Elbows up in Canada
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I can tell you that Canadians right now are upset, we're angry, we are dismayed. They're absolutely insane. Our two countries have worked together forever. Well, it all comes to Donald Trump, right? The constant jokes about annexing Canada

Canada being the 51st state. It's absolutely ridiculous. What he wants is to see a total collapse of the Canadian economy. He called our border a fictional line and repeated his disrespectful 51st state rhetoric. That'll make it easier to annex us. Canadians are angry.

And the President of the United States isn't backing down. Why would we pay $200 billion a year in subsidies to Canada when they're not a state? You do that for a state, but you don't do that for somebody else's country. So I think Canada is going to be a very serious contender to be our 51st state. This anger is reshaping Canadian politics.

A new prime minister's been sworn in despite never being elected to a political office. We didn't ask for this fight, but Canadians are always ready when someone else drops the gloves. On this special episode of Reuters World News: How Canada approaches this political moment and how the fight with America is affecting everyday life. We are Canada strong.

Vive le Canada. Merci. I'm your host, Christopher Waljasper, in Chicago. Every day, thousands of Comcast engineers and technologists, like Kunle, put people at the heart of everything they create. In the average household, there are dozens of connected devices. Here in the Comcast family, we're building an integrated in-home Wi-Fi solution for millions of families like my own.

It brings people together in meaningful ways. Kuhnle and his team are building a Wi-Fi experience that connects one billion devices every year. Learn more about how Comcast is redefining the future of connectivity at comcastcorporation.com slash Wi-Fi. I'm joined today by our Canada Bureau Chief, Caroline Stauffer. Caroline, how's Toronto? Toronto is warming up. It's not quite as chilly as it's been, but it has been a very active news scene here. I'm

I'm sure. And David Youngren covers breaking news and Canadian politics from the capital, Ottawa. Hey, David, how are you? I'm fine. We are kind of finally looking at the snow melting. The last two winters before this were absolutely miserable, but this winter's been a good one, so lots of snow. For once, being in Chicago, I'm the one with the tropical weather. That's a new one for me. Well...

So there's a lot of Canadians pretty upset with the U.S. right now. Help me understand from where both of you sit, who's more mad at the U.S., Toronto or Ottawa?

I was just in Ottawa and witnessed a protest outside of the Parliament building that had nothing to do with Canadian politics. It had everything to do with Donald Trump. And that kind of surprised me. I have not seen that kind of display in Toronto. There were signs criticizing Trump's imperialism, saying the free north loud and peeved. Very angry people. In Toronto, I think we're seeing more imperialism.

In stores, you cannot buy American wine in liquor stores anymore. And you go to a grocery store and there's definitely maple leaves everywhere encouraging consumers to buy Canadian. From the political side, I mean, I think it's fair to say there's a great sense of betrayal because the U.S. was always seen as Canada's main ally through thick and thin military, economically. The two countries are incredibly tightly intertwined.

and to suddenly have your best friend go rogue. And it's clear that while government ministers are trying to be polite, the irritation is starting to show. I mean, last week, the foreign minister referred openly to what was happening in the White House as a psychodrama, which is a word that you would never, ever have imagined a Canadian politician using to describe what was happening in the White House. Absolute sense of betrayal. And then, I'll

Because if your main friend and your main trading partner suddenly does turn on you, you are kind of stuck. Because the Canadians, they have free trade deals with various small countries. They have a free trade deal with the European Union. But I mean, the States take 75% of all exports. Certainly, certainly. So some Americans hear Trump say things about making Canada the 51st state and see it as hyperbole. But it seems that that's maybe not how Canadians see it.

Yeah, I think early on when Trump first started posting on social media about the 51st state, Canadians sort of thought, OK, that's a joke. It's not particularly funny. That started to change about a month, six weeks ago.

When it has been one of Trump's most relentless posts on social media, the 51st state, Canadians would be better off. It's at least once a week, if not every day, that this comment comes up. But it'll be for the state, one of our greatest states, maybe our greatest state. And then Trudeau actually told a roomful of business leaders that he did think the threat was serious and he thinks that Trump is interested in Canada's natural resources.

Yeah, I mean, Trudeau was giving an address to business leaders and his comments in public were fairly bland. And then as the reporters were let out of the room, he began expressing his feelings much more frankly. But it was done in such a way that any reporter with half a brain and a microphone could actually hear what was going on. So it was clear that Trudeau wanted the message to get out, that Trump was serious about annexation. Now, there are many, many reasons to believe this would be astoundingly complicated, especially when Trump talks about minerals.

