Britain, EU decide to take some time in getting Brexit right

BRUSSELS — Leaders from the European Union and Britain shrugged off a weekend negotiating debacle and previous deadlines Wednesday, giving themselves several more weeks to clinch a friendly divorce deal ahead of their separation.

After the EU insisted for months that the Wednesday summit was a key meeting to get a deal, its Brexit negotiator Michel Barnier said “we need much time, much more time and we continue to work in the next weeks” with his British counterpart.

British Prime Minister Theresa May also spoke about “working intensively over the next days and weeks” to achieve agreement that avoids a no-deal departure from the bloc on March 29 that could create chaos at the borders and in the economy. A deal must be sealed soon so parliaments have time to give their verdict on it.

Underscoring the newfound sense of non-urgency, Prime Minister Sebastian Kurz of Austria, which holds the rotating EU presidency, even spoke of the “coming weeks and months” to get a deal and sought to impose a soothing calm.

“There’s no need to dramatize matters. It’s always the case with negotiations, that in the end there are challenges,” he said.

May was preparing to address other EU leaders one day after European Council President Donald Tusk implored her to present new ideas for resolving the tricky problem of how to keep the land border between the Republic of Ireland and the U.K.’s Northern Ireland friction-free once Britain no longer is an EU member.

Tusk advised May that “creative” thinking from Britain was required to avoid a hard border on the island of Ireland, the issue that has brought divorce negotiations to a standstill. EU leaders dismissed May’s most recent proposal as unworkable.

But when the prime minister was asked in the House of Commons earlier Wednesday whether her government’s blueprint for an amicable divorce was dead, May replied: “The answer is no.”

The summit in Brussels had long been seen as the “moment of truth” in the two-year Brexit process. But after urgent talks on the Irish border ended Sunday without producing a breakthrough, Wednesday’s gathering looked more like a therapeutic bonding session than an occasion to celebrate.

The timeline for a deal has slipped into November, or even December, when another EU summit is scheduled.

“Today there will be no breakthrough,” said Lithuanian President Dalia Grybauskaite. She said 2 1/2 years after Britain’s Brexit referendum, the country had still not explained clearly how it wants to leave the EU.

“Today, we do not know what they want,” she said. “They do not know themselves what they really want. That is the problem.”

At present the two sides are proposing that Britain remains inside the EU single market and is still bound by its rules from the time it leaves the bloc in March until December 2020, to give time for new trade relations to be set up.

Many suspect that will not be enough time, which has led the EU to demand a “backstop” to ensure there are no customs posts or other controls along the currently invisible border between Northern Ireland and Ireland.

And there is talk that a transition period for the U.K. to adapt to its new status as a third country could be extended by a year.

Britain says it has not asked for an extension, but May has not yet come up with proposals for unblocking the Irish border logjam. She is hemmed in by pro-Brexit members of her Conservative Party, who oppose any more compromises with the bloc, and by her parliamentary allies in Northern Ireland’s Democratic Unionist Party, who insist a solution can’t include customs checks between Northern Ireland and the rest of the U.K.

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Geir Moulson in Berlin contributed to this story.

Raf Casert, Lorne Cook And Jill Lawless, The Associated Press

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Taxpayers Federation calling on BC Government to scrap failed Carbon Tax

Published on January 16, 2025

Todayville

From the Canadian Taxpayers Federation

By Carson Binda

BC Government promised carbon tax would reduce CO2 by 33%. It has done nothing.

The Canadian Taxpayers Federation is calling on the British Columbia government to scrap the carbon tax as new data shows the province’s carbon emissions have continued to rise, despite the oldest carbon tax in the country.

“The carbon tax isn’t reducing carbon emissions like the politicians promised,” said Carson Binda, B.C. Director for the Canadian Taxpayers Federation. “Premier David Eby needs to axe the tax now to save British Columbians money.”

Emissions data from the provincial government shows that British Columbia’s emissions have risen since the introduction of a carbon tax.

Total emissions in 2007, the last year without a provincial carbon tax, stood at 65.5 MtCO2e, while 2022 emissions data shows an increase to 65.6 MtCO2e.

When the carbon tax was introduced, the B.C. government pledged that it would reduce greenhouse gas emissions by 33 per cent.

The Eby government plans to increase the B.C. carbon tax again on April 1, 2025. After that increase, the carbon tax will add 21 cents to the cost of a litre of natural gas, 25 cents per litre of diesel and 18 cents per cubic meter of natural gas.

