June 4, 2025 • 36 mins
Trading up: Turning an eye to bolder trade diversification.
The impact of US tariffs is prompting savvy businesses to look beyond our borders, indeed beyond the continent. Europe and Asia provide the best opportunities to both grow and rebalance our still vital US connections. Join Edward Greenspon, John Risley, and Jakub Uziak as they delve into how Canadian companies can pull off this shift and, in the process, turn Canada into an "innovation nation" with a more diversified trade portfolio. Risley speaks from experience and speaks helpfully of his experiences.
This episode uncovers the bold strategies and necessary policy environment for redefining the trade and investment relations to enhance our sovereignty and expand our prosperity.
With guests John Risley, Co-Founder of Clearwater Seafoods & Chairman and CEO of CFFI Ventures Inc. and Jakub Uziak, Transfer Pricing Partner, Deloitte Canada
Hosted by long-time journalist and public policy leader Edward Greenspon
Disclaimer: Opinions expressed are genuine and reflect the guest's views; the guest is also a client of Deloitte Canada.
A French transcript of this episode can be read here: https://deloi.tt/3HpQlkM
***
Négociations accrues : aller vers une diversification plus audacieuse des échanges.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:04):
Hi everyone,
I'm Ed Greenspon and I'm delightedto be speaking in a couple of moments
with two great guestswho have much to say about how Canada
can use this momentto go from boiling frog to leap frog.
Why are recalling the seriesleap frog? Well,
Because every crisis creates opportunity,of course.
(00:24):
In fact,it often takes a crisis to clear away
the distractions and jump onwell known opportunities.
Boiling frogsyndrome is a passive form of decline.
A leap frog is positive, action oriented,
and fixed on trying out new things.
That leap is part of an innovationculture, a true innovation nation.
(00:47):
What will it take for Canadato come out of today's
geopolitical challenges more confident,more sovereign and more prosperous?
We will discuss these vital matters todaywith John Risley,
a legendary Canadian entrepreneur.
John was the founder of ClearwaterSeafoods.
He invested in an offshoot that becamethe world's largest producer of omega
(01:09):
three fatty acids and then discovered
there a prolific oil producing algae.
He helped bring MDA space back to Canada.
He is a proponent of building hydrogen
and a proponent of buildinginfrastructure in the Arctic.
And just as important.
He's a student of history,strategy, and leadership,
(01:29):
so he has the capacityto put everything into context.
And joining us from Deloitteis Jacob Zajac,
a trade and economic policy advisorwho works with businesses and government
to navigate the complexitiesof global markets.
So he's saying what they're saying.
We welcome you both to full Circle,the Leapfrog series.
Thanks, IRA. Great to be here.Hey, great. Great to be here.
(01:51):
And I'm glad you described meas a student.
That's exactly what I am.
That's okay.
The perpetual student. Excellent.
So, look, let's start Mr.
Perpetual studentwith the trade diversification,
which is obviously one of the main steps,main strategies being touted
in managing the risks, tariff and tradepolicies, posed to Canada.
(02:13):
And, John,you know, in the early days of Clearwater,
you sold lobster off the pickup truck,
then you sold in the U.S., then in Europe,then in Japan, then in China.
What lessons doyou have for Canadian businesses
as they think about diversifying?
That it takes time.
The US market is an incrediblycompetitive market and not in all cases.
(02:39):
But certainly in the case of our,our business
from very humble businessbeginnings, was a price focused market.
And it's difficultto make money in a price focused market
when you're a newcomer.
And so we had to go looking for marketsthat valued other things other than price
like consistency of supply quality,year round availability,
(03:05):
all the kinds of things forwhich sort of price is not unimportant,
but not necessarily, the driving,
decision making, apparatus and, and
while, we
never walked away from the US market,but we treated the U.S.
market as the US market treated us right.
(03:26):
The US market said, look, well, well,we'll deal with you when we want.
And our attitude to the US market is good.
Okay. No problem.
We'll deal with you when we want.
You're not our primary market.
That's not where we're going to focus.
That's not how we're where wherewe're going to sort of build our future
on how we're going to invest.
And so, as you would know,
(03:49):
obviously, the data says that Canadais usually dependent on the US.
I would not encourage anybodyto walk away from,
their current US relationships.
Despite them being challengingunder the current administration.
But do you need to get on your bikeand develop relationships
in other jurisdictions?
Yeah. But it takes time.
(04:11):
This is not other markets.
Whether they be in Europeor Asia, are not markets
where you knock on the door and say,you know what, my price is X?
And people will say, well, I'll make it y.
And we've got a deal, though.
I don't care what you're sellingor what service you're offering.
But it takes time.
Do you think do you think, giventhat time seems compressed
(04:31):
because of the pressures on the countryand presumably on companies?
Is there a way to speedup the process in any way?
Governments can help open doors,
but bad governmentscan't walk through them for you.
You've got to walk through them yourself.
So, yes,there is a way to speed up the process.
(04:51):
And the way to do it isyou've got to show early commitment.
You've got to figure out what is that thismarket wants, that it doesn't now have.
What servicecan I provide that, that the market,
is, is deficient around.
And then, you know what what we did
and we did so incredibly naively was we,we sort of
(05:13):
did that by saying,okay, what is it that you want, Mr..
Customer?
And the customer told us and withouteven understanding how we were going
to respond to those requests,we said, okay, we'll do it.
And, you know, sort of people
laughed and smirk,but I think what helped us a great deal
and I think still workstoday is our customers understood.
(05:37):
We were trying really hard. Right?
We we were investing.
We were trying to do thingswith the physiology of the product.
We were investing in storage facilities.
We were trying to improve.
We were really we'reworking hard to deliver.
And it probably took us yearsto get to the point where we could say
we were fulfilling some of the promiseswe made,
(06:00):
but the journey alongthe way was a, a journey
during which the customer could see hardevidence that we were we were working.
We were really taking their requests.
Seriously.
And I think that that, that still workstoday.
I don't care whether you're sellingsatellites or lobsters.
Check up with your,
(06:21):
with your clientsas you're out there talking to them.
And in the context of, you know,the situation we're in now, today.
Are they are they making these kindsof adjustments?
Are they, looking beyondAmerican markets, for exports and,
and actually not just lookingbut doing slowly.
I think to to John's point, it'snot something that, you know,
(06:43):
we can turn on a dime, I think I think formany, many companies, you know, U.S.
market is so close, that I thinkmany businesses got a little complacent.
Right.
And the international marketswere kind of more opportunistic.
As John said, I think, they require more time, more effort.
But we are seeing, you know, companieswho John said not move away from the U.S.
(07:07):
necessarily.
But, you know,
and we realize that the US can bea source of growth for forever, right?
And look for opportunitiesin Europe, in Asia, and in other,
other parts of the world, too,that may be, you know,
higher kind of growthpotential in the future.
So, so yes, we're seeing that I think the,
you know, when the tariffs were imposed,it accelerated that.
(07:28):
And then since they've been paused,it's slowed down again.
But I think that the need to diversifyis there.
So yes we're seeing it.
But I think it needsit needs to be accelerated.
You know.
I, I listen to the twoof you and I, I'm going to,
take a guess at theexpectation in the country that, you know,
(07:50):
currently we have 77% of our exportsgo to the United States.
And I think people kind of wantthat by next year to be 50%.
And then maybe 30%,
obviously that's not realistic.
So, you know what is realistic?
John. Yeah. Yeah, totally. Yeah.
