Why Canada Is Cozying Up to Europe

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

David Gura (0:08)

Canada's Prime Minister, Mark Carney, has been on a charm offensive.

Mark Carney (0:12)

Canada is one of the most connected economies in the world.

David Gura (0:15)

Just this morning, he came on Bloomberg television to talk about all the international investment he's hoping to bring to Canada.

Mark Carney (0:21)

It's going to help us realize what we think this economy needs, which is to catalyze about a trillion dollars of investment over the next five years.

David Gura (0:29)

Later this week, Carney will continue his campaign in Europe, where he'll address the European Parliament.

Mark Carney (0:35)

There is a huge host of areas where we can work together. It's an exciting time. Look, it's not going to be solved this week in Strasbourg. Just to be clear, it's the start of a process, but it's the start of a high-ambition process.

Derek Decloet (0:48)

Well, he has this line that he's used a number of times, that Canada is the most European of non-European nations.

David Gura (0:54)

Derek Decloet is the executive editor for Canada at Bloomberg News.

Derek Decloet (0:58)

So, what he's trying to do is pull Canada much closer to Europe in a bunch of different ways. Carney is something of a Europhile and I think sees natural alliances.

He has a Rolodex. He was governor of the Bank of England and even before that, as governor of the Bank of Canada, during the financial crisis, he was quite involved in some of the coordination among central banks and regulators for dealing with the financial crisis. So I do think he's the unique person. There are not many people in Canada who could try to pull this off and who have both the connections and that level of credibility.

David Gura (1:33)

Derek, how significant is this moment for Canada?

Derek Decloet (1:36)

I think it's really significant. I've been describing it to people as the biggest economic and political story probably of my lifetime. Because really since the 1980s, and arguably even before that, the entire trajectory of Canada economically has been pulling closer and closer with the US. I think it is a real shift in mindset for the whole country.

David Gura (2:09)

I'm David Gura, and this is the Big Take from Bloomberg News. Today on the show, Canada's pivot to Europe. Now the country appears to be reassessing its trade and security relationships and could be turning away from the US and toward the EU.

It was back in May that Mark Carney made another trip to Europe. He was there for the European Community Summit, and rather extraordinary because Canada is not a part of Europe. How receptive has Europe been to Prime Minister Carney's overtures?

Derek Decloet (2:42)

They've been quite receptive, and I think there are some logical reasons for that. Both Europe and Canada have been at the other end of verbal attacks from members of the Trump administration on all sorts of issues, including defense.

I think one could easily say that some of those criticisms, particularly around the case of defense spending, were justified. But I think the common thread of feeling a bit under attack by the US., by the Trump administration, the long history of joint NATO membership, you'll remember Carney's speech in Davos in January was where he said, you know, the rules-based order is dead.

Mark Carney (3:21)

It seems that every day we're reminded that we live in an era of great power rivalry, that the rules-based order is fading, that the strong can do what they can and the weak must suffer what they must.

Derek Decloet (3:38)

Middle powers, they have to work together in order to avoid being bullied. He didn't use the word bullied, but that's that was the message.

That was aimed in part at Europe. I mean, who's got middle powers? Europe does and lots of sort of similarly sized economies. So, the debate even prior to this speech that's about to happen, the debate in Canada about could we actually join the European Union has actually been sort of rolling along in the public sphere. For a number of months, there have been numerous kind of long features written about the pros and cons of this, as though EU membership is a real possibility for Canada. I mean, currently it's not, but other things are.

David Gura (4:22)

I've seen Bloomberg reporting that EU officials see the potential here to create perhaps a closer relationship with Canada than the relationship they have with the UK. And I'm curious sort of what that would look like. So broadly speaking, what the EU can offer Canada and what Canada can offer the EU.