Financial Procedures / Supply

Estimates: legislative item; votes must relate to the year for which they are granted; votes deleted from the estimates; proceedings on specific votes ruled null and void

March 20, 1991

Debates, pp. 18728-33

On March 8, 1991, Mr. René Soelens (Ontario) rose on a point of order regarding votes in the Supplementary Estimates (C) for the fiscal year ending March 31, 1991, and in the Main Estimates for the following fiscal year, involving a daily allowance of $153 payable to Senators for attendance in the Senate. Mr. Soetens argued that this allowance should be ruled out of order because the Parliament of Canada Act, under which sessional allowances are paid to Senators and Members, had not been amended to include the new allowance. He cited a number of precedents in support of his argument that a vote must not be used to obtain authorization for something that should normally be the subject of legislation. Other Members also intervened on the matter.^[1] The Speaker postponed the debate to the following week and invited the Members to let him know the date on which they wished to resume the discussion.

On March 12, Mr. Peter Milliken ((Kingston and the Islands)) rose on a point of order to describe the Liberal Party's position on this matter. He argued that Cabinet had approved the Supplementary Estimates (C) and the Main Estimates via the Royal Recommendation and that it had to accept very direct responsibility for having recommended these expenditures to the House through the Governor General. Mr. Rod Murphy (Churchill) commented at this point that Vote 2c in the Supplementary Estimates (C), providing for payment of the allowance "in the current and subsequent fiscal year," contravened the Financial Administration Act stipulation that the Estimates must be for "services coming in course of payment during the fiscal year".^[2] The Acting Speaker (Mr. Charles DeBlois) thanked the two Members for their contribution and reminded the House that the matter had been taken under advisement. The Speaker returned to the House on March 20, 1991 to deliver his decision which is reproduced in extenso below.

Decision of the Chair

Mr. Speaker: On Friday, March 8,1991, the honourable Member for Ontario rose on a point of order to object to the inclusion of items in the Supplementary and Main Estimates which would authorize the payment of $153 per diem allowance to senators. He argued that the authority to pay such an allowance should have been sought by means of an amendment to the Parliament of Canada Act. He quoted extensive authority to the effect that spending estimates cannot be used to amend legislation, and he invited the Chair to use its authority to rule the offending estimates out of order.

The honourable Member for(Kingston and the Islands) spoke to the issue on March [12], 1991. He asked the Chair to take into account that the Estimates are recommended to the House by the Governor General but that this recommendation is secured on the advice of Ministers of the Crown.

The honourable Member then referred the Chair to two precedents. One concerned provisions in Appropriation Act No. 2 in 1965 for the payment of a gratuity to the spouse of a deceased member. The second related to the inclusion in vote 1 under Privy Council Office in Appropriation Act No. 3 in fiscal year 1989-90 of the salaries for ministers of state who do not preside over a ministry of state.

The honourable Member for Churchill expressed the view that vote 2c in the Supplementary Estimates violated the Financial Administration Act in that it sought moneys to be used beyond the current fiscal year. Furthermore, he noted that the allowances in question should have been sought through an amendment to the Parliament of Canada Act. For this reason, he explained, the decisions of previous Speakers have been breached.

Finally, the honourable Member for Churchill concluded that it was particularly inappropriate to secure an individual profit for certain Members of Parliament by means that are in any way questionable.

As both the items objected to are estimates requested by the Upper House, the Chair's initial reaction was to consider the propriety of this House interfering with the Estimates of the other place. In the last 20 years or so that the items from the Senate have been before committees of the House of Commons, no witnesses from the other place have appeared before the standing committee charged with considering the estimates from the Upper House. Therefore no guidance can be sought in the review of those estimates.

The "parentage" of the particular items challenged also remains doubtful. The honourable Member for(Kingston and the Islands) pointed out that these estimates were recommended to the House by the Governor General, and by constitutional convention, he notes, that must indicate that they are approved by cabinet. The honourable Member for Churchill was more direct. He claimed that the Government had improperly brought these estimates before Parliament and that the Government had responsibility for ensuring that they were in proper form. The honourable Member for Calgary West (Mr. Jim Hawkes), on the other hand, has clearly distinguished between government estimates and the estimates from the House of Commons and the Senate.

