Financial Procedures / Miscellaneous

April 23, 1990

Debates, pp. 10539-42

On March 27, 1990, prior to the beginning of the debate on the motion for second reading and referral to a legislative committee of Bill C-69 respecting Government Expenditure Restraints, Mr. Peter Milliken (Kingston and the Islands) rose on a point of order to contest the validity of attaching a Royal Recommendation to the Bill. He argued that the Bill was designed to reduce government spending, that it entailed no new charge on the Treasury and thus required no Royal Recommendation. He further argued that the reason the Royal Recommendation had been included was to "stifle amendment by Members of the Opposition, amendments which Members are entitled to put." Other Members also intervened on the matter.^[1] The Acting Speaker (Hon. Steven Paproski) took the matter under advisement and called on the Hon. Gilles Loiselle (Minister of State (Finance)) to begin the debate. The Speaker returned to the House on April 23, 1990 to deliver his decision which is reproduced in extenso below.

Decision of the Chair

Mr. Speaker: On March 27, 1990, the honourable Member for(Kingston and the Islands) rose on a point of order to question the procedural acceptability of attaching a Royal Recommendation to the Government Expenditures Restraint Bill, Bill C-69. The honourable Member delivered a well researched argument, citing several precedents and making references to learned parliamentary authorities.

The honourable Members for Kamloops (Mr. Nelson Riis) and Gloucester (Mr. Douglas Young), as well as the Minister of State for Finance, also made contributions on this issue.

That exchange assisted the [Chair] in considering this complex issue which relates to a very fundamental element of our parliamentary system of government—the financial initiative of the Crown.

To many of our viewing audience, and indeed many of the honourable Members of the House, the subject matter of the financial initiative of the Crown sounds like an extremely Byzantine and hopelessly complicated matter. However, if you will bear with me for a few moments, the [Chair] will attempt to set out the issue in straightforward terms because it does have a serious impact on how the House conducts its business.

I wish to begin this explanation by quoting from page 247 of the Annotated Standing Orders which reads:

In our system of parliamentary government, the Sovereign, as represented by the Governor General, and acting on the advice of His or Her responsible ministers,—

—that is, the Cabinet—

—is charged with the management of all revenues of the State and the payment of all public expenditures. The appropriation-

—that is, the spending—

—of money for these payments has to be first recommended by the Governor General to the House (known as a Royal Recommendation) and then approved by Parliament.

In other words, before the House can introduce any Bill which would result in an expense to the Treasury, it must obtain a statement from the Governor General indicating that he or she recommends to the House of Commons the appropriation of public revenue as set out in the Bill. This is what is known as the Royal Recommendation.

This requirement for a Royal Recommendation is enshrined in our Constitution. As the honourable Member for(Kingston and the Islands) explained, section 54 of the Constitution Act, 1867 absolutely requires that a royal message of recommendation be obtained for the appropriation of any part of the public revenue or any tax prior to the adoption of a Bill.

Prior to the significant changes in our Standing Orders relating to financial procedures, which occurred in 1968, a Bill such as Bill C-69 would have been preceded by a motion adopted in the Committee of the Whole.

Under this procedure, it was fairly easy to ascertain whether any amendment proposed to the Bill was in order or not because it had to comply with the detailed motion adopted in Committee of the Whole. That is a committee of the whole House with all Members who are interested in that particular matter in attendance. It is not a committee meeting outside the Chamber.

However, the major complaint about this procedure was that it was too lengthy. It involved a debate to go into Committee of the Whole, another debate in committee on the motion, called the resolution stage, and further debates on the various stages of the Bill.

In December, 1968, this procedure was changed. The resolution stage in Committee of the Whole was eliminated, as was the Committee of Supply and the Committee of Ways and Means. The Royal Recommendation was given to the House thereafter simply as a printed notice, pursuant to Standing Order 79(2), which reads as follows:

The message and recommendation of the Governor General in relation to any Bill for the appropriation of any part of the public revenue or of any tax or impost shall be printed on the Notice Paper and in the Votes and Proceedings when any such measure is to be introduced and the text of such recommendation shall be printed with or annexed to every such Bill.

For several years following the changes, the form of the Royal Recommendation remained a detailed expression of the spending authority given by the Crown. There were occasions when honourable Members complained about the scope and adequacy of the Royal Recommendation, or that it was poorly drafted.

