BILL S-15: THE TOBACCO
YOUTH PROTECTION ACT
Law and Government Division
9 February 2001
A. Bill C-71:
The Tobacco Act
S-13: The Tobacco Industry Responsibility Act
C-42: An Act to Amend the Tobacco Act (Bill C-71)
S-20 AND BILL S-15: THE TOBACCO YOUTH PROTECTION ACT
1: Chronology of Events
2: 24th Report of the Standing Senate Committee on
Constitutional Affairs, 15 April 1997 [Bill C-71: The
3: Speakers Ruling on Bill S-13, Senate, 2 April 1998
4: Speakers Ruling on Bill S-13, House of Commons, 2 December
BILL S-15: THE
TOBACCO YOUTH PROTECTION ACT
A. Bill C-71:
The Tobacco Act
The Tobacco Products
Control Act (TPCA), which received Royal Assent in June
1988, was the first comprehensive legislative response to the ever-increasing
health concerns surrounding the use of tobacco products. It provided
the authority for:
all tobacco advertising;
restrictions on and the gradual phasing out of promotional activities
and sponsorship by tobacco manufacturers; and
more explicit health warnings on tobacco product packages.
In September 1995, the Supreme
Court of Canada ruled that Parliament could legislate with respect to
the advertising and promotion of tobacco products under the criminal law
power, which includes matters of public health. However, the court
also held that the restrictions on advertising and promotion under the
TPCA violated the freedom of expression of the affected tobacco
companies, and were invalid. In December 1995, the Minister of Health
released Tobacco Control: A Blueprint to Protect the Health of
Canadians, outlining the governments plans for new legislation.
In December 1996, the Minister
of Health introduced Bill C-71, An Act to regulate the manufacture, sale,
labelling and promotion of tobacco products. More generally known
as the Tobacco Act, the bill provided the authority to regulate:
the composition of tobacco
the access of young
people to tobacco products;
tobacco labelling; and
tobacco product promotion.
However, the debate over
the effect that Bill C-71s proposed restrictions would have on sponsorship
funding for art, cultural and sports organizations was particularly intense.
This resulted in an amendment providing a transitional period of one year
before the main sponsorship provisions came into effect, in the hope that
these organizations could find alternative funding. The amendment
delayed the coming into force of the sponsorship restrictions until 1
In the Senate, Bill C-71
was referred to the Standing Senate Committee on Legal and Constitutional
Affairs. The Committees report, presented on 15 April 1997,(1)
contained several recommendations. Noting that legislation
such as Bill C-71 is only one aspect to the development of an integrated
approach to prevent young people from starting to smoke, the Committee
recommended the development of programs targeted at youth, developed by
young people and focused on youth helping youth. The Committee also
recommended that the government make use of other resources in the community,
including the tobacco industry itself, to develop and fund programs targeted
at young persons. Finally, the Committee recommended interim funding
for the artistic, cultural and sporting groups dependent upon tobacco
company sponsorship, as well as independent studies on such matters as
the impact of advertising and promotional activities on both brand preference
and new markets.
During the third reading
debate, various amendments were proposed with a view to strengthening
Bill C-71. Senator Colin Kenny proposed an amendment which would
have set up a Tobacco Manufacturers Community Responsibility Fund to
assist the Canadian tobacco manufacturing industry to demonstrate its
commitment to the health and welfare of Canadians, and of young persons
in particular. Senator Kenny described the rationale behind
his amendment as follows:
My first concern is that
there is insufficient provision in the legislation to actually get young
people off tobacco. The bill focuses on a great many useful things,
but it does not focus on the very complex things that go through an
adolescents mind relating to self-identity, peer pressure, role
models and rebellion. These topics were related by the experts
who came before the committee, and they are very important to solving
the core of this problem.
The core of this problem
is that we know 40,000 Canadians are dying each year. Who are
the tobacco companies targeting to replace those 40,000 people?
They are replacing them from the youth of Canada. My concern,
then, is to set up something like a tobacco manufacturers community
responsibility fund in order to provide resources to get at this specific
My second concern is that
the bill does not provide adequate transition measures and adequate
help for those who are dependent on tobacco money to put on their events.
I am talking about the arts groups, the sports groups and the cultural
groups which exist across the country.
. . .
What I am bringing forward
for your consideration, honourable senators, is a productive way for
us to assist the tobacco manufacturers in getting our youth off tobacco.
I am also bringing forward a proposal for your consideration to provide
for a transitional fund that would allow the sports, arts and culture
groups to continue to be funded.
S-13: The Tobacco Industry Responsibility Act
The concept introduced in
Senator Kennys proposed amendment evolved into Bill S-13, which
he introduced in the Senate on 26 February 1998. Originally,
Bill S-13 had three objectives:
create a non-profit foundation (Part I, clauses 4-35);
establish a levy which would financially support that foundation (Part
II, clauses 36-44); and
foster a smooth transition for the arts, cultural and sports communities
in Canada from dependence upon tobacco industry sponsorship, and of
tobacco farmers to other viable crops or farm industry (Part III,
The bill had bi-partisan
support, having been seconded by Senator Nolin.
The creation of an independent
non-governmental foundation was a response to the perception that the
tobacco industry wanted to help stop under-age smoking, but did not have
the credibility within the community to be effective. The levy of
50 cents per carton was based on the concept of an industry levy for industry
purposes, and should have raised at least $120 million annually for
The two transitional funds
one for the arts/cultural/sports community and one for tobacco
farmers would have received half of the revenues from the levy
in the first year, but would have been reduced by 20% of the original
sum for each of the next four years. By the sixth year, all funds
raised by the levy would have been directed exclusively towards combating
the use of tobacco by young people, defined as persons under 18 years
Clause 3 set out the purpose
of the bill, which was to enable and assist the Canadian tobacco
industry to carry out its publicly-stated industry objective of reducing
the use of tobacco products by young persons throughout Canada.
Bill S-13 did not anticipate continued Ministerial involvement, except
for the right of the Minister of Health (the Minister) to
appoint members to the Canadian Tobacco Industry Community Responsibility
Foundation and to establish a regulatory framework for payment of the
This somewhat innovative
approach was crucial to the constitutionality of the bill. Had the
bill proposed that the government directly collect and administer the
funds, rather than creating an industry levy (which in this case would
be paid to an independent foundation), it would have resembled a taxation
measure. Section 53 of the Constitution Act, 1867 states
that bills for imposing any Tax . . . shall originate in the House
of Commons, making it unconstitutional to begin a taxation bill
in the Senate.
The remainder of clause
3 sets out why the legislation was in the interests of both society in
general, and the tobacco industry in particular:
under-age smokers become
addicted to tobacco, and suffer the numerous health consequences of
the industry cannot
successfully address under-age smoking because of a lack of credibility;
the tobacco industry
may well face even further restrictions on the manufacture and sale
of tobacco if under-age smoking is not checked.
