Bill C-507 (Historical)

Federal Spending Power Act

An Act to amend the Financial Administration Act (federal spending power)

This enactment amends the Financial Administration Act in order to end federal spending in an area of provincial jurisdiction in the absence of a delegation of power or responsibility in that area.

Bill C-507 — Speaker's Ruling

[The Speaker, Peter Milliken]

The Chair is now prepared to rule on the point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons on November 2, 2010, concerning the requirement for a royal recommendation for Bill C-507, An Act to amend the Financial Administration Act (federal spending power), standing in the name of the hon. member for Saint-Lambert.

I thank the parliamentary secretary for having raised this important matter. In raising his point of order, the parliamentary secretary set out two separate grounds on which he alleged that Bill C-507 infringes the financial initiative of the Crown. First, he claimed that the bill seeks to alter the terms and conditions of existing royal recommendations which authorize payments out of the consolidated revenue fund to provinces and municipalities for various purposes. This alteration would take two different forms. Where transfers are made conditional upon provinces meeting certain federal standards, these transfers would now be unconditional. Where the federal government provides funds to individuals, agencies or municipalities, these funds would now be transferred only to the provinces.

The parliamentary secretary maintained that this alteration in the way in which funds are transferred violates the terms of the existing royal recommendations on which those transfers depend.

The second cause for concern which the parliamentary secretary highlighted is the effect of the provisions of Bill C-507 on payments to provinces that choose to opt out of federal programs in areas of provincial jurisdiction. These payments would be authorized whenever a province did not delegate its responsibility to the federal government in relation to a federal program in an area of provincial jurisdiction. He claimed that this would result in payments out of the consolidated revenue fund for purposes not currently authorized.

The Chair has examined carefully the provisions of Bill C-507 in light of the arguments presented. The nature of the royal recommendation requirement is explained in the House of Commons Procedure and Practice, second edition, at page 834.

A royal recommendation not only fixes the allowable charge, but also its objects, purposes, conditions and qualifications. For this reason, a royal recommendation is required not only in the case where money is being appropriated, but also in the case where the authorization to spend for a specific purpose is significantly altered. Without a royal recommendation, a bill that either increases the amount of an appropriation, or extends its objects, purposes, conditions and qualifications is inadmissible on the grounds that it infringes on the Crown's financial initiative.

What is at issue in each case is whether the provisions of the bill introduce a new appropriation, increase an existing appropriation or entail changes to the objects, purposes, conditions and qualifications of the existing appropriations to enable these appropriations to be used for a new purpose.

Bill C-507 seeks to amend the Financial Administration Act by proposing new subsections 26.1(1) and (2) which would prevent the federal government from making payments in respect of expenditures in areas of provincial jurisdiction unless the province concerned delegates that power to it. Proposed new subsection 26.1(3) establishes a timeframe for that delegation. While it has been argued that the proposed new subsections 26.1(1), (2) and (3) would have the effect of altering the conditions under which the authorization to spend currently exists, the Chair is of a different view. These subsections in no way enable existing appropriations to be used for a new purpose. Instead, these new subsections would affect whether or not the moneys appropriated are actually spent. The appropriations themselves remain unchanged and such a consideration does not give rise to the need for a royal recommendation.

As for the second issue raised by the parliamentary secretary, the Chair refers honourable members to the proposed new subsection 26.1(4) which requires that payments be made to a province that does not provide a delegation under subsection 26.1(2). In the Chair’s view the effect of this provision would be to allow the transfer of funds without there being any conditions attached. In other words, those funds could be expended for purposes not limited to, or governed by, the conditions—or purposes—of the original appropriation. Obviously, this would be a relaxation of applicable conditions, to say the least, and would necessarily constitute an infringement of the financial initiative of the Crown as the appropriated funds could be used for purposes not approved by Parliament when it made the appropriation.

On this basis, it is my ruling that Bill C-507, in its current form, requires a royal recommendation. Consequently, I will decline to put the question on third reading of the bill in its present form unless a royal recommendation is received.

