June 22, 1938

CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

Penmans.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

The hon. member made the statement that they paid $10,000,000 in so many years.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

I can give my hon. friend the complete statement.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

Just the net profits.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

For no capital

investment in the company at all, the promoters of the syndicate that organized the company in 1906 have realized $10,205,304. That is given at page 230 of the McRuer brief.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

Have you the net profits for the last four or five years?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

I should like to finish this general argument. The hon. member will find all the information he seeks in the brief, which is available to everyone.

I was about to give examples of the salaries paid by some of the representative companies. Joseph Simpson and Sons Limited paid to one man, who appears to be only remotely connected with the management of the business, an annual salary of $31,000. That is at page 236. The executive salaries of this company for the last three years amount to over $90,000 per annum.

Let me deal for a moment with certain reprehensible practices. In connection with tax concessions I read this:

In addition to the tariff protection that the textile industry is receiving from the government of Canada, the individual companies engaged in the industry have with few if any exceptions received advantages over the ordinary taxpayers, from the municipal authorities where their respective mills are situated.

Then in connection with our own customs arrangements we find a little joker in the form of the clause "not made in Canada." The following statement appears on page 404 of the brief:

That either Mr. Hallam or Brack Silk Mills deliberately attempted to deceive the department is quite apparent.

That is the way the department is fooled. Here is one other statement which takes us into the international aspect of this matter:

It appears that Mr. Watson considered that he was entitled to use a hearing before the tariff board held pursuant to a treaty obligation to suit his own purposes, rather than considering that he and the industry were obliged in all cases to make full and complete disclosure to this tribunal.

I could go on and deal with the effect of specific duties, but I shall give this short quotation only:

The net result is that in addition to the regular ad valorem duty of 25 per cent, a specific duty of four cents per pound, and the excise duty of three per cent, leviable in April, 1932, the Canadian manufacturer had an additional protection on the above items-

In connection with special appraisals, we find the following:

-by the simple process of the publication of this appraisers' bulletin, the customs duty, taken on an ad valorem basis, was increased from 38 per cent to 67 per cent on the articles affected by the bulletin without consulting parliament.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

When was the bulletin

issued?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

I have not the

complete brief before me, but that statement is to be found on page 108 of the brief. In connection with costs of production I find the following:

It is submitted that the evidence shows that very few of the companies reporting to the commission keep such records as will enable them to state with reasonable accuracy what their cost of production is for any particular fabric.

There are other illustrations I could give showing the enormous amounts charged to operation for depreciation, repairs and betterments. It is stated that the Dominion Textile Company has had profits of about $1,000,000 per year since 1920, other than

The Budget-Mr. llsley

those disclosed in its public statements. I ask the government to explain why no action has been taken. This report has been in existence and available to the government for over a year.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

What does the hon. member mean by "no action"?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

Criminal action.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

Civil action has been taken.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

I am talking about criminal action. The criminal code covers this matter, and I should like to know why its provisions have not been invoked.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I am sorry to interrupt

the hon. member, but he has exhausted his time limit.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Hon. J. L. ILSLEY (Minister of National Revenue):

Mr. Speaker, the hon. member

has made some reference to the fact that the government has failed to take action against certain textile companies. I should like to take a few minutes of the time of the house to explain this matter.

The evidence given before the Turgeon commission revealed the fact that there were probably short payments under the Business Profits War Tax Act and the Income War Tax Act. The auditors of the income tax division went into the matter very carefully and spent several months investigating the situation. They came to the conclusion that eight textile companies had made short payments of business war profits and income taxes. The position taken by the income tax division was contested strenuously by the. companies, who contended that they had paid all the taxes due to the crown. Under these conditions I think the hon. gentleman will realize that criminal proceedings were entirely inappropriate.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

I do not realize

that at all.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

Is not the point that

they issued false balance sheets? That is similar to the Lord Kylsant case in England.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

Would the minister permit me to quote just one sentence?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The Minister of National Revenue (Mr. Usey) has the floor.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

Let the hon. member go

ahead.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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June 22, 1938