Journals of the Senate
45 Elizabeth II, A.D. 1997, Canada
Journals of the Senate
Issue 66
Tuesday, February 4, 1997
2:00 p.m.
The Honourable Gildas L. Molgat, Speaker
The Members convened were:
The Honourable Senators
Adams Anderson Atkins Beaudoin Berntson Bonnell Bosa Buchanan Carstairs
Cochrane Cogger Cohen Comeau Cools
De Bané DeWare Di Nino Doody Doyle Fairbairn Forest Forrestall Ghitter
Gigantès Grafstein Graham Grimard Gustafson Hays Hébert Hervieux-Payette
Jessiman Kelleher Kelly Kenny Kinsella Kolber Landry Lavoie-Roux LeBreton Lewis
Losier-Cool Lynch-Staunton MacDonald (Halifax) Maheu Mercier Milne Molgat
Moore Murray Nolin Oliver Pearson Petten Pitfield Poulin Prud'homme Riel Rizzuto
Roberge Robertson Rompkey Rossiter Simard Spivak Stratton Taylor Tkachuk Twinn
Watt Whelan Wood
PRAYERS
SENATORS' STATEMENTS
Some Honourable Senators made statements.
DAILY ROUTINE OF BUSINESS
Presentation of Reports from Standing or Special Committees
The Honourable Senator Kenny presented the following:
TUESDAY, February 4, 1997
The Standing Committee on Internal Economy, Budgets and Administration has the honour to present its
FOURTEENTH REPORT
Your Committee recommends the adoption of a Supplementary Estimate of $2,861,000 for fiscal year 1996-1997.
This Supplementary Estimate is requested to fund unanticipated expenses and capital expenditures and will result in significant savings. Initiatives recommended for implementation include the transfer of East Block Security at net savings of $80,000 per year after an initial pay-back period of three years, which is significantly less than the time Treasury Board uses as a guideline.
As the Main Estimates are prepared 12 to 18 months in advance, a number of special studies being undertaken by Senate Committees will be funded by this Supplementary Estimate. These studies involve issues which are important to Canadians and include topics as the State of Post-Secondary Education in Canada, including the Student Loan Program; the importance of the Asia Pacific Region, especially with regard to trade; the Amendment to the Constitution concerning Term 17 of the Terms of Union with Newfoundland with Canada; our International Competitive Position in Communications; and the State of Transportation Safety and Security in Canada.
The Supplementary Estimate also covers certain security issues to ensure that the Senate is not the weak link in Parliament's overall security effort. Some of these issues stem from recommendations made by the ad hoc committee of senior officials, established by the Solicitor General.
The Supplementary Estimate also covers funds for a computer/communication network so that the Senate remains compatible with the House of Commons systems and to adopt to technological changes in Government-wide financial and administrative practices.
Funds are also included to complete two replacement parliamentary committee rooms which were built by Public Works to compensate for the loss of rooms due to renovations. These rooms require appropriate furniture in line with their use and design concept utilised by Public Works, in addition to simultaneous translation equipment to meet official languages legislation.
Respectfully submitted,
COLIN KENNY
Chair
The Honourable Senator Kenny moved, seconded by the Honourable Senator Forest, that the Report be placed on the Orders of the Day for consideration on Thursday next, February 6, 1997.
The question being put on the motion, it was adopted.
The Honourable Senator Kenny, Chair of the Standing Committee on Internal Economy, Budgets and Administration presented its Fifteenth Report (Senate Estimates 1997-98).
(The Report is printed as Appendix "A")
The Honourable Senator Kenny moved, seconded by the Honourable Senator Maheu, that the Report be placed on the Orders of the Day for consideration on Thursday next, February 6, 1997.
The question being put on the motion, it was adopted.
The Honourable Senator Oliver for the Honourable Senator Kirby, Chairman of the Standing Senate Committee on Banking, Trade and Commerce, presented its Twelfth Report (Bill C-5, An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Income Tax Act) with certain amendments.
