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    "original_url": "https:\/\/www.nytimes.com\/2026\/09\/27\/world\/canada\/mark-carney-interview-transcript.html?emc=edit_nn_20260928&nl=the-morning&segment_id=227179",
    "parsed_content": "Trump-Xi SummitSimmering DivisionsArtificial IntelligenceTrade Truce ExtendedState DinnerChina\u2019s Domestic PrioritiesAdvertisementSKIP ADVERTISEMENTSupported bySKIP ADVERTISEMENTOur Interview With Mark CarneyNew York Times journalists pressed the Canadian prime minister about a range of topics in an hourlong interview last week. Here\u2019s a transcript of their conversation.Listen \u00b7 51:25 min Share full articleCanadian Prime Minister Mark Carney at The New York Times on Sept. 23, 2026.Credit...Daniel Berehulak\/The New York TimesBy The New York TimesSept. 27, 2026Sign up for the Canada Letter Newsletter Back stories and analysis from our Canadian correspondents, plus a handpicked selection of our recent Canada-related coverage. Get it sent to your inbox.Ten New York Times reporters and editors interviewed Prime Minister Mark Carney of Canada for an hour last Wednesday at The Times\u2019s office in Midtown Manhattan.It was the first interview Mr. Carney had given to The Times since becoming prime minister last spring.The journalists who participated were: Joseph Kahn, the executive editor; Kathleen Kingsbury, the opinion editor; Philip Pan, the international editor; Matina Stevis-Gridneff, the Canada bureau chief; Ezra Klein, an Opinion columnist and podcast host; Natalie Kitroeff, a host of \u201cThe Daily\u201d podcast; David E. Sanger, a White House correspondent with expertise in national security and diplomacy; Tyler Pager, a White House reporter; Colby Smith, an economics reporter who covers the Federal Reserve; and Sydney Ember, an economics reporter.This transcript has been edited for clarity.Trade with the United StatesJoseph KahnWe just saw the actual text of the agreement with Greenland between the United States and Greenland. It looks a good deal like the security agreement that the United States had with Greenland right after World War II, and doesn\u2019t appear to come very close to matching the rhetoric that President Trump attached to the whole effort. And it makes me wonder a bit, because so much of the battle, such as it is between the United States and Canada, seems to rely on the rhetoric coming from Trump. Do you imagine that something similar could come out of this heightened conflict between the two at the moment, or do you think it\u2019s deeper, more serious than that, and actually will have some kind of permanent impact in relations?AdvertisementSKIP ADVERTISEMENTMark CarneyI wouldn\u2019t mind not using Greenland as the analogue here, although I will concede that there are elements of the discussions, negotiations and the relationship over the last 18 months which have looked to impinge on Canadian sovereignty. The Greenland issue is obviously a series of sovereignty issues. There\u2019s a history there, with which you are well familiar. Go through the fine-tooth comb of the agreement, and judge what actually changed and what was reaffirmed.With respect to our discussions with the U.S. \u2014 have things changed? Yes, things have changed. There have been direct threats to our sovereignty, rhetorical, but efforts in negotiations that would have impinged on our economic sovereignty, which we would not accept.Aspects that were termed as \u201cirritants\u201d by the U.S., which are fundamental rights in Canada \u2014 language rights, cultural rights \u2014 which were worked into a proposed agreement, and that was enough of a red line in and of themselves not to sign. Restrictions or potential restrictions on our ability to sign trade deals with other countries. You know Canada is, by our judgment, the most connected economy in the world. We have free trade agreements with 1.5 billion people. We expect that\u2019ll be three billion by the end of this year. Maybe it\u2019ll slip by a couple months, but we will get to that three billion number, so we don\u2019t want our hands tied. We don\u2019t want to ask permission to have trade deals with other economies, or we would like it reciprocal, which I don\u2019t think would happen.So those elements are still rhetorical, because they haven\u2019t come into force, but there was more substance behind elements of the rhetoric. The other thing that\u2019s changed, and it\u2019s a judgment how long it endures, is that it\u2019s the avowed policy of the U.S. government for all countries, to charge access to the U.S. market.In some cases, that\u2019s tariffs. It\u2019s normally a combination of tariffs, investment commitments, changes to domestic policies as part of broad trade agreement requirements, and, as you move along that spectrum, you move into issues of sovereignty. So, from our perspective, we look at it in several ways.AdvertisementSKIP ADVERTISEMENTThe basic is there is a mutually advantageous trade deal to be had that can be built above and beyond, and we\u2019ll negotiate in good faith for that, and we will sign that. Even though in some areas, it will be different from the trade agreement that we do have with the United States.We do have a trade agreement with the United States, called U.S.M.C.A. It\u2019s still in force. Congress hasn\u2019t repealed it, and the U.S. has violated it. Those are the facts. But in a realpolitik way, there is something that can be negotiated, given the change in the U.S. stance commercially.We do have very clear red lines, as you would expect, in terms of sovereignty, and the dynamics of this mean that those are more likely to be respected if and when there is an agreement.But the other big lesson we take is twofold. One is we\u2019ve got to build up our strength at home, and that\u2019s what we\u2019ve been doing. We\u2019ll have a chance, maybe, to talk about that. And we have to diversify our partnerships abroad. And in diversifying those partnerships abroad, we are focusing particularly on strategic capabilities. In areas where our sovereignty can be impinged by any of the hegemons, in effect \u2014 critical minerals is a classic example for the U.S., what China attempted to do. Defense infrastructure is another example. Financial payments is an example. We have joined in sanctions on Russia, so we\u2019re very conscious of where others could have leverage over us, and we\u2019re looking to diversify in ways that reduce that leverage and obviously create commercial advantage. And once you see that, what we\u2019re doing with others is pretty