May 20, 1921

CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

There is no

change in regulation, though there is a change in the rate of tax. Last year I was scolded for taxing the poor man's medicine which was made by these very manufacturers; this year I am trying to get away from that and to make the poor man's medicine cheap. Unfortunately there are some chemists who still make up their own alcoholic preparations, and it will cost them just so much more under thns provision. If there is any suggestion my hon. friend has to offer by which the matter could be worked out to better advantage I would be most happy to consider it.

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L LIB

Joseph-Éloi Fontaine

Laurier Liberal

Mr. FONTAINE:

(Translation.) Mr. Chairman, I understand very well the reasons set forth by the hon. Minister of Finance. While I recognize the advisability of protecting the large manufacturing concerns, I do not see why it should be necessary to mqke such a big difference in rates as that between $2.40 and $9. I know that patent medicines are of advantage and are greatly appreciated in the country districts where there are neither chemists nor doctors; but it is not fair to compel three or four thousand druggists to pay a tax of $9, when their competitors, the manufacturers of patent medicines, have to pay only $2.40. It may be a somewhat intricate question, but it seems to me that the hon. minister with his ability in providing for taxes and his experience, should find a means not to so discriminate against druggists. The Government is protecting about thirty large manufacturing concerns at the expense of four thousand chemists. But

CSir Henry Draj

these chemists are not the only people to take into consideration. It is a well known fact that the chemist is not the party who will pay the increased tax on alcohol. He will simply increase the price of his products and it is the consumer, the sick person who goes and gives him the doctor's prescription who will have to pay for the difference. Instead of paying $1 for a bottle of medicine, he will be charged $1.50 or even $1.75. It is always the same old way of protecting a few privileged ones and not those who ought to be protected. Baptiste is always there to pay. The opinion expressed by the hon. leader of the Opposition that the consumers should be protected applies very well to this case. They are always protecting the manufacturer, always favouring a special class, and always calling upon the mass of the people to give out their money.

It does not befit me to tell the minister how he should arrange his taxation, but I venture to call his attention upon an anomaly which entails a very serious injustice. The chemist is called upon to pay the tax, but the ultimate sufferer will be the consumer. It is not reasonable and since taxes have to be imposed, they shou:d be distributed ar fairly as possible among all the people. Let there be no privilege and if the rate must be fixed at $9, let everybody pay that rate. If it is possible to make an exception for some, let us maice it for all, in order that everybody be treated alike.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

I think the hon. gentleman says that there are about 4,000 retail druggists and 30 wholesale druggists in Canada. Would he, being a doctor, know how much alcohol the ordinary druggist uses in the preparation of medicines?

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L LIB

Joseph-Éloi Fontaine

Laurier Liberal

Mr. FONTAINE:

(Translation.) I could not give the figures, but to-day, a chemist told me that he bought large quantities of alcohol, having to prepare all his drugs and all his elixirs and that he will have' to stand the adverse competition of large manufacturers who are not called up'on to pay this tax.

Once again, Mr. Chairman, I am unable to give you any figures, being no chemist, but a doctor; however, I understand that to-day chemists are using a great deal of alcohol because they cannot afford to buy all their products in a manufactured state on account of* competition.- They manufacture tfheir own products and this is why they use such a large quantity of alcohol.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

I wonder if the hon. member for Inverness (Mr. Chisholm) could tell the committee how much alcohol is used generally by the ordinary druggist in filling prescriptions of medical preparations?

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L LIB

Alexander William Chisholm

Laurier Liberal

Mr. CHISHOLM:

The minister has given me quite an order. As regards my practice,! I buy my drugs from the manufacturers, but we use a large quantity of alcohol for other purposes besides medical preparations. Large quantities are used for experimental purposes. The minister has given a very commendable concession to hospitals. I have not a hospital in my county; we need alcohol every day in very substantial quantities for purposes that he quite understands, and we have to pay the high figure for this alcohol, while those who are better off can go to the hospitals and enjoy cheap alcohol. The manufacturers also get this concession.! Personally, I do not manufacture drugs, and my knowledge of what goes on in the drug stores is limited because I buy my drugs from the manufacturers. I am sorry if I have not given the minister very much information.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

I am very

much obliged to the hon. gentleman. Could he help us further? He says that this is a first-rate thing to do for the hospitals. Could he suggest any way in which the doctors could be similarly placed to the druggists?

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L LIB

Alexander William Chisholm

Laurier Liberal

Mr. CHISHOLM:

I suppose by extending the same privilege to the doctors and druggists as the minister is giving to the manufacturers.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

The manufacturers are put under regulations and bond.

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L LIB

Alexander William Chisholm

Laurier Liberal

Mr. CHISHOLM:

What are the conditions under which the manufacturers get this privilege?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

They are

under bonds, and regulations, and the department also appoints men for the purpose of overseeing every single thing the manufacturers do, seeing that they do not use the alcohol for any other purpose. They have to pay all expenses of that supervision.

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L LIB

Alexander William Chisholm

Laurier Liberal

Mr. CHISHOLM:

Is it the privilege of the manufacturer to sell the alcohol to the druggist for the same price when it is to be used for this purpose?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

This special price is merely for the purpose of manufacturing these medicinal preparations which are supposed to be proper and essential to health.

