Hon. Wanda Thomas Bernard: Senator Pate, in the other place the government has taken the position that if the Senate amendment prohibiting insurance clawbacks was included in Bill C-22, and challenged in court, this would:

. . . create significant uncertainty and could impact the regulatory process, which could in turn impact benefit delivery. This could very well delay benefit payments.

This type of court challenge might create some uncertainty about whether insurers can claw back the benefit, but it’s difficult to see how it would create uncertainty about the issues that the government would need to determine in order to proceed with regulations and with paying out the benefit, such as who is entitled to the benefit, the amount of the benefit and the application process.

Senator Pate, do you have any reason to believe that benefit payments would be delayed in the event of a court challenge to the Senate’s private insurance amendment?

Hon. Brent Cotter: Honourable senators, I rise to speak to the message on Bill C-22. We are on the verge of a great achievement for tens of thousands of Canadians with disabilities. We’ve reached this point through the leadership of Minister Qualtrough; the determined work of people with disabilities and advocates for disabled people across this country; and the commitment of every member of the other place, every member of the Social Affairs Committee and every member in this Senate. Senators’ remarks today reinforce this.

I urge you to accept the message without modification so that this bill can receive Royal Assent.

First, I want to say, by way of context, that in these remarks, I’ll speak only to the part of the message that deleted the Senate amendment related to the prohibition of clawbacks in insurance contracts — I will call this the “no clawbacks” amendment. The other amendments, in my view, are great. This one would be too if it were constitutional, and that’s the point about which I will speak.

We heard from many witnesses and senators about the valid and serious concerns regarding the potential clawbacks of insurance benefits. I agree that all of these are legitimate and valid concerns, and I share them all. Unfortunately, for reasons I will explain, this is something that, as a federal Parliament, we cannot address through legislation. If it were an arguable case, I would be in favour of it.

The purpose of these remarks is to give you some comfort that we are doing the right thing by accepting — in its present form — the message that’s come to us. In that regard, I note and applaud the statements of senators who strongly support the “no clawbacks” provision, but who have also indicated that they will, nevertheless, vote in support of the bill in the form before us.

You have heard arguments in committee and in this chamber about why we can do this. I’m going to take this time to explain why we cannot — not just as a competing opinion, but also to express a certainty that this provision is, regrettably, an unconstitutional intrusion into provincial jurisdiction.

I will now talk about the Constitution of Canada, and I apologize for this sounding like a lecture. Though the clause is small, the point is significant.

We know that the Constitution is the supreme law of Canada. We are empowered by it and, in some ways, constrained by it. One of those constraints is federalism. As you know well, in Canada, legislative authority is divided into two categories: federal authority, or heads of power, nearly all of which are enumerated in section 91 of the Constitution Act, 1867; and provincial authority, or heads of power, in section 92 of the Constitution Act, 1867. The key provincial one relevant to our discussion is property and civil rights within the province, which is universally understood to include the regulation of contracts in the province, and, parenthetically, virtually every aspect of the insurance sector has been ruled by our highest court to be of provincial jurisdiction.

We don’t think very much about this next point: Everything we do in the Parliament of Canada has to be located in one area or other of federal jurisdiction. If it’s a matter related to section 91, Ottawa has free rein to regulate. If it is a matter related to section 92, the provinces rule.

Let me provide two examples of section 91 authority that you know well, one being banks and banking. In this head of power, Ottawa gets to set the rules. This includes regulating contracts under this power — contracts concerning banks, minimum wages, employment standards for bank employees under the banking power.

Another is criminal law. If something is genuinely criminal, Ottawa can prohibit it, including contracts. Just this week we will do this by making loans above a certain rate of interest — contracts to provide loans — a crime, again, under the criminal law power.

Next, the spending power: There is a federal spending power. The spending power is not listed in section 91. It is based on the idea that Ottawa has property — in this case money — and can do with it as it pleases. This is true within limits I will explain. It is a powerful but limited federal authority.

All are agreed with respect to this legislation that it resides within the federal spending power, and only within the federal spending power. The question we are facing is whether the “no clawbacks” provision is a constitutional use in the exercise of the spending power.

I should just say parenthetically that despite Senator Pate’s observation about ancillary provisions, ancillary powers do not apply to the spending power — and for obvious reasons I will get to.

At committee and in this chamber, three arguments were advanced to justify the constitutionality of the “no clawbacks” clause. Each of these is 100% incorrect. The first was the reference to the Merchant Seamen Compensation Act. This federal statute has a similar “no clawbacks” provision, which has never been constitutionally challenged, but the reason the Merchant Seamen Compensation Act provision has not been challenged is it’s not an exercise of Ottawa’s spending power. Indeed, it has nothing do with the spending power at all. It is an exercise of Ottawa’s section 91 head of power over navigation and shipping, a section 91 power specifically. You only have to read a little bit of this bill to discover this. And just like banking has a specific head of power given to Ottawa, Ottawa can regulate entirely in that area, including, just like banking, it can regulate contracts.

The second argument to the effect that Ottawa can regulate contracts was the Supreme Court of Canada decision regarding the constitutionality of the Genetic Non-Discrimination Act, which dealt with contracts and was upheld by the Supreme Court of Canada. But when you read this case, you discover that what Ottawa did in this context — for example, with respect to the example Senator McPhedran identified, requiring employees to take genetic testing — is that Ottawa invalidated those contracts by making them a crime. And if it is legitimately a crime, Ottawa has the power to regulate — that is, prohibit — contracts under the criminal law power.

Indeed, but for the finding that Ottawa was exercising its criminal law power in those cases, the provisions would have been profoundly unconstitutional interferences with property and civil rights.

Furthermore — and this is important — just because Ottawa can regulate or prohibit contracts in one specific area does not make that authority transferable to another area and, in particular, not transferable to the spending power, and there are very good reasons, sadly, for that.

The third spending-power argument was a quote from a distinguished, now deceased, professor Peter Hogg, the dean of constitutional law in Canada. This is what the quote said, speaking about the spending power:

. . . Parliament may spend or lend its funds to any government or institution or individual it chooses, for any purpose it chooses; and that it may attach to any grant or loan any conditions it chooses . . . .

Now, Professor Hogg had a bit more to say about the spending power, and the sentences that follow that quote explain what the limits of the spending power are.

Professor Hogg said:

There is a distinction, in my view, between compulsory regulation —

— think here the “no clawbacks” provision —

— which can obviously only be accomplished by legislation enacted within the limits of legislative power, and spending or loaning or contracting, which either imposes no obligations on the recipient . . . . There is no compelling reason to confine spending or lending or contracting within the limits of legislative power —

— meaning Ottawa can go where it wants with its spending, and it does, as you know —

— because in those functions the government is not purporting to exercise any peculiarly legislative authority over its subjects.

That is, people can take the money or not. There is no legislative power engaged.

What this means is that in spending its money, Ottawa can spend in areas of provincial jurisdiction and can impose any conditions it likes on the recipient of the money, but it cannot use its legislative power to impose obligations on anyone else, obligations that are in provincial jurisdiction. To be sure of this, I read every case Professor Hogg cited, and all of them confirm this.

