Traffic Problems at the Intersection
of Parliamentary Procedure
and Constitutional Law
John Mark Keyes and Anita Mekkunnel’
This article addresses the potential for conflict be-
tween courts and parliamentary bodies (including legisla-
tures) in making determinations as to the validity of legis-
lation on the basis of parliamentary procedure. The deci-
sion of the Supreme Court of Canada in Re Eurig Estate
serves as the catalyst for the discussion. It invalidated
regulations requiring the payment of probate fees in the
courts of Ontario on the basis of constitutional provisions
governing the enactment of financial legislation. The arti-
cle examines how Eurig and the Supreme Court’s subse-
quent decision in Ontario English Catholic Teadzes As-
sociation v. Ontario (A.G.) impinge on the traditional mu-
tual deference that judicial and parliamentary bodies accord
each other, particularly in terms of the procedures for en-
acting financial legislation. The article evaluates how the
courts have considered these matters, both before and after
Eurig, as well as how procedures for financial legislation
have been considered in parliamentary bodies in the form
of Speaker’s rulings in the House of Commons and the
Senate. The procedures relating to the delegation of taxa-
tion powers, and what constitutes a tax requiring the obser-
vance of these procedures by parliamentary and judicial
authorities, are also reviewed. In concluding, the authors
call for adherence to traditional notions of procedural
autonomy within the separate spheres of activity of the ju-
diciary and Parliament
Cet article tudie les conflits potenrtics cure Ie ti-
lettres d’homologation dvant le tribum
bunaux et les agences par lmentaircs (y compus Ie corp
lgislatifs) en cc qui conceme a d1temnination d- la %ali-
ditd de la legislation cn fonction de la procedure pa&r-
mentairm La discussion s’impose surtout &dpuis la d-cision
do la Cour suprOma du Canada dans
‘arrat Re Successin
Eurlg, o4 des r”glemnts exigeant le paiemnt &- frais pour
l’obtention d
ontariens oat WS nvalidn s suite a ‘rinmtdztion dz rgles
constitutionnelles sur l’adoption d lois en matihre d era-
tion de taxes. Ce artcle .tudie l’impact d la d&iion ct la
dcision ult.rieure de la Cour dans I’affaire Ontario Eng-
lish Catlwlic Tcadwrs”Association c. Ontario tP.G.) str la
d~fdrence que s’accordaient muttrellmeint le pouvoirjudi-
ciaire et le Parlement, notarnmcn au niscau des pmcddur
pour adopter des lois en mati~re d fiae. L”artil
examine l’approche des tribunaux par raippor a ccttz qu .-
tion, avant ci apr~s Eurig. ainsi que la faWno doz Ies prood-
dares d’adopgion de lois en matir d crtion dz taxes ont
W abordes par les agenecs parleentainrs sous Ia forum
de dcisions de la prdsidence h la Chambr- dCs commune.
et au Sdna. Les auteurs abordent 6galeznnt ta question des
procidures lis h la d1 gation des pouvoirs de taxation ct
des types do taxes qui exigent le respect d c- procdures
par les autoritds parlementaires ctjudidiaires En coneluaa.
les auteurs font appel au respect des notions trbditionnellts
d’autonomie proo durale dans les sectetrs d’ctiit, des
pouvoirsjudiciaire ct Idgislatif.
“John Mark Keyes, Director, Legislative Policy and Development, Department of Justice (Canada).
Anita Mekkunnel, Counsel, Office of the Legal Advisor to the Department of National Defence and
Canadian Forces. An earlier draft of this paper was presented at the 16th Constitutional and Adminis-
trative Law Conference of the Department of Justice (Canada) (Ottawa, 6 April 1999). The views ex-
pressed are those of the authors personally and are not made on behalf of the Department of Justice.
McGill Law Journal 2001
Revue de droit de McGill 2001
To be cited as: (2001) 46 McGill W. 1037
Mode de rf6rence: (2001) 46 R.D. McGill 1037
1038
MCGILL LAW JOURNAL / REVUE DE DROITDE MCGILL
[Vol. 46
Introduction
I. Parliament and the Courts
II. Procedures for Financial Legislation
Ill. Judicial Consideration of Procedures for Financial Legislation
A. Concept of a Tax
B. Delegation of Taxation Powers
C. The Wake of Eurig
IV. Parliamentary Consideration of Procedures for Financial Legislation
A. Concept of a Tax
B. Delegation of Taxation Powers
C. A Cautionary Tale: Bill S-13 (Tobacco Industry Responsibility Act)
Conclusion
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POST-EURIG
1039
Introduction
In Re Eurig Estate’ the Supreme Court of Canada invalidated regulations requir-
ing the payment of probate fees in the courts of Ontario. The decision has generated a
flurry of commentary and discussion in the context of estate planning! Many have
also recognized the potential impact of the decision on the operation of a wide range
of other revenue-generating provisions in delegated legislation. Its effect on the rela-
tionship between the courts and primary legislative bodies (Parliament and the pro-
vincial legislatures), however, remains largely undiscussed. This aspect of the deci-
sion turns on provisions in the Constitution Act, 1867 Section 53 governs the origi-
nation of taxation and spending bills, while section 54 requires a royal recommenda-
tion for spending bills. By invoking section 53 as a basis for invalidating the regula-
tions, the majority in Eurig has moved these arcane provisions out of the precincts of
Parliament and into the courts and chambers of judges. The purpose of this article is
to review this development and speculate on where it will lead. The article begins by
considering the relationship between parliamentary bodies and the courts in matters of
legislative procedure. It reviews the recent judicial consideration of procedures for fi-
nancial legislation, in particular Eurig and the Court’s subsequent decision in Ontario
English Catholic Teachers’Association v. Ontario (A.G.): The article then examines
how these procedures are viewed in Parliament, notably by the Speakers who rule on
them. Finally, the article notes the differences between the approaches taken by the
‘ [1998] 2 S.C.R. 565, (sub nom. Eurig Estate v. Ontario Court (General Division), Registrar) 165
D.L.R. (4th) 1 [hereinafterEurig], rev’g (1997), 31 O.R. (3d) 777, 96 O.A.C. 354 (CA.) [hereinafter
Eurig (CA)], aff’g (1994), 20 OR. (3d) 385, 5 E.T.R. (2d) 304 (Gen. Div.) [hereinafter Eurig (Gen.
Div.)].
‘ See B. Spencer, ‘Estate Planning, Wills and Trusts’ (1999) 23:4 Can. Law. 41; RIB. Thomas &
S.W. Bowman, “Ontario Probate Fees: If You Thought You Were Being Taxed, You Were Right”
(1998) 46 Can. Tax J. 1278; B. Corbin, “Re Eurig: Ontario Strikes Back” (1998) 13 Money & Farn.
L. 93; M. Fitz-James, “Estates and Trusts” (1998) 22:11 Can. Law. 13; W.D. Goodman, “Unlawful
Taxes and the Supreme Court’s Decision in Eurig” (1999) 31 Can. Bus. L.J. 291.
S(U.K.), 30 & 31 Vict., c. 3, ss. 53,54, reprinted in R.S.C. 1985, App. II, No. 5. The provisions read
as follows:
53. Bills for appropriating any Part of the Public Revenue, or for imposing any Tax or
Impost, shall originate in the House of Commons.
54. It shall not be lawful for the House of Commons to adopt or pass any Vote, Reso-
lution, Address, or Bill for the Appropriation of any Part of the Public Revenue, or
of any Tax or Impost, to any Purpose that has not been first recommended to that
House by Message of the Governor General in the Session in which such Vote,
Resolution, Address, or Bill is proposed.
” 2001 SCC 15, 196 D.L.R (4th) 577 [hereinafter OECTA], aff’g (1999), 44 O.R. (3d) 7, 172
D.LR. (4th) 193 (CA) [hereinafter OECTA (CA) cited to O.R.].
1040
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
courts and the Speakers, and concludes with a plea for judicial deference to parlia-
mentary bodies on these matters.