predictable.Relationship with ChinaKathleen KingsburyBefore your election, you identified China as one of the biggest threats to Canada. I\u2019m curious if you still see the relationship that way, if other things have taken over that at this point, or how you generally view your partnership with China or alliance with China.AdvertisementSKIP ADVERTISEMENTMark CarneyTwo things can be true at the same time. There\u2019s certainly issues. We\u2019ve had issues with China, and the relationship reflected those issues. We\u2019re very vigilant about foreign interference from any actor in our society, but we\u2019re also calibrating our relationships according to our values, is ultimately the way we frame it.Our commercial relationship, our people-to-people relationship, our cultural relationship with China, when I became prime minister, was fundamentally broken. Canada was in a bucket with most failed states in terms of visa restrictions and so on. I had a few conversations with President Xi about this and setting up clear guidelines on the relationship, where we look to cooperate, where we did not expect to cooperate. So when we say we calibrate the relationship, we\u2019re not going to have deep cooperation with China on A.I., for example. Defense, we are not going to cooperate on.Kathleen KingsburyWould you have China build infrastructure in Canada?Mark CarneyThey built some infrastructure in Canada. Where we\u2019ve identified was on the agricultural side. We struck a deal with China in January, which received a lot of attention, which is a fraction of the level of U.S. cooperation with China. We struck a deal which reopened Chinese markets for Canadian agriculture and some fishing goods, which allowed China to export to us at a capped level the amount of cars that they exported in 2024 \u2014 49,000, less than 3 percent of our market. They were all Teslas in 2024. We might get a bit of a mix.There\u2019s a few other things in that group, but that\u2019s basically it, and it\u2019s the start of a process. We think with China, there\u2019s energy cooperation, both clean and conventional. They need some conventional. Their expertise around clean is unquestioned, and so there\u2019s cooperation there. There are a few other areas, but one I\u2019ll just put on the table \u2014 we are of the view, like the United States, that there is a serious imbalance issue globally. Part of it is a financial sector issue. Part of it is the emergence of the Chinese financial sector and the ultimate flexibility of the renminbi. That is a very challenging process. It\u2019s very easy to get that wrong. We have some expertise in that, and so part of it will be financial services cooperation.ImageA portrait session at The New York Times with Mr. Carney on Sept. 23, 2026.Credit...Daniel Berehulak\/The New York TimesCurrency and global financeColby SmithHow much of the thinking around the renminbi, though, is something that you spent a lot of time thinking about when you were governor of the Bank of England \u2014 dollar dominance and the instability of that system? How does that fit into your ambitions today? And when you think about what you\u2019re prioritizing, is there more momentum, perhaps, for this shift away from the dollar than we\u2019ve seen in quite some time?AdvertisementSKIP ADVERTISEMENTMark CarneyThere is. This isn\u2019t a sentiment. It\u2019s a reality. You see it in a variety of metrics from reserve composition, payment flows, other aspects. It\u2019s sometimes represented that the shift in stablecoins and other things will arrest that. In the end, you\u2019re swapping payments through a different system than a bank-based system so, in general equilibrium, it doesn\u2019t materially change it. There is a shift. There\u2019s a directional shift. That shift can\u2019t fully happen until there\u2019s proper liberalization in China. That\u2019s the tough thing to do for them, for anybody to go from their system to have capital liberalization. So that will limit the extent to which it happens.Would the global system be in a better position if we had \u2014 I\u2019ve long thought this \u2014 diversification of reserve currencies? The answer is yes. That would provide more flexibility. If I were the reserve currency, I would want to keep that position for as long as possible, and so I understand the U.S. position there. But, the U.S. wants a weaker dollar, imbalances adjustment and to retain full reserve currency. And ultimately, our view may be wrong about this, but history tells you and logic tells you that rebalancing \u2014 yes, it\u2019s partly structural policy in China \u2014 but it\u2019s also going to be monetary reform, and that is going to shift reserve currency composition.Want to stay updated on what\u2019s happening in Canada and India? Sign up for Your Places: Global Update, and we\u2019ll send our latest coverage to your inbox.Colby SmithHow much of that, though, do you think is a reflection of U.S. administration actions and cutting off trade? Is that a direct result of that, or is that just where we were headed anyway?Mark CarneyOne of the costs, and we are a participant, Canada\u2019s a participant in this, and given the stakes in Ukraine, it\u2019s the right thing to do, it was before I was in government. But the freezing of Russian reserve assets and using the SWIFT payment system. The lesson that reserve holders and others take from that is you need to diversify into different payment systems. You can\u2019t hold, if you want to really have the reserves and use them, you can\u2019t hold them in certain banks, you can\u2019t hold them in certain areas. And the reality is that, as you know, you can sanction U.S. persons, and U.S. persons are anything that touches the dollar, and up until recently, virtually every financial transaction ultimately touches the dollar.AdvertisementSKIP ADVERTISEMENTEven if you\u2019re in two different currencies, the base currency is the dollar. That is now changing, and that is a big deal. It takes a while for it to happen, but it\u2019s a big deal. One of the questions to go back to, if I can generalize your first question \u2014 there\u2019s certain things, once you\u2019ve seen them you can\u2019t unsee them.And when integration is used as leverage for coercion, it\u2019s the \u201cfool me once, fool me twice\u201d point. You know, \u201cshame on you, shame on me.