May 22, 1939

INQUIRY WITH RESPECT TO MIDLANDVALE, ALBERTA, POST OFFICE


On the orders of the day:


SC

Charles Edward Johnston

Social Credit

Mr. C. E. JOHNSTON (Bow River):

I should like to direct the attention of the Postmaster General (Mr. McLarty) to a letter which I received from the people of Midland-vale, Alberta, with regard to a post office-

Topic:   POSTAL SERVICE
Subtopic:   INQUIRY WITH RESPECT TO MIDLANDVALE, ALBERTA, POST OFFICE
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?

Some hon. MEMBERS:

Order.

Topic:   POSTAL SERVICE
Subtopic:   INQUIRY WITH RESPECT TO MIDLANDVALE, ALBERTA, POST OFFICE
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE (Quebec East):

My hon. friend should send his letter to the Postmaster General (Mr. McLarty).

Topic:   POSTAL SERVICE
Subtopic:   INQUIRY WITH RESPECT TO MIDLANDVALE, ALBERTA, POST OFFICE
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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I think this is a question that ought to be placed on the order paper rather than asked on the orders of the day.

Topic:   POSTAL SERVICE
Subtopic:   INQUIRY WITH RESPECT TO MIDLANDVALE, ALBERTA, POST OFFICE
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SC

Charles Edward Johnston

Social Credit

Mr. JOHNSTON (Bow River):

I shall

place it on the order paper.

Topic:   POSTAL SERVICE
Subtopic:   INQUIRY WITH RESPECT TO MIDLANDVALE, ALBERTA, POST OFFICE
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WAYS AND MEANS

EXCISE TAX ON VEGETABLE OIL CONTENT OF SHORTENING AND SOAP


Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into committee of ways and means.


IND

Alan Webster Neill

Independent

Mr. A. W. NEILL (Comox-Alberni):

Mr. Speaker, I should like to ask the Minister of Finance (Mr. Dunning) a question which I should be prohibited from asking when we are in committee because there is no item which refers specifically to it. In his budget speech the minister intimated that there would be taxes of various descriptions placed upon vegetable oil contained in shortening and soap,

Income War Tax Act

but that this was contingent on obtaining the acquiescence of the British government. May I ask if that has been obtained, or if it is not obtained in time will it be possible to deal with this later by order in council?

Hon. CHARLES A. DUNNING (Minister of Finance): I believe I am debarred from answering a question on a motion of this kind, but I may tell my hon. friend that I expect to make a statement in due course.

Motion agreed to and the house went into committee, Mr. Sanderson in the chair.

Topic:   WAYS AND MEANS
Subtopic:   EXCISE TAX ON VEGETABLE OIL CONTENT OF SHORTENING AND SOAP
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INCOME WAR TAX ACT


Resolved, That it is expedient to amend the Income War Tax Act and to provide:- 1. That a taxpayer (other than a company deriving income from a metalliferous mine to which section 89 of the act applies) shall be entitled to deduct from the tax that would otherwise be payable under the act amounts not exceeding in the aggregate ten per cent of capital costs actually incurred and paid in the period beginning May 1, 1939, and ending April 30, 1940, in respect of the construction, installation, betterment, replacement or extension of plant, machinery or fixed equipment during the same period, by deducting, in each of the first three fiscal years of the taxpayer after April 30, 1940, in which the taxpayer has taxable income, an amount not exceeding one-third of the aggregate amount of the deductions authorized.


CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

As this resolution deals with the sales tax, I wish to discuss one point very briefly.

Topic:   INCOME WAR TAX ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

No, this resolution deals with the income tax, but go ahead anyway.

Topic:   INCOME WAR TAX ACT
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

I wish to put on record a suggestion which I have already made to the Minister of Finance. A company makes a sale on time, say three months, to a dealer and pays the sales tax on the goods sold. Then the dealer to whom the sale was made goes bankrupt and does not pay for the goods. It seems unfair that the company should lose not only the price of the goods which they would normally have received, but also the sales tax which they have paid. It has been a troublesome question, I believe, for a long time, but as we make refunds of various kinds through the Department of National Revenue-rebates of customs duties paid, for example-I think that in such cases the company should be refunded the sales tax which it has paid. It seems a reasonable request, and I am sure some way could be worked out of making the refund. I am making no criticism because I know the question has arisen under various governments ever

since the sales tax was introduced, but I trust that the minister will give the matter his attention with a view to working out some method of making a refund in cases of this kind.

Topic:   INCOME WAR TAX ACT
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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

I may be in a position to say something about the matter when the amendments to the Special War Revenue Act are under consideration. All I can say at the moment is that the question is a very old one which has been up frequently during the last few years, and no government has ever considered that it should adopt the, suggestion which is now being made. The sales tax is really a tax on the person who makes the first sale. The ground usually advanced for remitting taxes on commodities is that the manufacturer is merely a collector of the tax from the first person to whom he sells the goods, and it is repeatedly urged that where he is not able to collect the tax he should not be obliged to pay it to the government.

Topic:   INCOME WAR TAX ACT
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

But the tax is a tax on the sale of goods. A manufacturer, for example, sells one hundred dollars' worth of goods to a firm that goes bankrupt, and he pays a sales tax of eight dollars. But while technically he has sold the goods, actually there has never been a sale, because he gets paid nothing for them, and he loses not only the one hundred dollars he would have normally received but the eight dollars that he paid in sales tax. In other words he is paying sales tax on a transaction that was never completed. I do not think the justice of his claim for refund can be disputed. The company that writes me is a London company, and they claim that this occurs repeatedly where companies go into insolvency, as many have done during recent years. I do not think there can be any question as to the justice of their claim for a refund. The problem is to work out a method by which the refund can be made. I think that is the difficulty, because I do not imagine any government would question the right of a company to be remitted the sales tax on a sale that never took place.

Topic:   INCOME WAR TAX ACT
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I can remember this

question arising ten years ago. One must bear in mind that the principle of the tax is that it applies on the first sale. Many subsequent sales of the same article may take place, and the question arises as to bankruptcy, and how far along the line one should proceed. It becomes very complicated. If the manufacturer who pays the tax collects from the person to whom the first sale was

Income War Tax Act

made, then since the tax becomes a part of the secondary sale price, should the second seller of the article come in, if such an adjustment is to be made?

Topic:   INCOME WAR TAX ACT
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

The second seller collects

his money, or he would have a claim also.

Topic:   INCOME WAR TAX ACT
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May 22, 1939