The bottom line is that Ottawa can attach conditions to the receipt of money by the recipient but it can’t go beyond that. Think of it like a pipeline down which money can flow. Ottawa can attach terms and conditions to the flow of that money. If the terms are not met, it can cut off the flow or it can require money to flow back, but it can’t legislate outside the walls of the pipeline.

Let me suggest for you an example of the most significant use of the spending power in this country and a compelling example of its limits: funding to support health care. Ottawa transfers billions of dollars to the provinces to support the delivery of medicare under provincial jurisdiction. It does this in the exercise of the spending power and it attaches conditions to the transfer of the money. You know it well, particularly the five principles of the Canada Health Act.

One of the most obvious concerns is that Ottawa does not want doctors to extra-bill patients for insured services under medicare. You’ve heard this a million times. If, as is argued, the spending power is essentially unlimited, the most obvious way to achieve this would be for Ottawa to transfer the money and then simply legislate that doctors can’t extra-bill. I hope you can see the parallel.

But Ottawa does not do this. A condition of the health transfer is that doctors aren’t allowed to extra-bill, but that obligation is imposed by the provinces. The prohibition against extra billing in every province in this country is done by provincial legislation not because Ottawa wouldn’t want to do it — by God, they would — but because, constitutionally, they can’t. And it’s the same with the “no clawbacks” provision: It would be great to do it, but we can’t. Just because it’s a very good idea, doesn’t make it constitutional. Section 91 does not have a head of power called “good ideas.”

Now, this is a small provision, but constitutionally the overall issue is enormous, quite frankly. If Ottawa can, through the use of the spending power, wade into provincial jurisdiction whenever and wherever it wants to spend money, as the proponents of this provision would have it, it would actually be destructive of federalism.

Senator Plett spoke a while ago about the attention we need to pay to regional interests. I would invite you to focus for a moment on provincial interests and our duty to be respectful of provincial jurisdiction on which those interests rest.

There is likely to be litigation if this clause were implemented, and here is an awkward, tragic dilemma: The provinces, even sympathetic to the intentions of this clause, would have to join with insurance companies to avoid an unprecedented expansion of spending power into provincial jurisdiction.

Whether we like it or not — and I don’t — the “no clawbacks” clause has within it the seeds of an almighty constitutional fight which Ottawa would assuredly lose, to say nothing of the way in which it would poison federal-provincial relations just at a time when federal-provincial cooperation in the delivery of this benefit is at its most crucial.

Some have suggested that declining to include the “no clawbacks” provision by the government and 314 members of Parliament — twice — is being done in deference to the insurance industry. I would invite you to think of it in a different way. It’s actually an expression of respect for the provincial jurisdiction at play here and a statement that honours the provinces and signals a desire to work with them rather than against their interests.

Indeed, this approach increases the possibility mentioned here earlier that provinces will exercise their own jurisdiction to protect this benefit by disallowing insurance clawbacks and it increases the prospect of working out protocols with industry whereby the disability benefit will not result in clawbacks.

I’m not happy with that outcome. I am as concerned as anyone about the stories that both you and I have heard, but there are limits to what we can do. Indeed, we have an obligation to respect those limits whether we like it or not.

I hope and trust that this will give you some degree of comfort that, in adopting the message as received, we are doing the right thing as we now have the opportunity to launch this bill and its great benefits for our most deserving citizens.

Thank you.

Hon. Brent Cotter moved second reading of Bill C-51, An Act to give effect to the self-government treaty recognizing the Whitecap Dakota Nation / Wapaha Ska Dakota Oyate and to make consequential amendments to other Acts.

He said: Before I begin, I want to acknowledge that Canada’s Senate is located on the unceded traditional territory of the Algonquin Anishinaabeg people.

I want to begin my remarks by talking about the War of 1812. Now, I wasn’t there, and I don’t think most of you were either, but it was a fairly important war. It was our only war with the United States of America, and you might recall that we won. Indeed, though lost to a degree in the mists of history, the political and governance structure of this continent and this country would be vastly different if that war had had a different outcome.

The Dakota were critical military allies of the British in that war. During the War of 1812, they defended what is Canada today and were presented with King George medals and promises that their lands and rights would be protected.

This was a major moment in an otherwise formative period of the Crown-Dakota/Lakota relationship that began in the mid-18th century, and in a context of increasing conflict between British North America and the United States.

In the years that followed, the Dakota did not feel particularly welcome — that is, those who resided in the United States — and Chief Whitecap was one of the leaders that journeyed north with his community to Canada. They wanted to remain part of a British territory and reminded authorities of the promises made to them.

It is an understatement to say that their commitment to British North America did not make them popular in the United States and, as I will emphasize later, since time immemorial the Dakota, and specifically the Whitecap Dakota, have governed themselves.

I will now say a few words about the history of the Dakota and, in particular, the Whitecap Dakota, and then a bit about self‑determination and self-government for the Whitecap Dakota First Nation and leading to this bill and agreement. In doing so, I hope to show why the bill we’re speaking about is critical to advancing reconciliation in Canada. I hope to show that, while some of the bill’s details might be new, the concepts of self-determination and self-government it is based on are not new. Indeed, what we’re doing is reviving what previously existed.

The Dakota are part of the Oceti Sakowin Oyate, the People of Seven Council Fires, which was an alliance of seven Dakota, Lakota and Nakota groups. These groups shared similar languages, history and culture and their territory spanned central regions of the United States and Canada.

The word “Dakota” means “friends, or allies” — meaningful in the context of the War of 1812, I think — and the Dakota/Lakota Nation successfully built alliances to establish peace and prosperity.

In the early 1860s, when many Dakota people sought refuge in the north, they were led by Chief Whitecap, Chief Standing Buffalo and Chief Little Crow. Chief Whitecap established his community along the South Saskatchewan River, and — you may find this amazing — went on to co-found the city of Saskatoon, my city.

Most of the bands are located in Manitoba and Saskatchewan. The Whitecap Dakota band is on a reserve about 30 kilometres south of Saskatoon. It is a small First Nation with a population of 692. It has a small parcel of reserve land, much smaller than other treaty nations in Saskatchewan. It’s near the South Saskatchewan River. It’s not on good land, and for more than a century the Whitecap Dakota struggled.

Let me speak a bit about its history, in particular dating to 1991, more recently, when Chief Darcy Bear became chief. The nation had an unemployment rate of 50%, its social and health services for its people were in tatters and the band’s finances were abysmal. Chief Bear told me recently that when he became chief, he was attending university and was in business school. As a student, he had a small amount of money in his bank account. By comparison, the band’s bank account had nothing and, in fact, it was overdrawn. He was, in a way, richer than his whole First Nation.

Where is the Whitecap Dakota Nation now? The band has developed services for its people in education, social services and health. It has established a range of business enterprises and it has an almost nonexistent unemployment rate. Among their best‑known businesses and enterprises are a First Nations casino — the most spectacular and successful in Saskatchewan — a world‑class golf resort and an adjacent hotel resort. When it opened, the Dakota Dunes Golf Links was selected the best new golf course in Canada. The Professional Golfer’s Association Tour Canada, or PGA, stops there every July.

