Brian Mulroney joins board of directors of New York-based pot company

Brian Mulroney joins board of directors of New York-based pot company

Former prime minister Brian Mulroney is joining the board of directors of an American cannabis company.

Acreage Holdings, one of the largest vertically integrated cannabis companies in the U.S., says Mulroney will officially become a board member in November, when the company will list in the Canadian Securities Exchange.

Mulroney, who served as prime minister 1984 to 1993, will join other prominent former U.S. politicians in the board of Acreage, including former House of Representatives speaker John Boehner, and former Massachusetts governor William Weld.

The news comes on the day when recreational cannabis becomes legal in Canada.

In a statement released by the New York-based company, Mulroney says he is pleased that Canada has taken a leadership role in the field in North America, adding that he’s “encouraged about the prospects of what the end of prohibition” will mean for the country.

Mulroney’s daughter, Caroline Mulroney, is the attorney general of Ontario and has been overseeing the legalization of marijuana in the province.

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Drilling forecast bleak as discount for Canadian oil persists, analyst says

Oil prices at highest levels in 4 years after OPEC says it won't raise output

The Canadian oil and gas sector is in a holding pattern in which spending and production growth can’t occur until new ways to get products to export markets are found, according to CIBC analyst Jon Morrison.

The steep discounts being paid for Canadian heavy and light oil production compared with U.S. benchmarks won’t end soon and that means there’s no money for producers to increase their drilling budgets, he said in a report released Tuesday.

The report bodes poorly for Canada’s energy services sector as the industry enters the winter drilling season, its traditionally busiest time of the year as frozen ground allows more access to backcountry sites.

“We believe this reality will start to percolate into 2019 capex budgets, with a number of producers likely to delay the issuance of formal guidance until January and then we believe many are likely to announce development programs that show little to no incremental production growth,” said Morrison in the report.

Worldwide oil capacity declining

The report came as OPEC Secretary-General Mohammad Barkindo on Tuesday urged oil-exporting countries to increase investment to meet future demand as spare oil capacity declines worldwide.

In a speech posted on OPEC’s website, he said the global oil sector will need to invest US$11 trillion by 2040 to meet the future needs of the world.

But while world oil prices have risen recently to four-year highs due to concerns including possible U.S. sanctions on Iran, Canadian oil prices have gone in the opposite direction as new production floods pipelines and U.S. demand drops temporarily due to fall refinery maintenance outages.

“Canada is facing an unprecedented epic pipeline problem,” said Morrison. “And while we have known that this issue has been on the horizon for years, the pressure in the system is building and it’s set to remain ugly for some time.”

According to Net Energy Group, the difference between Western Canada Select bitumen blend prices and New York benchmark West Texas Intermediate for November delivery has averaged $45.50 US per barrel this month. The difference between Edmonton Sweet and WTI has been about $27 US.

Last week, the WCS-WTI differential widened to more than $52 US per barrel, at which point analyst Matt Murphy of Tudor Pickering Holt & Co. calculated bitumen producers were actually losing money because the light oil used to dilute their heavy sticky crude cost more than what the barrel was selling for.

More pipelines needed

Western Canada will remain short of pipeline capacity even if Enbridge Inc.’s Line 3 replacement pipeline is completed by 2020, thus adding 370,000 barrels per day of capacity, CIBC notes.

The short-term situation will improve but not enough to allow growth in activity if crude-by-rail exports double as expected to a record 450,000 barrels per day by the end of this year, the report says.

Unusually wet weather in Alberta in September will contribute to soft third-quarter earnings reports from oilfield services companies, Morrison added.

He said Canadian drilling rig utilization in the quarter ended Sept. 30 was about 32 per cent, higher than the 28.5 per cent achieved in the same quarter last year, while the number of operating days were about nine per cent higher.

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Canadian cannabis entrepreneurs dream big in the face of uncertainty

Canadian cannabis entrepreneurs dream big in the face of uncertainty

Trevor Fencott looks at the bare wooden beams in a stripped-down Edmonton retail store and sees nothing but possibility. He muses about cooking classes, perhaps lectures and community events in the barren space.

