06082018 business

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FRIDAY, JUNE 8, 2018

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Web shops urged to withhold due taxes

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

W

EB shops were yesterday urged to withhold all revenues currently due to the government, amid claims planned tax hikes were intended to wipe them out in favour of a national lottery.

Philip Galanis, the former MP and senator, told Tribune Business he had personally advised the sector to place all tax liabilities “in escrow” until the escalating dispute over the industry’s proposed new structure was resolved.

A long-time advocate for the sector’s legalisation, and an auditor for several operators, Mr Galanis blasted the magnitude of the

Tax change threat to ‘resilient’ $928m FDI inflow repeat

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas needs a repeat of last year’s “resilient” $928m foreign direct investment (FDI) inflow more than ever, but real estate’s new VAT treatment represents a potential obstacle.

While a United Nations (UN) agency said 2017’s FDI flow dropped just 1.6 percent year-over-year, Tribune Business was yesterday told that at least one developer is “pausing” their planned multi-million dollar project until they receive more “clarity” over the new tax treatment.

Edison Sumner, the Bahamas Chamber of Commerce’s chief executive, said this combined with the 60 percent VAT rate hike were already causing “a bit of anxiety” in the real estate development industry for both Bahamian and foreign players.

This is because the budget tax changes, as they currently stand, make it “impossible” for real estate projects to claim back VAT on their input costs after the government reverted to the old “transfer tax” structure.

The former Christie administration changed the ten percent stamp duty levied on real estate sales to accommodate the current VAT rate, splitting this 7.5 percent/2.5 percent between VAT and stamp duty.

But the 2018-2019 budget goes back to the ten percent stamp duty on all real estate purchases over $100,000.

KP Turnquest, deputy prime minister, said this was intended to “create a simpler formula” for real estate transactions by eliminating the VAT component.

But the government’s move will have the

* Adviser senses national lottery ‘conspiracy’ * Brands tax hikes ‘illegal, immoral, perverse’ * Argues sector can ‘tie up’ govt in courts

PHILIP GALANIS government’s tax “grab” as “illegal, immoral and perverse”.

The HLB Galanis & Company principal argued that the domestic gaming industry had been “targeted at the front end and the back end”

by the 2018-2019 budget, with taxation set to be imposed directly on its customers as well as operators.

He added that the tax hikes, which the industry argues range from 238 percent to 453 percent, would “literally kill a number of the web shop operators” as their gross gaming revenue (GGR) or turnover exceeds $100m - placing them into the highest 50 percent bracket.

Urging the web shops to make good on their threats of legal action to block the government’s new tax structure, Mr Galanis suggested

that the industry’s “deep pockets” would tie the matter up in court for years - with the placing of tax revenues in escrow depriving the Public Treasury of muchneeded revenue.

“I’m hoping and believing the web shop operators will go to court if they do not get this resolved,” he told Tribune Business. “I’ve advised them to put existing taxes into escrow until this is resolved.

“This deprives the government of taxes they would have otherwise earned. They

SEE PAGE 3

Ex-minister ‘totally opposed’ to web shop taxation hike

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE ex-Cabinet minister who oversaw the web shop industry’s legalisation yesterday queried why it was being hit with “destructive” taxation despite meeting all its obligations to date.

Obie Wilchcombe, the former minister of tourism, told Tribune Business he was “totally opposed” to “penalising” the sector with a huge taxation increase, and attacked the Minnis administration’s “retrogressive” plan for “taking the country backwards”.

Backing the domestic gaming industry’s

* Obie: why ‘penalise’ compliant sector * Taking legalisation rationale ‘backwards’ * Says politics influencing govt approach

OBIE WILCHCOMBE arguments, Mr Wilchcombe said it was one of the few government revenue sources to have “proven to be a stellar performer” since the 2015 legalisation.

He argued that the government’s approach to the web shops had been clouded by both politics and an instinctive dislike of the gaming activities it facilitates.

While calling no names, Mr Wilchcombe said the Cabinet contained several ministers who had been opposed to the web shop sector’s legalisation prior to taking public office.

And he suggested that some in the Free National Movement (FNM) believed

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the sector’s removal from the “informal economy” had created a group of wealthy “political players” able to provide the Progressive Liberal Party (PLP) with significant financial support.

Vehemently denying this was the case, or that it motivated the former administration’s policy towards the web shops, Mr Wilchcombe said of the proposed “sliding scale” tax structure: “totally opposed

SEE PAGE 5

* DEVELOPER ‘PAUSES’ PROJECT OVER VAT UNCERTAINTY * REVERSION TO OLD STRUCTURE CAUSES ‘BIT OF ANXIETY’ * AS BAHAMAS LEADS SIDS ON FDI ATTRACTION likely-unintended consequence of increasing real estate costs for both Bahamian and international buyers as developers can no longer offset their “input” VAT. Developers currently “net off” the VAT they pay on construction materials, and the likes of contractor, engineer and architect bills, against the “output” tax whenever a property is sold.

The budget’s altered tax structure, by eliminating VAT, robs developers of the ability to claim back already-paid input tax, thus saddling them with a multimillion dollar increase in development costs that will likely be passed on to buyers.

Mr Sumner revealed that this problem was already impacting real estate development projects, especially those that did not involve major hotels and other facilities able to access significant tax breaks that include VAT. He added that it could also cause a slowdown in segments of the FDI market at a time when The Bahamas needed such activity more than ever to offset the impact of a 12 percent VAT rate, plus other fiscal austerity measures, needed to eliminate the annual deficit and pay-off some $360m in

SEE PAGE 4

Gov’t shows ‘inflexibility’ on 12% VAT, timelines

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government has largely shown “little flexibility” to-date over the planned 12 percent VAT and timeline for its implementation, the Chamber of Commerce’s chief executive said yesterday.

Edison Sumner, pictured, told Tribune Business that the private sector was hoping for some “leeway” when it came to the July 1 deadline for the 60 percent rate hike’s implementation,

* PRIVATE SECTOR EYES JULY 1 ‘LEEWAY’ * RUNNING OUT OF TIME FOR ALTERNATIVES * RESTARTS ‘EXCLUSIVE’ VAT PRICE DEBATE

THE Bahamas’ aircraft registry ambitions “would not have been taken seriously” unless the ten percent Customs duty was eliminated, an attorney revealed yesterday.

