Mr. Speaker, I rise on a point of order concerning Bill S-13.
The bill has been passed in the other place and is currently at first reading. Even though the bill is not presently being debated, it has now been introduced and it is my first opportunity to speak on it under a point of order. I wish to discuss what I believe to be the constitutional and procedural propriety of this bill's being initiated in the other place.
I want to make it clear at the outset that I am not in any way taking the position at the present time on the policy embraced by this bill, as there will be ample opportunity to do that. What I am doing is responding in my duty as Leader of the Government in the House of Commons to defend the rules, the rights and the privileges of the House and all members who sit here.
The difficulty with Bill S-13, which has been initiated in the other place, as I intend to demonstrate, is that it constitutes in fact a tax bill and as such constitutionally and procedurally may be initiated only in the House of Commons and only after the House has concurred in the notice of ways and means tabled by a minister of the crown.
I am aware that the Speaker of the other place had occasion to rule on this question when the bill was in the other place. The question before us, however, concerns the constitutional rights of the House of Commons and only the Speaker of the House of Commons has the authority to assert these rights, no one else.
In addition, there are standing orders of the House of Commons that I maintain are violated by this bill and no ruling in the other place or anywhere else can have any impact on the decision of the presiding officer of this House in interpreting the rules of this House.
There are two principles that come into play in this case. The first is stated in Bourinot's parliamentary practice, fourth edition at page 491:
As a general rule, public bills may originate in either house; but whenever they... involve directly or indirectly the levying or appropriation of any tax upon the people, they must be initiated in the popular branch, in accordance with law—
This is based on section 53 of the Constitution Act, 1867:
Bills for appropriating any part of the public revenue, or for imposing any tax or impost shall originate in the House of Commons.
The second principle is stated at Bourinot's page 430 which reads as follows:
It is now a fixed principle of constitutional government that all propositions for the imposition of taxes should emanate from the ministry.
The first proposition then is that the bill must start in the House of Commons and, second, from the ministry.
This principle is embodied in our own rules governing tax bills. Standing Order 83(1) permits that only a minister of the crown is able to table a notice of ways and means which, under our procedures, must be concurred in before a tax bill may even be introduced. Since Bill S-13 clearly meets the test of neither of these principles, the question revolves around the issue of whether it does qualify as a tax bill. In my opinion it does not meet these tests and it is a tax bill.
I say this for the following reasons. Bill S-13 proposes what it refers to as a levy of 50 cents per carton on the manufacture of cigarettes and other tobacco products. This levy would raise, so we are told, $70 million to be paid into a non-government foundation that would support health and education and anti-smoking programs as well as transitional funding for arts and sports groups and tobacco farmers.
Proponents of the bill assert that this is not a tax but a levy and as such is not subject to our ways and means procedures and lends itself to initiation in the other place. This assertion is based, so they claim, on citation of Erskine May's parliamentary practice, 22nd edition, on page 779:
Levies upon an industry for purposes beneficial to that industry are regarded as not covered by the rules of financial procedure and so do not require authorization by ways and means resolution.
Even if Erskine May stopped there one would dispute whether the proposal meets the criterion of proposing a levy for the purpose beneficial to that industry.
But it goes on:
Modern legislation frequently makes provision for the imposition of other types of fees or payments which, although not taxes in the strict sense, have enough of the characteristics of taxation to require to be treated as `charges upon the people' and therefore to be authorized by ways and means resolution moved by a Minister of the Crown.
This distinction between the two types of payments which are or are not covered by the rules of financial procedure is not always straightforward in practice. In particular, May suggests: “Where payment is imposed in order to meet the cost of enforcing a new regulatory scheme which is for the general benefit, rather than for the benefit of the industry”, such a regime is one that requires the use of a ways and means procedures.
Erskine May makes it clear that a levy must be narrowly based and must also have a narrow purpose benefiting the industry on which the levy is made. This is not the case today.
The fact is the very commendable objectives of the bill are of broad public policy, namely to reduce smoking related health costs for young people and for supporting tobacco farmers and others. It is not the tobacco manufacturers who would obviously benefit from this levy on them but of course smokers, farmers and indeed the general public. That is the pith and substance of the bill.
Even the summary of the bill states that the mandate is to reduce the use of tobacco by young persons in Canada. This certainly does not meet Erskine May's test of being a levy on an industry for the narrow and specific benefit of the same industry. As a matter of fact, it is the direct opposite.
Those in the other place who support Bill S-13 relate it to last session's Bill C-32 amending the Copyright Act, which imposes a levy on an industry, but was not preceded by a House of Commons ways and means motion. A comparison of the two bills, S-13 and last session's C-32, emphasizes the ineligibility of Bill S-13 as far as procedure is concerned.
Last session's Bill C-32 imposed a levy on the manufacturers or importers of blank tapes into Canada and provided for the distribution of royalties to writers and performers, whose creativity would result in increased demand for the blank tapes distributed by manufacturers and importers.
This is to the advantage of all those affected by the levy, unlike Bill S-13, which is advantageous to all except those having to pay the levy.
The objective of Bill S-13 is not to increase the demand for tobacco, of course—if it were, we would not be discussing it—but rather to reduce the demand, or in other words to bring about the opposite of a benefit.
There are in fact several examples of bills, like the old C-32, which imposed levies for limited purposes, for the benefit of certain specific industries. These include expenditure and other levies in connection with marketing plans, broadcasting licence fees, and charges for insurance forms relating to specific activities within specific industries.
In each case, however, when ways and means procedures were not required, these levies were very specific, their purpose narrowly defined, their direct benefits as far as the levy is concerned, directly and specifically apparent.
Erskine May, 22nd edition, makes reference to a case that illustrates our subject on page 780. It relates to a bill concerning shipping, which was examined in the British House of Commons in 1973-74. This bill required oil importers to contribute to an international reserve to be used as compensation for damage caused by pollution, and these funds were not part of the consolidated fund. This bill required a ways and means resolution.
There is an obvious parallel with Bill S-13. Like the levy proposed by Bill S-13, this levy was not to be part of the consolidated fund and, as in Bill S-13, the sums amassed would be advantageous only to those who are not part of the industry and have provided the funds in question. As I have already indicated, this bill was subject to the ways and means procedure.
As I indicated at the start, I do not wish to see my objections to the procedure for Bill S-13 misinterpreted. They probably will be, anyway.
I believe the objectives of this bill are highly desirable. The policies proposed by the bill are creative and innovative. I, however, have problems with this bill, namely that the implications relating to procedure are totally regressive and undemocratic.
For more than 300 years it has been a fundamental of parliamentary democracy that a taxation measure may not be initiated in the upper house. It must be initiated by this House on a motion of responsible government. That is equally true in the United Kingdom and it is even true in the United States of America.
No matter how interesting I may find a program proposed in a bill that comes to us from the other place, it is my duty, Your Honour, to draw to your attention the fact that this bill violates the constitutional practices and more important the rules of the House.
The fact that the presiding officer of the other place thought the bill was in order is not material to the discussion. It is our constitutional system, and in this constitutional system only Your Honour as Speaker of the House and no one else can determine what a money bill is or what a tax bill is.
Mr. Speaker, I submit to you that Bill S-13 is indeed a taxation measure. As such it should have been initiated and can only be initiated in the House of Commons after concurrence in a ways and means motion and furthermore proposed by the minister of the crown.
I ask Your Honour to consider this and to rule that the House cannot consider this bill for the reasons that I have just stated.