The world’s largest economies have thrown their weight behind a global tax reform deal that would impose a minimum levy on multinational corporations, ramping up pressure on a small number of holdout countries to sign up to the agreement.
G20 economy ministers and central bankers meeting in Venice on Saturday issued a joint communique endorsing the tax deal, which was agreed by G7 nations last month and backed by 130 countries at talks hosted by the OECD in Paris earlier this month.
The communique said that the deal was “a historic agreement on a more stable and fairer international tax architecture” and the G20 invited “all members of the OECD . . . that have not yet joined the agreement to do so”.
It called on all countries in the negotiations to “swiftly address the remaining issues and finalise the design elements” by the next G20 meeting in October.
Janet Yellen, US treasury secretary, said that the G20 would try to bring small holdout countries, which include Ireland and Hungary, towards accepting the agreement but this was not essential to moving forward.
“It’s not essential that every country be on board,” she said.
Bruno Le Maire, French finance minister, called the tax deal “a once in a century tax revolution”.
“The reform of international taxation has been agreed and there is no turning back,” he said.
The next steps for the October G20 meeting will be to fix a globally agreed minimum tax rate and work out how shares of profits from taxation will be allocated between countries.
Eight countries, including Ireland, Barbados, Hungary and Estonia, have held off on agreeing the 15 per cent minimum levy, which is backed by the US, China, India and most EU countries. Other holdouts include Sri Lanka, Nigeria, Kenya and St Vincent & the Grenadines.
Some low-tax jurisdictions and investment hubs, such as the Bahamas and Switzerland, have already signed up.
Peru did not originally sign up because it did not have a government in place when the agreement was made but has now done so, making 131 signatories.
While the political endorsement of the G20 will provide an impetus to efforts to reach a final deal, which is expected to implemented by 2023, important technical issues remain and are unlikely to be resolved this weekend.
These include various so-called carve-out agreements which would let some countries use opt-outs from the deal to encourage investment.
Another hurdle is expected to be Republican opposition in the US Congress; President Joe Biden is likely to need Congressional approval for at least some elements of the proposal.
Kevin Brady, the top Republican on the House of Representatives’ ways and means committee, has described the deal as “a dangerous economic surrender that sends US jobs overseas”.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