\u201d And once you see that, then you start to think, OK, how do I diversify away? And so part of what\u2019s happening, and it\u2019s a big lift, but directionally the forces will point in the same direction. We\u2019re seeing it on the finance side.Interdependency and StarlinkEzra KleinLet me ask you about how you generalize that point. So, one tension I hear in what you\u2019re saying at the beginning, you say Canada is arguably the most open economy in the world, the most trade agreements, more coming.Mark CarneyYes.Ezra KleinAnd also something I\u2019m hearing you say, something that\u2019s become more prevalent here, is a sense that free trade, these open agreements, create interdependency, and interdependency in this era is dangerous. How do you think, at a principles level, about the case for openness versus the dangers of openness and interdependence?Mark CarneyThat is the fundamental tension, and so the way we think about it is: What are the areas that have the most leverage, and which we call strategic capabilities. So energy, food and fuel \u2014 you get a lot of leverage, and we\u2019re pretty well positioned for that in action. Critical minerals, obvious. The tech stack, and should you slice the tech stack, but the tech stack: space, basically because defense in space and satellite within space is very quickly linked.AdvertisementSKIP ADVERTISEMENTIf you\u2019re us, where do you have strategic capabilities? Where do you have leverage? And then how do you use those to build out where you\u2019re short? Who do you partner with to help build out where you\u2019re short? And for us, our point of departure, our answer to that, is we\u2019re not going to be able to be a target. That\u2019s not the right way to go. But we\u2019ve got to be smart about who we partner with and where we go deep in those areas. So we\u2019re not going to want to go deep with China in the defense aspect.We\u2019re much more interested in going deep with many European countries in defense because it\u2019s complementary, because they\u2019re not going to use the leverage against us. And second order, but super important, is it tends to be the case with those deals, and what we\u2019re seeing, is we get a much bigger percentage of the value add in Canada, so more jobs and industrial benefits. There\u2019s no perfect, but the more options you have, a dense web of connections, the more you build that out, the more robust you\u2019re going to be. And we start quite exposed to the United States. You\u2019ve got to net out some of the cross trade and identify the areas where we think we can rely on the U.S., whatever the political weather. And where we would be wise to have other options.Ezra KleinHow do you balance tech dependencies given things like compute and Starlink?Mark CarneyStarlink we will diversify away from, no question. Telesat LEO constellation, [will be launched in] Q1 2028, and that is an example where, at not the same scale as Starlink, but from a defense perspective \u2014 and certainly pooled with other partners, Europeans, Koreans potentially \u2014 you get to scale, and you cut that dependency, which has in certain circumstances been turned on and off in a way that was not sovereign to the actors in the conflict. And so again, that\u2019s something you can\u2019t unsee, and so it drives it on that. That\u2019s on the space element.The broader tech, exceptionally difficult. Nvidia chips, there are only so many chip makers. Enterprise A.I. solutions, sovereign cloud can help you get a step of the way there. It\u2019s still to play for. It\u2019s more to play for, and it\u2019s clearer six months on than it was six months ago, just in terms of do you need to be at the frontier.And look, I don\u2019t want to leave the impression that our entire strategy is diversifying away from the U.S. But what we\u2019re aware of is, if we are not more diversified, if we don\u2019t have broader and deeper partners elsewhere, we can be held up, and we don\u2019t want to be in that position.AdvertisementSKIP ADVERTISEMENTAnd the way we look at what we\u2019re doing right now is it\u2019s a robust strategy, because if the U.S. goes back towards the previous trajectory and its view of openness and its view of the relationship with Canada, etc., then we\u2019re going to be a better partner with these other partnerships. If it doesn\u2019t, if it stays on the current trajectory, we will have had to have done this. So we had the motivation to do it, and what I find, if you have access to everybody around the world, is that more and more countries are thinking in the same terms. So the conversations are, and what\u2019s falling on from it are quite tangible.Energy exports and potashMatina Stevis-GridneffAre there any circumstances under which you would consider curbing, limiting or imposing additional taxes on exports of energy products or potash, in view particularly of the most recent announcement by President Trump regarding Belarusian potash, which I believe is sanctioned and quite far away?Mark CarneyWell, we view Belarus as a party to Russia\u2019s illegal war, for a variety of obvious reasons, including where the troops came from and the support. Our position is, and I\u2019m going to quote the head of the I.E.A. [International Energy Agency]. He said it again yesterday, Fatih Birol, that the most important commodity in the world is trust. When he came to Canada, I don\u2019t know if he said it yesterday, but he said it publicly a couple times a few months ago in Canada: \u201cthis is what you have. This is your most important part: You\u2019re a reliable partner.\u201d If you\u2019re a reliable partner and you supply energy or food to somebody, it keeps flowing. It\u2019s a very, very, very high threshold to change that. We honor our trade deals, and, yes, we\u2019ve taken some retaliatory measures or counter tariffs against the U.S. because of what they\u2019ve done, different orders of magnitude, and in most cases to protect the industries that got a tariff, goods are flowing back into Canada, so it is a very high threshold.Never say never, but it starts from a position of: we need to be a reliable supplier in all cases, particularly if we\u2019re going to continue to be open.Defense cooperation and procurementDavid E. SangerThere\u2019s a tension between how you supply, particularly your defense stack here, and your reliance on the U.S. for things for which you cannot have anybody else step in. NORAD [the North American Aerospace Defense Command] is the most integrated defense system I\u2019ve ever seen. You never know whether it\u2019s an American or a Canadian plane that is going off to intercept the Russians or something along the way. The nuclear deterrent, you\u2019re not going to replace with the Europeans and so forth. So, as