House of Commons Hansard #131 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Business of the House
Oral Questions

3:10 p.m.

Liberal

The Speaker Peter Milliken

There is no motion before the House, so I think we will move on.

I believe the hon. member for Lanark—Frontenac—Lennox and Addington is rising on a question of privilege.

Parliamentary Precinct
Privilege
Oral Questions

3:10 p.m.

Conservative

Scott Reid Lanark—Frontenac—Lennox and Addington, ON

Mr. Speaker, I am rising on a matter of privilege regarding something that has been in the news the last little while.

Two members of this House, the hon. member for Ajax—Pickering and the hon. member for Notre-Dame-de-Grâce—Lachine, two days ago took several boxes of documents that they purport to have found in drawers and filing cabinets in what were formerly the Conservative offices, then the opposition offices, and have gone through them and have found and retained what they say are documents that may be of interest to the public for future release. I can quote from their press release as to exactly what they call these documents.

At any rate, they returned a number of the documents, including personnel files. With regard to retaining them, the hon. member for Ajax—Pickering said that “the Liberal caucus is retaining possession of some of the documents to determine whether or not they contain other issues that are in the public interest”. This is implying that they have gone through these files in sufficient detail to set aside some for further examination.

In addition, the hon. member for Ajax—Pickering said:

Today we're returning five years worth of personal performance appraisals of Conservative staffers that this government negligently left behind.

These are confidential documents on their own staff. Such gross ineptitude makes me nervous about how this government handles other issues of a private nature.

The documents then were boxed up and shipped down the street to the Langevin Building and the Prime Minister's Office.

The reason I rise on this is that, first of all, one of the members of the staff--and I believe there were about 30 members of the then opposition leader's staff whose personnel files were taken--of the then leader of the opposition, and before that of what was then the third party, the Reform Party, was myself. It seems reasonable to assume that further assurance is needed, more than simply the word of these two MPs, that these files have been returned unopened, unexamined and were not looked at and that none of them have been distributed or shown in any way.

I mention this in particular because some of what has been said by these hon. members in connection with this case appears, perhaps, to be at variance with the truth. I draw to your attention, Mr. Speaker, a number of indications of this.

First of all, there are the boxes. One of them contained an address label and this is clearly visible on TV footage of the boxes being transported down Wellington Street. The address label contains in the “from” area, “145 Well”, or in other words, Room 145 or Suite 145, Wellington. I remember this well, of course, because I worked there for a period of time. Second, visible is “320-3”, with no building indicated. That is the address of the Conservative research group on the third floor of the Wellington Building, not the building to which they were being transported.

Therefore, it is highly improbable that this sticker was attached by Liberal researchers or staff. Rather, it was probably a pre-existing label. That suggests that these documents were not in fact found in locked or unlocked drawers, cabinets and so on, but rather were actually in these boxes from the very start. That is one thing.

The second thing is that I have consulted with the individual at the Prime Minister's Office who now has possession of the boxes. It is reported to me that on the sides of the boxes, or at least on one of the boxes or perhaps several of them, are the words “Conservative files for Kev”. This is a possible reference to Kevin Bosch, the lead opposition researcher who has devoted many years of his career to doing opposition research with the intention of digging up documentation that might be damaging to the parties he is opposed to. So that certainly, particularly for the Conservative Party, is a matter for concern.

This puts into question the assertion that there was gross negligence on the part of the government in leaving these documents behind. It suggests, rather, that the documents were in fact boxed up to be shipped. We do not know why they were not shipped but presumably they fell into the hands of the opposition leader's office and staff a little more than a year ago at the time that the offices were being changed.

This means that if there is negligence, in that nobody noticed they were there, then that negligence would actually fall on the Leader of the Opposition and his staff. On the other hand, there is another possibility that these documents were retained with the intention of pulling out documents that were found to be potentially embarrassing and leaking them over a period of time as we get close to an election, or even in a writ campaign, and that would seem to be a robust hypothesis given the fact that certain documents were leaked and we were told that others are being saved for future consideration.

My concern in this matter of privilege is that it is difficult for me as a member of Parliament to carry out my functions as a member of Parliament when the only assurance I have that my documentation has not been treated in such a manner is the assurance of a member of Parliament whose recount of what has happened appears on some particulars to be at variance with the facts. This as well may constitute a contempt of Parliament on the part of that member.

At the very least, I would think it would be necessary to have proactive statements confirming that the personnel documents, and my personal document in particular, were treated with extreme respect and some demonstration be made of that from the hon. member for Ajax—Pickering and the hon. member for Notre-Dame-de-Grâce—Lachine who certainly were the ones who showed the folders to the press two days ago, as well as from the hon. Leader of the Opposition and his predecessor, the interim opposition leader in whose office these documents were kept and whose staff must have had them in their possession prior to the time at which these two hon. members drew them to the attention of the media, first selectively, and then as they returned the documents.

I note in this regard that Maingot's Parliamentary Privilege in Canada on page 163 states:

That any act within the precincts of Parliament could constitute a matter of privilege.

