Mr. Speaker, it gives me great pleasure to speak to the budget implementation act, the centrepiece of our Conservative government's economic agenda for Canada. There are three strong themes running through this budget: one, supporting jobs and growth; two, supporting families and communities; and, three, balancing the budget.
Jobs and opportunities for Canadians remain our government's top priorities. We have seen over a million net new jobs created since the global economic slowdown. This has reduced the unemployment rate to 6.9% and we will do even more to support job creation with this budget.
Measures we are taking include providing $100 million in interest-free loans to apprentices in the trades, $55 million for paid internships for recent graduates, and $75 million for the targeted initiative for older workers program to support older workers who want to participate in the job market. We are also cutting red tape for businesses by eliminating the requirement for 800,000 payroll remittances by 50,000 small and medium-sized businesses. As well, we are launching the new Canada job grant program. Canadians will now be able to qualify for up to $15,000 per person to get the skills and training they need for in-demand jobs.
British Columbia will also benefit directly in this budget as our government will be providing $222 million for world-class physics research in the TRIUMF laboratory at the University of British Columbia.
We have also announced the biggest infrastructure investment in Canadian history, an amazing $70 billion for new highways, bridges, ports and municipal utilities. Approximately $9 billion of those funds will be spent in British Columbia. This investment will keep a lot of trades employed in my community and across the nation, as well as help modernize and improve the efficiency of our economy to help Canada compete globally.
Indeed, our outlook extends past our borders. As a member of the international trade committee, I am an enthusiastic supporter of our drive to diversify and expand our export markets. Our focus on developing our exports has been characterized by the successful conclusion of negotiations for a free trade agreement with the European Union. The benefits Canada will realize from this agreement alone are an impressive $12 billion increase in the Canadian economy. That is equivalent to creating 80,000 new jobs or boosting the average Canadian family's income by $1,000 annually.
As the House knows, we have also reached a free trade deal with South Korea. I know this deal will be a great boost to our agricultural sector initially, but it will also benefit many other sectors in years to come.
However, there are other free trade agreements we are working toward that will continue to grow our economy, expand our exports and create wealth and high-paying jobs for Canadians.
The Trans-Pacific Partnership negotiations could lead to another huge trade deal for Canada and guaranteed access to many of the most populous nations of the world. Indeed, we are already trading with the TPP nations, but a free trade agreement would allow unhindered, duty-free access for Canadian exports. This deal would give a huge boost to industry in my home province.
For instance, in 2012, British Columbia exported almost $4.9 billion in wood and related products to TPP member countries. However, currently, Canada's exports of wood and related products face tariffs of up to 10% in Japan, 31% in Vietnam and 40% in Malaysia. Australia has tariffs of up to 5% on Canadian lumber. Paper and paperboard products face tariffs of up to 27% in Vietnam and 25% in Malaysia.
Eliminating these tariff barriers would significantly support sales of British Columbia's world-class wood and related products in the lucrative TPP market of 792 million consumers, meaning more jobs for British Columbians. Our economic action plan creates jobs directly through spending on infrastructure and it will support the creation of many more through expanded trade opportunities for our exporters.
The second major theme in our budget is supporting families and communities. We are accomplishing this goal through a number of key measures. One, which does not always receive much notice but greatly impacts our quality of life, is the annual federal transfer to the provinces for health care and welfare.
The previous Liberal government devastated our health care system by slashing transfers to the provinces. Despite the very real fiscal challenges we have faced over the past number of years, we have not cut a penny of health care funding.
On the contrary, we have increased funding for hospitals, doctors, nurses and equipment every year since we formed government. This year, my province of British Columbia will receive a record $5.8 billion to fund hospitals, housing and other social programs. Some of those funds will be used to support health care providers in my constituency such as the Peace Arch Hospital in White Rock.
We are also taking action in the budget to protect consumers. One action we are taking is addressing the unjustified Canada-U.S. retail price gap through new legislation. This issue is of particular concern to retailers in my border community as they lose critical business to American retailers which are just a short drive away.
We also committed to recognizing and supporting those who have risked all to defend our freedoms. Budget 2014 provides $2 billion to enhance the new veterans charter in support of serious injured veterans.
The third theme in our budget is balancing the books. Everyone knows that the global economic downturn hit government revenues hard. Before the global recession hit, our Conservative government paid down $37 billion in debt, bringing Canada's debt to its lowest level in 25 years.
Our fiscal responsibility and aggressive debt reduction placed Canada in the best possible position to weather the global recession. When the global recession hit, we made a deliberate decision to run a temporary deficit to protect our economy and jobs.
Many governments around the world are still struggling to tame their national finances. However, through prudent financial management, including trimming the size of our federal government departments and agencies, we are on track to be the first G7 nation to balance our budget.
Overall, since 2010, actions we have taken to make government more effective and efficient are saving taxpayers roughly $19 billion a year.
Canada's net debt to GDP ratio is 36.5%. This is the lowest level among G7 countries, with Germany being the second lowest at 56.3% and the G7 average at 90.2%.
Economic action plan 2014 would bring the projected deficit down to $2.9 billion by 2014-15, and forecasts a surplus of $6.4 billion in 2015-16. That is extremely good news for Canadian taxpayers.
Despite the fact that we have already cut personal and business taxes substantially, a balanced budget will allow more room for tax cuts and debt reduction in the years to come. Already, the average family of four has seen their taxes cut close to $3,400 annually, giving them greater flexibility to make choices that are right for them.
