June 24, 1938

ESTABLISHMENT BY BRITISH GOVERNMENT OF TRAINING CENTRES IN CANADA-QUESTION OF RECRUITING


On the orders of the day:


CCF

Charles Grant MacNeil

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

Mr. C. G. MacNEIL (Vancouver North):

Mr. Speaker, what are the intentions of the Department of National Defence with respect to the proposals that training centres for aviators be established in Canada by the British government, and what steps have been taken to aid recruiting for the Royal Air Force?

Topic:   ROYAL AIR FORCE
Subtopic:   ESTABLISHMENT BY BRITISH GOVERNMENT OF TRAINING CENTRES IN CANADA-QUESTION OF RECRUITING
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

The question the hon. member has asked is really one of government policy. I think I should say that it is not usual to make statements of government policy in reply to questions on the orders of the day. I believe that is all I can say.

Topic:   ROYAL AIR FORCE
Subtopic:   ESTABLISHMENT BY BRITISH GOVERNMENT OF TRAINING CENTRES IN CANADA-QUESTION OF RECRUITING
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CCF

James Shaver Woodsworth

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

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

May I ask the Prime Minister when he will divulge to the house what the government policy is in regard to this matter?

Topic:   ROYAL AIR FORCE
Subtopic:   ESTABLISHMENT BY BRITISH GOVERNMENT OF TRAINING CENTRES IN CANADA-QUESTION OF RECRUITING
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Any statement of policy in regard to the matter referred to will be made if and when occasion for such arises.

Topic:   ROYAL AIR FORCE
Subtopic:   ESTABLISHMENT BY BRITISH GOVERNMENT OF TRAINING CENTRES IN CANADA-QUESTION OF RECRUITING
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FARMERS' CREDITORS ARRANGEMENT ACT

FREE CONFERENCE WITH THE SENATE IN VIEW OF AMENDMENTS

LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Hon. T. A. CRERAR (Minister of Mines and Resources):

Mr. Speaker, earlier in the session Bill No. 25, amending the Farmers' Creditors Arrangement Act, 1934, received its first reading. Section 5 of the amending measure provided as follows:

The said act is amended by inserting therein immediately after section 19 thereof the following section:

20. On and after a date to be fixed by proclamation of the governor in council, no new proposals shall be made or filed by any farmer or accepted by any official receiver in any province in respect of which the said proclamation is issued.

When the measure was before the senate they amended it by striking out the section I have read, and by substituting therefor the following:

No proposal shall be received in any province later than the 31st of December, 1938, except in the provinces of Saskatchewan and Alberta.

Earlier in the session Bill No. 33, to amend the Soldier Settlement Act, was considered and passed by this house. As hon. members will recall, that measure had to do with what is known as the dollar for dollar bonus privi-

Income War Tax Act

lege that had been extended to soldier settlers under legislation passed by the previous government. The period under which the bonus could be paid expired on March 31 of this year.

At the time the legislation was before the house hon. members will recall that strong representations were made from various quarters of the house that the legislation should be continued for another three years. That was not done, largely on the assumption that soldier settlers who were in financial difficulties would and could have recourse under the Farmers' Creditors Arrangement Act for a composition of their debts, and that since that machinery was open to them for that purpose it was not necessary to extend the dollar for dollar bonus privilege right across the board.

I believe I am correct when I say that it was on that assumption the soldier settlement measure finally passed the house. If the amendment proposed by the senate, as indicated in the order now before the house, is accepted, then very largely if not entirely it nullifies the privilege that we thought would continue when the dollar for dollar bonus provision was before the house. For that reason the government cannot accept the amendment suggested by the senate, which I read a moment ago.

There are still in many of the provinces, and especially in all the western provinces, a very large number of soldier settlers who are in arrears. Those in charge of the administration of the Soldier Settlement Act feel that it is necessary and advisable that the soldier settlers should apply under the Farmers' Creditors Arrangement Act for a composition of their debts. Consequently for these reasons the government cannot accept the amendment proposed in the senate.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   FREE CONFERENCE WITH THE SENATE IN VIEW OF AMENDMENTS
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Leader of the Opposition):

There remains however a very difficult question in connection with the matter. Assuming that the senate should accept the suggestion made by the minister and extend the exception to applications of those who have loans under the Soldier Settlement Act, would the legislation then be acceptable to the government? The reasons the minister has urged against agreeing with the senate amendment would not apply if the senate were to provide for the exception,- that is, an exception in favour of cases under the Soldier Settlement Act. If that exception were added to the statute, then you would have the act no longer applicable except in Saskatchewan and Alberta, and the minister has not said whether that would be objectionable or acceptable to the administration. He has not referred to that at all.