Llewellyn BoyerCartwright, a leading advocate for the creation of an enhanced registry, told Tribune Business that the move represented “a huge step in the right direction” for achieving this goal - especially since it

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SEE PAGE 4

Aircraft registry ‘not serious’ unless 10% Customs levy ends

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

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* MOVE ‘HUGE STEP IN RIGHT DIRECTION’ * EXISTENCE ‘DETERRENT’ TO BUSINESS * ATTORNEY HOPES ‘WE’LL SEE IT THROUGH’ raised little to no revenue currently.

A Bahamian aviation law specialist and Callenders & Co attorney, Mr BoyerCartwright said that while

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THE TRIBUNE

PENNSYLVANIA TO REQUIRE GAS DRILLERS TO REDUCE AIR POLLUTION HARRISBURG Associated Press PENNSYLVANIA will begin enforcing tougher air pollution standards on its booming natural gas industry, the governor’s office said yesterday, with environmental advocates saying the standards will put the state among the leaders in going beyond federal requirements.

The new permits will take effect in August and begin requiring the Marcellus Shale exploration industry to use more advanced equipment to reduce methane emissions and other air pollutants, control emissions from a broader array of sites and check for leaks more frequently along pipelines and connections.

The permits will apply to new or updated well sites and compression, processing and transmission stations along pipelines.

The new permits could draw some sort of legal or administrative challenge from the industry, which says the permits will inflict new costs and delays on drilling new wells.

The announcement comes as Democratic Gov Tom Wolf is running for a second term in office, and environmental advocates could form an important part of Wolf’s support base.

Wolf’s administration also has signaled that it will eventually move to apply tougher standards to existing equipment.

Pennsylvania is the nation’s second-largest natural gas-producing state behind Texas, and the Marcellus Shale is the nation’s most prolific natural gas reservoir.

Preventing methane leaks from well-site equipment and pipelines has become important for regulators because methane is a potent greenhouse gas.

Industry officials point to government data that says methane pollution is falling, even as production rises, and that companies have every incentive to ensure methane makes it into the pipeline, rather than the atmosphere.

Environmental advocacy groups praised the move.

Friday, June 8, 2018, PAGE 3

Web shops urged to withhold due taxes FROM PAGE ONE [the web shops] have the financial capacity and resources to withstand this row for the government.”

Mr Galanis pointed out that any court battle could take up to six years to fully resolve, should it proceed to full litigation and move through all levels of the Bahamian legal system.

His suggestion is likely to further fuel an increasinglyheated dispute between the gaming industry and the government, where no side shows any sign of backing down.

The HLB Galanis principal also argued that the government was using the tax increases to eliminate the web shop industry in favour of a national lottery, something he argued was akin to “nationalisation” and “expropriation” of operators’ private property.

“The other objective I believe the government has in mind is to knock these operators out of the picture so the government can then step in and set up a national lottery.

It’s perverse,” Mr Galanis told Tribune Business.

Such suspicions have already been voiced privately by persons connected to the domestic gaming sector, although there is no proof this is the government’s intention.

The taxation row comes as the web shop industry’s own research, ironically, suggests there is scope to tax the industry more - although nowhere near the magnitude of the increases proposed by the Minnis administration.

The industry-commissioned “Review of the Gaming House Operator (Amendment) Regulations 2018” conceded that its current total tax rate, at 13 percent of gross gaming revenues (GGR), was “below average, but not significantly out of sync with [a global] average rate of 20 percent”.

Drawing on data from Copenhagen Economics, the report said the Bahamian gaming industry’s total tax rate was below that of the UK’s and New Jersey’s, which stand at 15 percent and 17.5 percent. The same consultancy suggests that an “optimum” tax rate for high-volume/revenue generating gaming jurisdictions is between 15 percent to 20 percent.

The study, conducted by ten-year gaming industry veteran and accountant, Gavin Hamilton, said web shop profit margins were in line with the global average - standing at 24 percent in 2017 compared to a 23 percent world benchmark.

However, the Hamilton report said one “trade-off” of the lower tax burden was that the Bahamian domestic gaming sector generated higher employment.

The 2,750 jobs it provides account for 1.2 percent of the country’s total employed labour force, compared to just 0.3 percent in the UK, a difference of some 275 percent.

Mr Galanis, meanwhile, told Tribune Business that “the Bahamian people should be disappointed the government has taken this tack” with the web shops, given predictions that the revised “sliding scale” tax structure will lead to 2,000 jobs losses if implemented as is.

“Certainly the gaming operators are disappointed because they seem to be the target of a government that is determined to put them out of business,” he said. “Because of the enormous taxation put on operators, and the five percent tax on patron deposits, what they’re saying to these people is they don’t want them to be in that business.”

Mr Galanis said it was “perverse” that deposits made at banks, and with lawyers, accountants and any other profession/industry that accepted such monies,

were not being subjected to a similar five percent levy.

He argued that this showed the discriminatory nature of the government’s domestic gaming taxation plan, and said: “That change demonstrates they have been targeted at the front end and the back end.

“That’s going to literally kill a number of the web shop operators. I’m not being hyperbolic about this; this is real life.” The former PLP MP and Senator said that, after working in partnership with the former Christie administration to legalise the sector, the government had now turned around “and all of a sudden blindsided them, is not going to consult with them and they’re essentially nationalising the industry.

“They’re expropriating the assets of people that built the industry. I think it’s illegal, I think it’s immoral, and it’s perverse,” the HLB Galanis principal told Tribune Business. “They’re expropriating the industry and they believe they have popular support; that there are people that don’t want it.

“What this boils down is nationalisation of the industry. They [the government] are driven by the fact these are young, entrepreneurial, black Bahamians that have found a way to make a lot of money in a very, very short time and don’t believe they should have done.”

Mr Galanis argued that the existing seven licensed web shop operators had “paid for their past sins” by parting with “an enormous sum of money”, equivalent to six years’ worth of revenue, to become legal. He

added that at least two to three operators had only been in the business for several years, but still had to pay up.

“They’ve paid for their past sins,” he said. “Let’s dispel the notion they have not paid nothing.”

The Hamilton report, produced for the web shop industry, said the government’s new proposed taxation structure would jump from an existing 13 percent of GGR to an average of 44 percent, and a more “marginal” 68 percent at the upper end. It argued that such percentages were higher than the “monopoly” Jamaican market.