The numbers you, suggest are completely
(08:13):
not not reasonableor realistic and, and and,
but doing business with the United Statesis easy for us to see for us
because we have sort of basicallycommon laws.
We have basically a common culture, lang,
which is the same geographically,very easy.
(08:33):
And Canada has got obviously inthe United States have long standing ties.
Right?
Everybody sort of vacationsand the other's country,
and we've got friends and everybody hasfriends in each of those jurisdictions.
So it's it's a natural placefor us to be doing business.
It's not natural to go to Munich.
It's not natural to go to Tokyoor Singapore or Shanghai.
(08:56):
And when you take a product or serviceto the United States, the first question
on the American customer'smind is, what's the price?
That's not what's first on, everybody'smind.
I'm not saying price isn't important,
but what makes your productglobally competitive?
Why should somebody in China,
or any other jurisdictionaround the world, do business with you?
(09:17):
What do you have to offerthat makes you unique?
Other than price?
And, so you need toyou need to understand,
what what am I trying to sell here?
Because what I'm saying is that
while price is important,it doesn't start with price.
So you've got to reimagine your business,and that takes time.
(09:41):
That doesn't happen overnight.
And it takes a deepunderstanding of the customer.
And the customer's ambitions and,
and even just selling,you know, a product like a foodstuff.
You go to Londonand you want to do business
with, let's say, a premier food retailerin London, like Marks and Spencer.
You know,
it's, they want to comeand they want to see your clients.
(10:04):
They want to understand, your,hygiene practices.
They want to understand your capacityto deliver.
They want to understand,how good are you at product development?
I mean, this is sort of a long interview,relationship building process.
Irrespective, this segment of the economyin which you compete.
(10:27):
Now, if you're in a Nvidiaand you have got,
you know, the best, chips in the world
and everybody wants them, you know,
of course, that's a different categoryof doing business. But.
Jacob wanted to come in here.
Yeah, maybe just a just a small note,and I think a teaser for John said,
I think, you know,in, in being more attractive to,
(10:49):
you know, to us customers,I think you know, for, for,
you know, it's been our kind of big plus,but also our big downside.
A lot of our exports are kindof raw products and staples, right.
Where it's hard. To, to be different.
It's hard to differentiate yourself.
I think one of the things that likewe as a country need to focus on
is, is moving up marketright from selling kind of raw product
(11:12):
to selling a finished productwhere you can demonstrate,
you know, value, add and and differentiateyourself from other suppliers
and to John's point,and make a differentiated product
that somebody in Germanyor somebody in Denmark will want to buy
because at, you know,at the very staple level, you're, you're,
you're essentially competing on price,right?
Yeah.
So, so to pick up on what you, Jacob saidmuch of what Canada
(11:36):
exports is and sort of a formI don't like to use the word commodity,
but is in a form that that isthen has value added to it.
And that would be the casewith their uranium.
It would be the case with their oil, which is a very special grade
and needs very special purposerefining, assets
(11:57):
in the United Statesto turn it into a usable product.
And that's sort of up and down.
I feel like, the trading relationshipbetween the two countries.
So if you're one of those suppliers,
of one of those products that has valueadded to it in the United States,
it's not simply that easy to sort of say,oh, well, I'm going to sell my product
(12:20):
somewhere else.
There's a value added capacityexisting in those other jurisdictions.
Are you wise to add value yourselfand then take that value added
product to the marketother than into the United States,
or perhaps even in the United States?
These are all very strategic questionswhich need to be asked
before you can really set aboutseriously diversifying that supply chain.
(12:42):
And it takes time.These things take a lot of time.
So so I would just want to make sureI understand that right.
Because I think it'sa very interesting point.
So, if a lot of the value was outin the United States
and we want to become less dependenton the United States,
then we need to bring some of that valueadd processing back home.
(13:04):
Yeah.
Or we need to find customerswho were prepared to invest in that value
addedprocessing capability in their own country
so that we can continueto sell the commodity product.
But let me give youwhat I think is a great example.
So as you know, we are exportersof electricity from from three provinces,
basically Quebec, Ontario and BritishColumbia and the United States market.
(13:26):
Right.
And we have the potential and,and prime Minister
Kearney has said he wants to turn Canadainto an energy powerhouse.
That's great.
I completely concurwith that strategic objective.
So we can generatea huge amount of renewable energy.
We can we can get more fossilfuels out of the ground.
(13:46):
And and we can do all sorts of thingsto fulfill that ambition.
Okay. So what are we going to do with it?
What are we going to do with all theseelectrons?
Okay, Nova Scotia turns on its offshorewind.
Newfoundland turns on its onshore wind.
What what's going to happento those electrons?
Well, you know, the the marketthe local market doesn't need them, right?
So the answer of the right answer, inmy opinion, is
(14:09):
we've got to turn those electronsinto a value added product.
And exportthat value added product. Right.
And that could be greenammonia could be green hydrogen,
it could be green steel,it could be bio methanol.
It could be locating a data center
that is got hugeappetite for electric green electrons.
Right? I mean, there are wethat's how we have to think.
(14:31):
We just don't want to send our energyto the United States,
who then say, hey, thank you for thisabundant supply of cheap energy.
Now we're going to use that and produce
something of meaningful valueto the economy, right?
We need to be thinking about doing thathere.
I, I hundred percent agree,I think that I think the, you know, policy
focus for the governmentshould be moving us up, you know, from,
(14:53):
you know, selling like John said,commodity
raw material productsto making more value added products.
Right where we'll be further along
the supply chainwill command a premium price
for what we're selling,and we can be more picky about what
we sell rather than just coming to the USbecause it's.
You know, Jacob, it's not somethingwe've done well as a country, I guess.
And, you know, forestry is a good exampleas a world leader.
(15:15):
And then we've allowed value to get at itand stand in it.
Well, it's not that we've allowed.
We've fallen behindothers who added greater value.
I guess maybe that's because it's so easy
to sell lower value products.
If you're in Canadasitting next to the United States, right.
Hundred percent.
I think it's I've actually heard somesome business people say, you know, the
(15:36):
this you know, it's right. Tariffsand threat of tariffs.
You know, this is a wake up callfor us to to do better and to wake up
from our slumber of just,you know, taking the easy way out.
Yeah.Well that's the idea of the leapfrog.
I think as well. Right.
Yeah.
So look, I think we have to understandthat as we try to mature our economy,
which is different from growing it,and we become more sophisticated
(16:00):
and follow the trendsthat, Jacob is advocating.
We have to understand there's a role for,what we do now.
Let me give you an example of that.
So, my friend JimIrving is a huge supplier,
lumber to HomeDepot in the United States.
(16:20):
That is, he's
adding value to his treesby producing lumber
and then taking it to the United States,which, you could argue the lumber itself
is priced as a commodity.And yes, that's true.
You know, obviouslythere are quality components of lumber
that that are important,but that's where the market is, right?
So you can't ignore the fact that
(16:41):
the United Statesis the world's largest economy.
And it's a huge it's got a voraciousappetite for a whole host of things.
So Canada okay, argue herethat that this idea
that we've got to diversifyquickly is is completely unrealistic.
It's not going to happen.
(17:01):
So if I were advising the government,today,
and I'm not saying I'm not trying to
I and I and I don't know that they wouldnecessarily want to listen,
but I would be saying, look,we need to become
more strategically importantto the United States
because it's a really importantrelationship to us.
(17:22):
And so we need to make sure that we doaway with this thesis that the president
likes to advocate, which is we there'snothing from Canada that we need, right?