you think about what\u2019s permanent in this, it sounds like the diversification is permanent because you never know which way the U.S. is going to go. But this other core of it, which is your fundamental defense, it doesn\u2019t seem to me you have a plan to diversify from it.AdvertisementSKIP ADVERTISEMENTMark CarneyA protected Canadian Arctic is first and foremost our responsibility, but it\u2019s clearly in the U.S. interests as well. Our approach there has been to take more and more responsibility for our own defense. So I came in, yes, people in NATO were all moving in these directions, but we were 1.4 percent of G.D.P., two and a quarter last year. We have provisioned all the way to 4 percent by the end of this decade. So it\u2019s in the budget. Exactly what we\u2019re going to spend it on, we\u2019re in the process of determining it, not least because technology is changing pretty rapidly. So if you take the list from the generals that they had a year ago, a lot of it is going to be outmoded. It\u2019s not going to be the best spend. Secondly, we intend to get maximum value for those dollars, and part of it is through defense partnerships. So, for example, our submarine deal with the Germans and the Norwegians, about 40 percent of the value add will be in Canada \u2014 $40 billion, big orders of magnitude. A big component of what we\u2019re doing on defense is Arctic security. So, four new bases in the Arctic, the submarines, some of the aircraft decision we have to make is how well they work in the Arctic. We are spending a lot more time with our Nordic partners, the Germans, and the French, because they are more active in the Arctic and it\u2019s much more integrated. So, under the umbrella of NATO, us plus the Nordics plus the Germans, and then down into the Baltics, that is much more integrated, and will increasingly become more and more integrated. The U.S. of course, primus inter pares in NATO, but they\u2019re not part of that. They\u2019re party to it, not part of it. And that\u2019s part of taking more responsibility. But hypersonic missile defense coordination with the United States will still be\u2026David E. SangerAnd Five Eyes?Mark CarneyYes, and Five Eyes.David E. SangerYou don\u2019t see them suffering from what you\u2019ve been going through?Mark CarneyIt hasn\u2019t been the case.Matina Stevis-GridneffI heard the beginning of an argument there in favor of more Gripens and fewer F-35s forming. Is that where your headed?Mark CarneyI wouldn\u2019t say it\u2019s where we\u2019re headed. It is a real decision. It is a real decision because of differing capabilities, because of strategic dependencies, and because of the economic return.Threat of U.S. military force against CanadaNatalie KitroeffAt any point in the last 18 months, were you ever seriously concerned that President Trump, as these threats escalated, would seriously use military force against Canada?AdvertisementSKIP ADVERTISEMENTMark Carney[Pauses] You have a responsibility in these roles to look at extreme tail risk. So, and as the tail fattens when a leader of a country threatens your sovereignty, you adjust accordingly. That\u2019s just risk management. That\u2019s not a base case, but it would be irresponsible not to take certain things into consideration.David E. SangerDid you make certain preparations for that?Mark CarneyI\u2019ll leave my answer where it was.ImmigrationKathleen KingsburyCan I ask you a domestic question? You know, I believe earlier this year you blamed some of the economic challenges that Canada is currently facing on population decline.Mark CarneyIt\u2019s a factual observation, but if your labor, your population is shrinking, your labor force is shrinking, then it\u2019s a per capita versus an overall level. It\u2019s not blaming, it\u2019s observing. It\u2019s not blaming.Kathleen KingsburyOne element of that decline has been from the immigration cuts by your government, and I\u2019m curious when you\u2019re planning on reversing those.AdvertisementSKIP ADVERTISEMENTMark CarneyI\u2019m going to simplify, but what happened post-Covid is there\u2019s a series of ways you can come into Canada.One is through controlled immigration, point systems, picture of economic and family reunification that had been gradually increased \u2014 think 300,000 people here.You have asylum seekers, which obviously you don\u2019t control people show up somehow and they seek asylum. And then we have rights-based processes that work that way. That can fluctuate depending on the situation, largely coming from the U.S. and then the other components that were uncapped and demand driven were foreign students and temporary foreign workers.So, under certain criteria, postsecondary institutions could grant visas or get visas for foreign students and temporary foreign workers. And there was a surge in demand through those two channels. The consequence of that was an immigrant population that went from 3 percent to 7.5 percent of the population in a little under five years. So it\u2019s a huge shift. Now, we\u2019re a country of immigrants. We consistently take around 1 percent of our population in terms of immigration. So the consequence of that was that the pressure on the education system, the pressure on housing, the pressure on other things was very high. So we stopped those from being purely demand-driven and capped them. And the fact was that what was also happening on the postsecondary side was there were basically degree factories coming up that were there for the visa as opposed to some of that demand.Kathleen KingsburyWas some of that demand because of policies from the Trump administration and students who are coming to Canada?AdvertisementSKIP ADVERTISEMENTMark CarneyNo, President Trump came in second term, and we made these changes within a few months, so it wasn\u2019t being driven because of that.What we\u2019ve basically been doing is first getting the system under control. So if we want to let in 500,000 people through formal immigration and some temporary workers and students, we cap things and we let in 500,000 people. There were years where the expectation would have been for example, 700,000 and it ended up 2 million. The overshoots were, and you know it\u2019s a country of 40 million people.These are big, big overshoots, and it\u2019s not that easy to get to Canada, right? It is from the U.S. but otherwise you\u2019re flying in or taking boats. So we\u2019ve taken measures to get that under control and we have it under control. So students down by 60 percent, temporary foreign workers down by 50 