OTTAWA — Ottawa’s long-awaited plan to help Canada compete with the United States for investment dollars is the centrepiece of its latest fall economic statement, which forecasts slightly deeper annual deficits over the coming years.Finance Minister Bill Morneau had faced pressure from the business community to take the big step of lowering the corporate tax rate across the board as his response to major tax and regulatory reforms in the U.S.In Wednesday’s economic update, Morneau chose a cheaper approach — but one that will still use billions worth of extra federal fiscal space to offer tax incentives for businesses that invest in Canada.Read the full Fall Economic Statement 2018Canadian Prime Minister Justin Trudeau embraces Minister of Finance Bill Morneau following the fiscal economic update. Canadian Press/Adrian Wyld Speaking with reporters, Morneau said Canada is benefiting from “a very good situation” when it comes to the health of the economy and the labour market. After hearing from companies, however, the government decided to do more to encourage investors to open their wallets north of the border.“We know that we have to consider investments in the future,” he said Wednesday shortly before tabling the fall update in the House of Commons. “That’s why we listened to and heard the anxieties of the business sector.”As part of the announcement, a government backgrounder warned the American reforms could significantly erode Canada’s overall business-tax advantage compared to the U.S.By far, the biggest-ticket items among the proposed tax measures are changes that would enable businesses to immediately write off the full cost of some types of machinery and equipment, and allow companies of all sizes and in all sectors to expense a larger share of newly acquired assets.The new writeoffs alone are expected to lower federal revenues by about $14 billion over the next half-decade.As part of its competitiveness plan, the government also proposed about $1.1 billion over the coming years towards efforts to open new markets for Canadian exporters. The amount includes a re-allocation of close to $800 million in infrastructure funds towards improving transportation capacity — at marine ports, in particular — to boost overseas trade.Ottawa also plans to add another $800 million over five years to its strategic innovation fund, which supports “innovative” investments in all sectors.That is effectively the platform that they’re running on today — that there will be deficits foreverConservative finance critic Pierre Poilievre A stronger economy has given the government about $22 billion in extra fiscal room over the coming years, compared with what federal forecasters projected in last February’s budget. But the new initiatives will also contribute to slightly larger-than-expected annual shortfalls, beginning next year.The government is now projecting deficits of $18.1 billion in 2018-19, $19.6 billion in 2019-20 and $18.1 billion in 2020-21. After 2020-21, the annual shortfalls are expected to shrink each year to $11.4 billion in 2023-24.The fiscal update contains no timetable to eliminate the Liberals’ deficits. The government has drawn almost daily criticism from the opposition Conservatives and some economists for failing to provide a timeline back to balance, especially with the economy running close to full strength.Following the 2015 election, the Liberal government abandoned pledges to run annual deficits of no more than $10 billion and to balance the books by 2019. Instead, it has focused on reducing the net debt-to-GDP ratio — also known as the debt burden — each year.The debt-to-GDP ratio is now projected to gradually fall from 30.9 per cent in 2018-19 to 28.5 per cent in 2023-24.With an eye on the 2019 election, the Tories’ parliamentary finance critic attacked the Liberals’ economic statement.“That is effectively the platform that they’re running on today — that there will be deficits forever,” Pierre Poilievre told the House of Commons.Poilievre warned that the core of the government’s claim to fiscal responsibility — the slowly improving debt-to-GDP ratio — will come apart with the inevitable arrival of the next economic downturn. The government, he added, will then be forced to raise taxes or slash spending at a time when the economy will need the exact opposite response.“In other words, they are putting our future in a reckless state of danger by spending our tomorrow on their today,” said Poilievre, who argued the Liberals have been fortunate to benefit from positive economic conditions outside their control — such as the booming U.S. and world economies.“For Canadians to be optimistic about their future, they need to see the prospect of jobs for them, for their children. That’s what is going to keep our economy goingFinance Minister Bill Morneau Morneau was asked Wednesday if Canada will be ready for the next downturn and about concerns the government is continuing to run deficits during good economic times.He insisted the government is on the right path by investing in the economy to help create jobs and to promote growth, while at the same time lowering the debt burden. Morneau warned some critics appear to advocating an “austerity” approach.“For Canadians to be optimistic about their future, they need to see the prospect of jobs for them, for their children,” he said. “That’s what is going to keep our economy going.”Morneau’s fall economic statement also proposes additional support for the country’s struggling journalism industry by enabling non-profit news organizations to take tax-deductible donations and by creating new tax credits — all of which are part of a plan expected to reduce government revenues by $600 million over five years.The government plan also proposes $240 million towards sustaining Canada’s wild fish stocks, with a focus on Pacific salmon.Many industry stakeholders welcomed the government’s business tax changes Wednesday.One expert said the new accelerated investment writeoffs will provide a boost to business, even though he thinks Canada’s corporate tax regime was still competitive even before Wednesday’s announcement.“But I think there was a lot of pressure on them to do something in order to regain the relative advantage compared to the U.S.,” said Randall Bartlett, chief economist with the University of Ottawa’s Institute for Fiscal Studies and Democracy.
