Bill C-219 (Historical)

An Act to amend the Income Tax Act (deduction for volunteer emergency service)

This enactment amends the Income Tax Act to allow volunteer emergency workers to deduct from their taxable income the amount of $1,000 if they performed at least 100 hours of volunteer service, and $2,000 if they performed at least 200 hours of volunteer service.

Bill C-214—Ways and Means Motion

[Greg McLean, Conservative, Calgary Centre, AB]

Mr. Speaker, I rise today in response to a point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons on November 3, regarding his concerns respecting Bill C-214, a private member's bill that I have sponsored, entitled “An Act to amend the Income Tax Act (qualifying environmental trust)”.

My colleague on the government side of the House believes that this bill would need to be preceded by the adoption of a ways and means motion. As he notes and as is clear in both Bill C-214 and in the Income Tax Act, a qualifying environmental trust is a special kind of trust that is recognized under the Income Tax Act for setting aside reclamation costs for mining sites, waste disposal and quarry sites, as well as pipelines.

The purpose of Bill C-214 is to amend the Income Tax Act to include in the definition “qualifying environmental trust” trusts that are maintained for the sole purpose of funding the reclamation of an oil or gas well operated for the purpose of producing petroleum or natural gas.

Bill C-214 proposes to repeal paragraph (a) of the definition “excluded trust” in subsection 211.6(1) of the Income Tax Act, which currently provides that oil and gas wells are excluded from the definition of a “qualifying environmental trust”, an unjustified inequity that the bill is meant to address, and proposes to add paragraph (e) to the definition of “qualifying site” in the same provision. The proposed paragraph (e) would read as follows: “the operation of an oil or gas well drilled for the purpose of producing petroleum or natural gas.”

The consequence of these proposed amendments would be that the reference to a qualifying site in paragraph (b) of the definition of a “qualifying environmental trust” would include the operation of an oil or gas well drilled for the purpose of producing petroleum or natural gas. Subsection 211.6(2) of the Income Tax Act is the charging provision that imposes tax on qualifying environmental trusts.

My colleague on the government side of the House states that adding a new paragraph (e) to the definition of a “qualifying site” in subsection 211.6(1) of the Income Tax Act would have the effect of expanding the definition of a “qualifying environmental trust” to include trusts that are maintained for the sole purpose of funding the reclamation of an oil or gas well operated for producing petroleum or natural gas. Perhaps that is so, or perhaps not. It depends on the trustee's approach. However, excluding language currently in the act that prejudices one sector of our nation's economy vis-à-vis others is a necessary step in addressing a historical economic inequity.

My colleague goes further to state, “Therefore, the effect of Bill C-214 would be to cause a tax to be payable by a new class of taxpayers, that is, qualifying environmental trusts in respect of the operation of an oil or gas well.” This reach of a conclusion ignores the very nature of how qualifying environmental trusts are taxed, but also by segregating qualifying environmental trusts established for the designed purpose as being a new class of taxpayer somehow distinct from the qualifying environmental trust already extant and effectively providing funding for reclamation and remediation services in Canada's other extractive industries.

In trying to justify the necessity of a ways and means motion, my colleague on the government side of the House erroneously states that Bill C-214 would represent an increase in the incidence of tax for these trusts. Maybe, but only as a result of the increased economic activity associated with the efficiency of using a trust structure to deal with environmental remediation activities. Incidental economic activity and the taxation revenue associated thereby is not subject to the necessity of a ways and means motion.

Finally, my colleague insists that Bill C-214 would represent an extension of a tax to a new class of taxpayer, which seems to indicate a prejudice that oil and gas remediation activities represent a different class in the structure of environmental trust, a mode of thinking that is, thankfully, archaic in most of society. Canadians do not segregate themselves by class according to industry sectors, neither does our tax system and neither should the House acquiesce to this regressive rationale.