It’s late June and Fencott has high hopes for this faded brick storefront on Whyte Avenue. He wants to turn it into the neighbourhood’s oasis of weed.

Fencott is CEO of Fire and Flower, an aggressive entrant in the retail cannabis industry. His ambition is to shape the early pot-purchasing experience for Canadians and build a dominant brand, which can be expanded internationally as cannabis laws evolve throughout Europe and South America.

But the last part of that dream, the international expansion, will all depend on “getting Canada right,” he says.

And that is already proving difficult.

Fire and Flower CEO Trevor Fencott stands inside a store on Edmonton’s Whyte Avenue, which he had hoped would be transformed into a retail location in time for legalization. Right now, the outlet remains mired in regulatory hurdles and won’t open on Oct. 17. (Terry Reith/CBC)

Canada’s cannabis retailers must follow a myriad of federal, provincial and municipal rules when marijuana is legalized for recreational use on Oct. 17. The stigma of dealing in a product which has been illegal and villainized for decades has perhaps created a culture of caution in the bureaucracy entrusted with establishing the regulations in this space.

Fire and Flower received just one of the 51 licences granted in Saskatchewan, which were awarded through a random draw from the more than 1,500 applications the province received.

It did better in Alberta, where 37 stores were approved.

So far, the company hasn’t secured a licence in Manitoba, and it is still waiting to hear back about its eight applications in B.C., which is the maximum number of submissions that the province allows.

Fencott admits that building a chain of retail pot stores is a daunting proposition in an industry where the rules change from province to province, town to town, and in some cases, week by week.

“We’re in a very emergent dynamic situation — and we know that coming in. I mean, that’s why our investors are risk investors,” he said.

Among the company’s larger investors are licensed cannabis producers Aphria and Hexo, which are prohibited from owning stores, but are free to put money into companies like Fire and Flower.

The privately owned retailer would not say how much it has spent overall so far, but through news releases and statements, it has publicly disclosed an investment of at least $27 million to date to help get its stores up and running.

While the stakes are high, so too is the potential windfall. Accounting firm Deloitte estimates Canadians will spend as much as $4.34 billion in the first year of the country’s legal cannabis market.

An industry ‘full of risk’

Kyle Murray, the vice-dean at the University of Alberta’s School of Business, has been watching the development of the cannabis business with amazement. He says the only possible comparisons to legalization are the early days of the internet, or the end of liquor prohibition.

“There’s all kinds of hyperbole, there’s all kinds of salesmen, CEOs, lots of new companies — everyone’s talking about all kinds of growth,” he said.

University of Alberta business professor Kyle Murray says the cannabis retail landscape is a high risk, high reward. (Terry Reith/CBC News)

There’s no doubt there will be big winners in the cannabis sweepstakes, Murray says, but he believes there is also the potential for some huge losses.

“I think what we’re looking at is an industry that’s full of risk. We know that some of these companies are going to fail, some will be acquired, some will close, and some of them probably will grow very rapidly and make their shareholders happy.”

Right now, he says, it’s impossible to say which brands will succeed and which will fail.

In the end, it comes down to luck

Fire and Flower has spent millions building its brand, but still hasn’t earned its first dollar. It began assembling a team of top retail talent long before it had even been granted its first licence. It has leased retail locations throughout Western Canada, hired and trained 47 retail managers — all on the assumption that it will be able to position itself as a market leader.

“We have a broad portfolio of real estate holdings, we have a broad portfolio of licence applications in various stages,” Fencott said.

That financial outlay is a major part of the costly challenge facing private retail stores.

In most cases, before store owners can apply for a retail licence, they have to have a lease signed. But there are no guarantees that having buildings, staff and startup money will translate into a licensed store — or multiple licensed stores, in the case of those trying to build a large retail brand.

Corporate trainer Tanis Danchuk works on some last-minute updates at Fire and Flower’s store in north Edmonton, just days before its official opening. (Terry Reith/CBC News)

“Initially what seemed possible was no longer possible in some markets,” Murray said of the competitive regulatory landscape. “You couldn’t just open stores, you also had to get a little bit lucky, and be one of the ones selected to have a licence in that location.

