Debates of the Senate (Hansard)
2nd Session, 35th Parliament,
Volume 135, Issue 81
Wednesday, March 12, 1997
The Honourable Gildas L. Molgat, Speaker
Wednesday, March 12, 1997
The Senate met at 1:30 p.m., the Speaker in the Chair.
National Farm Safety Week
Hon. Eileen Rossiter
: Honourable senators, today, March 12, marks the
beginning of National Farm Safety Week. It is important to draw attention to
farm health and safety, since farming is considered to be one of the most
dangerous occupations in Canada. The Canada Safety Council has estimated that
there are approximately 100 accidental deaths and more than 5,000 time-loss
injuries sustained each year by Canadian farm workers. The rate of accidental
death on the farm is predicted to be 20 per cent higher than the national
average, making the number of fatalities higher for farming than for any other
industry. The death rate in agriculture involves a proportionately higher
percentage of young and elderly. Children routinely work and play at the work
site, and the home is also located at the work site.
Hazards on the farm arise from a number of sources: chemical use, machinery
operation and repair, noise, dust, the design of farm facilities, and economic
and human stress, among others. These are hazards with which farmers and farm
families live on a daily basis. It is estimated that there are 130 farm-related
fatalities in Canada each year, that 1,200 people are hospitalized as a result
of farm-related injuries, and that 50,000 people sustaining farm-related
injuries are required to seek medical attention or take a day away from their
normal work activities. Many farm fatalities are predicted to result from
machinery use despite such design changes as roll-over protection, a reduced
number of points where blockages may occur, and improvements in guard design.
The issue of farm health and safety is not new to the Senate. I am reminded
of two reports tabled by the Standing Senate Committee on Agriculture and
Forestry. One is "Farm Stress: Its Economic Dimension, Its Human
Consequences" in June of 1993 under the chairmanship of Senator
Barootes, and the other is "Farm Machinery: Lost Lives, Lost Limbs" in
July of 1995 under the chairmanship of Senator Hays. It is fitting that the
Senate recognize the work done by the Canadian Coalition for Agricultural Safety
and Rural Health, the Canadian Federation of Agriculture, the Canada Safety
Council, Agriculture and Agri-Food Canada, and others in promoting greater farm
health and safety.
The message of farm health and safety is one that should be promoted not only
during National Farm Safety Week but in every hour of every day throughout the
year, every year.
Response to Questions Raised
During Debate on Interim Report
Hon. Ron Ghitter
: Honourable senators, my colleague Senator Taylor raised
a question last evening which I did not quite hear, or perhaps my stomach was
grumbling too much. Rather than leaving it unanswered on the record, I felt that
perhaps I should respond to that question.
Honourable senators may remember that Senator Taylor's question concerned the
difference between the original on-board diagnostic systems and the new on-board
diagnostic II systems, which are causing automobile companies apparent problems.
As Senator Taylor may recall, evidence came before our committee from Mr. Hicks,
the Vice-President of Ethyl Canada, who said as follows:
When we talk about OBD systems, as opposed to emission control systems, you
must keep in mind that the on-board diagnostic system is just that. It just
diagnoses a problem. It is a computer program, not hardware. What burned MMT
comes into contact with are the oxygen sensors that stick up into the exhaust
stream after the exhaust comes out of the engine and goes through the
catalyst. Basically, the oxygen sensor is there to help the fuel injector
operate. It tells it whether the mixture is too lean or rich. When the auto
makers were required to develop the OBD system, they added another exhaust gas
sensor after the catalyst, took measurements from both and somehow calibrated
it into a computer program that would state whether or not the catalyst is
It is a little misleading to say "gum up the OBD system." That is
like saying "gumming up" a computer. MMT would never come in contact
with the software or with the computer.
The situation is that there is no change. We are merely talking in terms of
the same software. We are merely talking in terms of MMT having no impact on the
software whatsoever. There is no mechanical technology involved here. There is
no new device which MMT might impact upon differently than it did in the test in
which the U.S. Environmental Protection Agency reached their conclusion that MMT
does not cause or contribute to the failure of any emission control devices. The
scientific evidence demonstrated that the operation of the sensors is not
affected by MMT.
Senator Doody: I am sure it is all perfectly clear now.
Hon. Nicholas W. Taylor: Honourable senators, may I be permitted to
ask a supplementary to that response?
Some Hon. Senators: No.
The Hon. the Speaker: The rules do not permit debate during Senators'
Statements. Nevertheless, the Senate is master of its own rules.
Senator Doody: The senator can make a statement if he wishes to do so!
The Hon. the Speaker: Is leave granted?
Some Hon. Senators: No.
The Hon. the Speaker: I am sorry, leave is not granted.
Senator Taylor: Honourable senators, the number of Liberal members in
the legislature may be low, but they still exceed - by approximately 400 per
cent - the number of Tories in the federal house.
An Hon. Senator: This is good news!
Senator Taylor: In other words, it is almost a mob compared to the
corporal's guard that they have.
Honourable senators, by accepting Ethyl Corporation's statement to the effect
that you could no more gum up an on-board diagnostic system than you could gum
up a computer, my honourable friend has shown how far out of date he is.
Computers can be gummed up, and gummed up royally. Anyone who has let their
grandchildren loose on a computer can tell them that!
An Hon. Senator: Or husbands!
Senator Taylor: Yes, or husbands.
The fact is that, by law, OBD-IIs are required on new cars sold in the lower
B.C. mainland and in California. If my honourable friend does not know the
difference between the OBD-II and OBD-I and is willing to accept the evidence
from Ethyl Corporation, which sells manganese derivatives, that there is no
The Hon. the Speaker: Order! Honourable Senator Taylor, I must
interrupt you. I repeat, Senators' Statements is not a time for debate or
questions. If you have a point that you wish to make on its own, that is valid,
but you cannot debate or respond in answer to a previous statement.
Senator Taylor: Your Honour, I am trying to make the point that some
of the earlier statements were incorrect. I am not debating, I just want to make
the point that the information is highly selective.
Some Hon. Senators: Order!
The Hon. the Speaker: Senator Taylor, I have been asked by honourable
senators to intervene, and I must ask you to defer.
An Hon. Senator: They are afraid of the truth!
The Hon. the Speaker
: Honourable senators, I wish to draw your attention
to some distinguished visitors in the gallery. We are honoured to welcome the
Honourable Mr. Luvsanbaldangiin Nyamsambuu, Minister of Agriculture and
Industrialization of Mongolia.
The minister is accompanied by another delegation, including two members of
the Great Hural, the Parliament of Mongolia, which is a newly democratic state.
I do not know if they will learn much by observing the Senate today, but we wish
them welcome here in the Senate of Canada.
Hon. Senators: Hear, hear!
The Estimates, 1996-97
Report of National Finance
Committee on Supplementary Estimates (B) Presented and Printed as Appendix
Hon. David Tkachuk
: Honourable senators, I have the honour to present the
ninth report of the Standing Senate Committee on National Finance concerning the
examination of Supplementary Estimates (B), laid before Parliament, for the
fiscal year ending March 31, 1997.
I ask that the report be printed as an appendix to the Journals of the
Senate of this day and that it form part of the permanent record of this
The Hon. The Speaker: Is it agreed, honourable senators?
Hon. Senators: Agreed.
(For text of report, see Appendix to today's Journals of the Senate, p.
The Hon. the Speaker: Honourable senators, when shall this report be
taken into consideration?
On motion of Senator Tkachuk, report placed on the Orders of the Day for
consideration at the next sitting of the Senate.
Transport and Communications
Notice of Motion to Authorize
Committee to Meet During Sitting of the Senate
Hon. Lise Bacon
: Honourable senators, I give notice that on Thursday
next, March 13, 1997, I will move:
That the Standing Senate Committee on Transport and Communications have
power to sit at 3:30 p.m. on Tuesday, April 8, 1997 for its study of Bill
C-216, An Act to amend the Broadcasting Act, even though the Senate may then
be sitting and that Rule 95(4) be suspended in relation thereto.
Social Affairs, Science and
Notice of Motion to Authorize
Committee to Monitor Implementation of Divorce Act
Hon. Mabel M. DeWare
: Honourable senators, Bill C-41 was returned to the
House of Commons, with a letter from the Honourable Joyce Fairbairn saying that
she would entertain a motion in the Senate to have a social policy committee
review the implementation of the bill.
Therefore, I give notice that on Thursday next, March 13, 1997, I will move:
That the Standing Senate Committee on Social Affairs, Science and
Technology be authorized to monitor the implementation and application of Bill
C-41, an act to amend the Divorce Act, the Family Orders and Agreements
Enforcement Assistance Act, the Garnishment, Attachment and Pension Diversion
Act and the Canada Shipping Act, and the Associated Federal Child Support
That the Committee present its report no later than June 30, 1998.
Legal and Constitutional Affairs
Committee Authorized to Permit
Electronic Coverage of Proceedings on Tobacco Bill
Hon. Sharon Carstairs
: Honourable senators, with leave of the Senate and
notwithstanding rule 58(1)(i
), I move:
That the Standing Senate Committee on Legal and Constitutional Affairs be
empowered to permit coverage by electronic media of its public proceedings
with the least possible disruption of its hearings.
The Hon. the Speaker: Is leave granted?
Hon. Senators: Agreed.
Hon. Michel Cogger: Honourable senators, would Senator Carstairs
entertain a question?
Senator Carstairs: Yes.
Senator Cogger: Is the honourable senator's motion forever?
Henceforth, will all proceedings of the Legal and Constitutional Affairs
Committee be televised, or is it for one particular reference?
Senator Carstairs: Thank you, Senator Cogger. The Senate has come to
an agreement with CPAC that they will provide up to eight hours of coverage.
Since they have expressed an interest in giving coverage to Bill C-71, I require
the permission of the Senate for the proceedings of the committee to be
Senator Cogger: Honourable senators, would the honourable senator make
that agreement with CPAC available to the Senate so that other chairmen who
might want their proceedings televised can look at it?
Senator Carstairs: The agreement is for eight hours of coverage. It is
up to CPAC to decide which committee it will cover and which committee it will
not cover. Quite frankly, they will probably select committees which they think
are of greatest interest to the public.
The Senate cannot dictate to CPAC what they will and will not cover. The
agreement is that they will cover up to eight hours a week.
Hon. C. William Doody: Honourable senators, it has been the tradition
in this place that the individual committees decide, from time to time and with
the permission of the Senate, whether they will telecast their proceedings.
I now understand - though I may be incorrect, and I hope I am - that we are
turning the authority for this choice over to CPAC, and they will decide when or
for how many hours the proceedings of an individual Senate committee will be
That is a pretty radical departure from the tradition of this place, although
it may have merit and may be the way to go. However, from this angle, it is
certainly a departure from tradition to have committee proceedings televised
under these circumstances. It should be done with the debate and concurrence of
Senator Carstairs: Honourable senators, it is my understanding that
the Internal Economy Committee - and perhaps Senator Kenny could more
appropriately answer these questions - worked out this agreement with CPAC.
I was contacted and asked if our committee would be interested in having our
hearings on Bill C-71 televised. I indicated that I had no difficulty with them
covering our hearings under the agreement that, apparently, had been entered
into by the Internal Economy Committee.
Senator Doody: I have no problem with CPAC televising these
proceedings. I do worry about the blank cheque which gives them the authority to
come and televise anything at their discretion. While granting permission or
authority from the chamber to do what Senator Carstairs is asking in this
particular instance, more serious thought should be addressed to the
implications of giving this authority to CPAC to do what they will, when they
The Senate has been jealous about guarding its prerogatives in terms of
television coverage. We should talk about it and think about it before we pass
it over to whomever, not only CPAC.
Hon. M. Lorne Bonnell: Honourable senators, I do not know just what
the committee has in mind. However I should like to suggest that we amend the
resolution to cover Bill C-71. If something else comes up, CPAC might want to
cover it, and we would just as soon keep it in situ. Perhaps we should
just have the motion refer to Bill C-71.
The Hon. the Speaker: It was moved by Senator Carstairs seconded by
Senator Losier-Cool, with leave of the Senate and notwithstanding rule 58(1)(i):
That the Standing Senate Committee on Legal and Constitutional Affairs be
empowered to permit coverage by electronic media of its public proceedings
with the least possible disruption of its hearings.
Does any other honourable senator wish to speak?
Motion in Amendment
Hon. M. Lorne Bonnell
: Honourable senators, I move:
That the motion be amended by adding after the word "proceedings"
during the period of its deliberation on Bill C-71.
Hon. John Lynch-Staunton (Leader of the Opposition): I second the
motion in amendment.
The Hon. the Speaker: Is it the wish of honourable senators to adopt
the motion in amendment?
Some Hon. Senators: Agreed.
Some Hon. Senators: No.
The Hon. the Speaker: Will those honourable senators in favour of the
motion in amendment please say "yea."
Some Hon. Senators: Yea.
The Hon. the Speaker: Will those honourable senators opposed to the
motion in amendment please say "nay."
Some Hon. Senators: Nay.
The Hon. the Speaker: In my opinion, the "yeas" have it. I
declare the motion in amendment carried.
Honourable senators, we are now on the main motion, as amended, by the
Honourable Senator Carstairs. Is it your pleasure to adopt the motion as
Some Hon. Senators: Yes.
Some Hon. Senators: No.
The Hon. the Speaker: Will those honourable senators in favour of the
motion as amended please say "yea"?
Some Hon. Senators: Yea.
The Hon. the Speaker: Will those honourable senators who are against
the motion as amended please say "nay"?
Some Hon. Senators: Nay.
The Hon. the Speaker: In my opinion the "yeas" have it. I
declare the motion as amended carried.
Motion as amended agreed to, on division.
Human Resources Development
Level of Unemployment-Comparison
with Other Industrialized Countries-Request for Timing of Response
Hon. Terry Stratton
: Honourable senators, I should like to address a
question to the Honourable Leader of the Government in the Senate. I want to
carry on from my question of yesterday regarding the high unemployment rate,
which is at a persistent 9.7 to 10 per cent, and the particularly disturbing
high unemployment rate for youth, which is hovering at 17 per cent. The minister
stated that she would get back to me concerning the reasons why there is a
discrepancy between the high unemployment rate in Canada and the low
unemployment rates in Great Britain and the United States, they being at
virtually half of what it is in Canada. I was wondering if perhaps the Leader of
the Government could give me a more definitive answer as to when that response
is likely to occur.
Hon. Joyce Fairbairn (Leader of the Government): Honourable senators,
I cannot be definitive at this time. I was in caucus all morning, and I do not
have a response for my friend as yet. However, I was making inquiries prior to
entering the house today, and I will obtain that response for the senator as
soon as possible.
Senator Stratton: Honourable senators, I appreciate the efforts of the
honourable senator. It is important that not only we in this chamber but all
Canadians understand why there is this high unemployment rate. My friend will
not mind if I am persistent on this question and continue on a weekly basis to
ask for the answer.
Senator Fairbairn: Certainly not. As a first time senator many years
ago, I made a habit of asking a sugar beet question every day the Senate sat, so
Senator Doody: Yes, I remember it well.
Level of Unemployment-Percentage
of New Jobs Created in Nova Scotia
Hon. J. Michael Forrestall
: Honourable senators, in answer to Senator
Stratton's questions yesterday, the minister spoke in terms of 700,000 new jobs.
How many of those jobs showed up in Cape Breton?
Hon. Joyce Fairbairn (Leader of the Government): Honourable senators,
I cannot answer that question for Senator Forrestall. I am not sure if
Statistics Canada can, either. However, I will make that inquiry.
Senator Forrestall: Perhaps the Leader of the Government would expand
it to include all of Nova Scotia.
Senator Fairbairn: I will make that inquiry as well.
Privy Council Office
Transfer of Personnel from
Ministers' offices-Government Position
Hon. Fernand Roberge
: Honourable senators, the 1998 Estimates which have
been tabled indicate that there has been a decrease in the number of staff
working in ministers' offices who fall under the PCO. This includes the staff of
the Leader of the Government in the Senate. The Estimates indicate a decrease
from 57 staff in 1996-1997 to 49 staff in 1997-1998.
We were advised by Treasury Board officials that these staff reductions
reflect the fact that members of the staff were merely made public servants and
that they remain in the Privy Council Office.
Can the Leader of the Government in the Senate tell me, were these eight
staff members given pink slips, or is it true that they were all transferred to
public servant status in the PCO? Can she explain this?
Hon. Joyce Fairbairn (Leader of the Government): Honourable senators,
in response to Senator Roberge, I will investigate that question and talk with
people in PCO about it. I cannot give him an answer today.
Senator Roberge: In Part III, the expenditure plan of the 1997
Estimates of the Privy Council Office, it is clearly indicated that the number
of staff working in the Prime Minister's Office has increased from 79 in
1994-1995, to 85 in 1997-1998. Would the minister also explain this increase?
Senator Fairbairn: I will take that question as notice as well,
Hon. C. William Doody: Honourable senators, I wonder if the honourable
leader could, at the same time, try to correlate the length of time it takes for
delayed answers to reach the floor of this place with the number of people
employed in the two offices just mentioned.
Special Joint Committee on Custody
and Access-Timetable for Implementation
Hon. Mabel M. DeWare
: Honourable senators, during our long debates in the
Standing Senate Committee on Social Affairs, Science and Technology on Bill
C-41, over and over again our witnesses discussed access and custody. Although
access was not one of the definitions in the bill, we could not seem to get away
from the fact that divorce and child custody are important issues in the country
today. At the end of our deliberations, the Honourable Mr. Allan Rock agreed to
appoint a joint committee of the House of Commons and the Senate to look into
the matter of access and custody.
