Chinese mining firm subsidiary disputes Ottawa’s review of Peruvian gold mine deal

WASHINGTON – One of Canada’s most influential business lobby groups is warning Ottawa about damage to the relationship with the United States after the Biden administration escalated efforts to halt the federal government’s tax on large foreign digital services companies.

The Business Council of Canada called for the digital services tax to be revoked after the Office of the United States Trade Representative requested dispute settlement consultations under the Canada-U.S.-Mexico trade agreement.

In a Sept. 9 letter to Finance Minister Chrystia Freeland and International Trade Minister Mary Ng, Goldy Hyder, the council’s president and CEO, said retaliatory measures by the U.S. would be harmful to Canadian families, businesses and the economy, while also negating any projected tax revenues.

Hyder cautioned the tax could also be destructive to Canada’s relationship with the U.S. ahead of the review of the trade agreement in 2026.

“In successive meetings with senior U.S. officials, we have been repeatedly told that if Canada’s unilateral DST remains in place it will imperil the upcoming mandatory review of the CUSMA,” Hyder wrote.

Americans have been critical of the three per cent levy on foreign tech giants that generate revenue from Canadian users. It means the companies will have to pay taxes on that revenue in Canada.

U.S. Trade Representative Katherine Tai, after requesting dispute consultations in August, called the tax discriminatory and said it is inconsistent with Canada’s commitments not to treat U.S. businesses less favourably than Canadian ones.

If the two countries are unable to resolve America’s concerns within 75 days, the U.S. may request a dispute settlement panel to examine the issue.

Ng and Freeland have remained steadfast behind the tax. They said last month that consultations under the trade agreement’s dispute mechanism will demonstrate Canada is meeting its obligations.

Hyder said Ottawa’s strategy will neither address nor assuage U.S. concerns. Instead it will risk undermining the trade agreement and “our most important trade and investment partnership,” he said.

The digital tax was part of the Liberal election platform during the 2019 campaign. Both the Conservatives and New Democrats proposed similar levies.

The Liberal government, however, delayed its implementation in order to give more time to global efforts to establish a broader, multinational taxation plan.

But after significant delays to that process at the Organization for Economic Co-operation and Development, Canada went ahead with its own tax.

The Canadian ministers have said the preference has always been a multilateral agreement.

Greta Peisch, the former general counsel for the Office of the U.S. Trade Representative, said concerns around Canada’s approach to the tax have been raised for a long time.

“I think the United States has been clear about how serious it is,” said Peisch, a partner at Wiely Rein in Washington, D.C.

“The argument is not that you can’t have a DST, it’s just that it should be neutral and not be inconsistent with our trade agreement.”

Peisch said the issue is around global revenue. Canada’s tax applies to foreign and Canadian digital services providers that earn total annual revenue from all sources of 750 million euros or more, and annual Canadian revenue more than $20 million a year.

Peisch explained American’s issue with the tax: if two companies provide the same service and have the same revenue from people in Canada, the foreign company will be treated differently.

“We have commitments in our trade agreements not to discriminate based on national origin among the trade agreement partners, that would be inconsistent with our trade obligations,” Peisch said.

The digital services tax has drawn opposition from trade associations and business groups on both sides of the international border.

Last month, Google announced it will implement a 2.5 per cent surcharge for ads displayed in Canada starting in October. Groups representing Canadian advertisers have warned other companies could follow the tech giant’s lead.

This report by The Canadian Press was first published Sept. 10, 2024.

The Canadian Press. All rights reserved.

Here is a roundup of stories from The Canadian Press designed to bring you up to speed…

Mark Carney, Trudeau to address Liberal caucus

Former Bank of Canada governor Mark Carney will present his vision for the Liberals’ economic policy when he meets with MPs in Nanaimo, B.C., today. The party announced Carney’s new role as chair of a Liberal task force on economic growth as MPs arrived for the caucus retreat Monday, where they are planning their strategy for the upcoming election year. Prime Minister Justin Trudeau is also expected to address his caucus as a whole for the first time since several of his MPs have expressed privately and publicly that he is not the person to lead the party into the next election.

NDP caucus meets after leaving deal with Liberals

New Democrats are kicking off a three-day caucus retreat today in Montreal, days after leaving the supply-and-confidence agreement with the Liberals. Leader Jagmeet Singh announced on Wednesday that he had “ripped up” the agreement with the minority government. Singh says the Liberals are too weak to fight for Canadians and can’t stop the Conservatives, offering himself as a credible alternative to Pierre Poilievre. The retreat is also happening in one of the two cities where the N-D-P is hoping to win a byelection on September 16th.

Here’s what else we’re watching…

Report highlights hurdles to federal housing plan

A new report warns Ottawa’s efforts to kickstart new housing supply likely won’t be enough to meet its optimistic targets. The report by Desjardins highlights the ongoing labour shortage in the construction industry as the main obstacle holding back housing starts. Ottawa has vowed to unlock 3.87 million new homes by 2031 through measures such as new tax incentives and building more housing on public lands. But the report says even with the projected increase in housing starts, it will still fall well short of the pace needed to achieve affordability by 2030.

