Canada wants to diversify. But diversify what, exactly? Exports? Customers? Suppliers? Technologies? Capital? Risk? And how would we know when we had actually done it? In this extended first episode of Canada’s Economy, Explained after the summer break, host Marwa Abdou sits down with Simon J. Evenett, Professor of Geopolitics and Strategy at IMD and founder of Global Trade Alert, for a wide-ranging conversation about one of the most consequential questions facing Canada: how much economic choice can a deeply integrated middle power actually create for itself? Evenett has spent much of his career studying the gap between how governments talk about international commerce and how trade, investment and business decisions actually work. Together, he and Abdou put some of today’s most comfortable policy words under pressure: openness, resilience, dependence, sovereignty and diversification. What begins with the gravity model of trade quickly becomes something much larger. How much can Canada really diversify away from geography? When does interdependence create prosperity, and when does it create leverage? What are we willing to pay for greater resilience? Who bears the cost of adjustment when supply chains move? And what happens when one country’s attempt to create more economic choice changes the incentives of the partner it is trying to become less dependent upon? Along the way, the conversation moves through outside options, supply-chain risk, portfolio theory, adjustment costs, repeated games, weaponized interdependence and the increasingly blurred boundary between trade policy and economic security.  And the stakes are no longer hypothetical. In the days after this interview was recorded, the Canada-U.S. confrontation escalated, making many of the questions in this conversation considerably less theoretical. Diversification may be easy to draw on a map. Building real economic freedom in an interdependent world is much harder. This episode was researched and editorially directed by host and executive producer Marwa Abdou, and brought to life in close collaboration with producer Nick Nikitaras, who led its creative direction and editing.   Links: - Simon J. Evenett, Professor of Geopolitics and Strategy, IMD - Global Trade Alert - Simon J. Evenett, Centre for International Governance Innovation (CIGI) - Down and Almost Out: A Time for Reflection on the Future of the Multilateral Trading System with Dan Ciuriak John M. Curtis, Henry Lotin - Trade Redirection of Chinese Exports During 2025: Evidence from Full-Year Data - China's Exports in 2025: Bilateral Tariff Hit, Limited Global Diffusion - Redirecting Chinese Exports from the USA: Evidence on Trade Deflection from the First U.S.-China Trade War Additional Resources: - Richard Baldwin et. al., “Global Supply Chain Risk and Resilience” - Kari Heerman and David Wessel, “Export Restrictions Don’t Solve Scarcity; They Redistribute It” - Daniel Trefler, “The Long and Short of the Canada-U.S. Free Trade Agreement,” American Economic Review - David H. Autor, David Dorn and Gordon H. Hanson, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” American Economic Review - Robert Axelrod, The Evolution of Cooperation - Pedro Dal Bó, “Cooperation under the Shadow of the Future: Experimental Evidence from Infinitely Repeated Games,” American Economic Review - Henry Farrell and Abraham L. Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion,” International Security - Chad P. Bown, “The Real Risk of a Trade War With Canada: America Needs Its Neighbors to Counter China,” Foreign Affairs - Chad P. Bown, “Negotiating a Win-Win End to the Lose-Lose U.S.-China Trade War Over Technology and Critical Minerals”

Trade used to be about efficiency. Now it’s increasingly about resilience, leverage and security.  In the mid-season finale, host Marwa Abdou sits down with two of the world’s leading trade policy voices: Wendy Cutler, Vice President at the Asia Society Policy Institute, and former Acting Deputy U.S. Trade Representative following nearly three decades at USTR, and Deborah Elms, Head of Trade Policy at the Hinrich Foundation, and Founder of the Asian Trade Centre in Singapore. Together, they unpack how the global trading system is being rewritten in real-time as countries increasingly reorganize trade around resilience, strategic alignment and economic security.  From China’s WTO accession to CUSMA, CPTPP, semiconductor chokepoints, industrial policy, friend-shoring and the rise of “mini trade deals,” this episode explores how trade became one of the defining geopolitical and economic stories of our time. Along the way, the conversation centres on a deeper question: If globalization was designed to reduce friction, what happens when the world starts optimizing for strategic insulation instead?  Because trade is increasingly no longer just about what crosses borders; it’s about who countries believe they can depend on when pressure arrives.   This episode was researched and editorially directed by host and executive producer Marwa Abdou, and brought to life in close collaboration with producer Nick Nikitaras, who led its creative direction and editing. Links: - Wendy Cutler, Senior Vice President, Asia Society Policy Institute - Dr. Deborah Elms, Head of Trade Policy, Hinrich Foundation - Dr. Deborah Elms, Founder and Executive Director, Asian Trade Centre - Refreshing the CPTPP  by Deborah Elms - Four known unknowns for US trade policy by Deborah Elms  \  Additional Resources: - World Trade Organization Global Trade Outlook and Statistics - Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - Regional Comprehensive Economic Partnership (RCEP) 