“The carbon tax has cost British Columbians a lot of money, but it hasn’t helped the environment as promised,” Binda said. “Eby has a simple choice: scrap the carbon tax before April 1, or force British Columbians to pay even more to heat our homes and drive to work.”

If a family fills up the minivan once per week for a year, the carbon tax will cost them $728. The carbon tax on natural gas will add $435 to the average family’s home heating bills in the 12 months after the April 1 carbon tax hike.

Other provinces, like Saskatchewan, have unilaterally stopped collecting the carbon tax on essentials like home heating and have not faced consequences from Ottawa.

“British Columbians need real relief from the costs of the provincial carbon tax,” Binda said. “Eby needs to stop waiting for permission from the leaderless federal government and scrap the tax on British Columbians.”

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The problem with deficits and debt

Published on January 13, 2025

Todayville

From the Fraser Institute

By Tegan Hill and Jake Fuss

This fiscal year (2024/25), the federal government and eight out of 10 provinces project a budget deficit, meaning they’re spending more than collecting in revenues. Unfortunately, this trend isn’t new. Many Canadian governments—including the federal government—have routinely ran deficits over the last decade.

But why should Canadians care? If you listen to some politicians (and even some economists), they say deficits—and the debt they produce—are no big deal. But in reality, the consequences of government debt are real and land squarely on everyday Canadians.

Budget deficits, which occur when the government spends more than it collects in revenue over the fiscal year, fuel debt accumulation. For example, since 2015, the federal government’s large and persistent deficits have more than doubled total federal debt, which will reach a projected $2.2 trillion this fiscal year. That has real world consequences. Here are a few of them:

Diverted Program Spending: Just as Canadians must pay interest on their own mortgages or car loans, taxpayers must pay interest on government debt. Each dollar spent paying interest is a dollar diverted from public programs such as health care and education, or potential tax relief. This fiscal year, federal debt interest costs will reach $53.7 billion or $1,301 per Canadian. And that number doesn’t include provincial government debt interest, which varies by province. In Ontario, for example, debt interest costs are projected to be $12.7 billion or $789 per Ontarian.

Higher Taxes in the Future: When governments run deficits, they’re borrowing to pay for today’s spending. But eventually someone (i.e. future generations of Canadians) must pay for this borrowing in the form of higher taxes. For example, if you’re a 16-year-old Canadian in 2025, you’ll pay an estimated $29,663 over your lifetime in additional personal income taxes (that you would otherwise not pay) due to Canada’s ballooning federal debt. By comparison, a 65-year-old will pay an estimated $2,433. Younger Canadians clearly bear a disproportionately large share of the government debt being accumulated currently.

Risks of rising interest rates: When governments run deficits, they increase demand for borrowing. In other words, governments compete with individuals, families and businesses for the savings available for borrowing. In response, interest rates rise, and subsequently, so does the cost of servicing government debt. Of course, the private sector also must pay these higher interest rates, which can reduce the level of private investment in the economy. In other words, private investment that would have occurred no longer does because of higher interest rates, which reduces overall economic growth—the foundation for job-creation and prosperity. Not surprisingly, as government debt has increased, business investment has declined—specifically, business investment per worker fell from $18,363 in 2014 to $14,687 in 2021 (inflation-adjusted).

Risk of Inflation: When governments increase spending, particularly with borrowed money, they add more money to the economy, which can fuel inflation. According to a 2023 report from Scotiabank, government spending contributed significantly to higher interest rates in Canada, accounting for an estimated 42 per cent of the increase in the Bank of Canada’s rate since the first quarter of 2022. As a result, many Canadians have seen the costs of their borrowing—mortgages, car loans, lines of credit—soar in recent years.

Recession Risks: The accumulation of deficits and debt, which do not enhance productivity in the economy, weaken the government’s ability to deal with future challenges including economic downturns because the government has less fiscal capacity available to take on more debt. That’s because during a recession, government spending automatically increases and government revenues decrease, even before policymakers react with any specific measures. For example, as unemployment rises, employment insurance (EI) payments automatically increase, while revenues for EI decrease. Therefore, when a downturn or recession hits, and the government wants to spend even more money beyond these automatic programs, it must go further into debt.

Government debt comes with major consequences for Canadians. To alleviate the pain of government debt on Canadians, our policymakers should work to balance their budgets in 2025.