He seems fixated on getting a more reliable supply of Canadian critical minerals, and he's also fixated on the Arctic. Now, the challenge with this idea is that the Canadian Arctic is 4.4 million square kilometers of not very much. Basically, it's ice. It's ice. Ice and frozen waterways. I've been to the Arctic several times. It is an astoundingly difficult place to work in, and...

Climate change is only making things worse. As someone said to me many years ago, we know how to drill a normal ground. We know how to drill in permafrost. But what we don't know how to do is to drill in permafrost that's melting. So you have stories. You have stories of rigs suddenly lurching 45 degrees because the ground underneath the rig suddenly melted. So you can't just waltz in and start mining in the Arctic. It's just not going to happen.

Okay, I have to ask, and maybe David, you can explain this to me. Last weekend on Saturday Night Live, Canadian comedy legend Mike Myers was on and was wearing a shirt defending Canada and then mouthed this phrase, elbows up, and kind of tapped his elbow. And this seems like a rallying cry. We've seen this other places. I think even Trudeau said it at one point. It's not a phrase I'm familiar with down here. Can you explain the elbows up phrase?

Yeah, it's the equivalent to gloves off or studs up in soccer, gloves off in boxing. Elbows up is a hockey term, yeah? If you fly into a confrontation with someone with their elbows up,

you are clearly sending a message that you're ready for a fight. You want to do them some harm, yeah? It basically means enough nonsense. We're getting serious now. So yeah, it's a very Canadian phrase. So let's jump into the politics here. The Liberal Party last weekend elected outsider Mark Carney as their head. He was sworn in as prime minister on Friday.

Does the average Canadian think that he's going to have the the metal to stand up to Trump and and all of this this rhetoric? These are very unusual times. I mean, let's make quite clear here that in a normal political cycle, Mark Carney wouldn't get within 2000 miles of where he is. I mean, he's the first person ever to have become prime minister without any political experience at all. He's never been a legislator, much less a cabinet minister. He is the ultimate outsider.

But what people appear to want is someone who can deal with Trump, someone who has a lot of experience of dealing with crises. So Mark Carney, when he was central bank governor in Canada, dealt with the 2008-2009 financial crisis. And when he was in England, he dealt with Brexit. And there are criticisms in both countries of how he managed LRF.

elements of both those crises, but I think it's generally accepted he did pretty well. So he comes in with no experience whatsoever saying, look, these are extraordinary times. You need my experience. So that's certainly one in the leadership of the Liberal Party in a landslide. But polls tend to suggest that he is tied with the opposition Conservative Party, who are most likely to be the main rivals. And it is quite likely that you have two parties, both

both telling electors, give me a strong mandate to deal with Trump. Whoever wins is going to have a minority of seats in Parliament. And in Canada, minority governments tend not to last very long. And because you can fall at any point, you'll continually try to shore up your support. So this could be very, very unpredictable times. We've heard...

I heard several political analysts use the term an adult in the room to describe the sudden appeal of Carney in politics, which I thought was interesting because the situation has completely changed since last year when the liberals were trailing the conservatives by some 20 points. But two things have changed since then. Trudeau resigned, who was deeply unpopular at that time.

opening space for a new candidate. And Trump started attacking Canada, which made people look south of the border and think, hold on, what's actually the best for our country at the moment? And in comes current

Carney. But Carney wasn't even an elected minister before this, and now he's the prime minister. How does that even work? Is that possible? It is possible. It's happened once before in 1984 when John Turner was elected leader of the party without a seat. I mean, and even Turner had had a long history of serving in previous liberal governments as a cabinet minister, so he kind of knew his way around the room. I

It wasn't as though Carney had even been a kind of an ever-present in Canadian politics. I mean, as Bank of Canada governor, you aren't allowed to be political. And then he'd spent 10 years in Britain, and then he'd come back and worked in finance. I mean, his name was always mentioned as a potential candidate, but he was very, very low profile. So it's not as though this was the...

obvious successor to Trudeau when Trudeau stepped down. He wasn't. In fact, you could argue that Christopher Eland, the former finance minister, was in some ways one of the obvious successors. So, County really has kind of burst onto the scene and people don't really know very much about him. He certainly doesn't come across as a politician. I mean, even people who support him will admit that his delivery is kind of

central banker-like. He has a fairly flat delivery. He's not able to kind of whip a crowd up. He stands there and just talks. My government will put into action our plan to build a stronger economy, to create new trading relationships with reliable trading partners.

But his message is, I am not a politician. I am an outsider. We do not need normal politicians right now. We need someone who knows what he's doing when the situation is bad.