He defines the precinct as the various parliamentary buildings, including the building,

--that was known, formerly the Metropolitan Life building which is now referred to as the Wellington building.

As you know, Mr. Speaker, the Wellington building is the building in which the events I have described took place and where the Leader of the Opposition's office is found and where my file was.

Maingot also points out on page 229,

Contempt is whatever a House finds as contempt

He cites Erskine May's definition:

Any act or omission which obstructs or impedes either House of Parliament in the performance of its functions, or which obstructs or impedes any Member or officer of such House in the discharge of his “parliamentary” duty, or which has a tendency, directly or indirectly to produce such results may be treated as a contempt even though there is no precedent of the offence.

An example of a ruling on a new contempt of Parliament, can be found on March 12, 1996, when the Speaker found a prima facie question of privilege when it was found that a member acted inappropriately after he sent out a press release inviting Quebeckers still serving in the Canadian Forces to integrate into a Quebec armed forces in the event of a yes outcome following the Quebec referendum.

While it is certainly true that the case of the members I mentioned are not identical to the 1996 case, one could argue that their actions are just inappropriate, that they destroy the atmosphere of trust and honour that are necessary to act effectively as a House and that they, therefore, are in contempt of Parliament, that it certainly is a breach of my privileges and is worthy of examination by the Standing Committee on Procedure and House Affairs.

Mr. Speaker, if you find that there is a prima facie case of privilege, I would be prepared to move the appropriate motion.

Parliamentary Precinct
Privilege
Oral Questions

3:20 p.m.

Liberal

The Speaker Peter Milliken

I appreciate the work of the hon. member for Lanark—Frontenac—Lennox and Addington and I assure him that I will await response from the hon. member for Ajax—Pickering and the hon. member for Notre-Dame-de-Grâce—Lachine.

I have not seen the files except in a photograph in the newspaper showing the two hon. members outside the Wellington Building wheeling a crate of files up Wellington Street, which I did recognize in the photograph. Of course, I only had what words were printed under the picture as evidence as to what was on the cart. Clearly, the Chair is not in a position to give much of an opinion on this matter at this point,

However, I am sure those hon. members will come to the House in due course and explain whatever is necessary and then the Chair will be able to make a ruling as to whether there has been a question of privilege raised by the hon. member and, if so, whether a motion to refer to the matter to the committee should be permitted. I am prepared to deal with that when the hon. members come back.

Business of Supply--Opposition Motion--Speaker's Ruling
Points of Order
Oral Questions

3:20 p.m.

Liberal

The Speaker Peter Milliken

I am now ready to give a ruling that everybody has been waiting a week for on the point of order raised on Wednesday, March 21, 2007 by the hon. government House leader alleging the inadmissibility of the opposition motion placed on the notice paper on March 20, 2007 in the name of the hon. member for Notre-Dame-de-Grâce—Lachine.

I would like to thank the hon. Government House Leader for raising this matter, as well as the hon. member for Wascana, the hon. member for Roberval—Lac-Saint-Jean and the hon. member for Vancouver East for their interventions.

In order to recapitulate the contributions made by the hon. House leaders and because of the complexity of the question before us, I have regrouped thematically the arguments presented.

The first argument to consider is the fundamental issue of balance between the majority and the minority in the proceedings of the House. This was raised by the government House leader when he stated that allowing the opposition motion appearing on the notice paper to proceed would “deny the minority parties...the opportunity and protections that exist in the Standing Orders for a full debate”.

The hon. member for Vancouver East also touched on this concept when stating that, “the smallest party in the House, would be the ones who would often be the victims of this kind of procedure”.

Second, the concept of the government prerogative to schedule government business was argued. The government House leader cited Standing Order 40(2) to the effect that, “Government Orders should be called and considered in such sequence as the government determines”.

Noting that the Standing Orders may be set aside temporarily only by unanimous consent and without setting a precedent, the minister contended that the motion in question proposes effectively to enact legislation under the rubric of supply, in violation of constitutional conventions reserving to the government the right to move government business.

The hon. members for Wascana and for Roberval—Lac-Saint-Jean invoked Standing Order 81(13) and House of Commons Procedure and Practice (Page 724) respectively, to the effect that opposition motions “may relate to any matter within the jurisdiction of the Parliament of Canada”.

This touches upon the third issue that I wish to address today namely, as the hon. member for Roberval—Lac-Saint-Jean underscored, the “wide scope on supply” afforded to members by the Standing Orders with respect to opposition motions and the correlative practice of the Chair not to intervene unless a supply motion is, “clearly and undoubtedly irregular”, i.e., where the procedural aspect is not open to reasonable argument.

Finally, the hon. member for Vancouver East pointed out that the proposed opposition motion would, if adopted, have the effect of an omnibus bill, bundling together a group of legislative proposals in order to expedite their passage. This fourth issue, which touches on the complexity of the motion itself, also requires separate examination.

As I pointed out when I ruled the motion unacceptable, the proposed opposition motion would have the effect of imposing closure or time allocation on four bills simultaneously, something which, in my view, would be out of order even if the government were to propose it.