For Fire and Flower, its multimillion dollar investment and carefully crafted retail image will see just four stores open on Oct. 17. Three are in the Edmonton region, and the fourth is in Yorkton, Sask.

The Whyte Avenue outlet that Fencott was wistfully dreaming about in June remains an empty shell, tied up by municipal regulations. In total, the company is still waiting to move ahead on 34 of its Alberta stores.

But Fencott remains undaunted.

“We’re not going to be able to rest. We’re going to have to keep opening stores. So as soon as we finish the first batch, we’re going to move onto the second, and the third, and the fourth, and again. We’re going to be all over Alberta.”

With files from Raffy Boudjikanian

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Clean up of wind and solar sites won’t land at Alberta farmers’ feet

Clean up of wind and solar sites won't land at Alberta farmers' feet

With a growing number of wind and solar developments studding Alberta’s landscape, the province has enshrined new rules that ensure operators — not landowners — are ultimately responsible for cleaning them up. 

The province has had renewable energy development for over two decades, but landowner advocates have more recently grumbled about insufficient rules. For one, farmers and landowners wanted to make sure their property is returned to its prior state when renewable facilities expired.

The oil and gas industry has had such regulation for years.

Now, Alberta Environment has issued rules that explicitly state operators have a duty to conserve and reclaim the land after they have finished using it. It also sets standards for the industry to follow during the process — standards that will have to be met before the province could certify that it was done properly.

Environment Minister Shannon Phillips said the rules fill a legislative gap that stretches back more than 20 years.

“We are ensuring Albertans can feel confident in entering renewable energy agreements on their land,” said Environment Minister Shannon Phillips. (Mike Symington/CBC)

“As hundreds of millions in new investments flow into Alberta’s renewable energy industry, we are ensuring Albertans can feel confident in entering renewable energy agreements on their land,” Phillips said in an email statement.

The new directive stops short of creating an “orphan” fund for renewable projects — similar to the one for oil and gas wells — that will pay to clean-up renewable energy sites if a company goes bankrupt.

But Daryl Bennett, a director with Action Surface Rights Association in southern Alberta, still welcomed the government’s initiative.

“It’s quite an improvement,” said Bennett. “This just puts some standards in place so all the companies are expected to reclaim in a similar fashion.”

Alberta is experiencing a renewable energy boom as the province wants to add up to 5,000 megawatts of renewable energy through private sector investment of about $10 billion by 2030. The province has become one of the hottest markets for the renewable energy sector in Canada.

But the growth also spurred farmers and landowners to raise their concerns, leading the government to host a series of feedback sessions this spring and summer. 

The meetings resulted in a 50-page directive from Alberta Environment that sets out planning requirements for everything from weed management to soil mapping at project sites. Of note, it outlines an operator’s “obligation” to reclaim specified land to equivalent land capability once they are finished using it.

Alberta is experiencing a renewable energy boom as the province wants to add up to 5,000 MW of renewable energy through private sector investment of about $10 billion by 2030. (CBC)

Alberta Environmental officials say the directive still provides landowners with the flexibility to enter into agreements with private companies to mutual benefit, including ensuring proper financial security.

The new rules were published last month.

In Alberta, landowners are not obligated to accept a wind, solar or geothermal project on their land. Contracts are negotiated bilaterally between the landowner and the renewable energy developer.

Bennett participated in the discussions with government this year. He said some landowners signed contracts with companies they simply shouldn’t have, but this new directive codifies the expectations for land reclamation.

For one, Bennett says it sets minimum depth levels to remove concrete bases, which could have significant, long-term impacts on the land if done poorly.

“I currently have some windmills going into hearings and I’ll be asking the [Alberta Utilities Commission] to consider some of the things that are in that document even though it hasn’t come into full force in effect yet,” Bennett said.

The directive takes full effect in January, 2020.

A spokesman for the wind power industry said the sector was supportive of the initiative overall. (The Canadian Press)

Some landowners had hoped the province would create an “orphan” fund that would pay to clean-up renewable energy sites if a company goes bankrupt.

