The House: Profits, policing and parcels

This week on The House, Finance Minister Bill Morneau discusses how targeting corporate Canada in his fall fiscal update will help middle-class Canadians. Kremlin critic Bill Browder's testimony to MPs was cut short due to a vote in the House of Commons, so what warning was he trying to give Canada? We'll hear from him. Plus: we track Newfoundland's largest off-shore oil spill, and the GM of eBay Canada on the impact of the Canada Post labour disruption.
Prime Minister Justin Trudeau shakes hands with the Minister of Finance Bill Morneau following the fiscal economic update in the House of Commons this week. (Adrian Wyld/Canadian Press)
Listen to the full episode49:59

Donald Trump's election to U.S. President in 2016 ushered in many changes, including economic ones that continue to have a ripple effect in Canada, according to Finance Minister Bill Morneau.

"The world changed when the U.S. changed its taxation environment, and it's critical that we remain competitive," said Morneau in an interview airing Saturday on CBC Radio's The House.

Trump's move earlier this year to cut corporate and personal tax rates raised concerns in corporate Canada that the cuts could shift profits and investment to the United States.

Those worries didn't go unheeded by the federal government, said Morneau, who presented his fall fiscal update on Wednesday.

"In talking with businesses, with people who make investments, we heard a concern around trade, we heard a concern that we ensure our regulations continue to protect Canadians, and we heard a concern that the next investment may be more likely to go south of the border if we didn't ensure our tax codes stayed up to date," he said.

"I was told directly by organizations making investments that they needed to believe they could make an investment here on a competitive basis, and the U.S. changes were making that more challenging for them."

The government's Fall Economic Statement delivers $17.6 billion in new spending over six years — about $16.5 billion of it in foregone revenue to boost Canadian business productivity.

The biggest move in the update is $14.4 billion earmarked to allow businesses to write off some capital costs more quickly. 

Min. Morneau discusses his new economic fall statement out this week, and how boosting Bay Street will help middle-class Main Street. 9:44

Flavio Volpe is the president of the Automotive Parts Manufacturers' Association. In a separate interview on The House this week, Volpe called the capital treatment a "very important hit."

"It was important for Canada to do something to counteract the U.S. tax reform package," he said. 

The new measures introduced this week will have an impact for the manufacturers Volpe represents, helping to "harden their footprint" in Canada, he added.

"For them, to be able to sell their goods to their customers, with this added bonus of their customers being able to write them off within a year, is going to lead to a lot warmer of a sales environment."

"What it does for a lot of parts makers is we would have sourced our tools on the U.S. side of the border into our U.S. operations, because we could have treated them differently on tax," he said. "Now we're going to buy them from the Canadian side. Canadian tool machine mould-makers now have a better playing field to stay here and do it."

That's what the government is trying to ensure happens, Morneau said. 

"We're trying to make sure that organizations that are here continue to invest," he told Hall. 

The finance minister added he's confident the boost to business — and the consequential move into deeper deficits — is the right one. 

When asked if, in five years, there will be more jobs directly related to the decisions he made in the fiscal update this week, Morneau replied with a definitive, "Yes."

His colleagues on the opposite side of the House aren't so confident. 

"Justin Trudeau is spending Canadians' tomorrow on his today," Conservative finance critic Pierre Poilievre said in a separate interview on The House this week. 

Conservative finance critic Pierre Poilievre, left, has focused his attackon on Finance Minister Bill Morneau over the fact that Morneau does not outline when his government will return to a balanced budget. (Sean Kilpatrick/Canadian Press)

Poilievre says his main issue is that the government is going deeper into deficit, with no road map to when, or how, it intends to get out of the red, he said.

"It's not that we don't trust his promise to balance the budget down the road, he has no promise. The government doesn't have a revenue problem, it has a spending problem."

The NDP's finance critic Peter Julian told The House that the government's fiscal update was a missed opportunity to focus on tax incentives around affordable housing and pharmacare.

"Many small businesses in my area say, 'we're having difficulty getting qualified workers because they can't find affordable housing'. These are the kinds of incentives that help Canadians at the same time as they help our businesses. Social programs also help the business community."

Morneau said his department is working with an advisory committee that will be coming back with recommendations for a universal pharmacare program. 

For now, though, the theme of this mini-budget is paving the way for the Liberals' final budget of their current mandate before the 2019 election.

"We are very focused on jobs," Morneau said. "It is the challenge of our time, the changing nature of work, the changing nature of the workforce. That is part of our middle-class agenda. You'll see us continue to focus on the middle class."

The finance minister also hinted at what Canadians can expect to see in the next budget.

"Things like skills and training will be prominent in 2019 as we think about dealing with the future in a way that makes sense for Canadians," he said. 

