Canadian Prime Minister Mark Carney Speaks At The Economic Club of New York

Added: 2026-05-28

[00:00:00]Thank you very much, uh, Bob Nter. Uh, hope you're sitting comfortably. Uh, I like that promptly at 12:45. That's a that's a that's guidance, uh, for me as a central banker. I won't speak as long as I did last time I was at the Economic Club of New York. Um, but thank you, uh, Barbara. Thank you very much, uh, for this, uh, invitation.

[00:00:22]Um, and I'm just going to say a few words. Uh, I'm just going to begin in French because Canada is a proudly uh, bilingual country and we have our media here.

[00:00:44]Noveil, no force.

[00:01:34]So if you understood that you can uh talk amongst yourselves. Uh the rest of you will listen. I Glenn uh Hutchkins um I last spoke here uh you uh you introduced me, you hosted me and at the time I reflected I was at the Bank of England. I reflected on the global financial crisis that had just passed and Brexit that was about to commence.

[00:01:56]And I maybe just with referring to the global financial crisis, may I salute uh the many contributions that Bob Steele made as uh at the US Treasury uh to helping to address those issues. Thank you, Bob.

[00:02:13]And Bob, when I look back uh to the those times, they were comparatively carefree days uh because the world is uh is undergoing a rupture. um led and there's positives and challenges within this. Led by the United States, technological change is accelerating at a pace we have not seen in our lifetimes. The US is transforming all of its commercial relationships as is its right. The world is becoming more divided and dangerous and Canada recognized these developments earlier than most and our response reflects the core lesson that we've taken from these tectonic shifts. namely that is that we have to take care of ourselves and we have to be true to ourselves.

[00:03:00]Taking care of ourselves means building our strength at home and diversifying our partnerships abroad. So in our first year in government, we cut taxes on incomes, on capital gains, on new business investments. We introduced something called the productivity super deduction. What you need to know is it gives Canada the most competitive tax rate for new investment in the G7. It's half the G7 average and four percentage points below that of the United States.

[00:03:28]We're in the process of catalyzing one trillion dollars of investment in Canada over the course of the next 5 years in energy, transportation, data, and defense. We've launched our most significant regulatory reforms in generations to fasttrack hundreds of billions of dollars of nation building infrastructure projects. And we're re realizing our full potential as an energy superpower.

[00:03:55]By the end of this decade, Canada will export nearly 50 million tons of LG annually. By the end of the next decade, we will double that capacity. We're advancing a potential pipeline that would carry at least a million barrels of low emission Alberta oil per day to Asian markets while creating a entirely new industry of large-scale carbon capture and storage.

[00:04:19]We're building right now the world's first operational small modular reactor in the G7 while expanding our worldleading uranium production. In the past year, we have signed 56 56 critical mineral agreements with more than 10 countries, unlocking more than $18 billion in capital while reducing dependence on foreign choke holes in that critical supply chain. We are doubling our electricity grid. That's more than 160 gawatts of new power, building on the lowest cost power in the G7 and the second lowest emission power in the OECD.

[00:05:00]That is what an energy superpower looks like when it decides to really act as one. Now, in parallel, we're diversifying our partnerships abroad.

[00:05:12]We've signed more than 20 economic and security deals across five continents in the past 12 months. Our existing free trade accords already provide access to 1 and a half billion consumers from the EU through to the CPTP.

[00:05:30]We're now on track to double double that addressable market this year with new deals with India, the Azan countries, Merkasaur, Thailand, and the Philippines.

[00:05:41]We're the only non-European member of SAFE, which is the Europeans's defense procurement initiative.

[00:05:49]Now, one of our core objectives of these partnerships, yes, it's access to markets, but it's also to increase our strategic autonomy because we all live in a world where integration has been weaponized. Think critical minerals. Because a country that can't feed, fuel, or defend itself is not truly sovereign. Because as well, strategic autonomy today extends to building partnerships, capabilities across AI, financial payments, space, critical minerals as I said, and clean energy.