percent. It happens to be the case. Part of this is tightening, but asylum seekers are down by one-third on a flow basis, and now the question starts to become: When do we resume some controlled increase in the population, which is the nature of Canada. So that will happen, and we just want to make sure that we\u2019ve got it under control.Outreach to the European UnionJoseph KahnCan I give you a skeptical view about your negotiations with the European Union over associate membership, and just looking at what a tighter affiliation with Europe has to offer. You already largely have open trade with them. You largely have open visa access. I guess there can be some improvements, but you have essentially zero growth in Europe. Very low growth. You have chronic high deficits everywhere, and they\u2019re not really at the bleeding edge of development of any new technologies, especially A.I., and the potential for candidates to significantly benefit from a tighter relationship with the European Union, as its relationship with the United States sours, in that sense, is limited. I\u2019m putting up a straw man a little bit. But realistically, does Canada have a huge amount to gain from a tighter affiliation with the E.U., or do you ultimately, at the end of the day, need to try to work out a stable relationship with the United States?Mark CarneyWell, the answer is both. Both, and.Our trade deal with India is important to us, and U.S., yes, Europe, India, ASEAN [the Association of Southeast Asian Nations] and beyond. But in terms of your core question, the European opportunity, I\u2019d say a couple things. One is, it\u2019s the second biggest economy in the world. It\u2019s not growing, but it\u2019s the second biggest economy in the world, in hard dollars, hard euros, and we are underpenetrated in that economy, and there\u2019s some reasons why we\u2019re underpenetrated in that economy. And in fact, when we look at what our capabilities are, sorry, I\u2019m going to talk like an economist. But if you look at revealed comparative advantage in Canada, where we can grow our economy and grow our exports, it is our biggest opportunity. Greater penetration of Europe is a bigger opportunity for Canada than China is. China is a bigger economy. Yes, we can do some agriculture stuff. We can do some energy stuff, and we will do that, and a few other things.AdvertisementSKIP ADVERTISEMENTBut China is less complementary to the nature of our economy than Europe right now. So that\u2019s the second point. Third point, to go back to the earlier discussions, there\u2019s a few key areas where we can get strategic autonomy with Europe. Space is one of them. Space satellite is one of them. A series of things on the defense side. We\u2019re going to spend half a trillion dollars on defense in the next 10 years, and it\u2019s a huge number for Canada. We want to get the maximum benefit of that. We will not get the maximum benefit from that with other jurisdictions. In order to get the maximum benefit for that with Europe, we\u2019re going to not just be part of SAFE, which is their defense procurement, but we\u2019re going to have to have similar approaches on cyber, on A.I., on space and others, so the synergies there are quite significant as well.The Europeans are not \u2014 I know you\u2019re doing a straw person \u2014 but you know, they\u2019re pretty cutting edge on pharma. We\u2019re pretty good in pharma. There\u2019s an opportunity there. So, our pooling on research as part of Horizon is a real advantage. Pooling on universities, you know, we would look to be part of Erasmus, which basically means Canadian students go there, their students come here, that sort of people-to-people ties.Here\u2019s one thing that we offer them apart from critical minerals and energy and serious things there, which actually the energy side is reciprocal because some of the expertise, non-China expertise in clean energy, a lot of it\u2019s European.Eighty percent of European data to Asia goes through the Red Sea, cables in the Red Sea. The quickest two points from Europe to Asia go through Russia. Good luck. Or you can go across Canada. Strategic capability, independence, Canada, Europe, we win because we\u2019re going to build that out. There\u2019s more. There\u2019s a lot to this. That\u2019s yes, economic, and actually cultural. And I wouldn\u2019t downplay \u2014 not that you did \u2014 the cultural side of it, cultural sovereignty, cultural independence. We\u2019re not going to be threatened. The Europeans aren\u2019t going to tell us what we have to put on our landing pages of Netflix or Spotify or whatever, and that stuff matters.Relations with IndiaMatina Stevis-GridneffYou mentioned India and it\u2019s timely. [Prime Minister Narendra] Modi is coming to Canada. You visited earlier this year. Obviously, this is a really painful topic for many Canadians. It was very recently that your predecessor ruptured that relationship by saying that Modi\u2019s government was behind an assassination on Canadian soil. Do you have reason to believe that this intervention, transnational repression, meddling in Canadian affairs, since you have restarted that relationship, has so radically changed that it no longer poses a threat to Canadians of Indian descent, Sikhs or otherwise?AdvertisementSKIP ADVERTISEMENTMark CarneyFirst off, we think, and there\u2019s some evidence, and I\u2019ll leave it since I don\u2019t want to delve into specific prosecutions, but there\u2019s some evidence of heightened coordination and implications of that heightened coordination for protecting Canadians and protecting others. That\u2019s the first point, and more generally, the security cooperation that\u2019s part of the relationship, which obviously could not take place in a rupture, we think is helpful and good. I\u2019m a believer that, regardless of the relationship, it\u2019s important to have a relationship so you can deliver messages directly, as opposed to preach from afar, and to limited effect. So there\u2019s been progress. The security side has deepened. You asked your question a bit like, almost, can I guarantee that no crime will occur in Canada? I can\u2019t guarantee that no crime will occur in Canada.CompetitivenessEzra KleinCan I keep us on Europe for one second, keep you speaking as an economist?Mark Carney[Laughs] Thank you!Ezra KleinIf you go back 15 years ago, 20 years ago, the possibilities of E.U. competitiveness against America were much more optimistic. You think about the books being written then. Obviously, you know some of those economies very well, and