Mr. Speaker, I rise to contest a ruling by the chair of the finance committee during clause by clause consideration last week. During that consideration, the chair of the committee ruled that an amendment referenced at the committee under the number 2972723 was out of order and could not be moved.
The amendment in question sought to provide a tax reduction to a group of taxpayers who would have otherwise paid 31.5% tax on proceeds from income trusts. Under my amendment, they would pay only 10%. The amendment also provides for a tax refund or credit of this tax for certain taxpayers. Both of these measures are clearly tax reductions.
With respect to the general tax reduction from 31.5% to 10% contained in the amendment, it was in no way questioned by the chair at the meeting. The chair presumably knew that such a tax reduction was in order. However, in committee, the chair ruled out of order another part of the same amendment that I proposed to clause 21 of the bill to reduce the tax on Canadian residents even further by way of a tax refund or credit, in subclause 2.1. Here I will quote the chair of the committee, who said that this “would require government spending”.
He then concluded, again erroneously, that this latter tax reduction required a royal recommendation, which if this was the case obviously could not be moved in committee. Therefore, the chairman mistakenly ruled the amendment out of order and the committee did not consider the amendment that I was proposing.
In addition, a number of amendments standing under my name at the committee simply could not proceed because the central amendment, which I have just described, could not be moved. The chair's ruling thus had an adverse effect not only on the amendment itself but on a number of other amendments as well.
I now want to touch briefly on the procedural arguments as to why I think the committee chair's ruling was erroneous. While I accept that increasing a tax or levy as well as increasing a benefit or grant are prerogatives of the Crown, my amendment did no such thing. It dealt with refunding a tax to a group that would otherwise have paid it.
On Monday, October 9, 1957, Speaker Lamoureux ruled in this place that reducing a tax by way of an amendment and without a royal recommendation was in order. This decision can be found in the Journals of the House of that day at page 254.
Speaker Lamoureux, in his decision, was basing himself on Erskine May's treatise on parliamentary procedure and form, the 15th edition, which says at page 704 that provisions for the alleviation of taxes are not subject to the rules of financial procedure. At page 572, May also states that a bill diminishing or repealing a tax or other public burden, unless the imposition of a new tax is proposed by way of substitution, needs no royal recommendation.
In our own House in the last Parliament, a number of private members' bills were passed, without royal recommendation, to provide tax alleviation. Two such examples were the bills to provide for a tax deduction for tools for automobile mechanics and a bill to provide similar relief for workers who purchase transit passes.
Only a few weeks ago, we passed private member's Bill C-294 to reduce income taxes for the benefit of lodging and other such allowances to young athletes, mainly hockey players. This bill was sponsored by the Conservative member of Parliament for Prince Albert.
Surely if it is in order to offer an exoneration of taxes for hockey players, which it certainly was and which I supported, it is equally in order to offer an amendment to reduce taxes to Canadian senior citizens who are now the innocent victims of the Prime Minister's broken promise on income trusts.
Finally, I wish to draw to the attention of the House a booklet published by the Procedural Services of the House of Commons under the authority of the Speaker and entitled “Amending Bills at Committee and Report Stages in the House of Commons”. At page 5 of this document, under the rubric “Financial Initiative of the Crown”, it is stated, “Any amendment to reduce public spending or to reduce a tax is admissible”.
Clearly the chair of the Standing Committee on Finance erred when he refused to allow me to move my amendment at committee. Equally clearly, the effect of not being able to move this important amendment was such that other amendments which I was offering either could not be moved because they were subordinate in nature or, in the case where they could be moved, did not carry much support simply because the main subject could not even be debated.
For greater clarity, I note that the Chair of the committee was in error when he suggested that subclause 2.1 was new tax expenditure. It is not. The subclause itself makes this point when it states, “Every individual who is resident in Canada and liable to pay tax under Part 1 may claim a refund or credit against tax otherwise payable”.
This subclause involves no new net tax expenditure by the Crown. It simply allows an individual taxpayer who is a Canadian resident to recover tax already paid on his or her behalf to the Crown.
A taxpayer who is a Canadian resident can recover not one penny more than that which was remitted on his or her behalf already to the Crown. Therefore, there is no new tax expenditure whatsoever.
In short, the withholding in question is then reimbursable to a specific category of investors, namely, Canadian residents, who would get their money back. For example, foreign investors would not qualify because they do not pay sufficient or any Canadian taxes. Pension funds would not qualify either because of their tax exempt status.
Therefore, there is a clear case of tax alleviation as identified by Erskine May, as I mentioned earlier.
That is why I am seeking this remedy in asking the Speaker that my amendment be allowed to be debated and voted on at report stage. The Chair of the committee provided an erroneous ruling which prevented me from doing my work of representing my constituents and Canadians generally at the committee.
