Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 2 - Evidence for November 17, 2004
OTTAWA, Wednesday, November 17, 2004
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill S-10, to harmonize federal law with the civil law of the Province of Quebec and to amend certain acts in order to ensure that each language version takes into account the common law and the civil law, met this day at 4:25 p.m. to give consideration to the bill.
Senator Lise Bacon (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, in consideration of Bill S-10, today we have with us from the University of Calgary, Catherine A. Brown, a professor from the Faculty of Law. We welcome you to our meeting, Ms. Brown. We look forward to hearing from you today and discussing this legislation with you. My colleagues will certainly ask you many questions.
Catherine A. Brown, Professor, Faculty of Law, University of Calgary: Madame Chairman, when I got the call from your committee, I was not sure how I might be of use to the committee, and was less sure when Madame Thomson assured me that I was not your first choice. However, I will certainly do what I can to speak to the points that I think might be useful.
I became involved in the bijuralism project when I received a call from Sandra Hassan of the Department of Justice. They were at that time looking at the Income Tax Act. I had done some work with both the Department of Finance and with the CCRA relating to issues in the Income Tax Act and, in particular, issues relating to trusts. I was recommended to the bijural group as somebody who might look at a very troubling concept in the Income Tax Act at that time. That was, of course, concept was beneficial ownership and the difficulty that the bijural group was facing at that time was how to take that concept, which is very clearly an English common law concept, and translate that into something that would work as well in the civil law tradition.
That was a very interesting project for me. At first, I was quite sceptical. I thought, good heavens, why are we spending a lot of time mucking around with this legislation. It will just be difficult and troubling, with no apparent benefits — at least from my perspective, for the common law lawyers. I found I was very wrong. One of the wonderful things about this exercise was that it became very clear, once we started working through the legislation, how incredibly difficult it was in many cases to apply the concept of beneficial ownership, even in the common law tradition. It also became clear that it really would behoove us to take a closer look at how we use some language and some terminology in our legislation, since most of the time we just toss it around without really thinking very much about what we mean when we use it. To give you a very simple example which I will toss out, and it is one I used when I chatted with the bijural group: What does love mean? I am sure every single one of us would come up with a different definition of that phrase. You can imagine trying to come up with a definition that would work in common law, let alone translate it into French and then to translate it into common law terminology in French, and so on.
The other very important thing I learned, as I went through this exercise, and it never occurred to me, is that there are a great many words that we use in everyday language that have a meaning, at least in the common law tradition, that often would have a different meaning in the civil law tradition. I will throw out a very simple word as an example, such as: What is a gift? Another very simple word might be: What is an employee? Those words that are very much a part of the thinking of a common law lawyer have a different meaning, or can often have a different meaning, if you are looking at those words in the context of the civil law tradition. I have to say that all those things gave me pause.
The other thing that gave me pause as I worked through the legislation is that there are also words in the Income Tax Act that come from the civil law tradition, and that I had no concept of what they meant. Of course, a problem came knocking at my door right out there in Alberta. The word I was having trouble with was ``usufruct.'' I have to tell you that you cannot say that word real fast out in Alberta or you get beaten up! Basically, what a usufruct is, as far as I can gather, is a life interest in property.
What we were dealing with was the estate of some oil man down in Louisiana, who also owned some oil and gas properties in Alberta, and had left a usufruct for his wife. We had to deal with whatever that word meant within the Income Tax Act and within the common law tradition, and then of course we had to go rooting through Quebec law to understand what it meant within that context. That then led us to the problem that, if we are using this kind of terminology, it also interfaces with all of the treaties that we enter into, including, in this case, the Canada-U.S. Tax Treaty. We were trying to find some close equivalent, such as what is a usufruct versus what is a spouse trust?
To make a long story short, it became very clear to me that there were some serious issues to be looked at in terms of trying to identify what some of these very important words meant. I had a fine time on a flight back when someone asked me what I was doing, because I was reading through materials on beneficial ownership. I told her that, in civil law, they do not have this concept, and in common law, we have a view of what it means, although it is a little fuzzy. The woman's reply to all of that was, ``Well, I surely would not want to be called common.''
