The Business of Ways and Means
The business of ways and means is the process by which the government sets out its economic policy through the presentation of a budget and obtains parliamentary approval to raise the necessary revenues through taxation. The most important revenue-raising statutes (i.e., those which replenish the Consolidated Revenue Fund) are the Income Tax Act, the Excise Tax Act, the Excise Act, and the Customs Tariff.
A principle fundamental to the ways and means process is the requirement that taxation bills originate in the House of Commons. The Constitution Act, 1867 provides that “Bills for appropriating any Part of the Public Revenue, or for imposing any Tax or Impost, shall originate in the House of Commons”,386 a requirement echoed in the Standing Orders of the House of Commons.387
There are two types of ways and means proceedings:
- the debate on a motion to approve in general the budgetary policy of the government (the budget presentation followed by the four-day ensuing debate); and
- the consideration of legislation (bills based on ways and means motions already approved by the House) which imposes a tax or other charge on the taxpayer.
A ways and means motion proposes that a particular financial measure be considered by the House. For a budget, the motion seeks to approve the budgetary policy of the government; for legislation, the motion sets out the terms and conditions of the proposed measures, most notably the rates and incidence of taxation. While a budget is normally followed by the introduction of ways and means bills, such bills do not have to be preceded by a budget presentation. Generally, taxation legislation can be introduced at any time during a session, the only prerequisite being prior concurrence in a ways and means motion.
The Crown, on the advice of its responsible Ministers, initiates all requests to impose or increase a tax on the public and the House either grants or withholds its consent.388 A ways and means motion may therefore be moved only by a Minister of the Crown.389 Once adopted, a ways and means motion forestalls the passage of any amendment that would infringe on the financial initiative of the Crown.390
Ways and Means Proceedings (1867-1968)
Initially, the business of ways and means involved the consideration and authorization of measures to raise revenue and measures to appropriate, or set aside, from the Consolidated Revenue Fund the funds approved in the estimates by the Committee of Supply.391 Ways and means proceedings remained essentially unchanged for the first 100 years following Confederation. Measures were proposed in the form of resolutions, each of which had to be debated and adopted formally in the Committee of Ways and Means, then reported to the House. Once reported, the resolutions were read a first and second time and agreed to before being embodied in one or more bills which then passed through the same legislative stages as other bills.392
Over the years, the major business of ways and means became the consideration and adoption of resolutions emanating from the budget speech. However, the financial statement by the Minister of Finance, and opposition responses, could hardly be termed a debate. On a designated day, the Minister of Finance would rise in the Chamber and address the House on the “financial condition of the Dominion”. Once the opposition had been given an opportunity to reply, the House would go into the Committee of Ways and Means and consider any resolutions respecting taxation or tariffs which the Minister had proposed in the budget. At first, consideration of the budget speech and consequential ways and means resolutions accounted for only a small proportion of the work of the Committee; the bulk of its time was occupied with appropriating the funds voted under supply. Gradually, however, the financial statement evolved into a major political event. Debate on the budget lengthened as the opposition used it both to challenge the government’s financial policy and, through the use of amendments, to draw attention to specific government actions and programs.
For many years after Confederation, the Minister of Finance followed no established procedure when presenting the budget. Sometimes the presentation was made on the motion for the House to resolve itself into the Committee of Supply393 and, on other occasions, while the House was sitting as the Committee of Ways and Means.394 From 1912 to 1968, the budget statement was presented on the motion for the House to resolve itself into the Committee of Ways and Means. As with supply, the motion for the Speaker to leave the chair to go into the Committee of Ways and Means was debatable, amendable and not subject to time limitations. This meant that budget proposals were debated initially on the motion to resolve into the Committee of Ways and Means, debated in the form of resolutions in the Committee, debated when the resolutions were reported to and read in the House, and debated again as bills passed through the normal legislative process. This practice was not modified until 1913, at which time the House resolved that, when the order was read to consider ways and means on a Thursday or a Friday, the motion for the Speaker to leave the chair would be decided without debate or amendment.
