By Canadian Press

The Tuesday news briefing: An at-a-glance survey of some top stories

Oct 17, 2017 | 7:58 PM

Highlights from the news file for Tuesday, Oct. 17

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TENSIONS ERUPT AS NAFTA TALKS PUSHED TO 2018: The tensions at the NAFTA negotiating table have exploded into public view, as U.S. Trade Representative Robert Lighthizer announced NAFTA talks are being extended into 2018. The next negotiating round is being pushed back almost three weeks in a tacit admission that negotiators aren’t going to meet their original deadline for a deal by year-end. The proposals tabled at the latest round have revealed huge chasms in negotiating positions, on everything from dairy and autos to even the basic architecture of an agreement — and the tone of Tuesday’s news conference made clear the talks have turned downright frosty. Lighthizer said other countries are struggling to accept the reality that the U.S. wants to rebalance its trade agreements. He said other countries and industries must stop counting on easy export access to the U.S. market. Canadian Foreign Affairs Minister Chrystia Freeland sounded a marginally more diplomatic note. But she made it clear Canada believes others at the table are preventing progress from being made. Mexico’s Economic Secretary Ildefonso Guajardo acknowledged that the talks would be difficult. He said obstacles to progress remain and that all sides need to work towards constructive solutions.

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UNDER SIEGE, MORNEAU SAYS HE’S NOT LEAVING: The federal ethics watchdog confirmed Tuesday that she advised Finance Minister Bill Morneau there was no need to put his substantial assets in a blind trust. “I told him that it wasn’t required,” ethics commissioner Mary Dawson said, although it was ultimately up to Morneau to choose how to handle his affairs. Dawson’s confirmation came amid a continuing furor over Morneau’s personal financial arrangements, which have combined with the angry backlash to his small business tax reform proposals to leave his credibility in tatters. So politically damaged has Morneau become that he was even asked Tuesday if the escalating ethics controversy has him reconsidering his career in politics. “Absolutely not,” he said in French after an event in Montreal. Rumours have been circulating around Parliament Hill for months that the wealthy former businessman is disenchanted with politics after two years in the Finance hot seat. He’s unlikely to feel more positively about politics now that the focus has shifted to his personal fortune and ethics.

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LIBERALS TO CHANGE PASSIVE-INCOME PLAN: The federal government is moving to pare down its controversial tax proposal on passive income so that it will only affect three per cent of private corporations. Finance Minister Bill Morneau will be in New Brunswick on Wednesday to unveil changes to his passive investment proposal so that it only targets unfair tax advantages used by the wealthy, a senior government official told The Canadian Press. The official, speaking on condition of anonymity ahead of the announcement, said Morneau will also share updated estimates showing there’s between $200 billion and $300 billion in assets sitting in the passive investment accounts of just two per cent of all private corporations. The finance minister will also point out that the dollar figure has been growing by $16 billion per year as wealthy incorporated individuals reap what the official described as unlimited benefits from tax-advantaged savings accounts over and above RRSPs and TFSAs, the official said. The government wants to prevent all of this cash, which it contends is not being reinvested into the businesses or the economy, from piling up in these savings portfolios over generations, the official added.

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FEDS PROMISE TO GUARD JOBS AFTER CSERIES DEAL: The Trudeau government is promising to build in safeguards to make sure this week’s stunning deal between Bombardier and European rival Airbus doesn’t hurt Canada’s aerospace industry. Airbus wants to buy a majority stake in Bombardier’s CSeries commercial planes, whose future has been in question after U.S. officials proposed a hefty 300 per cent import duty on the jet program. Airbus and Bombardier hope that by working together, they can skirt the duties by building CSeries planes for U.S. customers in Alabama instead of outside the U.S. That has raised questions about whether the deal will hurt jobs in Quebec, where Bombardier is based, but Economic Development Minister Navdeep Bains hopes it will have the opposite effect. The deal still needs federal approval, and Bains promises the Trudeau government will include specific long-term promises from Airbus about keeping jobs in Canada before signing off. But he says he is cautiously optimistic such requirements won’t be needed and that the deal will actually create jobs in Canada by helping sell more CSeries planes around the world.

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BANKING REGULATOR PUTS OUT CHANGES TO MORTGAGE GUIDELINES: Canada’s banking regulator said Tuesday it is going ahead with a new stress test for home buyers who don’t need mortgage insurance, who will soon have to prove they can make their payments if interest rates rise. The move is expected to reduce the maximum amount buyers will be able to borrow to buy a home, even if they have a down payment of 20 per cent or more, starting Jan. 1. The Office of the Superintendent of Financial Institutions set out final guidelines on the changes to its residential mortgage underwriting guidelines Tuesday, the broad thrust of which are similar to what it had proposed in a draft consultation in July. The regulator tweaked the calculation of the qualifying rate for uninsured mortgages to address concerns that using the contractual rate plus two per cent could lead borrowers to seek out shorter terms. Would-be homebuyers will need to prove they can still service their uninsured mortgage at a qualifying rate of the greater of the contractual mortgage rate plus two percentage points or the five-year benchmark rate published by the Bank of Canada. An existing stress test requires those with insured mortgages to qualify at the Bank of Canada benchmark five-year mortgage rate.

