By Zi-Ann Lum and Nick Taylor-Vaisey

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In today's edition:

→ Ottawa warns “disinformation” has entered the chat about the sudden fallout between India and Canada.

→ The Public Policy Forum shares some math behind the government’s pledge to help newsrooms.

→ GARRY KELLER, ex-chief of staff to foreign minister JOHN BAIRD, warns of a “dangerous inflection point” on tough questions after Trudeau’s stunning allegation.

Canadian Prime Minister Justin Trudeau listens as President Joe Biden speaks during a news conference. | Andrew Harnik/AP Photo

FALLOUT FRACAS — Canada-India relations continue to deteriorate and now Ottawa is warning about “disinformation” creeping into the news cycle.

The Washington Post reported Tuesday that weeks before Prime Minister JUSTIN TRUDEAU publicly linked the government of India to the June killing of B.C. Sikh leader HARDEEP SINGH NIJJAR, Canadian officials made requests to its allies “including Washington” to condemn the murder, but were rejected.

— Rejecting rejection: Two senior Canadian government officials, who spoke on the condition of anonymity to discuss the sensitive topic, called the newspaper’s reporting “absolutely false.” One of the officials said that Canada works closely with its allies. “No country would tolerate foreign state involvement of its citizens,” they told Playbook.

Foreign Affairs Minister MÉLANIE JOLY’s office also challenged the Post’s central claim, calling the story “false.”

Spokesperson EMILY WILLIAMS named India’s External Affairs Minister SUBRAHMANYAM JAISHANKAR in a statement as “the only foreign minister” Joly has engaged with related to allegations surrounding Nijjar’s killing ahead of the prime minister's announcement on Monday.

— GAC’s claim: Joly confirmed Monday that Trudeau raised the killing with U.S. President JOE BIDEN and U.K. Prime Minister RISHI SUNAK. Her office said Tuesday the insinuation Trudeau “or anyone” asked them “or others” to publicly condemn the murder isn’t true when the prime minister’s own accusation stopped short of a clear condemnation.

— View from America: India is a key partner for the United States and its rivalry with China. The development puts Washington in a tricky position, despite the Biden administration’s noted concerns about transnational repression.

— Fence sitting: National Security Council spokesperson JOHN KIRBY told CBS News the allegations are “serious” and that the United States doesn’t want to get ahead of Canada’s investigation. He made strained efforts to not pick sides.

“We’re going to stay in touch with our partners, both countries,” he said. “We want to see the investigation be able to proceed unhindered — and let the facts take it where it may.”

Buckle up: Former Trudeau advisor ROLAND PARIS told The Canadian Press’ DYLAN ROBERTSON Canada is in “early stages” of diplomatic tensions with India.

— ‘Real’ talk: In Ottawa, the opposition leader was eager to change the dial after Monday’s brief moment of unity. Conservative MP PIERRE POILIEVRE came out swinging to smack the government silly over the latest inflation numbers, but was forced to confront a weakness instead: Foreign affairs.

In one exchange, Toronto Star reporter STEPHANIE LEVITZ asked what the risk is if the prime minister doesn’t provide more information, or if the allegations about Nijjar’s killing are discredited.

Poilievre, for whom verbosity is not a problem, only offered up a one-word answer: “Real.”

— This week is one for the books: Special attention on foreign affairs will continue for the Ottawa bubble when Ukrainian President VOLODYMYR ZELENSKYY is expected to address Parliament on Friday.

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BEHIND THE REGS — Want to know what the Liberal government has in mind for giving journalism a boost? Go back in time and ask the Public Policy Forum, the think tank behind an influential set of recommendations that have found their way into federal budgets.

The PPF's Shattered Mirror report helped spawn tax credits for newsroom labor and digital subscriptions, and a local journalism fund for underserved communities. A follow-up report in 2022 drew up a blueprint for a process, which built on a similar Australian law, that would see Google and Meta compensate news outlets for posting or linking to their content.

Safe to say that, um, a lot has happened since.

Ottawa passed the Online News Act into law. Meta blocked news content for Canadians. Google threatened to do the same. The feds published regulations that implement the law.

