News & Updates

    The Morning Brief - 05.16.19

    Posted by Bruce Carson on May 16, 2019 9:25:21 AM


    Economy—Bills C-48 (tanker ban) and C-69 (no more pipelines) Update—Removal of U.S. Steel and Aluminum Tariffs, Update


    Bill C-48

    Last evening the Senate Transport and Communication Committee voted to defeat Bill C-48 as five Conservative Senators combined with one Independent Senator voting the Bill down. The next step will be a vote in the full Senate to adopt the report of this Senate committee and the bill; the oil tanker ban, would at least be dead until a new parliamentary session begins after the coming election.

    The bill was opposed by the oil and gas industry and their representative associations but also by a number of Indigenous groups. The defeat of this bill could clear the way for the Indigenous backed Eagle Spirit Energy Holding group as it proposes a pipeline from northern Alberta to Prince Rupert.

    In the discussions which led to the rejection of a number of amendments which attempted to find a middle ground, it was suggested that Canada adopt certain international safety standards which place stricter rules on shippers.  

    It is not clear when there will be a vote on the Transport Committee’s report in the full Senate.

    Bill C-69

    The Senate Energy and Environment Committee will begin its clause by clause study of this bill this morning and will deal with over 100 proposed amendments.

    The main thrust of the amendments is threefold: cut down the timelines proposed in the bill; limit the scope of ministerial powers and make economic considerations paramount when a project is being considered.

    On timelines, amendments would reduce the limits for consideration from 600 days to 510 days.

    The exercise of ministerial powers would be limited so that the minister of the environment would have to obtain written permission from the finance minister and the minister of natural resources before a project could be rejected on environmental grounds.

    The power of the minister of the environment to subject a project to review would be limited.

    It is proposed that the new Impact Assessment Agency and its review powers on various grounds be made discretionary rather than obligatory as the word “must” would be replaced by “may.” Also dealing with the list of matters to be taken into consideration, amendments would stress that economic concerns have priority. There are amendments that would limit the list of groups who can take part in the hearings to those who have information or expertise that would directly affect the project.

    Changes would also prevent or limit interference by foreign funded environmental activists in Canada. 

    Diane Francis wrote a piece earlier this week in the National Post entitled “the Liberals’ C-69, a train wreck of politically correct nonsense, passed last year is now in the Senate where dozens of amendments have been proposed.”  Her view is that the Senate should reject the bill but since that is quite unlikely; she focusses on what she refers to as a “goofy requirement.”

    This clause in the bill would require that projects be judged according to “the intersection of sex and gender with other identified factors.” She argues that this vague wording would tie up projects indefinitely, lead to lawsuits and frighten off investment.

    Her view is that Bill C-69 “replaces the private-sector with a politically correct sheltered workplace template” where success is based on factors other than skills, education and work history. She concludes with “Canada is rich because we have people who can find, finance and produce stuff that consumers buy” and that is not helped by this proposed legislation.

    She might have added that while this bill looks at impacts of projects on men and women, Indigenous men and women and immigrant men and women, other countries are clearing away regulatory hurdles so their citizens can “find, finance and produce stuff.”

    Al Monaco who heads up Enbridge pipelines told a recent shareholders’ meeting that the drop in oil patch investment over the last two years is connected to the pipeline bottleneck and without capacity and with production limits, industry spending is constrained. He added that without major changes to C-69 it is questionable whether pipeline projects will be presented in the future.

    Monaco is quoted as saying “we are squandering this opportunity, there is no doubt about it—while our largest trading partners across the border capitalize on the same advantage.”

    Looking at the deliberations on C-69 in a broader context, should this bill not be amended in an effort to achieve a more realistic balance between the environment and development and transport of Canada’s energy resources, the anger and frustration that brought Jason Kenney’s UCP to power may spill over in ways that demonstrate how fragile this federation is, at this point in time.

    Removal of U.S. Steel and Aluminum Tariffs, Update 

    The discussions that took place yesterday on this matter were eerily reminiscent of those that took place about a year ago on the main trade agreement; Mexico getting in ahead of Canada and arriving at solutions that work for it.

    Yesterday, Foreign Affairs Minister Freeland was in Washington for meetings with U.S. Trade Representative Robert Lighthizer and the chair of the Senate Finance Committee, Chuck Grassley. While everyone involved said the right things at the right time it is obvious that the Mexican representatives are more advanced in their negotiations to lift the tariffs than Canada’s negotiators are.

    It would seem from an interview by Vassy Kapelos with Mexico’s Chief Negotiator, Jesus Seade on Power and Politics yesterday that Mexico and the U.S. have basically agreed to the lifting of the tariffs and have moved beyond talking about quotas to having their relationship governed by a monitoring agreement. This would mean that both parties would keep track of steel and aluminum, the amount imported and its origins, so that dumping through Mexico into the U.S. does not occur.

    What we got from Minister Freeland yesterday was basically the same talking points as we have heard for months that the tariffs are illegal and absurd and Canada won’t move ahead with ratification of the USMCA as long as the tariffs are in place.

    Treasury Secretary Mnuchin told the Senate Appropriations subcommittee “I think we are close to an understanding with Mexico and Canada.” He also said “my sense is we are making progress but there is obviously more work to be done.” He also told the subcommittee that Canada and Mexico are priorities.

    Seade said that Mexico would pause its negotiations to allow Canada to catch up but this is a time limited pause. Also we did not hear anything from Freeland about whether Canada would agree to a monitoring agreement. We know that Freeland has rejected quotas.

    Hopefully over the next few days Canada will be able to catch up to where Mexico is now and we will find out what Freeland’s position is on a trilateral monitoring agreement.

    To Come

    --today, final episode of Big Bang Theory

    --today, provincial election in Newfoundland and Labrador

    --today, monthly survey of manufacturing for March to be released

    --today, House of Commons Defence Committee meets this afternoon to deal with the opposition motion to investigate the Norman affair

    --May 22, retail trade numbers for March to be released—another piece of data that will indicate whether the economy is in recovery mode

    --May 29, Bank of Canada interest rate announcement


    The Morning Brief returns on Tuesday, May 21 after the long weekend--bc

    Topics: Morning Brief

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