We need to turn that aroundso that the administration understands
there's a whole bunch of reasonswhy we need Canada,
because as long as the United Statesneeds us, we are going to have
(17:43):
a completely different relationshipfrom the one that that that where we can
sort of be beaten up,
if you like, as a trading partner,that can be easily replaced.
We need to put ourselves in a position
with the United Stateswhere we cannot be easily replaced.
And there's a whole host of thingswe could do.
Examples of that would belet's have a joint
(18:03):
military baseand and the North with the Americans.
Right. Our militaries have got along well.
It's half the cost for us.
It's half the cost for the Americans.
And we cooperatewith the American military.
Now, why not deepen that cooperationthat makes us more of an ally
to the United States?
It makes us more importantto the United States.
What are what aresome of the other things that we can do?
(18:27):
And I would advocateselling more energy to the United States,
which is desperately has got a huge energydeficit coming.
I mean, we all know what's happeningwith the grain in the United States
under enormous pressure.
Electricity consumption is growing.
Electricity prices are going throughthe roof.
They're desperate for more energy.
Canada can be a supplier of that energy.
(18:48):
And whilst I would like to seemuch of that incremental energy,
be used here in Canadaas Hydro-Quebec has used
their energy to spawn thingslike the aluminum industry in Quebec.
We need to do the same thing.
But exporting energy inthe United States is not a bad thing. Why?
Because there are huge infrastructureinvestments that go around that.
(19:11):
And there is the so-calledswitching costs.
Rates mean it's a bit like an oilrefinery dependent upon our Alberta crude.
They can't get a similar crudefrom virtually
any other jurisdiction other than Iraqand Venezuela anywhere in the world.
And that's, you know, there are all kindsof political issues around that.
So they're very varied,dependent on Alberta crude.
(19:32):
And that's why it's why the presidentdidn't put the same tariffs on crude,
that he put on un on other products,coming out of Canada.
So where else can we develop a dependencyfrom America on us
that makes our trading relationshipwith the United States more important?
While at the same time,and with emphasis on this point,
(19:53):
we need to be hustling our fataround the world
and selling our products and servicesand other jurisdictions.
You know, the wayI've been thinking about this
and writing about this since January isthat we have to have a two track strategy,
and track one is a long term strategyto be less dependent on the United States
and track two is a medium termand medium term strategy
(20:16):
to have greater accessto the United States
so that we can affect trackwhat and and if we do that,
then we'll be probably in a betterbargaining position.
We'll never be in a superiorbargaining position.
The United States will be in a betterbargaining position, presumably.
So we have to walk and chew gum.Go figure.
Yeah, totally. And I couldn't agree more.
And we need to what we need to dois make sure that the community writ
(20:40):
large understands that this, thatthis idea that because we're we've got
sort of challenges in the relationshipwith the Trump administration
that we need to sort of pick up ourour cards and walk home and go elsewhere.
That's not going to work.
We need to you're sayingexactly what I'm advocating,
which is no, no, no, no,that's totally the wrong thing to do.
(21:02):
We need to develop more strategic.
We need to be more strategicin our relationship to the United States,
while at the same time, to your point, addgetting on our bike
and selling our products and servicesand other jurisdictions around the world
where highly respected countryaround the world
and, we don't use that.
Oh, you know, some people might counterand there's some kind of nationalism
(21:25):
that has been unleashed in the country,understandably, by what's going on.
And some people say, well, look,
you know, we can't have confidenceor they're going to take our stuff.
They're not going to lock
us, that they're not going to,you know, that our cars will continue to,
go over that border multiple times,in, in the supply chain. So,
(21:47):
you know what,if we're not in control of the situation.
No, but but I think, look,
I, I'mI'm not here to be critical of the U.S.
administration. I don't want to do that.
At the same time,I'm encouraging us to develop
a stronger relationshipwith that same administration.
But I do think that a sense of reality,especially with the Treasury Secretary,
(22:10):
who I think has got aa greater and greater voice in the US
administration, that ityou know, pragmatism rules the day here.
And clearly the US stockmarket did not like this idea,
reciprocal tariffs and, and
the impact it was going to haveon the economy and inflation.
And I think the presidenthas been awakened to that reality.
(22:31):
And you have seen a substantial climb down
from, some of those, regional sort of,
economy busting,
rules around, you know, ridiculoustariffs, tariff levels.
Okay, Jacob, I'm.
Going to come back to you in a momentwith, say, the policy question
(22:53):
around government.
Trump has opened up something.
I want to ask him. About.
He's a b a company.
He's been very involved with M&A spaceand you know,
MBDa space is a company that essentiallyyou guys brought back into Canada.
So I imaginethere was a good business reason to do it,
(23:13):
given the kinds of pressuresyou're seeing.
And the pressure to manufacturemore in the United States, can you imagine
situations where where you might haveto, you know,
put more of the production facilities,let's say, into the United States?
Yes. Unfortunately,
if you want to do businesswith the American government,
(23:37):
military,it's very hard to do so from anything
other than a, a us,physical production facility.
However, however,and this is a really important nuance,
if we've got a product which is,
globally beating technology, right,that the Americans really need.
(24:00):
Right.
Prime example of that is, you know,
the president's thirst for something he'scalling the Golden Dome project.
Right.
Which most of you will have heard of.Right.
And, a bit like Israel's Iron Dome.
I think that's the metaphor.
So, we actually MBDa
(24:20):
could contribute in a very significant way
to the creation of a golden Dawn.
So instead of our Prime Minister
going off to Washington and saying,okay, well, yes,
this is all going to be builtin the United States.
And, you know, yes,we want to be part of it.
So how big this are?
Check out to be the Prime Ministercould go to Washington and say, actually,
(24:43):
we can contributeto the Golden Dome, right.
Because we've got a technologywhich you don't have,
but we're not going towe're not going to build that technology
and we're not going to contribute itfrom an American industrial base.
We're going to contribute it from,a facility or facilities in Canada.
Right.
Because this is going to be Canada'scontribution.
(25:04):
So what is itsuper important that Canada do?
It's super important that we have
and we can keep worldbuilding technologies in this country.
It's just we can'twe can't be a mature economy
if we're not the best at things,not everything.
(25:25):
But we've got to be the absolute bestin some things
that brings the worldto our doorstep, right?
It gives us leverage.
It's a reason for peopleto want to trade with us, not just simply
because we've got lotsof agricultural products
or we've got lots of uranium,or we get lots of potash.
Right. Itit we've got to be more than that.
(25:47):
And and we're the country has notbeen good in this area, as you know.
And and Jacob,we've got to get good in this area.
If I can add, add like I think you know,I work with a lot of technology companies
in Toronto, you know, Kitchener-Waterlooarea and most of most of them,
to John's point, are built to selland built to sell to US buyers.
Right.
(26:07):
And I think, you know,
that's something that to John's point,I think we need to change.
Right.
Like that technology for all those startupcompanies ends up moving to the US
and be incorporating, you know, improvedtheir and becomes a US technology.
I think I agree with John, in additionto kind of the, you know, raw
material economy, we need to, you know,become a better kind of technology
(26:29):
in our economy.
We have the talent, right?
All of the large US technologycompanies have thousands of people working
and in Toronto and Montreal and Vancouver,but we're working for the US companies.
Right.
We need some more homegrown,you know, leading
technology companies,which we really we haven't had since. But
(26:50):
and we need the environmentto, to be able to do that,
which I don't know if you were
that was going to be a policy question,but that should be something
that the government's focused on creatingthat environment and the ecosystem
for that, for that to be a viable pathand not just,
you know, to sell to the highest bidderin the US cities.
