Economic Action Plan 2014 Act, No. 1

Elizabeth May: Mr. Speaker, I rise tonight to speak to Bill C-31, yet another omnibus budget bill.

The bill has many provisions which are non-controversial and would not excite concerns from myself or very many members of Parliament. There are technical changes to the tax code that are certainly acceptable.

However, we are now being told that the process, once again, of including things in omnibus bills is a tradition. There is a spring omnibus budget bill and a fall omnibus budget bill, which means that since 2012, each federal budget has had approximately 800 pages of ancillary legislation, described as an omnibus budget bill, but which in point of fact often has provisions that have absolutely nothing to do with the budgetary process.

Again, I know it is popular on some sides of the House to say that what is happening now is just like what the Liberals used to do. The longest Liberal omnibus bill, which was the one that was brought in 2005 under Paul Martin’s administration, was about 100 pages.

By 2009, we were seeing 800-page omnibus bills from the Conservative minority. Another one in 2010 was closer to 900 pages. Now they are split between spring and fall and the combined legislative package is over 800 pages.

It is certainly anti-democratic. It certainly defies the meaning of a proper omnibus bill, which is many different parts of the bill, all meeting the same purpose, serving the same theme and delivering a policy instrument through the changes in numerous pieces of legislation.

I also appeared before the finance committee to speak to the bill. Under the new rules developed by the Conservatives ensure that at report stage members of Parliament in my position are no longer allowed to submit substantive amendments. They have actually changed the legislative process. For the first time in the history of our country, a majority party has found it so inconvenient to allow smaller parties to put forward views at report stage and has changed the legislative process to deny me my rights.

I have a simple amendment at this point. It is deletions. However, let me speak to Bill C-31 in terms of the pieces that disturb me the most.

Report stage should not go by without it being noted that the Canadian Bar Association, among others, has identified that the trademark changes in the bill will hurt Canadian business. This is found in part 6, division 25. These are completely new changes. As far as anyone can find, the most knowledgeable experts in trademark law were not consulted.

The changes will, on the advice of expert witnesses before the committee, hurt Canadian business. In their view, the change has probably been driven by the internal inefficiency of the trademarks office. It does not meet a public policy purpose. In fact, after some time, we will have to go back to try to fix the mistakes that are being made by ramming through changes in trademark legislation.

We also have changes in hazardous products and materials. Most of those are non-controversial, but they were pushed through and the committee did not even have a chance to hear witnesses on those sections.

The Conservatives were in such a rush that when I brought forward amendments to this, even the experts from the department dealing with that policy area were unable to answer questions. It was because there had been no study and no witnesses. When we got to clause by clause, suggestions for changes to the hazardous products aspect of the bill left members of the committee, as well as technical experts from departments, unable to answer simple questions.

When things are rushed through in an omnibus bill, mistakes are made and things are passed without study. In the case of this legislation, everything in here on hazardous products had no study and no witnesses. That needs to be underscored.

The piece my hon. friend from Victoria mentioned is the most controversial. It will certainly be the piece that will cause the greatest grief to this administration. It could cause real grief and hardship for about a million Canadians who may find themselves swept up, not as U.S. citizens, but described as U.S. persons.

I refer again to the Foreign Account Tax Compliance Act. This is unusual in a lot of ways. My friend from Victoria and I are both lawyers. I no longer practise in a way which anyone would notice. I am not a practising lawyer. I am not insured to practise law, but I know my legal principles.

It is certainly remarkable that U.S. legislation has been accepted in Canada as having extraterritorial application. Canada is prepared to say okay. I do not know if this would be allowed if, say, Iran decided to pass legislation to say that anyone with an Iranian connection in Canada had to be treated differently than other Canadians.

In the case of the United States and this piece of legislation, it is based on the implementation of something called the Intergovernmental Agreement, or IGA. Obviously, the United States is our greatest trading partner and closest friend. This is nothing against the United States, but as a matter in principle of law, one nation’s laws do not apply extraterritorially to citizens of other countries. In this case, we have agreed, as though it were a treaty, to implement the IGA.

What is fascinating about this is that the United States does not treat it as a treaty at all. It has not been sent to the U.S. Senate for ratification. In other words, the U.S. does not treat it as a treaty. The U.S. treats it as sort of a clarification of previous agreements. However, it contains substantive new obligations for foreign countries, and somehow Canada feels that we are obligated to enforce it.

Not all experts in tax law accept that. There was a particularly useful submission to Finance Canada prepared by Allison Christians, who is the H. Heward Stikeman Chair in Tax Law at McGill University, and Professor Arthur Cockfield of Queen’s University. Together they have looked at this and have urged Finance Canada to slow down. They say that the steps we have already taken completely vouchsafe Canadian business and protect Canadian banks. We do not need to push FATCA through, and we certainly should not be pushing it through in an omnibus budget bill.