My question for the Leader of the Government in the Senate today is: Could
she find out for us just when the Honourable Minister of Justice is planning on
setting up that committee? In his letter to the committee, he did say that it
would be during this session of the House.
Hon. Joyce Fairbairn (Leader of the Government): Honourable senators,
I will be pleased to ask my colleague that question.
Delayed Answer to Oral Question
Hon. B. Alasdair Graham (Deputy Leader of the Government)
senators, I have a response to a question raised in the Senate on February 6,
1997, by the Honourable Senator Tkachuk regarding the sale of Airbus aircraft to
Sale of Airbus Aircraft to Air
Canada-Alleged Conspiracy to Defraud Federal Government-
(Response to question raised by Hon. David Tkachuk on February 6, 1997)
Knowledge of Government Ministers-Source of Information Provided By Way of
The information in this and previous answers was provided by the Department
of the Solicitor General. There was no misleading of the Senate.
The Solicitor General learned that Mr. Mulroney was mentioned in the letter
of request on November 9, 1995, when he received a copy of correspondence sent
by Mr. Tassé, Mr. Mulroney's lawyer, to the Minister of Justice.
In the late summer of 1995, the Solicitor General was advised, in very
general terms, that the RCMP was asking Swiss authorities for help in the
Airbus investigation. He was not told who would be mentioned in the letter or
what its contents would be. When it is believed that a matter is in, or may
enter, the public domain, the Solicitor General is advised in order that he
may respond to Parliament on behalf of the RCMP, should any questions be
Second Reading-Debate Adjourned
Hon. P. Derek Lewis
moved second reading of Bill C-71, to regulate the
manufacture, sale, labelling and promotion of tobacco products, to make
consequential amendments to another Act and to repeal certain Acts.
He said: Honourable senators, I am pleased to rise today to begin the second
reading debate on Bill C-71, the Tobacco bill. This bill has one clear and
compelling purpose - the health of Canadians, especially the health of young
Canadians. Let there be no doubt on this point.
Honourable senators, as the Minister of Health has made clear during debate
in the other place, this bill is a central and critical element in the
government's comprehensive tobacco control strategy. It complements education
programs designed to make Canadians more fully aware of the serious health
consequences of tobacco use, as well as the tobacco tax increase and
anti-smuggling initiatives announced last November.
The government's tobacco control strategy recognizes the complex and
pervasive nature of tobacco use in our society. It takes into account the
various factors that influence the smoking decision process: the social
environment, messages and events that affect attitudes, beliefs and behaviours
about tobacco use. Bill C-71 addresses all of these, but most particularly how
these factors affect the decision of young people to start and continue to
smoke. Bill C-71 does this in a number of ways: One, it strengthens existing
restrictions on the access young people have to tobacco products; two, it places
reasonable limits on the marketing and promotion of these products; three, it
increases health information on tobacco packaging; and, four, it establishes the
powers the government will need to regulate the physical nature of tobacco
Honourable senators, these are reasonable constraints on a legal but lethal
product that has been conclusively shown to contribute to cancer, heart and lung
disease and a multitude of other health ailments. There are few Canadians whose
lives have not been touched by the death or illness of a family member or friend
from a smoking-related illness. One only has to witness the slow wasting away of
life caused by smoking to know that this product and its commercial promotion
must be controlled, and that comprehensive measures must be taken to encourage
Canadians not to start, or to quit smoking.
The facts about tobacco and its effect on health are well documented, but
they still bear repeating. Smoking is the number one preventable cause of death
and disease in Canada today. Smoking will kill over 40,000 Canadians this year.
That is three times more people than fall victim to AIDS, automobile accidents,
suicide and drug abuse combined. Seven million Canadians - almost one in three
over the age of 15 - are daily smokers. Most want to quit, and have tried to
quit, but the stranglehold of tobacco addiction makes quitting very difficult.
Of particular concern, honourable senators, is the pattern of youth smoking.
More than 250,000 Canadian youths take up smoking every year. Eighty-five per
cent of these new smokers are under the age of 16. Right now, 29 per cent of
young people between the ages of 15 and 19 smoke. Fourteen per cent of children
between the ages of 10 and 14 smoke. The majority of those young people who
continue to smoke into adulthood will die of tobacco-related illness. The need
for action is clear.
Some people argue that smoking is a matter of personal choice. Honourable
senators, that is simply not so. All Canadians pay for the ravages of smoking.
Smoking costs Canada's health care system over $3.5 billion annually. That is a
lot to ask of the health system at a time when all levels of government are
trying to restore fiscal sanity to their budgets.
The cost of smoking does not end at the hospital or the doctor's office.
Canada's overall economy must also bear the consequences of smoking through lost
productivity and lost income. Statistically, smokers are more likely to miss
work than non-smokers. Smokers cost Canadian employers approximately $2 billion
annually in employee absenteeism. That is 28 million days that are not worked by
people who smoke. All told, the economic cost borne by Canadian society as a
whole, due strictly to smoking, is approximately $15 billion.
Although this figure is staggering, it pales in significance when we consider
the human costs of smoking. The human suffering and tragedy caused by
smoking-related diseases simply has no price. This is why the government has
drafted this piece of legislation, and why it is so important to ensure its
swift passage into law.
Honourable senators may recall that in 1988 the government of the day
introduced, and Parliament passed, the Tobacco Products Control Act. This act
banned advertising and restricted the promotion of tobacco products, and
required packaging of tobacco products to display prominent health messages and
information on toxic constituents. In a 1995 Supreme Court of Canada decision,
key parts of the Tobacco Products Control Act were struck down. In rendering its
decision, however, the court made some very helpful observations and rulings
which provided guidance for acceptable legislation.
In the aftermath of the September 1995 Supreme Court decision to strike down
key parts of the Tobacco Products Control Act, the tobacco industry said that it
could regulate itself; but the industry's voluntary code failed at the starting
gate, and the people it has failed the most are Canada's young people. That is
the very same group which is most vulnerable to lifestyle advertising,
sponsorship promotions and tobacco brand name associations. These promotional
activities reinforce the mistaken notion that tobacco is normal or innocuous.
The government has taken great care to ensure that the legislative measures
contained in Bill C-71 are consistent with the directions provided by the
Supreme Court. In doing so, the government recognized that, in order to promote
the health of Canadians, the tobacco control measures contained in Bill C-71
must be able to withstand court challenges as already threatened by the tobacco
industry. The Supreme Court recognized that the detrimental health effects of
tobacco consumption are both dramatic and substantial. The Supreme Court
acknowledged that tobacco kills, and confirmed the right of the federal
government to legislate controls on the advertising of tobacco products. As
Justice LaForest wrote:
...the Parliament can validly employ the criminal law to prohibit tobacco
manufacturers from inducing Canadians to consume these products, and to
increase public awareness concerning the hazards of their use.
The Supreme Court also held that the purpose of the previous Tobacco Products
Control Act, to reduce inducements to use tobacco in light of the health effects
of tobacco consumption, is a valid and important legislative objective
warranting limitations to the right of free expression.
In the majority judgment, Justice McLachlin wrote:
...even a small reduction in tobacco use may work a significant benefit to
the health of Canadians and justify a properly proportioned limitation of free
The government is firmly of the view that Bill C-71 accomplishes this in a
reasonable and proportionate manner.
Contrary to what the tobacco industry may suggest, the Supreme Court
recognized the link between certain forms of tobacco advertising and
consumption. The court outlined for Parliament the options that it would
consider "a reasonable impairment on the right of free expression."
These court tested options are incorporated in this bill. They include: a
partial ban on advertising that allows product information and brand preference
advertising; a ban on lifestyle advertising; measures to prohibit advertising
aimed at children and adolescents; and health labelling requirements with
This bill not only reflects the guidance of the Supreme Court but also the
government's wide-ranging consultations with groups on all sides of the tobacco
sale and consumption issue.
Beginning with the publication of "Blueprint for Tobacco Control"
in December 1995, all interested parties have had ample opportunities to make
their views known to the Minister of Health. The result of these consultations
and the Supreme Court's guidance is a broadly balanced bill that takes into
consideration the need to restrict the sale and promotion of tobacco, but it
also respects the tobacco industry's right to communicate with its customers.
Since Bill C-71 was tabled in December, the Minister of Health has further
listened to the opinions of Canadians, Members of Parliament from all parties,
and the representatives of industry, cultural, sport and health groups. As a
result of this process, he has amended the original legislation to reflect these
further comments. In addition, the minister has committed the government to
consulting with all affected parties during the regulatory process.
The government has examined the linkages between smoking and advertising.
Bill C-71 responsibly and reasonably balances considerations for the tobacco
companies' freedom of expression with the advancement of the government's health
objectives, particularly where the health of young Canadians is concerned.
The government has listened to Canadians. Ninety-one per cent of them support
the goal of discouraging young people from becoming addicted to tobacco. Eighty
per cent of Canadians, including a majority of Quebecers, support the package of
anti-smoking measures contained in this bill. In short, Canadians see this as a
health priority and want us to act in the interests of health.
Bill C-71 addresses these public concerns through a comprehensive package of
measures. Let me now describe the bill's major elements and how the government
expects these to work.
The first element of this bill will restrict the access that young people
will have to tobacco products. Tobacco sales to minors are already illegal, yet
teenagers continue to be able to purchase cigarettes and other tobacco products.
It is clear that the government must act to reinforce the existing prohibition.
The bill would restrict the sale of tobacco products through vending machines
and ban their sale through the mail. Self-serve displays would disappear from
all retail outlets with the exception of duty-free stores. To further discourage
sales of tobacco to minors, retailers would now be required to request photo
identification from all customers who appear to be under the age of 18 years.
Taken together, these measures will ensure that anyone who wants to buy a
tobacco product must do so in person and be over 18 years of age. This first
element strengthens the existing provisions of the Tobacco Sales to Young
Persons Act. In addition to the federally-legislated measures, the provinces can
institute their own restrictions on the sale of tobacco to minors.
The bill will prohibit tobacco product advertising such as broadcasting
advertising, billboards, bus panels and street advertising posters. It will
permit tobacco companies to communicate product and brand preference information
in print ads in publications that are primarily read by adults, in direct
mailings to adults and in places where children are not permitted by law; for
example, premises that are licensed to sell alcohol.
The bill will prohibit brand name promotions at the retail level. For
example, the countertop display so common in many of Canada's shops will
disappear, as will floor displays that promote a given brand name product.
Further, in order to end the association that is created between tobacco and
certain lifestyles and activities, this bill will prohibit the use of false or
misleading claims on product packaging and end the use of tobacco brand names on
logos on youth-orientated products and those with lifestyle connotations. Why
should we allow our kids to be turned into walking billboards for the tobacco
Another element of this package of measures concerns the regulation of the
use of product brand names, logos and other elements in event sponsorship
promotions. The legislation will restrict the display of tobacco brand names and
brand elements to the bottom 10 per cent of the display area of promotional
Sponsorship promotions will be permitted in publications geared toward an
adult readership, in direct-to-home mailings, and at the site of sponsored
events. Broadcasting of events will also be permitted with no sight-line
Let me be perfectly clear about this point: This legislation does not ban
tobacco companies from sponsoring sports or cultural events. It does limit the
persuasiveness of tobacco promotion and its potential impact on young people.
Bill C-71 will ensure that the primary purpose of such activities will be to
promote the sponsored event, not tobacco.
Tobacco promotions literally paper our environment. Canadians cannot help but
be exposed every day to an onslaught of tobacco advertising. Young people are
especially vulnerable to these sophisticated promotions. By repeatedly
associating tobacco products with popular and socially acceptable events, the
industry creates the perception that tobacco is desirable, socially acceptable
and more prevalent in society than it actually is.
Young people themselves tell us that they recognize that promotional
materials for tobacco-sponsored events have more than one purpose. When asked
what they thought was the purpose of tobacco company sponsorships, Canadian
youths tell us that the use of brand names in tobacco sponsored events
advertizises tobacco products and smoking as well as the specific events.
The government recognizes that groups and organizations sponsored by tobacco
companies may be affected by the legislation and that they will need time to
make other sponsorship arrangements. That is why the government amended this
bill in the other place to include a phasing-in period before the provisions of
this bill, dealing with event sponsorships, come into force. I draw the
attention of senators to clause 66 of the bill which now provides that these
provisions will come into force on October 1, 1998.
The third element of the bill before us today would increase the health
information that is printed on tobacco product packages. At present, there
exists no requirement for tobacco companies to inform consumers about the health
smoking. This bill will once again require manufacturers to place prominent
health information on cigarette packages and to attribute these health messages
as required by the Supreme Court's 1995 ruling. It will also increase the amount
of information that smokers will receive about tobacco use, and the toxic
constituents in tobacco products and tobacco smoke.
The Health Canada study suggests that the cigarette package is second only to
television as the source of health information for smokers. After this bill
becomes law, Canadian smokers will have in their hands information which will
tell them exactly what are the dangers of smoking. It is the government's hope
that smokers who read about chemical substances such as lead, arsenic and
benzene contained in cigarette smoke will be further encouraged to quit.
The final element of this bill is the establishment of the powers to regulate
the physical nature of tobacco products and their smoke emissions. The
government does not intend to propose immediate regulations concerning products
and emissions. However, as our scientific knowledge about tobacco products and
their use develops, this authority would provide the government with future
flexibility in dealing with smoking and both its direct and indirect effects.
Moreover, it is important for the government to have the power to act as the
market for tobacco products changes. The establishment of this regulatory power
will enable the government to intervene, should any new tobacco products enter
the marketplace. Seeking this regulatory power is consistent with the overall
aim of controlling tobacco consumption. It is consistent with the historic role
of the federal government in product regulation. The federal government already
regulates a host of products, such as foods and drugs, where the health and
safety of the public is at stake. It is logical and overdue that the government
should extend this power to tobacco products, which are inherently hazardous and
lethal, but which have been treated for too long as an exception.
Let me say a few words about the regulatory process that will follow the
passage of this bill. Subject to my later observation, this process will not
differ in any way from the normal regulatory process. All regulations relating
to the Tobacco Act will appear in the Canada Gazette, and any and
all parties will have ample opportunity to make their views known to the
government concerning the specific details of the regulations. This, too, is
part of the normal, democratic process for laws of this type.
Since the publication of the "Blueprint for Tobacco Control," the
government has already consulted widely on its proposed tobacco control
policies. These consultations are reflected in the measures outlined in this
bill. During debates in the other place, the government listened attentively to
all parties and amended the bill to reflect some of these comments. The
regulatory process will be similarly open and transparent.
In this respect, I must draw the attention of honourable senators to a
government amendment to the bill which added clause 42.1. This clause provides
that no proposed regulation can be made unless it has first been laid before the
House of Commons, where it will be automatically referred to an appropriate
committee of that House for inquiry, which committee will report its findings
back to the house. The proposed regulation can only then be made if the House of
Commons has not concurred in the report of the committee within 30 sitting days
of its having been laid before the House, or the House of Commons has concurred
in the committee's report approving the proposed regulation. This provision
would appear to add greatly to the opportunity for consideration of any proposed
With Bill C-71, the government has made clear its determination to place the
health of Canadians foremost in its tobacco control policy. Children in
particular must be spared from the lethal addiction to cigarettes to the
greatest extent possible. To do so, the government has brought forward a
balanced, reasonable and, more important, comprehensive piece of legislation
that gives it the power to act now and in the future to discourage the use of
tobacco. When it comes to tobacco use, there can be no "business as
usual." Tobacco is the only legal product that, when used as directed, robs
the users of their health, and then kills.
Since the Supreme Court's decision to strike down the Tobacco Products
Control Act, another 375,000 Canadians have taken up this deadly habit. About
300,000 of them are children. We cannot permit this trend to continue unchecked.
Canadians have understood in a general way for years the link between health
and tobacco consumption. The Canadian public expects the government to help
reduce the tragic consequences of smoking. Let us not fail in our duty to these
Canadians who trust us to defend their health and that of their children.
Honourable senators, I ask for your support for this bill.
On motion of Senator Lynch-Staunton, debate adjourned.
Excise Tax Act
Federal-Provincial Fiscal Arrangements Act
Income Tax Act
Debt Servicing and Reduction Account Act
Bill to Amend-Report of Committee
On the Order:
Resuming debate on the motion of the Honourable Senator Kirby, seconded by
the Honourable Senator Maheu, for the adoption of the thirteenth report of the
Standing Senate Committee on Banking, Trade and Commerce (Bill C-70, to amend
the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income
Tax Act, the Debt Servicing and Reduction Account Act and related Acts, with
an amendment and a resolution), presented in the Senate on March 11, 1997.
Hon. John Buchanan: Honourable senators, I had prepared a speech to
deliver of approximately an hour and a half's duration, but I have decided to
split it up. I will deliver a little bit of it now and most of it later on.
First, I want to congratulate our committee because it did something that the
House of Commons refused to do. I really do not understand why the House of
Commons refused to go to the provinces of New Brunswick, Nova Scotia and
Newfoundland. Were they afraid to go?
Some Hon. Senators: Yes.
Senator Buchanan: Were they afraid of what people would say?
Some Hon. Senators: Yes.
Senator Buchanan: Were they afraid that they would come back with egg
on their faces and have to do something about it?
Some Hon. Senators: Yes.
Senator Buchanan: Therefore, they did not go, and Diane Brushett was
their spokesperson. What a spokesperson! First, she derided the Senate. She
said, "The gall of unelected senators to go down to Nova Scotia to hold
public hearings. The gall of them to ask the people of Nova Scotia to come forth
and say whether they want the HST or not. The gall of them asking senior
citizens and pensioners to come forward and tell the government why they do not
like the HST."
