THE WEST BLOCK
Episode 8, Season 8
Sunday, October 28, 2018
Host: Mercedes Stephenson
Guest Interviews: Minister Bill Morneau, Minister Karen McCrimmon,
Minister David Parker
Location: Ottawa
On this Sunday, the federal government introduces a carbon tax against four provinces Ottawa says have failed to produce a plan of their own to reduce emissions. A plan already under fire as the business community says it will hurt Canadian competitiveness. We’ll put this to the finance minister.
Then, a rare show of unity in the House of Commons, as MPs vote in favour of a national strategy to deal with returning ISIS fighters, but will the government follow through?
And, a conversation with New Zealand’s trade minister about the WTO getting rid of supply management and their 10-year free trade deal with China.
It’s Sunday, October 28th. I’m Mercedes Stephenson, and this is The West Block.
The federal government introduced its long-awaited price on carbon last week against four provinces: Ontario, Manitoba, Saskatchewan and New Brunswick, all of whom have refused to get onboard with Ottawa’s plan.
In those provinces, consumers will pay more for fuel then claim a credit on their federal income tax. The Opposition calls the plan a back-door tax grab.
Earlier, I sat down with Finance Minister Bill Morneau to talk about the carbon tax, and whether Canada is prepared for a looming recession.
Minister Morneau, thank you so much for joining us.
Minister Bill Morneau: It’s great to be here.
Mercedes Stephenson: This week, you announced the carbon tax. It’s been controversial, some of the provinces not very happy about it. Some people are saying this is just a way to increase revenue for the government, that it’s a tax grab.
Minister Bill Morneau: First of all, it’s about putting a price on pollution because we want to make sure that what we don’t want, pollution is priced so that people actually don’t want to pollute anymore. Secondly, we’ve said we’re going to give all the revenue back to the provinces. So 100 cents on the dollar, which means there’s no federal revenue in this at all. In fact, 90 per cent of the revenue will go back to citizens so they’ll actually get more money than prices will go up. And then the other 10 per cent will go to sectors of the economy that will have the ability to adapt.
Mercedes Stephenson: Now we’ve talked to the Canadian Federation of Independent Businesses. They say that small businesses are going to shoulder an unfair burden on this and that it’s affecting their competitiveness. Is that something you’re concerned about?
Minister Bill Morneau: You know we’re always concerned that small business is successful in Canada. That’s very important for our economy. What we’ve been doing for the last few years is, of course, addressing that. The small businesses taxes have gone down. We’ve obviously, seen a reduction in employment insurance charges. But in that case, what we’re seeing is that we’re actually going to push back a significant amount of money to small businesses.
Mercedes Stephenson: And the business community has been raising the issue with you of competitiveness. They’re concerned that Canada is not as competitive as the United States. And I was looking up the numbers just before we sat down to chat. The U.S. has a 4.2 per cent GDP growth rate compared to Canada’s 2.9 per cent. Their unemployment is lower at 3.7 per cent than ours at 5.9 per cent. What are you considering to increase competitiveness and could it include significant corporate tax cuts?
Minister Bill Morneau: So, our economy is doing very well. We’re in a situation where our growth has been strong, where unemployment rates, while different than the United States, they’re at near or 40-year lows. So we’re in a strong position economically and that’s the framework that we start with. Of course, what the United States has done is they’ve significantly increased their deficit at, you know, some significant long-term risks to their fiscal health. We’re going to take a look at how we can insure businesses in Canada stay competitive, which means they are competitive now but we know that there’s always more we can do. What I’ve heard from businesses is a few things as of note, listening to them. We’ve heard that they really are worried about trade. Of course, the USMCA deal, the deal with Mexico and the United States has really lessened that concern. They’ve been concerned in the oil and gas sector in particular about access to international markets. So our decision to purchase the Trans Mountain pipeline and the expansion, you know, that relieve that concern. We have more work to do to make sure we get that done right.
Mercedes Stephenson: Well, and when we look at foreign direct investment, it’s down. It’s at a 10-year low, and a lot of that has to do with natural resources and what’s happened with oil out in Alberta. But does it concern you that four foreign investors at this point, the U.S. economy is going great guns and the Canadian economy is not quite keeping up and not offering the same tax breaks?