The Summary of the
bill noted that Bill S-13 is complementary to the Tobacco Act
and clause 3(2) emphasized this point:
[Bill S-13] complements
the general legislative response to the national public health problem
of substantial and pressing concern addressed in the Tobacco Act
by coordinating the private and public sectors in a national effort
to address the problem of the use of tobacco products by young persons
These references to national
coordination and national effort suggest an attempt to situate
Parliaments power to pass the bill in the national concern
branch of the peace, order and good government (POGG) power
(Constitution Act, 1867, opening words of section 91).
The Supreme Court of Canada has clearly stated that Parliament has jurisdiction
over tobacco use, at least through the criminal law power which includes
a public health aspect. However, it is less certain whether federal
legislators can also invoke the broader national concern or
national dimension branch of POGG on the basis that tobacco
use is an important national problem that can only be dealt with at the
national level. Those interested in increased regulation of tobacco
use would like to see the applicability of the POGG power confirmed, and
may have felt that the courts would be more sympathetic to such an argument
when the legislative objective is restricted to the prevention of under-age
Part I of Bill S-13 would
have established the Canadian Tobacco Industry Community Responsibility
Foundation as an independent foundation. The overall objective of
the foundation would have been to protect young people from smoking and
the consequent health risks. Among the more specific objectives
were: developing a multi-year strategy to combat the use of tobacco
products by young people; monitoring the use of tobacco in Canada; and
sponsoring research into the use of tobacco products and how young people
can be discouraged from using them. The Foundation was also directed
to develop and distribute educational and communication tools to prevent
tobacco use by young people, and to sponsor group activities, including
among peer groups, for the same purpose. The single most important
objective was that of receiving and spending the funds raised by the levy
imposed by the bill, although the Foundation could also have received
funds from other sources. In dispersing funds, the Foundation was
to fund health groups, other organizations and persons, and/or any activity
that could prevent tobacco use by young persons.
Part II of Bill S-13 would
have set up a levy for industry purposes of $0.0025 per cigarette, $0.0025
per tobacco stick, $0.0250 per cigar and $0.0025 per gram of tobacco.
The levy would have fallen due when a tobacco product was sold, transferred
or otherwise disposed of. Because it could only be assessed once
for each product, the manufacturers would have been largely responsible
for collecting the levy.
Part III of Bill S-13, as
introduced, would have required the Foundation to set up two subsidiary
corporations to provide funding to:
non-profit arts and the arts, cultural and sport industries; and
growers who suffer a permanent reduction in their tobacco production;
for a transitional period
of five years where a loss of revenue could be established.
In its first financial year,
the Foundation would have been required to transfer 40% of the amount
raised by the levy to the subsidiary corporation dealing with the arts/cultural/sports
communities, and 10% of the levy to the subsidiary corporation dealing
with tobacco growers. These two amounts would have decreased by
20% of the original amount for each of the next five years. Thus,
by year five, the arts/cultural/sports fund would have been 8% of the
total levy, and the tobacco growers fund would have been 2%.
At the start of the second
reading debate on Bill S-13, on 17 March 1998, a point of order was raised
as to whether Bill S-13 imposed any tax or impost or appropriated
public revenue, in which case it could only originate in the House of
Commons under section 53 of the Constitution Act, 1867. As
well, on 25 March, Senator Kinsella raised the question of whether Bill
S-13 might be a private bill rather than a public one.
On 2 April 1998, the Speaker
gave his ruling that Bill S-13 was a public bill dealing with a levy rather
than a tax, and properly before the Senate. He noted that matters
are presumed to be in order, except where the contrary is clearly established.
On the question of whether
Bill S-13 was indeed a private bill, the Speaker noted that the bill would
affect public policy insofar as it was aimed at the reduction of smoking
by young people. Additionally, the magnitude of the area covered
by the bill and the multiplicity of interests involved suggest that it
was a public bill.
As for the issue of whether
the levy scheme established by the bill constitutes a tax, the Speaker
first noted the rule that the Speaker does not rule on questions of law.
On a point of order, however, the Speaker can assess what the bill declares
itself to be on its face. In this case, Bill S-13 spoke of a levy
to meet an industry purpose rather than a tax, even though the industry
purpose would also have a public benefit. Moreover, the funds collected
would not have formed any part of government revenue or entered the Consolidated
Bill S-13 was referred to
the Standing Senate Committee on Social Affairs, Science and Technology
and reported back on 14 May 1998.
C-42: An Act to Amend the Tobacco Act (Bill C-71)
On 3 June 1998, Bill C-42:
An Act to amend the Tobacco Act, was introduced in the House of Commons.
The bill, which had only five clauses, was designed to extend the transitional
period for the introduction of tobacco sponsorship restrictions.
In its final form, Bill C-71 provided for a transitional period of one
year after the proclamation of the Act before the main sponsorship provisions
came into effect. This would have given the affected organizations
until 1 October 1998 to find alternative funding.
Bill C-42 proposed that
sponsorships that existed as of 25 April 1997, the date that most of the
Tobacco Act came into force, would not be subject to any restrictions
for a further two years, or until 1 October 2000. On-site sponsorship
could continue for the next three years subject to some restrictions on
promotional material. After this five-year period, the promotion
of tobacco sponsorships would be totally prohibited as of 1 October 2003.
As a consequence of Bill
C-42, Bill S-13 was amended at third reading in the Senate to remove the
transitional provisions. Because the government had decided to defer
the sponsorship ban for up to five years, it was no longer necessary to
provide transitional support to the arts, cultural and sport communities
to compensate for lost sponsorships.(2)
On 10 June 1998, Bill S-13
passed the Senate. However, in December 1998, Bill S-13 was
ruled out of order in the House of Commons because the Speaker decided
that it involved a tax and not a levy. Section 53 of the Constitution
Act, 1867, requires that a bill for appropriating any part of
the public revenue, or for imposing any tax or impost, shall originate
in the House of Commons.
S-20 AND BILL S-15: THE TOBACCO YOUTH PROTECTION ACT
Bill S-20 the Tobacco Youth
Protection Act, was the successor Bill to S-13. Introduced in the
2nd Session of the 36th Parliament, Bill S-20
was passed by the Senate on 5 October 2000. The Bill died on
the Order Paper when Parliament was dissolved later that month, but was
reintroduced in the 1st Session of the 37th Parliament,
on 7 February 2001, as Bill S-15, the Tobacco Youth Protection Act.