"Now," says Diane Brushett, "I take issue with something
Senator Buchanan says. He says it will cost the consumers of Nova Scotia much
more money. I want to debate him on that." Unfortunately, for me, I was on
the telephone, wishing happy birthday to a dear old lady who had turned 80-some
years of age, and she was very upset about the HST, let me tell you. When I came
back, it was too late. The chairman, quite rightly, would not let me get up to
debate Diane Brushett, who had said that this change in the tax will not cost
anything to the senior citizens, and all of those other people, including
low-income and middle-income people. She said, "I challenge Senator
Buchanan to debate me on that," because she knew I was not in my seat. When
I came back, it was too late; her testimony was over.
Our committee did a service to the people of New Brunswick, Nova Scotia and
Some Hon. Senators: Hear, hear!
Senator Buchanan: There is no question about it; no doubt about it.
Senator Kinsella: Thanks to Senator Lynch-Staunton's motion.
Senator Buchanan: Yes, our leader moved the motion to have the
committee travel. However, I must tell honourable senators that I suggested it
to him. At any rate, the committee did travel, and it was an experience I will
Over the last 30 years, I have been a member of many committees and have
travelled to many parts of Nova Scotia during my time in our legislature. On my
appointment to the Senate, I travelled to various parts of the country to hear
people express their opinions on certain matters affecting them. This tax will
have no effect in Ottawa, Toronto, or Winnipeg, but it will affect people in
Nova Scotia, New Brunswick, and Newfoundland. Bearing that in mind, where were
the hearings held? They were held in Ottawa, Ontario. No one here even knows
what the tax is all about.
The committee did eventually travel to the East Coast where we heard from the
real people of our three provinces. We heard from the retailers, the business
people, the pensioners, the retailers, and the union representatives of our
three provinces, all of whom opposed the HST.
Real union leaders would never go against the wishes of their membership. We
heard from the Nova Scotia Government Employees Union, as well as from three
other unions from Nova Scotia, New Brunswick, and Newfoundland. We also heard
from the president of the Nova Scotia Federation of Labour. If honourable
senators wish to see the copies of the briefs which were presented by the
witnesses to the committee, I would suggest that you contact the committee
chairman, and he will make arrangements to provide them to you. Every witness
spoke about the hardships the HST would cause their membership. Why?
Senator Cools: Do not cry, now, Senator Buchanan.
Senator Buchanan: The imposition of this tax will mean an increase in
electricity and other power rates. Taxi fares will go up. Let me read something
funny to you.
Senator Graham: Save that for the next speech.
Senator Buchanan: Honourable senators, let me give you an example of
how silly this tax is. A former colleague of mine and cabinet minister in the
Nova Scotia legislature, Ron Russell, told me that the Honourable Paul Martin
was in Dartmouth talking to the Chamber of Commerce. He was told that people
were complaining, for instance, that the price of a haircut would go up. In
response, he said that should not be a concern because now, whenever the barber
buys a pair of scissors - and I do not know any barbers who use scissors
nowadays - he pays the tax on those scissors, and he will be entitled to a tax
"Therefore," said Paul Martin, "the price of a haircut will
comes down." Since those remarks, I have spoken to a number of barbers and
they all crack up when I tell them that story. One barber, a gentleman who
passed away quite recently in my riding, brought out the scissors he used and he
asked, "Do you know how long I have had these scissors, Ron?" I said,
"No. How long?" "Twenty-five years," he said. The tax input
credit for the purchase of scissors that Paul Martin spoke of will not make a
difference at all.
Senator Graham: Does Ron Russell need scissors?
Senator Buchanan: No, he does not. He is an excellent cabinet
minister, who has been elected in every election that I ran in with him.
I will restrict myself right now to the committee report on tax-included
pricing. The committee, after listening to 90 or 100 witnesses, 95 per cent of
whom were opposed to tax-included pricing, agreed that tax-included pricing
should be deleted from the HST bill. It is, effectively, deleted, because it
will not take effect until 51 per cent of Canadians agree to tax-included
pricing. Albertans will not agree to it because they do not have a sales tax.
With Ralph Klein back in for at least another 100 years, they will never have a
sales tax. Ontarians have definitively stated that they would not have a
harmonized tax and tax-included pricing. It just will not happen, which might be
unfortunate because I believe in tax-included pricing Canada-wide, from British
Columbia to Newfoundland, including the territories.
I congratulate the chairman and the deputy chairman who ensured that this
tax-included pricing be deferred, perhaps forever, from the HST bill. I seconded
the motion; therefore, I am rather proud that I was able to participate. I will
certainly vote that the report, as amended to exclude the tax-included pricing,
Hon. Senators: Hear, hear!
The Hon. the Speaker: It was moved by the Honourable Senator Kirby,
seconded by the Honourable Senator Maheu, that this report be adopted. Is it
your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
Third Reading-Motions in
The Hon. the Speaker
: When shall this bill be read the third time?
Hon. B. Alasdair Graham (Deputy Leader of the Government): With leave,
The Hon. the Speaker: Is leave granted?
Hon. Senators: Agreed.
The Hon. the Speaker: Honourable senators, is it your pleasure to
adopt the motion?
Senator Graham: Honourable senators, before we begin the debate on
third reading, by way of explanation, several speakers from the opposition wish
to move amendments to Bill C-70. As well, as indicated, Senator Buchanan will
have another offering for the chamber this afternoon. There is agreement that
any amendments which may be proposed this afternoon as well as the question on
the main motion will be put by the Speaker tomorrow afternoon at 3:30 p.m. The
amendments will be voted on separately and sequentially. Consequently, there
will be a 15-minute bell beginning at 3:15 p.m., and the votes will take place
at 3:30 p.m. I believe we have general agreement for that procedure.
Hon. Noël A. Kinsella: Honourable senators, I concur with Senator
Graham's explanation of our agreement as to the modus operandi concerning
the procedure on this matter. It is also our understanding that the bells will
ring tomorrow afternoon at 3:15 p.m. for the 3:30 p.m. vote, when we will deal
with all the amendments seriatim.
Hon. Jean-Maurice Simard: Honourable senators, our whip and the Deputy
Leader of the Government suggested that we agree to start voting on this report
and bill tomorrow at 3:30 p.m. In order to allow debate on third reading, may I
suggest that we sit tonight or, alternatively, tomorrow morning?
Senator Graham: It is my understanding that if we have this agreement,
all speeches would be made this afternoon. If we go beyond six o'clock, we will
return at eight o'clock, and then sit again tomorrow at two o'clock. The
agreement is that all votes will be taken at 3:30 p.m. tomorrow, with the bells
ringing at 3:15 p.m.
Hon. Marcel Prud'homme: Honourable senators, I think the agreement is
unanimous. Looking at my friend Senator Lawson, who always wants someone to
speak on behalf of the independents, it seems that the independents have also
agreed to the agreement that took place.
The Hon. the Speaker: It is agreed, then, honourable senators, that
the bells will ring at 3:15 p.m. tomorrow, that the voting will begin at 3:30
p.m., and that the votes will be taken sequentially, starting with the last
amendment proposed and moving to the first, as is the normal order, and then the
main motion. It is further agreed that if we need to sit this evening, we will
sit this evening and we will meet again tomorrow at two o'clock. Is that
Senator Graham: That is correct. Of course, we want to provide all
honourable senators who wish to speak the opportunity to do so.
The Hon. the Speaker: If that is the agreement of the house, that is
the basis on which we will proceed tomorrow. We are now on third reading.
Hon. John Buchanan: Now comes the other half!
Senator Bonnell: Tell us about the barber.
Senator Buchanan: You have already heard about that. It is interesting
that the honourable senator mentions that. I would say that you do not have to
worry about such things in P.E.I. Their legislators were very smart. They held
public consultations on this matter, and the leader of the Liberal government in
Prince Edward Island, Catherine Callbeck, told the Senate committee:
After considering the matter, the Committee has come to the conclusion that
the Province of Prince Edward Island should not harmonize its sales tax with
the federal GST. The Committee believes that the sales tax harmonization
proposal would not be beneficial to the Province and its people. As well,
harmonization would result in diminished provincial control over a major
revenue raising measure.
Honourable senators, in Nova Scotia, New Brunswick and Newfoundland, we gave
up our historic right to set our tax rates to the Government of Canada. Can you
imagine what will happen when that gets out during an election campaign, namely,
that John Savage and the provincial government gave up their historic rights in
favour of Ottawa? To put it the other way around, two provinces can say to Nova
Scotia: "We are increasing the rates, and you must, too." What kind of
democracy is that for the people of Nova Scotia? P.E.I. was smart. They would
not allow provincial control to be diminished. I continue to quote from
Catherine Callbeck's remarks:
The Committee recognizes that non-harmonization could potentially have a
negative impact on some sectors of the Island economy and that down the road
government may need to make adjustments in this regard. Therefore, it is
recommended that the Government of Prince Edward Island not enter into the
sales tax harmonization as proposed by the Government of Canada.
This is the recommendation that was unanimously accepted in the P.E.I.
legislature by Liberals and Conservatives and, with the turnover of government,
adopted by Pat Binns and the new Conservative government.
The gentleman applauding was the one who invited Nova Scotians to come over
to P.E.I. and do their buying over there, because they could buy things 8 per
cent cheaper. I thought that was very laudable on his part, which means that he
will be voting with us.
Senator Bonnell: All the senior citizens will be coming over to P.E.I.
Senator Buchanan: Yes, busloads of them will be coming over. Why will
we lose that revenue in Nova Scotia? Because of the HST, that is why.
Senator Lawson has left the chamber. I was about to tell him again that the
NSGEU, the Nova Scotia federation of labour, the New Brunswick federation of
labour, the Newfoundland federation of labour and the Nova Scotia Teachers Union
were all there, representing all union people in our provinces as one united
voice saying, "The HST is bad for the people who belong to the unions, the
working people of our three provinces." I know that Senator Lawson, being
the person he is, and has been over the last years, will certainly be voting
against this terrible tax that has been foisted upon the people and the
unionists of our provinces.
For those of you who are not aware of this, the Nova Scotia government has
said, through its Department of Finance that, "We have analyzed this HST
and it will cost the consumers of Nova Scotia $84 million." The Minister of
Finance, Bernie Boudreau, was asked: "What do you think about that?"
He said, "We will have to analyze those figures." He wanted to analyze
his own figures! I have not yet heard him analyze them. The net is $84 million.
Why is that?
They call this a tax that is consumer neutral. In other words, consumers will
save this much and pay this much, and it will be neutral and will not cost
anyone anything. Yet the provincial Department of Finance is saying that it will
cost $84 million. My experience with estimates of that nature is that they never
go down; they go up. The final cost will probably be closer to $100 million. Why
Let us look at what will be decreased, namely, the price of automobiles, by
3.7 per cent. However, the Government of Nova Scotia immediately put on a
2-per-cent surcharge. Therefore citizens in that area will not save 3.7 per
cent; they will save only 1.7 per cent whenever they buy a new automobile. Bill
Gillis said, "People will buy automobiles every two years." I do not
know how many pensioners, seniors, students and people earning in the range of
$25,000 to $30,000 a year will buy a car every two years. I suggest that the
answer is very few.
Let us talk about refrigerator freezers. I have one. I have had it for 15
years. I do not intend to get rid of it. Maybe in another 15 years I will buy
another one, God willing, if I am still around. I told my wife, "I will
save 3.7 per cent when I get a new refrigerator freezer in the next 10
years." She said, "Why do you not buy it now?" I will not buy it
What about those great big console stereos? You know what? You will pay 3.7
per cent less on those. You will probably buy one every year, I guess, the same
as people buy children's clothing every week or every month.
Fur coats will also be more expensive. I was in Northwood Manor in Halifax
and I thought about doing a poll on that subject, but I decided against it. How
many people will buy a fur coat next week, next year or in two years' time? You
know what the result of the poll would be. There is no question that you will
save money on these big-ticket items, such as items of furniture, but over a
long period of time.
Why is it that our own provincial Department of Finance has said that it will
cost consumers $84 million? Here is why: Electricity bills are going up; home
heating oil costs are going up; gasoline at the pump is going up by 8 per cent
on April 1, if this bill goes through - it goes up from about 58 or 59 cents a
litre to 63 or 64 cents. Who will be blamed? Not us. You people will be blamed
for that because you should never have started this exercise in the first place.
There is also the cost of children's shoes and clothing under $100. The price
is increasing on all of those items. Used cars and stamps will also cost more. I
can buy my stamps in P.E.I. for 48 cents each. In Nova Scotia, a stamp will cost
me 52 cents. As I told you before, I know people who will buy their stamps in
P.E.I. through their relatives, who will mail them over to them. People who do a
lot of mailing will save hundreds of dollars. The cost of funerals, haircuts,
well drilling, and so on, is all going up. The cost of new homes and home
construction is also going up by 8 per cent. Is it any wonder that those people
who appeared before our committee were concerned?
Here is the advice of one fellow who says that if you purchase an automobile,
he suggested that you leave it in the garage or driveway. As you continually
purchase the gasoline to run it, you eventually end up paying more taxes than
you saved. If you buy a stove, refrigerator or other appliances, he suggested
that you not plug them in or use them. He suggested that you just leave them as
an adornment in your kitchen because the minute you plug them in, you will be
paying the electricity on them. As you continue to use them, you pay higher
Here are more of his suggestions. Listen to these carefully. To avoid paying
higher taxes through the HST, he suggests the following tax avoidance.
One, do not die. You have to pay funeral expenses.
Two, let your hair grow.
This is the guy who lined all politicians up and had two Uzis in his hands
and said, "All right, you guys and gals..." Remember him?
Cover the holes in your shoes with wood. Do not take them and get them fixed.
Four, do not dry-clean.
Honourable senators, my rumpled blue suit has not been dry-cleaned. Just tell
people that your stained clothes are the new fashion.
Five, do not clothe your children.
Now, as you know, with the accounting and law, they will tax it all, but he says
that we should study accounting and law, and any other service that you may
require, so that you need not use lawyers and all those other professionals.
Freeze during the winter. You cannot use fuel oil any more.
Eight, use candles and eat more canned food.
Nine, buy a bicycle or walk.
Ten, do not brush your teeth.
That is what will happen in our three provinces if you people continue to put
this foolish bill through.
Here is another one that is very interesting. When I first looked at this, I
said, "This cannot be." I checked it, and it is. If this HST goes
through, if a multinational company buys a $30,000 car for a manager, do you
know how much BST or HST they will pay? Nothing. No tax. They get it all back.
However, if a regular Nova Scotian buys the same $30,000 car, he will pay $4,500
BST. If a multinational company buys a $3,500 computer, they pay no HST. If a
Nova Scotian student buys the same computer, he or she pays $525. If an oil
company buys $300 in boots and coveralls, they pay no BST. If the same worker
buys the same work clothes for himself or herself for $300, he or she pays $45.
The company pays nothing. That is how stupid this tax is.
I have a letter here from a very dear lady. I have known her for years,
although I do not know her politics. Her name is Loretta J. Smith, and she sat
all morning and all afternoon, waiting to be a walk-on witness. During her
testimony, she said:
Based on my previous expenses for fuel, lights and gasoline, I will be
forced to spend an additional $346.74. This does not include the additional 8
per cent tax on various other items which are now not taxed provincially. The
added burden of this tax will be greater for families with children who now
must pay only the 7 per cent on less expensive clothing and footwear. The cost
of a stamp will increase from 48 cents to 52 cents, but only in the three
Atlantic Provinces. Funeral expenses will increase by 8 per cent. We do not
yet know the full details of this Blended Tax, and in fact neither do the MLAs
who are so determined to foist it on us. This diabolical tax grab has been so
hastily contrived that the details were not worked out prior to the agreement
of the affected Provinces.
That is true. When they signed the agreement, they did not know the details
of the tax. They had no idea. They got the billion dollars. The Minister of
Finance in Newfoundland said, "They gave me a cheque that day; Paul Martin
gave me $348 million." Bernie Boudreau received over $200 million, as did
Senator Berntson: How could they do that? Under what authority? The
bill has not passed.
Senator Buchanan: It is an interesting thing as to how they did it.
Some people say it was wrong, including the Auditor General, but we will have to
wait and see how that works out.
Honourable senators, this tax is neither fair nor just. It most certainly is
not democratic. The brunt of this tax will affect most seriously those who are
least able to afford it: seniors, people working on minimum wages, et cetera.
I want to mention a couple of other items. Municipal councillors represent
the real grassroots. In politics, they are the people who are called most of the
time for the small items, but those are big items for some people. At the next
level are the provincial MLAs, and at the next level are the MPs. That is the
way it has always been. Here is what will happen in our three provinces with the
municipalities and the municipal taxpayers - and this comes from someone who is
probably one of the best municipal politicians in Canada. His name is Walter
Fitzgerald, commonly known as Goodie. To the committee, he said:
Halifax Regional Municipality strongly recommends that the proposed
legislation of the Harmonized Sales Tax, (`HST') be amended to neutralize the
impact of the tax on the municipality and its taxpayers.
The implementation of the HST and the application of this tax at 15 per
cent on all goods and services, currently taxed under the GST system at the
existing rate of 7 per cent, will have a negative financial impact on Halifax
By the way, it is the largest municipality in Canada.
With the implementation of the HST, the municipality will not only pay the
additional 8 per cent of the HST component on all goods and services, but will
be limited in its ability to recover the tax paid... The rebate
notwithstanding, the annual cost increase is in excess of $5 million to the
residential and commercial property taxpayers in Halifax Regional
Municipality. This "tax downloading" affects our overall budget and
will result in a net municipal tax increase of 1.8 per cent, on average -
for everyone in the Halifax Regional Municipality.
Since the province of Nova Scotia did not previously tax its
municipalities, this, in effect, represents a new tax...