For years, Canada has been described as a stable economy. Strong banks. Disciplined policy. Rising household wealth. But underneath that stability, something else has been doing much of the heavy lifting — households.  Canadian households now carry some of the highest debt burdens in the advanced world, with mortgage debt and housing wealth increasingly shaping not just personal finances, but the broader trajectory of the economy itself. What happens when growth becomes deeply tied to household balance sheets? And what does that mean for productivity, business investment, inequality, and long-term economic resilience?  In this episode, Marwa Abdou sits down with Stephen Poloz, Special Advisor at Osler, Hoskin & Harcourt LLP, 9th Governor of the Bank of Canada, and author of The Next Age of Uncertainty (2022). Together, they unpack the deeper structural forces behind Canada’s household debt story, from post-financial crisis monetary policy and housing markets to productivity stagnation and the changing nature of financial stability itself.  This episode also explores why household debt is no longer just a question of financial risk but is increasingly a question about growth itself. Because when economies rely heavily on household leverage to sustain momentum, stability can begin to depend on households continually absorbing more pressure. And eventually, the question is not just whether the system can withstand shocks… but what the system stops being able to build. This episode was researched and editorially directed by host and executive producer Marwa Abdou, and brought to life in close collaboration with producer Nick Nikitaras, who led its creative direction and editing.  Links: - Stephen Poloz, Special Osler, Hoskin & Harcourt LLP - The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future by Stephen Poloz - Stephen S. Poloz, Bank of Canada - -Stephen S Poloz BoC Speech 2018: Canada's economy and household debt - how big is the problem? Additional Resources: - The Hub: “At 103% of GDP, Canadian households have the most debt in the G7” - OECD Housing Policy Toolkit - Canadian Bankers Association: Household Borrowing in Canada - Statistics Canada National Balance Sheet Accounts - OECD Household Debt - IMF Canada Financial Sector Assessment Program (FSAP) - House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again by Atif Mian & Amir Sufi 

You earn it in one currency. You spend it in one place. It feels local. Personal. Contained.  But the system that determines how money actually behaves operates at a different level entirely.  In this episode, host Marwa Abdou sits down with Kenneth Rogoff, Maurits C. Boas Professor of Economics at Harvard University and author of Our Dollar, Your Problem, to unpack the architecture of U.S. dollar dominance and what it means for the global economy.  For decades, the U.S. dollar has functioned as the backbone of global finance. It anchors trade, shapes capital flows and influences borrowing costs far beyond U.S. borders. But that dominance is not static.  Drawing on decades of research, Rogoff explains why the dollar’s influence persists, how it is evolving and where underlying vulnerabilities are beginning to surface. From rising U.S. debt and shifting interest rate dynamics to the growing use of financial sanctions and the emergence of competing systems, this conversation explores the forces quietly reshaping the global monetary order.  This is not a story about the dollar disappearing. It’s a story about what happens when the system built around it begins to shift. This episode was researched and editorially directed by host and executive producer Marwa Abdou, and brought to life in close collaboration with producer Nick Nikitaras, who led its creative direction and editing.  Links: - Kenneth Rogoff, Harvard University - “Our Dollar, Your Problem: An Insider's View of Seven Turbulent Decades of Global Finance, and the Road Ahead” - Yale University Press - “The Curse of Cash” - Princeton University Press - This Time Is Different: Eight Centuries of Financial Folly by Carmen Reinhart and Kenneth Rogoff - "Exchange Arrangements Entering the 21st Century: Which Anchor Will Hold?" by Ethan Ilzetzki, Carmen M. Reinhart, and Kenneth S. Rogoff - "Was It Real? The Exchange Rate-Interest Differential Relation over the Modern Floating-Rate Period" by Richard Meese and Kenneth Rogoff

Inflation is cooling. The data says the worst is behind us. So why does everything still feel so expensive?  In this episode, we unpack one of the defining economic puzzles facing advanced economies today: The gap between what the numbers say and what people actually feel. Because inflation isn’t just about how fast prices are rising, it’s about where they land, and what it takes to live with that shift.  Featuring insights from Chief Economist Claudia Sahm and BMO Chief Economist Doug Porter, this episode explores how pandemic-era inflation reset the price level, why higher interest rates are still working their way through the system, and how housing, debt and timing are shaping the Canadian experience. Along the way, we dig into the difference between supply- and demand-driven inflation, the limits of monetary policy, and why the “way down” can feel just as difficult as the way up. This episode was researched and editorially directed by host and executive producer Marwa Abdou, and brought to life in close collaboration with producer Nick Nikitaras, who led its creative direction and editing. Links: - Claudia Sahm - Website - Claudia Sahm - Bloomberg - Claudia Sahm – Substack “Stay-At-Home-Macro" - Douglas Porter – BMO Economics - Doug Porter Talking Points - “It Ain’t Over ’til It’s Over” - Doug Porter Talking Points - “Whole Lotta Hold”