This prompted Speaker Lamoureux to make the following comment on November 2, 1970 at page [783] of Hansard:

I have very often felt it should not be necessary that our recommendations should attempt to go into all the details of the Bill because we are bound to get into difficulties. [...] We want to know whether His Excellency thinks this is a Bill with which we can proceed. If he tells us that in three words, we should take his word for it.

By 1976, the wording of the Royal Recommendation had changed. Bills introduced in the House from this point on bore a brief and abbreviated recommendation such as the following: "His or Her Excellency, the Governor General, recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled—" and then the name of the particular Bill would follow. Under these conditions, the Bill itself must now be used to determine the amount of the charge, the objects, purposes, conditions and qualifications set by the Royal Recommendation.

At first glance, one might think one could easily discern whether any new charge is placed on the Treasury. If a rate is increased, then it would appear to be obvious that an additional charge is placed on the Treasury and a Royal Recommendation must be obtained.

According to Citation 540 of Beauchesne Fifth Edition, however, the amount of the charge is not the only consideration. It states:

The guiding principle in determining the effect of an amendment upon the financial initiative of the Crown is that the communication, to which the Royal Recommendation is attached, must be treated as laying down once for all (unless withdrawn and replaced) not only the amount of the charge, but also its objects, purposes, conditions and qualifications. In relation to the standard thereby fixed, an amendment infringes the financial initiative of the Crown not only if it increases the amount but also if it extends the objects and purposes, or relaxes the conditions and qualifications expressed in the communication by which the Crown has demanded or recommended a charge.

As Beauchesne explains, there are instances where the objects, purposes, conditions and qualifications may be affected in such a manner as to involve financial implications. For instance, if a program is extended to cover an additional period of time or if the parameters of a program are broadened to cover more applicants, then a Royal Recommendation is necessary.

With this background having been explained, I would like to return now to the point of order raised by the honourable Member for(Kingston and the Islands). In his presentation the honourable Member suggests that the Government Expenditures Restraint Bill reduces government spending. It does not involve any new charge on the Treasury and, therefore, requires no Royal Recommendation. Furthermore, he suggested these recommendations are included in Bills "in an attempt by the Government to stifle amendment by Members of the Opposition, amendments which Members […] are entitled to put."

In reply, the honourable Minister of State for Finance explained that the Royal Recommendation was obtained for this Bill on the advice of the Office of the Law Clerk and Parliamentary Counsel because some provisions in the Bill widened existing conditions. He referred in particular to clause 2.

The Government Expenditures Restraint Bill is an extremely complex piece of legislation. The honourable Member for(Kingston and the Islands) himself described the Bill as containing "all kinds of formulae that I do not understand." The Chair has a great deal of sympathy for all honourable Members on both sides of the House who attempt to glean some understanding from Bills of this kind.

A review of clause 2 shows a formula for calculating limits on the 1991 contributions under the Canada Assistance Plan. Clause 5 provides for an escalator formula in the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act.

There is no doubt in the [Chair's] mind that the proposals in Bill C-69, which is an amending Bill, will change the conditions and qualifications that were attached to the original legislation recommended by the Governor General. The result from the calculation of any of the formulae may or may not cost the Treasury less money but the manner and the elements used to arrive at such results are certainly new.

The [Chair] would therefore conclude that a Royal Recommendation was appropriate.

As for the honourable Member's concern that the presence of a Royal Recommendation might restrict the opportunities for amendment, it is my view that this should not preclude any honourable Members from moving amendments to clauses of the Bill at committee and report stages subject to our normal rules and practices. In committee, honourable Members can propose amendments to any clauses. If any amendment is thought to be irregular, there is normally opportunity for procedural debate, followed by a decision of the Chairman.

Furthermore, report stage provides another opportunity to put forward amendments. As honourable Members know, there are normally consultations on the selection of amendments as well as on the groupings for debate and division. Any proposed amendment will, however, be subject to our practice that it cannot affect the objects, purposes, conditions or qualifications of the financial initiative.

I wish to thank the honourable Member for(Kingston and the Islands) for raising this issue and providing the [Chair] with an opportunity to clarify our practice with regard to the Royal Recommendation.

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1990-04-23