If the government wanted to do what this motion does, it would need to move a motion after due notice and, in the absence of agreement among the parties, it might resort to closure to have the matter decided and that would come only at a cost of at least one and one-half sitting days.

I would also note that our precedents, with the exception of cases dealing with the reinstatement of bills, would not permit the Chair to allow a government motion to deal with more than one bill in such a circumstance. At best then, the government could expedite passage of only one bill at a time through several stages using this procedure.

The arguments presented in this matter go to the essence of parliamentary procedure and provide a good opportunity for the Chair to remind the whole House of the underlying principles which support the work we do here.

House of Commons Procedure and Practice, at page 209, states that procedure is “at once the 'means' used to circumscribe the use of power and a 'process' that legitimizes the exercise of, and opposition to, power”.

Naturally, over time, our rules have evolved. The House has seen fit to adopt rules from time to time to govern how business is to be transacted and certain changes—closure in 1913 and time allocation in 1969, among others—have effectively given the government, in a majority situation, greater control over the advancement of its business. Nevertheless, to quote House of Commons Procedure and Practice (p. 210) again:

—it remains true that parliamentary procedure is intended to ensure that there is a balance between the government’s need to get its business through the House, and the opposition’s responsibility to debate that business without completely immobilizing the proceedings of the House.

At the present time, the chair occupants, like our counterparts in House committees, daily face the challenge of dealing with the pressures of a minority government, but neither the political realities of the moment nor the sheer force of numbers should force us to set aside the values inherent in the parliamentary conventions and procedures by which we govern our deliberations.

Hon. members are all aware of situations in committees of this Parliament where, because decisions of the chair are subject to appeal, decisions that were procedurally sound have been overturned by the majority on a committee.

Unlike the situation faced by committee chairs, a Speaker's decision is not subject to appeal. All the more reason then for the Chair to exercise its awesome responsibility carefully and to ensure that the House does not, in the heat of the moment, veer dangerously off course.

The Speaker must remain ever mindful of the first principles of our great parliamentary tradition, principles best described by John George Bourinot, Clerk of this House from 1890 to 1902, who described these principles thus:

To protect the minority and restrain the improvidence and tyranny of the majority, to secure the transaction of public business in a decent and orderly manner, to enable every member to express his opinions within those limits necessary to preserve decorum and prevent an unnecessary waste of time, to give full opportunity for the consideration of every measure, and to prevent any legislative action being taken heedlessly and upon sudden impulse.

In the present case, although the government does not have a majority in the House, it still has a duty to present to the House a legislative program and is entitled to expect that it could do so with all the responsibilities but also all the protections associated with our balanced framework of parliamentary law.

It is for this reason that the issue of prerogative is so important. The government has certain prerogatives; the opposition has certain other prerogatives. Our rules now even provide that private members have certain prerogatives. As House of Commons Procedure and Practice states at page 390:

Different categories of business have developed over the years in response to the need to adapt to the organization of House business. Some categories are now uniquely reserved for the government or the opposition; some are reserved for private members—

As the government House leader has pointed out, these prerogatives are given effect by the Standing Orders. He has cited Standing Order 40(2) as an example but there are many more. Only a minister may move closure or time allocation. Only a minister may move to suspend the Standing Orders pursuant to Standing Order 53. Only a minister may move a motion under Standing Order 56.1 when unanimous consent has been denied. The Chair has consistently ruled--and there are Speakers' rulings from 1928, 1944, 1961 and 1982 on this point--that any motion pertaining to the arrangement of the business of the House should be introduced by the ministry.

In short, as Mr. Speaker Fraser ruled in 1988, and I refer to the debates of July 13 of that year at page 17506, it is, with very few specific exceptions “the government's unquestioned prerogative to determine the agenda of business before the House”.

In a similar vein, several of our rules give the prerogative to the opposition--Standing Order 81(4)(a) concerning the consideration of estimates in committee of the whole is an example--and an entire chapter of our Standing Orders describes the prerogatives of private members with regard to the business that they may bring forward.

Where these prerogatives intersect is with regard to supply day opposition motions. Supply is government business; the government designates supply days or allotted days on which the opposition can exercise what Marleau and Montpetit has called “the right to have its grievances addressed before it considers and approves the financial requirements of the Crown” by proposing motions for debate. I refer hon. members in this regard to House of Commons Procedure and Practice, at page 701.

As the hon. members for Wascana and Roberval—Lac-Saint-Jean reminded us, such motions “may relate to any matter within the jurisdiction of the Parliament of Canada”. Members “enjoy a very wide scope in proposing opposition motions on Supply days and, unless the motion is clearly and undoubtedly irregular (e.g., where the procedural aspect is not open to reasonable argument), the Chair does not intervene.”

Past interventions from the Chair have, accordingly, been rare, restricted to cases in which a motion is “clearly and undoubtedly irregular”. Speaking to this principle, Mr. Speaker Fraser declared that “the use of an allotted day ought not to be interfered with except on the clearest and most certain procedural grounds”. I quote from the Debates of June 8, 1987 at page 6820.