Likewise, seniors have also seen substantial tax relief. Pension income splitting, a $2,000 increase in the age credit, doubling of the pension income credit, reducing the GST from 7% to 5% and other measures have reduced the taxes seniors pay by $2.8 billion annually.
These measures are particularly important to my community, as retirees choose to relocate to South Surrey—White Rock—Cloverdale from all over Canada to take advantage of our temperate climate and scenic coastal beauty.
Corporate taxes have also been cut from 21% to 15%, making Canada an attractive place for international businesses to locate and invest, creating more high paying jobs for Canadians. In fact, since 2006, we have cut taxes nearly 160 times, reducing the overall tax burden to its lowest level in 50 years.
Economic action plan 2014 delivers additional tax relief by introducing the search and rescue volunteers tax credit and acknowledging the valuable contributions ground, air and marine search and rescue volunteers provide to Canadians from coast to coast to coast.
A future budget surplus would allow our government to move forward with promised tax cuts, making the tax burden we carry even lighter and allowing Canadians greater freedom to make their own financial choices to save, invest and spend.
I call on all members to support this budget implementation bill.
Mr. Speaker, I thank my colleague from South Surrey—White Rock—Cloverdale for his excellent presentation. From a tourism perspective, there is not a nicer part of the country to visit.
It is with great pleasure that I rise today in this place to speak to the Canada-Honduras free trade agreement. In particular, I would like to say a few words about the issue of corporate social responsibility and how it relates to this agreement.
Corporate social responsibility can be defined as the voluntary activities undertaken by a company to operate in an economically, socially, and environmentally sustainable manner. It is also increasingly referred to as responsible business practices. It covers a broad range of activities, including environmental protection, human rights, labour relations, corporate governance, transparency, community relations, peace and security, and anti-corruption measures.
Our government recognizes the importance of corporate social responsibility in a globally competitive, well-regarded extractive sector. Our government encourages and expects Canadian companies working internationally to respect all applicable laws and international standards, to operate transparently and in consultation with host governments and local communities, and to develop and implement corporate social responsibility best practices.
Canada has a long-standing commitment to promoting and encouraging responsible business practices by Canadian companies operating overseas. For instance, Canada has been a key driver and supporter of the numerous other important international instruments, including the International Finance Corporation's Performance Standards on Social and Environmental Sustainability, the Extractive Industry Transparency Initiative, the Voluntary Principles on Security and Human Rights, and most recently, the United Nations' Guiding Principles on Business and Human Rights.
This clearly demonstrates that this government's commitment to international corporate social responsibility standards is a fundamental ongoing priority. Our government has turned this commitment into concrete action in a number of ways, including by integrating robust corporate social responsibility provisions into many bilateral and multilateral free trade agreements, of which the Canada-Honduras free trade agreement is no exception.
Another concrete example is Canada's corporate social responsibility strategy for the international extractive sector, also known as building the Canadian advantage. The strategy was announced in March 2009 after extensive cross-country consultations with a number of key stakeholders. It has proven to be a strong framework by which our government encourages and promotes responsibility, responsible business practices by Canadian companies working internationally in the extractive sector.
Our support for the international corporate social responsibility guidelines in principle extends this reach to all business sectors operating anywhere in the world. Therefore, our government encourages and expects Canadian companies working internationally to, one, respect all applicable laws and international standards, including those that pertain to human rights and environment, and two, operate transparently and in consultation with host governments and local communities.
I want to be clear. The vast majority of Canadian companies conduct their operations in line with international standards for responsible business conduct. This is a key reason why Canadian companies are highly regarded and respected around the globe. It is also one of the reasons why Canada is a leader in the global extraction sector.
I wish to comment briefly on Canada's approach, which emphasizes voluntary activities as opposed to regulations, obligatory actions, and punitive measures. Canada has worked hard in support of many corporate social responsibility guidelines, as we understand their value to Canadian companies operating abroad. In fact, they often provide valuable guidance, which allows our companies to succeed. This is reinforced by actions of Canadian companies. There has been a substantial transformation on the part of the private sector with respect to corporate social responsibility.
Today, Canadian companies operating abroad recognize that corporate social responsibility and responsible business practices are fundamentally important to their ultimate success and their bottom line, including shareholder value. They recognize that a commitment to responsible business practice is a commitment to their own success. In a sense, corporate social responsibility has been mainstreamed into the management and operational structure of Canadian companies.
Last June, the Prime Minister announced that our government will be establishing new mandatory reporting standards for Canadian extractive companies, with a view to enhancing transparency on the payments they make to governments. This effort, which will also help to ensure that citizens in resource-rich countries around the world are better informed and benefit from the natural resources in their country, builds on Canada's key role as a supporting country of the Extractive Industries Transparency Initiative. These initiatives on transparency highlight our government's commitment to working with our trading partners to pursue policies that support a responsible and sustainable investment environment in the best interests of host communities and businesses.
Responsible business conduct reinforces the positive effects that trade and investment can have on human rights, labour standards, the environment, and competitiveness. At the same time, it has a significant positive effect on the communities in which the businesses operate. The Canada-Honduras free trade agreement includes provisions on corporate social responsibility because our government believes that liberalized, rules-based trade and social and environmental responsibility go hand in hand.
The parallel agreements on labour co-operation and environmental co-operation ensure that increased business between our two nations does not come at the expense of our social and environmental responsibilities. Activities to promote responsible business practices can also be undertaken in the form of trade-related co-operation. Provisions in these agreements encourage both governments to promote voluntary principles of responsible business conduct with their business communities. Not only do these agreements advance our government's efforts to promote corporate social responsibility; they also provide an opportunity to engage partners to increase its promotion.