In support of his argument, my colleague reached for a precedent Speaker's ruling from 2011. I would ask the Speaker to examine how weakly that precedent represents the characteristics of the amendments sought in Bill C-214. I submit a more appropriate comparative would arise from a Speaker's ruling on February 1, 2008, on then Bill C-219, where it was deemed the amendments presented did not result in an increased tax burden on taxpayers.

I have addressed these matters at length through the private member's bill process. I have previously addressed your clerks, Mr. Speaker, on this matter. I have addressed the concerns raised by the legislation-drafting branch at the Library of Parliament. I have worked on the financial modelling with the Parliamentary Budget Officer to show the financial benefit of constructive legislation. In addition, the resultant environmental benefit is a key outcome.

At a time when the current government has intervened with a one-time expenditure of $1.7 billion to address the historical problem created by excluding oil and gas remediation from being classed as a qualifying environmental trust, why is the government attempting to stretch definitions in order to disallow a measure that would bring some overdue equity to the treatment of Canada's oil and gas industry?

Finance

[Rob Merrifield, Conservative, Yellowhead, AB]

Mr. Speaker, I have the honour to present to the House, in both official languages, the ninth report of the Standing Committee on Finance in relation to Bill C-219, An Act to amend the Income Tax Act (deduction for volunteer emergency service), with amendments.

Emergency Service Volunteers

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, it is my honour to present to this House a petition for emergency volunteers who risk life and limb to provide security and emergency services in the smaller communities. It is certainly an essential service for rural Canada. There is no remuneration for them. Personal expenses are incurred by emergency volunteers with no compensation. This inequity should be corrected immediately.

Therefore, the petitioners call upon Parliament to enact Bill C-219, An Act to amend the Income Tax Act , to permit a tax deduction for emergency service volunteers.

Bill C-219--Speaker's Ruling

[The Speaker, Peter Milliken]

I am now prepared to rule on a point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons concerning the need for Bill C-219, An Act to amend the Income Tax Act (deduction for volunteer emergency service), standing in the name of the hon. member for Malpeque, to be preceded by the adoption of a ways and means motion.

I wish to thank the hon. parliamentary secretary, as well as the hon. member for Malpeque and the hon. member for Mississauga South for their submissions on this matter.

On January 31, 2008, the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons rose to argue that the provisions of Bill C-219 to allow volunteer emergency workers to deduct certain amounts from their taxable income needed to be preceded by the adoption of a ways and means motion because they would have the effect of replacing several tax relief measures enacted by Parliament following the adoption of the Budget Implementation Act, 2006. He contended that removing such alleviations of taxes would result in an increased tax burden on taxpayers.

In his response, the hon. member for Malpeque argued that on the contrary, Bill C-219 would reduce taxes, not increase them. He pointed out that a very similar bill in the last Parliament, Bill C-273, An Act to amend the Income Tax Act (deduction for volunteer emergency service) had been accepted as being properly before the House and that there was no reason to judge it to be otherwise in the current session.

The Chair has carefully reviewed the provisions of Bill C-219. As has been pointed out, the bill provides for volunteer emergency workers to deduct certain amounts from their taxable income. It would thus reduce the amount of taxes payable. It does so by adding to, not replacing, parts of sections 60 and 60.02 of the Income Tax Act. Let me explain.

It is true that these same sections of the Income Tax Act were amended by the Budget Implementation Act, 2006, but those amendments dealt with very different issues than Bill C-219. Specifically, they provide tax relief in relation to the universal child care benefit, the Canada Disability Savings Act and income splitting for seniors.

On reflection, I believe that the House will conclude with the Chair in the first place that the sponsor of the bill could not have intended to amend provisions which did not even exist at the time of the introduction of his bill, Bill C-219.

Furthermore, Bill C-219 does not explicitly repeal provisions of the Income Tax Act, nor does it concern in any way the issues addressed in the subsequent amendments brought by the Budget Implementation Act, 2006. Instead, the bill deals with deductions for volunteer emergency workers.