The truth is that we do have a common law tradition in Canada. That language is woven all through federal legislation. It does have a meaning. At the end of this process, it became apparent to me that if I were operating in a legal tradition where those words had no meaning, were I to pick up something and look at it, I would really have some difficulties with that. I would really want to see language that is used in legislation that applied to me that had some concrete meaning in the legal tradition that applies.
I spent a huge amount of time studying the problem of beneficial ownership. Just to let you know where I ended, imagine all of us being discretionary beneficiaries of a trust of which George Bush was the trustee. Are any of us going to be beneficial owners of much of anything? This is not to say anything about Mr. Bush, but because the trust is totally discretionary, any of us could walk away with all of it. That is the problem with the use of that type of language. We have lost the sense of what it means.
The Chairman: As you said, you are a specialist on taxation. I wish to ask you a question in regard to the interpretation of the Income Tax Act. In some circumstances, Canadian courts have tended to refer to provincial private law to interpret the act, while in other cases courts have disssociated the interpretation of the act from provincial private law.
According to proposed subsections 8(1) and 8(2) of the first harmonization bill, we should refer to provincial private law unless otherwise provided by law in the interpretation process. Some academics are of the opinion that sometimes, specifically when the Income Tax Act is involved, this approach can produce unacceptable differences between provinces. They are of the opinion that, in some limited cases, legislative amendments are advisable to restore uniformity. What is your view of this question? Do you agree with that opinion?
Ms. Brown: It is true that there is language that is used in the Income Tax Act — and again a good example is the word ``gift'' — that has or can have a different meaning in civil law as opposed to common law. My view is that if we are using terms in legislation, they either ought to be defined, and they can easily be defined within the legislation, or if they are not defined, that the private law of the province should apply.
It is true, at least in my limited experience that that can possibly lead to different results in the Province of Quebec than it can in other provinces. As a result of that, the fallback position has been, because it can lead to a different result, we will apply the common law, because after all, when we drafted this legislation, that is what we had in mind. It means that you are applying private law concepts from the common law provinces to a result that might happen in Quebec.
Do I think that that is the correct result? It has a certain practical appeal. What needs to happen, though, is that those terms need to be defined in the Income Tax Act, and I do not think that is a difficult task. I think we should just say what we mean.
Senator Joyal: Ms. Brown, when I look at when your career as a law professor started, I am impressed by the list of publications of which you have been the author or co-author. I am referring in particular to the chapters on ``Taxation of the Family'' appearing in Canadian Taxation, that you co-authored with Faye Woodman; and then the chapter ``Tax Planned Perks for Executive Women: A New Look at Compensation and Day Care,'' that appeared in Women, The Law and The Economy in 1985. It seems that you have concentrated part of your professional expertise on analyzing the ``status'' of women in relation to taxation or in relation to fiscal issues and the discrepancy that might happen between what I call the common law tradition provinces and the civil law.
My question is very large and would probably deserve a thesis by you or one of your co-authors. Are there substantial differences in the implication of the status of women in relation to taxation, in relation to their rights, in relation to the civil law versus the common law? I realize that some of those publications pre-date the new civil code whereby you will remember that, before 1994, women in the civil code were not treated as an equal. Especially if she was married, she was under the tutorship of her husband and was an ``incapable,'' as we used to say, in terms of her own management of her affairs. Were you able to review that aspect and come forward with some reflection?
Ms. Brown: The work that you are referring to is work that I did in the early 1980s. It was not work that I undertook with a view to the differences in the two traditions. I will say there were some very different results in Quebec and in the rest of Canada on marriage breakdown. There are a number of women in Canada who have devoted a considerable amount of their time to addressing those kinds of issues and, in particular, women's issues. I have been criticized for not spending the time on those kinds of issues that people thought I should have.
The work to which you refer, much of that early work is much more descriptive, if I can put it that way, than they are policy pieces in that sense, except for the one piece that I wrote about the family as a unit of taxation. That was an interesting piece because there were some significant issues arising in the U.S. about whether that was better or worse for families. However, I have not analyzed that issue, looking at the civil and common law tradition at all.