Those of you who say this is not a new tax, forget it. It is a new tax. It is
a new tax for seniors, low- and middle-income people, pensioners, municipalities
and a few others. This is a brand new tax.
Here is what the municipalities very reasonably want: They want the 15 per
cent HST to be increased from 57.14 to 80 per cent, effectively restoring the
neutral position of the Halifax Regional Municipality with respect to the
province's conversion to the HST. This is not just Walter Fitzgerald, the mayor,
speaking. He was speaking, certainly, for his own municipality, but Dan Boyd
from the small municipality of East Heads was there telling us how much it will
cost that small municipality. The Nova Scotia Federation of Municipalities said
the same thing. Every municipality said it would cost in excess of $12 million
to $15 million for the municipal taxpayers in Nova Scotia.
Senator Robertson, the same thing will happen in New Brunswick. Senator
Cochrane, the same thing will happen in Newfoundland. We are all in the same
boat where the Government of Canada and the governments of the three provinces
put us for the municipalities.
Assomption Vie and Maritime Life manage segregated funds for residents of
Nova Scotia and New Brunswick. Under the proposed bill, only segregated funds
and trusts in the harmonized provinces will pay the additional 8-per-cent tax on
the investment administration fee charged by the issuer. That simply means that
if I go in to buy a segregated fund and I pay them a management fee, I must pay
them 8 per cent more. However, if I go to one of the companies in P.E.I, I can
get it without the 8 per cent. If I go to Ontario, Quebec or anywhere else, I do
not have to pay the 8 per cent. However, I think that will be handled. I believe
it has been handled in one way for a couple of years by the provincial
governments, and it probably will be again.
Honourable senators, that is about all I have to say.
Honourable senators will realize that I am not happy with the HST. However, I
am happy that the subject of tax-included pricing will not be raised again,
hopefully, for a long time.
I have an amendment which I should like to table. Simply put, Canadians like
to treat each other reasonably and fairly. However, one group in Canada has not
been treated fairly and will be treated even more unfairly with the introduction
of the HST. The group I speak of is medical doctors, an important segment of our
I know people say, "Oh, those doctors, look at all the money they
make." That is not so, honourable senators. Some doctors are in a marginal
situation right now.
As Senator Stewart and others know, in the last four years, 90 to 100 doctors
have left Nova Scotia to go to the United States, Australia or other places. The
introduction of the HST will be the straw that breaks their backs, and even more
will pack up and leave. The situation in East Hants Hospital in Nova Scotia is
close to dangerous. Hospitals in Cape Breton are in the same situation. They do
not have the surgeons or orthopaedic surgeons they require. GPs are packing up.
Dr. Kimball and Dr. Bell have both packed up. East Hants is concerned that they
will lose more doctors. The reason is that doctors, unlike any small business in
this country, are not permitted the HST tax-input credits. Why? I have heard the
argument that that applies to all health service providers. Honourable senators,
that is not quite true. Dentists, physiotherapists and others, although they are
not eligible for the tax-input credit, can pass the cost on to their patients.
Doctors cannot do that. The Government of Canada has stipulated that they cannot
pass that cost on to their patients. They must "absorb it." They are
boxed in, much in the same as Senator Kirby was boxed in the other day. The HST
will be 15 per cent which means that, in our three provinces, doctors will have
to absorb $4.7 million themselves.
When Dr. Cynthia Forbes, president of the Nova Scotia Medical Association, in
answer to my question, "Doctor, are you concerned with any doctors
leaving?" replied, "Absolutely, we are very concerned with more
doctors leaving." The same situation applies to New Brunswick and
The introduction of this measure, honourable senators, simply means that
doctors will be zero-rated.
Hon. John Buchanan
: The first motion in amendment I would move,
honourable senators, is as follows:
That clause 93.1 of Bill C-70 be not now read a third time but that it be
amended, on page 131, by replacing line 29 with the following:
"93.1 Section 5, Part II of Schedule V to the Act is replaced by the
5. A supply (other than a zero-rated supply) made by a medical
practitioner of a consultative, diagnostic, treatment or health care
service rendered to an individual (other than a surgical or dental service
that is performed for cosmetic purposes and not for medical or
93.2(1) The portion of section 6 of Part II."
My next motion in amendment is as follows:
That Bill C-70 be not now read a third time but that it be amended, on page
132, by adding the following after line 24:
"95.1 "Section 9 of Part II of Schedule V to the Act is
The next amendment I would propose, honourable senators is as follows:
That clause 136 of Bill C-70 be not now read a third time but that it be
amended, on page 156, by replacing lines 30 and 31 with the following:
"provision of Part II of Schedule V and a service related to".
The last amendment I would propose, honourable senators is:
That Bill C-70 be not now read a third time but that it be amended, on page
157, by adding after line 20 the following:
"136.1 Part II of Schedule VI, to the Act is amended by adding the
following after section 40:
41. A supply of any property or service but only if, and to the extent
that, the consideration for the supply is payable or reimbursed by the
government under a plan established under an Act of the legislature of the
province to provide for health care services for all insured persons of
I have prepared a French translation of my motions in amendment.
The Hon. the Speaker: It was moved by the Honourable Senator Buchanan
and seconded by the Honourable Senator Oliver that clause 93.1 of Bill C-70 be
not now read a third time but that it be amended, on page 131, by replacing line
29 with the following -
Hon. Senators: Dispense.
The Hon. the Speaker: Honourable senators, it is agreed that all
motions in amendment will be dealt with tomorrow.
Does any honourable senator wish to speak to these motions in amendment?
Senator Michael Kirby: I listened with considerable interest to the
empathy which Senator Buchanan has expressed for people in Nova Scotia who will
be impacted by a tax on commodities such as electricity and heating oil.
My question is this: Is it reasonable for me to conclude that Senator
Buchanan is clearly opposed to the principle of taxing electricity, heating oil
and so on? Am I correct that it is his opposition to that principle which has
led him to this conclusion?
Senator Buchanan: That is partially correct. There are times when it
becomes essential that governments tax certain commodities that normally
governments would not. Of course, electricity, home heating oil, and so on are
the commodities to which I am referring.
In the words of a gentleman for whom I have much respect most of the time,
whose father was an eminent member of this Senate and a member of the federal
government for many years because of my late uncle Angus, Minister Paul Martin,
junior, the GST rebate system for the people I just mentioned is "working
If taxation of these commodities is necessary, surely it must coincide with
the implementation of a system of generous rebates to those people who cannot
I agree with Minister Paul Martin that the GST rebate system is working
extremely well and we will have an amendment which will simply ask that the HST
be part of the GST rebate system because it has worked well. That is not just my
opinion, it is also the opinion of Senator Kirby's colleague in cabinet.
Senator Kirby: I am given to believe that Senator Buchanan has said
that he is not opposed to the principle of taxing things like electricity and
heating oil and so on; is that correct?
The reason I am raising the question, of course, is that, if the honourable
senator is saying that he is opposed to taxing these commodities in principle,
it would be interesting for me to understand how he could have accepted his
appointment to this place, given the fact that he was appointed precisely to get
the GST bill through which imposes a sales tax on exactly the litany of items
Senator Buchanan mentioned this afternoon.
If it is not an issue of principle, would the honourable senator please
explain to me why he voted for all the things he did when he was appointed,
given that he now so passionately opposes them? It seems to me that there is a
considerable inconsistency there, although that is not necessarily unusual in
his case. It would help me substantially to understand where the honourable
senator is coming from.
Senator Buchanan: Honourable senators, this is great. It reminds me of
a time 24 years ago in the Nova Scotia legislature when Senator Kirby would sit
up in the gallery and watch our great question periods. I loved to ask and
Honourable senators, I have a simple answer for Senator Kirby. I was not
appointed to this place to do what he just suggested. I have always suspected
that reform of the Senate would occur from outside. For 13 years, I and other
premiers tried that, right up to the Meech Lake accord. All our attempts from
1977 right up to the 1990s were defeated for one reason or another.
Therefore, when I was offered the opportunity to join this august group of
Canadians to help reform the Senate from within, I accepted that challenge. We
have done a lot over the last three or four years to reform the Senate and
elevate it in the eyes of Canadians. Canadians now have better respect for the
Senate because of the fight we put up over the HST, the Pearson bill, the
electoral boundaries redistribution bill and others.
People are beginning to express the belief that the Senate can do a great job
of protecting the regions of Canada when they need protection. We will do that,
which is what I was appointed to do.
Senator Kirby: Thank you, Senator Buchanan. I believe the honourable
senator's answer to my question is that this is not an issue of principle for
The Hon. the Speaker: Honourable senators, I must remind you that
there cannot be a secondary debate during the questioning.
Hon. Donald H. Oliver: Honourable senators, it will be extremely
difficult for me to follow the eloquence of Senator Buchanan. It will not be
difficult for members opposite to understand how he got elected so many times.
However, if you will bear with me, I will make a few remarks on Bill C-70.
The study of the Standing Senate Committee on Banking, Trade and Commerce on
this bill was a study in democracy at work. It showed the Senate at its best -
as a body of sober second thought. It also showed the weakness of the elected
chamber where the opposition is fractured and based not on national interests
but on one-issue regional parties. The elected chamber rejected the option of
listening to the people. The Senate took the time not only to study the
legislation but to travel to hear 200 witnesses in the three provinces affected
by this new harmonized tax. The House of Commons did not travel to the Atlantic
provinces and did not listen to the people. Its study was cursory, shallow and
perfunctory at best.
The Standing Senate Committee on Banking, Trade and Commerce, representing
this body of sober second thought, weighed the evidence, listened to the
experts, including three provincial finance ministers, and unanimously decided
to amend Bill C-70 to more accurately reflect the interests of all Canadians.
As the lead editorial in the Chronicle-Herald of March 8 stated:
The Senate Banking Committee would have to be pretty thick not to conclude
from witnesses it heard in Atlantic Canada this week that the blended sales
tax needs either to be drastically changed or scrapped.
The editorial went on to say:
...time and again, the Senators were thanked just for showing up and
listening, though people were in no mood to be fobbed off with a polite
hearing and no action. The Committee was repeatedly urged to do its job of
applying "sober second thought" to the tax.
The editorial stated further:
...the Senate has rarely had a chance to prove its relevance to the public.
We, the Progressive Conservative senators from Atlantic Canada, got the
message and we have delivered.
Honourable senators, I agree with the theory of harmonization. It makes good
business sense because it can be efficient and reduce costs to the consumer. I
agree that the goal of a harmonized GST-PST is laudable. However, I agree with
dozens of witnesses who reiterated that without the agreement of all the other
provinces at the same time, the result of tax inclusive pricing is a network of
multi-rate, partly harmonized systems. Through the chain, from the initial
purchase of merchandize for resale to the final sale to the customer, the
production, distribution, advertising, and sale of the merchandize becomes
prohibitively more costly to the retailer and eventually this price is passed on
to the consumer.
We on the Progressive Conservative side were deeply moved by many of the
presentations from students, seniors and Canadians with low incomes about the
effect of tax-in pricing and how it would produce increased costs to these
consumers. We carefully and gingerly asked questions of many of the witnesses in
order to elicit the best information we could on what, if anything, could be
done to mitigate the problem.
I am from Nova Scotia, and I was moved by the evidence of witnesses such as
the Progressive Conservative leader of the province of Nova Scotia, Mr. John
Hamm, when he said:
...let's make no mistake about the impact of the HST on the consumer.
According to the provinces' own reports, the HST will mean Nova Scotians will
pay at least 84 million dollars more in consumer taxes. Frankly, I believe it
will be significantly higher.
Dr. Hamm went on to say that the HST will mean Nova Scotians pay
approximately $15 million more in taxes on home heating fuel. It will mean Nova
Scotians will pay $15 million more in taxes on electricity. It will mean Nova
Scotians will pay approximately $54 million more in taxes on gasoline. These are
not discretionary items. These are items that we have no choice but to buy. And
these three items alone represent $84 million in new consumer taxes to Nova
I wish to commend Senator Ethel Cochrane for her resolution aimed at
alleviating the pain attendant on such a burden, which was unanimously adopted
by the Standing Senate Committee on Banking, Trade and Commerce and tabled by
Senator Kirby with the amendments to remove the TIP. Senator Cochrane's
resolution urged the three Atlantic provinces to produce an HST rebate similar
to the GST rebate to compensate the working poor, people on social assistance,
senior citizens, students and other low-income Canadians for the added burden
imposed by this tax.
In his remarks, Senator Kirby referred at great length to the APEC report.
The Atlantic Provinces Economic Council is a major think tank in Atlantic
Canada. It did indeed say in its preliminary analysis that the tax change
proposed would be beneficial to the Atlantic economy, but APEC also warned
senators that there are several irritants to the proposed HST which could
seriously reduce the effectiveness of the new regime. That means that it could
cause increased personal taxes and higher costs to those in Atlantic Canada who
cannot afford it, or who can least afford it.
APEC raised three major issues of concern, and I canvassed these issues with
a variety of witnesses in New Brunswick, Newfoundland and Labrador, and Nova
Scotia. I am concerned that the tax burden on Atlantic manufacturers and
retailers not be more onerous than it already is. Other organizations facing
rebate problems are hospitals, municipalities, public colleges and charities. I
will, at the conclusion of my remarks, move an amendment to try to rectify that
APEC said that tax-in pricing is a major issue and, fortunately, by the
unanimous vote of the Standing Senate Committee on Banking, Trade and Commerce,
tax-in pricing will be taken out of the bill. The other two areas that have
gained prominence and caused great concern for APEC and for me are those that
relate specifically to the tax-evasion effects created by the tax in certain
sectors, and the financing problems created by the new tax.
I raised these latter two concerns with both the Minister of National
Revenue, the Honourable Jane Stewart, and the Minister of Finance, the
Honourable Paul Martin. I will briefly describe the problem and then provide the
answers given to me by the two ministers. Under the HST, the labour component of
many installed products will now be taxed at 15 per cent rather than 7 per cent.
The material or product being installed is, however, likely to fall in price.
There may be an increased incentive to drive the labour component of these
installed goods underground. Consumers may choose to buy the material product of
a do-it-yourself job and then covertly hire the services of a craftsperson to
install the product, thereby avoiding HST on the labour component of the work.
With the tax going up from 7 per cent to 15 per cent, APEC said there is a
greater incentive to drive this work underground.
The financing issues, which is the third point raised by APEC, focused on the
need for an increase in working capital. While Atlantic firms will now be
entitled to receive a full tax credit on purchased inputs, they are also likely
to need increased sources of working capital to front the cost of paying a
higher tax. Particularly troublesome is the 15-per-cent tax charged on supplies
imported into the region from other Canadian provinces.
Many firms in Atlantic Canada source many, if not most, of their inputs from
other parts of Canada, and mainly from Ontario. Therefore, the costs of
increased working capital are likely to be significant. Firms in Ontario and
Quebec, on the other hand, will be able to finance their working capital
requirements from collected tax dollars and thereby reduce their financing
Here are the undertakings I got from the ministers. Minister Stewart said,
among other things:
The issue of cash flow for business is an important one. As you know, they
pay their tax and then complete their paper work. We make the input tax
credits or pay the tax credits. For businesses to have confidence in the
turn-around of that ITC system is critically important, and we take it very
She went on to say:
We have a number of strategies in place that focus on that, including
increased service, increased levels of staffing. Mr. Burpee has responsibility
for that area of the department. I am glad to have him comment directly on our
Mr. Mike Burpee, staff of the Department of National Revenue, then said:
My advice to any business that wants to ensure they get the quickest
possible refunds is to take us up, first of all, on filing their returns
electronically, which they are able to do, and allowing us to direct deposit
their funds or their credits.
Later, Minister Stewart said:
Mr. Burpee indicated some strategies that individual tax filers can use to
ensure that time is mitigated and reduced to, hopefully, no longer than three
weeks using electronic filing and other methods.
Then, the Minister of Finance, Mr. Paul Martin, stated in response to the
same series of questions:
Since we isolate this as a timing problem, Minister Stewart in the
Department of National Revenue has said they will substantially accelerate the
rebate program within the MNR. This is by far the best thing that the
government can do.
There are a couple of other things. First, businesses can file monthly. If
businesses file monthly, obviously that will accelerate the process. The
businesses at the same time will be charging 15 per cent, they will be
charging the larger amount of the sales tax and they will be holding on to
that money until such time as they file. There is actually a flip where they
actually benefit from it.
I know that Minister Stewart is looking at a number of other programs to
deal with your problem. The problem you raise is a valid problem and the
government intends to deal with it as expeditiously as possible. As far as the
companies, there are many things that they can do as well to minimize that
There is another matter I should like to raise about this democratic
experience of travelling in Atlantic Canada and listening to the people. The
matter was alluded to by Senator Kirby in his remarks yesterday when reporting
the bill with amendments. This bill involves a tax. It will affect all Canadians
in the harmonized area. We heard complaints and concerns and felt the anxieties
from retailers, manufacturers, consumers and politicians from all walks of life
about the fact that they had not been consulted and could not understand what
was going on. They could not understand the timing, they could not understand
how the tax would impact them, and they had enormous difficulty finding out by
telephone, by fax, or by conversation with bureaucrats exactly what was
happening in relation to the HST.
The Senate has been forewarned. We, as a body of sober second thought, should
use this experience and this opportunity to warn the government that they cannot
expect easy and speedy passage of sloppy legislation, poorly conceived and even
more poorly communicated, because that does a disservice to the institution of
Parliament and causes unnecessary frustration and anxiety in our citizens.
