Mr. Speaker, I rise on a point of order. I want to speak to the question of the need for a royal recommendation on two private members' bills.
On March 11, 2008, you noted that the spending provisions in two private members' bills appear to infringe on the financial initiative of the Crown. You invited members to make arguments on whether those bills require a royal recommendation. That is what I intend to do at this time.
The two bills are Bill C-445, An Act to amend the Income Tax Act (tax credit for loss of retirement income), and Bill C-490, An Act to amend the Old Age Security Act (application for supplement, retroactive payments and other amendments).
Let me begin with Bill C-445. This bill would create a new refundable tax credit for the loss of retirement income.
Refundable credits are direct benefits paid to individuals regardless of whether tax is owed or not and are paid out of the consolidated revenue fund. As a result, any legislative proposal to create a refundable tax credit requires a royal recommendation.
I would draw to the attention of the House two recent rulings wherein the Speaker of the House and the Speaker of the Senate concluded that creating or increasing a refundable tax credit requires a royal recommendation.
On June 4, 2007, there was a Speaker's ruling that a proposed amendment to Bill C-52 to create a refundable tax credit could not be selected for report stage because the amendment required a royal recommendation.
On May 11, 2006, the Speaker of the Senate ruled that Bill S-212 was out of order because it would have increased a refundable tax credit. The Speaker of the Senate stated:
--bills proposing to alter refundable tax credits need a Royal Recommendation.
This is because the payouts that will be made to taxpayers, who are entitled to claim them, must be authorized. This authorization is the Royal Recommendation. These payments can only be made from the Consolidated Revenue Fund; they are expenditures of public money.
Since Bill C-445 would create a refundable tax credit, it needs to be accompanied by a royal recommendation.
Now, in regard to Bill C-490, this bill proposes a number of changes to the old age security program which would result in increased spending and would therefore require a royal recommendation.
Clause 1 of Bill C-490 would apply to a person who ceases to have a spouse or common law partner because of the spouse's or common law partner's death and would provide that person with the old age security pension that would have been payable to the person's spouse or common law partner, for a period of six months. This extension of benefits would be a new program requirement, which would result in additional spending.
On December 8, 2004, a Speaker's ruling in the case of Bill C-278 concluded that a similar extension of benefits for the employment insurance program constituted a new and additional requirement for spending, and therefore required a royal recommendation.
Clause 2 of Bill C-490 would eliminate the requirement to make an application for a supplement for old age security benefits. Formal application is needed since the information available from the Canada Revenue Agency is sometimes insufficient to determine eligibility. This change would result in benefits under the old age security program being provided to persons who otherwise would not be eligible to receive them. This would be a new program requirement that would require additional spending.
On October 24, 2005, a Speaker's ruling with respect to a provision in Bill C-301, dealing with other proposed retroactive payments under the old age security program, concluded that:
Bill C-301...proposes to alter the process by which compensation is awarded to old age security recipients in the manner that retroactivity is handled.
Clauses 2, 3 and 4 remove the requirement that the recipient must make an application before they can receive a payment...This changes the conditions of the compensation process and creates new or additional spending.
Clause 3 of Bill C-490 would increase the guaranteed income supplement monthly benefit by $110. The Department of Human Resources and Social Development estimates that this change could cost up to $2 billion a year. This would constitute additional spending for a new and distinct purpose and would therefore require a royal recommendation.
Clause 6 of Bill C-490 would provide for retroactive payments where a person has not received a supplement, or a portion of a supplement, to which that person would have been entitled under the act.
On October 24, 2005, a Speaker's ruling on the retroactivity of payments in the case of Bill C-301, respecting the monthly guaranteed income supplement under the Old Age Security Act, concluded that:
--retroactivity is limited by the date upon which the application was made. Late applicants may only be eligible for the period dating from the application. It would appear then that this modification authorizes increased spending which would require a royal recommendation.
The Department of Human Resources and Social Development estimates that Bill C-490's provision of unlimited retroactivity for guaranteed income supplement monthly benefits could represent an initial lump sum payment to beneficiaries of up to $6 billion.
In conclusion, Bill C-490 would result in increased spending for the old age security program in the new and distinct ways I have just outlined. The bill therefore requires a royal recommendation.