Mr. Speaker, on June 2, you read a statement concerning certain bills which would infringe on the financial prerogative of the Crown and might therefore require royal recommendation. At that time, you specifically referred to my bill, Bill C-290, which is why I wanted to speak briefly. I am responding to your invitation to make representations to you on the matter.
I know that the Parliamentary Secretary to the Leader of the Government in the House of Commons spoke to this matter this morning, stating that my bill did require royal recommendation. You will not be surprised to learn that I do not share that opinion. I totally disagree and, I repeat, I will be brief in stating my point of view.
Hon. members need to understand that my bill amends the Income Tax Act to provide a refundable tax credit to an individual whose employer, and certain employees of that employer, failed to make the contributions required to be made to a registered pension plan. The bill seeks to help retired workers whose retirement income is reduced by the closure or bankruptcy of their company.
I am sure I will be able to convince you with my arguments. According to a ruling by the Chair on October 16, 1995, relating to Bill S-9, reducing income tax does not contravene Standing Orders 79 and 80. The Speaker at that time made the following ruling:
The bill will also have the effect of granting some tax relief retroactively and there may be some reimbursements payable for taxes paid under the law as it now reads, should Bill S–9 be passed by the House and receive royal assent.
The bill does not appropriate tax revenue, but rather exempts or reduces taxes otherwise payable, in some cases retroactively. [...]
In conclusion, Standing Orders 79 and 80 have not been contravened, as Bill S–9 neither imposes a tax nor appropriates money for any purpose. Since the bill relinquishes funds it might otherwise have gained, it is not appropriating money but forfeiting revenue it would have raised without such changes.
Thus, it seems to have the same tax effect given that we are reducing the state's tax revenue with our bill, as allowed by the Standing Orders. The Speaker should consider the fact that this measure does not seek to create a specific program to help workers who may have lost their retirement funds but rather to allow citizens who have paid taxes all their lives to benefit from tax credits.
This tax measure will reduce the tax burden of individuals who have lost their retirement income because their retirement fund was inadequate at the time the company they worked for ceased operations.
Take, for example, the 1,200 retired employees of Jeffrey Mine in Asbestos, which is in my riding. Since February 2003, they have lost no less than $55 million in retirement funds and $30 million in benefits. A retired worker who normally would have been entitled to $30,000 now only receives $22,000. Once the bill in question, Bill C-290, goes into force, that worker will receive 22% of the lost $8,000, or the non-taxable amount of $1,760.
In closing, passage of this bill will mean that all retired employees who find themselves in this type of situation can recover a portion of amounts lost through tax credits. It is important that we mention this fact. This would only result in a reduction in the government's revenue and not in a new social program.
I will conclude by saying that I am convinced this explanation will allow you, Mr. Speaker, to reconsider the need for obtaining a royal recommendation for Bill C-290.