The Report was then read by one of the Clerks at the Table, as follows:
Tuesday, February 4, 1997
The Standing Committee on Banking, Trade and Commerce has the honour to present its
TWELFTH REPORT
Your Committee, to which was referred Bill C-5, An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Income Tax Act has examined the said Bill in obedience to its Order of Reference dated Thursday, October 31, 1996, and now reports the same with the following amendments:
1. Page 4, clause 2: Strike out line 8 and substitute the following:
"person occurs at the time or date".
2. Page 21, clause 30:
(a) Strike out line 4 and substitute the following:
"be just and equitable in the circumstances."
(b) Add the following after line 14:
"(18) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the corporation shall be deemed to be a director for the purposes of this section.".
3. Page 30, clause 53: Strike out lines 7 to 9 and substitute the following:
"consumer debtor's circumstances that leads the administrator to conclude, after consultation with the debtor where practicable, that such change could jeopardize the consumer debtor's ability to meet the terms of the proposal, in writing, ".
4. Page 38, clause 65: Add after line 40 the following:
"(3) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the corporation shall be deemed to be a director for the purposes of this section.".
5. Page 75, clause 118: Strike out line 27 and substitute the following:
"(C) for the firm's own account,".
6. Page 76, clause 118: Strike out line 6 and substitute the following:
"count, and
(iii) any investments of the securities firm in its subsidiaries that are not referred to in subparagraph (i) or (ii); and".
7. Page 84, clause 121: Strike out lines 1 to 4 and substitute the following:
"3. (1) This Act applies in respect of a debtor company or affiliated debtor companies where the total of claims, within the meaning of section 12, against the debtor company or affiliated debtor companies exceeds five million dollars.
(2) For the purposes of this Act,
(a) companies are affiliated companies if one of them is the subsidiary of the other or both are subsidiaries of the same company or each of them is controlled by the same person; and
(b) two companies affiliated with the same company at the same time are deemed to be affiliated with each other.
(3) For the purposes of this Act, a company is controlled by a person or by two or more companies if
(a) securities of the company to which are attached more than fifty per cent of the votes that may be cast to elect directors of the company are held, other than by way of security only, by or for the benefit of that person or by or for the benefit of those companies; and
(b) the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the company.
(4) For the purposes of this Act, a company is a subsidiary of another company if
(a) it is controlled by
(i) that other company,
(ii) that other company and one or more companies each of which is controlled by that other company, or
(iii) two or more companies each of which is controlled by that other company; or
(b) it is a subsidiary of a company that is a subsidiary of that other company.".
8. Page 84, clause 122: Add after line 28 the following:
"(4) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the debtor company shall be deemed to be a director for the purposes of this section.".
9. Page 86, clause 124: Strike out lines 21 to 30 and substitute the following:
"(4), the applicant also satisfies the court that the applicant has acted, and is acting, in good faith and with due diligence.".
10. Page 90, clause 124: Add after line 10 the following:
"(3) Where all of the directors have resigned or have been removed by the shareholders without replacement, any person who manages or supervises the management of the business and affairs of the company shall be deemed to be a director for the purposes of this section.".
11. Page 91, clause 124:
(a) Add after line 21 the following:
"(4) Where the monitor acts in good faith and takes reasonable care in preparing the report referred to in paragraph (3)(b), the monitor is not liable for loss or damage to any person resulting from that person's reliance on the report.".
(b) Strike out line 22 and substitute the following:
"(5) The debtor company shall".
Attached as an Appendix to this Report are the observations and recommendations of your Committee on Bill C-5.
Respectfully submitted,
Michael J.L. Kirby
Chairman
Ordered, That the Appendix to the Report be printed as an Appendix to the Journals of the Senate of this day and form part of the permanent records of this House.