Senator Joyal: You are not in a position to suggest to us if, in the cluster of research that the department has suggested, that they are initiating for the third phase — because this is the second harmonization bill, as you know — that this issue is one that they should be addressing as a priority? Do you feel that there are enough differences or enough grey zones that this should be addressed as a priority?
Ms. Brown: I am not sure what the proposal is in the third round of changes that you have seen, so I feel very uncomfortable commenting on that because I have not addressed my mind at all to differences that might arise in Quebec, except for issues relating to what happens on marriage breakdown, and there are some significant differences.
Senator Joyal: Could you quickly explain on the subject of marriage breakdown where you see the major differences between the common law tradition and the civil law tradition, as much as you can recollect?
Ms. Brown: I do not feel comfortable answering that question, if that is all right. I know just enough to be dangerous. I am sorry, I am not trying to duck your question. I just do not feel informed enough to comment.
Senator Joyal: Do you know if any of your colleagues in the Canadian law school community have addressed this issue, one which remains important for us?
Ms. Brown: Are you referring to the issue of how tax legislation may impact women differently in the province of Quebec?
Senator Joyal: Yes.
Ms. Brown: I do not know of anyone who is looking at that issue in particular. I know that at one point Professor Lahey of Queen's University was doing some work, which is rather old now, on the tax treatment of women in Canada in general. I believe there was also someone at UBC who was doing such work. I think she was involved with the Department of Finance for a while in doing some drafting. I will remember her name in a few minutes. Those are the two women I know who were working in that area.
As for work done in recent years, I do not know of anyone who is doing any work around the issue of women and taxation.
Senator Joyal: Were you involved with the Justice Department on other issues in relation to the bijural initiative, besides the one that you have described?
Ms. Brown: There were two projects with the Department of Justice. There was the beneficial ownership issue that came up in the domestic context. I was also part of a panel of a half dozen people who met for round-table discussions on the concept of beneficial ownership in tax treaties that was causing some difficulties. That is causing issues globally. A number of professors and tax experts were gathered together in Toronto in February 2003 for a one-day forum.
Senator Joyal: According to your own experience, are there other aspects of the legal status of women that should be addressed as a priority? I am referring to issues that seem to be recurring, or issues that are raised to clarify the concept and to ensure that the law is seen as equal?
Ms. Brown: Are you talking about ones that are part of the bijural project?
Senator Joyal: Yes.
Ms. Brown: I have no information that allows me to speak to that issue. In the West, women are pretty concerned about whether they have the right cowboy boots. They are not nearly concerned as they should be about what is going on in Eastern Canada, I am afraid, at least not on this question.
I am lying about the cowboy boots.
Senator Milne: Ms. Brown, I am curious to know why you are here. You have not told us anything about the bill that is before us, although we have heard some really interesting stories from you.
Why not tell us how you translate or define words such as ``beneficial ownership'' and problem words such as ``gift'' and ``employee?'' We need something specific for this particular bill that we are looking at.
Ms. Brown: I understand. I was invited to appear before the committee. I have been through this bill. In my humble opinion, I do not think there is anything controversial in it because none of the words being translated appear to be anything other than technical terms. The particular project I was working on is in the next phase. We are still working on it. It is much more controversial than this measure.
I introduced myself by telling you how I came to be involved in the project. It is a very important project, both for the civil and common law tradition. I wish we could say we have found answers. I have certainly been involved in drafting exercises that look to finding answers, but it is difficult to find the right terminology. They are moving forward with it.
Senator Milne: One step forward and three steps back, you have just told me.
Ms. Brown: I do not think that is true. The language changes being proposed in this bill are simple and straightforward. I think they have a meaning both in common law and in civil law. I have seen some of the terminology introduced into the Income Tax Act, and it is not troubling to a common law lawyer or a civil law lawyer.
To give you an example, there are terms such as ``trustee'' and ``executor.'' We know what those are. All of a sudden, however, there is something called the ``liquidator of the succession.'' I do not know what a liquidator of the succession is. I am sure it means something like a trustee or an executor in the common law tradition. When words like this go into the legislation, they become very ``untroubling'' for a lawyer working with the language. Some are much easier to translate than others.
