May 20, 1921

UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

We have cured that

now by legislation.

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UNION

John Alexander Stewart

Unionist

Mr. STEWART (Lanark) :

In theory,

perhaps. What I rose to say was that the whole thing to-day is a matter of control, and there is no reason why the control could not foe put upon a basis that would make it available for people who did not require as large a quantity of alcohol as some other people. That is all a matter of control. If the Government can be protected in the use of alcohol,

there is absolutely no argument that I know of that can be advanced against the retailer, the druggist, or the physician who compounds his own medicines, getting alcohol at $2.40, just the same as the man who manufactures it in quantities sufficient to enable him to go to all this expense that is now necessary for the purpose of carrying out the regulations of the Government. It is entirely possible, and I would suggest to the minister that the regulations might be worked out in a way that would be advantageous to all who compound medicines legitimately, and at the sametime protect the Government, because, after all, that is the only question at issue.

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UNION

Robert James Manion

Unionist

Mr. MANION:

In order to clear up the point, I may say a word as one who has practised medicine for quite a few years. The vast majority of druggists or pharmacists buy their medicines ready made up. I am speaking more especially of druggists and pharmacists in Ontario and the West. They buy their tinctures and elixirs, as mentioned by my hon. friend from Hull (Mr. Fontaine), ready made up from the large manufacturing chemists, such as Wampoles, Parke Davis, and various other firms. So that in a great number of cases, particularly in Ontario and the West, the druggist does not compound his own elixirs or tinctures, because the manufacturing chemist can make these preparations much better and more cheaply, and in a more palatable form than can the druggist. Regarding the doctors who prepare their own prescriptions and dispense them, as stated by my hon. friend from Inverness (Mr. Chisholm), there are a few who will be touched to a certain extent in this respect, but I think that even my hon. friend from Inverness will admit that for most of his medicines he imports his tinctures and elixirs ready prepared. I think I am correct in that. The hon. member signifies his concurrence in the statement. Most doctors in the cities do not dispense their own medicines, but my hon. friend and others who do so, import their own elixirs and tinctures ready prepared, so that these. preparations which go to make up the medicines they would dispense would not be touched. They would not have to pay on them; they escape the tax by buying from the manufacturing chemists. As my hon. friend from Inverness states, there is an occasional case where a_ doctor might wish to give whisky as a stimulant, or might prescribe alcohol for rubbing purposes. That is a case where no doubt those who dispense their own

medicines would be interfered with. And the'same thing applies to druggists selling alcohol for rubbing purposes. I should think it would be a very difficult thing to make a law which would protect the Government and the people against any infractions of it, not so much because the doctors or the druggists would seek to break the law, but because, as occurs in the prohibition parts of the province from which I come, men are continually coming and asking for a bottle of alcohol. Foreigners particularly come and ask for a quart of alcohol, and when they are asked for what purpose the liquor is wanted, they say it is for rheumatism, for rubbing the joints, and so forth. As a matter of fact, before prohibition came into force, I cannot recall any foreigners coming and asking for a prescription for a quart of alcohol for rubbing purposes.

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L LIB

Jacques Bureau

Laurier Liberal

Mr. BUREAU:

It is wanted for rubbing inside.

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UNION

Robert James Manion

Unionist

Mr. MANION:

I give that as an illustration of the way in which the law is infringed, not because doctors purposely give prescriptions to persons who want the liquor merely as a beverage, but because men succeed in getting these prescriptions for application and use the alcohol for drinking purposes. The vast majority of doctors and druggists in Ontario and the West buy their tinctures and elixirs ready prepared from the manufacturing chemist, and this tax will not apply to them, with one exception suggested by my hon. friend from Inverness, in the case of giving alcohol for rubbing purposes, in connection with which there may be a disability imposed upon certain people.