The nation’s wise land management, a range of economic development initiatives and efforts to build a tax base for their own-source revenues is exceptional.

The Whitecap Dakota Nation is well known across Canada for this remarkable socio-economic development and the various successes of its business ventures and partnerships, many with the private sector and with the Province of Saskatchewan.

Though the reserve is small and the population, as I said, is only 692 people, its enterprises generate millions annually in own-source revenue for their community. This prosperity extends beyond Whitecap Dakota’s reserve and has significant benefits for neighbouring local businesses and the city of Saskatoon. For example, the on-reserve businesses employ as many non-First Nations people from off-reserve as there are citizens of the Whitecap reserve in total. About 650 non-members are employed at Whitecap; Whitecap is an economic engine for my city. In short, Whitecap is a strong, thriving community and has a long history of self-governance.

The Crown promised assistance and protection following their participation in the War of 1812. How did that work out?

Well, that promise was broken. Talk about breaking promises early. The war occurred in 1812, and promises were broken in the negotiations that concluded with the Treaty of Ghent in 1815 — three years later. These are the negotiations that ended the War of 1812.

The Dakota were not welcomed by the Crown as allies. Instead, they were permitted to stay in Canada but branded as “American-Indian refugees” in the decades that followed. When the Crown began entering into the numbered treaties with First Nations in Western Canada in the late 1860s, the Dakota were purposefully excluded from the numbered treaties.

As a result of unfair policy decisions made over a century ago, the Dakota have been denied formal recognition as Aboriginal peoples of Canada under section 35 of the Constitution Act, 1982 — denied recognition as Aboriginal peoples until, hopefully, Thursday of this week. In every way but one, the Dakota nations have been treated as any other First Nation, Your Honour, and, generally speaking, the treatment has not been favourable. They were subjected to the Indian Act, residential schools, the Sixties Scoop, the pass system, the theft of their children, the reserve system and various other laws and policies that have failed Indigenous people and Canada writ large. The Dakota have shared in this experience and, at the same time, do not even have a constitutional foothold the way that other Indigenous communities have. They continue to exist today as “American-Indian refugees,” present in Canada at the pleasure of the Crown.

The Whitecap Dakota self-government treaty we’re talking about today in Bill C-51 will change all of that. It will reinforce the Dakota spirit of alliance, as was recognized way back when. What does the Whitecap Dakota Nation think of this bill? It is acknowledged to be the next step toward the First Nation’s vision of self-determination. The treaty is a product of 12 years of negotiations. Senator Arnot was an early proponent of this, and I hope he will speak about it himself in his remarks. It was approved by Whitecap Dakota membership through a community approval campaign that was aligned with their customary decision-making processes with 92% support in the fall. When, finally, the membership voted on this governance treaty, the vote was 100% in favour. Sounds fairly positive to me: strong community support.

What does Bill C-51 do? The bill does two things: First, it recognizes Whitecap Dakota as a First Nation pursuant to section 35 of the Constitution. This changes their status from refugees to an Aboriginal people recognized under section 35, correcting more than a century of injustice. Second, it removes Dakota Whitecap from the oversight of most aspects of the Indian Act and recognizes a range of governmental authorities for Dakota Whitecap in the self-government treaty. As we know, many federal laws and policies, including the Indian Act, have constrained First Nations governance.

First, the Indian Act imposed a colonial form of governance on Dakota Whitecap, and so many other First Nations, with limited forms of local administration. For decades, the Dakota Whitecap have been working to leave the Indian Act. They had a series of initiatives from 1989 to 2012 and have removed themselves, as if percentages matter, from about 35% of the Indian Act’s control over Whitecap Dakota — steps toward reclaiming self‑governance.

To replace this very large Indian Act framework in this treaty and self-government agreement, the governance treaty provides that the Government of Canada will recognize the First Nation and give it jurisdiction over core governance; membership; language and culture; lands management; emergencies; public order; peace and safety; taxation; environment; resource management; agriculture; public works and infrastructure; local traffic and transportation; wills and estates; education; health; licensing, regulation and operation of businesses; economic development; alcohol, gaming and intoxicants; landlord and tenant matters; and the administration and enforcement of Whitecap Dakota laws. It’s a pretty spectacular range of governmental authority.

I want to say a word or two about taxation, and here I will leave my prepared remarks, if I may.

One of the great constraints of the Indian Act and the Canadian relationship with First Nations, in my view, is that we have not moved to models like own-source revenues and the building of financially accountable governments. We have relied too much on transfers from Ottawa.

We need to build the models of government that communities need and want. One of the keys to that is building a taxation regime that a government can administer itself. From my briefs with government officials over the past few days, I understand the Department of Finance has been working to negotiate a complementary real property tax agreement and tax treatment agreement setting out the scope of Whitecap Dakota’s tax jurisdiction on reserve lands.

The department highlighted that Whitecap Dakota have proven successful with innovative taxation tools and powers and that these complementary agreements yet to come will provide the community with added taxation powers to advance this interest. In fact, the real property tax agreement set out in this legislation is the first agreement of its kind in the country.

Senators, this is good legislation. It puts decision-making power back in the hands of Indigenous governments to make their own choices about how to deliver programs and services to their own communities. The bill also, I should say parenthetically, renames the self-governing entity the Whitecap Dakota Nation. They lost their name when they left the Indian Act, and they needed a new one. This is the one the community wanted, and it is a good one.

This bill is a major step to revive self-governance and self‑determination for the Whitecap Dakota people who have contributed to our country for a very long time, and that contribution has not been well recognized. It is also an important step for reconciliation, moving past colonialism and paternalism, toward legislation grounded in equality and respect.

Honourable senators, I encourage you to join me in taking this next step.

Thank you, pidamayado.

Hon. Mary Jane McCallum: Would Senator Cotter take a question?

Senator Cotter: I certainly would.

Some Hon. Senators: Hear, hear.

Hon. Yonah Martin (Deputy Leader of the Opposition): Senator Cotter, thank you for your speech. I enjoyed the historic piece on the journey of the Whitecap Dakota Nation.

Honourable senators, I rise today to speak to Bill C-51, An Act to give effect to the self-government treaty recognizing the Whitecap Dakota Nation / Wapaha Ska Dakota Oyate and to make consequential amendments to other Acts.

On Tuesday, May 2, 2023, the Whitecap Dakota Nation signed a self-government treaty recognizing them as a section 35 rights holder in Canada. Those negotiations began in 2009 under the former Harper government. The agreement was co-developed in consultation with the Whitecap Dakota First Nation, and affirms their inherent right to self-government under the Constitution Act, 1982. The treaty is the first of its kind in Saskatchewan.

The Whitecap Dakota First Nation was an ally of the British Crown, as explained by Senator Cotter, and, through historical oversights, they were never given that proper recognition. This legislation aims to correct the oversights from past governments, and to provide the Whitecap Dakota First Nation with its own self-government treaty.

