Bill C-4 (Historical)

Economic Action Plan 2013 Act No. 2

A second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013 and other measures

Part 1 implements certain income tax measures proposed in the March 21, 2013 budget. Most notably, it
(a) increases the lifetime capital gains exemption to $800,000 and indexes the new limit to inflation;
(b) streamlines the process for pension plan administrators to refund a contribution made to a Registered Pension Plan as a result of a reasonable error;
(c) extends the reassessment period for reportable tax avoidance transactions and tax shelters when information returns are not filed properly and on time;
(d) phases out the federal Labour-Sponsored Venture Capital Corporations tax credit;
(e) ensures that derivative transactions cannot be used to convert fully taxable ordinary income into capital gains taxed at a lower rate;
(f) ensures that the tax consequences of disposing of a property cannot be avoided by entering into transactions that are economically equivalent to a disposition of the property;
(g) ensures that the tax attributes of trusts cannot be inappropriately transferred among arm’s length persons;
(h) responds to the Sommerer decision to restore the intended tax treatment with respect to non-resident trusts;
(i) expands eligibility for the accelerated capital cost allowance for clean energy generation equipment to include a broader range of biogas production equipment and equipment used to treat gases from waste;
(j) imposes a penalty in instances where information on tax preparers and billing arrangements is missing, incomplete or inaccurate on Scientific Research and Experimental Development tax incentive program claim forms;
(k) phases out the accelerated capital cost allowance for capital assets used in new mines and certain mine expansions, and reduces the deduction rate for pre-production mine development expenses;
(l) adjusts the five-year phase-out of the additional deduction for credit unions;
(m) eliminates unintended tax benefits in respect of two types of leveraged life insurance arrangements;
(n) clarifies the restricted farm loss rules and increases the restricted farm loss deduction limit;
(o) enhances corporate anti-loss trading rules to address planning that avoids those rules;
(p) extends, in certain circumstances, the reassessment period for taxpayers who have failed to correctly report income from a specified foreign property on their annual income tax return;
(q) extends the application of Canada’s thin capitalization rules to Canadian resident trusts and non-resident entities; and
(r) introduces new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion.
Part 1 also implements other selected income tax measures. Most notably, it
(a) implements measures announced on July 25, 2012, including measures that
(i) relate to the taxation of specified investment flow-through entities, real estate investment trusts and publicly-traded corporations, and
(ii) respond to the Lewin decision;
(b) implements measures announced on December 21, 2012, including measures that relate to
(i) the computation of adjusted taxable income for the purposes of the alternative minimum tax,
(ii) the prohibited investment and advantage rules for registered plans, and
(iii) the corporate reorganization rules; and
(c) clarifies that information may be provided to the Department of Employment and Social Development for a program for temporary foreign workers.
Part 2 implements certain goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 21, 2013 budget by
(a) introducing new administrative monetary penalties and criminal offences to deter the use, possession, sale and development of electronic suppression of sales software that is designed to falsify records for the purpose of tax evasion; and
(b) clarifying that the GST/HST provision, exempting supplies by a public sector body (PSB) of a property or a service if all or substantially all of the supplies of the property or service by the PSB are made for free, does not apply to supplies of paid parking.
Part 3 enacts and amends several Acts in order to implement various measures.
Division 1 of Part 3 amends the Employment Insurance Act to extend and expand a temporary measure to refund a portion of employer premiums for small businesses. It also amends that Act to modify the Employment Insurance premium rate-setting mechanism, including setting the 2015 and 2016 rates and requiring that the rate be set on a seven-year break-even basis by the Canada Employment Insurance Commission beginning with the 2017 rate. The Division repeals the Canada Employment Insurance Financing Board Act and related provisions of other Acts. Lastly, it makes technical amendments to the Employment Insurance (Fishing) Regulations.
Division 2 of Part 3 amends the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act to remove the prohibition against federal and provincial Crown agents and federal and provincial government employees being directors of a federally regulated financial institution. It also amends the Office of the Superintendent of Financial Institutions Act and the Financial Consumer Agency of Canada Act to remove the obligation of certain persons to give the Minister of Finance notice of their intent to borrow money from a federally regulated financial institution or from a corporation that has deposit insurance under the Canada Deposit Insurance Corporation Act.
Division 3 of Part 3 amends the Trust and Loan Companies Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act to clarify the rules for certain indirect acquisitions of foreign financial institutions.
Division 4 of Part 3 amends the Criminal Code to update the definition “passport” in subsection 57(5) and also amends the Department of Foreign Affairs, Trade and Development Act to update the reference to the Minister in paragraph 11(1)(a).
Division 5 of Part 3 amends the Canada Labour Code to amend the definition of “danger” in subsection 122(1), to modify the refusal to work process, to remove all references to health and safety officers and to confer on the Minister of Labour their powers, duties and functions. It also makes consequential amendments to the National Energy Board Act, the Hazardous Materials Information Review Act and the Non-smokers’ Health Act.
Division 6 of Part 3 amends the Department of Human Resources and Skills Development Act to change the name of the Department to the Department of Employment and Social Development and to reflect that name change in the title of that Act and of its responsible Minister. In addition, the Division amends Part 6 of that Act to extend that Minister’s powers with respect to certain Acts, programs and activities and to allow the Minister of Labour to administer or enforce electronically the Canada Labour Code. The Division also adds the title of a Minister to the Salaries Act. Finally, it makes consequential amendments to several other Acts to reflect the name change.
Division 7 of Part 3 authorizes Her Majesty in right of Canada to hold, dispose of or otherwise deal with the Dominion Coal Blocks in any manner.