Their recommendation I think is worth reading into the record this evening:

…we recommend that the government delay passage of the Implementation Act until: (a) the issues surrounding Charter protections, other taxpayer protections, and global cooperative efforts have been thoroughly studied and addressed; and (b) the U.S. government agrees to reciprocal treatment with respect to the tax information reporting system that has been unilaterally imposed on Canada.

We are looking at a piece of legislation that imposes on Canada requirements that the U.S. does not have to reciprocate without a treaty having been ratified in the United States.

What are the implications for Canadians? Well, as I just mentioned, Professors Christians and Cockfield talked about charter implications. My office some time ago filed an access to information request. That is how Professor Peter Hogg’s constitutional advice to Finance Canada became public.

Professor Hogg’s letter, dated December 12, 2012, was advice to Finance Canada that what he saw in FATCA definitely violated the Charter of Rights and Freedoms, specifically section 15 of the charter, which says:

Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination…

This is clearly discrimination, and Professor Hogg went on is his letter to point out the following:

There is no mechanism in the Model IGA whereby individuals who are suspected to be U.S. citizens would even know that their personal information was provided to the IRS.

Further on in his letter, he puts it very strongly and clearly:

In my opinion, the procedures mandated by this Model IGA [FATCA] are discriminatory in a way that would not withstand Charter scrutiny. These procedures effectively treat individuals differently, and adversely, based on immutable personal characteristics, specifically citizenship (whether or not acknowledged or desired by the individual) or place of birth. If Parliament were to enact legislation authorizing and permitting this type of differential and adverse treatment, the legislation would contravene the equality protections in section 15 of the Charter.

That is not a tentative conclusion. It is an authoritative conclusion from the most respected constitutional law expert in the land. He wrote the book on constitutional law that I studied when I was in law school. He taught constitutional law to our dear late friend, Jim Flaherty. Jim claimed that he gave him an A, but we cannot verify that.

However, we know that this piece of legislation, I say without qualification, clearly is unconstitutional, and it brings shame to this place to knowingly pass an unconstitutional act.

Raymond Côté: Mr. Speaker, I have to admit that the speech by the member for Saanich—Gulf Islands has left me scratching my head. I do not know why, but at the beginning she seemed to be trying to absolve Liberal governments or indicating that, when they were in power, introducing omnibus bills was less serious than it is today.

We should not ignore the fact that the Conservative government is going much further compared to what we have seen in the past. It is a complete abuse of our institutions. The government is doing away with our right to defend the opinions of our constituents. It is holding that right hostage.

However, I would like to understand what motivated the member for Saanich—Gulf Islands to downplay the Liberals’ actions when they were in power.

Elizabeth May: Mr. Speaker, I thank my colleague.

My motivation is that I like the truth. I think it is important that we tell the truth in this place. It is not true that former Liberal governments have the same record as the Conservatives when it comes to introducing omnibus bills.

When Mr. Martin was prime minister, he introduced a 100-page omnibus bill. It was the biggest in Canada’s history. I believe that the current government’s abusive practice truly threatens real democracy.

I believe that it is important to tell the truth. In recent years under this Conservative government, we have had bigger and more egregious omnibus bills, which are unparalleled in Canada’s history.

Marc Garneau: Mr. Speaker, I thank my colleague from Saanich—Gulf Islands for raising the issue of the Charter of Rights and Freedoms, because we in the Liberal Party are also concerned, based on what we have seen from constitutional experts, that there may be violations of the charter.

Let me get to my question, which deals with FATCA. As we know, under FATCA, Canadian banks must report to the IRS the accounts held by clients who happen to have U.S. citizenship. In Canada there are about a million of them. Otherwise they face the prospect of a 30% withholding tax on their U.S. income.

The government seems to have been very motivated to protect the banks from this. It has come up with some alternate arrangements and changes. As it turns out, the banks would report to the CRA, which would then report to the IRS.

However, there does not seem to be the same concern for the citizens themselves. In fact, it seems that the government has folded its tent here, and it seems quite happy to do the work of the IRS insofar as citizens are concerned.

I would like to hear more from my hon. colleague on why she thinks the banks would be protected but not Canadian citizens with dual nationality.

Elizabeth May: Mr. Speaker, I will try to use less than that in case there are other questions.

I think what has happened here is that there have been threats made by the U.S. administration to sanction Canadian banks. The expert legal advice we have is that the best approach would be to push back on that internationally and to say that there is no right on the part of the U.S. government to penalize banks operating within the United States on the basis of this treaty, which the U.S. has not even ratified itself.

Murray Rankin: Mr. Speaker, my hon. friend was there at the committee stage. Why does she think the government would not accept an amendment that would say, for greater certainty, that the provisions would comply with the Charter of Rights and Freedoms and the Privacy Act, and it would not accept the need for notice of Canadians before their information was released?

Elizabeth May: Mr. Speaker, there were some concessions the Canadians officials gained, such as making sure that RRSPs and other pension and tax savings funds would not be caught under this web. They felt so good about those that they felt they did not dare do anything to protect Canadians and that they got the best deal they could get. They should be listening to legal advice, particularly constitutional law.