Bill C-507 (Historical)

Federal Spending Power Act

An Act to amend the Financial Administration Act (federal spending power)

This enactment amends the Financial Administration Act in order to end federal spending in an area of provincial jurisdiction in the absence of a delegation of power or responsibility in that area.

Federal Spending Power Act

[The Speaker, Liberal, Peter Milliken]

The House will now proceed to the taking of the deferred recorded division at second reading of Bill C-507 under private members' business. The question is on the motion.

The House resumed from February 3 consideration of the motion that Bill C-507, An Act to amend the Financial Administration Act (federal spending power), be read the second time and referred to a committee.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Mr. Speaker, first, I would like to thank my colleague from Hochelaga for his earlier remarks about this bill. He spoke with all the zeal and passion we have come to expect from him. Specifically, he spoke clearly about Bill C-507.

I have the pleasure of rising to conclude the debate at second reading of Bill C-507 regarding what has become known as the so-called federal spending power.

Contrary to what the members for other parties may have said over the course of the debate, the purpose of this bill is not theoretical debate, as the Parliamentary Secretary to the Prime Minister might think, nor is it an “esoteric constitutional matter,” as it was described by the member for Brossard—La Prairie during first reading.

First, I would like to remind those esteemed members that the termination of the so-called federal spending power is something that Quebec has been demanding for a long time. In fact, since the 1960s, no matter what their political party, all the successive Quebec governments have been disputing the so-called spending power that the federal government has given itself. The federal government gave itself this power in order to assume unlawful oversight in Quebec's affairs and impose its standards and conditions on Quebec. I am always extremely surprised to hear Conservative members from Quebec accept this fact. By exercising this so-called power, the federal government negates the social choices that Quebeckers have made, are making and will make. The reason this issue is important is that in Quebec we are concerned about our health care, education and other systems. And that is neither theoretical nor esoteric.

For instance, consider the example of research in Quebec universities. Federal funding in this area comes with strings attached, which means that the federal government can choose the areas of research it wants to promote. In budget 2008, for example, research grants were awarded on the condition that the research relate to business. Other examples are the Mental Health Commission of Canada or the cervical cancer vaccination program announced by the Conservative government in budget 2007, whereby the transfer of federal funds was conditional on respect for federal priorities without taking into account the priorities of Quebec and the provinces.

During the 2005 election campaign, they tried to seduce Quebec by promising to eliminate the fiscal imbalance, even though the federal government's exercise of the so-called spending power is an integral part of the fiscal imbalance.

A few months after the election, the Prime Minister even added: “I have said many times, even since the election of this new government, that I am opposed and our party is opposed to federal spending power in provincial jurisdictions. In my opinion, such spending power in the provinces' exclusive jurisdictions goes against the very spirit of federalism. Our government is clear that we do not intend to act in that way.”

Since that time, however, the Conservative government has definitely not “delivered the goods”. Indeed, in budget 2007, it instead quietly mentioned that it wanted to limit the supposed federal spending power instead of ending it altogether. After project seduction and the election campaign were over, we began to see the true colours of this government. By saying it wanted to limit a power that does not exist, the government was in fact acknowledging it.

Then, in budget 2008, the government said it wanted to introduce a bill that would impose limits on the so-called federal spending power in areas of Quebec and provincial jurisdiction. Obviously, we are getting further and further from the Conservatives' original promise. In fact, the Conservatives are simply following in the footsteps of all previous federal governments, regardless of their party colours: interfering in fields of Quebec and provincial jurisdiction to set national standards and determine what Quebec's priorities should be, instead of allowing Quebec to do so.

As for the NDP, in the first hour of debate, the member for Outremont used a false pretext to avoid saying he was in favour of the bill. The bill would set the record straight by limiting federal spending power to the federal government's own areas of jurisdiction. If the provinces want the federal government to interfere in their affairs, they can sign agreements. The member for Outremont said that he recognized the federal government's right to interfere in areas outside its own jurisdiction, and that he would legitimize the so-called spending power by amending our bill to say that this power exists, except for Quebec.

We cannot accept that. The rule must be clear: the federal government cannot spend money in areas outside its own jurisdiction, unless it is exceptionally asked by a province.

Lastly, all of the federalist parties refuse to recognize that the so-called federal spending power has no basis and that we must put an end to it and give some tax room to Quebec and the provinces to properly fulfill their responsibilities in accordance with their own priorities.

All of these federalist parties insist on legitimizing this so-called spending power to continue to deny Quebec's legitimate aspirations and choices. In fact, all—

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Speaker, I have been listening to the members speaking on this issue here today. Of course, no political system is considered perfect. Some would say that the current system is very generous towards the provinces, but in what way? It is generous towards the provinces with the provinces' money. It is generous with the power it gives itself with the money that the provinces or the taxpayers must pay to the provincial and federal governments.

The hon. member for Lotbinière—Chutes-de-la-Chaudière tried earlier to justify the federal government's stranglehold over provincial powers by citing urgency. He probably wrote his speech yesterday when it was extremely cold out. He gave a speech that I would describe as numb, as though from the cold. He had no idea where he was going with his totally gratuitous remarks.

In the current situation, one would have to be either small-minded or an idiot to say such things to Quebeckers. If he really believes them or if the Conservatives really believe them, we can only denounce such woeful ignorance.

Bill C-507 focuses on three principles. First, it seeks the explicit elimination of Ottawa's self-given right to spend in areas outside its jurisdiction, a right Ottawa claimed not by citing urgency and saying that it knows how to spend our money better than we do, but rather by believing that it is easier to ask for forgiveness than to ask for permission. That is what the member for Lotbinière—Chutes-de-la-Chaudière was saying. Asking for permission would have taken too long. He is probably right, because we agree that having endless discussions on the Constitution and on the power to do this and that takes too long.

We only need to look at how the federal Minister of Finance behaves with the Quebec finance minister concerning tax harmonization. They have been arguing about it and discussing it for 19 years. He says that it does not seem to be taking too long and that the officials are going to continue discussing it. As long as they are in discussion, Quebec will not see any money. Time is money.

The second aspect of Bill C-507 has to do with Quebec's systematic right to opt out without conditions and with full compensation. In other words, having joined Confederation once upon a time, we could agree to put this or that into the pot, but if something has been forcibly taken from us then it must be given back.

The third aspect is that compensation has to come in the form of tax points and not a cheque. We know full well that sometimes a cheque can be withheld. We see that clearly with the Minister of Finance, who owes $5 billion to Quebec. He says he is not sending us the cheque. There were two court rulings, one in 2006 and another in 2008. The government did not go to the Supreme Court because it would have been denounced. It is not paying. Anyone in this House who had two court rulings ordering him to pay up would have his assets seized if he did not. In this case, the Queen is saying that we cannot seize crown assets. We are fed up with this type of discussion. We are not interested in getting cheques. We want tax points in order to determine a tax field that would belong to us.

This entire discussion is the basic principle behind our sovereignist or independence movement. We want to do things our own way. The members opposite can have their own country, the way they want it. I have no problem with that. If they want to give the automotive industry $10 billion, that is fine by me. If they want to give the oil industry billions of dollars, that is just great, but let them do it with their own money, not with mine or ours. We need the money for the forestry industry. That is spending power.

We have our own beliefs, principles and views. We want to build a country in a certain way. What is a country? It is tax principles. In other words, we do not like the tax havens that others encourage. We do not like fraudsters. On Tuesday, in the Standing Committee on Finance, we were told that Canada was promoting the use of tax havens. If that is what they want, that is fine, but we do not agree. Can we opt out and have our own tax policies?

There is also the social aspect. I met with the Minister of Finance yesterday. I told him that, for us, community housing and the fight against homelessness, for example, are very important. We shall see. For years they have said no, they do not agree. If they do not agree, that is fine, but what we are saying is that as long as we are part of this country, we want our money. The member for Lotbinière—Chutes-de-la-Chaudière was right in saying that our stated political goal is to get the heck out of here, to be somewhere else, at home, in Quebec. That is what we are doing today, what we did yesterday and what we will be doing tomorrow.

However, as long as the people say that they are willing to wait for a “yes” vote in a referendum, we will be here, because we were elected by people who asked us to be here. And the members need not be worried: we will get re-elected. We will get re-elected because we have different social and moral objectives.

We saw it with the gun registry. The vote was not close, not at all. It is not true that there was a two-vote difference. More than 75% of Quebec members voted to keep the gun registry and more than 60% of Canadian members voted against it. They might scrap it, but we do not agree and we will create our own.

There are fundamental differences. This bill is super-simple. It asks the government to stop encroaching on our jurisdictions, to stop acting like highway robbers who claim to know what we need. We have had enough constitutional negotiations. We have had enough fighting over the numbers. Is it $6 billion, $5 billion or $2 billion? What do you want? What do you not want? What do we want? What do we not want? Today it was about taxing diapers. Come on. They can tax them if they want to, but we do not want to.

In the meantime, we want our full powers. That is what this bill is about, and I will say that this bill is just a reasonable accommodation until we are able to pick up and leave, when we have the power to make Quebec our own country. That is why we are all here. That is why I am here and that is why we will be here until Quebec sovereignty is a reality.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to offer some commentary on Bill C-507, An Act to amend the Financial Administration Act (federal spending power).