Both Canada and Honduras have agreed to support positive corporate social responsibility practices and to remind companies of the importance of incorporating corporate social responsibility standards in their internal practices. A fundamentally important aspect of this bilateral approach is that it helps level the playing field for Canadian investors when they invest in Honduras, by encouraging corporate social responsibility principles amongst all investors. At its core, responsible business practices incorporate social, economic, and environmental concerns into the daily operations of firms to benefit industry and society, with particular consideration for the community in which they are operating. Given that Canada and Honduras have a significant investment relationship, it was critical to include corporate social responsibility in these important agreements.
Our government has shown its commitment to promoting corporate social responsibility and responsible business practices internationally and is pleased to work with trade partners to broaden this commitment. The Canada-Honduras free trade agreement recognizes this and is an important mechanism to create jobs, opportunities, and prosperity for Canadians in a socially and environmentally responsible manner.
For these reasons, I ask all hon. members for their support of this very important agreement.
It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, The Budget; the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord, Industry.
Resuming debate. The hon. member for South Surrey—White Rock—Cloverdale.
Mr. Chair, one of the things I want to point out tonight is the tremendous commitment that the Prime Minister and the Minister of Foreign Affairs have shown to this issue right from the beginning of the crisis.
We can go back to November 21, when we first heard from Ukraine and from its leader that they were going to sever their ties and the agreement they were supposed to have signed with the EU and then move towards an association with Russia.
It was only about three days later, on November 24, when hundreds of thousands of people gathered in Kiev. A couple of days later, when it looked as though the protests were beginning to wind down a little bit, the Ukrainian police attacked the protesters and really set this off.
I see my colleague getting a little excited here, so I would like to point out that I am going to share my time with my colleague from South Surrey—White Rock—Cloverdale.
In early December, our minister went to Kiev. As I mentioned earlier, the opposition was confused as to why he would be there. He went out and spent some time with the demonstrators and expressed our support for their position.
From there it took off. We had a debate here in the House on December 10. The real troubles escalated throughout December and January. On January 22, a couple of protestors were shot and lost their lives while working toward freedom. The ceasefire that was put in place temporarily was broken by January 25. The violence escalated from there.
This government moved early. On January 28, we put travel bans in place on their key government leaders. Around the middle of February, on February 18, there was more extreme violence. On that date, we decided we were going to provide assistance directly to Ukraine and to the protestors there. We made a commitment to provide medical assistance and help to them.
On February 20, we moved to extend that ban. We then began to work toward putting sanctions in place. I think every one of us was very happy to see, on February 21, that we really did not have to do that, because Yanukovych left his position. We believe Ukraine will judge him and will judge his supporters. We see clearly that the judicial system in Ukraine is already looking for him. They have an arrest warrant out for him.
The travel ban had been instituted and then extended, and I think there has been some confusion about sanctions. I heard some news reports. I just want to talk a bit about that.
The same measures on travel bans and sanctions that were announced by the Prime Minister, that we were working on last week, are calibrated and will be calibrated to respond to the developments that take place in Ukraine. The reality is that travel bans remain in effect for those individuals who were covered by them previously, and we will continue to watch that situation.
We had some discussion today at the foreign affairs committee about these bans and what they meant, but the reality is that the bans are on, they were on, and they stayed on the individuals they covered before. The sanctions that were going to be placed did not then need to be carried through, because Yanukovych left, and we are just waiting to see how the situation in Ukraine develops. They will be calibrated to respond to what takes place.
We continue to work with our like-minded partners to coordinate an international response. It has been exciting, as one of the nations that has led the fight, to see that the changes taking place now in Ukraine will be, we believe, dramatic, and we hope that they will be permanent. We believe they acted legitimately in naming Speaker Turchinov as the acting president pending the May 25 elections. Today we see they have now put a government in place. Interim Prime Minister Yatsenyuk is in place, and the cabinet is to be confirmed tomorrow.
I again want to acknowledge the leadership of the Minister of Foreign Affairs, who is leading a delegation to Ukraine to affirm and recognize the new government, give them our support, and let them know we stand behind them. I should acknowledge the support we are getting from around the world as well, including from the Secretary General of the Ukrainian World Congress, who has expressed his gratitude on behalf of the Ukrainian World Congress to our Prime Minister's government and praised the individual efforts of our Minister of Foreign Affairs for his leadership and resilient position in supporting Ukraine towards democracy and ending the current tyranny.
We have been privileged to be able to be a part of working towards these changes and helping the Ukrainian people realize their freedom and democracy.
Mr. Speaker, I stand on behalf of my constituents of South Surrey—White Rock—Cloverdale, who are calling for tougher laws and a new mandatory minimum sentence for those convicted of impaired driving and for redefining the offence of impaired driving causing death as vehicular manslaughter.
Mr. Speaker, Canadians from coast to coast to coast, including three brave Conservative MPs, have written letters condemning the sell-off of our natural resources to a Chinese state-owned company.
In fact, as the member for South Surrey—White Rock—Cloverdale wrote, “our trading and investing relationship with China is one-sided and a...proposal of a similar magnitude and nature by a Canadian company in China would simply not be welcomed”.
The member for Medicine Hat wrote, “Canadian laws must prevail, and if we were to allow a state-owned company of a foreign nation...to buy a strategic asset here, we would be setting a very dangerous precedent”.
