Financial Procedures / Legislation

February 12, 1998

Debates, pp. 3765-6

On February 4, 1998, Lee Morrison (Cypress Hills—Grasslands) rose on a point of order concerning Bill S-4, An Act to amend the Canada Shipping Act (maritime liability). Mr. Morrison was concerned, first with the introduction of public bills in the Senate and, secondly, with the fact that this bill represented a breach of the constitutional principle that money bills must be introduced in the House of Commons. Mr. Morrison argued that the bill violated Standing Order 80 because it substantially increased the limits of liability upon the government, thereby infringing on the financial privileges of the House of Commons. He concluded by requesting that the bill be removed from the Order Paper. After the intervention of other members on the question, the Speaker took the matter under advisement.^[1]

On February 12, 1998, the Speaker gave his ruling on the point of order. He noted that there were few decisions in the area of liabilities and how these related to the financial privileges of the House. He stated that while Crown liability was increased in Bill S-4, compensation was provided for by another Act. Consequently the bill did not require a royal recommendation and was in order.

Decision of the Chair

The Speaker: My colleagues, I am now prepared to rule on the point of order raised by the honourable member for Cypress Hills—Grasslands on February 4, 1998, concerning Bill S-4, An Act to amend the Canada Shipping Act.

Before I begin, I would like to thank all the members who participated in the discussion on this matter: the honourable member for Elk Island, the honourable member for Nanaimo—Albemi and the leader of the government in the House of Commons.

I would especially like to commend the honourable member for Cypress Hills—Grasslands for having raised his point of order in such an articulate way that demonstrated thorough research and concise argumentation.

The honourable member argued that Bill S-4 violates Standing Order 80 because it substantially increases the limits of liability upon the government, thereby infringing on the financial privileges of the House of Commons. He concluded by requesting that Bill S-4 be removed from the Order Paper.

I wish to remind all honourable members of citation 619 of Beauchesne 6th edition which states in part:

Under Standing Order 80, the House of Commons claims that all aids and supplies are the sole gift of the House of Commons and are not alterable by the Senate.

In other words the House of Commons claims pre-eminence in financial matters, that is, public expenditure and taxation. Public expenditure is sometimes referred to as charges upon the public revenue, and taxation as charges upon the people. Therefore, all legislation that entails charges upon the public revenue or upon the people must originate in the House.

To determine if Bill S-4 is properly before the House, the Chair must ascertain whether or not it does in fact constitute a charge upon public funds.

Before doing so, I want to say a few words regarding one of the precedents cited by the honourable member for Cypress Hills—Grasslands.

In support of his claim that Bill S-4 breached the financial privileges of the House, the honourable member made reference to a decision given by Speaker Lamoureux on June 12, 1973^[2] concerning the then Bill S-5, An Act to amend the Farm Improvement Loans Act.

At that time Speaker Lamoureux ruled that Bill S-5, while not proposing a direct expenditure did involve substantial additional liabilities on public moneys and therefore infringed on the financial privileges of the House. Obviously Speaker Lamoureux could find no financial authority to cover such liabilities and consequently ordered that notice for first reading of Bill S-5 be removed from the Order Paper.

While looking at the elements of the case before us I have discovered that there exists very few decisions in the area of liabilities and how these relate to the financial privileges of the House.

For those reasons I have relied on the well-established principles described in the 21st edition of Erskine May under the subheading “Tests used to determine whether expenditure involves a charge”. In deciding if a proposal for expenditure actually imposes a charge, May stipulates that a charge must be new and distinct. This is explained at page 712 where it is stated:

The question may arise whether a proposal for expenditure or for increased expenditure is not already covered by some general authorization. The test for determining this question in the case of a substantive proposal, that is a provision in a bill, as introduced, is a comparison with existing law.

The comparison of provisions in a bill with the law on the subject, as it exists, may show that, while such provisions undoubtedly involve expenditure, the power to incur such expenditure is covered by general powers conferred by statute.

My colleagues, I would point out to you that these are very technical matters, so I would ask that you give them some attention.

My understanding of the procedural implications of Bill S-4 is the following. The increased limits of liability are set out in the proposed amendments to the Canada Shipping Act but the actual compensation available to claimants is subject to the Crown Liability and Proceedings Act, more specifically section 30(1) of this Act which states:

On receipt of a certificate of judgment against the Crown issued pursuant to the regulations, the Minister of Finance shall authorize the payment out of the consolidated revenue fund of any money awarded by the judgment to any person against the Crown.

To further quote from Erskine May, it is stated at page 717:

Where sufficient statutory authority already exists for payments to which bills relate, no further resolution and recommendation is required.

There follows a list of cases not requiring further authorization, one of them being case No. 2 which is “Liability, to pay damages, covered by existing law”.

What this says is that in the case of the Canada Shipping Act, provisions are made for changes to liabilities which, as the honourable member for Cypress Hills—Grasslands says, will create a charge upon the public revenue. However as Erskine May explains, where there is an act already in force to pay damages, no royal recommendation is required.

I conclude that there is already statutory authority under the Crown Liability and Proceedings Act to make the payments that Bill S-4 outlines. Therefore I would rule that Bill S-4 is in proper form and that it should remain on the Order Paper.

P0610-e

36-1

1998-02-12