the narrative since, simultaneously, China\u2019s become more authoritarian, America\u2019s become more erratic and reckless. The American and Chinese economies have done really, really well. Europe has stagnated a bit to the point that it\u2019s a big issue there. You\u2019re sort of reminding us here that it\u2019s the second largest economy. What do you learn from what has happened in these divergent competitiveness trajectories, both as, what do you learn as an economist for Europe, but what are the lessons then for Canada?Mark CarneyIt\u2019s a very good question, and it\u2019s going to sound shameless, but it\u2019s an abundance issue. But it\u2019s the core. What\u2019s the core of our strategy? I can understand why we talk about international. The core of our strategy is building in Canada. The core of our strategy is regulatory simplification. We got a massive bill just introduced into Parliament: one project, one review, one year. That is major change in Canada. Major, major change in Canada. And just to give a background, and there\u2019s a European analogue to this, we built up \u2014 with a series of well-meaning but overlapping and conflicting and multi-jurisdictional regulations on a variety of areas \u2014 a series of blocks, basically, on our ability to build.When I ran a year and a half ago, one of the core points was: we used to build in this country. We\u2019re going to build Canada strong, and here\u2019s how we\u2019re going to build again. And so, the regulatory simplification using our fiscal capacity, which is considerable \u2014 we\u2019ve the lowest deficit, we\u2019re AAA, we\u2019re in good shape \u2014 but we\u2019re using it very deliberately to catalyze investment. So we just did a big tax cut on business investment. Headline figure: G7 average is 25 percent, if you look at marginal rates on business, U.S. is 17 percent after the big beautiful bill, we were at 15 percent. Now we\u2019re at six and a half. Six and a half. It is no contest in terms of the return on the investment dollar.AdvertisementSKIP ADVERTISEMENTI can give you a bunch of other examples, but to thematically answer your question, what do we take from that? We take a real lesson from Europe in terms of regulatory superstate, and we have characteristics of that without question in Canada. We\u2019re addressing them straight on, and we have many of the same values. The issue in Canada, we have to address it in a way that\u2019s consistent with Canadian values. We value the constitutional right to strike. We\u2019re going to build inclusively with Indigenous peoples and build sustainably at the same time. So we get the balance, but you don\u2019t need to take 10 years to do all of those things. We\u2019ve been taking 10 years. So we take that from Europe.What do we take from China? What\u2019s interesting from China has been we\u2019re now getting to the end of the catch up, and as you know, everyone knows now they\u2019re at frontier in many industries, and it is not all over capacity. Some of it is fundamental innovation, state-driven innovation or state-assisted innovation, and they\u2019ve managed to have a competitive state-sponsored ecosystem, if I can put it that way. You know, you certainly see that in clean energy, for example. I can see that and I can observe it, I actually don\u2019t feel there\u2019s a lesson for us to pour into an economy like Canada\u2019s there. So we take the big regulatory thing. We very much have an abundance agenda, unapologetically, and I guess the other component of that agenda is we\u2019re building out our trade infrastructure: east, west, north, not south, because it\u2019s consistent with where we\u2019re going.Image\u201cThirteen years as a central banker, I defend the right of my central bank to do whatever they think is right,\u201d Mr. Carney told journalists at The Times.Credit...Daniel Berehulak\/The New York TimesPain from payoff from economic reorientationSydney EmberAs you continue to think about this and continue to think about reorienting your trade strategy and the Canadian economy, you\u2019ve talked about there being timing issues for Canadians as all of this happens. How long do you think the pain will last for Canadians, and what does the pain actually look like?Mark CarneyThe payoff on a number of these major projects \u2014 we\u2019re doing the biggest clean energy project in North American history in Churchill Falls, 14 gigawatts, hydro and wind. If every vehicle were electric, every vehicle in Canada could be powered by this for the whole time. The actual construction of that, which is considerable, we just agreed it, so a year and a half probably when it actually starts going, takes another five years before you start to see things coming online. You have a series of things like that, which are huge, transformative. They\u2019re certainly beyond the political cycle, but the traction on that one is extreme.AdvertisementSKIP ADVERTISEMENTThe traction on a series of other things, on home building, on some of the base infrastructure, the port infrastructure, and others that\u2019s starting to be built. The defense side, it\u2019s starting to come through. This is an imperfect guide. You\u2019re looking kind of a year and a half, two years before the big infra starts to really materially impact the growth. So you have that period with headwind from the tariffs, headwind from uncertainty that\u2019s going on.But let\u2019s put it in context. Last quarter we grew 3.3 percent annualized. Household balance sheets are in good shape. We can provide some short-term stimulus, which we will do. Non-U.S. exports are up sharply. U.S. share of exports has gone from 75 percent to 62 percent in 18 months. Obviously, it\u2019s tougher to export to the United States, but things have also been building up, and we\u2019re growing through that period. We\u2019ve got to be upfront with people. You don\u2019t transform the economy overnight, but we start from a position of strength. We\u2019re going to draw on some of those strengths, and I guess the last thing I\u2019d say is, you see it, the country is in a pretty positive mood, recognizing that this is a real problem. It\u2019s a real shock, but they\u2019re kind of over the shock, and they\u2019re in the \u2018roll up the sleeves, let\u2019s build, let\u2019s move forward\u2019 attitude, as opposed to lashing out. And that helps. There\u2019s various measures of these things, but we are \u2014 and again I\u2019m on the record and I don\u2019t have it right in front of me \u2014 but if you look at countries around the