Following changes to the Standing Orders in 1955, there was no longer any debate on the motion for the Speaker to leave the chair for the House to go into the Committee of Ways and Means, except on occasions when a budget was to be presented.395 In such cases, the motion, together with any amendments, could be debated for a total of eight sitting days. Any subamendment would be disposed of on the fifth day of debate; any amendment on the seventh.396 In the early 1960s, the House further limited the budget debate to six days,397 with the subamendment and amendment disposed of on the second day and fourth day, respectively. Speeches, with the exception of those of the Minister of Finance, the Prime Minister, the Leader of the Opposition and the Member speaking first on behalf of the Opposition, were limited to 30 minutes; the Member moving the subamendment could speak for 40 minutes.398
Before the 1968 changes to the Standing Orders, tax changes could be introduced only in a budget. Most felt this procedure was ill-suited to the modern context in which government saw fiscal policy as its prime instrument for influencing economic activity and needed the flexibility to respond quickly to changing economic conditions.399
Ways and Means Proceedings (1968 to Present)
In 1968, the House agreed to abolish the Committee of Ways and Means400 in order to do away with the Committee’s role in considering resolutions to authorize any withdrawals from the Consolidated Revenue Fund following the adoption of supply, and to eliminate the repetitive process of debating budget proposals initially on the motion to resolve into the Committee of Ways and Means, again in the Committee of Ways and Means, and yet again during the various stages of the bills subsequently introduced.401 Ways and means bills, however, continued to be considered in a Committee of the Whole until 1985.402
As a result of these changes, the budget debate takes place on a generally worded motion respecting the budgetary policy of the government. Ways and means motions (proposals respecting changes to government revenues) resulting from the budget are proposed to the House once the budget debate has concluded and are decided without debate or amendment. Detailed consideration of the proposed ways and means measures takes place only during the debate on the bills brought forward to implement them.403
In 1982, the time limit for all Members speaking to the budget motion, except the Minister of Finance, the Member speaking first on behalf of the Opposition, the Prime Minister and the Leader of the Opposition, was reduced from 30 to 20 minutes and a 10-minute period for questions and comments was set aside following each 20-minute speech.404 In 1991, the total number of sitting days allocated to the budget debate was reduced from six to four, with the subamendment and amendment disposed of on the third day and fourth day, respectively. As well, amendments were adopted governing the notice provisions for a budget presentation, as well as the provisions governing proceedings on the day of the budget presentation.405
In February 1994, the House decided that the adoption of a ways and means motion could apply to amendments to a bill then before the House, provided that such amendments were otherwise admissible.406 At the same time, a new rule authorized the Standing Committee on Finance to consider and report on proposals with respect to the budgetary policy of the government.407 The Committee could begin its review on the first sitting day in September of each year and present its reports on this matter until the 10th sitting day before the last normal sitting day each December. In 2015, the deadline for presenting the report was changed to the third sitting day before the last scheduled sitting day in December.408
The term “budget” derives from “budge”, an anglicized form of the French word “bouge”, which denotes a small bag. A 1733 satirical pamphlet, “The Budget Opened”, caricatures Sir Robert Walpole, then British Prime Minister and Chancellor of the Exchequer, “explaining his financial measures as a quack doctor opening a bag filled with medicines and charms”.409 The term “budget” appears to have acquired its current meaning around this time.
By tradition, the Minister of Finance makes a formal budget presentation annually offering a comprehensive assessment of the financial standing of the government and giving an overview of the nation’s economic condition.410 The Minister also declares if and where the burden on the taxpayer will be increased or reduced.
In 2015, as part of the budget bill, the House enacted the Federal Balanced Budget Act, which requires that budgets be balanced and debts reduced. The Act stipulated the circumstances that allowed for a projected or recorded deficit, and required the Minister of Finance to appear before a House committee to explain the reasons for the deficit and present a plan to return to a balanced budget.411 However, this section of the Act was deemed never to have come into force and was repealed in 2016, following the adoption of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2016.412
The Budget Speech
Whenever the government wishes to make a budget presentation, a Minister413 will rise in the House to request that an Order of the Day be designated for this purpose; the Minister will also specify the date and time of the presentation.414 Traditionally, the Minister of Finance makes the announcement during Oral Questions in the House, in response to a question.415 However, a Minister may do so at any time while the House is sitting.416 The Minister’s announcement has been deemed to be the request that a day be designated pursuant to the requirements of the Standing Orders, that is, for it to be placed on the Order Paper, and no further notice is required. The Order of the Day is also deemed to be an Order of the House to sit beyond the ordinary hour of daily adjournment if required.417
