Canada’s finance ministers meet in Ottawa to discuss trade, competitiveness

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Finance ministers from Canada’s provinces and territories are meeting with their federal counterpart in Ottawa to discuss the country’s economy, competitiveness and trade. 

Topics will also include the global economy, the Canada Pension Plan, a review of the efficacy of the cannabis tax, and countering tax evasion. 

The meetings began Sunday night, and will carry on into Monday. The ministers typically meet with federal Finance Minister Bill Morneau twice a year.

« In my estimation, it should be a constructive opportunity for us to discuss the economy, » Morneau said Sunday night. 

He highlighted the country’s low unemployment rate. He also acknowledged there are challenges like the situation in the oil sector to discuss.

In advance of the meeting, Morneau also confirmed that the federal government will be providing $78.7 billion in transfer funding to provinces and territories during the next fiscal year.

The Liberals are billing the gathering as a time to « advance progress for the middle class, » but many provinces have other issues top of mind. 

Ontario, Saskatchewan and New Brunswick have loudly condemned the federal government’s plan to impose a carbon tax, starting in 2019. 

Morneau said he’s prepared to listen to the ministers’ concerns, and hopes to provide clear answers as to how the federal plan will work. 

However, the objective is clear.

« Obviously we are looking towards ensuring that all parts of the country have a price on pollution. We thinks that’s important, » he said.

Objectives and frustrations

Alberta has asked for funds to buy rail cars to move more oil to market, as delays with the Trans Mountain pipeline expansion mean there’s more crude on hand than the province can transport. Because of that, last week Premier Rachel Notley announced a temporary 8.7 per cent cut in oil production.

Even with some frustrations, it’s unlikely to be as tense as the First Ministers’ meeting was on Friday — which Morneau spoke at, along with the prime minister. 

In the lead up to the last finance ministers’ summit this summer, Morneau was under pressure to match U.S. President Donald Trump’s tax cuts, which slashed the U.S. corporate tax rate from 35 per cent to 21 per cent.

Canada’s combined corporate tax rate is just above 25 per cent, depending on the province.

While it didn’t equalize Canada with the U.S., the Liberal government’s fall fiscal update committed to spend billions to help corporate Canada compete.

Before the last meeting, Morneau was also dealing with renewed calls to change the way equalization payments are distributed across the country. 

Equalization payments are based on a complex calculation that is designed to help poorer provinces provide public services that are reasonably comparable to those in wealthy provinces.

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Morneau to outline plan to boost business competitiveness in fiscal update

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Finance Minister Bill Morneau will deliver an update on the country’s finances today and outline his plan to keep Canada competitive as the U.S. takes bold steps to lure investment and boost business growth.

Morneau is expected to stress that Canada’s economy is strong overall — but faces competitive challenges from the deep tax cuts and regulatory reforms brought in by U.S. President Donald Trump’s administration.

Business groups have been pressing the federal government to cut tax rates. The government is expected instead to opt for targeted reforms meant to boost productivity, such as better tax incentives for companies that buy new equipment and invest in productivity.

Morneau will deliver his update at 4 p.m. in the House of Commons; opposition leaders will offer their reactions afterward. CBCNews.ca will carry it all live.

Prime Minister Justin Trudeau said today his government has been working hard to grow the economy and its efforts are showing « real results. »

« We’re going to continue our plan to help the middle class and those working hard to join it and support businesses as we move forward, » he said.

Trudeau said today’s statement will be focused on boosting competitiveness and reaping benefits from trade deals signed and advanced in recent years.

There are also signs the statement will offer support for struggling media companies, measures to boost trade between Canadian provinces and efforts to diversify international markets beyond the U.S.

The Conservatives have been pressing the Liberals for a timeline on returning the federal budget to balance. Today’s fiscal update is not expected to offer a target date for eliminating the deficit.

The Liberals’ 2015 election campaign platform promised to clear the deficit by 2019 and to refrain from deficits higher than $10 billion — but this year’s budget forecast a deficit of about $18.1 billion for this fiscal year.

Today’s statement sets the stage for next year’s critical federal budget — the Trudeau government’s last before the 2019 election campaign.

CBC News Network will have special coverage of Morneau’s statement starting at 4 p.m. ET, followed by a special edition of Power & Politics from 5-7 p.m. ET.

With files from the CBC’s David Cochrane

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