Bill S-15 differs from the
original Bill S-13 in three significant ways: clarifying that the bill
is intended to introduce an industry levy rather than a taxation measure;
tightening up the administrative provisions surrounding the creation of
a Foundation, thereby considerably enhancing the accountability and transparency
of the proposed Foundation; and tripling the amount of the proposed levy.(3)
The first category of change clarifying that the bill is intended
to introduce a levy for industry purposes appears designed to provide
a firmer base for the argument that Bill S-15 does not impose a tax, and
to give the Speaker of the House of Commons room to alter his ruling should
he so wish.(4)
The difference between a
taxation measure and a levy is not always clear. Peter Hogg, in
Constitutional Law of Canada notes, for example, that marketing
levies designed either to defray the cost of administering
a marketing scheme or to equalize the returns to producers are
not considered taxes.(5)
He also notes that a levy, or regulatory charge, will have to be based
on some valid head of regulatory power.
Although impositions are
generally not considered taxes unless the proceeds are paid into the Consolidated
Revenue Fund, the Speaker cited Erskine May to the effect that money
raised by statutory imposition [that] is not to be channelled to the Consolidated
Fund but is nonetheless to be used for the benefit of the public at large
or for purposes which might otherwise have required to be financed from
the Consolidated Fund is likely to be considered a tax or impost.(6)
The Speaker seemed to accept
that Bill S-13 would not be a taxation measure if it imposed a charge
primarily for a purpose beneficial to the tobacco industry.
He concluded, however, that the purpose of the bill was a matter
of public policy, namely, the health of young Canadians and not, as many
members have argued, a matter of benefit to the tobacco industry.
He also found that it strained credulity to claim that the objective of
reducing the use of tobacco products by young persons is a benefit to
the tobacco industry.
However ingenious the
framers of Bill S-13 have been in drafting and structuring the bill
to resemble an industry purpose, one that perhaps would enhance the
standing in our society of the tobacco industry, Bill S-13 has as its
main object the reduction and elimination of smoking. This is
a matter of public health policy and it is by virtue of this public
purpose that I have concluded that the charge Bill S-13 imposes on the
industry is a tax.
Several significant changes
between S-13 and S-15 relate to the Speakers ruling that S-13 was
a taxation measure and not a levy. A lengthy preamble has been added
to establish that it would be in the industrys interest to prevent
youth from smoking, and that the industry does not have the credibility
to undertake such a program on its own. As well, a new Part III,
Industry Benefits, has been added as section 34, declaring
the benefits of this Act to the Canadian tobacco industry.
These benefits include the containment of an illegal market for industry
products, and some mitigation of the damage to the consequent reputation
of the industry.
Many of the other differences
between Bill S-13 and Bill S-15 reflect technical changes or drafting
improvements. The short title of Bill S-15 is the Tobacco Youth
Protection Act and the name of the Foundation established is the Canadian
Anti-Smoking Youth Foundation. The short title of Bill S-13 was
the Tobacco Industry Responsibility Act and, when the bill was first introduced,
the Foundation was correspondingly named the Canadian Tobacco Industry
Community Responsibility Foundation. However, when third reading
of Bill S-13 began in early June 1998, Senator Wilbert Keon proposed a
further amendment to change the name of the Foundation to the Canadian
Anti-Smoking Youth Foundation on the grounds that the tobacco companies
would otherwise be getting a free ride on the backs of the poor
unfortunate nicotine addicts who are paying the fare for this foundation.(7) The change in the short title
of the bill and the name of the Foundation would seem to reflect a tidying-up
of this amendment by reconciling the short title and the name of the Foundation.
Part I of Bill S-15 contains
the interpretation and purpose sections. These are similar to the
comparative sections in Bill S-13, although the purpose of the bill, laid
out in clause 3 in both bills, has been considerably refined in Bill S-15.
The purpose is now threefold:
assist the Canadian tobacco industry in attaining the objective, articulated
to Parliament, of preventing the use of tobacco products by young
provide a framework for a national private-sector effort protecting
youth against tobacco products that complements public-sector efforts;
complement the general legislative response to a national public health
problem of substantial and pressing concern addressed in the Tobacco
This redrafted provision
would seem to emphasize that the purpose of Bill S-15 would be primarily
to benefit the industry, and secondarily to complement not replace
public-sector efforts to reduce youth smoking. The reference
to a substantial and pressing concern suggests that the jurisdiction
for the act would be grounded in the national concern branch
of the peace, order and good government (POGG) power, rather
than just the criminal law power.
Part II of Bill S-15 would
establish the Canadian Tobacco Youth Protection Foundation. The
objectives of the foundation would be substantially the same as in Bill
S-13, although a new objective has been added: to examine the existing
models for tobacco control in North America and to develop a model to
be applied in Canada. Also new are several provisions to increase
accountability. Clause 24, Transparency, would require that
the business and affairs to the Foundation shall be generally conducted
in a transparent manner that is open to public scrutiny, and sets
out several detailed requirements. Clause 31, Programs, sets
out proposed evaluation and contracting requirements when programs are
to be funded by the Foundation.
Additionally, Part VI, clause
44, would require the Auditor General to annually audit the Foundation
(audit costs to be borne by the Foundation). Part VIII, clause 46,
would require the Minister to order an independent review of both the
Act and the Foundation five years after the Act comes into force, and
to lay the review report before the Houses of Parliament.
Part IV of the bill establishes
the levy for industry purposes. In Bill S-15, the levy would be
three times as great as in Bill S-13: $0.0075 per cigarette, tobacco
stick or gram of tobacco, and $0.0750 per cigar.
Another important difference
is that Bill S-15 and its predecessor S-20 has the support of the major
In June, the tobacco companies
surprised everyone by appearing before a Senate committee to support
the bill. In recent days, Imperial Tobacco and JTI-Macdonald have
bought ads in major newspapers to sell their position.
The JTI-Macdonald ad describes
S-20 as one of the best pieces of legislation ever designed
to curb teen smoking.(8)
Overall, the main difficulty
facing the bill would seem to be the Speakers statements regarding
public policy. Although all public bills involve a degree
of public policy, the argument will presumably be made that regardless
of any industry benefits, educating youth on the dangers of tobacco is
primarily a public policy function, which should be dealt with by the
government and financed out of the Consolidated Fund. Moreover,
there may well be concern with the precedent that Bill S-15 would set.
If it were to be decided that Bill S-15 does not impose a tax, then similar
bills could presumably be introduced by members in the House of Commons
without a Ways and Means motion.
Tobacco raises a specific
problem, because it is widely accepted that there must be a ceiling on
cigarette prices above which smuggling will re-commence. Therefore,
the hundreds of millions of dollars that would be raised by Bill S-15
could well restrict the governments own taxing room.
Finally, there may well
be a concern that, whether it is a levy or a tax, Bill S-15 looks very
much like a dedicated levy or tax. Although there are
undoubtedly many in the health community who enthusiastically back the
concept of a stable income for a Foundation whose purpose is to stop youth
smoking, governments have traditionally had concerns about losing their
flexibility to allocate funding to the priorities that arise on a budget-to-budget
Chronology of Events
1988 June - The Tobacco
Products Control Act (TPCA), receives Royal Assent.