The member for Kitchener—Conestoga said, “this is an example of the most unfair trade possible...”.
Today I rise to salute those brave MPs who have stood up to the Conservative Prime Minister's reckless rubber-stamping and sell-off of our natural resources. Now, if only a few more Conservatives would follow their lead.
I do not understand why the opposition would be opposed to labour organizations. It seems that we are getting some heckling from members on the other side who do not agree with us when we say that they play a crucial, multi-faceted role in our society. They contribute to the Canadian workplace in many ways. Currently there are over four and a half million workers who are union members, representing over 25% of Canada's civilian labour force.
Strong labour management relations contribute to our country's economic prosperity and the economic security of all Canadians. Labour organizations play a direct role as advocates for organized labour. They are also important in the negotiation and enforcement of collective agreements and labour standards. Further, these organizations have played a pivotal role in the past in advancing some of the most fundamental improvements in the workplace. Issues they have contributed to include advocating for fair wages, reasonable working times, providing training and learning for employees, protecting vulnerable workers, improving working environments for women and promoting compliance with and enforcement of labour laws across Canada.
As a part of that, these organizations are given generous benefits through the tax system. Labour organizations are exempted from tax on their income, and members are entitled to deduct any dues paid to such organizations. Notwithstanding these generous tax benefits, labour organizations are not required to disclose their financial activities in any significant detail. This is despite the fact that they are democratic organizations supported by dues-paying members and are subsidized by the Canadian tax system.
We believe that democratic values go hand in hand with openness and transparency. Today's bill proposes to amend the Income Tax Act by requiring labour organizations to file a standardized public information return with the Canada Revenue Agency each year. Currently, there is no separate information return for labour organizations. By requiring such a return, the bill promotes better accountability to Canadians.
The bill will also improve the quality of information provided by labour organizations to their members and to the public at large. This would be done by requiring such organizations to submit not only their financial statements but also separate schedules that provide specific details on the activities in which a labour organization engaged in any given year and the amounts devoted to those activities. Examples of the information a labour organization would be required to report include details on any loans it made, its investment activities, the amounts spent on labour relations activities, as well as amounts paid to executives and on general administration.
Information submitted by labour organizations would be made available on the website of the CRA in a searchable format. In this regard, today's bill would enable members of labour organizations to satisfy themselves that their organization is operating in an appropriate manner. Canadian taxpayers would also have access to this information, making labour organizations more accountable for the generous tax benefits they are provided.
Finally, the bill proposes that any labour organization that did not file an annual information return within six months from the end of its fiscal period would be subject to a monetary fine for non-compliance. Quite simply, we believe that since labour organizations are provided the privilege of a tax exemption, they should be accountable to Canadians on how they operate and spend their funds.
In addition, there is concern about the quality of the information being provided by labour organizations. Even where disclosure requirements exist, these are often limited in scope. While some jurisdictions require that audited financial statements be disclosed to members, this, again, is not uniform across Canada. Further, financial statements present only limited financial information and may not provide information about the amount spent by labour organizations on particular activities important to their members, such as salaries paid to the executives or details of their political activities.
The level of detail disclosed in financial statements is generally left to the discretion of the organization. While members not satisfied with the disclosure may be able to approach their labour relations board to require their union to provide additional more-detailed information, this may be a cumbersome and expensive process and may deter many workers from accessing the information.
I will also highlight that registered charities are required to provide information to the CRA that is subject to public disclosure. Registered charities are also given generous tax advantages by the tax system.
First, as are labour organizations, registered charities are exempted from paying income tax. Second, in recognition of the valuable services provided by charities, the Income Tax Act provides special incentives to encourage Canadians to donate. Registered charities are given the privilege of being able to issue official donation receipts for any gifts that they receive. Donors then use these receipts to reduce their taxes payable. To ensure that registered charities are accountable to Canadians for these tax privileges, all registered charities are required to file a registered charity information return, which is published on the CRA's website. This information enables the CRA to ensure that registered charities are operating in compliance with the rules and that they devote their resources exclusively to charitable activities. Transparency around this information also enables donors to verify their donations are being used appropriately and to determine which organizations they want to support. Through enhanced disclosure, Canadians can give with confidence, knowing that donations of their hard-earned dollars are used to support legitimate charities.
The registered charity information return contains information similar to that which has been proposed by the hon. member for South Surrey—White Rock—Cloverdale. In addition to filing financial statements, which are available to the public, registered charities must file detailed information as to how they carry on their activities each year. While I am not proposing to provide an exhaustive list of these requirements, I will take a minute to highlight a few.
All registered charities are required to provide information regarding the charitable programs they carried on throughout the year, including details on any new programs. Charities must also provide detailed financial information regarding their financial activities during the year. The information generally includes: the charity's assets and liabilities; the charity's sources of revenues, including the total amount for which it issued donation receipts; income earned from business activities and the amount of government grants received; and the charity's expenditures, including the aggregate amount spent on charitable activities, administration, fundraising and political activities.
Further, to ensure that charitable resources remain within the charitable sector, when a charity makes a gift of its funds to other charities or other qualified donors it must attach a detailed statement that lists the organization to which it gifted the funds as well as the amount given. Charities are also required to provide specific details around other issues of importance to Canadians, such as the amounts they devote to foreign charitable activities, the salary levels paid to their highest-compensated employees as well as the amounts they pay to professional fundraising companies. The transparency regime for registered charities is an important tool in helping to ensure that Canadians can give with confidence to registered charities and that those charities are accountable for the tax privileges granted to them under the Income Tax Act.