Today's debate, however, is on the motion for second reading and this motion shall be put to a vote at the close of the second reading debate.

I thank hon. members for their attention.

Private Members' Business--Bill C-507

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

Mr. Speaker, on October 7, 2010, you raised concerns about four private members' bills, which, in your view, appeared to impinge on the financial prerogative of the Crown and you invited members to comment. One of the bills you mentioned was Bill C-507, An Act to amend the Financial Administration Act (federal spending power). I am rising today on a very lengthy point of order regarding that bill.

Bill C-507 would amend section 26 of the Financial Administration Act, which states:

Subject to the Constitution Acts, 1867 to 1982, no payments shall be made out of the Consolidated Revenue Fund without the authority of Parliament.

In other words, section 26 does not provide authority to make payments out of the Consolidated Revenue Fund but establishes that payments out of the fund can only be made with the authority of Parliament.

Clause 2 of Bill C-507 would add a series of subsections to section 26. A new subsection 26.1(1) would provide that no payment from the consolidated revenue fund shall be made for matters listed in section 92 and paragraph 92A(1) of the Constitution Act, 1867, that are under provincial jurisdiction.

A new subsection 26.1(2) would enable payments to be made from the consolidated revenue fund to provinces which have delegated to the government the power to incur expenditures referred to in subsection 26.1(1) or the responsibility to administer programs associated with those expenditures, or both.

A new subsection 26.1(3) would set out the duration and nature of the delegation referred to in subclause 2(2). A new subsection 26.1(4) would enable the federal government to make a payment out of the consolidated revenue fund to a province where the federal government proposes incurring expenditures or administering a program. A new subsection 26.1(5) specifies that such a payment may be made in the form of a transfer of a taxation field.

The provisions of Bill C-507 have two impacts related to the need for a royal recommendation. The first impact is to alter the terms and conditions of original royal recommendations authorizing existing payments out of the consolidated revenue fund for grants or direct payments to provinces and municipalities.

In the case of grants, under existing statutes, federal grants to the provinces can be either conditional or unconditional. Two examples of conditional grants to provinces are the Canadian health transfer, also known as the CHT, and the Canadian social transfer, also known as the CST.

In order to receive the CHT, provinces must meet federal standards and comply with the requirements of the Canada Health Act in sections 7 to 12. In order for the provinces to receive the CST, grants are subject to a prohibition on minimum residency requirements for social assistance. Bill C-507 would change the terms and conditions of these existing grants or transfer of grants to the provinces by making them unconditional, thereby waiving the conditions related to these transfers.

In the case of direct spending, under existing statutes direct spending in the areas of provincial jurisdiction occurs when the federal government allocates money directly to individuals, agencies or municipalities. An example is the transfer of federal gas revenues to municipalities and the universal child care benefit. Bill C-507 would no longer allow these transfers for direct spending to be made to municipalities but, rather, would only allow the federal government to transfer money directly to the provinces.

This would change the manner in which existing direct payments are made since these payments would no longer be made to the currently authorized recipients but to the provinces. Precedents indicate that changes to the terms and conditions of a royal recommendation require a new royal recommendation.

On June 21, 1972, the Speaker ruled in the case of Bill C-220, respecting regional incentives development data:

...it is not only the amount approved or recommended by the royal recommendation that cannot be changed but there is also a prohibition against a redirection of the amount that is approved or recommended to the House in the royal recommendation.

The second impact of Bill C-507 relates to how its provisions would authorize payments out of the consolidated revenue fund to provinces that choose to opt out of federal programs in areas of provincial jurisdiction.

I would note that on April 14, 2010, the member for Saint-Lambert introduced Bill C-507 and stated that the bill would:

...introduce an automatic and unconditional right to opt out with full financial compensation and would establish permanent compensation in the form of the transfer of tax room.

In other words, the bill would provide for the authorization of payments out of the consolidated revenue fund to provinces for purposes not currently authorized in statute. Page 834 of House of Commons Procedure and Practice, second edition, states:

A royal recommendation not only fixes the allowable charge, but also its objects, purposes, conditions and qualifications. For this reason, a royal recommendation is required not only in the case where money is being appropriated, but also in the case where the authorization to spend for a specific purpose is significantly altered.

