June 19, 1925

IND

William Charles Good

Independent Progressive

Mr. GOOD:

I am sorry if I have not made myself heard by my hon. friend behind me. I cannot face all directions at once. If I turn round and face in his direction, I am afraid a majority of the members of the House would not be able to hear me at all.

I submit, Mr. Speaker, to you and to the House, that the present provisions for appeals are entirely unsatisfactory. I have already read an extract from a letter written by a responsible party in the province of Ontario complaining that for years when the board of referees was apparently available appeals have been made, but these appeals have been disregarded and ignored; and that subsequently, in 1923, the whole system of appealing to boards of referees was done away with, and the appeal provided to the Exchequer Court. He states-and I think it will be obvious to everyone-that the appeal to the Exchequer Court is only possible for and only likely to be made by the very large taxpayers who can afford to run the risk and to incur the expense necessarily involved.

Seventhly, I submit, from the evidence which was laid before the committee, that although the Business Profits War Tax Act does not apply to accounting periods subsequent to 1920, assessments and collections under that act have not yet been cleaned up in this year 1925. The commissioner has admitted delay possibly measured in years, both in the sending out of the preliminary letter of advice to taxpayers, and in the sending out of the final notice of assessment. The commissioner has also admitted and defended deliberate delay in issuing the final notice of assessment, in some cases where firms were in financial difficulties. By reason of such delays in making assessments and collections, there have been unknown and indeterminable losses of revenue, -either by loss of interest or due to intervening bankruptcies.

These are the facts and conditions in the department that have been brought out by the inquiry. What then is the conclusion to

which we are driven? I submit that it is this: The Commissioner of Taxation possesses quite extraordinary powers, and virtually complete immunity from investigation and criticism. There is every opportunity and temptation to exercise discrimination in the administration of law. No official should be placed in this position. No man should possess such tremendous and such arbitrary power. What therefore should be done? I suggest the following as remedial measures.

First, there should) be an amendment to section 11 of the Income War Tax Act dealing with secrecy, to make it clear beyond question that the Auditor General has full power to make investigation of all matters pertaining to assessment and collection of income taxes. I understand it is the intention of the Acting Minister of Finance to recommend that the Auditor General be empowered to audit the revenue of the Dominion. The latter has stated that there is some doubt as to whether or not he is permitted under the law to audit this particular department, and I submit to the minister, to the House and to the gov-vernment, that such amendment ought to be made immediately so that the Auditor General would be in a position beyond any doubt or controversy to investigate these matters. I should like personally to turn over to the Auditor General, since I have been unable to secure action on the part of the committee, a number of specific allegations of irregularity that have come to me privately, and I should like to have him investigate these matters. If this amendment to the act be not passed, he may come back next year and state that he has been unable or has not been permitted to make this very necessary investigation.

In the second place I think there should be such amendments to the Act as will enable taxpayers to carry their appeals to local courts, thus taking away from the Commissioner of Taxation the opportunity for exercising discrimination in the secret adjustment of appeals; also making appeals much less expensive than they are now to the Exchequer court. I desire, without making any personal reflections, to point out to the House and to the minister that there is under the present system every opportunity for a secret arrangement between the commissioner and any taxpayer, an arrangement which if it is irregular or unwise is not possible of discovery later on.

In the third place-and although this dea's with a somewhat different matter, it is a matter which ought to be considered and acted upon, I think, by this House in the near

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future; I refer to the assessment of income taxes-

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

I rise to a point of order. The hon. member (Mr. Good) has just made a statement which reflects very seriously upon the honesty', honour and integrity of an old and long-tried public servant, under circumstances of the privilege of parliament, where such public servant has no opportunity to reply. I submit as my point of order that this whole subject was fully discussed before the Public Accounts committee during this session; that the said public servant was before the Public Accounts committee-I refer to the Commissioner of Taxation;-that the hon. member now making this charge under these unfair conditions had ample opportunity to examine the said public servant; that he did not succeed in securing the support of the said parliamentary committee; and that therefore his charge is out of order, is wholly unfair, and in no case in harmony with either the rules or the ethics of parliament.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