The Honourable Senator Oliver moved, seconded by the Honourable Senator Atkins, that the Report be placed on the Orders of the Day for consideration at the next sitting.
The question being put on the motion, it was adopted.
The Honourable Senator DeWare, Chair of the Standing Senate Committee on Social Affairs, Science and Technology, presented its Twelfth Report (Bill C-202, An Act respecting a National Organ Donor Week in Canada) without amendment.
The Honourable Senator DeWare for the Honourable Senator Keon moved, seconded by the Honourable Senator Rossiter, that the Bill be placed on the Orders of the Day for a third reading at the next sitting.
The question being put on the motion, it was adopted.
Government Notices of Motions
With leave of the Senate,The Honourable Senator Graham moved, seconded by the Honourable Senator Riel, P.C.:
That when the Senate adjourns today, it do stand adjourned until tomorrow, Wednesday, February 5, 1997, at 1:30 p.m..
The question being put on the motion, it was adopted.
Introduction and First Reading of Government Bills
A Message was brought from the House of Commons with a Bill C-57, An Act to amend the Bell Canada Act, to which they desire the concurrence of the Senate.
The Bill was read the first time.
The Honourable Senator Graham moved, seconded by the Honourable Senator Rizzuto, that the Bill be placed on the Orders of the Day for a second reading on Thursday next, February 6, 1997.
The question being put on the motion, it was adopted.
Notices of Motions
With leave of the Senate,The Honourable Senator Carstairs moved, seconded by the Honourable Senator Losier-Cool:
That the Standing Senate Committee on Legal and Constitutional Affairs have power to sit at 3:15 p.m., tomorrow, Wednesday, February 5, 1997, even though the Senate may then be sitting and that Rule 95(4) be suspended in relation thereto.
The question being put on the motion, it was adopted.
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Ordered, That Order No. 83 (motion) under ORDERS OF THE DAY, Other be brought forward.
Resuming debate on the motion of the Honourable Senator Kinsella, seconded by the Honourable Senator Doyle:
That, notwithstanding Rule 98, the Standing Senate Committee on Energy, the Environment and Natural Resources present an interim report, before submitting its final report on Bill C-29, An Act to regulate interprovincial trade in and the importation for commercial purposes of certain manganese-based substances, relating to its findings on the following questions:
(1) Is MMT based petroleum the cause of OBD malfunc tioning?
(2) Does MMT in gas cause a health hazard to Canadians?
(3) Does MMT in gas cause direct damage to the environ ment?
After debate,
The question being put on the motion, it was adopted.
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With leave of the Senate,The Honourable Senator Ghitter moved, seconded by the Honourable Senator Kenny:
That the Standing Senate Committee on Energy, the Environment and Natural Resources have power to sit at 3:30 p.m. today and at 3:15 p.m. tomorrow, Wednesday, February 5, 1997, even though the Senate may then be sitting, and that Rule 95(4) be suspended in relation thereto.
The question being put on the motion, it was adopted.
ORDERS OF THE DAY
OTHER BUSINESS
Senate Public Bills
Orders No. 1 to 3 were called and postponed until the next sitting.
The Order for the second reading of Bill S-12, An Act providing for self-government by the first nations of Canada, was called.
SPEAKER'S RULING
Honourable Senators, you will recall that when Senator Tkachuk attempted to move second reading of Bill S-12, an Act providing for self-government by the First Nations of Canada, a point of order was raised by Senator Stanbury who objected to the proceedings because the bill lacked a royal recommendation. As debate on the point of order proceeded, it became apparent that the issues raised were indeed significant. They relate to the right of the Senate to consider legislation. In preparing my decision, I have spent a great deal of time reviewing the authorities on the subject of money bills in general and the practices of the Senate in particular, with regard to financial legislation.
To better explain the issues involved, I will briefly review the arguments that were presented by Senators who spoke to this point order.