It is a very straightforward bill. It basically states:

...no payment shall be made out of the Consolidated Revenue Fund in respect of expenditures relating to any of the subjects listed in section 92 and subsection 92A(1) of the Constitution Act, 1867 that are under provincial jurisdiction.

That is unless the province gives the authority to do so. It basically says that the federal government should stay out of provincial jurisdictions and just give them the money and everything will be fine.

The bill requires the royal recommendation in the first place and, therefore, will not be coming to a vote. However, it does give members an opportunity to put on the record some of the thoughts that they have with regard to the importance of healthy federal-provincial relationships in Canada. There are split jurisdictions but there are some things we must work on together because there is no point in having 10 of something, or 12 if we include the territories, when it is possible to have it all come under one umbrella with a sharing of the cost. It is like economic efficiencies.

I will give an example of such an efficiency which might demonstrate why I feel that the bill is not appropriate. It has to do with the fact that Canada is the only industrialized country in the world that does not have a national public cord blood bank. I am sure most members of Parliament have read stories about how after a baby is born the blood can be removed from the cord and the placenta. It is about a cup of blood that is so enriched with stem cells and pluripotent cells that it can be of enormous benefit to the child that it belongs to should he or she develop health problems. This can be stored. Interestingly enough, though, that is a private system. There are private businesses. I know one of our colleagues is spending $100 a month to store the cord blood for his recently born child.

Other countries have found that, because of the costs involved, this is not a health service available to Canadians as a whole. However, having a public bank would allow people to store cord blood and then, through a registry system similar to the way we match blood types, commence matching for anything requiring compatibility to lessen the risk of rejection. This all has to do with stem cell research and therapy.

The fact that we are the only industrialized country that does not have one causes me to question why we would not do such a thing. We do have the Canadian Blood Services Agency which, in 2007, consulted with the provinces, research groups, transplant physicians and operators of public cord blood banks, and it concluded that Canada needed to establish a national public cord blood bank and that the time to begin was now. However, we have not done it and the reason we have not done it is because we are feuding about money.

I was at a breakfast this morning sponsored by the member for Etobicoke North who is very knowledgeable in this area. She told me that I needed to go to the breakfast because I needed to hear something. We are talking about $60 million to establish a national public cord blood bank. It would be of benefit to all Canadians and in fact would be linked into an international network. I have strayed too far away from the bill in terms of time so I will leave it at that.

This is a perfect example of federal and provincial co-operation. Even though health care delivery is a provincial responsibility, the bill says if we want to have a national bank, go ahead, but the provinces do not want it. The provinces want to be able to opt out and get compensation. With that kind of relationship between the provinces, the territories and the Government of Canada, good things do not and cannot happen.

That is a specific example of why the provinces want to have a national public cord blood bank, but they want to haggle over the cost, and that is why they are so far behind. They are probably about five years behind other countries around the world, because of haggling on the financial side. It is shameful. It is wrong and it should be changed. If I had my way, if I were the minister of finance, I would put $60 million in the budget to start a national public cord blood bank. That is the way it should be done because it is for the health and well-being of all Canadians.

We cannot vote on the bill because it requires a royal recommendation, but I have some other thoughts.

The federal-provincial fiscal arrangements in which the federal government exercises spending power in the areas of jurisdiction afforded to the provinces actually dates back to Confederation when the provinces were provided with grants from the federal government to compensate them for the loss of certain fiscal powers. Today these arrangements form an important and positive nexus in federal-provincial relations that help to shape the economic and social environment of the country. The most visible means by which the federal government exercises this power is through transfer payments, including the Canada health transfer and the Canada social transfer. However, various third party federal trust and federally funded institutions, including the Canadian Foundation for Innovation also act as vehicles for exercising federal spending powers in the provinces.

Some parties consider the manner of federal spending as a forcible encroachment by Ottawa on the provincial jurisdiction, which the bill does without consultations or consent. That has fuelled the desire for increased autonomy, especially in the case of the province of Quebec and, more recently, the province of Alberta. When things are good provincially, we fight for our province.

There comes a point at which there is no rational reason to argue it is me first before the country. That goes not only for provinces, it goes for our people. We are all better off when Canada is strong, when Canada is humming along. Unfortunately, the current government has had some difficulty managing a simple bank book. It did not understand that black was good and red was bad. We have too much red in the books, but if we get more red on the other side of the House, we will fix it and bring it back to the black.

The proposed change the Bloc is seeking in the bill is absent of any explicit authorization from the provincial government and is the main issue within the bill.

The Liberal Party opposes this motion for the same reasons that we opposed the Bloc opposition day motion on October 21, 2010. It was quite extensive, but again, incorporated the same elements of argument in this bill, and members may want to consult the Debates of October 21, 2010, to get more background and details as to the arguments made by the various parties.

Having said that, the bill is not votable. However, should it have been votable, the Liberals would vote against it and we oppose the principle of the bill.

[Jacques Gourde, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and for Official Languages]

Mr. Speaker, there are several reasons why I wanted to participate in this debate on Bill C-507, introduced by the member for Saint-Lambert.

First, I must say that only the Bloc could come up with a scenario like the one described in this bill. Our party will obviously be opposed. This bill would not benefit anyone in Quebec or in the rest of Canada. It proposes a system that cannot work, and the consequences of this bill would no doubt be terrible.

We have to wonder about the relevance of this initiative and about its real goal, which is purely political and partisan. I was very surprised that it was introduced, since the federal spending power is something on which we have taken concrete action.

In the spirit of our open federalism, our government has shown flexibility, particularly by restoring the fiscal balance, by focusing on its core jurisdictions and by avoiding interfering needlessly in the provinces' jurisdictions. Furthermore, when such expenditures were necessary, we sought and obtained the consent of the provinces. We avoided creating shared-cost programs in provincial areas of jurisdiction, and when we did so, we sought and obtained the consent of the province or territory.

Let us look at the example of Canada's economic action plan. I do not think I need to go into detail about the difficult situation that forced us to adopt this series of aggressive measures to help Canada make it through the worst economic crisis since the recession in the 1930s. But we worked together with the provinces for the benefit of Canadians. And now, with this bill, the Bloc is asking us to forever abandon this tool that successfully helped us through the crisis.

To that end, our government had to spend in areas of provincial responsibility, sometimes through shared-cost programs such as the $500 million recreational infrastructure Canada program or the $4 billion infrastructure stimulus fund. The provinces' approval of this approach reflected the belief that the response to the crisis had to be a shared response. Furthermore, the targeted, temporary and time-limited nature of the economic action plan reflected our government's desire to avoid long-term distortions of roles and responsibilities.

When the economic recession hit the world, we implemented one of the largest stimulus plans in the G7. Canada's economic action plan used every means at its disposal to stabilize the Canadian economy and get Canadians back to work.

Canada was able to respond to the crisis from a position of strength owing to the stability of its financial sector, the good financial health of businesses and households, the ongoing effect of broad-based tax reductions it had already instituted, as well as its strong fiscal position.

What was the outcome of this co-operation among the various levels of government? Canada is leading the global economic recovery.

Of all the G7 countries, Canada recorded the smallest decline in output during the recession. It is the only G7 country to have practically returned to pre-recession output levels. It is the only G7 country to have recorded, in March 2010, a year-over-year increase in employment. Since July 2009, our government has contributed to the creation of more than 420,000 jobs.

This exceptional performance has not gone unnoticed by other countries.

Canada's economic leadership stands out and has been recognized by international economic organizations and the press. In an article that appeared in the New York Times on January 31, 2010, economist Paul Krugman wrote that the United States must learn lessons from countries that have obviously made the right choices and that their northern neighbour is at the top of that list.

In this context, Quebec is benefiting from Canada's performance.

In his March 30, 2010 budget speech, Premier Jean Charest said:

The recovery plan we have implemented and the strategic investments we are making in our infrastructure, which total $9.1 billion for 2010-11, have enabled Quebec to distinguish itself and do better than any other economy in the world. With more than 3.9 million Quebeckers in the labour force, we are reaching new heights in our history.

At this time, we would like to point out the importance that Mr. Charest gives to the infrastructure program, which is both an essential component of the economic action plan and an excellent example of intergovernmental co-operation.

Although the economic recovery in Canada remains fragile, Canadians can be proud of how the federal, provincial and territorial governments have worked together to deal with the major issue of the country's economic vitality.

It goes without saying that the model proposed in this bill would have made the implementation of the action plan extremely complicated because of the delays the proposed amendments to the Financial Administration Act would have caused. Our government was able to quickly implement the economic action plan; however, the federal-provincial-territorial negotiations that would be necessary if this bill were passed would make such a quick and efficient response impossible. This is just one of the major flaws in this proposal.

There is also another disadvantage to this bill that does not really seem to pose a problem for the Bloc Québécois but that is certainly an issue for anyone who cares about the proper functioning of our federation: the role that the Government of Canada is called upon to play. The constraints imposed by Bill C-507 would make the federal government's leadership subject to the mercy of the provinces. The bill would deprive the Government of Canada of the latitude needed to react to changing circumstances both within the country and throughout the world. It would also undermine the Government of Canada's ability to strengthen the country in the interest of all Canadians.

