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Five things to keep in mind following Canada’s triumph over Trump’s tariffs

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OTTAWA — Five things to keep in mind in the wake of Friday’s news that Canada and the U.S. reached an agreement to end punitive American tariffs on steel and aluminum exports:

1. The devil is in the details. So far, it’s not clear what concessions Canada made in order to convince a famously stubborn White House to abandon the tariffs, which survived not only the reaching of the U.S.-Mexico-Canada Agreement last September, but also its ceremonial signing two months later in Buenos Aires. What, exactly, prompted the self-proclaimed “Tariff Man” to finally stand down? All that’s known is that Canada agreed to “prevent” the import of unfairly subsidized or “dumped” steel, and work with the U.S. to prevent transshipment — foreign steel that moves through either country to the other. Reaching an “agreed-upon process” to monitor metals trading is also part of the deal, which allows the U.S. to reimpose tariffs should import levels spike.

2. Next, the new NAFTA. never mind Democratic intransigence on Capitol Hill; the tariffs emerged in recent months as the number-one obstacle to getting the USMCA ratified not only in the U.S., but in Canada and Mexico as well. It’s unknown if the tariff detente will jar loose the long-standing logjam in Congress, where conventional wisdom says many Democrats are reluctant to give President Donald Trump even a whiff of victory as the 2020 election approaches. However, there are signs that opposition may be dwindling: House of Representatives Speaker Nancy Pelosi, widely seen as holding the fate of the agreement in her hands, sent positive signals about her party’s desire to “get to Yes” after a “productive meeting” earlier this week with U.S. Trade Representative Robert Lighthizer.

3. The China conundrum. Canada has been caught in the crossfire between the U.S. and China ever since Huawei chief financial officer Meng Wanzhou was detained in Vancouver late last year at the behest of the U.S. Justice Department. Meng, who is caught up in an American indictment that accuses Huawei of violating U.S. sanctions against Iran, is awaiting an extradition hearing to determine whether she will be sent stateside to face charges. China has since detained two Canadians on claims of espionage and sentenced a third to death for drug smuggling. Friday’s tariff agreement, which enlists Canada’s help in policing the North American steel market against Chinese dumping, could be seen as pushing Canada even deeper into America’s corner.

4. Canada’s election. With voters headed to the ballot box this fall, polls suggest Prime Minister Justin Trudeau is in trouble. But Trump is deeply unpopular, and the tariffs haven’t helped; Friday’s news will give the governing Liberals the chance to portray themselves as the only party with experience — and success — in dealing with the famously unpredictable and combative commander-in-chief. Look for the hard-charging Conservatives to do their level best to counter that perception when the House of Commons comes back May 27 after next week’s break.

5. America’s election. As 2020 approaches, look for Trump to mount a full-court press to get the USMCA ratified in Congress and give him badly needed campaign-trail ammunition. Will the Democrats, who control the House of Representatives and have never been known as free-trade fans, be willing to hand him a victory? Or are they content to fight other, higher-profile battles, wary of the blowback from constituents who want to see the deal passed?

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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