I would like to make a ruling on Bill C-364, the trade compensation act. I am prepared to rule on the point of order raised by the parliamentary secretary to the government House leader on October 19, 2005, concerning Bill C-364, the trade compensation act.
At the outset I would like to thank the parliamentary secretary for having raised this important issue concerning the financial prerogative of the Crown. I would also like to thank the hon. members for Vancouver Island North and for Fort McMurray—Athabasca for their interventions on this matter.
Bill C-364 proposes that the Minister of Finance shall compensate any Canadian exporter of Canadian goods exported to a foreign state for the loss incurred as a result of any unjustified restrictive trade actions by the government of that state.
The parliamentary secretary pointed out that clause 3 of the bill requires the Minister of Finance to pay all reasonable legal expenses of exporters and industry associations and would therefore require a royal recommendation.
In rebuttal, the member for Fort McMurray--Athabasca argued that such funding was already authorized since the Minister of International Trade announced on April 15, 2005, in a press release that “funding will be provided to offset legal expenses incurred in defending Canadian interests against U.S. trade actions in the softwood lumber trade dispute”.
The Chair would comment that while funding may have been made available for a specific purpose by the Minister of International Trade, Bill C-364 is proposing an expenditure of public funds for a general purpose that is new. Despite what provisions may appear in other acts, the Chair is of the view that such a statutory initiative as expressed in Bill C-364 would have to be accompanied by a recommendation from the Crown as it mandates a new expenditure of public funds.
In his point of order, the parliamentary secretary also stated that clause 4 obliges the minister to provide loan guarantees whenever a deposit, surety or bond must be posted by an exporter or an industry association pending resolution of a dispute by a tribunal and that such a provision requires a royal recommendation.
The member for Vancouver Island North argued that the loan guarantee only commits the government to back a loan in that it does not result in public funds being actually removed from the consolidated revenue fund.
It is important to note, however, that if such a loan defaulted, the Crown would be responsible for paying the debt. For this reason, the bill requires a royal recommendation as it mandates a new expenditure of public funds by imposing this liability upon the consolidated revenue fund.
Consequently, I must conclude that Bill C-364 requires a royal recommendation.
The member for Fort McMurray--Athabasca said on November 14 that this does not prevent debate from continuing at second reading or prevent the bill from being considered in committee or at report stage if the House so decides. He is absolutely correct in this respect. However, the purpose of my decision today is clarify the requirement for a royal recommendation before third reading.
Accordingly, due to provisions which authorize spending, the Chair will decline to put the question on third reading of this bill in its present form unless a royal recommendation is received.