With web shops’ collective GGR standing at $196m, and net revenues at $184m after rebates, the report estimated that the industry would be driven into loss with $82m in taxes wiping out $72m in earnings before interest, taxation, depreciation and amortisation (EBITDA).

Individual web shops were said to generate a nine percent profit margin after tax, based on an average $740,000 in gross turnover and $165,000 in EBITDA. The Hamilton report argued that if the new tax structure was introduced as is, an average web shop location would be plunged into a $161,000 annual loss.

“At a 44 percent expected tax rate, revenues per shop would need to increase more than 150 percent to restore the same level of profitability,” the study added.

The present tax structure requires web shop operators to pay 11 percent on taxable revenue or 25 percent of

EBITDA (earnings before interest, taxation, depreciation or amortisation), whichever is greater.

However, under the proposed new “sliding scale” they will pay: • Up to $20m in revenue, a rate of 20 percent.

• Between $20m and $40m, a rate of 25 percent.

• Between $40m and $60m, a rate of 30 percent.

• Between $60m and $80m, a rate of 35 percent.

• Between $80m and $100m, a rate of 40 percent.

• Over $100m, a rate of 50 percent.

And, in a nasty twist as far as web shop operators are concerned, the government has also imposed new taxation on gamblers themselves rather than the sector. Patrons, from July 1, will have to pay a five percent stamp tax on both their web shop deposits and nononline games/digital sales.

To advertise in The Tribune, contact 502-2394

THE ANGLICAN DIOCESE OF THE BAHAMAS AND THE TURKS AND CAICOS ISLANDS (Incorporated Trustees Of The Church Of England In The Bahamas)

FINANCIAL COMPTROLLER The Diocese of The Bahamas and The Turks and Caicos Islands is seeking a suitably qualified individual to fill the position of Financial Comptroller. This officer is the chief financial functionary for the Diocesan Office.

Duties include, but are not limited, to: • Managing the efficient operation of the Accounts Departments of the Diocesan Office and the four schools of the Anglican Central Education Authority (ACEA), ensuring adherence to policies and procedures.

• Having control of the finances of the Diocese and the keeping of proper records of financial transactions.

• Preparing monthly reports on the financial position of the Diocese to the Bishop, The Synod, The Diocesan Council, The Diocesan

Finance Committee, The Anglican Central Education Authority, The Diocesan Pension Board and The Property Committee.

• Preparing all financial statements for the Diocese in accordance with International Financial Reporting Standards.

• Acting as a contact person and liaise with external auditors, bankers and government agencies.

• Assisting with the preparation of the Diocesan budget.

• Supervising the maintenance and repairs of non-parochial Diocesan buildings and grounds in New Providence, with the exception of the schools.

• Traveling to Family Islands as required.

• Performing other duties as requested by the Bishop, the Bishop-in- Council or Diocesan Administrator.

The successful candidate should possess: • A Bachelor’s Degree in Accounting • CPA desired but not necessary • At least 10 years’ relevant experience • Up to date knowledge of accounting regulations.

• A strong proficiency in Microsoft Office and Peachtree Programs.

• Strong written and oral communication skills.

• Excellent leadership and management skills, with hands on approach.

• Good organizational skills and a commitment to timely and accurate reporting.

Applications must contain a cover letter and CV and may be submitted via email to hr@bahamasanglican.org or dropped off at the Diocesan Office, Sands Road no later than Friday, June 15th, 2018 at 5p.m.

PAGE 4, Friday, June 8, 2018

THE TRIBUNE

Gov’t shows ‘inflexibility’ Tax change threat on 12% VAT, timelines to ‘resilient’ $928m FROM PAGE ONE

“The government hasn’t shown any flexibility for the private sector at large for the extension of timelines for implementation,” he said. “Some things were considered for the hotel and tourism sector that we fully support.

“We’re looking to see what kind of leeway and leverage they will allow the rest of the business community to reconfigure their systems for July 1. There isn’t a lot of time. There are many merchants that have to reprice their SKUs (stock keeping units), upgrade their financial systems, and reprice and make adjustments in their point-of-sale (PoS) systems.

“There’s going to be a lot of work required for the large companies that have to reprice thousands of products and items on their shelves.”

Mr Sumner said the narrow, 30-day window for the more than 6,000 VAT registrants to adjust their systems and pricing for the 12 percent rate was especially ill-timed given that it coincided with the filing of returns and payments for all businesses at the 7.5 percent rate.

“Companies not only have to prepare quarterly and monthly filings, but prepare themselves for the new VAT rate,” he added.

“There’s going to be a rush, and there’s going to be pressure put on the resources of those companies to comply

and have their systems ready for July 1,” he added.

“One of the things we’re hoping for, and we know the government needs access to those funds quickly, is that the government will give some extension to those who need it to make their systems compliant.”

Besides allowing extra time, the private sector will also be hoping for compliance tolerance in meeting all requirements of the 12 percent rate.

“It seems they’re going to be inflexible with any adjustment to the VAT rate, even though the Chamber’s position is pretty clear,” Mr Sumner said. KP Turnquest, deputy prime minister and minister of finance, earlier this week “called out” the private sector on alternatives to the 12 percent VAT, and the Chamber chief acknowledged that the clock was against it on this matter.

He added that the Chamber was moving to re-engage Oxford Economics, the consultancy that had modelled the economic impact of the first 7.5 percent VAT, to conduct a similar exercise on the likely effects of the 4.5 percentage increase.

However, with the government needing to pass its budget by end-June in time for the 2018-2019 fiscal year’s start, the month between its unveiling and implementation leaves little time for the Chamber and others to come up with other options for bridging a $400m “funding gap”.

“We will be looking,

through that exercise, at some of the alternatives to recommend to the government,” Mr Sumner told Tribune Business. “This budget is expected to be passed very soon.

“The deputy prime minister has indicated he is open to receiving more feedback and recommendations from the Chamber and private sector. Whether we’re able to get them in time for this budget cycle, I don’t know.

Whatever we put forward may have to be considered in the next budget cycle.”

Mr Sumner, though, said the Chamber planned to use the 60 percent rate hike to re-examine other VATrelated issues, including the ongoing debate over “exclusive versus inclusive” pricing.

“Many of the merchants have reached out to us and are very favourable to the price exclusive approach.

We have made that known to the government,” he told Tribune Business. “We’re hoping to offer feedback shortly to confirm they’re prepared to look at that.”