Citing rule 81 of the Rules of the Senate, Senator Stanbury asked me to rule whether Bill S-12 is properly before the Senate, since it could be regarded as a money bill requiring a royal recommendation which it does not have. Senator Stanbury argued that bills requiring an expenditure of public funds cannot be introduced in the Senate. In his view, Bill S-12 would result in the expenditure of federal funds for the transfer of reserve lands to First Nations because of a need to conduct land surveys and environmental audits. In addition, he argued that by extending to Indian corporations the tax exemption currently available to Indian individuals under the Indian Act, a significant amount of potential tax revenue would be eliminated. Because costs seemed to be involved in Bill S-12, Senator Stanbury claimed that it is a money bill and therefore requires a royal recommendation. He noted that a previous bill on the same subject, Bill S-18, had been ruled out of order on February 27, 1991, because the Speaker found it to be a money bill which lacked a royal recommendation.
Senator Tkachuk, having anticipated this point of order, argued that the Senate should proceed to consider this bill. He stressed that the Senate must not continually narrow its focus and run the risk of becoming irrelevant. Rather, Senators must be allowed to move bills in which they believe, as long as they do not overstep their constitutional bounds. Senator Tkachuk argued that the passage of Bill S-12 would have no impact on the public purse of the Government of Canada and should therefore be ruled in order.
In speaking to the point of order, Senator Cools referred to two reports of the Senate which have an important bearing on this question. The more recent of the two is the Ninth Report of the Standing Senate Committee on National Finance on the subject of royal recommendations, adopted by the Senate on May 29, 1990. The other is the Report of the Special Committee appointed to determine the Rights of the Senate in Matters of Financial Legislation, commonly known as the Ross Report, adopted by the Senate on May 22, 1918. Senator Cools voiced her concerns about so-called "money bills". She also raised questions about the rights and privileges of individual Senators and Members of Parliament to move initiatives through their respective chambers and the level of government control over the parliamentary agenda. Senator Cools suggested that it is the Speaker's duty to defend the rights and privileges of individual members of Parliament, particularly Senators.
When Senator Kinsella spoke to the point of order, he drew attention to clause 12 of the bill and asked whether that clause is attempting to give the power to tax. If so, he suggested that it would likely be "within the rubric of what constitutes an appropriation of public money." This point about taxation was seized upon by Senator Stanbury who felt that it added to the arguments he had made earlier. Senator Tkachuk replied that there would be no tax consequences to the Government of Canada from Bill S-12, since it would impose no taxes, but rather "it would recognize the legislative jurisdiction of the Indian community to raise money by way of taxes and other assessments. The power to tax arises from the Indian Act and is an action already authorized by Parliament...The bill only recognizes the power and moves it from the Indian Act to Bill S-12."
Finally, Senators Twinn and Marchand spoke to the importance of the legislation. Senator Twinn also noted that he saw no added costs being incurred through passage of the bill. I wish to thank them and all other Senators who participated in the debate on this point of order.
My obligation as Speaker is to apply the Rules of the Senate to the best of my ability. There are only two Senate rules which directly address the subject of money bills, and only one is relevant to the matter before us today. Rule 81, which was cited by Senator Stanbury, states that:
The Senate shall not proceed upon a bill appropriating public money that has not within the knowledge of the Senate been recommended by the Queen's representative.
This rule extends to the Senate the constitutional requirement imposed on the House of Commons by section 54 of the Constitution Act, 1867 which states that:
It shall not be lawful for the House of Commons to adopt or pass any Vote, Resolution, Address, or Bill for the Appropriation of any Part of the Public Revenue, or of any Tax or Impost, to any Purpose that has not been first recommended to that House by Message of the Governor General in the Session in which such Vote, Resolution, Address, or Bill is proposed.
By adopting rule 81, the Senate took the responsibility to ensure that bills appropriating public money are initiated by the Crown and recommended to Parliament. Non-ministerial parliamentarians, including Senators, do not have the opportunity to introduce bills that would appropriate any part of the public revenue or of any tax or impost.
