Bill C-50 (Historical)

Budget Implementation Act, 2008

An Act to implement certain provisions of the budget tabled in Parliament on February 26, 2008 and to enact provisions to preserve the fiscal plan set out in that budget

Part 1 enacts a number of income tax measures proposed in the February 26, 2008 Budget. In particular, it
(a) introduces the new Tax-Free Savings Account, effective for the 2009 and subsequent taxation years;
(b) extends by 10 years the maximum number of years during which a Registered Education Savings Plan may be open and accept contributions and provides a six-month grace period for making educational assistance payments, generally effective for the 2008 and subsequent taxation years;
(c) increases the amount of the Northern Residents Deduction, effective for the 2008 and subsequent taxation years;
(d) extends the application of the Medical Expense Tax Credit to certain devices and expenses and better targets the requirement that eligible medications must require a prescription by an eligible medical practitioner, generally effective for the 2008 and subsequent taxation years;
(e) amends the provisions relating to Registered Disability Savings Plans so that the rule forcing the mandatory collapse of a plan be invoked only where the beneficiary’s condition has factually improved to the extent that the beneficiary no longer qualifies for the disability tax credit, effective for the 2008 and subsequent taxation years;
(f) extends by one year the Mineral Exploration Tax Credit;
(g) extends the capital gains tax exemption for certain gifts of listed securities to also apply in respect of certain exchangeable shares and partnership interests, effective for gifts made on or after February 26, 2008;
(h) adjusts the rate of the Dividend Tax Credit to reflect corporate income tax rate reductions, beginning in 2010;
(i) increases the benefits available under the Scientific Research and Experimental Development Program, generally effective for taxation years that end on or after February 26, 2008;
(j) amends the penalty for failures to remit source deductions when due in order to better reflect the degree to which the remittances are late, and excuses early remittances from the mandatory financial institution remittance rules, effective for remittances due on or after February 26, 2008;
(k) reduces the paper burden associated with dispositions by non-residents of certain treaty-protected property, effective for dispositions that occur after 2008;
(l) ensures that the enhanced tax incentive for Donations of Medicines is properly targeted, effective for gifts made after June, 2008; and
(m) modifies the provincial component of the SIFT tax to better reflect actual provincial tax rates, effective for the 2009 and subsequent taxation years.
Part 1 also implements income tax measures to preserve the fiscal plan as set out in the February 26, 2008 Budget.
Part 2 amends the Excise Act, the Excise Act, 2001 and the Customs Tariff to implement measures aimed at improving tobacco tax enforcement and compliance, adjusting excise duties on tobacco sticks and on tobacco for duty-free markets and equalizing the excise treatment of imitation spirits and other spirits.
Part 3 implements goods and services tax and harmonized sales tax (GST/HST) measures proposed or referenced in the February 26, 2008 Budget. It amends the Excise Tax Act to expand the list of zero-rated medical and assistive devices and to ensure that all supplies of drugs sold to final consumers under prescription are zero-rated. It also amends that Act to exempt all nursing services rendered within a nurse-patient relationship, prescribed health care services ordered by an authorized registered nurse and, if certain conditions are met, a service of training that is specially designed to assist individuals in coping with the effects of their disorder or disability. It further amends that Act to ensure that a variety of professional health services maintain their GST/HST exempt status if those services are rendered by a health professional through a corporation. Additional amendments to that Act clarify the GST/HST treatment of long-term residential care facilities. Those amendments are intended to ensure that the GST New Residential Rental Property Rebate is available, and the GST/HST exempt treatment for residential leases and sales of used residential rental buildings applies, to long-term residential care facilities on a prospective basis and on past transactions if certain circumstances exist. This Part also makes amendments to relieve the GST/HST on most lease payments for land on which wind or solar power equipment used to generate electricity is situated.
Part 4 dissolves the Canada Millennium Scholarship Foundation, provides for the Foundation to fulfill certain obligations and deposit its remaining assets in the Consolidated Revenue Fund, and repeals Part 1 of the Budget Implementation Act, 1998. It also makes consequential amendments to other Acts.
Part 5 amends the Canada Student Financial Assistance Act and the Canada Student Loans Act to implement measures concerning financial assistance for students, including the following:
(a) authorizing the establishment and operation, by regulation, of electronic systems to allow on-line services to be offered to students;
(b) providing for the establishment and operation, by regulation, of a program to provide for the repayment of student loans for classes of borrowers who are encountering financial difficulties;
(c) allowing part-time students to defer their student loan payments for as long as they continue to be students, and providing, by regulation, for other circumstances in which student loan payments may be deferred; and
(d) allowing the Minister of Human Resources and Skills Development to take remedial action if any error is made in the administration of the two Acts and in certain cases, to waive requirements imposed on students to avoid undue hardship to them.
Part 6 amends the Immigration and Refugee Protection Act to authorize the Minister of Citizenship and Immigration to give instructions with respect to the processing of certain applications and requests in order to support the attainment of the immigration goals established by the Government of Canada.
Part 7 enacts the Canada Employment Insurance Financing Board Act. The mandate of the Board is to set the Employment Insurance premium rate and to manage a financial reserve. That Part also amends the Employment Insurance Act and makes consequential amendments to other Acts.
Part 8 authorizes payments to be made out of the Consolidated Revenue Fund for the recruitment of front line police officers, capital investment in public transit infrastructure and carbon capture and storage. It also authorizes Canada Social Transfer transition protection payments.
Part 9 authorizes payments to be made out of the Consolidated Revenue Fund to Genome Canada, the Mental Health Commission of Canada, The Gairdner Foundation and the University of Calgary.
Part 10 amends various Acts.

Committees of the House—Speaker's Ruling

[The Speaker, Conservative, Andrew Scheer]

I am now prepared to rule on the points of order raised on November 26, 2012, by the hon. House leader for the official opposition and the member for Kings—Hants, both of which arose from proceedings in the Standing Committee on Finance during its consideration of Bill C-45, a second act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.

I would like to thank the hon. House Leader of the Official Opposition and the hon. member for Kings—Hants for having raised their concerns, as well as the hon. Leader of the Government in the House of Commons and the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons for their interventions.

In raising his point of order, the opposition House leader asserted that the Standing Committee on Finance, through the adoption of a timetabling motion on October 31, 2012, regarding how it would conduct its proceedings on Bill C-45, went beyond its mandate and usurped the authority of the House when it invited other standing committees to study particular sections of Bill C-45 and to forward any proposed amendments back to the finance committee. He drew particular attention to that part of the finance committee's timetabling motion that provided for amendments to the bill recommended by other committees to be deemed proposed to the finance committee and must be considered in its proceedings along with amendments proposed by members of the committee. He argued that, as the House had referred the bill specifically and solely to the finance committee and had not adopted a motion of instruction authorizing other committees to study specific parts of the bill and subsequently report back to the House in the usual manner, the 13th report of the committee on Bill C-45 should be ruled out of order.