I am sure everyone will agree that this bill would not improve the functioning of our federation in any way; the only party in the House that is not striving to achieve this objective is the very same party that is proposing that Bill C-507 be passed. This party's loyalties lie elsewhere and it is easy to see where.

By way of example, I would like to quote the member for Bas-Richelieu—Nicolet—Bécancour who said in the September 11, 1997 issue of Le Droit, “We have to show that federalism is not advantageous for Quebec. Sometimes, it appeared to be working. Now, we will be able to take it apart at our leisure.”

The House resumed from November 2, 2010, consideration of the motion that Bill C-507, An Act to amend the Financial Administration Act (federal spending power), be read the second time and referred to a committee.

Bill C-507 — Speaker's Ruling

[The Speaker, Liberal, Peter Milliken]

The Chair is now prepared to rule on the point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons on November 2, 2010, concerning the requirement for a royal recommendation for Bill C-507, An Act to amend the Financial Administration Act (federal spending power), standing in the name of the hon. member for Saint-Lambert.

I thank the parliamentary secretary for having raised this important matter. In raising his point of order, the parliamentary secretary set out two separate grounds on which he alleged that Bill C-507 infringes the financial initiative of the Crown. First, he claimed that the bill seeks to alter the terms and conditions of existing royal recommendations which authorize payments out of the consolidated revenue fund to provinces and municipalities for various purposes. This alteration would take two different forms. Where transfers are made conditional upon provinces meeting certain federal standards, these transfers would now be unconditional. Where the federal government provides funds to individuals, agencies or municipalities, these funds would now be transferred only to the provinces.

The parliamentary secretary maintained that this alteration in the way in which funds are transferred violates the terms of the existing royal recommendations on which those transfers depend.

The second cause for concern which the parliamentary secretary highlighted is the effect of the provisions of Bill C-507 on payments to provinces that choose to opt out of federal programs in areas of provincial jurisdiction. These payments would be authorized whenever a province did not delegate its responsibility to the federal government in relation to a federal program in an area of provincial jurisdiction. He claimed that this would result in payments out of the consolidated revenue fund for purposes not currently authorized.

The Chair has examined carefully the provisions of Bill C-507 in light of the arguments presented. The nature of the royal recommendation requirement is explained in the House of Commons Procedure and Practice, second edition, at page 834.

A royal recommendation not only fixes the allowable charge, but also its objects, purposes, conditions and qualifications. For this reason, a royal recommendation is required not only in the case where money is being appropriated, but also in the case where the authorization to spend for a specific purpose is significantly altered. Without a royal recommendation, a bill that either increases the amount of an appropriation, or extends its objects, purposes, conditions and qualifications is inadmissible on the grounds that it infringes on the Crown's financial initiative.

What is at issue in each case is whether the provisions of the bill introduce a new appropriation, increase an existing appropriation or entail changes to the objects, purposes, conditions and qualifications of the existing appropriations to enable these appropriations to be used for a new purpose.

Bill C-507 seeks to amend the Financial Administration Act by proposing new subsections 26.1(1) and (2) which would prevent the federal government from making payments in respect of expenditures in areas of provincial jurisdiction unless the province concerned delegates that power to it. Proposed new subsection 26.1(3) establishes a timeframe for that delegation. While it has been argued that the proposed new subsections 26.1(1), (2) and (3) would have the effect of altering the conditions under which the authorization to spend currently exists, the Chair is of a different view. These subsections in no way enable existing appropriations to be used for a new purpose. Instead, these new subsections would affect whether or not the moneys appropriated are actually spent. The appropriations themselves remain unchanged and such a consideration does not give rise to the need for a royal recommendation.

As for the second issue raised by the parliamentary secretary, the Chair refers honourable members to the proposed new subsection 26.1(4) which requires that payments be made to a province that does not provide a delegation under subsection 26.1(2). In the Chair’s view the effect of this provision would be to allow the transfer of funds without there being any conditions attached. In other words, those funds could be expended for purposes not limited to, or governed by, the conditions—or purposes—of the original appropriation. Obviously, this would be a relaxation of applicable conditions, to say the least, and would necessarily constitute an infringement of the financial initiative of the Crown as the appropriated funds could be used for purposes not approved by Parliament when it made the appropriation.

On this basis, it is my ruling that Bill C-507, in its current form, requires a royal recommendation. Consequently, I will decline to put the question on third reading of the bill in its present form unless a royal recommendation is received.

Today's debate, however, is on the motion for second reading and this motion shall be put to a vote at the close of the second reading debate.

I thank hon. members for their attention.

Federal Spending Power Act

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Mr. Speaker, I am pleased to stand in the House today to speak to Bill C-507. However, I must say that this is beginning to seem a bit like déjà vu.

I find this motion rather curious in that it claims to deal with an urgent issue of vital importance to Quebec, according to the Bloc Québécois. Moreover, the ideology behind it draws on ultraconservative theories that even the Reform government opposite refuses to tackle officially.

This issue was addressed by the Bloc on October 21 during its opposition day motion. May I remind the member for Saint-Lambert that her party's motion was defeated 42 yeas to 232 nays.

However, even with Bill C-507 on the order paper prior to the opposition day motion, the Bloc could not have envisioned a better time to bring this idea to the forefront of debate thanks to the member for Beauce. Remember that the member for Beauce in a speech to the Albany Club in Toronto on October 13 stated that the federal government intervenes in provincial jurisdictions and that, in his inflated opinion, it has no constitutional legitimacy to do so.

The member for Beauce’s eloquent rant continues by stating that we should envisage a new way of conducting federal-provincial relations. The big bad wolf, as the member for Beauce calls the federal government, should not interfere in provincial matters and activities. Clearly, it is a simplistic way of summarizing the highly complex task of governing the federation. I remind my colleagues who seem to have forgotten this, that we are still one country.

Before delving into the arguments against the motion, which seem exceedingly clear to me, I would like to point out the glaring inconsistencies in the Bloc Québécois’s bill.

Since when does that party which claims to be the only true defender of Quebec's interests want to promote a bill that would actually provide fewer services for the province while dismantling tried and tested programs? Does it really want less for Quebec?

Let us now look at the arguments which, in my opinion, call into question the relevance, not to mention the urgency, of this issue. At present, this is not even an issue in Quebec. My fellow citizens of Quebec have much more pressing concerns, such as the future of their pension plan, their health care system and their jobs, than such very esoteric constitutional matters. Furthermore, whether you are a nationalist or a federalist, today, as was the case 15 years ago, this is not an issue in which Quebeckers are engaged on a daily basis.

The central issues in the major debates on the future of Quebec that we have had over the past 25 years are language, culture, pride and other aspects of identity. I have never heard talk of the spending powers of the different levels of government outside of political circles.

The Bloc members will now rise together to proclaim loud and clear that this motion is vital because the current government does not respect the division of powers set out in the British North America Act. I would like to digress a bit here to point out the subtlety of my referring to that constitutional legislation, since I assume the Bloc Québécois would not be not referring to that act, given that Quebec refused to sign the Constitution in 1982. But looking closer, perhaps I am mistaken.

The Bloc Québécois claims that the federal government should not help the provinces when it comes to health and education, because those areas fall under provincial jurisdiction according to the Constitution. Let us take a closer look at the ins and outs of the Constitution Act, 1982.

On the one hand the Bloc is saying that the federal government violates the Constitution the province refuses to adhere to, but on the other hand, wait. It now appears it is somewhat opportune to refer to it while that party is still refusing to admit the brilliance of its scope. When it works in their favour, the Bloc members like it and when they do not get enough out of it, it is a disgrace. It is looking more and more like a case of having one's cake and eating it too, or as we say in Quebec, avoir le beurre et l'argent du beurre.

At the heart of this debate on the division of government powers and responsibilities lies, I believe, the whole question of the very delicate balance we are trying to achieve in terms of governance within the federation. This balance is not only vital to making this country work, but it is also the primary reason we have been so successful over the past 143 years.

We in the Liberal Party are fully aware that our federation can always be improved, but its basic principles—including the federal responsibility of ensuring the greatest possible fairness for all Canadians—are not negotiable. In that regard, the Bloc Québécois and the Reform Conservatives form the strongest coalition this House has ever seen. For both parties, the best form of governance for Canada would be a federal government stripped to bare bones, in which all real power would belong exclusively to the provinces.

The irony of this approach is that the current government is using its spending power excessively and has run up a huge operating deficit, showing complete disdain for the most basic democratic principles and profound distrust of all of the accountability mechanisms established by our parliamentary system.

This brings me back to the idea of balance. Balance is what we are severely lacking because the Conservative Reform government refuses to be fiscally responsible, socially fair and an equitable partner our provinces need and expect. Balance is the crucial determinant of a solid and functional federation. It is the only way to ensure that all players are equally represented regardless of size, wealth or background.

Prior to 2006, federal governments of all political stripes tried, in their own way, to work harmoniously with the provinces.

