The Legislative Process / Form of Bills

Ways and means bills: Member arguing subclause to be inappropriate delegation of subordinate law

May 3, 2007

Debates, pp. 9047-8

On April 17, 2007, Derek Lee (Scarborough–Rouge River) rose on a point of order. He challenged the admissibility of subclause 13(1) of Bill C-52, Budget Implementation Act, 2007, which contained a provision amending the Income Tax Act as regards the regulation of the taxation of income trusts by providing for interim taxation rates based on the “Normal Growth Guidelines” issued by the Department of Finance on December 15, 2006. Mr. Lee drew the attention of the Chair to the absence of a corresponding measure from a related ways and means motion. He charged that the Bill attempted to exempt a measure which was, in all but name, delegated legislation, from the rules of the House governing parliamentary scrutiny of subordinate law, and that it did not comply with the Government’s own guidelines on the proper drafting of legislation. The Speaker took the matter under advisement.^[1] On April 19, 2007, Peter Van Loan (Leader of the Government in the House of Commons and Minister for Democratic Reform) rose to argue that the matter raised by Mr. Lee was one of debate, noting the absence of any procedural authorities precluding the House from “legislating in this manner”. The Speaker continued his consideration of the matter.^[2]

On May 3, 2007, the Speaker delivered his ruling. He reminded the House that his role was restricted to ensuring that the rules of procedure and practice were respected, and stated that it was not for the Speaker to answer or resolve potential questions or difficulties with respect to the interpretation and future implementation of bills currently before the House. He added that the determination of the legal status of the “Normal Growth Guidelines” issued by the Department of Finance and referred to in subclause 13(1) of the Bill and the authority of the Minister to issue such guidelines were beyond the purview of the Chair. He also noted that it was not for the Speaker to rule on questions related to the Government’s compliance with its own rules for drafting legislation. With regard to the issue of ways and means motions and legislation based upon them, he agreed that the contested provision in subclause 13(1) of Bill C-52 did not appear in ways and means Motion No. 10, to which Mr. Lee had referred, but noted that it did appear in ways and means Motion No. 20, tabled on March 27 and adopted on March 28, 2007. Since the wording of the Bill accurately reflected that of the motion, he affirmed that the Bill was fully in compliance with the requirements of the Standing Orders in that respect. He concluded that he had not found any procedural irregularities and that consequently subclause 13(1) and Bill C-52 as a whole were in order.

Decision of the Chair

The Speaker: I am now prepared to rule on the point of order raised by the hon. Member for Scarborough–Rouge River on April 17, 2007, concerning the procedural admissibility of Bill C-52, An Act to implement certain provisions of the budget, tabled in Parliament on March 19, 2007.

I would like to thank the hon. Member Scarborough–Rouge River for having raised this issue as well as the hon. Leader of the Government in the House of Commons for his submission.

In raising this point of order, the Member for Scarborough–Rouge River appealed to the Chair to find that Bill C-52 is improperly before the House by virtue of the provision included in subclause 13(1) of the Bill, which amends paragraph 122.1(2)(b) of the Income Tax Act.

This provision, if enacted, would regulate the taxation of existing income trusts during a transitional period by providing for interim taxation rates based on the “Normal Growth Guidelines” issued by the Department of Finance on December 15, 2006.

The hon. Member drew the attention of the Chair to the absence of a corresponding measure from a ways and means motion tabled on October 31, 2006, ways and means Motion No. 9.

In reviewing the hon. Member’s submission, it became apparent to the Chair that the hon. Member for Scarborough–Rouge River must have been referring to ways and means Motion No. 10, tabled on November 2 and concurred in on November 7, 2006, since ways and means Motion No. 9 is still on the Order paper and has not been concurred in.

That being said, the Member is quite correct in pointing out that while the motion to which he refers does provide for a transitional exemption applicable to existing income trusts, it does not include the protocol based on the “Normal Growth Guidelines” which later appeared in subclause 13(1) of the Bill.

Describing these “Normal Growth Guidelines” as “no more than a press release”, the hon. Member characterized the effect of the provision in question as “a delegation of subordinate law, not by regulation nor by ministerial directive, but by press release”.

He expressed concern about the possibility alluded to in the Minister’s press release that criteria not included in the Bill might be invoked after its coming into effect to rescind the taxation deferral with respect to specific income trusts and he declared that this would amount to the imposition of an unlegislated supplementary tax burden.

