April 24, 1917

LIB
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

widened, as it is a fair matter of complaint on the part of many of those who are already taxed under that Act that there are many other concerns and partnerships which barely fail to qaulify within the Act as taxpayers, but which should be contributing something. In many cases their profits exceed the profits of companies and concerns which are taxed under the Business Profits War Tax Act. It is very hard to answer that criticism because, as the minister himself stated this afternoon, any businessman or concern that is to-day making a profit, is doing so almost entirely owing to war conditions, and therefore, as the minister put it, such profit is fairly a matter of taxation.

I shall not, at the present moment at least, analyse the announcement made 'by the minister this afternoon in respect to additional taxation under the Business Profits War Tax Act. 1 would, however, point out to him that it would have been far better had he last year imposed this taxation under that Act to the same extent as he proposes to do this year, because the profits earned by those liable to taxation under that Act were very much greater last year than they will be this year, or than they will be next year. Many concerns in Canada manufacturing munitions which made large profits last year are not likely to make very much profit this year and are likely to make much less the next year. The minister states that if the war continues, the Government will probably have to make a further levy of taxation upon business profits. The time to secure all you can as a tax on business profits is when the maximum profits are being earned, because it is useless imposing taxation when such profits have practically ceased to be earned. It is in the day of prosperity that he should secure by taxation the maximum amount, and he should not wait until the last days of the war, when the financial conditions of the country will not be as they are to-day, to impose fresh taxation in the hope of securing additional revenue. If he does so, I believe he will fail.

I wish to refer briefly to that portion of our revenue which is secured by taxation upon imports. At the beginning of the war or shortly afterwards, the minister brought into effect amendments to the tarriff, imposing seven and a half per cent surtax upon the general tarriff, and seven and a half per cent upon non-dutiable goods. This application of the seven and a half per cent

tax was made indiscriminately, and I said then and I say now, I am of the opinion that it was not in the interest of the country, nor of the revenues, to have applied the seven and a half per cent tax indiscriminately as he did. In the one case to the general tarriff and in the other by applying it to free goods. Were one to take the time to study carefully the result of the imposition the seven and a half per cent upon the general tarriff, one could, I think, show that it has yielded little or no revenue. I find in the Customs returns for 1916 at page 192 sets forth that the tariff war tax yielded $21,814,000, and I take it that that statement in the Customs returns means that the $21,-

814,000 came from the seven and a half per cent super tax on dutiable goods and the seven and a half per cent tax on free goods.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
CON

Arthur Meighen (Solicitor General of Canada)

Conservative (1867-1942)

Mr. MEIGHEN:

What year was that?

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

The year ended March 31, 1916. I find that in that year free goods were imported to the amount of $254,312,000, and seven and a half per cent on that would yield about $19,000,000, so that it would appear that out of the total revenue of $21,-

814,000 received from this source, $19,000,000 came from free goods and practically nothing came from the imposition of the seven and a half per cent super tax upon imports already dutiable. If that statement be susceptible of any explanation, I have no doubt we shall have it. As a matter of fact, however, I think it was always anticipated by the Minister of Finance that he would get little revenue by reason of the imposition of the seven and a half per cent super tax on dutiable goods, but that he would get a substantial levenue from the imposition of the seven and a half per cent tax on free goods. If it be the case that the imposition of the seven and a half per cent super tax on dutiable goods is yielding little or no revenue, it should be removed, it does not promote trade interests it rather impedes trade. It adds to the cost of articles essential to life to-day, now oppressive in prices, thereby involving a great hardship to the masses of the people.

I submit there should have been some readjustment of the tariff this year, and what more natural than to expect a remission of the surtax of 7i per cent upon the general tariff. Why should it not be removed, in some cases at least? If its imposition was intended virtually to prohibit some classes of imports, which might at present in some cases be desirable, I would not object.. It might be justifiable to continue

the present duties on luxuries. Speaking generally, however, I say that the imposition of the 7| per cent surtax was a mistake in the first place, and I think in justice to the people of this country it should be removed, or modified at least and this would have been a proper time for t'he Minister of Finance to act in that respect.

The Minister of Finance was considering the question of tariffs quite re-5 p.m. cently, from motives of party welfare I have no doubt, and not in the interests of the state, and by subterranean paths rather than by direct routes. I am sure it must have been a veritable Getbsemane for him when the hon. gentleman who now sits at his right hand (Mr. Meighen) returned from the West a few days ago and informed him that he must enter into a reciprocity treaty with the United States. The Government have, in fact, entered into a statutory reciprocity treaty with the United States, terminable at the will of either country, in respect of wheat and flour, which have been so long the subject of discussion in Parliament and the country. If the Government are truthful men, and speak after intelligent consideration of the matters upon which they assume to guide and instruct the public, I suppose now, in view of this arrangement, we must expect Canadian wheat to lose its identity, Canadian east-bound and westbound traffic to be very much injured, if it /does not altogether cease to exist, the flour mills of this country to be ruined and go into the hands of receivers, and this country to become, for a time at least, the back-door of Chicago. Rut if the Government are not true prophets, and the prevailing view in Western Canada is correct, we shall all be benefited temporarily, and later this temporary arrangement will inevitably be made permanent.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

George Perry Graham

Liberal

Mr. GRAHAM:

Under which flag?