Division 8 of Part 3 authorizes the amalgamation of four Crown corporations that own or operate international bridges and gives the resulting amalgamated corporation certain powers. It also makes consequential amendments and repeals certain Acts.
Division 9 of Part 3 amends the Financial Administration Act to provide that agent corporations designated by the Minister of Finance may, subject to any terms and conditions of the designation, pledge any securities or cash that they hold, or give deposits, as security for the payment or performance of obligations arising out of derivatives that they enter into or guarantee for the management of financial risks.
Division 10 of Part 3 amends the National Research Council Act to reduce the number of members of the National Research Council of Canada and to create the position of Chairperson of the Council.
Division 11 of Part 3 amends the Veterans Review and Appeal Board Act to reduce the permanent number of members of the Veterans Review and Appeal Board.
Division 12 of Part 3 amends the Canada Pension Plan Investment Board Act to allow for the appointment of up to three directors who are not residents of Canada.
Division 13 of Part 3 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to extend to the whole Act the protection for communications that are subject to solicitor-client privilege and to provide that information disclosed by the Financial Transactions and Reports Analysis Centre of Canada under subsection 65(1) of that Act may be used by a law enforcement agency referred to in that subsection only as evidence of a contravention of Part 1 of that Act.
Division 14 of Part 3 enacts the Mackenzie Gas Project Impacts Fund Act, which establishes the Mackenzie Gas Project Impacts Fund. The Division also repeals the Mackenzie Gas Project Impacts Act.
Division 15 of Part 3 amends the Conflict of Interest Act to allow the Governor in Council to designate a person or class of persons as public office holders and to designate a person who is a public office holder or a class of persons who are public office holders as reporting public office holders, for the purposes of that Act.
Division 16 of Part 3 amends the Immigration and Refugee Protection Act to establish a new regime that provides that a foreign national who wishes to apply for permanent residence as a member of a certain economic class may do so only if they have submitted an expression of interest to the Minister and have subsequently been issued an invitation to apply.
Division 17 of Part 3 modernizes the collective bargaining and recourse systems provided by the Public Service Labour Relations Act regime. It amends the dispute resolution process for collective bargaining by removing the choice of dispute resolution method and substituting conciliation, which involves the possibility of the use of a strike as the method by which the parties may resolve impasses. In those cases where 80% or more of the positions in a bargaining unit are considered necessary for providing an essential service, the dispute resolution mechanism is to be arbitration. The collective bargaining process is further streamlined through amendments to the provision dealing with essential services. The employer has the exclusive right to determine that a service is essential and the numbers of positions that will be required to provide that service. Bargaining agents are to be consulted as part of the essential services process. The collective bargaining process is also amended by extending the timeframe within which a notice to bargain collectively may be given before the expiry of a collective agreement or arbitral award.
In addition, the Division amends the factors that arbitration boards and public interest commissions must take into account when making awards or reports, respectively. It also amends the processes for the making of those awards and reports and removes the compensation analysis and research function from the mandate of the Public Service Labour Relations Board.
The Division streamlines the recourse process set out for grievances and complaints in Part 2 of the Public Service Labour Relations Act and for staffing complaints under the Public Service Employment Act.
The Division also establishes a single forum for employees to challenge decisions relating to discrimination in the public service. Grievances and complaints are to be heard by the Public Service Labour Relations Board under the grievance process set out in the Public Service Labour Relations Act. The process for the review of those grievances or complaints is to be the same as the one that currently exists under the Canadian Human Rights Act. However, grievances and complaints related specifically to staffing complaints are to be heard by the Public Service Staffing Tribunal. Grievances relating to discrimination are required to be submitted within one year or any longer period that the Public Service Labour Relations Board considers appropriate, to reflect what currently exists under the Canadian Human Rights Act.
Furthermore, the Division amends the grievance recourse process in several ways. With the sole exception of grievances relating to issues of discrimination, employees included in a bargaining unit may only present or refer an individual grievance to adjudication if they have the approval of and are represented by their bargaining agent. Also, the process as it relates to policy grievances is streamlined, including by defining more clearly an adjudicator’s remedial power when dealing with a policy grievance.
In addition, the Division provides for a clearer apportionment of the expenses of adjudication relating to the interpretation of a collective agreement. They are to be borne in equal parts by the employer and the bargaining agent. If a grievance relates to a deputy head’s direct authority, such as with respect to discipline, termination of employment or demotion, the expenses are to be borne in equal parts by the deputy head and the bargaining agent. The expenses of adjudication for employees who are not represented by a bargaining agent are to be borne by the Public Service Labour Relations Board.
Finally, the Division amends the recourse process for staffing complaints under the Public Service Employment Act by ensuring that the right to complain is triggered only in situations when more than one employee participates in an exercise to select employees that are to be laid off. And, candidates who are found not to meet the qualifications set by a deputy head may only complain with respect to their own assessment.
Division 18 of Part 3 establishes the Public Service Labour Relations and Employment Board to replace the Public Service Labour Relations Board and the Public Service Staffing Tribunal. The new Board will deal with matters that were previously dealt with by those former Boards under the Public Service Labour Relations Act and the Public Service Employment Act, respectively, which will permit proceedings under those Acts to be consolidated.
Division 19 of Part 3 adds declaratory provisions to the Supreme Court Act, respecting the criteria for appointing judges to the Supreme Court of Canada.

