Mr. Speaker, on Friday, October 30, you made a statement respecting the items of Private Members' Business on the order of precedence. Specifically, Mr. Speaker, you drew members' attention to concerns respecting Bill C-214, sponsored by the member for Calgary Centre, entitled “An Act to amend the Income Tax Act (qualifying environmental trust)”.
I am rising to make an intervention as to why I believe the bill would need to be preceded by the adoption of a ways and means motion. A qualifying environmental trust is a special kind of trust that is recognized under the Income Tax Act for setting aside reclamation costs for mining sites, waste disposal and quarry sites, as well as pipelines.
The purpose of Bill C-214, as set out in the summary, is to amend “the Income Tax Act to include, in the definition 'qualifying environmental trust', trusts that are maintained for the sole purpose of funding the reclamation of an oil or gas well operated for the purpose of producing petroleum or natural gas.”
Bill C-214 proposes to repeal paragraph (a) of the definition “excluded trust” in subsection 211.6(1) of the Income Tax Act, which currently provides that an excluded trust includes a trust that “relates at that time to the reclamation of a well;” and proposes to add paragraph (e) to the definition of “qualifying site” in the same provision. The proposed paragraph (e) would read as follows:
(e) the operation of an oil or gas well drilled for the purpose of producing petroleum or natural gas.
The consequence of these proposed amendments would be that the reference to a qualifying site in paragraph (b) of the definition of a “qualifying environmental trust” would include the operation of an oil or gas well drilled for the purpose of producing petroleum or natural gas.
Subsection 211.6(2) of the Income Tax Act is the charging provision that imposes tax on qualifying environmental trusts. Adding a new paragraph (e) to the definition of a “qualifying site” in subsection 211.6(1) of the Income Tax Act would have the effect of expanding the definition of a “qualifying environmental trust” to include trusts that are maintained for the sole purpose of funding the reclamation of an oil or gas well operated for producing petroleum or natural gas. Therefore, the effect of Bill C-214 would be to cause a tax to be payable by a new class of taxpayers, that is, qualifying environmental trusts in respect of the operation of an oil or gas well.
Page 906 of the third edition of the House of Commons Procedure and Practice states:
The House must first adopt a ways and means motion before a bill which imposes a tax or other charge on the taxpayer can be introduced. Charges on the people, in this context, refer to new taxes, the continuation of an expiring tax, an increase in the rate of an existing tax, or an extension of a tax to a new class of taxpayers.
The proposed amendment in Bill C-214 in respect of qualifying environmental trusts would represent an increase in the incidence of tax for these trusts. The definition of qualifying environmental trusts in Bill C-214 would now include trusts that are maintained for the sole purpose of funding the reclamation of an oil or gas well operated for the purpose of producing petroleum or natural gas.
As a result, the number of qualifying environmental trusts that would be subject to part XII.4 tax will increase. Therefore, I submit that this is a situation where the adoption of a ways and means motion would need to precede the introduction of Bill C-214, since the effect of the bill would represent an extension of a tax to a new class of taxpayers.
In terms of precedents to support the argument that the introduction of the bill should have been preceded by the adoption of a ways and means motion, I would draw the attention of members to the following Speaker's ruling.
On November 4, 2011, the Speaker ruled that Bill C-317, an act to amend the Income Tax Act regarding labour organizations, should have been preceded by the adoption of a ways and means motion, since the provision of the bill would have created a new class of taxpayer. The Speaker ruled:
If enacted, Bill C-317 would thus create a situation whereby labour organizations can be differentiated into two distinct categories, those that comply with the financial reporting mechanism and those that do not.
In the Chair's opinion, this new category of labour organization would constitute a class of taxpayer that does not currently exist. Labour organizations in the newly created class, that is those that do not meet the financial reporting requirements outlined in the bill, would see the removal of their current tax-exempt status....
As a result of this determination, I find that Bill C-317, by distinguishing between certain labour organizations, creates a new class of taxpayer and that this new class of taxpayer would then be subject to a removal of an alleviation of taxation.
For the reasons stated, I must, therefore, rule that Bill C-317 should have been preceded by a ways and means motion.
The principle to be derived from Bill C-317 is that any measure that would have the effect of subjecting a new group of taxpayers to a tax must be preceded by the adoption of a ways and means motion. This principle also applies in the case of Bill C-214.