June 19, 1925

PRIVATE BILLS COMMITTEE


Mr. A. J. LEWIS (Swift Current) presented the ninth report of the select standing committee on Miscellaneous - Private Bills.


PRIVATE BILLS

REFUNDING OF ADDITIONAL CHARGES

IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN (South York) moved:

That in accordance with the recommendation contained in the eighth report of the select standing committee on miscellaneous private bills, the additional charge paid on Bill No. 98, for the relief of Cecil Hunter, be refunded.

Motion agreed to on division.

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CON

William Foster Garland

Conservative (1867-1942)

Mr. W. F. GARLAND (Carleton) moved:

That, in accordance with the recommendation contained in the eighth report of the select standing committee on miscellaneous private bills, the additional charge paid on Bill No. 98, for the relief of Jacob Edward Thuna, be refunded.

Motion agreed to on division.

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LIB

Herbert Meredith Marler

Liberal

Mr. HERBERT MARLER (St. Lawrence-St. George) moved:

That whereas it appears by the Votes and Proceedings o

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

I offer the same objection as I have made to similar motions.

Motion agreed to on division.

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CON

Thomas Joseph Stewart

Conservative (1867-1942)

Mr. T. J. STEWART (West Hamilton) moved:

That in accordance with the recommendation contained in the ninth report of the select standing committee on miscellaneous private bills, the additional charge levied and paid under rule 89 ss. 3 (c) and 8 on Bill No. 185 (Letter A5 of the Senate), intituled: " An Act for the relief of George William Quibell," be refunded.

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He said: The committee recommended the refund of this money only this morning, and I have just received the motion.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

On that understanding, is it the pleasure of the House to adopt the motion?

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Motion agreed to.


FIRST AND SECOND READINGS

LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

In order to save time, if the House does not object, we could give these bills a first and second reading now.

Bill No. 219, from the Senate, respecting certain patents of Accounting and Tabulating Machine Corporation.-Mr. Jacobs.

Bill No. 222, from the Senate, for the relief of Walter Roderick Lewis.-Mr. Duff.

Bill No. 223, from the Senate, for the relief of Irene Muriel Corelli.-Mr. Garland (Car-Ieton).

Bill No. 224, from the Senate, for the relief of Wilfred Clarence Byron.-Mr. Ross (Kingston).

Bill No. 225, from the Senate, for the relief of Jessie Irene Yates.-Sir Henry Drayton.

Bill No. 226, from the Senate, for the relief of Mary Ann Tattersall.-Mr. Preston.

Bill No. 227, from the Senate, for the relief of Walter Lewis Hawkins.-Mr. Stewart (Leeds).

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UNSATISFACTORY AUDIT CLERK

LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Hon. J. A. ROBB (Acting Minister of Finance):

At the request of the Auditor

General, I lay on the table copy of a letter which he has written me respecting certain matters referred to in the discussion which took place on Thursday last when the estimates of the Department of Finance were under consideration. I also submit copy of my reply. In the memorandum which I read to the House at the time, an instance was cited of a clerk sent by the Auditor General's department to assist in audit work in the Department of Finance who had previously been in our employ in the identical branch concerned and had been found to be unsatisfactory. No name was mentioned and I do not think it is advisable or necessary to do so as, after all, the clerk referred to is a young man in the making with his future before him. The Auditor General included with his letter copies of certificates from the Civil Service Commission which give the name of the employee; but, for the reasons given above, I have thought it well not to include the same with the correspondence tabled.

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TAX COLLECTIONS

IND

William Charles Good

Independent Progressive

Mr. W. C. GOOD (Brant):

I presume,

Mr. Speaker, that I have now complied with the rules of the House in having given regular notice of the motion which I undertook to move on Tuesday last. I desire now to move:

Whereas under an order of reference made on the 23rd of March. 1925, the standing committee on Public Accounts has had under investigation the methods of assessment and collection of business profits and income taxes;

Therefore be it resolved,

That the said committee on Public Accounts be instructed that they have power to consider and recommend to this House such amendments to the Income War Tax Act as may seem to them advisable.

When I was ruled out of order on the previous occasion I had submitted to the House in support of the motion, first, that the Commissioner of Taxation was formerly a tariff officer of the Canadian Manufacturers' Association; secondly, that he had assumed full responsibility for all the assessments made under the Business Profits War Tax Act; and, in the third place, that not a single one of some 30,000 assessments had been pressed in appeal. The fourth point I submitted was that no member of parliament nor any committee of parliament had had the privilege of examining any original assessment or any modifications thereof. I submitted that all the files were strictly confidential and that all the officials were under a solemn obligation to preserve secrecy in regard to those files. Not only was this the case, but I stated that recently the department had required of all officials at Ottawa a sweeping and solemn declaration before a commissioner to the effect that they had not, in writing or otherwise, directly or indirectly, disclosed or caused to be disclosed, or made available, any such confidential information; and that they were not aware of any person or persons, if any, to whom there had been such disclosures. And so forth.