This legislation has been in negotiations for 13 long years, and has been a joint effort between the Whitecap Dakota First Nation; Conservative Minister Chuck Strahl and Conservative Minister John Duncan; and Liberal Minister Carolyn Bennett and Liberal Minister Marc Miller.

I am pleased that it was expedited through the other place, and I hope that we can accomplish the same here in the Senate.

The bill recognizes that the Whitecap Dakota First Nation has jurisdiction and law-making powers on their reserve lands over governance, land, natural resources, membership, cultural matters, language revitalization and preservation, education, financial management and accountability, health and social services. The treaty is seen as an important opportunity for the Whitecap Dakota First Nation to move out from under the Indian Act.

The bill does several important things: It recognizes the Whitecap Dakota First Nation as Aboriginal peoples with full section 35 and section 25 constitutional rights. It constitutionally protects their inherent right to self-government as set out in the treaty. It strengthens their position to treat with Canada in the future on lands and titles. It removes the First Nation from the Indian Act. And it ensures that the Whitecap Dakota First Nation can still access the First Nations Fiscal Management Act.

The Whitecap Dakota First Nation fully supports the bill, with Chief Darcy Bear stating:

I am incredibly proud of our community as we make history together to better the lives of generations to come. Our Governance Treaty with Canada affirms our place as Dakota peoples alongside all other Aboriginal Peoples in Canada with constitutional protections. It also establishes a Whitecap Dakota government with the tools and status to continue to build our nation and contribute to Saskatchewan and Canada as whole.

The entire community was part of the process; a Whitecap advisory committee of elders, youth, women and community members helped to shape the agreement, and ensure the process protected First Nation perspectives, culture and customs. As a result, 92% of Whitecap members voted to approve the treaty, which affirms the First Nation’s inherent right to self‑government.

When asked about the importance of finally being recognized as a section 35 rights holder in Canada, as well as what that means for his community, Councillor Dwayne Eagle said to the House of Commons Standing Committee on Indigenous and Northern Affairs:

I’ll get a little personal. Sometimes when there’s a dispute with other First Nations, they say something like, “go back to where you came from.” We’re from Canada. That’s our land and territory. Once they recognize us as Aboriginal peoples of Canada —

That’s one of the things that we talked about with our community. They want that. They want to make sure that’s included in the agreement. It’s pretty important for us.

Honourable senators, I have kept my comments brief in recognition of the importance to pass this bill as quickly as possible. The recognition inherent in Bill C-51 is important to Whitecap Dakota First Nation members and elders. It protects their self-government treaty, and from here we can move forward and build on reconciliation efforts with the community.

As Fraser Tolmie, MP for Moose Jaw—Lake Centre—Lanigan in Saskatchewan, said to the House of Commons Standing Committee on Indigenous and Northern Affairs yesterday:

. . . one of the frustrating things for me when I go through this history and this recent history is that it seems so simple. This should have been done such a long time ago . . . .

Honourable senators, let us not delay this any further. Conservatives support treaty rights and the process of reconciliation with Canada’s Indigenous peoples — and we support Bill C-51.

Hon. David M. Arnot: Honourable senators, I rise to speak in support of Bill C-51, An Act to give effect to the self-government treaty recognizing the Whitecap Dakota Nation / Wapaha Ska Dakota Oyate and to make consequential amendments to other acts.

Colleagues, Bill C-51 represents a full circle moment for me. More than 25 years ago, I was the Treaty Commissioner for Saskatchewan, and I had a mandate to research, document and capture the meaning of the treaties in a modern context in the Province of Saskatchewan.

In January 1999, the minister of the former Department of Indian and Northern Affairs and Northern Development and the chief of the Federation of Sovereign Indigenous Nations, or FSIN, directed me to facilitate discussions between the Dakota and the Lakota on treaty adhesion claims in Saskatchewan.

There are three Dakota First Nations in what is now Saskatchewan — the Standing Buffalo, the Wahpeton and the Whitecap — and there is one Lakota First Nation: Wood Mountain. These First Nations never negotiated treaties, or adhesions, with Canada. It was not, however, for a lack of trying on their part.

Mr. James Morrison, a legal and historical researcher, found that several Dakota chiefs had expressed interest in adhering to the treaties at the time they were made — Treaty 4 in 1874, and Treaty 6 in 1876: According to the minutes of the council with Treaty 4 commissioners, Lieutenant Governor Alexander Morris told the Dakota that they should settle away from the American border. They would be entitled to the same consideration as the Dakota who had been offered reserve lands on the Little Saskatchewan River, which is now in part of Manitoba.

In 1862, Chief Whitecap, came north of the 49th parallel after the Minnesota massacres. However, the Dakota people had been in the territory for centuries before that, and they were able to demonstrate that.

In 2003, I was fortunate to see and hold a centuries-old medal during the discussion at the treaty table. This medal, known as the “Lion and Wolf” medal and called “Mazaska Wanpin” by the Dakota, represents the forging of the relationship with the Crown.

This medal was on display at the Office of the Treaty Commissioner for some time. If you looked at the obverse side of the medal, you could see that it was well worn and you could tell that it was proudly worn by Dakota chiefs for some 200 years.

On August 17, 1778, in Montreal, 11 Dakota chiefs received “Lion and Wolf” medals from the British general Frederick Haldimand. The lion symbolized the British Crown, and the wolf symbolized the American government nipping at the heels of the lion. The chiefs were given the medals because they were essential in the British campaigns in Illinois and Kentucky during the American Revolution.

The Dakota also received seven “Lion and Wolf” medals during the War of 1812, most likely in June of 1812 at Chief Wabasha’s village. Dakota warriors played an integral role in the British capture of Michilimackinac and the siege of the American Fort Meigs during that war.

A much more unique and compelling history of the bond between the Crown and the Dakota people was offered during discussions at the treaty table in Saskatchewan.

I wrote a report recommending that the Dakota people be allowed to adhere to Treaty 4 and Treaty 6, respectively. I also recommended that, in the alternative, Canada enter into treaty discussions with the Dakota people because the Government of Canada could choose to enter into treaty with whomever they want to, and that should happen in a modern context. Most importantly, it would be the right thing to do.

Despite the goodwill and good faith of the parties to the discussion, and despite the hours of interest-based discussions that took place, the process — which I was part of — was ultimately not successful. However, I believe that those original efforts laid the groundwork for the bill we are considering today. The comprehensive self-government negotiations, which began anew in 2009, were built on the relationships that were forged a decade earlier at the treaty discussions in Saskatchewan.

An understanding, appreciation and acceptance of the oral history, as well as the historical record, bring us here today. There is much evidence that the Dakota people had been in the territory for centuries. Historical records tell us that even in the absence of treaty signing or adhesion in the latter half of the 1800s, promises were made to the Dakota people.

Dr. Sarah Carter, professor of history at the University of Alberta, detailed the meeting with Treaty Commissioner and Lieutenant-Governor Alexander Morris, on September 16, 1874:

[Chief] White Cap began by saying that “he does not know what to do as he heard the country is going to be sold and wants advice on how to live. He puts his hand in the governor’s to show he shakes hands with the Queen —

— Queen Victoria —

— His ancestors used to do the same.” Morris said that we don’t want all your friends [from the United States] to come over . . . [However] who have been here a number of years it is different. He stated he had the ability to give each family 80 acres of land.