The objective was always to ensure equitable, fair transfers in the areas of health and education. Clearly this has not always been easy, nor have the provinces always obtained everything they asked for. However, the search for that balance was certainly a constant during those 143 years of congenial federalism.

The prosperous and generous Canada of the 21st century is the brilliant result of the fragile but undeniable equilibrium our governments have always sought to achieve.

That said, in working out my pro-federative and resolutely federalist arguments, I am beginning to understand, though I can never subscribe to their reasoning, why my Bloc Québécois colleagues felt it was important to introduce Bill C-507, which we are debating today. I can get a sense of their argument for a federal government reduced to its simplest form.

In the face of the Reform Conservative government's dictatorial and simplistic approach, it is easy to conclude that it would be better to get rid of any possibility of power being exercised by people who are so ignorant and contemptuous of the tradition of striving for balance to which I referred earlier.

Federal spending power is the critically important means by which the federal government can exercise its responsibility to make Canada a viable political unit and to strengthen it. This is certainly the way Ottawa has traditionally used its spending power under Liberal governments such as when we introduced the old age security plan, the national health care act, employment insurance and many other initiatives.

Canada is not the European Union; Canada is a true federation with constitutional mechanisms and responsibilities that allow it to ensure a certain cohesion among all of its components.

Our differences, be they linguistic, geographic or ethnocultural, are a source of wealth and innovation. They define our place in the world and allow us to be creative in our search for solutions. As someone who left Canada after a long stay here once said, “Canada is a solution in search of a problem.”

The Bloc Québécois has its raison d'être, and I know for a fact that I am not going to be the one to change its outlook. However, I am no more ready than they are to abdicate the vision I have had of Canada for 32 years, one which has inspired me to pursue the federalist adventure.

The federation we created in 1867 was extremely idealistic. I am convinced that there were not many observers at the time who would have bet on its success.

And yet—can we forget that for six years in a row, Canada ranked first among the best countries in which to live? Can we forget that Canada originated the concept of the duty to protect, an obligation which is now the guiding philosophy of the United Nations? Can we forget the sacrifices made by all our soldiers who have fought for democracy?

As a proud Canadian and a proud Quebecker, I really do not believe that to be the case.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, it is intriguing to hear the Prime Minister’s spokesman categorize the debate on limiting the federal spending power as theoretical given that it was his Prime Minister who promised to introduce legislation in the House to do just that.

As for his assessment that some, particularly in the Bloc, will continue to demand spending in areas where they do not want it, I think that any honest assessment of the bill and of the speeches made earlier by Bloc and NDP members—and I dare say by his own Prime Minister—shows that people are fully aware that this problem must be resolved. That is one of the challenges that needs to be addressed, instead of pouring oil on the fire as the Prime Minister’s spokesman did by oversimplifying things, which is neither in keeping with the standards of this House nor worthy of the individual who just spoke. He knows what he just said was not honest. I think that those of us who have spent their careers trying to build bridges between Quebec and the rest of Canada are extremely disappointed because it is his own Prime Minister who promised to introduce legislation.

Now, I must come back to an important point made by my colleague, the Bloc Québécois member for Saint-Lambert, in her speech. In response to my question, she said that her bill was optional for the other provinces. But the fact is that she failed to read her own bill. Clause 2 of Bill C-507 could not state more clearly that the legislation applies to all provinces. One simply has to read the summary of the bill:

This enactment amends the Financial Administration Act in order to end federal spending in an area of provincial jurisdiction in the absence of a delegation of power or responsibility in that area.

The bill applies therefore to all the provinces’ areas of jurisdiction.

Based on the response the member gave earlier, she would have had us believe that the bill applied solely to Quebec. And yet, the recent letter from the leader of the New Democratic Party to the leader of the Bloc concerning the Bloc’s motion could not have been clearer.

It is being said that the Conservatives are irresponsible because they failed to stand by their commitment to introduce legislation. And we agree. We do not agree, however, when the member for Saint-Lambert says that Quebec is the only province to be recognized as a nation. We do agree with the first part. But she wants Quebec to be treated just like the other provinces. The NDP does not agree with that. We want this recognition of the Quebec nation to be truly meaningful, and that is what the leader of the NDP sought to do in writing to his Bloc counterpart. It is why we kept all the provisions limiting the scope of our proposal, but made them specific to the provinces’ exclusive areas of jurisdiction; and yes, that includes Quebec.

We have no interest in playing games as the Bloc seems to want to do by introducing legislation it knows is doomed to failure because it will upset the provinces when they have asked for nothing of the sort. There is nothing optional about Bill C-507.

It is worthwhile to take a look at the NDP’s historical approach to this. At its founding convention 50 years ago, the NDP was the first Canada-wide political party to recognize the reality of the Quebec nation. That is a very important historical fact.

Then a broad consultation was held everywhere in Canada, called the Social Democratic Forum on the Future of Canada. This was a report by a group co-chaired by Nycole Turmel, long-time president of the Public Service Alliance of Canada, and Dick Proctor, a former colleague of ours in this House from Saskatchewan. Charles Taylor and Bill Blaikie were also members of the forum. Of course, that was Charles Taylor of the Bouchard-Taylor Commission and Mr. Blaikie, who was once voted best member of the House.

The report led to a recommendation that we have asymmetrical federalism when it comes to Quebec, and co-operative federalism. Obviously, it is that last word that causes so many problems. It sticks in the craw of the Bloc members to think that something constructive could be done in Canada to improve things for Quebec.

That was implicit in her answer to my question: she wants to be able to keep saying, every time she talks about it, that Canada cannot be reformed.

That is what we are talking about. Canada is a work in constant progress. It is entirely perfectible, and one of the things we have done to make Canada better is to recognize the reality of the Quebec nation in this House. The NDP is now trying to give that a little more substance.

A series of positions that are quite clear were then adopted in the Quebec section. They are worth examining, in light of recent efforts by the NDP intended precisely to give some real meaning to that recognition of the Quebec nation. Five years ago, it was said that Quebec’s national character was based particularly, but not exclusively, on a majority French-speaking society that works in the common language in the public space. A bill was introduced in this House to extend the language guarantees in the Charter of the French Language of August 1977 to federal enterprises. That was in response to this first concern.

We raised something else, namely a specific culture that is unique in the Americas and that finds expression in a sense of identity and belonging to Quebec. I proposed a motion in the House following the Supreme Court’s decision invalidating Quebec's Bill 104, which opened an enormous hole in Bill 101 concerning access to English schools. We managed to get it adopted unanimously by the House. The House agreed unanimously that immigrants who choose Quebec must learn French first and foremost. That is important to the history of this country.

Finally, we also speak of Quebec’s specific history and institutions. The NDP courageously supported the Bloc motion to maintain Quebec’s political weight in the House of Commons. We did not see any contradiction between the need to increase the number of seats in provinces that required it, such as British Columbia, Ontario and Alberta, and the need to maintain Quebec’s percentage. We moved an amendment that the Bloc accepted, and there was a vote. Ultimately, it was defeated because the Liberals always vote against Quebec, whether in regard to the language of work, the specificity of its culture, access to French schooling, or its political weight. However, there is a progressive, federalist, Canada-wide party that can stand up in the House and say loud and clear that we should stop being half-hearted about our recognition of the Quebec nation. The time has come to really breathe some life into it.

Finally, because the fourth point deals with specific economic and political institutions, I would like to add in regard to the regulation of securities that, once again, when there were votes in the House—the Liberals are hiding now behind a reference to the Supreme Court—they voted against Quebec’s right to keep the regulation of securities within its jurisdiction.

Those are four examples. That was followed in the fall of 2006 by what is called the Sherbrooke declaration, which was approved at the first meeting I had the pleasure of attending for the NDP in September 2006. It was held in Quebec City. All of these principles favoured asymmetrical federalism and a federalism that worked through consent, consultation and negotiation. We wanted to eliminate the federal spending power from areas of exclusive Quebec jurisdiction. It is in keeping with this position, unanimously supported by the NDP, that we are trying today to repeat what the leader of the NDP recently offered the Bloc in regard to their motion.

If the Bloc is sincere, if it is serious, if the Bloc members are not just engaging in a positioning exercise, as they often do, if they want to have a chance to get this passed, they should agree to propose an amendment making it clear that they are speaking exclusively about Quebec and its exclusive areas of jurisdiction. The NDP will be there. That is totally in keeping with the positions adopted by our party pursuant to these very important consultations that found expression in the NDP’s Sherbrooke declaration.

We say in our document that we have to break the deadlock. That is what we are trying to do. Unfortunately, the Bloc prefers to keep us there.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

moved that Bill C-507, An Act to amend the Financial Administration Act (federal spending power), be read the second time and referred to a committee.

Mr. Speaker, on April 14, I had the honour and privilege of introducing Bill C-507, which proposes to rectify one of the biggest injustices of the current federalism: the fact that over the years the federal government has given itself an illegitimate power, the so-called “federal spending power”.

We are talking about a “so-called” power because it is nothing more than a federal government creation that has no basis in the Canadian Constitution.

The vast majority of jurists feel the same way. Nothing in the Constitution resembles this so-called federal spending power.

