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A chronology of Canada’s standoff with U.S. over steel, aluminum levies

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OTTAWA — Here is a timeline of key events in Canada’s dispute with the United States over NAFTA, the U.S.-Mexico-Canada Agreement and American tariffs on steel and aluminum:

June 28, 2016: Republican presidential candidate Donald Trump declares his antipathy for the North American Free Trade Agreement in a campaign speech in Pittsburgh, in the heart of a Rust Belt state that he would eventually win to secure the presidency. “NAFTA was the worst trade deal in history,” says Trump, pledging to renegotiate the pact “to get a better deal for our workers.” He promises to leave the agreement if Canada and Mexico refuse to bargain with him.

Aug. 16, 2017: Canada, Mexico and the United States begin the renegotiation of NAFTA in earnest. The Trump administration opens with a lecture, upping the ante from earlier remarks that it simply wants to “tweak” the deal. Trump’s trade czar Robert Lighthizer declares: “We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement.”

October: The U.S. introduces so-called “poison pills” that Canada says it simply can’t accept. The U.S. wants to increase American content in automobiles, get rid of Canada’s supply-management system in agriculture, introduce a five-year sunset clause to force regular renegotiations, do away with a dispute-settlement mechanism and reduce Mexican and Canadian access to bidding on U.S. procurement projects. The three countries do eventually reach a new deal on autos, while the U.S. backs away from the other demands.

March 14, 2018: Prime Minister Justin Trudeau says Canada won’t be “bowled over” at the NAFTA talks by Trump. Trudeau makes the remarks while visiting steelworkers in Sault Ste. Marie, Ont. “We’re standing up for ourselves. But we know there’s a win-win-win we can get to,” Trudeau says. “We’re pushing back on some things that we think might not be the right suggestions, which is what people would expect from Canada.”

May 31: Commerce Secretary Wilbur Ross declares that the Trump administration is making good on its threat to slap hefty tariffs on Canadian metals exports — 25 per cent on steel and 10 per cent on aluminum — on the grounds that foreign steel dependency poses a threat to American national security. However, Ross signals clearly the tariffs are linked to the trade talks: “As to Canada, Mexico, you will recall that the reason for the deferral (of tariffs) had been pending the outcome of the NAFTA talks,” he said. “Those talks are taking longer than we had hoped.”

June 7: Trump hurls a series of personal insults at Trudeau from Air Force One after a G7 summit in Quebec. The president calls Canada’s prime minister “dishonest” and “weak” after Trudeau repeats his objections to the steel and aluminum tariffs. The incident marks a new low in prime ministerial-presidential politics across the 49th parallel at a time when NAFTA negotiations remain deadlocked.

July 1: Canada imposes dollar-for-dollar tariff “countermeasures” of its own on up to $16.6 billion worth of imports of steel, aluminum and other products from the U.S. — everything from flat-rolled steel to playing cards and felt-tipped pens. Foreign Affairs Minister Chrystia Freeland calls the U.S. tariffs illegal and counterproductive; Trudeau calls it inconceivable that Canada could be seen as a national-security threat to the U.S.

Aug. 27: Mexico and the United States announce their own bilateral trade deal after weeks of negotiations that were supposed to be only about autos. Instead they negotiated a sweeping text covering the full scope of the trading relationship. Foreign Affairs Minister Chrystia Freeland blows up a trip to Europe and diverts to Washington, starting a month of intense negotiations to bring Canada into the NAFTA fold.

Sept. 20: Liberal government insiders indicate that as the NAFTA talks come down to the wire, the so-called Section 232 tariffs — so named for the obscure U.S. trade-law provision under which they were imposed — remain a major sticking point. Some observers suggest negotiating the tariff dispute separately would mean a shorter path to a deal.

Sept. 26: Trump strikes again, this time at the UN General Assembly: “Frankly, we’re thinking about just taxing cars coming in from Canada,” he says when asked about the stalled talks. “We’re very unhappy with the negotiations and the negotiating style of Canada,” he continues, adding, “We don’t like their representative very much” — a reference to Freeland.  

Sept. 30: Staring down a midnight deadline to provide a text of an agreement to Congress, Trump’s and Trudeau’s team work out last-minute details that bring Canada into a renewed continental trade pact. Trudeau leaves the Prime Minister’s Office after a late-night cabinet meeting and says six words: “It’s a good day for Canada.”

