Freeland made the announcement earlier today and released the letter of resignation she had sent to Prime Minister Justin Trudeau.

“On Friday, you told me you no longer want me to serve as your Finance Minister and you offered me another position in the Cabinet,” she wrote. “Upon reflection I have concluded that the only honest and viable path is for me to resign from the Cabinet.”

Freeland goes on to say that she and the Prime Minister have been “at odds about the best path forward for Canada” over the past few weeks, and cites the incoming U.S. President, Donald Trump’s, threat of a 25 per cent tariff as a “grave challenge.”

“We need to take that threat extremely seriously. That means keeping our fiscal powder dry today, so we have the reserves we may need for a coming tariff war,” Freeland wrote. “That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment.”

In addition, Freeland wrote about “pushing back against ‘America First’ economic nationalism,” and working together with Canadian premiers to build a “true Team Canada response.”

Canada’s provincial and territorial leaders met with Trudeau this past weekend in Mississauga. The looming threat of U.S. tariffs was a key topic of discussion.

“I will always be grateful for the chance to have served in government, and I will always be proud of our government’s work for Canada and Canadians,” Freeland concluded.

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The federal finance department on Nov. 16 posted its legislative and regulatory proposals for changes to the UHT online and has teed up a consultation period for those proposals. Canadians and other stakeholders and organizations are asked to submit comment via email by Jan. 3, 2024.

The UHT — an annual, one per cent tax on ownership of vacant or “underused” housing in Canada which took effect Jan. 1 last year — has led a clutch of national farm groups to call on Ottawa for a blanket exemption for farmers from having to file a UHT return.

Canadian citizens and permanent residents are exempt from the UHT, but many corporations are not. That means a farm operating via a Canadian corporation or partnership with a residential property is required to file a UHT return each year, even if other exemptions mean no UHT will be owed.

Furthermore, the farm groups said, while some forms of farm worker housing, such as a bunkhouse or mobile home, are exempt, a detached house used for worker housing is not. That rule, they said, amounts to a penalty on higher-quality housing options for farm workers.

Freeland’s proposal would see certain types of corporations and partnerships added to the list of “excluded owners” for the purpose of UHT reporting — which means those entities “would no longer have UHT reporting obligations.”

The proposal would exclude:

• a “specified Canadian corporation” — that is, a Canadian corporation in which foreign individuals/corporations hold less than 10 per cent of votes or equity;
• any partner of a “specified Canadian partnership” — generally, a partnership whose partners are exclusively “Canadian”; and/or
• any trustee of a “specified Canadian trust” — generally, a trust whose beneficiaries are exclusively “Canadian.”

Freeland’s proposal would also set up a new UHT exemption for “residential properties held as a place of residence or lodging for employees.”

That new exemption would cover residential properties anywhere in Canada, except those in a census metropolitan area or “a census agglomeration having 30,000 or more residents.”

Those changes are expected to apply for the 2023 calendar year and subsequent years, the government said.

Not retroactive

Federal Revenue Minister Marie-Claude Bibeau tweeted Wednesday on X that the fall economic statement “addresses major irritants” of the UHT, particularly by broadening its definition of “excluded owner.”

That move will “eliminate the need to file (UHT) returns for many Canadian businesses, such as agricultural businesses,” said Bibeau, a former federal agriculture minister.

However, she noted in response to other X users’ replies on Wednesday, the changes will not be retroactive to the 2022 tax year.

UHT filers have been granted two “transitional” extensions to file for the 2022 tax year without penalty. The first, announced in late March, extended the deadline to Oct. 31; then, on Oct. 31, another extension was granted, giving UHT filers until April 30, 2024 to file their 2022 UHT returns.

However, the government said, UHT returns for the 2023 calendar year will also need to be filed by the normal deadline of April 30, 2024, to avoid penalties and interest.

That said, Freeland’s proposed changes to UHT rules also call for reduced penalties for those who fail to file UHT returns by the annual deadline — and would make those reductions retroactive to the 2022 tax year.

Those penalties — now $5,000 per failure for individuals, and $10,000 per failure for corporations — would be cut to $1,000 and $2,000 respectively. — Glacier FarmMedia Network

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Freeland’s 2023 federal budget, released Tuesday, includes $13 million in 2023-24 for Agriculture and Agri-Food Canada to temporarily increase the interest-free limit for loans under its Advance Payments Program (APP) to $350,000 for the 2023 program year.