[00:06:27]And we are making progress because Canada has much of what the world needs and wants from energy to key aspects of aerospace, cyber, AI, and quantum. Our pension funds are amongst and some of them are here if you need money. some our pension funds although I'm not sure the economic club of New York needs money yet or has money to but our pension funds are amongst the most sophisticated infrastructure investors in the world and our banks amongst the most resilient and we are also making progress because our reputation as a reliable predictable partner has rarely been more valuable in a world where transactions are replacing relationships We're blessed with many commodities in Canada, but we have earned the most valuable one, which is trust.

[00:07:21]Which brings me to the second element of that lesson, which is being true to ourselves. True to our values of taking care of each other and meeting our responsibilities to our allies.

[00:07:33]Canadians take care of each other with a relentless focus on affordability, by providing universal child care, healthcare, education, by building, as we are now, affordable housing at scale, and we're now doing our share abroad.

[00:07:50]For the first time since the fall of the Berlin Wall, we are meeting our NATO targets as well. We have already embedded in our fiscal framework. In other words, we provided in our budget a path to 4% of spending of GDP in total defense by the end of this decade on route to the 5% NATO schedule in 2035.

[00:08:13]We've launched in recent months our first defense industrial strategy that alone will catalyze half a trillion dollars of investment in Canada in the next decade. Building on our strengths in aerospace, ship building, AI, cyber, and again quantum.

[00:08:29]We are leading NATO's multinational brigade on the front lines and they are the front lines now in Latia.

[00:08:37]We are one of the largest, not the largest per capita contributor as part of the coalition of willing for Ukraine, standing up for freedom, for democracy, territorial integrity, human rights against criminal Russian aggression.

[00:08:53]Let me say that the outcome of this war is not in doubt. The only question is the scale of the senseless human suffering that will be inflicted before Russia and its enablers accept the inevitable.

[00:09:07]We're stepping up to protect Arctic sovereignty through intensified cooperation with the Nordic countries, with Germany, the United Kingdom, and working within NATO to make Arctic security the priority it needs to be.

[00:09:22]To back that up, we've moved quickly in the past year to build new military operating hubs to commission over the horizon radar. We're going to buy new submarines while larding while adding to the world's largest fleet of ice breakers.

[00:09:37]We're also in the process of creating a new multilateral institution, the Defense Security and Resilience Bank, to provide long-term lowcost financing for defense and resilient projects across NATO allies.

[00:09:53]And being true to our values also means continuing to invest in global public goods, in climate finance and development finance, even as others are sharply pulling back. And it means helping to broker an enormous potential trade pack between the EU and the CPTP, a bridge that would expand the footprint of rules-based trade.

[00:10:15]We're just getting started, but the early results are encouraging. Canada is projected to have the second fastest growth in the G7 this year and next. We already have the strongest fiscal position in the G7, and we're reinforcing that advantage by cutting 10% of the federal civil service, 20% of our spending on consultants, and reducing the annual growth of operational spending from over 8% per year, which is where it's been for the past 10 years, to less than 2%, which is where it's been since I came into government, and where it will stay. Non- US exports are up sharply and we're on track to double them, which is our target over the next decade. And foreign investment is now running at twice the rate of our nearest G7 peer.

[00:11:01]On some measures, we we are ranked as the most attractive country in the world for infrastructure investment. So, let me bring this to a conclusion. That's a false sort of it's going to take longer than a few words, but I'm going to bring it towards a conclusion before the conversation with uh Nat. And I'm going to draw on an insight of uh the Finnish president, my friend Alex Stub, who observed that people consistently, myself included, do three things.

[00:11:31]Overrationalize the past, over dramatize the present, and underestimate the future. And so when I look back at the right path out of the global financial crisis and the right response to Brexit, both of those now look very clear in hindsight. But I think as Bob, myself, Tim Gener, and others can tell you that as being at the table during the time, there were relatively few who identified those paths. And there were fewer still who had the courage of their convictions to walk them because in a crisis, the fog and fear are real. They always are.

[00:12:10]The right response to these tectonic forces, the global rupture that I described at the start, the right response today is clearer than it may feel. It's the same. In a crisis, fortune always favors the bold. Canada got this early. We understood the world's change. We understand that nostalgia is not a strategy. So, we're focused on what we can control. And that means weaving a dense web of international partnerships abroad.

