Mr. Speaker, on first reading today's motion my reaction was of pleasant surprise. It appears to raise an issue of Canadian governance that is both philosophically important and publicly current. That was on quick first reading. But a moment's reflection reveals that the motion has serious problems and does not deserve our support. In fact, there is more than a bit of the old Trojan horse in the hon. member's proposal, not to mention some contradictory logic.
First, by focusing on the Rosenberg decision involving pension benefits for same sex couples, the opposition raises disturbing questions about what its real agenda is here. Is it the defence of parliamentary prerogative that is actually at issue for it? Is Reform saying appeal because it does not like the judicial process involved? Is it the application of the charter of rights and freedoms by a court that it objects to or is it really its dislike of the fact that a court has decided that same sex couples qualify as spouses under the Income Tax Act and that the government may decide to accept the consequences for existing income tax legislation?
There is a second reason why the House should reject this motion. As I said a minute ago, there is a distinct whiff of self-contradiction here. The motion clearly suggests that judicial rulings are pre-empting the government's ability and authority to govern. But surely that same ability and authority must rest on government's having the opportunity and obligation to deal with issues in a considered, comprehensive manner.
Courts should not carelessly rush to judgment and neither should governments. It makes for bad law and much worse national leadership. That is not an attribute that this opposition seems to appreciate or apply, be it on social values or national unity.
Let me remind the House that the government does have until June 22 to decide whether to appeal the decision to the Supreme Court of Canada. Our government is considering the implications of the Rosenberg case. We will take as much of the time available as we need because only that way do we have the best chance to ensure and give Canadians the confidence that our decision is in the best interests of the country and all its citizens. That is how a country should be governed. We will not be pushed to judgment and risk enshrining intolerance or a partisan whim.
I have no trouble speaking against this motion. It has nothing to do with the important issue of the balance between legislative authority and the obligation of Canada's courts to apply the charter of rights when required. Clearly this balance is not always an easy one. I will listen with great interest to members of all parties who can bring real legal and philosophical expertise to the debate when and if the opposition lets that take place.
Maybe I can help today's debate become more than a typical opposition grandstand by doing what I can to encourage a different balance here today, a balanced understanding of background to the Rosenberg issue.
At question is a recent ruling by the court of appeal. It found that the charter of rights requires that employer sponsored pension plans offering benefits to same sex partners be accepted for registration for income tax purposes. The courts remedy reads same sex partners into the definition of spouse in the Income Tax Act for this purpose.
In other words, it means that the judgment effectively amends or overrides the tax act definition of spouse which limits entitlement to a spouse of the opposite sex. Let us be clear about something. As it stands, the court's decision applies only to determined eligibility for pension survivor benefits. It does not affect the definition of spouse for other purposes in the Income Tax Act.
It should also be noted that this judgment does not require employers to include survivor benefits for same sex partners in the package of pension benefits they provide to their employees. Nor do current rules prevent them from doing so. What the judgment does require is that when an employer does offer such benefits, the pension plan must now qualify under the Income Tax Act to be registered and to receive the same tax treatment as any other registered plan.
There is nothing arcane or ominous about this tax treatment of registered plans. Any pension plan registered for tax purposes simply receives beneficial tax treatment similar to the treatment enjoyed, for example, by anyone who holds an RRSP. Contributions to such a pension plan by employers and employees are tax deductible. The contributions made by employers are not treated as taxable benefits to the employee and there is no tax on the investment income earned by the plan. Instead this tax is paid when funds are withdrawn from the plan normally as pension amounts paid to the employee after retirement.
I said earlier that the Rosenberg decision relates only to the registration of pension plans. There is no question that the decision, as it now stands, could have significant implications for other provisions of the Income Tax Act and could extend to other legislation. To begin with, provisions such as the tax free transfer of RRSP balances to a surviving spouse are parallel in function and logic to the survivor benefits provided under pension plans. Amendments to these rules would need to be considered. Beyond this is the question whether the logic of the Rosenberg judgment should be considered to apply to other tax provisions that provide benefits to married and common law heterosexual spouse.
There are literally hundreds of provisions related to spouses in the Income Tax Act. Such benefits include the spousal credit, the transfer of unused credits, including the age credit, pension income credit, disability credit, education and tuition fee credits, and the ability to contribute to spousal RRSPs. These are benefits provided to Canadians under the Income Tax Act. We should also recognize that the act contains many provisions that impose obligations on spouses as well.
These include the requirement to combine incomes for purposes of income tested refundable tax credits such as the GST credit and the child tax benefit, limiting couples to one principal residence only, the income attribution rules and the extension to related persons of restrictions applicable to significant shareholders.
Clearly it would be difficult to justify extending only the benefit conferring provisions of the ITA to same sex partners and not the provisions that impose obligations. The result would be a tax system that systematically advantaged same sex couples over married and common law couples. In contrast, the existing rules do not systematically favour one group over another since those who qualify as spouses are exposed to a balanced mixture of benefits and obligations.
This leads to another interesting point. If all the provisions of the ITA that relate to spouses were extended to apply to same sex partners, it is not at all clear that the same sex couples as a group would be net beneficiaries of the change. Although data do not allow precise estimates I understand that work done by the Department of Finance suggests that if we modify the current rules to treat same sex couples in the same way as married and common law couples for all purposes of the ITA it would actually result in a small annual aggregate net financial loss for same sex couples.
The result is that the gain to the government in lower benefits under provisions like the GST credit would exceed the additional revenue cost of benefit conferring provisions like the spousal credit. We fully appreciate that the question of recognizing same sex partners in government legislation must not be limited to questions of financial advantage or disadvantage for the individuals concerned or for the government.
It is proper and useful to debate such a topic. The balance of rights and obligations for spouses under the ITA is not a win-win situation. The issue of how some same sex partners are treated by the tax system is not simply one of denial of benefits available to other Canadians.
We all know that opposition members, especially those of the official opposition, likes to reduce things to issues of black and white. It allows them to thunder and thrash with great emotion. Anyone who has real passion for good governance and its fundamental basis in human rights, social justice and tolerance knows that effective decision making demands the application of both head and heart, which means considering all aspects of an issue. That is what our government is doing because that is the real way of doing things. That is the fair way and that is the logical way. That is why the principled response to the motion is to reject it. When they are willing to engage in open and honest debate the House should listen, but for the motion the only response possible is to send it to defeat.