The interest-free portion of an APP loan was previously capped at $100,000 but that level was temporarily raised last summer to $250,000 for the 2022 and 2023 program years.

The APP provides farmers with cash advances of up to $1 million, based on up to 50 per cent of the anticipated market value of a farm’s eligible production, whether it’s still to be produced or is already stored.

“Farm production costs have increased in Canada and around the world, including as a result Russia’s illegal invasion of Ukraine and global supply chain disruptions,” Tuesday’s budget documents said. “It is important that Canada’s agricultural producers have access to the cash flow they need to cover these costs until they sell their products.”

On that note, the budget also committed the feds to “consult with provincial and territorial counterparts to explore ways to extend help to small agricultural producers who demonstrate urgent financial need.”

Fertilizer funding

On the matter of input costs, the budget also notes Russia’s invasion of Ukraine “has resulted in higher prices for nitrogen fertilizers, which has had a notable impact on eastern Canadian farmers who rely heavily on imported fertilizer.”

To that end, the budget proposes a $34.1 million addition to the federal On-Farm Climate Action Fund over three years, specifically “to support adoption of nitrogen management practices by eastern Canadian farmers, that will help optimize the use and reduce the need for fertilizer.”

That $34.1 million figure roughly coincides with a recent estimate of the tariffs collected so far on imports of Russian fertilizer into Eastern Canada. Several grower groups in that region have called for an end to that tariff and for farmers to be directly reimbursed for tariffs already paid.

Dairy development

Among other longer-term investments, the budget proposes $333 million over 10 years to set up what it calls the Dairy Innovation and Investment Fund, starting in 2023-24, to back development of new dairy products based on solids non-fat (SNF), a dairy processing byproduct.

The dairy sector is up against “a growing surplus” of SNF, for which the limited processing capacity in Canada “results in lost opportunities for dairy processors and farmers,” the budget said.

The new fund would support “investments in research and development of new products based on SNF, market development for these products, and processing capacity for SNF-based products more broadly.”

Inoculation inventory

The budget also pledges $57.5 million over five years starting in 2023-24, and $5.6 million ongoing, for the Canadian Food Inspection Agency to set up a foot-and-mouth disease (FMD) vaccine bank for Canada and develop FMD response plans.

Recent outbreaks of FMD in livestock in Asia and Africa “have increased the risk of global spread,” the budget said, and if an FMD outbreak were to occur in Canada it “would cut off exports for all livestock sectors, with major economic implications.”

The impact of a potential FMD outbreak “would be significantly reduced with the early vaccination of livestock,” the budget said. For the vaccine bank, the feds plan to “seek a cost-sharing arrangement with provinces and territories.”

The Canadian Cattle Association on Tuesday hailed the vaccine bank announcement, describing a vaccine bank as a “critical” investment which “helps provide necessary insurance to protect Canada’s export markets.” Several livestock groups have called for such an investment in recent years.

“While we hope this vaccine bank is never needed, we are grateful for today’s investment and its establishment,” CCA president Nathan Phinney said in a separate release. “We appreciate the government listening to our concerns and understanding the critical need to put in place emergency preparedness plans to control the spread of the disease and protect our export markets for Canadian beef.”

Risk management

CCA also hailed a separate budget line item pledging $184 million over three years to boost the Species At Risk Act. That funding goes to the federal environment, parks, fisheries and natural resources departments “to continue monitoring, protecting and promoting the recovery of species at risk to help restore their populations.”

“We will be engaging with the government of Canada to ensure beef producers are at the table as key stewards of lands where species at risk live,” the CCA said.

On that matter, noting cattle producers’ stewardship work on endangered native grasslands, Phinney said the CCA calls on Ottawa “to include support for protecting Canada’s grasslands in the future.”

Liquor and cannabis

Among federal sin taxes, the feds propose to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at two per cent, for one year only, as of April 1. Alcohol excise duties are usually automatically indexed to total Consumer Price Index (CPI) inflation at the beginning of each fiscal year.

The feds also announced plans to allow all licensed Canadian cannabis producers to remit excise duties on a quarterly basis rather than a monthly basis, also starting April 1. That move expands on a measure put in place for “certain smaller” cannabis producers in the 2022 budget.