The great constitutionalist, Andrée Lajoie, is categorical about this and says:

...the expression “spending power” as used in Canadian constitutional discourse refers to the ideological affirmation of a non-existent federal power to spend in the provinces' areas of jurisdiction by imposing conditions equivalent to a normative intervention.

I find that to be an accurate and appropriate definition of this so-called power usurped by the federal government over the course of the past century. The definition contains all of the key elements. First, it states that there is no justification for this power under the Constitution of Canada, either the original 1867 version or the current version that was adopted, need I remind you, in spite of the unanimous opposition of the elected members of the National Assembly of Quebec, and that no Quebec government, federalist or sovereignist, has endorsed to date.

Then there is the fact that the expenditures in question pertain to areas of jurisdiction belonging exclusively to Quebec and the provinces and which, therefore, are not under federal jurisdiction.

Finally, there is the manner in which Ottawa has used these expenditures to assume unlawful oversight in Quebec's affairs, impose its standards and conditions, and lay the foundation for the paternalistic ideology we call “Ottawa knows best”.

The federal spending power is just a tool for justifying the federal government's centralist meddling, its hope for a unitary state and its dreams of reducing the provinces to simple administrative entities that Ottawa could relegate to the rank of subcontractors. Quebeckers will never accept that.

However, after this Parliament recognized Quebec as a nation, we would have expected it to concurrently recognize that a nation has collective rights, just as individuals have rights, and that they include the right to define one's own national identity.

The areas of jurisdiction belonging to Quebec and the provinces are instruments that provide an affirmation of identity and values and, to that end, unlawful federal interference, by means of the so-called federal spending power, must be seen and judged for what it is—an attempt to impose on Quebeckers values that are not our own.

Therefore, we should not be surprised that the provinces, except for Quebec, have practically never manifested their opposition to this so-called power because the federal government, the government of Canadians, has generally attempted to promote the values of the Canadian nation.

The federal government's illegitimate expenditures in areas under Quebec's jurisdiction fall into at least three categories. The first is conditional transfers—money that the federal government transfers to Quebec and the provinces—such as the Canadian health and social transfer. The second is direct services to the population. The third includes individual benefits and business subsidies in fields not under federal jurisdiction. The Canada Council for the Arts, the Economic Development Agency of Canada for the Regions of Quebec and research grants are examples of this.

Every Quebec government since Duplessis, whether Union Nationale, PQ or Liberal, has criticized this kind of normative interference.

And rightly so. Currently, the federal government spends over $60 million in areas not under its jurisdiction. This year, nearly one-quarter of the Quebec government's budget came from the federal government.

The federal government spends money on university research, education, health, social housing and parks. Now it is trying to impose a single securities commission.

Every time it does this, it is imposing its priorities, values and principles on Quebec. Those are Canada's priorities, values and principles, not Quebec's. For Quebec to exist as a nation, it must, at the very least, be in control of the levers and powers set out in the Constitution. That is why I will not accept the member for Beauce's lame reasons for voting against the Bloc Québécois's October 21 motion, which was essentially the same as Bill C-507.

The member for Beauce basically said that he did not support the Bloc Québécois motion because its intent was to destroy Canada. I have two things to say about that. First, it is yet another intellectual shortcut to equate the desire to build one's own country with the destruction of another. The difference between the two is fundamental. Sovereignists do not despise Canada, nor do we wish to destroy it or make it ungovernable. All we want is for Quebeckers and Canadians each to have their own country.

If I follow his logic right through to the end, to say that abolishing the federal government’s spending power would mean the destruction of Canada is to suppose that this alleged power is basic to Canada. Since this so-called power is illegitimate, illegal and unconstitutional, the only possible conclusion is that he thinks the foundations of modern Canada are illegitimate, illegal and unconstitutional. If that is the conclusion he wanted to reach, I can only say I agree. The supposed federal spending power is nothing less than the constitutional equivalent of the sponsorship program: nothing less than an indirect way for Ottawa to engage in nation building through dollops of millions of dollars in propaganda.

I hasten to add, though, in case there still any doubts in this regard, that our identity and allegiance are not for sale. Quebeckers will never sell their soul to the highest bidder. That is why the Bloc Québécois has been saying for years that such interference in Quebec’s affairs must stop. I want to emphasize that it should stop, rather than falling back on any notions of limiting the so-called federal spending power, as the Conservative government proposed before getting elected in 2006. Illegalities do not become more justifiable and legitimate, as if by magic, just because someone puts a limit on them. In any case, how can one limit a power that does not exist in the first place?

It is very amusing, therefore, to watch the federalist parties thrash about trying to find some justification for this illegitimate power—simply because they are federalists—when this power is the exact negation of the principles on which the Canadian federation is supposedly based. It is intriguing to see those parties all entangled in this paradox because they have only themselves to blame. They created it.

Their blatant inability to condemn the supposed federal spending power only reinforces the impression, which seems to get stronger every day, that the Canadian federation cannot be reformed and the only option still on the table for these federalists is the status quo. But that is unacceptable to Quebec.

The legislative changes in this Bloc bill are not radical in the least. Quite the opposite, they are intended simply to repair an error and an illusion that federal governments have been trying for decades to turn into a central principle. The supposed federal spending power is nothing more or less than the zenith of constitutional trickery. But Quebeckers are not fooled.

So how can this mistake be fixed? First of all, by doing an inventory of all federal spending in jurisdictions that belong to Quebec and the provinces. Next, by withdrawing, without any form of negotiation, from those jurisdictions and transferring the funds involved to Quebec and the provinces, unless of course, the federal government is given express written consent to continue that spending. Thus, opting out, as it is commonly known, would disappear, to be replaced by its counterpart, which I will call opting in.

In other words, the desired goal is to reverse the onus: instead of having to enter into long, painful negotiations every time, the federal government's exclusion from jurisdictions that are not its responsibility would become the norm.

In order to ensure that a province or Quebec is not shackled by a decision to opt in, these agreements would have to be renegotiated every five years.

Lastly, fair compensation must be given for all programs that would be returned to Quebec and the provinces, ideally by freeing up some of the federal tax room that the federal government unfairly has at this time and that means that the fiscal imbalance has definitely not been resolved, despite this government's claims.

If it were resolved, we would not be here discussing this bill, because the very existence of federal intrusions in our jurisdictions is the most indisputable proof of the fiscal imbalance.

In order to solve it, tax points would definitely have to be transferred so that Quebec would not have to beg the federal government for the financial resources needed to assume its responsibilities, which are more significant than federal responsibilities.

In fact, that is precisely what was recommended by the Séguin commission on fiscal imbalance, whose final report was unanimously adopted by the National Assembly.

Two of the commission’s main recommendations called specifically for the Canada health and social transfer to be replaced by a transfer of tax points, preferably from the GST but possibly from personal income tax, and for an end to the abusive, unconstitutional use of the supposed federal spending power in areas of Quebec and provincial jurisdiction.

Generally speaking, that is exactly what is proposed in the bill before us now.

Despite the fact these recommendations were approved by the National Assembly, despite the fact the Quebec nation was officially recognized right here in this Parliament, and despite the fact this bill provides a perfect opportunity for the federalist parties to demonstrate their good faith, I harbour few illusions about the fate that will befall Bill C-507.

Despite the goodwill they like to display and the rationales they always find to give themselves a clear conscience, the federalist parties will always want the power to dictate to Quebec what path it should follow, ad that will be, always and forever, the Ottawa knows best approach.

By spending in areas of Quebec and provincial jurisdiction, the federal government imposes its priorities and its vision of a unitary country. But that is wrong. Canada is not a unitary country. It is a divided country, irredeemable divided, between two nations, the Quebec nation and the Canadian nation, not to forget the many first nations of course.

By spending in areas of Quebec and provincial jurisdiction, the federal government tries to iron out the differences, even though they are huge and very significant, between Quebec’s political choices and Canada’s political choices.

Quebec has decided, in particular, to adopt the most progressive social policies in North America. The federal government tries, however, in every way to meddle in Quebec’s social affairs, generally by adopting a poor copy of what is done in Quebec and then imposing its own conditions and standards if Quebec wants the funding.

People who defend this attitude generally say the federal government’s supposed spending power is like a present that Quebec and the provinces are free to accept or reject.

But the supposed presents from the federal government are paid for with money from Quebec taxpayers. What a gift.

Quebeckers are told they are being given a present, but they are the ones paying for it. The worst thing is that the people who defend this do not even realize how absurd their rationale is. If they do realize it, they invoke all kinds of equally absurd principles to justify the unjustifiable.

Our proposal—like Quebec’s position for the last 60 years—at least has the merit of being clear.

In conclusion, I would like to say that Quebec is a young nation that has dreams and aspirations, just as people do. But because of Ottawa’s paternalistic, condescending attitude toward it, I am more convinced than ever that we will only be able to realize these dreams when we are completely and totally free, when we are a sovereign country.

Private Members' Business--Bill C-507

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, on October 7, 2010, you raised concerns about four private members' bills, which, in your view, appeared to impinge on the financial prerogative of the Crown and you invited members to comment. One of the bills you mentioned was Bill C-507, An Act to amend the Financial Administration Act (federal spending power). I am rising today on a very lengthy point of order regarding that bill.