It would be simple to amend this bill in the senate and say that the act shall not apply to any province in Canada after December 31, 1938, except the provinces of Saskatchewan and Alberta, and to cases which might arise in any province under the Soldier Settlement Act. That would still leave jurisdiction to deal with soldier settlement cases in all the provinces, and would leave the act otherwise operative in Alberta and in Saskatchewan, but not elsewhere. I think the government should indicate, since we are dealing with it in this way and as it will mean an ultimate conference if the amendments are not agreed to, whether or not, if the suggestion now made by the minister is adopted by the senate, he would have any objection to the other provisions of the senate amendments.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   FREE CONFERENCE WITH THE SENATE IN VIEW OF AMENDMENTS
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

I intended to indicate that that was one reason why the government could not accept the amendment. An additional reason is the fact that it would constitute a hardship on many settlers, apart from soldier settlers, in the western provinces. If a conference takes place it is not the intention of the conferees representing the government to limit it solely to the claims of soldier settlers.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   FREE CONFERENCE WITH THE SENATE IN VIEW OF AMENDMENTS
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

While we are on the subject I should like to move:

That a message be sent to the Senate requesting a free conference with their honours to consider certain amendments made by the Senate to Bill No. 25, intituled: An act to amend the Farmers' Creditors Arrangement Act, 1934, to which this house disagrees, and upon which the Senate insists, and any amendment which at such conference it may be considered desirable to make to the said bill or amendment thereto.

That the Clerk do carry the said message to the Senate.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   FREE CONFERENCE WITH THE SENATE IN VIEW OF AMENDMENTS
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Motion agreed to.


WAYS AND MEANS

INCOME WAR TAX ACT


The house in committee of ways and means, Mr. Sanderson in the chair. Resolved, That it is expedient to amend the Income War Tax Act and to provide: 1. That lump sum payments made in Canada, which sever the funds permanently from the assets of the payor company, for the establishment of superannuation or pension fund plans with a view to providing benefits for employees in respect of past years' services, shall be allowed as a deduction to the extent of one-tenth of such lump sum payments in each of ten successive years, commencing the year in which the payment is made; provided that in the case of superannuation or pension fund plans heretofore established by lump sum payments the said deduction shall commence in the year 1938



Income War Tax Act



and' continue thereafter until ten years shall have elapsed from the date. of the initial payment.


LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

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

With regard to this proposed amendment, I may say that at present deductions are allowed in respect to contributions to pension funds made during the current year. That is to say, these contributions are regarded as legitimate items of cost incurred in earning income on which a tax is being paid. There is no provision in the act for allowing in one year a deduction in respect of lump sum payments covering past years of employees' services. Several large companies have expressed their intention of making contributions to pension funds, of the sort here in question, and have argued that an allowance should be made in respect of them. It is believed that through allowing these lump sum payments as deductions, this practice of creating pension and superannuation funds will be encouraged, and that substantial social benefits will accrue through the incentive here being offered. It is realized that this provision should be amply safeguarded, and it is particularly provided that the funds contributed must be permanently severed from the assets of the company making the contribution. This will prevent an unscrupulous company from retaking to itself contributions once made and in respect of which deductions from income tax have been allowed. It was felt inadvisable that the deduction should be made all in one year and it is proposed that the allowance shall be spread over a ten-year period. Moreover, it was felt that an employer who in the past had made a lump sum contribution of the sort here in question and had received no allowance in respect of such contribution should not be excluded entirely from the benefits of this proposed amendment if such contributions were made within the past ten years. Accordingly, in respect of lump sum payments heretofore established, deductions shall commence in the current year and shall continue until ten years have elapsed from the date of the initial lump sum payment. Thus a company that had made a lump sum contribution to a pension fund five years ago would still be allowed five annual deductions, each equalling one-tenth of the original lump sum contribution.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAR TAX ACT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Retroactive legislation is always bad so far as theory is concerned. In practice it frequently is. In this case what will happen will be that those who have made payments ten years ago-and large financial institutes have done that-will receive no benefit. But they will receive a benefit if the contribution happens to have been made dur-

ing the last ten years. They will get one-tenth allowance if it was made nine years ago, two-tenths if it was eight years ago, and so on.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAR TAX ACT
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June 24, 1938