In replying to these arguments, the Leader of the Government in the House of Commons insisted that the Standing Committee on Finance had at no time relinquished any of its authority over the committee proceedings on Bill C-45, as it had simply invited other committees to offer suggested changes to the legislation. Further, he stated that there was an established practice whereby a committee charged with studying a bill has consulted other committees by inviting them to study a particular subject matter in the bill and then provide feedback.

The point of order raised by the member for Kings—Hants centred on the manner in which the committee dealt with the amendments to the bill which he, as a member of the committee, had submitted. He pointed out that the motion adopted by the committee on October 31, 2012, specified that once a specific time was reached, “the Chair shall put forthwith and successively, without further debate or amendment, each and every question necessary to dispose of clause-by-clause consideration of the bill”, and explained that, accordingly, the chair of the committee ruled that the committee would not be voting on any amendments on notice which had not been moved prior to the deadline.

Because the committee overturned that decision by the Chair, the member for Kings—Hants argued that the committee forced votes to be held on all amendments submitted, even those which had yet to be moved. He alleged that the removal of his discretion to decide which amendments he wanted to move, coupled with the overturning of the Chair’s procedurally sound ruling, constituted an abuse of the committee process.

The government House leader began his remarks by pointing out that, as committees are masters of their own proceedings, such matters ought to be settled in committee. He then argued that a broader interpretation of the timetabling motion adopted by the finance committee was needed in order to have a consistent interpretation in committee and in the House of such practices. He asserted that, in overturning the chair's decision, the committee broke no rules, nor did the putting of the question on all amendments submitted result in the member's rights being denied.

The Chair is therefore being asked to address two questions. First, did the Standing Committee on Finance overstep its authority when it adopted a timetabling motion, which, among other provisions, asked other standing committees to consider the subject matter of various parts of Bill C-45 and to offer suggestions as to possible amendments?

Second, do the actions of the committee in overturning the Chair so as to have all amendments on notice—including all the amendments of the hon. member for Kings—Hants—deemed moved during clause-by-clause consideration constitute a denial of his rights as a member?

The government House leader and the parliamentary secretary have both argued that the approach taken by the Standing Committee on Finance, namely, to seek the assistance of other standing committees in the consideration of the subject matter of a bill, is not extraordinary. In support of that contention, the parliamentary secretary referred to a motion of the Standing Committee on Finance on April 28, 2008, when it proceeded in a similar fashion by requesting that the Standing Committee on Citizenship and Immigration consider the subject matter of a part of Bill C-50, an act to implement certain provisions of the budget tabled in Parliament on February 26, 2008 and to enact provisions to preserve the fiscal plan set out in that budget.

While it may be overstating matters that this is “established practice”, it is true that committee practice is of considerable flexibility and fluidity. This is acknowledged by the opposition House leader himself who spoke of the need for committees to respect clear and distinct limits but declared to that, “when work is assigned to it by the House, it is largely up to the committee to decide how and when to tackle it”.

It should be noted that in the present case, even though other committees were invited to suggest amendments, it is the finance committee itself that chose to do so. It also decided how to deal with any suggested amendments and it retained the ability to decide whether or not to adopt any such amendments.

This is not the first time proceedings in a committee have given rise to procedural questions in the House and concerns about precedents being created. The Chair is reminded of a ruling given by Speaker Fraser on March 26, 1990, which can be found at page 9757 of the Debates of the House of Commons, in relation to a particularly controversial committee proceeding. He said:

I would caution members, however, in referring to this as a precedent. What occurred was merely a series of events and decisions made by the majority in a committee. Neither this House nor the Speaker gave the incidents any value whatsoever in procedural terms. One must exercise caution in attaching guiding procedural flags to such incidents and happenings.

The case at hand is not necessarily analogous to the one before us now but, nevertheless, this quote from Speaker Fraser serves as a useful reminder that committee practice is in continuous flux and that it is important to place particular occurrences in context.

As all members are aware, it is a long-established practice that committees are expected to report matters to the House before they can be considered by the Speaker. Speaker Milliken, in a ruling made on November 27, 2002, which can be found at pages 1949 and 1950 of the Debates, put it this way:

As Speaker, I appreciate the responsibility that I have to defend the rights of all members and especially those of members who represent minority views in the House. At the same time, it is a long tradition in this place that committees are masters of their own proceedings. Ordinarily the House is only seized of a committee matter when the committee reports to the House outlining the situation that must be addressed.

In the same ruling, he added:

...it is true as well that committees are permitted a greater latitude in the conduct of their proceedings than might be allowed in the House. It may not always be clear in a particular set of circumstances how best to proceed and so the ultimate decision is left to the committee itself.

Even the rulings of the chair of a committee may be made the subject of an appeal to the whole committee. The committee may, if it thinks appropriate, overturn such a ruling.

Today, I am being asked to decide, in the absence of a report from the committee whether, in this particular instance, the committee exceeded the limits of its powers to such an extent as to warrant an intervention from the Chair. As I see this case, the House referred the bill to the committee for study. The committee proceeded to study the bill, as has been described, and then the committee reported the bill back to the House without amendment. The report of the committee returning to us the bill is all this House has before it.

In other words, I cannot see how the Chair can reach into committee proceedings to somehow provide redress without a report to the House from the finance committee detailing particular grievances or describing a particular set of events. Accordingly, I cannot find sufficient evidence that the standing committee exceeded the limits of its mandate and powers in the manner in which it considered Bill C-45.

The Chair is fully aware that some members are frustrated with the way in which the proceedings took place in committee, particularly given that, as events unfolded there, they believe they were left without recourse. However much I might appreciate these frustrations, the fact remains that none of the actions of the Standing Committee on Finance have been reported to the House for its consideration. Therefore, in keeping with the long established practices of the House in that regard, the Chair is not in a position to delve into the matter further.

In conclusion, the Chair finds that the 13th report of the Standing Committee on Finance on Bill C-45 is properly before the House and, accordingly, that the bill can proceed to the next steps in the legislative process.

I thank members for their attention.

Committees of the House

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I rise to briefly supplement the initial response of the hon. government House leader to the point of order raised yesterday by the hon. House Leader of the Official Opposition on proceedings of the Standing Committee on Finance on Bill C-45.

To be clear about the October 31 motion of the finance committee, which the four New Democrats on the committee voted for, for the record, the chair of that committee was asked in paragraph (a) to write to his counterparts on 10 other standing committees “inviting those Standing Committees to consider the subject-matter” on certain provisions of Bill C-45. They were invited to take up a subject matter study, on which the NDP House leader himself admitted yesterday, “any committee has the right to initiate a study on the subject matter that applies to their policy area, including on the elements of Bill C-45”.

