing business in the states has got to remind their suppliers or the people they're buying and vendors that they're this is important to them and tell them to address their congressman. That message will get through to the White House and that's where we're going to have to listen to.

Host: And that's where we're going to have to leave it. Colin, really appreciate it. Martha, thank you so much for your time. We really appreciate your insights.

Colin Robertson: No, great. Thank you.

Host: Prime Minister Mark Carney and Chinese President Xi Jinping recently announced they'd struck a deal after years of tension between their two countries. Tariffs on Chinese EVs will be lifted on up to 49,000 vehicles in exchange for China lowering its tariffs on canola. Premier Doug Ford wasn't initially happy about the deal. not happy at all. But a meeting with the prime minister seems to have brought the temperature down. The strategy, a task force with Ontario to consult on strategy and job protection. So, how big could the market here be for Chinese EVs? Will the drivers of this country embrace them? I sat down with Stephanie Walcraft, former president of the Automotive Journalist Association of Canada to talk about how cheaper EVs will roll out in Ontario and the rest of Canada and how much this will shake up the market.

Host: Stephanie, great to have you on the show. How are you doing?

Stephanie Walcraft: Doing great, thanks. Uh, very happy to be here.

Host: All right, we're going to talk uh about Doug Ford. First off, a bit of a change of tune. He hasn't called for a boycott of Chinese EVs since he met with uh Prime Minister Mark Carney and Industry Minister Melanie Jolie. What do you think they might have told him about the plan? I know there's lots of details that we'd like to know about it as well, but what do you think has kind of settled him a little bit?

Stephanie Walcraft: And I'm not any more privy to information than anybody else, but my guess is not what whatever happened in that room where it happened. I think Doug Ford was shown some dollar signs.

Host: Okay.

Stephanie Walcraft: Yes. I have a feeling that there are aspects of this China Canada arrangement that involve bringing some manufacturing of vehicles to Canada. Vehicles possibly also batteries. It makes a lot of sense

Host: what he wants,

Stephanie Walcraft: right? Speaking back to the point that Prime Minister Cardi made in Davos that Canada has what the world wants when we're talking about what Canada has that the auto industry wants. That's critical minerals,

Host: right? So, it makes fiscal sense or it seems to because we're now seeing other automakers jockeying for position on this as well. Volkswagen's building a battery plant outside of St. Thomas.

Stephanie Walcraft: We just earlier this week learned that um South Korea and uh and Canada signed a memorandum of understanding around possibly bringing some manufacturing battery and vehicle to Canada. And that's related to the submarine deal which is a whole other topic, right? But bringing that back to China, that those dots all connect to making it seem as though it makes fiscal sense to build the batteries and build the cars where the minerals are coming from rather than shipping them around the world.

Host: So I would imagine there's a portion of this deal that hasn't gone public yet that may involve scaling up the the quota that comes into Canada over time, right? And with that also China making some manufacturing investment which of course brings jobs and just bolsters the economy. It makes a lot of sense with the ring of fire being developed in Northern Ontario that that would end up being in Ontario where that manufacturing would take place. And that brings us back to Doug Ford being a happy man.

Host: All right. Well, let's get away from the headlines for a minute. I want to talk about um some numbers from last year. Sales of electric vehicles in Canada plummeted in 2025. not the story. When we look at Europe, across Africa, the Middle East, China, they roast. Why are EV sales in Canada so low?

Stephanie Walcraft: A lot of that comes down to price, which is why we're talking about this entire subject, right? To to recap for anybody who's not familiar with the the Canada China deal. It's 49,000 EVs that Canada has committed to bringing in from China at a lower tariff. There was a 100% tariff that was in place uh to match with the United States. This is 6.1% a significant drop right um and to come back to your point Europe and the Middle East and other markets are already getting those those cheap right EVs 50% of that allotment of the 49,000 is meant to be priced off the boat at least under 35,000 whether that's going to equate to that when it gets to dealership lots is a different story but that does speak to the point that we don't have anything at that price point in our market right And this this creates the potential to to bolster that especially in the wake of the federal government having canceled the EV rebates which were the only thing that were bringing some of those cars even close to that rep level and that coincided exactly with that drop in sales that you were talking about.