Mr Sumner urged the private sector to attend next Thursday’s National Conclave of Chambers of Commerce in The Bahamas, where the deputy prime minister is the main speaker.

He added that the event provided an opportunity for businesses to understand the rationale behind the VAT increases and other budget measures.

FDI inflow repeat

FROM PAGE ONE unfunded arrears.

“The idea of increasing the VAT rate now, and talking about exempt treatment for those in the real estate industry, may cause a bit of anxiety for the FDI industry,” Mr Sumner told Tribune Business.

“I got a phone call today from a developer exposed to a large capital project, and they were going to be ‘exempt’ as opposed to ‘zero rated’ for VAT. They’re not going to be able to recover the input VAT. We’ve already raised that issue with the government, and they’ve promised to get back with clarity. If there are adjustments to be made, we hope to get them considered before the budget passes.”

The Chamber chief continued: “We were advised by that developer or their representative that they are likely to pause plans for their development until they get clarity on zerorated versus exempt, and costs related to VAT going up.

“That will have implications for FDI investment coming back. Over time the shock [of the rate increase] wears off, but everyone is looking at the impact on

business and we have to be cognisant of the changes.”

Mr Sumner did not name the developer involved Tribune Business sources yesterday revealed that several developers are planning to jointly submit a position paper to the government and lobby for changes to the 2018-2019 budget, given the negative impact it will have on their businesses and the overall sector.

The changes come after The Bahamas was again pegged as the FDI inflows leader in 2017 for small island states, beating Jamaica to top spot based on figures produced by the United Nations Conference on Trade and Development (UNCTAD).

Its annual World Investment Report 2018 said The Bahamas received $928m in FDI inflows in 2018, down almost two percent on the prior year, but still described this nation’s performance as resilient.

“Despite the slowdown in the two largest FDI host SIDS in the region, The Bahamas and Jamaica, foreign investors remained active. In The Bahamas, where FDI dipped in 2017, after a 131 percent rebound from 2015 to 2016, the opening of a mega resort project, Baha Mar, created

nearly 4,000 jobs,” the UNCTAD report said.

Increased FDI inflows will be key if The Bahamas is to hit its projected 2.5 percent GDP growth target for 2018, and 2.2 percent in 2019. With the 12 percent VAT rate hike predicted to suck $400m out of the economy, the government is relying on the traditional external drivers - Baha Mar’s opening, improved tourism numbers and the FDI pipeline - to offset the negative impact and maintain the growth momentum.

“FDI investment and inflows are extremely important to the economy,” Mr Sumner said. “We get a lot of capital inflows from FDI. It’s important to not only continue building the economy but the foreign currency reserves.”

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LEGAL NOTICE

Roneragh Holdings Ltd. NOTICE IS HEREBY GIVEN as follows: (a) Roneragh Holdings Ltd. is in voluntary dissolution under the provisions of Section 138 (4) of the International Business Companies Act 2000. (b) The dissolution of the said company commenced on the 31st day of May, A. D., 2018, when the Articles of Dissolution were submitted and registered by the Registrar General. (c) The Liquidator of the said company is Edward Riley of Tweede van der Helststraat 27-ii, 1073 AG, Amsterdam, The Netherlands.

Dated this 6th day of June, A. D., 2018.

Edward Riley Liquidator

NOTICE VECTIS MANAGEMENT LTD. In Voluntary Liquidation Notice is hereby given that in accordance with Section 138(4) of the International Business Companies Act. 2000, VECTIS MANAGEMENT LTD. is in dissolution as of June 5th, 2018.

IGNACIO RIVA FIERRO situated at Rue du Prince 6, 1204 Geneva-Switzerland, is the Liquidator.

LIQUIDATOR ______________________

NOTICE Pursuant to the provisions of Section 138 (4) of the International Business Companies Act, (as amended) NOTICE is hereby given that ALAMANDA CAY PROPERTY LIMITED is in dissolution and the date of commencement of the dissolution is 31st May, 2018.

Lynn Kelly and Halson Ferguson LIQUIDATORS c/o EFG Bank & Trust (Bahamas) Ltd West Bay Street and Sea View Drive 3rd Floor, Goodman’s Bay Corporate Centre P. O. Box CB 10956 Nassau, Bahamas

WANTED

Senior ConStruCtion Manager

for Large Scale – Condominium/Hotel Development

A well established and project secured developer is looking for a high-end experienced Construction Manager. The successful candidate must have a minimum of 30 years on-site experience in the high volume, high end residential/hotel construction industry and have a complete portfolio of work performed, including references.

The successful candidate must have complete knowledge of all aspects of highrise construction including but not limit to, budgeting, estimating, critical path scheduling, reporting and liaising with all authorities with jurisdiction and the consultant and ownership group.

They must be in a position to assume full operational control of the entire construction program, must be self-motivated and willing to work long hours, inclusive of evenings and weekends as the schedule would dictate.

Salary will be commensurate with experience. Send Resume and Written References to: jknowles@wynnbahamas.com

THE TRIBUNE

Friday, June 8, 2018, PAGE 5

Aircraft registry ‘not serious’ unless 10% Customs levy ends FROM PAGE ONE the ten percent duty was not implemented in practice, its existence on the statute book was a major “deterrent” to aircraft registration, financing and leasing through this nation.

“For me it’s fantastic news,” Mr BoyerCartwright, pictured, said of the 2018-2019 budget change, something he has long campaigned for. “As I have said to you previously, no other jurisdiction would take us seriously in terms of doing business here in terms of registration, financing and leasing aircraft if that duty was not removed.

“This is a huge step in the right direction. There’s no doubt. It’s very encouraging.

I feel very confident, very positive, and it looks like this may have happened.

I have been advised by others in the industry that

as long as that Customs duty remains, the jurisdiction will not be taken seriously.

“It’ll create more interest now in the jurisdiction.

It really does. I think we’re going to see a little more attention now once the word gets out.”

Mr Boyer-Cartwright revealed he had multiple experiences where the ten percent customs duty’s existence has cost him business. “I can’t speak for the government, but let me say this,” he

added. “The duty had never been imposed, so I’m not sure what revenue was being lost or has been lost.

“Aircraft owners who were looking at registering their aircraft in The Bahamas or doing a financial arrangement through The Bahamas, once they learned of the ten percent customs duty it was a significant deterrent. The fact it’s law, it’s on the books, I can’t ask you to lay your hand on that.”