Precedents demonstrate that the Crown alone institutes all public expenditure and Parliament may only authorize spending that has been recommended by the Governor General.

On October 13, 1983, the Speaker ruled certain motions in an amendment at report stage that would have directed the government to establish a system of payments to agricultural producers inadmissible because they imposed a charge upon the treasury.

On May 28, 1990, the Speaker ruled motions in amendment at report stage, which would have substituted a different escalator clause for fiscal arrangements, inadmissible because they infringe upon the financial initiative of the Crown.

On June 13, 2005, the Speaker ruled on Bill C-280, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence that:

...Bill C-280 effects an appropriation by spending or authorizing the spending of public funds by transfer of the funds from the Consolidated Revenue Fund to a separate EI Fund with the result that these monies are no longer available for other appropriations Parliament may make. ... Such a transfer...constitutes an appropriation within the meaning of section 54 of the Constitution Act, 1867 and for this reason a royal recommendation is required....

The precedents have parallels to the impacts of provisions in Bill C-507 for authorizing a new and distinct spending in that Bill C-507 proposes a new scheme for making payments out of the consolidated revenue fund in matters and for purposes not currently authorized by Parliament.

I submit that Bill C-507 would change the authorization for grants and direct payments, as well as payments to provinces that choose to opt out of federal programs in areas of provincial jurisdiction. These changes, in our view, would therefore require a royal recommendation.

Opposition Motion—Federal Spending Power

[Daniel Paillé, Bloc, Hochelaga, QC]

Madam Speaker, I heard the amendment proposed by the hon. member for Outremont. Unfortunately, his amendment simply did not hold water, it did not make sense.

We presented this motion because a federation exists between equal people. We are not opposed to federations; it depends on how people are treated. Usually, federations are created by people who consider each other equals. It can be a group of friends, neighbours or merchants. It can be a group of people who are different but who, in all equality, have decided to pool together a number of things. That is the principle and the basic principle is that none of the members of a federation takes precedence over the others. That is the very basis of that political concept.

Let us go back to 1867. It was determined, in a number of territories, that certain governance powers should remain close to citizens. Those entities which are now called the provinces—Quebec was one them—decided to do in their own way everything that affected their citizens directly and closely. That is why the establishment of cities, for instance, has nothing to do with the federal government. It is entities from Quebec and the other provinces that decided to create their own municipal bylaws.

The provinces decided they would keep education and health under their responsibility, as well as social affairs, culture and language, particularly in Quebec, for business relations with entrepreneurs, individual investors and small and medium size businesses, because they felt they were in the best position to look after these matters. They also decided to share a number of things that did not directly affect people or the public, such as the army, defence and borders.

I come from a family of entrepreneurs, of grocers. When I was very young, my father was an independent grocer. He was in control of his grocery store and no one could tell him what to do. At one point, we joined a co-op, a federation. It was called Les Épiceries Lasalle. Later on, it became Les épiceries Metro, and we pooled a number of things together. However, I can assure hon. members that no one, neither the Metro federation nor any Metro grocer could say anything to the owner of our family store. They had a say about things that were decided together, but certainly not as regards anything else.

As far as the federal government’s appropriation is concerned—and here is where we come back to our motion—I get the sense that the federal government finds it easier to ask for forgiveness than to get permission. It encroaches and then takes a wait-and-see approach: if people complain, we will tell them that they have nothing to complain about; and if they do not, we will move in on such and such an area of jurisdiction and present it as a fait accompli. There have been many examples of this.

Let me now turn back to the very nature of power. If one has certain powers, one's principles determine whether one keeps or shares them. Things get a little trickier when it comes to using these powers. Money, taxes and levies are required. Things get more nuanced, and discussions or even disputes ensue.