Nonetheless, it remained up to those 10 other committees as to how they would respond to the finance committee's invitation. As I understand it, to a committee, they agreed to consider the relevant subject matter of this budget implementation bill. Indeed, pages 1004 and 1005 of the House of Commons Procedure and Practice, second edition, state:

The standing committees may themselves initiate, without first obtaining the prior approval of the House, any study they feel it advisable to undertake, insofar as it falls within the mandate provided to them by the Standing Orders.

Circumstances of a wide variety inform the choices of committees for studies, whether they be legal or procedural in nature or have a political impetus behind them or, in this case, an invitation letter from a fellow committee. Meanwhile, in paragraph (b), the other committees were “requested to convey recommendations, including any suggested amendments...in a letter...”.

The other committees were not instructed to make a report to the finance committee, as the hon. member for Skeena—Bulkley Valley suggested yesterday. They did, however, each agree to correspond back to the finance committee chair with their views on the subject matter studied. That the other committees have not reported to the House on these studies is not a matter of concern for a point of order in the chamber.

I will continue reading the passage from O'Brien and Bosc at page 1005, which states:

The committees then undertake to define the nature and scope of the study, to determine how much time they will devote to it and whether or not they will report their observations and recommendations to the House.

As the hon. government House leader pointed out yesterday, the finance committee did not cede any of its authority with respect to Bill C-45 and the finance committee retained the authority to vote on all proposed amendments before the bill was ever reported back to the House. There was certainly no undue delegation of authority here.

Finally, he pointed out that this was not a novel practice. It may be of benefit to point out, for example, the case of Bill C-50, the Budget Implementation Act, 2008, in the second session of the 39th Parliament. As part of its study of that bill, the finance committee adopted a motion to ask the citizenship and immigration committee to consider the subject matter of a portion of it. The immigration committee accepted the invitation and later agreed to a letter in reply to the finance committee, even agreeing to append a dissenting opinion to that letter.

In closing, while it may be infrequent for one committee to write to another committee inviting it to undertake a study within its area of competence and to reply with suggestions, it is not out of order.

[Sidney Frank, Immigration Program Manager, New Delhi, India, Department of Citizenship and Immigration]

That's great. Thank you, Mr. Chair.

I want to thank the committee for inviting me to speak. My name is Sidney Frank, and I am the program manager of the New Delhi visa office and area director for South Asia.

I would like to provide a short overview, emphasizing topics that I understand are of most interest to the committee.

New Delhi is Canada's largest visa office, with over 150 staff. We are responsible for delivery of the immigration program in India, Nepal and Bhutan. A satellite office in Chandigarh processes temporary residence applications, primarily from the states of Punjab and Haryana.

We operate a network of visa application centres in nine major Indian cities and in Nepal to make the application process more convenient for private visitors, tourists, business travellers, students and temporary workers.

I am certain that you are aware that in spite of the current worldwide economic downturn, India's economy continues to grow rapidly. Consequently, our visitor, study permit, and work permit programs have grown very rapidly in the past decade. They have roughly tripled in size. This pattern continued in 2010, with an increase of about 20% over 2009 volumes.

New Delhi assessed over 96,000 temporary resident applications in 2010, and it receives over 1,500 passports on peak days. Nevertheless, we are able to maintain our processing standards on all temporary resident business lines at all times.

A significant portion of the Indian population has not benefited from economic growth. As a result, strong push factors for migration remain, and fraud and misrepresentation are widespread. In spite of high levels of fraud, roughly 75% of our temporary resident visa applications are approved.

We also have several innovative programs through which we work closely with stakeholders to facilitate documentation for low-risk travellers. For example, our business express program, in cooperation with about 55 large and reliable firms that do regular business in Canada, provides simplified documentation and 24- to 48-hour processing. It has an approval rate of over 98%.

Our student partners program, inaugurated in 2009, and now with 43 participating community colleges, has succeeded in improving approval rates and in quadrupling application volumes while managing risk through stricter documentation and feedback on actual attendance.

In each of our temporary resident business lines, processing times are falling. For example, 92% of all visitor visa applications are finalized within one week, and a growing number are done within two days.

India has been Canada's second-largest source of permanent residents in recent years. New Delhi issued over 25,000 permanent resident visas last year.

New Delhi has by far Canada's largest number of family class program applicants and also the largest inventory of economic category applications. They issue about 20% of the global family class visas each year.

In our priority category--spouses and dependent children--we finalize 80% of cases within six months. The median is three months. Although marriages of convenience are common, the large majority of marriages are genuine. About 82% are normally approved.

In the parents and grandparents category, output is managed globally. We process a sufficient number of cases each year to meet the objective assigned to the office. Current processing time at the visa office is 31 months, but this does not include sponsorship processing time at the case processing centre in Mississauga.

For sponsored parents and grandparents, the primary difficulty relates to the misrepresentation of dependent children. Many families provide fraudulent documentation showing that children are still full-time students, or they add unrelated children to their applications. As applicants are generally elderly, these cases are also frequently delayed by complex medical conditions.

New Delhi had the largest inventory of skilled worker cases submitted prior to the ministerial instructions pursuant to Bill C-50. In 2008-09 significant progress was made in reducing the pre-2008 inventory of over 140,000 persons to the 119,500 persons there are today, which is a decrease of 15%. The processing time for these cases continues to lengthen. It was 79 months in 2010.

Due to the large number of new cases submitted under ministerial instructions, we processed few old inventory cases in 2010. At the present time we are devoting all available resources to the quick processing of new cases received under the second and third set of ministerial instructions. In 2010 we finalized 80% of all these cases within 10 months.

New Delhi issued over 11,900 skilled worker visas in 2010, which was an increase from about 8,400 in 2009.

I would also note that New Delhi is quickly becoming one of the major source countries for provincial nominee programs. This program was small in India until recently, but tripled in size between 2008 and 2010.

The federal investor program was very small in Delhi in the past, with few applications prior to 2007. Intake has increased significantly in the past two years. In 2010 we finalized 80% of cases within 28 months.

I wish to assure you that the team in India is committed to the expeditious processing of all types of cases and is working hard to advance Canada's interests in India.

I also would be happy to answer any questions the committee might have.

Thank you.

[Nigel Thomson]

It's a huge issue, obviously, in generating the backlogs we face today. Bill C-50 was again very innovative. The minister took a bold step to give himself some control over the ability to accept applications. But that, moving forward, is only addressing essentially economic immigration categories; it hasn't addressed the family class, particularly parental sponsorships.

I think we have a basic conflict, Mr. Weston, between the basic principles of the Immigration and Refugee Protection Act, which embodies and enshrines family reunification as a principle we all adhere to, and the concept of what family reunification really means in the 21st century. That's something that needs to be the subject of a frank, open, and realistic conversation with Canadians.

