House of Commons Procedure and Practice

Second Edition, 2009

House of Commons Procedure and Practice - 18. Financial Procedures - The Commons' Claim to Predominance in Financial Matters

*   The Commons’ Claim to Predominance in Financial Matters

The Constitution and the Standing Orders of the House of Commons require that bills which appropriate (impose a charge on the public revenue) or levy any tax or duty (impose a charge upon the people) must first be introduced and passed in the House of Commons.[87] The Speaker has ruled that a Senate bill which appropriated public money could not be introduced in the House and directed that the notice for the first reading of the bill be removed from the Order Paper.[88] The Speaker has also ruled that a Senate bill which had been read a first time in the House was in fact imposing a tax and should have originated in the Commons; the proceedings on the bill were declared null and void and the bill was ordered withdrawn from the Order Paper.[89]

Financial legislation is, in the opinion of the House, not alterable by the Senate.[90] Since Confederation, the Senate has regularly asserted the right to amend money bills.[91] Most of the disagreements between the two Chambers arise over the extent of the Senate’s authority to amend financial legislation. On the one hand, it has been argued that the Senate is restricted to passing or rejecting such bills.[92] Others maintain that the Senate has full powers to amend, provided that it does not increase appropriations or the amount of taxation.[93] The issue is whether a money bill is one that includes any financial provisions or whether its purpose must be primarily or solely financial; and, consequently, whether any restrictions on the Senate’s power to amend should extend to the whole bill or simply to its financial aspects. A further question is whether or not the Senate can propose amendments to bills amending existing financial legislation.[94] In some instances, the House of Commons has rejected the Senate’s amendments and claimed its financial privilege.[95] On other occasions, however, the House has waived its privileges and accepted the Senate amendments.[96] Where the Commons choose to accept a Senate amendment (to a bill appropriating funds or imposing a tax), they usually waive their financial prerogative, while insisting that their decision in this instance does not constitute a precedent.[97] However, the House has, on occasion, accepted or rejected amendments with no reference made to its privileges, whatsoever.[98] On at least two occasions, the Speaker has refused to lay aside Senate amendments to financial legislation, maintaining that it is the responsibility of the Commons, not the Chair, to invoke or waive the privileges claimed by the House.[99] Although the Chair has acknowledged its responsibility for directing the House’s attention to any Senate bill or amendment which breaches its privileges,[100] the Speaker does not rule on the right of the Senate to amend financial legislation on the grounds that this is a constitutional issue.[101] Senate bills, on the other hand, have been laid aside on the grounds that they contravened the constitutional principles that financial bills originate in the Commons and are introduced at the initiative of the Crown.[102]

The House will allow the Senate to include or alter pecuniary penalties in bills, where such penalties seek only to punish or prevent crimes or offences and do not have the effect of incurring a public expenditure or imposing a tax on the people.[103]

[87] Constitution Act, 1867, R.S. 1985, Appendix II, No. 5, s. 53; Standing Order 80(1).

[88] See Speaker Lamoureux’s ruling, Journals, November 12, 1969, pp. 79‑80.

[89] See Speaker Parent’s ruling on Bill S‑13, An Act to incorporate and to establish an industry levy to provide for the Canadian Tobacco Industry Community Responsibility Foundation, Debates, December 2, 1998, pp. 10788‑91, as well as Speaker Milliken’s ruling on Bill S-15, An Act to enable and assist the Canadian tobacco industry in attaining its objective of preventing the use of tobacco products by young persons in Canada, Debates, June 12, 2001, pp. 5024‑7. See also Debates, November 27, 2001, pp. 7572‑4.

[90] Standing Order 80(1).

[91] In 1918, the Senate established a Special Committee to consider its rights with respect to money bills, under the chairmanship of Senator Ross. The Committee’s report was presented to the Senate on May 15, 1918. See Second Report of the Special Committee on the question of the rights of the Senate respecting Financial Legislation (Money Bills) (Ross Report), Journals of the Senate, May 15, 1918, pp. 193‑204. See also Robertson, J.R., Financial Legislation and the Senate, Ottawa: Library of Parliament, April 19, 1990.

[92] This argument posits that a financial bill amended by the Senate becomes a different bill and is not the same as that which originated in the House of Commons (Driedger, p. 41).

[93] See the Ross Report, presented to the Senate on May 15, 1918 (Journals of the Senate, pp. 193‑204), and adopted on May 22, 1918 (Journals of the Senate, p. 241). See also Robertson, pp. 10‑2.

[94] This arose with respect to Bill C‑21, An Act to amend the Unemployment Insurance Act (Second Session (1989‑91), Thirty‑Fourth Parliament).

[95] See, for example, Journals, May 23, 1873, pp. 429‑30; July 18, 1959, pp. 750‑1; July 6, 1961, p. 812; July 18, 1988, pp. 3210, 3223‑4; May 9, 1990, pp. 1668‑70.

[96] See, for example, Journals, May 23, 1874, pp. 335‑6; September 15, 1917, pp. 662‑3; May 23, 1918, p. 333; June 11, 1941, p. 491; March 20, 1997, pp. 1326‑7. The requirement that bills which appropriate or impose a tax originate in the Commons is included in the Constitution and may not be waived by the House; whereas the principle that such bills are not alterable by the Senate is a privilege claimed by the Commons (Standing Order 80(1)) and, as such, may be waived by the House.

[97] The Speaker has ruled that to waive its privileges respecting financial legislation the House must suspend Standing Order 80(1). Typically, this is done with the consent of the House. However, where consent is denied, a motion to suspend must be proposed and decided, after appropriate notice of the motion has been given. See Speaker Michener’s ruling, Journals, July 14, 1959, pp. 708‑10, Debates, pp. 5977‑85.

[98] See, for example, Journals, May 15, 1989, pp. 222‑3.

[99] See Speaker Fraser’s rulings, Debates, July 11, 1988, p. 17384; April 26, 1990, p. 10723. See also Speaker Rhodes’ ruling, Journals, September 15, 1917, pp. 662‑3.

[100] See Speaker Michener’s ruling, Journals, July 14, 1959, p. 708.

[101] See, for example, Journals, September 15, 1917, p. 663; July 14, 1959, p. 708; Debates, July 11, 1988, p. 17384; April 26, 1990, p. 10722.

[102] See Speaker Lamoureux’s rulings, Journals, November 12, 1969, p. 80; June 12, 1973, p. 402. See also Speaker Parent’s ruling, Debates, December 2, 1998, pp. 10788‑91; Speaker Milliken’s ruling, Debates, June 12, 2001, pp. 5024‑7.

[103] Standing Order 80(2).

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