At the specified time on the designated day, typically in the late afternoon after the financial markets have closed, the Speaker interrupts any proceedings then before the House, which are deemed adjourned,418 and the House proceeds to the consideration of the Order of the Day for the budget presentation. The Minister of Finance then rises in the House to move a ways and means motion, “That this House approve in general the budgetary policy of the government”,419 and to deliver the budget speech. The Minister may also table notices of ways and means motions setting out the various taxation and other financial measures that will be needed to implement the budget provisions and ask that an Order of the Day be designated for the consideration of each of these motions. However, concurrence in any of these motions, or of any ways and means motions tabled at any other time during the session, may not be proposed until the debate on the budget is completed. This is to allow the House to pronounce itself on the budgetary policy of the government before considering individual taxation measures.420
It is the long-standing practice of Canadian governments to put tax measures into effect as soon as the notices of the ways and means motions on which they are based are tabled in the House of Commons, with the result that taxes are collected as of the date of this notice, even though it may be months, if not years, before the implementing legislation is actually passed by Parliament.421
There is a long-standing tradition of keeping the contents of the budget secret until the Minister of Finance actually presents it in the House. Respect for a budget’s impact on financial markets has often been used as the basis of questions of privilege or points of order respecting the validity of budget proceedings where there has been a budget “leak”.422 However, Speakers have maintained that secrecy is a matter of parliamentary convention rather than one of privilege.423 Speaker Sauvé noted that while a breach of budget secrecy:
… might have a very negative impact on business or on the stock market [and] might cause some people to receive revenues which they would not otherwise have been able to obtain … [it has] no impact on the privileges of a member. [It] might do harm—irrevocable in some cases—to persons or institutions, but this has nothing to do with privilege. It has to do with the conduct of a minister in the exercise of his administrative responsibility.424
In order that Members of Parliament and the news media are able to respond to the budget speech, a closed-door informal session, or “lock-up”, is usually provided for them by Finance Department officials several hours before the actual budget presentation in the House.425 Although questions of privilege have been raised concerning lock-ups, the Speaker has ruled that admission to lock-ups and the nature of lock-ups are not a matter for the Chair to decide.426
With a growing emphasis on consultation, many of the budget’s financial provisions have been discussed publicly before the budget is ever drafted.427 Since 1994, the Standing Committee on Finance has been specifically empowered to hold “pre-budget” consultations.428 Prior to this, only the Minister and the Department of Finance had consulted with the government’s economic and social partners during the budget preparation process. The Standing Committee on Finance already had the authority to undertake this type of consultative study;429 however, the inclusion of an explicit Standing Order for this purpose indicates the House’s willingness to receive and consider a report on the matter.
On occasion, the Committee asks that the House authorize the Committee to travel throughout Canada during its proceedings and to broadcast its deliberations.430 While it seems a tradition has now developed in this regard, these yearly trips are neither automatic nor obligatory. Under the Standing Orders, the Committee may report the outcome of its budgetary consultations to the House up to and including the third sitting day prior to the last scheduled sitting day in December as provided for in the House of Commons calendar.431 Although it is not required to do so, the House occasionally considers the subject matter of the report on pre-budgetary consultations in a take-note debate, which is normally held under Government Orders some time before the budget is actually presented.432 Holding a take-note debate does not prevent a Member from moving concurrence in the report of the Standing Committee on Finance presented pursuant to Standing Order 83.1.433
On occasion, the Minister of Finance makes an economic statement to the House, generally referred to as a “mini-budget”,434 that provides basic economic and fiscal information that will be the subject of policy review and public debate leading up to the next budget.435 Unlike a budget presentation, these statements are delivered without notice and do not precipitate a budget debate. Notices of ways and means motions are also tabled on these occasions. Such statements have been made in the course of debate during consideration of the Address in Reply to the Speech from the Throne,436 on a motion to adjourn the House for an emergency debate,437 during Routine Proceedings under “Statements by Ministers”,438 on a government motion,439 and on moving the motion for second reading of a borrowing authority bill.440 The rules of debate pertinent to each situation have applied.441
The Budget Debate
Following the budget speech, the Speaker recognizes a representative of the official opposition, usually the finance critic, who, after a brief speech, moves the adjournment of the debate, which is then deemed adopted. In doing so, that Member reserves the right to speak first when debate on the motion resumes at a subsequent sitting. The Speaker then adjourns the House until the next sitting day.442
Maximum of four days
Minister of Finance makes presentation normally in late afternoon
Amendment and subamendment normally moved
Subamendment— question put 15 minutes before the end of the time provided for government business
Amendment— question put 15 minutes before the end of the time provided for government business