Colleagues, the first statement in the preamble of Bill C-51 clarifies the importance of history as we look to the future. It states:

Whereas the Whitecap Dakota Nation and the Government of Canada recognize distinctive historical relationships between certain Dakota communities and the Crown based on, at various times, treaties or alliances of peace and friendship . . . .

With an understanding of the past, and as we reflect on the needs of the present — as the drafters of Bill C-51 have done — this act requires us to look to the future of the Whitecap Dakota First Nation, a future largely free from the constraints of the ndian Act, founded on the principle of the inherent right to self‑government and based on a government-to-government relationship.

We are all aware that the Whitecap Dakota First Nation signed their self-government treaty with Canada on May 2, 2023. This treaty confirms Whitecap Dakota First Nation’s jurisdiction on their reserve lands over governance, natural resources, membership, financial management and accountability, health, language and culture promotion and preservation, and education. Affirming their section 35 constitutional rights as Aboriginal peoples signifies a historic shift in Canada’s position on the Dakota and enables ongoing reconciliation.

Bill C-51 and this governance treaty have been a long time coming for the Whitecap Dakota peoples, their community and leaders — by one estimate, nearly 140 years.

Colleagues, I wish to acknowledge the leadership, guidance and determination of Chief Darcy Bear. Chief Bear is an extraordinary leader, relationship builder and entrepreneur. I have had the good fortune to get to know him and work with him over the course of the last 30 years. He has been notably successful in many areas, including housing on the reserve, the creation of a casino and hotel, and the establishment of a world‑class golf course, as has been mentioned.

I also want to acknowledge the contributions of two long-time councillors, Mr. Frank Royal and Mr. Dwayne Eagle.

I am grateful to the elders who help guide Chief Bear and his community. They were also involved in the processes in which I took part.

I am deeply indebted to Elder Melvina Eagle and the late Elder Mel Littlecrow — two elders who freely provided their knowledge, wisdom and guidance to the parties and to me those many years ago. Their knowledge is fundamental to this bill, to the relationships that have been forged and to the reconciliation that this treaty represents, which is encompassed in this bill.

Colleagues, the Whitecap Dakota First Nation people have always had high expectations for their community and for themselves. Bill C-51 acknowledges their rightful place within the Canadian state. I believe this legislation is in Canada’s best interest, and I ask you to join me in supporting this bill, which rights a historical wrong and represents a modern-day example of reconciliation. Thank you.

[Translation]

Hon. Renée Dupuis: Would Senator Arnot accept a question?

[English]

Hon. Tony Loffreda moved third reading of Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023.

He said: Honourable senators, it is with pleasure that I rise to speak at third reading of Bill C-47, budget implementation act, 2023, No. 1. I’m particularly pleased to rise to discuss a bill that wasn’t amended in committee.

Budget 2023 comes at an important time for our country. The bill that accompanies the government’s latest budget contains important measures that will help entrepreneurs, workers, students and families.

Some of those many measures are the Canada Growth Fund and the new Canada innovation corporation. These two entities will help Canada meet its net-zero emissions goals. They should also be able to help to accelerate and increase investment in Canada, which will drive domestic economic growth and create jobs.

[English]

Colleagues, you can all breathe a sigh of relief. I will not speak for 45 minutes today, although I’m tempted to because I feel Bill C-47 is such a good piece of legislation.

In my second reading speech, you may recall that I provided a detailed account of half of the measures in the bill, so I don’t feel the need to rehash everything today. I thank Senator Marshall for her comprehensive speech, too. Like it was for me, I know it was difficult for her to condense everything she wanted to say into 45 minutes. I’m always impressed with her detailed analysis of the government’s budgetary measures. We are lucky to have her on our National Finance Committee, for sure.

Thank you also to Senator Colin Deacon for raising some concerns regarding division 39 of the bill that deals with the Canada Elections Act. I would second his call to action that the political parties in our country, with their large databases of information on their members and supporters, need to start adhering to strong international norms in terms of privacy policies.

Today, I will not discuss the content of Bill C-47 specifically. I did that in detail in my second reading speech. Rather, I will do three things. First, I will provide a more detailed answer to the question raised by Senator Wallin at second reading on the Air Travellers Security Charge. Then, I will discuss the four observations of our National Finance Committee on Bill C-47. As usual, great work has been done by our committee, and I think it is important that we bring out the observations and work of all of the committees that have helped to build Bill C-47. Finally, I will wrap things up with a few words of thanks.

As you may recall, Senator Wallin asked about the rate increase to the Air Travellers Security Charge, or ATSC. The government is proposing to increase the rates by 32.85% in May 2024, which would, on average, increase the cost of a domestic return trip by about $5. Senator Wallin wanted to know about how and where the money generated from this measure will be used. As you know, air travel security expenses include CATSA operations, but also include the contracting of RCMP officers on selected flights.

When Minister Alghabra appeared before our Committee on Transport and Communications, Senator Harder asked him if 100% of the fees generated by this increase will be dedicated to CATSA, and the minister said, “Yes.” The minister added:

CATSA has not seen an increase in its fees in 13 years. The last time we increased those fees was 2010. Again, during the pandemic, we saw some of the vulnerabilities and some of the capacity issues and technologies that they need to improve upon. So this was a reminder to us as a government and a country that we need to modernize CATSA. That is the purpose of this new proposal.

I hope this answers Senator Wallin’s question.

The second item I want to highlight are the observations our National Finance Committee included when we adopted the bill last week. I thank my colleagues on the committee for their insightful contributions and for proposing the following four observations.

First, the committee urges the government to undertake a comprehensive review of how the tax system can be updated in order to help lift some Canadians out of poverty. The Income Tax Act is over 3,400 pages. It’s overly complicated, and our committee believes a thorough overhaul of the tax system is long overdue. We need to find ways of promoting fax fairness, as well as substantive equality and accessibility.

Second, as you may recall from my second reading speech, much was said about the GST/HST treatment of payment card clearing services and the application of a retroactive tax. Allow me to read, verbatim, our observation:

Members of the National Finance Committee expressed reservations about certain provisions of sections 114 to 116 of Bill C-47 which would make the GST/HST applicable retroactively to payment card clearing services even though the Federal Court of Appeal had clearly ruled in January 2021 that these services are financial in nature and therefore exempt from GST/HST. According to the testimonies heard, this would also constitute a certain inconsistency with the international practices in force in countries where a value-added tax like the GST/HST is in place.

In the eyes of the committee members, the 26-month delay observed by the federal Department of Finance in reacting to a decision by the Federal Court of Appeal is not only unacceptable but also constitutes a dangerous precedent according to the Canadian Bar Association.

Third, and as stipulated by the Committee on Transport and Communications, the provisions on the extension of interswitching also raised some questions among the members of the National Finance Committee. As we wrote:

The Committee has reservations about the interconnection extension provided for in section 22 of Part 4 of Bill C-47, considering, among other things, that these measures had already been put in place in 2014 and were subsequently eliminated because they were deemed inadequate.