[The Chair, Conservative, James Rajotte]

I apologize, but the time is up.

That was a very interesting panel. Thank you so much for being with us. If you have anything further you wish to submit to the committee, please do so. We look forward to seeing some of you here again on Bill C-4.

The meeting is adjourned.

[Jim Stanford, Economist, Unifor]

Mr. Chair, members of the committee, thank you very much for inviting Unifor to your hearings.

We agree with the supposition of the meeting that economic growth and job creation are the central goals and should be the central goals of a federal budget policy.

Unifor is Canada's largest trade union in the private sector of the economy. We represent over 300,000 members in over 20 different sectors. We were formed earlier this year through the merger of the former Canadian Auto Workers and the Communications, Energy and Paper Workers. I do want to recognize my colleague with me today, Dave Moffat, assistant to the president of Unifor and the top negotiator and official in charge of our energy, communications, and media sectors.

I must make one note regarding process. I know that in addition to these pre-budget hearings your committee is also investigating the current budget implementation bill, Bill C-4. Representatives from Unifor will appear before you next week to express our views on certain aspects of that legislation, but we do want to register as an organization our concerns regarding the process by which these budget omnibus bills, such as C-4, are being used to change far-flung pieces of legislation that have no direct relation to a budget bill. In our judgment, some of the issues tackled by your committee through the C-4 hearings should be considered more directly and fulsomely through a normal legislative process.

On the issue at hand about economic growth and job creation, we have a written submission that has been distributed. Let me briefly highlight four points from the written document, and I refer you to the document for more details.

First of all, in terms of the status of Canada's overall labour market, it is often claimed that our labour market has done very well, sometimes supported by discussion about absolute increase in employment or percentage growth in employment. That is not the best way to measure labour market performance either over time or across countries, for the simple reason that we also have to take into account growth in the working age population, which is the pool of workers who are available for those jobs. A better measure is the employment rate, which considers the level of employment relative to growth and labour in the working-age population, which is relatively rapid in Canada's case. We have one of the fastest rates of population growth in the developed world.

In that regard, I'll refer you to figure 1 at the end of our brief, which shows the evolution of the employment rate in Canada since the years before the recession to present. As the recession hit, the employment rate fell rapidly, by 2.5 percentage points of the working-age population. That was the most dramatic and rapid decline in the employment rate since the 1930s. With the initial stimulus effort, fiscal and monetary interventions and other measures, that recuperated in the first year and a half of the recovery by about half of a percentage point, or about one-fifth of the way back. What's very important to note, though, is that since late 2010, for three years now, there's been no increase in the employment rate at all, so from a jobs market perspective relative to our population growth, the recovery has completely stalled. This picture is in fact a perfect L. In regard to my colleague's presentation recently about an L-shaped recovery, this is a perfect L. The only reason the unemployment rate has declined gradually over the last three years is the decline in labour force participation, which is nothing to be proud of.

I'll also refer you to table 1 at the back of the brief, which compares Canada's performance in the employment rate to the other industrialized countries of the world. Again, if we adjust for the differential population growth rates in different countries, Canada does not rank at the top, or even near the top. We rank 20th out of 34 countries in terms of the change in the employment rate from 2008, when the recession hit, to 2012 most recently. This shows that the argument of our labour market problem being one of a mismatch between available workers and available jobs, or certainly a shortage of workers or even a shortage of skills workers, is quite misplaced. That is a misdiagnosis of the problem and could lead to incorrect policy responses, including some of the measures the federal government has taken clearly aimed at trying to push a labour supply, whether that's temporary migrants, or changes to the EI rules, or other measures. In fact, I would argue there are over 20 unemployed Canadians effectively for every available job vacancy.