In light of this, the Chair simply cannot accept the arguments put forward by the hon. parliamentary secretary. If and when the bill is referred to committee, the Chair has no doubt that any clause numbering inconsistencies will be corrected.

Accordingly, I find that Bill C-219 is properly before the House and that debate on the motion for second reading may commence as planned.

Bill C-219

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I rise on a point of order to respond to the comments made earlier today by the parliamentary secretary to the government House leader, in which he stated that my private member's bill, Bill C-219, was improperly before the House. I was not in the chamber at that time so I did not have a chance to respond.

Bill C-219 would amend the Income Tax Act to allow voluntary emergency workers to deduct from their taxable income the amount of $1,000 if they performed at least 100 hours of volunteer service and $2,000 if they performed at least 200 hours of volunteer service.

The parliamentary secretary contends that Bill C-219 is improperly before the House as it has not been preceded by a ways and means motion because, in his view, the bill would increase the level of taxation. He argued that Bill C-219 would increase taxation.

As I have already indicated, the bill would increase the exemption from taxation. House of Commons Procedure and Practice at page 898 states:

...private Members' bills which reduce taxes, reduce the incidence of a tax, or impose or increase an exemption from taxation are acceptable.

Ways and means motions are necessary for bills that impose a tax or other charge on the taxpayer. This bill does not do that.

The fact is that the current bill is similar to Bill C-273 that was in the last Parliament. It went as far as the finance committee and at that level there were technical questions on who it applied to, the record-keeping procedures for hours, et cetera, but not about increasing taxes.

This bill does not propose the expenditure of public funds but rather affects the exemption from taxation which is permitted under our rules.

In conclusion, I believe this bill is properly before the House and I ask that you, Mr. Speaker, allow this bill to proceed as it is supposed to during private members' business tomorrow.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I agree completely with the hon. member opposite who has said that this is obviously a very complex and highly unusual situation concerning Bill C-219. I point out again, however, that we are talking about a ways and means motion rather than a royal recommendation. As the Speaker completely understands, there is a distinction between the two.

Even though I appreciate the arguments made by my hon. colleague about the need perhaps for the member who introduced this private member's bill to be consulted and have a chance to address the situation, and it is an unusual situation and I give full weight to that, Marleau and Montpetit, on pages 701-702, states that a fundamental principle of our parliamentary system is that all taxes imposed on our nation must be granted by Parliament. That was the crux of my argument.

This protection of the principle is an important concern for all members of the House. While I appreciate the arguments of my hon. colleague, there is also convention and procedures that we must observe, Mr. Speaker. I look for your ruling on this matter in the near future.

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, I rise on a point of order respecting the procedural acceptability of Bill C-219, An Act to amend the Income Tax Act (deduction for volunteer emergency service), which is currently on the order of precedence in the name of the hon. for Malpeque.

Without commenting on the merits of the bill, I would ask the Speaker to rule on whether the bill conforms to the procedural requirements for tax legislation.

Briefly stated, the Income Tax Act has been amended since the introduction of Bill C-219, so that the bill now has the unintended effect of increasing taxes.

Although the bill was in order when it was first introduced, I will be arguing that the bill should have been preceded by a ways and means motion when it was reinstated in the current session of Parliament.

I will therefore be arguing that the bill should be withdrawn from the order paper.

Bill C-219 proposes to amend the Income Tax Act to allow volunteer emergency workers to deduct $1,000 from their taxable income if they performed at least 100 hours of volunteer service and $2,000 if they performed at least 200 hours of volunteer service.

Bill C-219 was first introduced in the House during the previous session of Parliament on April 10, 2006.

On October 16, 2007 the bill was deemed to have been introduced and read a first time in the current session of Parliament pursuant to Standing Order 86.1 which provides for the reinstatement of private members' business following a prorogation.

