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STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, May 1, 2001

• 0940

[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order.

As everyone knows, today we're dealing with Bill C-18, an act to amend the Federal-Provincial Fiscal Arrangements Act.

As witnesses, from the Department of Finance we've got Dominique La Salle, Chief, Strategic Planning, Federal-Provincial Relations Division; and Sean Keenan, Senior Program Analyst, Federal-Provincial Relations Division.

We'll of course be dealing with some amendments. I believe the first one is Mr. Brison's. You may want to read your amendment.

(On clause 1)

Mr. Scott Brison (Kings—Hants, PC): The amendment reads as follows:

    Subsection 4(9) of the Federal-Provincial Fiscal Arrangements Act is repealed.

This effectively addresses the issue of the imposition of the ceiling on equalization. This reflects the views of the five governments that appeared before the committee representing their provinces. It also further reflects the views of all Canadian premiers, who are united on the issue of the removal of the ceiling on equalization. It's also consistent with the position of the Prime Minister and the Minister of Industry during the federal election.

The Chair: Okay, Mr. Brison. I said earlier to you that I'll have to rule on the inadmissibility of the amendment.

Under the Canadian system of government, the crown alone initiates all public expenditure. Where public expenditure is deemed to be a charge of the public revenue, Parliament may only authorize spending that has been recommended by the Governor General. This prerogative, referred to as the “financial initiative of the Crown”, is signified by way of the “royal recommendation”.

You can find that in Marleau and Montpetit, the 2000 edition, on page 709. Then on page 711 it reads:

    A royal recommendation not only fixes the allowable charge, but also its objects, purposes, conditions and qualifications. An amendment which either increases the amount of an appropriation, or extends its objects, purposes, conditions and qualifications is admissible on the grounds that it infringes on the Crown's financial initiative.

The effect of the amendment is to remove the ceiling on equalization payments provided for under the Federal-Provincial Fiscal Arrangements Act. Increasing the public expenditure infringes on the financial initiative of the crown and therefore contravenes the terms of the royal recommendation. For this reason the amendment is inadmissible, and we discussed this earlier.

Mr. Epp.

Mr. Ken Epp (Elk Island, Canadian Alliance): Mr. Chairman, just for clarification, does this mean that one of the six members opposite could have moved this motion and it would have been admissible?

The Chair: No.

Mr. Scott Brison: You have to be a member of cabinet.

The Chair: No, you have to be a member of cabinet.

Mr. Ken Epp: In other words, unless this comes from cabinet, it can't be admitted?

The Chair: That's right.

Mr. Ken Epp: Then I ask the rhetorical question, what are we as members of Parliament doing here?

Mr. Scott Brison: But, Mr. Chairman, may I suggest that...?

Mr. Ken Epp: That doesn't make any sense.

Mr. Scott Brison: I'm sorry to interrupt, Mr. Epp.

Mr. Ken Epp: You go right ahead.

Mr. Scott Brison: I'd like to make the following motion, then. That the finance committee ask the Minister of Finance to make the following amendment to Bill C-18. That amendment would be that:

    Subsection 4(9) of the Federal-Provincial Fiscal Arrangements Act is repealed.

In recognition of your ruling, the motion I have just moved would in fact be legitimate because we as a committee are asking that the minister introduce this amendment as a member of the cabinet.

Could I have a seconder?

The Chair: We'll go to Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman.

While I can understand the interest in this amendment from the member from Kings—Hants, if the government were about to introduce amendments, they would have done so here today. The government has no plan to introduce amendments. In fact, this particular amendment would totally turn the bill on its head.

The whole purpose of the bill centres on the Federal-Provincial Fiscal Arrangements Act. There has been a ceiling. The ceiling was recommended by the Auditor General as a way of containing or at least controlling costs and ensuring that equalization would be sustainable into the future.

So the amendment, Mr. Chairman, from the member from Kings—Hants totally flies in the face of the intent of the bill. If the government had that intention, they certainly wouldn't be presenting this bill in this way. I would think there's absolutely no chance whatsoever that the minister would introduce your amendment. I think it would be folly to proceed along those lines.

The Chair: Mr. Epp.

• 0945

Mr. Ken Epp: This is absolutely bizarre because we had the Prime Minister make a commitment during the election campaign to lift the ceiling for one year, which is contrary to the act. He can do it without there even being legislation, yet when it comes time to legislate exactly the same thing on an ongoing basis, we're told that (a) the government is unwilling to do it, and (b) nobody else can do it. This is absurdity at its greatest magnitude.

I just want to be on record as saying that this shows a fundamental flaw in the way these decisions are made in our country.

Mr. Scott Brison: Mr. Chairman, this is in the spirit of constructive opposition committee work. While I understand the parliamentary secretary's view on this, I still believe that my motion to ask the Minister of Finance to amend the legislation as previously described is entirely consistent with the rules of the House. It would simply provide him with an opportunity as a member of cabinet to.... He may decline, certainly, but I would move that the finance committee at least ask that he make that change.

The Chair: As a reminder, that's what's on the floor right now. The discussion we're having is on this particular recommendation.