[00:12:42]That's making us a much stronger, more resilient, more independent country.

[00:12:48]Above all, as you would expect, we're focused on things that are good for Canada. This is good for all Canadians, but it's also good for the United States because a stronger Canada is a better ally. And we know we know that while Canada and the United States have had our differences over the centuries, we have always worked and eventually work through them because we share values and our common interests run deep.

[00:13:23]They run through our economies. Canada is America's largest customer. We buy more goods from America than China, Japan, and Germany combined. Those common interests run through our supply chains where 70% of Canadian exports are inputs to American cars, homes, aircraft, machinery, finished goods, creating hundreds and hundreds of billions of dollars of US value add.

[00:13:47]They run through our energy partnership where at a time of a global energy crisis, Canada provides the United States with reliable power with critical minerals that help fuel American growth.

[00:14:00]99% of US natural gas imports, 85% of electricity imports, 60% 60% of crude oil imports. That is mutual strength.

[00:14:13]Let's be absolutely clear. Canada strong will help make America great again.

[00:14:20]Examples of where that's true are Legion, where we should work together and compete with the world together. And to those ends, we have made specific practical proposals to the US administration.

[00:14:34]Consider aluminum.

[00:14:37]It's basically electricity in an ingot.

[00:14:40]And Canadian exports to the United States are the energy equivalent of 10 Hoover dams. With America's growing energy needs because of the incredible transformation here, does it really make sense to build the gigawatts here needed to replace Canada on automobiles? Canada is far and away America's biggest customer and an integrated North American market for production is the best and most durable way to confront intense truly intense global competition on critical minerals with our endowments from potachsh nickel copper uranium lithium cobalt beyond Canada can be the most reliable supplier that America needs to put affordable food on the table strengthen national defense and ex and meet the exploding demand and to power AI. So, Alex is right. We shouldn't underestimate the future as the United States approaches its 250 birthday.

[00:15:40]Happy birthday, as the most in advance.

[00:15:43]Um, as the most, but it approaches this moment as the most dynamic, resilient, and inventive country the world has ever seen. As a country whose founding values of liberty, democracy, justice, and openness should continue to serve as guides to its future and the future of the world. That future should include a new partnership with Canada, a true partnership that reimagines cooperation in specific sectors that are deeply challenged by global competition. a partnership with a different Canada, a stronger Canada, a more confident Canada, a country that is applying the lessons from past crisis, a country unleashing its enormous potential. A country aggressively translating our belief in openness into dozens of new partnerships. A country that's predictable, reliable, and principled in a world that's anything but. Thank you very much, and I look forward to the conversation.

[00:16:54]Thank you very much prime minister.

[00:16:58]This is a transformational time economy with geopolitics today. Uh you are setting a transformation your economy.

[00:17:13]You spoke today in Dallas about this moment.

[00:17:44]I thought we'd start with a global economy question. Um what you spoke about diversification, autonomy, resilient, sovereignty. Uh these have all are all of course not just geopolitically and macroeconomically challenging. uh but they're also structurally capital intensive which the energy and AI buildout that you just spoke about is only sharpening. This global economic rewiring driving higher for longer inflation is a trend that you were tracking long before most as a central banker and it has only intensified since bending the path of monetary policy and redefining the economic playing field for every major economy not just the US. So my question to start us off is when you think about this new era of strategic autonomy, how you're driving that change for Canada and how many other countries are also beginning to follow your lead. Is this a fundamentally higher inflation, higher growth equilibrium, what you called a while ago growth flation, or do you see a path to managing uh this inflation picture in part by fixing some of the imbalances in the global economy uh that are also going to be on the agenda of the G7 meeting that's coming up in a couple of weeks.

[00:19:01]>> Okay. Wow. Um brings me back to uh yes, the good old days of central banking again. Um the short answer is yes in terms of the overall trends. I I I think you've you you've described it well and and let me expand a bit which is that there are structural inflationary pressures that come and I've spoken about this in the past around the time that I gave the speech here actually I think about the process of delobalization some forms of fragmentation. I mean one of the benefits of globalization there are many challenges but one of the benefits was it was structurally disinflationary um and the reverse is also proving to be true the fragmentation that comes uh with that in many cases for good reason there's being more resilient you're paying insurance premium to become more resilient but that has to be ultimately paid and is passed through. Um so there's a structural element to that in and of itself just in terms of the changing of the level of integration.