In summary, I believe the proposals contained in the bill are consistent with those principles of transparency and accountability. These organizations are provided generous tax benefits in the form of exemption from income tax and the deductibility of dues paid by members. These organizations should be accountable to the public as well as to their members as to how they carry out their activities and how they are spending their resources. I therefore encourage all members to support the principles of the bill.
There are five motions standing on the notice paper for the report stage of the member for South Surrey—White Rock—Cloverdale's Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations).
While it is not usual for the Chair to provide reasons for the selection of report stage motions, in this case it has been decided to do so given that the Speaker has received written submissions from the hon. members for South Surrey—White Rock—Cloverdale and Cape Breton—Canso, outlining exceptional circumstances surrounding the committee consideration of the bill.
As members know, consistent with the note to Standing Order 76.1(5), the Chair would not normally select motions that could have been presented in committee.
In the present case, however, there appears to be extenuating circumstances. The hon. members who have submitted motions at report stage were in attendance at the meeting scheduled for the clause-by-clause consideration of the bill by the Standing Committee on Finance. In addition, they had both submitted motions in advance of this meeting and these had been circulated to all members of the committee. At first glance, it would therefore appear that the amendments submitted by these members could have been proposed during the committee consideration of the bill.
In his submission, the member for South Surrey—White Rock—Cloverdale explained the efforts that were made to ensure that the committee would actually begin the clause-by-clause study of the bill as scheduled in order to complete consideration of the bill within the prescribed deadlines attached to it. He reported that these efforts were unsuccessful and, as a result, there was no opportunity to propose amendments in committee.
The Chair has been met with this kind of circumstance before. On September 20, 2010, in the Debates on page 4,069, Speaker Milliken ruled on a case where the member for Scarborough—Guildwood faced a similar situation in relation to his Bill C-300, an act respecting corporate accountability for the activities of mining, oil or gas in developing countries. In that case, the Speaker selected report stage motions for debate because it had been established that the member had made clear attempts to have the clause-by-clause study take place so that amendments could be considered by the committee.
Similarly, in the case before us today, the Chair has carefully reviewed the sequence of events as well as the written submissions from the members for South Surrey—White Rock—Cloverdale and Cape Breton—Canso and is satisfied that these motions could not be presented during the committee consideration of the bill.
Accordingly, Motions Nos. 1 to 5 have been selected for debate at report stage. They will be grouped for debate and voted upon according to the voting patterns available at the table.
I shall now propose Motions Nos. 1 to 5 to the House.
I thank the hon. member for South Surrey—White Rock—Cloverdale for his further points on this question.
Mr. Speaker, I do appreciate the member's attempt at brevity but I must say that it reminded of that old classic movie, Airplane from 1980, penned by Jim Abrahams and David Zucker.
What I kept thinking of when I was listening to his brief presentation was those continuous scenes where Ted Striker, the ex-army pilot who was afraid to fly would continue to tell stories to the people in the seat next to him and they would end up attempting suicide. However, I do want to thank my friend for being at least a little more brief than the official opposition House leader. I will attempt to be even briefer than my friend from the Liberal Party.
I rise to respond to last Thursday's intervention by the hon. member for Rosemont—La Petite-Patrie and yesterday's intervention by the hon. member for Saint-Lambert concerning a royal recommendation for Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations).
Bill C-377 was introduced on December 5, 2011, by the member for South Surrey—White Rock—Cloverdale and has since been read the second time and referred to the Standing Committee on Finance. The bill would amend the Income Tax Act to require labour organizations to provide financial information for public disclosure.
I would note that this bill was not identified by the Speaker as an item of concern with respect to the financial prerogative of the Crown, nor has it been the subject of an intervention by a minister of the Crown or a parliamentary secretary on behalf of one.
The hon. member for Rosemont—La Petite-Patrie argued that the provisions of the bill requiring labour organizations to submit financial information and the requirement for the Canada Revenue Agency to publish the information on a website with search tools somehow represent new and distinct charges on the treasury which are not currently authorized.
The hon. member for Saint-Lambert then added the information provided to the finance committee by the Canada Revenue Agency which provided estimates on the expected incremental costs associated with implementation.
There are procedural authorities and precedents for cases where a new royal recommendation was not required for incremental modifications to expand the operation of provisions already authorized by a royal recommendation. The hon. member for Rosemont—La Petite-Patrie cited page 833 of the second edition of the House of Commons Procedure and Practice. The most relevant portion pertaining to amending bills, such as Bill C-377, is that a royal recommendation is required for:
...bills which authorize new charges for purposes not anticipated in the estimates. The charge imposed by the legislation must be “new and distinct”; in other words, not covered elsewhere by some more general authorization.
Section 220 of the Income Tax Act provides the minister with the authority to administer and enforce the provisions of the act. Indeed, this authority was cited in the same materials provided to the finance committee which the member for Saint-Lambert cited yesterday.
In particular, subsection 220(2) provides broadly and generally that:
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.
Clearly, the authority to retain any necessary staff has already been addressed by Parliament.
It may also be useful to add here that subsection 5(1) of the Canada Revenue Agency Act provides that:
The Agency is responsible for
(a) supporting the administration and enforcement of the program legislation....
Program legislation is, in turn, defined in section 2 of that act as:
....any other Act of Parliament....
(a) that the Governor in Council or Parliament authorizes the Minister, the Agency, the Commissioner or an employee of the Agency to administer or enforce, including the....the Income Tax Act....