world, are they going in the right direction or are they going in the wrong direction? We are an outlier. That\u2019s the popular opinion. Now, you can\u2019t take that for granted. You got to deliver it, but that\u2019s the answer.Colby SmithJust on these stimulus measures, though, the Bank of Canada looks like it\u2019s on the cusp of raising interest rates and following other major central banks around the world in combating elevated inflation, so do you see any of this working at cross purposes with the central bank? How do you think about inflation?Mark CarneyThirteen years as a central banker, I defend the right of my central bank to do whatever they think is right. Core inflation is running at 2 percent, headlines run into 3 percent, but core runs into 2, and so the inflation pressures are much less in Canada than some other jurisdictions that you might be familiar with, and the fiscal position is much stronger. You know, we borrow 110 basis points through the U.S. \u2014 that tells you a lot, and the economy is growing. This is not European low interest rates because of that. It\u2019s because we got our fiscal house in order and the central bank has a lot of credibility.Philip PanYou mentioned the share of exports to the United States coming down. Do you have in mind what a healthy level would be given your concerns about dependencies?AdvertisementSKIP ADVERTISEMENTMark CarneyUltimately, it\u2019s going to depend on what trade arrangement we have, and some of the dependencies are strategically important, but they\u2019re not that big. So, critical minerals are called critical minerals for a reason, but they\u2019re not macro significant. They\u2019re strategically important for us because they help us get better agreements with others, because we\u2019re going to be a reliable supplier of those. And we want to be diversified in those strategic areas. Then you know, the U.S. trade share settles out again, depending on where the ultimate deal is. One of the issues right now, put a fine point on it, which is that there are certain industries that are highly, highly integrated, and the U.S. wants to repatriate them wholly to the United States. Our view is well, that\u2019s not great for Canada. But we also think it\u2019s fundamentally not good for the United States. The auto industry. My entire life, and I\u2019m 61. Feeling every bit of it. But my entire life we\u2019ve had an integrated auto sector. You know the auto pact, increasingly integrated. The famous \u2014 the car goes across the border six times on average. The average U.S. content in a Canadian vehicle is 50 percent. We are far and away the biggest export market for U.S. cars. We\u2019re the only people in the world who buy U.S.-built cars aside from Americans, basically.And to pull that apart and repatriate to the U.S. at a time particularly when the whole industry is being revolutionized because of the shift to electric and connected, we think doesn\u2019t make sense, and so we don\u2019t want it. We, for our direct reasons, obviously first and foremost serving Canadians. We don\u2019t want to sign a trade deal that has elements that would end that integration. Somewhere along the spectrum, there\u2019s an answer, and we\u2019ll see where we end up.Relationship with President TrumpTyler PagerSpeaking about the U.S., you made it clear that you need to have a relationship with them, and similarly to Matina\u2019s question about India, that a dialogue is better in these times. So, what is the plan with President Trump? Do you plan to reach out to him? Is there a model that you think could work? You see someone like Mayor Mamdani here in New York, they spar on social media, but then they have joint press conferences. And on that point, is the U.S.M.C.A. salvageable? Is there a trade deal? What is the plan moving forward with the Trump administration?Mark CarneyThe president and I talk frequently. We talked a number of times since the end of the trade talks. There\u2019s a wide range of issues of mutual interest, from defense issues, geopolitical issues, trade issues, other issues. So from my perspective, we have a good relationship in the sense we can pick up the phone and talk to each other about issues. He\u2019s direct, I\u2019m direct in terms of where positions are. It\u2019s much more efficient that way, and so that exists and that will continue to exist.U.S.M.C.A. is still operating today. It\u2019s still in force. It\u2019s not being fully respected, and that\u2019s an issue for the U.S. political system to determine the governance of that. Is there a mutually beneficial trade deal between Canada and the U.S.? Absolutely, absolutely there is one. I\u2019ll give you an example.AdvertisementSKIP ADVERTISEMENTYou raised potash. We\u2019re the biggest producer of potash in the world. Forty percent of the world potash, we supply 80 percent of the U.S.\u2019s potash. Eighty percent and cost effective. We\u2019re right next door. We\u2019re massively expanding our industry. One of the opportunities is that we Canada and the U. S., could be Mexico as well, we can be fertilizer independent. And again, if you look at what\u2019s happening in the Black Sea, what\u2019s happening in Hormuz, why wouldn\u2019t you want to be fertilizer independent? We can help make that happen. Big potash, we\u2019ve got tons of natural gas, we have ammonia. This is a doable component of a deal, and there are other examples of that, and we\u2019re ready to work toward that.Artificial intelligenceTyler PagerOne other quick one for me. What is your P(doom) score?Mark Carney(Laughs) Look, I would say \u2026Tyler PagerWe need a number.Mark CarneyIt\u2019s false precision. It\u2019s false precision, but it\u2019s above zero. I\u2019ve thought that for a number of years. I\u2019ve been part of some of those discussions.Tyler PagerAnd so, Trump has largely rejected any sort of international regulation of A.I. President Xi has little incentive to do so. What is, as you chart this new path, what is your prescription for the right path to develop internationally?Mark CarneyI take seriously that some of the principal developers, whether it\u2019s Demis Hassabis, Dario [Amodei], Sam Altman, Elon [Musk], you know, all see \u2026 are motivated. Those closest to the technology, at least on the Western side, if I can put it that way, see merits in elements of A.I. safety, various components. By the way, a number of those people, certainly Demis, four or five years ago, thought the same thing. So he didn\u2019t need Hugging Face. He didn\u2019t need a specific example. This was