Category "News/Politics"

Canada plans to build up to 18 new coast guard ships at a cost of $15.7 billion in an effort to renew Canada’s Coast Guard fleet,  Prime Minister Justin Trudeau announced Wednesday.

Up to 16 of the ships will be constructed in a fleet renewal project anchored in Seaspan’s Vancouver Shipyards. Two others — Arctic patrol ships that will be modified for the Canadian Coast Guard — will be built at Irving Shipyards in Nova Scotia.

“Canadians deserve better than to have this fleet rust out,” Trudeau said during his visit to Vancouver.   

“By renewing the Coast Guard fleet, we’re making sure our coast guard has the ships they need to carry out their important work for the entire country in the years to come,” he said in a statement.

Trudeau also announced the government is launching a competitive process for the design of a new class of smaller ships. The mid-shore multi-mission ship will work with the large fleet in shallow areas and perform some science activities. 

A plan to refit and extend the life of existing vessels at shipyards across the country will cost up to $2 billion.

Aside from the shipbuilding plan, the federal government is providing an additional $351.3 million to enhance capacity of the coast guard, strengthen management and oversight and promote a greener way of doing business. 

According to a government statement, the $15.7 billion figure is an “early estimate” of the cost for construction, support, infrastructure, project management and cost overruns, or contingency funding. The costs of each ship will be announced, the government said, after contract negotiations have been completed. 

CCGS Captain Molly Kool is presented to the media after undergoing refit and conversion work at the Davie shipyard in December 2018 in Lévis, Que. Much of the Canadian Coast Guard’s aging fleet has exceeded expected lifespans. (Jacques Boissinot/Canadian Press)

According to a statement, the government also intends to launch a competitive process to add a third Canadian shipyard as a partner under the National Shipbuilding Strategy.

“The National Shipbuilding Strategy is the right approach to ensure our Coast Guard, Navy, and marine activities are supported by modern vessels,” Minister of Public Services and Procurement and Accessibility Carla Qualtrough said in a statement. 

The 16 multi-purpose vessels will be used for light icebreaking, environmental response and search and rescue while the two new Arctic and offshore patrol ships will perform duties further offshore.  

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Prime Minister Justin Trudeau is expected to announce Wednesday that the federal government is buying two more Arctic patrol ships on top of the six it has already ordered from Halifax-based Irving Shipbuilding.

However, unlike the first six ships, which are being built for the navy at a total cost of $3.5 billion, a government source said the seventh and eighth will be built for the Canadian Coast Guard.

The source, who was not authorized to comment publicly, said the move is intended to address the Canadian Coast Guard’s desperate need for new ships.

Documents obtained by The Canadian Press earlier this year warned that more than a third of the coast guard’s 26 large vessels have exceeded their expected lifespans — and many won’t survive until replacements arrive.

And that advanced age is already affecting the coast guard’s ability to do its job, including reduced search-and-rescue coverage, ferry-service disruptions and cancelled resupply runs to Arctic and coastal communities.

The second problem is the threat of layoffs, which Irving has long warned will happen unless the government fills a gap between when the last Arctic patrol ship is finished and construction on the navy’s new $60-billion warship fleet, the source said.

The government sought to address that gap in November when it ordered the sixth Arctic patrol vessel for the navy from Irving and agreed to pay the shipyard to slow production for a total cost of $800 million.

‘A prudent way forward’

Government officials at the time defended the high cost of that move, saying a third-party assessment commissioned by the government, which has never been made public, indicated it would cost even more to allow a gap to persist.

“Ultimately what happens is the workforce gets laid off, you rehire people, it’s not the same people so you’re retraining, and then you have this learning curve,” Patrick Finn, the Defence Department’s head of procurement, said in January.

“From some of the data we’ve run, doing what we’ve done, if we don’t do it, we’re probably going to pay that much money anyways in inefficiencies and get nothing for it. So the analysis shows that this is really a prudent way forward.”

Even then, federal bureaucrats and Irving both warned more would need to be done as even with those measures, there was still the threat of an 18- to 24-month gap between construction of the two fleets.

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Canada’s retaliatory tariffs on American goods played a key role in restoring free access to the U.S. market for Canadian steel and aluminum, Prime Minister Justin Trudeau says.