The new directive doesn’t do that, but it’s becoming more common in contracts between landowners and operators for the company to agree to post some kind of financial security.

A representative of the wind power industry said the sector was supportive of the initiative overall.

Evan Wilson, spokesman for the Canada Wind Energy Association (CanWEA), said the government’s initiative will introduce some specific costs to the pre-construction, construction and operations cycle of a project. But he said the directive offers clarity to all sides.

“Not only does it provide predictability for our members,” Wilson said, “but it’s our expectation that it will provide comfort for landowners and communities to know that there is a standard that industry can point to, that government can point to, that will allow landowners to know what is being done on their land at the end of life of the project.”

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Canada to apply USMCA cultural exemption to digital trade

Canada to apply USMCA cultural exemption to digital trade

The broad cultural exemption Canada fought to keep in the renegotiated North American free trade deal will allow for Canadian content rules in digital media.

But government sources say the Trudeau government will not use that exemption in order to escape a section of the revised trade deal that extends copyright protections for artistic works by 20 years.

Since the text of the United States–Mexico–Canada Agreement (USMCA) was released on Oct.1, it’s been unclear exactly which chapters Canada’s cultural sector must comply with, and from which provisions it will be exempt. In response to CBC News inquiries, government sources have clarified what’s actually covered.

Like the original Canada–U.S. free trade agreement and its successor, NAFTA, USMCA includes a broad cultural exemption near the end of its text to allow Canadian policymakers to continue favouring their domestic cultural industries, including publishing, film, television, news and music.

But USMCA’s digital trade chapter says no country is allowed to discriminate or give less favourable treatment to digital products “created, produced, published, contracted for, commissioned or first made available on commercial terms in the territory of another party, or to digital products of which the author, performer, producer, developer or owner is a person of another party.”

USMCA does allow a government to provide subsidies or grants to its own residents and businesses, including “government-supported loans, guarantees and insurance.”

With digital text, audio and video becoming more and more popular, and with print media and analog broadcast services in decline, the Canadian government wanted to ensure it could continue to favour domestic industries in the future.

Stronger protection than TPP

Canada failed to secure a broad cultural exemption in the Trans-Pacific Partnership text it reached with the U.S., Mexico and other Pacific Rim trading partners in 2015, although some specific cultural exceptions were written into chapters of that agreement.

When the U.S. left the TPP — and minor revisions were made to refashion the deal into the Comprehensive and Progressive Trans-Pacific Partnership between the remaining 11 countries — Canada sought and received side letters from each partner exempting Canadian cultural industries from two specific measures in the digital trade chapter.

Canada wanted to be exempt from TPP rules that prevented foreign digital content from being blocked. It also wanted to preserve its ability to require that foreign digital content creators pay into funds from which they could not benefit.

Preserving a broad cultural exemption during the NAFTA talks wasn’t easy, but Canada succeeded.

On Tuesday, a government official confirmed to CBC News that, despite previous demands from the American side that digital content not be subject to a cultural exemption, the USMCA exemption allows for Canadian content rules in the digital sphere.

Consider, for example, a hypothetical government program offering funding to support Canadian online journalism in the face of failing advertising and subscription revenue models.

The government might want to make sure it’s allowed to spend taxpayers’ money only on Canadian news written by Canadian journalists, as opposed to the work of foreign news outlets.

Similarly, it might want to preserve its ability to fund or otherwise set favourable rules for Canadian audio or video content, in a world where more and more music, games, movies and television shows are streamed, not broadcast or purchased for playback.

Retaliation possible

“(The exemption) applies to all cultural industries regardless of the mode of diffusion, whether it is online or under additional formats,” said Gilbert Gagné, who specializes in trade policy research at Bishop’s University.

The new USMCA text, however, could have a chilling effect on Canadian policy, Gagné cautioned.

The cultural exemption allows the U.S. or Mexico to retaliate if Canada goes too far in protecting its domestic industries. The text specifies that other parties “may take a measure of equivalent commercial effect” in response to something deemed too egregious a violation of fair trade.