As the Speaker knows, bills that increase the level of taxation must first be preceded by the adoption of a ways and means motion. The 22nd edition of Erskine May states at pages 777 and 778 that matters requiring authorization by a ways and means resolution include “the repeal or reduction of existing alleviations of taxation, such as exemptions or drawbacks”.

Bill C-219 proposes to amend the Income Tax Act to provide a tax deduction for voluntary emergency workers. Erskine May makes clear at page 781 that bills that alleviate taxation do not require a ways and means motion.

I therefore recognize that the bill was properly before the House when it was first introduced in the previous session of this Parliament. However, since Bill C-219 was first introduced, the Income Tax Act has been amended and as a consequence Bill C-219 will now have the unintended effect of increasing levels of taxation.

Let me take a moment to explain why.

Bill C-219 would add proposed paragraphs 60(y) and 60(z), and proposed sections 60.03 and 60.04 to the Income Tax Act. As I noted earlier, after Bill C-219 was introduced, the Income Tax Act was amended by Parliament in ways which affect Bill C-219.

First, paragraph 60(y) of the Income Tax Act was added by subsection 174(1) of the Budget Implementation Act, 2006, which received royal assent on June 22, 2006.

The effect of this new paragraph is to provide a deduction equal to the amount of any universal child care benefit that a taxpayer is required to pay. The deduction is necessary because when the taxpayer initially received the universal child care benefit the amount is required to be treated as income. As such, it is taxable.

However, if the benefit is to be repaid, taxes would be paid on an amount the taxpayer did not get to keep. That is why the deduction is required. Without it, more taxes are paid. Therefore, removing the deduction would have the effect of increasing the taxes paid.

Proposed paragraph 60(y) contained in Bill C-219 would set out the new tax deduction proposed in the bill but would also have the effect of replacing existing paragraph 60(y) in the Income Tax Act. Therefore, as currently drafted, Bill C-219 would result in a greater tax burden.

The same could also be said for proposed paragraph 60(z), contained in Bill C-219. Section 105 of the Budget and Economic Statement Implementation Act, 2007, which received royal assent on December 14, 2007, has already added paragraph 60(z) to the Income Tax Act.

Paragraph 60(z) provides for the deduction of any repayment of any grants or bonds paid under the Canada Disability Savings Act. Bill C-219 would remove that deduction.

The third change to the Income Tax Act to which I wish to draw attention is proposed section 60.03 which was added by section 5(1) of the Budget Implementation Act, 2007, which received royal assent on June 22, 2007.

Section 60.03 of the Income Tax Act allows a couple to split their pension income to permit them to take advantage of a lower effective marginal tax rate.

The proposed section 60.03 of Bill C-219 sets out the evidence taxpayers are required to submit to be eligible for the new tax deduction proposed in the bill, but would also have the effect of replacing the existing section 60.03 in the Income Tax Act. In other words, Bill C-219 would repeal the pension splitting provisions and therefore result in a greater tax burden for seniors.

We have with Bill C-219 an unusual circumstance. A ways and means motion was not required when the bill was introduced in the previous session because the bill did not have the effect of increasing taxes at that time.

However, Bill C-219 amends the Income Tax Act, which has since been amended. The provisions of the Income Tax Act, which are being repealed by Bill C-219, were for the benefit of taxpayers. By removing these provisions, we would be adding to the tax burden. Consequently, I would suggest that the bill should have been preceded by an adoption of a ways of means motion at the time of reintroduction in this session and that the bill is therefore now improperly before the House.

I note that in this session the government tabled ways and means motions and had them adopted by the House before the reinstatement of two government tax increase bills from the previous session, namely Bill C-10, the income tax bill, and Bill C-12, the bankruptcy and wage earner protection bill. The government would have tabled a ways and means motion for any new government bill to increase taxes which would remove provisions added in previous budget bills.