Bill C-507 would amend section 26 of the Financial Administration Act, which states:

Subject to the Constitution Acts, 1867 to 1982, no payments shall be made out of the Consolidated Revenue Fund without the authority of Parliament.

In other words, section 26 does not provide authority to make payments out of the Consolidated Revenue Fund but establishes that payments out of the fund can only be made with the authority of Parliament.

Clause 2 of Bill C-507 would add a series of subsections to section 26. A new subsection 26.1(1) would provide that no payment from the consolidated revenue fund shall be made for matters listed in section 92 and paragraph 92A(1) of the Constitution Act, 1867, that are under provincial jurisdiction.

A new subsection 26.1(2) would enable payments to be made from the consolidated revenue fund to provinces which have delegated to the government the power to incur expenditures referred to in subsection 26.1(1) or the responsibility to administer programs associated with those expenditures, or both.

A new subsection 26.1(3) would set out the duration and nature of the delegation referred to in subclause 2(2). A new subsection 26.1(4) would enable the federal government to make a payment out of the consolidated revenue fund to a province where the federal government proposes incurring expenditures or administering a program. A new subsection 26.1(5) specifies that such a payment may be made in the form of a transfer of a taxation field.

The provisions of Bill C-507 have two impacts related to the need for a royal recommendation. The first impact is to alter the terms and conditions of original royal recommendations authorizing existing payments out of the consolidated revenue fund for grants or direct payments to provinces and municipalities.

In the case of grants, under existing statutes, federal grants to the provinces can be either conditional or unconditional. Two examples of conditional grants to provinces are the Canadian health transfer, also known as the CHT, and the Canadian social transfer, also known as the CST.

In order to receive the CHT, provinces must meet federal standards and comply with the requirements of the Canada Health Act in sections 7 to 12. In order for the provinces to receive the CST, grants are subject to a prohibition on minimum residency requirements for social assistance. Bill C-507 would change the terms and conditions of these existing grants or transfer of grants to the provinces by making them unconditional, thereby waiving the conditions related to these transfers.

In the case of direct spending, under existing statutes direct spending in the areas of provincial jurisdiction occurs when the federal government allocates money directly to individuals, agencies or municipalities. An example is the transfer of federal gas revenues to municipalities and the universal child care benefit. Bill C-507 would no longer allow these transfers for direct spending to be made to municipalities but, rather, would only allow the federal government to transfer money directly to the provinces.

This would change the manner in which existing direct payments are made since these payments would no longer be made to the currently authorized recipients but to the provinces. Precedents indicate that changes to the terms and conditions of a royal recommendation require a new royal recommendation.

On June 21, 1972, the Speaker ruled in the case of Bill C-220, respecting regional incentives development data:

...it is not only the amount approved or recommended by the royal recommendation that cannot be changed but there is also a prohibition against a redirection of the amount that is approved or recommended to the House in the royal recommendation.

The second impact of Bill C-507 relates to how its provisions would authorize payments out of the consolidated revenue fund to provinces that choose to opt out of federal programs in areas of provincial jurisdiction.

I would note that on April 14, 2010, the member for Saint-Lambert introduced Bill C-507 and stated that the bill would:

...introduce an automatic and unconditional right to opt out with full financial compensation and would establish permanent compensation in the form of the transfer of tax room.

In other words, the bill would provide for the authorization of payments out of the consolidated revenue fund to provinces for purposes not currently authorized in statute. Page 834 of House of Commons Procedure and Practice, second edition, states:

A royal recommendation not only fixes the allowable charge, but also its objects, purposes, conditions and qualifications. For this reason, a royal recommendation is required not only in the case where money is being appropriated, but also in the case where the authorization to spend for a specific purpose is significantly altered.

Precedents demonstrate that the Crown alone institutes all public expenditure and Parliament may only authorize spending that has been recommended by the Governor General.

On October 13, 1983, the Speaker ruled certain motions in an amendment at report stage that would have directed the government to establish a system of payments to agricultural producers inadmissible because they imposed a charge upon the treasury.

On May 28, 1990, the Speaker ruled motions in amendment at report stage, which would have substituted a different escalator clause for fiscal arrangements, inadmissible because they infringe upon the financial initiative of the Crown.

On June 13, 2005, the Speaker ruled on Bill C-280, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence that:

...Bill C-280 effects an appropriation by spending or authorizing the spending of public funds by transfer of the funds from the Consolidated Revenue Fund to a separate EI Fund with the result that these monies are no longer available for other appropriations Parliament may make. ... Such a transfer...constitutes an appropriation within the meaning of section 54 of the Constitution Act, 1867 and for this reason a royal recommendation is required....

The precedents have parallels to the impacts of provisions in Bill C-507 for authorizing a new and distinct spending in that Bill C-507 proposes a new scheme for making payments out of the consolidated revenue fund in matters and for purposes not currently authorized by Parliament.

I submit that Bill C-507 would change the authorization for grants and direct payments, as well as payments to provinces that choose to opt out of federal programs in areas of provincial jurisdiction. These changes, in our view, would therefore require a royal recommendation.

Opposition Motion—Federal Spending Power

[Daniel Paillé, Bloc, Hochelaga, QC]

Madam Speaker, I heard the amendment proposed by the hon. member for Outremont. Unfortunately, his amendment simply did not hold water, it did not make sense.

We presented this motion because a federation exists between equal people. We are not opposed to federations; it depends on how people are treated. Usually, federations are created by people who consider each other equals. It can be a group of friends, neighbours or merchants. It can be a group of people who are different but who, in all equality, have decided to pool together a number of things. That is the principle and the basic principle is that none of the members of a federation takes precedence over the others. That is the very basis of that political concept.

Let us go back to 1867. It was determined, in a number of territories, that certain governance powers should remain close to citizens. Those entities which are now called the provinces—Quebec was one them—decided to do in their own way everything that affected their citizens directly and closely. That is why the establishment of cities, for instance, has nothing to do with the federal government. It is entities from Quebec and the other provinces that decided to create their own municipal bylaws.

The provinces decided they would keep education and health under their responsibility, as well as social affairs, culture and language, particularly in Quebec, for business relations with entrepreneurs, individual investors and small and medium size businesses, because they felt they were in the best position to look after these matters. They also decided to share a number of things that did not directly affect people or the public, such as the army, defence and borders.

I come from a family of entrepreneurs, of grocers. When I was very young, my father was an independent grocer. He was in control of his grocery store and no one could tell him what to do. At one point, we joined a co-op, a federation. It was called Les Épiceries Lasalle. Later on, it became Les épiceries Metro, and we pooled a number of things together. However, I can assure hon. members that no one, neither the Metro federation nor any Metro grocer could say anything to the owner of our family store. They had a say about things that were decided together, but certainly not as regards anything else.

As far as the federal government’s appropriation is concerned—and here is where we come back to our motion—I get the sense that the federal government finds it easier to ask for forgiveness than to get permission. It encroaches and then takes a wait-and-see approach: if people complain, we will tell them that they have nothing to complain about; and if they do not, we will move in on such and such an area of jurisdiction and present it as a fait accompli. There have been many examples of this.

Let me now turn back to the very nature of power. If one has certain powers, one's principles determine whether one keeps or shares them. Things get a little trickier when it comes to using these powers. Money, taxes and levies are required. Things get more nuanced, and discussions or even disputes ensue.

If the money is coming from elsewhere, not from our own pocketbooks, we may be less critical. When children get a Christmas present, it comes from Santa Claus, not from their family. When they are really young, it is the parents who control the purse strings and decide what is best for the child. You often hear children say that they would like this or that, but Santa Claus does not listen to them for their own good. That is all well and good when the child is young and does not have any money, but what happens when the child is a teenager? It is a little tougher, and among adults it is a different story altogether. Everyone here has had the experience of giving children gifts. What do you do when these children are older? You give them money or a check and tell them to use the money as they see fit.

So there is a certain level of maturity required when wielding these powers, which are a gift from someone else. When it is my money and my taxes, I am not going to have someone come along and tell me what to do with it. Nobody is going to tell me how to spend my money. And that is when big problems crop up. There is a difference between being given a house, a car or a cottage with a mortgage, and having a mortgage-free one. At some point, you will ask whether you can decide that you do not want it because you would rather manage the tax field or mortgage yourself.

In Quebec, every government—be it the Parti Québecois government of which I was a part, or the Liberal government the member for Outremont was in when he was in Laval—has repeatedly observed that this spending power was never given to the federal government to be used as it is currently being used.

The result is that the federal government loves to spend. It decides to do this or that because it thinks it is good for Quebeckers and Quebec families. Where does it get the cash? From the pockets of Quebeckers. That is where it gets its taxes. No more water can be squeezed out of a sponge than there is in it. At some point, poor Quebec taxpayers start wondering which government is theirs.

If a survey was done across Canada asking Canadians which government was theirs and who their Prime Minister was, they would instinctively say the Government of Canada. In Quebec, though, it would be the Government of Quebec, regardless of who the Premier was and the government in power. We identify much more with Quebec than with Canada.