Minister Bill Morneau: Well let me just challenge the frame there a little bit. Just in the last few weeks, you’ve seen, you know, LNG Canada make the largest single private sector investment in this country’s history, a $40 billion dollar investment. What we’ve seen over the last year and a half is the total business investment in our country is actually going up. So when you refer to investment challenges, I think to a great extent, what you’re really referring to is the challenge that’s happened in the oil and gas sector with the decline in oil prices, which did reduce investment in that sector and did so significantly. But really we’ve been climbing out of that for the last year and a half. There’s more to do. We want to make sure that investment continues in Canada and that’s exactly why I’ve been out listening to businesses and that’s exactly why I’ve said that what we want to do in the fall economic statement is address that business anxiety in a way that’s consistent with our goal of being prudent and managing our budget but addressing the concern that we have investment for long-term jobs.
Mercedes Stephenson: And you mentioned oil and gas, of course, we think about the Trans Mountain pipeline. It’s now the federal governments. I know that you have made the decisions in terms of how long the consultations will take that you’re required to do. Are you willing to commit to a date for when we can expect to see the pipeline start going through?
Minister Bill Morneau: We want to make sure that we address the issues in a way that actually makes sure that this pipeline expansion gets delivered. And so that means not setting a fixed date because we need to have at least the ability to ensure that we engage constructively. So first, we’ve said we want to make sure we go through the National Energy Board (NEB) process to ensure that we’re dealing with the issues around the west coast to make sure that we’ve heard about the species at risk challenges. We think we’ve already addressed those with our Oceans Protections Plan (OPP), but you know we want to listen to make sure. And then, once that’s done and we’ve got it in 22 weeks, there’ll still be some more consultation with Indigenous peoples to make sure we’ve heard and constructively engaged to get to what we hope is a positive result. That’s what we’re aiming for. I’m not going to give an exact date because the process needs to flow through—
Mercedes Stephenson: An approximate date? A ballpark?
Minister Bill Morneau: Well, we’ve said clearly that we have to do this the right way.
Mercedes Stephenson: Where are we at on steel and aluminium tariffs?
Minister Bill Morneau: Well, where we’re at is an unfortunate place. We obviously, are unhappy that we have this U.S. action against us. We think it’s completely inappropriate. We’re a U.S. ally. The use of Section 232 in order to make an excuse for steel and aluminium tariffs we think is just flat out inappropriate. So, where are we at? We’re taking measures in a few directions. First and foremost, obviously, we are negotiating with the Americans in order to try to get past this. But while we do that, and that requires some, you know, ongoing discussions, we’re making sure that we manage the stability of the market. So we’ve ensured that there are safeguards put in place. We’ve taken a look at how we can have remission orders for Canadian purchasers of steel that need them. That’s allowed us to keep the market stable during this period of challenge for both the producers and the users of steel.
Mercedes Stephenson: Is there any end in sight for the deficit?
Minister Bill Morneau: I’m—I’m—oh, for the deficit. Well, I was going to say, I’m always cautiously optimistic about getting through the steel and aluminium tariffs, and I’m always going to be fiscally prudent when it comes to managing our overall finances. So that’s important—
Mercedes Stephenson: Do you think we’re in a position to handle a recession which the big banks are predicting?
Minister Bill Morneau: First, I would say that our economy, again, is doing well. You always, though, want to make sure that your balance sheet is resilient enough to deal with challenges. I guess the way to think about that is where does Canada stand in comparison with other countries? If you look at the G7 countries, and you look at the amount of debt any of those G7 countries have as a function of their GDP, we are far in a way the lowest among the G7 countries. In fact, we’re less than half of the average debt as a function of our GDP. So, that’s sort of not different than when you look at a company and say, you know, how much debt are they carrying? Well, the Canadian government is carrying the lowest amount of debt to those comparable economies. So that puts us in a position where should we find ourselves, for whatever reason, to need to demonstrate that resilience, we’ll have the capacity.
Mercedes Stephenson: Okay. Minister Morneau, thank you so much for your time today.
Minister Bill Morneau: Thanks.
Mercedes Stephenson: Up next, will the government bring ISIS fighters returning to Canada to justice?