[00:19:58]Okay, the first point. Second point, part of your question but very much of the reality that this room, this city, this country is living is uh just the scale of the infrastructure buildout that is only just beginning across I'll call it the intelligence stack but it's everything from power uh to the data centers to the chips to the int and and beyond that comes and affects virtually every enterprise and it's only just starting and the scale and the speed of that build uh which on one hand is tremendously exciting exciting and promising on another hand uh just causes big shortages. You think about uh if you're in the energy business um you know 5 years to get a gas turbine uh is what one example of that uh land power th those elements are are are front and center. So that is adding I think to inflationary pressure. Um the third element which we haven't yet seen but we're at the cusp and again because we're in the heart of global finance a number of the people in the room would be living this is actually the cost of protection cyber protection um and um uh but basic I'll call it cyber protection but the broader range of protections that's occasioned by mythos everyone knows what mythos is in this room um and what that's showing and that's I think is going to be the early stage of the what of of just a big operating spend that's going to be required to address those issues. So soft the marginal cost of software is no longer zero. Uh it's actually quite material and is likely to be there for some time. So those are those are three elements of the inflationary structural inflationary pressures that are there. Then you have what's coming with that the growth component certainly the growth component which comes from the investment boom uh the growth component which and this is one of the big questions when will the productivity be show up on a macro scale it will come but when does that show up and which would which which would offset uh some of this um finally you throw into that the challenge we have globally and it will be one of the issues center stage at the G7 around global imbalances um Chinese over capacity, uh Chinese underconumption. I mean, just put in context, China's brought ballpark, um 13% of global consumption, 30% on the way to 40% of global manufacturing. Okay, so just just orders of magnitude the uh the the pressures that come there. It's a bit of an offset um to the inflation side, but we can't solve the macro problem ultimately. you never totally solve a macro chrome without getting the imbalances uh component uh uh addressed there. Some of that will be financial.

[00:22:45]So what and I'll I'll last thing I'll say and then hand back to you which is part of the answer not all of the answer but part of the answer is going to be around energy and when you when you look from our perspective we see a very clear path to doubling our what is the lowest cost energy effectively in the OECD of the major economies. doubling that grid, doubling it without uh emissions uh materially, we see a very clear path to expanding our energy exports, which are the cheapest natural gas um effectively in the world, certainly landed in the United States and uh the cheapest uh oil uh exports that the US can get, plus on the uh on the critical mineral side. So part of a structural solution, Canada, we have it. We're going to benefit from it, but it is part of a a potential structural solution in a in a new partnership with the US.

[00:23:39]>> Great. Let me let me just pick up on one element of this before we take uh a broader set of issues that you're leading um not just for Canada but for the for much of the rest of the world.

[00:23:50]So another way to think about disjunction the global economy you and I have been talking about this is that um whether in the context of the global economy or in geopolitics this is becoming I think more and more clearly an age of asymmetry. Um it's a transitional era where power flows less from size or wealth than from the ability uh to convert imbalances into leverages. Um, as great powers seek to exercise uh their power in the ways that they do, a range of countries like Canada, middle powers and others are seeking to identify their asymmet as asymmetric strength, their source of leverage. We think of asymmetry a lot as a risk or a challenge. But if you look at various choke points and whether upstream uh uh inputs to the global economy, how do you think about that as you're now putting into place and really executing on the vision in Davos? How are you thinking about how Canada can win in this age of asymmetry?

[00:24:49]>> Yeah, I it's this is a crucial point and it's a very good it's your framing actually the age of asymmetry. Um um but it's a very good way to understand how many countries around the world are approaching their trade relationships, their investment relationships, their their priorities. Um for exactly the reason you can look at it defensively uh where am I exposed? Um uh you know we used uh as asymmetry to use your framework uh against Russia with the with the financial payment system. China used it on critical minerals. Those are two prominent examples. But where else uh am I exposed? Am I exposed in space?

