The Morning Brief:

Bruce Carson - June 19, 2017


Economy—NAFTA Negotiations: Advice from a Former Prime Minister to the Present Prime Minister

Advice on NAFTA Negotiations—Both at the Canada 2020 policy meeting and later during appearances on political programs, former Prime Minister Brian Mulroney had advice for Prime Minister Trudeau and his negotiating team as the start of negotiations loom ahead in August. Included in the negotiating advice were some general comments on the Canada-U.S. relationship.

On the negotiations themselves Mulroney made it clear that once they start the rule is “we keep our heads down and our mouths shut.” In other words those involved should not feel it necessary to engage in public commentary on passing events. As he said “we should avoid public shouting matches with the Americans as we prepare to sit down for this whole ball of wax.” The rule is to stay focussed on the negotiations themselves. It is also important that the negotiators realize that Canada is not some little country that can be pushed around. “We have the strength to say no” realizing that Canada is $2 trillion economy.

Mulroney noted the change in the economy since the Canada-U.S. Free Trade Agreement and NAFTA had been negotiated. “New technology and automation are displacing jobs all over the place and the challenge is to reconstruct the economy. Training and retraining of employees to handle the new jobs that are being created and move to a greener economy” are the challenges facing negotiators. In these talks Trudeau needs to lay the foundation that moves Canada to a $3-$4 trillion economy.

On the length of the negotiations Mulroney is at odds with U.S. Commerce Secretary Wilbur Ross. Mulroney believes it may be possible to complete the negotiations prior to the 2019 federal election. Ross has said that he wants negotiations wrapped up by January, 2018 so as not to encroach on the Mexican elections or the U.S. mid-terms set for November, 2018. Mulroney is probably being more realistic on the length of time this will take, having been at the table during the initial negotiations. He sees this as more of a long distance run. It seems that Ross believes the negotiations can be shortened by introducing a number of the agreed-to elements from the Trans Pacific Partnership Trade Agreement.

One area where the former prime minister agrees with present federal negotiator Raymond Chretien is that it is important to solve the softwood lumber dispute before the NAFTA talks begin. Mulroney believes if this does not happen then the softwood lumber issues could derail the larger talks and poison the well for future agreement.

On the Canada-U.S. relationship Mulroney said “Canada is privileged to have the U.S. as a neighbour and friend and the U.S. should thank their lucky stars every morning that they have Canada on their northern border. This is the most strategic and peaceful bilateral relationship in history and must be cherished.” He noted that while in Canada the Conservative party under Interim Leader Rona Ambrose has been supportive of the government as talks approach, the U.S. has seen anti-trade sentiment fuelled by both the left and the right of the political spectrum. Mulroney hopes that the Conservative Party’s new leader Andrew Scheer will follow the lead of Ms. Ambrose on NAFTA.

This is a leadership moment for the Trudeau government. Mulroney said “the NAFTA negotiation is absolutely crucial. It will be a challenge of this government, this parliament and this country. It’s one for the history books.” His leadership advice to Trudeau came in the form of a quote from Ted Sorensen “look to the next generation, not the next election” in these negotiations and borrowing from Bill Clinton he urged Trudeau to “look around the corner of history.”

In the last few days Prime Minister Mulroney has set out a path for the upcoming talks; the issue that remains is whether the Trudeau government can follow the route he has set out for it?

Other National Issues

The Senate and the Budget Implementation Bill C-44

When looking at the Senate of June, 2017 it is hard not to use the advertising slogan of the 1960s “you’ve come a long way, baby.” Come a long way from the expense issues, from suspended Senators and from expelled or resigning Senators. Instead of focussing on the negative aspects, commentators have zeroed in on the sober, second thought role of the Senate as it reviews and occasionally amends government legislation. As Marie-Danielle Smith has noted, one in every five pieces of government legislation has been returned to the House of Commons with amendments.

This role, highlighted by Trudeau appointed Independent Senators working with Conservative and former Liberal Senators was front and center just over a year ago when the Senate dealt with the government’s Medically Assisted Death Bill C-14. In this instance the Senate amended the bill so that it more closely matched the decision on this matter by the Supreme Court of Canada. The Commons accepted some amendments but rejected the major ones and the Senate bowed to the wishes of the elected house.

Now more than a year later Senators have taken issue with at least two parts of the Budget Implementation Bill; the Canada Infrastructure Bank and the escalator clause dealing with excise taxes on beer, wine and spirits. Last week saw Independent Senator Pratte argue in favour of splitting out the section of the bill dealing with the infrastructure bank so that it could be studied and dealt with separately. Government Representative in the Senate, Senator Peter Harder argued successfully before the Speaker that this was a money bill and the Senate if it split the bill would be creating a new money bill, which is prohibited by the Constitution.

The Senate process regarding this bill has led the National Post’s Andrew Coyne to note that the government is answerable to the House of Commons and “the Senate by contrast is elected by no one, accountable to no one; as such it has no business amending or defeating anything, let alone a budget bill.” He suggests that this problem could be solved by reducing the Senate to a suspensive veto only. Others such as Campbell Clark have argued that in its actions on this bill the Senate is only exercising its authority, providing sober, second thought. Over the weekend the prime minister offered his opinion that “we will take note of the recommendations they (the Senate) make, but on the issue of the budget, it’s a well established fact the Senate defers on money bills, particularly to the legitimacy of the House of Commons.

In recent times this has not always been the case. In 1988 the Liberal dominated Senate forced an election by blocking the Free Trade Bill and then blocked the GST introduced by the Mulroney government and the Prime Minister asked for eight additional Senators to be appointed to break the deadlock. Also in 2008-09 the Liberals joined with the Bloc and NDP to stop changes to political party financing contained in the fall economic update. During the Harper minority years the Senate delayed, amended and attempted to amend government legislation. However, it was respectful of the Commons role in budgetary matters and did pass the Harper budgets.

The House of Commons is the confidence chamber, not the Senate. However this does not mean that the Senate has no role to play in these matters. It can offer amendments and send Bill C-44 back to the House of Commons amended, giving the government another opportunity to review and possibly amend this bill. The Senate also has a practice whereby it sometimes attaches “observations” to a bill and that practice could be followed here.

In the end as former Progressive Conservative Government House Leader, Doug Lewis used to say in situations like this “the government is entitled to its bad legislation.”

But as noted above perhaps the most important point in all of this is that commentary on the Senate is now focussed on its work. Future issues of The Morning Brief will deal with the Senate, possible improvements and changes that could be made to the appointment process. Past political activity should not disqualify one from being considered for appointment to the Senate. Past political activity does not preclude independence of thought or action.

To Come

--today, federal, provincial and territorial finance ministers meet in Ottawa to talk about taxing marijuana sales and NAFTA negotiations
--today, the plaintiffs in the Descheneaux case are in court seeking an extension to the deadline for amendments to the Indian Act dealing with gender equality
--June 20, the government is to table amendment s to the Access to Information Act and Bill C-51, the Anti-terror Act
--June 20, trade numbers for April to be released
--June 22, B.C. Legislature begins with election of the Speaker

This is the last scheduled week for the House of Commons to sit prior to the summer recess so question period will no doubt continue to concentrate on the government’s approval of the Norsat International sale and delays in the justice system--bc

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