So that's very similar.
You've gone down a road that, you know,that I wanted to ask a little bit about,
(27:12):
you know, in terms ofif we are going to diversify
and, and again, and the businessesthat you're, you're speaking with.
So we're going to move from,to less of a north south orientation,
not no orientation, but let's sort ofsay more of a global orientation,
more of both east west,domestically and globally.
(27:32):
As well as, as well as north southand bring those into a different.
Kind of balance with one. Another.
What do we need government to do?
Yeah.
So, so look, great question.
Hard answer.
So, we need to attract talent.
We need to grow talent in this country.
(27:53):
We need to make it attractiveto stay here.
But we also need to make Canada anattractive place to attract talent, too.
Right.
And we are seeing in the United Statesnow an environment which,
you know, is not particularly favorablefor the research community.
We need a very, very focused,directed immigration policy around
(28:16):
attracting the world's top researchers,the world's top scientists,
highly skilled peoplefor technically sophisticated industries.
We need to make this a very attractivejurisdiction for people, to come to.
That's number one.
Number two,why wouldn't the government, to your point
and what can the governmentdo from a policy perspective,
(28:38):
given the environment I've just described,why wouldn't, the government
go to the country's top research, institutions and universities
and say, okay, we're going to
let you attract just to pick an example,because it's in my home,
why wouldn't we go to Dalhousie and say,okay, you guys are really good
at ocean research.
(28:59):
We're going to let you hire sevennew top world class researchers, right?
And we're going to provide youfor the funding to do that
for, let's say, five years.
And after thatyou're on your own sort of thing.
But you know, and do thatacross the country, across, you know,
very segments of very segments and, and the economy, we don't need to look far
(29:19):
for lessons on the policy frontto figure out how to grow an economy.
And we've got the platform.
My God.Come on, let's take advantage of it.
Okay, Jacob,how are we going to take advantage of it?
I was just going to layer on
some of what John said as I,Andrew 100% agree and more funding for,
you know, for our universities,for innovation,
(29:41):
you know, federally funded,you know, research chairs, to drive
that innovation that Canadian companiescan then use rather than, you
know, licensing technologyand knowhow from, from other countries.
And then I think your question ed around,you know,
immigration and John's point aroundinfrastructure are connected.
If we want, you know, more immigration
(30:04):
that we need to solve our infrastructureand our housing issues.
I think I think the two thingsare connected, you know, living outside
Toronto, John's point around high speedrail is a is a sore point for me.
And, you know,
Jeff, you know, Japan builthigh speed rail in the 60s.
France fit it in the 80s.
We're in 2025and we don't have high speed rail.
(30:24):
You know, we keep talking about thisproject from Windsor to Pivot City.
But you know,I don't know how many years it's been,
you know, we've been talking about it,but there's been no movement.
Let's make let's make some small progress.
Let's, let's,let's do Hamilton to Toronto.
Right.
Like think about all of the
housing opportunities that there would befor new immigrants in Hamilton
(30:45):
if they were half an hour away from workin Toronto instead of an hour and a half.
That they are right today.
Yeah, I am struck as we aswe get ready to wrap up here, I'm,
I'm struck in some ways that, that the conversation has turned to talent
and how we nurture, attract,retain talent.
(31:06):
You know what's high speed rail about it.
So it's about moving people aroundnot just for their work, obviously,
but also, you know, also for their, for their work, new airports, you know,
and it's to get people togetherto figure out things,
to invent things in thereand on your journey.
And a lot of what you're saying,you're talking about,
you know, research and development and,you know, the companies
(31:27):
you've been involved with donea lot of research and development.
Canada's not very goodat research and development.
At least our private sector isn't.
So, it's an interestingpoint of convergence.
We're not good at commercializing it.
Yeah, yeah, we're not bad at research.
We're just not goodat commercializing research.
Okay.
So that will be a focus ofwhen we start a trade diversification.
(31:48):
We end with talent.
It's actually very natural progressionof the conversation.
Look, I want to thank you
both I got from most of our questions, which is good.
I'm sure other people outthere will have questions, too.
But, you know, I just wanted with this,you know, on a scale of 1 to 10,
how optimistic are youthat we can make something of this moment
(32:10):
we find ourselves in and come out of it,you know, for the better.
I'm Jacob, you go first.
I was hopingyou would ask John to go first.
Somewhere between 6 and 7.
Okay, John, how optimistic should we be?
Yeah.
So I would say, I'm, I'm mixed emotions.
And and by that, I mean, I'm really superworried that we don't take advantage of,
(32:35):
where we are in the crisisthat we find ourselves in.
But I'm super optimisticthat we've got a leader,
now who has not been
a politicianat any point in time in his life, has been
has had an incredibly successful career,who's super smart,
(32:56):
who's, going to be,I hope, a demanding leader.
He's not going to be afraidof taking risks.
Who is going to endorse, the prospectand in fact, the need for change.
And it's going to be willingto do those things and make mistakes.
And that's how you grow.
So, I'm worried that that,
(33:18):
that somehow the system got some, some
and stripped some,
the, the sort of the sort of charactertraits that I think he brings to the job.
And I hope that he's strong enoughto resist them
and impose himself on, and the countrythe country needs great leadership.
(33:38):
Right. So we need that.
Okay. I'm giving the warrior in.
You may be a three and I'm giving the, twoor and you may be Nate.
Right. There we go.
Thank you both so much, John and Jacob,that, such an insightful conversation.
Thank you.
My pleasure.
Okay, Jacob, we're back for a few minutes
(34:00):
to do a little bit of a recap of whatwe just heard.
You know, what would your main takeawaysbe from the conversation on withdrawal?
I think John was pretty, pretty vocal on,you know, diversification is good,
but that doesn't meanwe're walking away from the U.S right?
And I think
I think, you know, as we were talking
(34:20):
just now, I think that's, that's importantfor people to hear.
Now, I, I personally do thinkand I think John mentioned this as well.
It's maybe, you know, relooking at that,you know,
that relationship, you know, can we can we
you John said, you know, demonstrate
our, you know, how valuablewe are to the U.S.
(34:41):
economy.
And can we,can we change how we contribute?
But, you know, as a longer term strategy,we should look to diversify it.
But as a short to medium term strategy,you know, the U.S.
is the biggest market in the world.
Economy will continue to grow.
It's, you know, it'sa, you know, the population in growth
in one of the few countries in the worldwhere it's going to continue to increase.
(35:03):
Right?
So it's, you know, I think I think it's a
maybe it's not somethingpeople will necessarily like hearing,
but I think that's the reality of ourof our economy in our situation.
A doable proposition to marry the private
needs of companyis the public need of the country.
If you. Well.
I think that it's it's a tough one.
(35:23):
I think, you know,you mentioned a couple times
during the interview,you know, this nationalistic,
you know,feeling that we have in Canada of,
you know, fighting Canadianand reducing reliance on the U.S.?
I think, you know,
the thebusiness needs are slightly different.
And I think that will likelycome to the fore.
But but again, I think it's not an eithernor strategy.
(35:46):
Right. I think I think we can do both.
I think we canwe can focus on Canadian product.
I think we can focus ondiversifying while,
you know, still maintaining and improvingthe relationships of the U.S..
All right, Jacob, thank you so much for, for being with us today.
And, good luck.
As you help others,you know, adjust to the circumstances and,
(36:09):
you know, plantheir strategy is so important.