Now I proceed to the submission of further facts and arguments in support of this motion. I would point out, further, that if there are any alleged irregularities or discriminations, no one, in view of the facts I have just cited, can make any investigation to determine whether or not the allegations are well founded. The officials are bound to secrecy under heavy penalties and the Public Accounts committee is not permitted to investigate even in camera. Indeed, the Auditor General is in doubt as to whether he has the power to institute an investigation. When he was before the committee

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that question was put to him very definitely and he admitted that there was some doubt as to whether even he had the power to inquire into these matters.

In the fifth place, I submit that all the officials in the Taxation branch, not only in Ottawa but throughout the whole of Canada, are outside the Civil Service Commission and that even the practice of advertising for applications is not followed. Therefore, the commissioner or perhaps technically, the minister, " hires and fires " at pleasure.

In the sixth place, there is very considerable dissatisfaction with the administration in this branch, particularly in the case of appeals. I should like in that connection to refer to a couple of letters which have come to me in the course of the investigation, one from Mr. F. W. Gerrish, of Montreal, who is a chartered accountant and a graduate of Cambridge university. I quote in part from his letter:

In my opinion the income tax is by no means a most desirable form of taxation, but if it is retained, I consider that returns should be sent in annually by the end of January and all assessments should be made by the end of June, in order to avoid waste of time to tax-payers and the government. A proper judicial system of assessment is far preferable to arguments between tax-payers and inspectors examining books at the offices of tax-payers, as such arguments may often be carried on without regard to elementary principles of law, fact, accounting, and admissibility of evidence. I see no logical reason why such appeals should not be heard publicly.

Under the present system large firms have office organizations and professional advisers to protect them. The small tax-payer through ignorance is often liable to pay an arbitrary assessment in excess of his real income.

Mr. Gerrish encloses with his letter to me a letter which he wrote to the Montreal Herald and which was published in its issue of January 21, 1922. That letter deals with the policy and administration in the Taxation branch and makes certain criticisms and complaints, particularly in regard to the absence of a body of case law which should be built up as a guidance for taxpayers as well as for the department. I do not wish to burden the House with a long quotation from the letter at this moment, but I refer to it because it appeared publicly in one of the Montreal papers.

I want to refer now to some other letters which I have had from a firm of accountants in western Ontario. In the matter of appeals, I quote the following:

During the last four years there have been possibly twenty or thirty of our clients who have requested a hearing before the Board of Referees as provided in the act as originally drawn, and in not a single case

[Mr. Good.}

has the request been treated otherwise than with unmitigated contempt.

We have been informed that under pressure from the public for hearing before the Board of Referees, Mr. Breadner made representations to the government to have the board abolished. This he succeeded in doing and had substituted therefor reference to the Exchequer Court of Canada and the Supreme Court of Canada, procedure, which, on account of the expense involved, is utterly prohibitive to any but taxpayers of very large means.

From this office alone there are at present pending in the commissioner's office many appeals from assessments, some of which have been lying undisposed of for as long as two or three years. Throughout the country there must be thousands of such cases which have been appealed and remain in the commissioner's files undisposed of.

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LIB
IND

William Charles Good

Independent Progressive

Mr. GOOD:

This is from Falls, Scott & Co., of Windsor, Ontario. With this letter was enclosed also an editorial from the Canadian Chartered Accountant of this year. I will read a few sentences from this editorial which bear upon the administration of this branch:

At each successive annual meeting of the Dominion association for some years past, the unsatisfactory conditions which prevail in and about the collection of the federal income tax have been the subject of complaint. There are very many uncertainties as to the exact state of the law at the present time, due to the fact that amendments to the act from time to time have been dictated by the exigencies of special cases which have arisen rather than by an appreciation of the necessity for a fundamentally sound and equitable system of taxation of this particular kind. Every year, a few days before the close of the parliamentary session, when legislators are tired and perspiring, a batch of minor amendments appears in the form of a bill, and these go through-as is doubtless the intention-without time being allowed for examination by those most concerned, namely-The suffering public. The matters thus dealt with, being somewhat technical, their significance is not apparent, the House takes little interest and the law becomes still further complicated.

That is a statement of facts which anybody, who looks over the amendments to the act that have been made almost every year since it was first passed in 1917 can verify. I do not need to refer further to these letters, but I have received other letters complaining of various matters in conection with the administration. In that connection I should like to refer briefly to the provisions in the amendment to the act of 1923 in regard to appeals. Section 7 of the amendment passed in that year reads as follows:

Sections 12 to 21 of the said act both inclusive are repealed, and the following are substituted therefor.

Then follow new clauses providing an entire and revolutionary change in the method of appeal. Instead of having a board of referees available for appeals, the appeal in the first instance is to the Commissioner of Taxation ostensibly the department, and if no adjustment is arrived at the taxpayer may if he

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wishes carry the appeal to the Exchequer court. But hon. members will note this:

The party appealing shall thereupon give security to the satisfaction of the minister in a sum not less than four hundred dollars for the security of the costs of the appeal. Unless such security is furnished by the party appealing within one month after the mailing of the notice of dissatisfaction the appeal and all proceedings thereunder shall become null and void.

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LAB

William Irvine

Labour

Mr. IRVINE:

Before the hon. member concludes, would he turn around and face this way, tell us on what subject he is speaking and what he wants us to do? Because we have not the slightest idea.

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June 19, 1925