“To the extent that the U.S. insists in the absence of restrictions in digital trade, and this includes the cultural dimension, would the Canadian government refrain from promoting Canadian content online?” Gagné said. “There is always the danger. But that danger has always existed.”

Sometimes people cheat, so you need arbitration,’ says Quebec’s chief NAFTA negotiator Raymond Bachand. 6:56

Copyright terms not exempt

While the cultural exemption was important to Canada for the digital trade chapter, the same government source told CBC News the exemption will not be applied to the intellectual property chapter’s copyright extensions.

Creative works like books or musical compositions are among the copyrighted material that will receive 20 more years of protection under USMCA. Canadian law currently provides a copyright for 50 years after the death of its creator, but USMCA will require 70 years.

While it might have been legally possible for Canada to use its broad exemption to cover copyrights as well, the government source that spoke to CBC News said Canada will keep the commitment it made to its North American trading partners and change its law accordingly.

Bringing Canadian copyrights in line with American law was a priority for U.S. negotiators.

No WTO arbitration on culture

The fine print at the bottom of the cultural exemption includes something else that could be considered a win for Canada.

If disputes arise over Canada’s cultural exemption, the text says these disagreements will be resolved through the dispute settlement provisions of USMCA — an arbitration panel would hear the arguments and decide if a policy reversal or retaliation is warranted.

“The U.S. cannot go to the [World Trade Organization] anymore,” Gagné said. “I think this is a significant accomplishment.”

Why would Canada prefer a USMCA panel arbitration?

“Within the WTO there is a danger for Canada that some cultural measures would be deemed to contravene international trade rules,” Gagné said.

In the 1990s, the U.S. brought a case to the WTO over Canada’s treatment of split-run magazines — publications full of American content sold with Canadian advertising to Canadian readers.

The WTO allowed Canada to keep subsidizing Canadian publications, but the panel found that Canada was wrong to assume NAFTA’s cultural exemption allowed it to prohibit imports of split-run magazines, charge higher postal rates for imported publications and impose an 80 per cent tax on advertising in split-run issues.

This text keeps any disputes the Americans might raise inside the USMCA’s jurisdiction.

“It’s not at all perfect. There is no ironclad guarantee that Canadian cultural initiatives could not be subject to retaliation from the United States,” Gagné said. “But there is nevertheless greater protection for Canadian culture than there used to be.”

USMCA is expected to be signed by the three countries in late November and ratified in 2019.

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TSX posts best day in 6 months despite pullback in cannabis shares

Canada's main stock index sustains largest loss in more than a month

Canada’s main stock index posted its best day in six months despite a pullback of cannabis stocks on the last trading session before Wednesday’s legalization.

The upturn in markets was almost global, where the stock losers of the past few days outperformed led by the technology sector, said Patrick Bernes, a portfolio manager for CIBC Asset Management.

The activity comes as U.S. corporate earnings have started to roll in with Goldman Sachs and Morgan Stanley on Tuesday outperforming some forecasts, suggesting a solid earnings season ahead.

“We’ve seen the selloff, a little bit of a correction and you’ve seen some decent results come in. I don’t think there are any growth or macro concerns that would warrant further downward pressure,” he said of equity markets.

Bond yields retreat in recent days

Bernes said bond yields, which drove investor anxiety when they increased to multi-year highs, have retreated in the last few days to provide some support to equity markets.

“I think from here we’re probably past the selloff,” he added.

The S&P/TSX composite index closed up 170.27 points at 15,579.74, a high for the day on 280.4 million shares traded.

The market was led by technology stocks that were up about four per cent. Heavily weighted sectors like industrials, energy, financials and materials were also up. Only gold and health care closed down.

Bernes said he doesn’t believe there are any fundamental drivers for Tuesday’s 3.4 per cent slide in cannabis stocks a day after they enjoyed large gains. The sector has been highly volatile even though the market capitalization of various producers have surged since the Liberals promised to legalize recreational cannabis use three years ago.