These latter two, he stated, are not government estimates and come before us through the mechanisms specified in the Parliament of Canada Act. Now, section 51 of the Parliament of Canada Act provides that the estimates of the House of Commons "shall, on approval by the Board of Internal Economy, be transmitted by the Speaker to the President of the Treasury Board who shall lay them severally before the House of Commons with the estimates of the government for the fiscal year." On a plain reading of these words, it appears that the honourable Member for Calgary West is perfectly correct in claiming a special status for the House of Commons estimates. The Chair was not, however, referred to nor has it uncovered any similar legislative provision as respects the Senate.

Against the issue of ownership of the Senate Estimates and the propriety of any intervention by the House of Commons is arrayed a formidable force composed of a substantial body of significant rulings by my predecessors and the provisions of the Financial Administration Act and Citation 233 of Beauchesne Fourth Edition which states that:

The cardinal principle on which the whole of our financial system is based is that of parliamentary control, and by this is understood not the control of Parliament in its constitutional sense, but control by the Commons alone.

The honourable Member for Ontario has made his case carefully and well. In his intervention, he set out all the relevant sections of the Parliament of Canada Act to demonstrate that there is no provision in that statute upon which the Senate's present request for an allowance could be based. The honourable Member then marshalled the various rulings of the Chair since 1971 in support of the concept that authority to act is received through legislation, whereas money to finance authorized action is received through the passage of an Appropriation Act. He contended that the allowance sought by the honourable senators should have been obtained by means of an amendment to the Parliament of Canada Act and, in an impressive survey of Speakers' rulings, demonstrated that in the past, attempts to legislate or to amend statutes other than Appropriation Acts by means of items inserted in the estimates have been disallowed.

The honourable Member for Churchill agreed that there was an attempt here to do through appropriations what should be done through legislation and that this was in breach of the Speakers' rulings. He also made the point that the estimates according to section 27 of the Financial Administration Act should relate only to expenses for the current fiscal year and drew attention to the fact that Senate vote 2c in the Supplementary Estimates sought authority for the payment of the allowance in the current and subsequent fiscal year. It should also be noted that Senate vote 5 in the Main Estimates 1991-92 seeks the same authority not only for the current and subsequent fiscal years but for all subsequent fiscal years.

The honourable Member for(Kingston and the Islands) in his intervention did not question the impact of the authorities quoted by the honourable Member for Ontario. Rather, he provided for the Chair's consideration two precedents which the Chair will discuss briefly.

It appears common ground in the arguments that have been made, first, that statutes ought not to be amended by means of items in the estimates; second, that authority to act in cases where statutory provisions already exist should be sought by the passage of amending legislation and only then the money to finance that action should be sought through appropriation acts and, third, that funds requested in the estimates must relate only to the fiscal year for which they are requested.

In this event, there remains only for the Chair to decide, as the Member for(Kingston and the Islands) put it, whether the items in the estimates providing for the senators' allowance fall into the impugned type of estimates.

The honourable Member referred the Chair to a particular item in the schedule to Appropriation Act No. 2 for 1965 which authorized the payment of a gratuity to the spouse or estate of a deceased member of the Senate or House of Commons. I believe the honourable Member himself recognized that this precedent is of little utility in the current circumstances, because it relates to a time when there was a radically different supply process in this Chamber and, of course, it predates the significant rulings of the Chair in the 1971-84 period.

The honourable Member's second precedent referred to an item in the schedule to Appropriation Act No. 3 for the financial year 1989-90. Vote 1 under Privy Council Office, he noted, provided for the payment to ministers without portfolios, or to ministers of state who do not preside over a ministry, a salary equal to the salary paid pursuant to the Salaries Act to a minister of state who presides over a ministry. There are other provisions therein, but it is not necessary to quote at length. On June 18, 1982, the honourable Member for Calgary Centre (Mr. Harvie Andre) challenged precisely this item. He said, as recorded at page 18607 of Debates:

In spite of the Chair's very clear rulings there is one vote which seeks to amend legislation. I am referring to Privy Council, Vote 1 which states :

Program expenditures, including the operation of the Prime Minister's residence; the payment to each member of the Queen's Privy Council for Canada who is a minister without portfolio or a Minister of State who does not preside over a Ministry of State of a salary equal to the salary paid to Ministers of State who preside over Ministries of State under the Salaries Act, as adjusted pursuant to the Senate and House of Commons Act....

