June 2, 1921

UNION

Samuel Francis Glass

Unionist

Mr. GLASS:

I did not quite catch the question. Members of Parliament are allowed their travelling expenses. The railway transportation itself is no expense; "travelling expenses" include sleeping car, dining car, hotel expenses incurred on the way, transportation of baggage-for round trips during the session. It does not include tips. A member who comes from a place more than 400 miles distant from Ottawa gets an allowance of so much per diem, which covers these expenses. It would be very unfortunate if the impression should go abroad that members who have the privilege of free transportation are allowed to charge also on the basis of mileage, for that is not the case. My point was this: while I do not wish to avoid paying tax on any item which is income, it seems clear to me that amounts paid for actual travelling expenses do not constitute income.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

Let me guard against any misapprehension with regard to my remark concerning the travelling expenses of members. I would not have any one think that what I said was intended in any way to be a reflection upon any member

[Mr. Fielding.;

of the House, or as a suggestion that members were paid anything to which they were not entitled under the law. But I had the impression that legally and properly under the process of law a member was entitled to travelling expenses on the basis of mileage while at the same time he was getting free transportation. If that practice has been changed, then what I said in that regard would not apply.

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L LIB

Roch Lanctôt

Laurier Liberal

Mr. LANCTOT:

I must say that this is something new to me. I have been a member of this House for seventeen years, and I have never made out a bill of travelling expenses from my home to Ottawa, because I have always had a pass in my pocket and have used it. That being the case, I could not explain to my farmers how I could charge the country $5 or $6 as my expenses in coming to Ottawa. Now I understand that mileage is paid to members who live more than 400 miles from Ottawa. What is that mileage?

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UNION

Arthur Meighen (Prime Minister; Secretary of State for External Affairs)

Unionist

Mr. MEIGHEN:

No mileage.

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L LIB
CON
UNION

Charles Robert Harrison

Unionist

Mr. HARRISON:

For some time the

railroad men have been asking that the Income Tax Act be further amended so as to provide that in cases like theirs the balance of income after deducting personal expenses incurred when away from usual place of residence shall be considered as the net income for the purposes of the Act, returns for such expenses to he made under oath. This matter was placed before the Minister of Finance some time ago along with several other representations, and it is something to which the minister should give consideration. Take, for instance, the case of a crew of a passenger train running between Ottawa and Toronto. The members of the crew live in Toronto, and when their train comes to Ottawa they have to incur certain expenses for board and lodging in this city. The conductor may make $30 for the round trip, out of which he has to pay, perhaps, $5 for expenses, and the baggageman and brakeman may make $25 or $20 for the round trip and pay out $5 for expenses. When the Government send any of their salaried men out to do work in places other than their places of residence they are allowed expenses which are not included in their incomes for the purposes of taxation. The commercial

traveller gets a salary and his expenses, but the railroad man, who lives away from home the greatest part of his time, has to pay his expenses out of his income and gets no consideration whatever on that account. I suggest that the minister provide some amendment to take care of cases of this kind.

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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:

There have

been a number of requests for changes in the Act, as I have explained on previous occasions. We are not making any changes except as regards penalties. Amongst the points considered were the ones raised by the hon. member.

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L LIB

Rodolphe Lemieux

Laurier Liberal

Mr. LEMIEUX:

It was stated at one time during the session that the minister would have the original Act with the various amendments consolidated. Has he taken any action in the matter? While, perhaps, this is not pertinent to the present Bill, I notice that some municipalities have adopted the income tax system, and they levy even on Victory bonds which are non-taxable. I am told that there is a case pending between the city of Ottawa and one of the taxpayers. Has the minister conferred with the Minister of Justice (Mr. Doherty) on the subject, and is his department represented on that litigation? May I express surprise that those Canadian bonds, which are declared by Act of Parliament to be non-taxable and which have been circulated amongst and purchased by the public under that solemn pledge, are being taxed by municipalities in disregard of that pledge? It would seem that when federal bonds are declared to be non-taxable, no Provincial Government nor municipal government could levy a tax on such bonds.

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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 work in connection with the consolidation of the Act is going on; in fact, it is practically completed. The reason that it has not been brought down is on account of the desire to close the session, and the further fact that delay would not do the slightest possible harm; the only thing that could do harm would be these penalties which have been reduced to a very large extent.

The provision as regards freedom from taxation under any law of the Dominion of Canada does not apply to municipal taxation. We are not parties to the litigation to which my hon. friend refers.