1989 January - The Tobacco
Products Control Act comes into force.
1991 - The Quebec
Superior Court finds the TPCA invalid.
1993 - The Quebec Court
of Appeal upholds the constitutional validity of the TPCA.
1995 September - The Supreme
Court of Canada, by a 5-4 decision, finds that the TPCA violates the
freedom of expression provisions of the Canadian Charter of Rights
December - The Minister
of Health releases Tobacco Control: A Blueprint to Protect the Health
1996 December -
The Minister of Health introduces Bill C-71, the Tobacco Act.
1997 April 15 -
The Standing Senate Committee on Legal and Constitutional Affairs reports
back Bill C-71 without amendment, but with the recommendation that programs
be developed targeted at preventing young people from smoking.
The Committee notes that the artistic, cultural and sporting groups
now receiving monies from tobacco companies who sponsor their activities
will need both public and private support over the next three to five
April 25 - Bill C-71 receives
Royal Assent, having been amended so that the sponsorship restrictions
do not come into force until 1 October 1998.
1998 February -
Bill S-13 receives first reading in the Senate.
April - The Speaker of
the Senate rules that Bill S-13 is validly before the Senate, and the
bill is referred to the Standing Senate Committee on Social Affairs,
Science and Technology.
May - Bill S-13
is reported back to the Senate.
June 3 - The Honourable
Allan Rock, Minister of Health, introduces an amendment to the Tobacco
Act (Bill C-42) extending the transitional period during which the
sponsorship provisions will not apply to either 1 October 2000 or 1
October 2003, depending largely upon whether the promotion is on the
site of the event being promoted.
June 9 - Third reading
of Bill S-13 begins, with Senator Nolin, the co-sponsor of the bill,
moving an amendment to remove the sections on transitional funding for
arts and sports groups.
June 10 - Bill S-13
passes the Senate.
November - Bill S-13
receives first reading in the House of Commons.
December 2 - The
Speaker of the House of Commons rules that S-13 is not properly before
the House, and first reading proceedings are null and void.
2000 April 5 -
Bill S-20, the Tobacco Youth Protection Act, is introduced in
May 9 - Bill S-20
is referred to the Standing Senate Committee on Energy, the Environment
and Natural Resources.
June 8 - When the
presidents of three tobacco companies appear before the Committee, two
out of the three support Bill S-20.
October 5 - Bill
S-20 passed by the Senate.
2001 February 7 -
Bill S-15, the Tobacco Youth Protection Act, is introduced in
24th Report of the Standing Senate Committee on Legal and
15 April 1997
[Bill C-71: The Tobacco Act]
Report of Committee
Hon. Sharon Carstairs,
Chair of the Standing Senate Committee on Legal and Constitutional Affairs,
presented the following report:
Tuesday, April 15, 1997
The Standing Senate Committee
on Legal and Constitutional Affairs has the honour to present its
Your Committee, to which
was referred Bill C-71, An Act to regulate the manufacture, sale, labelling
and promotion of tobacco products, to make consequential amendments
to another Act and to repeal certain Acts, has, in obedience to the
Order of Reference of Thursday, March 13, 1997, examined the said Bill
and now reports the same without amendment but with the following recommendations:
Smoking and its associated
health problems are a significant health concern in Canada. However,
it was clear to your Committee that there were no simple solutions.
Your Committee believes
that legislation such as Bill C-71 is only one aspect to the development
of an integrated approach to prevent young people from starting to smoke
and/or encouraging others, both young and old, to quit smoking.
Your Committee is particularly
interested in the development of programs targeted at youth. Your Committee
recommends that such initiatives be motivational, comprehensive, continuous
and holistic. Wherever possible, they should be developed by young people
and focus on youth helping youth.
Your Committee is aware
that not all revenues raised from the surtax on tobacco, now approximately
$65 million per annum, is directed toward such initiatives. Your Committee
believes it is incumbent upon government to direct such revenues particularly
to pre-teens and teenagers, to prevent the development of what, for
many, will become a lifelong habit.
However, your Committee
also recommends that the government make use of other resources in the
community, including the tobacco industry itself, to develop and fund
programs targeted at young persons.
In addition, your Committee
strongly recommends that the government find, by public and private
means, transitional funding to allow artistic, cultural and sporting
groups to obtain alternatives to the monies now provided by tobacco
companies to sponsor their activities.
These events are important
to the people of Canada, and Canadians do not want them to cease. Your
Committee recognizes that many groups have sacrificed and sought alternative
funding over the past five years, and they should be congratulated.
However, the urgency presently exists for those who accept tobacco sponsorship,
and they will need both public and private support over the next three
to five years.
Your Committee is of the
view that the government must sponsor a number of important studies.
These studies should be conducted by independent researchers, and they
should be subject to peer review. First, a study should be undertaken
to examine the value and consequences of reclassifying tobacco as a
narcotic or noxious substance. The purpose of this study would be to
enable government to make more effective regulations governing this
product. A second study should be undertaken to determine the impact
of advertising and promotional activities on both brand preference and
new markets, in particular where young persons are concerned.
Speaker's Ruling on Bill S-13
2 April 1998
of Order-Speaker's Ruling
On the Order:
Motion of the Honourable
Senator Kenny, seconded by the Honourable Senator Nolin, for the second
reading of Bill S-13, to incorporate and to establish an industry levy
to provide for the Canadian Tobacco Industry Community Responsibility
The Hon. the Speaker:
Honourable senators, on Tuesday, March 17, I stated that I would take
under advisement the important points of order that had been raised with
respect to Bill S-13, to incorporate and to establish an industry levy
to provide for the Canadian Tobacco Industry Community Responsibility
Foundation. Arguments were presented by several senators, and three separate
documents were presented by Senator Kenny.
On March 25, with leave
of the Senate, Senator Kinsella raised another question regarding the
procedural acceptability of this bill. He asked the Chair to consider
whether this bill might in fact be a private bill rather than a public
one. I have reviewed all the statements made by senators who participated
in the discussion on the point of order, studied the documents that were
tabled and examined the bill itself. I am now prepared to rule on the
point of order.
There are two fundamental
questions that were first raised with respect to Bill S-13 on March 17.