I. Parliament and the Courts
Judicial and parliamentary bodies have traditionally steered clear of each other
when it comes to the way they operate (proceedings and procedure), as opposed to the
end products of their operation (laws and decisions). Although legislatures have re-
versed court decisions and courts have invalidated legislation, they have generally re-
spected each other’s right to function as each sees fit. In Parliament the subjudice rule
prevents debate on matters that are before the courts.’ By the same token, the courts
have recognized the right of legislative bodies to control their own proceedings.’ For
example, in New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House
of Assembly),7 McLachlin J. said:
Our democratic government consists of several branches: the Crown, as repre-
sented by the Governor General and the provincial counterparts of that office;
the legislative body; the executive; and the courts. It is fundamental to the
working of government as a whole that all these parts play their proper role. It
is equally fundamental that no one of them overstep its bounds, that each show
proper deference for the legitimate sphere of activity of the other.’
Section 9 of the Bill of Rights, 1689 also recognizes that Parliament and the courts are
to operate in separate spheres, stating “[t]hat the freedom of speech and debates or
proceedings in parliament, ought not to be impeached or questioned in any court or
place out of parliament” ‘ The Supreme Court of Canada in the Reference Re Resolu-
5 See e.g. A. Fraser, W.F. Dawson & J.A. Holtby, Beauchesne’s Rules & Forms of the House of
Commons of Canada with Annotations, Comments and Precedents, 6th ed. (Toronto: Carswell, 1989)
at 153-54.
‘See e.g. British Railways Board v. Pickin, [1974] A.C. 765, [1974] 1 All E.R. 609 (H.L.); Drewery
v. Century City Developments (No. 1) (1974), 6 O.R. (2d) 288, 52 D.L.R. (3d) 512 (H.C.); Reference
Re Canada Assistance Plan (Canada), [1991] 2 S.C.R. 525, (sub nom. Reference Re Canada Assis-
tance Plan (B.C.)) 83 D.L.R. (4th) 297. But see K. Swinton, “Challenging the Validity of an Act of
Parliament: The Effect of Enrollment and Parliamentary Privilege” (1976) 14 Osgoode Hall L.J. 345.
‘ [1993] 1 S.C.R. 319, (sub nom. Speaker of the House of Assembly v. Canadian Broadcasting
Corp.) 100 D.L.R. (4th) 212 [hereinafter N.B. Broadcasting cited to S.C.R.].
‘ Ibid at 389. See also Ziindel v. Boudria (1999), 46 O.R. (3d) 410, (sub nom. Zllndel v. Liberal
Party of Canada) 181 D.L.R. (4th) 463 (C.A.), leave to appeal to S.C.C. refused, [1999] S.C.C.A. No.
593, online: QL (SCCA).
‘ (U.K.), 1 William & Mary, Sess. 2, c. 2.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POST-EURIG
1041
tion to Amend the Constitution” has accepted that this provision is “undoubtedly in
force as part of the law of Canada.'”
Views about the appropriate spheres of courts and parliament were greatly influ-
enced by the political events and constitutional changes of the seventeenth and eight-
eenth centuries. The law of Parliament was seen as a separate law, distinct from the
common law. For that reason it was the common belief that “judges ought not to give
any opinion of a matter of Parliament, because it is not to be decided by the common
laws but secundwn legemn et consuetudinem parliamenti [according to the laws and
customs of parliament] “‘
The concept of parliamentary privilege also demonstrates the demarcation be-
tween the courts and Parliament. Through parliamentary privilege, the legislature
maintains its formal internal autonomy from external forces such as the public, the
executive, and the courts. The privileges of Parliament include those rights necessary
for free action within its jurisdiction and the necessary authority to enforce those
rights if challenged. Among the most important privileges of the members of a legis-
lature is the enjoyment of freedom of speech in debate. Although originally intended
as protection against the power of the Crown, it was later extended to protect mem-
bers against attack from all sources. This freedom of speech may not be impeached or
questioned in the courts, and statements made within the precincts of Parliament can-
not be the subject of an action for defamation or contempt.” Members are liable to
censure and punishment only by the House itself for a breach of its rules.
If the judicial and parliamentary spheres are separate in many respects, there are
also several points at which they appear to overlap. For example, there may be an
overlap between Crown privilege, which protects the confidentiality of cabinet confi-
dences, and parliamentary privilege, which includes the right to obtain documents and
require the attendance of witnesses. As Professor de Smith has said, “[Tihere may be
at any given moment two doctrines of privilege, the one held by the courts, the other
by either House … and [there is] no way of resolving the real point of issue should
10 [1981] 1 S.C.R. 753, (sub noin. Reference Re Amendnent of Constitution of Canada) 125 D.LR.
(3d) 1 [hereinafter cited to S.C.R.].
at 785.
“b i
2 SirE. Coke, Fourth Part of the Institutes of tie Laws of England (1797) at 14, cited in Sir D. Li-
mon et aL, Erskine May’s Treatise on the Law Privileges, Proceedings and Usage of Parliament, 22d
ed. (London: Butterworths, 1997) at 155 [hereinafter Erskine May].
3 See Roman Corp. v. Hudson’s Bay Oil and Gas Co., [1972] 1 O.R. 444, 23 D.LR. (3d) 292
(CA.), afF’d, [1973] S.C.R. 820,36 D.L.R (3d) 413. See also Fraser, Dawson & Holtby, supra note 5
at 20-22.
1042
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
conflict arise'” 4 With the Supreme Court’s decision in Eurig there now appears to be
an additional area of overlap, relating to parliamentary procedures for the enactment
of financial legislation.
II. Procedures for Financial Legislation
The procedures for enacting financial legislation have been codified to some ex-
tent in sections 53 and 54 of the Constitution Act, 1867.” These provisions apply not
only to the federal Parliament, but also to the provincial legislative assemblies by vir-
tue of section 90 of the same act. They are the culmination of centuries of struggle in
England between the House of Commons and the House of Lords and between the
Crown and Parliament.” The results of this struggle are now an integral part of Cana-
dian parliamentary culture. As Bourinot has written, “All the checks and guards which
the wisdom of English parliamentarians has imposed in the course of centuries upon
public expenditures now exist in their full force in the parliament of the dominion.”‘
Procedural questions relating to financial legislation involve not only the origina-
tion of bills, but also the adoption of a ways and means motion. This motion is a nec-
essary preliminary to taxation measures, including the “the continuation of an expir-
ing tax, an increase in the rate of an existing tax, or an extension of the incidence of a
tax so as to include persons not already payers.”” Bourinot indicates that the funda-
mental principle underlying all parliamentary rules and procedures dealing with fi-
nancial legislation is that
when burthens are to be imposed on the people, every opportunity must be
given for free and frequent discussion, so that parliament may not, by sudden
and hasty votes, incur any expenses, or be induced to approve of measures,
which may entail heavy and lasting burthens upon the country. 9
If a bill imposing a tax does not originate in the House of Commons and is not
preceded by a ways and means motion, the Speaker of that House may rule it out of
order. The Supreme Court of Canada’s decision in Eurig, however, now suggests that
4 S.A. de Smith, “Parliamentary Privilege and the Bill of Rights” (1958) 21 Mod. L. Rev. 465 at
470, citing D.L. Keir & F.H. Lawson, Cases in Constitutional Lmv, 4th ed. (Oxford: Clarendon Press,
1954) at 125.
” See supra note 3.
16 See E.A. Driedger, “Money Bills and the Senate” (1968) 3 Ottawa L. Rev. 25; J. Small, “Money
Bills and the Use of the Royal Recommendation in Canada: Practice Versus Principle?” (1995) 27
Ottawa L. Rev. 33.
17 Sir J.G. Bourinot, Parliamentary Procedure and Practice in the Dominion of Canada, 4th ed.
(Toronto: Canada Law Book, 1916) at 404.
‘4 Erskine May, supra note 12 at 777.
“Bourinot, supra note 17 at 404-405.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLE__S POST-EURIG
1043
the Speakers are not the only ones who may rule on procedural matters relating to fi-
nancial legislation.
Ill. Judicial Consideration of Procedures for Financial Legislation
Eurig involved probate fees imposed by regulations under section 5 of the Ad-
ministration of Justice Act.’ The appellant attacked the validity of the regulations on a
number of bases, including sections 53 and 54 of the Constitution Act, 1867. The Su-
preme Court of Canada allowed the appeal. Although it did not draw any conclusions
about section 54, the majority’s conclusions about section 53 are startling.
