Senate growing powerful

In last week’s report, I referred to the emerging new dynamic in Ottawa as the increasingly more independent Senate is interfering with the Liberal Governments Parliamentary agenda.

While most of the local response was supportive of the Senate reviewing and amending legislation they believe to be flawed, there are certainly some who oppose any intervention from an unelected Senate over bills passed in a democratically elected house.

The primary issue I raised was the Liberal government's proposed use of an escalator tax that would be levied on most wine, beer and spirits sold in Canada. Under an escalator tax, essentially the tax rate is increased every year and is set by civil servants linked to inflation as opposed to having to come before the House for debate in the annual budget.

As I also speculated last week, despite considerable effort by the Liberal government to the contrary, the Senate did indeed vote to amend the Liberal budget bill and removed the escalator tax.

What happens next?

Once the Senate amends legislation, it must then be sent back to the House of Commons where the Liberals have already stated they will reject the amendment made by the Senate and insist on the inclusion of the escalator tax in the budget bill.

This, in turn, has the potential to send the re-amended bill back to the Senate where it could potentially be amended again, thus creating a legislative standoff. At this point, it is unclear what the outcome will be however many eyes in the Ottawa bubble are focused on this topic.

From a parliamentary aspect, it should not be overlooked that the idea of removing senators from caucus to sit as independent senators was championed and done by Prime Minister Justin Trudeau.

In that respect, some observers point out that this problem is one of the Liberal's own creation. However a closer inspection reveals that the independent senators appointed by the PM have actually voted in support of Liberal government bills close to 95 per cent of the time.

In reality, it is former Liberal senators now sitting as Independent Liberals and Conservative senators who more frequently vote against Liberal legislation.

One point that all Ottawa pundits do agree on is that the greater independence of the Senate has ultimately created a more powerful Senate.

This is a point that has not been lost on Ottawa lobbyists either.

Recent lobbyist registry data shows that senate lobbying has increased dramatically. In fact, senators were lobbied more in 2016 than any other year in history with close to 700 interactions recorded.

In 2015, the last year the former government was in power, this number was 217.

Although most citizens I have heard from support the senate’s current efforts to stop the escalator tax, there may well come a time when the senate stages an intervention on a democratically passed bill that the public may be supportive.

I welcome your comments on this or any subject before the House. I can be reached at [email protected] or call toll free at 1-800-665-8711.


Senators corking wine tax

In my May 25, 2016 MP Report, I wrote:

“If you have been following our Canadian Senate, you may know that a recent effort has been underway by the Liberal government to appoint senators who are considered independent as they are not political members of the Liberal caucus.

"More recently senators have also been appointed by the prime minister with the benefit of being selected by a panel of appointees who, in theory, are selecting citizens without political considerations being part of the criteria.

"These recent Senate reform efforts have also resulted in a number of senators who were formerly affiliated with party caucuses to resign and also sit as Independent members of the Senate. The end result is that there are now more independent senators and a different structure in place from a political perspective than had existed previously.”

I also observed “that all eyes will be on the Senate for more reasons than usual.” And one year later, more so today, that is precisely what is occurring in Ottawa.

Why do I mention this?

Recently, I wrote about escalator taxation that was being introduced by the Liberals. Escalator taxation is when a tax will increase every year by default at the rate of inflation that would not be annually determined or debated by members of Parliament.

In this current case, the tax escalator would be set on most beer, wine and spirits sold in Canada along with user fees in other areas.

This is a slippery slope that if left unchallenged may lead to other taxes also quietly receiving annual escalators set by unelected department officials in Ottawa.

Reaction to my report on this subject was overwhelming with many concerns expressed and strong opposition.

Comments such as “taxation without representation” were common and some pointed to the loss of many well-paying jobs when the former Hiram Walker plant near Kelowna shut down, the last time an escalator tax was applied to spirits in Canada.

I mention these things because a number of senators have decided to stage an intervention and seek to potentially amend the Liberals' budget bill in the Senate to stop the use of escalator taxation.

As one senator describes it: "If the government wants to increase the excise duties on alcohol, which is completely legitimate, then it should do so manually every year, in every budget. Automatic increases don't take into account the state of the economy."

While many welcome this potential intervention by the chamber of “sober second thought” and point to this as a reason why the Senate exists, others are quite strongly opposed.

Those who disagree have expressed concerns that an un-elected Senate has no business amending legislation put forward and passed by a democratically elected House.

What are your thoughts on this topic?

Should senators intervene in what they view as flawed legislation or as they are unelected and unaccountable should they refrain?

I can be reached at [email protected] or call toll free at 1-800-665-8711

Canada muscling up?

Canada plans to get more muscular.

The Liberal government has announced a new defence policy for Canada. While details are still being revealed, here is some of the information that has been released.

It is proposed that annual operational military spending will be increased from $18.9 billion in the current fiscal year and will rise to $32.7 billion in the 2026-2027 budget.

Part of this increased spending means that 3,500 more military personnel can be added to the total regular force size that will be increased to 71,500 troops.

In addition, it is also proposed to make significant upgrades to Canada’s military hardware. The current CF-18 jet will be replaced with 88 yet to be named replacement jet fighters.

It is also proposed to add remotely piloted attack aircraft, often referred to as drones although the exact number has yet to be announced.

It is also proposed to either upgrade or replace many existing aircraft such as the CC-150 Polaris, CC-138 Twin Otter and CP-140 Aurora. Air to air missiles, communications and radar systems are also proposed for modernization.

Part of the equipment upgrades will also apply to the Canadian Navy as it is proposed to add 15 new surface combat ships and two joint supply ships.