Hon. Donald H. Oliver
: In conclusion, honourable senators, I should now
like to move two amendments to the bill. The first relates to the question of
rebates for hospitals, public colleges, municipalities, and non-profit
I move, seconded by Senator Kinsella:
That clause 69 of Bill C-70 be not now read a third time but that it be
(a) on page 91, by deleting lines 42 to 46;
(b) on page 92, by deleting lines 1 to 4; and
(c) by renumbering subclauses (2) to (12) as subclauses (1) to
(11), and any cross-references thereto accordingly.
I also move:
That Bill C-70 be not now read a third time but that it be amended, on pages
95 to 98, by deleting clause 69.1.
I also move, seconded by Senator Kinsella:
That clause 149.1 of Bill C-70 be not now read a third time but that it be
amended, on page 164, by replacing line 8 with the following:
"149.1 Schedule VI to the Act is amended by adding the following after
1. A supply of a printed book, but not including anything that is or the main
component of which is
(a) a newspaper
(b) a magazine or periodical acquired otherwise than by way of
(c) a magazine or periodical in which the printed space devoted to
advertising is more than 5% of the total printed space;
(d) a brochure or pamphlet;
(e) a sales catalogue, a price list or advertising material;
(f) a warranty booklet or an owners' manual;
(g) a book designed primarily for writing on;
(h) a colouring book or a book designed primarily for drawing on
or affixing thereto, or inserting therein, items such as clippings,
pictures, coins, stamps, or stickers;
(i) a cut-out book or a press-out book;
(j) a program relating to an event or performance;
(k) an agenda, calendar, syllabus or timetable;
(l) a directory, and assemblage of charts or an assemblage of
streets or roads maps, but not including
(i) a guidebook, or
(ii) an atlas that consists in whole or in part of maps other than the
street or road maps;
(m) a rate book;
(n) an assemblage of blueprints, patterns or stencils;
(o) prescribed property; or
(p) an assemblage or collection of, or any item similar to, items
included in any of the paragraphs (a) to (o).
Section 149.2(1) Section 4 of Schedule VII to the".
The Hon. the Speaker: It was moved by the Honourable Senator Oliver,
seconded by the Honourable Senator Kinsella, that clause 69 of Bill C-70 be not
now read a third time but that it be amended -
Hon. Senators: Dispense.
The Hon. the Speaker: Honourable senators, it is agreed that all
motions in amendment will be dealt with tomorrow.
Hon. Ethel Cochrane: Honourable senators, in considering Bill C-70, I
intend to ignore those parts which involve changes to the administration of the
federal GST. I understand that these are desirable changes which should have our
That is not the case with the remaining parts of this bill, which deal with
the harmonized sales tax. I travelled with the Standing Senate Committee on
Banking, Trade and Commerce to St. John's and Halifax last week. During those
hearings, I was forcibly struck by the depth of the concern felt by the many
disadvantaged people in Atlantic Canada about the effect the harmonized sales
tax will have on their lives.
Both the federal and provincial governments have repeatedly assured consumers
that this tax will be revenue neutral, that increases in some costs will be
balanced by decreases in others. Honourable senators, I ask you to understand
that if this is true at all, it is true only in the overall sense of total
provincial tax levels. There will be winners in this new tax structure.
Businesses will benefit tremendously, as will consumers who can afford
big-ticket items. However, there are very many people in Atlantic Canada who
cannot afford to rush out next month to buy a new car, to buy large appliances -
yes, or even fur coats.
In my own province of Newfoundland and Labrador, 78,000 people now depend
upon social assistance to survive. There are 18,000 people, plus their families,
who rely on benefits from TAGS, the Atlantic Groundfish Strategy. Another 54,000
people and their families depend upon Employment Insurance. More than 150,000
people in the province - 25 per cent of the population - have no disposable
income. The TAGS benefits are about to run out, putting more people on social
assistance. The EI benefits have been reduced, despite the massive surplus the
government has in the EI account, and the eligible benefits period is now
In addition, we have thousands of seniors who live on fixed incomes,
thousands of students with inadequate incomes and student loans, and thousands
more families who survive on very low wages, often from just part-time jobs, as
the witnesses who appeared before us testified.
All of these people spend their small incomes on necessities, the essentials.
They do not have discretionary income to spend on cars, fur coats and
appliances. When I think back to the committee's hearings, I am reminded of the
little elderly lady in Halifax whom Senator Buchanan mentioned. She sat
patiently and listened to the testimony from one o'clock in the afternoon until
eight o'clock in the evening before she was finally allowed a couple of minutes
to tell us she simply cannot afford higher prices for her heat, for her
electricity, for her transportation, and for her daily living costs.
I think of another woman in Halifax who works for Tim Horton's. She has a
very small income and children to support. She is one of the many thousands of
Atlantic Canadians who live from pay cheque to pay cheque with no money left
over for frills or frivolous expenses, and often not enough to cover the
necessities. She told us about her genuine fear that, when the HST comes into
effect, she may simply be unable to feed and clothe her two boys.
Honourable senators, this woman, like so many others, cannot afford to pay 8
per cent more for her heat, for her hydro, for her children's clothing, for
shoes, for haircuts and all of the other day-to-day, month-by-month expenses
that are unavoidable necessities. She does not have 8 per cent flexibility in
her family budget. The day before pay day, she is broke. Where is that extra
money supposed to come from? We cannot try to tell her that it will be fine,
that she will make up for this added expense the next time she buys a car or a
new stove. She cannot afford a new car or stove, or any of the other big-ticket
items the government says will make all of this even out for her. All she sees
is added costs for all of the purchases she and her family must make, all of the
services they must have, simply in order to live. Because of those added costs,
her children will have less food and less clothing, and she will never be able
to save a down payment for that new car or buy a new stove.
What will happen now, if her plumbing or her old stove needs to be repaired?
She will not be able to afford to have them fixed. Those services will now cost
8 per cent more.
These are the taxpayers who will provide most of the government's revenue
from the harmonized sales tax. I think you should consider their priorities,
honourable senators. They really do not care about the issues that have consumed
so much of the committee's and the government's attention over this bill. They
do not care about tax-included pricing, for example.
I know honourable senators have seen a survey from the Department of Finance
which shows that 72 per cent of Atlantic Canadians are in favour of tax-included
pricing. What they were asked was this: Assuming that there will be this tax, do
you think it should be included in the price or shown separately? Try asking
this lady who works four and one-half hours a day at Tim Horton's the real
question: Do you want the tax at all? She will give you a very different answer,
I can assure you, and so will the vast majority of her fellow Atlantic
This witness was certainly not unique. The committee heard from many others
in Atlantic Canada who expressed the same concerns. In St. John's we heard a
joint presentation by the Coalition for Equality, the Group Against Poverty, and
the National Anti-poverty Organization. This is what they told us:
Now Newfoundlanders are facing a new consumption tax which will hurt low
income people - but our Finance Minister claims, "The vast majority of
families in all income categories will pay less tax." This is true only
if you have discretionary income to spend, unlike people who live on low fixed
incomes such as pensioners, people forced to take social assistance, and
people with low paying jobs or employment insurance.
These people are all going to be hurt by the harmonized sales tax because
we don't buy many items that will have reduced taxes... The new 8% tax on
heating fuels, electricity, purchased transport, gasoline, and children's
clothing is a huge price for people who live on low fixed incomes to pay. It
is extremely unfair to implement this tax that will push the poorest people in
our province into deeper poverty.
The Newfoundland and Labrador representatives of the Canadian Federation of
Students told us they are very concerned about higher costs for heating,
electricity, books and other essentials. They are especially worried about the
effects of the HST on students with small children. They also fear that this
will mean another increase in tuition fees. Operating costs for Memorial
University are expected to increase by $750,000 a year. That is three-quarters
of a million dollars a year that Memorial University will have to spend as a
result of this HST, and the university will have to find that money somewhere,
and I do not have to tell you where. The same will be true for other educational
institutions in Atlantic Canada.
Many students are tenants, and they worry that their rents will go up because
of the HST. That is a concern of many low-income people. They have good reason
for their concern. In Halifax, we heard from the Investment Property Owners of
Nova Scotia who told us that they will be forced to cut back on maintenance and
increase rents. They said:
Tenants will suffer from a decrease in quality of their rental
accommodations for the same rent they paid before the harmonized tax. Whatever
the amount, the cost of rental accommodation will increase to tenants. In some
cases, however, the individuals can't afford any cost increases; therefore
these individuals are forced to move to cheaper rental accommodation.
What about those low-income people who own their own homes? More and more of
these seniors are doing that. Will they get a break here? Apparently not. The
HST will also result in significant cost increases for municipalities, which
will have to be passed on. For example, the town of Windsor, Nova Scotia, told
The result of this is that all municipalities will be paying millions of
dollars in additional taxes to the province. This will result in higher
increases in property tax just to maintain the same level of service as last
Honourable senators, most senior citizens live on fixed incomes. They are
very frightened about the effect the HST will have on their purchasing power.
Listen to the voice of this Nova Scotia division of Canadian pensioners. This is
what they said:
More than 50 per cent of the seniors population have gross incomes of less
than $24,000 per year per household.... Among the major concerns voiced by
seniors has been the effect this tax will have on essentials such as fuel,
power and transportation.... Seniors have also expressed concern regarding the
effects the HST may have on their cost of accommodation... They are concerned
about increased postal rates, the costs of clothing and footwear under $94,
funeral expenses,... the provision of home care services.... Even services
such as tax preparation and the preparation of wills will cost more with the
addition of the HST.
Honourable senators, in the face of all these very serious worries, concerns
and fears that we heard from low-income people in Atlantic Canada, we have
repeated assurances from federal and provincial ministers of finance. They say
"Don't worry." They say, "The extra tax on some items will be
offset by lower taxes on others." They say, "There will be
compensation for the poor." In Newfoundland and Labrador, our Minister of
Finance, Paul Dicks, has said that there will be an announcement in the
provincial budget of "some relief" - and I use his phrase, "some
relief" - from the harmonized sales tax for people with low incomes. We do
not know that yet. We have not got it in writing.
When the committee was in Halifax, the opposition leader, John Hamm, told us
that the province is establishing an $8-million assistance program for the poor.
He also told us, however, that according to the province's own reports, the HST
will mean that Nova Scotians will pay $84 million more in sales tax. That
$8-million assistance package is a drop in the bucket. Mr. Hamm offered us this
The bottom line is lower and middle income Nova Scotians who have little or
no discretionary income will be gouged by the HST. They don't have a lot of
money left over after heating their homes, gassing up the car, or clothing the
kids. And they'll have a heck of a lot less after April 1 if the HST is
approved by the Senate.
Consumers will pay $84 million per year in sales tax with the HST. Yet, the
provincial government says it will lose $100 million a year in revenue with the
HST. In Newfoundland and Labrador, the government says it will lose $105 million
every year with the HST. I have not seen the New Brunswick figures, but I
presume they are much the same, and that is about a $100-million loss per year.
This adds up to $305 million in lost revenue every year for the three provinces.
Of course, that is why the federal government paid out $761 million to those
provinces as an incentive to convert to the GST.
However, if the provinces will lose revenues, how can consumers be paying
more after April 1? It seems there is a simple answer. The Atlantic Provinces
Economic Council has estimated that businesses in these three provinces will pay
$581 million less per year in sales tax as a result of the HST. They will profit
handsomely. The difference between the gain by businesses and the losses by the
provinces of $305 million is $276 million a year. That is the amount of added
tax burden that the consumers of Atlantic Canada will be forced to bear by the
HST. Those added taxes will fall most heavily on - guess who - the low-income
people of Atlantic Canada. That, honourable senators, is why I simply cannot
bring myself to support this bill.
I would like to leave you with one brief quotation. It is from a submission
the committee received from Phyllis and Ellen Cottreau of Yarmouth, Nova Scotia.
We are opposed to the BST being put on the necessities of life... We cannot
afford it! Get real!
I believe they speak for many people in Atlantic Canada.
Motion in Amendment
Hon. Ethel Cochrane
: Honourable senators, as a result of what I heard, I
would like to put forward this amendment. I move:
That Bill C-70 be not now read a third time but that it be amended, on page
365, by adding after line 40 the following:
"269.1(1) The portion of subsection 122.5(3) of the Act before
paragraph (a) is replaced by the following:
(3) Where a return of income (other than a return of income filed under
subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or
subsection 150(4)) is filed under this Part for a taxation year in respect
of an eligible individual resident in a non-participating province as
defined in subsection 123(1) of the Excise Tax Act and the individual
applies therefor in writing, 1/4 of the amount, in any, by which the total
(2) The Act is amended by adding the following after subsection
(3.1) Where a return of income (other than a return of income filed under
subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or
subsection 150(4)) is filed under this Part for a taxation year in respect
of an eligible individual resident in a participating province as defined in
subsection 123(1) of the Excise Tax Act and the individual applies
therefor in writing, 1/4 of the amount, in any, by which the total of
(b) $407 for a person who is the qualified relation of the
individual for the year,
(c) $407, where the individual has no qualified relation for the
year and is entitled to deduct an amount for the year under subsection
118(1) by reason of paragraph (b) thereof in respect of a qualified
dependent of the individual for the year,
(d) the product obtained when $214 is multiplied by the number
of qualified dependants of the individual for the year, other than a
qualified dependant in respect of whom an amount is included by reason of
paragraph (c) in computing an amount deemed to be paid under this
subsection for the year, and
(e) where the individual has no qualified relation for the year,
the lesser of
(i) $214, and
(ii) 4.3% of the amount, if any, by which
(A) the individual's income for the year
(B) the amount determined for the year for the purposes of
(f) 5% of the amount, if any, by which
(i) the individual's adjusted income for the year
shall be deemed to be an amount paid by the individual on account of
the individual's tax payable under this Part for the year during each of
the months specified for that year under this subsection (4).".
The Hon. the Speaker: It is moved by the Honourable Senator Cochrane,
seconded by the Honourable Senator Simard, that Bill C-70 be not now read a
third time but that it be amended on page -
An Hon Senator: Dispense.
Hon. Donald H. Oliver: Honourable senators, on a point of order, I
should like to revert to the amending motion I moved in relation to books. I
should have read in one more motion in amendment which is as follows:
That Bill C-70 be not now read a third time but that it be amended, on
pages 95 to 98, by deleting clause 69.1.
That is part of the amendment related to books.
The Hon. the Speaker: If it is part of the amendment, then it need not
be moved again. We will accept it as part of the amendment. Is it agreed
Hon. Senators: Agreed.
Hon. Brenda M. Robertson: Honourable senators, during the debate on
second reading of Bill C-70, I said that I was optimistic that I could speak
more positively about the provisions of this bill on third reading. I was
counting then on my certainty that, once the members of the Standing Senate
Committee on Banking, Trade and Commerce had the opportunity to listen to those
Atlantic Canadians most directly affected by this bill, those honourable
senators would hear the same fears and concerns that I had been hearing
personally in New Brunswick for many months.
The witnesses who appeared before the committee did a great job of describing
the reality of the impact of the HST on businesses and individuals in Atlantic
Canada. It is directly because so many groups and individuals took
responsibility for explaining in detail the real effects of the HST that I
believe the committee is recommending improvements to the bill.
The committee's recommendation that there be improvements to the bill is a
victory for those witnesses and supporters who worked so hard to help honourable
senators understand the serious implications of a fairly complex piece of
legislation. By their appearances before the committee, they also helped other
New Brunswickers, Nova Scotians and Newfoundlanders to understand the
implications of it as well.
It is also a victory for the "system." A pharmacist from Moncton
called my office this morning and said, in relation to the deferral of the
tax-in pricing provisions, "This is proof that the system really works,
Brenda, and that the Senate does have an important function."
I am very happy for all Atlantic Canadian consumers and businesses who would
have been harmed by the tax-in pricing provisions of the HST. Should the
committee's recommendation be passed, these discriminatory and confusing
provisions will effectively have been removed from the bill, which is very good
news. However, honourable senators, I have other concerns about the HST,
particularly its harmful impact on lower-income individuals and families.
It is clear that the HST will hurt the most vulnerable people in the Atlantic
region - those on social assistance, unemployed people, seasonal workers, those
who must rely on employment insurance for part of the year, those working at or
near the minimum wage level, senior citizens, and those with disabilities who
are living on pensions and fixed incomes. All of us in this chamber from
Atlantic Canada know we have a lot of those people.
In fact, this reality was acknowledged by various studies which demonstrated
that low-income groups would be negatively affected by the HST because the tax
would increase the price of basic necessities, including electricity, heating
fuel, clothing and footwear under $100, bus rides, diapers, used cars sold
privately, and so on.
The same research, by the same government sources, revealed that upper-income
households in the region could expect to save as much as 25 times more - and
maybe that is why Senator Stewart is smiling - than the lower-income people in
some categories of expenditures where the combined HST will be less than the tax
Honourable senators, the impact of the HST on New Brunswick is best
understood when one takes into consideration the reality of its social and
economic conditions. In New Brunswick, with a population of just 762,000 at last
count, more than 70,000 people are on social assistance; more than 46,000 people
are on employment insurance; approximately 100,000 people file an EI claim per
year; and 33,000 children live in poverty. As well, almost 96,000 senior
citizens live in New Brunswick, most of whom are dependent on small pensions,
generally the OAS-GIS.
Although it is difficult to obtain statistics on "the working
poor," a two-year-old study revealed that of those New Brunswickers who
held one job during the year, 6.9 per cent were working at the minimum wage
which, at the time, was between $4.50 and $4.75 an hour. As well, more than 14
per cent of the population was working for $6 an hour.
Honourable senators, for the past three years, the average weekly earnings in
New Brunswick were up by only $4.08 while weekly earnings in Canada were up by
$26.62. High unemployment, a large number of people on social assistance and EI,
far too many people working for low wages, and a dismal growth in weekly
earnings is the reality in New Brunswick.
