Capital Dispatch: Tariff threat and tax-break politics

Here's what you need to know about the top political stories of the week.

November 29, 2024

Keep calm and tax-free holiday shop on? Trump pressures Canada on the border, Singh forces split of affordability package  The compromise and big politics behind the first piece of government legislation to be debated and passed in the House of Commons in months. And, U.S. president-elect Donald Trump's 25 per cent import tariff threat pushes premiers and the prime minister to meet, as the fear of major economic impacts dangles overhead.  Here's what went down on the Hill this week.    The week that was The week got off to a dramatic start.   Monday night, Trump posted on social media platform Truth Social that as of Jan. 20, "as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders." The president-elect said the tariffs would stay, until the two border countries address what he called the "long simmering problem" of drugs and illegal immigrants crossing into the United States.  "We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price!" Trump said. Cue the barrage of reaction.  The next morning, after a late-night call with Trump, Prime Minister Justin Trudeau confirmed he'd be heeding the demand of the premiers – which was unknowingly well-timed as it came in just hours before the threat was made – and called a meeting for Wednesday evening.  He and his ministers then spent the next few days offering various versions of essentially the same keep calm and carry on, "Team Canada" messaging.  From Public Safety Minister Dominic LeBlanc saying the security of the border is a shared priority and more resources are coming, to Immigration Minister Marc Miller emphasizing how different the migrant situation is at the southern border with Mexico.  Energy and Natural Resources Minister Jonathan Wilkinson told reporters that he intends to focus "on mutual benefits," in conversations with his incoming counterparts. Last year, according to the government, 60 per cent of American crude oil imports came from Canada.  Ontario Premier Doug Ford, chair the Council of the Federation, called Trump lumping Canada in with Mexico "unfair" and "insulting." "It's like a family member stabbing you right in the heart," Ford said.  More on the immediate reaction, here.  In stating he was intending to put partisanship aside, Conservative Leader Pierre Poilievre called on the prime minister to present "a plan to put Canada first on the economy and on security" that starts with halting the next carbon tax increase. He also said if he was prime minister he'd retaliate "if necessary." More on what's been said about the potential for retaliation so far, here.  Then came the meeting, and Ford accusing the federal government of being "stuck on its backfoot," all of which my colleague Stepahanie Ha covers, here.   The other major storyline of the week was the winding and weaving path to pass the GST holiday bill.  The prospect of passing the holiday affordability package as a whole was put in peril after NDP Leader Jagmeet Singh – who was briefed on the announcement before saying he'd back the whole thing – walked back his party's support.  This position shift came amid pushback from seniors and others who were left out of the workers' benefit.  With the Bloc Quebecois also not willing to support the suite of cost-of-living measures without changes, Deputy Prime Minister and Finance Minister Chrystia Freeland was forced to hive off the package to try to pass what the NDP could support – the two-month tax holiday – in time for the Dec. 14 deadline.    This move left Trudeau's promise of a new one-time benefit payment of $250 for 18.7 million workers hanging in the balance as it too, needs legislation to be enacted. As drafted it would not have the support needed in Parliament, but an expansion of eligibility could be expensive.  Freeland's office has sought to assert that the decision to prioritize the passage of the $1.6 billion tax reprieve – on a slate of items including children's clothing and toys, beer and wine, restaurant and premade meals, as well as common stocking stuffers – was because they have more time to advance the $4.7 billion cheque plan.  Ultimately, after hours of procedural maneuvers in the House of Commons, the Liberals' "Tax Break for All Canadians Act" cleared all stages of scrutiny in one swift move late Thursday night, with the backing of the NDP. When Bill C-78 came up for debate, around 9:20 p.m. EST, it was the first piece of government legislation to be debated by MPs since late September. And two hours later, it became the first government bill to pass in the chamber, in months. As declared earlier in the day, Poilievre and his MPs voted against what he said "isn't a tax cut," but rather a "irresponsible, inflationist … temporary two-month tax trick." "Now is the worst possible time to be blowing $6 billion trying to save Justin Trudeau's political skin," Poilievre told reporters on Thursday. After expressing misgivings about the GST holiday as "a measure which is basically built on the idea that the Liberal government can try to buy votes," Bloc Quebecois Leader Yves-Francois Blanchet and his caucus also voted against the legislation. Green Party Leader Elizabeth May's two-person caucus supported the bill, but during Thursday night's debate, said it made her "feel queasy." "It's not good policy. Whether it's good politics, we'll see," said May. The GST bill is now off to the Senate for a second round of scrutiny. It will need to pass the upper chamber before the holiday tax break can become a reality.