A. Concept of a Tax
In Eurig Major J., writing for a majority of the Court, held that the fees were
taxes, as that concept has been elaborated in constitutional case law dealing with the
division of powers, most notably Lawson v. Interior Tree Fruit and Vegetable Corn-
mittee of Direction.’ Laivson held that a charge is a tax if it is imposed under the
authority of Parliament, by a public body, for a public purpose, and is enforceable by
law.’ Even if a charge meets all four criteria, however, it may still not be considered a
tax “in the constitutional sense” if it can be characterized as a regulatory charge?’ This
characterization depends on the purpose of the charge. If its primary purpose is rais-
ing revenue for general governmental purposes, it is a tax. If, though, the charge is
imposed for a specific regulatory purpose, it is not a tax. Regulatory charges are im-
posed to defray the cost of certain programs or services. The amount of the charge
must reasonably relate to the cost of providing the service.- It may be a regulatory
charge even if it has some revenue-raising aspect to it, as long as this aspect is ancil-
lary or necessarily incidental to the regulatory characteristic.?
2 2R1S.O. 1990, c. A.6.
2″ [1931] S.C.R. 357, [1931] 2 D.L.R. 193 [hereinafter Lawson cited to S.C.RI].
2T!b
‘Labourers’ International Union of North America v. Ontario Construction Secretariat (1996), 31
at 363.
O.R. (3d) 261 at 267,95 O.A.C. 374 (Div. Ct.) [hereinafterLIUNA cited to O.R.].
‘4 See Reference Re Agricultural Products Marketing Act, [1978] 2 S.C.R. 1198, 84 D.LPR (3d) 257
[hereinafter Agricultural Products]; Reference Re Proposed Federal Tax on Exported Natural Gas,
[1982] 1 S.C.R. 1004, 136 D.L.R. (3d) 385 [hereinafter Exported Natural Gas]; Allard Contractors v.
Coquitlam (District 03), [1993] 4 S.C.R 371, 109 D.L.R. (4th) 46 [hereinafter Allard cited to S.C.R.];
Ontario Home Builders’Association v. York Region Board of Education, [1996] 2 S.C.R. 929, 137
D.L.R. (4th) 449 [hereinafter Ontario Home Builders cited to S.C.R.].
25 See Exported Natural Gas, ibid; Ontario Home Builders, ibid. But note that in a recent Austra-
lian case, Airservices Australia v. Canadian Airlines International, [1999] H.C.A. 62, 167 A.LR.
392, the High Court considered whether it was necessary for charges to relate to particular services
1044
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
In deciding the constitutional validity of legislation that imposes a charge, courts
have used the pith and substance analysis to determine the purpose. They have asked:
Is the legislation imposing the charge, in pith and substance, in relation to taxation? Is
the charge imposed to raise revenue for government purposes? Is it imposed to defray
the cost of a regulatory program? If there is a revenue-raising aspect, is this aspect an-
cillary to the regulatory scheme? 6
Major J. concluded in Eurig that the probate fees were taxes because they met the
four criteria in the Lawson test and were not regulatory charges, since “[t]he evidence
in this appeal fails to disclose any correlation between the amount charged for grants
of letters probate and the cost of providing that service:’ ‘
The distinction between a regulatory charge and a tax has been revisited by the
Supreme Court in Westbank First Nation v. British Columbia Hydro and Power
Authority.=’ The Court held that certain bylaws passed by the Westbank First Nation
imposing levies and penalties on a provincial utility company constituted taxation
measures, not regulatory charges. Since the company was an emanation of the Crown,
it was immune from taxation because of section 125 of the Constitution Act, 186 7.’
On the one hand, the Court found that the charge was not connected to a regula-
tory scheme and that some of the factors necessary for the finding of a regulatory
charge were absent. In particular, the scheme did not form part of a detailed code of
regulation, and there was no relation between the revenue generated from the charge
and the cost of any services provided. The Court also noted that the band had com-
plete discretion in spending the revenue and that there were no restrictions imposed in
this regard.” On the other hand, the Court held that the charges bore all the hallmarks
of a taxation measure: they were imposed under the authority of the legislature, they
were levied by a public body for a public purpose, and they were enforceable by law.”
for a characterization as regulatory. In holding that it was unnecessary that there be a precise correla-
tion between charges and expenses, the court stated that “there is no reason why a fee for services
should be limited to a fee which merely seeks to recover expenses or outgoings” (ibid. at para. 72).
‘6 See Lavson, supra note 21 at 363-64; LIUNA, supra note 23 at 267-68; Exported Natural Gas,
ibid at 1070-75; Allard, supra note 24 at 401-406; Ontario Home Builders, ibid. at 981, 1017-18.
Eurig, supra note 1 at para. 22.
[1999] 3 S.C.R. 134, 176 D.L.R. (4th) 276 [hereinafter Westbank].
Supra note 3. Section 125 reads as follows:
125. No Lands or Property belonging to Canada or any Province shall be liable to
Taxation.
‘0 Westbank, supra note 28 at paras. 37, 38.
” abid.
at para. 45.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POST-EURIG
1045
B. Delegation of Taxation Powers
Once it is established that a charge is a tax, the next question is whether there is
authority to impose it. In Eurig Major J. decided that the Lieutenant Governor in
Council did not have this authority. This aspect of his decision rested on two bases.
The first was that the enabling act did not delegate a power to impose taxes.” This
conclusion reflects the general strictness with which taxation legislation is interpreted,
as has often been recognized in the context of delegated legislation.” If Major J. had
concluded on this point, his decision would have been unexceptional. He also, how-
ever, considered section 53 of the Constitution Act, 1867 and suggested that the fees
were invalid because they were imposed by a regulation of the Lieutenant Governor in
Council, rather than by a bill passed by the legislative assembly. He wrote:
In my view, the rationale underlying s. 53 is somewhat broader. The provi-
sion codifies the principle of no taxation without representation, by requiring
any bill that imposes a tax to originate with the legislature. My interpretation of
s. 53 does not prohibit Parliament or the legislatures from vesting any control
over the details and mechanism of taxation in statutory delegates such as the
Lieutenant Governor in Council. Rather, it prohibits not only the Senate, but
also any other body other than the directly elected legislature, from imposing a
tax on its own accord?
It is not at all clear what “imposing a tax on its own accord” means in this con-
text. Taxation powers can only exist if there is statutory authority for them. It is im-
possible for a body other than a legislature to impose a tax without this authority. It
might be argued that Major J. was merely identifying a constitutional basis for the in-
terpretive presumption that taxation powers must be clearly conferred by enabling
legislation. It is difficult to imagine, however, why it was necessary to find such a ba-
sis, since the presumption is already so well entrenched in the rules of statutory inter-
pretation. In addition, the reference to the “details and mechanism of taxation” sug-
gests that Major J. considered section 53 to prohibit the delegation of control over
anything more than this. The implication is that parliamentary bodies must provide
some guidance on how taxes are to be imposed, but this leads to the question of how
much guidance is enough, and what is to be gained by having the courts rule on the
sufficiency of this guidance?
3 Eurig, supra note 1 at paras. 38-42.
3 See e-g. R v. National Fish Company, [1931] Ex. C.R. 75 [hereinafter National Fish]; A.G. v.
Wilts United Dairies (1922), 91 LJ.K.B. 897,25 Digest 132,519 [hereinafter Wilts Dairies].
3,Eurig, supra note 1 at para. 30.
1046
MCGILL LAW JOURNAL / REVUE DE DROITDE MCGILL
[Vol. 46
Major J. characterized section 53 as “a constitutional imperative that is enforce-
able by the courts.”” He also rejected the argument that any legislation inconsistent
with section 53 should be considered to be an indirect amendment to this section:
Subsection 52(1) of the [Constitution Act, 1982] effectively requires any pro-
vincial legislation that seeks to amend the constitution of the province to do so
expressly…. Nothing in the Administration of Justice Act purports to amend the
constitutional requirement for imposing tax legislation set out in s. 53.’
He concluded this discussion of section 53, though, with a comment indicating that
his remarks on the permissibility of delegating taxation powers were obiter.