On that note, the budget said, “while significant progress has been made in eliminating criminal activity in the cannabis market, licensed cannabis producers are currently experiencing financial difficulties as they help to build a stable, legal cannabis industry in Canada.” — Glacier FarmMedia Network

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Finance Minister Chrystia Freeland on Thursday laid out a federal budget with about $452.3 billion in total expenses against $408.4 billion in expected revenues from taxes and other sources, for a projected total 2022-23 deficit (after net actuarial losses) of $52.8 billion, down from $113.8 billion in 2021-22.

Canadians, she said, “know that fighting COVID and the COVID recession came at a high price” but “our ability to spend is not infinite. The time for extraordinary COVID support is over.”

Freeland’s budget projects increases in both federal revenue and expenses over the following four fiscal years, gradually narrowing its projected annual budget deficit to $8.4 billion by 2026-27.

This year, with federal-provincial discussions still underway on the Next Policy Framework — the new five-year ag policy funding agreement due to replace the current Canadian Agricultural Partnership in April 2023 — new ag-specific programming in the 2022 budget instead comes mainly from the announcements made last week.

With that new framework deal still pending, “we don’t have any indication of commitments to increase funding for most of our essential programming,” Ian Boxall, president of the Agricultural Producers Association of Saskatchewan, said Thursday in a separate release. “In other areas, we have to wait and see if there is going to be more progress on agricultural priorities.”

The program pledges from last week’s Emissions Reduction Plan affirmed in Thursday’s budget include:

• $329.4 million over six years to triple the size of the Agricultural Clean Technology Program;
• $469.5 million over six years to expand the Agricultural Climate Solutions program’s On-Farm Climate Action Fund;
• $150 million for a “resilient agricultural landscape” program, to support carbon sequestration and adaptation and to address other “environmental co-benefits,” with details still to be discussed with provinces and territories; and
• $100 million over six years to federal granting councils to support post-secondary research in developing technologies and crop varieties that “will allow for net-zero emission agriculture.”

Potato probe

One ag sector, the Prince Edward Island potato industry, can expect a bit of indirect additional funding in 2022-23, over and above previous support programs announced during the recent closure of the U.S. border to P.E.I. table stock potatoes.

The budget calls for $16 million over two years for the Atlantic Canada Opportunities Agency toward “long-term investments and (to) assist in stabilizing the Prince Edward Island potato sector and supply chain.”

It also adds $12 million over two years for the Canadian Food Inspection Agency to “accelerate the investigation into the latest detection of potato wart (in P.E.I.) to help prevent its spread and to allow for full trade to resume with the United States as soon as possible” — a reference to the continuing U.S. ban on P.E.I. seed potatoes.

CUSMA compensation

Meanwhile, supply-managed producers in Canada’s dairy, poultry and egg sectors who have been waiting on details of compensation for “incremental” market access concessions made under the Canada-U.S.-Mexico Agreement (CUSMA) — the successor deal to NAFTA — will have to wait longer.

Those sectors in recent years have received federal compensation for concessions granted under the Canada-E.U. (CETA) and Trans-Pacific Partnership (CPTPP) trade deals.

Thursday’s budget, however, pledges instead to announce “full and fair compensation for the supply managed sector related to the new NAFTA” in the government’s 2022 fall economic and fiscal update.

Dairy Farmers of Canada, in a separate statement Thursday, thanked the government for the “clarity” it provided by giving a timetable for a compensation announcement. However, DFC added, “in tabling Budget 2022 without details, the government missed an opportunity to provide predictability to the industry.”

‘Surplus stripping’

Thursday’s budget also pledges a new round of consultations on federal income tax law to address changes made by Bill C-208, a 2021 private member’s bill from Manitoba MP Larry Maguire meant to standardize the tax treatment for sales of farms and other small businesses.

C-208, which took effect with the new tax year on Jan. 1, 2022, was passed in response to a rule in the Income Tax Act meant to prevent people from converting dividends into lower-taxed capital gains using certain “self-dealing transactions” referred to as “surplus stripping.”

C-208, according to Thursday’s budget, set up an exception to that rule “in order to facilitate intergenerational business transfers. However, the exception may unintentionally permit surplus stripping without requiring that a genuine intergenerational business transfer takes place.”