The hon. Member went on to cite a number of authorities, including the Statutory Instruments Act, in support of his contention that subclause 13(1) of the Bill attempts to exempt from parliamentary scrutiny by the Standing Joint Committee on the Scrutiny of Regulations a measure that is, in all but name, delegated legislation.

Finally, the hon. Member stated that subclause 13(1) of the Bill fails to conform to the Government’s own drafting guidelines, in particular to its standards for the making of proper subordinate law as expressed in the Guide to Making Federal Acts and Regulations promulgated by the Privy Council Office. He concluded with an appeal to the Chair to rule subclause 13(1) of Bill C-52 null and void.

The hon. Government House Leader responded to the point of order on April 19. On the issue of the prior inclusion of the provision of subclause 13(1) in a previously adopted ways and means motion, he drew the attention of the Chair to ways and means Motion No. 20, adopted by the House on March 28, affirming that the latter motion did indeed include the provision in question.

With respect to the argument that subclause 13(1) of the Bill provides for the inappropriate delegation of the right to make subordinate law, he declared that the provision in question violates no procedural prohibition recognized by this House and is therefore a matter for debate. He added that the same principle applies to the issue of the conformity of the Bill to the Government’s drafting guidelines.

The hon. Government House Leader also noted that it is not at all uncommon for bills to establish forms of delegated legislation not subject to the Statutory Instruments Act.

I have examined this matter with care in view of the complexity of the issues raised. As I have done on many occasions in the past, I must remind the House that my role here is restricted to ensuring that our rules of procedure and our practice are respected. Potential questions or difficulties with respect to the interpretation and future implementation of bills currently before the House are matters of law and are not for the Speaker to answer or resolve.

The legal status of the “Normal Growth Guidelines” issued by the Finance Department on December 15, 2006 and referred to in subclause 13(1) of the Bill and the authority of the Minister to issue such guidelines are likewise beyond the purview of the Chair. What does or does not fall within the definition of “statutory instrument” is a legal question and not one of procedure.

In our practice, the Standing Joint Committee on the Scrutiny of Regulations has the duty of examining whether the Government is employing “the appropriate principles and practices… in the drafting powers enabling delegates of Parliament to make subordinate laws”. That quote comes from page 689 of House of Commons Procedure and Practice.

It is not, however, for the Speaker to rule on such questions or to evaluate the Government’s compliance with its own rules for drafting legislation. There is, furthermore, no procedural objection to making reference in legislation to documents which are not subject to review by the House or its committees. Whether provisions which do so should be adopted, amended or rejected is a decision for the House to make.

With regard to the issue of the link between ways and means motions and legislation based upon them, it is perhaps useful to quote a passage from House of Commons Procedure and Practice at page 760. It states:

Ways and means motions can be expressed in general terms, or be very specific, as in the form of draft legislation. In either case, they establish limits on the scope—specifically tax rates and their applicability—of the legislative measures they propose.

This principle is reflected in Standing Order 83(4), which states in part:

The adoption of any ways and means motion shall be an order to bring in a bill or bills based on the provisions of any such motion—

Having carefully examined the ways and means motions relevant to this question, the Chair agrees that the contested provision in subclause 13(1) of Bill C-52 does not appear in ways and means Motion No. 10, to which the hon. Member for Scarborough–Rouge River refers, which was tabled on November 2 and adopted on November 7, 2006.

However, as the Government House Leader has indicated, the provision does appear in ways and means Motion No. 20 tabled on March 27 and adopted on March 28, 2007. Bill C-52 is based on ways and means Motion No. 20. Since the wording of the Bill accurately reflects that of the motion, the Chair must conclude that the Bill is fully in compliance with the requirements of Standing Order 83(4).

The other issues raised in the point of order of the hon. Member for Scarborough–Rouge River, while interesting and cogently argued, are related to the substance of the Bill and to legal issues arising therefrom and not to procedural considerations. While they may well be of interest to Members as they consider this legislative proposal, they are beyond the purview of the Chair.

In conclusion, the Chair has not found any procedural irregularities in this matter. Subclause 13(1) of the Bill and Bill C-52 as a whole are in order and the Bill can proceed in its current form.

I would like to once again thank the hon. Member for Scarborough–Rouge River for his vigilance in drawing these matters to the attention of the House.