— Reading the fine print: The PPF's COLIN CAMPBELL talked through those regulations with Shattered Mirror's authors: ED GREENSPON, the head of the PPF; and CHRIS DORNAN, former director of the School of Journalism and Communication and the Arthur Kroeger College of Public Affairs at Carleton University.

Read the 6,000-word Q&A here. These are three takeaways from the convo:

→ The law could create thousands of jobs. Total compensation is calculated based on a formula that divides each company's global search revenue by 2 percent, and then slaps a 4 percent levy on the remainder. Google would be on the hook for C$172 million. Meta would fork over a combined C$62 million.

Greenspon crunched some hypothetical numbers. The federal labor tax credit covers an annual maximum of C$13,750 per journalist. If Google's compensation agreements ponied up the same amount, the company would be supporting 12,500 jobs.

If the company covered the entire salary of a typical unionized reporter, Greenspon says, that still adds up to 2,000-plus journalists — "enough to put two people in the newsrooms of every community paper or radio station across Canada."

→ News outlets split the proceeds. The law's regs "shift the burden of deciding who gets to share in the proceeds onto the industry itself," says Greenspon. News outlets will organize themselves into collectives that negotiate with the giants: "In the Canadian version of the Australia [compensation] model, it now will be the news media sector itself that draws the final line between who is in and who is out."

→ Where does the CBC fit into compensation agreements? In Australia, the public broadcaster signed deals with the two tech giants — and claimed the money paid for dozens of journalism jobs. But that might not fly in Canada. "If there is private sector rescue money on the table," says Dornan, "it seems reasonable to ask if it’s somehow wrong for the CBC to rake up half of it." Others will argue the public broadcaster ought to qualify.

‘RISKY’ RELATIONS THREAT — Forty-one bipartisan U.S. lawmakers have written a new letter to U.S. Secretary of the Treasury JANET YELLEN and U.S. Trade Representative KATHERINE TAI, urging action on Canada’s proposed digital services tax, which they called “discriminatory.”

Ottawa’s decision to go ahead with the tax would be “risky and may damage bilateral relations with its largest trading partner,” the letter read.

— Who signed: Member of the Ways and Means Committee, led by Reps. BILL PASCRELL (D-N.J.), SUZAN DELBENE (D-Wash.), BETH VAN DUYNE (R-Texas) and DARIN LAHOOD (IL-16).

— Background: The U.S. has threatened to launch a 301 investigation if Canada imposes its proposed digital services tax which, if implemented, will slap on a 3 percent tax, targeting large digital companies that operate in Canada.

— Details: The National Foreign Trade Council and Information Technology Industry Council have increased pressure on Ottawa to drop the contentious tax, citing concerns it goes against digital trade commitments under the Canada-United States-Mexico Agreement.

— What’s next: The committee asked Tai, Yellen and KAREN ENSTROM, chargé d'affaires of the U.S. Mission to the OECD, for an update on their efforts “to ensure Canada does not enact” the tax by Oct. 3.

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— It’s caucus day on the Hill.

— Prime Minister JUSTIN TRUDEAU is in New York with Foreign Affairs Minister MÉLANIE JOLY and Environment Minister STEVEN GUILBEAULT for the United Nations General Assembly.

— Deputy Prime Minister CHRYSTIA FREELAND is in New York and begins the day with a roundtable discussion with the Atlantic Council's International Advisory Board. She has a 2:30 p.m. meeting with JANET YELLEN. At 9:15 p.m. Freeland will deliver remarks to introduce Yellen, recipient of this year’s Global Citizen Award from the Atlantic Council.

9:15 a.m. The Liberals’ Atlantic caucus holds a press conference at the Sir John A. Macdonald building to outline their fall priorities.

9:50 a.m. International Trade Minister MARY NG will beam in for a keynote chat with SCOTTY GREENWOOD at the first-ever North American Manufacturing Conference in Washington. Ng is appearing virtually after recently testing positive for Covid-19.