While these provisions authorize the Lieutenant Governor in Council to
impose fees, they do not constitute an express delegation of taxing authority.
Whether the province may delegate its taxing authority was not fully argued
before this Court, is obiter in the result, and should be considered only when
the issue has been raised in the courts below. Of relevance to this appeal is that
the Act clearly does not authorize the imposition of a tax, albeit direct.”
Major J.’s foray into the parliamentary procedure for passing financial legislation
is unprecedented. The issue was not addressed by the lower courts, which considered
only whether the charge was a tax or a fee.” Major J. rejected the rulings and dicta of
previous Canadian cases,3″ and did not mention that the High Court of Australia ruled
that the courts have no power to enforce comparable provisions in the constitution of
that country, their jurisdiction being confined to laws, not “proposed laws”.’
Another significant omission relates to the position of the United States Supreme
Court on a similar origination provision found in article I, 7, of the U.S. Constitu-
tion.”‘ In Skinner v. Mid-America Pipeline Co., the court held that this clause “implies
nothing about the scope of Congress’ power to delegate discretionary authority under
its taxing power once a tax bill has been properly enacted ” ‘ The next year, however,
in United States v. Munoz-Flores,” the court considered whether a requirement to pay
a monetary “special assessment” to the Crime Victims Fund established by the Wc-
tims of Crime Act of 1984″ was invalid because the act had originated in the Senate. A
3 Ibid. at para. 34.
Ibid. at para. 35.
‘7 Ibid at para. 39.
3 See Eurig (C.A.), supra note 1; Eurig (Gen. Div.), supra note 1.
“See Agricultural Products, supra note 24 at 1291; R. v. Irwin, [1926] Ex. C.R. 127.
40 See Victoria v. Commonwealth (1975), 7 A.L.R. 277 at 347, 134 C.L.R. 338 (H.C.).
4 This clause provides: “All Bills for raising revenue shall originate in the House of Representa-
tives”
42 490 U.S. 212 at 221, 109 S. Ct. 1726 (1989).
4″ 495 U.S. 385, 110 S. Ct. 1964 (1990) [hereinafter Munoz-Flores cited to U.S.].
“18 U.S.C. 3013.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLFiS PosT-EURIG
1047
majority of the court rejected the argument that the origination clause raised a “non-
justiciable political question” of the Idnd that the court in Baker v. Cart had decided
was unreviewable. The majority also rejected the conclusion of Stevens J. that the
second clause of article I, 7, provided for bills to become lav even when they were
improperly originated.’ The majority, however, concluded that the provision in ques-
tion was not one for raising revenue and so there was no violation of the origination
clause.
Munoz-Flores raises a number of important factors bearing on the judicial review
of the origination of bills. These factors relate to respect for democratic institutions,
the ability of these institutions to determine origination questions and enforce origi-
nation requirements themselves, the impact that non-observance of these requirements
may have on individual rights, and whether origination questions involve standards
that are amenable to judicial determination. Although the Supreme Court of Canada
viewed the U.S. justiciability doctrine with some skepticism in Operation Dismantle
v. R.,’ the factors mentioned in Munoz-Flores are still relevant to the two-step ap-
proach to justiciability that Wilson J. formulated in the former case. She wrote that the
first step is to determine who “as a constitutional matter” has the decision-maling
power, the second is “to determine the scope (if any) of judicial review of the exercise
of that power.” The majority judgment in Eurig took no notice of these issues, let
alone the factors to be considered in determining them.
4 369 U.S. 186 at 217, 82 S. Ct. 691 (1962). In that case the court said:
Prominent on the surface of any case held to involve a political question is found a
textually demonstrable constitutional commitment of the issue to a coordinate political
department; or a lack ofjudicially discoverable and manageable standards for resolving
it; or the impossibility of deciding without an initial policy determination of a kind
clearly for nonjudicial discretion; or the impossibility of a court’s undertaking inde-
pendent resolution without expressing lack of the respect due coordinate branches of
government; or an unusual need for unquestioning adherence to a political decision al-
ready made; or the potentiality of embarrassment from multifarious pronouncements
by various departments on one question.
Stevens I supported his conclusions with the following reasons:
First, the House is in an excellent position to defend its origination power. … Second,
the House has greater freedom than does the Judiciary to construe the Origination
Clause wisely. … Third, the House is better able than this Court to judge the prejudice
resulting from an Origination Clause violation … Fourth, the violation complained of
by respondent is unlike those constitutional problems which we have in the past recog-
nized as appropriate for judicial supervision (Mnoz-Flores, supra note 43 at 403-406).
(4th) 481 [hereinafter Operation Dismantle cited to S.C.R.].
47[1985] 1 S.C.R. 441, 18 D.L.RI
41 !I. at 471.
1048
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol, 46
It is difficult to know what prompted the majority in Eurig to overcome the tradi-
tional judicial reserve about treading into parliamentary affairs. Perhaps the best ex-
planation lies in its characterization of section 53 as embodying the principle of “no
taxation without representation”. This elevates it from a mere rule of internal proce-
dure to a constitutional protection for the purses of citizens. In this the majority was
clearly following the lead staked out in the legislative language cases that extend from
Quebec (A.G.) v. Blaikid9 to R. v. Mercure.In these cases the Supreme Court found
that provisions such as section 133 of the Constitution Act, 1867″ are much more
than rules of internal procedure. They recognize the fundamental importance of lan-
guage as the medium for participating in law-making activity and for communicating
the law. Their importance in advancing democratic values and the rule of law provides
the rationale for their judicial enforcement.
Another important parallel between Eurig and one of the language rights cases,
Mercure, involves the form of constitutional amendments. Both cases rejected the no-
tion of implied repeal, which Pigeon J. had previously accepted in Agricultural Prod-
ucts,52 asserting that amendments to constitutional provisions must be express, identi-
fying how the text of the provisions is changed. This rejection of implied repeal
dovetails with the majority’s suggestion in Eurig that section 53 prevents parliamen-
tary bodies from delegating unfettered power to impose taxes. Both views insist on a
minimum level of detail in statutes. Constitutional amendments must be made in ex-
press terms, while the delegation of taxation powers must be accompanied by a legis-
lative framework to structure or constrain them.
As noted above, Major J.’s comments on the delegation of taxation powers were
obiter. It is, therefore, worth noting the strong dissenting judgments of four members
of the Court. Binnie J. held that section 53 deals with “bills”, not regulations,” while
Bastarache J. noted the extensive authority supporting a legislature’s authority to
“‘ [1979] 2 S.C.R. 1016, 101 D.L.R. (3d) 394 [hereinafter Blaikie].
‘o [1988] 1 S.C.R. 234,48 D.L.R. (4th) 1 [hereinafterMercure].
5′ Supra note 3. Section 133 reads as follows:
133. Either the English or the French Language may be used by any Person in the De-
bates of the Houses of the Parliament of Canada and of the Houses of the Legis-
lature of Quebec; and both those Languages shall be used in the respective rec-
ords and Journals of those Houses; and either of those Languages may be used
by any Person or in any Pleading or Process in or issuing from any Court of Can-
ada established under this Act, and in or from all or any of the Courts of Quebec.
The Acts of the Parliament of Canada and of the Legislature of Quebec shall be
printed and published in both those Languages.
52Supra note 24.
,Eurig, supra note 1 at paras. 64-66.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POST-EURIG
1049
delegate powers” and argued that at most section 53 (if it applies at all to a unicameral
legislature) requires enabling provisions to be in bills originating in the lower house.”
This interpretation is confirmed by the generality of its reference to bills “for” appro-
priating public revenue or imposing taxes.2’
Eurig raises questions, not only about section 53 of the Constitution Act, 1867,
but also about other constitutional provisions relating to parliamentary procedure. It
remains to be seen what approach the Court will take to the requirement of a royal
recommendation under section 54 of the Constitution Act, 1867, or indeed, to the
other rules expressed in sections 34 to 36 and 44 to 49, which deal with matters such
as quorum and majority votes. Should these provisions be judicially enforced too?