If the money is coming from elsewhere, not from our own pocketbooks, we may be less critical. When children get a Christmas present, it comes from Santa Claus, not from their family. When they are really young, it is the parents who control the purse strings and decide what is best for the child. You often hear children say that they would like this or that, but Santa Claus does not listen to them for their own good. That is all well and good when the child is young and does not have any money, but what happens when the child is a teenager? It is a little tougher, and among adults it is a different story altogether. Everyone here has had the experience of giving children gifts. What do you do when these children are older? You give them money or a check and tell them to use the money as they see fit.

So there is a certain level of maturity required when wielding these powers, which are a gift from someone else. When it is my money and my taxes, I am not going to have someone come along and tell me what to do with it. Nobody is going to tell me how to spend my money. And that is when big problems crop up. There is a difference between being given a house, a car or a cottage with a mortgage, and having a mortgage-free one. At some point, you will ask whether you can decide that you do not want it because you would rather manage the tax field or mortgage yourself.

In Quebec, every government—be it the Parti Québecois government of which I was a part, or the Liberal government the member for Outremont was in when he was in Laval—has repeatedly observed that this spending power was never given to the federal government to be used as it is currently being used.

The result is that the federal government loves to spend. It decides to do this or that because it thinks it is good for Quebeckers and Quebec families. Where does it get the cash? From the pockets of Quebeckers. That is where it gets its taxes. No more water can be squeezed out of a sponge than there is in it. At some point, poor Quebec taxpayers start wondering which government is theirs.

If a survey was done across Canada asking Canadians which government was theirs and who their Prime Minister was, they would instinctively say the Government of Canada. In Quebec, though, it would be the Government of Quebec, regardless of who the Premier was and the government in power. We identify much more with Quebec than with Canada.

The federal government invades our tax room. Tax room is a space where there is income from which the government can decide to take a portion. We would rather look for tax room among people earning more than $150,000 or $250,000. We said so last year in our pre-budget submissions.

If other provinces do not want that, it is okay, they can do things their way and use their tax room as they see fit. If the Canadian provinces want to give more powers to the federal government, they should do it and give the Government of Canada taxing authority. They may regret it though. In Quebec, that is not how things work. In Quebec, the fiscal imbalance led to the Government of Canada’s excessive use of too much tax room. We made the decision in Quebec to pay for social services, education, day care and health care. At some point, there is very little tax room left. It is all gone. When two governments are in the same tax room, we have what is called a fiscal imbalance. It does not come out of nowhere. It happens when governments cannot agree to come to terms on a certain tax room and use it well.

When a government takes advantage of tax room, it is because it is entitled to do something with the money it collects. When there is tax room, people give their government the ability to collect taxes and provide services. When one of the two parties does not merely offer but imposes services and says things will be done its way, and it wants to fund these things with money from our pockets, at some point, a huge problem arises. The fiscal imbalance in Canada was never resolved, regardless of what our Conservative friends might say. We are always aware of that in Quebec. I repeat: all Quebec premiers, whether from the PQ, the Liberals or even the old Union Nationale, have agreed that the fiscal imbalance problem has never been solved. Never. It is an illusion.

While we wait for a majority of Quebeckers to get behind the idea of having a government that uses the entire fiscal room and adopts its own measures in relation to health, social services, education, culture, languages and everything else, what are we doing in the Bloc Québécois? We are working, and for example, under the leadership of the member for Saint-Lambert, we have introduced Bill C-507, which is up for consideration in the House. At the press conference I held with my colleague, I said it was a reasonable accommodation. It is our way to say yes, let us do that while we wait for Quebec to be a sovereign country. What do we say about that? We say that in Quebec, we should have the sovereign, inescapable right to take all of our powers, to prevent the federal government from allowing new spending, to get the federal government out of areas where it has no jurisdiction, and to stop this kind of behaviour. There is one other aspect that we must keep in mind and that is that money must come with those measures. What kind of money? We are not expecting a cheque, we are expecting fiscal room. If someone is delighting in the cheque they got from their parents, or cash as a gift, when they became a teenager or an adult, and then keep expecting such handouts the rest of their lives, at some point they will be waiting a long time. What does a person do? They say: “I am going to create my own fiscal room, I am going to be independent and I am going to create my own wealth.”

