Wednesday, March 19, 2008

History is where you find it, even in Report on Business

Neil Reynolds, the well-informed paleo-capitalist in the Report on Business, muses today in his column about the constitutional significance of Dan McTeague's recent private member's bill to make educational savings tax-deductible. Reynolds observes that in the parliamentary tradition, the introduction of money bills has long been a prerogative of the cabinet, and that parliamentary government can hardly be carried on on any other basis.

It's an interesting argument, and historical discussion in the RoB needs to be savoured whenever found. Reynolds ponders parliamentary precedents set down in the day of good Queen Anne and observed in Lord Durham's report and the British North America act.

Reynolds is on to something important, but he takes his point a mile too far. He seems to think that the money-bill principle authorizes the cabinet to override the legislature -- a most unparliamentary notion. (Indeed, he calls for all involved in McTeague's bill to be haled off to some kind of monarchist Gitmo.)

The government does have a monopoly on the introduction of money bills, but it enforces that monopoly by confidence. If the house takes steps that may cost money, the executive can make it a confidence motion. And if the executive lacks the confidence of the house, the money matter is moot anyway -- the executive will have to go.

Reynolds misstates the Canadian experience in the 1830s. It was because the executive in Canada in those days was exempted from needing the confidence of the legislature, that the legislative members, unable to throw out or control bad cabinets, had to resort to acting like a cabinet themselves, directing the spending of the tax money they alone could raise. Responsible government in 1848 cured for that problem, by establishing the government's accountability.

Confidence eventually took care McTeague's bill. Had the government being paying attention, it could have stopped the bill at its introduction. Instead it missed the whole thing and had to invoke confidence at a second go-round. Once again, rumours of a constitutional crisis are exaggerated; the parliamentary system is an old and supple one, and has dealt with most of these problems before.

Still, a column worth reading.

Late update: Today March 20 in the Letters column, Dan McTeague offers his own correction. It was never a money bill, and did not fall under the constitutional provision. But it still seems to me the confidence test remains the vital one.

And Later: Neil Reynolds took up the same subject in a second column Friday, March 21 -- and a third on March 26 (find 'em at My text above has been corrected: he's Reynolds, not McReynolds.
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