[Jason Kenney, Conservative, Minister of Citizenship]

I will try to be quicker than that, Mr. Chair. Thank you.

My thanks to all the members of the Standing Committee on Citizenship and Immigration. It is a pleasure for me to appear before the committee for the first time since this Parliament began its work.

I would like to congratulate all the members of the committee on the activities they are undertaking. I would particularly like to thank the committee for choosing the backlog in our immigration system as its first study topic. This is quite a serious problem that we must all work together to resolve.

I am pleased to be here with some senior officials of Citizenship and Immigration Canada. We have our Deputy Minister, Mr. Neil Yates, our Assistant Deputy Minister, Strategic and Program Policy, Mr. Linklater and our Assistant Deputy Minister, Operations, Ms. Deschênes.

Mr. Chair, allow me to say that, as minister, I am very fortunate that the officials at all levels of the department are so capable and dedicated.

Mr. Chair, I would like to provide you with a presentation showing the principal elements of the problem of the backlog in our immigration system. I must say at the outset that the backlog problem is partly a reflection of the fact that Canada is the world's most desirable destination.

So I can tell you that the problem we have with inventories.... The technical term in the ministry is inventories; the common English is backlogs. Whatever we call them, they are partly a reflection of the fact that Canada is, I believe, the most desirable destination in the world. In fact, last year Ipsos Reid did a global poll, from which they estimated that at least two billion people around the world would like to emigrate to Canada right now. This includes 77% in China, 71% in Mexico, 68% in India, etc. They didn't actually survey every country of the world.

This is a reflection of the good problem we have, that Canada is seen as such a land of opportunity, prosperity, and democracy. This of course is why we must have a managed immigration system. The objective of that managed immigration system is to attract and select those people to Canada who will make the maximum economic contribution to our country, in part. It is in part to deal with the challenge of our shrinking labour force in the future because of our aging population. It's in part to try to counteract that aging demographic, so we have more people working and paying taxes, contributing to our country and economy and its prosperity in the future. Of course, as the country that now receives the highest per capita number of resettled refugees in the world, we also seek through our immigration programs to discharge our humanitarian obligations.

There's that huge, almost infinite, supply, if you will, of people who are what we would call in immigration policy a huge push factor from all around the world. How do we do in terms of receiving people? On slide 2 we can see that Canada has very high levels of immigration. In fact, over the course of the past five years our government has received the highest sustained level of immigration--that is to say, of permanent residents, not just temporary residents--of any government in Canadian history, with an average of 254,000 admissions. Admissions is a term that used to be called landings, but that basically means when someone comes here and has the right to stay permanently to work and to live in Canada. That compares to the previous 12 years, when the average was 222,000.

To put it in relative global terms, this represents about 0.8% of our population that we add on average per year. That is the highest per capita level of immigration in the developed world. I say the developed world because many third world or developing countries don't really have control of borders or managed immigration systems, so they're not a fair comparator. The only country that comes close to our levels right now would be New Zealand.

During and since the recent global economic downturn, many other countries actually cut their immigration levels. I'll give you one example. The United Kingdom has a population about twice our size, and they are right now restricting immigration to about 100,000 a year, when our average intake is a notch over a quarter of a million a year, so three to four times more on a per capita basis. That just gives you one point of comparison.

The backlog problem facing us is quite simple, in a way. Backlogs are a function of very simple mathematics.

Backlogs are a function of very simple, basic math. Here is the calculation. When you get more applications for immigration than you're able to admit, you end up with a backlog. When total applications exceed total admissions, you get a backlog. When that happens year after year after year, the backlog grows. As the backlog grows, of course so do processing times. Even though the time it takes our ministry to process a particular application may shrink through operational efficiency, the total time it takes someone to go from the point of application to the point of admission gets longer. This is not because of operational inefficiencies but because they're simply waiting in a growing queue.

The inverse mathematical formula is when the total number of admissions exceeds the total number of applications, backlogs shrink and processing times speed up.

I invite you to remember this basic mathematical formula through today's hearing and during all of your studies. There are a lot of interesting issues to be discussed, but at the end of the day it's a very simple mathematical problem.

Let's see how this works out in any given year. I'll just take, for example, 2008, which is the last year for which we have full stats, and it's an average year in terms of numbers for the past several years.

So, on page 5, we can see

--and I hope you see that we have these video screens--that we established an operational target for 2008 for admissions in the range of a quarter of a million, which is about average for the past several years. We assessed those applications and we found that about a quarter of a million met our criteria and could come to Canada, and about another 100,000 applications were rejected. But here's the problem. We received about 450,000 applications. That is to say that the total number of applications that we received exceeded the total number that we were able to consider that year by about 100,000. This is the problem we've had year after year.

Another way we could look at this is to think if we were to actually try to process everyone who would like to make an application, based on the Ipsos Reid poll, that would be over two billion people. I just throw that in there just to give us a sense of perspective about how much supply there is versus our capability to accommodate that demand to come to Canada.

As another way of looking at this, a metaphor I often use is to look at how a transport company would sell tickets, because it's a good way of considering the problem of backlogs.

This is essentially what happened. The problem really picked up momentum following the adoption of the Immigration and Refugee Protection Act by the previous government in 2001, because that act created a legal obligation on my department, on the government, to process all new applications to a final decision, regardless of how many people we plan to admit or practically could admit. So there was, frankly, I would say, an irresponsible policy decision that threw completely out of alignment the number of incoming applications with an obligation to process them versus the capacity to admit people and settle them in Canada. That is one of the primary reasons we've seen this problem.

So one way of explaining this metaphorically would be to say that over the past decade or so the Government of Canada was on an annual average basis selling 400,000 or more tickets on the plane to Canada to that market of two billion people who would like to buy those tickets. Yet even though we've been maintaining our highest average levels of immigration in our history, the highest averages in the developed world, unprecedented levels of immigration to a developed country, notwithstanding that, we've been admitting about, on average, a quarter of a million people. It was a little less than that under the previous government, a little more than that under the current government.

So every year selling 400,000-plus tickets, admitting, let's say for sake of argument, a quarter of a million people, what does that mean? It means 150,000 customers, if you will, who bought their tickets to Canada, who paid their fees, and those fees went into our general revenue fund and we cashed those cheques. And they end up at the airport, saying, “What happened? You oversold the plane by 35% and we're left sitting here.” We say, “Yes, sorry about that”. Next year we come back and we sell another 400,000 tickets. We say there are a quarter of a million spots on the plane to Canada and then that crowd at the airport grows to 300,000 the next year. Then the third year we do it again. The next thing you know there's a growing number; in fact, there are 450,000 in the backlog. Year after year, that's how you end up with a backlog of over a million people.