The first has to do with the possibility that the bill requires a Royal
Recommendation. The second is whether the levy described in the bill is,
in fact, a tax. If the answer to either of these questions is affirmative,
that the bill does require a Royal Recommendation or that the bill does
impose a tax, then this so-called "money bill" would not properly
be before the Senate, since such a bill must originate in the House of
Commons. Under such circumstances, the order for second reading of the
bill would have to be discharged and the bill itself dropped from the
Order Paper. In order to determine the answers to these questions, it
is necessary to review the basic arguments.
who brought this matter to the attention of the Senate when Bill S-13
was called for second reading, took no position on the matter. He raised
the question simply for the purpose of clarification asking whether Bill
S-13 was a money bill. A similar motive seems to have prompted Senator
Stollery to rise on a point of order after the second reading of the bill
was formally moved. In presenting his case, Senator Stollery pointed to
the obvious financial implications of the bill and suggested that this
bill may indeed be a money bill. After citing sections 53 and 54 of the
Constitution Act, 1867 as well as rule 81 of the Rules of the Senate,
the senator noted that the bill appears to authorise the collection of
money that is to be spent in pursuit of a public purpose. If such an assessment
were accurate, the bill, in Senator Stollery's words, "must be introduced
in the House of Commons by a minister, not in the Senate by a private
Speaking on behalf
of the bill's procedural acceptability, Senator Kenny began by
stating simply that Bill S-13 is not a money bill. He claimed
that the financial provisions of the bill "do not appropriate
any part of the public revenue and do not impose a tax."
Developing his position in greater detail, he pointed to the clauses
of the bill which indicate that the money raised through the levy
is not public revenue. The senator noted, for example, that the
collected funds received by the non-profit corporation established
through the bill do not form any part of the Consolidated Revenue
Fund, even if the corporation should be dissolved. He also cited
a clause which states explicitly that the corporation is not an
agent of the Crown, and its funds are not public funds.
As to whether the
levy is a tax, Senator Kenny explained that, based on relevant
citations of the 21st edition of Erskine May Parliamentary
Practice, the levy described in the bill is not a tax, and
as such is exempt from normal financial procedures including,
presumably, the obligation to have this bill considered first
in the House of Commons before the Senate.
This is because,
as he stated, the levy is being imposed exclusively on the tobacco
industry and in pursuit of its own purposes even though there
is a public benefit as well. In addition, he sought to buttress
his case with references to legal opinions which concluded that
the levy described in the bill was not a tax. Since it did not
have as its primary purpose the collection of revenue for government
purposes and because the levy was part of a regulatory scheme,
the money collected through this bill was not a tax.
After Senator Kenny
had spoken, several other senators made some comments. Senator
Kinsella attempted to find out if the government had a position
on this bill. This theme was subsequently raised again by Senator
Murray after Senator Carstairs explained that because the bill
was not sponsored by the government, it had taken no position
on it. Instead, she said that the government was prepared to await
the Speaker's decision. Senator Bryden then expressed some doubt
about whether the levy was in fact a tax. Of greater concern to
him was whether the bill was making the government some sort of
ally of the tobacco industry. Speaking immediately after Senator
Murray, Senator Gigantès suggested that the Senate should be more
confident in exercising its own powers.
Stewart maintained that the real question, in fact the only question,
was whether the levy involves a tax or impost. As he put it, "If
it is a tax or impost, it is out of order here. If it is not a
tax or an impost, the question of a Royal Recommendation for an
appropriation does not arise."
A week after the
point of order was originally raised, Senator Kinsella obtained
the leave of the Senate to reopen the matter in order to ask another
question with respect to the procedural acceptability of Bill
S-13. His question concerned whether this bill was a private bill
or a public one. In stating his case, he noted that the corporation
established by this bill was for the benefit of the tobacco industry.
This being so, he then wondered if perhaps the industry should
be petitioning for this bill, a required preliminary to the introduction
of any private bill. He then referred to the four criteria listed
in Beauchesne's Parliamentary Rules and Forms used to assess
whether a bill should be viewed as private or public and suggested
that the Chair take them into consideration. Senator Kinsella
also took note of the fact that the bill conferred on the corporation
certain powers, including the power to collect levies. Without
reaching a firm conclusion, he indicated that he was suspicious
that this bill is more in the nature of a private bill.
I want to thank
all honourable senators who contributed their views to this point
of order. As I already stated, I have taken the opportunity to
review the arguments, the tabled documents and the bill itself
since the point of order was first raised March 17.
Let me begin with
this general proposition. It is my view that matters are presumed
to be in order, except where the contrary is clearly established
to be the case. This presumption suggests to me that the best
policy for a speaker is to interpret the rules in favour of debate
by senators, except where the matter to be debated is clearly
out of order.
the question that was raised by Senator Kinsella asking if Bill
S-13 should be viewed as a private bill rather than a public one,
I have taken his advice and looked closely at the four criteria
spelled out in the sixth edition of Beauchesne at citation 1055.
In addition, I have carefully reviewed the bill in light of the
standard definition of a private bill. Beauchesne, in words closely
based on Erskine May, states, at citation 1053, that "private
legislation is legislation of a special kind for conferring particular
powers or benefits on any person or body of persons, including
individuals and private corporations, in excess of or in conflict
with the general law." Proceedings on a private bill
are initiated by a petition solicited by the parties interested
in promoting the bill.
In this case, Senator
Kinsella has suggested that, if this bill is indeed a private
bill, it would be out of order since it was not introduced into
the Senate through a petition. If, on the other hand, it is a
public bill, no petition would be necessary. Senator Kinsella
identifies the possible petitioners as the "tobacco industry."
He does not, however, identify the individuals or corporations
who should be the petitioners for the tobacco industry. Nor does
the bill define the tobacco industry or specify who are its members.
Whatever the precise
identity of the tobacco industry, the first question that must
be decided is whether Bill S-13 is a private bill or a public
Looking at the four
criteria which would determine whether a private bill should be
handled as a public bill, I am struck by two of the criteria which
lead me to believe that Bill S-13 is properly a public bill. The
first is the fact that the objects of the bill affect public policy.
While it cannot be denied that the language of the bill highlights
industry benefits, it is equally true that public policy is very
much served by the bill insofar as it is aimed at the reduction
of smoking by young people as is stated in subsection 3(2) of
the bill. As well, the magnitude of the area covered by the bill
and the multiplicity of the interests involved, which is the third
criterion listed in Beauchesne, suggest to me that the bill is
a public bill.
In the absence of
any compelling reasons to assess the bill any other way, I am
satisfied that Bill S-13 can proceed as a public bill.
Taking the first
question that was raised on March 17, does the bill require a
Royal Recommendation, I must conclude that it does not.
purpose of the requirement for a Royal Recommendation is to limit
the authority for appropriating money from the Consolidated Revenue
Fund to the Government. In section 2 of the Financial Administration
Act, "appropriation" is defined to mean "any authority
of Parliament to pay money out of the Consolidated Revenue Fund";
"Consolidated Revenue Fund" is defined to mean "the
aggregate of all public moneys that are on deposit at the credit
of the Receiver General." Only Ministers can obtain the necessary
approval from the Governor General for a Royal Recommendation
to appropriate these funds. The Constitution stipulates that bills
requiring or possessing a Royal Recommendation must originate
in the House of Commons, a requirement enforced through rule 81
of the Senate.