Mr Boyer-Cartwright has at times seemingly led a “one-man crusade” to establish an upgraded Bahamian aircraft registry, said these essential reforms would build on the platform provided by the Civil Aviation Act 2016 and its accompanying regulations.

Reiterating that the customs duty elimination was a “first step”, he added that efforts to establish an aircraft registry would

receive a further credibility boost if The Bahamas became a signatory to the Cape Town Treaty (Aircraft Convention), which gives financiers and leasing companies confidence that their liens and charges over planes - and plane parts - will be recognised and secure whatever jurisdiction the craft is in.

“The Minister of Tourism and Aviation [Dionisio D’Aguilar] has expressed his intent, and the government’s commitment, to the establishment of an enhanced aircraft registry with a mortgage registry and ratification of Cape Town,” Mr Boyer-Cartwright said.

“The Minister has mandated myself and another... really, he’s tasked us to start working with the Cape Town Convention in terms of getting The Bahamas signed on and ratified. That gives me even more hope that we’ll see it through. It’s adding

almost another industry, or arm, of the financial services industry and to the aviation industry.”

Mr Boyer-Cartwright previously revealed that Bahamas-based companies and residents typically have to pay more when leasing aircraft from US companies because this nation is not a Cape Town Convention signatory, and the owner wants extra compensation for the extra risk.

Apart from increasing cost, and reducing affordability for Bahamas-based interests, the Callenders & Co attorney said the reluctance of banks to finance purchases of “mobile assets” such as aircraft meant buying options were limited.

As a result, Bahamian parties frequently ended up leasing planes long-term, while being reluctant to entertain lease-to-purchase deals for fear of being hit with the ten percent

customs duty when the aircraft was brought to The Bahamas.

An improved Bahamian aircraft registry has been viewed as a value-added complement to the financial services industry’s high-end clients, many of whom own or lease planes. It also fits in with the shipping registry and other efforts to expand and diversify the economy.

Mr Boyer-Cartwright added that “other jurisdictions wouldn’t be in the game” if aircraft registries were not lucrative, with virtually all The Bahamas’ international financial centre (IFC) rivals possessing their own facilities.

“I just hope that we can structure it in such a way and make it so competitive that we will be just as competitive as any of the other jurisdictions,” he told Tribune Business.

Ex-minister ‘totally opposed’ to web shop taxation hike FROM PAGE ONE to it. It takes us backwards as opposed to taking us forwards.

“What I find incredible is that the Minister [KP Turnquest] did not stand up and say they’re not paying paying their taxes. He did not have reason to penalise them because they are paying.”

Mr Wilchcombe added that Mr Turnquest, in his mid-year budget communication, identified gaming - together with value-added tax (VAT) and the Road Traffic Department - as three areas that had produced revenue growth during the 2017-2018 fiscal year.

“They have been proven to be stellar with their performance, and are living up to their obligations,” he told Tribune Business. “Why target them, and put in taxation that destroys them and sends them underground?

It’s destructive, and against the intent behind their legalisation. Why take this approach? Why seek to penalise them and seek to damage what exists today?”

Mr Wilchcombe hit out after research commissioned by the web shop industry suggested that the government’s aggressive double-digit tax hikes will force the sector to cut 2,000 jobs and 75 percent of its locations.

The study, conducted by ten-year gaming industry veteran and accountant, Gavin Hamilton, argued that the government’s tax take from the increased rates would be $35m less than anticipated due to one-third of the sector’s customer base shifting to “underground” gaming.

The government is projecting that it will double its total gaming revenues to just over $70m in the 20182019 budget, with virtually all this increase generated by the new domestic gaming tax structure. The Hamilton study, though, suggests there will be no increase in the sector’s contribution to the Public Treasury - and it might even decrease.

“We sat and had long, arduous meetings with the gaming industry,” Mr Wilchcombe recalled. “We arrived at a number to tax the industry, as we did with the casinos.

“We arrived at an arrangement, and they indicated that the investment they’d made would take a while to grow, and as it grew the country would be better off from taxes and other revenues.”

He pointed to the two percent of turnover that web shops must currently contribute to community causes, including sports and cultural activities, as something that was generating $2-$2.5m per year to benefit wider Bahamian society when the Christie

administration was voted out of office in May 2017.

Besides the two percent “community contribution”, the present tax structure requires web shop operators to pay 11 percent on taxable revenue or 25 percent of EBITDA (earnings before interest, taxation, depreciation or amortisation), whichever is greater.

However, under the 20182019 budget’s proposed new “sliding scale” they will pay: • Up to $20m in revenue, a rate of 20 percent.

• Between $20m and $40m, a rate of 25 percent.

• Between $40m and $60m, a rate of 30 percent.

• Between $60m and $80m, a rate of 35 percent.

• Between $80m and $100m, a rate of 40 percent.

• Over $100m, a rate of 50 percent.

And, in a nasty twist as far as web shop operators are concerned, the government has also imposed new taxation on gamblers themselves rather than the sector. Patrons, from July 1, will have to pay a five percent stamp tax on both their web shop deposits and nononline games/digital sales.

Mr Wilchcombe yesterday suggested the government’s approach to the web shop industry may have been clouded by political overtones, especially the perception that its evergrateful operators would be substantial financial contributors to the PLP. “Many of them sitting in office don’t like the gaming industry, and were against its legalisation,” he told Tribune Business. “One thought it was going to empower then to be political players in conjunction with the PLP. “No. The reality of it is these are people who have moved along the lines and demonstrated they can be professionals. It’s something where those in opposition to it believed we were seeking to empower those who should not be empowered.”

Members of the Minnis Cabinet have made clear their dissatisfaction with the domestic gaming industry’s present regulatory structure. Dionisio D’Aguilar, who currently has ministerial responsibility for the sector, gave signals that he believed increased taxation

was appropriate within months of becoming minister of tourism and aviation.

Mr Wilchcombe, meanwhile, backed web shop industry arguments that the tax hikes, which the industry argues range from 238 percent to 453 percent, would drive the sector and its patrons back into the “underground” economy that existed pre-2015.

He added that this would attract renewed scrutiny of The Bahamas by the international bodies that have “blacklisted” this nation’s financial services industry for perceived

regulatory weaknesses.

The ex-Cabinet minister argued that the government should instead focus on ensuring web shops live up to their present regulatory/ taxation obligations, and operate in accordance with global best practices.

“They play a major role in providing employment.