Arguably, they should not because they are directed exclusively to the internal
functioning of Parliament and do not confer rights or benefits on anyone outside this
institution. For example, section 54 protects the right of the Crown to initiate spending
legislation and acts as a flag to make members of Parliament aware of the spending
implications of bills.It is difficult to see in it any more noble principle that benefits
the public generally apart from providing greater control over the spending of public
money. It was originally included in pre-Confedemtion colonial constitutions out of
concerns regarding the fiscal responsibility of the nascent elected bodies. Surely the
governments and parliamentarians of a mature constitutional democracy today need
no help from the courts in overseeing public spending.
C. The Wake of Eurig
It has not taken long for Eurig to be argued and applied in other cases.”‘ The most
notable example is OECTA, which involved paragraph 257.12(l)(b) of the Education
Hodge v. P,. (1883), 9 A.C. 117 at 131-33 (PC.); Shannon v. Lower Mainland Dairy Products
Board, [1938] A-C. 708 at 722 (P.C.); Iring Oil v. Provincial Secretary of New Brunswick, [1980] 1
S.C.R. 787, 109 D.L.R. (3d) 513.
5 Eurig, supra note 1 at paras. 50-61.
See J.M. Keyes, Executive Legislation: Delegated Lav Makng by the Executive Branch (Toronto:
See J.M. Keyes, “When Bills and Amendments Require the Royal Recommendation” (1997-98)
Butterworths, 1992) at 44.
20:4 Can. Parl. Rev. 15.
‘ See e-g. Westbank, supra note 28; OECTA, supra note 4; Urban Outdoor Trans Ad v. Scarbor-
ough (City of) (1999), 43 O.R. (3d) 673, 63 C.R.R. (2d) 165 (Sup. Ct. J.); Balders Estate Nt Halifax
(County of) Registrar of Probate (1999), 181 N.S.R (2d) 201,42 C.P.C. (4th) 241 (S.C.). See also the
dissent in Farhat v. Ordre des opticiens d’ordonnances du Quebec, [1998] A.Q. No. 3661 (CA.), on-
line: QL (QJ), leave to appeal to S.C.C. refused (1999), 249 N.R 391 (note) (S.C.C.). For cases con-
sidering Eurig, see Re Antigonish (Town of) Waste Disposal Charges Bylav (1999), 7 MP.LR. (3d)
165 (N.S. S.C.); Howard Estate v. British Colunbia (1999), 26 _.T.R. (2d) 210 (B.C. S.C.); Lalonde
1050
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
Quality Improvement Act.”‘ The act delegated to the minister of finance the power to
set the rate of school taxes.’ There was no doubt that the Ontario legislature intended
to delegate power to fix the rate of taxes, rather than fees. It was argued, however, that
the delegation of this power was contrary to sections 53 and 54 of the Constitution
Act, 1867.
The Court of Appeal dismissed the relevance of section 54, “as it concerns the
appropriation of taxes, and not the imposition of taxes,'”‘ but it grappled with the sug-
gestion of the majority in Eurig that section 53 limited the scope for delegating taxa-
tion powers:
Major J. was of the opinion that “the Lieutenant Governor in Council can-
not impose a new tax ab initio without the authorization of the legislature” If
we are to accept that Major J. subscribes to the converse of this proposition, it
means a new tax can be imposed by the Lieutenant Governor in Council with
the authorization of the legislation. Applied to this appeal, it follows that hav-
ing established the education tax the legislature could delegate to the Minister
the power to prescribe” the tax rates without running afoul of s. 53. However,
Major J. later concluded that because the legislature did not delegate the
authority to the Lieutenant Governor to impose a probate tax, it was unneces-
sary to address whether it could constitutionally delegate its total responsibility
to impose a tax. With great respect to Major J., it would appear that he did ad-
dress this issue at least implicitly, in the passage quoted from his reasons in the
first sentence of this paragraph.
It is important to observe that the issue which Major J. declined to address
was the narrow question of whether s. 53 precludes the legislature from dele-
gating to a subordinate authority the total power to impose a tax-be it a pro-
bate tax or an education tax, or any other tax. Given the facts of Eurig, it was
unnecessary for him to consider the issue that arises in this appeal-the dele-
gation of one component of the power to impose a tax.6
Having found that Major J. did not address the situation involved in the case at
hand, the Court of Appeal looked at the reasons of the four dissenting judges in Eurig
and relied on them to confine the scope of section 53 so that it did not prevent the
delegation of power to set tax rates. The court also characterized this as a delegation
v. Ontario (Commission de restructuration des services de sant6) (1999), 48 O.R. (3d) 50, 181 D.L.R.
(4th) 263 (Div. Ct.).
59 S.O. 1997, c. 31.
o The tax was imposed by the act, ibiL:
257.7(1) Subject to the regulations, the following shall in each year levy and collect
the tax rates prescribed under section 257.12 for school purposes on the
property indicated …
61 OECTA (C.A.), supra note 4 at 43.
62Ibid. at 44.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POsT-EURIG
1051
of “authority to provide for the details of a tax through regulation:’ adding that “the
amount of the tax, or tax rate, is a detail, or component, of the tax:”‘
This approach is difficult to square with other case law suggesting that the rate of
tax is a fundamental aspect of the imposition of a tax.” It is also worth considering
whether there is a workable distinction between the imposition of a tax and the estab-
lishment of its “details”. The Court of Appeal identified the various elements involved
in the imposition of a tax,” but apart from its conclusion about the rate it gave little
guidance on which elements or how many of them must be established in a statute.”
Finally, the decision raised, but did not answer, the question of how the broad taxation
powers that have been historically delegated to municipalities are to be treated under
section 53. Does the electoral mandate of municipal bodies mean that delegation of
taxation powers to them accords with the principle of no taxation without representa-
tion? But how can it, when the delegate in Eurig was also an elected body (the pro-
vincial cabinet acting through the Lieutenant Governor in Council)?
In March 2001 the Supreme Court of Canada answered these questions with its
appeal decision. Writing for the Court, Iacobucci J. first dismissed the relevance of
section 54, noting that it “has nothing to do with the actual imposition or levying of
“Thid. at 46.
“InAir Canada v. Dorval (City og, [1985] 1 S.C.RI 861,19 D.LL (4th) 401 [hereinafter Air Can-
ada cited to S.C.R.], a statute authorized municipal councils to “impose by by-law and collect certain
annual dues or taxes on all or some trades, manufactures, financial or commercial occupations … car-
ried on or followed in the city” (ibid. at 863). The city of Dorval passed a bylaw that imposed a tax on
all businesses, but provided that the rate of tax was to be set by resolution of the council. The Su-
preme Court found that this amounted to an illegal transformation of the city’s power and that the rate
had to be set in the bylaw itself.
It [the council] enacted provisions in accordance with the Act by making certain of the
choices offered to it. However, it did not exercise its power respecting the rate. To use
the language of Laskin J. in Brant Dairy Co., the Council, in which the power to set a
rate by by-law was vested, redelegated to itself the power to set it by way of resolution.
The Council did not have the power to thus make a redelegation to itself (ibid. at 871).
Air Canada suggests that the rate is a fundamental feature of the imposition of a tax, and that if a tax
is to be imposed through a particular legislative process (in this case the bylaw process), the rate must
be set through that process as well.
“The court held:
In our view, the power to impose a tax consists of the intention to legislate in respect to
all acts necessarily included in the creation of the tax, as well as all acts consequent to
its creation, such as the purpose of the tax and its nature, the tax base, the class of per-
sons required to pay it, the rate of the tax or the formula to enable the taxpayer to cal-
culate the amount of the tax, and the means for the collection of the tax (OECTA
(CA), supra note 4 at 40).
at 40-41.
