Canada column for Sunday, July 30/17
THE CANADIAN REPORT
(c) By Jim Fox
The U.S. government’s decision to drop a proposed border tax has been welcomed by Canada as removing the threat of a trade war.
The unilateral imposition of a revenue-generating border tax would have been a “very destructive action to take,” said Perrin Beatty, president of the Canadian Chamber of Commerce.
It could have come just as negotiations to modernize the North American Free Trade Agreement are to begin on Aug. 16.
The lack of action also reduces pressure on Prime Minister Justin Trudeau to cut Canada’s corporate tax rate to keep pace with the promised steep reduction in the United States.
Trudeau expressed satisfaction with the move as U.S. officials said they’re “confident” a tax on imports is no longer needed to pay for broader tax reform.
The border adjustment tax would have been a “serious impediment to trade with Canada,” he said.
“There is no economic relationship anywhere in the world like the one between Canada and the United States and that needs to be protected,” Trudeau added.
Strong household spending pushed Canada’s economy up 2.6 percent to end last year.
Statistics Canada said that overall the economy expanded by 1.4 percent in 2016, up from 0.9 percent the previous year.
After raising its trendsetting key interest rate by 0.25 percent last month, the Bank of Canada held the rate steady while warning it was watching “significant uncertainties” concerning the economic outlook.
That was a reference to gauging the direction of U.S. economic policy.
There is concern in the Canadian business community and the federal government over possible changes to taxation and trade policies.
News in brief:
- Travelers are being warning of delays as 700 ground crew workers at Toronto’s Pearson International Airport, Canada’s busiest, are on strike. The Teamsters are employed by Swissport serving 30 airlines including Sunwing, Air Transat, Air France and British Airways. They are fighting a potential wage freeze for three years.
- A submarine mission is underway in Lake Ontario searching for nine models of the Avro Arrow aircraft believed ditched there since 1959. The advanced Canadian jet fighter program was controversially cancelled and the free-flight prototypes are believed to be in the water. Kraken Sonar Inc. is exploring an area just off Point Petre in an expedition called “Raise the Arrow,” headed by John Burzynski of OEX Recovery Group Inc.
Facts and figures:
Canada’s dollar has climbed to 80.41 cents U.S. while the U.S. dollar returns $1.243 in Canadian funds before exchange fees.
The Bank of Canada’s key interest rate is 0.75 percent while the prime-lending rate at commercial banks is 2.95 percent.
Stock markets are mixed, with the Toronto exchange index down at 15,128 points while the TSX Venture index is up at 772 points.
The average price for gas in Canada is steady at $1.054 a liter or $4 (Canadian) for a U.S. gallon.
Lotto 6/49: (July 26) 1, 2, 18, 26, 36 and 44; bonus 49. (July 22) 5, 8, 17, 32, 38 and 45; bonus 18. Lotto Max: (July 21) 2, 11, 12, 25, 33, 39 and 44; bonus 8.
- A deal is near in the heated softwood lumber dispute between Canada and the U.S., said British Columbia Premier John Horgan. He met for two days with trade officials in Washington where “intense negotiations” involve Canada’s Foreign Affairs Minister Chrystia Freeland and U.S. Secretary of Commerce Wilbur Ross. Earlier this year, the U.S. imposed tariffs and duties averaging 27 percent on Canadian softwood imports.
- “Lightning” has struck twice for Jules Parent, 69, of Quebec who won $1 million twice playing the lottery. He picked up a check at the Loto-Quebec offices in Quebec City for $1.22 million in the Crown of Egypt lottery online. In 2008, he won $1 million tax free playing Lotto 6-49. With his luck, Parent said: “I'm going to continue playing.”
Jim Fox can be reached at email@example.com