That is what Quebec wants. The federal spending power should be limited to what it originally was; it should withdraw from the entire room it has invaded since then; and the government of Quebec should get a transfer of tax points and be able to work with them, either by giving the money back to the taxpayers or by using it according to its own standards. We have seen that in the past. The Government of Canada took one or two points off the sales tax. At that time, and that was the same government we have now, the Government of Quebec used it by returning it to the taxpayers of Quebec. That was its decision. Did we agree? That is not the issue, here. It was the government that decided. Personally, I would have liked to use it differently, but we respect the authority and power of the Government of Quebec. It is the federal system that we have a problem with.

Just now, they were making fun of the Bloc Québécois’ new guru, but it has to be said that there are mirages in life. Sometimes, there are flashes of brilliance. Sometimes people see UFOs and are convinced they have seen them.

This is what the member for Beauce said:

Ending the federal spending power, eliminating the federal programs that violate the division of powers, and transferring tax points to the provinces would be the right thing to do from several perspectives.

That is what he said. The speech is on his website, and in it he also said:

Instead of sending money to the provinces, Ottawa would cut its taxes and let them use the fiscal room that has been vacated. Such a transfer of tax points to the provinces would allow them to fully assume their responsibilities, without federal control.

That is not a new guru. That is someone who saw a UFO, and who claims that that is the way it should be. That is what he might have thought, but it will not happen. The Government of Canada simply does not want to go that way. It is telling us that if are not happy, we either accept it, or we go away and become sovereign and independent.

Is it the same everywhere in Canada? No; some provinces are perhaps fine with the federal government having control over certain things. Good for them. We do not want that. That is where we differ. When there are conditional transfers, we refuse them. Who has power over whom? That is the question.

Is this a more sensitive issue in Quebec? Perhaps not. Is it different in Quebec? Yes; it is different because we are different. That must be accepted. We will remain in North America. We will continue to do business with Canadians and Americans. We will continue to trade. Canada has Quebec to thank for being so open to the world. However, a nation does not let someone else control its culture, its social development, its education or economic development. Is that simple enough? We cannot accept that Canada acknowledges we exist, but that it retains control over us. In Quebec, we say that we exist, so we will control our own affairs.

[Jean Dorion, Bloc, Longueuil—Pierre-Boucher, QC]

moved:

That, in the opinion of the House, the government should, as long called for by the Bloc Québécois and now called for by the Member for Beauce, end the so-called federal spending power in the jurisdictions of Quebec and the provinces, eliminate the federal programs that violate the division of powers, and transfer tax points to the provinces by: (a) eliminating all federal spending in the jurisdictions of Quebec and the provinces, unless express authorization is given by Quebec or the province; (b) providing a systematic right to opt out with full financial compensation and without condition of all existing and future programs, whether co-funded or not, that intrude into jurisdictions of Quebec and the provinces; and (c) transferring, at the request of Quebec or a province, fiscal room in the form of tax points and/or GST to replace the amounts that the province would otherwise have received under the Canada Health Transfer, federal programs in its areas of jurisdiction and the transfer for social programs and post-secondary education indexed to 1994-1995 levels.

Mr. Speaker, in 1867, the people of Quebec were not consulted on whether or not they wished to join Confederation, but in order to make the pill go down, so to speak, it was promised a spoonful of sugar: that it would be sovereign in several areas, and that it could use that partial sovereignty to develop as a society. That is indeed what the use of the word “confederation” rather than “federation” implied. It was on this condition that Quebec became a part of Canada.

However, Ottawa does not hesitate to invade Quebec's exclusive fields of jurisdiction. Family policy, health, education and regional development are a few of the most striking examples of areas of federal interference. In 2008-09, the federal government spent more than $60 billion in areas that fall under Quebec's and the provinces' jurisdiction. This situation is patently intolerable.