6Ibil
1052
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
any tax or impost.” He then confirmed that “the fundamental democratic principle of
‘no taxation without representation’ is guaranteed by s. 53 of the Constitution Act,
1867″‘ He cited the passage noted above from Major J.’s decision in Eurig that this
provision “‘prohibits not only the Senate, but also any other body other than the di-
rectly elected legislature, from imposing a tax on its own accord””‘ He also noted that
the Court in Westbank had already reaffirmed the view that section 53 is judicially en-
forceable,” and he went on to say that, although “the tax rate is the defining feature of
a tax,”
The delegation of the imposition of a tax is constitutional if express and un-
ambiguous language is used in making the delegation. The animating principle
is that only the legislature can impose a new tax ab initio. But if the legislature
expressly and clearly authorizes the imposition of a tax by a delegated body or
individual, then the requirements of the principle of “no taxation without repre-
sentation” will be met. In such a situation, the delegated authority is not being
used to impose a completely new tax, but only to impose a tax that has been
approved by the legislature. The democratic principle is thereby preserved in
two ways. First, the legislation expressly delegating the imposition of a tax
must be approved by the legislature. Second, the government enacting the
delegating legislation remains ultimately accountable to the electorate at the
next general election….
The basic purpose of s. 53 is to constitutionalize the principle that taxation
powers cannot arise incidentally in delegated legislation. In so doing, it ensures
parliamentary control over, and accountability for, taxation.:7
Iacobucci J. supported these conclusions by referring to the dissenting opinion of
Bastarache J. in Eurig that “[t]he provincial legislature is entitled to delegate taxing
powers to its subordinate bodies, including the Lieutenant Governor in Council” He
went on to cite further authority to support the delegation of taxation powers to any
‘ OECTA, supra note 4 at para. 70.
“ibi at para. 71.
Ibid
70 The Court in Westbank held:
Mhe Canadian Constitution (through the operation of section 53 of the Constitution
Act, 1867) demands that there should be no taxation without representation. In other
words, individuals being taxed in a democracy have the right to have their elected rep-
resentatives debate whether their money should be appropriated, and determine how it
should be spent. Intergovernmental taxation is prohibited, in part, because one group of
elected representatives should not be allowed to decide how taxes levied under and
within the authority of another group of elected representatives should be spent (supra
note 28 at para. 19).
7 OECTA, supra note 4 at paras. 74,75.
7 Ibid at para. 76, citing Eurig, supra note 1 at para. 55, citing the cases noted in supra note 54.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEAS POST-EURIG
1053
administrative body the legislature sees fit, including municipalities, school boards,
and Aboriginal band councils.’ The only limitation on the delegation of power is that
the delegating legislature must possess the power in the first place. So, for example, a
provincial legislature cannot delegate power to levy an indirect tax.
The Supreme Court has now clearly resolved the questions arising from Eurig
about whether a legislature (or Parliament for that matter) can delegate taxation pow-
ers. In affirming that “the fundamental democratic principle of ‘no taxation without
representation’ is guaranteed by s. 53 of the Constitution Act, 1867,” however, the
Court has left open the possibility that this provision may be applied by the courts to
constrain legislative action in other ways, most obviously to review whether bills
originating in the Senate should have originated in the House of Commons. To appre-
ciate the implications of this review, it is necessary to understand how parliamentary
bodies function when it comes to the creation and imposition of taxes.
IV. Parliamentary Consideration of Procedures for Financial
Legislation
The entry of the courts into parliamentary procedure relating to financial legisla-
tion raises the possibility of conflict with Speakers’ rulings, and if there is such a con-
flict, the question of which should prevail. The potential for conflict arises not only
because judges’ and Speakers’ rulings have traditionally operated quite independently
of each other, but also because of their institutional differences.
Courts operate within a relatively rigid system of rules, argument, and precedent.
They follow the rulings of higher courts, unless those rulings can be distinguished. In
contrast, the procedural system that the Speakers superintend does not have the same
rigidity. Procedure is as much a product of practice, custom, and convention as it is of
rules and rulings.’ The mere fact that a particular procedure has been previously fol-
lowed makes it a precedent.s Arguments about parliamentary procedure are not the
preserve of lawyers, and procedural decisions often reflect their fluid political context.
In fact, in the Senate, the Speaker’s rulings can be overturned by a majority vote.’
The Speaker does not rule on questions of law. Procedural questions about finan-
cial legislation, however, may require the Speaker to consider whether a particular bill
‘ OECTA, ibil at paras. 76-78, citing Wilts Dairies, supra note 33; Gnen 1127ch Co. of Canada v.
Canada (A.G.), [1950] O.R. 429 at 438, [1950] 4 D.LR. 156 (H.C.), aff’d on this point in Bulova
Watch Co. v. Canada (A.G.), [1951] O.R. 360 (CA.); National Fish, supra note 33.
7,See P. Laundy, Parliaments in the Modern. 1brld (Aldershot, U.K.: Dartmouth, 1989) at 62.
75See the ruling of the Speaker of the Senate on Bill S-13, infra note 93, discussed balow.
76Rules of the Senate, s. 18(4).
1054
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
imposes a tax. Speakers have often noted this overlap, as indeed the Speaker of the
House of Commons did recently in ruling on Bill S-13:”
[T]hough this tax question might be characterized as a question of law and in
another context outside this Chamber might be raised and considered as a
question of law, in this context it is considered only as an integral part of a
question on procedure and parliamentary privilege.”
In this section, we consider how the institutional differences between parliamen-
tary bodies and the courts affect how Speakers deal with the concept of a tax and the
delegation of taxation powers.
A. Concept of a Tax
There is no shortage of Speaker’s rulings on whether a charge is a tax. In these
rulings, the most basic indicator of a tax is the payment of its proceeds into the Con-
solidated Revenue Fund. The fact that they are to be paid elsewhere, however, does
not indicate conclusively that the charge is not a tax. If the proceeds are to be used for
a public purpose that might otherwise have required financing from the Consolidated
Revenue Fund, the charge will be considered a tax. One area where the characteriza-
tion problem arises frequently is that of industry levies. Charges imposed on an in-
dustry for its own purposes have been held not to be taxes.” In determining whether
the levy is imposed for the purposes of the industry, the Speakers try to ascertain
whether it is for the benefit of the industry. Erskine May provides the following ex-
amples in the English Parliament of charges that were considered not to be for the
benefit of the industry:
”
*
the Air Travel Reserve Fund Bill 1974-75, establishing a levy to compen-
sate passengers who sustained loss as a result of the financial failure of a
travel company, considered a tax rather than a levy because the govern-
ment had complete discretion to dispose of the assets if the company were
wound up;’
the Merchant Shipping Bill, 1973-74, establishing a charge to pay for
pollution damage; payments imposed to meet the cost of enforcing a new
regulatory regime for the general benefit, rather than for the benefit of the
industry or profession subject to regulation, such as charges for licences
for activities affecting the environment or for adventure activities.”‘
n Infra note 93.
7’ House of Commons Debates (2 December 1998) at 10788. See also Fraser, Dawson & Holtby,
supra note 5 at 49.
” Erskine May, supra note 12 at 779.
‘0 Ibid. at 780, n. 2.
” Ibid. at 779-80.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POsT-EURIG
1055
In contrast, the following examples were characterized as industry charges:
the Sea Fish Industry Act 1951, imposing a levy on persons engaged in
the white fish industry to finance the White Fish Authority, and the In-
dustrial Training Act, imposing a levy on employers in a particular indus-
try to finance the activities of a training board for that industry!
There are also examples of a number of other measures’ that were considered taxes in-
sofar as they required a ways and means resolution:
”
”
*
the Fmance Act, 1925, reimposing certain dudes after previous duties im-
posed in Funace (No. 2) Act, 1915 were allowed to lapse in 1924; the re-
vival of the expired tax was considered as the imposition of a new tax;
the Fumwe Act No. 2, 1931, extending an existing tax to include new
classes of taxpayers, considered a new tax; and
the charges for services provided by the government if the charges are so
disproportionate to the cost of the services or so broadly based as to
amount to taxation; charges that escape this characterization have also
been described as “a small fee of an administrative character”,!
The pith and substance approach used by courts in the determination of a tax in
the division of powers context is different from the more flexible approach taken by
the Speakers in the procedural context. Unlike the courts, the Speakers do not look at
the correlation between the cost of the program and the levy imposed to determine
whether the amount of the levy is reasonable-they look only at whether the levy is
imposed on an industry and whether it is imposed for the benefit of that industry. For
example, levies used to fund a regulatory scheme created for the protection of the
public generally would likely be considered taxes by the Speakers, but not by the
courts. To the contrary, if a levy were imposed to raise revenue for an industry, with-
out any relationship to the costs incurred in regulating the industry, parliamentary
practice suggests that it would be an industry levy, but the courts would most likely
find it to be a tax.’