Mr. Scott Brison: But right now we are discussing a motion to ask the Minister of Finance to make this amendment as a member of government.

The Chair: Mr. Nystrom.

Mr. Lorne Nystrom (Regina—Qu'Appelle, NDP): There are two or three points here. The minister can do or not do whatever he wants. As Mr. Cullen said, the minister has no intention of introducing an amendment, but that doesn't preclude the committee's requesting something.

The committee wants to be independent, and across the way I see a lot of independent spirits, namely Mr. Mills, Mr. Gallaway, and others. The committee is the master of its own fate. If we want to ask the minister to dye his hair, we can do that. That's up to the committee.

The Chair: You could propose that. That's a very good one.

Mr. Lorne Nystrom: I want to suggest that we maintain some of our independence and request the minister to proceed with an amendment appropriate to what we've heard the witnesses—

The Chair: Any further comments?

Mr. Epp.

Mr. Scott Brison: It wouldn't take a lot of dye.

Mr. Ken Epp: Mr. Chairman, this is just for clarification. Bill C-18 was passed in the House on second reading. It has now come to the committee for study and report, and we will report back to the House. Is there in fact a parliamentary mechanism whereby the government can introduce this amendment? Can they do that?

The Chair: They could at report stage, I think.

Mr. Ken Epp: Wouldn't it have to come back to this committee?

The Chair: No.

Mr. Ken Epp: It wouldn't.

The Chair: No. You can make many changes at report stage, and bills have been changed at report stage.

Mr. Ken Epp: Okay. So then what Mr. Brison is asking for is that the minister introduce an amendment at report stage in the House. That's what you're asking for.

The Chair: Mr. Cullen.

Mr. Roy Cullen: Mr. Chairman, this is just to clarify matters in terms of Mr. Epp's comment. The idea of a royal recommendation in money bills is not a matter of government discretion. This is part of our Constitution. I should point out that many private members find ways to try to get around this. If you have a private member's bill that calls for the expenditure of public funds, it requires a royal recommendation. If you bring in a bill that reduces taxes, which is basically a tax expenditure, that does not require a royal recommendation. This is just a general point concerning members' latitude, but in this case, with regard to money bills and royal recommendations, it's a matter of our Constitution.

I would just like to come to Mr. Nystrom's and Mr. Brison's point. I think it would be more or less folly for the committee to recommend that the government introduce this amendment. The government clearly has absolutely no intention of doing so because it would turn the bill on its head. It would be absolute folly.

The Chair: Mr. Loubier hasn't had a chance yet.

Mr. Loubier.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Chairman, I don't quite understand Mr. Cullen's attitude, simply because Mr. Brison requested a second time that this motion, which calls for amendments to the bill and for additional funding, not be adopted. He simply asked the committee to recommend to the Minister of Finance that he adopt some amendments.

• 0950

If we no longer have the right to make recommendations, then I suggest we pack our bags and go home. I find these kinds of arguments, namely that we would turn the bill on its head, totally ridiculous. We aren't doing anything of the sort. It's our job to make recommendations about a bill.

Mr. Brison and everyone else seated at this table understand that these amendments have financial implications and that it is beyond our power to adopt amendments that impact the government's financial decisions. Everyone is in agreement on that score.

However, Mr. Brison's second proposal, which changes absolutely nothing in the bill, involves a recommendation to the minister, namely that he raise the ceiling for the next few years. It is our job, and our duty, to make recommendations. However, if we're only puppets of the Finance Minister's office, then that's an entirely different matter. It means that we have been rendered powerless. We do not wish to play this game. Maybe they do, but we are not in the least bit interested. If committees are no longer able to make recommendations, then they lose, all of them, their raison d'être. I can't believe it.

[English]

Mr. Lorne Nystrom: I'm surprised at Mr. Cullen's comments. It's one thing to oppose the substance of the motion in terms of its contents, but to say we shouldn't do this because the minister disagrees is really something I've never heard as an argument before.

We can recommend whatever we want as a committee, and the fact that the minister disagrees doesn't preclude us from introducing an amendment. If that were the way Parliament operated, why would you have committees in the first place? If the minister would disagree, you can't move an amendment? If the minister disagrees, we can't make a recommendation?

Over the history of Parliament, there have been all kinds of recommendations made by many, many committees where the minister has disagreed and doesn't follow recommendation. That's his prerogative or her prerogative at that time, but we have the right and the independence and the duty—

Mr. Ken Epp: The obligation.

Mr. Lorne Nystrom: —to make a recommendation in accordance to what we think.

Mr. Scott Brison: Mr. Chair, if I may give the Minister of Finance some credit here, he has demonstrated significant intellectual flexibility in the past in accepting and embracing policies that he had previously rejected, including the GST.

Voices: Oh, oh!

Mr. Scott Brison: I think we're selling him short if we deny him the opportunity to change his mind on this particular initiative as well.

The Chair: Okay.

Mr. Lorne Nystrom: In fact, maybe he already has.

The Chair: All right. Any further comments? Questions?