Trudeau was visiting an aluminum processor Tuesday in Sept-Iles, Que., part of a victory lap after the United States lifted tariffs on Canadian metals late last week.

“I think one of the things that we saw very clearly, and the Americans learned, is that Canadians were going to stay firm,” Trudeau said at Aluminerie Alouette, in the town on the north shore of the Gulf of St. Lawrence.

“We strategically put a significant number of American products and produce under tariffs and that had an impact on governors, on members of Congress, who continued to talk to the president and to members of the administration about lifting these tariffs.”

The U.S. imposed import taxes of 25 per cent on Canadian steel and 10 per cent on aluminum a year ago as a pressure tactic when negotiations on a new North American free-trade agreement got difficult.

Canada responded by putting taxes on similar U.S. goods, but also on a range of other products — from cucumbers to coffee to whisky to playing cards to lawn mowers. In many cases, these were grown, processed or manufactured in districts represented by key American politicians.

Canada, the United States and Mexico signed the new trade treaty at the end of last year; it awaits ratification in each country’s national legislature.

“With the full lift of the steel and aluminum tariffs, the last major barrier against ratification has been taken away — on both sides, because it was also a barrier to the American ratification process,” Trudeau said. “(The agreement) is a good deal for Canadians, for workers, for businesses on both sides of the border.”

‘A difficult situation’

Time is short, though, with just a few weeks left before the House of Commons breaks for the summer and a federal election scheduled for October.

Trudeau said he’s not worried that a closer relationship with the United States under President Donald Trump will make resolving tensions with China more difficult. The two economic giants are in a fight of their own, with Canada in the middle since the RCMP arrested an executive of China’s Huawei Technologies last December on a U.S. extradition warrant.

China responded by detaining two Canadians — former diplomat Michael Kovrig and entrepreneur Michael Spavor — and beginning to obstruct trade in Canadian products such as canola, soybeans and pork.

“I speak to global leaders who are all very concerned about some of the decisions and some of the positionings that China has taken recently,” said Trudeau, who was asked about reports that Canada has sent a parliamentary delegation to aid in securing the release of the two men.

“Canada obviously is in a difficult situation with China right now but we’re going to continue to hold strong, we’re going to continue to stand up for our values and principles. We’re going to put the safety and security of Canadians first and foremost, as we always do, and we’re going to work with our allies to ensure that China understands that Canada is going to stay strong.”

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Prime Minister Justin Trudeau’s government set the stage Tuesday for an overhaul of Canada’s laws governing the internet and digital privacy.

Innovation Minister Navdeep Bains today unveiled elements of the government’s long-awaited digital strategy. Among other things, the strategy includes a digital charter that guarantees Canadians data portability — the ability of consumers to retain data when changing services.

Bains said the ten-point digital charter will lay out the government’s basic principles for online governance, including universal access, safety and security, user control over personal data, transparency and portability and keeping digital platforms free from hate and violent extremism.

Bains said there would be “clear, meaningful penalties for violations of the laws and regulations that support these principles.” He did not say how stiff the penalties might be, or whether they could reach the level of fines being levied on tech giants by European nations — such as the fine of 50 million euros France slapped on Google earlier this year.

The government also is promising to strengthen the Personal Information Protection and Electronic Documents Act (PIPEDA), the privacy law that governs private sector corporations. PIPEDA has not been substantially updated since the early 2000s and has grown increasingly out of date in comparison with new privacy laws adopted around the world.

Bains also is calling on Canada’s competition watchdog to take an active role in fostering a level digital playing field.

“The government will ensure fair competition in the online marketplace,” Bains told an Empire Club lunch meeting today. “We want to facilitate the growth of Canadian businesses and affirm Canada’s leadership on digital and data innovation, while protecting Canadian consumers from market abuses.”

Bains said he has written to Matthew Boswell, federal commissioner of competition, to ensure he has the tools necessary to ensure healthy competition in the digital environment.

In his letter to Boswell, Bains said it’s important to ensure that Canada’s laws, policy and practices are keeping pace with the marketplace.

“We must review how to continue to manage the risks and ill effects of data abuse and of the potentially emerging data monopolies,” he wrote. “While there has been considerable focus on privacy and on digital infrastructure, we much also reflect upon the potential for market distortions, and for unforeseen disruptions where abuses of market power can occur in the collection, processing and use of data.”

