Darryl White & Ian Bremmer on the Importance of the US-Canada Relationship

Kim Hanson:

Great. Thank you. Hello everyone. I have the privilege of being joined by Ian Bremmer, President and Founder of Eurasia Group and GZERO Media, and Darryl White, the Chief Executive Officer of BMO, at our First Canadian Place building here in Toronto. Today, we’re going to discuss the opportunities and challenges both the United States and Canada face as we navigate the intricacies of one of the world’s most developed geopolitical relationships.

With such incredible promise for the future in a changing world, I look forward to discussing learnings about the way forward for our two countries. So why don't we start there? Darryl. The Canada-U.S. relationship is poised for long term growth. What opportunities are you seeing both near and long term, given the special relationship between our two countries?

Darryl White:

Well, I look I think the opportunities are plentiful and I think the moment is really important. You ask about Canada, U.S. and I've said before but I think it is up there and it might be the most successful bilateral relationship on the planet. And yet we don't really talk about it much, do we?

And just because we don't talk about it doesn't mean everything's always okay. The best relationships, as we've discussed in the past, require tending. And I think if we tend to them properly, the long-term opportunities are really important in terms of supply chain, in terms of the advantage that North American economies should have in a reorganizing world.

And if you look beneath that to things like critical minerals that we have an abundance of here, I think the opportunities are great both in the long term as well as in the short term. When we think about, change that is potentially upon us right in the windshield, not just out on the horizon, because we're going to have elections, in both countries in the next year and a half.

So there's possible scenarios in front of us there. And we've got a review of the USMCA, and you put all of that into context. I think there's a real opportunity for North America, Canada and the US, but we shouldn't waste it.

Kim Hanson:

Thank you. We look forward to taking a deeper dive on new market opportunities, Darryl. But turning to Ian and switching to trade negotiations and the presidential election. Even between the closest of friends, trade negotiations can be full of competing interests for the United States and Canada. Fast approaching negotiations will be crucial to maintaining a global leadership position and high quality of life. And while the 2026 review of the USMCA may seem far away with the US presidential election and a Canadian federal election, in the meantime, complacency amounts to sleepwalking. As you both so eloquently put. What are your thoughts there? How would a Biden or Trump presidency respond?

Ian Bremmer:

Well, my thoughts first are to echo what Darryl just said, that the US-Canada relationship is one of the most significant, one of the friendliest, one of the most functional bilateral relationships on the geopolitical stage today. But we are watching our political institutions in the United States and around the world erode, and they're eroding because they're not being tended.

The work is not going into them. And what I think Darryl and I are both really committed to is putting work into this US-Canada relationship. Not allowing us to be asleep at the switch, making sure that we at the highest level and across the political and economic spectrum, are engaging with each other so that there's more resilience when bumps in the road occur.

And one of those bumps, much more than the Canadian elections, is the US election, whether it's Biden or Trump.

Kim Hanson:

The U.S. and Canada have one of the largest bilateral commercial relationships in the world, when we think about new markets in that context, what about critical minerals and the business opportunities that may arise from the newly formed materials?

Darryl White:

In the overall supply chain, when we look at whether it's because of global supply chains or whether it's because of the path on decarbonization - that our clients are considering, whether you're a firm or you're an individual, the critical minerals are obviously going to need to be the material that supports that path.

Supply chains, decarbonization. And when we look at those opportunities that we've got in North America, we have an abundance. We have a lot in Canada, we have a lot in the United States. So whether it's lithium, cobalt, whether it's copper, whether it's any of the other rare minerals, and we flow into the battery supply chain, we've got a real opportunity here in North America. I would say the opportunity is very clear to investors, and it's going to require a lot of capital to align with a return thesis. But I think where it's lacking is an overall framework. We don't have an overall framework to help investors understand how we're going to attract that capital with some certainty in terms of development timelines, that I think is the biggest issue that we ought to be focusing on.

Kim Hanson:

Thank you. Darryl. And I think you mentioned a little bit about batteries. If we could, just expand upon that a little bit. But what about batteries as we look at the North American auto industry?

Darryl White:

Yeah. Well, look at batteries can only go as critical minerals go. So there's going to be an increasing need over time for batteries. But I think here the problem is, is there's a very big difference on development timelines. If you look at what Tesla's doing in Texas, we can build an enormous Gigafactory in less than two years or in China in one year, as is happening right now.

As you know, we care a lot about the metals and mining sector here at BMO. We have one of the biggest commitments to it on the planet. And when we brought together all of our clients, developers, prospectors, explorers, investors, what they tell us is we've got a 15-year time horizon from a standing start to the full infrastructure to develop the critical minerals, again, 1 or 2 for the battery plant. The impetus is real to get going and get going really fast on the supply chain around the critical minerals.

Kim Hanson:

That's great Darryl, thank you so much. Ian, switching to the geopolitical space this year, roughly half of the world is voting in elections. What is the state of democracy today, in your opinion, and what does it mean for the US and Canada?

Ian Bremmer:

It's weaker than it has been, in a long time. And, you know, there are, lots of elections happening around the world. Most of them, in fact, almost all of them, when you look at democracies, are seen as free and fair by their populations. We just had an election in India. Almost 1.5 billion people transition, not the vote that the Prime Minister Modi wanted.

And yet, free and fair. Indonesia, 120 million people voted in one day. Free and fair. South Africa, the European Union, its parliaments. Don't. Mexico go on and on. One problem, the United States. And that's a country that Canada relies on, you know, engages with, it's very, very important. The importance for Canada to double down on its leadership and engagement in US led multilateral institutions to ensure that they are stable and secure and to ensure that the United States had friends around it that are consistent and committed to those institutions.

As the United States thinks about wavering, right? Whether it's NATO or whether it's the WTO, whether it's the United Nations, all those organizations, the need for Canada to be there and committed is growing. Canada's relationship in industrialized times, that is increasingly, a question mark. And it's not as if Canada can hedge. It's not as if there are other countries out there that can fulfill the U.S. relationship for Canada. It can't. We are married, right, in good times and bad. And so the Canadians have to prepare for real challenges with U.S. democracy.

Kim Hanson:

Ian, staying on you for another minute. While the U.S. and Canada have been able to expand trade and work closely together across the geopolitical space, we're seeing some of the worst conflicts in recent history unfold among neighbors. What are you seeing and how is it impacting the West?

Ian Bremmer: The reality is that the major wars that we see in the world today that are affecting markets, in particular in Europe, with the Russian invasion of Ukraine in the middle East with October 7th and the war in Gaza on the back of that, neither of them are being significantly contained, by the West. The one major relationship that is being better managed is the US China relationship, which doesn't have a lot of trust in it. But nonetheless, both sides, for different reasons, believe that that relationship needs time and effort, because the alternatives are problematic for their own national security and economy. And so in that regard, we have more stability. But that stability is managed decline.

Kim Hanson:

And thank you for that. Darryl, before we wrap up, this is our second annual U.S. Canada summit. What are you hoping to get out of this year's event?

Darryl White:

The North American investment advantage needs to be tended to. And that's what we're encouraging through this summit. We've got folks from both countries. We got both folks from government folks from business folks who are expert analysts from around the world coming together so that we can put a lot of emphasis on this point, which is that we really do know who our friends are, but we also know that we've got to invest in those agendas as we go forward into a changing world.

Kim Hanson:

Thank you, Darryl. Thank you, Ian. BMO is proud to be partnering with the Eurasia Group to host our second annual U.S. Canada Summit.