Here I will admit that our government did not act quickly enough to reverse the policy mistake of our predecessors to align the number of applications with a capacity to accept newcomers to Canada. This is not the fault of one government. We must accept some of the responsibility for not having acted more quickly to better align applications with admissions. This is why we've now ended up with a total backlog in all programs of just over a million. In fact, I think it has just gone back down below that.

Let's look at this over time, in the past decade. On slide 8 you'll see that in 2001 the backlog was just under 700,000. But here's the interesting thing. The bottom line shows the immigration target. This is what we call our operational target. And you'll see that it's gone up over the course of the past decade to about a quarter of a million a year.

The red line above it shows the number of applications received, and as you can see, the number of applications received over the past several years is consistently over 400,000. That means there is a consistent, perpetual surplus of applications over admissions. And because of the basic math formula I talked about, that's why you see the growing backlog.

The backlog, incidentally, was at about 150,000 when our government came to office in 2006. The good news is that in some of the programs we've begun reducing the backlog, and I'll address that in a moment.

What are the possible solutions? Well, they really boil down to two very simple possible solutions. One would be a massive increase in the level of immigration to Canada, by orders of magnitude. So if we wanted to just maintain what we would call a working inventory, or a just-in-time immigration system, without limiting the number of new applications, then we would have to increase overall immigration levels to over 400,000 a year. That's a massive increase, an increase by orders of magnitude.

Or we could limit new applications, find ways to control incoming applications or at least our obligation to process new applications. Or we could do a combination of both.

Let me just say that there are some people suggesting that we actually open up whole new huge avenues of immigration to Canada. For example, I believe my friend Mr. Davies suggested recently that we find a pathway to permanent residency for all temporary foreign workers. Excluding those who already have a pathway to permanent residency, that would mean adding about 140,000 additional people to the immigration queue.

So if we want to prevent the further growth of backlogs merely by increasing admissions, we'd have to increase admissions to over 400,000. If we then wanted to add new PR programs, as Mr. Davies has suggested for temporary foreign workers, we'd have to increase it by about another 140,000, and that would bring us up to well over half a million permanent resident landings per year to Canada. And a valid argument could be made for that. I don't think there are many Canadians who support that, but if that's where people want to go and if that's where parliamentarians or this committee want to go, I invite you to be explicit about wanting to invite over half a million immigrants, essentially more than doubling immigration levels to Canada. Let Canadians participate in that debate.

I have a little dynamic video here and I have a mad scientist here who is going to show what happens when you try to do this. Some have said we should just increase processing resources for the department. Give Claudette more money to hire more visa officers around the world so they can make these decisions faster. And that's one of the suggestions that's come from the opposition, faster processing. Well, here you can see what happens when you're trying to take the demand—that is to say, the number of applications we get—and put it through a funnel, so it goes slowly. The number of people coming, the volume that is received, comes through that funnel, but you see it goes up to the number of people we can accept, which is about a quarter of a million.

Let's say that we hire a whole bunch more visa officers and process the applications faster. Well, guess what. You end up with just the same number of people admitted to Canada. So that's not a solution. Let me put it this way. Backlogs are not a function of a scarcity of operational resources in the department. Yes, our department could always function more efficiently, and we are doing that. In fact, I'll get into this perhaps in questions and answers. Through our implementation of, for example, our global case management system—which is a new worldwide electronic IT platform—together with other aspects of modernization, we are seeing our whole system operate more efficiently. But at the end of the day, if there's not an alignment between the number of new applications and the number of admissions, it doesn't matter how quickly you can process them. You could hit your targets in the first quarter of the year, and if the surplus of applications over admissions ends up waiting in the airport lounge, so what?

I'm someone who believes we should listen to Canadians on immigration.

I do not want to see here the problems that we see in Europe, for example, where immigration policies do not reflect the will of the public. In Canada, fortunately, people are on the whole in favour of immigration and diversity.

I want to keep our minds open in that way, Mr. Chair, but I am conscious of the fact that about 80% of Canadians tell us that immigration levels must be frozen at present levels or reduced.

Consistently, only about 10% of Canadians indicate that immigration levels are too low. About eight out of ten Canadians are saying that they're too high or high enough. There was a study that came out this week that points out that immigrants to Canada are those who are least likely to support increased immigration levels, and that's consistent in the polling.

Let's look at how we might fix the problem. In 2008 we had to overcome opposition, but we managed to pass Bill C-50, which gave the minister the capacity to limit the number of incoming applications. This power we have applied to the federal skilled worker backlog—that is, the point system. Had we not taken those actions, the federal skilled worker backlog would now be over a million. But as a result of limiting those applications to 10,000 a year, we are at 475,000 overall, so we've had a significant reduction.

We've applied the same logic to the investor immigrant program, and we are doing the same thing with the privately sponsored refugee program. But there's one program where we have seen real problems with backlogs and we've not applied that logic—parents and grandparents. The backlog when our government came to office was 108,000; it's now 160,000. Last year we received almost 38,000 applications for the program. On average, over the course of the past decade, we've been admitting about 18,000 people. Just to freeze the backlog would require that we double the number of parents and grandparents coming to about 38,000 a year, which would be moving that up from about 6% to maybe 14% of total immigration to Canada. That would mean cutting economic immigration. Increasing admissions to that program, even doubling them, will not eliminate or even significantly reduce the backlog in the program. We could not achieve this even if we cut applications in half.

My hope, my vision, is that by using some common sense, we can in the next few years arrive at a just-in-time immigration program where applications received for our various programs are processed in the same year, and people are admitted without having to wait longer than a year. I hope that we can have a constructive debate about how to get to that just-in-time immigration system.

Merci beaucoup.

[Les Linklater, Assistant Deputy Minister, Strategic and Program Policy, Department of Citizenship and Immigration]

Thank you very much, Mr. Chair.

It is a pleasure for us to be here today, to give you an overview of our operations and provide some background on our activities and policies at the Department of Citizenship and Immigration. Our presentation contains 12 or so slides and will take 30 to 40 minutes.

There is a lot of material here, so we will make sure we leave time for questions at the end.

Before we go into the detail of the slide presentation—and I apologize that it was a table drop—let me say that I think it will be useful reference material for committee members as we see a lot of you over the course of the next few months, and it will help situate some of the challenges and opportunities the department has.

On the opening slide we have the historical overview of immigration levels to Canada. These are the permanent admissions to Canada for the last 100 years or more, looking at some of the trends we have seen.

The spikes on the far left-hand side are really about immigration to western Canada in the early part of the last century. The big dip is World War II and the depression. Following that are a couple of spikes, notably post-war, but there is the Hungarian uprising—that one spike in the middle of the page—the Czech uprising further on, and the Indo-Chinese movement in the early seventies. More recently, since the early part of this century, we have the highest level of sustained immigration to Canada historically, whereby we have welcomed traditionally between 225,000 to 250,000, and now between 250,000 and 265,000 immigrants to Canada every year.