Bains’ call for Canada’s competition watchdog to play a greater role in policing tech giants comes as companies like Facebook are facing calls in the U.S. for greater regulation, and as questions are being raised about whether the company should be broken up under antitrust laws.

The government also will review the Statistics Act, which landed in the headlines last year after news emerged of Statistics Canada’s controversial plan to collect banking information of Canadians. Bains said the government wants to ensure Canadians can trust the way Statistics Canada is handling their data.

With only four weeks left in Parliament’s calendar before it rises for the summer, and only five months left before the next election, it’s not clear how much concrete change can be implemented before Canadians go to the polls.

Elizabeth Thompson can be reached at

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A deal was reached on Friday to end the metal tariff battle between Canada and the U.S. Steel and aluminum imports from Canada will no longer be taxed, but that doesn’t mean all the problems are over. 

The new NAFTA still has to be ratified and the protectionist administration in the U.S. is still causing anxiety in Canada. 

Here’s what you need to know about the tariffs deal and what happens next. 

When do the tariffs end?

The American tariffs on Canadian steel and aluminum — 25 per cent and 10 per cent, respectively — disappeared as of today. Finance Minister Bill Morneau announced on Monday that Canada lifted its retaliatory countermeasures against the U.S., according to a news release from the Department of Finance Canada.

When the deal was announced on Friday, the government said the taxes would stop in two days time. 

However, that doesn’t mean that Canadian metal is in the clear yet. The U.S. reserved the right to reimpose duties if imports “surge” beyond historical levels. 

What exactly does that mean? We’re not sure yet. 

Foreign Affairs Minister Chrystia Freeland told CBC Radio’s The House that it was very intentional language from the Americans, but she didn’t clearly define what a surge would be. 

Canada buys more steel from the U.S. than any other country. Half of American steel finds its way to Canada, and in 2017 more than $18 billion CAD in steel was traded between the two countries, according to Global Affairs.

Trade in aluminum between Canada and the U.S. is around $15 billion a year, and 84 per cent of Canada’s aluminum is exported to the Americans.

Part of the deal included implementing a monitoring system that would signal if trade is getting close to a “surge” level.

What the Americans are worried about is cheap Chinese steel coming into their market via Canada.

Freeland said if the tariffs come back, they only would target the specific offending material — meaning steel won’t be affected by aluminum imports, and vice-versa. 

How did we get here?

The tariffs were in place for almost a year. The new NAFTA was signed in the fall, after intense negotiations, and there had been hopes that the tariffs might come off then as a sign of good faith from the Americans.

That didn’t happen and it didn’t go over well with Canadian officials. Once the deal was done, all attention turned to kicking those duties. 

Watch a segment from Power and Politics: 232 tariffs ‘no longer a barrier’ to NAFTA 2.0

Finance Minister Bill Morneau says that the removal of 232 tariffs is an important step toward NAFTA 2.0 ratification, but wouldn’t say if the deal would make it through Parliament before the House rises. 8:01

Canada challenged the U.S. (and will now drop the case) under World Trade Organization rules, calling the imposition of tariffs illegal. The U.S. had introduced them under the guise of Section 232 of the little-used Trade Expansion Act, which allows a president to enforce levies for national security reasons. 

The negotiations continued, with little tangible progress — until the last few weeks.

Prime Minister Justin Trudeau had a series of phone calls with President Donald Trump about the situation. Freeland had meetings in Washington. And a well-timed opinion article from Republican Sen. Chuck Grassley — who vowed Congress would not pass the new ​​​NAFTA legislation until the tariffs were lifted — helped tip the scales in Canada’s favour.

What products are no longer affected?

When the U.S. announced it would be slapping tariffs on Canada, the federal government hit back with $16.6 billion in dollar-for-dollar reciprocal duties. 

But because we don’t import the exact same amount of steel and aluminum from the U.S., the list got more creative — including chocolate, toilet paper, hair gel, boats, and other seemingly random products to match the dollar amount.

A closer look revealed the government was aiming at key Republican targets. Orange juice from the swing state of Florida, Kentucky whiskey from Sen. Mitch McConnell’s home state, and dairy products from Rep. Paul Ryan’s Wisconsin.