The consultations announced Thursday are to look at how existing rules could be strengthened to “protect the integrity of the tax system while continuing to facilitate genuine intergenerational business transfers.”

The government said it’s “committed to bringing forward legislation as necessary to address this specific issue,” noting such legislation could be included in a bill to be tabled in the fall after consultations wrap up.

Supply chain support

Among other new spending expected to benefit the broader ag sector, Freeland’s budget calls for the creation of a new Canada Growth Fund, to be initially capitalized at $15 billion over the next five years, to help attract private investment toward several policy goals, including “the restructuring of critical supply chains in areas important to Canada’s future prosperity.”

For Transport Canada, the budget also calls for $450 million over five years to support supply chain projects through the National Trade Corridors Fund, “which will help ease the movement of goods across Canada’s transportation networks.” That fund, in place since 2017, is due to be renamed “to reflect the government’s focus on supply chains.”

The transport department will also get $136.3 million over five years to develop “industry-driven solutions to use data to make our supply chains more efficient” and $16.9 million over five years “to continue making Canada’s supply chains more competitive by cutting needless red tape, including working to ensure that regulations across various modes of cargo transportation (e.g., ship, rail) work effectively together.”

“The budget does have some interesting initiatives and we’ll wait to see how they apply to the agricultural sector,” APAS’ Boxall said Thursday. “One of those initiatives is infrastructure funding for road and rail to the Port of Vancouver, and there is also funding to improve supply chains for essential industries, and we need governments to recognize our needs for better access and pricing for inputs.”

Foreign labour

The budget also lays out funding for several measures meant to help improve protections for temporary foreign workers (TFWs) coming to Canada to work in agriculture and other sectors. Those include:

• $48.2 million over three years to set up a new foreign labour program specifically for agriculture and fish processing, “tailored to the unique needs of these employers and workers;”
• $29.3 million over three years to set up a “Trusted Employer” model that reduces red tape for repeat TFW employers who “meet the highest standards for working and living conditions, protections, and wages in high-demand fields;”
• $14.6 million in 2022-23 for “improvements to the quality of employer inspections and (to) hold employers accountable for the treatment of workers;” and
• $64.6 million over three years for increased capacity to “process employer applications within established service standards.”

On the plan for a new foreign labour program targeting ag processing, Canadian Cattlemen’s Association president Reg Schellenberg said Thursday in a separate release that “one of the largest factors limiting our ability to grow Canada’s beef industry and our contributions to Canada’s economy is access to labour… We have long been advocates to create agriculture-specific solutions to address challenges related to labour and we are pleased to see this continue to advance.”

Also, among other emission reduction programs seeing a funding boost, the existing federal Nature Smart Climate Solutions Fund — which supports projects that “conserve, restore and enhance wetlands, peatlands and grasslands to capture and store carbon” — will now get $780 million over five years, starting in 2022, up from the $631 million over 10 years announced in 2021. — Glacier FarmMedia Network

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However, while Bill C-208 is now in federal tax law, further amendments are en route to plug legal loopholes the bill may have opened.

Finance Minister Chrystia Freeland on Monday issued a statement that “seeks to bring clarity” in the wake of a June 30 finance department statement, which in turn had followed passage through Parliament — and, on June 29, royal assent — for C-208.

C-208, a private member’s bill spearheaded by western Manitoba Conservative MP Larry Maguire, was meant to amend the Income Tax Act to exclude sales of farms and other small businesses to adult children or grandchildren from current federal anti-avoidance rules.

In its June 30 statement, the finance department had said the government would “introduce legislation to clarify that these amendments would apply at the beginning of the next taxation year, starting on Jan. 1, 2022.”

But Freeland, in her new statement Monday, said instead that the changes contained in C-208 “now apply in law” within the Income Tax Act.

“We fully support genuine intergenerational share transfers and regret recent uncertainty that we have caused,” she said Monday. “Bill C-208 was voted on by Parliament and received royal assent. The law is the law.”

That said, she added that the minority Liberal government plans to draft further amendments and put them forward for consultations. The additional amendments to the Income Tax Act would “honour the spirit” of C-208, while “safeguarding against any unintended tax avoidance loopholes that may have been created.”

The further amendments, she said, will be “to make sure that (C-208) facilitates genuine intergenerational transfers and is not used for artificial tax planning purposes.”