There are three broad streams of permanent immigration to Canada. The first is the economic movement, with a number of subclasses, including federal and provincial programming. There is family reunification—spouses, dependent children, partners, as well as parents and grandparents. Finally, there is the class of refugees and protected persons.

Given the various streams and subcomponents within these three broad categories, setting a levels plan is a challenge for the minister as he tables his report every year before November 1, in that we need to find the right balance between the various priorities that many stakeholders and other groups have and the government's priorities for immigration—more recently, ensuring that our economic needs are supported through permanent migration as well as temporary migration.

I think as well it's interesting to note that there is a considerable temporary movement to Canada. This includes temporary foreign workers, international students, and also individuals who seek admission as simple tourists or business visitors, many of whom require a visa from Canada. This requires our officers overseas to make more than a million decisions every year. My colleague, Ms. Edlund, will get into that a little later on.

One of the key elements, which I would reinforce this morning, is that in setting the levels plan—and we hear media reports or other commentary about caps on certain parts of the program—it's important to understand that what we're talking about is providing a levels plan that balances the various components I've mentioned, and that we are quite limited, in any given year, in the number of immigrants we can bring in. Striking the right balance is our challenge. Effectively, all streams within the levels plan have certain limits, as we look at meeting the trade-offs and the balances across streams.

More generally, historically the program has not had intake controls. We introduced some in 2008 with C-50 that have proven to be quite effective. But as you can imagine, without intake controls, backlogs accumulate, as the pipe is only so big. If we have a levels plan of 240,000 to 265,000 admissions in any given year and applications far outstrip that number, backlogs are inevitable and then lead to processing time delays and concerns, and likely to representations to your offices.

With that, perhaps we can get into the substance of the presentation. I'll ask Dawn to take you through slide 2, which is an overview of our operations.

[Jim Versteegh]

I'll begin with a short overview of what this office does.

Hong Kong is a full-processing mission responsible for the delivery of the immigration program in Hong Kong and Macau, and we share responsibility with Beijing for the immigration program in China. Family class applicants from the four southern provinces of China are processed here in Hong Kong, in part because of Hong Kong's Cantonese language capacity. All other immigration applicants in China have the option of applying either in Beijing or here in Hong Kong. Since the opening of the visa application centres in China in July 2008, People's Republic of China residents rarely apply here for temporary resident visas. There remains, however, a large Hong Kong-based temporary worker and student movement out of the office in Hong Kong.

The immigration section in Hong Kong consists of 10 Canada-based officers and 62 locally engaged staff, including seven designated immigration officers. Two of the CBO positions are migration integrity officers filling CBSA positions here. Hong Kong works with the regional medical officer and the FCO based in Beijing and the RCMP liaison officer here in Hong Kong. The highest production office of the Service de l'immigration du Québec is also located here in Hong Kong in the same office tower, just below us. That office has regional responsibility for all of Asia.

The Hong Kong visa office issued just over 16,000 immigrant visas in 2010, and we expect to issue a similar number in 2011. Almost all visas issued by this office are to people resident in mainland China, with over 80% being in the economic categories. Output, however, continues to be lower than intake. As a result, the inventory of cases in Hong Kong has grown from about 22,000 early in 2008 to over 34,000 today. That represents about 95,000 people. The largest component of our inventory is federal investor applications, of which we have about 16,000 cases and over 50,000 people. The next largest part of our backlog is pre-Bill C-50 skilled worker files; we have over 10,000, or about 24,000 people, with the oldest cases dating back to 2006. We issued about 1,500 visas to Bill C-50 skilled workers in 2010.

Hong Kong has a large temporary worker population originating from many source countries in the region, such as the Philippines, Indonesia, Nepal, and China. The majority work in the domestic sector and in construction. Though Hong Kong relies heavily on foreign workers, it remains difficult to obtain permanent resident status here, including for people from the People's Republic of China. As a consequence, accepting a temporary work contract here in Hong Kong is seen by some, particularly domestic workers, as a stepping stone for a subsequent move to Canada. Hong Kong processed over 3,600 temporary work permit applications in 2010, mostly to LCP applicants, and our refusal rate was about 12%. The number of applications for temporary work permits received in 2010 was comparable to that of the previous year. Fifty per cent of temporary work permit cases were processed in about two months.

Counteracting fraudulent activity is a major preoccupation here in Hong Kong and is addressed by way of a multi-faceted anti-fraud and quality assurance strategy. An experienced case analysis unit that is skilled in document verification works closely with an anti-fraud unit that is part of our migration integrity unit. Site visits are also carried out on a regular but exceptional basis by the migration integrity officers stationed in Guangzhou and Shanghai.

A major focus of our anti-fraud activities has been spousal applications; in this area, marriages of convenience have been found to be endemic. The family class priority processing timeframes incorporate the assumption that 80% of such cases are non-problematic; in Hong Kong, the reverse is true. We have serious fraud concerns for 60% of our spousal movement and have some concerns for another 20%.

Although in most countries FC1 interviews can be waived, that is not the case in Hong Kong. About half of our spousal applicants are interviewed in order to give them an opportunity to address our concerns in person. Of those seen at interview in 2010, 70% were refused because of confirmed or highly suspected marriage fraud. The information and evidence collected suggest strongly that the movement is organized and very lucrative for the organizers. Our high refusal rate has resulted in a decrease in new applications received in that category in the past two years, as those intent on abusing our system are now less likely to apply. As a consequence, our refusal rate has started to go down; it down from 57% in 2009 to 47% in 2010. Constant vigilance, however, is required to curb abuse.

Priority processing has been maintained for genuine spousal cases. We have instituted measures such as tracking case processing at the front end stages, doing upfront background checks, increasing our interview schedule, and requesting the passport early on in the process to meet the new service standards, but we're not there yet. The extra time required to investigate many of our most problematic cases adds to our average processing times, but with the ratio of illegitimate cases decreasing, we are focusing on bringing down overall processing times in the next months.

The changes to the federal immigrant investor program that took effect on December 1, 2010, served to moderate the intake of new applications. At the time of the moratorium on investor applications in June 2010, we had already received about 9,000 such applications that year. Following the reopening of the program in December and the doubling of the personal net worth and investment requirements, the number of new applications received dropped to a more manageable 300 per month. Active recruiting for business immigrants by consultants continues to take place in the PRC, and we do not discount the possibility of renewed growth in our intake. The visa office in Hong Kong processed about half of Canada's 2010 global target of federal investor cases and will do so again in 2011.

New applications, however, still outnumber finalized ones. As a result, a backlog of new federal investor files is already being created, while there is little reduction in the inventory of old files. We are currently processing applications received in mid-2008 in that category. The majority of Quebec and provincial nominee cases processed in Hong Kong are also in the investor categories.