In the first two months of the taxes, Canada had taken in almost $300 million.

Now that relative peace has been established, those Canadian tariffs dissolve too. 

What happens next?

One hurdle is out of the way, but that doesn’t mean it’s smooth sailing for the new NAFTA. 

Canada still has to ratify the agreement, and send implementation legislation through the House of Commons. 

While the federal cabinet ratifies trade treaties, it does so only after it has passed in Parliament, readying Canadian laws and regulations to comply with the new terms.

Freeland says it’s “full steam ahead” on that endeavour and called on the other parties to co-operate.

So far, they’re not quite on board. 

The NDP’s trade critic Tracey Ramsey says it’s foolish to ram the deal through Parliament before we see what changes the Democrats in the House of Representatives make. 

The U.S. ratification will be an uphill battle, as questions linger about how to effectively implement labour and environmental regulations set out in the deal. 

Ramsey said that’s part of the reason why she doesn’t think NAFTA will see the light of day before October’s election. 

And getting assent from the Conservatives, who aren’t onside with much the Liberals have done, will be a tough sell too. 

Leader Andrew Scheer said having the tariffs lifted is a good thing for workers, but there’s still a lot of uncertainty. 

And then there’s the bailout the government gave to steel and aluminum workers. 

In March, the Liberals announced $100 million in funding for small and medium-sized manufacturers. Trudeau says that will stay in place for now, but it’s unclear when the help will end. 

The safeguards put in place to prevent dumping of foreign steel will also stay as part of a “continued commitment,” and part of the tariff deal includes keeping an eye out for any unwanted surges of global product in North America. 

“We have to make sure we protect our market,” Finance Minister Bill Morneau said.

Another unanswered question is the future of dealing with an ultra-protectionist administration in the U.S. 

Canada is on relatively stable ground now in regards to metal tariffs, and it has also secured a near-exemption on auto tariffs. 

But the foreign affairs minister isn’t relaxing just yet.

Freeland said it would be naive to feel secure and that she was still concerned about what could come next from Donald Trump. 

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Canada and the U.S. are close to reaching a deal to remove steel and aluminum tariffs, CBC News has learned.

High-level discussions to hammer out any final details are happening now, and the deal could be announced as early as Friday, according to a source with knowledge of the negotiations. 

While nothing is finalized, the source said momentum is heading in the right direction and called today a moment to mark.

However, they cautioned that the devil will be in the details.

Almost a year ago, the U.S. Department of Commerce slapped tariffs of 25 per cent on imports of steel and 10 per cent on aluminum, citing national security interests.

Canada retaliated with its own tariffs of 25 per cent on steel and 10 per cent on aluminum, but also imposed a 10 per cent tariff on multiple consumer items, targeting products such as Kentucky bourbon from states represented by U.S. politicians who might push back against the tariffs.

The tariffs have disrupted supply chains and added extra costs for consumers and businesses across a wide range of industries on both sides of the border.

Foreign Affairs Minister Chrystia Freeland was in Washington, D.C., earlier this week to sit down with her American counterpart and held a series of  meetings with members of Congress.

Her trip followed on the heels of two phone conversations Prime Minister Justin Trudeau had with U.S. President Donald Trump within the past week, where he asked for an end to U.S. steel tariffs and additional diplomatic assistance in Canada’s ongoing dispute with China.

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The Bank of Canada’s latest financial system review report is being released today — and it’s expected to be the first ever to explore the threat climate change poses to the country’s financial system.

The central bank’s annual financial system review (FSR) analyzes the resilience of the country’s financial system, cataloguing the main vulnerabilities and risks facing it. Critics have been urging the bank to examine the impact of climate change on financial stability for years now.

The Bank of Canada recently announced it is joining the Network for Greening the Financial System, a worldwide forum of central banks and financial system supervisors looking to better manage the financial risks of climate change. The network launched in 2017.

“And so for two years, Canada has been absent from that international discussion,” said Kevin Quinlan, a consultant who focuses on climate change and responsible investment and an ex-chief of staff to former Vancouver mayor Gregor Robertson.

“Countries that have very different economies than Canada’s are really setting the agenda … and that’s a real disadvantage for Canada.”

