May’s govt faces no-confidence vote after huge Brexit defeat

LONDON — British Prime Minister Theresa May faced a no-confidence vote Wednesday, a day after Parliament rejected her Brexit deal by a historic margin, unleashing a power struggle over control of Britain’s planned exit from the European Union.

May was battling to save her job after staking her political reputation on winning support for the divorce agreement she negotiated with the EU over the last two years. Although the Brexit defeat was widely expected, the scale of the rout — 432 to 202 — was devastating for May’s leadership.

Immediately after the vote, opposition leader Jeremy Corbyn of the Labour Party issued a no-confidence motion, saying it would give Parliament a chance to give its verdict “on the sheer incompetence of this government.”

Still, most analysts predict May will survive because lawmakers from her Conservative Party are unlikely to vote against her, and the Democratic Unionist Party in Northern Ireland, which supports the government, has said it will continue to back the prime minister. If her government were to lose, it would have 14 days to overturn the result or face an early national election within weeks.

After the biggest defeat for any British government in well over a century, May promised to consult with senior lawmakers on future moves, but gave little indication of what she plans to do next. Parliament has given the government until Monday to come up with a new plan for how Britain should leave the EU.

“The House has spoken and the government will listen,” May said after Tuesday’s vote, which leaves her Brexit plan on life support just 10 weeks before Britain is due to leave the bloc on March 29.

May faces a stark choice: Steer the country toward an abrupt break from the EU without a deal on their future relations, or try to nudge it toward a softer departure. Meanwhile, British lawmakers from all parties are trying to wrest control of the Brexit process from a paralyzed Conservative government, so that lawmakers can direct planning for Britain’s departure from the EU.

But with no clear majority in Parliament for any single alternative on Brexit, there’s a growing chance that Britain may seek to postpone its departure date while politicians work on a new plan — or even hand the decision back to voters in a new referendum on Britain’s EU membership.

Political analyst Anand Menon, from UK in a Changing Europe, said history is being made week after week in the Brexit saga, with the government being held in contempt even as May soldiers on.

“She seems content with bringing something back to Parliament to vote on again,” Menon said. “The thing about Theresa May is that nothing seems to faze her. She just keeps on going.”

European leaders are now preparing for the worst — even though German Chancellor Angela Merkel said there was still time for further Brexit talks. She told reporters in Berlin that “we are now waiting to see what the British prime minister proposes.”

But her measured remarks contrasted with the blunt message from French President Emmanuel Macron, who told Britons to “figure it out yourselves.” He said Britain needs to get realistic about what was possible.

“Good luck to the representatives of the nation who have to implement something that doesn’t exist,” Macron said.

EU Brexit negotiator Michel Barnier said the bloc is stepping up preparations for a chaotic “no-deal” departure by Britain after Parliament’s actions left the bloc “fearing more than ever that there is a risk” of a cliff-edge departure.

Economists warn that an abrupt break with the EU could batter the British economy and bring chaotic scenes at borders, ports and airports. Business groups have expressed wide alarm at the prospect of a no-deal exit.

“Every business will feel ‘no-deal’ is hurtling closer,” said Carolyn Fairbairn, director-general of the Confederation of British Industry. “A new plan is needed immediately.”

But investors have so far shrugged off the rejection of May’s deal. The pound was up 0.1 per cent at $1.2869 in early morning trading in London, and the FTSE 100 index of leading British shares was down 0.1 per cent at 6,888.

While the uncertainty surrounding Brexit remains elevated, many investors think Tuesday night’s vote makes it less likely Britain will crash out of the bloc with no deal.

James Smith, an economist at ING, says the “calm market response” suggests investors think at the very least that the government will end up having to seek an extension to the Brexit timetable.

May, who postponed a Brexit vote in December to avoid certain defeat, had implored lawmakers to back her deal and deliver on voters’ decision in 2016 to leave the EU.

But the deal was doomed by deep opposition from both sides of the divide over the U.K.’s place in Europe. Pro-Brexit lawmakers say the deal will leave Britain bound indefinitely to EU rules, while pro-EU politicians favour an even closer economic relationship with the bloc.

The most contentious section of the deal was an insurance policy known as the “backstop” designed to prevent the reintroduction of border controls between the U.K.’s Northern Ireland and the Republic of Ireland, an EU member state. Assurances from EU leaders that the backstop is intended as a temporary measure of last resort failed to win over many British lawmakers.

Irish leader Leo Varadkar told reporters Wednesday it was now up to the British government to come up with alternatives to avoid departing from the EU without an agreement.

Varadkar said if May’s government is willing to shift some of its so-called “red lines” in negotiations — such as exiting a customs union and leaving the single EU market — then the position of EU negotiators would also change.

“The onus is on Westminster” to come up with solutions, Varadkar said.

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Raf Casert in Strasbourg, France, and Pan Pylas in London, contributed to this report.

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Follow AP’s full coverage of Brexit at: https://www.apnews.com/Brexit

Danica Kirka 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.