Still, there is nothing whatever in the relevant procedural authorities to suggest that opposition motions on supply days were ever conceived of as a means of fast-tracking bills already present elsewhere on the order paper. Indeed, it is evident from their historical background that opposition motions on supply days were never envisaged as an alternative to the legislative process.

While we are reflecting this afternoon on the nature of opposition motions on supply days, may I say that neither were they created to address concerns about House procedure. To be sure, as hon. members have pointed out, the phrasing of Standing Order 81(13) is very broad indeed, stating as it does:

Opposition motions on allotted days...may relate to any matter within the jurisdiction of the Parliament of Canada--

In the same vein, I myself as Speaker in a ruling on October 31, 2002 mused that the opposition has “the right to move whatever motion it chooses to on an opposition day”. It should come as no surprise therefore that, sheltered by that very broad umbrella, the House may have strayed rather far from the original crux of the matter, namely, airing grievances before voting supply to fund the Crown's program. Perhaps the Standing Committee on Procedure and House Affairs can review these Standing Orders to consider whether revisions to their wording might be helpful in realigning them with their original mission.

The motion which concerns us proposes to expedite the passage of four government bills simultaneously via their deemed adoption at all remaining stages. In this it is similar in form and substance to motions from government ministers which seek to expedite the legislative business of the House. There is, however, a crucial distinction between the two: although both seek the implementation of their provisions notwithstanding any rule or practice of the House, except in very well-established circumstances such as for the reinstatement of bills at the beginning of a session, for example, the government generally may not move such motions without unanimous consent.

Such motions permit the government to rearrange the business of the House by means of temporary suspensions of the Standing Orders. They represent a well-established practice whereby the government introduces motions pertaining to the arrangement of the business of the House. Furthermore, such abbreviations of the legislative process can take place only by unanimous consent, which may be difficult to obtain in respect of the simultaneous fast-tracking and adoption of more than one bill.

The very high threshold of unanimous consent creates a pivotal safeguard in ensuring that every measure before the House receives full and prudent consideration. What is being proposed not only does away with that safeguard, it takes advantage of the stringent regime governing supply days. In that regard, for example, it is important to note the precedence accorded to opposition motions over all government supply motions on allotted days.

Furthermore, recent amendments to the rules dealing with such motions offer an especially stringent regime: first, the rules provide what amounts to an automatic closure mechanism, since the motion comes to a vote at the end of the day, thus guaranteeing a decision on the motion; and second, no amendment to the motion is possible without the consent of the mover.

In stark contrast, any motion which could be brought forward by the government to expedite consideration of a bill would be debatable and amendable, and the imposition of time allocation or closure would necessitate a separate question from the motion proposing adoption of the bill at a particular stage or stages in the legislative process.

This brings the Chair to the important point raised by the hon. member for Vancouver East regarding the complexity of the motion. The motion in question seeks to fast-track not one but four separate bills. Since it is a supply motion, any amendment would require the consent of the motion's sponsor and the unanimous consent of the House would not be required for adoption of the motion.

The Chair has been unable to find any examples even of government-sponsored multi-bill motions being moved after due notice, with the exception, as noted earlier, of motions to reinstate legislation at the beginning of a session. Even in these cases, the authority of the Speaker to divide a motion is unquestioned.

On this point I refer hon. members to pages 299–300 of Debates for October 4, 2002 where I ruled that just such a motion be divided. In doing so, I quoted p. 478 of House of Commons Procedure and Practice which states:

When a complicated motion comes before the House (for example, a motion containing two or more parts each capable of standing on its own), the Speaker has the authority to modify it and thereby facilitate decision-making for the House.

This passage is supported by rulings from Mr. Speaker McNaughton in 1964, see Journals of June 15, 1964, pages 427-31, and another from Mr. Speaker Fraser in 1991, see Debates, April 10, 1991, page 19312.

There is little doubt that the motion of the hon. member for Notre-Dame-de-Grâce—Lachine is a complicated one since it concerns four distinct legislative proposals, each of which would be disposed of, in some cases through more than one stage, through a single vote of this House. The motion before us clearly seeks to circumvent the rules and practices governing the legislative process in a manner prejudicial to the proper consideration of proposed legislation.

By curtailing the legislative process, interrupting the consideration of bills in committee, and eliminating opportunities for amendment at various stages of the legislative process without the requirement for unanimous consent, a fertile imagination is not required to imagine that supply motions similar to this could be used to deprive the government of effective control over the content and disposition of its own bills once these have been introduced to the House. Not only would this violate the entire ethos of the business of supply, it would clearly interfere with the “unquestioned prerogative” of the government and it would do so in a manner utterly inconsistent with the limited exceptions contemplated by House of Commons Procedure and Practice and other authorities.

By way of analogy, hon. members might wish to consider their own reaction should the government seek to interfere with the consideration of private members' business in a similar fashion. In the Chair's view, any of these scenarios of usurpation, whether the opposition seeks to hijack the government's agenda or the government the opposition's or that of private members, might reasonably be characterized as a “tyranny of the majority” of a type unforeseen even by Monsieur Bourinot.