Quebec Provincial Police officers carry Nadia Makhavekova to a boat so she can retrieve some belongings from her flooded home on Friday, May 3, 2019 in Ste-Marthe-sur-la-Lac, Que. (THE CANADIAN PRESS)

‘When the Bank speaks, people listen’

In late March, as it was joining the Network for Greening the Financial System, the central bank publicly committed to building climate-related risks into its FSR process and developing a multi-year research plan focused on climate change.

“The importance of climate-related issues for financial stability and monetary policy (has) become increasingly clear,” said Bank of Canada Governor Stephen Poloz at the time. “This is particularly true for Canada, where resources play a vital role in our economy and where the natural environment is a defining feature of our national identity.”

Experts argue the Bank of Canada is ideally placed to research and model the potential threats climate change poses to Canada’s economy and financial systems — not only to meet its own mandate of predicting economic growth and setting monetary policy, but also to help guide corporate Canada.

“We’re still at the very beginnings of modelling the impact of climate change on the economy … the Bank should obviously have a leading role in that,” said Céline Bak, president of Analytica Advisors and a senior associate with the International Institute for Sustainable Development.

“When the Bank of Canada speaks, people listen.”

Investing in an age of climate change

Canada made a commitment under the Paris Accord to reduce its greenhouse gas emissions and limit the rise of global temperatures to less than 2 degrees Celsius. Meeting that target requires a greener economy — and getting there will affect corporations and businesses tied to the fossil fuel industry.

The impact on Canadian firms could come though shifts in where Canadians place their investments and pension portfolios, and from government regulatory changes that constrict companies.

Even if Canadians continue to invest as they do now, they can’t make informed decisions about the security of those investments if they don’t know the degree to which their investments are exposed to the costs of climate change.

“Just getting the discipline within mainstream financial statements (on) what the impact of climate change is going to be on the company, and what the company’s impact on climate change is, should be a minimum standard,” said Bak, adding that transparency is the cornerstone of well-functioning capital markets.

But while some members of corporate Canada have started disclosing climate change risks to their shareholders, they’re not required by law to do so and there are no agreed-upon standards on how and what to report.

‘Overly optimistic’

“Any financial reporting that a company does has to be audited. None of that exists with climate disclosures,” said Hugh Smith, an expert in environmental and social governance at Refinitiv, a financial market data provider.

“Companies highlight what they’re doing well. It tends to be very overly optimistic.”

Smith called for mandatory reporting and national standards, arguing that even ordinary investors can play a role in bringing that about.

“Capital has more power to make change than anything else,” he said. “(Climate change) is a material impact to the companies you’re investing in. If you ignore them, that’s just not prudent investing.”

Some argue that Canada’s stock exchanges could compel companies to report their climate change risk as a condition of being listed.

Workers clean up flood debris in Sainte-Marthe-sur-le-Lac, Que., Monday, May 6, 2019. (Ryan Remiorz/The Canadian Press)

Another risk posed by climate change is infrastructure damage due to more extreme weather, such as fire and floods. A side effect of that is the exploding cost of insurance claims.

That impact on insurance companies has been the focus of the Office of the Superintendent of Financial Institutions, which regulates Canada’s banks, insurance and trust companies and pension plans.

But experts argue that the economic threats facing Canada go well beyond the physical impacts of climate change — that a resource-dependent economy is vulnerable to an eventual consumer-driven shift away from fossil fuels.

Which is why critics like Quinlan and Bak said they have been disappointed that the Bank of Canada has been so slow to take a leadership role on this issue, unlike European central banks. (The U.S. Federal Reserve has not signed on to the Network for Greening the Financial System.)

In April, Bank of England Governor Mark Carney argued in an op-ed in The Guardian that the financial community urgently needs to prepare for an “orderly transition to a low-carbon economy” to avoid a climate-driven “Minksy moment” — a sudden collapse in asset prices.

With so little modelling done, it’s difficult to estimate the financial impact of climate change on the economy of one country, let alone the world.

“There’s no sense of what the overall bottom line would be,” said Smith. “But that being said, it would be an absolutely massive number.”

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Stephen Harper made it next to impossible heading into the 2015 election for any political party to propose a tax on Netflix, Google and other foreign online services.

