Morning Update: U.S. bill sets stage for trade fight with Canada over digital sales taxes

Good morning,

When the United States Senate passed the Inflation Reduction Act earlier this week, Canadian political and industry leaders were elated by the legislation’s climate provisions, which seem likely to provide a boost to this country’s electric vehicle industry. But other major changes in the bill set the stage for a trade standoff between the two countries over digital sales taxes.

An earlier version of the U.S. bill would have effectively raised America’s minimum corporate tax rate to 15 per cent. This would likely have put the U.S. in compliance with a key element of a global tax deal announced last summer by Canada and more than 130 Organization for Economic Co-operation and Development countries, the intent of which was to prevent multinational companies from dodging tax obligations.

But the minimum corporate tax provision was recently dropped as part of a major backroom revision of the U.S. legislation, and the updated bill is expected to receive final approval in the coming days. The reversal means the OECD tax deal may have to go ahead without full participation from the U.S., the world’s largest economy, which would weaken the agreement significantly.

Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks to reporters before heading to Question Period in the House of Commons on Parliament Hill in Ottawa on June 23, 2022.Justin Tang/The Canadian Press

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Canadian Blood Services eyes getting plasma from paid donors amid supply challenges

Canadian Blood Services says it may for the first time work with private companies that pay people in Canada for their blood plasma, as the organization looks for ways of overcoming a dearth of unpaid donations.

CBS said in a statement that it is in talks with potential commercial plasma-collection partners. The organization had long warned that allowing companies to pay for plasma could siphon donors away from the voluntary non-profit collection system.

UN’s deal to get Ukrainian grain to starving nations obstructed by business contracts

Few cargo ships have received a bigger send-off than the Razoni, a Sierra Leone-flagged vessel that set sail from the Ukrainian port of Odesa last week loaded with 26,527 tonnes of corn.

Its departure received global attention and was seen as a triumph of a UN-brokered deal to unblock Ukraine’s Black Sea ports and a step toward preventing a global food crisis. The ship was supposed to go to Lebanon, which is in desperate need of food, but it didn’t get there. Instead, the crew changed course and headed to Turkey.

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Also on our radar

Ontario introduces ‘strong mayor’ legislation, will apply to Toronto and Ottawa first: The mayors of Ontario’s two largest cities will soon have the power to veto budget decisions and bylaws that contradict provincial priorities, under legislation introduced Wednesday.

Ontario Health Minister doesn’t rule out some privatization of health care services: When asked about plans to address the hospital staffing crunch that has shuttered emergency rooms in recent weeks and whether privatization is possible, Sylvia Jones said “all options are on the table.”

Former PM Odinga holds narrow lead in Kenyan election as digital results give new transparency: In one of the tightest presidential election races in Kenyan history, former prime minister Raila Odinga held a narrow lead over his main rival in unofficial counts a day after the voting ended.

Trump refuses to answer questions in New York civil investigation into business dealings: Former U.S. president Donald Trump said he declined to answer questions during an appearance before New York State’s attorney general in a civil investigation into his family’s business practices, citing his constitutional right against self-incrimination.

Analysis: FBI raid on Trump’s Mar-a-Lago residence raises more questions than it answers

Unifor elects Lana Payne to succeed Jerry Dias as president: Payne, a former journalist who built her career in labour activism in the Atlantic provinces, is the first woman to head Canada’s largest private-sector union and had served as secretary-treasurer of Unifor since 2019.

Newfoundlanders prepare for possible evacuations, more road closures as forest fires hold steady: Residents are preparing as two large forest fires continue to rage through the central parts of the province, with thick smoke forecasted to cover some areas in the coming days.

Morning markets

Global shares edged higher on Thursday as investors bet on the pace of interest rate hikes slowing after data pointed to inflation peaking, leaving the U.S. dollar struggling after its biggest fall in five months. Just before 5:30 a.m. ET, Britain’s FTSE 100 lost 0.11 per cent and Germany’s DAX was down 0.15 per cent. France’s CAC 40 advanced 0.08 per cent and Hong Kong’s Hang Seng gained 2.4 per cent. Markets in Japan are closed today. New York futures were higher. The Canadian dollar was trading at 78.32 US cents.

What everyone’s talking about

By asking farmers to cut emissions, is Ottawa biting the hand that feeds us?

“Canada has to strike a balance. Avoid steps that will lower food production, or raise food prices. Aim for emissions reductions – but only in the most efficient way possible.” - The Editorial Board

Pierre Poilievre does not need Stephen Harper’s help to mobilize progressives against him

“It is hard to believe, as some have suggested, that [Stephen] Harper broke his silence because he feared [Pierre] Poilievre was in any danger of losing the leadership race. A more plausible explanation for his endorsement lies in his antipathy toward [Jean] Charest, with whom he clashed on plenty of occasions when he was prime minister and Charest Quebec’s premier.” - Konrad Yakabuski

Today’s editorial cartoon

Living better

Tips on keeping your marriage together in retirement

When it comes to retirement, most couples plan for the places they’ll go and the people they’ll see, but don’t spend enough time thinking about how they’ll pass the rest of the time with their spouse.

Kathy Kerr writes about some suggestions on how to keep your retirement – and marriage – bliss.

Moment in time: Aug. 11, 1938

Grasshoppers swarm Regina

Removing grasshoppers from the wall of the [Saskatchewan] Legislature building in Regina on Aug. 11, 1938.University of Saskatchewan Archives and Special Collections

It could have been a scene from a horror movie. On this day in 1938, a grasshopper blizzard darkened the skies over Regina, bringing life in the Saskatchewan capital to a standstill. The summer’s hot, dry weather had provided ideal breeding conditions for the insect pest. All it took was a windy day to give them lift and bring them into the city in unimaginable numbers. The grasshoppers were everywhere – landing on sidewalks and streets, clinging to the sides of homes and buildings, flying through open windows and descending on backyard gardens. They even covered the headstones in the Regina Cemetery, while large, writhing flotillas formed on Wascana Lake. The custodial workers at the Saskatchewan Legislature building spent the day sweeping them from the walls and front steps. Local businesses tried to keep them at bay with kerosene torches. But there was no relief until an evening rain storm washed away most of the grasshoppers, temporarily clogging sewer drains. It would take more than a shower, though, to remove the greasy goo from grasshopper carcasses on the city’s roads. By the next day, people were joking about the invasion, happily swapping grasshopper stories, the more exaggerated the seemingly more believable. Bill Waiser

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