In addition, I suggest that the requirement for a ways and means motion is not limited to the introduction of a bill, but also to any motion that would increase taxation. For example, it is clear that motions to amend bills that have the effect of increasing taxation require a ways and means motion. Citation 982 of the sixth edition of Beauchesne's states that, “No motion can therefore be made to impose a tax”.

It could therefore be argued that the motion for second reading of Bill C-219 is out of order, as the bill would have the effect of increasing the levels of taxation.

Finally, Mr. Speaker, if you were to find that Bill C-219 is now improperly before the House, as I argue, I believe you would be obliged to direct that the order for second reading of the bill be discharged and the bill be withdrawn from the order paper, as you did in the case of Bill C-418 earlier in the session, on November 28, 2007.

35th Annual Tournament of the Northwest Firefighters Association

[Jean-Claude D'Amours, Liberal, Madawaska—Restigouche, NB]

Mr. Speaker, I would like to take this opportunity today to congratulate everyone who took part in the 35th annual tournament of the Association des pompiers du Nord-Ouest, which took place in Saint-Basile.

I have great admiration for the members of this association and the work they do to make our communities safer. These firefighters do not hesitate to risk their own lives when a fire breaks out, and they deserve recognition.

At the tournament banquet, I had the opportunity to speak to the firefighters, and I again pledged my support for Bill C-219, which proposes to reduce taxes for volunteer emergency workers, including volunteer firefighters.

I want to congratulate the Green River brigade, which won the 35th annual tournament and will represent the northwest region at the provincial tournament.

I also want to thank all the volunteers and the organizing committee members for all their efforts in planning this memorable event.

DNA Identification Act

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, I rise on a point of order. On May 31, 2006 you invited members to comment on whether Bill C-279 would require a royal recommendation.

Without commenting on the merits of this private member's bill, I would appreciate your consideration on whether this bill requires a royal recommendation, since the bill proposes the creation of two new indices and modifies the purposes of the existing act.

The Speaker has previously ruled that the creation of a new office or purpose involves new costs, and therefore bills proposing such new offices or purposes require royal recommendations.

On November 22, 2004 your Honour ruled that a royal recommendation would be required for Bill C-243, an Act to amend the Corrections and Conditional Release Act (establishment of the Office of Victims Ombudsman of Canada). In that ruling, you noted that:

--this bill would create the position of victims ombudsman of Canada, with remuneration for such officers and employees as are necessary to perform the functions and duties. It is abundantly clear that this legislative initiative would authorize the spending of public funds.

Similarly, on June 13, 2005 the Chair indicated:

Where it is clear that the legislative objective of a bill cannot be accomplished without the dedication of public funds to that objective, the bill must be seen as the equivalent of a bill effecting an appropriation.

The purpose of the existing DNA Identification Act is to help law enforcement agencies identify persons alleged to have committed designated offences. I would note that this Act was accompanied by a royal recommendation.

Section 3 of Bill C-279 would add an additional purpose, which is to identify missing persons via their DNA profiles.

Section 4 of Bill C-279 would follow-up on this additional purpose by requiring the establishment of two new indices under the national DNA databank to be administered by the databank commissioner.

Given that it would create an addition purpose and new program requirements which would modify the purpose of the DNA Identification Act, and result in significant new expenditures, the bill should be accompanied by a royal recommendation.

Income Tax Act

[Wayne Easter, Liberal, Malpeque, PE]

moved for leave to introduce Bill C-219, An Act to amend the Income Tax Act (deduction for volunteer emergency service).

Mr. Speaker, this bill would provide for a deduction to volunteer emergency workers of $1,000 if they perform at least 100 hours but less than 200 hours of volunteer service as an emergency worker, and $2,000 if they provide 200 hours or more of service. In other words, it would provide equity to all those who volunteer in their communities to assist their neighbours in a time of emergency. It would also give recognition to firefighters.

(Motions deemed adopted, bill read the first time and printed)