With respect to
Bill S-13, the money raised through the levy is to be collected
by the Canadian Tobacco Industry Community Responsibility Foundation
or its agent. The Foundation also disposes of the funds raised
in the manner and for the purposes spelled out in the bill. While
section 2 of the Financial Administration Act defines "public
money" in part as "all money belonging to Canada,"
clause 33(1) of the bill expressly states that "the Foundation
is not an agent of Her Majesty and its funds are not public funds
of Canada." Moreover, no part of the bill suggests that any
money need be appropriated from the CRF in order to implement
any aspect of this bill.
Therefore, I can
see no requirement for a Royal Recommendation for this bill.
The second question
of March 17 has to do with whether or not the levy scheme established
through this bill constitutes a tax. In answering this question,
I am constrained by the rule that the Speaker does not rule on
questions of law. Citation 168(5) of Beauchesne states that "The
Speaker will not give a decision upon a constitutional question
nor decide a question of law, though the same may be raised on
a point of order or question of privilege."
What is within my
authority, however, is the examination of the bill, in order to
assess what it declares itself to be. I accepted the plain and
ordinary meaning of its words and studied them to see if all the
clauses relevant to the issue of the levy were internally consistent.
I then measured the levy described in the bill against the criteria
Erskine Maysets out at pages 730-737 for identifying levies that
are exempt from financial procedures governing the imposition
With respect to
the matter of the plain language of the bill, it speaks in terms
of a levy rather than a tax. This is evident from Part II of the
bill. It is also clear that the levy is imposed upon the tobacco
industry alone. The purpose of the levy, as stated in the bill,
is to meet an industry purpose beneficial to it, although this
industry purpose also has public benefit. Clause 3 states categorically
that the purpose of the bill is "to enable and assist the
Canadian tobacco industry to carry out its publicly-stated objective
of reducing the use of tobacco products by young persons throughout
The levy is imposed
exclusively on tobacco products of whatever description and is
to be spent in pursuit of the goals listed in clause 5. Consequently,
with respect to the language of the bill, I must accept that what
is proposed is a levy, not a tax.
Erskine May describes
two criteria by which a bill proposing a levy is exempt from the
financial procedures, including the adoption of a Ways and Means
resolution that would normally apply to bills imposing a tax.
The first criterion is that the levy must be for industry purposes.
The second is that the funds collected must not form any part
of government revenue. Erskine May includes examples of bills
which were regarded as levies as well as those which failed to
meet either or both of these two criteria. Some of these examples
are of relatively recent date, suggesting that the criteria remain
applicable in modern British practice. More important, they also
seem to be applicable in Canadian practice.
Beauchesne, at citation
980(1), states that "a Ways and Means motion is a necessary
preliminary to the imposition of a new tax." It is a corollary
to the principle behind the Royal Recommendation in that it requires
a sanction of the Crown to provide the revenue that may be appropriated
for public purposes at a future date. Beauchesne goes on to explain
the circumstances relative to the introduction of a new tax. Citation
980(2) declares that "no motion can be made to impose a tax,
save by a Minister...nor can the amount of a tax proposed on behalf
of the Crown be augmented, nor any alteration made in the area
of imposition. In like manner, no increase can be considered.
. . . except by a Minister, acting on behalf of the Crown.
Once a Ways and
Means motion has been proposed and subsequently adopted, it becomes
a Ways and Means Resolution. Following the adoption of this resolution,
a bill is introduced based on its provisions, given first reading,
printed, and ordered for second reading at the next sitting of
the house. In Canadian practice, based on the British model, any
bill proposing to introduce a new tax must be proceeded by a Ways
and Means motion. Without it, any charge proposed in a bill would
not be identified as a tax.
Bill C-32, An Act
to amend the Copyright Act, passed by the previous Parliament,
was mentioned by Senator Kenny when he presented his case on this
point of order. Certain provisions of Bill C-32, a government
bill, imposed a levy on the sale of blank tapes to be distributed
to artists and artist groups as a form of royalty. The senator
indicated that Bill C-32 did not have a Royal Recommendation,
suggesting at the very least that the funds distributed were not
regarded as an expenditure of government revenue and, hence, not
connected by a tax. However, that is not the complete picture.
There is further evidence that the levy was not viewed as a tax.
I say this because, so far as I have been able to determine, the
bill was not preceded by a Ways and Means resolution, which would
have been a prerequisite if the funds had been viewed as a tax.
Applying the criteria
explained in Erskine May, and based on the model of the Bill C-32,
I can only determine that the levy proposed in Bill S-13 is not
a tax from a procedural point of view. Consequently, the bill
is not subject to the usual financial procedures that would require
it to be considered first in the other place.
My ruling is that
the bill is properly before the Senate, and debate on second reading
may now proceed.
Ruling on Bill S-13
House of Commons
2 December 1998
I am now ready to rule on the point of order raised by the hon.
government House leader on November 18, 1998, concerning the procedural
acceptability of Bill S-13, an act to incorporate and to establish
an industry levy to provide for the Canadian anti-smoking youth
First of all, I
would like to thank the hon. government House leader and the hon.
member for St. Paul's for their learned contributions on this
I also want to thank
the other members who intervened on this point of order: the hon.
members for Macleod, Winnipeg North Centre, PictouAntigonishGuysborough,
HaldimandNorfolkBrant, EsquimaltJuan de Fuca,
Hillsborough, Kamloops, Thompson and Highland Valley, PierrefondsDollard,
New Brunswick Southwest, Lac-Saint-Jean, DeltaSouth Richmond,
WhitbyAjax, BurnabyDouglas and WentworthBurlington.
Their contributions were very helpful to the chair in examining
We heard almost
two hours of argument on this point of order and, while I do not
propose to match those arguments minute for minute, I ask the
House to bear with me as I explain the facts of the case before
us and the conclusions which I have drawn from them.
Bill S-13 establishes
the Canadian anti-smoking youth foundation, a non-profit corporation
whose mandate is to reduce and to work toward the elimination
of the use of tobacco products by young persons in Canada. To
this end, Bill S-13 proposes that a levy be imposed on tobacco
manufacturers to provide the foundation with the necessary funds
to carry out its mandate.
A private member's
bill originating in the other place, Bill S-13, was adopted there
on June 10, 1998 and was given first reading in the House of Commons
on November 18, 1998.
The point of order
raised by the hon. government House leader, simply put, is that
the Bill S-13 proposes a taxation measure and that, as such, the
bill ought to have been introduced in the House of Commons where
it would have to have been preceded by a ways and means motion.
