U.S. bor­der tax plan would cut one per­cent­age point from Cana­dian growth: study


Even with com­pa­nies and politi­cians breath­ing a lit­tle eas­ier af­ter Justin Trudeau’s first en­counter with U.S. Pres­i­dent Don­ald Trump, it re­mains to be seen what the two gov­ern­ments ac­tu­ally agreed to.

A day af­ter the Trudeau-Trump tete-a-tete, ques­tions on crit­i­cal files re­mained unan­swered — from trade, to in­fra­struc­ture, to taxes, to pipe­lines.

Trudeau cabi­net min­is­ters ac­knowl­edged Tues­day that the Trump-re­lated eco­nomic un­cer­tainty had yet to dis­si­pate.

On en­ergy, Nat­u­ral Re­sources Min­is­ter Jim Carr said there’s still a lot of un­fin­ished work when it comes to re­mind­ing Amer­i­cans that the two economies are highly in­te­grated.

“I’ve been spend­ing an aw­ful lot of time on the tele­phone talk­ing to peo­ple who are very close to those in a po­si­tion of in­flu­ence in the United States to make that ar­gu­ment,’’ Carr told re­porters in Ot­tawa af­ter a cabi­net meet­ing.

“We’re do­ing two things: we’re mak­ing ar­gu­ments and we’re mak­ing friends — and then our friends will help us make the ar­gu­ment.’’

Canada’s cru­cial oil and gas in­dus­try has con­cerns about a pos­si­ble bor­der-ad­just­ment tax as well as Trump’s pledge to boost U.S. en­ergy pro­duc­tion — even as car­bon pric­ing in Canada is poised to be­come more ex­pen­sive. On the other hand, the pres­i­dent did sign an ex­ec­u­tive or­der ad­vanc­ing the con­tro­ver­sial Key­stone XL pipe­line, which would ben­e­fit the Al­berta oil­patch.

In many ways, the joint state­ment re­leased af­ter the Trudeau-Trump meet­ing raised even more ques­tions than it an­swered.

— The doc­u­ment de­clared the gov­ern­ments would “en­cour­age op­por­tu­ni­ties for com­pa­nies in both coun­tries’’ to cre­ate jobs through in­fra­struc­ture in­vest­ments, but it did not of­fer ex­plicit com­fort that Canada would be ex­empt from any Buy Amer­ica pro­vi­sions.

— It men­tioned the two sides would work to­gether on labour mo­bil­ity in var­i­ous eco­nomic sec­tors. How­ever, it didn’t say how it would make that hap­pen or whether it would come through the up­com­ing rene­go­ti­a­tion of the North Amer­i­can Free Trade Agree­ment.

— The state­ment said the two sides would con­tinue talks on reg­u­la­tory is­sues to make them more busi­ness friendly and to cut costs with­out com­pro­mis­ing health, safety, and en­vi­ron­men­tal stan­dards. It did not pro­vide de­tails on how it would get there.

The joint dec­la­ra­tions that fol­low meet­ings be­tween U.S. pres­i­dents and Cana­dian prime min­is­ters rarely in­clude specifics and this one was no dif­fer­ent.

How­ever, the many un­knowns sur­round­ing Trump, and the po­ten­tial for spillover into Canada, has cre­ated an in­tense thirst for de­tail.

Com­pa­nies say they need to have con­fi­dence in the fine print be­fore they can make big de­ci­sions in ar­eas like in­vest­ment.

On trade, busi­ness lead­ers said they felt some relief af­ter Trump told re­porters Mon­day that NAFTA would only be tweaked, rather than torn up, as he had promised on the cam­paign trail.

But they re­mained un­sure what a Trump tweak might look like.

Parts of Cor­po­rate Canada has been brac­ing for the worst since Trump’s un­ex­pected elec­tion vic­tory in Novem­ber. The com­bi­na­tion of his un­pre­dictabil­ity and his pro­tec­tion­ist vows has raised con­cerns across many sec­tors.

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