Finance Minister Bill Morneau to talk tax reforms at first ministers’ meeting


OTTAWA — The Liberal government has been fielding a lot of complaints about controversial proposed tax reforms — and now the premiers are poised for their turn as they gather in Ottawa to meet Prime Minister Justin Trudeau.

The provincial and territorial leaders will get a chance Tuesday to hear Finance Minister Bill Morneau discuss his proposals to eliminate small business tax provisions the Liberals believe allow some wealthier Canadians to avoid paying their fair share.

The suggested changes have led to an outcry from doctors, farmers, small business owners and even some premiers who fear the effect they would have on their provincial economies.

One of them is Manitoba Premier Brian Pallister, who said Monday he wants the Liberal government to abandon the plan.

“We need to be very, very careful with our engine of growth, not to take out the spark plugs,” Pallister said in an interview.

Don Morgan, deputy premier and justice minister of Saskatchewan, said the proposed changes could have unintended, negative consequences in his province, which he said has used tax tools to encourage professionals to move to rural areas.

“There are doctors that have moved to smaller centres than Saskatoon based on the fact that they were able to do some tax planning,” said Morgan, who will be attending the meeting instead of Premier Brad Wall.

“Some of those people may very well not only leave Saskatchewan, but may leave Canada. So we’re hoping that they (the federal government) will look at those things and say ‘This was not what we contemplated. This was not what we wanted’,” he said.

Morneau has said repeatedly he was listening throughout the consultation period that wrapped up Monday and is open to changes, but Pallister said he thinks it is too late.

“I’ll use the phrase poisoned water,” he said. “The nature of the dialogue has offended so many people.”

The premiers will also meet MP Bill Blair, parliamentary secretary to the minister of justice, to discuss the role they will play in regulating the coming legalization of marijuana for recreational use.

Some of the provinces have been expressing their concerns about the tight timeline for legalizing pot.

Once again, Manitoba is one of them, although it has introduced some legislation to prepare for the new reality.

“I think it’s a rush job and a dangerous one at that,” said Pallister.

“We have one chance to get this right. I understand the prime minister wants to keep his promise, but he could also keep his promise one year later.”

Morgan said Saskatchewan could use another year too, or at least six months.

He said it would “allow us to get up to speed training our police officers and to get better testing and just sort of consider all of the options that are necessary to get a plan in place.”

Ontario has already announced its framework for legalizing recreational marijuana, with legislation to be introduced this fall, but the province is still looking for support from the federal government, such as adequate taxation levels for enforcement at the provincial and municipal levels.

Asked about cannabis Monday, Quebec Health Minister Gaetan Barrette could not avoid slamming the federal government over its handling of the issue.

“We know that the federal government sent us the problem and we have to handle the risks that go with it,” he said in Montreal.

Trudeau and the premiers begin their day-long meeting by gathering with Indigenous leaders from the Assembly of First Nations, the Metis National Council and Inuit Tapiriit Kanatami.

Perry Bellegarde, the national chief of the Assembly of First Nations, said he will press the premiers to invest in education and training, by measures such as increased funding for colleges and universities that have a strategy to help Indigenous youth develop the skills they need to join the workforce.

“Tap into that untapped potential,” Bellegarde said.

Bellegarde said he will also ask the premiers to support adding an Indigenous chapter to the new North American Free Trade Agreement, among other economy-related proposals, but he will also be pushing for a separate meeting devoted entirely to Indigenous issues.

Foreign Affairs Minister Chrystia Freeland and David MacNaughton, Canada’s ambassador in Washington, will give the premiers an update on the relationship with the U.S. following the third round of negotiations for the new NAFTA.

Ontario Premier Kathleen Wynne will be listening keenly for NAFTA negotiation updates, as her government has been on a strong push to promote Ontario trade on a subnational level.

Wynne has met with more than two dozen U.S. governors in an attempt to fight against a tide of U.S. protectionism and she is expected to update fellow premiers on her recent meeting with U.S. Secretary of Commerce Wilbur Ross.

The premiers will also hear from Anil Arora, the head of Statistics Canada, and Stephen Poloz, the governor of the Bank of Canada.

— With files from Sidhartha Banerjee in Montreal, Allison Jones in Toronto and Jennifer Graham in Regina.

— Follow @smithjoanna on Twitter

Joanna Smith, The Canadian Press