1:30 p.m. The Bank of Canada will post a summary of the deliberations related to the central bank’s recent decision to hold its key interest rate at 5 percent.

2 p.m. NDP Leader JAGMEET SINGH holds a media availability before question period.

4 p.m. Ontario Regional Chief GLEN HARE and First Nations Leadership and youth representatives hold a press conference in West Block to voice their opposition against Bill C-53.

4:30 p.m. The House natural resources committee meets to continue its study on Canada’s clean energy plans in the context of North American energy transformation. Alberta Federation of Labour President GIL MCGOWAN is among the committee’s witnesses.

4:30 p.m. Alliance Canada Hong Kong’s CHERIE WONG and BENJAMIN FUNG will be at the House science and research committee as part of MPs’ study on the use of federal grants by universities and research institutions in partnership with entities linked to the People’s Republic of China. The University of Alberta China Institute’s GORDON HOULDEN joins via video link.

5 p.m. Foreign Affairs Minister MÉLANIE JOLY co-hosts a dialogue on fighting arbitrary detentions in state-to-state relations featuring MICHAEL KOVRIG and international law and human rights barrister AMAL CLOONEY on the margins of the U.N. General Assembly.

6:30 p.m. Environment Minister STEVEN GUILBEAULT moderates a panel discussion during an event hosted by Canada at U.N. HQ, promoting the Global Carbon Pricing Challenge.

A ROCK AND A HARD PLACE — As the Hill reckons with a deep freeze in Canada-India relations, it's becoming clear that few tendrils of the bilateral relationship are simple. Playbook spoke to GARRY KELLER, StrategyCorp VP and former chief of staff to foreign minister JOHN BAIRD, for his observations during the Harper era.

How complex was the Canada-India relationship in those years?

Complex is a good way to put it. When we were talking about a Canada-India free trade deal, there were still some people in the department who said, "We can't trust India because of 1974." Well, I was born in 1974. They said, "When India bought CANDU reactors from Canada, they used the nuclear material to build nuclear weapons." There was still distrust about India in the department going back as far back as that.

When Modi got elected in 2014, there was a lead-up period to that point where there was a real debate about who he was. There was controversy about his time as chief minister in Gujarat. It became very clear that this guy was going to win, so how do we deal with it? Layer in diaspora politics, layer in the history of the Air India terrorist attack. It's a very complex relationship.

Pierre Poilievre's initial response to the allegations in the House of Commons was all about solidarity. On Tuesday, he had tough questions for the Liberals about the evidence behind the allegations. How important is it to keep the opposition onside?

The response on the first day was very strong. But it is the opposition's role to ask questions and hold the government to account — and to see if the government's story holds up.

I think the opposition has to tread carefully. It can be a dangerous inflection point if the opposition overplayed its hand. It can also be a danger point for the government, if what they say isn't rock solid. If there's any wiggle room on any of the facts that have been publicly stated, and it has negatively impacted a relationship with a country like India, that also is a challenging point.

How will diaspora communities interact with politicians in Ottawa? Are political parties thinking about how this plays out in the next election?

I don't think that happens right away. The first reaction of constituents is to send an email, call your MP. If you have a large population in your constituency from the South Asian community, you're getting emails, you're getting texts, you're getting calls. And it puts MPs in a very challenging spot, because they're getting half the calls on one side, and half the calls on the other side, and saying to their leaders, "I'm kind of stuck between a rock and a hard place here. Help!"

Of course, people's minds will go to how this impacts electoral politics, but they may not even have gotten that far yet. It's more like, "How do I respond to these without alienating one side of my constituency versus the other side of the constituency?" You're a backbench MP with four staff and you can barely manage. You can't send out emails because your inbox has been jammed with emails on all sides of this issue.

A message from CPAC:

— POLITICO’s BETHANY DAWSON breaks down how conspiracy theories infected British politics

— In The Hub, University of Calgary economics professor TREVOR TOMBE writes on the political irrelevance of a fed food price plan that he says doesn’t make sense.

— The Hamilton Spectator’s journalists will have no physical newsroom come early October as owner Torstart tries to save money, CBC News’ BOBBY HRISTOVA reports. The company’s Waterloo and Markham offices are also on the chopping block.