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UNION

William Foster Cockshutt

Unionist

Mr. COCKSHUTT:

Is it incumbent

upon a single person having an income of say $1,200, or a married person having an

income of, say $2,200, part of that being in both cases, deductable on account of Victory bonds that are non-taxable, thus bringing the income under $1,000 in the one ease and under $2,000 in the other, to make returns if he is not asked to do so?

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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:

My recollection is that it is not; that the test is whether they have taxable income or not. In the cases put by my hon. friend, they would not have taxable incomes.

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Section agreed to. Sections 3 and 4 agreed to. On section 5-notice of assessment.


UNION

John Allister Currie

Unionist

Mr. CURRIE:

I want to point out to this committee that the Government must take into consideration the question of abolishing this income tax at an early date. There is no question in the world that the troubles of this country at the present moment, the lack of business and of any initiative of any kind, is due entirely to this income tax. I have not yet been able to find out how the minister could justify last year taking off the war tax of 7i per cent and imposing an income tax such as he imposed. The income tax last year brought in about $36,000,000, and we cannot expect to collect more than $36,000,000 a year from the income tax.

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L LIB
UNION

John Allister Currie

Unionist

Mr. CURRIE:

We have the double income tax this year which stops everybody building and everything else. I understand what is wrong with the country. It is all right for hon. gentlemen opposite, who have been fed up for years on the principle of an income tax; they cannot change their clothes now, and there is nobody left to speak for the abolition of this tax except a few old protectionists on this side. If the minister had retained the protective of 71 per cent what would have occurred? This country would have benefited to the tune of $75,000,000; that is the amount of additional money that the country would have received. If the question was whether the income tax or the protective tariff of 7i per cent should be abolished, the interest of this country demands that the income tax should be taken off. There is practically no country throughout the world that has not a breaking-down income tax on the people, and that is what is stopping business. If Canada had taken off the income tax and left on the

surtax what would have occurred? People throughout the world who have capital would have brought it into this country, and we need capital very much. There is not a single tax known to economists that we do not have in this country. There is no other country staggering under a sales tax or a greater income tax than Canada. It is all very well to say that an income tax is such a beautiful thing. An income tax was imposed in England in 1799, and what occurred? It was a war tax, and an income tax always is a war tax. They did not know so much about the customs tax as we know now, because they did not have it to the extent that we have it. In 1815 and 1818, the agitation against the income tax was so great that the British Government in 1816 was defeated on a motion to impose it again, and it was ordered in the British House of Commons that all documents and resolutions in connection with the income tax of Great Britain were to be burned by the official executioner. You can search the journals of that House and you will find this fact.

In this country we need capital and business, and if you are going to take the surplus capital of the people away; if you are going to take away 12 per cent of the earnings of the people annually, you are not going to have any business in this country. So long as I have a seat in this House, I am going to agitate against this income tax, because every economist of any consequence in Great Britain has denounced it. The hon. member for Red Deer (Mr. Clark) is always tahc-ing about the Liberal and Reform Parly in Great Britain and what they did to abolish the tariff and to impose the income tax. He forgets that Gladstone in 1861 went to the country on a proposal to wipe out the income tax.

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PRO

Michael Clark

Progressive

Mr. CLARK (Red Deer):

I am bound to forget that because he did not do it. He went to the country in 1874.

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UNION

John Allister Currie

Unionist

Mr. CURRIE:

Well, 1874. I do not know that it was 1874. I think it was 1867, and that we are both wrong. He went to the country on that issue, and he made a promise to the people of Great Britain that, if elected to office, he would abolish the income tax. He again and again called on his successors to abolish it. He was not in favour of an income tax; I am not in favour of an income tax, and the time is coming when we will have to abolish it. Great Britain had to abolish the income tax after the Napoleonic wars.

The United States imposed an income tax when they had the Civil War, and they had to take it off inside of three or four years after the war. The moment they did that, the money of Great Britain and other countries began to flow into the United States and to establish businesses and to carry the business of the country on. I love my country; I know exactly what is injuring the country at the present moment, and I say that it is the unjust and drastic taxes that are put into our legislation. If the minister had strictly enforced the income tax of last year, we would have had to double the accommodation of the jails throughout the country. We need a war tax and this House is responsible for deciding whether it is going to impose the tax on the individual direct, or by way of a customs tax. If they had left on that customs tax last year, we would have derived_$75,OOO,O0O from it, and you could have wiped out the income tax and still been $30,000,000 to the good.

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L LIB
UNION

June 2, 1921