New Brunswick's Minister of Finance has conceded that as many as 20 per cent
of New Brunswickers could be impacted negatively by the HST. Honourable
senators, about 20 per cent, as the minister casually said, means that
approximately 160,000 of our people will be negatively impacted by the HST. Put
another way, the minister is saying that poor families and individuals will lose
out under harmonization.
Of course, our unemployment rate is not as bad as some rates in parts of
Atlantic Canada, so the impact will be more serious in those areas. It this very
troubling to me, and it should be troubling to every senator in this chamber -
especially those senators from New Brunswick, Nova Scotia and Newfoundland. The
people in our three provinces will know how you voted on these serious issues.
These people will also know who, in the other place, voted to hurt them further.
David Amirault of the Atlantic Provinces Economic Council - some of you from
Atlantic Canada know David - is particularly scathing on the impact of the HST
on low-income families. He said:
Breaking down the HST's impact clearly shows the new tax's
"gouging" effect on low-income consumers, with many of the expected
price hikes affecting basic necessities.
Bernard Valcourt, leader of the Conservative Party in New Brunswick, released
a detailed analysis carried out using Statistics Canada family expenditures
data, an analysis which clearly shows that families earning below $30,000 would
be affected negatively by this tax.
It is interesting to note that $30,000 is roughly the amount used by the
federal government to determine its GST rebate. All we are asking is that the
federal government somehow pressure the provinces, through this amendment, to
provide for a rebate on that other portion of the harmonized tax. That is what
this is all about.
Premier McKenna's government response was a so-called income tax reduction
and a child poverty initiative. The income tax reduction is merely the shifting
of provincial taxes from personal income to a consumption tax. That measure was
also adopted in Nova Scotia. That is an interesting twist of the dollar. There
the government was honest enough to clearly state what they were doing. They
were not quite that honest in New Brunswick. While the provincial child poverty
initiative may be a step in the right direction, it is just that, a step.
From its inception, the federal program was intended to replace the old
family allowance and to provide an income supplement to the working poor. It was
never meant to be a replacement or a rebate for a tax they had to pay on basic
I would add that, while other children in Canada will have the benefit of the
increase in the child tax benefit, our children will not, because it will be
more than eaten up by this new tax on the necessities of life. I suppose we are
once again relegating Atlantic Canadians to second class citizens.
Those who argue that the HST will not hurt New Brunswickers are placing their
faith in unrealistic models and assumptions. One model includes a figure of $600
as a cost to heat a typical New Brunswick home. I am not sure where in New
Brunswick they live, but experience suggests that this is a wildly inaccurate
estimate. Perhaps this amount would heat the average home for less than half a
It is also argued that much of the benefit of the HST results when business
and retailers pass on the savings from input tax credits to the consumer. This
assumption is seriously challenged by those who argue that, after years of
marginal profits, few businesses are in a position to pass on savings.
I must take issue with the notion that the Government of New Brunswick has
taken action that will offset the harmful effects of the HST on lower-income
people. While the government has certain measures to improve the child tax
benefit and the working income supplement, I must emphasize that these measures
are a far cry from a satisfactory response to the effects the HST will have on
lower-income New Brunswickers. These measures were never intended as a response
to what is, essentially, an 8-per-cent tax hike on the necessities of life.
Honourable senators, I support this amendment because the measures taken in
New Brunswick in response to the HST are extremely modest. The provincial
Minister of Finance admits that some lower-income people - 20 per cent is
mentioned casually - will fall through the cracks. When you have 160,000 people
falling through the cracks, that is a significant number. They will be hurt by
Honourable senators, it is within the power of the federal government to take
appropriate measures to right an injustice which will affect lower-income New
Brunswickers and Atlantic Canadians. In committee, members said that this was a
provincial responsibility, and outside the Senate's realm of responsibility. I
would suggest that there are measures that the federal government could take.
The federal government could insist that the bonus of just under $1 billion that
they are paying to the three provinces for helping them out on this legislation
be rebated on the provincial share of the harmonized tax. We hear nothing but
silence on this issue.
Honourable senators, our people are going to be hurt and we better do
something about it. We have got to have a rebate of the provincial portion of
the harmonized tax or else too many people will suffer again, and we will be
I support this amendment as I hope other honourable senators will.
Hon. Mabel M. DeWare: Honourable senators, I rise today to speak on
third reading of Bill C-70. Before I do, I would like to express my appreciation
of the work done by our committee at our hearings held in Ottawa and in Atlantic
As a Canadian senator and as an Atlantic Canadian member of the Atlantic
caucus, I also appreciated listening to the views of Atlantic Canadians. I
appreciated their efforts.
Honourable senators have already heard from Senator Cochrane, who listed the
concerns of the people in Newfoundland and Labrador; and from Senator Robertson,
who detailed the concerns of the people in New Brunswick. My remarks will be in
somewhat different vein because I will deal with concerns which affect all
I should like to take a moment to express some of my observations on this and
other recent parliamentary matters, both as a New Brunswicker and as an Atlantic
Canadian. I hope my colleagues across the way, and certainly members of
Parliament from the other place, will reflect on what it is that troubles me so.
The Senate is a place of sober second thought, a place where legislation can
be given further consideration or, as some have said, where bills can stew
awhile and, with a pinch of this and a little of that, their flavour might be
It appears to me that senators are having to cook entire meals. We are
receiving legislation that is of inferior quality, and Bill C-70 is no grade-A
cut of beef.
Similarly, other bills have been sent to this chamber without having
undergone any real legislative examination before they are sent to us. I am not
sure what is the cause of this lack of attention to basic detail, but it is
Perhaps it is because the opposition in the other place do not concern
themselves with the monotony of committee work and the improvement of bills.
Perhaps they are too busy to do the work necessary to ensure that Canadians are
not hurt by poorly drafted bills.
Had we not had an opportunity to put our arguments to Liberal senators, and
had we not had a chance to hear from the people in Atlantic Canada who will be
affected by passage of this bill, Liberal senators would not have seen the error
of the bill as drafted.
Thankfully, with our members' deliberations in committee, Liberal senators
agreed that an amendment was necessary. They agreed that the tax-included
pricing would cost retailers, and that those costs would have to be passed on to
Our committee was told, when some of the retailers appeared before us - and I
imagine they also appeared before the Liberal caucus - what it would cost them.
They told us it would cost them a figure in the millions of dollars to do the
kind of cataloguing, pricing and price changing from one part of Canada to
another. Some companies, as you heard today, said that tax-in pricing would cost
too much and that they would have to close their stores in Atlantic Canada.
Liberal senators now agree that TIP in Atlantic Canada would have led to a
fragmentation of the Canadian market at a time when we are trying to decrease
internal barriers to trade. Passage of the unamended bill would have led to the
Balkanization of Atlantic Canada. We have only just built a bridge to link
P.E.I. to the mainland and the government wants to cast Atlantic Canada adrift
once again to fend for ourselves.
Where did such an idea originate? Was this whole idea the Prime Minister's or
Sheila Copps'? Was it meant to trick Atlantic Canadians into thinking that the
Liberals were keeping their promise to scrap the GST?
One would hope that the government, despite having such a free ride in the
other place, would ensure that they listen carefully to the concerns expressed
by their own members of caucus. Some members from Atlantic Canada must have
spoken up on this matter - I cannot imagine them not doing so - before this
legislation was tabled.
Canadians have had to hope that government members will speak up to ensure
that legislation that is in the public interest will come out of the government
machine. However, honourable senators, that has not happened.
As I listened to Senator Buchanan today, I was reminded of all the efforts to
convince supporters of the Liberal government, including Liberal senators, that
their EI regulations would hurt Atlantic Canadians. Liberal MPs from Atlantic
Canada disregarded the concerns expressed by Elsie Wayne on the EI matter, and
the Liberal government tried to disregard the efforts of Senator Buchanan and
the rest of the Atlantic caucus on the matter of the HST, until they realized we
were right. Why does it take them so long to do the right thing? Why is it up to
us to consider the inner details of legislation that would have profound effects
on the economic health of all Canadians? Surely it was not envisioned that our
job would be to dot the "i"s and cross the "t"s in
government legislation. Surely, we in the Senate were not supposed to have to do
the work of the elected members of Parliament. More and more we are called upon
to defend not only the constitutional interests of Canadians, as is this
chamber's traditional role, but to deal with tangible economic matters.
The Consumers' Association of Canada told us that there is a difference
between what consumers say they want and what they are willing to pay for. They
recommended that tax-included pricing be removed from this Liberal bill as the
cost would be alarmingly high.
We in the Senate are supposed to look at things carefully. The new term
"precautionary principle" is supposed to be very important here. It
has fallen to us here in the Senate to ensure that the regions are not forgotten
and that government does not run roughshod over the interests of Canadians.
Unamended, this bill would have done a disservice to Atlantic Canadians.
Where were the Atlantic MPs, as Senator Buchanan has asked, both on this issue
and on the EI system? Did the Liberal MPs from Atlantic Canada not do any
homework on this bill, or are they not telling the truth? They voted for this
bill on three separate occasions. They studied it in committee. They heard
witnesses point out the exact problems that we are now addressing. They are
afraid to speak out against the wishes of Ms Copps and the Prime Minister. Until
we have more opposition MPs from Atlantic Canada, it will fall to us to do this
most basic of legislative work.
I once again thank all honourable senators for their tremendous efforts to
ensure that the voice of Atlantic Canadians was not disregarded and that a bill
which should have been amended long ago finally received due consideration.
I am concerned that several changes to the bill were not embraced by Liberal
senators. However, given their past record, I am sure they will come to their
senses when we vote for the amendments, if not for Atlantic Canadians, perhaps
for the political needs of their party.
Hon. Jean-Maurice Simard: Honourable senators, since I spoke last week
at second reading, I will take just a few minutes to explain my position to you.
Like my colleagues, I congratulate the Liberal senators on the committee, the
Chair, Senator Kirby, in particular. If he would take off his Liberal hat more
often, he would be a credit to his party and to the Senate, and the outcome
could be improved legislation.
Two weeks ago, we received a 400-page bill making 300 amendments to four
acts. After the public servants finished their work, the House of Commons
deigned to accept another 100 amendments. During last week's visit to the
Atlantic provinces, we discovered that people were not aware of these
amendments. We heard 200 groups and individuals, and thanks to the interviews
Senator Kirby gave to the print and broadcast media, people were made aware of
the scope of this hateful and ill-conceived bill, which will punish the
middle-income earners and the disadvantaged, even if the four amendments
proposed by us today are accepted.
I am not going to repeat all of my arguments in favour of these amendments
presented by my colleagues. As I said last week, if we could have found one or
two Liberal senators in the Atlantic region to join forces with us in improving
this bill, we would have done a good job and could have delayed past April 1,
the effective date of this mongrel bill. I am not calling only on the Liberal
senators from the Atlantic region, but also on the independent senators from
Quebec, Ontario and the other provinces, to consider the amendments tabled today
and to support the amendment moved by the committee, which eliminates this
second product pricing system.
On television yesterday, Senator Kirby admitted that the Liberal senators had
been backed into a corner by the Progressive Conservative senators. I would like
to see Senator Kirby tell his colleague Paul Zed, the MP for Fundy-Royal, that
he and his buddy are not the ones who convinced the Minister of Finance, Paul
Martin, six months ago in the parliamentary restaurant. From Mr. Martin's
appearance before the committee last Monday, we know that he has admitted that
he was not in favour of the hidden tax for this Atlantic region.
I wish Senator Kirby would tell Paul Zed that it was thanks to the efforts of
Progressive Conservative senators that Mr. Martin changed his mind and postponed
the implementation of this second labelling system. We stated our reasons for
objecting to the system as well as those given by retailers, wholesalers and
manufacturers. We checked and it was confirmed by the federal government and the
provinces that the cost of implementing this hybrid system for the benefit of
the 8 per cent of Canadians living in Atlantic Canada, especially the most
disadvantaged, would have been $150 million the first year and then $75 million
annually, at least.
Liberal senators are to be commended for taking the time to consider the
precarious circumstances of the people in Atlantic Canada. This has not happened
often. During the past week, thanks to our efforts, the National Press Gallery
woke up and saw the impact that implementing this disastrous tax would have on
Atlantic Canada and the rest of the country. On behalf of my colleagues, I
congratulate them for making the rest of the media aware of these facts.
Those 2 million people living in Atlantic Canada were not fooled by the
strategy of the Liberal government. We were reminded in the last few days that
the government wrote three cheques last June or July, totalling almost $1
billion, to these three Liberal governments. There is nothing wrong with that.
However, Canadians living in Atlantic Canada will not be fooled by this
strategy. The government paid the cheques in June or July. Then they waited
until two months ago to introduce in the House of Commons this complex 400-page
bill, and they allowed two days' debate in the House of Commons. They refused to
travel to the regions, and by doing so they refused to hear the people living in
However, we did that. We did our work. We tried to do the best we could with
a bad piece of legislation.
There is another thing on which the citizens living in Atlantic Canada will
not be fooled. They have already discovered that the government broke its
promise to scrap the GST - as we were told seven years ago. We still have the
same GST, only they have compounded the problem. They compounded the problem for
the poor and senior citizens who will have to deal with this harmonization
legislation if it passes, and I hope it will be killed. Should it pass,
Canadians living in Atlantic Canada, especially the poor, will not be fooled,
because they will have to manage, with greater difficulty, their personal
budgets. They will remember that at election time.
Speaking of elections, I stopped making predictions on results 25 years ago.
However, I will make a prediction today. In New Brunswick - I do not know about
Nova Scotia - at least four and possibly five sitting Liberal members will pay
for this bad legislation with their seats. It comes after a bad EI bill and bad
gun control legislation. They will pay with their seats, come June 9 - or July
or even as late as September. If they wait until September, we will have the
summer to campaign. Mark my words. We will remind Liberals, Conservatives and
other citizens that this government has double-crossed them on the EI
legislation, has double-crossed them on gun control legislation, and imposed a
disguised GST then compounded the problem with this bill which is now before us.
Speaking of EI legislation, where is the so-called reform? I want to remind
honourable senators today that this Senate, on three occasions, refused the
requests of some senators to travel to Atlantic Canada, New Brunswick in
particular, to hear citizens on that issue. We all know that a month ago Liberal
MPs, Paul Zed included, discovered they had made a mistake. They should have
accepted the resolution to hear the citizens of New Brunswick.
Senator Kinsella: Who is Paul Zed?
Senator Simard: He will be the former Liberal MP from Fundy-Royal.
Honourable senators, I will finish my speech right now. I will have a chance to
get back to this next week or later. I would like to appeal one last time to
senators who will vote tomorrow, not only Liberal senators but Conservatives and
independents, from the Atlantic, from Toronto and from Western Canada, to vote
against this bill. We must realize that this is a bad bill, even in its amended
I could support this bill if the senators on the majority side indicated
their support for these three amendments.
The Hon. the Speaker: Honourable senators, I am sorry to interrupt but
the sound system is not working.
Senator Simard: Honourable senators, if the Senate in its wisdom could
accept these three amendments - the first one on the pricing system, the one on
physicians and the one urging the federal government and the provinces to allow
a rebate on the provincial tax portion, I could support the bill. Even with
those amendments, the bill is poor legislation, but I would be willing to
I would like to call on senators not only from the Atlantic region, but from
all the provinces. I invite them to consider the amendments proposed today and
to not be party to this strategy I mentioned earlier, this scandalous
legislative measure that will penalize the most disadvantaged in the Atlantic
As Jean-Marc Parent puts it in his performances, my party did it.
We flashed the lights in the Atlantic region. If the flashing of the lights
in the Atlantic region sent a message to the other regions so that the present
government will assess the damage it has done to the Atlantic region, we have
The three or four amendments before you today are, in my opinion, the minimum
required to make this bill acceptable. If, in their wisdom, the honourable
senators accept these amendments affecting doctors, the provincial rebate and
sticker prices, I could support the bill. Otherwise, I will use all the powers
at my disposal to convince my colleagues from Quebec, Ontario, Saskatchewan,
Prince Edward Island and the other provinces to join together in killing this
bad bill, even if the amendment proposed by the Senate Committee on Banking,
Trade and Commerce were approved.
Hon. Noël A. Kinsella: Honourable senators, we seem to be concluding
third reading debate on this bill, and it does not appear that our colleagues
opposite will be participating viva voce. It does not appear that we will have
the benefit of their wisdom on the important amendments that have been moved
this afternoon. Once again, Atlantic Canadians will reflect upon the level of
interest shown by some honourable senators toward the concerns of the public in
the provinces of New Brunswick, Newfoundland and Labrador and Nova Scotia.
However, honourable senators, we have had great leadership to take up the
concerns of the public in Atlantic Canada over the past couple of weeks. We have
had the leadership of Senator Buchanan who, at second reading, laid out the
issues surrounding this bill very clearly.
The issues are serious ones that speak to the socio-economic, life-and-death
situations of the people of New Brunswick, Nova Scotia, and Newfoundland. This
is not an academic exercise. This is not a financial administration exercise.
This is about people who are living on the edge for a variety of socio-economic
reasons. These are people of whom Senator Cochrane spoke eloquently this
afternoon; people for whom being able to pay for fuel to heat their homes in the
cold of winter is a real issue. This bill would raise their fuel bill by 8 per
If these people are freezing, perhaps they could buy more clothing.
Currently, honourable senators, in the province of New Brunswick there is 7 per
cent GST on clothing, but no provincial sales tax. This measure would raise the
tax on clothing to 15 per cent.
