An Act to amend the Income Tax Act (qualifying environmental trust)

This bill was previously introduced in the 43rd Parliament, 1st Session.

Sponsor

Greg McLean  Conservative

Introduced as a private member’s bill. (These don’t often become law.)

Status

Dead, as of Nov. 30, 2020

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Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act to include, in the definition “qualifying environmental trust”, trusts that are maintained for the sole purpose of funding the reclamation of an oil or gas well operated for the purpose of producing petroleum or natural gas.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Bill C-214—Ways and Means Motion—Speaker's RulingPoints of OrderOral Questions

November 26th, 2020 / 3:15 p.m.
See context

Liberal

The Speaker Liberal Anthony Rota

I am ready to rule on a point of order raised on November 3, 2020, by the hon. parliamentary secretary to the government House leader concerning Bill C-214, An Act to amend the Income Tax Act (qualifying environmental trust), standing in the name of the hon. member for Calgary Centre.

In his intervention, the parliamentary secretary alleged that the bill should have been preceded by a ways and means motion. He argued that the bill would expand the definition of “qualifying environmental trust” to include a trust maintained for the sole purpose of funding the reclamation of an oil and gas well. As such trusts are taxed, he argued that the bill would extend the tax to a new class of taxpayer and should therefore be ruled out of order.

The hon. member for Calgary Centre argued that his bill would not create a new class of taxpayer, but would merely allow the oil and gas industry to use an existing tax mechanism already in use by the extractive industries. He also argued that an increase in tax revenue would only be incidental and would therefore not normally require a ways and means motion.

Bill C-214 would amend the Income Tax Act to include, in the definition of “qualifying environmental trust”, trusts that are maintained for the sole purpose of funding the reclamation of an oil or gas well operated for the purpose of producing petroleum or natural gas. As the sponsor of the bill noted, such trusts may already be used to fund reclamation activities by other extractive industries, but the act currently prohibits the use in relation to oil and gas wells. The bill's sponsor has argued that such a prohibition is unfair and that his bill seeks to correct the inequity. The Chair's decision, however, must be based not on the worthiness of the bill's policy objective, on which the Chair has no views, but rather on its compliance with our rules.

House of Commons Procedure and Practice, third edition, states at page 906, and I quote:

The House must first adopt a Ways and means motion before a bill which imposes a tax or other charge on the taxpayer can be introduced. Charges on the people, in this context, refer to new taxes, the continuation of an expiring tax, an increase in the rate of an existing tax, or an extension of a tax to a new class of taxpayers.

The question before the Chair is whether Bill C-214 extends a tax to a new class of taxpayers. The tax treatment of qualifying environmental trusts, or QETs, is admittedly quite complex, with a series of offsetting credits and deductions between the trust and the corporation that contributes to it. Generally, such a trust is created by a corporation as it would provide a tax advantage.

However, this is not a circumstance where the bill proposes a tax reduction or a tax credit. The means by which this advantage is gained is through the creation of a separate and distinct taxpayer, the trust. The bill's sponsor argues that QETs already exist as a class of taxpayers. Indeed they do. At present, however, the Income Tax Act specifically excludes a trust relating to the reclamation of a well. This exclusion has been part of the act ever since these sorts of trusts were first introduced in Bill C-59, An Act to amend the Income Tax Act and the Income Tax Application Rules, in 1995, when they were originally known as mining reclamation trusts.

Having been renamed “qualifying environmental trusts” in 1998, the number of eligible industries was expanded to include other extractive industries in 2011 via Bill C-13, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures. Each of these bills was preceded by a ways and means motion. While they clearly contained other measures, the Chair believes that such a motion was necessary to expand the various types of industries able to create a QET.

Accordingly, a ways and means motion is necessary. The bill cannot proceed and should be discharged.

Pursuant to Standing Order 92.1, the hon. member for Calgary Centre may substitute a new item in the order of precedence to replace Bill C-214.

I thank hon. members for their attention.

Income Tax ActRoutine Proceedings

February 24th, 2020 / 3:15 p.m.
See context

Conservative

Greg McLean Conservative Calgary Centre, AB

moved for leave to introduce Bill C-214, An Act to amend the Income Tax Act (qualifying environmental trust).

Mr. Speaker, the bill is about equity for the Canadian resource industry. It would provide a level playing field in the oil and gas sector and a financial instrument that is already available for every other extractive industry in Canada, including pipelines. It would allow us to move forward in dealing with environmental liabilities associated with end-of-life wells, inactive wells and suspended wells from the oil and gas sector.

Qualified environmental trusts were brought in by a previous Liberal government, in 1994, in recognition of the fact that liabilities occurred at the end of well life and resource life whereas revenues occurred toward the beginning of resource life. This would match income with expenses. It is a good instrument for our oil and gas industry, particularly in these times when there is so much environmental remediation required in the industry.

Why was it was left out of that legislation in 1994? It is only because oil and gas companies at that time had a surfeit of opportunities that were at all stages of their development, and it was not recognized as being necessary. It is completely necessary now, given what is happening in the oil and gas industry and in Alberta.

We need to recognize that this industry provides so much for Canada. There is so much value to be brought by this new legislation, including $20 billion of economic activity over the next 20 years. This would be a boon to employment in Alberta and GDP across Canada.

The bill would level the playing field for an industry that has not been represented well at this level. I hope we can move it forward very quickly.

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