On that basis, he argues that the bill is improperly before the
House and asks the Chair to rule that the House of Commons cannot
proceed with its consideration.
Before I address
the substance of this point of order, I want to respond to the
contention made by the hon. member for St. Paul's. The hon. member
argued that inquiring beyond the face of the bill and questioning
the express provisions of it is to go well beyond the realm of
procedure and into an area of law with which the Speaker is not
to deal. The hon. member argued that the question of whether Bill
S-13 imposed a tax was a matter of law and legal interpretation
and, as such, not normally within the jurisdiction of the Speaker.
The general proposition
that the Speaker will not decide a question of law is set out
in Beauchesne's 6th edition, citation 168(5) at page 49, although
the hon. member for St. Paul's did not invoke this citation. The
examples provided by Beauchesne involved questions that could
only be considered as questions of law and which had no procedural
dimension. In both cases the issue was whether the legislative
proposal before the House was within the legislative powers of
the House as set out in the Constitution Act, 1867.
The question that
I must consider in relation to Bill S-13, that is whether or not
the charge imposed by the bill is a tax, relates to the procedural
rules and practices of this House as well as to the time honoured
privilege of this House in respect of taxation measures.
two questions are presented on this point of order and both are
clearly within my jurisdiction as Speaker. First, is a ways and
means motion required for Bill S-13? Second, should this bill
have originated in the House and not the other place? However,
both these questions depend on the answer to be given to a third
question, that is, does Bill S-13 impose a tax. If it does, a
ways and means motion is required and the bill ought to have originated
in this Chamber.
This third question
is unavoidable if the procedural and privilege questions are to
be addressed. For this reason, though 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. Accordingly,
it is proper that I address this question and let me do so now.
In his presentation,
the hon. government House leader argued that Bill S-13 should
have originated in the House of Commons since it imposes a tax.
Section 53 of the
Constitution Act, 1867, states:
Bills for appropriating
any Part of the Public Revenue, or for imposing any Tax or Impost,
shall originate in the House of Commons.
described in citation 980 found at page 265 of Beauchesne's, 6th
edition, bills imposing a tax must be preceded by adoption of
a ways and means motion.
To safeguard the
financial privileges of the Commons, it is the duty of every member
of this House to be vigilant and to ensure that every bill that
comes before the House respects this criterion.
Standing Order 80
is categorical on the subject and states in part:
All aids and supplies
granted to the Sovereign by the Parliament of Canada are the
sole gift of the House of Commons, and all bills for granting
such aids and supplies ought to begin with the House
In short, the House
of Commons claims pre-eminence in financial mattersthat
is public expenditure and taxationand all such legislation
must originate in the House.
To determine if
Bill S-13 is properly before the House, the Chair must ascertain
whether or not it imposes a tax. If it does impose a tax, the
bill should have originated in the House of Commons and been preceded
by a ways and means motion.
Members will appreciate
that this matter involves issues of a complex and technical nature.
For this reason, the Chair has taken particular care to examine
closely the relevant authorities on this issue. I have consulted
extensively the works of Erskine May and have found May to be
a comprehensive and reliable source of information on financial
procedures. I ask for the House's indulgence as I offer the following
exposition of the problem at hand.
As members know,
financial procedure is primarily concerned with the authorization
of public expenditure and taxation. It has been argued that the
charge proposed by Bill S-13 is not a tax because the funds collected
would not form any part of the consolidated revenue fund.
Under the heading
of Matters requiring authorization by Ways and Means resolution,
May's, 22nd edition at page 777, states:
are not generally charges on the people (that is to say, taxes)
unless the proceeds are payable into the Consolidated Fund,
the absence of a requirement for payment into the Consolidated
Fund is not by itself conclusive indication that a charge upon
the people has been avoided. If, for example, money raised by
statutory imposition is not to be channelled to the Consolidated
Fund but is nonetheless to be used for the benefit of the public
at large or for purposes which might otherwise have required
to be financed from the Consolidated Fund, that imposition is
likely to need authorization by a Ways and Means resolution.
In other words,
if a charge raises funds that are channelled to the consolidated
revenue fund, that charge is a tax. Even if a charge raises funds
that are channelled elsewhere, the charge may still be a tax,
however. But a charge can only be considered a levy, and thus
free to go forward without the usual constraints of financial
procedure, if it is a charge made for an industry purpose.
Thus, the point
of order, as I see it, hinges on the nature of the charge in Bill
S-13 and its objects or purpose. Consequently, a closer examination
of the bill is required.
The argument has
been made that Bill S-13 imposes a levy for an industry
purpose. In chapter 32, Ways and Means and Finance
Bills of May's 22nd edition, we read, at page 779:
Levies upon employers
in a particular industry for the purpose of forming a fund used
to finance activities beneficial to the industry are not normally
regarded as charges (that is to say, taxes).
May goes on to state:
however, frequently makes provision for the imposition of other
types of fees or payment which, although not taxes in a strict
sense, have enough of the characteristics of taxation to require
to be treated as charges upon the people and therefore
to be authorized by a Ways and Means resolution moved by a Minister
of the Crown. This distinction between the types of payments
which are or are not covered by the rules of financial procedure
is not always straightforward in practice.
In other words,
the central issue here is whether or not the levy imposed by Bill
S-13 is a charge that is imposed primarily for a purpose beneficial
to the tobacco industry. If so, the charge would not be a tax.
Here too May is
helpful when he describes a case which presents some similarities
with Bill S-13, namely, the U.K. Merchant Shipping Bill of 1973-74.
That bill obliged oil importers to contribute to an international
fund for compensation for oil pollution damage. In the 21st edition,
at page 731, May states:
This impost was
so clearly not for the benefit of the industry concerned that
it was held to be a tax in spite of the fact that its proceeds
were not payable to the Consolidated Fund.
it was decided that particular bill fell under the rules governing
financial procedures and so had to be preceded by a ways and means
resolution before being considered by the House of Commons in
the United Kingdom.
In studying the
case now before us, I have examined whether our House has ever
dealt with the public bill providing for an industry levy. In
a session of the 35th Parliament, Bill C-32, an act to amend the
Copyright Act called for the imposition of a levy on blank audio
The levy was of
benefit to that industry since it permitted the audio duplication
of copyright material for private use. This would enhance the
market for blank audio tapes. The levy on the tapes was designated
to raise funds by which owners of copyright material would be
compensated for losses caused by private duplication of that material.
The link between the benefit to the industry and the levy being
imposed seems clear in that case. The levy appears to satisfy
the criterion that it was of benefit to the industry and so would
not normally be regarded as a tax.
Bill C-32 was not
required to adhere to the usual financial procedures and was not
preceded by a ways and means motion.