Yeah, and only 150,000 party members actually voted in the liberal leadership contest. And this is a country of 40 million people, of course. One question that Carney has been asked is actually how involved was he in the Trudeau government? Because what he is facing now is the conservatives kind of accusing him of being an advisor in the background, and they're trying to kind of paint him as continuity with Trudeau. Carney's response to that has been...

look, I'm on the board of several organizations. I've been doing all these things with the United Nations and other organizations. When would I really have had time to advise Trudeau? But I think it remains to be seen how successful he'll be campaigning against a career politician who has been preparing for this fight for years now. Now, it strikes me, David, you referred to Carney's affect as somewhat flat.

In recent weeks, we've seen another Canadian politician really step into the limelight, right? Doug Ford, the provincial premier of Ontario. Now, I'll be honest, I didn't know who Doug Ford was before all this. Some Americans might remember his brother, former Toronto mayor Rob Ford, for his viral moments a little over a decade ago.

But Doug seems to be a big contrast to Mark Carney's more mild approach. We will apply maximum pressure to maximize our leverage. That's why today we're moving forward with a 25% surcharge on electricity exports. How exactly did Doug Ford find his way into this conversation? Well, as a vacuum. I mean...

Trudeau is still in office, but isn't really acting as a prime minister. Carney is not in office yet, so he can't do anything. And so for the last week, 10 days or so, there's been a vacuum at the heart of power in Ottawa with no coordinated approach from the federal side. So Ford just saw this gap and decided to go for it. Now, Ford is not an experienced international politician. He, I think, has said and done things that clearly

clearly irritated Trump no end and he has been talking about how he's going to go to Washington and talk about an early renegotiation of this trade deal. As a provincial premier he has absolutely no say whatsoever in what is absolutely a federal jurisdiction so an

Another Canadian expression which I actually quite like. He's getting ahead of his skis. Certainly. As they say in Canada. So you have to have then federal politicians stepping in to quietly say, well, in fact,

this is one for us but I mean there was a vacuum and he felt that someone had to stand up and be as they say as there's this phrase Captain Canada in times of a crisis you want someone to kind of stand up with the cape and the hat so he he took on the role of Captain Canada and again given that there were no adults minding the store in Ottawa he basically took the ball and ran with it I

I think what we saw happen last week was a bit too chaotic for many Canadians' tastes. I think just that back and forth has just left many Canadians feeling quite whiplashed about what tariffs are in place, what they might be facing. Because all of this will have a real economic impact on Canadians, on people's jobs, on their spending power, on the currency where they can travel. So there is definitely a sense of fatigue over this.

the tariff policy. So Carney's now prime minister. What happens next? We've been told by sources in the Liberal Party that his intention is actually to call an election as soon as possible. That will enable him to form a more permanent cabinet and just know what the mandate is and kind of end this period of

uncertainty. So if that happens in the next week or two, a federal election could occur in Canada in about a month.

And we will know if the Conservatives prevail or if Carney manages to pull off what would essentially be a very big upset. What do the other parties in Canada see as the way forward as we head towards an eventual election? Trudeau governed for almost three years with the help of the New Democrats, which, like the Liberals, attract the Democrats.

centre-left vote. Polls tend to suggest that the New Democrats are going to get stomped. The Greens only have three seats. So the only other serious opposition party is the Bloc Québécois, which in a uniquely Canadian twist is in fact a separatist party that sits in the

and don't have a majority in the House of Commons, it is easier to see how they could cobble together another agreement to govern than it is for the Conservatives, because the Conservatives don't really have any other obvious partners in Parliament. So balance of power...

tends to favor the center-center-left parties in Canada. But as Caroline mentioned, the Conservatives were seeing a rise in popularity before this breakdown with the U.S. What was behind that increase? As we saw in many parts of the world coming out of the pandemic, Canadians grappled with high inflation and cost of living, here in particular a housing crisis. And

It really seemed to be economic factors that were kind of behind the decline in Trudeau's approval numbers. So I think that's also behind the rise of the leader of the Conservative Party, Pierre Poliev. He had participated in some anti-government, anti-vaccine mandate protests in Canada and gotten some attention that way. And some of the factors that were behind Trump's election

election in the United States have also played out in Canada, at least before we got into this trade situation. And also Trudeau is a very divisive figure. I mean, you know, people who love him, love him, and people who hate him really hate him. There isn't much middle ground. And when he came into power in 2015, he replaced a fairly, should we say, stolid conservative prime minister who wasn't very exciting. And Trudeau came in overtly pro-feminist,

Pro-LGBT, just a fresh face, funny, confident. I mean, Trudeau mania really was a word. I mean, I went with him on his first trip to Manila in November 2015. He was mobbed in a conference center. His security detail

Had to kind of pluck him out of this crowd and whisk him away. But to Caroline's point, I mean, COVID didn't help in the sense that Trudeau came on TV almost every day to reassure Canadians about what the government was doing. Don't be scared. We've got your backs. And I think people who work for him will admit now he was grossly overexposed. And Caroline's point, the eruptions caused by COVID, a lot of people lost their jobs. A