B. Delegation of Taxation Powers
The delegation question has been specifically addressed in two rulings in the
British House of Commons. In 1917 the chairman of the Committee of Ways and
Means did not allow an amendment to a finance bill that would have authorized the
S/bidL at 782.
!3bl at778.
/bid, n. 2.
/5ibid at 782.
See Eurig, supra note 1 at paras. 38-42.
1056
MCGILL LAW JOURNAL / REVUE DE DROITDE MCGILL
[Vol. 46
food controller to make orders amending the relief from duty granted by the bill. The
reason given was that “rlt would allow an authority other than the Committee of
Ways and Means to impose taxation.”‘ Two years later the Speaker of the House of
Commons ruled on this question, but reached a different conclusion. Lord R. Cecil
submitted that “it is a fundamental rule that this House does not delegate its power of
taxation “‘ But the Speaker replied:
The third question is whether the House of Commons can divest itself of the
responsibility of fixing the rates and amounts of these fines and fees and hand
that duty over to an outside body such as a Trade Regulation Committee. It has
been part of the unwritten law of Parliament that the goods upon which and the
rates at which taxes are to be levied shall be fixed and determined by the House
of Commons itself. I am not prepared to say that the House cannot delegate
that power to some other body, such as a Trade Regulation Committee. I will
only say that at present I am not aware of any similar case. It may be urged that
if Parliament is desirous of altering its practice it should be done in some defi-
nite, specific and formal manner, and not a mere adjunct to other proposals, just
as when we desire to alter our common law we do so by passing a Statute for
that express purpose. ….
But, upon the assumption-an assumption which I am bound to make-that
the House of Commons desires to impose these fines and fees, which, owing to
the nature of the circumstances in which we now find ourselves, may vary from
week to week, or, at all events, from month to month, how can it be done? It is
evidently impossible to bring in a Bill every month to deal with a fresh situa-
tion. It seems to me to be reasonable to fix either certain limits, or a ratio which
the fine is to bear to the cost of the article, and to give to some authority the
duty of fixing the price and applying the ratio or determining the exact figure of
the fine, or in some similar fashion.”
This Speaker’s ruling lends credence to the majority position in Eurig insofar as it
emphasizes the exceptional circumstances justifying the delegation of power and the
need to indicate clearly that such delegation is being proposed. The ruling also, how-
ever, stops short of saying that Parliament has no power to delegate taxation powers,
and it does not question the justification given for the delegation, but rather assumes it
is justified. In the wake of this ruling, similar provisions have been incorporated into
bills founded upon ways and means resolutions, most recently exemplified by sec-
tions 2(2), 5, and 97 of the Value Added Tax Act 1994.’ Furthermore, not all bills
delegating taxing powers require a ways and means resolution. The matters given by
Erskine May as requiring a ways and means resolution include “Delegation of taxing
U.K., H.C., Parliamentary Debates, vol. 95 (2 July 1917) at 828.
Ibid., vol. 122 (2 December 1919) at 212.
Ibid. at 213-14. This ruling was cited with approval in ibid., vol. 259 (17 November 1931) at 720.
9′ See Erskine May, supra note 12 at 779.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POST-EURIG
1057
powers within the United Kingdon”, ‘ suggesting, for example, that bills for self-
government outside the United Kingdom are excluded. Bills empowering municipal
authorities to levy taxes or borrow money are also excluded.’
C. A Cautionary Tale: Bill S-13 (Tobacco Industry Responsibility Act)
The possibility of conflict between parliamentary and judicial rulings is illustrated
by the differing rulings of the Speakers of the Senate and of the House of Commons
in relation to Bill S-13, ‘ which was first introduced in the Senate on 26 February
1998. This bill proposed the incorporation of a non-profit foundation (the Canadian
Tobacco Industry Community Responsibility Foundation). It also proposed
to
authorize the foundation to collect a levy on the sale or other disposition of tobacco
products, and to use the proceeds for a variety of purposes, principally related to re-
ducing the use of tobacco products by young persons in Canada.
On 2 April 1998 the Speaker of the Senate decided that the provisions authorizing
the use of this money did not amount to an appropriation requiring the royal recom-
mendation. The Speaker began his ruling by stating that “[t]he fundamental purpose
of the requirement for a Royal Recommendation is to limit the authority for appropri-
ating money from the Consolidated Revenue Fund to the Government.’ He also
noted the definitions of “appropriation”, “Consolidated Revenue Fund”, and “public
money” in the Financial Adrninistration Act,’ observing that the definition of “public
money” is cast in terms of “all money belonging to Canada”. The decision turns on
this point, since the bill stated that “the Foundation is not an agent of Her Majesty and
its funds are not public funds of Canada. ‘
The Speaker then addressed the question whether the levy actually constituted a
tax. He found that the levy did not constitute a tax because it was “imposed on the to-
bacco industry alone … to meet an industry purpose beneficial to it.’ This conclusion
was based on the language of the bill, which said that its purpose was “to enable and
assist the Canadian tobacco industry to carry out its publicly-stated objective of re-
9,bid [emphasis added].
9- !bid at 781.
‘ An Act to Incorporate and to establish an industry levy to provide for the Canadian Tobacco In-
dustry Community Responsibility Foundation, 1st Sess., 36th Pard., 1998; reintroduced as Bill 5-15,
An Act to enable and assist the Canadian tobacco industry in attaining its objcetive of preventing the
use of tobacco products byyoungpersons in Canada, 1st Sess., 37th Pad., 2001.
9, Senate Debates (2 April 1998) at 1339.
95 RS.C. 1985, c. F-11, s. 2.
Supra note 94 at 1340.
Supra note 93, cL 33(1).
Supra note 94 at 1340.
1058
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
ducing the use of tobacco products by young persons throughout Canada” The
Speaker also took note of Bill C-32,'” which had been introduced in the House of
Commons without a ways and means motion. This bill provided for the imposition of
a levy on blank recording tape and the payment of the proceeds into a fund to benefit
composers and recording artists. ‘
When the bill reached the House of Commons, the government house leader ob-
jected that it imposed a tax, and should, accordingly, have originated in that house and
been preceded by the adoption of a ways and means motion. The debate focussed on
whether the levy was imposed for the benefit of the tobacco industry. On 2 December
1998 the Speaker decided it was not and ruled the bill out of order because it had
originated in the Senate.'” Although he noted both the stated purpose of the bill and
the provision that the levy was not payable into the Consolidated Revenue Fund, he
concluded:
Surely the lack of credibility referred to [in the bill] is a function of our com-
mon sense understanding of the self-interest of the tobacco industry, namely,
that, as a commercial enterprise, its primary goal is to expand its markets and
thereby to increase profits. Young people would constitute the future growth
potential for the industry’s market. How could it be to the benefit of the indus-
try to reduce smoking among the very people who constitute its growth mar-
ket? It is this implausible proposition that underlies the credibility problem to
which the bill refers.’
The Speaker of the House of Commons also noted the blank tape levy imposed
by Bill C-32, and considered it to be an example of a levy imposed on an industry for
its own purposes. He found that the bill was therefore “not required to adhere to the
usual financial procedures” (including a ways and means motion).'”‘ The question of
whether the manufacturers of blank tapes were the actual beneficiaries, considering
that many held no copyright in musical works, was not raised. The benefit was merely
asserted to be “clear” with no discussion of whether the existence of copyright laws in
actual fact hampers the market for blank audio tapes in any significant way.'” In other
words, is it actually the broader artistic community that benefits?
99 Supra note 93, cl. 3(1).
’00 An Act to amend the Copyright Act, 2d Sess., 35th Parl., 1996 (1st reading 25 April 1996, as-
sented to 25 April 1997, S.C. 1997, c. 24).
101 Supra note 94 at 1341.
‘0o House of Commons Debates (2 December 1998) at 10788.