The general thrust of fiscal policy should be to address the main problem in the job market, which is a lack of jobs. So it's job creation and an expansionary program, and we have five dimensions of that written in the brief. In general, I think the continued emphasis on fiscal austerity, which has been indicated by the finance minister, is quite misplaced. We will balance the budget a year early; we will underspend our budgets in several key areas; and then we will further decline program spending relative to GDP in the years even after a balanced budget.

That is a very hollow victory at a moment when over two million Canadians are effectively unemployed. I think the continuing decline in program spending as a share of GDP after the balanced budget has been attained will reduce our GDP growth by up to half a point of GDP a year. I think that continuing austerity is both unnecessary and counterproductive.

Thank you for having us.

[The Chair, Conservative, James Rajotte]

I'd like to call this meeting back to order. I would ask our witnesses and colleagues to find seats as soon as possible, please. Thank you. I'm sorry, but we're very tight on time today.

Colleagues, briefly, have you had a chance to review this budget? Are there any questions? This is for Bill C-4. The amount requested is $26,400. Are there any concerns about it?

Ms. Nash.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you very much.

I am going to ask Mr. Lavoie, Ms. Kozhaya and Ms. Labrecque all the same question.

As you know, Bill C-4, which we will begin studying next week, contains a government measure to eliminate the tax credit for labour-sponsored venture capital funds. The measure is especially relevant for Quebec, since 90% of the tax credit goes to Quebec funds.

Where do your respective organizations stand on the subject? In your view, how important are labour-sponsored venture capital funds to Quebec's economy? What do you recommend as far as this measure is concerned?

[The Vice-Chair, NDP, Lysane Blanchette-Lamothe]

We can start this fourth meeting of the Standing Committee on Citizenship and Immigration. Thank you all for being here today.

According to our agenda, we'll spend the first hour studying the possibility of suggesting amendments to the Standing Committee on Finance. In the second hour of our meeting, witnesses from the Department of Citizenship and Immigration will join us for an information session, which will be followed by a question and answer period.

For this first hour of our meeting, which will run until noon, I'd like to remind everyone that on November 5, the Standing Committee on Finance sent us a letter inviting us, should the committee so wish, to convey our recommendations, including any suggested amendments in relation to clauses 174 and 175 and 290 to 293 of Bill C-4.

In carrying out its work, the committee may choose to hear witnesses—which we did in the last two meetings— may choose to recommend changes or propose amendments to the Standing Committee on Finance, which will then take these into consideration during its clause-by-clause study of Bill C-4.

For the first hour of the meeting, we have with us Mr. McNamee, Director, Immigration Strategies and Analysis, Ms. Welbourne, Senior Director, Strategic Policy and Planning, Ms. Imrie, Director General, Passport Program Transition Office, and Ms. Dikranian, Senior Analyst, Passport Program Transition Office. Thank you for being here this morning.

These witnesses are here to answer questions and provide clarification on any topic that may influence our decision to send amendments, suggested amendments or suggested changes to the Standing Committee on Finance.

Honourable members of the committee, the floor is yours. I'm waiting to see if you have any suggested amendments to send to the Standing Committee on Finance.

Mr. McCallum, you have the floor.

[Françoise Boivin, NDP, Gatineau, QC]

The time we have doesn't let us take full advantage of your expertise, and that's too bad, because these are very important issues.

Last Tuesday, I asked the minister the following question, but I didn't really get an answer. According to Professor Dodek, it is problematic that clauses 471 and 472 were submitted to Parliament at the same time as a reference to the Supreme Court of Canada took place. Bill C-4 needs the Minister of Justice's agreement, and it needs to be established that it complies with Canada's constitutional laws and the Canadian Charter of Rights and Freedoms, in particular. At the same time, the minister checks with the Supreme Court to see whether these two provisions are compliance.

Do you think that constitutes a problem?

My question is for all three witnesses. Let's start with Professor Pelletier.

[Pierre Thibault, Assistant Dean and Counsel, Civil Law Section, University of Ottawa, As an Individual]

Mr. Chair, hon. members, thank you for inviting me to give testimony before you today on clauses 471 and 472 of Bill C-4.

In order to stay on time, I will first look at the scope of the proposed amendments and then briefly talk about why sections 5 and 6 of the Supreme Court Act cannot be amended on a purely legislative basis.