No, thank you.
Thank you, I appreciate it.
And thanks for having me.
Trade
diversification isn't just a nice to have.
It's a national imperative that it's goingto take real leadership from government.
Yes, but in boardrooms and corner suitesas well,
(36:30):
companies, not governments,are the ones who ultimately trade.
Governments need to create the rightconditions and incentives
to encourage themin publicly interested direction,
but the private sector has to pull it off.
Thanks for listening to Full Circle,the Leapfrog series.
Well, see you.
Or at least, hear you.
Or maybe you'll just hear us next time.
(36:52):
Thank you.
Hi everyone,
I'm Ed Greenspon and I'm delightedto be speaking in a couple of moments
with two great guestswho have much to say about how Canada
can use this momentto go from boiling frog to leap frog.
Why are recalling the seriesleap frog? Well,
Because every crisis creates opportunity,of course.
(00:24):
In fact,it often takes a crisis to clear away
the distractions and jump onwell known opportunities.
Boiling frogsyndrome is a passive form of decline.
A leap frog is positive, action oriented,
and fixed on trying out new things.
That leap is part of an innovationculture, a true innovation nation.
(00:47):
What will it take for Canadato come out of today's
geopolitical challenges more confident,more sovereign and more prosperous?
We will discuss these vital matters todaywith John Risley,
a legendary Canadian entrepreneur.
John was the founder of ClearwaterSeafoods.
He invested in an offshoot that becamethe world's largest producer of omega
(01:09):
three fatty acids and then discovered
there a prolific oil producing algae.
He helped bring MDA space back to Canada.
He is a proponent of building hydrogen
and a proponent of buildinginfrastructure in the Arctic.
And just as important.
He's a student of history,strategy, and leadership,
(01:29):
so he has the capacityto put everything into context.
And joining us from Deloitteis Jacob Zajac,
a trade and economic policy advisorwho works with businesses and government
to navigate the complexitiesof global markets.
So he's saying what they're saying.
We welcome you both to full Circle,the Leapfrog series.
Thanks, IRA. Great to be here.Hey, great. Great to be here.
(01:51):
And I'm glad you described meas a student.
That's exactly what I am.
That's okay.
The perpetual student. Excellent.
So, look, let's start Mr.
Perpetual studentwith the trade diversification,
which is obviously one of the main steps,main strategies being touted
in managing the risks, tariff and tradepolicies, posed to Canada.
(02:13):
And, John,you know, in the early days of Clearwater,
you sold lobster off the pickup truck,
then you sold in the U.S., then in Europe,then in Japan, then in China.
What lessons doyou have for Canadian businesses
as they think about diversifying?
That it takes time.
The US market is an incrediblycompetitive market and not in all cases.
(02:39):
But certainly in the case of our,our business
from very humble businessbeginnings, was a price focused market.
And it's difficultto make money in a price focused market
when you're a newcomer.
And so we had to go looking for marketsthat valued other things other than price
like consistency of supply quality,year round availability,
(03:05):
all the kinds of things forwhich sort of price is not unimportant,
but not necessarily, the driving,
decision making, apparatus and, and
while, we
never walked away from the US market,but we treated the U.S.
market as the US market treated us right.
(03:26):
The US market said, look, well, well,we'll deal with you when we want.
And our attitude to the US market is good.
Okay. No problem.
We'll deal with you when we want.
You're not our primary market.
That's not where we're going to focus.
That's not how we're where wherewe're going to sort of build our future
on how we're going to invest.
And so, as you would know,
(03:49):
obviously, the data says that Canadais usually dependent on the US.
I would not encourage anybodyto walk away from,
their current US relationships.
Despite them being challengingunder the current administration.
But do you need to get on your bikeand develop relationships
in other jurisdictions?
Yeah. But it takes time.
(04:11):
This is not other markets.
Whether they be in Europeor Asia, are not markets
where you knock on the door and say,you know what, my price is X?
And people will say, well, I'll make it y.
And we've got a deal, though.
I don't care what you're sellingor what service you're offering.
But it takes time.
Do you think do you think, giventhat time seems compressed
(04:31):
because of the pressures on the countryand presumably on companies?
Is there a way to speedup the process in any way?
Governments can help open doors,
but bad governmentscan't walk through them for you.
You've got to walk through them yourself.
So, yes,there is a way to speed up the process.
(04:51):
And the way to do it isyou've got to show early commitment.
You've got to figure out what is that thismarket wants, that it doesn't now have.
What servicecan I provide that, that the market,
is, is deficient around.
And then, you know what what we did
and we did so incredibly naively was we,we sort of
(05:13):
did that by saying,okay, what is it that you want, Mr..
Customer?
And the customer told us and withouteven understanding how we were going
to respond to those requests,we said, okay, we'll do it.
And, you know, sort of people
laughed and smirk,but I think what helped us a great deal
and I think still workstoday is our customers understood.
(05:37):
We were trying really hard. Right?
We we were investing.
We were trying to do thingswith the physiology of the product.
We were investing in storage facilities.
We were trying to improve.
We were really we'reworking hard to deliver.
And it probably took us yearsto get to the point where we could say
we were fulfilling some of the promiseswe made,
(06:00):
but the journey alongthe way was a, a journey
during which the customer could see hardevidence that we were we were working.
We were really taking their requests.
Seriously.
And I think that that, that still workstoday.
I don't care whether you're sellingsatellites or lobsters.
Check up with your,
(06:21):
with your clientsas you're out there talking to them.
And in the context of, you know,the situation we're in now, today.
Are they are they making these kindsof adjustments?
Are they, looking beyondAmerican markets, for exports and,
and actually not just lookingbut doing slowly.
I think to to John's point, it'snot something that, you know,
(06:43):
we can turn on a dime, I think I think formany, many companies, you know, U.S.
market is so close, that I thinkmany businesses got a little complacent.
Right.
And the international marketswere kind of more opportunistic.
As John said, I think, they require more time, more effort.
But we are seeing, you know, companieswho John said not move away from the U.S.
(07:07):
necessarily.
But, you know,
and we realize that the US can bea source of growth for forever, right?
And look for opportunitiesin Europe, in Asia, and in other,
other parts of the world, too,that may be, you know,
higher kind of growthpotential in the future.
So, so yes, we're seeing that I think the,
you know, when the tariffs were imposed,it accelerated that.
(07:28):
And then since they've been paused,it's slowed down again.
But I think that the need to diversifyis there.
So yes we're seeing it.
But I think it needsit needs to be accelerated.
You know.
I, I listen to the twoof you and I, I'm going to,
take a guess at theexpectation in the country that, you know,
(07:50):
currently we have 77% of our exportsgo to the United States.
And I think people kind of wantthat by next year to be 50%.
And then maybe 30%,
obviously that's not realistic.
So, you know what is realistic?
John. Yeah. Yeah, totally. Yeah.
The numbers you, suggest are completely
(08:13):
not not reasonableor realistic and, and and,
but doing business with the United Statesis easy for us to see for us
because we have sort of basicallycommon laws.
We have basically a common culture, lang,
which is the same geographically,very easy.
(08:33):
And Canada has got obviously inthe United States have long standing ties.
Right?
Everybody sort of vacationsand the other's country,
and we've got friends and everybody hasfriends in each of those jurisdictions.
So it's it's a natural placefor us to be doing business.
It's not natural to go to Munich.
It's not natural to go to Tokyoor Singapore or Shanghai.
(08:56):
And when you take a product or serviceto the United States, the first question
on the American customer'smind is, what's the price?