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UNION

Matthew Robert Blake

Unionist

Mr. BLAKE:

The point raised by the member for Shelburne and Queen's (Mr. Fielding), has not so far been dealt with, and that is that chemists and druggists should have some better rate than $9. I was speaking to a druggist in the city who makes up his own tincture of iodine, and I learned that he uses one gallon per month. He will be precluded from doing that and will have to buy tincture from the pharmaceutical houses. I do not know that that will make much difference. The pharmaceutical manufacturer can get alcohol for $2.40 a gallon, and the druggist has to pay $9, so that he is precluded from doing any manufacturing whatever. I do not see any way by which you can overcome this difficulty. If you legislate so that what the druggist uses for manufacturing purposes will be charged excise at $2.40,

and what is required for beverage and rubbing purposes will be charged at $9, it . will be impossible to collect the tax. It would simply resolve itself into either giving the druggists the same rate as is charged at present, or a lower rate, or else the flat rate of $9 for all they use. If you say that what is used for manufacturing purposes will be charged at $2.40, some druggists would say that all of the alcohol used was for manufacturing. As the member for Lanark (Mr. Stewart) says, they would put in some tincture of gentian or medication, and say that they used the alcohol for manufacturing purposes. As I say, it resolves itself into the question whether the druggists shall be given a rate of $2.40, or an intermediate rate, or whether the rate shall be left as it is. In the West-I speak particularly in regard to Manitoba-alcohol is not obtainable by the public, except on a doctor's prescription for drinking or application. Practically all the alcohol handled in Manitoba is therefore obtained through the prescriptions of doctors, who can prescribe only'12 ounces. Of course, it all comes through the Government vendor and the revenue could be charged on it through the vendor. In Manitoba, the alcohol used for beverage purposes is all bottled before it leaves the Government vendors, but in regard to the other alcohol handled by the druggists, I think it would be only reasonable to leave the rate at $4.40.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

I am sure the Minister of Finance is as desirous as any of the ' rest of us to make the taxes reasonable. The druggist is now paying $4.40. What is the matter with the present regulations? If the present rate is sufficient, why increase it?

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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 druggist pays $4.40 in the open market. If we had never raised the duty from $4.40 to $9 the question would never have come up, except in regard to patent medicines, which it was claimed did not show a profit in the year's business, ^nd the prices of which had to be largely increased. We have the right of making regulations which will enable the law to be properly carried out, and if there is any possible way in which this matter can be satisfactorily adjusted, I shall be happy to consider it. At the moment, I confess that I cannot see that there is anything better than the present proposal.

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L LIB

Joseph-√Čloi Fontaine

Laurier Liberal

Mr. FONTAINE:

(Translation.) I think that the suggestion made by the hon. member for Queen's and Shelburne would be the

best. The rate of $9 per gallon which it is proposed to ask of the druggist is out of all proportion to the rate of $2.40 per gallon which is asked from the manufacturer. It seems to me that there should *be an intermediate rate and that the duty of $4.40 which prevailed in the past should be considered as quite sufficient. I realize that the manufacturer has to go to some expense for the putting up of a warehouse and to pay the cost of a government inspector, but even taking such expenditure into account* I think, that there is too great a margin between what he has to pay and the amount of $9 which is required for a druggist. We should adopt a middle term and leave the tax as it is. A druggist is a graduate, an honoured and conscientious man, as well as a physician. We should rely on his good-will and moral sense. Because the manufacturer uses a great deal more of alcohol than the druggist, it is not a reason why the latter should be called upon to pay a heavier tax.

It is not for me to devise the best form of taxation, but the Minister of Finance, who is thoroughly posted on that subject, should be able to settle that difficulty in such a way as to do justice to all parties. This change of rate is certainly a great injustice done to the retailer and as I said a moment ago, it is not the retailer who will pay the tax, but the consumer; it is the public who will be called upon to pay. We pay enough taxes without enacting any for the benefit of a special class. Before this resolution is adopted, I would ask the hon. Minister of Finance to devise some means of doing both parties justice.

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L LIB

Jean-Joseph Denis

Laurier Liberal

Mr. DENIS:

I notice that in the case of spirits manufactured in Canada a duty of $9 is imposed on every gallon of the strength of proof by Sykes' hydrometer, and that on spirits imported there is a duty of $10 a gallon according to the strength of proof. Is the gauge used to measure the alcohol which is manufactured in Canada different from that which is used to gauge the imported 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:

No the

method is the same.