Mr. Ken Epp: Is this in order at this stage? We're dealing now with clause-by-clause.

The Chair: Yes.

Mr. Ken Epp: It is in order?

The Chair: His original motion wasn't, but this is.

I call to a vote the motion that the committee recommend to the minister, by way of a report to the House, that the minister seek a royal recommendation to accompany Mr. Brison's amendment, which was PC-1.

(Motion negatived)

The Chair: Yes, Mr. Loubier.

[Translation]

Mr. Yvan Loubier: I would like to move another motion. Let's move down a level. When we're too low, maybe then they will be ashamed. I think I would like to make a recommendation. We the members of the Finance Committee have the right to make recommendations without referring to Mr. Brison's proposals. Can the Finance Committee recommend to the Minister of Finance that he consider the advisability of raising the ceiling on equalization for 2000-2001, 2001-2002 and subsequent years? Can we put forward this recommendation?

I repeat, I wish to move that the Finance Committee call upon the Minister of Finance to consider the advisability of raising the ceiling on equalization for fiscal year 2000-2001 and for subsequent years. Can the committee formulate this kind of recommendation? If it can't, then we have a problem.

[English]

The Chair: Actually, I sought the guidance of counsel here, and what they're saying is that we could do this, but after we deal with the bill.

[Translation]

Mr. Yvan Loubier: That's fine with me. I will reformulate my motion later.

[English]

The Chair: All right. So now, Mr. Nystrom, we're back to you. I guess you're going to withdraw the recommendation about changing his hair colour, right? Because I don't know if that's on the floor and if that was serious.

Mr. Lorne Nystrom: Well, Mr. Gallaway wants me to keep it there, so I think I....

Voices: Oh, oh!

Mr. Scott Brison: That was for Minister Fry. That was the wrong minister.

The Chair: Okay, Mr. Nystrom.

Mr. Lorne Nystrom: Okay, I have two amendments.

The Chair: Yes. You have one amendment. Then we'll deal with Mr. Brison's second amendment, and then we'll go back to your amendment, NDP-2.

• 0955

Mr. Lorne Nystrom: The amendment is that Bill C-18 in clause 1 be amended by replacing line 17 on page 1 with the following—

Mr. Ken Epp: Line 17 or line 14?

Mr. Lorne Nystrom: Line 17.

The Chair: You mean line 14? Okay.

Mr. Lorne Nystrom: I move that Bill C-18 in clause 1 be amended by replacing line 14 on page 1 with the following: “the amount of $10.8 billion”.

The Chair: Mr. Nystrom, just to clarify, you're going with line 14 on page 1 now, right?

Mr. Lorne Nystrom: Yes.

The Chair: Okay. So that's where we're at. So this is in order; it's amendment NDP-1.

Mr. Lorne Nystrom: Yes, that Bill C-18 in clause 1 be amended by replacing line 14 on page 1 with the following: “on April 1, 2002”.

Now, in effect what we're doing here, Mr. Chairman, is changing the date so that the $10-billion cap doesn't apply for the next year.

I think we all know the arguments here. We've had the four Atlantic provinces and Manitoba speak to us about the importance of the cap being raised. If you go back a ways to 1982, I think one of the best things about the patriation of the Constitution—besides the Charter of Rights and Freedoms—was that we became the first country in the world that I know of that enshrined in its constitution the obligation of equalization of condition amongst the provinces of the country.

That was a very, very dramatic step in terms of our federation evolving into one of greater equality. We have three provinces that have done quite well historically; those are the provinces of British Columbia, Alberta, and Ontario. The other provinces, from time to time, have been much worse off.

What this clause does in the Constitution, of course, is try to equalize conditions among the provinces. It's not like you're taking taxes out of the Province of Alberta and transferring them to Newfoundland, for example. What you're doing is taking money from the general revenues of the country—the consolidated revenue fund—and equalizing conditions across the country. I think that is a very, very fine principle.

What's happened is that now the cap is too low. The cap has to be raised to reflect the changing growth in the economy. That can now be done because of the predicted federal surplus. I think most recent surplus predictions are about $17 billion, so it's not that this can't be done fiscally. It's not irresponsible. We're finding some provinces falling further and further behind in our federation. What we're trying to do here is to find another way to remove the cap for a bit longer, Mr. Chair, and I think the reasons for doing so are quite obvious.

The Chair: Thank you, Mr. Nystrom.

As you probably know, this is in the same spirit as the other one, and the result of my ruling will be the same. But, just for the record, the effect of the amendment is to remove the ceiling on equalization payments for the fiscal years 2000-2001 and 2001-2002. This both increases the charge and extends the object of Bill C-18 and therefore contravenes the terms of the royal recommendation. For this reason the amendment is inadmissible.

Mr. Brison.

Mr. Scott Brison: Do you want to move a new amendment?

The Chair: Yes. You have an amendment as well?

Mr. Scott Brison: Yes. My second amendment, Mr. Chairman, would be as follows—and I expect a similar ruling. I move that Bill C-18 in clause 1 be amended by replacing line 17 on page 1 with the following: “amount of the Final Estimate for 1999-2000 were changed”.