— KEN BOESSENKOOL writing for the Line compares Poilievre’s recent party convention success with STEPHEN HARPER’s March 2005 confab.

— Brits are eyeing Canada’s critical minerals, reports CHELSEA NASH in The Hill Times, and the U.K.’s Americas minister is “personally learning” the importance of Indigenous peoples in trade planning.

— Former CSIS honcho RICHARD FADDEN tells CBC News’ AARTI POLE foreign interference is “not going to go away” and Canada needs to finally step up to address it.

— Down UNGA: POLITICO’s National Security Daily newsletter compares the messages conveyed by U.S. President JOE BIDEN and Ukrainian President VOLODYMYR ZELENSKYY’s speeches.

Our latest policy newsletter for Pro subscribers from KYLE DUGGAN and ZI-ANN LUM: Canada-India trade talks frozen over killing claims.

In other news for Pros: 

— Canada paused India trade talks over concerns about Sikh activist killing

— Biden and GM CEO Mary Barra are buds. It could affect the strike.

— U.S. Treasury outlines guidance for net-zero financing

— U.S. to name synthetic drugs envoy

— Most Asian EVs to be excluded from French car subsidy scheme

Kanji Yamanouchi, Japan's ambassador to Canada, plays the piano at the embassy's celebration of the 95th anniversary of diplomatic relations between the two countries on Sept. 19, 2023. | Zi-Ann Lum / POLITICO

Birthdays: HBD to Summa Strategies chairman emeritus DOUG YOUNG. Quebec solidaire MNA ANDRÉS FONTECILLA also celebrates today.

Is there an upcoming birthday that we should know about? Email us: [email protected]

Spotted: Indigenous Resource Network’s ZACHARY AUTHIER on Parliament Hill for the first time … Foreign Affairs Minister MÉLANIE JOLY shaking hands with Ukrainian President VOLODYMYR ZELENSKYY on the floor of the United Nations’ General Assembly.

Inside the Sir John A. Macdonald building, celebrating the 95th anniversary of Canada-Japan diplomatic relations: House Speaker ANTHONY ROTA; Conservative MPs PIERRE PAUL-HUS, STEPHANIE KUSIE and SHUV MAJUMDAR; India's High Commissioner to Canada SANJAY KUMAR VERMA; Pendulum Group team HEATHER BAKKEN and YAROSLAV BARAN; JEFF VALOIS; Sen. STAN KUTCHER; Japan’s deputy head of mission FURUYA TOKURO and Ambassador KANJI YAMANOUCHI sending the crowd into the night by serenading the room with a piano rendition of The Beatles' "Let it be."

Movers and shakers: Sen. IRIS PETTEN has joined the Independent Senators Group.

Conservative national councilor MATTHEW CONWAY started a new gig as senior adviser at Sherpa, a lobbying and public affairs firm.

Send Playbookers tips to [email protected].

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10 a.m. Sens. RATNA OMIDVAR, YUEN-PAU WOO and HASSAN YUSSUFF release a report on Canada’s International Student Program.

1:30 p.m. The Bank of Canada will post a summary of the deliberations related to the central bank’s recent decision to hold its key interest rate at five percent.

4:15 p.m. The Senate legal and constitutional affairs committee meets to study Bill S-212.

4:30 p.m. The House natural resources committee meets to continue its study on Canada’s clean energy plans in the context of North American energy transformation. Alberta Federation of Labour President GIL MCGOWAN is among the committee’s witnesses.

4:30 p.m. Alliance Canada Hong Kong’s CHERIE WONG and BENJAMIN FUNG will be at the House science and research committee as part of MPs’ study on the use of federal grants by universities and research institutions in partnership with entities linked to the People’s Republic of China. The University of Alberta China Institite’s GORDON HOULDEN joins via videolink. The committee shifts its focus to impacts of pay gaps at Canadian universities in its second half.

6:45 p.m. The Senate Indigenous peoples committee will hear briefings from nine witnesses including Ontario Chief Coroner DIRK