The federal government invades our tax room. Tax room is a space where there is income from which the government can decide to take a portion. We would rather look for tax room among people earning more than $150,000 or $250,000. We said so last year in our pre-budget submissions.

If other provinces do not want that, it is okay, they can do things their way and use their tax room as they see fit. If the Canadian provinces want to give more powers to the federal government, they should do it and give the Government of Canada taxing authority. They may regret it though. In Quebec, that is not how things work. In Quebec, the fiscal imbalance led to the Government of Canada’s excessive use of too much tax room. We made the decision in Quebec to pay for social services, education, day care and health care. At some point, there is very little tax room left. It is all gone. When two governments are in the same tax room, we have what is called a fiscal imbalance. It does not come out of nowhere. It happens when governments cannot agree to come to terms on a certain tax room and use it well.

When a government takes advantage of tax room, it is because it is entitled to do something with the money it collects. When there is tax room, people give their government the ability to collect taxes and provide services. When one of the two parties does not merely offer but imposes services and says things will be done its way, and it wants to fund these things with money from our pockets, at some point, a huge problem arises. The fiscal imbalance in Canada was never resolved, regardless of what our Conservative friends might say. We are always aware of that in Quebec. I repeat: all Quebec premiers, whether from the PQ, the Liberals or even the old Union Nationale, have agreed that the fiscal imbalance problem has never been solved. Never. It is an illusion.

While we wait for a majority of Quebeckers to get behind the idea of having a government that uses the entire fiscal room and adopts its own measures in relation to health, social services, education, culture, languages and everything else, what are we doing in the Bloc Québécois? We are working, and for example, under the leadership of the member for Saint-Lambert, we have introduced Bill C-507, which is up for consideration in the House. At the press conference I held with my colleague, I said it was a reasonable accommodation. It is our way to say yes, let us do that while we wait for Quebec to be a sovereign country. What do we say about that? We say that in Quebec, we should have the sovereign, inescapable right to take all of our powers, to prevent the federal government from allowing new spending, to get the federal government out of areas where it has no jurisdiction, and to stop this kind of behaviour. There is one other aspect that we must keep in mind and that is that money must come with those measures. What kind of money? We are not expecting a cheque, we are expecting fiscal room. If someone is delighting in the cheque they got from their parents, or cash as a gift, when they became a teenager or an adult, and then keep expecting such handouts the rest of their lives, at some point they will be waiting a long time. What does a person do? They say: “I am going to create my own fiscal room, I am going to be independent and I am going to create my own wealth.”

That is what Quebec wants. The federal spending power should be limited to what it originally was; it should withdraw from the entire room it has invaded since then; and the government of Quebec should get a transfer of tax points and be able to work with them, either by giving the money back to the taxpayers or by using it according to its own standards. We have seen that in the past. The Government of Canada took one or two points off the sales tax. At that time, and that was the same government we have now, the Government of Quebec used it by returning it to the taxpayers of Quebec. That was its decision. Did we agree? That is not the issue, here. It was the government that decided. Personally, I would have liked to use it differently, but we respect the authority and power of the Government of Quebec. It is the federal system that we have a problem with.

Just now, they were making fun of the Bloc Québécois’ new guru, but it has to be said that there are mirages in life. Sometimes, there are flashes of brilliance. Sometimes people see UFOs and are convinced they have seen them.

This is what the member for Beauce said:

Ending the federal spending power, eliminating the federal programs that violate the division of powers, and transferring tax points to the provinces would be the right thing to do from several perspectives.

That is what he said. The speech is on his website, and in it he also said:

Instead of sending money to the provinces, Ottawa would cut its taxes and let them use the fiscal room that has been vacated. Such a transfer of tax points to the provinces would allow them to fully assume their responsibilities, without federal control.

That is not a new guru. That is someone who saw a UFO, and who claims that that is the way it should be. That is what he might have thought, but it will not happen. The Government of Canada simply does not want to go that way. It is telling us that if are not happy, we either accept it, or we go away and become sovereign and independent.

Is it the same everywhere in Canada? No; some provinces are perhaps fine with the federal government having control over certain things. Good for them. We do not want that. That is where we differ. When there are conditional transfers, we refuse them. Who has power over whom? That is the question.

Is this a more sensitive issue in Quebec? Perhaps not. Is it different in Quebec? Yes; it is different because we are different. That must be accepted. We will remain in North America. We will continue to do business with Canadians and Americans. We will continue to trade. Canada has Quebec to thank for being so open to the world. However, a nation does not let someone else control its culture, its social development, its education or economic development. Is that simple enough? We cannot accept that Canada acknowledges we exist, but that it retains control over us. In Quebec, we say that we exist, so we will control our own affairs.

[Jean Dorion, Bloc, Longueuil—Pierre-Boucher, QC]

moved:

That, in the opinion of the House, the government should, as long called for by the Bloc Québécois and now called for by the Member for Beauce, end the so-called federal spending power in the jurisdictions of Quebec and the provinces, eliminate the federal programs that violate the division of powers, and transfer tax points to the provinces by: (a) eliminating all federal spending in the jurisdictions of Quebec and the provinces, unless express authorization is given by Quebec or the province; (b) providing a systematic right to opt out with full financial compensation and without condition of all existing and future programs, whether co-funded or not, that intrude into jurisdictions of Quebec and the provinces; and (c) transferring, at the request of Quebec or a province, fiscal room in the form of tax points and/or GST to replace the amounts that the province would otherwise have received under the Canada Health Transfer, federal programs in its areas of jurisdiction and the transfer for social programs and post-secondary education indexed to 1994-1995 levels.

Mr. Speaker, in 1867, the people of Quebec were not consulted on whether or not they wished to join Confederation, but in order to make the pill go down, so to speak, it was promised a spoonful of sugar: that it would be sovereign in several areas, and that it could use that partial sovereignty to develop as a society. That is indeed what the use of the word “confederation” rather than “federation” implied. It was on this condition that Quebec became a part of Canada.

However, Ottawa does not hesitate to invade Quebec's exclusive fields of jurisdiction. Family policy, health, education and regional development are a few of the most striking examples of areas of federal interference. In 2008-09, the federal government spent more than $60 billion in areas that fall under Quebec's and the provinces' jurisdiction. This situation is patently intolerable.

We recall that the Conservative government committed to creating a framework for the so-called federal spending power in 2006, but so far it has not followed through. Last week the Conservative member for Beauce went further and proposed the pure and simple elimination of the so-called federal spending power as a solution to constitutional squabbles. This is what the Bloc Québécois is asking for today in this motion, and also what was proposed in the bill tabled in April by my colleague, the member for Saint-Lambert.

The motion focuses on three elements. First, it seeks the explicit elimination of Ottawa's self-given right to spend in areas outside its jurisdiction. Second, it calls for Quebec to be given a systematic right to opt out of programs, without conditions and with full compensation. Third, it seeks compensation in the form of tax points so that Ottawa cannot determine how much Quebec allocates to its various areas of responsibility.

The House of Commons finally recognized the Quebec nation. And recognizing a nation is more than just a symbolic gesture. Nations, like people, have fundamental rights, the most important being the right to control the social, economic and cultural development of its own society, in other words, the right to self-determination. You cannot, on one hand, recognize the Quebec nation and its right to make choices that are different from Canada's and, on the other, deny the nation the ability to assert that right by maintaining the federal spending power. Denying Quebec the power to spend undermines its very existence as a nation.

Let us consider the recent comments of the member for Beauce. It is a rare occasion when I agree with the member for Beauce, but I see that he has finally sided with the Bloc Québécois, and I hope that he can convince his party to support today's motion.

This is what the member for Beauce said on October 13. He himself was quoting Sir Wilfrid Laurier. The member for Beauce said that, in a speech to the Legislative Assembly of Quebec in 1871, Laurier made the following statement:

If the [federal] system is to avoid becoming a hollow concept, if it is to produce the results called for—this is Laurier speaking—, the legislatures must be independent, not just in the law, but also in fact. The local legislature must especially be completely sheltered from control by the federal legislature. If in any way the federal legislature exercises the slightest control over the local legislature, then the reality is no longer a federal union, but rather a legislative union in federal form.

That is the end of the quote by Sir Wilfrid Laurier cited by the member for Beauce.

The member for Beauce concluded:

Now, it’s obvious that what Laurier feared has unfortunately come true. Ottawa exercises a lot more than “the slightest control” over local legislatures. The federal government today intervenes massively in provincial jurisdictions, and in particular in health and education, two areas where it has no constitutional legitimacy whatsoever. This is not what the Fathers of Confederation had intended. The objective of the 1867 Act was not to subordinate provincial governments to a central authority. But rather to have sovereign provinces within the limits of their powers, dealing with local matters that directly affected citizens; and a sovereign federal government within the limits of its own powers, dealing with matters of general national interest.

The member for Beauce and the Bloc Québécois are not the only ones challenging the legitimacy and the very basis for the existence of the federal spending power; all governments of Quebec have done so, no matter what their political allegiance. Why? Because the federal spending that encroaches on provincial jurisdictions is in direct opposition to the division of powers in Canada. In principle, both orders of government in Canada are equal and equally sovereign in their respective areas. The division of jurisdictions is supposed to be watertight in order to prevent the majority nation, the Canadian nation, from imposing its views on the minority nation, the Quebec nation.