The key question then becomes whether or not Bill S-12 appropriates public money. Past interpretations of rule 81 and what constitutes an "appropriation" have sometimes been quite broad, for instance when Bill S-18 was ruled out of order in February 1991. In that case, reliance was placed on statutes and practices in the British House of Commons which have, to some extent, been adopted by our House of Commons. However, I would like to remind Senators that with respect to the powers of the Senate and the House of Commons in dealing with money bills, the two chambers have not always agreed. Indeed, the Ross Report rejected the idea that British practice with respect to money bills was any part of the Constitution of Canada and noted that claims by the House of Commons to the broader powers and privileges of the British House of Commons were unwarranted under the British North America Act, 1867.
In addition, the Senate's National Finance Committee has expressed some doubts about the use of the current form of the royal recommendation. As the Committee Report of 1990 explained, prior to 1968, each bill or clause in a bill which sought or authorized an appropriation was preceded by passage in the House of Commons of a financial resolution which defined the amount and purpose of the appropriation. This resolution was recommended to the Commons by the Governor General and formed the basis of the subsequent bill. In 1968, the Standing Orders of the House of Commons were amended so that the royal recommendation would be given to the Commons in the form of a printed notice, rather than a proposed resolution. For several years after the change, the notice of the royal recommendation still provided sufficient detail to explain the amount and purpose of the appropriation. However, since 1976, the royal recommendation has taken on a standard form, and the purpose and amount of any appropriation is no longer evident. Indeed, testimony before the National Finance Committee indicated that the royal recommendation is sometimes attached to bills in which there is no apparent appropriation. As a consequence, the Committee recognized that members of both Houses, including the Speakers, are now left without a clear statement from the Crown as to what appropriations are being sought by a recommendation. Seven years after the report was adopted, the problem still exists.
In the case of Bill S-12 now before us, the task is not to determine what the recommendation might mean, but whether one is required at all. I have carefully reviewed Bill S-12 with respect to the arguments that were made on November 27 and I have been unable to find any provision that clearly appropriates money from the Consolidated Revenue Fund. Moreover, while Senator Stanbury indicated that clauses 16 to 27 might possibly involve an expenditure by the government, it is not certain whether these anticipated operations would be funded by a new appropriation which would require a royal recommendation or by existing allocations established through previous legislation. Nor is there any language in the bill that effectively imposes any perceived appropriation. Yet these are the conditions to be satisfied when considering whether a royal recommendation should be attached to the bill.
Also, with respect to the concern about foregone tax revenue, I can find no basis for ruling the bill out of order. Bill S-12 would extend to Indian corporations the tax exemption currently available to Indian individuals under the Indian Act. The objection raised is that this extension would eliminate potential tax revenue and therefore amount to an appropriation of public revenue. However, there is no requirement for a royal recommendation in cases where a bill proposes to reduce a charge or extend an exemption from a tax.
Without sufficient evidence that Bill S-12 as drafted provides for an appropriation or creates a new charge, I have no authority to prevent debate on it. Based on the arguments that were presented, I find that a case has not been made that Bill S-12 requires a royal recommendation. With respect to rule 81, the bill is properly before the Senate. Accordingly, its fate rests with the Senate itself.
When I began my ruling I mentioned that I had taken a great deal of time to review this matter. I recognize that this may have been inconvenient to some Senators, but the time was needed in order to sift through the debate on Bill S-12 and to review the tangled history of money bills and the use of the royal recommendation. It has been a challenging task. It has also revealed to me that something really should be done to clarify the position of the Senate with respect to financial legislation and the proper use of the royal recommendation. The Ross Report and the National Finance Committee Report acknowledged these problems and recommended further study. Perhaps the time has finally come for the Senate to follow up on these proposals.