Mercedes Stephenson: Welcome back. It hardly ever happens in the House of Commons, a partisan place, but last week, in a rare show of unity, the government voted to support the Conservative motion, to create a national strategy to deal with returning ISIS fighters. But the Opposition says the government needs to do more than just endorse their motion with words.
Minister Andrew Scheer: “In the past, where they support a motion that Conservatives have put forward and then they do absolutely nothing to take action afterwards.
The Prime Minister has had years to deal with this issue, and the fact is that these individuals who have gone and fought with ISIS are coming back and are not facing justice. He has introduced legislation that actually ties the hands of our security officials and, shockingly, he’s reduced the penalties for those who are facing terrorist-related charges.
When will the Prime Minister finally take real action to protect our communities?”
Mercedes Stephenson: Joining me now is Karen McCrimmon, the Parliamentary Secretary for Public Safety. Thank you so much for joining us.
Minister Karen McCrimmon: My pleasure, Mercedes.
Mercedes Stephenson: So an unusual moment in the House this week when you agreed with the Opposition motion. Why did you agree with it? Why did the government vote in favour of this?
Minister Karen McCrimmon: I think what it comes down to is that we want to make sure that Canadians have the confidence in their security, in their public safety measures. And we agree that Daesh and the heinous acts that they committed in Syria and Iraq really needs to be acknowledged, and we need to condemn it very, very strongly.
Mercedes Stephenson: What is the government going to do, though, beyond condemning it? In terms of actual action, what is this national strategy look like?
Minister Karen McCrimmon: Okay. Sometimes I have a hard time when I sit in the House and I—we have these kinds of challenges because I know that the previous government actually cut a billion dollars from our national security agencies.
Mercedes Stephenson: But you have had three years now.
Minister Karen McCrimmon: And we’ve put $700 million of it back, plus. So we’ve—that’s in the RCMP alone that we’ve increased spending by $700 million dollars. And I think what we believe needs to happen is that you need a very disciplined, very deliberate, very conscious approach to dealing with these kinds of challenges. And you need to do it with your partners. And so—
Mercedes Stephenson: But what does that look like in terms of actual action?
Minister Karen McCrimmon: Actual actions. Well, first of all, we are prosecuting in court. So, there have been four people charged. Two have been convicted, two are underway and that’s more than the previous government had done. Also, in terms of—we have other tools at our avail that we can, you know, challenge people. We can trace them, we can survey them, we can monitor them, and I think there’s a lot of that going on while you gather the evidence you need in order to lay a charge.
Mercedes Stephenson: Police have said that they have a hard time charging people because typically, if you’re a police officer, you go gather the evidence. You can’t do that in Syria, although in some cases these people have produced videos of themselves advocating for the deaths of Canadians. Are you looking at changing the laws to make it easier for police to charge?
Minister Karen McCrimmon: I think that dilemma of how do you take intelligence information and turn it into evidence that would stand in court? That’s a dilemma that we’re all dealing with. And you can understand it because if you get information in Syria that someone is working, a Canadian is working with Daesh, and you’re getting that from a certain sources, chances are you’re not going to be able to get that source to actually testify in court. So you’ve got to find other measures of evidence. And there are—some people will say one thing up front and then they’ll recant it later on. So we’ve seen that happen as well. So we need to find the firm evidence and that’s exactly what we’re working on.
Mercedes Stephenson: Why bring these people back to Canada at all? The Brits just stripe them of citizenship and say sorry, you can stay there. The French actually send in Special Forces hit squads to kill their own citizens, and we see Global Affairs reaching out and saying would you like to come to Canada? And Canadians are wondering why on earth would you do that?
Minister Karen McCrimmon: Well there are—Global Affairs has their own work to do in difficult parts of the world. And I think we could probably expect people to reach out and say is this a possibility there? But let’s make it quite clear, those people left the safety of Canadian democracy willingly and they’ve gone to fight with really a heinous organization on the other side of the world. There has to be consequences for that and there will be.
Mercedes Stephenson: So why let them come home, though? Why not just leave them there?