We recall that the Conservative government committed to creating a framework for the so-called federal spending power in 2006, but so far it has not followed through. Last week the Conservative member for Beauce went further and proposed the pure and simple elimination of the so-called federal spending power as a solution to constitutional squabbles. This is what the Bloc Québécois is asking for today in this motion, and also what was proposed in the bill tabled in April by my colleague, the member for Saint-Lambert.

The motion focuses on three elements. First, it seeks the explicit elimination of Ottawa's self-given right to spend in areas outside its jurisdiction. Second, it calls for Quebec to be given a systematic right to opt out of programs, without conditions and with full compensation. Third, it seeks compensation in the form of tax points so that Ottawa cannot determine how much Quebec allocates to its various areas of responsibility.

The House of Commons finally recognized the Quebec nation. And recognizing a nation is more than just a symbolic gesture. Nations, like people, have fundamental rights, the most important being the right to control the social, economic and cultural development of its own society, in other words, the right to self-determination. You cannot, on one hand, recognize the Quebec nation and its right to make choices that are different from Canada's and, on the other, deny the nation the ability to assert that right by maintaining the federal spending power. Denying Quebec the power to spend undermines its very existence as a nation.

Let us consider the recent comments of the member for Beauce. It is a rare occasion when I agree with the member for Beauce, but I see that he has finally sided with the Bloc Québécois, and I hope that he can convince his party to support today's motion.

This is what the member for Beauce said on October 13. He himself was quoting Sir Wilfrid Laurier. The member for Beauce said that, in a speech to the Legislative Assembly of Quebec in 1871, Laurier made the following statement:

If the [federal] system is to avoid becoming a hollow concept, if it is to produce the results called for—this is Laurier speaking—, the legislatures must be independent, not just in the law, but also in fact. The local legislature must especially be completely sheltered from control by the federal legislature. If in any way the federal legislature exercises the slightest control over the local legislature, then the reality is no longer a federal union, but rather a legislative union in federal form.

That is the end of the quote by Sir Wilfrid Laurier cited by the member for Beauce.

The member for Beauce concluded:

Now, it’s obvious that what Laurier feared has unfortunately come true. Ottawa exercises a lot more than “the slightest control” over local legislatures. The federal government today intervenes massively in provincial jurisdictions, and in particular in health and education, two areas where it has no constitutional legitimacy whatsoever. This is not what the Fathers of Confederation had intended. The objective of the 1867 Act was not to subordinate provincial governments to a central authority. But rather to have sovereign provinces within the limits of their powers, dealing with local matters that directly affected citizens; and a sovereign federal government within the limits of its own powers, dealing with matters of general national interest.

The member for Beauce and the Bloc Québécois are not the only ones challenging the legitimacy and the very basis for the existence of the federal spending power; all governments of Quebec have done so, no matter what their political allegiance. Why? Because the federal spending that encroaches on provincial jurisdictions is in direct opposition to the division of powers in Canada. In principle, both orders of government in Canada are equal and equally sovereign in their respective areas. The division of jurisdictions is supposed to be watertight in order to prevent the majority nation, the Canadian nation, from imposing its views on the minority nation, the Quebec nation.

The division of powers that took place in 1867 between Ottawa and the provinces is quite simple if we look at it in the context of the 19th century. Matters that directly affected people and their way of organizing their society fell under the jurisdiction of Quebec and the provinces. This was the case for instance for the civil laws that codified the relationships between people and the organization of society through social programs, health, education, cultural matters, etc.

If, however, an issue did not directly affect people or the internal organization of their society, it could be placed under federal jurisdiction. This is the case for monetary policy, international trade, and the overall regulation of trade and industry. In 1867, Quebec was not really industrialized and that aspect did not affect people very much. Thus, Quebeckers believed they had acquired the autonomy they needed to allow them to organize their own society without external interference. And it was on that basis that Quebec agreed to enter into the Canadian federation in 1867.

However, the federal spending that encroaches upon areas of provincial jurisdiction calls into question this division of powers and Quebec's autonomy. In fact, this was the pact at the basis of the Canadian federation, which Canada is denying daily and has been denying for three generations by interfering freely with Quebec's areas of jurisdiction.