I'll stop there, Mr. Chairman. Thank you, and I'll be happy to answer any questions the committee may have.

Jobs and Economic Growth Act

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Madam Speaker, I look forward to this chance to speak to Bill C-9, although I must say quite candidly that I find the bill very troubling.

I am proud to speak today to the amendments to this bill brought forward by the member for Hamilton Mountain. It is very clear that this bill must be amended. It is unconscionable that the government would continue to include in its budget implementation bills the kinds of things that are objectionable not just to the members of this House, but to the people of Canada. I welcome the amendments, and I do hope that, despite their incredible silence, members of the opposition will support these amendments.

I want to start with an observation. The Conservative government claims to be the government of accountability, yet it has proven time and time again that it is anything but. Rather than putting forward individual bills dealing with many of the issues that face this country, the government instead elects to hide issues in its bills. We call these poison pills, and there are a number of poison pills in this budget implementation bill.

Before I speak about the poison pills in Bill C-9, I want to take a few minutes to review the poison pills of the past, because in budget after budget we have seen these poison pills.

The first one that I want to speak about is pay equity. The House will remember that the changes to pay equity were slipped into a budget implementation bill. The government, and the government before it, could have and should have used the 2004 pay equity commission report, an incredible and solid report, to create a pay equity bill that actually worked for the women of this country. Instead, the government chose to put in its place the excuse for pay equity that came forward in its budget implementation bill that stripped away the right of women to be considered as worthy of equal pay for work of equal value.

The government called it the equitable compensation bill or something like that, but the truth is that it was far from equitable. It basically told women that they would have to negotiate at the collective bargaining table whether they deserved equal pay for work of equal value. That is not acceptable.

Pay equity is a human right; it is not something that can be negotiated away. In these troubled times when negotiations are very difficult, it only stands to reason that if issues of women in the workforce are not regarded or taken as seriously as some other issues, such as dental benefits or long-term health benefits, that human right could be negotiated away.

The government is saying to women across this country that it is lovely that they make up 52% of the population and do contribute to the economy, but when it comes to equal pay for work of equal value, when it comes to their human rights, it is just not interested. The government perpetrated this sham on the women of Canada, and that is not the end of the things it has done to the women of Canada.

The Conservative government cancelled the court challenges program. It removed equality from the mandate of the status of women department. The Conservatives did put back the word, because there was a great outcry across the country, but they did not put back the spirit of equality, because they have continued with their draconian measures against women's groups across this country that advocate for women, that stand up for women in regard to the issues that they and their families face.

The Conservatives have also removed research from the mandate of the status of women department. That research was absolutely integral to providing the kind of intelligent policy that would guide us to real equality. Members may have noticed that I used the term “intelligent policy”. That is something that we do not have and are not likely going to see.

Even more to the point, the Conservatives underfunded or defunded groups that were the least bit critical. I am thinking of two: the National Association of Women and the Law and the Canadian Research Institute for the Advancement of Women. Why? Because those two groups had the audacity to hold the government and the previous government to account in regard to our CEDAW obligations.

Members will recall that in 1982 this country signed the covenant on the elimination of discrimination against women. This country signed it and this country pledged that it would do something positive for women. This country would make sure that aboriginal women were given opportunities in regard to education and housing and were protected from violence, and infact, that all Canadian women were protected from violence and that women had economic security and the opportunity in regard to pay equity, child care and housing.

All of these things are in CEDAW, and this country signed it in 1982. In the nearly 30 years since that agreement was signed, nothing has been done in terms of advancing women. We do not have a universal housing policy. In fact, we have 1.2 million Canadians who are under-housed, homeless or living in unsafe conditions, Canadians who are living in these unsafe and unacceptable conditions with their children.

We have no national child care program. Since 1984, this Parliament in its various incarnations, whether it was the Mulroney government, the Chrétien government or the Martin government, promised the women of this country that there would be a national child care program, but we do not have one. It is 2010 and there is nothing in sight in terms of how we are going to address the real needs of young families in this country, women being the primary caregivers.

These groups that advocated for women had to be shut down and silenced. The women in this country had to be put on the back burner, as it were, because the government had another agenda. I am saying now and I do believe these words will ring true, the women of Canada will not forget what the government has done to them, nor will they forget that the Liberals aided and abetted in this disgusting behaviour towards the women of Canada.

There were other poison pills, such as immigration changes in Bill C-50. Those immigration changes made it virtually impossible for family reunification. They chose very carefully. They gave the minister the ability to determine who could come into this country. Even if people had been approved, even if they were on a waiting list, if they came from Southeast Asia, if they came from the Middle East, if they came from certain African countries, they were removed from the list because the minister said they were not any longer acceptable. So people who were waiting, who had fulfilled all of their obligations, who would have made wonderful Canadian citizens were told, “Sorry, too bad, you cannot be reunited with your families, because the minister says so”.

Imagine that in a democracy. It is absolutely unthinkable. Of course, the list goes on and on, but I want to address some of the issues in Bill C-9 and the fact that it has a number of poison pills too.

First of all, we have the tax grab such as the airline security tax. That is something that is profoundly concerning. The government claims and claims it shrilly, and claims it at every question period and with all kinds of bravado, that they are the government of tax cuts. That is ludicrous. Conservatives are most certainly not the government of tax cuts. If we look at the HST and what is perpetrated against Canadians, they are the government of tax grabs.

Let us go down the list. In regard to the emptying of the employment insurance account, that $57 billion belongs to the people of this country, who put that money in so that families could be secure in the event of a downturn in the economy. Conservatives are waiving that money and taking it away.

They like to blame it on the Liberals and they are very good at blaming everything on the Liberals, but the truth is that they have done nothing in terms of making sure that Canadian families are safe and secure. They are taking that money away and it is supposed to be for Canadians.

I have much more to say, but I will wait for the questions.

[Jason Kenney, Conservative, Calgary Southeast, AB]

Thank you, Mr. Chair.

Certainly the experience of Mr. Shory is not unique. The regrettable thing is that there are so many foreign-trained professionals, like Mr. Shory, who never do get accredited in their chosen professions. I commend Mr. Shory for overcoming the obstacles and persevering and for being called to the bar in Canada. It is a great example for many others who feel frustrated and give up.

As the member knows, Mr. Chairman, this is a problem that's vexed successive federal governments, because at the end of the day, labour market regulation is not a federal responsibility. However, we have seen, I believe, under this government, a growing federal leadership role in accelerating and creating more transparent pathways to foreign credential recognition in the provinces. The Department of Human Resources and Skills Development has a robust foreign credential recognition program, which, among other things, provides support to local organizations that assist individuals in making their applications and in dealing with the more than 400 credentialling, recognition, and licensing bodies across the country. There are more than 40 in each province.