[00:25:27]Am I exposed in cyber? Am I exposed various? And that is the framing at a minimum as a leader, you have to think about those issues and how do I minimize those exposures. The answer if you're a country of the size of Canada or even if you're uh you know a European uh one of the major European economies is there's no one answer. The answer is a series of partnerships, a web of of partnerships that need to be put in place. Then the more positive side. So that's a defensive thing. Who do I need? Who can I rely on? Uh and who's not going to hold me up down the road? That dictates a lot of these uh trade discussions. The more positive is well, where can I be a solution to others? And that's where I do think we have a number of advantages in Canada. Let me give it specific. Let me make granular. So I mentioned critical minerals. Okay. So what? Well, here's the so what. Last week I was in Quebec. Um we uh opened uh just or broke ground on uh the the largest graphite mine in the G7 eight times the production of everywhere else. Um key for and it's integrated into battery chains and others uh is what will be built. Um so who the off takes the government of Canada provided support to get the thing going. Here's your guaranteed off. We've already syndicated it out to Italy um uh to uh to uh to Japan, Panasonic in the case of Japan, ENI for Italy um uh and uh Luxembourg uh that that is buying off of that so that they know that they don't have that chokeold on lithium. That's one example. Uh we announced yesterday um again private company uh indigenousled actually private company uh an LG uh 25-y year LG train to Germany which helps obviously uh reduce exposure to Russia. So you know uh that sort of uh energy providing uh same thing on uranium. Where else are we strategically relevant? I think well I know uh we are strategically relevant in cyber. We're strategically relevant in next stage cyber which is which is quantum. Um so we were building a series of packs with and you would expect it with our closest allies the closest allies of the United States in those areas uh to build out. I'll I'll give one other example which is um in space um where from a consumer perspective we're all familiar with Starlink and and those advantages low earth orbit orbit satellites but it's crucial for military uh and defense applications and nobody wants to be in a position where there's only one option uh and we have a company teles which is the next option which is literally coming uh that element of their uh business is coming on stream next year so those are to to make it tangible. Those are the types of conversations that or or deals I I put it even that way that are happening and then they get embedded in bigger uh trade relationships as well.

[00:28:21]Let's let's turn to to China because you've touched on it a couple of times and while your Davos speech really completely reset I think uh the way both businesses, investors and governments are thinking about this moment. What I always emphasize to people is where you uh came to DAO from. you had just been to Beijing uh and you like u many other advanced economies are navigating this very complex challenge given the imbalances given how you just described China's economy of how you navigate the opportunity with an economy like that with the strategic exposure you have uh take us if you will uh a bit into the room uh the meeting you had with Xiinping um what did you say to him what did he answer back how can we better understand that Canada China relationship ship from that meeting.

[00:29:10]>> Um okay. Um well, let me let me give a bit of context first which um in terms of the Canada to China relationship and where it was prior to uh prior to those meetings and why that was important. Um our our relationship was to put it mildly in need of a reset. Um uh basically diplomatic relations had broken down, trade relationships uh were fraught with a series of tariffs. We had big challenges in Canada particularly for our agricultural sector our our our fishery sector uh where there were punit we were locked out of the Chinese market which was historically a very important market to put it in human terms 250,000 people whose livelihood uh livelihoods directly were affected uh by this uh so we had that we also we had a series of uh restrictions on China um so at a minimum and and the dialogue was not there and Look in this world yes it's the second largest economy but you need to have a dialogue with China I mean this is stating the obvious uh there virtually every issue or most issues in the world geostrategic and other China uh is a player um and having that done so we needed to reestablish so what we what we accomplished out of the to simplify and then I'll get to the in the room and the dynamics and where this goes what we accomplished was a very basic reset of the relationship. Um so that China reopened uh their agricultural markets. There's some details around this. They're important.