“The prices ran up on hope but now that actual sales are going to happen and it’s going to be legal you’re going to start seeing a differentiation as the winners and losers kind of sort themselves out,” he said. “So it should be interesting. I think investors are positioning for the next stage in the evolution of this market.”

Canadian dollar and Dow Jones higher

In New York, the Dow Jones industrial average was up 317.67 points at 25,568.22. The S&P 500 index was up 33.30 points at 2,784.09, while the Nasdaq composite was up 103.98 points at 7,534.72.

The Canadian dollar traded at an average of 77.29 cents US compared with an average of 76.96 US on Monday.

The loonie’s rebound against the U.S. dollar and the Euro came after a Bank of Canada survey on Monday signalled a healthy business outlook which gives a green light to further interest rate increases.

The November crude contract was up 14 cents at $71.92 US per barrel and the November natural gas contract was down three tens of a cent at US$3.24 per mmBTU.

The December gold contract was up 70 cents US at $1,231 US an ounce and the December copper contract was down nine tenths of a cent at $2.78 US a pound.

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Canada Post workers could begin rotating strikes Monday

Canada Post workers could begin rotating strikes Monday

The Canadian Union of Postal Workers says it has given strike notice to Canada Post that workers could walk off the job as early as next week.

The union representing 50,000 Canada Post employees says rotating strikes will begin Monday if agreements aren’t reached with the Urban Postal Operations and Rural and Suburban Mail Carriers bargaining units.

The union is pushing for improved job security, an end to forced overtime, and better health and safety measures.

Locations of the potential job action have not yet been determined. (Ted S. Warren/Associated Press)

Locations of the rotating strikes have yet to be determined.

The possibility of a work stoppage has hovered over Canada Post since Sept. 26 after postal workers voted overwhelmingly in late summer in support of a potential walkout to back their contract demands.

Postal workers voted overwhelmingly in support of strike action if their demands are not met. (Darryl Dyck/Canadian Press)

Canada Post is the biggest parcel shipping company in the country, having delivered about one million parcels a day during the holiday season last year — an increase of 20 per cent over the same period in 2016.

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Federal government’s tariff relief plan faces criticism; Morneau says 50 firms tariff-free

Federal government's tariff relief plan faces criticism; Morneau says 50 firms tariff-free

The federal government has so far exempted 50 Canadian companies from surtaxes imposed last summer when Ottawa slapped retaliatory tariffs on U.S. steel and aluminum imports, Finance Minister Bill Morneau said Tuesday as he faced pointed questions about his relief plan from political opponents.

Morneau provided the figure before a parliamentary committee, where opposition MPs accused the government of being too slow in helping Canadian firms affected by the cross-border tariff fight.

Members of the international trade committee also said Ottawa’s remission request process has been too onerous for many companies, particularly smaller ones already consumed by the day-to-day activities of running their businesses.

“You said in your statement that we’re doing everything possible, but I have to be frank that we’ve heard quite the opposite here,” said New Democrat MP Tracey Ramsey.

“From the witnesses at this committee, we’ve heard of the dire consequences of these tariffs and the government’s failure to get that support directly to people on the ground. Businesses are talking about laying off people.”

Conservative MP Dean Allison said he’s heard from many businesses caught in the crossfire that are worried the financial relief isn’t arriving quickly enough.

“I can assure you that that money cannot get out the door soon enough in order to keep these companies viable over the long term,” Allison told Morneau.

The finance minister, who said 135 companies have submitted remission requests, agreed he would like to see the relief money flow faster — but he stressed there’s a process that must be followed.

“This is pretty unprecedented. We aren’t in a situation where there’s a play book,” Morneau said. “And we certainly hope it goes away quickly.”

Providing support

In July, Ottawa applied retaliatory tariffs on $16.6-billion worth of U.S. imports of steel, aluminum and other products.

The federal government has said it had no choice but to hit back at the U.S. with the countermeasures.

It also announced a financial aid package for industries caught in the middle of the dispute, including up to $2 billion in new funding and support for workers in steel, aluminum and manufacturing sectors.

During his appearance Tuesday, Morneau provided an update on another category of support provided via the aid package, which involves the Business Development Bank of Canada and Export Development Canada.