Last October 22, the Minister of Justice of Canada introduced declaratory amendments to the Supreme Court Act. According to those amendments, a barrister or advocate with at least 10 years standing at a bar can be appointed to the Supreme Court of Canada. In terms of Quebec, barristers or advocates who have been members of the Barreau du Québec for more than 10 years can also be appointed to the Supreme Court. It should be noted that this is not a formal amendment to sections 5 and 6 of the Supreme Court Act, but rather a declaration by the Government of Canada and subsequently by the Parliament of Canada if Bill C-4 is passed. That is how those two sections will be interpreted.

As Professor Pierre-André Côté explains, the legislator sometimes passes declaratory legislation. This is what he says:

No formal constitutional provisions prevent the legislature from at times interpreting its own legislation, although this is in principle the responsibility of the courts. Interpretive or declaratory acts serve “...to remove doubts existing as to common law, or the meaning or effect of any statute”.

Furthermore, it is important to point out that a declaratory piece of legislation applies retroactively. In fact, the Supreme Court of Canada has recently ruled on the Régie des rentes du Québec v. Canada Bread Company Ltd. case. This was in 2013. Justice Wagner, who is from Quebec, wrote the following for the majority:

It is settled law in Canada that it is within the prerogative of the legislature to enter the domain of the courts and offer a binding interpretation of its own law by enacting declaratory legislation... In enacting declaratory legislation, the legislature assumes the role of a court and dictates the interpretation of its own law...As a result, declaratory provisions operate less as legislation and more as jurisprudence. They are akin to binding precedents, such as the decision of a court...Such legislation may overrule a court decision in the same way that a decision of this Court would take precedence over a previous line of lower court judgments on a given question of law. It is also settled law that declaratory provisions have an immediate effect on pending cases, and are therefore an exception to the general rule that legislation is prospective. The interpretation imposed by a declaratory provision stretches back in time to the date when the legislation it purports to interpret first came into force, with the effect that the legislation in question is deemed to have always included this provision. Thus, the interpretation so declared is taken to have always been the law...

Chief Justice McLachlin points out the impact of declaratory provisions. She agrees with Justice Fish on this point, although she disagreed with him in this decision. She says:

I agree with my colleague Wagner J. that the legislature has the power to enact declaratory provisions which have a retroactive effect, and that such provisions apply to all pending cases.

With respect to those who think differently, I feel that Parliament is fully entitled to pass declaratory provisions. In that regard, I think clauses 471 and 472 of Bill C-4 are perfectly valid.

The second issue I would like to address is the amendment to sections 5 and 6 of the Supreme Court Act, the amendment to section 6 in particular.

This section has been amended seven times since 1875, basically because of technicalities, with the exception of the 1949 amendment, which increased the number of judges from Quebec to three. In 1985, when the last amendment was made and when the legislation was revamped mostly with technical amendments, the words “Court of Appeal” replaced “Court of Queen's Bench”. Let me draw your attention to two unsuccessful attempts at making major amendments in 1987 and 1992.

With the advent of the Meech Lake accord in 1987, an amendment to the Constitution Act, 1867 was proposed to incorporate sections 5 and 6 of the Supreme Court Act by adding something about the territories and federal courts. Subsection (1) of the new section 101B stated:

Any person may be appointed a judge of the Supreme Court of Canada who, after having been admitted to the bar of any province or territory, has, for a total of at least ten years, been a judge of any court in Canada or a member of the bar of any province or territory.

Subsection (2) stated:

At least three judges of the Supreme Court of Canada shall be appointed from among persons who, after having been admitted to the bar of Quebec, have, for a total of at least ten years, been judges of any court of Quebec or of any court established by the Parliament of Canada, or members of the bar of Quebec.

This constitutional amendment was supposed to clarify the situation of federal court judges. It also meant that the legislator or the constitutional constituent did not intend to exclude territory and federal court justices from being appointed to the Supreme Court. Unfortunately, this provision never came into force, because the Meech Lake accord was not duly ratified by the legislative assemblies of Newfoundland and Manitoba within the required timeframe.

The same provision was reconsidered in the Charlottetown accord, to no avail. This time it was because of the October 1992 referendum when Canadians and Quebeckers said no.

However, those attempts at amending the Constitution enable us to draw two conclusions about section 6 of the Supreme Court Act.

First, it is not unreasonable to think that this is a constitutional provision. However, we must point out that the doctrine is divided. Professors Peter Hogg and Benoît Pelletier, my colleague, feel that the composition of the Supreme Court of Canada can be amended through legislation by the Parliament of Canada, basically because the Supreme Court Act is not mentioned in the schedule referred to in section 52 of the Constitution Act, 1982.