Effectively that would—again consistent with the Prime Minister's utterances in September as part of the agreement with the premiers—effectively ensure that equalization keep track with GDP growth and would remain consistent with the percentage of GDP as opposed to a more arbitrary figure, which would again result in a cap that would impede the abilities of recipient provinces to create the necessary fiscal environments they're trying to achieve.

The Chair: Thank you, Mr. Brison.

• 1000

I will once again have to rule that this is more or less in the same spirit, and the effect of the amendment is to remove the ceiling on equalization payments provided for under the Federal-Provincial Fiscal Arrangements Act. The amendment extends the object and condition of Bill C-18 as provided for under the royal recommendation. For this reason the amendment is inadmissible.

We'll now move to Mr.—

Mr. Scott Brison: Mr. Chair, if I may....

The Chair: Yes, you may.

Mr. Scott Brison: Again, the effect of this amendment would be that effectively equalization would grow, tied with the growth of GDP.

Consistent with the Prime Minister's statements in September, I would like to introduce or move a motion that the committee ask the finance minister to introduce an amendment to Bill C-18, identically worded to that which I moved and which was ruled out of order.

The Chair: It's the same sort of—

[Translation]

Mr. Yvan Loubier: No, it's not the same thing.

[English]

Mr. Scott Brison: This motion is to simply ask that the minister...the finance committee asks the Minister of Finance to amend Bill C-18 in clause 1 by replacing line 17, on page 1, with the following: “amount of the Final Estimate for 1999-2000 were changed”.

That would be the motion. We're actually asking the finance minister to move that as a member of the cabinet.

The Chair: We're going to have to take some time here to find out exactly whether that's going to fly or not. We just have to cooperate here for a second.

The term “the final estimate” is unclear.

Mr. Brison, how did you get the term “final estimate”?

Mr. Scott Brison: We could say “final equalization estimate”. That would be—

The Chair: What is that? We have to get precise terminology.

Mr. Scott Brison: We could say “the final equalization estimate” as opposed to simply “the final estimate”, if you want. That is precise phraseology. Instead of “estimate” we could say “final equalization estimate”. That would clarify it.

The Chair: The term that we found is “equalization entitlement”.

Mr. Scott Brison: Okay. That's fine.

The Chair: Then we go back to the original method, where I have to rule, and essentially the effect is the same.

Mr. Scott Brison: Sure.

The Chair: Mr. Brison, we'll deal with yours in the same way I'm going to deal with Mr. Loubier's, after the bill.

Mr. Scott Brison: Okay.

The Chair: Okay. Good.

Mr. Nystrom.

Mr. Lorne Nystrom: The next motion would be that Bill C-18 in clause 1 be amended by replacing line 17 on page 1 with the following: “amount of $10.8 billion were changed”.

This, of course, is raising the cap from $10 billion to $10.8 billion. I think we already heard the arguments. I don't want to waste the time of the committee to repeat them.

The Chair: You probably heard the arguments that I presented all morning.

Mr. Lorne Nystrom: I can remember a certain echo.

The Chair: But I will do it for the record again. This amendment raises the ceiling on equalization payments under the Federal-Provincial Fiscal Arrangements Act, thereby increasing the level of public expenditure. The amendment infringes on the financial initiative outcome and therefore contravenes the terms of the royal recommendation. For this reason, the amendment is inadmissible.

Now we'll move to clause-by-clause, and then we'll go to Mr. Loubier and Mr. Nystrom.

(Clause 1 agreed to)

The Chair: Shall the title pass?

Some hon. members: Agreed.

The Chair: Shall the bill carry?

Some hon. members: Agreed.

The Chair: Shall I report the bill to the House?

Some hon. members: Agreed.

• 1005

The Chair: Thank you. I want to thank the officials, by the way, for the briefing. You're all done. Maybe you should stay, just in case.

Mr. Loubier, now we'll deal with your issue.

[Translation]

Mr. Yvan Loubier: Mr. Chairman, now that all of the motions introduced have been rejected, can the committee at least recommend to the Minister of Finance - and this is how I would like my motion to be worded - that he consider the advisability of raising the ceiling on equalization for fiscal year 2000-2001 and for subsequent years?

That is my motion, and it is seconded by Mr. Brison. Not only does the committee have the right to make recommendations, it has a duty to do so.

[English]

The Chair: I will report to the committee that this is admissible, so we'll go on. Any comments on this particular issue?

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman. These issues have been around, so I won't bore the committee with more commentary. I'd just like to clarify a couple of points.

At the first ministers conference in the fall the Prime Minister agreed to lift the ceiling for the fiscal year 1999-2000, and he said he'd do that because there were pressures on the ceiling. He made no further commitments. The finance minister consulted with the finance ministers. There are ongoing discussions at the officials level in regard to equalization. Those will go on as they usually do, but that was the commitment the Prime Minister made. That's what this bill implements, and to re-base it following a couple of the amendments that have been put forward here, even if there is no growth, will add about $4 billion in equalization payments.