So far, he said BDC has authorized loans totalling $131 million for 189 businesses, while EDC has authorized $44 million worth of loans for 24 clients.

Negotiating in public

Morneau noted that firms approved for remission will also be eligible for refunds on duties they’ve already paid in the months since Ottawa imposed the counter-tariffs.

He was asked how much extra revenue the surtaxes have already brought in, but he declined to provide a number and only said the duties were generating “significant” revenues.

The tariff dispute has dragged on even though the Liberal government reached a new continental trade agreement this month with Washington and Mexico City. The Trump administration has maintained its stinging levies on Canadian steel and aluminum.

Morneau said the government is still negotiating with U.S. officials in hopes of seeing the duties lifted.

Committee member and fellow Liberal MP Peter Fonseca asked Morneau whether the government was considering a quota system as part of the potential solution to the tariff dispute.

“We’re really not going to negotiate in public in terms of the actual approach that we’re trying to take,” said Morneau, adding he wants to make sure the market is stable and that the Canadian steel industry and users of steel are unharmed.

“Clearly, we want to move away from the current situation. So, the mechanism to do that? We’re not at a stage where we’re able to talking about that because it’s not close to being done.”

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U.S. border patrol warns ‘amnesty’ for pot convictions doesn’t guarantee entry

U.S. border patrol warns 'amnesty' for pot convictions doesn't guarantee entry

A senior U.S. border patrol official is warning travellers that cannabis remains an illegal narcotic in the U.S. despite Canada’s legalization — and even if you’ve been granted amnesty for a previous pot-related criminal conviction, you could still be denied entry to the United States.

The statement comes as Ottawa readies a plan to allow people to apply for a pardon for minor pot-related convictions. A person with a criminal history typically seeks a pardon to make it easier to rent an apartment, apply for a mortgage, get a job or volunteer, or cross the Canada-U.S. border.

Federal Liberal cabinet ministers are expected to unveil details of the pardon plan tomorrow — Oct. 17 — when cannabis for recreational purposes becomes officially legal in Canada.

“Really, we don’t recognize the Canadian amnesty. If you’ve been the subject of a violation of U.S. laws, that will still make you inadmissible to our country,” Todd Owen, the assistant commissioner of field operations at U.S. Customs and Border Protection (CBP), said in a teleconference with reporters Tuesday.

A sign warning travellers against having cannabis at the Canada-U.S. border was erected by the Canada Border Services Agency (CBSA) Tuesday in Gretna, Man. (Remi Authier/Radio-Canada)

Owen said it doesn’t matter whether someone has received a Canadian pardon — just admitting to having consumed the drug in the past is grounds to be barred from the U.S.

“We hope the word is out, the education, [we’re] making sure the travelling public knows that U.S. federal law has not changed in terms of marijuana. It’s still a controlled substance. You may be inadmissible if you have ties to that,” Owen said.

While some U.S. states have dismantled prohibition — including Washington, a border state — cannabis possession remains a criminal offence federally. And the U.S. border is governed by federal law.

Don’t be ‘less than truthful’

The U.S. CBP is privy to a traveller’s criminal past in Canada — this information is recorded in the Canadian Police Information Centre (CPIC) database — and the agency is warning all foreigners that a drug-related criminal history is grounds for denial of entry to the U.S.

A person could apply for a waiver — a potentially lengthy and costly process that, even if successful, makes cross-border travel much more difficult.

Owen said anyone who has ever consumed the drug in the past, is an “addict” and/or a drug abuser, could be deemed inadmissible. Border guards, Owen said, are generally trying to prevent someone who has a proclivity for consuming cannabis from doing so on American soil.

Under U.S. law, even a traveller who admits to having smoked cannabis casually in the past could be denied entry. For American border guards, a confession is just as good as a conviction.

Owen did not make it clear how CBP would deal with someone who has sought, and received, a record suspension — a pardon — from the Canadian federal government, as a pardon usually ensures an individual’s criminal past is removed from the CPIC database.

​CBC News has asked for clarity and will update this story accordingly.