The Salaries Act, as amended last July, states the remuneration to be paid to each minister. Section 5 states:

The salary of each Minister of State, being a member of the Queen's Privy Council for Canada, who presides over a Ministry of State is $30,800 per annum.

What Vote 1 of the Privy Council seeks to do, is amend that act, because it says that ministers of state who do not preside over a ministry of state will have a salary equal to that paid to a minister of state who does preside over a ministry of state. That is exactly parallel, Madam Speaker, to a vote which you ruled out of order, appropriately so, last year, being vote 30 of Agriculture in the 1981-82 Main Estimates. That vote stated, and I quote:

Agri-Food Regulation and Inspection-Contributions including compensation at rates determined in the manner provided by Section 12 of the Animal Disease and Protection Act to owners of animals affected with diseases coming under that Act that have died or have been slaughtered in circumstances not covered by the Act.

So that vote attempted to extend the act to situations not covered by it. Quite properly, Madam Speaker, you ruled that was an amendment to the legislation. Privy Council, vote 1 does exactly the same thing, and is clearly out of order based on your ruling of last year.

Madam Speaker Sauve ruled on June 21, 1982, as recorded at page 18646 of Debates:

The next item objected to by the honourable Member for Calgary Centre is Privy Council, Vote 1 on the grounds that it seeks to amend legislation and, on this basis, the honourable Member makes a parallel with Agriculture, Vote 30 in the 1981-82 Main Estimates which was ruled out of order on June 12, 1981. I must admit this vote caused particular concern to the Chair. Agriculture, Vote 30 was specifically seeking to go beyond Section 12 of the Animal Disease and Protection Act and was ruled out of order for attempting to amend existing legislation, whereas Privy Council, Vote 1 does not refer to specific legislation but is in fact a continuation of a vote in the 1981-82 Main Estimates covered by the Appropriation Act No. 2, 1981-82. In other words, Privy Council, Vote 1 does not attempt to amend the Salaries Act but provides for the salary of certain Ministers of State assigned by virtue of Section 23 of the Government Organization Act, 1970, which is itself the legislative authority required. The authority for the amount can be found in the Appropriation Act No. 2, 1981-82. I therefore find Privy Council, Vote 1 also in order.

That 1982 precedent, based, as it was, on existing legislative authority, is not on all fours with the present case. By extension, neither is the 1989-90 identically-worded item referred to by the honourable Member for(Kingston and the Islands).

There is a clear line of authority evinced through Speakers' rulings as to the distinction between the proper subject-matter of legislation and the proper subject-matter of supply.

Twenty years ago on March 10, 1971, when the House was just embarking on the present supply practice, Speaker Lamoureux ordered three one-dollar items struck from the motion to concur in the Supplementary Estimates. He explained as recorded at pages 4125-7 that such items when "... they are clearly intended to amend existing legislation, should come to the House by way of an amending bill rather than as an item in the supplementary estimates."^[3] Speaker Lamoureux had occasion to confirm this principle in both 1973 and 1974.

Mr. Speaker Jerome, called upon to rule on a number of disputed items in Supplementary Estimates on March 22, 1977, characterized the central question to the issue as "whether or not the government can obtain, through passage by

Parliament of a supply item in an appropriation bill, authority which it does not have under existing legislation." He capsulized the discussion held in respect to that central question around two key points:

… first, changes in legislation ought to be dealt with by legislation and not by supply items. The opportunity to debate, to consider and to discuss the two are totally different. Therefore, where changes to legislation are sought, they ought to be done in the proper way of all stages of a bill. The second point is that appropriation acts have temporary duration, being for the balance of the fiscal year. Therefore, they ought not to be used as a vehicle to finance or authorize on-going programs.

That is in Debates, page 4220. In pronouncing on the general question for the sake of providing future guidance, Mr. Speaker Jerome said:

On the general question, it is my view that the government receives from Parliament the authority to act through the passage of legislation and receives the money to finance such authorized action through the passage by Parliament of an appropriation act. A supply item, in my op inion, ought not, therefore, to be used to obtain authority which is the proper subject of legislation.