In their work entitled Droit constitutionnel, professors Brun, Tremblay and Brouillet feel that the composition of the Supreme Court, including the civil law component, is protected under the Constitution. That is also the opinion of Professor Monahan and of Warren Newman, a Government of Canada lawyer who has expressed his personal view in a scholarly article published a few years ago. Mr. Newman's conclusion was that the civil law component of the Supreme Court is protected and that an amendment to section 6 of the Supreme Court Act would require the consent of the 10 provincial legislative assemblies and of the Government of Canada.

As a result, I feel it is accurate to conclude that federal court judges could be appointed to the Supreme Court of Canada. In our view, that is an accurate interpretation, whether teleologically speaking, as my colleague Benoît Pelletier pointed out, or broadly speaking, as a constitutional provision must be interpreted.

I would be happy to answer any questions you may have in the next few minutes.

Thank you.

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Thank you, Mr. Minister.

Are you politicizing the Supreme Court of Canada by putting the answers you want to hear into Bill C-4? Are you aware that you are not complying with the separation of powers? The basis of our entire democratic system is now at stake.

[Peter MacKay, Conservative, Central Nova, NS]

Look, that may well be. The fact remains that we want to expedite the process and get the result, and the result means having a full complement of judges.

There are only nine judges. They have a tremendous workload. There are tremendously important cases, including a Senate reference that you're aware of, for which we want to have, and pardon this expression, but all of the horses in harness pulling and doing the work that we've asked of them. They're currently short-handed. The reason that we put this declaratory provision in the BIA was to do it as quickly as possible. As you know, our legislation is denoted with numbers. This is Bill C-4, meaning this was the fourth bill brought before Parliament in this session. It was the earliest opportunity that we could bring this matter before the House of Commons, and ultimately the Senate.

That was the path we chose. Could it have been done in a stand-alone way? Yes. It probably would have taken longer. This was a way to expedite this process, ultimately get what we think is a very straightforward decision, a similar decision from the court. Then this Supreme Court justice, this very eminently qualified individual, will take his place on the bench and they can get on with their very important work with all of the judges in place.

[Françoise Boivin, NDP, Gatineau, QC]

Thank you for being here this morning, Mr. Minister. I am not as grateful to you for the situation we find ourselves in concerning an institution as important as the Supreme Court of Canada.

When Professor Dodek testified here this week, he raised quite an interesting point. He wondered how you could do these two things at the same time. I am sure you will tell me it is a matter of your authority to do so.

Bill C-4 has been tabled in the House of Commons. In your capacity as Attorney General of Canada and Minister of Justice, all government bills receive your seal of approval indicating that they are in compliance with the legislation, the regulations and the Constitution. I doubt that you let Bill C-4 through without having consulted all the people in your department and done all the usual checks.

At the same time, you are submitting a reference to the Supreme Court in which you ask about the government's jurisdiction.

That's the question you're asking the Supreme Court of Canada:

Can Parliament enact legislation that requires that a person be or has previously been a barrister or advocate of at least 10 years standing at the bar of a province as a condition of appointment as a judge of the Supreme Court of Canada or enact the annexed declaratory provisions as set out in clauses 471 and 472 of the Bill entitled Economic Action Plan 2013 Act, No. 2?

Back to Professor Dodek, how can you claim with Bill C-4 when it's filed in the House that it is in order, but at the same time ask the Supreme Court whether you are in order? I have a bit of a problem seeing some logic between the two.

[Peter MacKay, Conservative, Minister of Justice and Attorney General of Canada]

Yes. Thank you very much, colleagues, and Mr. Chair.

I'm pleased to be here with Laurie Wright to speak to you about the declaratory provisions to the Supreme Court Act proposed in division 19, part 3 of Bill C-4, and the Economic Action Plan 2013, No. 2.

Colleagues, these declaratory provisions have been introduced to clarify the most basic criteria for appointment to the Supreme Court and are the same regardless of the appointee's province or region, and to ensure that any future government can continue to draw from the ranks of the most talented and experienced jurists who currently sit on Canada's federal courts in filling vacancies on the highest court in the land, the Supreme Court of Canada.

Mr. Chair, esteemed colleagues, I am hopeful that public consideration of these provisions in Parliament will also help the public to better understand the work of the federal courts and remove any doubt as to the eligibility and suitability of its judges for appointment to the Supreme Court of Canada, including as members of the court for Quebec.

Colleagues, in the government's view, the eligibility of the federal court judges to fill any vacancy on the Supreme Court should not be in doubt. It is solidly supported by legal opinion prepared by respected former Supreme Court Justice Ian Binnie, which itself was supported by his former colleague, the Honourable Louise Charron, as well as by noted constitutional expert, Professor Peter Hogg.

However, as you are no doubt aware, Mr. Chair, colleagues, despite the weight of legal expert opinion, some have continued to question the eligibility of federal court judges for appointment to the Supreme Court, particularly as members of the Court for Quebec. In order to resolve this critical matter as soon as possible, the government is proceeding on two fronts.