Oct. 19: Liberal government officials make it clear Canada will not accept any sort of a quota restriction on steel and aluminum exports to the U.S. in exchange for lifting the tariffs. Meanwhile, Mexican officials fuel speculation that the U.S. plans to lift the tariffs once the new agreement is signed during a G20 summit in Argentina.

Nov. 30: Trump, Trudeau and outgoing Mexican president Enrique Pena Nieto sign the new U.S.-Mexico-Canada Agreement, or USMCA, at the summit but there is no sign of movement on tariffs.

Jan. 30, 2019: Kevin Brady, the ranking member of the House Ways and Means Committee (its senior member from the minority Republicans), sends the first clear signal that the tariffs could be a problem for both Democrats and Republicans when it comes to ratifying the new trade deal. “They’re not really willing to consider this agreement until the steel and aluminum tariffs are ensured to be lifted off, including quotas,” Brady tells a trade conference in Washington.

Feb. 21: David MacNaughton, Canada’s ambassador to the U.S., declares publicly that he’s confident the tariffs will be lifted “in the next few weeks” — comments he later acknowledges were aimed at lighting a fire under recalcitrant U.S. negotiators. Later that same week, Transport Minister Marc Garneau tells a gathering of governors in the U.S. capital that Canada would struggle to ratify the agreement with the tariffs still in place. “I got the message loud and clear,” responds Larry Kudlow, Trump’s senior economic adviser.

May 17: Prime Minister Justin Trudeau suddenly adds a trip to a Stelco plant in Hamilton, Ont., to his schedule. He confirms reports that an agreement on tariffs has been reached and that the levies will be gone within 48 hours. “This decision reflects what is known to be true by friends on both sides of the border,” Trudeau says. “Canada has been America’s most steadfast ally for more than 100 years, and our long-standing partnership and closely linked economies make us more competitive around the world and improve our combined security.”

The Canadian Press

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Crime up, homicide down: Five things to know about the 2018 crime statistics

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police tape

OTTAWA — New national crime data for 2018 was released Monday, courtesy of Statistics Canada, with big changes to some key indicators. Here are five things that stood out:

Crime up, but still near decades-long low

The national statistics agency says both the crime rate and its measurement of the severity of crime were up two per cent this year, the fourth straight year of increases since 2014.

StatCan cautioned the prevalence of crime and its severity remain 17 per cent lower than in 2008, reflecting a long decline in crime rates nationally. From its peak in 1991, the national crime rate declined more than 50 per cent until 2014.

The agency says the increase in the severity of crimes in 2018 was attributable to marked increases in fraud (up 13 per cent), one particular class of sexual assault (15 per cent), shoplifting (14 per cent) and theft of items worth over $5,000 (15 per cent).

Less homicide, but provinces may vary

The rate of homicides in Canada ticked down nationally by four per cent, with 15 fewer homicides in 2018 than in 2017.

But the statistics tell a different story when broken down by province. Much of the decrease in came from declines in Alberta (38 fewer) and British Columbia (30 fewer), but Ontario experienced an enormous increase in homicides — 69 more than last year.

Statistics Canada analyst Greg Moreau notes that several incidents in Toronto, including the Danforth shooting one year ago (in which two people were killed), the discovery of eight victims of serial murders, and the North York van attack (in which 10 people died) all elevated the number of homicides recorded in 2018.

The data also shows decreases in firearm-related (by eight per cent) and gang-related (by five per cent) homicides across the country, the first time they have decreased since 2013 and 2014, respectively.

Statistics Canada further notes Indigenous people continue to disproportionately be the victims of homicide. Though they make up five per cent of Canada’s population, Indigenous people were 22 per cent of homicide victims.

Sexual assault is up, and more left unreported

The rate of “Level 1” sexual assault — defined statistically as sexual assault without a weapon and without other physical harm — was up 15 per cent in 2018 over 2017. And in his article, Moreau says that rate remains “likely an underestimation of the true extent of sexual assault in Canada.”

This is the fourth consecutive year this class of sexual assault increased, and it usually makes up around 98 per cent of all police-reported sexual-assault incidents. But since these types of crimes often go unreported, the actual incidence is likely not reflected in the statistics.

In 2014, another Statistics Canada survey estimated only five per cent of sexual assaults were reported to police.

Prince Edward Island reported an increase in sexual-assault reports by over half (55 per cent, though with the number of incidents provincewide in the dozens) while Nova Scotia (42 per cent), Yukon (20 per cent) and Ontario (18 per cent) all reported increases above the national average for 2018.