As your Speaker, it is my duty to remind the House of some of these fundamental tenets of parliamentary procedure. It is now up to the House to determine how it wishes its procedures to evolve. In the meantime, the Chair is not in doubt that in this case, the motion of the hon. member for Notre-Dame-de-Grâce—Lachine as it appeared on the notice paper was “clearly and undoubtedly irregular” and therefore out of order.

I apologize for taking all this time of the House to come back with these lengthy reasons, but I felt that the issue was an important one and I wanted to make very clear what the views of the Chair were on this matter.

Message from the Senate
Oral Questions

3:40 p.m.

Liberal

The Speaker Peter Milliken

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bill:

Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters.

The House resumed consideration of the motion that Bill S-2, An Act to amend the Hazardous Materials Information Review Act be read the third time and passed.

Hazardous Materials Information Review Act
Government Orders

3:40 p.m.

Bloc

Marcel Lussier Brossard—La Prairie, QC

Mr. Speaker, this afternoon I will speak about Bill S-2, An Act to amend the Hazardous Materials Information Review Act. This bill originated in the Senate and had already been tabled. It was formerly called Bill S-40. It has been renumbered and is now S-2.

This bill aims to improve the current process of the Hazardous Materials Information Review Act, and it has three main objectives.

The first objective is to allow companies that want to be exempted from the general rules concerning the listing of hazardous ingredients to make a declaration that information in respect of which an exemption is claimed is confidential business information, and that information substantiating the claim will be provided on request, rather than de facto providing all information.

The second objective is to allow companies to voluntarily give an undertaking to the Hazardous Materials Information Review Commission to modify and to bring a material safety data sheet or a label of products containing hazardous ingredients into compliance with the provisions of the Hazardous Products Act or of the Canada Labour Code.

The third objective is to allow the limited participation of the Hazardous Materials Information Review Commission before an appeal board.

The Workplace Hazardous Materials Information System, or WHMIS, combines an assortment of legislation, regulations and procedures whose objective is to protect workers by preventing illness and injury that could result from the use of certain hazardous chemicals in the workplace.

Quebec, the provinces and the federal government are all part of WHMIS.

Under WHMIS, manufacturers and distributors of controlled (hazardous) products must provide information on the health and safety risks associated with their products, together with instructions for safe handling, storage, transportation, disposal and first-aid treatment. This information is conveyed by the product’s mandatory Material Safety Data Sheet (MSDS) and label—

Each product's MSDS must include a number of elements. It must list all hazardous ingredients in the product, its toxicological properties, and the precautions one must take when using the product. The MSDS must also indicate the necessary first aid measures for anyone exposed to a product.

When the indications that must appear on the MSDS involve trade secrets—and this is where the problems begin—and disclosure of these secrets could have serious consequences, a mechanism is in place to, on one hand, assess the pertinence of not disclosing all the information and, on the other hand, ensure that workers' rights are protected. Therein lies the conflict between trade secrets and workers' rights. The mechanism in question is the Hazardous Materials Information Review Commission.

This commission was formed in 1987 and consists of quite a few people. That is the beauty of the commission, which has about 18 people on it. There are automatically two representatives of worker interests, one representative of suppliers, one employer representative, one representative of the federal government, and various representatives of the provincial and territorial governments for a total of about 18 people, who form a review committee.

Simply put, the commission’s mandate is to “help safeguard both workers and trade secrets in Canada’s chemical industry”. So when a company wants an exemption from its general obligations in order to safeguard confidential business information—this could be the identity or concentration of a hazardous ingredient in one of its products—it must apply to the commission for an exemption. The claim is registered and it is up to the commission to decide whether an exemption is called for.

The commission’s mandate may also cover evaluating whether certain data sheets and hazardous product labels are in conformance.

There are certain problems with the current legislation. It mandates the council to make recommendations to the health minister on the methods for reviewing claims, the appeal procedures, and the fees to make a claim.

In November 2002, the council officially and unanimously recommended the amendments in the current Bill S-2 to the health minister at the time.

There are three kinds of problems: the complexity of the economic information, the lack of a voluntary process for correcting the data sheets, and finally the lack of flexibility in the exchange of information between the commission and the independent boards in the appeal process.

That is why the bill proposes three amendments. The first amendment in clauses 1, 2 and 8 proposes a change to the obligations in section 11(4) of the Hazardous Materials Information Review Act in order to specify that when companies claim an exemption, they do not need to provide all the documentation previously required. This is intended to reduce the complexity of the claims, especially when the information does not really help the commission very much in judging the economic aspects of the claims.

Under the current process, companies claiming an exemption must submit detailed information on what they have done to safeguard the confidentiality of the ingredients used to manufacture their product and on the financial impact of the possible disclosure of this information.

In her testimony given to the Standing Senate Committee on Social Affairs, Science and Technology in 2006, Sharon Watts, vice-president of the Hazardous Materials Information Review Commission, specified in which cases the commission would require full documentation.