As you know, the matter is referred to the Supreme Court of Canada to confirm, first, the meaning of the statute, and second, Parliament's authority to enact legislation that requires that a person be, or has previously been, a barrister or advocate of at least 10 years’ standing at the bar of a province as a condition of appointment as a judge of the Supreme Court of Canada, or to enact the declaratory provisions under consideration here today before you.

On the other front, the Economic Action Plan 2013, No. 2 was determined to be the most expeditious and most efficient way of introducing declaratory provisions and ensuring that they are enacted on time to guarantee that federal court judges can be considered in the process of filling upcoming Supreme Court vacancies, the first of which arises next April.

These declaratory provisions clarify—without making substantive changes to the existing law—that individuals with at least 10 years at any bar in Canada, including the Quebec bar, at any time during their career, are eligible to sit on the Supreme Court of Canada.

It's very straightforward language.

Mr. Chair, I would like to stop here for a moment and make the point that it may appear a bit technical, but it is of central importance to this committee's consideration of clauses 471 and 472 of Bill C-4. The provisions that these clauses introduce differ in quality and, consequently, in effect from the types of statutory amendments generally considered and debated by Parliament or by a committee such as this. These provisions are declaratory in nature and, as such, they do not amend the Supreme Court Act in the way that a standard statutory amendment would.

Typically, statutory amendments enact new provisions or change existing provisions in a way that makes the result different in substance from the provisions they would replace, modify, or amend. The nature of the proposed declaratory provisions is to explain the proper interpretation of the law from the time it came into force and effect.

Essentially, it is language that adds to the meaning in a way that will bring about greater understanding.

The Supreme Court of Canada recently explained the impact of declaratory provisions in its 2013 decision in Régie des rentes du Québec v. Canada Bread Company Ltd. The court stated in that case:

The interpretation imposed by a declaratory provision stretches back in time to the date when the legislation it purports to interpret first came into force, with the effect that the legislation in question is deemed to have always included this provision.

In keeping with the purpose of a declaratory provision, clauses 471 and 472 confirm the basic requirement that judges must meet to be appointed to the Supreme Court of Canada. These provisions will make it clear that the current wording of these sections does, in fact, allow for judges of the Federal Court to fill Quebec vacancies on the Supreme Court of Canada, as long as at some point in their legal career they had been members of the Quebec bar for a minimum of 10 years. This ensures that current and former members of the Quebec bar are treated in the same way as current and former members of any other province. So it is to keep consistency and parity with all provincial bar associations.

I should explain, Mr. Chair, that the wording of these provisions has changed very slightly over the course of the past century as a function of legislative revision and consolidated exercises performed for all federal statues. However, there have been no substantive changes. We're talking about changes here after a considerable period of time for the purposes of clarification.

Successive pieces of legislation empowering Parliament have established that any changes that occur during these revision exercises are not intended to be substantive. The rule reflects an important principle. Given Parliament's role in enacting the laws of Canada, it should be inappropriate for mere housekeeping matters to change the law.

This principle is reflected as well in long-established rules of statutory interpretation that routine statutory revision and consolidation do not result in substantive legislative amendments.

That's what we're talking about here today. It is not a substantive change but a declaratory statement to clarify existing law.

Mr. Chair, I want to point out as well that the appointment of federal court judges to the Supreme Court of Canada is in no way novel. Mr. Justice Marshall Rothstein, a current and esteemed member of the court, was a member of the Manitoba Bar, appointed to the Federal Court, then to the Federal Court of Appeal and, ultimately, to the Supreme Court of Canada in 2006. Before him, Justices Frank Iacobucci and Gerald Le Dain, both members of the Ontario Bar, followed the same route to the Supreme Court.

It should be neither surprising nor unexpected that Supreme Court vacancies have in the past been filled from the ranks of Federal Court judges. This is not without precedent.

Experience in the Federal Court enhances rather than negates a long-time advocate's qualification to serve on the Supreme Court of Canada. I say that because the Supreme Court regularly hears appeals from decisions of the federal courts. In 2012 alone, the Supreme Court heard 10 appeals from decisions of the Federal Court of Appeal, as compared to 15 from the much larger Court of Appeal of Québec.

As I mentioned at the outset, Mr. Chair, it has been suggested in particular that judges of the Federal Court ought not to be appointed given the requirement under section 6 of the Supreme Court Act that three of the nine judges of the Supreme Court be appointed from Quebec.

The argument is that since Quebec is a civil law jurisdiction where the Quebec civil code applies, only those who practise law in Quebec at the time the appointment must be filled or who sit on a Quebec superior court are qualified. However, Mr. Chair, this argument is demonstrably without merit, not least because it reflects a fundamental misunderstanding of the nature of the work of the federal courts.