[00:30:44]But big picture, yes. Uh for that, we restored access for Chinese uh vehicles, electric vehicles to the same level as it was in 2024 when things broke down, which to put in context is 49,000 vehicles in a market that's 1.8 8 million vehicles. So less than 3%. Um and with a that's at the U MFN tariff rate which 6 and a half% and then above it it's a 100% tariff rate. So basically that's the the cap uh on on Chinese vehicles coming in. And historically they're all Teslas. It looks like most of the ones that'll come in are Teslas as well in the in the short term. Now over time we're going to get lower cost a broader range of things but in a in a controlled way. Um but the discussion so these are important trade discussions there's other elements of the trade relationship etc. Um but the but the broader discussion which I think is the thrust of your question is about where is the world going and um that it's what President Xi and President Trump and uh quite understandably are are particularly focused on where um I'll give it's it's was in the news uh recently but uh so so I'm going to pick up on one aspect of the conversation. Um he raised I sorry I raised with him the sus thusidities trap. Um now I raised it with him because I had been in a meeting with him with a handful of US CEOs a few years previous. Um and President G had raised it in that context. Um and I quoted in effect back to him the president saying I remember you said that and what you said at the time was the way out of it is cooperation on issues of of global public interest. So what are the issues of global public interest you know leading him to where where is that where is that cooperation between the hegeimons he's really talking about but others support it and you know for him at least in the response then which in fairness was more or less what he'd said two years previously uh is around is around climate is around clean energy and climate and we're establishing a leadership there but everyone needs it and how do we how are we going to share this and how are we going to finance it etc. and his point there was exactly that how do we restructure the institution so that's one thing I'll say one other thing which I a point I made to him because you raised imbalances earlier which is I also raised with him adjacent to this is that the the the scale of the challenges of imbalances the fact that this is bad for having lived through we live I'm looking at you Bob we live through the crystallization of imbalances in the global financial crisis um that this needs to be um they need to be part of the solution. Part of the solution is the over capacity, greater consumption, absolutely fundamental, but part of the solution is also uh the role of their currency. Uh the role of remmbb uh the opening up of their capital account uh is going to be a necessary part. And if you are, in his analogy, a rising power, economic power, which they certainly are, you have to assume more responsibility for the global uh international monetary and financial system. And that is one of the toughest things to do that transition. But you've got to you've going to have to move in my judgment, and I said it to him in private, I'm happy to say it in public, uh in my judgment, they need to move uh more uh more rapidly and more deliberately on it. I think we need to help them in a way around uh around the margins. Um so both of those areas where we're really talking about global public good um is is necessary for the engagement.

[00:34:41]>> Turning to another aspect of your uh role and your leadership uh you're spending I'm sure um more time than you would want on you know open conflicts in the world. Uh and so you touched on the Russian invasion of Ukraine and the war that's going on four years on in Europe.

[00:34:57]Um you mentioned that the outcome is not in doubt but only a question of how much human suffering will further have to take place. Give us a sense from uh from where you're sitting. Um what do you think the outlook is for the war and maybe speak a bit to some of the risks.

[00:35:13]There's certainly concern in Europe that the Russians are going to have another push over the summer possibly threaten uh one of the Baltic states as they've uh in a more specific way. uh give us a sense of uh how you're thinking about this as a leader, as a NATO leader and also maybe a bit how it connects to defense strategy and defense industry strategy for Canada.

[00:35:31]>> Okay. Um so let me let me start with um let me start with what we're doing um and uh and then get to uh the outlook for it. Um so we are we're one of the largest arguably the largest per capita contributor to Ukraine across uh humanitarian and uh defense. Um so $25 billion uh and and counting. Um our defense contributions um our principal defense contribution, but this is going to ch this is changing with time and it gets to your defense question uh have been basically uh purchase or financing of of US weaponry uh uh for Ukraine defensive weaponry. So they're called pearl packages, but for those of you who follow it would know what they are. And it's a way to band together through NATO uh purchase um largely um as you would expect missile and uh drone defense there. It's an expensive way to do it, but it's necessary as we saw with this atrocious hypersonic missile attacks uh uh a few days ago that Russia inflicted.

[00:36:33]So So we're doing that. The second thing um is um we're we're involved. We've we've trained 50,000 Ukrainian troops and and running. We're very involved there. We're we're part of what's called a coalition of the willing which is a series of countries largely European but including um uh Australia, New Zealand um uh a few others ourselves um that uh is providing a security backs stop. So when there is a peace deal there'll be a credible backs stop for Ukraine. First line of defense of course is them.