03 Ibid. at 10790.
104 Ibid.
105 Ibid.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POSTEURIG
1059
Yet the Commons Speaker had also cited an English Speaker’s ruling as an exam-
ple of when a levy was found not to be for the benefit of the industry concerned. This
ruling involved a bill amending the Merchant Shipping Act, which provided for a levy
on the shipping industry to be paid into a fund to defray the costs of cleaning up oil
spills. The ruling had found that the Merchant Shipping Act levy was for a general
public purpose (environmental restoration), and as such was a tax. The bill was there-
fore subject to the rules governing financial procedures.” This ruling conflicts with
the precedent set in Canada with a similar piece of legislation, Bill C-121,’ which
was introduced without a ways and means motion, even though it too imposed a levy
on the shipping industry and established the Ship-Source Oil Pollution Fund under the
Canada Shipping Act.’
The differing results in the rulings by the two Speakers demonstrate the fluidity of
parliamentary practice. They also turn on how each Speaker determined the purpose
of the bill. The Senate Speaker was prepared to rely on what the bill said, whereas the
Commons Speaker took a substantive approach, relying on “our common sense under-
standing” and posing the question “Why is legislation like this requiredT’ The differ-
ing approaches raise important questions that go to the heart of the Speaker’s role.
The textual approach of the Senate Speaker operates at a distance from the bill,
avoiding comment on its merits. This allows the Speaker to maintain the impartiality
that is so crucial to his or her office by leaving the merits to be judged by the mem-
bers. It also leaves open, however, the possibility of form triumphing over substance, a
possibility that clearly worried the Commons Speaker. This concern for substance is
laudable, and it is one also demonstrated by the courts when they must determine the
purposes of legislation or the character of amounts required to be paid under it. But it
requires a thorough understanding of the context of the legislation and how it is likely
to operate. Deciding these issues at a preliminary stage in parliamentary proceedings
on the basis of “common sense” may not necessarily do them justice. For example,
Bill S-13 was intended to operate in the context of the prohibitions of the Tobacco
Act” on furnishing tobacco products to young persons. Steps to dissuade them from
tobacco use would arguably not be contrary to the interests of the tobacco industry
because sales to young persons were already illegal. Finally, it should be noted that
the application of section 54 of the Constitution Act, 1867 is scarcely more settled.
Although some aspects of this requirement that spending bills be accompanied by a
“6!bil at 10789.
“‘ An Act to amend the Canada Shipping Act and to anend anotherAct in Consequence thereof, 3d
Sess., 34th ParL, 1993 (1st reading 2 April 1993, assented to 23 June 1993, S.C. 1993, c. 36).
.RS.C. 1985, c. S-9, s. 702.
“9 Supra note 102 at 10790.
“o S.C. 1997, c. 13.
1060
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
royal recommendation are clear, others (such as its application to indirect appropria-
tions) are debatable, and as two other recent Speaker’s rulings demonstrate, appear to
be in a state of flux.”‘
Conclusion
The Supreme Court’s decisions in Eurig and OECTA pose a host of questions
about the relationship between the courts and parliamentary bodies because they sug-
gest that the courts may determine questions of parliamentary procedure arising from
section 53 of the Constitution Act, 1867. They may also open the door to similar con-
clusions in relation to other procedural provisions, such as section 54.
Although OECTA has clarified the delegation issues relating to section 53, this
provision is still capable of casting a long shadow, since the Supreme Court has rec-
ognized that it constitutionalizes the fundamental democratic principle of “no taxation
without representation”. Yet this characterization of section 53 surely bears further
examination, particularly if it is to be applied beyond the delegation issues considered
in Eurig and OECTA. What is it about the requirement to originate bills in the lower
house that supports the principle of no taxation without representation? Why is that
principle not adequately safeguarded through the requirement that taxation bills (like
all other bills) be passed by the lower house? Is the Senate not a representative body
for the purposes of applying the principle?
The Supreme Court has also given little consideration to the threshold question of
whether section 53 raises justiciable issues. This is surprising given the position in
Australia that the courts have no power to enforce comparable provisions of its con-
stitution”2 and the split decision of the U.S. Supreme Court in Munoz-Flores, when it
considered the justiciability of the origination provisions of the U.S. Constitution.”‘
Eurig and OECTA may also have implications beyond the origination require-
ment of section 53. Does the recognition of no taxation without representation as a
fundamental principle now invite the courts to inquire, more generally, into the quality
of democratic representation when taxation measures are being enacted? And what of
the other constitutional provisions noted above that bear on the functioning of Parlia-
ment and the legislatures?” Will they have a bearing on whether legislation is enacted
in accordance with this fundamental democratic principle?
. See J.M. Keyes, “The Royal Recommendation: An Update” (1999) 22:2 Can. Parl. Rev. 19.
.. See supra note 40 and accompanying text.
“‘ Supra note 43.
“‘ See text following note 56.
2001]
J.M. KEYES & A. MEKKUNNEL – PROBLEMS POST-EURIG
1061
The conclusion that the courts have a role to play in enforcing constitutional re-
quirements of parliamentary procedure is profoundly disturbing. In countless deci-
sions, courts have recognized that parliamentary bodies must be allowed to manage
their own proceedings without interference, including interference from the courts.
The limits on their ability to do so relate almost exclusively to the content of the laws
that they enact and are based on clearly established principles and interests such as the
federal-provincial division of legislative powers and the Canadian Charter of Rights
and Freedoms.”‘ With the exception of language rights relating to the legislative proc-
ess, these limits have little effect on how these bodies function. And in turn, Speakers
have recognized that they have no jurisdiction to decide such “legal” questions. With
Eurig and OECTA, however, we now have a significantly expanded range of questions
capable of being decided by both the Speakers and the courts. The potential for con-
flict is clear.
The question whether section 53 limits the delegation of taxation powers is now
settled, happily in accordance with parliamentary practice, and in a way that stopped
short of saying that it cannot be done”‘ and recognized the acceptability of delegating
taxation powers to municipal authorities. This still leaves, however, many significant
questions on which conflict may occur, most obviously on whether bills originating in
the Senate impose taxes. Given the disagreement between even the Speakers of the
two houses on Bill S-13, it is surely not difficult to imagine that the courts may reach
different conclusions as well on whether a provision imposes a tax. This is particu-
larly likely because the judicial concept of a tax is rooted in constitutional law cases
on the division of powers between Parliament and the provincial legislatures.”” The
courts have taken little account of how taxes have been characterized for the purposes
of parliamentary procedure.
When one turns to section 54 and the royal recommendation, there are also strong
arguments against judicial enforcement. Section 54 protects the right of the Crown to
initiate spending legislation, and alerts members of Parliament to the spending impli-
cations of bills. It is clearly an internal procedural matter that is virtually unknown
outside the parliamentary precincts. This section and the other constitutional provi-
sions dealing with parliamentary procedure should not be judicially enforced, because
they are directed exclusively to the internal functioning of Parliament and do not con-
fer rights or benefits on anyone outside its precincts.
At a time when the Supreme Court has taken pains to develop judicial deference
to the decisions of administrative bodies, it seems truly odd that it would embark on
“‘5 Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (U.K.), 1982, c.
11 [hereinafter Charter].
l’ See supra note 73 and accompanying text.
7 See LaIvson, supra note 21.
”
1062
MCGILL LAW JOURNAL / REVUE DE DROIT DE MCGILL
[Vol. 46
an unprecedented review of the procedural decisions of parliamentary bodies. These
decisions often reflect their fluid political context. They should not be determined in a
judicial forum that strives to distance itself from political matters. In N.B. Broadcast-
ing the Supreme Court recognized that the exercise of parliamentary privilege was not
reviewable on the basis of the Charter. How, then, can it justify reviewing the actions
of parliamentary bodies on a basis that falls within the powers of these bodies to man-
age their own proceedings? Non-legal matters of politics and the propriety of parlia-
mentary procedure should not be the subject of judicial comment. The question here
is justiciability involving a concern for the appropriate role of the courts as a forum
for the resolution of certain types of disputes.”8 A matter is not justiciable if it requires
determinations that courts are not intended to make. Courts should retain their tradi-
tional reluctance to comment on procedural matters within Parliament and should, as
McLachlin J. said in N.B. Broadcasting, show proper deference to Parliament’s le-
gitimate sphere of activity.”‘
See Operation Dismantle, supra note 47 at 459.
,19See N.B. Broadcasting, supra note 7 at 389.