The commission will require full documentation to support a claim for exemption from disclosure when an affected party challenges a claim or when a claim is selected through a verification scheme that we will set up to discourage false or frivolous claims

The second change is proposed at clauses 3 and 4 of the bill which amend sections 16 and 17 of the Hazardous Materials Information Review Act in order to establish a new mechanism for the voluntary revision of material safety data sheets by the companies. With this new mechanism, when a company files a claim for exemption, a screening officer may “send an undertaking to the claimant setting out the measures that are required to be taken for the purpose of ensuring compliance” with those provisions governing dangerous goods contained in the Hazardous Products Act and the Canada Labour Code.

The purpose of this second change is twofold: to ensure that changes to material safety data sheets and labels are made more quickly and that companies acting in good faith will not be issued an order by the HMIRC, as this could be misleading about their willingness to comply.

In comparison, current legislation requires the Hazardous Materials Information Review Commission to issue a formal order for compliance, even if the company seeking an exemption is prepared to comply and to make the necessary corrections after having been notified.

The legislation also provides for a rather strict and time-consuming process. Thus, where non-compliance is found, an order is issued to the company seeking an exemption. This order is then published in the Canada Gazette and it does not become binding until 75 days after its publication. Other time limits are specified in the event that the company decides to appeal the order, or to allow the company to comply with the order and submit a new data sheet.

Finally, the existing rules would still allow orders to be issued to uncooperative companies in case of non-compliance with the rules and in the absence of a voluntary undertaking.

The third amendment proposed in Bill S-2 is contained in clause 7 of the bill, which amends the former section 23 of the Hazardous Materials Information Review Act, to enable the commission to provide clarification in respect of an appeal that has been submitted to an appeal board. Clause 8 amends section 48 of the Hazardous Materials Information Review Act to permit the making of regulations “respecting the participation of the Commission in an appeal heard before an appeal board”.

According to representatives of the commission, the third amendment seeks “to improve our appeals process by allowing the commission, at the request of an appeal board, to provide factual clarification of the record to appeal boards, when needed to facilitate the process. Appeals are heard by independent boards with three members drawn from labour, industry and government. The government member acts as chair of the board. Most appeals heard to date would have benefited from additional explanatory information from the commission, but this is not permitted under our legislation”.

In short, the Bloc Québécois supports Bill S-2. The Bloc believes that when it comes to hazardous materials, it is vital to keep in mind worker safety and to base all decisions on that imperative.

The Bloc Québécois recognizes that the amendments to the Hazardous Materials Information Review Act contained in Bill S-2 were unanimously approved by the members of the HMIRC council of governors.

The Bloc, therefore, supports Bill S-2 so that the amendments called for by the principal stakeholders in this kind of workplace can be adopted.

In all its actions, the Bloc seeks to protect the interests of workers. That is why we tabled Bill C-257, which, unfortunately, died on the Order Paper; a bill dealing with preventive withdrawal would have enabled pregnant Quebec workers in companies operating under federal jurisdiction to receive the same benefits as Quebec workers—another bill that died on the Order Paper; and Bill C-269 to improve the employment insurance system.

Hazardous Materials Information Review Act
Government Orders

3:55 p.m.

NDP

The Deputy Speaker Bill Blaikie

Is the House ready for the question?

Hazardous Materials Information Review Act
Government Orders

3:55 p.m.

Some hon. members

Question.

Hazardous Materials Information Review Act
Government Orders

3:55 p.m.

NDP

The Deputy Speaker Bill Blaikie

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Hazardous Materials Information Review Act
Government Orders

3:55 p.m.

Some hon. members

Agreed.

Hazardous Materials Information Review Act
Government Orders

3:55 p.m.

NDP

The Deputy Speaker Bill Blaikie

(Motion agreed to, bill read the third time and passed)

Income Tax Amendments Act, 2006
Government Orders

3:55 p.m.

Liberal

Massimo Pacetti Saint-Léonard—Saint-Michel, QC

Mr. Speaker, I am pleased to rise today to speak to this fascinating bill, Bill C-33, An Act to amend the Income Tax Act, including amendments in relation to foreign investment entities and non-resident trusts, and to provide for the bijural expression of the provisions of that Act.

The bill represents a necessary update to the Income Tax Act, particularly as it relates to foreign amendments and other domestic measures. The majority of the bill's provisions are taken from the Liberal government's budget of 1999. The government put the proposed changes up for public comment in July 2005. The changes we are debating today also contain revisions made to that July 2005 release.

Although the amendments to the income tax will be mainly administrative, it is important to highlight them to have a better understanding ahead of an eventual vote.

The bill can be broken down into three parts.

Part one deals with amendments to provisions of the Income Tax Act governing the taxation of non-resident trusts and their beneficiaries and of Canadian taxpayers who have interests in foreign investment entities.

Part two deals with technical amendments that were included in part one of a discussion draft entitled “Legislative Draft Proposals and Draft Regulations Relating to Income Tax”, released by the minister of finance in February 2004.

Part three deals with provisions of the act not opened up in parts one and two.

The proposed measures in part one deal with non-resident trusts and foreign investment entities designed to ensure Canada is properly taxing those Canadians who are earning income through foreign intermediaries in the same manner that income would have been taxed had it been earned directly.