Five to six Arctic patrol ships have also been proposed including more modernization for the current four Victoria class submarines. Weapons such as torpedoes will also be part of the upgrade effort.

Vehicles, weapons, cyber capabilities and even space capabilities will also be included in the modernization and expansion efforts.

This is only a partial summary of a fairly extensive proposal.

From my perspective, there is little dispute that our Canadian Forces are in serious need for upgraded and modernized capabilities.

We have an outstanding group of Canadians who serve in our armed forces and they deserve the tools necessary to serve the interests of Canada both at home and abroad. 

I do, however, have some concerns with this proposal.  As a significant amount of purchases will be required having an efficient and effective procurement process will be vitally important.

To date, federal governments of all political stripes have long struggled with implementing an effective procurement process and this area will in my view remain a challenge.

My other major concern is the obvious. How does this ambitious plan get paid for?

As is the case with most announcements from this Liberal government, the spending is typically back loaded with little spending now and the majority schedule to occur after the next election and is imposed on future governments who might not support these initiatives.

At the same time, the Liberals have not announced where this significant amount of money to pay for it will come from.

Given that the Liberals are currently running deficits significantly larger then promised and refuse to present a plan when they will return to a balanced budget it is unclear if this spending will result in even more debt or if taxes are going to be significantly increased.

Canadians deserve to know these details.

I welcome your comments and questions on the new Defence Plan or any matter before the House of Commons and can be reached at [email protected] or call toll free at 1-888-665-8711.


Tax escalator under scrutiny

One event that seldom gets much media coverage outside Ottawa is committee stage review.

Basically, once a bill has passed to second reading in the House of Commons, it will come before the appropriate parliamentary committee for further scrutiny. That examination often involves hearing from affected stakeholders and expert witnesses.

This closer scrutiny by parliamentarians may often reveal a much greater level of detail that can illustrate areas of concern.

Recently, at the Finance Committee, an example of this occurred during scrutiny of the Liberals omnibus legislation related to the Budget Implementation Act.

More specifically, the Liberals promise to raise taxes on most beer, wine and spirits by two per cent in the upcoming budget was examined.

Upon further investigation, it was revealed that the proposed legislation calls for this increase in taxation to occur every year, rising with the rate of inflation.

Why is that a problem?

Ultimately, there is an expectation that any proposed tax increase or decrease must be signed off on by the Minister of Finance so it can be fully debated and scrutinized in Parliament.

In this situation, this tax would increase every year by default at a rate of inflation that would not be determined by a democratically elected member of Parliament.

To some, this may not be a concern, but others view it as a slippery slope that if unchallenged might lead to other taxes also quietly receiving annual escalators set by unelected department officials in Ottawa.

In this case, the Department of Finance estimates this proposed tax escalator may well raise roughly $470 million over the next five years so it is not an insignificant amount of money that may also adversely impact Canada’s producers of these related beverages.

There is also a possible Okanagan connection as currently 100 per cent Canadian produced wine is exempt from this tax. However, the proposed increase in tax onto imported producers products may be subject to a trade challenge that could threaten the current domestic tax exemption.

From a historical perspective, the last time an annual escalator tax was used in Canada was under the Liberal government of Pierre Trudeau.

Already I am hearing concerns from industry producers however as most citizens are not aware of the proposed use of escalator taxation the feedback locally has been minimal.

My question this week relates to the use of escalator taxation.

  • Is escalator taxation something you support as an efficient means for government to raise revenue or should all proposed increases or decreases in taxes be contained and debated in a related budget?

I can be reached at [email protected] or call toll free at 1-800-665-8711

More Dan in Ottawa articles

About the Author

Dan Albas has been a Penticton resident since 1981. After attending Okanagan University College, he chose to move into small business where his company Kick City Martial Arts has flourished, training hundreds of men, women and children to bring out their best. For his work on child safety and awareness, Dan was the recipient Penticton’s 2005 Young Entrepreneur of the Year award.

Dan and his wife, Tara, reside in West Kelowna, where they raise their four daughters.

He has served as campaign chair for the United Way of the South Okanagan-Similkameen in 2006-07 and 2010-11, both times surpassing their fundraising goals.

As a community leader, he was elected to Penticton City Council in the 2008 municipal elections, where, as a first time candidate, he won with 5,656 votes, topping the polls. Through his work as a city councillor, Dan has proven himself to be a strong constituency worker delivering results and standing up for what he believes in. Dan took a leading role on public safety by proposing aggressive panhandling and dog control bylaws; he proposed a review that greatly helped his community to balance the books and to focus on core services by eliminating wasteful or unnecessary spending. His Penticton Politics website blog has offered new ways for constituents to communicate on important issues.

On June 28 of 2012 Dan became one of the first MP’s in recent history to have a Private Members Bill (Bill 311) C-311 become law with the unanimous all party support of both the House of Commons and the Canadian Senate.  Bill C-311 “An Act to amend the importation of intoxicating liquors Act” amended a prohibition era law to prevented the free trade of wine over provincial boarders.

Dan is honoured to serve the residents of Central Okanagan-Similkameen-Nicola as their Member of Parliament. He has made good on his commitment to establish a personal blog with his http://www.danalbas.com/mp-report site, where he chronicles his activities as the Member of Parliament for Central Okanagan-Similkameen-Nicola.

Dan welcomes your input, so please contact him by e-mail, phone or mail. He can be reached at:

Central Okanagan-Similkameen-Nicola's MP office

2562-B Main Street
West Kelowna, B.C. V4T 2N5
Email: [email protected]
Phone toll free: 1.800.665.8711
Fax: 250.707.2153

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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