But two provinces are now charging sales tax on those foreign media companies, suggesting that at least some politicians now see the economic benefits outweighing the political risks.

“This is an issue of fairness,” said social policy analyst John Anderson, who has written extensively on the digital economy. “It’s not a left-right issue. It’s about ensuring that we allow Canadian companies to compete on a level playing field.”

Four years ago, the Conservatives sent out an ad blast featuring Harper saying that only his party “could be trusted not to bring forward a new Netflix tax.” It didn’t get him re-elected, but the other major party leaders quickly fell into line.

NDP Leader Tom Mulcair said his party had no plans to bring in a tax, a position that’s since been reversed by his successor, Jagmeet Singh.

The answer from the federal Liberals on the question of taxing digital services, then and now, has been a resounding ‘no’. On the other hand, a spokesman for Finance Minister Bill Morneau says Canada continues to work with other countries in the Organization for Economic Development and Cooperation to come up with a policy on taxing digital companies.

Why wait?

Conservative Leader Stephen Harper effectively shut down debate on taxing online services like Netflix during the 2015 election. (Twitter)

Quebec was the first province to charge the PST on foreign digital sales. In the first three months of this year, Anderson said, the province took in $15.5 million in revenue — far more than the original forecast.

Saskatchewan also is requiring companies like Netflix to start collecting the province’s six per cent sales tax from its customers, arguing SaskTel, Shaw and other Canadian online service providers already do it.

Neither province experienced a consumer revolt.

University of Calgary economist Jack Mintz said the idea of charging federal sales tax on e-commerce is attractive on a number of fronts — chief among them the fact that sales taxes are far less likely to spark international disputes than attempts to tax the corporate profits of huge multinational companies based in other countries, like Google, Amazon, Facebook and Spotify.

“I just don’t see why we don’t do it,” said Mintz. “Why should consumers pay sales tax on Rogers, Bell and other domestic internet services and not on foreign companies? Why allow the tax system to influence people’s consumer choices?”

A taxation taboo

The answer, of course, is politics. Proposing to raise taxes in an election year is, to paraphrase Winston Churchill, like standing in a bucket and trying to lift yourself up by the handle.

Anderson said Harper tried to provoke the public into accepting the idea that a tax on Netflix would be a special tax, something groundbreaking, rather than simply a measure to ensure the company faced the same requirements as everyone else.

It worked. None of the other main parties went into the last election proposing a tax on online services.

Four years later, there’s still considerable political pressure to do nothing.

The Liberals already are facing voter pushback in provinces where they’ve imposed a carbon tax, said Mintz, while the Conservatives will never campaign on raising taxes.

A tax system stuck in the past

That leaves the NDP alone among the three major parties in favouring a federal tax that analysts like Anderson say could raise as much as $360 million a year — while eliminating a significant competitive advantage enjoyed by some of the very biggest multinational companies in the world.

Anderson said debate over a “Netflix tax” masks a bigger problem with Canada’s tax system: from streaming video to online retail to e-books, the online marketplace is exploding, while our tax laws stand still.

Stats Can reported last August that nearly two-thirds of Canadians aged 18 or older spent spent a collective $2 billion on music and video downloads and other streaming services in the 12-month period ending last June.

The way people shop, and where they spend their money, is changing fast. Canada isn’t keeping pace.

“The economy is shifting to e-commerce,” Anderson said. “And that means taxing those services is only going to grow in importance.”

Just last week, the auditor general reported that the federal government passed up an estimated $169 million in GST revenues in 2017 on foreign digital products sold in Canada.

Quebec Liberal MP Steve MacKinnon said the Trudeau government isn’t deaf to the arguments coming from Canadian content producers — that foreign-based online services like Netflix are enjoying an unfair taxation advantage here.

“We know that the economy is undergoing significant change. We want to create a regime that is durable and fair to Canadian companies,” he said. “That’s what I’ve been advocating for and my colleagues are advocating for.”

Netflix already has indicated it would collect and remit GST or HST if the federal law changes.

For now, it appears it won’t. Not until after the next election, at least.

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Foreign Affairs Minister Chrystia Freeland gave no hint today that the United States is set to lift steel and aluminum tariffs, even though Mexico’s top trade representative is saying a deal for their country is imminent and the U.S Treasury secretary says all three countries are “close” to finding a solution to the standoff.