Main motion— question put 15 minutes before the end of the time provided for government business
Duration of Debate
Once the budget has been presented, the Standing Orders provide for a maximum of four additional days of debate on the budget motion and any amendments proposed thereto.443 The four days of debate do not have to be consecutive444 and, if few Members wish to speak, the debate can be less than four days. The unused days may be added, if the House so agrees, to the number of opposition days in the same supply period, as suggested by the Standing Orders.445
Since the rule changes in 1955, there have been seven cases where budget debates have not continued for the full amount of time provided for in the Standing Orders.446 In 1962, the budget was presented and Parliament was dissolved before any debate on the budget could take place.447 The House adopted special orders providing for fewer days of debate in 1966 and 1969.448 Another two debates (in 1974 and 1979) were cut short when the Prime Minister sought and was granted a dissolution of Parliament after subamendments were adopted.449 In early 1991, when the Standing Orders required that there be six days of debate, only four days of debate were held on the budget presented on February 26; both the amendment and the subamendment were negatived and debate on the main motion was not resumed before prorogation occurred in May.450 In 1993, only two days of debate took place on the budget presented on April 26; the subamendment was negatived and debate on the amendment and the main motion was not resumed before dissolution occurred in September 1993.451
Precedence of Debate
In 1955, the House established that debate on the budget motion should be given precedence over all other government orders.452 When an Order of the Day is called for resuming debate on the budget motion, pursuant to the Standing Orders it stands as the first item of business for the sitting and no other government business may be considered during that sitting, unless the motion has been disposed of.453
Length of Speeches
The Standing Orders impose a 20-minute time limit on the speeches delivered by all Members, with the exception of the Minister of Finance, the Prime Minister, the Leader of the Opposition and the first Opposition Member speaking to the motion, all of whom have unlimited time. A 10-minute questions and comments period is made available following these speeches.454 The general nature of the budget motion allows for a wide-ranging debate, during which the rules of relevance are generally relaxed.
Disposal of Amendments and Termination of Debate
Only one amendment and one subamendment may be proposed to the budget motion.455 The purpose of this rule is to permit opposition parties officially to present their proposals on an issue and have the House come to a decision. This is contrary to the usual rules of debate where Members are permitted to move an unlimited number of amendments and subamendments, provided that each one has been disposed of before the next is proposed. On the first day of resumed debate on the budget motion, the Opposition Member who had previously moved the adjournment of the budget debate continues with his or her speech and traditionally moves an amendment at the end of it. The next speaker, a Member of the next largest opposition party, typically moves a subamendment at the end of his or her speech.456 Occasionally, no subamendment is proposed.457 Amendments to the budget motion are rarely inadmissible.458 There is no rule preventing the amendment or the subamendment from being moved on a day after the first day of resumed debate (although this has occurred only once since the number of days of resumed debate was reduced to four in 1991).459
The Standing Orders define the exact procedures to be followed for the disposal of the amendment and subamendment. On the second day of resumed debate, if a subamendment has been proposed, the Speaker will interrupt the proceedings 15 minutes before the end of the time provided for government business to put the question to dispose of the subamendment.460 In the same manner, at the end of the third and fourth day’s resumed debate, the Speaker puts the question on the amendment and the main motion, respectively. If the subamendment and amendment were moved after the third day, they would be voted on at the end of the fourth day.461 During the 1970s, the main motion was frequently adopted on division,462 but since the 1980s, with one exception,463 Members have requested recorded divisions.
As with amendments moved to the Address in Reply to the Speech from the Throne, proposed amendments to the budget motion are opportunities for expression of non-confidence in the government. On several occasions since 1930, proposed amendments to the budget motion have been worded as explicit statements of non-confidence in the government.464 In two cases in the 1970s, the adoption of subamendments was followed by the Prime Minister seeking a dissolution of Parliament.465
The Legislative Phase
The legislation required to give effect to taxation proposals, whether outlined in a budget or initiated independently of a budget during the course of a session, must go through a unique preliminary step in the legislative process. The House must first adopt a ways and means motion before a bill which imposes a tax or other charge on the taxpayer can be introduced. Charges on the people, in this context, refer to new taxes, the continuation of an expiring tax, an increase in the rate of an existing tax, or an extension of a tax to a new class of taxpayers.466 Industry levies and service fees imposed by departments do not constitute charges on the people in the context of ways and means.467 Legislative proposals which are not intended to raise money but rather to reduce taxation468 or to change the way in which the funds are to be used once they have been paid into the Consolidated Revenue Fund469 need not be preceded by a ways and means motion before being introduced in the House.