Speaking to the point of order, I wish to state that I have not made a charge against the Commissioner of Taxation. I have merely stated that the evidence submitted to the committee makes it quite clear that the commissioner has every opportunity for the exercise of favoritism and is practically beyond investigation. That is the only statement I made. I think the system is wrong; the law puts it in the hands of any man who is Commissioner of Taxation under the present system-

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CON
LIB
CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I was one of the members of that committee. The hon. member (Mr. Good) brought up this matter before the committee, and the committee voted it down, so that I think the point raised by the hon. member for Vancouver Centre (Mr. Stevens) is well taken-that an hon. member may not bring before the House a suggestion which has been regarded as unsatisfactory by a com-

TMr. Good.]

mittee of the House, after due consideration by that committee.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Do any other hon. members wish to speak to the point of order.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

In regard to the point just raised by the hon. member for Fort William and Rainy River (Mr. Manion), I may say that the motion I made in the committee to empower the committee to investigate these matters was turned down. That is one reason why I am now submitting my case to rhe House and to the country. I find it is necessary to do that. I do not wish to transgress the rules of the House, and I do not know that I am doing so. If I am, I shall be glad to be corrected and to confine myself within the rules. I am simply submitting to the House my reasons for the motion which I have made, that is, that the Public Accounts committee should be empowered by this House to consider and make recommendations as to amendments to the Income War Tax Act.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I am informed by the chairman of the Public Accounts committee that no report has been submitted by that committee to the House with respect to the proceedings referred to. First of all, it is not permissible for any hon. member to reflect on the witnesses who appeared before *) committee and second the proceedings of a committee can not be debated until a report, of that committee is before the House. With regard to the reference made by the hon. member to the subject of the evidence given by Mr. Breadner, I will quote from paragraph 246 of Beauchesne's Parliamentary Rules and Forms:

All references to judges and courts of justice and to personages of high official station-

I consider Mr. Breadner, the Commissioner of Taxation, as one of high official station.

-of the nature of personal attack and censure have always been considered unparliamentary.

I therefore rule, first, that no invidious reference be made as against that official, who is not here to defend himself. Besides, 1 gather from members of the committee who have spoken that his evidence was considered satisfactory by the majority of the members of the committee. Second, I would judge that the motion made by the hon. member (M \ Good) is not in order, because I now learn that the report of the committee is not before the House. When that report is before the House and the House is in possession of the facts, the hon. member may move for a reference of the report back to the committee with instructions as contained in his motion. The hon. member is anticipating action which

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should be taken only when the report is before the House.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

May I say, Mr. Speaker, that you accepted the motion as being in order, and I spoke to it on the understanding that it was in order?

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I could only pass judgment after hearing the statements made by the hon. member. When the report is before the House the hon. member can move his motion.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

Will you permit me, Mr. Speaker, to make this explanation? I brought the motion in, feeling that I would never have another opportunity of presenting this matter to the House and to the country.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I accept the explanation of the hon. member, but I am bound by the rules. The motion would be in order if the report was before the House, but as the report, is not before the House the motion cannot be entertained.

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IND
PRO

George Gibson Coote

Progressive

Mr. COOTE:

May I ask that the motion of the hon. member be read? I am of the opinion there is nothing in it which refers to the report of the committee.

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?

An hon. MEMBER:

The ruling is given.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I will read the motion again, out of courtesy to the hon. member (Mr. Coote):

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.

Mr. HANOE J. LOGAN (Cumberland): Mr. Speaker, I am somewhat in doubt about the point of order, but I would like to make a very few remarks in connection with this matter. The hon. member for Brant has thrown out some rather serious insinuations. The difficulty with my hon. friend from Brant is that he does not seem to understand the difference between making insinuations and making charges.

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PRO

Arthur John Lewis

Progressive

Mr. LEWIS:

Mr. Speaker, I understand that you have ruled this motion out of order and therefore it is not debatable.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Is the hon member speaking on a question of privilege?

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LIB

Hance James Logan

Liberal

Mr. LOGAN:

I am speaking on a question of privilege, regarding an attack made on a committee of which I am chairman. I desire in the very fewest words-

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June 19, 1925