Mr. Speaker, I would like to respond today to the point of order that was raised by the hon. member for Scarborough—Rouge River concerning Bill C-52, the budget implementation act.
The member argued that clause 13(1) of the bill respecting the application of the definition of “SIFT trust”, which is a specified investment flow-through trust, is not in keeping with the practices and customs of this House. In his view, the provision represents an inappropriate delegation of subordinate law and the member has asked that the Speaker rule that the clause be struck from the bill and the bill ordered reprinted.
As the Speaker has noted, this is a complex issue.
I appreciate the expertise of the member for Scarborough—Rouge River on matters of subordinate law. However, I submit that this is not a valid point of order, as there are no procedural authorities that preclude the House from legislating in this manner. In short, this is a matter for debate, which would be better dealt with by members in the House and at committee, rather than a procedural question for the Speaker to resolve.
Let me first briefly provide some background to this issue in order to assist the Chair.
The provision in question provides a rule for the application of the definition of “SIFT trust”. In particular, the provision sets out when a trust will be subject to the new rules pertaining to the taxation of income trusts.
Under the bill, a new trust will become a SIFT trust and therefore subject to the new rules for the taxation year in which it first meets the definition. However, for an existing trust, the SIFT trust definition will not apply, and therefore the new rules will not apply until the earlier of the 2011 taxation year, and the taxation year in which the trust exceeds the normal growth guidelines issues by the Department of Finance on December 15, 2006, unless that excess arose as a result of a prescribed transaction. As you can see, Mr. Speaker, this is quite technical.
To achieve this, the provision in question contains an incorporation by reference of the normal growth guidelines issued by the Department of Finance, to which I just referred. Incorporation by reference is a proper and legal approach to enacting legislation. It is neither rare nor unusual in legislation. An examination of Canadian statutory law would reveal many instances where incorporation by reference has been used in just this fashion.
For example, sections 181.3 and 190.13 of the Income Tax Act refer to the use of risk-weighting guidelines issued by the Superintendent of Financial Institutions in order to determine the amount of capital of an authorized foreign bank. These guidelines are defined in section 248 of the Income Tax Act and are issued pursuant to section 600 of the Bank Act. I could go on with other examples, but I am sure the Speaker would find that a tad tedious.
Furthermore, it is not uncommon for legislation to allow documents incorporated by reference in legislation to be changed from time to time. For example, section 11 of the Customs Tariff incorporate by reference the Compendium of Classification Opinions to the Harmonized Commodity Description and Coding System published by the Customs Co-Operation Council, as amended from time to time.
Therefore, it is not just in the Income Tax Act, but in other legislation as well that we see this same approach. As I said, we could go on at length, but I shall save us and save the House that lengthy example. I think the Speaker has ample precedent there.
In terms of procedural arguments, the member for Scarborough—Rouge River essentially made three points. He has argued: first, that the provision is not in keeping with the practices and customs of this House; second, that the clause attempts to exempt itself from rules regarding parliamentary scrutiny of subordinate law; and third, that the clause does not comply with the government's own internal rules on legislative drafting.
Let me address each point in turn.
On the first point, the practices and customs of the House, the essence of the member's argument appears to be that the clause does not conform to the rules of the House. The government submits that Bill C-52 and all of its provisions are properly before the House. The provision in question was included in a detailed notice of ways and means motion tabled on March 27, which was adopted by the House on March 28.
The ways and means motion adopted by the House on March 28 included the identical provision that the member for Scarborough—Rouge River questioned. Therefore, the provision in question is consistent with the rules governing financial procedures.
I submit there are no procedural grounds for the clause to be ruled out of order. Rather, this is an issue that would be more appropriately considered by the Standing Committee on Finance in its review of the bill. Should the member wish to improve the text of the bill, he and his colleagues are free to propose amendments to the bill in committee.
Citation 322 of the sixth edition of Beauchesne's states that:
When a bill is under consideration, points of order should not be raised on matters which could be disposed of by moving amendments.
This clearly falls into that category.
With the exception of very limited circumstances, it is clear that only the House itself can decide to alter the content of bills
The 22nd edition of Erskine May states, at pages 544 and 545, the following:
Throughout all these stages and proceedings the bill itself continues in the custody of the Public Bill Office, and, with the exceptions mentioned below, no alteration whatever is permitted to be made in it, without the express authority of the House or a committee, in the form of an amendment regularly put from the Chair, and recorded by the Clerks at the Table or by the clerks from the Public Bill Office in standing committee.
As Marleau and Montpetit note, at page 620:
The Chair has clearly ruled in the past that when a bill is in possession of the House, it becomes its property, and cannot be materially altered, except by the House itself. Only “mere clerical alterations” are allowed. By issuing a corrigendum to the bill, the Speaker may correct any obvious printing or clerical error, at any stage of the bill. On the other hand, no substantive change may be made to the manner in which a bill was worded when it was introduced, or when a committee reported on it, otherwise than by an amendment passed by the House.
There would appear, Mr. Speaker, to be only two circumstances where the Speaker can make alterations to a bill: first, where the Chair has ruled that amendments adopted by a committee are beyond the scope of the bill, as you had recently ruled with respect to committee amendments to Bill C-257, the replacement workers bill; or second, when there is a clear printing error. As you noted in a ruling on February 23, 2004, this is only done in rare cases where there is a manifest error in the printing of the bill.
Apart from these limited instances, I submit that it is up to the House to decide whether or not to adopt a bill with our without amendment.
Even if you were, Mr. Speaker, to conclude that the provision of the bill as currently drafted is unacceptable, I would submit that the House and the committee should, first, have an opportunity to review the matter and consider possible amendments to improve the text of the bill.
In the event the provision in question remains in the bill at third reading, I submit that it is at that point when the Speaker should intervene on this matter in the unlikely case you think it is necessary.
It is analogous to the procedure that we use with private members' bills when we have those flaws. Committee exists and represents an opportunity for the flaws to be cured. If this is a flaw, indeed, that would be the place at which it could happen. The Speaker, if faced by a change that is unacceptable, does not need to put the question on that clause at third reading.
On the question of the review of statutory instruments, the hon. member has also suggested that the provision of the bill exempts itself from the rules of the House regarding parliamentary scrutiny of delegated legislation. It is not uncommon for bills to establish forms of delegated legislation that are not subject to the Statutory Instruments Act. It is perfectly within the prerogatives of the House to pass legislation to that effect. As I have indicated earlier, it is not the role of the Speaker to decide whether such legislation is appropriation.
The third point is the government guide for drafting.
The hon. member also suggested that the provision in question is not consistent with the government's “Guide to Making Federal Acts and Regulations”.
The guide sets out principles for making legislation and regulations, as well as government processes for ensuring that statutory and legislative changes are made in an effective way.
Apart from the fact that this guide is by no means a procedural authority, I would also point out that the guide does not prevent the government from introducing legislation such as the provision in question, provided that the cabinet has authorized such legislation.
In conclusion, I would submit that clause 13(1) of Bill C-52 is properly before the House. This is a matter for debate. The issue is properly in the hands of the House and the finance committee will be better placed to examine whether this section of the bill is appropriate or whether it can be improved.
As always, I understand that the Minister of Finance is prepared to discuss this matter, and all matters related to the bill, further in committee. Indeed, if there is any flaw, committee can certainly be curative in so doing.