Host: So fair to say the cars that would be imported from China here don't necessarily have competition right now in Canada. There is a a glaring gap or give us an idea of sort of maybe what is the price of a of an EV right now? Now, an average cost of an Eevee right now in Canada,

Stephanie Walcraft: there is a glaring gap. Well, whether I'd call it glaring depends on a lot of context.

Host: Right now, we're looking at a 2027 Chevrolet Bolt, which interesting has which interestingly has already been discontinued.

Stephanie Walcraft: Oh, okay.

Stephanie Walcraft: Different subject entirely, but that is priced at an MSRP manufacturer's suggested retail price of just under 40,000 before fees.

Host: That's not that far off that 35,000 that we're talking about. and certain provinces and territories still do offer rebates. So, there are places in the country where you can get that car for cheaper. So it's not that it doesn't exist, but it's more that it's not as widespread as it could be. The other aspect of that storyline is do we immediately see those cheap EVs coming from Chinese manufacturers? Right? This is something that I spoke to when the news first broke. 49,000 is not it's a drop in the bucket relative to the Canadian auto industry in general. We sell about 1.9 million cars a year. So that and the EV portion of that is about 5%. So we're talking about roughly 2.5 2.6% of the full market is what we're bringing in in from this deal from China. And that's not enough to make huge waves at at any level at this early stage. But it does put pressure on other automakers to to start bringing those prices down, which is the rebates were always meant to just make up for the fact that EVs were more expensive initially and were meant to the rebates were meant to be removed when those prices came down to be at par with internal combustion engine vehicles. They were never meant to be permanent. Right. Right.

Stephanie Walcraft: So what this does is sort of bring those Chinese those Chinese EVs in particular back. They they they make up that loss and and bring cars back, those EVs back down to a level where they can compete directly on price with internal combustion engine vehicles. Will we see immediately those $35,000 BYDs or Xpangs, those Chinese brands? I don't know if that's going to be an immediate thing because you're talking about an automaker having to come into the country, set up a head office, set up a dealership network. That takes time, right? And what some Canadians don't realize is there are already Chinese-built EVs on Canadian roads, right? We talk about Chinese EVs in terms of those brands I just brought up, but there are Chinesebuilt EVs that have been on our roads for a while, right? Tesla Tesla built imported 44,000 just Model Wise in 2023.

Host: So that's pretty darn close to that 49,000 that we're talking about, right? Uh, one of the things uh that uh a few people have been concerned about and I don't know if it's a genuine concern from from your expertise, but what worries does Canada have about Chinese access to Canadian EV user data uh that it doesn't have already with North American automakers? Because I think one when we talk about EVs, we we jump right to security concerns, but there are EVs here in North America, North American made that uh that potentially could have the same concerns, but we don't have those red flags. I don't know that it's the fact that it's EVs specifically that are the the discussion point there. I think it's more that the cars are coming from China and they have an awful lot of software in them, a lot of technology in them. Interestingly, it's Blackberry

Stephanie Walcraft: that actually supplies the software for BYD. So there's already a Canada China connection there and Canada's deeply involved in that.

Host: So is it tinfoil hat or not? It's hard to say. But there has been some discussion of you know really high level national security things like it's it sounds crazy but China has been accused of putting shutdown operations in in Chinese-built vehicles so that so that they would have a way to remotely just prevent them from the vehicle from working

Host: right now in the announcement of the the auto working group uh minister Jolie did address that and said that that national security concern is on their radar. Thank you so much.

Stephanie Walcraft: My pleasure.

Host: Before we go, we are a new show and we want to be a show for [music] you and all Ontarians. So, it's important that we're covering topics that matter to you. Let us know what you like and don't like and about how we're doing so far by going to tvO.org/runddown [music] feedback or leave us a comment on YouTube. Until then, I will see you next week.