TSX up on positive U.S. retail sales, higher oil prices amid concern over Iraq by Linda Nguyen, The Canadian Press Posted Jun 12, 2014 6:49 am MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email TORONTO – The Toronto stock market closed higher Thursday amid unfolding conflict in Iraq that pushed up energy prices and positive economic data from the United States.The S&P/TSX composite index added 17.50 points to 14,909.63. The Canadian dollar gained 0.10 of a cent to 92.12 cents US.In the U.S., the Dow Jones industrials dropped 109.69 points to 16,734.19, the Nasdaq fell 32.99 points to 4,298.94 and the S&P 500 dipped 12.03 points to 1,931.86.Oil prices rose after an al Qaida-inspired group that captured two key cities in Iraq last week vowed to also invade Baghdad.One of those two cities, Mosul, lies in an area that is a major gateway for Iraqi oil. The uncertainty over oil supplies prompted the July crude contract on the New York Mercantile Exchange to jump $2.13 to US$106.53 a barrel.Portfolio manager Kash Pashootan said there is little evidence that demand for oil, particularly from China and the U.S., will rise in the medium to long term, but any kind of international conflict will raise prices.“The market will try to trick us with rising oil prices,” said Pashootan, a vice-president at First Avenue Advisory in Ottawa, a Raymond James company.“But if you look at examples from earlier this year, the major driver for energy prices has been the same factor — geopolitical tension.”The energy sector climbed 1.69 per cent on the Toronto Stock Exchange. However, gold was the leading advancer, up by 2.73 per cent, as bullion gained $12.80 to US$1,274 an ounce. July copper declined three cents to US$3.02 a pound.Meanwhile, there were more signs of economic improvement in the U.S., as the Commerce Department reported retail sales rose for a fourth consecutive month in May — up 0.3 per cent amid a surge in demand for autos.However sales fell shy of the 0.4 per cent increase that economists had expected.Also, the U.S. Labor Department says weekly applications for unemployment benefits rose 4,000 to a seasonally adjusted 317,000.In Canada, the central bank issued a warning about the country’s housing market and the high levels of consumer debt.In its latest semi-annual review, the Bank of Canada said the housing market is showing signs of a soft landing, but it still remains the biggest domestic risk.The comments come as Statistics Canada reported that its new housing price index rose 0.2 per cent in April, following identical increases in both February and March. Meanwhile, the Teranet–National Bank National composite house price index said Canadian home prices were up in May, rising 0.8 per cent over the previous month.On the corporate front, shares of Lululemon Athletica Inc. (NASDAQ:LULU) were hammered after it reported a lower first-quarter profit of $18.98 million and cut its outlook for the year. Shares in the company fell nearly than 16 per cent, or $7.05 to close at US$37.25 in New York despite the company announcing it plans on buying back up to US$450 million of its shares.Follow @LindaNguyenTO on Twitter.Note to readers: This is a corrected story: A previous version incorrectly said the market closed lower. It also incorrectly pegged the Dow close at 16,752.05
“Further prolongation of this crisis will make the situation untenable for the millions of people whose daily lives have been seriously disrupted,” UN High Commissioner for Human Rights Zeid Ra’ad Al Hussein said in a statement from his Office on the release of the report.“For almost half a year, residents of the areas affected by the armed conflict have been deprived of their fundamental rights to education, to adequate healthcare, to housing and to opportunities to earn a living.” The 6th monthly report of the 35-strong UN human rights monitoring mission in Ukraine covers the period from 18 August to 16 September. It notes that between 24 August and 5 September, armed groups of the self-proclaimed ‘Donetsk people’s republic’ and ‘Luhansk people’s republic’ were bolstered by an increasing number of foreign fighters, including citizens believed to be from Russia.The report also found that while there has been an absence of large-scale offensive actions since the ceasefire was announced on 5 September, in some areas, artillery, tank and small arms exchanges have continued on an almost daily basis. Armed groups also destroyed housing and seized property. There have also been continued allegations of human rights violations committed by some volunteer battalions under Government control. From mid-April to 6 October, at least 3,660 people were killed and 8,756 wounded in eastern Ukraine. Since the ceasefire began, between 6 September and 6 October, at least 331 fatalities were recorded, although some of the individuals may have been killed prior to the ceasefire, with the data only recorded later.Between 24 August and 5 September, there was also a sharp increase in detentions by the armed groups, and there were alarming reports of torture and ill-treatment of detainees, including mock executions and sexual violence. There were also reports of ill-treatment of those detained by Ukrainian armed forces and police. “With the shift in control of territory during the reporting period between Government forces and the armed groups, the risk of reprisals against individuals for collaborating with ‘the enemy’ or for such perceived collaboration has increased,” the report notes. High Commissioner Zeid stressed that all violations and abuses of international human rights law and violations of international humanitarian law must be scrupulously investigated and prosecuted, including the indiscriminate shelling of civilians, killings, allegations of sexual violence, the illegal seizure of property and the ill-treatment of detainees. “This is a call for justice, not retribution. All parties must ensure that there are no reprisals for perceived collaboration or affiliation with an opposing camp,” the High Commissioner said, referring to the report’s documentation of increased tensions between residents and IDPs. Meanwhile, in the Autonomous Republic of Crimea, the human rights situation continued to be marked by multiple and ongoing violations, the report notes, including the curtailment of the freedoms of expression, peaceful assembly, association, and of religion or belief, and increasing intimidation of Crimean Tatars under the pretext of combating extremism.