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Alexander Kenneth Maclean

Liberal

Mr. A. K. MACLEAN:

I am not going

to say very much about the placing of wheat on the free list, because there are many gentlemen on this side -of the House *who are better informed on that subject than I, and they propose discussing the subject in this debate. I have only one word to say about it. This statutory treaty, was negotiated and put into effect under the War Measures Act. Now, Mr. Speaker, I say that by no flight of the imagination can any man truthfully say that that Order in Council was properly a war measure.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Rodolphe Lemieux

Liberal

Mr. LEMIEUX:

It was a death-bed repentance.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Alexander Kenneth Maclean

Liberal

Mr. A. K. MACLEAN:

It was a political measure prompted by partisan motives almost entirely, I venture to say. It involved an amendment to the tariff of this country. Now, in our Customs Act, we have ample machinery for doing exactly what was done by this Order in Council passed under the War Measures Act. At any rate, Parliament was about to meet; the representatives of the people were soon to assemble in this forum to deliberate on all matters of interest to the country, and in fairness and justice to the people, who are the masters, I say this change in the tariff should have been announced here by the minister. He should have given Parliament his reasons for the change here to-day; the representatives of the people should have heard from his own lips the reasons which prompted him to make this move, so that we could determine whether or not he was justified in making it.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

George Perry Graham

Liberal

Mr. GRAHAM:

His reason for the change is sitting right beside him (Mr. Meighen).

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Alexander Kenneth Maclean

Liberal

Mr. A. K. MACLEAN:

I doubt very much if he had authority under the War Measures Act to pass the Order in Council. I have not given the matter much consideration, though I propose to do so later on, but I doubt very much if the Order in Council is within the spirit of the Act, and I am afraid my hon. friend had no legal [DOT] authority for passing the Order in Council. Indeed, I doubt very much whether the United States will accept the Order in Council as the equivalent of placing wheat and flour on the free list. I doubt if in the end they will permit our wheat and flour to enter the United States duty free. It is certainly not within the spirit of the conditions contained in their tariff Act. I doubt whether the proper authority in the United States responsible for rulings on tariff questions will consider this Order in Council as placing Canadian wheat and flour on their free list in the sense intended by the United States Tariff Act. However, this matter will be discussed later on. I assume that hon. gentlemen opposite consider that the passage of this Order in Council will result in some benefit to the producers of wheat in western Canada. I assume they had that in mind when the Order in Council was passed, although not so much as they had in mind party considerations. But if they thought it would benefit the West, why was not the Order in Council passed last

autumn? Would iit not have done more good then than to-day, when last year's production has been largely disposed of, (although no doubt a considerable portion of the crop is still held in the West. But if it was a good thing to do at the beginning of the seeding season of 1917, would it not have been a better thing to do at the beginning of the harvest season of 1916? Will the Minister of Finance or has colleagues explain upon what grounds the Government refused to place wheat and flour on the free list in August or September last, when it was urged just as strongly then as now? How long does the Government expect that this Order in Council shall remain effective? Do I understand the minister and the Government to say that as soon as the war ends this Order in Council becomes void?

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

The Order in

Council has precisely the same effect as an Act of this Parliament.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

We understand one another, I think. When the war ends the Order in Council ends.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

No, the effect of that Order in Council is to place wheat, wheat flour, and semolina on the free list, and they remain on the free list until a change is made by or under the authority of Parliament.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

I am glad to have that as the opinion of the Minister of Finance. I suppose it is the view of the Government. But from the proposition stated by the minister I entirely dissent.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

If the hon. gentleman wishes, I can give him the opinion of the Deputy Minister of Justice, whose opinion is entitled to some weight.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB
LIB

Wilfrid Laurier (Leader of the Official Opposition)

Liberal

Sir WILFRID LAURIER:

Does the minister say that these articles can be removed from the free list only by the authority of Parliament?

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

Wheat, wheat

flour, and semolina have been placed on the free list by Order in Council, which Order in Council has precisely the same authority as an Act of Parliament.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
LIB

Wilfrid Laurier (Leader of the Official Opposition)

Liberal

Sir WILFRID LAURIER:

So far, so good.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

The effect of

that Order in Council remains until some other disposition of the matter is made by or under the authority of this Parliament.

Topic:   THE BUDGET.
Subtopic:   ANNUAL STATEMENT BY THE MINISTER OF FINANCE.
Permalink

April 24, 1917