Personally, I accept that the government is implementing this new pilot, which is in response to the National Supply Chain Task Force’s 2022 final report. Although railways are not supportive of this measure, many other industries are calling for its implementation. It will allow the government to gather data to assess the value of extending interswitching on a permanent basis.

Finally, our committee’s last observation is one I addressed in my second reading speech. Senator Marshall raised similar concerns in her remarks. Our committee “. . . expresses its concern about the continued use of Omnibus Bills.” It feels that:

 . . . many sections . . . are unrelated to the fiscal policy of the Government, such as the amendments to the Criminal Code and the Canada Elections Act.

As I said a few weeks ago, there are many legislative changes in Bill C-47 that could have, and probably should have, been introduced with their own stand-alone pieces of legislation. Senators will likely agree with our committee “. . . that insufficient time was provided to the Senate to thoroughly study the Bill, and to determine its impact.” I am also preoccupied with the swift manner in which we must always deal with budget implementation acts, or BIAs. Although it has become part of parliamentary convention, it still does not make it right.

However, despite these very legitimate concerns, Canadians can feel confident in the work of our committees. Including the clause-by-clause consideration of the bill, our committees held 40 meetings in total, and there have been 210 unique committee witness appearances. We heard from cabinet ministers, dozens of government officials and a long list of relevant stakeholders.

Would we have appreciated more time to study the bill? Of course; there is never enough time. Could we have questioned more witnesses and obtained more testimony? Most certainly, but we did our work despite tight deadlines. There’s no doubt about it.

This brings me to my final comments.

Sponsoring a budget implementation act through the Senate is a big undertaking. I want to thank Senator Gold’s office and the Deputy Prime Minister’s office for all their assistance. They have been instrumental in helping me navigate the legislative process, and provide the support and appropriate information to senators and their staff when needed and in a timely manner. Thank you.

I want to thank all the staff at the National Finance Committee and all those behind the cameras that make our committee run like clockwork. A special thank you to Ms. Aubé, our clerk, and her assistant, as well as our two analysts. Once again, thank you to all the committee members — those on national finance and all the other committees — who did great work on Bill C-47, which I strongly support.

Once more, I want to acknowledge the work of our eight Senate standing committees that supported the National Finance Committee in pre-studying Bill C-47. Your reports were very helpful, and I know we all appreciated your work.

I want to take this opportunity to thank all my colleagues for their insight, comments, and interventions, for supporting me in my role as sponsor of Bill C-47 and I wish you all a pleasant and restful summer. Hopefully, this will be if not my last intervention, one of my last, but we never know in this chamber. So we’re ready when it happens, but hopefully it’s one of my last.

Before we adjourn, I would urge all my honourable colleagues to support the passage of Bill C-47 not because the government wants us to, but because it’s a good bill with great measures that many stakeholders are calling for. Thank you, meegwetch.

[Translation]

The Hon. the Speaker pro tempore: Are senators ready for the question?

The Hon. the Speaker pro tempore: Is it your pleasure, honourable senators, to adopt the motion?

Hon. Clément Gignac: Colleagues, I rise today to share my thoughts on Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023. Given that we are at third reading stage and about to rise for the summer, I will keep all of my thoughts on the state of the Canadian economy to myself. I also want to thank Senator Loffreda for his restraint because it means I will be able to give my speech before dinner. We will wait until we come back in the fall to talk about the economy.

As our colleague, Senator Mockler, already mentioned, the Standing Senate Committee on National Finance, of which I’m also a member, held eight meetings and devoted nearly 14 hours to an in-depth study of the bill. We heard from some 74 witnesses. That may seem like a lot, but this is a huge bill with dozens of regulatory tax initiatives, some of which, quite frankly, should have been introduced in separate bills. In fact, an observation to that effect was made by the committee, which finds the practice to be unacceptable.

[English]

Before addressing my discomfort with the retroactive tax measure contained in this budget, let me share with you my concern about the rapid increase in the size of the federal government in recent years.

[Translation]

The best way to illustrate this rapid expansion of the federal government is to point out the actual number of employees in the public service. From 2016 to 2023, the public service workforce grew from 340,000 to nearly 425,000 full-time equivalent, or FTE, employees. That means it grew by 25%. Even more troubling is the increase in payroll, which has risen by 70% over the past seven years. As Parliamentary Budget Officer Yves Giroux pointed out, this dramatic rise can be attributed to the growing number of programs brought in by the federal government in recent years.

Another way to illustrate how the federal government has grown in size is to express budgetary expenditures as a percentage of gross domestic product, or GDP. As an economist, I find this method even more relevant because it offers the advantage of taking into account population growth and inflation, and it facilitates comparison over time. If we exclude debt servicing, budget spending can be grouped into three broad categories. The first is transfers to individuals, such as Old Age Security, or OAS, and EI. The second is transfers to the provinces, and the third is government operating expenditures, also known as direct program expenses.

In my opinion, the category we ought to pay the closest attention to when referring to the increase in the size of government is the last one, operating expenditures. Indeed, these expenditures increased from 6.6% of GDP in 2016 to 8.1% of GDP in the last fiscal year. However, during this same period, transfers to individuals and to the provinces remained relatively stable, about 4.1% to 3.1% of GDP respectively.

[English]

It should also be noted that the national defence sector included in the federal government’s operating expenditures is not the cause of the increase of the size of the federal government since 2016 since the ratio of military expenditures to GDP has remained relatively flat for seven years, around 1.3% — a figure still very far from the official 2% target recommended by the North Atlantic Treaty Organization, or NATO.

On this subject, despite a full chapter in the budget dedicated to Canada’s leadership in the world, I was very surprised to find out last spring, after examining the budget document, that the national defence budget will still be around 1.3% of GDP five years from now. As a member of the National Security, Defence and Veterans Affairs Committee, I find this a little awkward, especially with the new geopolitical context since the invasion of Ukraine by Russia.

Honourable senators, I am also very disappointed with the absence of a budgetary anchor in the 2023 budget. Contrary to what was observed after the 2008-09 financial crisis, the current government has not committed yet to return to a balanced budget or shared any precise calendar to return to the previous federal debt-to-GDP ratio seen before the pandemic. More disturbing is the fact that the federal debt-to-GDP ratio will increase from 42.4% to 43.5% over the next year despite an economy running at full capacity. The government is content to reiterate its intention to reduce the debt-to-GDP ratio over the medium-term.

[Translation]

According to several experts, the federal government’s lack of fiscal restraint has helped stimulate economic activity, making the Bank of Canada’s job of controlling inflation more difficult. Honourable senators, the government and certain other observers have argued that Canada has the lowest ratio of net public debt to GDP of all G7 countries and a triple-A credit rating. That’s right.

However, senators should know that this top position is largely due to the significant financial assets held by our public sector pension plans. Here in the Senate, we keep hearing over and over that their operations, including those in tax havens and in certain autocratic nations, are at arm's-length from the government.