To me, this is a very simple, technical bill. It does not change the intention or the meaning of Parliament. As far as I can see, it clarifies the language.
Senator Milne: That is what we needed to hear.
Senator Mercer: Ms. Brown, thank you for coming to the committee. I apologize for being late.
One of my areas of expertise is in philanthropy and giving. I am concerned that when we look at the civil law and the common law, they are treated the same. Do you see any differences here? Do you see any differences that we need to be concerned about because of the nuances that are happening today in the philanthropic community? One of my purposes in life here as a senator is to continue to push the government to remove the remaining 50 per cent capital gains tax on gifts of annuities and real property. Do you see any difficulties here?
Ms. Brown: There has been significant abuse of the income tax provisions around charitable gift-giving in the past. You will be quite pleased to know that earlier this year they went through and cleaned up a lot of the legislation and the terminology. They have defined what is a gift and have taken significant steps to prevent further abuse of any of the gift-giving provisions. I understand many of the changes in the new terminology will result in the same treatment of gifts and the same understanding of what a gift is, no matter which legal tradition is applied.
Senator Mercer: My other concern does not pertain to this bill. Perhaps I might direct your attention to a bill and its regulations which were just introduced in the other place with respect to non-profit organizations. I do not know when that bill will arrive in the Senate. I hope that when it arrives you, or someone else in the legal community, will come and talk to us about it.
I direct your attention to the Standing Senate Committee on Banking, Trade and Commerce which is doing a study on charities. I am very concerned that either we in the Senate or our colleagues in the House of Commons will study those of us who are in the charity business. Even though many of us around the table have not been professionals in the field, most have volunteered to raise money for charitable organizations. We might be putting ourselves in a position which could box us in. I commend that to you for future study.
Ms. Brown: Of course there are significant liability issues for volunteers. Obviously, that would be of concern.
Senator Cools: My question is not about anything astronomical. It has more to do with drafting. In looking at the bill, virtually every clause is a new clause being added instead of a previous section in the measure.
For example, looking at page 1 of the bill, clause 2, it states under Part 1:
Subsection 13(2) of the Animal Pedigree Act is replaced by the following:
Is this a standard way of drafting or do we usually say something is repealed and the following substituted therefor? The same wording is repeated in clauses 3 and 4. I assume it is used throughout the bill.
For example, under ``Bankruptcy and Insolvency Act'' clause 7(3) says:
The definition ``sheriff'' in section 2 of the English version of the Act is repealed.
The observation may not be significant, or it may be, but I am curious, Madam Chairman.
The Chairman: I am not in a position to answer that question.
Senator Cools: Does ``replace'' mean ``repeal?'' I was always under the impression that you repeal and then put forth the new proposal.
The Chairman: Senator Cools, the officials from Justice will be here tomorrow. Maybe that is a question we can ask them.
Senator Cools: I thank the witness for coming, but many of us who have no experience in the civil law are at a marked disadvantage because we are being asked to trust that this is the best that can be done. Senator Joyal has great familiarity with the civil law of Quebec, but I always find myself to be in a terribly awkward position when I have to rely on sheer trust on these kinds of questions.
Do you have any comment on that? The only people who know the civil law are the civil lawyers from Quebec. This is voluminous, and I wish that these kinds of initiatives could be preceded by a study in which many of us could take part.
I have been doing a lot of work recently on the new public safety and emergency preparedness act. My understanding is that whenever a major change in the machinery of government or a major shift in government or in the law takes place, it should always be preceded by some very profound and tangible studies that we can point to, rather than for the department to simply say that they have been looking at it for years. This is not a subject-matter that I can get my mind around because I am not that familiar with the civil law, the terminology, the principles or the methodology.
Is there any advice you can give us? You are not involved in this project but you say you are involved in the next one. I hate to admit this, but many of us around this table are voting quite blindly, and I am always very uncomfortable with that.
Ms. Brown: I understand that. Do you have a copy of the legislative summary?
Senator Cools: I must have it, but that still does not help me very much.