Regardless, Owen stressed that all Canadians should be completely truthful with border guards when crossing south — especially about their criminal history — or risk being banned from the U.S. for life.

“You definitely don’t want to be less than truthful when you’re being interviewed by a CBP officer,” Owen said.

Moreover, Owen said those found at the border with cannabis on their person, or in their car, could face arrest and prosecution by U.S. officials.

Conversely, it is illegal for a person travelling to Canada to bring cannabis with them across the border, the Canadian Border Services Agency (CBSA) has said.

A government official, speaking on background to CBC News Tuesday, said all CBSA guards will now be required to ask each and every traveller about cannabis possession at the border, and a question about cannabis use will be added to the declaration forms travellers fill out when entering Canada by air.

Cannabis investors are warned

Owen also sought to clarify the U.S. agency’s position on a Canadian who is an owner of, or an investor in, a cannabis-related business.

He said, for example, that someone who holds an interest in a cannabis company through a mutual fund or a pension plan fund, or through some other indirect means, likely will not face greater scrutiny at the border.

Todd C. Owen, assistant commissioner of the office of field operations at U.S. Customs and Border Protection, said Tuesday simply admitting to having consumed cannabis in the past is grounds for a person to be barred entry. (U.S. Custom Border Patrol)

But he said an owner or major investor linked to a cannabis company, travelling to the U.S. on cannabis-related business, likely would be denied entry.

“If a Canadian is knowingly engaged, and invested, in the marijuana industry and is going to the U.S. for that specific purpose — to facilitate the industry — they would be found inadmissible.

“If a Canadian is working in the legalized business and coming to the U.S. for a different intent — they’re coming to go shopping or do some other recreational activity — they could be found admissible.”

Watch the Minister of Organized Crime Reduction Bill Blair discuss pot pardons

‘We’ve given police additional tools,’ says the former Toronto police chief and current government point person on pot. 11:27

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Speculation tax tabled by B.C. government

Speculation tax tabled by B.C. government

B.C.’s finance minister has introduced legislation to move ahead with a controversial speculation tax on vacant or underutilized properties.

The bill ends months of speculation about how the province planned to use the new levy to help deal with runaway housing prices in some B.C. communities.

If the legislation is passed, the new tax will apply to all properties in designated regions of B.C. 

Homeowners who live at their properties — or rent them out — will receive an exemption by filing an annual declaration form.

For the remaining properties, a tax rate of 0.5 per cent of the assessed value will apply for 2018.

In 2019 and subsequent years, B.C. residents with vacant or underutilized properties will continue to pay that rate, while Canadian citizens or permanent residents who are not B.C. residents will start paying one per cent. 

Foreign homeowners will pay more

Foreign homeowners or “satellite families” who make 50 per cent of their income outside B.C. will pay two per cent of a vacant or under-utilized property’s value.

The goal is to prevent housing speculation and help turn vacant properties into rentals, said Carole James, B.C.’s finance minister.

“As a government, we have a responsibility to act, to make sure that people can afford a home in the communities where they live and work,” she said. “The speculation and vacancy tax is a critical piece if we want to moderate our overheated housing market.”

Some opposed mayors in regions where the tax is set to apply had called on the finance minister to allow an opt-out clause, but James declined.

“When you face a major provincial crisis, it is the responsibility of the provincial government to act, not to let municipalities pick and choose about whether they want to address affordable housing,” James said.

‘NDP Arrogance and hypocrisy,’ say Liberals

However, the opposition Liberals say the measure is merely a tax on people in B.C. who want to have a retirement home and it will do little to improve housing affordability.

“This is the height of NDP arrogance and hypocrisy,” said Liberal leader Andrew Wilkinson. 

Green leader Andrew Weaver, who has been critical of the tax in the past, said he’s still reviewing the fine print in the bill to determine if his concerns have been addressed.

“I still have concerns that Canadians are not being treated equally and that there is an insufficient role for local governments in determining what happens in their communities,” Weaver said in a statement.

The legislation also includes a number of exemptions for what the province calls special circumstances, including major home renovations and divorces.

Read more from CBC British Columbia 

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