In the 2006 budget we created the Foreign Credentials Referral Office, which is working to provide information on the process for immigrants before they land in Canada so they can get the ball rolling before their arrival and can get a head start. Most importantly, at the January first ministers meeting here in Ottawa, the Prime Minister led his provincial and territorial colleagues to agree to the creation of a pan-Canadian framework for foreign credential recognition. The target date for an initial report is September of this year. Our budget put a $50 million investment into putting the meat on the bones of that pan-Canadian policy framework for credential recognition. Twenty-five million dollars of that $50 million is being invested through my ministry. We are focusing on the priority occupations included in the ministerial instructions under the Bill C-50 amendments to work with the relevant professional agencies in Canada.

The bottom line is that in the framework of credential recognition, a necessary precursor is labour market mobility within Canada. Part of the problem is that there are 10 to 13 different regimes in each single profession. It's ridiculous that you can go from Poland to Portugal in Europe as a medical doctor and be recognized, but you can't go from Manitoba to Saskatchewan. We need to solve that problem, which the provinces and the federal government are working on. That itself will help create a simpler, more transparent pathway to recognition.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Fine.

If I may, my intention was not for you to justify the decision, but rather to establish that it was made at your level—meaning that the government made the decision and that it was not on the recommendation of the two competent bodies.

When Bill C-50 was passed and received royal assent in June 2008, a decision was made to set up a $2 billion fund. Can you tell me where that $2 billion came from?

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chair.

My question is for Ms. Finley.

Ms. Finley, last year, the House passed Bill C-50, and it received royal assent on June 18, 2008.

That royal assent authorized the establishment of the Canada Employment Insurance Financing Board. It was a new organization that was supposed to be able to set up a separate employment insurance fund.

Furthermore, the act confirmed that the Canada Employment Insurance Commission was being maintained. Its role is to make recommendations on the EI program, and the board's role is to manage the premiums.

In the last budget, which was sanctioned and approved by the Liberals, you froze the EI premium rate at its lowest level since 1982; you also decided which EI measures would be enhanced.

Two years ago, representatives of the organizations spoke up and said that the two establishments, especially the board, would only serve to ensure that the Conservatives retained control over the fund. Are we to understand that those concerns are founded?

Private Member's Bill C-241

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, last Thursday, the Parliamentary Secretary to the Leader of the Government in the House of Commons spoke in this House to indicate to you that Bill C-241 to remove the waiting period imposed on employment insurance recipients requires royal recommendation. You will not be surprised to hear that I not share that opinion at all.

Although I do recognize, as the parliamentary secretary has said, that you ruled on this matter during the 39th Parliament concerning Bill C-269, which also contained provisions for elimination of the waiting period, I am of the opinion that there are some new elements that need to be drawn to your attention.

In fact, there have been many changes since that ruling. In my opinion, it ought to be reviewed because the legislation surrounding the funding of employment insurance has changed. Bill C-50 to implement the February 26, 2008 budget, which was given royal assent on June 18, 2008, enacted the Canada Employment Insurance Financing Board Act.

In order to properly explain the purpose of that act, I would like to quote an except from page 71 of the 2008 budget plan.

To enhance the independence of premium rate setting and to ensure that EI premiums are used exclusively for the EI program, the government is creating a new, independent Crown corporation, the Canada Employment Insurance Financing Board (CEIFB). It will have the following key responsibilities:

Managing a separate bank account. Any annual EI surpluses going forward will be held and invested until they are needed for EI program costs.

Then, further down on page 71:

The CEIFB will be structured as a Crown corporation that will report to the Minister of Human Resources and Social Development. It will have an independent board of directors and be staffed with the experts needed to manage the financing of the EI program.

I would like to now draw your attention to a ruling by the Deputy Speaker of the House on October 3, 2005 concerning a bill which dealt with the use of the surplus in the reserve fund of the Canadian Mortgage and Housing Corporation. I will quote an excerpt from that ruling if I may:

Bill C-363 proposes that monies within the control of CMHC—not the Crown—be dedicated for a particular purpose. A royal recommendation is required when a bill seeks an authorization to withdraw monies from the Consolidated Revenue Fund. Is Bill C-363 seeking to withdraw monies from the Consolidated Revenue Fund? I would conclude that it is not. Bill C-363 is preventing CMHC monies from being placed in the Consolidated Revenue Fund by having them used for another purpose. The transfer of monies from the CMHC reserve fund to the Consolidated Revenue Fund—or in this case to the provinces—is not a matter relating to the appropriation of monies from the Crown. Therefore, Bill C-363 does not infringe on the financial initiative of the Crown.

The parliamentary secretary also cited a May 9, 2005 ruling, which among other things addressed the objects, purposes, conditions and qualifications of the royal recommendation. He argued that Bill C-363 is adding a new purpose which was not contemplated in the original legislation establishing CMHC and would therefore need a new royal recommendation. Again I wish to stress that the original royal recommendation strictly applied to matters concerning the objects, purposes, conditions and qualifications of an appropriation of monies within the control of the Crown; that is not the case with Bill C-363. As Bill C-363 does not appropriate from the Consolidated Revenue Fund, it cannot be considered as altering the purpose of the original royal recommendation.

This precedent is extremely relevant in this case. We have already noted that the government's aim in creating the Canada employment insurance financing board was to set up a separate bank account in order to make sure that contributions would be used exclusively for the employment insurance program. Therefore, by the government's own admission, the purpose of creating the Canada employment insurance financing board is to make sure that the monies in this account are no longer available to the Crown for general appropriations.

Once this has been established, we must conclude that a royal recommendation cannot apply to Bill C-241, because it does not have to do with monies within the control of the Crown. The monies in question here are within the control of the Canada employment insurance financing board. Consequently, in our opinion, this bill does not require a royal recommendation.

[The Chair, Conservative, James Rajotte]

From a finance point of view, what we tried to do was have one session dedicated to navigable waters. Obviously members are free to substitute in or out. It is my understanding that this is how it was handled in the last session of Parliament with respect to the immigration provisions of Bill C-50.

Monsieur Carrier.

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Did we forget Bill C-50 or Bill C-17?

(Motion negatived)

The Economy

[Jim Flaherty, Conservative, Minister of Finance]

Mr. Speaker, there is something cooking and it is a new-found friendship and some strange bedfellows over here, these clueless people that they are making arrangements with about economic policy.

If we run a deficit of $30 billion in this country, we are running a structural deficit. It took a long time to get out of that problem. We have taken the long-term view, the view that says we have to help Canadian business with the Bank of Canada, with Bill C-50, with ensuring adequate credit in this country. There are more provisions in that regard in the fall economic statement, all good for the country, not running big deficits.