all predictable and was predicted, not the exact manifestation, but the risk there. So that\u2019s where they are. I recognize the competitive dynamic that exists.AdvertisementSKIP ADVERTISEMENTOur view is the following \u2014 and look, full disclosure. I\u2019m a prisoner of my past. I chaired the Financial Stability Board, and so we have a similar dynamic in the financial sector. It\u2019s not a perfect analogy, but you cannot have an unregulated financial sector without having a crisis, right? It\u2019s just the nature of finance that people push it and push it and push it and push it, and so you end up in a crisis. What is the FSB model? What it is you have experts, and you have the political side through the treasuries and the central banks, who are of course all-knowing [chuckles]. And you develop standards which have no force of treaty or law, but is the best judgment of how much capital someone should have, how the derivative market should be organized, etc. And then you all go home, and you decide whether or not to implement.And guess what? When the Chinese go home, or the Canadians. The Europeans, they add a few layers to it. The U.S. waters it down a bit. But if you can establish the general consensus, you have a general approach, and then you\u2019re back at the table, and you say, \u201cWell, how did that work out?\u201d So you have some sense of shared responsibility. Personally, I think that is the right model. Now that requires countries, the main players, to participate. I won\u2019t speak for the G7 president, but I think he\u2019s very sympathetic to that approach and is not unknowledgeable about the technology and the issues around it. And I would note the U.K. is going to be the G20 president next year, and has the world\u2019s leading A.I. safety unit. We have arguably the second, with Law Zero, which, if you\u2019re not familiar with it, I recommend it. And so there\u2019s components of this that can be put together. I understand where the president is.Tyler PagerWhere do you put that?Mark CarneyBy the way, you made a representation on the Chinese. I\u2019m not sure that\u2019s how I would frame the Chinese position.David E. SangerWhere would you put that regulatory [coordination]?Mark CarneyIt\u2019s virtual. It just exists in that. You have to have the principals at the table, so people really know what they\u2019re talking about.Leadership and standing up to President TrumpDavid E. SangerYour reputation here, around the world, on your ability to stand up to the president. As you just told us, you still talk to him. He tends to do the most with people who stand up to him. Think of Xi Jinping arriving today. I\u2019m surprised that more world leaders have not sort of followed your model, and I\u2019m wondering if you have been surprised or not.AdvertisementSKIP ADVERTISEMENTMark CarneyI don\u2019t want to judge. You\u2019re in these roles, and whoever you\u2019re dealing with you should be clear. You\u2019ve got to be respectful. You\u2019ve got to pick your spots. You don\u2019t want to pick on every single issue, but it doesn\u2019t make sense to sit across from Xi Jinping or Modi or President Trump and not say what you think or what is the most important. And in terms of what\u2019s been interpreted and what I\u2019ve said and what we\u2019re doing, it makes all the sense in the world what we\u2019re doing. For us, it\u2019s just obvious when your integration is being used as leverage, in some cases as coercion, and therefore you diversify. Either you retreat wholly into yourself, or you diversify.I\u2019m in a democracy. I need to tell people why we\u2019re doing that, explain it in clear terms, and that becomes interpreted. Yes, it becomes interpreted. And yet, OK, in some cases we stood up and walked away from the table on trade. That\u2019s what made sense. We will be a better partner for the United States because of what we\u2019re doing. We\u2019re stronger. We\u2019re stronger now than we were 18 months ago, domestically, economically. We\u2019ve got a better international network. We\u2019ve got better defense. We\u2019re building the defense industry. We\u2019re building our military capabilities. We\u2019re a better partner there. A.I., you don\u2019t want one model, you don\u2019t want one frontier model. You want diversity.What\u2019s the lesson? What\u2019s the lesson of Mythos? Really? We have one system? If you don\u2019t get your hands on Mythos, your debt as a financial institution \u2014 that\u2019s a disaster, right? What kind of system is that? Does it make sense that your cyber is driven by Mistral to you know to pick a non-hegemon name if you will, or Cohere, or some variant of that across the industry, so everyone\u2019s not hit at the same time.Regrets and the futureNatalie KitroeffIs there anything you regret about the way you handled the negotiations in the talks?Mark CarneyNo. No.Matina Stevis-GridneffNothing you would have handled differently?Mark CarneyLook, there\u2019s a good deal on the table, and the United States needs to respect our sovereignty. That\u2019s that. And it\u2019s not that hard. We\u2019re reasonable people.AdvertisementSKIP ADVERTISEMENTKathleen KingsburyAre you going to run again?Mark CarneyAm I going to run again?Kathleen KingsburyYes.Matina Stevis-GridneffIs it too early to ask?Mark CarneyI just got here! Yes, it is too early to start asking.Matina Stevis-GridneffAre you enjoying this?Mark CarneyIt\u2019s hard. It\u2019s hard. It\u2019s a huge time of consequence, and so yes, that\u2019s why I\u2019m here. And it\u2019s probably why I got elected because it was an important time. It\u2019s why I put myself up. It\u2019s why I keep going. It\u2019s why \u2014 I was asked yesterday, are you going to have an election? We just got here. We\u2019ve got a majority. We\u2019ve got a big job to do. This is big, tough stuff. You just focus on that, and I think my value as a member of my party is to hit on the big things and move forward. And then at the end of that, you see how much has got done, and if something else needs to be done. So we don\u2019t think about it in those terms.Matina Stevis-GridneffSo maybe you\u2019ll run again.Mark CarneyWho knows? I got to survive. From the commentsMatina Stevis-GridneffCanada Bureau ChiefWe had a wide-ranging, in-depth interview with PM Mark Carney last week. To reflect the full depth of coverage alongside our published stories, we are sharing the complete transcript to give a fuller sense of the conversation.AdvertisementSKIP ADVERTISEMENT",
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