The Morning Brief: NAFTA, the Boushie Trial

Bruce Carson - February 13, 2018


Economy—Fair and Reciprocal Trade, President Trump—Trans Mountain Pipeline Update

Fair and Reciprocal Trade, President Trump—It was inevitable that during this hiatus between rounds of formal NAFTA talks that President Trump would insert himself into border and trade issues, if not directly into the NAFTA talks themselves. Yesterday, during his announcement dealing with record spending on infrastructure he was quoted as saying “Canada does not treat us right in terms of the farming and the crossing of borders.” Then he added “we cannot continue to be taken advantage of by these countries.”

Then he moved into his tax rhetoric when he said that “we are going to charge countries outside of our country—countries that take advantage of the United States.” He went on to say “some of them are so-called allies but they are not allies on trade. So we’re going to be doing very much a reciprocal tax and you’ll be hearing about that during the week and the coming months.”

“We are going to be doing very much a reciprocal tax.”

It was not clear what he was talking about or how such a tax would be implemented. Was he referring back to the idea of a border tax which floated around in the first few months of his presidency, before formal negotiations on NAFTA began? The idea was rejected as being too hard to implement and counterproductive.

It is also hard to determine how the president would implement such a tax as tax rates are set by Congress and it was Congress that in informal discussions with the administration rejected this initiative. Also tariff rates are negotiated with the WTO and while the president would like to pick a jurisdictional fight with the WTO, is this tax or tariff, the fight Trump wants to pick? Also and perhaps most importantly, this reciprocal tax is not in the 2018 budget which has just been completed. One would think that if this was a real proposal it would be in the budget.

It is quite possible that on the way to announcing trillions of dollars in new spending someone said to Trump that we need more revenue raising tools and the idea of the reciprocal or border tax sprung back to life. However, Trump has been saying for a while now that he favours “fair and reciprocal trade” and these words were in the State of the Union Address.

The next round of NAFTA discussions begin in Mexico on February 26 and it would be helpful for those sitting around the negotiating table to know whether what was said yesterday is a real thing to be added to the talks.

Trans Mountain Pipeline Update—Yesterday was a Conservative Party opposition day in the House of Commons, a day when a recognized party gets to select the topic for debate. Not surprisingly the Conservatives picked the biggest economic issue facing the country, the future of the Trans Mountain pipeline. The Conservative Party motion called on the government to use every tool at its disposal to ensure the pipeline is built and to report back to the House by noon on Thursday with a concrete implementation plan.

In response to the motion, Natural Resources Minister Carr said the government will not entertain any attempts by British Columbia to stall or stop the expansion of the Trans Mountain pipeline. He went on to say in response to a question as to whether the federal government would take the B.C. government to court that the federal government would use all “kinds of options” to exert its constitutional authority over interprovincial pipelines. Referring to B.C.’s actions to date Carr said that all B.C. has done is to announce a plan to consult B.C. residents as to whether more research needs to be done and it is his position that nothing has been done that should stop the construction of the pipeline. Carr also said that he supported using a panel of the National Energy Board as a means to settle this dispute. Those who can remember back as far as last Thursday will recognize the irony in this, as the government’s new approach to energy and environment announced then, left the NEB on a scrapheap.

Shannon Stubbs, the Conservative critic for energy said in debate yesterday “I can’t help but wonder if the reason the prime minister is sitting on his hands and failing to get involved and lead is because he’s just waiting for the clock to run out on the authorization for the pipeline expansion on September 30, 2021.” She added “the question here is what does a federal approval of a pipeline that has already gone through Canada’s rigorous, stringent energy approval process mean when the project can be continually delayed.”

Premier Notley added to this debate yesterday by saying that the Alberta government is not ruling out exercising any option in this dispute, but does not want to hurt Alberta residents. She said that she will be giving the federal government some time and space to resolve the dispute before taking further action. She wants to see progress within days on the dispute from the federal government. This aligns to a certain extent with something Carr said last week that he would give B.C. some time, but that time was limited.

Given the politics involved in B.C.’s position, it is hard to see the B.C. government backing off without endangering the future of its pact with the Green Party whose continuous support is necessary for Premier Horgan to remain in power. The most likely scenario would be a court order bringing this dispute to an end, ruling that B.C.’s action or intended action is not within its jurisdiction. But this would require the federal government to act, which despite strong words, doesn’t seem likely at this point.

As Premier Notley said yesterday the federal government has judicial options, parliamentary options and negotiating options. It is going to have to exercise at least one of these options soon or Notley will escalate the trade war. Or Kinder Morgan will start looking seriously at its options.

Other National Issues

The Jury Verdict in the Trial of Gerald Stanley, Part 2

Yesterday the family of Colten Boushie met with Ministers Bennett and Philpott and as the family said, the purpose was to establish relationships. Today the family meets with the Prime Minister, Public Safety Minister Goodale and Justice Minister Wilson-Raybould. There was never any question as to whether Trudeau would meet with the family as this controversy directly affects the part of his brand that there is no more important relationship for his government than the one it has with Canada’s Indigenous peoples. So far in this matter he has been able to protect the brand as no one has asked why his government, which has been studying judicial reform for the last two years have done nothing on jury trials, particularly ones involving Indigenous accused.

The best that one could glean from Wilson-Raybould yesterday was that the government has to do more about the underrepresentation of Indigenous people on juries. And she will continue to have conversations on this matter. The issue that the Boushie case raises dealing with juries raises the question as to how much say should the accused/defence have in relation to jury selection and how should that be weighed against the say that the victim should have in jury selection. In a hierarchy of rights whose rights are at the top, should their interests not align; the victim or the accused. In the Boushie case do the victim’s rights in relation to jury selection outweigh those of the accused?

Perhaps this would be resolved by eliminating the pre-emptory challenge that may be used by defence counsel to eliminate without cause, jurors who may be problematic. If this is one of the fixes settled upon, surely Wilson-Raybould can pull it out of the bigger judicial reform package, and put it into a separate piece of legislation for consideration by Parliament. There is no question that the issues here are much broader and deeper than just one fix, but it would be a start and demonstrate at least some progress. The systemic issues that were discussed yesterday such as systemic racism in the legal system and elsewhere will require a broader approach. As pointed out here yesterday one of the main problems that the Trudeau government must deal with is its lack of action on matters of growing significance to Canadians. As Shannon Stubbs said yesterday in the debate on the pipeline “this government is all talk and no action.”

There will also be the temptation today for Trudeau and Wilson-Raybould to comment directly on the decision in the Stanley case. They need to be reminded of the situation that then Minister of Corporate and Consumer Affairs, Andre Ouellet got himself into in March, 1976 when he criticized the verdict of acquittal of three sugar refineries in a price fixing case. He was found in contempt of court and resigned from cabinet. While Ouellet’s situation is different as the Stanley case involves a jury, the same principle holds that there is a separation between the executive and the judiciary which must be respected.

There is much work to be done in this matter and this situation should not be used to score political points by either the government or the opposition.

To Come

--today, Canada beats Finland 4-1 in Women’s hockey, next up USA
--today, Ministers Goodale and Wilson-Raybould as well as the prime minister meet with the Boushie family
--today and tomorrow, the Inquiry into Missing and Murdered Indigenous Women and Girls is in Moncton
--February 15, EI numbers for December to be released
--February 16, monthly survey of manufacturing for December to be released--bc

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