Private Members’ Business / Financial Limitation

Royal recommendation: increase in operating costs

December 6, 2012

Debates, pp. 12937–8

On November 22, 2012, Alexandre Boulerice (Rosemont—La Petite-Patrie) rose on a point of order with respect to Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations), standing in the name of Russ Hiebert (South Surrey—White Rock—Cloverdale). Mr. Boulerice argued that the bill would require the Canada Revenue Agency (CRA) to produce new financial reports and acquire a new computer system, both of which would result in the expenditure of public funds in a manner not then authorized. Consequently, Mr. Boulerice argued, the Bill should be accompanied by a royal recommendation. Other Members made comments on that day and at subsequent sittings of the House. The Speaker took the matter under advisement.^[1]

Resolution

On December 6, 2012, the Speaker delivered his ruling. He explained that, although the passage of Bill C-377 could result in an increased workload or operating costs for the CRA, the proposed changes fall within the mandate of the CRA and therefore do not require spending for a new function. Consequently, the Speaker concluded that Bill C-377 does not require a royal recommendation.

Decision of the Chair

The Speaker: I am now prepared to rule on the point of order raised on November 22, 2012, by the hon. Member for Rosemont—La Petite-Patrie regarding the need for a royal recommendation for Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations), standing in the name of the hon. Member for South Surrey—White Rock—Cloverdale.

I would like to thank the Member for Rosemont—La Petite-Patrie for having raised the matter; as well as the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons; the hon. House Leader of the Official Opposition; and the Members for Saint-Lambert, Cape Breton—Canso and South Surrey—White Rock—Cloverdale for their interventions.

In raising this matter, the Member for Rosemont—La Petite-Patrie explained that the provisions of clause 1 of the Bill would result in
expenditures of public funds in a manner and for purposes not currently authorized. Specifically, he claimed that a new entity within the Canada Revenue Agency, CRA, would have to be created to administer and enforce the provisions contained in the Bill, and that there would be costs incurred in setting up a new computer system to meet the requirements of the legislation. These, he concluded, would constitute “new and distinct” costs, thereby creating a need for a royal recommendation.

Similarly, the Member for Cape Breton—Canso argued that the Bill envisioned a new function and purpose within the CRA and as such the terms and conditions of the Royal Recommendation that authorizes the agency’s current spending would be altered. He also suggested that Bill C-377 would regulate the internal affairs of unions and the relationships with their members, thus giving the CRA a new labour relations function.

For his part, the Parliamentary Secretary to the Leader of the Government in the House of Commons rejected these arguments, claiming instead that the authority to spend for the purposes set out in the Bill would fall under the general authority of existing broader provisions of the Income Tax Act, as well as the Agency’s general authorities under the Canada Revenue Agency Act.

He illustrated this by referring to those portions of the Income Tax Act dealing with reporting requirements for charity organizations. He also stated that, should additional funds be required, the Government would seek them from Parliament through an appropriation bill covering operating expenses.

The question before us is whether the implementation of Bill C-377 would constitute a new appropriation requiring a royal recommendation, or whether the costs would be administrative in nature and would fall under the ongoing mandate of the Canada Revenue Agency.

I would like to remind the House of the conditions under which a royal recommendation is required. As the Member for Rosemont—La Petite-Patrie noted in his presentation, bills which authorize new charges for purposes not anticipated in the estimates require royal recommendations. House of Commons Procedure and Practice, Second Edition, at page 833, further states:

The charge imposed by the legislation must be “new and distinct”; in other words, not covered elsewhere by some more general authorization.

The Canada Revenue Agency already has the mandate to administer various tax and benefits regimes and to manage a broad range of other programs and activities. More specifically, section 5 of the Canada Revenue Agency Act mandates the Agency to support the administration and enforcement of program legislation. Furthermore, in reviewing the documentation provided by the Member for Saint-Lambert, which makes reference to specific cost information provided by the CRA in response to questions from the Standing Committee on Finance, the Chair notes the references made to section 220 of the Income Tax Act, which states:

(1) The Minister shall administer and enforce this Act and the Commissioner of Revenue may exercise all the powers and perform the duties of the Minister under this Act.

(2) Such officers, clerks and employees as are necessary to administer and enforce this Act shall be appointed or employed in the manner authorized by law.

In carefully reviewing this matter, it seems to the Chair that the provisions of the Bill, namely the requirements for the Agency to administer new filing requirements for labour organizations and making information available to the public, may result in an increased workload or operating costs but do not require spending for a new function per se. In other words, the Agency, as part of its ongoing mandate, already administers filing requirements and makes information available to the public. The requirements contained in Bill C-377 can thus be said to fall within the existing spending authorization of the Agency.

In a ruling given by Speaker Milliken on February 23, 2007, which can be found at page 7261 of Debates, he stated, in relation to the then Bill C-327, An Act to amend the Broadcasting Act (reduction of violence in television broadcasts), that:

Bill C-327 may or may not result in a greater workload for the CRTC, but the activities being proposed are within its mandate. If additional staff or resources are required to perform these activities then they would be brought forward in a separate appropriation bill for Parliament’s consideration.

It appears to the Chair that a similar situation would arise should Bill C-377 be enacted and, thus, that this particular ruling is directly relevant and applicable to the current circumstance.

A second ruling by Speaker Milliken, this one on December 3, 2010, Debates page 6803, in reference to then Bill C-568, An Act to amend the Statistics Act (mandatory long-form census), is also helpful. In that ruling it was apparent to the Speaker that the proposed legislation was not adding to or expanding upon the existing mandate of Statistics Canada and, thus, that the bill in question did not require a royal recommendation.

Accordingly, the Chair rules that Bill C-377 in its current form does not require a royal recommendation to proceed through the next stages of the legislative process.

I thank hon. Members for their attention.

Postscript

Bill C-377 completed all stages during subsequent sittings of the House and the Senate during the First Session of the Forty-First Parliament, was reinstated and received Royal Assent on June 30, 2015, in the Second Session of the Forty-First Parliament.