Ms. Brown: There are pages in the back which talk about what words have been added. By way of example, the word ``forthwith'' is replaced by ``without due delay.'' The words ``pecuniary or priority interest'' are replaced by ``pecuniary or other interest.''
Senator Cools: It is still the same problem. Someone is telling me.
The Chairman: Perhaps our researcher can help you, Senator Cools.
Senator Cools: I am not one to have the staff speaking at meetings.
The Chairman: I am one for the staff speaking if they can help you.
Mr. Wade Raaflaub, Researcher, Library of Parliament: In response to your initial question, it is my understanding that it is a very usual drafting technique to just use the word ``replace'' and that does, in effect, notionally repeal what was there originally and replace it with the new version of what the subclause or paragraph will be.
Senator Cools: How old is that tradition?
Mr. Raaflaub: I am not sure if it is very recent or not.
Senator Cools: Quite frequently I am told that traditions are two years old.
I am just very curious. Perhaps the people to properly answer these questions are the departmental officials.
The Chairman: They will be here tomorrow.
Senator Cools: Or perhaps the minister. I may be totally wrong, but I was always under the impression that you repeal first and make your positive proposal second.
We have gone through a bill like this before and I had the same problem then. I am a little reluctant, quite often, because I feel so inexperienced. I do not feel inexperienced in the common law. I understand the notions of the common law since that is what I was raised in. However, I feel extremely cautious, and quite often reluctant, because one thinks it is a good thing to provide harmony. No one can quarrel with that. However, I have been around here for a long time and I see a lot of material coming before us in bills with which I disagree. I do not accept the notion of ``trust us.'' Perhaps I may have when I was younger.
Ms. Brown: The question is whether the words really mean the same thing?
Senator Cools: Yes. The department is saying that and the summary is reflecting that, so it is like talking to one's self. Maybe there is no solution, but I feel that I am in the dark.
Ms. Brown: I can tell you a little about the process that I was involved in, if that is useful to you. They had property law lawyers look at some of the concepts that I was looking at. They had common law property lawyers look at the concepts. I attempted to describe what it was we thought we meant in the legislation, using common law terminology, and we tried to match that with the property law concepts in Quebec. In our exercise, we tried very hard. We have been involved in the process now for a couple of years, and I think it is fair to say that we still have not come up with language that works. I think it is fair enough that we have not, even though I think we have given it a very good try. More work needs to be done.
Some of the language seems to mirror and match. ``Hypothèque'' and ``mortgage'' seem to be the same thing. The word ``agent'' is here and I see they have used the word ``mandataire.'' I was asking what this concept means, and really it is just a type of agency.
Some of those concepts are very transparent, while others are very difficult. I hope we will find a solution at some point, but because so much of the English common law is seeped in tradition that we call ``equity'' from the old chancery courts and are mixed up with canon law and church law, it becomes very difficult to match some of those concepts with the civil law tradition.
Senator Cools: I am pleased that you appreciate that because it is not even commonly known, particularly when you go to certain common law concepts, that you have to go to the canon law. After the chancery courts were done away with in Canada, which I think was in the 1870s, we took a lot for granted. It is now the situation that many of the lawyers and judges are no longer trained in equity. I am pleased that you mentioned that.
I put this on the record to explain that, for me with my British background, much of this is very alien. Perhaps no one else feels a sense of anxiety that they do not really know what they are working on, but I have a very clear sense of anxiety that I am agreeing to things out of goodwill, but certainly not out of knowledge or wisdom, and there is a difference.
Ms. Brown: I am certainly not sure what a usufruct is.
Senator Mercer: This may tie in with what Senator Cools is saying. We are involved in a very academic process. It is not something that we are used to doing because of the nature of blending the two laws, common and civil. I think you are feeling that there is a little reluctance on the part of some of us, especially those of us not trained in the law, which I pride myself in. It is an academic process, and we are having difficulty getting our heads around it.
There is also the fact that, like others, when we see words in one language that we are not used to working in that look different in the other, it confuses us. I do not know that I have a question. I am commenting on the frustration we are feeling. Your comments have been helpful, and we appreciate them. You have said some things that we want to say, but with a legal twist to it, which is helpful.
