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Report of the Standing Senate Committee on National Finance (Subject matter of Bill C-74, the Budget Implementation Act)

Report of the Standing Senate Committee on National Finance (Subject matter of Bill C-74, the Budget Implementation Act)

Report of the Standing Senate Committee on National Finance (Subject matter of Bill C-74, the Budget Implementation Act)

Hon. Lillian Eva Dyck: 

Honourable senators, I rise today to briefly speak to the twenty-ninth report of the Standing Senate Committee on National Finance, the subject matter of Bill C-74.

Specifically, I would like to focus my remarks on Part 3 of Bill C-74, which includes the proposed amendments to the Excise Act, 2001 (cannabis taxation), the Excise Tax Act and other related texts.

As indicated in the title of this part, it includes the excise tax framework to the legalization of cannabis, which will occur when Bill C-45 receives Royal Assent and the bill is implemented.

As senators know, this issue of excise tax revenue sharing agreements between the provinces and the federal government on cannabis came up during the Standing Senate Committee on Aboriginal Peoples’ study of Bill C-45.

According to the agreement reached, the excise tax collected on cannabis will be split 75 to 25 between the provinces and territories and the federal government. What we heard at the committee was that there should be an excise tax revenue sharing mechanism for First Nations as well. However, as I said in my speech at report stage of Bill C-45, on the report from the Standing Senate Committee on Social Affairs, Science and Technology, we in the Senate face a quandary in trying to rectify this. We were advised that Senate amendments to create or impose a new tax or that require an appropriation of funds are out of order. That role is reserved for the elected house, the other place.

I want to advise senators that in this regard we did consult the Law Clerk’s office and we were advised that such amendments would be outside the powers of the Senate as prescribed in our practice and procedures through various speakers’ rulings and the constitutional provisions of section 53 of the Constitution Act, 1867, that specifically states:

Bills for appropriating any Part of the Public Revenue, or for imposing any Tax or Impost, shall originate in the House of Commons.

Colleagues, because Bill C-45 did not contain any specific clauses that dealt with the excise tax framework, there was no place to amend it with regard to excise tax revenue sharing for First Nations. That framework and those provisions are contained in Bill C-74.

During the pre-study of Bill C-74 at the Finance Committee, this issue of First Nations excise tax was also raised and is reflected in their committee’s report as well.

The Finance Committee also heard from the Chief Commissioner of the First Nations Tax Commission, Manny Jules. Parliamentary Secretary Bill Blair also addressed the issue of First Nations excise tax revenue sharing models for cannabis in his appearance before the committee. The Finance Committee reported it in their observations:

Our committee encourages the government to continue its discussions with First Nations in accordance with their jurisdiction.

Parliamentary Secretary Bill Blair stated at the Standing Senate Committee on National Finance, on May 23, 2018:

The government has been engaging with Indigenous groups to seek their views and access to tax revenues. It is part of a wider discussion on the development of a new fiscal arrangement with First Nations Indigenous communities that’s taking place currently with the government.

. . . I believe the cannabis revenue and taxation issues are more appropriately dealt with within the context of that larger framework rather than as a single event.

Colleagues, I will name the Indigenous senators because there is some confusion as to who they are: Senator Sinclair, Senator Christmas, Senator McCallum, Senator Boyer, Senator Brazeau, Senator Lovelace Nicholas and me.

In response to the Standing Senate Committee on Aboriginal Peoples’ report on Bill C-45, and to the added concerns of all the Indigenous senators, the Minister of Indigenous Services, Jane Philpott, and the Minister of Health, Ginette Petitpas Taylor, issued a public letter to the committee addressing the significant Indigenous concerns about the bill, and Senator Harder read that letter into the debate at third reading of Bill C-45.

Now, on the specific issue of the need to come to an agreement with First Nations over the issue of excise tax revenue sharing on cannabis, Ministers Philpott and Petitpas Taylor stated in their letter to me and to Senator Tannas:

The Government has previously agreed that our commitment to a new fiscal relationship with Indigenous communities will include discussions about revenue sharing and taxation arrangements. As you have asserted to us, this must include discussions with National Indigenous Organizations and organizations like the First Nations Tax Commission, among others. We are committed to advancing a new fiscal relationship with Indigenous communities based on the need for sustainable, sufficient, predictable and long-term funding arrangements.

We will advance this new fiscal relationship with Indigenous communities by our commitment to sustainable, sufficient, predictable and long-term funding arrangements, in addition to supporting the continued development of First Nations taxation and regulatory regimes.

Furthermore, the government has committed to two formal reports, the first report by September, three months from now, and the second within 12 months of Royal Assent of Bill C-45. The senators on the Standing Senate Committee on Aboriginal Peoples will continue to push this issue forward and hold the government accountable to these words.

Colleagues, had it been possible to propose an amendment to actually accommodate an excise tax revenue-sharing system for First Nations within this current framework, as in Bill C-74, I or another Indigenous senator would have done so. However, as I have just explained, the Senate cannot amend a bill to cause the appropriation of funds or imposition of tax. Thank you.