Indeed, this broad mandate already enjoyed by the Canada Revenue Agency is addressed in response to the Liberal question 1(a) in the finance committee materials the hon. member for Saint-Lambert cited, which asked how Bill C-377 aligns with the Canada Revenue Agency's mandate.
The agency replied:
A measure introduced by Parliament that is incorporated into the Income Tax Act and falls under the responsibility of the Minister of National Revenue will be administered by the CRA. Parliament determines if a measure will be incorporated into the Income Tax Act.
In other words, the Canada Revenue Agency has already been given a broad, sweeping mandate to administer and enforce federal taxation laws. Meanwhile, other existing provisions of the Income Tax Act allow the minister to require certain persons or entities to file information for the purposes of taxation.
Specifically, for example, subsection 149(14) dealing with qualified donors provides a requirement for public foundations to
—file with the Minister both an information return and a public information return for the year in prescribed form and containing prescribed information.
In other words, the act already requires information to be submitted to the minister in a prescribed form and containing prescribed information. Therefore, this does not constitute a new function, mandate or duty for the minister or the agency.
The hon. member for Rosemont—La Petite-Patrie also argued that making the information public represented a new and distinct activity that was not currently authorized.
First, the agency has a comprehensive website which publishes lots of information and materials, so that would not be a new responsibility for the agency.
As for making information public, I would note that the Income Tax Act provides provisions now to that effect. Subsection 149(15) relates to information that may be communicated in respect of charitable organizations. It states:
—the information contained in a public information return...shall be communicated or otherwise made available to the public by the Minister in such manner as the Minister deems appropriate...the Minister may make available to the public in any manner that the Minister considers appropriate...
In other words, the act provides the minister with the authority to publish in any manner the minister considers appropriate the content of a public information return. That other information would fall within an existing mandate and duty does not, I submit, require a royal recommendation.
Turning to some precedents, on February 10, 1998, at page 3647 of the Debates, Bill S-3, an act to amend the Pension Benefits Standards Act, 1985 and the Office of the Superintendent of Financial Institutions Act, was found not to require a royal recommendation. In his ruling, Mr. Speaker Parent said, in a case where powers were expanded yet no royal recommendation was needed, that:
It seems fairly evident that the powers of the superintendent would be extended by Bill S-3. It may well be that additional expenditures would be incurred because of those enhanced powers of the superintendent. Should an increase in resources be necessary as a result of these new powers, the necessary allocation of money would have to be sought by means of an appropriation bill because I was unable to find any provision for money in Bill S-3.
The hon. member for Rosemont—La Petite-Patrie made mention of the additional tasks which would fall to the employees of the agency as well as training which might be required for the new filings. Your immediate predecessor's ruling, Mr. Speaker, at page 7261 of the Debates for February 23, 2007 on Bill C-327, an act to amend the Broadcasting Act answers this point, states:
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.
More recent, on October 26, 2010, Mr. Speaker Milliken ruled concerning the need for a royal recommendation for Bill C-300, an act respecting corporate accountability for the activities of mining, oil or gas in developing countries. The bill, among other things, required the Minister of Foreign Affairs to establish a process for the examination of complaints concerning possible contraventions of the guidelines. The Speaker ruled then:
—the Chair is of the view that the examination of such complaints is not a departure from or expansion of the current ministerial mandate under the Department of Foreign Affairs and International Trade Act...Bill C-300 may put forth more stringent requirements, but it does not expand the mandate per se.
It may be that a reorganization of resources or even additional funds would be required, however, it appears these would be operational in nature.
I submit that Bill C-377 is consistent with the precedents cited in that it does not authorize a new expenditure of public funds. Rather it deals with the operation of provisions already authorized by Parliament which were accompanied by a royal recommendation at the time these provisions were enacted.
The hon. member for Rosemont—La Petite-Patrie mentioned that there was nothing set out in the recently tabled supplementary estimates (B) for this fiscal year. The hon. member for Saint-Lambert also claimed that this was confirmed in the agency's answers to finance committee.
Let us be clear. The usual practice we can expect to see unfold would be that the agency would account for its operations under Bill C-377, should it become law, in its estimates after the bill becomes law. That is a common practice with respect to any proposed legislation that has not yet been enacted. The supplementary estimates argument advanced by those hon. members is really a red herring in this entire debate.
Should Bill C-377 become law, the authority to spend for the purposes set out in the bill will be 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. Should additional funds be required, the government would seek them from Parliament as part of the supply cycle through an appropriations bill in the ordinary manner for operating expenses.
I respectively submit that Bill C-377 does not require a royal recommendation and is properly before the House.
Mr. Speaker, I am rising on a different point of order. I want to recognize and commend my colleague from Skeena—Bulkley Valley on a very well referenced and articulated point of order. I hope I can only match that. I assure the House I will surpass him on the aspect of brevity.
I rise on a point of order with respect to Bill C-377, an act to amend the income tax act (requirements for labour organizations). Although my colleagues from the NDP have also risen on this matter, I am not convinced the arguments they put forward have been complete in terms of substance. As such, I want to offer further points on this matter for your consideration, Mr. Speaker.
I submit that Bill C-377's provisions to provide for reporting and public disclosure of certain financial transactions and administrative practices of labour organizations envisages a new function and purpose within the Canada Revenue Agency, or CRA. As such, the terms and conditions of the royal recommendation that authorizes CRA's current spending are being altered so that a new and distinct authorization for spending is being permanently created, which will therefore require a royal recommendation.