Colleagues, I don’t want to linger on these two concepts of net public debt and gross public debt, because that might eat up the rest of my speaking time. I’m sure that, with Senator Marshall and Senator Loffreda, I’ll have the great pleasure of doing so in the fall.

However, everyone agrees that one notion illustrates the weight of public debt, that of debt servicing, which has gone from 7 cents per dollar of recorded revenue before the pandemic to roughly 12 cents for this year. What’s more, this rate will likely go up since it’s based on the assumption that the interest rate will be lowered below the 3% mark as early as next year. Fortunately, we’re far from the 38-cent rate we saw in the mid-1990s, a time when Canada was at risk of being placed under the stewardship of the International Monetary Fund, the IMF. However, that shouldn’t be an excuse for being complacent or nonchalant.

Honourable colleagues, I’m also very skeptical about the fiscal projections set out in Budget 2023 regarding a gradual reduction in the deficit and the size of government. First, unlike the good governance practices put in place by former Liberal finance minister, the Right Honourable Paul Martin, and maintained almost every year by the various Liberal and Conservative finance ministers who followed since the mid-1990s, this budget doesn’t set out a contingency reserve. Simply put, if the Bay Street economists, who all agree, are wrong about the direction of the Canadian economy and the country goes into a recession, then the budget deficit for the current year will go up because there’s no emergency cushion or contingency reserve.

Second, Budget 2022 created expectations by announcing the launch of a comprehensive strategic policy review to assess program effectiveness and identify opportunities to save, but, oddly enough, there’s no further mention of that in Budget 2023. As the Parliamentary Budget Officer said, and I quote:

Aside from proposing to reduce spending on consulting, other professional services and travel, Budget 2023 does not identify opportunities to save and reallocate resources “to adapt government programs and operations to a new post‑pandemic reality” . . . .

[English]

In the absence of any exhaustive review of programs by the Treasury Board, I have some doubts about the projected spending reduction five years from now to get back to the 2016 level of 6.6% of GDP. I believe that this figure will be revised upwards with the implementation of the future dental insurance and drug insurance programs, not to mention the pressure to be exerted by the Pentagon and our other NATO allies to finally commit to the 2% of GDP target for military spending.

[Translation]

Colleagues, as a final point, I’d like to talk about the tax measure — which is retroactive to boot — that really upset me. Senator Loffreda has already spoken about it. It has to do with certain provisions in clauses 114 to 116 of Bill C-47 that make payment card clearing services subject to GST retroactively. This is a technical measure that hasn’t won much sympathy from the public, because it affects financial institutions.

As pointed out by the Canadian Bankers Association, the Desjardins Group and even the Canadian Bar Association, the legitimacy of the government’s decision to introduce new tax rules in the budget isn’t in dispute. Rather, it’s the retroactive nature of this measure that’s problematic.

This saga began in 2015, when CIBC decided to formally challenge, before the Tax Court of Canada, CRA’s interpretation that these clearing services were administrative, not financial, in nature. Accordingly, these services would be subject to the GST. Based on the testimony we heard, the fact that the federal government lost in Federal Court in January 2021, didn’t appeal to the Supreme Court and came back 26 months later with a retroactive measure is unprecedented. This sets a dangerous precedent, as mentioned by the bill’s sponsor, Senator Loffreda, whose perseverance and leadership I commend.

Honourable senators, despite everything I told you, despite my reservations and my disappointments, I will support Bill C-47. My discomfort with the last fiscal measure I talked about earlier was the subject of an observation presented by the committee, and not an amendment.

Let’s clarify, for new senators, that bills related to the budget, unlike other bills, are rarely amended.

The last time an amendment to a budgetary bill was accepted was in 2016. My colleague Senator Harder must remember, since one of the measures clearly interfered in Quebec’s jurisdiction with respect to the Consumer Protection Act. It was the government representative in the Senate who proposed this amendment on the suggestion of the Minister of Finance following pressure from Senator Pratte and the Government of Quebec. It is possible, but rather rare, for amendments to be made to budget implementation bills.

In conclusion, honourable senators, I’d like to take this opportunity to put both current and future governments on notice: My support for budget bills is not unconditional. During the pandemic, I supported this government’s emergency measures to keep the country from sinking into a recession because I felt it was the right thing to do.

However, I believe that the authorities would be well advised to adopt fiscal anchors soon to avoid fuelling inflation before they implement expensive new social programs like pharmacare and dental care, especially since these are under provincial jurisdiction.

As a former politician whose face once appeared on campaign signs, I’m well aware that we, as senators, don’t have the same legitimacy as representatives in the other chamber. I accept that. I don’t miss it. However, the Senate is an institution of sober second thought that is now made up mostly of independent senators from all walks of life. Their qualifications are the envy of the boards of directors of many large Canadian corporations.

Moreover, we now have a minority government holding on to power thanks to an alliance with a third party. This situation demands vigilance on our part because many initiatives didn’t necessarily get the support of a majority of Canadians in the last election. In fact, some weren’t even on the governing party’s platform.

This independence from a political party and this freedom of speech prompted several of us to apply to join the Senate to work together in the interest of Canadians. In my humble opinion, the current or future government and Canadians in general should be delighted with senators’ intellectual independence, even if it sometimes causes delays because of in-depth studies by committees and proposed amendments. After having heard the wise comments made by Senator Shugart in this chamber, I recognize that we’re definitely in uncharted waters. I’m counting on him and all of you, esteemed colleagues, to guide me in carrying out this role of second sober thought, while believing that there’s added value in my sitting in the Senate and commenting on Bill C-47.

Thank you for your attention.

[English]

Hon. Kim Pate: Honourable colleagues, I rise today on behalf of Senator Galvez to deliver her remarks on Bill C-47, the 2023 budget implementation act.

This omnibus bill seeks to implement some, but not all, provisions set forth in the 2023 budget, as well as provisions that were not specified in Budget 2023.

The bill has four parts covering a vast number of both economic and non-economic topics over a total of 408 pages. As is usual, specific sections have been referred to some committees for study. In the limited time I have available, I will focus on three sections with environmental impact that my team and I believe are of utmost importance to bring to the public’s attention.

The first pertains to the crucial issue of remediating the Faro Mine in Yukon, a site that has posed environmental problems to Indigenous and non-Indigenous communities for decades. Second, I will touch upon issues relating to the Canada Growth Fund. Lastly, I will discuss the significance of making changes to the mandate of the Office of the Superintendent of Financial Institutions, or OSFI, using a budget bill.

Bill C-47 authorizes the remediation of the Faro Mine in Yukon with an estimated cost of $1 billion plus $166 million for the first 10 years of long-term operation and maintenance. This is a huge budget and a very long duration, but most important is the message it sends; it enforces the belief that the principle of “polluter pays” can’t be avoided because the government will assume remediation costs. We need to have stronger legislation to prevent similar situations in the future. For example, it is now that, with respect to oil sands tailings ponds, we need to clearly establish how much the remediation will cost, what treatment will be used, when they will be remediated and who will pay.