The government is responding to the recommendations of the Auditor General that a more effective cap be put on equalization. The notion that the provinces have all the expenditures and don't collect any revenues is not totally on point either, because in fact, Mr. Chairman, if you look at provincial revenues, including transfers, they have exceeded federal revenues for almost 25 years, since 1976. The provincial debt burden, Mr. Chairman, is half the federal government's. Federal debt charges consume one-quarter of all federal revenues, compared to about 12% at the provincial-territorial level.

Mr. Chairman, if you look at the notion behind equalization, to try to provide Canadians, no matter where they live in Canada, with roughly equal services in respect of quality and accessibility, I think equalization has shown that it does that. In fact, if you look at—

The Chair: Mr. Loubier.

[Translation]

Mr. Yvan Loubier: On a point of order, Mr. Chairman.

I'm not asking Mr. Cullen to take the place of the Finance Minister. I'm not asking him to explain equalization to me, or the importance of ceilings and needs assessments. First of all, it's none of his business. He has no decision-making authority. He will not be the one to present to us the findings of the analysis the Finance Minister is being asked to conduct. The motion is not directed at him, but rather to the Minister of Finance.

If we've reached the point where a parliamentary secretary can tell us what the Finance Minister wants or does not want, then what is the point of recommending anything at all? If the work of the Finance Committee is pointless because the minister has already made up his mind to follow a particular course of action, then what are we doing here? This is incredible.

[English]

The Chair: I think Mr. Loubier raises an interesting point. We should, when we're debating this issue, deal with the substance of the motion. What he's basically saying is that the committee make a recommendation to examine the possibility of lifting the equalization ceiling for the fiscal year 2000-2001 and thereafter. We should stick to that, and any point of debate should be related directly to this particular motion. So anybody else making comments on this, kindly stick to the point.

[Translation]

Mr. Yvan Loubier: I said more than that, Mr. Chairman. The committee mustn't be a puppet committee where the parliamentary secretary can come and tell us anything and speak for the Finance Minister. At some point, there's a limit to being ridiculed in this manner.

• 1010

If the Finance Minister wants to pull the strings of the Finance Committee, then he should join us for some lively discussions. However, when he sends Mr. Cullen to lecture us on what we can and cannot do, on our freedom as members to perform our work and to make recommendations to the government and to the responsible minister, well I won't have it, nor will my colleagues.

Everyone seated at this table has the right to speak. We are all elected representatives capable of reflection. We are all equally as intelligent, capable of thinking for ourselves and of making recommendations. It doesn't commit us to anything. We are simply bringing to light a problem, something on which virtually everyone in Canada agrees, namely that the equalization ceiling should be raised. Could we too have the freedom to reflect on this issue and to make recommendations?

The Chair: Thank you.

[English]

Mr. Brison, and then we'll go back to Mr. Cullen.

Mr. Scott Brison: Mr. Cullen read the September 11 quote from the Prime Minister relative to this and indicated that in fact this legislation meets the criteria set out by the Prime Minister.

Mr. Cullen didn't read the last sentence of that quote, which reads as follows:

    Thereafter the established Equalization formula will apply, which allows the program to grow up to the rate of growth in GDP.

That is consistent with some of the amendments we are trying to make. Certainly it's an oversight. We are trying on this side of the table to ensure that this legislation reflects the views as articulated by the Prime Minister on September 11, as I'm sure the members opposite would agree if they had heard the entire quote.

The Chair: Okay, are there any further comments?

[Translation]

Mr. Roy Cullen: Mr. Chairman, I disagree with Mr. Loubier because he is trying to convince everyone here to support his motion.

[English]

We are all independent members of this committee who can make our own decisions. I have the right, as you and anybody on this committee has the right, to try to argue for or against the very motion you are presenting.

The motion you are presenting says we will take a number of amendments and ask the Minister of Finance to present them. I have the right, indeed I have the responsibility, to try to convince members of this committee, including my colleagues, not to support the motion.

[Translation]

Mr. Yvan Loubier: That is not the gist of my motion. Pay attention instead of...

I move that the committee call upon the Minister of Finance to consider the advisability of raising the ceiling on equalization for fiscal years 2000-2001 and for subsequent years. This is a recommendation to the minister. We're not asking him to adopt amendments. That was the gist of Mr. Brison's earlier motion.

[English]

Mr. Roy Cullen: You're not listening, Mr. Loubier. What I am saying—

The Chair: We'll let Mr. Cullen speak, and then Mr. Brison.

[Translation]

Mr. Yvan Loubier: Do you have the English version? I will read it to him. I don't think he understands. Give me the English version or read it to him.

[English]

Mr. Roy Cullen: Excuse me, I have the floor.

The Chair: Yes.

Mr. Roy Cullen: What I'm saying is, you're asking the committee to support a motion that would ask the minister to consider various amendments. So that's what we're debating.

[Translation]

Mr. Yvan Loubier: No, that's not it.

[English]

Read the motion in English.

The Chair: It says that the committee recommend to the Minister of Finance that he examine the possibility of lifting the equalization ceiling for the fiscal year 2000-01 and thereafter.