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CANADIANS CHARGED IN MASSIVE U.S. OPIOID PROBE: Two men imprisoned in Canada are accused of playing a leadership role from behind bars in what American authorities are calling one of the world’s most prolific fentanyl-trafficking and money-laundering operations. The charges in the case, which come as North America grapples with an increasingly deadly opioid crisis, are said to the first in the United States against designated Chinese manufacturers of fentanyl and other opiates. The U.S. Justice Department says customers bought pure fentanyl and other dangerous drugs online directly from Chinese factories. According to the indictments, Jason Berry and Daniel Ceron ran the Canadian end of the alleged criminal enterprise while imprisoned in the Drummond Institution in Drummondville, Que. Further details about them were not immediately available, but they are accused of arranging shipments of fentanyl and other drugs from Canada to Florida and Portland Ore., in 2014, according to documents filed with an American court. The duo are among five Canadians facing charges, U.S. authorities said. Two Chinese nationals were indicted as overall leaders of the group that operated from January 2013 through August 2016.

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SURVIVORS CAN PRESERVE DOCUMENTS, BENNETT SAYS: Crown-Indigenous Relations Minister Carolyn Bennett says there is a proactive effort underway to tell residential school survivors that their records can still be preserved if they so choose. The move comes after the Supreme Court of Canada ruled earlier this month that records detailing the abuse of former students can eventually be destroyed. The court unanimously upheld a lower court ruling that said the sensitive material collected for independent assessments should be destroyed after 15 years. The federal government and the Truth and Reconciliation Commission argued survivor accounts are a critical part of Canadian history that should be preserved. Bennett, who expressed her disappointment following the court’s decision, tells The Canadian Press she fears researchers will not be able to explore central questions about the residential school legacy if the documents are in fact destroyed. She says it will be important to give assurances to survivors that their names will remain anonymous.

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INDIGENOUS NAFTA CHAPTER KEY, BELLEGARDE SAYS: The national chief of the Assembly of First Nations says an Indigenous chapter in NAFTA mustn’t be allowed to fall by the wayside, regardless of the challenges and tight timeline currently confronting negotiators. Perry Bellegarde, who is also part of an advisory committee on the talks, tells The Canadian Press he wants officials to understand the importance of including the interests of Indigenous Peoples, noting they were left out of the original NAFTA negotiations in the 1990s. Bellegarde spoke Tuesday at the National Congress of American Indians in Wisconsin to build support for the chapter among U.S. tribes. Foreign Affairs Minister Chrystia Freeland has called for “progressive” elements to be included in a renegotiated NAFTA, such as stronger labour standards, tougher environmental protections and chapters on gender and Indigenous rights. Ottawa has been exploring how provisions in the trade agreement can support Indigenous economic development while it also considers how to make the pact compliant with the UN Declaration on the Rights of Indigenous Peoples.

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TSB PROBING COLLISION BETWEEN DRONE AND PLANE IN QUEBEC: The Transportation Safety Board of Canada is investigating last week’s collision between a drone and a commercial aircraft near Quebec City. The Beech King Air A100 with two crew members and six passengers was approaching Quebec City airport last Thursday when it struck the drone at an altitude of 1,500 feet. Aircraft rescue and firefighting services were deployed and the aircraft safely landed. No one was injured. The federal agency says it is the first time it has investigated such an incident. Officials say gathering information has been complicated by the fact the drone has not been found and that its owner has not yet been identified. “Given this is a first — and I believe not just in Canada because as far as I know this hasn’t happened anywhere in the world — we’re trying to see what can be done to improve transport safety,” TSB investigator Isabelle Langevin said in an interview. “Because drones are here to stay.” Transport Canada has previously issued a series of interim safety measures for drone operators as it continues to work to regulate the industry. Under these rules, it is illegal to fly a recreational drone within 5.5 kilometres from an airport and 1.8 kilometres from a heliport without special permission.

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TRIBUTES POUR IN FOR ‘TRAILER PARK BOYS’ ACTOR JOHN DUNSWORTH: As foul-mouthed alcoholic supervisor Jim Lahey on the comically crass mockumentary series “Trailer Park Boys,” John Dunsworth was a slurring, stumbling mess with a drink in hand and a bitter attitude. Behind the scenes, he couldn’t have been more different, say those who knew him. Word of the beloved Halifax actor’s death Monday night prompted a flood of celebrity tributes that painted a picture of a vibrant, intelligent actor who devoted himself to the craft, served as a mentor and lived an alcohol-free lifestyle. “For a guy who doesn’t drink a drop, he was the most affable drunk in the country,” Lucy DeCoutere, who co-starred with Dunsworth on the “Trailer Park Boys,” said Tuesday in a phone interview from Italy. “He wasn’t a drinker but I guess because he could embody the inhibitions that come from being intoxicated, he was able to add the nuance and subtlety that comes from being a raging booze hound.” Dunsworth died “peacefully after a short and unexpected illness,” according to a Twitter post by his daughter Sarah, who was also on “Trailer Park Boys.” He was 71. Many stars took to social media to express condolences, including members of the “Trailer Park Boys,” late-night talk-show host Jimmy Kimmel, Canadian rockers Rush and actor Tom Arnold.

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The Canadian Press