Senator Milne: I have just a very short comment. I agree with Senator Cools. On the committee, we are missing the long-time presence of Senator Beaudoin, who was the deputy chair of this committee for so many years, and he was the one who picked out these differences and helped everyone understand them.
The Chairman: We have people who are knowledgeable and can be of help.
Senator Cools: Can you tell us more about the next phase that you have been involved in, not so much from the point of view of disclosing anything you should not, but can you tell us conceptually the problems you have been attempting to fix?
Ms. Brown: My specific problem was to go into tax legislation and look at it being translated, as well as corporate law legislation and other types of legislation. In the federal legislation I was looking at, I started with tax, because that is where the most obvious problem was. I think it is the fault of people such as you, to tell you the truth, because politicians needed to set up blind trusts and move their property into these blind trusts. They came in with legislation around 2000 to say that there would be no disposition when you move that property into blind trusts as long as there was no change in beneficial ownership. What does beneficial ownership mean, and what do you do if you are a politician in Quebec? How do you move your property into this type of trust without there being a change in beneficial ownership? We began with some of these concepts in the Income Tax Act. It is all through corporate law legislation as well. Who beneficially owns the shares? Who gets to vote the shares? There are all of these kinds of questions.
The first part of the project I was involved in was, ``Kathy, you are a common law lawyer; can you please explain to us what this means in the common law tradition?'' That became a difficult project, and I can say that it became a difficult project because if you have a stockbroker holding your shares for you, we know you are the beneficial owner. I will go back to my earlier example. If President Bush sets up a discretionary trust for all of us, who is the beneficial owner of that property? All of us are, and any one of us is. It becomes a difficult question to answer. Those were the types of questions I was wrestling with in the tax legislation.
Once we identified what the problems were, we said, ``All right, is there a way to take this and describe it in terminology that does not use the old equitable English common law language? Is there language that we can use that means the same thing?'' I spent a lot of time interacting with civil law lawyers. We had each identified where we found the problems to be. We each wrestled with language. I was only working in English, because my French is not good enough to work in French, and I was trying to come up with language that would make sense to a common law lawyer — I am apparently an expert in trust law — but language that would also make sense in the civil law tradition. It became more and more difficult because we always want to fall back on the language we are comfortable with, such as ``beneficial owner'' and ``beneficial enjoyment.'' These are the words we know and that have a meaning for us.
Senator Cools: In this instance, how do you arrive at language? Language is a very cultural thing. How are you certain that the language is communicating what the law should be communicating? In the last many years, and on a different and unrelated subject, there was a lot of talk about plain talk and plain language in law. So much has been written out of the law conceptually in the name of plain language and so much has been lost. I admire the fact that you are wrestling with a huge subject, and I respect that, but when you are trying to bring in new language, what certainty do you have that that language means the same thing, and that it will do in legislation what you want it to do? If someone knows anything about law and making legislation, it is that things turn into their opposite very quickly.
Ms. Brown: The area that I happen to be tackling as part of the project I was working in, because you wanted to know about the process, is very difficult and controversial. Much of the language in this bill before you is not controversial. I look at something that says replace ``forthwith'' with language that says ``without delay.'' It is pretty clear what that means, and they are just cleaning up some archaic language and replacing it with clearer language.
I absolutely agree with you. There will be difficult language changes as they move through. This will be a very slow process. I do not see that in this bill, to be candid. I was hoping it would be the one I specifically worked on, but it is not.
Senator Cools: You are saying this one is much more straightforward?
Ms. Brown: Yes, this is very straightforward. However, you asked about the process, and I can tell you about the process. The process involved the engagement of both civil law lawyers and common law lawyers, the exchange of briefs between us and many academics with probably way too much time on their hands to think about these thing, and lots of lively debate about the use of language, and so on. I came into the process as a sceptic, but I think the process has been very thorough.
Senator Cools: That is encouraging. Thank you.
Senator Pearson: My comments are not totally related to the bill, because I take comfort in the fact that you say this is fairly uncomplicated. It is interesting because we have talked about the harmonization of two traditions, but we are also talking about the harmonization of two languages. I do not know whether you have any experience in this area, but in the province of Alberta, where you are now from, are there any cases that actually take place in French? Does the common law in French get any practice in Alberta?