Speaking to reporters in Washington after meeting with U.S. Trade Representative Bob Lighthizer, Freeland said that ratification of the new NAFTA and the tariffs were discussed in the meeting. She refused to give any details

“During the NAFTA negotiations, we took the view that talking about the details of our conversations in public was counterproductive and I think that was an important confidence-building step in terms of creating a good atmosphere for the whole negotiation to move forward,” she said.

Freeland also refused to weigh in on comments by Jesús Seade, Mexico’s chief North American trade negotiator, who told CBC News Network’s Power & Politics that a deal to lift tariffs on Mexican steel was “almost done.”

“Very quickly we have made a tremendous progress and I’m looking to an early resolution on the basis of lifting the tariff, no quotas. We were getting close to an agreement,” Seade told host Vassy Kapelos.

Seade said that the only thing stopping him from signing a deal with the U.S. to lift tariffs was a desire to speak to Canada first.

Freeland said that when it comes to Mexico and the U.S. striking a deal on tariffs without Canada, she would “leave it to the Mexicans and the Americans to comment.”

Last June, the U.S. Department of Commerce slapped tariffs of 25 per cent on imports of steel and 10 per cent on aluminum, citing national security interests. Canada, Mexico and a number of other countries were affected.

Canada retaliated with its own tariffs of 25 per cent on steel and 10 per cent on aluminum, but also imposed a 10 per cent tariff on multiple consumer items, targeting U.S. politicians in states where those products are made.

Pushing back against quotas

That product list included Kentucky bourbon, lawn mowers, ketchup, maple syrup, appliances, boats and many other items. The federal government said it was targeting goods that Canadians could otherwise buy from domestic suppliers.

Since then, the Liberal government has rolled back some of the retaliatory tariffs, including ones imposed on recreational boats, while others remain in place.

As long as the tariffs remain in place, ratification would be very, very problematic.– Foreign Affairs Chrystia Freeland on the revamped NAFTA

U.S. officials have suggested that Canada and Mexico accept quotas on their steel and aluminum exports to resolve the impasse. By setting the tariff-free threshold high enough, an agreed-upon level of NAFTA trade would no longer face extra costs, while U.S. producers would continue to be protected from any unexpected surges in North American supply.

But both Canada and Mexico have been unwilling to accept limits on their tariff-free trade in aluminum and steel, frustrating attempts at quickly resolving the issue so all countries can move on to ratifying the revamped NAFTA.

NAFTA ratification unlikely with tariffs in place

Alongside the optimism voiced by Seade, U.S. Treasury Secretary Steven Mnuchin told a Senate committee Wednesday that resolving the steel and aluminum tariff issue with Canada and Mexico was a priority for the Trump administration.

“The president has instructed us to try to figure out a solution,” he said. “This is a very important part of passing USMCA [the renegotiated NAFTA] which is a very important economic agreement for two of our largest trading partners.

“I think that we are close to an understanding with Mexico and Canada. I’ve spoken to the finance ministers. Ambassador Lighthizer is leading the effort on this, but I can assure you it is a priority of ours.”

Freeland said that Canada has “been having some very good, very close, really pretty much constant conversations” with her American counterparts and that as long as Canada and the U.S. keep talking, Canada is moving towards a point in time when tariffs will be lifted.

“Canada believes in the new [NAFTA] agreement that we reached with the United States and Mexico,” Freeland told reporters in Washington D.C. “We very much hope it can be ratified in all of our countries, although the domestic processes are up to each country.

“When it comes to Canada, it is certainly the case for us that as long as the tariffs remain in place, ratification would be very, very problematic.”

Freeland said that, without giving away anything said behind closed doors, Canada would continue to work toward the complete lifting of the tariffs because it would be “great for the people, the workers, the consumers, the companies in both” the U.S. and Canada.

Mexico’s chief NAFTA negotiator Jesus Seade says Mexico is close to a deal to lift U.S. steel and aluminum tariffs. 7:42

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A senior Mexican cabinet secretary said today she thinks Mexico is close to a deal to lift the United States’ controversial ‘national security’ tariffs on steel and aluminum and suggested Canada, the U.S. and Mexico might negotiate a trilateral agreement to eliminate the tariffs.