I’m very concerned about that,” Mr Wilchcombe said of the projected 2,000 job losses. “We have to appreciate we have a high level of unemployment now, and they provide more jobs than the casinos.

“If you put them in the

unemployment line, you’re creating more problems.

The approach is absolutely and totally wrong. If you are committed to raising tax rate by two percent or whatever, why couldn’t you have discussed it with the gaming houses.

“These are businessmen, reputable businessmen.

This is wrong. It sends a wrong message to the country, and is destructive to this industry which is creative and thinking outside the box. It’s legal, and there’s no reason to penalise them having arrived where we are now.”

PAGE 6, Friday, June 8, 2018

THE TRIBUNE

MIXED FINISH FOR STOCKS AS ENERGY RISES AND TECH DROPS NEW YORK Associated Press US STOCKS closed mixed yesterday as technology companies took their worst loss in six weeks, but energy companies rose with oil prices. A four-day winning streak for the S&P 500 index ended.

Energy companies rallied as the price of US crude oil rose almost two percent.

Smaller companies fell.

Like technology companies, they’ve done far better than the rest of the market in the last few weeks. Some stocks that have struggled lately, including utilities, finished with gains.

Household goods makers also broke from their recent losses to finish higher. JM Smucker dropped after issuing a weak quarterly report and a disappointing forecast for the year. Bond prices climbed and yields dipped.

Quincy Krosby, the chief market strategist at Prudential Financial, said investors were playing it safe as they wait for leaders of the Group of Seven to meet today and tomorrow, and for European Central Bank and Federal Reserve meetings next week.

“This G-7 meeting does not follow the historical template,” she said. “The market is concerned about tariffs, negative trade dialogue coming from that meeting.”

Still, Krosby said it’s a good sign that investors were willing to take some of their winnings from the technology sector and put it into other parts of the market.

The S&P 500 index lost 1.98 points, or 0.1 percent, to 2,770.37. The Dow Jones industrial average picked up 95.02 points, or 0.4 percent, to 25,241.41, helped by big gains for McDonald’s and Chevron.

The Nasdaq composite

slumped 54.17 points, or 0.7 percent, to 7,635.07.

The Russell 2000 index of small-company stocks slid 8.17 points, or 0.5 percent, to 1,667.77. Both of those indexes set all-time highs the last few days.

More stocks rose than fell on the New York Stock Exchange.

Benchmark US crude rose 1.9 percent to $65.95 per barrel in New York.

Brent crude, used to price international oils, gained 2.6 percent to $77.32 per barrel in London.

Chevron jumped 2.9 percent to $126.96 and Exxon Mobil rose one percent to $82.88.

Commerce Secretary Wilbur Ross said the US government has reached a deal with Chinese telecommunications giant ZTE that includes a $1bn fine, monitoring and leadership changes. ZTE has already paid about $1bn for selling equipment to North Korea and Iran in violation of US sanctions. In April the department blocked ZTE from importing any US components for seven years, which threatened to put the company out of business.

The Wall Street Journal said that with the ZTE

MARKET REPORT THURSDAY, 7 JUNE 2018

t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com

BISX ALL SHARE INDEX: CLOSE 1,932.50 | CHG 1.38 | %CHG 0.07 | YTD -131.07 | YTD% -6.35 BISX LISTED & TRADED SECURITIES 52WK HI 4.50 19.17 7.50 3.85 1.48 0.19 4.05 8.90 6.60 5.30 10.40 2.71 1.61 8.21 6.10 11.48 7.29 13.67 12.51

52WK LOW 3.50 17.43 7.50 3.32 0.90 0.12 3.10 8.40 6.00 3.15 9.00 2.30 1.40 7.25 6.00 8.78 5.67 3.25 12.50

SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson

1050.00 1000.00 1000.00 1000.00

1000.00 1000.00 1000.00 1000.00

Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Fidelity Bank Class A Focol Class B

PREFERENCE SHARES

1.00 103.00 100.00 106.00 105.00 103.00 100.00 10.00 1.01

1.00 100.00 100.00 100.00 105.00 100.00 100.00 10.00 1.00

SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ

E J K L M N

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00

52WK LOW 100.00

CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

SECURITY Fidelity Bank Note 22 (Series B) +

SYMBOL FBB22

Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y

BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

MUTUAL FUNDS 52WK HI 2.15 4.16 2.00 178.69 157.58 1.55 1.70 1.62 1.10 6.99 8.54 6.15 10.52 11.46 10.46

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.48 1.62 1.57 1.04 6.41 7.62 5.66 8.65 10.54 9.57

LAST CLOSE 4.40 17.43 9.09 3.85 1.01 0.18 3.10 8.89 6.12 4.10 10.05 2.53 1.60 7.53 6.10 11.00 6.30 3.25 12.51

CLOSE 4.50 17.43 9.09 3.85 1.01 0.18 3.15 8.89 6.12 4.10 10.05 2.54 1.60 7.55 6.10 11.00 6.30 3.25 12.51

CHANGE 0.10 0.00 0.00 0.00 0.00 0.00 0.05 0.00 0.00 0.00 0.00 0.01 0.00 0.02 0.00 0.00 0.00 0.00 0.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

LAST SALE 100.00

CLOSE 100.00

CHANGE 0.00

107.83 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

107.83 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund

VOLUME 1,000

1,000

120

20

VOLUME

35

NAV 2.15 4.13 2.00 179.39 153.02 1.55 1.68 1.63 1.09 7.15 8.14 6.41 11.26 11.68 10.24

EPS$ 0.361 0.932 -0.306 0.283 -0.973 0.000 -1.465 0.638 0.573 0.171 0.627 0.102 0.330 0.000 1.129 0.679 0.610 0.293 0.543

DIV$ 0.080 1.130 0.000 0.230 0.000 0.000 0.000 0.320 0.220 0.120 0.620 0.060 0.050 0.084 0.320 0.500 0.200 0.120 0.580

P/E 12.5 18.7 N/M 13.6 N/M N/M -2.2 13.9 10.7 24.0 16.0 24.9 4.8 N/M 5.4 16.2 10.3 11.1 23.0

YIELD 1.78% 6.48% 0.00% 5.97% 0.00% 0.00% 0.00% 3.60% 3.59% 2.93% 6.17% 2.36% 3.13% 1.11% 5.25% 4.55% 3.17% 3.69% 4.64%

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

INTEREST Prime + 1.75% 6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25% YTD% 12 MTH% 1.23% 4.12% -0.16% 5.10% 0.74% 2.38% 4.66% 3.89% -0.25% 4.57% 1.04% 4.26% -1.06% 2.15% 0.58% 3.61% -0.48% 4.84% -1.08% 1.77% -5.96% -3.05% 1.90% 4.59% 7.24% 11.96% 2.77% 3.88% 3.94% 4.69%

MATURITY 19-Oct-2022 20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022 NAV Date 30-Apr-2018 30-Apr-2018 26-Apr-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018

MARKET TERMS BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225

matter settled, China’s government will likely approve a deal for Qualcomm to buy NXP Semiconductors.

