Trudeau ministers gather in Ottawa to meet US Treasury Secretary Steve Mnuchin

Marco Green
June 10, 2017

OTTAWA-U.S. Treasury Secretary Steven Mnuchin said Friday the Trump administration has "backup plans" to keep the government operating in the event Congress doesn't lift the debt ceiling before the summer recess.

"I don't want to leave any doubt, we have plans, backup plans for funding the government", Mnuchin told reporters Friday at a press conference in Ottawa with Canadian Finance Minister Bill Morneau.

Earlier this week, Morneau said in an interview that the pair would discuss areas where they can work together as they move toward talks on the North American Free Trade Agreement, as well as how best to grow their respective economies and confront global challenges. "We will be fine if they don't do it beforehand, but I want to emphasize that the sooner they do it, the less uncertainty there is in the market", he said.

The agenda featured a number of cross-border topics that could have a significant impact on the Canadian economy, including USA tax reform and trade issues surrounding sectors from lumber to dairy to energy. A wide range of tax policy proposals has circulated in Washington, but a consensus has not yet emerged.

Some business leaders fear that corporate tax cuts under discussion in the US could hurt Canadian competitiveness.

Some Canadian politicians and business leaders are concerned that if Trump cuts corporate taxes, it could make companies north of the border less competitive. Mr. Morneau has responded by noting that Canada's corporate tax rates are now lower than those of the United States, but that he is monitoring the debate.

"We have a very close relationship with Canada and will continue to do so", said Mnuchin.

President Donald Trump has made tax reform one of his biggest priorities.

After Friday's meetings, Mnuchin sought to ease concerns, but said it was still premature to get into specifics about what Washington's eventual asks might look like.

Mr. Morneau suggested on Friday that Canada is willing to adjust its tax rates if necessary in response to USA tax reform.

"I think whatever we do, our objective is to make sure that this is positive for the USA economy and positive for the Canadian economy to continue to allow the commerce that we have between us", he told a news conference.

"And that's positive from our standpoint, because that clarity is good". So everything I heard today was consistent with what I might have expected. "We have plans and back-up plans for funding the government".

The meeting marked the first bilateral visit to Ottawa by a U.S. Treasury secretary in 10 years.

Both Canada and the United States are promoting infrastructure plans to encourage private-sector investment in infrastructure.

Earlier in the day, Mnuchin participated in a roundtable with about 20 business leaders in Ottawa. Executives from Magna International, Ford Canada, GM Canada, GE Canada, Pfizer Canada, OpenText, Google and Molson also attended.

The business roundtable is expected to include a segment that focuses on women entrepreneurs. Mr. Trump has yet to announce his choice for ambassador to Canada, although he is expected to nominate Republican fundraiser Kelly Craft.

Canada's ambassador to the United States, David MacNaughton, also attended, as did Chargé d'Affairs Elizabeth Moore Aubin, who represented the U.S. Embassy.

Other reports by Click Lancashire

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