The federal government is expressing confidence in Canada's economic strength one year out from the next election. That position was reflected in the fall fiscal update released Wednesday, which included a multi-billion dollar tax incentive plan to help Canadian businesses compete with their U.S. counterparts. Rosemary Barton sits down with Finance Minister Bill Morneau to go over the detail. 3:09

Kremlin critic Bill Browder: Interpol, interrupted

Hermitage Capital CEO and Kremlin critic Bill Browder attends a news conference in London on Nov. 20, 2018. Two top targets of international arrest warrants sought by Moscow said Tuesday they were launching a legal bid to get Russia suspended from Interpol for abusing the global police organization. The intervention by investor Bill Browder and Mikhail Khodorkovsky -- a former oil baron who spent 10 years in a Russian jail and now lives in London exile -- came as Putin was on the brink of getting an ally named to a top Interpol post. (Daniel Leal-Olivas/AFP/Getty Images)

One of the Kremlin's most prominent critics is calling on the Canadian government to lead the charge to suspend Russia from the international police organization Interpol.

In recent days, Bill Browder — who spearheaded the global Magnitsky Act movement to punish Russian officials responsible for the death of accountant Sergei Magnitsky in a Moscow prison in 2009 — has been part of a vocal campaign to stop Russian interior ministry officer Alexander Prokopchuk from becoming Interpol's next president, fearing that country's government would manipulate the job to punish Kremlin critics.

In the end, Interpol's general assembly elected South Korea's Kim Jong-yang as its new leader. He is taking the job after his predecessor, Meng Hongwei of China, was detained and accused of taking bribes by Chinese anti-corruption authorities in September.

"What I'm saying to the Canadian Parliament and the Canadian government is Canada should lead right now on suspending Russia from the Interpol system," he told The House on Thursday, the same day his testimony before the Public Safety committee was cut short due to a vote in the Commons. 

"All it takes is one country to take the lead here."

Canada did not endorse any candidate before the Interpol presidency vote earlier this week, but Public Safety Minister Ralph Goodale said RCMP Commissioner Brenda Lucki, Canada's representative at the meetings, was "working assiduously" to defend Canada's interests within Interpol.

Prominent Kremlin critic on why he wants Russia kicked out of Interpol - with Canada's help. 6:41

Canada's cold feet on Khashoggi case?

The Saudis denied for several days having involvement in Jamal Khashoggi's disappearance and killing. (Hasan Jamali/Associated Press)

In addition to discussing his ongoing battle with Russian officials, Browder spoke to host Chris Hall about the murder of journalist Jamal Khashoggi, and the involvement of the Saudi government. 

He questioned why Canada appears to have pumped the brakes when it comes to confronting the kingdom about Khashoggi's death 

"If there was ever a case beyond the Magnitsky case that the Magnitsky Act should apply to, it's Jamal Khashoggi. There has to be consequences for the people who killed him." 

Canada Post labour dispute heats up

Canada Post vehicles sit idle during the rotating strike currently affecting various parts of the country on November 21, 2018. (Carlos Osorio/Reuters)

The federal government's decision to table legislation that would force Canada Post employees back to work comes after a series of rotating strikes by the mail carrier over the last five weeks.

Union leaders are mounting fierce opposition to legislation they say would be unconstitutional, vowing to fight the government's actions in court and on the streets.

Minister of Labour Patty Hajdu defended her government's legislation, saying it's not "heavy-handed."

"The government has provisions to use back-to-work legislation in cases where people are relying on a service essential to Canadians," she said Friday. 

Mike Palecek, president of the Canadian Union of Postal Workers (CUPW), said the government has mischaracterized the disruption to service, as strikes are rotating and essential cheques mailed to seniors and low-income Canadians are still being delivered.

Palecek said members are fighting for pay equity and safer working conditions as employees face an injury "crisis."

Striking Canada Post workers keep their hands warm as they picket at the South Central sorting facility in Toronto on Tuesday, November 13, 2018. (Frank Gunn/The Canadian Press)

Small businesses hit by strike

In her scrum, Hajdu also touched on the impact the labour dispute has had on small businesses reliant on Canada Post to ship their products.

"When I say 'small,' I mean really small," she said. "I mean people that, you know, sell marmalade or hand-made goods, that this is the most profitable time of their year and if they are unable to make their earnings this time of year, they very well might be facing the end of their business."

Andrea Stairs is the general manager of eBay Canada, the popular online auction service used to buy and sell items. She agreed that small businesses are hurting from the strikes, especially as the holiday season ramps up with Black Friday and Cyber Monday shopping.

"The large guys are able to adopt alternative shipping methods. It's the small, micro guys who can't negotiate favourable rates with a courier company," Stairs said in an interview that took place Friday.

Stairs also pointed out the dominant role Canada Post plays in shipping and delivering packages.

"People think of Canada Post as being one of a number of alternatives," she said. "The reality is, Canada Post carries more than two-thirds of total e-commerce volume in the country. On a platform like eBay, they're carrying more than 80 percent of our volume. You can't just easily replace that share."

"The price point for CP services is significantly below the price point of courier services, too," she added. 

Stairs isn't sure what should happen next with the beleaguered postal service.

"Parcel volume is growing massively. I think we need to look at how the system is set up. I don't know if that means privatization or any other kind of ownership reform. I think that's really the mandate of the government to look at," she said.

In the meantime, the backlog resulting from the rotating strikes could take weeks to clear up, even going into the new year, said Canada Post.

The GM of eBay Canada addresses the impact of the Canada Post labour disruption. 6:09


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