Benoît Pelletier, the former Quebec Minister of Intergovernmental Affairs under Jean Charest, said the following:

I...have a great deal of difficulty in reconciling the values underlying the Canadian federation with the idea of a federal spending power that is in no way subject to the division of powers.

It is for that reason that the Séguin report in its turn expressed the opinion that:

The “federal spending power” displays a singular logic in that the federal government intervenes every time in a field falling under provincial jurisdiction without having to adopt a constitutional amendment.

We could add “without having to obtain the authorization of Quebec's National Assembly”. In short, the federal spending power is the way English Canada unilaterally put an end to the pact in which Quebec agreed to be a part of Canada. Through the spending power, it managed to unilaterally change the distribution of powers to its benefit without having to go through the cumbersome process of constitutional amendment.

There is now a consensus in Quebec. The spending power is illegitimate. Quebec has always felt that the federal spending power was nothing more than a power to implement, that is to say that in the final analysis, it is a power to impose policies.

That is why Quebec maintains that federal spending power should be limited to areas in which the federal Parliament has legislative jurisdiction. Regardless of the party in power, Quebec has consistently maintained that Ottawa simply does not have the power to spend money in whatever area it chooses, and that any federal intervention in areas under Quebec's jurisdiction is in direct violation of the Constitution.

Federal government interference in fact proves that the fiscal imbalance has not been resolved. The fiscal imbalance is due to the fact that Ottawa raises more in taxes than it needs to discharge its own responsibilities. And the result, in Quebec's case, is that Quebec no longer has the tax room it needs to fund its own activities independently.

As long as Ottawa has the authority to spend in areas under provincial jurisdiction, the fiscal imbalance cannot be resolved. Conservative members who claim that the fiscal imbalance is now resolved have not understood a thing. The fiscal imbalance cannot be resolved without putting an end to federal spending power in areas that encroach upon the jurisdiction of Quebec and the provinces.

As the Séguin commission stated, and I quote:

...The problem of the federal spending power is closely tied to fiscal imbalance, and its use is underpinned by the surplus funds that the federal government controls.

That is what the commission found.

Quebec has no intention of being one of Ottawa's mere subcontractors. No, the fiscal imbalance has not been resolved and is, in fact, getting worse. More and more, as a result of the fiscal imbalance and its offshoot—spending power—the Quebec government is being relegated to the ranks of a federal government subcontractor. Through its interference and conditional transfers, Ottawa is imposing Canada's priorities and choices on Quebec.

The situation has gotten so bad that Quebec's own-source revenues hit an all-time low in 2009-10, when a quarter of Quebec's budget envelope was being controlled by the federal government. Now more than ever, it is time for the federal government to hand over the GST to Quebec, as well as a portion of individual income tax, so that Quebec is no longer at the mercy of federal transfer payments and Ottawa's whims.

In 2006, as I was saying earlier, the House of Commons finally recognized the existence of the Quebec nation. Recognizing the existence of a nation is more than just a symbolic act. Nations, like people, have fundamental rights, and the most fundamental among them is a nation's right to control its own social, economic and cultural development, that is to say, the right to self-determination.

One cannot, on the one hand, recognize that the Quebec nation exists and has the right to make choices that are different from those that Canada makes, which right is at the core of nationhood, and on the other hand, deny that right by maintaining the federal spending power. That spending power is in fact a negation of the Quebec nation.

The so-called framework mentioned in the 2007 Speech from the Throne, which was to set limits on the spending power, had indeed been the subject of official Conservative promises, and has continued to be the subject of such promises since; it is nothing but lip service.

I will now quote from the 2007 Speech from the Throne, which said:

...our government will introduce legislation to place formal limits on the use of the federal spending power for new shared-cost programs in areas of exclusive provincial jurisdiction. This legislation will allow provinces and territories to opt out with reasonable compensation if they offer compatible programs.

