Frank talk on challenging times

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This article was published 05/06/2019 (2525 days ago), so information in it may no longer be current.

As the former three-term premier of New Brunswick, a former Canadian ambassador to the U.S. and now as deputy chairman of TD Bank Group, Frank McKenna has a unique perspective on domestic and international political issues that is overlaid with more than a dozen years of high-level financial services industry experience.

McKenna was in Winnipeg this week — where his sister Loretta has lived for many years — to speak to a group of about 500 TD Bank customers and staff.

In conversation with the Free Press, he made it clear that he has never lost the political bug and he agrees wholeheartedly with many people in the business community that we are living in challenging times.

FP: In addition to being full-time deputy chair of TD Bank, you are also chairman of the board of Brookfield Asset Management and on the board of Canadian Natural Resources. You were also chair of Canwest Global Communications Corp. in its last days. What was that like?

McKenna: I loved that board. I loved Izzy, Gail, Leonard, all the Aspers. We were maybe one of the first victims of the total change to the digitalization… the dis-intermediation of the channels and then of the newspapers. It was a perfect storm. In fairness, we bought Hollinger probably at the very top of the cycle. I felt particularly bad for Leonard.

FP: As a senior executive of a huge financial institution and a former ambassador to the U.S., would you agree there are some long-standing postwar trends getting shaken these days, like global trade issues? How do you manage through it, and do you believe there is something fundamentally different going on now?

McKenna: Speaking for the bank and the private sector in general, I can’t recall a time when geopolitical issues have had so much influence on business. Normally, business is challenged enough just dealing with business cycles, competitive forces, all of the things that keep businesspeople awake at night. These days, on top of that, you have to pay attention to trade wars that can emerge on a weekly basis. For instance, Brexit is very disruptive. We have had to physically relocate 80 employees from London to Dublin at a cost of tens of millions of dollars… It is tricky. I have never seen a time where geopolitical forces have intruded so dramatically on economic stability.

FP: And it is happening at a time when global trade has broadened substantially.

McKenna: That is an interesting point. We forget that the overall trend has been towards a more liberalized trading environment for the world and most countries buy into the Ricardian theory of comparative economic advantage. We have moved hundreds of millions of people out of poverty. Around the world, we have seen this dramatic improvement in poverty reduction, child mortality rates, disease attenuation. All of that is good. In my view, it is all in large part a result of global forces that are lifting everybody around the planet… it is just the geopolitical forces that are showing volatility.

FP: A decade after your term as ambassador to the U.S., do you still follow those diplomatic affairs?

McKenna: It is like malaria. It gets in your bloodstream. I live every day as if I was still premier or ambassador in terms of the news I absorb. If you are a policy wonk, it is like catnip. I am very, very interested in it all.

FP: Do you think Canada should have taken a harder stand in trade issues with the U.S. and China?

McKenna: We have to be realistic with respect to the U.S. and China. They are the two biggest powers on the planet. Close to 40 per cent of our GDP goes to the U.S. It is such an important relationship. On that, I think most Canadians would give Trudeau and Canada 10 out of 10 on the way it has been handled. In the case of China, our tools are more limited. We have very little leverage. Most well-informed observers would say the road to China goes through Washington. Washington has huge leverage and Canada needs to be part of the ultimate negotiations between China and the U.S. Our government is working assiduously to make that happen.

martin.cash@freepress.mb.ca