Ms. Brown: To be candid, I do not think there is a lot, but anyone who wants to be tried in Alberta has the right to be tried in French. There was a bit of an uproar last year because someone insisted on having their trial in French. A number of my colleagues have gone from the law school and been appointed to the bench.
Senator Pearson: In Manitoba, I would presume there would be much more of that, and that would be informing in a way this process that is working towards harmonization. Senator Cools said that language is a cultural fact. Senator Watt was involved in the negotiations in Northern Quebec, and he talked about some of the challenges of the concepts from both traditions, and the concepts from the Inuit tradition, and harmonizing. I find it an exciting process. It is very technical, but it is enriching.
Ms. Brown: I found it very enriching in even understanding what the legislation is intending to do within the common law tradition in English.
Senator Cools: That is a sticky point.
Senator Pearson: To continue briefly, you found you were somewhat surprised at how challenging it was when you went into it, and that you had not thought much about it before. Is it producing, in the acts themselves, some evolution in conceptual thinking?
Ms. Brown: I think so.
Senator Pearson: I wonder whether you could tell us of any kinds of evolutions?
Ms. Brown: I am involved in a large area, if you are paying tax, but a small part of the legislative changes being proposed. As part of that process, I have been in contact with people from both the Department of Finance and from the CCRA, and some of these questions I am exploring as well with them. When the last round of amendments came through with respect to trusts, I did some work and they changed the legislation as a result. There is another round that came out on September 16. I e-mailed a paper on that to the CCRA — I would have met with them before now but WestJet kept me on the tarmac in Toronto — so it is still at the bill stage.
There is an evolution and a crystallization, if I can say that, of concepts around how we are using language in federal legislation that I think this bijural process has really brought to bear. It has got people thinking: What do we actually mean when we use this language in our legislation? What was the purpose, what was the intent? I think we get sloppy with language.
Senator Pearson: Oh, yes. It would be interesting to see a contrast with what is happening in the United States, which does not have a bijural tradition, whether it helps us to have a more progressive law or not. I am just asking that question for myself. You do not need to tackle it.
Senator Joyal: It is civil code.
Ms. Brown: I think it is civil code. Louisiana does have that.
Senator Cools: They still have a civil code in at least Louisiana.
Ms. Brown: Some of the property laws in some of the other states - California, for example, I gather, was originally conquered by Spain, and it still has a property law regime similar to that of Quebec.
Senator Joyal: Following the question put to you by Senator Cools about the uncertainty or insecurity, perhaps, in which some of the honourable senators might feel themselves on the basis that they are venturing into unknown territory in terms of concept, are you personally satisfied, as much as you can judge from your own professional standpoint, that the process followed by the Justice department, in order to come to a conclusion about the definition or the harmonization of the terminology, contains safeguards whereby we can trust the result, as much as the human mind can achieve?
Ms. Brown: I can only speak to the part of the process in which I was involved. We have not reached a conclusion yet, but I thought at least the investigative process was very thorough. Every effort was made to find scholars from across Canada that had expertise in the area to work on the project. I believe they consulted with both the Department of Finance and with the CCRA to find people who were working in the subject area, and I think they put together the best team they could find. Not myself, speaking modestly, of course, because they picked me, but I was impressed with the process.
I cannot speak to this bill, but certainly all of the underlying papers, the research papers, are available on the Web site and one can go and read those research papers if one wants to look into the background underlying the process. I came to Ottawa a number of times and met with this group and we had a number of conference calls. The whole process was not based on an agenda; it was based on trying to find a common meaning for words. I found it to be a cooperative process, and more of a search.
Senator Joyal: Is it not true that if, at the end of the overall process, there is still uneasiness among the various parties involved in it about the conclusion, that they will not move forward but would leave the issue to mature before making a decision, instead of risking coming forward with a definition that might be too dubious about its interpretation?
