A Canadian constitutional expert weighs in on how the public service could operate while Parliament is in limbo.
In the big picture, federal public servants will continue to operate on “a business as usual” basis following Prime Minister Justin Trudeau’s decision to prorogue Parliament on Jan. 6, according to one of Canada’s leading constitutional experts.
There is still, however, plenty of intrigue about the nuances of running a country with Parliament effectively in limbo until March 24.
“The prime minister will be not be resigning until there’s a new leader,” said Errol Mendes, a law professor with the University of Ottawa. “The government is still in charge. Nothing has changed there. But Parliament has stopped in its tracks. There has to be some interaction between Parliament and the public service.”
The Privy Council Office, which serves to support the prime minister and the cabinet in pushing forward its vision of the country, will play a major role in the next two months, according to Mendes.
In a telephone interview with the Ottawa Citizen, Mendes helped explain some of the intricacies of the machinery of government while Parliament is shut down and what could happen with the 26 bills that have been paused in the process. That includes the “tricky” file involving the Liberals controversial plan to alter capital gains taxes.
Does the caretaker convention apply to prorogation?
When an existing government loses a non-confidence vote and Parliament is dissolved during election campaigns, the public service operates under what’s known as the caretaker convention. Under these rules, the public service operates with “restraint” because of the uncertainty of who will form the next government.
Evening Update
In the case of prorogation, however, the prime minister is still the head of government. The caretaker convention would only kick in during an election campaign if the government falls after a new Liberal leader (and interim PM) is in place and Parliament resumes.
Once the campaign is underway, however, the convention states that “the routine operation of government must be continue and necessary business must be transacted. In the event of emergencies, such as natural disasters, the government must have a free hand to take appropriate action to ensure that the public interest, notably the safety and security of Canadians, is preserved.”
The convention also says decisions involving policy, expenditures and appointments should be “routine”, “non-controversial”, “urgent”, and “in the public interest.”
However, the vagueness of the language opens the door for potential abuses.
“There are going to be political issues at play here,” said Mendes. “One of the very interesting issues is who will be in charge of the departments? If half the cabinet goes for the (Liberal) leadership, who is running their department? Decisions have to be made between the Deputy Minister and the Privy Council about how to co-ordinate a structure around the caretaker rules.”
How will the Canada Revenue Agency navigate planned capital gains changes?
That is the $250,000 question. Last September, the Liberals introduced changes to the way capital gains are taxed. They raised the portion of capital gains taxes on companies to two-thirds from one half. Individuals earning more than $250,000 would also be subject to the tax increase.
The changes were supposed to impact any capital gains realized after June 25, 2024, but Parliament has not passed legislation enacting them.
“There are lots of concerns here,” said Mendes. “Does it get stopped in its tracks? Can the CRA say ‘we’re almost there, let’s go ahead with it’? But you have to have Parliamentary approval to pass a money bill. What happens when a new leader comes in and there’s a confidence vote and an election is called? It could take another couple of months and what happens to the inclusion rate?”
On the afternoon of Jan. 7, though, the Department of Finance signalled that it would go ahead with the new proposed capital gains rules. The Canadian Revenue Agency said it will stop the policy if the new government opts to abandon the planned changes.
“My advice would be to be careful in terms of setting a precedent that can be manipulated or exploited,” said Mendes. “The country is not going to die if the inclusion rates just get stopped until a new government is formed.”
The fate of other significant bills, including the Online Harms Bill and the First Nations Clean Water Act, is also now unclear.
X:Citizenkwarren