The division of powers that took place in 1867 between Ottawa and the provinces is quite simple if we look at it in the context of the 19th century. Matters that directly affected people and their way of organizing their society fell under the jurisdiction of Quebec and the provinces. This was the case for instance for the civil laws that codified the relationships between people and the organization of society through social programs, health, education, cultural matters, etc.

If, however, an issue did not directly affect people or the internal organization of their society, it could be placed under federal jurisdiction. This is the case for monetary policy, international trade, and the overall regulation of trade and industry. In 1867, Quebec was not really industrialized and that aspect did not affect people very much. Thus, Quebeckers believed they had acquired the autonomy they needed to allow them to organize their own society without external interference. And it was on that basis that Quebec agreed to enter into the Canadian federation in 1867.

However, the federal spending that encroaches upon areas of provincial jurisdiction calls into question this division of powers and Quebec's autonomy. In fact, this was the pact at the basis of the Canadian federation, which Canada is denying daily and has been denying for three generations by interfering freely with Quebec's areas of jurisdiction.

Benoît Pelletier, the former Quebec Minister of Intergovernmental Affairs under Jean Charest, said the following:

I...have a great deal of difficulty in reconciling the values underlying the Canadian federation with the idea of a federal spending power that is in no way subject to the division of powers.

It is for that reason that the Séguin report in its turn expressed the opinion that:

The “federal spending power” displays a singular logic in that the federal government intervenes every time in a field falling under provincial jurisdiction without having to adopt a constitutional amendment.

We could add “without having to obtain the authorization of Quebec's National Assembly”. In short, the federal spending power is the way English Canada unilaterally put an end to the pact in which Quebec agreed to be a part of Canada. Through the spending power, it managed to unilaterally change the distribution of powers to its benefit without having to go through the cumbersome process of constitutional amendment.

There is now a consensus in Quebec. The spending power is illegitimate. Quebec has always felt that the federal spending power was nothing more than a power to implement, that is to say that in the final analysis, it is a power to impose policies.

That is why Quebec maintains that federal spending power should be limited to areas in which the federal Parliament has legislative jurisdiction. Regardless of the party in power, Quebec has consistently maintained that Ottawa simply does not have the power to spend money in whatever area it chooses, and that any federal intervention in areas under Quebec's jurisdiction is in direct violation of the Constitution.

Federal government interference in fact proves that the fiscal imbalance has not been resolved. The fiscal imbalance is due to the fact that Ottawa raises more in taxes than it needs to discharge its own responsibilities. And the result, in Quebec's case, is that Quebec no longer has the tax room it needs to fund its own activities independently.

As long as Ottawa has the authority to spend in areas under provincial jurisdiction, the fiscal imbalance cannot be resolved. Conservative members who claim that the fiscal imbalance is now resolved have not understood a thing. The fiscal imbalance cannot be resolved without putting an end to federal spending power in areas that encroach upon the jurisdiction of Quebec and the provinces.

As the Séguin commission stated, and I quote:

...The problem of the federal spending power is closely tied to fiscal imbalance, and its use is underpinned by the surplus funds that the federal government controls.

That is what the commission found.

Quebec has no intention of being one of Ottawa's mere subcontractors. No, the fiscal imbalance has not been resolved and is, in fact, getting worse. More and more, as a result of the fiscal imbalance and its offshoot—spending power—the Quebec government is being relegated to the ranks of a federal government subcontractor. Through its interference and conditional transfers, Ottawa is imposing Canada's priorities and choices on Quebec.

The situation has gotten so bad that Quebec's own-source revenues hit an all-time low in 2009-10, when a quarter of Quebec's budget envelope was being controlled by the federal government. Now more than ever, it is time for the federal government to hand over the GST to Quebec, as well as a portion of individual income tax, so that Quebec is no longer at the mercy of federal transfer payments and Ottawa's whims.

In 2006, as I was saying earlier, the House of Commons finally recognized the existence of the Quebec nation. Recognizing the existence of a nation is more than just a symbolic act. Nations, like people, have fundamental rights, and the most fundamental among them is a nation's right to control its own social, economic and cultural development, that is to say, the right to self-determination.

One cannot, on the one hand, recognize that the Quebec nation exists and has the right to make choices that are different from those that Canada makes, which right is at the core of nationhood, and on the other hand, deny that right by maintaining the federal spending power. That spending power is in fact a negation of the Quebec nation.

The so-called framework mentioned in the 2007 Speech from the Throne, which was to set limits on the spending power, had indeed been the subject of official Conservative promises, and has continued to be the subject of such promises since; it is nothing but lip service.

I will now quote from the 2007 Speech from the Throne, which said:

...our government will introduce legislation to place formal limits on the use of the federal spending power for new shared-cost programs in areas of exclusive provincial jurisdiction. This legislation will allow provinces and territories to opt out with reasonable compensation if they offer compatible programs.

It should be noted that the government's offer, its commitment in that text, is limited to new programs, even though it was already spending $62 billion in areas that do not fall under its jurisdiction. That is the figure from 2008-09. This amount is more or less equivalent to Quebec's entire budget, which was $65 billion for that year, and this is money Ottawa spent in areas that fall under the jurisdiction of Quebec and the provinces. The Speech from the Throne allows all of that to go on happening. Moreover, it only refers to new shared-cost programs, which are almost non-existent. For instance, as agriculture is an area of shared jurisdiction, the agriculture policy framework is not covered by the commitment in the throne speech. Moreover, insofar as the infrastructure Canada program is concerned, the throne speech changed nothing because Quebec already had the right to select its own projects.

So there was nothing, absolutely nothing in the Speech from the Throne aside from empty words. In fact it was a new version of the Jean Chrétien throne speech, which said approximately the same thing in 1996; and nothing was done following that one either, of course.

It is the same thing as the member for Saint-Laurent—Cartierville's social union, by virtue of which the Canadian provinces, with the exception of Quebec, agreed to allow Ottawa to take the lead in matters of social policy.

The bill that the Bloc Québécois already tabled is an offer of reasonable accommodation. We are aware that Canadians do not want to completely eliminate the federal power to interfere. When I say Canadians, I am obviously not talking about Quebeckers, but other Canadians, who generally want the central government to be able to set directions and priorities for the entire country in all areas. That is not in keeping with the promise made to Quebec 140 years ago. It is in keeping with Canadians' vision of Canada, though. In April 2010, to put an end to Ottawa's interference in areas under Quebec's jurisdiction, the Bloc Québécois introduced Bill C-507, which I just mentioned, on eliminating the federal spending power in Quebec's jurisdictions.

Today's motion, which is very much in line with our bill, proposes a compromise by saying that Ottawa should at least give Quebec a full right to opt out of any federal programs in areas that intrude into the provinces' jurisdictions. Canadians will be able to keep on denying the division of powers for themselves, but not for us in Quebec.

One Conservative Party member heard the Bloc Quebecois' call, and we can only be glad. Just a few months after we introduced our bill, the member for Beauce repeated the Bloc's demands almost word for word. He said:

However, several other programs, from family allowances to grants to universities and hospital insurance, were set up which clearly did not respect the constitutional division of powers...

This intrusion into provincial jurisdiction was accomplished by the so-called federal spending power.

No constitutional provision to legitimize this federal spending power was ever adopted. The Supreme Court of Canada has never explicitly recognized this power either. The federal government was certainly aware that the power to spend in areas of provincial jurisdiction does not exist in the Constitution...

Ending the federal spending power, eliminating the federal programs that violate the division of powers, and transferring tax points to the provinces would be the right thing to do from several perspectives.

We agree. Consequently, I invite the Conservative government to support our Bill C-507. I also invite the Conservative members and the members from all the other parties to support the motion I have put forward this morning.

Private Members' Business

[The Speaker, Liberal, Peter Milliken]

Before I call upon the hon. member for Ottawa South to ask his question, I would like to take a moment to provide some information to the House regarding the management of private members' business.

As members know, after the order of precedence is replenished, the Chair reviews the new items so as to alert the House to bills which at first glance appear to impinge on the financial prerogative of the Crown. This allows members the opportunity to intervene in a timely fashion and present their views about the need for those bills to be accompanied by a royal recommendation.

Accordingly, following the October 1 replenishment of the order of precedence with 15 new items, I wish to inform the House that there are four bills that give the Chair some concern as to the spending provisions they contemplate. They are: Bill C-449, An Act regarding free public transit for seniors, standing in the name of the member for Hull—Aylmer; Bill C-507, An Act to amend the Financial Administration Act (federal spending power), standing in the name of the member for Saint-Lambert.

There are also Bill C-530, An Act to amend the Northwest Territories Act (borrowing limits), standing in the name of the hon. member for Western Arctic, and Bill C-572, An Act to amend the Parliament of Canada Act (Parliamentary Budget Officer), standing in the name of the hon. member for Ottawa Centre.

I would encourage hon. members who would like to make arguments regarding the need for a royal recommendation to accompany these bills or any of the other bills now on the order paper to do so at an early opportunity.

I thank honourable members for their attention.