It is essential that Canada close tax avoiding loopholes, not only to protect our own tax base but also to demonstrate our commitment to the international community. We must show our international partners that Canada takes its international responsibilities seriously and that Canada is not a destination for taxation loopholes.

If I look at the bill, it is over 500 pages long. It is not likely that anybody in the chamber has read it. Even if people have, I am not too convinced they can understand this type of bill. However, as vice-chairman of the finance committee, I look forward to sending the bill to the finance committee after second reading so we can further study to determine if any amendments will be needed to make it an even better bill than what it is today.

We need bills like this. They may be complex, but in debating the bill in the past, members have decided to concentrate their points on other areas. As an accountant, I know the foundation of these bills are important. They are just as important as any other bill we debate in the House. That is why, if read some of the debate that went on in previous sessions by members of the opposition, especially government members, they had trouble determining what was a tax haven, what was a tax treaty and what were international tax agreements.

Tax havens are jurisdictions where people park their money, or investments, and they pay no income tax on the income generated on these moneys. Tax havens are countries like Bermuda, Cayman Islands, Turks and Caicos, Gibralter, just to name a few, where people or companies put their money, leave it there and it accumulates tax free. The purpose of the bill is not to address tax havens.

The second point is government members feel these are tax treaties. This is not a tax treaty. A tax treaty is like one of the bills we discussed a few months ago, Bill S-5. Tax treaties are conventions between two countries. Normally the purpose of the tax treaty is to avoid double taxation so Canadians or residents of the other countries do not have to pay double tax. Bill S-5 was our agreement with countries like Mexico, South Korea and Finland.

Some of the other problems we get into when we speak about tax treaties, tax havens and international conventions is our tax base does not get protected. Canada's tax base needs to be protected. If people start taking their hard-earned money and parking it elsewhere, Canada will be unable to maintain the revenue stream that we need so we can rely on the social programs.

The other item that makes Bill C-33 important is there are advantages to using a non-resident trust. If we do not put limits on it, the foreign investment entities will be eliminated.

There are a lot of points on which I would like to speak, but one of the items is the international tax agreements. We can sign these international tax agreements because this affects foreign entities. From what I understand, in the 1990s, although I was not in the House then but perhaps the Speaker was, a tax treaty with Italy was passed by the House. Italy has yet to ratify that treaty.

Italy now has two members of Parliament from other countries who sit in the House of Commons. It has an elected member of Parliament representing the riding of North America. One member of Parliament was born in the United States. The other one was born in Canada. It even has a senator. These elected members of Parliament and senator live outside of Italy but they have full right of vote. One MP seems to be lobbying. He has asked what has happened with the treaty. It was signed with Canada but it has not been ratified.

This is a typical example of a treaty we signed with a developed country and there has been no advancement. Some residents of both countries have had to pay double tax. Then they have to file their tax returns to get some of the money back, all because one country has ratified the treaty and the other country has not.

We can talk about the tax treaties and what these types of bills do on the international scene. When we look at what the government has done in the last little while on its international tax position, we think about regulation. I read in the today's paper that we have a regulation as to foreign ownership in the telecom sector, but we still see foreign entities trying to take over one of our biggest corporations in Canada, BCE, formerly Bell Canada.

Some of the articles say that they are looking for Canadian partners. If we do not protect ourselves with agreements like this, foreign corporations can come here, set up non-resident trusts, with Canadian owners but not really beneficial owners, and take over our corporations. We have seen that in the last few years. We just saw it last year when Inco was taken over by another foreign company.

If things continue as they are, all our historic corporations, which have added to the country's past, will slowly slip away. CN has its head office in Montreal, but it is just a skeleton. Most of the decisions are made in Chicago. We have lost part of that.

These agreements are important. The government has to realize that when it makes a decision, it has to be an overall decision to protect Canadian interests. Canada's financial markets represent 1% or 2% of worldwide markets. We need to protect Canada's corporations or they will be swallowed up in this international global economy that we live in today.

In the budget just tabled one of the items concerns me when it comes to the international tax system and fairness. Canada and the U.S. apparently have agreed in principle to update the Canada-U.S. tax treaty. They want to eliminate the non-resident withholding tax on interest payments and Canada also plans to unilaterally remove the withholding tax from arm's length interest payments to other countries.

What does that mean? Does that mean we will not collect any money on interest payments that are made to foreign companies? How about having an agreement with the U.S. in this case to ensure that the money will be taxed on the other side? When companies from the U.S. pay Canadians, we can collect our taxes from those Canadians.

The government then says that we need to promote more business investment. We turn around and look at the budget. Budget 2007 proposes to eliminate the deductability of interest incurred to invest in businesses and business operations abroad.

How does that make any sense? The government wants Canadian businesses to buy foreign entities. Does it want foreign entities to buy Canadian businesses? This will eliminate the deductability of interest incurred to invest in business operations abroad.

