UK Cabinet to meet after Britain, EU reach draft Brexit deal

LONDON — Negotiators from Britain and the European Union have struck a proposed divorce deal that will be presented to politicians on both sides for approval, officials in London and Brussels said Tuesday.

After a year and a half of stalled talks, false starts and setbacks, negotiators agreed on proposals to resolve the main outstanding issue: the Irish border.

British Prime Minister Theresa May’s office said the Cabinet would hold a special meeting Wednesday to consider the proposal. Its support isn’t guaranteed: May is under pressure from pro-Brexit ministers not to make further concessions to the EU.

Ambassadors from the 27 other EU countries are also due to hold a meeting in Brussels on Wednesday.

May told the Cabinet earlier Tuesday that “a small number” of issues remain to be resolved in divorce negotiations with the European Union, while her deputy, David Lidington, said the two sides are “almost within touching distance” of a Brexit deal.

Britain wants to seal a deal this fall, so that Parliament has time to vote on it before the U.K. leaves the bloc on March 29. The European Parliament also has to approve any agreement.

Negotiators have been meeting late into the night in Brussels in a bid to close the remaining gaps.

The main obstacle has long been how to ensure there are no customs posts or other checks along the border between the U.K.’s Northern Ireland and EU member Ireland after Brexit.

Irish national broadcaster RTE said the draft agreement involves a common customs arrangement for the U.K. and the EU, to eliminate the need for border checks.

But May faces pressure from pro-Brexit Cabinet members not to agree to an arrangement that binds Britain to EU trade rules indefinitely.

May also faces growing opposition from pro-EU lawmakers, who say her proposed Brexit deal is worse than the status quo and the British public should get a new vote on whether to leave or to stay.

If there is no agreement soon, U.K. businesses will have to start implementing contingency plans for a “no-deal” Brexit — steps that could include cutting jobs, stockpiling goods and relocating production and services outside Britain.

Even with such measures in place, the British government says leaving the EU without a deal could cause major economic disruption, with gridlock at ports and disruption to supplies of foods, goods and medicines.

On Tuesday, the European Commission published a sheaf of notices outlining changes in a host of areas in the event of a no-deal Brexit. They point to major disruption for people and businesses: U.K. truckers’ licenses won’t be valid in the EU, British airlines will no longer enjoy traffic rights, and even British mineral water will cease to be recognized as such by the EU.

The EU said Tuesday it was proposing visa-free travel for U.K. citizens on short trips, even if there is no deal — but only if Britain reciprocates.

“We need to prepare for all options,” EU Commission Vice-President Frans Timmermans said. On a deal, he said: “We are not there yet.”

Meanwhile, official figures suggest Brexit is already having an impact on the British workforce.

The Office for National Statistics said the number of EU citizens working in the country — 2.25 million— was down 132,000 in the three months to September from the year before. That’s the largest annual fall since comparable records began in 1997.

Most of the fall is due to fewer workers from eight eastern European countries that joined the EU in 2004.

Jonathan Portes, professor of economics at King’s College London, said the prospect of Brexit “has clearly made the U.K. a much less attractive place for Europeans to live and work.”

___

Raf Casert in Brussels 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.