After consultations, the government’s amendments would be introduced in a separate bill and would apply either upon the date of publication of that bill’s final draft or on Nov. 1 this year, whichever comes later.

‘Surplus stripping’

Maguire had brought forward C-208 as a remedy in cases where a person sold a small business or farm to a child or grandchild and the difference between the sale price and the original purchase price was deemed a dividend under pre-C-208 tax law.

If a business instead was sold to a non-family member, he said, the sale under pre-C-208 tax law was deemed a capital gain — and taxed at a lower rate.

In excluding intergenerational sales of farms and small businesses, Freeland said Monday, C-208 may “inadvertently permit” business owners the opportunity for “surplus stripping.”

That term refers to cases in which dividends are converted to capital gains to take advantage of a lower tax rate “without any genuine transfer of the business actually taking place.”

The pre-C-208 anti-avoidance rule was meant to prevent business owners from just removing earnings from their corporations by using a sale to a “linked” corporation — such as that of a close family member — as a basis to do so.

The government’s further amendments, when passed, would set up a requirement to transfer both “legal and factual control of the corporation carrying on the business” from the parent to the child or grandchild.

The further amendments would also lay out the level of ownership in the corporation carrying on the business that a parent can maintain for a “reasonable” time after the transfer.

They would also clarify the requirements and timeline for a parent to transition their involvement in the business to the next generation, as well as the level of involvement of the child or grandchild in the business after the transfer, Freeland said. — Glacier FarmMedia Network

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Finance Minister Chrystia Freeland released the budget Monday, showing the majority of new spending will take place over three years and be largely focused on “green growth.”

“Budget 2021 announces the government’s intention to return a portion of the proceeds from the price on pollution directly to farmers in backstop jurisdictions (currently Alberta, Saskatchewan, Manitoba and Ontario), beginning in 2021-22,” Freeland’s budget documents said.

Farmers are expected to receive roughly $100 million in the first year, and “returns in future years will be based on proceeds from the price on pollution collected in the prior fiscal year, and are expected to increase as the price on pollution rises.”

Further details are expected to be released later this year. Some of the provinces currently subject to the federal backstop have recently signalled intent to design their own carbon pricing schemes, meaning producers in those provinces wouldn’t be eligible for the federal payments.

Budget 2021 also extends funding for the Agricultural Clean Technology Program. The $25-million, three-year investment launched in 2018 is to be replaced by a $165 million allocation as the program continues to expand.

According to the budget, $50 million is being prioritized for the purchase of more efficient grain dryers for farmers.

“These initiatives will help farmers transition to lower-carbon, more fuel-efficient ways of farming,” it said.

Freeland’s “green and clean” budget hails farmers as “major players in Canada’s fight against climate change.”

“The agricultural sector has the potential to scale up climate solutions, many of which are already underway across the country,” the budget said.

An additional $200 million over two years is being added to the Agricultural Climate Solutions program, which will “will target projects accelerating emission reductions by improving nitrogen management, increasing adoption of cover cropping, and normalizing rotational grazing.”

That funding will kick in during the 2021-22 fiscal year.

Ottawa also plans to allocate $60 million over the next two years from the Nature Smart Climate Solutions Fund to “target the protection of existing wetlands and trees on farms, including through a reverse auction pilot program.”

A consultation process for carbon border adjustments will also be announced in the coming weeks, Freeland announced.

“This consultation process will begin in the summer with targeted discussions, including with provinces and territories, importers, and exporters — especially those who deal in emissions-intensive goods. The broader public will be engaged this fall,” the budget said.

“Throughout this process, the government intends to continue its international engagement with like-minded partner.”

Because Canada’s Clean Fuel Standard is expected to reduce greenhouse gases by more than 20 megatonnes in 2030, the government is spending $67.2 million over seven years to implement and administer it.

“This standard creates new economic opportunities for Canada’s biofuel producers, including farmers and foresters, who are part of the diverse supply chain for low-carbon fuels. Making this investment now will secure Canada’s future competitiveness in the global transition to a low-carbon economy,” it said.

The government’s spending plans also account for $292.5 million over seven years in compensation to Canada’s supply managed sectors for the CETA and CPTPP trade deals.

The budget confirms a program supporting temporary foreign workers is being extended into 2021-22 to assist with costs associated with COVID-19 and mandatory isolations. It will then be slowly eliminated.