Honourable senators opposite, like other arrogant, well-heeled people from
Upper Canada and elsewhere, may be able to buy fur coats and beaver hats, but
for the people along the banks of the great Miramichi and Saint John Rivers,
that increase in tax from 7 per cent to 15 per cent will mean that they will go
without heat in the winter, and they will shiver for lack of the extra clothing
If I am wrong, honourable senators, I challenge my friends opposite to
provide me with the socio-economic data and analysis that this government or its
compatriots in those three provinces have adduced. What is your evidence? What
does your analysis show? Did you look at the levels of poverty in the real
world? I know that many of our honourable friends opposite are of the older and
great tradition of the Liberal Party which had a social conscious. However,
unfortunately, the reformed Liberals have been overcome by a neo-conservative,
Were there a good cabinet system in government, perhaps many silly measures
such as this one would not be introduced by a minister, very often without the
national caucus of the governing party having seen it in advance. I have great
sympathy for my friends in the other place who sit in the government caucus.
They did not know this was coming forward. These things are introduced and they
are asked to be good sailors and row in the direction of the leadership.
Obviously, when the legislation gets to this place, the leader and the
supporters of the government in the Senate do their best to support a government
initiative, even if they do not believe in it. I cannot believe that many of my
friends opposite believe in this bill. However, they will do as they have been
trained to do - that is, support the government - and we will not be surprised,
when the vote is taken tomorrow, to see how some of them vote.
However, honourable senators, I will make one final attempt to persuade my
friends opposite to support some good amendments that speak to the
socio-economic reality of our part of the country. We all know that the policy
underlying this bill is politically driven. It had a great deal to do with the
promise made during the last election and in the Red Book. The debate on whether
or not that promise was made was reflected in the town hall meeting on the CBC.
The reality is that many people in Atlantic Canada thought that the promise
was to get rid of the GST, and they were trying to help the federal government
to do that.
Mind you, they were encouraged by the fact that they had a nice cheque being
associated with their enthusiasm to help the federal government meet one of its
election promises, which we were told was not one of the promises,
notwithstanding the fact that the Deputy Prime Minister resigned.
It is another one of those terrible messes, and those messes inevitably
unfold when a government measure is not based on good policy. This policy was
politically driven and exercised with no good public policy principles to
underlie it, and no good financial studies or socio-economic studies as its
underpinning. Consequently, we on this side of the house attempted to do what we
could to rectify a bad situation.
Once again, I want to compliment the Honourable Senator Buchanan, as well as
the other senators who travelled to three provinces in Atlantic Canada. The
people in New Brunswick, whom I know a little better than those in other parts
of the country, appreciated that they were given an opportunity to be heard.
They appreciated Senator Lynch-Staunton's request to this chamber that the
committee travel to Atlantic Canada to hear the views of the people. That is
particularly so, given the fact that the House of Commons committee refused to
Honourable senator, I would conclude by encouraging all members to support
all the amendments we will be addressing tomorrow.
Hon. John B. Stewart: I should like to ask the Honourable Senator
Kinsella to confirm that his party voted for the GST. Also, am I informed
correctly that his party is in favour of the harmonization of the GST and the
provincial sales tax?
Senator Lynch-Staunton: Across the country.
Senator Stewart: The bill now before the Senate, as reported
unanimously from the Standing Senate Committee on Banking, Trade and Commerce,
recognizes the principle of harmonization across the country, and provides that
tax-in prices will come into effect only when the 51 per cent of the population
threshold is met.
Consequently, I ask Senator Kinsella to explain how, in view of what he has
just said in condemnation of the bill as reported unanimously by the committee,
his position is consistent with the declared position of the Progressive
Conservative Party with regard to the GST initially and its declared position
with regard to harmonization?
Senator Kinsella: I thank the Honourable Senator Stewart for his
question. I will attempt to provide clarification and an explanation.
As far as the Goods and Services Tax is concerned, it is a good tax. It is an
appropriate tax. Upon analysis and study of that bill when it was before us,
notwithstanding the odd distraction, I voted in favour of it.
I have lived in several other countries around the world when they introduced
their goods and services taxes. I lived in Italy when the Italian government
introduced their VAT tax.
Given the nature of the country in which we live, which is a Confederation,
and the fact that there are sales taxes in many provinces, the importance of the
principle, from a public policy standpoint, of harmonization, seems to follow
like night and day. That is the principle to which I subscribe today. It is the
principle upon which this kind of system can be made to work effectively.
What I disagreed with, and what I continue to disagree with, is the
Balkanization that may occur as a result of this measure because, obviously, it
is piecemeal and it will not be effective across the country. It will cause
great disharmony. It will have the effect of isolating these three provinces in
That is why I was prepared to listen carefully to what the Standing Senate
Committee on Banking, Trade and Commerce said about the 51 per cent rule - that
you must have most of the country on side if you hope to have harmonization.
Let me express a concern I have. It is this: What was the motivation behind
this amendment relating to tax-in prices? Would we have been successful in
having the Standing Senate Committee on Banking, Trade and Commerce present its
report with this recommendation under the leadership of Senator Buchanan? When I
say "we," I mean the senators from Atlantic Canada. Was the amendment
accepted because the Retail Council of Canada and the major suppliers, which are
not located in our provinces, effectively said, "We will not deal in that
area unless you remove this element?"
Was the public interest of New Brunswickers the first and foremost issue that
has driven this bill?
Senator Robertson: There is no rebate.
Senator Kinsella: There are many other things, and that is the
difficulty. I hope I have clarified the situation.
Senator Gigantès: I still do not understand.
Senator Lynch-Staunton: It is all Greek to you.
Senator Stewart: As I understood Senator Kinsella, he said he believed
in harmonization, but he is against the bill as it now stands because of
Balkanization. Is that correct?
Senator Kinsella: Yes.
Senator Stewart: And this is notwithstanding the unanimous report of
the Standing Senate Committee on Banking, Trade and Commerce on which Senator
Buchanan was a member; is that correct?
Senator Kinsella: Yes. I do not like the bill.
The Hon. the Speaker: If no other honourable senator wishes to speak,
this matter will be considered debated and, by the unanimous agreement of
earlier today, we will defer the vote to tomorrow at 3:30 p.m.
Bill to Amend-Report of Legal and
Constitutional Affairs Committee-Motion in Amendment-
On the Order:
Resuming debate on the motion of the Honourable Senator Carstairs, seconded
by the Honourable Senator Losier-Cool, for the adoption of the Sixteenth
Report of the Standing Senate Committee on Legal and Constitutional Affairs
(Bill S-3, An Act to amend the Criminal Code (plea bargaining)),
presented to the Senate on November 7, 1996.-(Honourable Senator Kinsella).
Hon. Anne C. Cools: I ask if the Honourable Senator Kinsella will
defer to me so that I may speak on this issue.
Hon. Noël A. Kinsella: Agreed.
Senator Cools: Honourable senators, the sexual assault murders of
three teenage girls, Tammy Homolka, Leslie Mahaffy and Kristen French by the
husband and wife sexual psychopath couple, Karla and Paul Bernardo, of which
Karla was a sister to the murdered Tammy, and the consequent Karla Homolka's
plea bargain agreement, shocked Canadians from coast to coast and attracted much
public repugnance. Simultaneously, the prosecutorial and judicial management of
this case resulted in much public indignation and loss of confidence in the
administration of justice in Canada. The public has been shocked by the
provincial and federal governments' reluctance to correct this terrible travesty
of justice, and also by the fact that both the legislature of Ontario and the
Parliament of Canada have been disinclined to examine this terrible affair.
Bill S-3 is my second initiative urging the Senate and the Parliament of
Canada to examine this matter to bring this plea bargain agreement under
parliamentary investigation. Senators know and remember that my first
initiative, a Bill of Pain, was halted rather abruptly on November 28, 1995.
However, Bill S-3 is a proposed amendment to the Criminal Code aimed at enabling
courts to repudiate miscarried plea bargain agreements like the Homolka
agreement and to impose a suitable penalty.
Bill S-3 passed second reading unanimously on May 2, 1996 and was referred to
the Standing Senate Committee on Legal and Constitutional Affairs. I have been
disappointed that the Senate committee did not call a single witness from the
public. On November 7, 1996, the chairman, Senator Carstairs, reported Bill S-3
to the Senate with a one sentence report that:
...this Bill be not proceeded with further in the Senate for the following
This recommendation is based on your committee's concern that Bill S-3 could
infringe legal rights protected by section 11(h) of the Canadian Charter of
Rights and Freedoms by allowing an accused to be punished more than once for
the same offence.
This is most interesting, honourable senators, because section 11(h) is not
relevant to Bill S-3. Section 11(h) states:
If finally acquitted of the offence, not be tried for it again and, if
finally found guilty and punished for the offence, not to be tried or punished
for it again...
Bill S-3 does not propose that any accused be punished more than once for the
same crime but, rather, proposes that the accused be punished once for what the
accused was not punished under the miscarried plea bargain agreement.
Like many in this country, I had expected the Senate committee to conduct an
exhaustive study on the issue of plea bargaining, particularly in light of
expressed public wishes. In 1995, more than 320,000 people signed petitions to
the legislature of Ontario and approximately 12,000 signed petitions to the
Senate seeking inquiry of this matter. The notoriously public crimes in Karla
Homolka's plea bargain agreements deserved the investigative action of the
Senate committee. I refer you to my two second reading speeches on Bill S-3 of
March 19 and May 2, 1996, and my statements before the Senate committee on
September 26, 1996. I shall not repeat myself. I shall move on to new ground.
Honourable senators, the issue is plea bargaining and prosecutorial
discretion in the formation of plea bargain agreements with criminal offenders,
in particular, the actions of Crown prosecutors, the responsibility of ministers
for plea bargain agreements and the responsible ministers' duty to Parliament,
to the public and to justice itself for the same. In Canada, all Crown
prosecutors and justices operate under our system of parliamentary governance -
that is, ministerial and responsible government. All Crown prosecutors of the
Department of the Attorney General and all judges of the superior courts are
bound by the law and the Constitution, and by the constitutional conventions and
usages of ministerial responsibility to Parliaments. No one is exempt, and
deviation will quickly set a minister, the Attorney General, his Crown
prosecutors and any judge in violation of the law and the Constitution. The
issue is the discretion of the Crown prosecutor in making plea bargain
agreements with criminal offenders and the nature and extent of the Crown
prosecutor's discretion. In the Homolka plea bargain agreements, the Crown
prosecutor, Mr. Murray Segal; his superior, Assistant Deputy Attorney General,
Mr. Michael Code; and Mr. Code's superior, Deputy Attorney General Mr. George
Thomson, all of Ontario, have founded their actions and their justification for
same on the prosecutorial discretion.
In his Reasons on Sentencing, Mr. Justice Francis J. Kovacs of the Ontario
Court General Division, in granting judicial assent and force of law to their
actions in Homolka's trial on July 6, 1993 for two charges of manslaughter, also
relied upon and cited prosecutorial discretion. Finally, former Mr. Justice
Patrick Galligan, in his review of their actions - ordered by Ontario's newly
elected Conservative government's Attorney General, Charles Harnick - reported
in "The Report to the Attorney General of Ontario on Certain Matters
Relating to Karla Homolka" dated March 15, 1996, also relied upon the
prosecutorial discretion of the Crown prosecutor. This prosecutorial discretion
is in fact ministerial discretion - that is, the Attorney General's
discretionary powers under the Royal Prerogative. In short, this exercise of
powers is derived not from statute but from the Royal Prerogative. Of the
Ontario Attorney General agents who relied upon Crown prosecutorial discretion,
none - not one - have addressed the equally pressing dimension of a discretion,
which, simply put, is the legal and constitutional limits to that discretion.
On October 24, 1996, at the Standing Senate Committee on Legal and
Constitutional Affairs considering Bill S-3, I put this very question to
Department of Justice official Yvan Roy, General Counsel, Criminal Law Policy
Section, Criminal and Social Policy Sector. I asked him: "Could you tell us
the legal and constitutional limits to that discretion?"
I had hoped that this question, which Mr. Roy and every agent have
disregarded, would have been well reviewed by the Senate committee. My hope
found no favour. I submit that the exercise of this discretion by department
officials in criminal justice today is compelling legislative and parliamentary
study. Mr. Roy answered:
This exercise of that discretion must be supervised by the courts. The
court was quite adamant that the courts have the last say...
His misunderstanding is a compelling problem. The supervision of ministerial
discretion derived from the Royal Prerogative is the issue of ministerial
responsibility to Parliament. This supervision belongs to the electorate through
their representative institutions in Parliament. Such supervision is the
business of politics and Parliaments, not the courts.
Honourable senators, prosecutorial discretion by Crown prosecutors is not
absolute. It is bounded by legal and constitutional limits. Further, I believe
that the above Crown prosecutors of Ontario's Attorney General exceeded those
limits and acted unlawfully. I assert that the Homolka plea bargain agreements
were unlawful and unjust. Her first plea bargain agreement of 1993 is as
unlawful and unjust as it is base and shameful. I assert that this plea bargain
agreement and its judicial assent is an audacious mischief which has brought the
administration of justice into contempt and has diminished the Royal
I shall show that the limits of prosecutorial discretion are the limits of
ministerial responsibility for the minister's exercise of the Royal Prerogative.
I ask the Senate to condemn this Homolka plea bargain agreement.
Honourable senators, in 1993, under the New Democratic Party Ontario
government, then Attorney General Marion Boyd charged Karla Homolka with the two
manslaughter deaths, murders of Leslie Mahaffy and Kristen French. Homolka was
convicted of these two manslaughter charges and sentenced to 12 years on each
charge concurrently. The Attorney General did not charge her with the murder of
her sister Tammy, though at trial Homolka admitted criminal culpability for it.
The Crown prosecutors and Mr. Justice Kovacs employed a peculiar device to
forgive Karla Homolka for Tammy's murder. It is on this that I build my
assertion that the Homolka plea bargain agreement is an unlawful act. This
device was the Crown Prosecutor's act, on July 6, 1993, of reading into Karla
Homolka's trial record on the two manslaughter charges, the details and facts of
Tammy's murder - the third murder - including Karla Homolka's admitted
culpability without the Crown prosecutor's laying a formal criminal charge for
Tammy's murder. That is extraordinary. In short, they dispensed with the laying
of a criminal charge. A consequence of such reading into the record without the
laying of a criminal charge is that Karla Homolka would never be charged with
Tammy's murder - that is, immunity from criminal prosecution. In short, it was
an absolute forgiveness, achieved not only prior to the conviction but also
without a formal criminal charge ever having been laid.
Honourable senators, I assert that this technique of the Crown prosecutors,
assented to by Mr. Justice Kovacs, is not an exercise of prosecutorial
discretion but is, instead, the exercise of a pardon. I assert that the act of
forgiving a murder, a culpable homicide, is an act of the Royal Prerogative, the
royal mercy and the royal pardon, and, in Canada, such forgiveness and pardoning
powers are not within the prosecutorial discretion or powers of a provincial
Attorney General or his Crown prosecutors, nor within the judicial powers of a
justice of a superior court. In Canada's constitutional usage, practice and
history, the exercise of royal pardon for a culpable homicide is the
Sovereign's, the Governor General's acting upon the advice of the full cabinet,
and is totally beyond the ken of the Attorney General of Ontario.
Honourable senators, the most reliable and frequently cited definition of
pardon is found in Sir Edward Coke's ancient 1644 work entitled Institutes of
the Laws of England, Third Part. The 1817 Nineteenth Edition says:
A pardon is a work of mercy, whereby the King either before attainder,
sentence, or conviction, or after forgiveth any crime, offence, punishment,
execution, right, title, debt or duty...
I repeat, "forgiveth."
In Canada, these pardon powers are found in the 1947 Letters Patent
constituting the Office of Governor General of Canada, Article XII, which
instruction articulates the settled opinion since 1878 on the constitutional
pardoning powers of the Sovereign in Canada and states:
And We do further authorize and empower Our Governor General, as he shall
see occasion, in Our name and on Our behalf, when any crime or offence against
the laws of Canada has been committed for which the offender may be tried
thereunder, to grant a pardon to any accomplice, in such crime or offence, who
shall give such information as shall lead to the conviction of the principal
offender ... and further to grant to any offender convicted of any such crime
or offence in any court, or before any Judge, Justice, or Magistrate,
administering the laws of Canada, a pardon, either free or subject to lawful
conditions, or any respite of the execution of the sentence of any such
offender, for such period as to Our Governor General may see fit, and to remit
any fines, penalties, or forfeitures which may become due and payable to Us.
Pardons are generally granted after the conviction of the offender as
formally criminally charged by the Attorney General, but the Sovereign has the
power to grant pardon before conviction. In his 1964 book entitled Essays in
Constitutional Law, Second Edition, Robert F.V. Heuston, a United Kingdom
constitutionalist, confirmed this, saying:
It is, however, important to note that the monarch may pardon any offence
against the criminal law, whether before or after conviction.
In current constitutional practice in the use of pardon, the
Sovereign-in-Council in the United Kingdom and Canada have declined in the last
100 years to grant pardons or mercy prior to a conviction of an offender,
particularly those offenders who have turned Crown witness to give Crown
evidence. It used to be quite a rampant practice, but not any more.
In fact, Canada, the United Kingdom and most commonwealth countries have
constitutionally imposed pre-conviction limitations on pardon basically to allow
the courts to do their work and perform their function without executive
intervention. About this, Professor John Ll. Edwards wrote in his landmark 1980
study, entitled Ministerial Responsibility for National Security, at
footnote number 177 noting a document in his possession that:
Home Office historical note on the subject of "Pardons before
conviction," kindly forwarded to this author. The same document states:
"When in 1947 counsel prosecuting in a criminal case inquired as to the
possibility of using the prerogative in that way he was informed, after
consultation with the Director of Public Prosecutions, that it was no longer
the practice to grant free pardons for this purpose."