In the case of Bill
S-13, the Chair must determine the nature of the charge being
imposed by the bill. It has been argued that the charge is a levy
for the benefit of the tobacco industry. In support of that view
we are referred to clause 3 of the bill which bears the heading
Purpose and which states in subsection (1), in part:
(1) The purpose
of this Act is to enable and assist the Canadian tobacco industry
to carry out its publicly-stated industry objective of reducing
the use of tobacco products by young persons throughout Canada
I will set aside,
without comment, the question of whether or not the industry has
publicly stated as its objective the reduction of smoking in any
segment of the population.
Let me simply continue
to quote from clause 3(1) which expands on the purpose of the
bill to reduce the use of tobacco products by young Canadians
(a) numerous debilitating
and fatal diseases and other consequences injurious to health
are associated with tobacco use;
(b) young persons
throughout Canada use tobacco products and become addicted to
tobacco and dependent on its use;
(d) young persons
can only use tobacco products because the products are manufactured
The text then goes
on to read in subsection (2) of the same clause 3:
(2) The Act complements
the general legislative response to the national public health
problem of substantial and pressing concern
seem to me to indicate that the purpose of the bill is a matter
of public policy, namely, the health of young Canadians and not,
as many members have argued, a matter of benefit to the tobacco
There are those
who say that the two need not be mutually exclusive and that the
benefit to the industry is such that the charge in question is
not a tax, but a levy. Proponents of this view point to paragraph
(1)(c) of this same clause 3 which reads:
(c) the industry
is incapable of addressing on its own the problem of tobacco
use by young persons because, by its own admission, its members
and agents lack credibility as advocates for a reduction in
the use of tobacco products
Surely the lack
of credibility referred to here is a function of our common 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 industry to reduce smoking
among the very people who would constitute its growth market?
It is this implausible proposition that underlies the credibility
problem to which the bill refers.
Proponents of the
bill argue that the public relations benefit represented by the
establishment of the foundation would be a benefit for the industry.
They cite the independence of the proposed foundation and its
role in the national co-ordination of anti-smoking efforts. Is
it not reasonable to suppose, if the industry had wanted to improve
its public image in this matter, that of its own volition it could
have created an arm's length body like the foundation? Why is
legislation like this required?
Let us return to
clause 3, this time to paragraph (1)(e) which reads:
(e) it is foreseeable
that the industry's ability to manufacture and sell tobacco
products will be further restricted if the rate of use of tobacco
products by young persons is not reduced;
It has been argued
that this section points again to a benefit to the industry since
the foundation activities may pre-empt further restrictions on
the industry. This is to speculate on future government measures
and to conclude that the establishment of the foundation will
obviate the necessity for such measures. But is this simply not
another way of saying that this charge in this bill is a benefit
to the industry only because future measures might be less palatable?
I have carefully
considered all of the arguments presented and have examined all
of the cases which hon. members have brought to my attention,
even though I have not discussed each one in detail in this ruling.
I am forced to conclude
that the charge imposed by Bill S-13 is directed not toward any
benefit to the tobacco industry but to a matter of public policy,
that is, the health of young Canadians, a laudable purpose without
The bill seeks to
establish the Canadian anti-smoking youth foundation whose objective
is to reduce and eventually eliminate the use of tobacco products
by young persons in Canada. It strains credulity to claim that
this objective is a benefit to the tobacco industry.
the framers of Bill S-13 have been in drafting and structuring
the bill to resemble an industry purpose, one that perhaps would
enhance the standing in our society of the tobacco industry, Bill
S-13 has as its main object the reduction and elimination of smoking.
This is a matter of public health policy and it is by virtue of
this public purpose that I have concluded that the charge Bill
S-13 imposes on the industry is a tax.
The House of Commons
has the exclusive right and obligation to legislate financial
measures. Only the House of Commons, acting on the initiative
of ministers of the crown, can impose taxes to generate the funds
needed to support public policy programs. I am obligated as your
Speaker to ensure that these fundamental financial privileges
are not compromised.
Simply put, any
bill imposing a tax must originate in the House of Commons and
must be preceded by a ways and means motion. Since Bill S-13 proposes
a tax, did not originate in the House of Commons and thus was
not preceded by a ways and means motion, I therefore find that
it is not properly before the House.
reading proceedings are null and void and this item is withdrawn
from the order paper.
I thank hon. members
for their attention.
See the April 1997 entry of Appendix 1 for the full report.
See 3rd reading debate on Bill C-13, Hansard, 10 June 1998.
You will recall that one of the shortcomings we identified last
year in examining Bill C-71 was the whole issue surrounding
tobacco company sponsorships. This led to our including
in Bill S-13 a series of measures to assist cultural and sports
organizations over a five-year period to make up for the loss
of tobacco company support.
Since we looked
at the bill in committee, the government has decided to introduce
an amendment to Bill C-71, to defer the sponsorship ban for
five years. We must therefore amend Bill S-13 accordingly.
See Tobacco Youth Protection Act: Bill S-20,
from the website of Senator Kenny, for a description of the changes;
See Appendix 4, 2nd reading debate on Bill S-20, 9 May 2000:
Bill S-13 was not passed by the House of Commons. By correcting
it, we ensure that Bill S-20 will not suffer the same fate.
Bill S-20 amends
S-13 in order to ensure that the Speaker in the other place
accepts it, not as a measure that is establishing a tax, but
rather one that involves a levy.
In committee we
will have the time to explain to the members why Bill S-20 is
appropriate. There are three reasons why it is acceptable.
According to the ruling by the Speaker of the Other Place, the
preamble was what was involved. There have been legal rulings
to that effect. The preamble sets out clearly why the
tobacco industry, which is currently out of public favour, has
no credibility to defend, promote, or counteract the way youth
smoking is developing, even if it wished to. A number
of industry spokespersons testified on this, but they had no
credibility whatsoever. This is why it is important for
there to be a fund available if such an objective is to be attained.
Bill S-20 improves
on Bill S-13. It should be approved by the other place,
because clause 3 of the bill establishes that a distinction
must be made between the reason for establishing the Foundation
the program of education for youth and the
bill. That may seem similar, but they are two completely
different things. Perhaps they were not properly understood
by the Speaker of the other place.
Clause 35 of the
bill establishes the benefits for the industry. It sets
out three reasons that, according to the knowledgeable counsel
who examined the matter, would indicate that Bill S-20 should
not meet the same fate as Bill S-13. If it receives the
approval of this house, when it is under examination in the
other place, we have every reason to believe that it will be
Carswell, looseleaf edition, section 30.10(b).
See Appendix 4, Speakers Ruling, Hansard, 2 December
1998, p. 3.
See Hansard, 10 June 1998.
Mark Kennedy, Senators bill on tobacco levy embarrassing
government, Ottawa Citizen, 25 September 2000,