How will that help Canadians to expand, to go abroad and increase productivity? It will not. I am not sure what the government is trying to avoid here. There is no basis for saying it is going to affect revenues in Canada. Most Canadian companies that borrow to purchase foreign affiliates borrow from Canadian financial institutions. The Canadian financial institutions from what I understand pay taxes here.

Perhaps the government should have put a disclaimer that said if a Canadian business was to purchase an operation abroad, as long as it borrowed the money from a Canadian financial institution, that interest could be deducted.

When other members spoke on the bill, they spoke about income trusts. Income trusts have a non-resident aspect to it. We see now that the rules were changed. Some REITs are still allowed, but the government has put a limit as to how much foreign ownership or foreign property they are allowed to invest in.

In the news it said that Canadian REITs were not allowed to invest in foreign entities or foreign real estate up to a certain level. How will that help Canadian companies if they cannot go abroad? As we say in French, “Les bâtons dans les roues”.

Getting back to income trusts, the government has imposed a 31.5% tax on income trusts, which is fine if it chooses to do that. Now it has totally eliminated that sector because it says it did not pay tax or claimed too much tax. The government keeps flip-flopping in terms of its position.

Now we have income trusts that are now going to have to pay 31.5%. People were interested in investing in income trusts, especially the energy sector, because these allowed corporations to go out and get capital at a cheaper price because they were selling units instead of shares. Then the government decided to implement this 31.5% tax. It said that trusts were no longer allowed to operate as of 2011. Existing corporations cannot be converted to trusts.

What has happened is there are no restrictions for foreign entities to buy these companies and turn them into private entities or private trusts to be controlled by foreign entities? There are no restrictions on the actual way in which incomes trusts can now function.

The Liberal way would have been to tax earnings only, to keep the income trusts and tax the non-residents who benefit from the tax free distribution from these income trusts.

Before I get to my next point on private members' bills, I want to go over the tax treaties. The government has also decided to unilaterally provide U.S. companies to borrow in Canada on these limited partnership payments.

What has happened again, if we look at what is in the news, is these limited partnership entities that are allowed to operate in Canada and are allowed to deduct interest payments in the United States are now going to be able to buy up Canadian companies and get a deduction in the United States as well as here in Canada. The only problem is that Canada is not getting cooperation from the U.S. They will probably be able to deduct the interest here in Canada, buy up Canadian companies and use Canadian capital. There is no consistency in how these fee agreements are treated.

There is a whole page on the interest deductibility on the foreign affiliates. There are going to be a lot of problems when we go through this in the finance committee. We are already hearing that Canadian corporations with foreign affiliates are not happy that they are not able to deduct these payments. These items will have to be dealt with when the budget implementation bill is sent to the finance committee.

There was just one more aspect that I want to talk about. If the government is serious about getting a handle on money offshore or making sure that people are not hiding income from Revenue Canada, there are certain procedures that could be used. Some of the departments here in Canada could monitor these moneys or shifts in large sums of money that seem to go offshore and are not accounted for.

FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada was established a couple of years ago. We just did the five year review so it has been around for five or six years. There are financial institutions that have to report to FINTRAC whenever they receive payments of more than $10,000, so FINTRAC could easily monitor any payments that are going offshore.

The problem is that FINTRAC's basic responsibility is to look at whether sums of money are used for terrorist financing or money laundering. It is for crime proceeds. Tax avoidance does not seem to be within its mandate. This is one of the amendments that I had asked for when we were doing the five year review of its mandate, to see if FINTRAC could look at the way tax avoidance is handled in this country.

Another idea that I had was similar to an initiative which has been done in Europe and a couple of countries. It was to provide Canadians with a once in a lifetime opportunity to declare all their worldwide income, and if they repatriated back here, to charge them something like 10% or 20%, and split that amount with the provinces. It would be a good way to generate some revenue even for the provinces. If somebody had forgotten to declare some money or they happened to have some money in another country, they could bring it back. We could assess a tax of 10% or 20% tax. They would not have to pay any interest or penalties on those sums of money.

This initiative seems to have worked in a few other countries. I do not have the stats but apparently there was a good take on it and it increased government revenues by a good 10% or 15%.

There are other ways in which we can look at how tax havens and tax treaties are handled. A 500 page bill is definitely an interesting way to look at all these complex items. The bill tries to amend the Income Tax Act. The Income Tax Act is one of the more complex pieces of legislation, although apparently, the Employment Insurance Act is much more complex.

These are all issues the government should be looking at. I am looking forward to seeing Bill C-33 come to committee so we can analyze it and get a better understanding of what this 500 page document is all about.

Income Tax Amendments Act, 2006
Government Orders

4:15 p.m.

Bloc

Mario Laframboise Argenteuil—Papineau—Mirabel, QC

Mr. Speaker, I am trying to understand what my Liberal colleague is saying. To the Bloc Québécois, Bill C-33, which deals with foreign investment entities and non-resident trusts, aims, in part, to counter tax avoidance.

I understand that my colleague was talking about income trusts, among other things, and I see that he was trying to connect that with foreign trusts. But for us, this is a bill to counter tax avoidance.

I would like to know if my colleague is for or against tax avoidance, and if he is for or against the bill.