Another $57.6 million is being spent to extend the program, which offers up to $1,500 per worker in isolation until June 15 this year.

“If workers are required to quarantine at a government-approved facility, due to a lack of suitable facilities at their employers’ facilities, employers can receive up to $2,000 per worker for costs associated with mandatory isolation requirements,” the budget said.

After June 15, employers will be able to receive $750 per worker “until the wind-down of the program” on Aug. 31.

Following this, the government intends to phase out the program, but “will consult with employers on the transition to ensure that migrant workers are similarly compensated through their quarantine period by their employers.”

Over six years, the government plans to spend $1 billion on the Universal Broadband Fund “to support a more rapid rollout of broadband projects in collaboration with provinces and territories and other partners.”

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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Federal Finance Minister Chrystia Freeland’s 2021 budget is scheduled to be released Monday in the House of Commons, at about 4 p.m. ET.

Canadians didn’t get a 2020 budget: it was an early casualty of COVID-19, cancelled in the pandemic’s infancy. Economic updates and a series of spending announcements, almost entirely COVID-19-related, were released instead.

The Canadian Federation of Agriculture, for one, released its budget wish list back in August, offering three broad recommendations, each highlighted by specific measures that can be taken.

To kick-start economic recovery, the CFA recommended the government restore the AgriStability payment trigger to 85 per cent and eliminate the cap to reference margins. A partial agreement with the provinces has since been reached to remove the reference margin limit.

Citing a $77 million investment from the federal government to help food processors combat COVID-19, the CFA says additional support is needed for the processing sector.

“To secure these critical food infrastructure links in advance of a second wave and the peak harvest season for many Canadian commodities, CFA recommends the next federal budget increase financial support to the food processing sector,” the federation’s document says.

“In addition to this support for existing food processors, CFA also recommends that the next federal budget invest in programming to support the development of more food processing facilities across Canada.”

Agriculture Minister Marie-Claude Bibeau has previously expressed interested in growing Canada’s regional food processing facilities.

CFA is also asking Agriculture and Agri-Food Canada “to reallocate underutilized AgriMarketing program dollars to implement a buy Canadian campaign for Canadian retail channels, and engage exporters to identify and address key export opportunities.”

The wish list also includes a call for better leveraging of agriculture’s environmental contributions, such as programs allowing “producers to generate credits for agricultural activities under both the Federal Greenhouse Gas Offset System and Clean Fuel Standard.”

Protocols for carbon offsets in some sectors of agriculture are currently in development, and CFA continues to lobby the government on this front.

Building resilience into Canada’s food system, through a $3 million investment, is another CFA ask. It proposes those dollars be used to reduce job vacancies “through career promotion, improve skills-training opportunities for workers, support human resource management training/certification, and support commercialization of labour-saving technologies.”

CFA also requests the federal government reinforce a $50 million fund targeted at reducing food waste.

For the 2021 budget, MPs on the Commons finance committee also recommend the federal government restore AgriStability levels to previous levels, create a national labour strategy for agri-food and develop a new business risk management program focused exclusively on climate change.

The multi-partisan committee heard testimony and received submissions from more than 800 groups and individuals. Mostly virtual meetings took place in December and a consultation report was released Feb. 16.

One recommendation is to “work with industry to develop a labour action plan for Canada’s agri-food sector.”

It’s a recommendation that will be welcomed by many in the industry. Food and Beverage Canada offered testimony to the committee and called for the development of a labour action plan.

The organization represents 1,500 food and beverage manufacturing businesses in Canada, and has long been a vocal supporter of developing such a strategy.

It released its own pre-budget consultation in August, which lobbied for a rebalancing of relationships across the supply chain.

The finance committee also recommended the creation of a new business risk management program focused on climate change.

Called AgriResilience, the program would be designed to “to help farmers transition to lower-carbon agriculture practices, thereby reducing the growing climate risk in this sector. An AgriResilience program would reward innovation and the adoption of new, more resilient farming practices, thereby helping to reduce climate risk.”

It’s an idea that originated from Equiterre, a Quebec-based environmental organization with ties to the Liberal cabinet via one of its founders, Steven Guilbeault, who is currently Canada’s minister of heritage.

Equiterre also recommended the federal government “adopt and fund a national strategy with nature-based solutions in the agriculture sector to limit growing GHG emissions and protect soil health.”