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L LIB

Jean-Joseph Denis

Laurier Liberal

Mr. DENIS:

I wish to place myself on

record as being opposed, generally speaking, to the increase of duties on alcohol. Formerly the duty on alcohol was $2.40 a gallon. Last year it was raised to $4.40, and this year it has again been raised to $9 in the case of alcohol manufactured in Canada and $10 when it is imported. I have particu-

lar reference to. the alcohol manufactured in Canada, and it seems to me that the imposition of such a heavy duty is based upon a wrong principle. It means tl^t the people of this country will be penalized by being called upon to pay a stiff duty on using that commodity, if alcohol can be called a commodity. The true economic principle is to apply taxation as fairly as possible to everybody. In this case the Government chooses for taxation a particular class of people who are making use of alcohol, and penalizes them by the imposition of an extraordinary tax which nobody would have ever thought of a year or two ago. I am not speaking in defence of alcohol. I am not saying that it should be consumed, but my point is this: If the use of alcohol is to be allowed in this country then people should not be penalized to such an extent because they use it. On the other hand if alcohol is to be prohibited a different measure should be adopted other than the imposition of an exorbitant duty. We must bear in mind the fact that the use of alcohol is either good or bad. It is not very long ago I read an article in a scientific newspaper under the caption of "Is Alcohol food?" the article was being devoted to a discussion of a question of whether or not alcohol is a food. Some people are very strongly opposed to the use of alcohol but the Government permit its importation and therefore take a neutral stand-if I may so express it-on the question; they leave the matter entirely in the hands of the Provincial Governments. The Federal Government, not being opposed to the use of alcohol, should not impose on it such enormous duties; it is an absolutely false principle in economics. We all know that great quantities of alcohol have been imported within the past few weeks and distributed throughout Canada, including the province of Ontario. It was only a few days ago I read that 5,000 cases of alcohol were going into the city of Toronto every day. I would not go the length of offending the minister by suggesting that possibly there may have been a "leak", for I do not think the news was known a minute before it was announced in this House. The reason alcohol was imported in such great quantities by people in Ontario was no doubt by reason of the referendum last April, but in the meantime rich people in that province, to say nothing of people in other provinces, have had the opportunity of filling their cellars with cheap alcohol on which they paid a duty of only $5 per gallon. What I have said about the importation of alcohol is only incidental. The principle is wrong in so far as it imposes on a particular commodity or a particular beverage an enormous duty absolutely out of proportion to duties imposed on other beverages and commodities, and thereby strikes a particular class of the community very severely by forcing them to pay more money to the treasury than other classes who do not make use of those beverages or commodities.

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Amendment agreed to.


UNION

Michael Steele

Unionist

The CHAIRMAN (Mr. Steele):

Shall I report the resolution?

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L LIB

Jean-Joseph Denis

Laurier Liberal

Mr. DENIS:

Mr. Chairman, before the resolution is reported, I have been looking with a great deal of anxiety to the clock which I am now facing on the Government side, and which is marking at the present time 7.15.

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L LIB
L LIB

Jean-Joseph Denis

Laurier Liberal

Mr. DENIS:

Perhaps the difference in time may be attributed to the fact that the clock is on the Government side of the House and the Government is behind the times. But I am not forgetting the fact that we left the House at six o'clock this morning, and therefore I respectfully suggest to the minister that after this resolution is passed we should adjourn.

Resolution reported, and concurred in.

Sir Henry Drayton moved for leave to introduce Bill No. 200 to amend the Inland Revenue Act.

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Motion agreed to, and Bill read the first time. ,


WAYS AND MEANS-SPECIAL WAR REVENUE ACT


The House again in Committee of Ways and Means-to consider the following proposed resolution.-Sir Henry Drayton.- Mr. Boivin in the Chair. Resolved, that it is expedient to amend The Special War Revenue Act, 1915, as amended by Chapter 71 of the Acts of 1920, by striking thereout sections 19BB and 19BBB, the several enumerations of goods respectively, and the several rates of excise taxes specified therein, and to provide that the following sections he substituted therefor:- 19BB. (1) The following excise taxes shall be imposed, levied and collected on the articles hereinafter specified, namely:- (a) A tax on playing cards for every fifty-four cards or fraction of fifty-four in each package,-when selling at twenty-four dollars or less per gross packages, eight cents per pack; when selling in excess of twenty-four dollars per gross packages, fifteen cents per pack;


May 20, 1921