“Our chief negotiator Jesus Seade has been in Washington for a number of days in the past few months,” Mexican Secretary of Economy Graciela Márquez Colín said Tuesday in an interview on CBC News Networks Power & Politics. “We are, I think, close to negotiating a lifting of the tariffs.”

Colín went on to say that a possible trilateral agreement between the North American trading partners is on the table.

“So far we have been negotiating on bilateral terms, but if we get similar proposals we might go into a trilateral, but that’s just a possibility,” Colín told host Vassy Kapelos.

“That’s why it’s important to be here in Canada today, so that we can share opinions and sense how the negotiation is going in Canada, how the negotiation is going in Mexico.”

Two government officials, speaking on background to CBC News, tempered Colín’s optimism about a deal being reached soon to lift the so-called Section 232 tariffs.

Both sources stressed that from the Canadian perspective, a breakthrough does not appear imminent.

Foreign Affairs Minister Chrystia Freeland will be in Washington D.C. Wednesday to sit down with her American counterpart and hold a series of bilateral meetings with members of Congress.

Freeland and U.S. Trade Representative Bob Lighthizer will have plenty to talk about, starting with China’s ongoing trade actions against both countries. Freeland also is expected to press the U.S. on tariffs, arguing Canada would have a hard time ratifying a revamped NAFTA deal while U.S. steel tariffs remain in place.

On June 1 of last year, the United States Department of Commerce imposed tariffs of 25 per cent on Canadian steel and 10 per cent on aluminum, citing national security interests.

Canada responded with its own tariffs of 25 per cent on steel and 10 per cent on aluminum, but also slapped a 10 per cent tariff on a long list of consumer items meant to target U.S. politicians in states where those products are made.

That product list included Kentucky bourbon, lawn mowers, ketchup, maple syrup, appliances, boats, and many other items. The federal government said it was targeting goods that Canadians could otherwise buy from domestic suppliers.

Since then, the Liberal government has rolled back some of the retaliatory tariffs, including ones imposed on recreational boats, while others remain in place.

Freeland’s trip to Washington D.C. comes after Prime Minister Justin Trudeau had two telephone conversations with U.S. President Donald Trump within the past week, and another with U.S. Vice President Mike Pence today.

During the calls with Trump, Trudeau asked for an end to U.S. steel tariffs and additional diplomatic assistance in Canada’s ongoing dispute with China.

Blowback from China

In December, Canada detained Huawei Technologies chief financial officer Meng Wanzhou at the Vancouver International Airport on an extradition request from the United States. She was later granted bail and is now awaiting court proceedings.

Shortly after Meng’s arrest, the Chinese detained two Canadian expats living in China: Michael Kovrig and Michael Spavor. In March, China’s Central Political and Legal Affairs Commission accused Kovrig of stealing state secrets passed on to him by Spavor.

According to a source with direct knowledge of one of the calls with Trump last week, Trudeau reminded Trump of the blowback Canada has faced from China since Meng’s arrest, placing a special emphasis on the conditions of Kovrig and Spavor’s imprisonment.

The pair have had limited access to consular officials and are not allowed to see family or loved ones. They have been confined to single rooms without the ability to turn the lights off in their cells at night.

One month after Kovrig and Spavor were arrested, China sentenced Canadian Robert Lloyd Schellenberg to death in a sudden retrial in January. Schellenberg already had been sentenced to a 15-year jail term for drug smuggling.

Last month, a Chinese court sentenced another Canadian, Fan Wei, to death for participating in a global methamphetamine operation.

Since Meng’s arrest, China also has placed a number of trade hurdles in front of Canadian exporters — banning imports from two canola producers, tying up shipments of pork over paperwork issues and putting unusual obstacles in the way of Canadian soybean and pea exporters.

The Trump administration has signalled its concern over the plight of Kovrig and Spavor and has publicly voiced support for the campaign to free the men — but has shown itself far less willing to agree with Canada when it comes to tariffs on steel and aluminum.

Mexico Secretary of Economy Graciela Márquez Colín told Power & Politics Tuesday that she thinks Mexico is close to negotiating a deal with the U.S. that will see the steel and aluminum tariffs lifted. 8:04

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