Ms. Brown: I can only speak to the part of the process in which I was involved. I finally wrestled my way to what I thought was language that might work for a common law lawyer. I am only assuming because we are still stalled and there has been no word of any changes that whatever language I have come up with is not language that civil lawyers are happy with yet. I imagine it will be some time before a resolution is found. It may be that we will not be able to find neutral language to solve that problem. We may have to move to definitions within the statute itself in order to find a solution.
Senator Joyal: You will understand the point raised by Senator Cools. I have as much preoccupation as a lawyer to be sure that I can trust the text I am reading and am called to interpret for the benefit of customers and for the benefit of justice being rendered, that if the Department of Justice comes to the conclusion that on some issues they have not totally resolved the question mark, they would not move forward and solve it quickly just as a the matter of clearing the act generally. They would leave some sections or some concepts aside in terms of additional research rather than put them into legislation and finish with it. I think that there is much on the part of the department, such that I could have listened to them, and we will hear from them tomorrow, that will perhaps help us to comfort ourselves that if there is further study to be made, there is further refinement to be made on a concept, they will put it on hold and not move on it and pass the bill we have now.
Ms. Brown: As far as I can see, the goal is to have the same result if federal legislation is applied, to have a uniform result or to have it in all the provinces. The ones who are most seeking that goal are people from the civil law tradition, so I think in order to ensure that that happens, it needs to be as right as it can be. It is to the disadvantage of anyone to bring forward language in French to represent the civil law tradition, or even to translate it into English to represent the common law tradition in French, if it is not as crisp and precise as it can be. I see that, as closely as one can get, that is the goal of this legislation.
The Chairman: Thank you, Ms. Brown.
Senator Eyton: I have a question. It may be a little naive and I apologize for coming in late.
In your view, is the bill before us, this legislation, necessary or useful? I say that in the context that for some years I practiced as a commercial lawyer. I worked out of Toronto but I spent a great deal of time in Montreal because, certainly in those days, it was the financial centre of the country. I helped people buy and sell businesses, and finance, manage and deal with the whole range of agreements that had to apply to companies and businesses that were very national in scope, sometimes international.
It was a given fact that some of the arrangements needed to be adjusted for their application in Quebec, or the other way around, for application outside Quebec. We did it just as a matter of course. In that context, you look at it and you engineer and draft and you proceed on the basis that you have taken into account the differences and adjusted for the particular circumstances in front of you. It seemed to work very well, at least while I was doing that, and it was for 15 years that I undertook that kind of activity.
With all of this, it is very subtle and difficult but in your view, is this bill, first of all, necessary, or second, useful in terms of the ongoing activity of Canadians?
Ms. Brown: I want to go back just for a moment to your activities out of Toronto. I gather, in those arrangements, you are dealing with private contracts between parties?
Senator Eyton: We dealt with a whole range of different terminology that we had to adjust in order to make things work.
Ms. Brown: You were dealing with two parties who wanted to come together and be involved in a business arrangement?
Senator Eyton: Well, it would involve often dozens and dozens of parties.
Ms. Brown: My point is, I think it is different if private parties are engaged in commercial transactions than if one is dealing with legislation that has terminology that has no application to you, or has no meaning for you. That is the difference, as one looks at the legislation and tries to understand what the legislation means. Not to make that point too tritely, but the problem with the use of language is one that the OECD is wrestling with now. You wrestle with it whenever you try to bring together more than one legal system. What happens is that you try to find common language that will work. I do think the process is important.
When I started to read through some of the tax provisions that used terminology that is part of the civil law tradition, I have to say I got very frustrated. I had no idea what those words meant. I went to the library — I was called to the bar in 1977 and I like to think I am fairly well-versed legally — and this language had no meaning for me. If I was looking at federal legislation, I would want to be reading language that had some meaning for me when I was looking at it, so I do think it is important. Can it be worked around? Of course, it can. It has been worked around for centuries. I do not know if that is the point.
The Chairman: I think we must be very careful in the harmonization process and have a view, not just of the tree but also of the whole forest. That will be very important and we will have other answers tomorrow for our questions of today. Thank you for spending the time here with us. It has been very helpful.
We will adjourn until tomorrow at 10:45 and I would ask members of the Steering Committee if it is at all possible to be here at 10:30 for a meeting before we meet.
The committee adjourned.