Hate crimes down from 2017 peak

After the rate of hate crimes spiked in 2017 by almost 50 per cent, there was a reduction of 13 per cent in 2018. Still, hate crimes occurred at a higher rate last year than in any other year since 2009, Statistics Canada says.

Statistics Canada notes the decline is almost completely attributable to reductions in Ontario, and the number of hate crimes against Muslims halved year-over-year.

Both violent and non-violent hate crimes decreased, and hate crimes that targeted black people and hate crimes targeting people over sexual orientation both fell by double digits. The share of hate crimes aimed at Jews also fell, by four per cent.

More fraud, more extortion

Statistics Canada notes the world of scams and extortion is increasingly moving online, with the Canadian Anti-Fraud Centre flagging schemes in which scammers pretend to be from the Canada Revenue Agency as well as gift-card scams.

Overall, the rate of fraud increased by 12 per cent, and sits almost 50 per cent higher than in 2008, after growing for seven years in a row. There were over 129,400 incidents of fraud reported to police in 2018, StatsCan says.

StatCan does say the increasing ease of reporting fraud online could have contributed to the higher numbers.

There was an even more dramatic increase in extortion from 2017 to 2018 — a 44-per-cent leap, Statistics Canada says. The dynamic is the same across the country, and the rate has been increasing since 2012.

Christian Paas-Lang, The Canadian Press

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Court dismisses challenge of deal that helps U.S. nab tax cheats in Canada

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Supreme Court

OTTAWA — A Canada-U.S. deal allowing Canadian financial institutions to send customer information to U.S. authorities to help find tax cheats does not violate the Charter of Rights and Freedoms, a judge has ruled.

Federal Court of Canada Justice Anne Mactavish dismissed an appeal from two American citizens, Gwendolyn Louise Deegan and Kazia Highton, who now live in Canada and have no real ongoing connection with the United States.

The U.S. Foreign Account Tax Compliance Act, or FATCA, requires banks and other institutions in countries outside the United States to report information about accounts held by U.S. individuals, including Canadians with dual citizenship.

Deegan and Highton challenged the constitutionality of Canadian provisions implementing a 2014 agreement between the countries that makes the information-sharing possible.

They argued the provisions breach charter guarantees that prevent unreasonable seizure and ensure the equality of people under law.

Mactavish concluded in her decision released Monday that although the provisions do result in the seizure of the banking information of Americans in Canada, the affected people have only “a limited expectation of privacy” in their data.

She also ruled that the provisions do not violate the charter guarantee that every person is equal under the law without discrimination based on national origin.

Under the tax arrangements, Canadian financial institutions are legally required to provide the Canada Revenue Agency with data concerning accounts belonging to customers whose information suggests they might have American citizenship. The revenue agency then hands the information to the U.S. Internal Revenue Service.

Nearly all countries levy income taxes based on residency, while the U.S. system is based on citizenship.

The U.S. considers all American citizens to be permanent tax residents in the United States for federal income-tax purposes, taxing the worldwide income of “specified U.S. persons” regardless of whether they live, work, or earn income in the United States.

“The result of this is that every Canadian resident who is an American citizen is subject to U.S. federal taxation on all of their income from all sources, wherever that income may be derived, even if he or she is also a Canadian citizen,” Mactavish says in her decision.

“Canada clearly found itself in an extremely difficult position as a result of the enactment of FATCA by the American government.”

U.S. law requires extensive financial and asset reporting, with the threat of significant penalties for failure to meet the obligations.

However, Mactavish notes, the U.S. government estimates that fewer than 10 per cent of all people who file American tax returns from outside the United States ultimately owe any taxes to Washington.

In addition, a tax treaty between Canada and the United States allows residents of Canada to receive credit for some taxes paid to the federal and provincial governments that would otherwise have been owed to the U.S. revenue service.

Deegan and Highton unsuccessfully argued the provisions require Canadian banks to transfer the information of potentially hundreds of thousands of people annually to the federal revenue agency in Ottawa without judicial authorization or any state oversight.

They said this amounts to “a massive fishing expedition and a seizure that offends every core precept of the citizenry’s … right to a reasonable expectation of privacy.”

Mactavish pointed out that the Supreme Court of Canada has found that taxpayers’ privacy interest in records that may be relevant to the filing of income-tax returns is “relatively low.”

The method used to collect this information is “minimally intrusive” and the data shared with the U.S. revenue service is afforded protection under the tax treaty between the two countries, she added.

— Follow @JimBronskill on Twitter

Jim Bronskill , The Canadian Press

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