That's not what's first on, everybody'smind.
I'm not saying price isn't important,
but what makes your productglobally competitive?
Why should somebody in China,
or any other jurisdictionaround the world, do business with you?
(09:17):
What do you have to offerthat makes you unique?
Other than price?
And, so you need toyou need to understand,
what what am I trying to sell here?
Because what I'm saying is that
while price is important,it doesn't start with price.
So you've got to reimagine your business,and that takes time.
(09:41):
That doesn't happen overnight.
And it takes a deepunderstanding of the customer.
And the customer's ambitions and,
and even just selling,you know, a product like a foodstuff.
You go to Londonand you want to do business
with, let's say, a premier food retailerin London, like Marks and Spencer.
You know,
it's, they want to comeand they want to see your clients.
(10:04):
They want to understand, your,hygiene practices.
They want to understand your capacityto deliver.
They want to understand,how good are you at product development?
I mean, this is sort of a long interview,relationship building process.
Irrespective, this segment of the economyin which you compete.
(10:27):
Now, if you're in a Nvidiaand you have got,
you know, the best, chips in the world
and everybody wants them, you know,
of course, that's a different categoryof doing business. But.
Jacob wanted to come in here.
Yeah, maybe just a just a small note,and I think a teaser for John said,
I think, you know,in, in being more attractive to,
(10:49):
you know, to us customers,I think you know, for, for,
you know, it's been our kind of big plus,but also our big downside.
A lot of our exports are kindof raw products and staples, right.
Where it's hard. To, to be different.
It's hard to differentiate yourself.
I think one of the things that likewe as a country need to focus on
is, is moving up marketright from selling kind of raw product
(11:12):
to selling a finished productwhere you can demonstrate,
you know, value, add and and differentiateyourself from other suppliers
and to John's point,and make a differentiated product
that somebody in Germanyor somebody in Denmark will want to buy
because at, you know,at the very staple level, you're, you're,
you're essentially competing on price,right?
Yeah.
So, so to pick up on what you, Jacob saidmuch of what Canada
(11:36):
exports is and sort of a formI don't like to use the word commodity,
but is in a form that that isthen has value added to it.
And that would be the casewith their uranium.
It would be the case with their oil, which is a very special grade
and needs very special purposerefining, assets
(11:57):
in the United Statesto turn it into a usable product.
And that's sort of up and down.
I feel like, the trading relationshipbetween the two countries.
So if you're one of those suppliers,
of one of those products that has valueadded to it in the United States,
it's not simply that easy to sort of say,oh, well, I'm going to sell my product
(12:20):
somewhere else.
There's a value added capacityexisting in those other jurisdictions.
Are you wise to add value yourselfand then take that value added
product to the marketother than into the United States,
or perhaps even in the United States?
These are all very strategic questionswhich need to be asked
before you can really set aboutseriously diversifying that supply chain.
(12:42):
And it takes time.These things take a lot of time.
So so I would just want to make sureI understand that right.
Because I think it'sa very interesting point.
So, if a lot of the value was outin the United States
and we want to become less dependenton the United States,
then we need to bring some of that valueadd processing back home.
(13:04):
Yeah.
Or we need to find customerswho were prepared to invest in that value
addedprocessing capability in their own country
so that we can continueto sell the commodity product.
But let me give youwhat I think is a great example.
So as you know, we are exportersof electricity from from three provinces,
basically Quebec, Ontario and BritishColumbia and the United States market.
(13:26):
Right.
And we have the potential and,and prime Minister
Kearney has said he wants to turn Canadainto an energy powerhouse.
That's great.
I completely concurwith that strategic objective.
So we can generatea huge amount of renewable energy.
We can we can get more fossilfuels out of the ground.
(13:46):
And and we can do all sorts of thingsto fulfill that ambition.
Okay. So what are we going to do with it?
What are we going to do with all theseelectrons?
Okay, Nova Scotia turns on its offshorewind.
Newfoundland turns on its onshore wind.
What what's going to happento those electrons?
Well, you know, the the marketthe local market doesn't need them, right?
So the answer of the right answer, inmy opinion, is
(14:09):
we've got to turn those electronsinto a value added product.
And exportthat value added product. Right.
And that could be greenammonia could be green hydrogen,
it could be green steel,it could be bio methanol.
It could be locating a data center
that is got hugeappetite for electric green electrons.
Right? I mean, there are wethat's how we have to think.
(14:31):
We just don't want to send our energyto the United States,
who then say, hey, thank you for thisabundant supply of cheap energy.
Now we're going to use that and produce
something of meaningful valueto the economy, right?
We need to be thinking about doing thathere.
I, I hundred percent agree,I think that I think the, you know, policy
focus for the governmentshould be moving us up, you know, from,
(14:53):
you know, selling like John said,commodity
raw material productsto making more value added products.
Right where we'll be further along
the supply chainwill command a premium price
for what we're selling,and we can be more picky about what
we sell rather than just coming to the USbecause it's.
You know, Jacob, it's not somethingwe've done well as a country, I guess.
And, you know, forestry is a good exampleas a world leader.
(15:15):
And then we've allowed value to get at itand stand in it.
Well, it's not that we've allowed.
We've fallen behindothers who added greater value.
I guess maybe that's because it's so easy
to sell lower value products.
If you're in Canadasitting next to the United States, right.
Hundred percent.
I think it's I've actually heard somesome business people say, you know, the
(15:36):
this you know, it's right. Tariffsand threat of tariffs.
You know, this is a wake up callfor us to to do better and to wake up
from our slumber of just,you know, taking the easy way out.
Yeah.Well that's the idea of the leapfrog.
I think as well. Right.
Yeah.
So look, I think we have to understandthat as we try to mature our economy,
which is different from growing it,and we become more sophisticated
(16:00):
and follow the trendsthat, Jacob is advocating.
We have to understand there's a role for,what we do now.
Let me give you an example of that.
So, my friend JimIrving is a huge supplier,
lumber to HomeDepot in the United States.
(16:20):
That is, he's
adding value to his treesby producing lumber
and then taking it to the United States,which, you could argue the lumber itself
is priced as a commodity.And yes, that's true.
You know, obviouslythere are quality components of lumber
that that are important,but that's where the market is, right?
So you can't ignore the fact that
(16:41):
the United Statesis the world's largest economy.
And it's a huge it's got a voraciousappetite for a whole host of things.
So Canada okay, argue herethat that this idea
that we've got to diversifyquickly is is completely unrealistic.
It's not going to happen.
(17:01):
So if I were advising the government,today,
and I'm not saying I'm not trying to
I and I and I don't know that they wouldnecessarily want to listen,
but I would be saying, look,we need to become
more strategically importantto the United States
because it's a really importantrelationship to us.
(17:22):
And so we need to make sure that we doaway with this thesis that the president
likes to advocate, which is we there'snothing from Canada that we need, right?
We need to turn that aroundso that the administration understands
there's a whole bunch of reasonswhy we need Canada,
because as long as the United Statesneeds us, we are going to have
(17:43):
a completely different relationshipfrom the one that that that where we can
sort of be beaten up,
if you like, as a trading partner,that can be easily replaced.
We need to put ourselves in a position
with the United Stateswhere we cannot be easily replaced.
And there's a whole host of thingswe could do.
Examples of that would belet's have a joint
(18:03):
military baseand and the North with the Americans.
Right. Our militaries have got along well.
It's half the cost for us.
It's half the cost for the Americans.