Mr. Yvan Loubier: So that's not another amendment, but to consider the possibility—

Mr. Roy Cullen: Okay, but the point is, you are trying to convince members of this committee to support your motion, so we all have the right to present views on whether we should accept your motion—you and I, and other members of this committee.

To say that my intervention is out of order, Mr. Chairman, is totally out of order.

The Chair: I haven't ruled. I didn't say it was out of order.

Mr. Brison.

Mr. Scott Brison: Mr. Loubier's motion doesn't really have a downside to it. We as a committee, operating as much as possible in a non-partisan and constructive way, can suggest to the minister that he consider some changes to the equalization system. If the minister says no and determines not to take that recommendation, that's fine, but as a committee I think it's completely legitimate to ask that.

The Chair: I think it's pretty clear, and the motion is obviously a legitimate one. We as a committee do have the right to make a recommendation if the committee so wishes. That's pretty clear to me. There's really nothing to debate. We can go over and over the same points, but this is elementary material. So let's move to the vote.

• 1015

(Motion negatived)

[Translation]

Mr. Yvan Loubier: I have another motion, Mr. Chairman. Perhaps I could move that the committee recommend to the minister that he remove...

Mr. Chairman, this is getting ridiculous. Why bother with the study stage if ultimately, we can't make recommendations?

[English]

The Chair: Mr. Brison, we'll deal with yours.

Mr. Scott Brison: Thank you, Mr. Chair.

The Chair: Would you read your motion, please?

Mr. Scott Brison: I move the following motion, that the committee ask the Minister of Finance to consider amending Bill C-18 by replacing line 17 on page 1 with the following:

      amount of the final equalization entitlement for 1999-2000 were changed

The effect of this amendment would be to ensure that the equalization entitlement would grow consistent with the rate of growth of GDP. This is entirely consistent with the Prime Minister's statement on September 11, 2000. That statement is as follows:

    The Minister of Finance will examine this issue further after consultation with provincial Ministers of Finance.... ...necessary steps would be taken to ensure that no ceiling will apply to the 1999-2000 fiscal year. Thereafter, the established Equalization formula will apply, which allows the program to grow up to the rate of growth in GDP.

So this would enable the legislation to be consistent with the Prime Minister's intentions in September.

The Chair: All those in favour?

An hon. member: Before we—

The Chair: Look, whenever you want to make a comment, as you know, you raise your hand so that I can recognize you. Nobody has raised their hand, so I didn't recognize anybody.

Mr. Epp.

Mr. Ken Epp: Excuse me, Mr. Chairman, for being tardy.

I would like to appeal to the Liberal members, who obviously have the balance of power here, to support this motion. The important reasons are, first, the Prime Minister made essentially this commitment during the election campaign; secondly, I think we have a clear message from all the premiers in the provinces; and thirdly, there's nothing to be lost by asking the finance minister to consider this, as the motion says.

So I would appeal to the members opposite, who clearly have the balance of power in this committee, to seriously consider saying yes to this. I think it is an important one. It would send a good message to the provinces that we want this equalization thing to work.

The Chair: Mr. Cullen.

Mr. Roy Cullen: Thank you.

As a brief comment, first of all, if the government were planning at this point to contemplate the types of amendments that you are proposing, he would have dealt with that in terms of this bill, and he hasn't done that.

I've said before, and I'll say it again, there are discussions ongoing with all the provinces and territories at the officials level. To say that equalization, the way it's structured now, will be thus forever and a day may not necessarily be the case. The minister will bring forward at some point the results of those deliberations. This is an ongoing process. But to ask him to do that now when he has introduced a bill that deals with it in this way, I think frankly would be—

Mr. Ken Epp: But this is outside of the bill. We've already dealt with the bill, and it's going to be reported, so we've already dealt with that. This is in addition; this is ancillary work to our committee to make a recommendation to the Minister of Finance on something that we think should be given some attention.

The Chair: Thank you, Mr. Epp and Mr. Cullen.

Mr. Nystrom.

Mr. Lorne Nystrom: I think the argument Mr. Cullen makes is a very weak one, that the minister doesn't want to do it or is not ready to do it, and therefore we shouldn't do it. We're not a puppet of the Minister of Finance. We're not a puppet of the Prime Minister of Canada, or anybody. We are an independent committee, for God's sake.

Timid little recommendations seem to be out of order in the mind of the parliamentary secretary. What has this place come to? Don't we want any kind of parliamentary reform? We don't even have to reform Parliament to take this little tiny step. We just show a little tiny bit of independence. No wonder Mr. Gallaway hangs his head in shame. It's incredible that this committee—

• 1020

An hon. member: Actually, he's sleeping.

Mr. Lorne Nystrom: It's incredible that this committee is so timid, and I'm really flabbergasted. You wonder why we spend so much money as taxpayers funding the House of Commons committees if we can't even have this little tiny bit of independence. It's absolutely astonishing. If people could see this, I think they would scratch their heads in great disdain.