Minister Karen McCrimmon: Well, I think the thing—we don’t believe in two-tier citizenship and if someone’s a Canadian citizen, we’re responsible for them whether we like it or not, which means these people, they need to be held accountable for their crimes. So we will take them home and they will be prosecuted and in a court of law and treated accordingly. I don’t think when there’s Canadians abroad who have broken the law, it’s our responsibility to deal with it. We can’t just hand that off to some other nation to deal with.
Mercedes Stephenson: I mean you pointed out the four prosecutions, but there is belief to be a much, much larger number of returning fighters who are in Canada, another surge potentially coming home. The RCMP has said they don’t have the resources to monitor all these people. Are you considering spending more money on public safety to allow them to put more tracking devices on people, to surveil them so you actually know where these people are when they come home if they’re not in jail, which at this point they’re not.
Minister Karen McCrimmon: I think that’s exactly why we added annually, $700 million dollars to the RCMP budget. But that’s an annual increase—
Mercedes Stephenson: So would you add more on top of that?
Minister Karen McCrimmon: Well—
Mercedes Stephenson: Because there’s been a trend to stress at local border crossing and other areas for the RCMP.
Minister Karen McCrimmon: Yeah. And there’s more than one way of doing things. We’re never going to talk about all of the tools that are at our disposal because, you know, you could jeopardize things. You could jeopardize a court proceeding or a conviction. You could jeopardize your source. You could jeopardize the men and women who actually go out there and collect that evidence. But there are more ways of doing this than might meet the eye, and I think the RCMP have done a really good job of collaborating with all our—all the other nations who have the same challenge that we will.
Mercedes Stephenson: We have to wrap it up there, unfortunately because we’re out of time. But thank you so much for joining us today.
Minister Karen McCrimmon: It’s been my pleasure, Mercedes.
Mercedes Stephenson: Up next, New Zealand’s trade minister on how to get it right on free trade with China.
Mercedes Stephenson: Welcome back. Increasing trade between Canada and China is a focus on both sides of the Pacific, but it’s not without its challenges. New Zealand, however, may provide some insight into how to get trade with China right. Last week, I sat down with New Zealand’s Trade Minister David Parker, to talk about trade with China and reforming the WTO. Here’s that conversation:
Welcome to Canada, and thank you so much for joining today, Minister Parker.
Minister David Parker: It’s been my absolute pleasure.
Mercedes Stephenson: Now you’ve been sitting down with other countries talking about how to reform the World Trade Organization. It’s something Donald Trump says he has no use for. What did you discuss at this meeting about how countries like Canada and New Zealand can navigate and try to bring meaningful change to the WTO?
Minister David Parker: You know the 13 countries in the room that Canada brought together today represent GDP twice that of the United States. We were there trying to find solutions to address the legitimate concerns of the U.S.A., things like problems in the Appellate Body, the fact that the WTO doesn’t seem to be able to update its rules to meet current challenges. And there was an acknowledgement in the room that if we can’t achieve that as an international community, then the WTO will wither.
Mercedes Stephenson: Is it hard to figure out what changes to make, though, if you don’t have the two biggest players there? And that’s China and the United States.
Minister David Parker: Well, you know, actually, sometimes these negotiations can be bigger than Ben-Hur. There are other negotiations. For example, there’s one going at the moment that involves the EU, Japan and U.S.A. in respect of what are called notifications, transparencies around subsidies by different countries. So there’s more than one thing going on at the same time, but this is a really worthy effort on the part of Canada to bring together likeminded countries to see if we can make a difference.
Mercedes Stephenson: How important is it to be able to maintain an institution like the WTO in this uncertain international environment?
Minister David Parker: The smaller the country, the more important it is. But even larger countries like G20 countries like Canada, it’s obvious from their comments that they believe in the system as well. And I think that the rule of law is important including in trade and that’s effectively what the WTO, give us.
Mercedes Stephenson: Now there’s been a lot of discussion about China all around the world with Donald Trump’s potential trade war, which it appears he’s implementing. Certainly here in Canada we’ve been talking about it because we just signed the USMCA deal that has restrictions, potentially, on Canada’s ability to sign a trade deal with China. I bring this up because in New Zealand, I was fascinated to learn that China is your biggest trading partner and that you’ve had 10 years this month of free trade with China. How has that worked out for you?