And we cooperatewith the American military.
Now, why not deepen that cooperationthat makes us more of an ally
to the United States?
It makes us more importantto the United States.
What are what aresome of the other things that we can do?
(18:27):
And I would advocateselling more energy to the United States,
which is desperately has got a huge energydeficit coming.
I mean, we all know what's happeningwith the grain in the United States
under enormous pressure.
Electricity consumption is growing.
Electricity prices are going throughthe roof.
They're desperate for more energy.
Canada can be a supplier of that energy.
(18:48):
And whilst I would like to seemuch of that incremental energy,
be used here in Canadaas Hydro-Quebec has used
their energy to spawn thingslike the aluminum industry in Quebec.
We need to do the same thing.
But exporting energy inthe United States is not a bad thing. Why?
Because there are huge infrastructureinvestments that go around that.
(19:11):
And there is the so-calledswitching costs.
Rates mean it's a bit like an oilrefinery dependent upon our Alberta crude.
They can't get a similar crudefrom virtually
any other jurisdiction other than Iraqand Venezuela anywhere in the world.
And that's, you know, there are all kindsof political issues around that.
So they're very varied,dependent on Alberta crude.
(19:32):
And that's why it's why the presidentdidn't put the same tariffs on crude,
that he put on un on other products,coming out of Canada.
So where else can we develop a dependencyfrom America on us
that makes our trading relationshipwith the United States more important?
While at the same time,and with emphasis on this point,
(19:53):
we need to be hustling our fataround the world
and selling our products and servicesand other jurisdictions.
You know, the wayI've been thinking about this
and writing about this since January isthat we have to have a two track strategy,
and track one is a long term strategyto be less dependent on the United States
and track two is a medium termand medium term strategy
(20:16):
to have greater accessto the United States
so that we can affect trackwhat and and if we do that,
then we'll be probably in a betterbargaining position.
We'll never be in a superiorbargaining position.
The United States will be in a betterbargaining position, presumably.
So we have to walk and chew gum.Go figure.
Yeah, totally. And I couldn't agree more.
And we need to what we need to dois make sure that the community writ
(20:40):
large understands that this, thatthis idea that because we're we've got
sort of challenges in the relationshipwith the Trump administration
that we need to sort of pick up ourour cards and walk home and go elsewhere.
That's not going to work.
We need to you're sayingexactly what I'm advocating,
which is no, no, no, no,that's totally the wrong thing to do.
(21:02):
We need to develop more strategic.
We need to be more strategicin our relationship to the United States,
while at the same time, to your point, addgetting on our bike
and selling our products and servicesand other jurisdictions around the world
where highly respected countryaround the world
and, we don't use that.
Oh, you know, some people might counterand there's some kind of nationalism
(21:25):
that has been unleashed in the country,understandably, by what's going on.
And some people say, well, look,
you know, we can't have confidenceor they're going to take our stuff.
They're not going to lock
us, that they're not going to,you know, that our cars will continue to,
go over that border multiple times,in, in the supply chain. So,
(21:47):
you know what,if we're not in control of the situation.
No, but but I think, look,
I, I'mI'm not here to be critical of the U.S.
administration. I don't want to do that.
At the same time,I'm encouraging us to develop
a stronger relationshipwith that same administration.
But I do think that a sense of reality,especially with the Treasury Secretary,
(22:10):
who I think has got aa greater and greater voice in the US
administration, that ityou know, pragmatism rules the day here.
And clearly the US stockmarket did not like this idea,
reciprocal tariffs and, and
the impact it was going to haveon the economy and inflation.
And I think the presidenthas been awakened to that reality.
(22:31):
And you have seen a substantial climb down
from, some of those, regional sort of,
economy busting,
rules around, you know, ridiculoustariffs, tariff levels.
Okay, Jacob, I'm.
Going to come back to you in a momentwith, say, the policy question
(22:53):
around government.
Trump has opened up something.
I want to ask him. About.
He's a b a company.
He's been very involved with M&A spaceand you know,
MBDa space is a company that essentiallyyou guys brought back into Canada.
So I imaginethere was a good business reason to do it,
(23:13):
given the kinds of pressuresyou're seeing.
And the pressure to manufacturemore in the United States, can you imagine
situations where where you might haveto, you know,
put more of the production facilities,let's say, into the United States?
Yes. Unfortunately,
if you want to do businesswith the American government,
(23:37):
military,it's very hard to do so from anything
other than a, a us,physical production facility.
However, however,and this is a really important nuance,
if we've got a product which is,
globally beating technology, right,that the Americans really need.
(24:00):
Right.
Prime example of that is, you know,
the president's thirst for something he'scalling the Golden Dome project.
Right.
Which most of you will have heard of.Right.
And, a bit like Israel's Iron Dome.
I think that's the metaphor.
So, we actually MBDa
(24:20):
could contribute in a very significant way
to the creation of a golden Dawn.
So instead of our Prime Minister
going off to Washington and saying,okay, well, yes,
this is all going to be builtin the United States.
And, you know, yes,we want to be part of it.
So how big this are?
Check out to be the Prime Ministercould go to Washington and say, actually,
(24:43):
we can contributeto the Golden Dome, right.
Because we've got a technologywhich you don't have,
but we're not going towe're not going to build that technology
and we're not going to contribute itfrom an American industrial base.
We're going to contribute it from,a facility or facilities in Canada.
Right.
Because this is going to be Canada'scontribution.
(25:04):
So what is itsuper important that Canada do?
It's super important that we have
and we can keep worldbuilding technologies in this country.
It's just we can'twe can't be a mature economy
if we're not the best at things,not everything.
(25:25):
But we've got to be the absolute bestin some things
that brings the worldto our doorstep, right?
It gives us leverage.
It's a reason for peopleto want to trade with us, not just simply
because we've got lotsof agricultural products
or we've got lots of uranium,or we get lots of potash.
Right. Itit we've got to be more than that.
(25:47):
And and we're the country has notbeen good in this area, as you know.
And and Jacob,we've got to get good in this area.
If I can add, add like I think you know,I work with a lot of technology companies
in Toronto, you know, Kitchener-Waterlooarea and most of most of them,
to John's point, are built to selland built to sell to US buyers.
Right.
(26:07):
And I think, you know,
that's something that to John's point,I think we need to change.
Right.
Like that technology for all those startupcompanies ends up moving to the US
and be incorporating, you know, improvedtheir and becomes a US technology.
I think I agree with John, in additionto kind of the, you know, raw
material economy, we need to, you know,become a better kind of technology
(26:29):
in our economy.
We have the talent, right?
All of the large US technologycompanies have thousands of people working
and in Toronto and Montreal and Vancouver,but we're working for the US companies.
Right.
We need some more homegrown,you know, leading
technology companies,which we really we haven't had since. But
(26:50):
and we need the environmentto, to be able to do that,
which I don't know if you were
that was going to be a policy question,but that should be something
that the government's focused on creatingthat environment and the ecosystem
for that, for that to be a viable pathand not just,
you know, to sell to the highest bidderin the US cities.
So that's very similar.
You've gone down a road that, you know,that I wanted to ask a little bit about,
(27:12):
you know, in terms ofif we are going to diversify
and, and again, and the businessesthat you're, you're speaking with.
So we're going to move from,to less of a north south orientation,
not no orientation, but let's sort ofsay more of a global orientation,
more of both east west,domestically and globally.
(27:32):
As well as, as well as north southand bring those into a different.
Kind of balance with one. Another.
What do we need government to do?
Yeah.