The Hon. the Speaker: I hesitate to interrupt the honourable senator,
but her 15 minutes has expired.
Senator Cools: May I have permission to continue, honourable senators?
The Hon. the Speaker: Is leave granted?
Hon. Philippe Deane Gigantès: Honourable senators, before I grant
leave, I should like to repeat my concern of the other day about this 15-minute
rule which senators opposite introduced, and which is a very good rule. There is
no speech that cannot be improved by being compressed to 15 minutes.
Senator Berntson: I remember 1990.
Senator Gigantès: That was filibustering; it was not a speech. It was
something to make you people angry, and I think I succeeded.
If we want to have proper debate, there is no speech which could not be
improved by being compressed to 15 minutes. It could be further improved if
compressed to five minutes.
Senator Cools: This is a speech, honourable senators.
The Hon. the Speaker: Honourable senators, is leave granted?
Hon. Senators: Agreed.
Senator Cools: The reasons for this pre-conviction limitation are
explained by Stanley A. de Smith, Cambridge University Law Professor, in his
1971 book entitled Constitutional and Administrative Law. He stated:
It would seem that a pardon may be granted before conviction; but
this power is never exercised. The line between pardon before conviction and
the unlawful exercise of dispensing power is thin.
The Crown's use of the dispensing power, the suspending power and the Royal
Prerogative have bedevilled parliaments for years.
Finally, honourable senators, the pardon that I believe was granted to Karla
Homolka by the Crown prosecutors of the Ontario Attorney General and Mr. Justice
Kovacs, was a pardon for no minor offence, but a major offence, the death and
murder of a human being, a child really, a culpable homicide. Culpable homicide
was termed until recently as a capital offence. In Canada's constitutional
usage, such pardon, such forgiveness, is within the exclusive jurisdiction of
the federal powers and the Governor General in Council. The 1947 Letters Patent
constituting the Office of the Governor General, Article XII instructs
ministerial responsibility of the full cabinet on pardons for culpable homicide
And We do hereby direct and enjoin that Our Governor General shall not
pardon or reprieve any such offender without first receiving in capital cases
the advice of Our Privy Council for Canada and, in other cases, the advice of
one, at least, of his Ministers.
This constitutional practice in Canada was a departure from the United
Kingdom practice and was a unique and peculiar Canadian constitutional
development. Pardon for culpable homicide was thought to be too heavy a burden
to be carried by an individual minister of the Crown in Canada when the Colonial
Secretary in the United Kingdom still held significant powers, because it was
always related to the publicly controversial issue of capital punishment, and
still is. The Constitution of Canada instructs that the Governor General may
forgive an offender for taking a human life only on the advice of the full
cabinet, including the Prime Minister. Such absolute forgiveness, as granted by
those honourable gentlemen, was not theirs to offer or plea bargain with,
exceeded their lawful authority and the legal and constitutional limits of their
discretionary powers, and is, in fact, an abuse of the Royal Prerogative and
contrary to Canada's constitutional usage and practice.
My assertion regarding the full cabinet at Ottawa's involvement in the
forgiveness of capital offences is confirmed by the wording of the Criminal
Code, sections 749 and 751, on the prerogative of mercy. Section 749 reads:
(1) Her Majesty may extend the royal mercy to a person who is sentenced to
imprisonment under the authority of an Act of Parliament, even if the person
is imprisoned for failure to pay money to another person.
(2) The Governor in Council may grant a free pardon or a conditional pardon
to any person who has been convicted of an offence.
The more relevant section to my argument is section 751 entitled Royal
Prerogative which reads:
Nothing in this Act in any manner limits or affects Her Majesty's royal
prerogative of mercy.
Honourable Senators, the Homolka plea bargain agreements are still before the
public. Paul Bernardo's former lawyers, Mr. Ken Murray and Miss Carolyn
MacDonald, have been charged criminally with obstructing justice, possessing
child pornography and making obscene material. Mr. Murray, in 1993, kept
evidence in his possession, the horrific videotapes of the sexual assaults.
These lawyers' questionable actions, their vulnerability in the courts, before
some who themselves may even have been involved as authors of those Homolka plea
bargain agreements, may now provide ample and further justification and
opportunity for some to exonerate their very own actions. The potential for the
public sacrificing of these two lawyers as having caused everything that went
wrong in the Homolka case is great. I urge the Senate and all Canadians to be
vigilant about the prosecution of these two persons.
Honourable senators, the protective shields and interests that have encrusted
around this plea bargain agreement and its authors are publicly obvious. There
is concern that the superintendent of the formulation of this Homolka plea
bargain agreement, Mr. George Thomson, then Ontario's Deputy Attorney General,
is now the Deputy Minister of Justice of Canada and the superintendent of the
advice of the Senate committee on Bill S-3.
Further, the committee never shared its research materials with me, nor did
its steering committee meet with me as the bill's sponsor to discuss the bill's
progress or witnesses. This concerns senators' rights and privileges as members
of Parliament granted by the Constitution Act, 1867, section 18, to advance
legislation. However, that is an issue for another day.
In conclusion, Parliaments in recent times have declined to hold ministers,
particularly Attorneys General, responsible to Parliament for the exercise of
their discretionary powers derived from the Royal Prerogative. Consequently,
large numbers of bureaucrats and officials are operating under their own steam,
without parliamentary supervision. Furthermore, their appetite
for such operation grows and keeps on growing. When bureaucrats like Mr. Roy,
and others such as Crown prosecutors, cite Royal Prerogative rather than statute
for extending immunity from criminal prosecution to offenders, particularly for
capital offences of culpable homicide, the public expects its representative
institution, Parliament, to inform the responsible ministers that their
activities are echoes of the Stuart kings' dispensing powers, which powers were
wholly condemned and resolved in the Bill of Rights of 1688, and further urges
Parliament to take action.
Honourable senators, the entire country knows that the Homolka plea bargain
agreements offended the law, the Constitution and justice, and devalued - I
repeat, devalued - human life and humanity.
The use of the Sovereign's Royal Acts of Grace and Mercy are intended to
correct injustice and to correct miscarriage of justice. In the Homolka plea
bargain agreement, the use of the Royal Prerogative powers by the Crown
prosecutors is itself the miscarriage of justice.
Honourable senators, to the extent that what we have now before us is an
indeterminate situation, where the report from the committee says one thing and
I say another, I propose that the only way to make a determination on this
basically is to return the bill to the committee for further study.
Motion in Amendment
Hon. Anne C. Cools
: Therefore, honourable senators, I move, seconded by
Senator Robertson, that the report of the committee not be adopted, but that it
be referred back to the committee for further consideration.
The Hon. the Speaker: Is it your pleasure, honourable senators, to
adopt the motion in amendment?
Hon. Noël A. Kinsella: Honourable senators, I have a few small points
I wish to raise. The motion does not carry with it any specific instructions to
the Standing Senate Committee on Legal and Constitutional Affairs, which has
already examined Bill S-3 once. Based upon what we have heard this afternoon,
and also observations we made on the report earlier, it seems to me that a
number of witnesses should be called by that committee.
Senator Cools, if I heard correctly, made reference to a number of
individuals who seem to have played a key part in that particular unfortunate
affair. Obviously, we are more interested in the larger question, and the bill
deals with the larger question. One would think that individuals such as George
Thomson, the Deputy Minister of Justice, and perhaps the Crown Attorney in the
city of Scarborough, among others, who have had some knowledge of this case,
should be invited by the committee.
I support the motion.
Hon. Philippe Deane Gigantès: Honourable senators, I hereby declare,
and I will not change my mind, I shall never again give permission for unanimous
consent to extend the 15-minute limit.
Senator Lynch-Staunton: Never is a long time.
On motion of Senator Corbin, debate adjourned.
The Honourable Maurice Riel
Career of a Distinguished
Hon. Noël A. Kinsella:
Honourable senators, I think this matter has been
dealt with as part of Tributes yesterday. Perhaps we could strike this item from
the Order Paper.
The Hon. the Speaker: Honourable senators, is it agree that this
Inquiry be considered debated?
Hon. Senators: Agreed.
Visible Minorities and the Public
Service of Canada-
Hon. Donald H. Oliver
Report to Human Rights Commission-Inquiry-
rose pursuant to notice of March 10, 1997:
That he will call the attention of the Senate to a report submitted to the
Canadian Human Rights Commission (CHRC) by John Samuel and Associates Inc.,
entitled Visible Minorities and the Public Service of Canada.
He said: Honourable senators, I rise today to speak to the inquiry of which I
gave notice a few days ago, to draw your attention to the situation that visible
minorities face in finding employment and receiving promotions within the Public
Service of Canada. A report entitled "Visible Minorities and the Public
Service of Canada" was submitted last month to the Canadian Human Rights
Commission by John Samuel and Associates. I will briefly summarize the findings
of the report before describing what actions I believe the Senate might be able
to take to help improve the situation.
The rate of visible minority representation in the Canadian public service is
far lower than those of both the private sector and the Canadian labour force in
general. It is estimated that visible minority representation in the Canadian
labour force as a whole now stands at 12 per cent. Between 1987 and 1994, the
visible minority group represented in the private sector rose from 5 per cent to
8.2 per cent. Last year, the five chartered banks had representation levels
ranging from 10.7 per cent to 18.2 per cent. Yet, the rate of visible minority
representation in the Canadian public service last year was a mere 4.1 per cent.
It was with these numbers in mind that the Canadian Human Rights Commission
initiated the report. Fourteen departments and agencies were chosen for the
study. They ranged in size and in success rates at hiring visible minority
employees. More than 2,000 employees of these departments volunteered to
participate. The study involved both qualitative and quantitative techniques.
These ranged from questionnaires to focus groups and interviews. The groups that
participated were visible minority employees including a group of former public
servants, a control group of non-visible minority public servants, public
servants with staffing-managing responsibilities and executives known as EX,
primarily assistant deputy ministers and directors general.
Twelve private sector firms also received a questionnaire. Eight high-ranking
human resource officials of the private sector were interviewed, along with the
former president of the Canadian Bankers Association.
Both visible minority employees and public service managers felt that racial
discrimination against visible minorities is prevalent in the Public Service of
Canada. The comments of the participants emphasized the need for both
flexibility and accountability.
Participants stated that hiring practices and procedures, restrictions on
external recruitment, for example, are not flexible enough to provide increased
employment opportunities for visible minorities. However, some participants
believe that visible minorities were adversely affected when managers used their
discretion, for example, in the case of acting appointments. The report
concludes that an increase in flexibility may only be effective if managers are
held accountable for the successful implementation of employment equity goals.
These goals, the report states, should be factored into all aspects of the
For those senators interested in the detailed findings of the report, it is
available at the Human Rights Commission.
Honourable senators, I believe that the present situation is unacceptable.
First, the matter of minority representation in the public service is a basic
question of human rights. Second, the employer in question is the Government of
Canada. As Canadians, we like to think of our society as tolerant and open, but
how can the federal government insist that society be open when its own hiring
practices seem not to be or are at least suspect?
Canada has often taken a leading role in the international community in the
area of human rights. A prime example of such leadership is the stance that
Prime Minister Brian Mulroney took against South African apartheid. The inequity
of our public service affects not only individual Canadians but our
effectiveness to deal with the question of human rights around the world.
In the last few years, the federal government and its provincial counterparts
have taken up the challenge of fighting the deficit. Witness this unified stand
as the Canadian people have developed the will to support such a struggle. Yet,
as important as Canada's financial deficit may be, our deficit of equal
opportunity is much more so.
This nation of different linguistic, religious and ethnic backgrounds has
defined itself as an open society. We have distinguished ourselves within the
community of nations as holding firm to the values of equality and tolerance. It
is with the goal of such nation building that we take up the struggle against
the financial deficit. Our finances are but a means of providing that the
society that we believe in is the most just in the world.
Over the last two decades, we have kept this vision in mind. Numerous studies
both by the Public Service Commission and women's groups were done on female
representation within the public service. The will to overturn the obstacles
facing women in the public service has allowed for their representation rate to
be greatly increased within the last 20 years. Such measures have legitimized
the government's voice in demanding that the private sector also become more
inclusive of women.
Honourable senators, I believe the time has come to take similar aggressive
measures to increase visible minority representation within the public service.
Without first cleaning up our own house, I find it difficult to see how we can
encourage the private sector to increase their own levels of visible minority
representation in management.
As Dr. John Samuel's report suggests, what is needed are not quotas but
goals, sensitivity training and cross-cultural understanding. Too often managers
look for elements of themselves within prospective employees, and confuse
cultural differences for character deficiencies. With clear criteria for hiring
and promotions, as well as rewards for positive results, the representation of
visible minority groups can easily surpass levels found in the private sectors.
I do recognize, however, that even the thousand-step journey begins with but a
To my honourable colleagues, I suggest the two following options: A special
committee may be struck to examine hiring practices within the Senate itself.
How does our visible minority representation rate compare with the rates of the
public service as a whole, the private sector and the general labour force? Does
the criticism outlined in Dr. Samuel's report apply to our own staffing
practices? What changes need to be made? What goals and rewards should be
In addition, or alternatively, a special joint parliamentary committee could
be struck to examine the public service as a whole, with the purpose of
initiating change. Once again, it will be necessary to examine the alleged
rigidity of staffing practices and biases of evaluators.
Of these two endeavours, honourable senators, attempting the first before the
second seems to be the most reasonable course of action. Not only is the group
being studied smaller, but honourable senators will most likely have more
control over the Senate committee than they commonly do over a joint committee.
As well, having first studied the Senate and
suggested improvements, senators will most likely find work on a joint
committee to be less daunting and more familiar. Finally, having some prior
experience in studying such matters, honourable senators will be important
resources in any joint committee studies.
In a search for steps that Canada could take to more fully investigate this
issue, I found a report on visible minorities in the Public Service of Canada to
be instructive. It was prepared by the House of Commons in 1984. The committee
that conducted the study was a mix of Liberals, New Democrats and Conservatives.
The report is divided into six chapters, including social integration,
employment, public policy, legal and justice issues, media and education.
On page 59, the report spoke of conducting an evaluation of employment and
development programs. There was reference to the National Industrial Program and
several employment development programs such as Leap, Summer Canada, and Canada
Community Development Projects, all of which are designed to help train visible
minorities for subsequent positions in the public service.
A special committee of the Senate or a joint committee of the Senate and the
House of Commons would do well to review equality now, and update our findings
for the next millennium.
Living in a nation of immigrants, most Canadians now understand that there
are no "real Canadians." With the changing face of the population, it
requires a particularly stubborn kind of bigotry to keep asserting otherwise.
In a previous study, John Samuel indicated that Canada's visible minority
rate will have increased over 350 per cent between the years 1986 and 2001.
Visible minority rates in the public service would now have to increase by
almost 300 per cent simply to reflect the actual rates in the general work
Honourable senators, the problem in question is by no means insignificant.
This underrepresentation is not simply a statistical anomaly. There can be no
question that something has gone wrong. The discrimination that visible
minorities face in the public service is the epitome of systemic racism. Whether
intentional or not, the staffing practices in the public service are to the
great disadvantage of visible minorities. These individuals are more than just
potential employees; each is, simultaneously, a stockholder and client. As
taxpayers, they provide the financial capital for the government's services. As
citizens, they vote to choose Canada's party of governors. Finally, as
residents, they expect and deserve a quality product and essential services they
can count on. Thus, great visible minority representation in the public service
is more than just a matter of human rights - it is a question of the government
positioning itself to best serve its clients.
Like in private industry, increasing opportunity and access to people of
colour will help the public service find new talents and ideas. As John Samuel's
report suggests, the underrepresentation of visible minorities may well be
explained by the monopoly that government has over its services. With the
changing nature of Canada's population, increased inclusiveness will most likely
be interpreted by Canadians as a greater ability to be responsive to their
The question of increasing visible minority representation is a challenge
that must be met if Canadians are to remain truly united in the next millennium.
The relationship between citizens and their government is unquestionably one of
the most important factors in forging national identity. If the public service
is unable to change at a rate similar to that of the Canadian population, the
next century will prove to be one in which government is found to be too far out
of step with the people, but this outcome can be avoided if the commitment to
change is made now.
Honourable senators, the question of inclusiveness is not simply a matter of
perceptions. Inclusiveness in the public service will have real consequences.
The way government does business and the way Canadians perceive their government
depends largely on the ability of the public service managers to empathize with
the Canadians they serve. The solution to the problem requires a true sense of
urgency and a real understanding of the issues. The Senate, charged with
upholding the rights and interests of minorities, is an ideal catalyst for such
change. I believe that honourable senators are well positioned for studying the
matter and proposing whatever means necessary to achieve our desired end, which
is equality within the public service.
Hon. Philippe Deane Gigantès: Honourable senators, I compliment
Senator Oliver on his excellent speech.
On motion of Senator Gigantès, debate adjourned.
First Nations Government
Bill-Committee Authorized to Apply Materials and Evidence Gathered on
Subject-Matter Examination to Study of Current Bill
Hon. Landon Pearson
, pursuant to notice of March 11, 1997, moved:
That the papers and evidence received and taken by the Standing Senate
Committee on Aboriginal Peoples during its consideration of the subject-matter
of Bill S-10, An Act providing for self-government by the First Nations of
Canada, in the First Session of the Thirty-fifth Parliament, be referred to
the Committee for its present study of Bill S-12, An Act providing for the
self-government by the First Nations of Canada.
The Hon. the Speaker: Is it your pleasure, honourable senators, to
adopt the motion?
Motion agreed to.
The Senate adjourned until tomorrow at 2 p.m.