Minister David Parker: Very well. We’ve got a trade balance with China that’s at slight surplus for New Zealand. It is our largest trading partner. It sort of flips between China and Australia being our largest trading partner, but they’re both very, very important. To put it in context, it’s about twice as much as our trade with the United States.
Mercedes Stephenson: One of the concerns that’s been raised around China is that they pour cheap goods into the market, that it can depress wages, it can displace jobs. Have you had that experience with your free trade with China?
Minister David Parker: Not really, no. I think the technological disruption that’s being caused by the digitalization and automation of many jobs would have been of more effect than that. They have been outsourcing of jobs to lower labour cost countries around the world, including China. You know, we don’t really have a textile industry in New Zealand now, but I think that would have happened irrespective of where they had a free trade agreement with China. And we’re careful in our conversations with New Zealanders to say, look, you know, you can’t blame other countries for the technology revolution that’s sweeping the world either. You’ve just got to make sure that the government supports are in there for people to retrain, for example, if they lose their job and to push against some of the adverse effects of globalization like multi-national tax avoidance and the like.
Mercedes Stephenson: New Zealand used to have a system that was somewhat similar to Canada in terms of supply management quotas. You got rid of that system.
Minister David Parker: We did.
Mercedes Stephenson: This is a sacred cow, so to speak, in Canada. What has the experience been for New Zealanders dealing with the dairy the industry without those kinds of supports?
Minister David Parker: Our industry has become more efficient and larger. So rather than being adverse to their interests, it’s turned out the opposite way. There were fears, of course, at the time, but it’s worked out very well.
Mercedes Stephenson: How does New Zealand deal with Donald Trump?
Minister David Parker: Respectfully. We have respect for relationships with every country in the world. You know, we’re a minnow in the world. We haven’t got the power to push anyone around. I’ve just been to Washington. We were treated very politely and we wanted to learn more about some of the concerns that the United States has, for example, about how the WTO’s Appellate Body works. And we actually share their concerns. We agree that those—
Mercedes Stephenson: And what are some of those concerns?
Minister David Parker: Well, for example, we were joint plaintiff with the United States in the case against another country in respect of legal practices relating to beef. The Appellate Body took nine months when it should have taken three months to deliver a decision. And their eventual decision, which was in our favour, was six months late. And you never get a remedy for those six months that you’ve lost. Well the rules say, it’s meant to be done with, in 90 days. So we’re with the U.S. that says that the Appellate Body should stick to it and apply the rules. And that’s one of the reasons why we came here because we want to work with other likeminded countries like Canada and the other countries in the room, to try and bring forward practical solutions, quickly, to solve these problems that have been complained about long before the Trump administration, but have yet to be fixed within the WTO.
Mercedes Stephenson: The last question I wanted to ask you is immigration, which I know is not really your file, but it’s something that Canada’s dealing with. We’ve had thousands of people coming across the U.S. border, claiming asylum in Canada. You’re right next to Australia, which has had some very strict immigration policies. You’ve talked to them about possibly taking some of the people who are on the Pacific island who are refugees. How do you think, in this modern world where it seems like borders are disappearing, countries can deal with the challenges of people becoming more and more mobile and hoping to move somewhere where they can have a better life but also the challenges that come with that?
Minister David Parker: Well, you’re right. I’m not the immigration spokesperson. Suffice it to say, these are mixed issues for the world and they’re very, very difficult issues that if you get wrong, cause unusual outcomes within countries is being seen in parts of Europe. So they’re issues that we take seriously. We don’t have to grapple with some of the issues that other countries have to because there’s a lot of sea between us an anywhere. In respect of immigration policy, more broadly, we’re quite an open country. We’re similar to Canada in that regard. We have high rates of immigration and we found that it has helped aid in the prosperity of our country. But it’s not without controversy in our own country as well, particularly in respect of immigration that impacts upon the bottom end of the labour market.
Mercedes Stephenson: Very interesting, Minister Parker. Thank you so much.
Minister David Parker: Thank you.
Mercedes Stephenson: That’s our show for today. Thanks for joining us. I’m Mercedes Stephenson. See you next week.
Comments