Qualcomm added 1.3 percent to $60.64 and NXP rose 4.8 percent to $120.07.

Technology stocks have fared far better than the rest of the market for more than a year, but they broke from that pattern yesterday.

Facebook lost 1.7 percent to $188.18 and Microsoft fell 1.6 percent to $100.88.

Chipmaker Lam Research shed 5.4 percent to $188.83.

Smucker’s profit and sales fell short of analyst estimates, as did the company’s forecasts for the new fiscal year. The maker of jams, jellies and other foods said it is facing difficulties including higher raw materials and freight costs and rising interest rates. The stock lost 5.4 percent to $100.80.

Allergan jumped 5.1 percent to $163.27 after Bloomberg News reported that investor Carl Icahn bought a small stake in the Botox maker. Bloomberg had no details on Icahn’s plans, but he could join other activist investors who are pushing the company to make bigger changes.

At the end of May the company finished a strategic review and said it could sell its infectious disease and women’s health businesses. But on Tuesday, Senator Investment Group and Appaloosa sent Allergan a letter saying they were “underwhelmed”, and they suggested splitting Allergan’s CEO and chairman roles and making changes to its board. Allergan stock is down 28 percent over the last 12 months.

The dollar fell to 109.60 yen from 110.19 yen. The euro rose to $1.1813 from $1.1768 after a European Central Bank board member said policymakers will discuss ending the bank’s bond-purchasing stimulus programme next week.

The Federal Reserve, meanwhile, is expected to raise interest rates on Wednesday. That would be the second increase in rates this year, and the Fed has said it expects to raise rates three times in 2018. But investors are looking for clues the Fed is planning a fourth increase.

Bond prices rose. The yield on the ten-year Treasury note fell to 2.92 percent from 2.97 percent.

In other energy trading, wholesale gasoline rose 2.2 percent to $2.11 a gallon.

Heating oil jumped 2.5 percent to $2.18 a gallon.

Natural gas climbed 1.2 percent to $2.93 per 1,000 cubic feet.

Gold rose 0.1 percent to $1,303 an ounce. Silver added 0.7 percent to $16.82 an ounce. Copper gained 0.4 percent to $3.28 a pound.

Germany’s DAX lost 0.1 percent and the CAC 40 in France slid 0.2 percent.

Britain’s FTSE 100 slipped 0.1 percent after London’s stock exchange opened one hour late because of a technical problem.

Japan’s Nikkei 225 jumped 0.9 percent while the Kospi in South Korea finished up 0.7 percent and Hong Kong’s Hang Seng index advanced 0.8 percent.

THE TRIBUNE

Friday, June 8, 2018, PAGE 7

Trump to find a chilly host in Canada visit amid trade rift QUEBEC CITY Associated Press WHEN President Ronald Reagan visited Quebec three decades ago, he was so friendly with Prime Minister Brian Mulroney they sang a song together.

Expect no duets when President Donald Trump makes his first presidential visit to Canada today for a summit in a picturesque Quebec town with the leaders of the Group of Seven wealthy democracies. The mood will likely be something less than harmonious.

Prime Minister Justin Trudeau hasn’t been shy about venting his fury with Trump for imposing tariffs on steel and aluminum imports — including Canada’s — and for justifying the protectionist move by calling those imports a threat to US national security.

Trudeau has charged that he found the tariffs “insulting” and said such tactics are hardly how two close allies and trading partners that fought side-by-side in World War II, Korea and Afghanistan should treat one another. The Trump administration has also clashed with Canada over his insistence that the 24-year-old North American Free Trade Agreement involving the United States, Canada and Mexico be written to better serve the US. The prime minister had at first refrained from criticising Trump, apparently in the hope that he could forge a personal relationship that might help preserve the landmark free trade deal, a forerunner of which Reagan and Mulroney negotiated.

Those two leaders became fast friends and famously sang “When Irish Eyes Are Smiling” together in Quebec City in 1985.

PRESIDENT Donald Trump shakes hands with Canadian Prime Minister Justin Trudeau in the Oval Office of the White House. When Trump visits Canada this week there’s speculation he could walk out of meetings with allies furious over his belligerent trade policies.

Trudeau has said he finds it “insulting” that Trump considers Canadian imports a threat, saying that is not how allies who fought sideby-side in World War II, Korea and Afghanistan should treat one another.

Photo: Evan Vucci/AP Trudeau’s courting of Trump appeared to work for a time. The president had initially exempted Canada from the steel and aluminum tariffs in March. But Trudeau became exasperated and took a shot after Trump let the exemption expire last week.

“We’ll continue to make arguments based on logic and common sense,” he said, “and hope that eventually they will prevail against an administration that doesn’t always align itself around those principles.”

The prime minister had hoped to visit Washington last week to complete what he thought would be the final stages of the NAFTA renegotiation. But Vice President Mike Pence called and demanded he agree to “sunset clause” that would end NAFTA unless the three

countries agreed to extend it every five years.

Trudeau refused, and he canceled the proposed visit.

NAFTA talks stalled. Since then, Trump has sounded hostile at times toward Canada.

Nelson Wiseman, a professor at the University of Toronto, said he can’t recall relations between US and Canada being worse. He said the G-7 meeting will appear to be six lined up against one. Indeed, on yesterday, French President Emmanuel Macron suggested in a tweet that Trump might not sign the final summit statement on G-7 priorities.

“The American president may not mind being isolated,” Macron tweeted, “but neither do we mind signing a 6-country agreement if need be. Because these 6 countries represent values,

they represent an economic market which has the weight of history behind it and which is now a true international force.”

Trump offered his own dig the evening before his departure.