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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Prime Minister Justin Trudeau had made Freeland his main U.S. go-between when he named her deputy prime minister after last year’s election, with Foreign Minister Francois-Philippe Champagne handling all the other diplomatic files.

Now Champagne will also handle U.S. ties, sources said.

“We’re back in more of a traditional setup in terms of the relationship,” said one of the sources. “Obviously with any relationship as complex as the Canadian-U.S. one, by necessity, different ministers will be speaking to their counterparts.”

As foreign minister in Trudeau’s previous government, Freeland had led Canada’s hard-nosed renegotiation of a new North American trade deal, known as the Canada-U.S.-Mexico Agreement (CUSMA).

Because of the long shared border and close economic ties, the United States is by far Canada’s most crucial ally, and the relationship was often strained during the trade negotiations and a dispute over aluminum tariffs.

In September 2018, President Donald Trump hinted he did not like Freeland, without naming her.

“We’re very unhappy with the negotiations and the negotiating style of Canada. We don’t like their representative very much,” Trump said at the time.

Freeland will continue to support the prime minister in managing the U.S. relationship, a third government official said, “particularly in the fight against the unfair and unjust U.S. aluminum tariffs.”

Tensions erupted again earlier this month when Trump moved to reimpose 10 per cent tariffs on some aluminum products, prompting Freeland to respond the next day with retaliatory tariffs.

Canada has not yet officially informed the United States of the change in Freeland’s responsibilities, a source familiar with the matter said.

“The most significant relationship we have with the United States is an economic one… so she’s still going to very much be there” as finance minister, said Stephanie Carvin, an assistant professor of international relations at Ottawa’s Carleton University.

Freeland also remains Trudeau’s deputy prime minister, while New Brunswick MP and Privy Council president Dominic LeBlanc was shuffled Tuesday into Freeland’s spot as intergovernmental affairs minister — a post LeBlanc previously held in 2018-19.

— Reporting for Reuters by Steve Scherer and David Ljunggren.

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United States President President Donald Trump tweeted the news Wednesday saying “trade will not be affected.”

On March 16 Prime Minister Justin Trudeau and several of his ministers hinted at a tightening of the border, but stressed the essential movement of such things as food and medications must continue.

“We recognize the integration of our two countries and that demands a certain level of co-ordination over next steps and that is what is happening,” Trudeau, who is self-isolating after being exposed to COVID-19 by his wife Sophie Grégoire Trudeau, told reporters outside his home in Ottawa, March 16.

“We will not rule out anything to keep Canadians safe,” Trudeau said when pressed to explain why he was restricting foreign access to Canada, but making an exception for Americans.

Deputy Prime Minister Chrystia Freeland told reporters later exceptions were necessary.

“We have understood just because of the way that Canada-U.S. border, in particular, is a life-line for both countries that there do need to be some carves outs to that strong recommendation for essential workers — people like the truck drivers who are driving trucks of food in both directions across the border… like air crews,” she said. “There are other categories of essential workers as well and that is a situation, which we are closely and continuously reviewing.”

The question now is, what’s essential?

Food has been mentioned so presumably that includes livestock and meat, which flows both ways.

Fertilizer Canada says fertilizer is essential to global food production and should move freely between Canada and the U.S.

“This movement must continue, allowing farmers to position product for the beginning of the planting season in late April and early May and ensure additional quantities are available for replenishment throughout the entire planting season,” Fertilizer Canada said in a news release March 17.

“The Canadian supply chain is resilient and can manage through these challenges. Our industry would be concerned about any restrictive measures that may have unintended consequences on rail, port and truck service, imports or operations at agri-retail. Governments must ensure that the Canadian border remains open to the movement of fertilizer in order for farmers to receive their product and meet their spring seeding requirements.”

Speaking Wednesday morning Trudeau had few details, but it appears commercial travel will be largely unaffected.

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U.S. Trade Representative Robert Lighthizer and White House senior adviser Jared Kushner are due to fly to Mexico City on Tuesday to try to pin down final details of the agreement, an administration official told Reuters late Monday afternoon.

Congressional aides and industry sources said that a proposed deal has been sent to U.S. House of Representatives Speaker Nancy Pelosi, who will make the final decision on whether and when to bring the U.S.-Mexico-Canada Agreement (CUSMA) to a vote.