That is in Debates, page 4221. This was further expanded upon on December 7, 1977, in a similar ruling where Mr. Speaker Jerome said:

I think all honourable Members understand that the supply process is confined in its method of debate and exposure to the House in that it is put forward by way of an estimate which is examined by the committees of the House, and, at the end of that process when the estimate is deemed to be reported or in fact reported back to the House, it is dealt with rather quickly by way of a supply bill on the final supply day of the particular semester in which the estimate was originally advanced.

This is a process which has long been adhered to by the House which provides for an examination of the estimates in rather great detail, but does not provide for extensive debate between the various stages of the supply bill. As a result of that, it has long been a tenant [(sic)] of the House that supply ought to be confined strictly to the process for which it was intended; that is to say, for the purpose of putting forward by the government the estimate of money it needs, and then in turn voting by the House of that money to the government, and not to be extended in any way into the legislative area, because legislation and legislated changes in substance are not intended to be part of supply, but rather ought to be part of the legislative process in the regular way which requires three readings, committee stage, and, in other words, ample opportunity for Members to participate in debate and amendment.

That is from Votes and Proceedings, page 184.

As the honourable Member for Ontario acknowledged in raising his point of order, Madam Speaker Sauvé in a carefully-structured ruling on June12, 1981, set out the principles established by her predecessors. She said: "This history shows that during the past ten years, Members have objected that in one way or another the estimates that have been submitted from time to time by the government have attempted to do more than set out the spending requirements of the government for the next fiscal year. This is of course supposed to be the acknowledged purpose of estimates and appropriation acts."^[4]

In light of this line of authority, the direction the Chair must take in this regard is evident.

The language of both Senate vote 2c in the Supplementary Estimates 1990-91 and of vote 5 in the Main Estimates 1991-92 is specific. Vote 2c reads as follows:

To authorize the implementation of the Forty-first Report of the Standing Senate Committee on Internal Economy, Budgets and Administration, 2nd session, 34th Parliament, adopted by the Senate on June 5, 1990, and to authorize, in the current and subsequent fiscal years, payment of the allowance referred to within the report.

Vote 5 reads:

To authorize the implementation of the Forty-first Report of the Standing Senate Committee on Internal Economy, Budgets and Administration, 2nd session, 34th Parliament, adopted by the Senate on June 5, 1990, and to authorize, in the current and subsequent fiscal years, payment of the allowance referred to within the report.

In both instances authority is sought, first, to implement the Senate committee report which recommended the allowances and, second, to pay the allowances. The very wording of the votes confirms that there is no existing statutory authority under which the allowances could be paid. If the statutory authority existed there would be no need to seek approval for implementation in this fashion. The type of authority sought here is akin to approval in principle and, as was made clear in the rulings of both Speakers Lamoureux and Jerome, should be sought through legislation other than appropriation bills.

The lack of legislative authority on which to base a request for funds exceeding an existing and continuing act of Parliament, alone, would be reason enough for the Chair to order that the offending items be struck from the estimates; but authority is also sought to spend in a time period beyond the current fiscal year. That too is also clearly prohibited. The cycle of supply is articulated at page 677 of May's 18th edition: ''According to the "principle of annuality", which is strictly enforced, every financial year is treated as a closed period separate from every other financial year. Money voted for, and revenue received during, a particular year cannot be applied to the use of a subsequent year"; furthermore Citation 483 of Beauchesne Fifth Edition refers to "the main Estimates to cover the incoming fiscal year". Citation 484 states:

The purpose of the Estimates is to present to Parliament the budgetary and non-budgetary expenditure proposals of the Government for the next fiscal year....

May and Beauchesne read together leave no room for doubt on this point. Supply requests, through main or supplementary estimates, must relate solely to the fiscal year for which they are granted.

The weight of precedent and the strength of the argument made by Members in the House compel me to find that vote 2c under Parliament in the Supplementary Estimates 1990-91 and vote 5 under Parliament in the Main Estimates 1991-92 are not properly before the House, and are therefore deleted from the estimates. All proceedings relating to those specific votes are declared null and void and there can be no further proceedings relating to those two votes.

The Chair extends its appreciation to the honourable Member for Ontario who so carefully set out his point of order and to the honourable Members for(Kingston and the Islands) and for Churchill and for Calgary West for their contributions to this procedural debate.

F0605-e

34-2

1991-03-20