Let me explain. Judges of the Federal Court have jurisdiction over a wide and diverse area of law, and the principle of bijuralism means that they must regularly apply federal law in accordance with legal rules and principles in force in the province from which it arises.

For matters arising from Quebec this means that judges of courts, like the Federal Court of Appeal, must routinely interpret Quebec's civil code in deciding matters arising in complex and diverse areas such as tax law, copyright, and bankruptcy. That is why, like the Supreme Court Act, the Federal Court Act requires that there be a minimum number of judges on the Federal Court and the Federal Court of Appeal who have also been members of the bar from Quebec at any time. There are ten on the Federal Court and five on the Federal Court of Appeal. In essence, it's the same type of composition. There is mandatory membership on the Federal Court and the Federal Court of Appeal from Quebec.

The object of this statutory requirement is precisely the same as that of section 6 of the Supreme Court Act. It is to ensure that those courts have the requisite bijural capacity to deal with matters that arise from both civilian and the common law systems that define our system of administration of justice. To exclude the eminent Quebec jurists appointed to the Federal Court in satisfaction of such a requirement for consideration for appointment to the Supreme Court of Canada, and satisfaction of an essentially similar requirement, evidently makes no sense. Indeed, it could only serve, in my estimation, to weaken the guarantee provided by section 6 of the Supreme Court Act.

Moreover, as the Hon. Robert Décary, former justice of the Federal Court of Appeal, has recently and eloquently observed (in La Presse on October 25, 2013), to suggest that a judge of the federal courts trained in civil law does not have the level of expertise in civil law that section 6 is intended to protect is to ignore the practical reality of Canada's, and the world's, legal landscape. In his words, Quebec's civil law:

…has made its mark in the world. It borrows from common law and it lends to common law.

Which lawyer or judge in Quebec can claim today to live exclusively in the world of classic civil law? Divorce law is federal. Our administrative, criminal and penal law is Anglo-Saxon in inspiration. Commercial law is increasingly international. Human rights are global rights.

In addition, Mr. Chair, and to conclude, taking a restrictive interpretation of section 6 of the Supreme Court Act would exclude not only judges from the Federal Court but also many other candidates from appointment to the Supreme Court of Canada. For example, judges of La Cour du Québec would be excluded as they are neither judges of the Superior Court or the Court of Appeal, nor are they currently advocates. This restrictive interpretation would lead to an absurd result that has been noted by other constitutional experts. Later this morning, I understand, you'll hear from Professor Benoît Pelletier. In an interview on Radio-Canada on October 23, he stated:

The interpretation that prevails, I believe, or should prevail, when one looks at the spirit of the provision is that you just need to have been a member of the bar for 10 years, but you do not have to still be one today.

Mr. Chair, by taking this legislative step and also by referring this question to the Supreme Court of Canada, our government is defending the eligibility of members of the bar in all provinces and territories to sit on the highest court of the land. Members of the Quebec bar should be, and are under law, treated the same as lawyers in other provinces and territories in Canada.

Our government looks forward to a prompt, conclusive resolution of these questions ensuring the continued eligibility for appointment to the Supreme Court of eminent jurists of Canada's federal courts. This could only help ensure that the Supreme Court will maintain the long tradition of independence and excellence that has made it the envy of both the developed and developing democracies.

Mr. Chair, I thank you for your indulgence.

I'd be pleased, of course, to answer your questions.

[The Chair, Conservative, Mike Wallace]

I call this meeting to order.

Welcome to meeting number six of the Standing Committee on Justice and Human Rights.

Pursuant to Standing Order 108(2), we are studying the subject matter under clauses 471 and 472 of BillC-4 a second act to implement certain provisions of the budget tabled in Parliament on March 21, 2013, and other measures.

Our first witness today is our minister, the Hon. Peter MacKay, and with him from the Department of Justice is Laurie Wright, the Assistant Deputy Minister for Public Law.

We have the minister for about an hour.

Is there any opening comment you would like to make, Minister?

[Sari Sairanen]

I have certainly not used the word “catastrophic”. Those are your words. However, we do oppose the changes to the health and safety provisions contained in Bill C-4.

[Devinder Shory, Conservative, Calgary Northeast, AB]

I'm moving forward now, Mr. Chair, on Bill C-4.

I have a quote from Mr. Dias, from a Unifor press release. It's on Bill C-4. They say, “The government should look to strengthen health and safety provisions, not destroy them.”

Do you agree with that quote?

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

A point of order, Mr. Chair.

This is clearly not a question about the issue and the study we are having right now. We're talking about Bill C-4. We're talking about specific articles of this bill, about health and safety issues.

I think my honourable colleague here just wants to make political points and embarrass the witnesses. It's not fair and it's not the job of this committee.