“We’re studying the proposal,” a senior Democratic aide told Reuters, adding that there was not yet an agreement to announce.

The Mexican government has also invited Canada’s deputy prime minister, Chrystia Freeland, to Mexico City, a Mexican official said.

Canadian Prime Minister Justin Trudeau’s office on Monday said Freeland would also be in Mexico City on Tuesday to “participate in meetings with the United States and Mexico on NAFTA.”

CUSMA, which would replace the 26-year-old North American Free Trade Agreement (NAFTA), encompasses US$1.2 trillion in annual trade across the continent. Its backers say it is responsible for 12 million U.S. jobs and a third of all U.S. agricultural exports.

It needs to be approved by lawmakers in all three countries. In the United States, Democrats have so far been reluctant to stage a vote that would give a political victory to Republican President Donald Trump.

And time is running out for a vote before year end. Lawmakers from both parties said that waiting until next year could make it more difficult to ratify, because the presidential election campaign — and perhaps impeachment proceedings against Trump — will be in full swing.

Many on Capitol Hill were reluctant to declare that a deal had been struck. Since negotiations to replace NAFTA first started in August 2017, deals have been imminent numerous times, only to be delayed by last-minute hitches.

Leaders of the U.S., Canada, and Mexico signed the initial CUSMA agreement more than a year ago, but since then, Democrats controlling the House have pressed for changes to strengthen the enforcement of new labour standards and relax data protections for biologic drugs that they fear will mean higher drug prices.

Pelosi is scheduled to meet on Monday evening with senior House Democrats who have been working on changes to the pact, a Democratic House aide said.

Lighthizer last week also added a new demand — that the trade deal strengthen the automotive rules origin to include steel and aluminum that is “melted and poured” in North America.

The prior requirement that 70 per cent of the steel and aluminum in North American cars come from the region did not specify a production method, opening the door to the used of semi-finished metals from China and elsewhere.

Trump, who blamed NAFTA for the loss of millions of U.S. factory jobs during his 2016 re-election campaign and vowed to quit or renegotiate it, said Monday that “a lot of strides have been made over the last 24 hours” on CUSMA.

“I’m hearing very good things. I’m hearing from unions and others that it’s looking good,” Trump told reporters at the White House.

Trump spoke earlier with AFL-CIO president Richard Trumka about the CUSMA negotiations, a person familiar with the call said.

Trumka, one of the most powerful U.S. labour leaders, has been a major party to the negotiations, pushing for stronger labour enforcement provisions that ensure Mexican workers are allowed to unionize.

Trumka earlier told the Washington Post that there was a deal on CUSMA that he was reviewing with his executive committee.

“We have pushed them hard and have done quite well,” Trumka was cited as saying by the Post.

Neither Trumka nor an AFL-CIO spokeswoman responded to queries about the pact or the phone call with Trump.

Mexican senators endorse changes

Details of the proposed changes have not been disclosed. Mexican officials rejected U.S. demands to allow U.S. factory inspectors to supervise labour enforcement, but have said that Mexico would allow panels of experts and a third party to review labour standards.

Mexican President Andres Manuel Lopez Obrador on Monday said that Mexican senators had endorsed changes to CUSMA that had been accepted by Mexico. He urged Pelosi to move forward with a vote on the trade deal.

U.S. Senate finance committee chairman Charles Grassley spoke with USTR’s Lighthizer about the pact on Monday and is hoping for a deal announcement soon, said Grassley’s spokesman, Michael Zona.

Congress had been scheduled to leave Washington by the end of this week, but consideration of spending and defense bills is likely to keep lawmakers working for a few more days beyond that.

“We have to bring this to an end,” Johns Hopkins University professor Jonathan Sands, who directs the university’s Center for Canadian Studies, said of CUSMA approval. “Every part of the trade debate is up in the air right now, with the trade war on China and trade tensions with Europe ramping up.”

U.S.-China trade talks are set to come to a head this week. New U.S. tariffs on some US$156 billion worth of Chinese consumer goods are due to take effect on Sunday unless an interim deal is reached before then.

— Reporting for Reuters by David Lawder and Sharay Angulo; additional reporting by Richard Cowan, David Shepardson, Steve Holland, Jeff Mason and Andrea Shalal; writing by David Lawder. Includes files from Glacier FarmMedia Network staff.

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