The Chair: Well, actually, Mr. Nystrom, if people would see the work of the finance committee, whether we're talking about our pre-budget consultation or about cost recovery—for those of us who are here regularly—and the work on productivity, which many academics and other people have viewed as an extensive study—for those of us who actually participated extensively on those hearings.... You will find that the finance committee has an excellent reputation out there. The fact that the majority of the recommendations made by the finance committee are accepted by the Minister of Finance speaks of that reality—for those of us who are regularly here.

Mr. Brison.

Mr. Scott Brison: Mr. Chairman, it's in the spirit of that earned reputation of excellence of this committee and its chairman that I move this motion, because you make the point, and I agree, that the finance committee has a better reputation than many committees in making constructive recommendations, many of which are accepted by the Minister of Finance. However, if in fact we only present those recommendations that we are supremely confident that the Minister of Finance will accept, that potentially means we are tilting the scales a little bit in our favour.

The Chair: We don't accept everything.

Mr. Scott Brison: That's right, but the fact is the finance committee has an earned reputation, and you as a chairperson have an earned reputation for ensuring that these types of recommendations are made. Sometimes they're rejected. Sometimes they're accepted. But it's in the spirit of that non-partisan cooperation and constructiveness that I move this motion.

The Chair: And it's in that spirit that we're considering it as well.

Ms. Bennett.

Ms. Carolyn Bennett (St. Paul's, Lib.): Just in the same spirit, I think we would be expecting the minister to come perhaps at some time for an economic update. Maybe, Mr. Brison, you should ask him the question then in terms of the recommendation and how he interprets it with the Prime Minister's remarks from September 11.

There is an ongoing method of committees dialoguing with the minister, and it involves bringing the minister in and asking him to do things. We don't usually at committees recommend that the minister consider this or that. We talk to him, and he'll be here soon, I think.

The Chair: Well, then, I think a motion would be in order—I don't know if anybody wants to take the lead on this—to invite the minister to appear in front of our committee. But we'll have to deal with this first, by the way.

An hon. member: But we're going to ask him.

[Translation]

Mr. Yvan Loubier: It's not a big deal. It's planned.

[English]

Mr. Lorne Nystrom: The minister can consider the possibility of “maybe”.

The Chair: Okay, we're going to stick with—

An hon. member: Maybe one day, perhaps, considering.

The Chair: Mrs. Barnes.

Mrs. Sue Barnes (London West, Lib.): I would think that would come under future business, which we hope we'll get to on today's schedule.

The Chair: Yes, I hope that this—

Mrs. Sue Barnes: —but at this time, I've just voted for a bill to go back to the House in one direction, with one philosophy, if you want to phrase it that way. At the same time I voted for that, I'm not really interested in suggesting we go off before the bill is even past the House. We've got to let it get outside of this committee, back to the House, and then at that later date I would consider discussion of another process for looking at this, but not at this time. I would ask you to call the question.

The Chair: Okay.

Mr. Scott Brison: Mr. Chair, Mrs. Barnes has said she has supported a particular philosophy. Unbridled partisanship is not a philosophy.

Mrs. Sue Barnes: Well, Mr. Brison, you could phrase it whatever way you wish. I would say that I've just voted for a bill because of my feeling on it.

The Chair: I think when we get into this type of debate, it's obvious that the points have been saturated. The debate is saturated, as far as I'm concerned, so we'll move to the vote.

Mr. Roy Cullen: What are we voting on?

The Chair: We're voting on the motion that is on the floor, namely the motion moved by Mr. Brison, but we can read it if you like.

• 1025

It is moved that the committee ask the Minister of Finance to consider amending Bill C-18, clause 1, by replacing line 17 on page 1 with the following: “amount of equalization entitlement for 1999-2000 were changed”.

The Chair: Mr. Loubier.

[Translation]

Mr. Yvan Loubier: Mr. Chairman, I would like to move one final motion, just to see how far the Finance Committee can go in making strong recommendations to the committee. I would like to move it and I believe it is in order. I would also like a recorded division on the motion.

I move that the committee call upon the Minister of Finance to perhaps consider the possibility, admittedly slim, of raising the ceiling on equalization for fiscal years 2000-2001 and perhaps for subsequent years, contingent upon the good will of the minister and his main spokesperson on the Finance Committee.

I request a recorded division.

[English]

The Chair: Now that's much better.

[Translation]

Mr. Yvan Loubier: I'm certain the motion is in order.

[English]

The Chair: It's much better. Do you want to debate Mr. Cullen again or do you want to go—

[Translation]

Mr. Yvan Loubier: I request a recorded division on this motion.

[English]

(Motion negatived: nays 5; yeas 4)

The Chair: We have to move to future business now.

We're going in camera for this?

Mr. Lorne Nystrom: I have another one.

The Chair: Okay.

Mr. Lorne Nystrom: I move that the committee report to the House in order to request a royal recommendation for a motion to amend Bill C-18 at report stage, which would allow for an increase in the base level of equalization payments.