[00:37:04]Second line of defense uh would be uh would be us in various forms. And that is I will just give you the punchline that is a highly credible detailed operational security backs stop. Um it's been it's been worked out and full credit to President Mron and Prime Minister Chararmmer for helping to lead uh and make that uh make that a reality.

[00:37:22]Um the third thing in the region is we lead the brigade in u the NATO brigade in Latvia. So as I've said I think I said in my remarks it's on the front line. That's you know that is very much an operational role. So, and and and to get to where the conflict is, um to put human suffering in context, um I mean the terrible civilian suffering, I mean, the civilian suffering in uh in Ukraine, the direct hits. Um but Russia's losing 35,000 uh pe uh troops uh a month. Um 22 to 23 depending on the month of those troops are killed. Um the the balance are incapacitated to use a euphemism but will not fight again. They're losing troops faster than they can replace them. Uh they are not gaining territory.

[00:38:10]Uh Ukraine is able to strike as you see uh increasingly deep into Russian territory on strategic energy and other targets and they are doing so and they will continue to do so. Russian economy is under more pressure. Um, this can go on for longer than uh any of us. It already has, but uh can continue to go on, but the balance of of force uh is moving in the Ukrainians direction. And that gets to the last bit of your question. I'll try and be quick, but this is super important. So, we and others uh are uh following the the Danish model uh where we're partnering with because Denmark pioneered this. We're partnering with Ukrainian defense contractors. We're financing them to produce drones and other things for Ukraine's defense, but then we we're building capacity in Canada and Denmark and other places so that we can build that out for the future for our own defense because uh you know the cutting edge of of defense, defensive warfare is in Ukraine and the integration of autonomous warfare, AI and those defenses are in Ukraine. So part of this we Canada has been a lagard. We're no longer a lagard in defense spending.

[00:39:24]We're not going to be a lagard. But part of the advantage of being a lagard.

[00:39:26]There's sometimes an advantage is when technology and things are changing. We will catch up at the at the frontier or at least that is that is very much our intention.

[00:39:36]>> Um I know we're coming up against our deadline but we we just a couple more questions. First we're obviously in New York, we in the United States. um a line in your speech um I think caught many of us uh and I think is really important which is what you when you said that this stronger Canada more sovereign uh more self-reliant um is actually going to be a better ally to the United States. I don't think it's lost on any of us just how complicated uh US Canada relations have become. Uh but having said that, what makes you optimistic uh not just given the transformation you're leading in Canada, but what you know and how you describe the US economy at the end. What makes you optimistic about this economic relationship and partnership going forward?

[00:40:25]>> Well, I I'm going to start on I'll start on economics, but I'll but I'll end on values because I think that's ultimately where things stand. Um on the economics I mean it's still the case that 85% of our trade goes across tariff-free.

[00:40:38]There's highly highly integrated.

[00:40:40]Everyone benefits from that. Um secondly there are huge opportunities for that new partnership. Um in part because we're becoming uh stronger. Um so the energy side I've mentioned I mean this is a time where the US uh is energy short for good reason because of the transformation. uh but it's really energy short and that's going to get that's going to get more uh more acute and we can be part of the solution we can be part of the solution uh just um on inference as well to put it more broadly energy and inference um uh the third thing is there are core areas it's our strong view and we've been clear about this that um a fortress um North America in in autos uh in steel in aluminum that's in everyone's interest uh we're part of the solution clearly on uh critical minerals we're working very well with the US on that and then as well as I move towards values I mean we shouldn't there are issues but we did need to step up uh to take more responsibility for Arctic security we're doing that now uh we're taking responsibility uh with respect to uh uh with Ukraine with others uh the front lines uh in the Baltics um and the opportunities for defense and security cooperation are legion um so we look to that last thing you know in the end and I I am conscious we're coming up to the two both our timeline and our 250 your 250th birthday here um you know these core values on on on on freedom uh on liberty like the that's ultimately where we stand um and that reasserts that reasserts over time. So we'll work our way through Bob will come up he'll tell us it's 12:45 and everyone will get on with moving forward. Thank you very much.

[00:42:26]>> Thank you.