Good morning,
It's Small Business Week, and the Liberal government is celebrating by stretching out its announcement of how it proposes to change taxes on private corporations. On Monday, the government said it will keep most of its proposal to cut down the use of income sprinkling, in which business owners can share income with family members even if they don't do any work for the company.
Today the Liberals will say what they will do about keeping passive investments inside corporate accounts, which was one of the most contentious proposals. Tech leaders say they expect good news, for them, today. And there will be two more announcements, about transferring family businesses and venture capital, in the days ahead.
And, in unrelated news, Tragically Hip frontman Gord Downie has died. On a personal note, it was one year ago today I saw him in concert in Ottawa.
This is the daily Politics Briefing newsletter, written by Chris Hannay in Ottawa and Mayaz Alam in Toronto. If you're reading this on the web or someone forwarded this email newsletter to you, you can sign up for Politics Briefing and all Globe newsletters here. Have any feedback? Let us know what you think.
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CANADIAN HEADLINES
As questions continue about the nature of Finance Minister Bill Morneau's financial holdings, the Ethics Commissioner now says she did not instruct him to not set up a blind trust for his substantial assets – she just told him he didn't have to. Mr. Morneau, who says he is just following the watchdog's guidance on all matters, wrote her a letter yesterday that said that her advice – not his decisions – have come under scrutiny and that he'd be happy to do something different, if she wanted him to.
The Liberal government is mulling even more stringent bilingualism requirements for public servants, the National Post reports.
Bombardier's deal to sell a majority stake in its C Series division to rival Airbus was made after talks broke down with Chinese investors and secret negotiations with Boeing fell apart, sources tell The Globe and Mail. They say the decision was made as a last-ditch effort to ensure the C Series did not fail.
Conservative Leader Andrew Scheer's campaign manager, Hamid Marshall, is now set to be campaign manager for the party in the next election. Mr. Marshall was the subject of an awkward question-and-answer at a press conference on Monday that led to Mr. Scheer walking away from reporters.
And thousands of pounds of lobsters dumped in the forest, fishing boats stolen and set on fire and protests that have fishers divided largely along racial lines. These are just some of the signs of flaring tensions in southwestern Nova Scotia, the most lucrative part of Atlantic Canada's lobster fishing industry. A lack of enforcement of federal regulations has enabled a black market to grow. The federal government says that an investigation is ongoing but many in the community are frustrated with the pace of the inquiry into an issue plaguing an industry that is "the backbone of our economy," according to Colin Fraser, the Liberal MP for the area.
Konrad Yakabuski (The Globe and Mail) on Bombardier: "During this nearly two-decade-long saga, the odds were always stacked against Bombardier. Its decision to try to take on Airbus and Boeing on their own turf – the 100-plus seat jet category – always contained an element of sheer recklessness. Betting the house on a product that sought to eat into the market share of its rich and ruthless rivals was not the kind of provocation Bombardier could ever afford to make on its own. That is now painfully clear as Canada's national aerospace champion hands the C Series controls to Airbus for not even so much as a symbolic $1."
Eric Reguly (The Globe and Mail) on Bombardier: "As soon as the C Series got slammed with the tariffs, it was game over and Airbus was able to negotiate a sweet deal that will see Bombardier – and perhaps the Canadian and Quebec taxpayers – still write the cheques for a product over which it has lost control. Airbus was brilliant. It owns the finest piece of Canadian aerospace technology on the market, and it got Bombardier to subsidize the deal."
John Ibbitson (The Globe and Mail) on NAFTA talks: "For many decades, Canada has been a friend and ally of the United States. We have had serious disagreements – over Vietnam, over Iraq and more – but seldom has an American official spoken publicly about Canada, and Mexico as well, with the hostility that United States Trade Representative Robert Lighthizer displayed Tuesday."
Robyn Urback (CBC) on the government's issues management: "You see, friends, when this government makes mistakes, it owns up to them — eventually and sort of, with little explanation. And usually only after those meddling reporters have dug up too much dirt to ignore."
Susan Delacourt (iPolitics) on the Liberal Party: "It's entirely possible that the past few stormy weeks have revised Trudeau's bias against the party as it existed before him. He may even recognize that 'new and young' is not always better than 'old and experienced' — especially now that Conservatives and New Democrats have leaders newer and younger than Trudeau."
Gary Mason (The Globe and Mail) on Energy East and Western alienation: "Mr. Kenney has tapped into a resentment that is tied to the sense that the rest of Canada has turned its back on a province that has, for years, been the country's economic sugar daddy. Moreover, there is the growing perception that Mr. Trudeau and the band of progressives around his cabinet table are anti-resource development. And on that front, the death of the Energy East pipeline has only helped inflame East-West tensions. While there is certainly plenty of evidence to suggest the pipeline's demise was primarily based on market economics, there is no escaping the long shadow of politics that loomed over the decision."
Zosia Bielski (The Globe and Mail) on after #metoo: "What needs more airtime? Concrete measures for enacting cultural and institutional change – conversations more complicated than hashtagged confessions. From the ground up, we need to start with schools imparting deeper knowledge to young minds about consent, empathy, entitlement, bodily autonomy and bystander behaviour. We need real protections for women at work, including stronger unions. We need to start looking at potent deterrence for perpetrators and their enablers, be that through the court system or through robust independent reviews in the workplace."
INTERNATIONAL HEADLINES
Negotiators are expecting to talk NAFTA into 2018. As the fourth round of talks wrapped up in Washington D.C. yesterday a new schedule was announced that extends the time in between sessions and the overall timeframe of the renegotiations. Canada, Mexico and the U.S. remain far apart, which begs the question, what does a world without the trilateral trade deal look like for Canada and how would we fare? If NAFTA ends, Canada will be negatively impacted but it doesn't have to be an economic catastrophe in the long run, The Globe's Barrie McKenna explains, writing that it could be a wake up call that enables us to diversify our trade partners. The New York Times looked at the view from Mexico, and what America's southern neighbour is preparing as a contingency plan.
Arab and Kurdish soldiers have captured Raqqa, the Islamic State's "capital," after a four-month-long battle. The coalition-backed troops are expected to face pockets of resistance in the coming days but the U.S. estimates that around 90 per cent of the city had been taken from the extremists. The fall of Raqqa comes after Mosul was won back in Iraq earlier this year.
Catalonia is refusing to renounce its declaration of independence, despite pressure from the Spanish government. Thousands rallied yesterday following the arrest of two separatist leaders. If the autonomous region doesn't abandon its plans for independence by Thursday, Spain's central government has threatened that it will control the area through direct rule.
When Xi Jinping began his first term as leader of China's Communist Party he was a charismatic unknown. Five years later, he is a feared leader who has tightened his grip on China's military, society and economy and has arguably become the most powerful person in the world. He'll look to further consolidate his power starting today at the Party's congress, which takes place once every five years. The Globe's Nathan VanderKlippe looked at Xi's rise and what's expected to go down in Beijing as the party's leaders meet.
And former CIA officers are running for the U.S. Congress. And they're running as Democrats.
Andrei Sulzenko (The Globe and Mail) on Trump's NAFTA plan: "The U.S. administration's game plan is now clear: Make multiple outrageous demands that, even if partially accepted, constitute a huge 'America First' victory; or, if rejected outright by Canada and Mexico, set up a failed negotiation and a messy denouement – also a win in terms of U.S. President Donald Trump's public antipathy to the North American free-trade agreement."
Chris Hannay