I believe, Mr. Chair, that's in order. We're asking for a royal recommendation and allowing a motion to come at report stage that would allow for an increase in equalization. Again, it doesn't specify an amount and it's very general, very open, and very reasonable. Therefore I think we should be approving this unanimously.

The Chair: All those in favour of the motion?

(Motion negatived: nays 6, yeas 4)

The Chair: Now we'll go back to future business.

• 1030

Mr. Scott Brison: I would like to move the following motion: that the committee—this is consistent with your expressed wishes—invite the Minister of Finance to appear before the committee to discuss Bill C-18 and the equalization system.

Mr. Roy Cullen: Mr. Chairman, I think my colleague has made an excellent suggestion.

The minister was going to be here for the economic and fiscal update. We can ask the minister at that point in time anything our little heart desires, so to single that out would not be necessary and it would be inappropriate.

Mr. Scott Brison: Mr. Chair, with due respect, when the minister appears as part of the fiscal update, there are going to be numerous questions that each of us have on other issues. I'm moving that we ask the minister to appear before committee on the very specific issue of Canada's equalization system and Bill C-18.

The Chair: Mr. Cullen.

Mr. Roy Cullen: Could we repeat the question and have a vote?

Mrs. Sue Barnes: I was just going to say, Mr. Chair, that on the agenda now is future business. So I would think that we should look at that and look at what we're doing and how all of this will fit together.

Mr. Scott Brison: Yes, but there is a motion.

Mrs. Sue Barnes: I would think that future business is where this is supposed to be going.

Mr. Scott Brison: There is a motion now.

[Translation]

Mr. Yvan Loubier: There is a motion on the table calling for the Minister of Finance to specifically address the issue of equalization. In Quebec, the Finance Minister spends many long hours before the Committee on Labour and the Economy fielding questions from MNAs. Here, the Minister appears before the committee once a year to make some positive announcements and to put on a big show.

Is there some way to make him assume his responsibilities and to come meet with the committee? Instead of speaking to us through Mr. Cullen and pulling strings in this manner, the Minister of Finance could meet with us in person, address the issue of equalization and tell us what the future holds in store for equalization. Inviting the Minister of Finance here could also be another one of the committee's recommendations.

I can't believe it. It's enough to boycott the committee because it serves no purpose whatsoever. Why even bother discussing future business when our ideas our rejected out of hand and deemed worthless?

[English]

The Chair: Can we look at—

[Translation]

Mr. Yvan Loubier: Absolutely not. First we must dispense with your motion.

[English]

The Chair: We're going to be dealing with future business now and this motion is part of the future business. Is that the way you want to proceed?

Mr. Scott Brison: Well, whether or not we discuss it as future business or as it pertains to Bill C-18, the motion has been moved and I'm not going to retract it and say we'll discuss it as future business. I'm presenting this more as it pertains to Bill C-18 than to the issue at hand in terms of equalization. But since there is only a motion, perhaps unless there's further debate, we just move to a vote.

The Chair: Okay, so that's what we are dealing with here. Mr. Brison would like the minister to appear specifically on equalization. Apparently, according to Mr. Cullen, the minister may in fact appear in front of the committee sometime in May. There was an earlier comment, I think by Dr. Bennett, that in fact the minister should appear in front of the committee. Now my assumption is that he would come to this committee to do an economic and fiscal update. That's my sense. Maybe, Mr. Cullen, you could speak to that.

So in other words, we're basically going to invite him twice, once to make an economic and fiscal update and another time to review the equalization payments. Am I correct, Mr. Brison?

Mr. Scott Brison: Specifically to discuss it.

The Chair: Thank you, Mr. Brison.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman. Certainly the minister has indicated that he'll come before the committee probably in the next few weeks and do his economic and fiscal update, a kind of a mini economic and fiscal update.

• 1035

If the committee wants him to come and speak specifically on equalization, we can put the request in. Why would that need a formal motion from the committee?

The problem is, if he comes here to do an economic and fiscal update, given his schedule, I'm not sure we could get him here just to discuss equalization.

The Chair: Mr. Brison is within his right as a member of the committee to request the appearance of the minister, or for that matter that minister or any other minister of the crown who deals with finance-committee-related issues. We can invite and they can accept or reject; that's entirely up to them. But before we even make that invitation, we have to get agreement in the committee to in fact invite the minister. So we're still at phase one.

Mr. Pillitteri.

Mr. Gary Pillitteri (Niagara Falls, Lib.): Thank you, Mr. Chairman.

No, I do not support that, quite simply because when the Minister of Finance and the ministers of the provinces go into talks about equalization payments, these are agreements that they go on. I don't think we should be making a recommendation that we should be speaking to the minister and asking questions to state his position over here when he is negotiating with the provinces. It's not a thing that's really in order when you are negotiating this with the provinces and you want to preclude it here in conversation with the finance committee. I don't think that's in order.

If you want to ask questions of the minister when he comes here on the update, then I could see asking any questions you want, but not specifically on equalization payments. I would not be supporting that motion.

The Chair: When we're dealing with future business, as we are now, we usually move in camera. Do I have a consensus?

Some hon. members: Agreed.

[Proceedings continue in camera]

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