It should be noted that the government's offer, its commitment in that text, is limited to new programs, even though it was already spending $62 billion in areas that do not fall under its jurisdiction. That is the figure from 2008-09. This amount is more or less equivalent to Quebec's entire budget, which was $65 billion for that year, and this is money Ottawa spent in areas that fall under the jurisdiction of Quebec and the provinces. The Speech from the Throne allows all of that to go on happening. Moreover, it only refers to new shared-cost programs, which are almost non-existent. For instance, as agriculture is an area of shared jurisdiction, the agriculture policy framework is not covered by the commitment in the throne speech. Moreover, insofar as the infrastructure Canada program is concerned, the throne speech changed nothing because Quebec already had the right to select its own projects.

So there was nothing, absolutely nothing in the Speech from the Throne aside from empty words. In fact it was a new version of the Jean Chrétien throne speech, which said approximately the same thing in 1996; and nothing was done following that one either, of course.

It is the same thing as the member for Saint-Laurent—Cartierville's social union, by virtue of which the Canadian provinces, with the exception of Quebec, agreed to allow Ottawa to take the lead in matters of social policy.

The bill that the Bloc Québécois already tabled is an offer of reasonable accommodation. We are aware that Canadians do not want to completely eliminate the federal power to interfere. When I say Canadians, I am obviously not talking about Quebeckers, but other Canadians, who generally want the central government to be able to set directions and priorities for the entire country in all areas. That is not in keeping with the promise made to Quebec 140 years ago. It is in keeping with Canadians' vision of Canada, though. In April 2010, to put an end to Ottawa's interference in areas under Quebec's jurisdiction, the Bloc Québécois introduced Bill C-507, which I just mentioned, on eliminating the federal spending power in Quebec's jurisdictions.

Today's motion, which is very much in line with our bill, proposes a compromise by saying that Ottawa should at least give Quebec a full right to opt out of any federal programs in areas that intrude into the provinces' jurisdictions. Canadians will be able to keep on denying the division of powers for themselves, but not for us in Quebec.

One Conservative Party member heard the Bloc Quebecois' call, and we can only be glad. Just a few months after we introduced our bill, the member for Beauce repeated the Bloc's demands almost word for word. He said:

However, several other programs, from family allowances to grants to universities and hospital insurance, were set up which clearly did not respect the constitutional division of powers...

This intrusion into provincial jurisdiction was accomplished by the so-called federal spending power.

No constitutional provision to legitimize this federal spending power was ever adopted. The Supreme Court of Canada has never explicitly recognized this power either. The federal government was certainly aware that the power to spend in areas of provincial jurisdiction does not exist in the Constitution...

Ending the federal spending power, eliminating the federal programs that violate the division of powers, and transferring tax points to the provinces would be the right thing to do from several perspectives.

We agree. Consequently, I invite the Conservative government to support our Bill C-507. I also invite the Conservative members and the members from all the other parties to support the motion I have put forward this morning.

Private Members' Business

[The Speaker, Peter Milliken]

Before I call upon the hon. member for Ottawa South to ask his question, I would like to take a moment to provide some information to the House regarding the management of private members' business.

As members know, after the order of precedence is replenished, the Chair reviews the new items so as to alert the House to bills which at first glance appear to impinge on the financial prerogative of the Crown. This allows members the opportunity to intervene in a timely fashion and present their views about the need for those bills to be accompanied by a royal recommendation.

Accordingly, following the October 1 replenishment of the order of precedence with 15 new items, I wish to inform the House that there are four bills that give the Chair some concern as to the spending provisions they contemplate. They are: Bill C-449, An Act regarding free public transit for seniors, standing in the name of the member for Hull—Aylmer; Bill C-507, An Act to amend the Financial Administration Act (federal spending power), standing in the name of the member for Saint-Lambert.

There are also Bill C-530, An Act to amend the Northwest Territories Act (borrowing limits), standing in the name of the hon. member for Western Arctic, and Bill C-572, An Act to amend the Parliament of Canada Act (Parliamentary Budget Officer), standing in the name of the hon. member for Ottawa Centre.

I would encourage hon. members who would like to make arguments regarding the need for a royal recommendation to accompany these bills or any of the other bills now on the order paper to do so at an early opportunity.

I thank honourable members for their attention.