I am now prepared to rule on the point of order raised by the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform concerning the requirement for a royal recommendation for Bill C-357, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, standing in the name of the hon. member for Gaspésie—Îles-de-la-Madeleine.
I would like to thank the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform for having raised this issue as well as the hon. Gaspésie—Îles-de-la-Madeleine for his comments.
In his presentation, the hon. parliamentary secretary argued that clause 2 of the bill would create an employment insurance account that is outside the consolidated revenue fund, thus transferring money out of the consolidated revenue fund into the employment insurance account where money would no longer be available for any appropriations Parliament may make. He further argued that Bill C-357 would change the duties of the Employment Insurance Commission by allowing it to deposit assets for the financial institution and to invest assets to achieve a maximum rate of return. Finally, he expressed concern that clause 5 would increase the number of commissioners on the Employment Insurance Commission from its current four to seventeen.
The hon. parliamentary secretary claimed that these arguments were supported by a ruling delivered by the Speaker on June 13, 2005, concerning Bill C-280, also entitled An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence, and nearly identical to Bill C-357.
The hon. member for Gaspésie—Îles-de-la-Madeleine countered that there is no basis for the claim that this bill would bring about “additional” or “new” expenditures and that the transfer of revenue to an independent fund would not change the circumstances, manner and purposes by which Canada's Employment Insurance Commission will set the premiums and manage its revenue. Although he acknowledged that a royal recommendation would be necessary if the bill were seeking to withdraw revenue from the government's consolidated revenue fund to be used for purposes other than those described in the act, he claimed that this was not the case since the purpose of the bill would not alter anything in the current legislation.
He further argued that having Canada's Employment Insurance Commission invest assets to achieve a maximum rate of return did not constitute a new purpose for the fund since the federal government was “investing” these public monies to pay down the Canadian debt.
He concluded by saying that adding 13 new commissioners will be financed by a small increase in expenses, which will no longer appear as an expenditure from the consolidated revenue fund given that the employment insurance fund will no longer be a part of the consolidated revenue fund.
After examining Bill C-357, the Chair was struck, as was the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform, by its similarity to Bill C-280. Indeed, the proposed amendments to sections 71 and 72 of the Employment Insurance Act included in Bill C-357 are in many respects virtually identical to those in Bill C-280.
For instance, like in Bill C-280, the proposed section 72 in Bill C-357 would credit moneys from the consolidated revenue fund to the commission, which would then place it into a new and separate account, one that would be outside the consolidated revenue fund.
Today, moneys in the consolidated revenue fund are available for eventual expenditure for purposes of claims under the Employment Insurance Act. With the passage of Bill C-357, these funds would no longer be available because, in effect, they have been spent, that is, transferred out of the consolidated revenue fund to a separate and independent account outside the consolidated revenue fund.
When the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities sought clarification regarding the provisions of Bill C-280 as it related to the royal recommendation, the Chair ruled, on June 13, 2005, that:
Such a transfer, in my view, constitutes an appropriation within the meaning of section 54 of the Constitution Act, 1867 and for this reason a royal recommendation is required in respect of clause 2 of the Bill.
The Chair sees no reason to reach a different conclusion on this provision of Bill C-357 than the one that was reached at that time on Bill C-280.
In relation to the argument that the proposed change to subsection 72(6) of the Employment Insurance Act found in Bill C-357 creates new duties for the commission in terms of managing and investing amounts paid into the employment insurance account, the Chair does not accept the argument put forward by the hon. member for Gaspésie—Îles-de-la-Madeleine that the federal government's use of moneys in the consolidated revenue fund to pay down the Canadian debt constitutes an authority to spend funds for a new purpose.
In addition, the Chair is of the view that the bill's proposed alteration of the duties of the EI Commission to enable the spending of public funds by the commission, namely, the investment of public funds to achieve a maximum rate of return, is a new purpose and requires a royal recommendation.
Finally, the increase in the number of commissioners on the Employment Insurance Commission from its current four to seventeen also clearly requires a royal recommendation. Although the hon. member for Gaspésie—Îles-de-la-Madeleine contended that these expenses would not come from the consolidated revenue fund but rather from the newly created employment insurance fund, clause 5 of the bill clearly calls on the governor in council to appoint these new commissioners. Given that the current commissioners are remunerated, it follows that the proposed new commissioners would also be paid. As such, the addition of these new commissioners would involve an additional appropriation of a part of the public revenue.
Consequently, I will decline to put the question on third reading of this bill in its present form unless a royal recommendation is received.
However, the debate is currently on the motion for second reading, and this motion shall be put to a vote at the close of the second reading debate.