The combination of people being fed up with COVID and just fed up with government and fed up with Trudeau. Yeah, in the last 18 months before the Trump threats, his figures were through the floor. But this is nothing unusual in Canadian politics. I mean, Canadian prime ministers very rarely last more than nine or 10 years. So what's unusual about the prospect of a Carney victory is that the lifespan of the government, which would normally have ended at about 10 years with the Conservatives coming in, could be extended significantly.

in such a way that the liberal government lasts longer than it would normally have done. Now, I wonder, we've talked a lot about the trade war and the flaring up of tensions with Donald Trump. There's been a lot of conversation about who's going to feel the effects of this trade war more.

But do we know who's going to win and who's going to lose? I think economists would say pain will be felt on both sides of the border. And certainly Canadian officials, while trying to negotiate these tariffs, they've been a bit shocked, I think, to go to Washington and kind of come out of meetings not feeling

thinking that the Americans really realize that tariffs will result in higher prices in the United States. That's particularly when Trump was talking about tariffs on energy. Canada is the number four energy exporter. 90% of its oil goes to the United States. All of the oil refineries in the U.S. Midwest, around Chicago, Detroit, those areas are refining Canadian oil. So to suddenly...

add a tariff to that oil would massively increase gas prices in the United States. There's now an exemption for certain products in the current trade dispute, but

Certainly, anytime you add a tariff, you're adding a tax to American consumers. So there will be inflation on both sides of the border, essentially. With the tariffs particularly targeting steel and aluminum, we saw Carney go out and visit steel workers in Ontario. And those workers are, of course, very terrified.

Okay, so the vast majority of Canada's exports go to the United States. But what does the flip side of that look like? How could people in the U.S. feel the pain from this? Well, part of this is linked to the auto industry. And this is why these, I think this is why the Canadians are so bemused, because the average auto made in North America crosses the border like six or seven times. And if you're going to impose a tariff on the

as yet not fully constructed auto every time it crosses the border, then you have the price of a final car in the States going up $12,000 in price. Wow. To Caroline's point, as gas prices begin to jump, as the cost of a new car begins to jump, as the cost of some foodstuffs begins to jump, as the cost of beer cans, because aluminum prices have gone through the roof, inflation is going to tick up pretty quickly. Yeah.

you get the impression that at least part of the Canadian approach is just to kind of wait and watch and kind of come out of this relatively unscathed because the Americans just decide, okay, enough is enough. But how realistic that is, I don't know. I mean, Trump doesn't sound like the kind of person who gives up quickly and

Now, Canada, I think 23% of Canada's GDP is comprised of trade. And I think the figure for the States is 1.5%. Canadians need the Americans far more than the Americans need the Canadians. I mean, the US economy is 10 times the size of Canada's. So it will at best be a valiant defensive action because they have a lot more to lose than the Americans do.

Now, Carolyn, before you were Canada's bureau chief, you were my bureau chief here in Chicago and covered the Midwest, a lot of which voted for Trump. And as you pointed out, there's a lot of potential impacts to this trade war that could affect Trump's base. So how might that resonate with voters? I think it's still unclear in his first term position.

Trump took a lot of trade actions that really hurt American farmers. He compensated for that by giving them large amounts of aid to counteract the lost markets on trade. So a lot of farmers kind of came out of those four years feeling like Trump had their back, even though the policies weren't particularly beneficial to them. This time around, it seems like a lot of Trump voters were upset about inflation and

A lot of cattle go back and forth across the border and tariffs on Canadian beef and cattle could actually increase beef prices in the United States, beef being a popular item in the Midwest and the same, of course, with autos and trucks. So I think it's an unfinished question, but the previous Trump term did show that Trump voters would stick with him even after facing policies that did not particularly benefit them.

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Mark Carney was sworn in on Friday as Canada's new prime minister after a month of nonstop tariff news from both sides of the border. A big thank you to Carolyn, David, and everyone who's been covering this trade war blow by blow. Stay with us on this feed, Reuters.com, or the Reuters app to stay up to date.

If you want to learn more about the Elbows Up protest movements, there's a great piece on Reuters.com right now. We'll link to it in the podcast description. The Reuters World News team includes Kim Vinnell, Sharon Reich-Garson, Jonah Green, David Spencer, Gail Issa, and, of course, me, Christopher Waljasper. Our senior producers are Tara Oakes and Carmel Crimmins.

Lila de Kretzer is our executive producer. Engineering, sound design, and music composition by Josh Sommer. We'll be back on Monday with our daily headline show. To make sure you never miss an episode, follow along on your favorite podcast player or download the Reuters app.