Trudeau Talks Deficits, Bombardier and Brand Canada: Transcriptby
Canadian prime minister speaks in Bloomberg interview
Highlights include manufacturing's future, stock-option taxes
Canadian Prime Minister Justin Trudeau spoke with Bloomberg on Wednesday in Vancouver. What follows is a partial transcript of the interview:
Q: You’ve signaled the deficit will be larger than forecast. You’re sticking to spending pledges?
A: We’ll be open and responsible about it, but the fact we’re already that much in the hole in deficit is not a reason not to do the investment. It’s to me even more of a reason why we need to be investing intelligently in infrastructure, in money in the pockets of the middle class, to grow the economy.
Q: Why not spend more, then?
A: These are the kinds of decisions we’re taking. We’ve committed to being fiscally responsible. And we’re very aware that smart decisions made in the ’90s left us in the situation of a debt-to-GDP ratio that’s the envy of the class to a certain extent, when you look internationally. And we want to keep declining our debt-to-GDP ratio because that’s healthy for our economy. So balancing that fiscal responsibility that Liberals have always had with an understanding that, in order to grow, we need to invest, is the balance we’re working hard to strike.
Q: So you’re considering topping up your C$10 billion in campaign spending pledges?
A: It’s too early to say. The decisions we made in the platform, in building the platform, we made some real choices because we wanted to put out a credible platform we were planning on actually running on. … One of the questions that came up: “Well, would you want to flow more infrastructure dollars quicker?” There’s a limit on how much you can flow infrastructure dollars in a short time frame from a standing start. So I think we’re around the right frame.
Fiscal vs. Monetary
Q: Are you considering any massive new stimulus?
A: No, no, certainly not. I don’t think we need massive stimulus. I think what we need are smart investments that are going to help the economy and the families who need it in the short term while creating a path toward greater growth and greater prosperity in the longer term.
Q: Can Canada be a leading voice globally against austerity?
A: I think we should. I think there’s certainly an example we could give. I think making sure monetary policy and fiscal policy are aligned and complementary is obviously a benefit to any economy. But at the same time I don’t want to be overly preachy. ... I’m very aware that we’re in a particular situation but that doesn’t mean we can’t encourage people to think about the kinds of things we’re going to do effectively in a way that suits their own economies. I think the last thing Canada needs to be is either preachy or bombastic or “hey look at us, we’re the best, do what we do or else you’re doing the wrong thing.” That’s not what people need to hear from Canada.
Q: What’s your message to the Bank of Canada?
A: I really appreciate the nature of the relationship between the Government of Canada and the Bank of Canada. Yes, we keep each other informed of the issues and the sense of solutions we’re looking at putting forward, but there is no interference, there is no direction. I have no business telling Stephen Poloz to do anything nor does he to me.
Q: You spoke Wednesday at a green technology conference. Is that the future of manufacturing, or can Canada see a rebound in traditional manufacturing as well?
A: Obviously this is part of the future, but even when we look at legacy manufacturers -- whether you’re talking about auto, steel, those kinds of things -- the call of low labor costs that was so prevalent around the world over the past decade or more has diminished a little bit as people are realizing consumers around the world are looking for reliability and quality and will pay a little bit more for something that’s not going to fall down around their ears or be knocked over in the first earthquake or whatever it is. People are looking for a little more environmental responsibility in the choices they make, and one of the big things I’m trying to promote is this idea of the Canadian brand.
There are certain countries that are associated with certain brands. If I say, “oh, that’s a German product,” that automatically conjures a certain suite of expectations. “That’s made in Japan” -- there’s another suite of expectations. If something is made in Canada, what are the attributes that you attach to it? I’d like that to be that it’s done responsibly, it’s done [in a way that’s] environmentally sound, it’s done with quality in mind, it’s done in an innovative, respectful way.
Q: You’re still considering Bombardier aid?
A: We’re taking this challenge Bombardier is facing very, very seriously. I believe in the future of aerospace in Canada. It’s the kinds of good jobs, the kind of innovation, the kinds of world-class products that Canada can and should be known for with good jobs, with all the parts, the brands, that we need. Bombardier is facing both short-term, medium-term and long-term challenges and that’s the lens we’re taking on this decision of how we can move forward, how we should move forward with this.
One of the great things that we’re very, very aware of is the C Series is a superlative product. You look at everything people have written about it, it’s going to be an extraordinary airplane, so our question is very much, “well, how do we make sure that airplane is a success and how are we making sure it is a Canadian success story?”
Q: Is the family’s share structure a problem?
A: You know what, we’re digging into all sorts of different aspects of it, because we want to make the right decision not just for the short-term but the long-term.
Q: Are you still considering stock option changes, which some have warned would hurt tech startups and other innovative firms?
A: It was something we talked about in our platform, but as the guys from [Kitchener-Waterloo] are saying, it really matters how it’s implemented, how it’s done. And in any measure we put forward, we will be extremely responsible about how it’s going to have the right kinds of impacts and not the wrong impacts.
Q: So it’s still on the table?
A: We are going through a very rigorous process of looking at all sorts of different options and alternatives for fiscal measures and others, and we’ll have a lot more to say about it March 22. … Certainly everything that was in the platform is part of the mix of things we’re considering for this budget.