Past Speakers have ruled that legislation imposing additional functions on bodies funded by public money, if the functions are substantially different from their existing functions, will require a royal recommendation.
I believe that Bill C-377 will require royal recommendation for two reasons. First, the bill creates a new purpose for CRA in terms of a public reporting function that has no obligatory ties to taxation under the Income Tax Act. The bill would follow up on this additional purpose by creating what the CRA characterizes as “a comprehensive system that includes electronic processing, validations, and automatic posting to the CRA Web site”.
The Income Tax Act is concerned with the taxation of individuals, organizations and businesses. Any reporting requirements imposed on individuals and organizations are directly tied to their tax obligation or the exemption of these obligations. For example, charities can only keep their tax exempt status and donors only receive a tax receipt if the charity meets reporting requirements.
The Canada Revenue Agency is responsible for applying and interpreting the Income Tax Act in this regard. The primary goal of the agency, as Canada's tax administrator, is to ensure that taxpayers comply with their tax obligations and that Canada's tax base is protected. I want to stress that again: tax obligation.
Bill C-377 is strictly a function of publicly reporting information on one specific group of individuals, in this case labour organizations and labour trusts, outside of any direct obligations that those organizations or their members must have under the Income Tax Act. Given that it would create an additional purpose and new program requirements that would amend the Income Tax Act and modify the purpose of the CRA, the result is a new expenditure. The bill should be accompanied by a royal recommendation.
Mr. Speaker, I want to draw your attention to a Speaker's ruling in the other place on February 27, 1991 on pages 2262 through 2264 of the Journals regarding Bill S-18, an act to further the aspirations of the aboriginal peoples of Canada. The Speaker found that provisions imposing additional functions on bodies funded by public money, if the functions are substantially different from their existing functions, require royal recommendation.
The member for South Surrey—White Rock—Cloverdale and the government will no doubt argue that because labour organizations receive a public benefit, as charities do, they should be required to report as charities do.
The simple rebuttal to this argument is the fact that the reporting requirement for charities is based on a tax obligation. A charity must publicly report information in order to keep the tax exempt status it receives and the preferential tax treatment its donors enjoy. This will simply not be the case with labour organizations under Bill C-377.
To further disprove this counter-argument, I think we need to look no further than the first incarnation of Bill C-377, which was Bill C-317. The bill tied the reporting function of labour organizations to the enjoyment of the tax exempt status offered to them in paragraph (k) of subsection 149(1) of the Income Tax Act. Labour organizations not in compliance with the financial disclosure requirements outlined in Bill C-317 would lose their tax exempt status. Bill C-317 also sought to effect the tax treatment of union members if their union did not comply with its requirements by not allowing union dues to be tax deductible.
In your ruling, Mr. Speaker, on Bill C-317, which was delivered on my birthday of November 4, 2011, and found on pages 2984 to 2986 of the Debates, you said that Bill C-317 had not respected the rules of the Standing Orders because to remove a tax exemption was in effect to raise taxes, which would require a ways and means motion, which the bill did not have.
Your ruling, Mr. Speaker, disallowed that and forced the member for South Surrey—White Rock—Cloverdale to remove the parts of the bill that tied the reporting requirements to the enjoyment of tax exempt status by labour organizations and tax deductibility of dues by their members. In doing so, there is no longer any direct tie or connection to taxation or benefits received by labour organizations or their members. Labour organizations or trusts who fail to comply with the requirements of Bill C-377 will not lose their tax exempt status and their members will not lose the tax deductibility of their dues.
Bill C-377 solely becomes a simple public reporting function, which is a new function of the Income Tax Act and a new purpose for the CRA in its capacity to administer the act. As such, it should require a royal recommendation.
The second issue I want to bring to your attention, Mr. Speaker, has to do with how Bill C-377 regulates the internal affairs of unions and their relationships with their members. In essence, this is a de facto labour relations function that is completely new for CRA and duplicates the function of the Canada Industrial Relations Board.
Bill C-377 is modelled on a United States reporting regulation for American unions that falls under the Labor-Management Reporting and Disclosure Act of 1959. This act legislates labour relations. It promotes labour union and labour management transparency through reporting and disclosure requirements for labour unions and their officials. This act is administered by the Office of Labor-Management Standards within the United States Department of Labor, not the Internal Revenue Service.
The reporting requirements in Bill C-377 were copied from the reporting requirements of the most detailed and onerous reporting form from the Office of Labor-Management Standards, Form LM-2. Specifically, the bill copies the revisions to the reporting regulations that were introduced on January 21, 2009, by the U.S. Department of Labor and later rescinded on October 13, 2009.
Mr. Speaker, I will provide you with a copy of the final rule for both actions, which was posted on the U.S. Federal Register, so you can see how this legislation is a copy of the U.S. labour relations regulations.
The Disclosure Act of 1959 requires the public disclosure of union financial reports. In fact, the public disclosure is through an online, searchable database known as the electronic labor organization reporting system, the same type of electronic system proposed by the bill.
Bill C-377 is, in effect, a replication of U.S. labor relations law and regulations, specifically the department of labor regulations for the labor-management reporting and disclosure act of 1959.
The Canada Labour Code currently includes a section that deals with union financial transparency and accountability. It requires unions to disclose financial statements to members on request, or to the Industrial Relations Board to enable members to view that information. Part of their function is to regulate labour organizations.
