May gets rebellion reprieve, but faces warning from allies

LONDON — British Prime Minister Theresa May got a reprieve in one of her Brexit battles Tuesday as party rebels said they did not yet have the strength for a leadership challenge. But she faced a new headache as parliamentary allies warned they could remove support from May’s minority government if she does not alter her divorce deal with the European Union.

Northern Ireland’s Democratic Unionist Party struck a deal last year to back May’s Conservatives on major legislation. But the Protestant, pro-U.K. party opposes the Brexit deal’s plans for keeping the border between Northern Ireland and EU member Ireland open after Brexit, saying it weakens the ties binding the U.K. by creating separate trade rules for Northern Ireland.

In a warning to May, DUP lawmakers abstained or opposed the government during several votes on finance bill late Monday.

DUP lawmaker Sammy Wilson said the votes were “designed to send a political message to the government: Look, we’ve got an agreement with you but you’ve got to keep your side of the bargain.”

May defended her deal in an article for Tuesday’s Belfast Telegraph, saying it “puts Northern Ireland in a fantastic position for the future.”

She said businesses would benefit because Northern Ireland would “be a gateway to both the EU market and the rest of the U.K.’s market.”

In better news for the beleaguered British leader, a leading pro-Brexit lawmaker acknowledged that the rebels haven’t mustered the numbers for a leadership challenge.

Jacob Rees-Mogg is one of a group of Conservative legislators who have written letters calling for a no-confidence vote in the prime minister. They say the draft divorce deal would leave Britain tied to the bloc’s rules without any say in making them.

The group has previously said it was confident of getting the 48 letters — from 15 per cent of Conservative lawmakers — needed to spark a leadership challenge.

“Patience is a virtue, virtue is a grace,” Rees-Mogg said Tuesday. “We shall see whether letters come in due time.”

The draft agreement reached last week triggered an avalanche of criticism in Britain and left May fighting to keep her job even as British and EU negotiators raced to firm up a final deal before a summit on Sunday where EU leaders hope to rubber-stamp it.

The 585-page, legally binding withdrawal agreement is as good as complete, but Britain and the EU still need to flesh out a far less detailed declaration on their future relations.

May’s office said she would meet European Commission President Jean-Claude Juncker in Brussels on Wednesday as part of work to finalize the declaration.

EU leaders have largely welcome the deal, but Spain has expressed concerns, saying the wording leaves unclear how Gibraltar, the British territory at the southern tip of the Iberian Peninsula, would be dealt with.

Spanish Prime Minister Pedro Sanchez said Tuesday that his country would vote against the divorce agreement if Gibraltar’s future isn’t considered a bilateral issue between Madrid and London.

If the EU approves the deal it needs to be passed by the European and British Parliaments — where the parliamentary arithmetic looks daunting for May.

Rejection of the deal would spark a political crisis, with Brexit day looming.

___

Aritz Parra in Madrid contributed to this story.

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.