Hoggard to seek bail pending appeal attempt

Canadian musician Jacob Hoggard is expected to seek bail at a court hearing today, weeks after beginning to serve his sentence for a sexual assault conviction. The Hedley frontman filed an application seeking leave to appeal his case to the Supreme Court of Canada last week. Hoggard was found guilty in June 2022 of sexual assault causing bodily harm against an Ottawa woman and later sentenced to five years behind bars. He is set to seek bail at the Court of Appeal today as he seeks leave to appeal at the Supreme Court.

Unifor vote begins at Walmart warehouse in Ontario

Unifor says employees at a Walmart warehouse in Mississauga, Ont., will begin voting Tuesday on whether to join the union. The union applied to the Ontario Labour Relations Board to represent the workers on September 3, and said a vote would be called if the cards submitted by Unifor represented at least 40 per cent of the eligible workforce. Unifor represents 315,000 workers across the country. Unifor National President Lana Payne says in a statement that a vote for the union this week is “the best way for workers to get a level playing field with a corporate giant.”

Business warns Ottawa about digital services tax

One of Canada’s most influential business lobby groups is warning Ottawa its digital services tax may damage the relationship with the United States. The Business Council of Canada called for the tax to be revoked after the Office of the United States Trade Representative asked for dispute settlement consultations under the Canada-U.S.-Mexico trade agreement. Canada’s three-per-cent tax on large foreign digital services companies has been criticized by U-S companies and officials, because it would force American companies to pay taxes on revenue generated from Canadian users.

This report by The Canadian Press was first published Sept. 10, 2024.

The Canadian Press. All rights reserved.

MONTREAL – The deaths of a provincial police sergeant and the mentally ill man who fatally stabbed her were avoidable, a Quebec coroner has concluded, saying health-care workers and police should have communicated better.

Géhane Kamel’s report, released Monday, includes 38 recommendations for various health, public security and law enforcement groups in connection with the deaths of Sgt. Maureen Breau and Isaac Brouillard Lessard.

On March 27, 2023, Brouillard Lessard fatally stabbed Breau with a kitchen knife and seriously injured another officer before being shot dead by police in his apartment building in Louiseville, Que., about 100 kilometres northeast of Montreal. Brouillard Lessard, 35, suffered from schizoaffective disorder and was killed while police were attempting to arrest him for uttering threats to a family member and breaking probation.

The coroner’s inquest heard of numerous failings in the assessment and supervision of Brouillard Lessard, who had been found not criminally responsible because of mental illness five times for offences in 2014 and 2018, and had been followed by the province’s mental health board. Witnesses testified that Brouillard Lessard was resistant to treatment and wasn’t following court orders regarding his medication.

The lack of communication between mental health officials and police contributed to Brouillard Lessard’s death and that of Breau, a 42-year-old mother of two with more than two decades of policing experience, the coroner said.

“All of the facts heard in the hearings lead me to conclude that it is entirely likely that the deaths of Sgt. Maureen Breau and Mr. Isaac Brouillard Lessard could have been avoided,” Kamel wrote. “In retrospect, it is distressing to see so many resources focused on the same individual (Brouillard Lessard) and so little concerted communication between the various stakeholders over the years.”

The deaths led to the provincial government tabling a law in May that includes a budget of $11.3 million over five years for a team of “liaison officers” mandated to monitor people who commit crimes but who are judged to be not criminally responsible because of mental health disorders, and to assess the risk they pose.

Breau was just a handful of shifts away from beginning a new job as an investigator before she was murdered.

On March 24, 2023, three days before Brouillard Lessard killed Breau, his parents had called police because he had inundated his mother with hundreds of text messages and phone calls, some menacing. Officers went to see Brouillard Lessard that day but determined they didn’t have reason to detain him.

Then, on March 27, Brouillard Lessard’s uncle filed a police complaint over the alleged threats, resulting in the officers’ visit to the apartment building.

In her report, Kamel highlighted several red flags concerning Brouillard Lessard that predated Breau’s death, notably that he had moved several times over the years and that the health care network, including the mental health board, was unable to properly keep tabs on him.

In the last year of his life, monitoring by a community mental health team was limited to text messages, and his last psychiatric appointment had been five months before he attacked the sergeant. Kamel said the mental health team and other health workers had the means to assess him for the risk he posed to others, but they never did.

“Monitoring by a case manager would have been more than useful to avoid communication failures between institutions — and even within the same institution,” Kamel wrote.

The coroner said the deaths of Breau and Brouillard Lessard highlight the need for the province’s mental health board to revise its approach to surveilling people who are resistant to treatment.

“All the actors in our society will have to think about their approaches to mental health,” Kamel said. “The lack of resources is a real problem, but the followup structures for people who are resistant are even more so.”

Kamel will address a news conference on Tuesday in Montreal, following which the Quebec provincial police will comment on the report.

“Our duty to remember must be accompanied by societal reflection,” she wrote. “Two people lost their lives and each, in their own way, leaves an unfinished story for their loved ones.”

This report by The Canadian Press was first published Sept. 9, 2024.