Not to be missed Contract suspension for Boissonnault's former company   The medical supply company co-founded by Liberal MP and former minister Randy Boissonnault has been suspended from bidding on or entering into contracts with the government of Canada. In a statement issued Tuesday, Public Services and Procurement Canada (PSPC) announced that as of Nov. 22, Global Health Imports Corporation (GHI) has been blocked from participating in federal procurement. "The suspension will last for a period of 90 days and may be extended as necessary until a final decision regarding the supplier's status under the Ineligibility and Suspension Policy is rendered," PSPC said in a statement. GHI did have one active contract, which was awarded by Elections Canada through what PSPC said was "a competitive procurement process that did not include an Indigenous set-aside requirement." Elections Canada confirmed that "no deliverables have been received and no payments have been made against the contract," and as of Nov. 20, the federal elections agency had issued a full stop-work order to the company.  'Too far apart': No deal yet in Canada Post strike     And, the Canada Post strike is expected to continue as parties remain "too far apart on critical issues" to reach a deal, with the special federal mediator temporarily suspending his mediation mid-week, according to Labour Minister Steven MacKinnon. "This pause in mediation activities will hopefully permit the parties to reassess their positions and return to the bargaining table with renewed resolve," MacKinnon said. He has asked the parties to meet at his office, where he will tell them that "they alone" are responsible to find a solution to the deadlock. "Canadians are counting on them to create these conditions quickly." Speaking to reporters later in the day, MacKinnon said the government does not plan to force a result through binding arbitration, as it did when port workers went on strike earlier in November, and when rail workers went on strike in August. The Canada Post strike began nearly two weeks ago, the number of packages that have been delayed, continues to climb, and now the union representing Canada Post workers says striking employees have started to be laid-off, a move the Crown corporation says is temporary.

Quote of the week "The NDP leader is giving Canadians whiplash with his latest flip-flop and the flop on the flip. First, he said he tore up his deal with the Liberal government. Then he said that he had taped it back together because it had signed on to his two-month tax trick. Now he rises on his feet to say that the trick is a rip off of seniors and persons with disabilities."    -  Conservative Leader Pierre Poilievre, in question period on Monday.

The week ahead Next week is going to be another interesting one for the procedurally inclined. The government is trying to move ahead on clearing what's become a bit of a mini-backlog of opposition days. Government House Leader Karina Gould has signalled she's in talks with the other parties to try to use a similar procedural mechanism, as seen with the GST bill, to try to adjourn debate on the privilege motion one day at a time. If agreed to, there would be a Conservative opposition day on Monday and an NDP opposition day – the only one of the fall sitting – on Tuesday, and potentially another Conservative opposition day on Thursday. There are four supply days that are supposed to be dealt with by Dec. 10. If the government can schedule these three next week, that would leave just one more Conservative chance to set the agenda in the House of Commons and potentially advance non-confidence motions before the new year. It would also clear the way for the Liberals to advance their outstanding supplementary estimate spending. More on that in the lower half of this piece.  "I hope that we can find agreement … so that the House can debate and vote on the billions of dollars needed to fund the programs and services that Canadians rely on and depend on," Gould said in her Thursday statement.

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