Ways and Means Motions
Before taxation legislation can be read a first time, a notice of a ways and means motion must first be tabled in the House by a Minister of the Crown; this may be done at any time during a sitting.470 The notice normally indicates that the government will ask that the legislation be retroactive to the time of its notice, although it can also be used as a vehicle for public scrutiny prior to the introduction of the relevant legislation. On the day the notice is tabled or at some other time during the session, a Minister of the Crown may make a request to the Speaker that an Order of the Day be designated for the consideration of the motion at a subsequent sitting; that is, to put it on the Order Paper.471 Although there are virtually no restrictions on when a notice can be tabled, a ways and means motion cannot be moved during the same sitting in which the notice is tabled,472 or when the ways and means proceedings regarding the budget have yet to be completed.473 When the Order of the Day is called, a Minister moves that the motion be concurred in. The motion for concurrence must then be decided immediately without debate or amendment.474 The adoption of a ways and means motion stands as an order of the House either to bring in a bill or bills based on the provisions of that motion or to propose an amendment or amendments to a bill then before the House.475
Ways and means motions can be expressed in general terms,476 or be very specific, as in the form of draft legislation.477 In either case, they establish limits on the scope—specifically tax rates and their applicability—of the legislative measures they propose. Neither the provisions of a ways and means bill nor any amendment subsequently proposed to the bill may exceed the limits imposed in the ways and means motion. In particular, they may not increase the amount of a tax or extend the incidence of a tax or the applicable tax base.478 Should this occur, either a new ways and means motion must be adopted authorizing the exceptions before those provisions may be considered in committee, or the offending provisions must be amended to conform to the resolution on which the bill is based.479 To proceed otherwise would infringe on the financial initiative of the Crown in taxation measures. Speaker Jerome expressed this in a December 1974 ruling on the matter: “The terms of the Ways and Means motion are a carefully prepared expression of the financial initiative of the Crown and frequent departures from them can only invite deterioration of that most important power”.480 When a new ways and means motion is required, it must also be adopted rather than simply tabled.481 Should a bill be found not to conform to the provisions of a ways and means motion, a new motion will be required before the non-conforming provision can be considered and a decision taken.482
A ways and means motion often refers to more than one legislative proposal; it can encompass more than one provision in a bill and may seek to introduce more than one bill or a bill amending more than one statute. There are essentially no procedural restrictions on the motion’s wording or content.483
Ways and Means Bills
Concurrence in a ways and means motion constitutes an order to bring in a bill or bills based on the provisions of the motion.484 A ways and means bill must be “based on” but not necessarily “identical to” the provisions of its ways and means motion.485 Such a bill can then be read the first time and printed immediately after the motion is concurred in or at a subsequent sitting of the House.486 From this point on, the legislative steps that ways and means bills must complete are exactly the same as those followed for other public bills.487 Like all tax measures, bills imposing a charge upon the people and thereby requiring a ways and means motion must originate in the House of Commons.488
Amendment in Committee and at Report Stage
No amendment may be proposed to the text of a bill until the bill is considered in committee. Amendments to ways and means bills are subject to the same rules respecting legislation.489 Amendments which exceed the scope of the motion on which the bill is based are procedurally unacceptable unless a new ways and means motion is concurred in prior to the amendment being moved.490 Since ways and means motions may be proposed only by a Minister of the Crown, and since Ministers do not usually sit on committees, any amendment exceeding the provisions of the authorizing ways and means motion may be proposed and considered only at report stage. If the House has concurred in the required ways and means motion prior to the bill reaching report stage, the Minister may put amendments on notice and they will be considered with any other report stage amendments.
Ways and Means Bills Requiring a Royal Recommendation
If a bill based on a ways and means motion also contains provisions relating to government expenditure, the bill will also require a royal recommendation.491
Prior to 1994, in such cases, the House had to both adopt the ways and means motion authorizing the government to proceed with the taxation measures, and give leave, after the normal 48-hour notice period, to introduce those spending provisions which were subject to the royal recommendation before proceeding to the first reading of the bill.492 In the event that the notice requirements for the expenditure provisions in a bill requiring a royal recommendation had not been met, the bill was withdrawn and the order for second reading of the bill discharged and removed from the Order Paper. However, this would not affect the validity of any ways and means motion previously concurred in by the House.493
Since 1994, it is however no longer necessary for a royal recommendation to be provided prior to the introduction of such a bill. The legislation can proceed through all stages provided that any royal recommendation required is on notice a minimum of 48-hours before the bill is read a third time and passed.494