Mr. Speaker, I will go through it as quickly as I can. It certainly speaks to the issue at hand. It is very specific.
One of the arguments raised by the House leader is this is a tax and not a levy. I want to step through here for the Canadian public. Mr. Speaker, I am sure that through your examination of this you have discovered some of this on your own, but to put it on the record I think is important.
A tax is generally defined as a compulsory contribution levied on a person by a government body with the intent to transfer resources from the private to the public sector. A tax is imposed to finance public sector goods and services and to redistribute income among different economic groups in society.
The issue of whether a charge imposed by a government is or is not a tax has been examined by the courts in relation to section 92(2) of the Constitution Act, 1867 in determining the status of various charges, some of them federal and some of them provincial.
Since pursuant to section 92(2) a province or the federal government may impose a direct but not an indirect tax, if the charge were an indirect charge it would be invalid.
The Supreme Court of Canada has examined this issue in the following cases and I will use the appendix of some of these cases to explain in more detail: the Agricultural Products Marketing Act, 1978; the Exported Natural Gas Act, 1982; Allard Contractors v Coquitlam, 1993; the Ontario Home Builders' Association v York Region Board of Education, 1996.
In the agricultural products case the Supreme Court of Canada held that marketing levies imposed by a marketing board were regulatory charges intended to deal with the expenses of the marketing board. The marketing levies were not a tax because they were not imposed to raise revenue for the public purse. The member for St. Paul's articulated this very clearly in her argument, that it is not moneys for the public purse.
In the Allard Contractor's case the Supreme Court of Canada held that a fee imposed by a municipality on companies engaged in the extraction of gravel was not a tax, as the fees raised were intended to be used to repair roads. The fee had a specific use. The key is specific use and because that was a specific use it was a valid regulatory charge.
In The Ontario Home Builders' Association case, the Supreme Court of Canada held that a charge imposed by school boards on land developers, which was intended to be used to fund the construction of new schools, was a regulatory charge and not a tax.
The Ontario Court of Appeal found that the probate fees levied by the province of Ontario were part of a regulatory scheme relating to the maintenance of the Ontario court. The levying of probate fees was part of a general revenue raising program and as such was not a tax.
In the natural gas tax case, the Supreme Court of Canada found that the charge in issue was intended to raise revenue for general public purposes and as such was a tax.
The result of these cases is that a levy imposed by a public body can be characterized as a regulatory charge and not a tax if the amounts received pursuant to the levy are to be used for a specific governmental service and the amount of the levy reasonably relates to the cost of providing that service. That was articulated very well by the member for St. Paul's in terms of what would be raised by this levy, where and how it would be spent, how much of it would be spent and what would happen if all the money were not spent.
The levy intended to be imposed pursuant to part two of Bill S-13 is a levy that is clearly intended to provide funds to defray the cost of providing the services and products referred to in section 5 of the proposed act. It is not intended that the levy provide revenue to be transferred to any public authority to be used for general public purposes. The levy is to be specifically applied toward the needs of the foundation.
The relationship between the levy and the expenses of the foundation is indicated in section 36(3) of the proposed act in that if the number of young persons in Canada who are smoking tobacco products declines to 5% or less in the fifth or the subsequent year of the foundation, the foundation may reduce or eliminate the levy imposed pursuant to section 36(1) of the proposed act for the particular year. It is to be presumed that the expenses of the foundation would decrease if there were fewer young persons in Canada smoking and as such the need for a levy to satisfy these expenses would be correspondingly reduced. That is articulated very clearly in the bill. It is my opinion that the levy to be imposed pursuant to part two of the proposed act is not a tax.
I have another two or three pages to go. In the interests of time I would like to table them.