The Honourable Senator Tkachuk moved, seconded by the Honourable Senator Twinn, that Bill S-12, An Act providing for self-government by the first nations of Canada, be read the second time.
After debate,
The Honourable Senator Hébert moved, seconded by the Honourable Senator Gigantès, that further debate on the motion be adjourned until the next sitting.
The question being put on the motion, it was adopted.
Reports of Committees
Orders No. 1 to 3 were called and postponed until the next sitting.
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 in the Senate on November 7, 1996.
After debate,
The Honourable Senator Kinsella moved, seconded by the Honourable Senator Doyle, that further debate on the motion be adjourned until the next sitting.
The question being put on the motion, it was adopted.
Other
Orders No. 25, 24, 15, 27 (inquiries), 22 (motion) and 21 (inquiry) were called and postponed until the next sitting.
Order No. 13 (inquiry) was called and pursuant to Rule 27(3) was dropped from the Order Paper.
REPORTS DEPOSITED WITH THE CLERK OF THE SENATE PURSUANT TO RULE 28(2):
Report of the Clerk of the Privy Council and Secretary to Cabinet to the Prime Minister on the Public Service of Canada, pursuant to the Public Service Employment Act, R.S.C. 1985, c. P-33, s. 47(2).-Sessional Paper No. 2/35-556.
Summary of the Corporate Plan for 1996-97 to 2000-2001 of the Canadian Broadcasting Corporation, pursuant to the Broadcasting Act, S.C. 1991, c. 11, s. 55(4).-Sessional Paper No. 2/35-557.
Annual Report of the Public Service Staff Relations Board for the fiscal year ended March 31, 1996, pursuant to the Parliamentary Employment and Staff Relations Act, R.S.C. 1985, c. 33 (2nd Supp.), s. 84.-Sessional Paper No. 2/35-558.
Reports of the Atlantic Canada Opportunities Agency required by the Access to Information Act and the Privacy Act for the period ended March 31, 1996, pursuant to the Access to Information Act, R.S.C. 1985, C. A-1, s. 72(2) and the Privacy Act, R.S.C. 1985, c. P-21, s. 72(2).-Sessional Paper No. 2/35-559.
Report of the National Arts Centre, together with the Auditor General's Report, for the fiscal year ended August 31, 1996, pursuant to the National Arts Centre Act, R.S.C. 1985, c. N-3, sbs. 17(2). -Sessional Paper No. 2/35-560.
ADJOURNMENT
The Honourable Senator Graham moved, seconded by the Honourable Senator Moore:
That the Senate do now adjourn.
The question being put on the motion, it was adopted.
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Changes in Membership of Committees Pursuant to Rule 85(4)
Standing Committee on Internal Economy, Budgets and Administration
The name of the Honourable Senator Petten substituted for that of the Honourable Senator Gauthier (January 15).
Standing Senate Committee on Legal and Constitutional Affairs
The name of the Honourable Senator Moore substituted for that of the Honourable Senator Stanbury (January 16).
The names of the Honourable Senators Petten and Losier-Cool substituted for those of the Honourable Senators Moore and Bryden (January 24).
The name of the Honourable Senator Moore substituted for that of the Honourable Senator Petten (February 4).
Standing Senate Committee on Social Affairs, Science and Technology
The name of the Honourable Senator Perrault substituted for that of the Honourable Senator Landry (January 24).
The names of the Honourable Senators Pearson and Maheu substituted for those of the Honourable Senators Haidasz and Perrault (January 27).
The name of the Honourable Senators Lavoie-Roux and Haidasz substituted for those of the Honourable Senators LeBreton and Maheu (February 4).
Standing Senate Committee on Energy, the Environment and Natural Resources
The names of the Honourable Senators Carstairs and Whelan substituted for those of the Honourable Senators Kirby and Marchand (February 3).
Standing Senate Committee on Fisheries
The name of the Honourable Senator Losier-Cool substituted for that of the Honourable Senator Robichaud (February 4).