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UNION

John Alexander Stewart

Unionist

Mr. STEWART (Lanark) :

It might be inferred from the discussion that, under the provisions that are here made, there was a conflict, between the manufacturer and the retail druggist. As I understand the matter, no provision is made in the resolution in favour of the 10 p.m. manufacturer. There is a provision permitting the sale of alcohol at $2.40, for a purpose, without reference to who uses it for that purpose. The manufacturer has no concession that is not available to any one, a doctor or a druggist, who takes advantage of it in the way that is provided in this resolution.

The difficulty, as I understand it, is to protect the Government iri the use of $2.40 alcohol as against $9 alcohol for beverage purposes. So far as I understand the posh tion of the manufacturing pharmacists, they would be delighted to secure alcohol at $2.40, but as I understand the department's position, it is that all who use the alcohol for the purposes of the exemption set out in the Act must do so under Government control. If there is to he an exemption provided, and alcohol is permitted at $2.40 a gallon, the department feel that they must follow it from the point where it issues, in the Inland Revenue Department, to the point where it is used for the purpose for which the lower duty was granted.

The point I want to emphasize is that there is no provision in the Act in favour of the manufacturer as against the retailer. In the last analysis the difficulty is that the retailer may be operated against for the reason that he may not be able to use sufficient alcohol to pay for the supervision which the regulations that will be drafted under the Act will in all probability require. There is really no difference in principle between the conditions that will exist under this provision in the law and the conditions that have existed heretofore. Manufacturing pharmacists have been obliged to manufacture under Government control for years, for the reason that in manufacturing in bond, non-potable alcohol was permissible, and has been for years-not permissible for the manufacturer, but permissible for any one who manufactured it for the purpose, and who was in a proper position, both with regard

to the equipment of his premises, and with regard to manufacturing a sufficiently large quantity to justify the Government supervision. The regulations of the department have always provided that the personal supervision of the Inland Revenue officer had to he paid for by the party who was using that service. The point I want to emphasize is that so far as the manufacturer and retailer are concerned there is absolutely no conflict of interest, but there may be an operation that will place the retailer in a less favourable position than the manufacturer. That is only as a result of the fact that for reasons whieh he may or may not be able to control- the volume of his business, for instance- the provisions here may operate against him.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

My hon. friend has

stated the matter very fairly, yet the law will' work out in this way, that the large manufacturer will gdt his alcohol at $2.40, while., the druggist will have to pay $9. Now that is a striking fact. I grant you that it arises out of the condition of bonding regulations. We can all understand that a large manufacturer may be able to afford the expense of a bonding system which the smaller man cannot afford. May I ask the Minister of Finance at what rate the druggists are getting their alcohol to-day?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

Why increase that to $9?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

Their rate

was a general rate before. It has to be a general rate unless the Government keeps its hand on that alcohol from start to finish, until the Government sees that it is put to the purpose for which the lower rate of duty is thought to be advisable.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

I quite appreciate the difficulty which my hon. friend has. On the other hand, it is worth remembering that the druggists as a class-there are exceptions; there are even bad politicians- are a fine type of men. They are all licensed by their respective provinces. The medical men of this country also, I say it to their honour, are almost invariably men of high class. Onlv rarely will you find a medical man who re prepared to abuse the law and issue a lot of prescriptions for alcohol for beverage purposes, but these, after all, are the exception. The great mass of the medical men and druggists are law-abiding citizens who will try to meet the regulations, and I think the minister should

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devise some means of making the tax lower. I am not able to suggest at the moment just what it should be, but we have the striking fact that the large manufacturer is getting his alcohol for $2.40 while the druggists and doctors who undertake to put up medicines are paying $9. That is a condition which the public generally will think ought not to exist. I do not venture to suggest any change, but I think the minister ought to devise some means of making the tax lower. I think he could trust to a very large degree both the druggists and medical men. I grant you that once in a whole druggists may abuse the law. I have seen cases where medical men have issued a volume of prescriptions under the Ontario and Nova Scotia temperance laws, which made it clear that they were abusing the law, but these, after all, are the exceptions, and we must not make regulations to deal with exceptions. We should try to adapt them to the general conditions of the country. I do not believe that the average medical man and the average druggist needs as much watching and such an expensive bonding system as my hon. friend is going to impose upon them.

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UNION

John Alexander Stewart

Unionist

Mr. STEWART (Lanark) :

I am in entire accord with the hon. member for Shelburne and Queen's (Mr. Fielding) in everything he has said. I want to go a little further, and say this. There is no more reason why the alcohol that goes into the manufacture of a medical preparation- I do not care whether it is manufactured by a druggist, a large manufacturer, or a retailer, or whether it is compounded by a doctor-should be taxed any more than any 'other ingredient in that preparation should be taxed. If it is properly medicated, it should not foe taxed at all. The fact is that alcohol entering into the manufacture of medicinal preparations has been taxed all during the years simply as a result of the fact that alcohol was also available for beverage purposes.

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May 20, 1921