So, so look, great question.
Hard answer.
So, we need to attract talent.
We need to grow talent in this country.
(27:53):
We need to make it attractiveto stay here.
But we also need to make Canada anattractive place to attract talent, too.
Right.
And we are seeing in the United Statesnow an environment which,
you know, is not particularly favorablefor the research community.
We need a very, very focused,directed immigration policy around
(28:16):
attracting the world's top researchers,the world's top scientists,
highly skilled peoplefor technically sophisticated industries.
We need to make this a very attractivejurisdiction for people, to come to.
That's number one.
Number two,why wouldn't the government, to your point
and what can the governmentdo from a policy perspective,
(28:38):
given the environment I've just described,why wouldn't, the government
go to the country's top research, institutions and universities
and say, okay, we're going to
let you attract just to pick an example,because it's in my home,
why wouldn't we go to Dalhousie and say,okay, you guys are really good
at ocean research.
(28:59):
We're going to let you hire sevennew top world class researchers, right?
And we're going to provide youfor the funding to do that
for, let's say, five years.
And after thatyou're on your own sort of thing.
But you know, and do thatacross the country, across, you know,
very segments of very segments and, and the economy, we don't need to look far
(29:19):
for lessons on the policy frontto figure out how to grow an economy.
And we've got the platform.
My God.Come on, let's take advantage of it.
Okay, Jacob,how are we going to take advantage of it?
I was just going to layer on
some of what John said as I,Andrew 100% agree and more funding for,
you know, for our universities,for innovation,
(29:41):
you know, federally funded,you know, research chairs, to drive
that innovation that Canadian companiescan then use rather than, you
know, licensing technologyand knowhow from, from other countries.
And then I think your question ed around,you know,
immigration and John's point aroundinfrastructure are connected.
If we want, you know, more immigration
(30:04):
that we need to solve our infrastructureand our housing issues.
I think I think the two thingsare connected, you know, living outside
Toronto, John's point around high speedrail is a is a sore point for me.
And, you know,
Jeff, you know, Japan builthigh speed rail in the 60s.
France fit it in the 80s.
We're in 2025and we don't have high speed rail.
(30:24):
You know, we keep talking about thisproject from Windsor to Pivot City.
But you know,I don't know how many years it's been,
you know, we've been talking about it,but there's been no movement.
Let's make let's make some small progress.
Let's, let's,let's do Hamilton to Toronto.
Right.
Like think about all of the
housing opportunities that there would befor new immigrants in Hamilton
(30:45):
if they were half an hour away from workin Toronto instead of an hour and a half.
That they are right today.
Yeah, I am struck as we aswe get ready to wrap up here, I'm,
I'm struck in some ways that, that the conversation has turned to talent
and how we nurture, attract,retain talent.
(31:06):
You know what's high speed rail about it.
So it's about moving people aroundnot just for their work, obviously,
but also, you know, also for their, for their work, new airports, you know,
and it's to get people togetherto figure out things,
to invent things in thereand on your journey.
And a lot of what you're saying,you're talking about,
you know, research and development and,you know, the companies
(31:27):
you've been involved with donea lot of research and development.
Canada's not very goodat research and development.
At least our private sector isn't.
So, it's an interestingpoint of convergence.
We're not good at commercializing it.
Yeah, yeah, we're not bad at research.
We're just not goodat commercializing research.
Okay.
So that will be a focus ofwhen we start a trade diversification.
(31:48):
We end with talent.
It's actually very natural progressionof the conversation.
Look, I want to thank you
both I got from most of our questions, which is good.
I'm sure other people outthere will have questions, too.
But, you know, I just wanted with this,you know, on a scale of 1 to 10,
how optimistic are youthat we can make something of this moment
(32:10):
we find ourselves in and come out of it,you know, for the better.
I'm Jacob, you go first.
I was hopingyou would ask John to go first.
Somewhere between 6 and 7.
Okay, John, how optimistic should we be?
Yeah.
So I would say, I'm, I'm mixed emotions.
And and by that, I mean, I'm really superworried that we don't take advantage of,
(32:35):
where we are in the crisisthat we find ourselves in.
But I'm super optimisticthat we've got a leader,
now who has not been
a politicianat any point in time in his life, has been
has had an incredibly successful career,who's super smart,
(32:56):
who's, going to be,I hope, a demanding leader.
He's not going to be afraidof taking risks.
Who is going to endorse, the prospectand in fact, the need for change.
And it's going to be willingto do those things and make mistakes.
And that's how you grow.
So, I'm worried that that,
(33:18):
that somehow the system got some, some
and stripped some,
the, the sort of the sort of charactertraits that I think he brings to the job.
And I hope that he's strong enoughto resist them
and impose himself on, and the countrythe country needs great leadership.
(33:38):
Right. So we need that.
Okay. I'm giving the warrior in.
You may be a three and I'm giving the, twoor and you may be Nate.
Right. There we go.
Thank you both so much, John and Jacob,that, such an insightful conversation.
Thank you.
My pleasure.
Okay, Jacob, we're back for a few minutes
(34:00):
to do a little bit of a recap of whatwe just heard.
You know, what would your main takeawaysbe from the conversation on withdrawal?
I think John was pretty, pretty vocal on,you know, diversification is good,
but that doesn't meanwe're walking away from the U.S right?
And I think
I think, you know, as we were talking
(34:20):
just now, I think that's, that's importantfor people to hear.
Now, I, I personally do thinkand I think John mentioned this as well.
It's maybe, you know, relooking at that,you know,
that relationship, you know, can we can we
you John said, you know, demonstrate
our, you know, how valuablewe are to the U.S.
(34:41):
economy.
And can we,can we change how we contribute?
But, you know, as a longer term strategy,we should look to diversify it.
But as a short to medium term strategy,you know, the U.S.
is the biggest market in the world.
Economy will continue to grow.
It's, you know, it'sa, you know, the population in growth
in one of the few countries in the worldwhere it's going to continue to increase.
(35:03):
Right?
So it's, you know, I think I think it's a
maybe it's not somethingpeople will necessarily like hearing,
but I think that's the reality of ourof our economy in our situation.
A doable proposition to marry the private
needs of companyis the public need of the country.
If you. Well.
I think that it's it's a tough one.
(35:23):
I think, you know,you mentioned a couple times
during the interview,you know, this nationalistic,
you know,feeling that we have in Canada of,
you know, fighting Canadianand reducing reliance on the U.S.?
I think, you know,
the thebusiness needs are slightly different.
And I think that will likelycome to the fore.
But but again, I think it's not an eithernor strategy.
(35:46):
Right. I think I think we can do both.
I think we canwe can focus on Canadian product.
I think we can focus ondiversifying while,
you know, still maintaining and improvingthe relationships of the U.S..
All right, Jacob, thank you so much for, for being with us today.
And, good luck.
As you help others,you know, adjust to the circumstances and,
(36:09):
you know, plantheir strategy is so important.
No, thank you.
Thank you, I appreciate it.
And thanks for having me.
Trade
diversification isn't just a nice to have.
It's a national imperative that it's goingto take real leadership from government.
Yes, but in boardrooms and corner suitesas well,
(36:30):
companies, not governments,are the ones who ultimately trade.
Governments need to create the rightconditions and incentives
to encourage themin publicly interested direction,
but the private sector has to pull it off.
Thanks for listening to Full Circle,the Leapfrog series.
Well, see you.
Or at least, hear you.
Or maybe you'll just hear us next time.
(36:52):
Thank you.
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