The Faro Mine, an area the size of Victoria, B.C., holds a significant place in Canada’s mining history. It was once one of the largest lead and zinc mines in the world, operating from 1969 to 1998. The environmental consequences of the mine’s operations became apparent after its abandonment in 1998, when it left behind 70 million tonnes of tailings and 320 million tonnes of waste rock. The vast amounts of tailings, waste rock and water, with high concentrations of heavy metals, pose severe risks to the surrounding ecosystem and communities.

The mine site contains various hazardous substances, including heavy metals such as lead, zinc and cadmium, which can contaminate water sources and soil. Exposure to these contaminants can have severe health consequences, particularly for local Indigenous communities who rely on the land and water for their traditional practices and sustenance. Prolonged exposure has led to various health problems, including neurological disorders, developmental issues in children, respiratory ailments and an increased risk of certain types of cancers.

The remediation efforts aim to mitigate contamination and restore the affected ecosystems. Importantly, the goal is not necessarily to remove the contamination but to cover it and push that responsibility of environmental stewardship onto future generations.

An official of the Government of Yukon told the committee that “. . . active management at the Faro Mine . . . will be measured in hundreds of years.”

The Hon. the Speaker pro tempore: I am sorry, Senator Pate, but you will have 11 minutes upon our return.

Honourable senators, it is now six o’clock. Pursuant to rule 3-3(1), I am obliged to leave the chair until eight o’clock, unless it is your wish, honourable senators, not to see the clock.

Is it agreed not to see the clock?

Some Hon. Senators: Agreed.

Some Hon. Senators: No.

The Hon. the Speaker pro tempore: Honourable senators, leave is not granted. Therefore, the sitting is suspended, and I will leave the chair until 8 p.m.

(The sitting of the Senate was suspended.)

(The sitting of the Senate was resumed.)

On the Order:

Resuming debate on the motion of the Honourable Senator Loffreda, seconded by the Honourable Senator Gold, P.C., for the third reading of Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023.

Hon. Kim Pate: I will continue.

The Faro Mine is just one example of a larger issue that extends beyond its specific case. Across Canada, we have witnessed the troubling pattern of resource development companies declaring bankruptcy and leaving behind contaminated sites, burdening taxpayers with the responsibility of remediation. This issue is not limited to the Faro Mine; it resonates with the challenges faced in provinces like Alberta and Saskatchewan, where the proliferation of orphaned oil and gas wells has become a significant concern. These orphaned wells, left behind by both financially and morally bankrupt companies, pose environmental risks and financial liabilities that ultimately fall on public funds. It is crucial that we address this systemic issue, reinforcing the principle of the “polluter pays” to hold companies accountable for the environmental consequences of their operations and to protect taxpayers from bearing the brunt of remediation costs.

The Faro Mine is situated on traditional lands of the Kaska and Selkirk First Nations, and the remediation project must prioritize the concerns and aspirations of these communities. Meaningful consultation and collaboration with Indigenous peoples are paramount to ensure that their rights, interests and cultural heritage are respected throughout the remediation process.

It is wrong to force the development of the economy of a town or region to a “decontamination economy.” This thinking is captive to the broken window fallacy and entraps communities in the boom-bust cycle that has already ensnared the economies of some entire provinces that are now desperately seeking to diversify. While the decontamination economy can provide short-term economic benefits, we must also explore sustainable and diversified economic opportunities for the long-term well-being of these communities.

One striking realization is that while we grapple with the consequences of past mining activities, new mining projects adjacent to the old Faro Mine are already under way. This serves as a stark reminder of the urgent need to reinforce the “polluter pays” principle and hold resource development companies accountable for the environmental impact of their operations.

Another key proposal within Bill C-47 is the Canada Growth Fund. With a budget of $15 billion, the fund is designed to attract private capital and stimulate investment in low‑carbon projects, technologies, businesses and supply chains.

However, there are concerns regarding the lack of clarity surrounding the criteria used to allocate funds to specific projects. It is important for the government to provide transparent guidelines and selection criteria to ensure that investments made through the fund align with Canada’s environmental objectives and climate commitments so that it can contribute effectively to the transition to a clean economy.

The decision to entrust the management of the fund’s assets to the Public Sector Pension Investment Board, or PSP Investments, has also raised questions among members of the National Finance Committee concerning the independence of PSP or, in my case, the absence of their commitment to achieve net-zero emissions by 2050. PSP Investments continues to invest in fossil fuel companies without a clear decarbonization plan, undermining the purpose of the fund. Additionally, the presence of a corporate director of Imperial Oil on the PSP board of directors reveals appearance and potential conflict of interest, according to corporate governance experts.

In light of these issues, it is crucial for the government to address these concerns, provide clarity on investment criteria, manage potential conflicts of interest, establish performance indicators and ensure transparent and accountable governance. This will not only enhance public confidence in the fund but also strengthen its ability to attract private capital and drive the growth of Canada’s clean economy.

The third and final issue I would like to raise is the expansion of OSFI’s mandate to determine whether financial institutions have adequate policies and procedures to protect themselves against threats to their integrity and security.

Omnibus bills, which encompass both fiscal and non-fiscal items, have been employed as a strategic tactic by governments to pass significant legislation. Bill C-47 is no exception, featuring a wide array of provisions including amendments to the Criminal Code and electoral laws.

The expansion of OSFI’s mandate is worth noting because such a significant amendment would typically be the subject of a separate bill, allowing for public consultation and stakeholder input. OSFI’s mandate, as it stands, has garnered widespread agreement among experts in sustainable finance that it needs revision to incorporate considerations of environmental, sustainability and social factors, including climate risk. It is essential to align the oversight of our financial sector with emerging risks identified by reputable international organizations like the Organisation for Economic Co-operation and Development, or OECD. While the bill alludes to these risks, including the mention of one specific risk, it leaves room for ambiguity that could potentially pose challenges if legally contested. Furthermore, the absence of an associated budget allocation for this aspect raises further concerns.

Colleagues, climate change represents a significant threat to the integrity and security of our financial sector. CSIS has warned us that climate change could undermine global critical infrastructure, threaten health and safety, create new scarcity and spark global competition and that it might open the door to regional or international conflicts. As we strive to transition to a low-carbon economy and mitigate the risks associated with climate change, it is essential that our financial institutions are well equipped to assess and manage these risks.

The amendments proposed in Bill C-47 acknowledge the importance of protecting financial institutions from various threats, and it is only logical that climate change, with its far-reaching implications, is considered among those threats.

I encourage you to vote in favour of passing Bill C-47 because Canadians need stability and increased trust in our democratic system, but it is up to us parliamentarians to scrutinize and reflect in efficient ways on the expenditure of taxpayer funds.

Thank you. Meegwetch.

[Translation]

Hon. Pierrette Ringuette: Honourable senators, I rise today to speak to a specific section of Bill C-47, the budget implementation bill.

In this bill, division 34 of part 4 amends section 347 of the Criminal Code in order to lower to 35% the criminal rate of interest, in accordance with generally accepted actuarial practices and principles.

As many of you know, this is an issue I have been endeavouring to fix for a very long time, nearly 10 years.