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Trudeau kicks off cabinet retreat in Newfoundland with NAFTA and economy briefings

Toronto Star logo Toronto Star 2017-09-12 Tonda MacCharles - Ottawa Bureau reporter

ST. JOHN’S, NL—As the federal cabinet sat down to work through priorities for the fall parliamentary sitting, it got an earful from Newfoundland and Labrador’s Liberal premier about a controversial tax proposal.

Premier Dwight Ball, the provincial Liberal leader, told reporters the federal Liberal government needs to clearly explain its understanding of the “consequences” of its proposal to change the way incorporated small businesses and professionals can shift income around to lower their tax rate.

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The proposal has outraged the Canadian Chamber of Commerce, the Canadian Federation of Independent Business and many physician groups who view the tax advantages of incorporation as part of their compensation package, and a way to save for retirement.

“What we’re asking for is consideration of the impacts of the changes to taxation. I’ve heard this from all provinces, I’ve heard it from small businesses, I’ve heard it from physicians throughout Newfoundland and Labrador,” said Ball.

“I want to make sure that we have enough physicians, enough health care providers,” he said. “We need to have those professionals available to us to deliver health care services. We also need vibrant small businesses, companies that are strong to actually create employment throughout Newfoundland and Labrador.”

This two-day gathering is the first cabinet meeting since Prime Minister Justin Trudeau heard similar concerns expressed by MPs across the country at last week’s caucus retreat in Kelowna, B.C.

A source with knowledge of the caucus discussions said not all MPs who spoke out communicated opposition but several, in fact, supported the changes.

Trudeau and his ministers have been billing the planned changes as part of a “tax fairness” agenda they campaigned on, and insist they are only targeting loopholes that high-income earners take advantage of—not middle-class small business owners and professionals.

Finance Minister Bill Morneau declined to take questions on his way into hear Ball’s presentation. Morneau is expected to tout signs the Canadian economy is growing faster than expected, with strong economic output and employment creation numbers that will help the Liberal government tackle the deficit that ballooned beyond levels promised during the 2015 campaign.

The other pressing agenda for the Liberal government is the status of negotiations to rewrite the North American free trade pact.

U.S. Ambassador David MacNaughton briefed ministers on the NAFTA talks, and trade positions that are hardening in the U.S. including Boeing’s trade challenge to Canada’s Bombardier over the sale of its C-series planes to Delta Airlines.

The U.S. Administration is investigating Boeing’s complaint that the Canadian and Quebec governments provide unfair subsidies to its aerospace rival Bombardier. MacNaughton told reporters here he doesn’t understand the Boeing’s beef given that Boeing wasn’t even in that competition.

Commerce Secretary Wibur Ross is taking the Boeing complaint seriously, despite Canada’s hints that it jeopardizes Ottawa’s planned purchase of Super Hornet jets from Boeing.

Canada’s approach to the NAFTA is the subject of a growing attack by the Conservatives, who suggest the Liberal government is wasting its time pressing for inclusion in the main deal of enforceable guarantees for gender equality and Indigenous rights.

The NAFTA talks are to resume in Ottawa in late September with battle lines more clearly drawn after two rounds of negotiations concluded last week in Mexico City.

Other issues bubbling on the government’s agenda include its handling of the influx of asylum seekers, and its efforts to toughen environmental assessments.

TransCanada Corp. has asked to suspend for 30 days its application to build a proposed Energy East pipeline to transport crude oil from Alberta and Saskatchewan to refineries in Saint John, N.B. and other parts of eastern Canada. The company cited the government’s “significant” move to assess the impact of the project on upstream and downstream greenhouse gas emissions.

The federal Liberal government is quick to point out that it has approved other energy projects even after assessing such rules, with one official suggesting the real factor in the company’s decision is market conditions.

Four ministers will provide an update Tuesday on the status of relief efforts in the wake of Hurricane Irma that struck the Caribbean and American coastal states.

International Development Minister Marie-Claude Bibeau said Canada is still assessing the needs in the region. She admitted the government could have communicated better with Canadians “but I can assure you we were following the situation closely. We are in contact with the families, those who contacted us.”

Bibeau said it’s up to Canadian travellers to check government websites before travelling, and “should always register for the government to know where we are in case of emergency.” And if they don’t, she said, it’s up to family members to let the government know where their relatives are.

“This will help us to follow up.” In all, she said, “all the Canadians who wanted to come back” from Turks and Caicos and Saint-Martin island had returned on government-chartered commercial flights, with 691 arriving back in Toronto over the weekend and Monday.

The cabinet retreat kicked off with an invitation-only event Monday on the 16th anniversary of the Sept. 11th terror attacks in the U.S.

Trudeau celebrated the warm welcome Canadians gave stranded American plane passengers that day.

But it was his government’s handling of stranded Canadians in the Caribbean that are dogging his government.

Trudeau suggested his government has been all over the unfolding crisis, as he acknowledged the generosity of Canadians celebrated in the musical Come From Away now playing on Broadway.

“We’re all glued to our phones and TV screens thinking about folks facing an awful lot of weather further south as Hurricane Irma barrels through up the Florida coast, and people have been struggling for the past week. I know the stories, and there are a number of them, of people reaching out helping each other through difficult times and saving each other in difficult situations, and we’re very much engaged as well.”

“It’s these times...that we see what is in the core of each and every one of us,” said Trudeau. “It happened in Gander (on 9/11) and we’re celebrating it, and certainly in surrounding communities” as well, he said.

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