Human Resources Committee on April 26th, 2007

[The Chair, Conservative, Dean Allison]

Order.

Pursuant to the order of reference of Wednesday, November 22, 2006, Bill C-303, we will now pursue going through the bill and hearing some witnesses.

I would like everyone to welcome, from the Department of Human Resources and Social Development, Mr. McCombs and Mr. Beaulieu.

I believe you gentlemen have a short statement, and then we can hear some questions from our members of Parliament relating to Bill C-303. Once again, gentlemen, thank you for being here this morning.

You have the floor with your opening statement.

[Mark McCombs, Senior General Counsel, Legal Services, Department of Human Resources and Social Development]

Thank you, Mr. Chair.

I have a very brief statement and then I'll entertain questions. My name is Mark McCombs. I'm legal counsel from the Department of Justice and the head of HRSDC legal services. I'm accompanied by Christian Beaulieu. He's senior counsel in our legal services and head of our legal services social programs group.

I appreciate the opportunity to attend the committee this morning and to respond to any questions you may have. By way of information for the committee, I should mention that my appearance today follows the long-standing tradition of this House that the Department of Justice, in accordance with its mandate, doesn't provide legal advice to Parliament. That is the role of the law clerk. However, Mr. Beaulieu and I will be able to provide technical explanations to the committee on the bill itself, without giving legal advice, and answer questions.

I understand that the committee may have some questions surrounding the use of the federal spending power and how that works. Mr. Beaulieu and I are quite able to answer that. We're quite pleased to talk about the law in that area.

[The Chair, Conservative, Dean Allison]

That was a very short opening statement. If all my witnesses had short opening statements like that, I'm sure we'd get more questions in.

[Mark McCombs]

I was taught that less is better.

[The Chair, Conservative, Dean Allison]

Less is more.

And I'm sure there'll be no political questions today, but just in case, I know you guys are skilled enough to know how to answer questions.

We're going to start with you, Mr. Savage. You have seven minutes, sir.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Thank you for that detailed statement.

It clears up any questions I had, Mr. Chair.

I wonder if you could just give us an overview, having looked at the legislation. Is there anything that stands out to you as legislators that we should be aware of?

[Mark McCombs]

Christian, do you want to go first?

[Christian Beaulieu, Senior Counsel and Team Leader, Legal Services, Information Management and Social Programs Groups, Department of Human Resources and Social Development]

Sure.

When you look at the bill, we see that one single purpose is attached to the bill, and it's set out in clause 3, which in our view is quite clear: the purpose of this act is simply to establish criteria and conditions that must be met before any payment is made to a province to support its programs. That's the only purpose we see in the act.

[Mark McCombs]

With that, now we'll fall into the part that we were quite able to advise the honourable member on, and that's with respect to the federal spending power.

With regard to the law in this area, as you know, there is no specific enumerated head of power in the Constitution with respect to the so-called federal spending power. The courts have accepted that it's a power that allows the federal government to spend in areas where it couldn't normally legislate. It's a power the courts have endorsed as allowing Parliament to impose conditions to regulate and safeguard the use of federal funds, but it doesn't allow the federal Parliament to legislate in provincial jurisdictions. So the key question in a federal spending power sense is the conditions that might be attached to the federal money.

Just by way of background, the federal spending power doesn't attach to a particular section. It's inferred from a series of sections: 91.1A, which is the federal government's power to legislate public debt and property; 91.3, which is the power to raise taxes; 102, which is the money raised in taxes is then deposited--the creation of the CRF; and 106, which is the ability of this Parliament then to spend the money by way of a voted appropriation.

The only other section relevant to this is section 36 of the 1982 Constitution Act on the equalization authorities, and that buttresses the federal spending power.

So that's really how it all works. By way of background, that would be the underpinnings of this type of legislation.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Is there a template for this? In what other areas do we have legislation that outlines accountability measures for money that's transferred? Is this like the health care accord?

[Mark McCombs]

The Canada Health Act is an example.

[Christian Beaulieu]

And CHST, to an certain extent, I think; it's under the Federal-Provincial Fiscal Arrangements Act.

I think there might be a certain degree of accountability on the part of provinces, particularly the Province of Quebec. When it comes to student loans, under the Canada Student Financial Assistance Act, in section 14, the money may be transferred to Quebec to run its own student loan program. I think there are some accounting measures there, or at least in practice there are with other programs.

[Mark McCombs]

The old CAP assistance system was based on the federal spending power, and that's one of the major cases in this area.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

So this concept itself, of determining that before transfer payments are made there would be agreed-on criteria, this is not a new idea for Canada.

[Christian Beaulieu]

Not at all.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

We've used this quite a few times.

We've heard about the possibility of having something like this for transfers on post-secondary education and things as well, whereby provinces would agree on a national standard, national accountability.

[Mark McCombs]

This is normally how these types of programs are established. The federal government sets aside a certain amount of money and the objective is certain national standards. Provinces then can decide whether or not they want to accept the funds on the terms the federal government's offering. If they decide not to, well, they decide not to.

That's really the way this give and take of the federal spending power works.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Okay.

We're going to hear from some provinces later on today. Are you aware of concerns that have been raised by some of the provinces on this?

[Mark McCombs]

Generally, yes, but I think they're better placed to talk about their concerns vis-à-vis their jurisdiction than I am.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

But are you prepared to give me your view of their concerns?

[Mark McCombs]

Well, I can tell you where the federal spending power creates issues. The federal spending power creates issues when the line is crossed vis-à-vis interprovincial jurisdiction. The courts have said the federal spending power can be used as long as it doesn't regulate within provincial jurisdiction.

The CAP case is one particular case.

[Christian Beaulieu]

There is a CAP reference that speaks to that issue. There's also the Winterhaven decision from the Court of Appeal of Alberta that speaks to that. It's established law now, as we speak. The federal government may spend money in those areas and attach conditions to those transfers as long as there's no regulation of the field.

One example I could offer to you to establish the distinction was from Professor Dreidger; he passed away, unfortunately. Professor Dreidger gave the example of the Salvation Army. The Salvation Army, as we know, can't regulate hospitals, but the Salvation Army does run them, the same as the Shriners do. Of course, any legal person may attach conditions, may make payments, but may also attach strings to those payments to make sure the person will use the money the right way. That's different from saying that I will tell you....

I'll try to give you an example. Let's say you were to buy a car. You're a teenager, and you want to buy a car, but you don't have the money. Your parents will purchase the car. You're the one who will buy the car, but your parents have said they will pay up to $25,000 for your car, but your car must not be red, it must have four doors, and so forth.

Your parents are not the ones buying the car; there will be no consequences. The only thing is that if you don't abide by their conditions, you will not get the money.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

I understand.

How much time is left, Chair?

[The Chair, Conservative, Dean Allison]

You're out of time. Good timing.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

No time at all?