“Please tell Prime Minister Trudeau and President Macron that they are charging the US massive tariffs and create non-monetary barriers. The EU trade surplus with the US is $151 Billion, and Canada keeps our farmers and others out,” he tweeted, adding, “Look forward to seeing them tomorrow.”

There has even been speculation that Trump might walk out of the meetings — or even decide not to show up.

“We can never underestimate the president’s capability to provide theater

in a scenario like this,” said Daniel Ujczo, a trade lawyer with Dickson Wright. “And it would play well in places like Ohio, where I live. It is world leaders in one these globalist meetings, and they are ganging up on him.”

Under Trump, the United States has abandoned its traditional role in the G-7.

American presidents from Reagan to Barack Obama pressed for freer global trade. And they championed a trading system that required countries to follow World Trade Organization rules.

Trump’s policies, by contrast, are unapologetically protectionist and confrontational. To hear the president, poorly conceived trade deals and unfair practices by America’s trading partners have widened America’s trade deficit with the rest of

the world — $566bn last year — and contributed to a loss of millions of factory jobs.

Given the conflicts between Washington and its allies, the most likely outcome of the G-7 talks, said William Reinsch, a trade analyst at the Center for Strategic and International Studies is “polite acrimony”.

The United States has experienced tense relations with its allies before — over the Vietnam War, for example, over Reagan’s decision to deploy Pershing II missiles in Europe and over President George W Bush’s invasion of Iraq. But Trump’s moves — the tariffs and his decisions to pull out of the Paris climate agreement and the Iran nuclear deal, among other actions — have taken the hostility to heights.

“This is the first time the US government is seen as truly acting in bad faith, in treating allies as a threat, in treating trade as negative and fundamentally undermining the system that it built,” said Adam Posen, president of the Peterson Institute for International Economics. “This US administration feels unbound by previous US commitments in a way that no other administration has ever felt.”

“Prime ministers are people, and he’s insulted them,” Reinsch said.

“They’re just not going to easily roll over when he punches them in the nose like that.”

Canada and other US allies are retaliating with tariffs on US exports. Canada is waiting until the end of the month to apply them with the hope the Trump administration will reconsider. The Canadian tariffs would apply to goods ranging from yogurt to whiskey.

PAGE 8, Friday, June 8, 2018 WASHINGTON Associated Press A LEADER of House Republican moderates said yesterday that a tentative deal with conservatives is being discussed to help young “dreamer” immigrants stay in the US legally. It was unclear if the plan was a potential breakthrough in the GOP’s long-running schism over immigration or would devolve into another failed bid to bridge that gap.

The proposal emerged the same day that House Speaker Paul Ryan, R-Wis, said leaders will craft an attempt at compromise on the issue that Republicans could embrace. Ryan is hoping an accord will derail threats by GOP centrists to force a series of House votes on immigration soon that leaders say would be divisive and damage the party’s electoral prospects in November.

The flurry underscored the escalating pressure Republicans face to address

GOP MODERATE: TENTATIVE IMMIGRATION DEAL WITH CONSERVATIVES immigration, an issue pitting centrists representing Hispanic and moderate voters against conservatives with deep-red constituents sympathetic to President Donald Trump’s anti-immigrant outbursts. Painfully aware of those divisions, leaders had seemed happy to sidestep the issue until the moderates’ rebellion

forced their hand.

Rep Jeff Denham, R-Calif, said that under an offer from the hard-right House Freedom Caucus, young immigrants brought illegally to the US as children could get a new visa that would let them stay in the country for eight years.

He expressed uncertainty over what would happen

THE TRIBUNE

REP DANA ROHRABACHER, R-Calif, speaks to reporters as he emerges from a closed-door meeting yesterday on Capitol Hill where House Republicans are trying to bridge their party’s internal struggle over immigration in Washington. Rohrabacher is holding an amendment he is introducing that proposes a $1m fee for an immigrant visa.

Photo: J Scott Applewhite/AP after that, but said participants have characterised the proposal as a bridge to the legal immigration system — which suggests a pathway to remaining in the US permanently.

Rep Carlos Curbelo, R-Fla, Denham’s fellow moderate leader, said that while talks have focused on providing legal status to Dreamers, the proposal “does not involve a special pathway nor a visa unique to any specific group”.

Conservatives have been adamant about not providing a “special” process carving out a unique way for dreamers to gain legal status, and some of them bristled at Denham’s narrower description. Later, the Freedom Caucus tweeted that the group “has not made an offer” but is engaged in talks focused on border security and the status of Dreamers.

Denham, Curbelo and other lawmakers said details of the proposal remained in flux and nothing has been finalised.

“This was their offer to us and it’s something we can agree to, but not until we see it on paper,” Denham said.

Denham said that without a deal, the moderates’ threat to force the House to

consider four immigration bills remains in effect. He and Curbelo need two more GOP signatures on a petition that could force those votes, assuming all Democrats sign. If they get them by next Tuesday, the House would be on track to have those roll calls on June 25.

“We have a firm deadline of next Tuesday,” Denham said. “We’re prepared to have the final signatures if there’s no agreement between now and then.”

The moderates would force votes on bills ranging from liberal plans offering citizenship to dreamers to a conservative proposal curbing legal immigration. GOP leaders and conservatives say the likely result would be left-leaning legislation that would never clear the Senate or get President Donald Trump’s signature.

They also say it would antagonise conservative voters, jeopardising GOP turnout in November elections in which control of the House is at stake.

While Republicans acknowledged talks were underway, Rep Mark Meadows, R-NC, leader of the Freedom Caucus, said no immigration agreement has been reached and said the question of granting citizenship to dreamers “has

been the thorniest issue from the start.” Another member of that group, Rep Dave Brat, R-Va, said the idea Denham described has been discussed, but cautioned that there are “tons of moving pieces to it”.

Denham said moderates would accept border security measures as part of the accord, including backing the full $25bn Trump wants to construct his proposed wall with Mexico.

He said the conservatives’ proposal involves a merit system, but said he was unfamiliar with its details.

He also said the plan would apply to more than the nearly 700,000 people who have been protected by the Obama-era Deferred Action for Childhood Arrivals program, or DACA, that Trump has halted. Around another 1 million immigrants are thought to have qualified for that program but not applied, by some estimates.

Ryan described leaders’ effort to find compromise after a meeting of all House GOP lawmakers that didn’t resolve the party’s divisions.

He said leaders would work toward a draft that resembles Trump’s demands on the issue.

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