Politics Briefing: Small-business tax debate could heat up

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Good morning,

Tax changes don't usually grab headlines, especially ones involving "income sprinkling" or "passive investments," but keep an eye out for the debate about the Liberals' current proposals. As Bill Curry writes today, small business owners and lobby groups are concerned about changes the government is considering for private corporations. As evidence, what was supposed to be a small briefing by a tax specialist in Calgary this week instead drew a crowd of 300. Finance Minister Bill Morneau says the changes are just meant to close "unfair" loopholes in the tax code.

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CANADIAN HEADLINES

The New Democrats say they have 124,000 members ready to vote in the party's leadership race this fall. That's three times as many members as the NDP boasted earlier this year, and about on par with how many people were available to vote in the 2012 leadership race.

Opposition Leader Andrew Scheer will announce his shadow cabinet today. Former Conservative leadership hopeful Maxime Bernier wanted to become the Finance critic, he told The Globe's Laura Stone in July, but will instead be named the critic for Innovation, Science, and Economic Development, CBC News reports.  Third place finisher Erin O'Toole will be the Global Affairs critic. Mr. Scheer will refer to the MPs as "shadow ministers" instead of "critics," echoing language that is commonly used in the U.K.

Liberal MP Darshan Kang defended himself publicly for the first time yesterday from allegations of sexual harassment. He says he has taken medical leave during the investigation.

Ontario Health Minister Eric Hoskins announced $222-million in additional funding over the next three years towards battling the province's opioid crisis. It comes after a range of professionals and academics implored Ontario to declare the situation a public health emergency like British Columbia did last year. 

British Columbia's Liberals will pick a new leader on Feb. 4, as the party attempts to rebuild from losing power after governing for 16 years. Former premier Christy Clark stepped down earlier this month, weeks after the New Democrats took power by defeating the Liberals in the legislature. Several names have emerged as possible leadership candidates, including former Surrey Mayor — and current Conservative MP — Dianne Watts and former B.C. finance minister Mike de Jong. The party will pick a leader through three days of online and telephone voting.

B.C. has been granted intervener status in a Federal Court of Appeal case challenging the Trans Mountain pipeline expansion. The NDP government applied for status as part of an election promise to oppose the pipeline — a sharp policy change from the previous Liberal government. A Federal Court of Appeal judge says B.C. can join alongside a list of intervenors that includes the province of Alberta. However, Justice David Stratas says the B.C. government's application was "blasé" and demonstrated a poor understanding of the case, and he warned the province's status could be revoked if it doesn't follow the rules.

Saudi Arabia is planning a charm offensive in Ottawa next month, even as controversy continues about how the country has used Canadian-made armoured vehicles.

And Senator Murray Sinclair, a former judge and chief commissioner of the Truth and Reconciliation Commission, says it's more important to honour Indigenous role models than it is to tear down symbols of past leaders, such as John A. Macdonald.

Lindsay Rodman (The Globe and Mail) on our Afghanistan strategy: "Canada's reaction should be patient and measured, but open. With Defence Secretary James Mattis at the helm, the United States may surprise many and come up with a coherent and supportable strategy for Afghanistan that has a well-articulated, ambitious, but achievable endstate. If some of the potential minefields introduced by Mr. Trump, such as his approach to economic development, and the balance of U.S. partnership with India and Pakistan, are sufficiently handled, Canada could consider supporting this effort."

André Picard (The Globe and Mail) on Quebec and wait times: "Last year, [Quebec's Health Minister] resorted to the tried-and-true method, pumping $100-million into Quebec's emergency departments. Nothing really changed. So now, he's telling those responsible that their jobs are on the line. Good on him. The performance of our health system is middling at best. After decades of ladling out carrots, it's about time someone wielded a stick."

Michael Torrance (The Globe and Mail) on a national policy for business and human rights: "Canada is lacking a coherent policy approach to address business and human rights as well as the risks of modern slavery in corporate supply chains. Closing this gap should be a priority for the Canadian government to keep up with our global peers and maintain competitive advantage for Canadian business."

Vicky Mochama (Metro) on denouncing hate: "It should not have taken a racist march and a white woman's death in Charlottesville for the federal Conservative party to distance itself from The Rebel. It's unfortunate that the party has been more than willing to stoke fears and look away from those within its ranks who would."

INTERNATIONAL HEADLINES

With a missile over Japan, North Korea shattered the brief interlude of calm in East Asia. Japanese Prime Minister Shinzo Abe and Global Affairs Minister Chrystia Freeland both called the action "reckless," while U.S. President Donald Trump reiterated that "all options are on the table." One resident in Hokkaido awoke to this message at 6:02 a.m., four minutes after North Korea launched a missile: "Missile launch. Missile launch. North Korea appears to have fired a missile. Take refuge in a solid building or underground." If you need to get caught up on what's happened so far, and how we got to this point, we've broken it down in an explainer.

While Brazil has been in the headlines for corruption-related charges over the past year, Ecuador is being thrust into the spotlight. Vice-President Jorge Glas allegedly took bribes in relation to Brazilian construction firm Odebrecht S.A. and has been stripped of his duties. The revelation is part of the growing investigation called Lava Jato, roughly translated to 'car wash,' that has been embroiling leaders across South America. Earlier this summer, The Globe's Latin American correspondent Stephanie Nolen looked at the far-reaching consequences of the investigation.

On Monday, Mr. Trump said that it's great that Finland was buying new fighter jets from Boeing while at a press conference with Finnish President Sauli Niinisto. Finland's leader looked surprised at the comments. On Tuesday, he denied that Finland was purchasing the planes.

Defence Secretary Jim Mattis has put on hold Mr. Trump's proposed ban on transgender people serving in the military. He says the military needs time to study the directive.

And SPOILER ALERT: This paragraph is about season 7 of  Game of Thrones. While HBO's hit TV show may technically fall under the fantasy genre, it has all the hallmarks of a political drama. With that in mind, Vox ranked each major character's strategy during season 7, which ended on Sunday, based on political science.

Derek Burney and Fen Osler Hampson (The Globe and Mail) on the U.S.'s strategy on North Korea: "Patience may not be the popular watchword henceforth but, until or unless there is a dramatic change of mind in China, containment, not denuclearization, will be the name of the game. That may include more advanced measures to shoot down North Korean missiles before they strike any target, including the THADD anti-missile system now being rapidly deployed in South Korea. One way or another, tension and uncertainty will prevail on the prickly Korean peninsula with daunting implications for the region, if not the world as a whole."

Barrie McKenna (The Globe and Mail) on Harvey and flood insurance: "The day of reckoning is approaching for federal flood insurance. Running out of cash, the program is set to lapse at the end of September – the end of the U.S. government's fiscal year. A few months back, U.S. President Donald Trump floated what he thought was a brilliant solution. He suggested adding a surcharge to flood-insurance policies, with the proceeds going to help pay for his oft-promised wall along the U.S.-Mexico border. Killing two birds with one stone, as it were. In the wake of Harvey's soggy destruction, Mr. Trump and Congress will find it much more difficult to punish the victims." (for subscribers)

New York Times editorial board on hurricane relief: "Despite the Red Cross's enormous size and revenues ($2.7 billion in 2015), most of the disasters it responds to are relatively small, like single-structure fires. Its record on large-scale operations is spotty, and given the enormous amount it collects from Americans, the scope of its ambitions and the fact that a chunk of its budget comes from government agencies, there has been less accountability than Americans might expect emanating from its grand marble headquarters in Washington."