The finance committee received a number of submissions on this bill. One submission was from Le Syndicat de professionnelles et professionnels du gouvernement du Québec. It included a legal opinion that argued that the bill was concerning labour relations. Although the argument was for an entirely different matter, I believe the substance concerning labour relations was sound, and it would be of assistance to you, Mr. Speaker, in your decision.
The predominant purpose of this bill, as promoted by the member for South Surrey—White Rock—Cloverdale, is to increase the transparency and accountability of labour organizations. During second reading, the member stated:
With the passage of the bill, the public would be empowered to gauge the effectiveness, financial integrity and health of any labour union.
The bill's summary states:
This enactment amends the Income Tax Act to require that labour organizations provide financial information to the Minister for public disclosure.
The degree of detailed information this bill requires is far broader in scope than any other requirement on any other entity that is publicly disclosed by the government. This is clearly an attempt to monitor and regulate the activities of labour organizations. This is especially clear when the bill requires the detailed time and expenditures that labour organizations spend on non-labour relations activities, such as political activities and lobbying.
Mr. Speaker, I want to draw your attention to a previous Speaker's ruling on October 20, 2006, and found on page 4039 of the Debates regarding Bill C-286, An Act to amend the Witness Protection Program Act (protection of spouses whose life is in danger) The bill proposed to expand the witness protection program to include persons whose lives were in danger because of acts committed against them by their spouses. The Speaker explained that the bill proposed:
...a protection that does not currently exist under the witness protection program. In doing so, the bill proposes to carry out an entirely new function.
As a new function, such an activity is not covered by the terms of any existing appropriation. ... New functions or activities must be accompanied by a new royal recommendation.
The government and the member for South Surrey—White Rock—Cloverdale may argue that the function proposed by Bill C-377 is the same function the CRA performs with respect to Charities Directorate or other tax exempt organizations. Although it is true that the processes and infrastructure required may be similar, the function and purpose for those processes are very much different.
Mr. Speaker, I draw your attention to the Speaker's ruling on November 8, 2006, and found on pages 4905 and 4906 of the Debates regarding Bill C-279, An Act to amend the DNA Identification Act (establishment of indexes). I believe the particulars on this issue have a lot of similarities in the case at hand and would deny this counter-argument.
Bill C-279 would have created a new purpose for the DNA Identification Act and established new indices in the DNA data bank, similar in context to the new database that would be created under this bill for unions. The Speaker explained there was an addition of a new purpose to the DNA Identification Act which was to identify missing persons via their DNA profiles. Again, this is similar to Bill C-377 that wishes to impose reporting requirements on another tax exempt organization under section 114 of the Income Tax Act.
In that ruling, the Speaker stated, “Amending legislation that proposes a distinctly new purpose must be accompanied by a further royal recommendation”. The Speaker's ruling on Bill C-279 clearly shows that just because a process, in that case the collecting of the DNA, and the infrastructure needed, meaning a database, are the same as the current function of an act, it is still considered a new function and purpose that gives rise to the requirement of a royal recommendation.
Mr. Speaker, whether you look at the detailed requirements of the bill, its summary, the testimony of government witnesses who spoke about how this would regulate unions or just read the statements made by the member for South Surrey—White Rock—Cloverdale, clearly regulating labour relations is the dominant nature of this bill. No such labour relations function exists at the CRA currently. Therefore, this bill would create a new purpose, a new function and/or an activity at CRA that would require a royal recommendation.
Unlike its failed predecessor Bill C-317, the reporting requirements and the public disclosure imposed by Bill C-377 in no way is linked to the imposition or levitation of taxes, levies or tariffs. Instead, this bill seeks to use the powers of the Income Tax Act to solely provide public information that would constitute a new function or activity. In addition, the bill would clearly create a new labour relations function at the CRA that not only does not exist presently but duplicates this function that is already happening at the Canada Industrial Relations Board.
Because this bill would create a new function and purpose at the CRA, I respectfully submit that Bill C-377 should require a royal recommendation.
Order, please. I will ask hon. members to hold off on their applause until the hon. member for South Surrey—White Rock—Cloverdale is finished asking his question. The hon. member has the floor.
Mr. Speaker, I listened to my colleague's intervention with great interest. While I can say that the government profoundly rejects his contention that Bill C-377 would obligate the government to more spending initiatives, I do wish to say that we will take his intervention under advisement and I wish to let you know, Mr. Speaker, that we would make a more detailed response at our earliest opportunity, after we have had a chance to consider his remarks today.
I would also suggest that the member for South Surrey—White Rock—Cloverdale would also like to make a detailed response since he is the sponsor of Bill C-377. I will be advising him that he should be able to do so in short order as well.
We look forward to discussing this in more detail at a future date.
Mr. Speaker, last night, our American cousins re-elected President Obama for another four-year term. Canada looks forward to continuing the close co-operation we have had with the Obama administration. In particular, we embrace the opportunity to continue the positive work that has already begun under the beyond the border initiative.
My riding of South Surrey—White Rock—Cloverdale hosts the busiest border crossings in western Canada and we understand the importance of working together. Making our border more secure, while facilitating the efficient flow of people and goods is critical to the economies of both Canada and the U.S.
Under beyond the border initiative, we have just launched the new shiprider program, allowing for joint maritime border enforcement to crack down on smugglers.
We look forward to closer regulatory co-operation as well, as Canada and the U.S. both work to create jobs and growth in our economies.
Canadians wish the President and the new Congress every success in their next term.
The electoral district of South Surrey--White Rock--Cloverdale (British Columbia) has a population of 111,756 with 84,964 registered voters and 231 polling divisions.
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