June 24, 1940

INCOME WAR TAX ACT


Resolved, that it is expedient to amend the Income War Tax Act and to provide:- 1. That the rates of tax applicable to persons other than corporations shall be increased to the rates of tax set forth in the following schedule: A.-Rates of Tax Applicable to Persons other than Corporations and Joint Stock Companies On the first $250 of net income or any portion thereof in excess of exemptions 6 per centum or $15 upon net income of $250; and 8 per cent upon the amount by which the income exceeds $250 and does not exceed $1,000 or $75 upon net income of $1,000; and 12 per centum upon the amount by which the income exceeds $1,000 and does not exceed $2,000 or $195 upon net income of $2,000; and 16 per centum upon the amount by which the income exceeds $2,000 and does not exceed $3,000 or $355 upon net income of $3,000; and 20 per centum upon the amount by which the income exceeds $3,000 and does not exceed $4,000 or $555 upon net income of $4,000; and 24 per centum upon the amount by which the income exceeds $4,000 and does not exceed $5,000 or $795 upon net income of $5,000; and 27 per centum upon the amount by which the income exceeds $5,000 and does not exceed $6,000 or $1,065 upon net income of $6,000; and 30 per centum upon the amount by which the income exceeds $6,000 and does not exceed $7,000 or $1,365 upon net income of $7,000; and 33 per centum upon the amount by which the income exceeds $7,000 and does not exceed $8,000 or $1,695 upon net income of $8,000; and 35 per centum upon the amount by which the income exceeds $8,000 and does not exceed $9,000 or $2,045 upon net income of $9,000; and 37 per centum upon the amount by which the income exceeds $9,000 and does not exceed $10,000 or $2,415 upon net income of $10,000; and 39 per centum upon the amount by which the income exceeds $10,000 and does not exceed $20,000 or $6,315 upon net income of $20,000; and 41 per centum upon the amount by which the income exceeds $20,000 and does not exceed $30,000 or $10,415 upon net income of $30,000; and 44 per centum upon the amount by which the income exceeds $30,000 and does not exceed $40,000 or $14,815 upon net income of $40,000; and 47 per centum upon the amount by which the income exceeds $40,000 and does not exceed $50,000 or $19,515 upon net income of $50,000; and 50 per centum upon the amount by which the income exceeds $50,000 and does not exceed $75,000 or $32,015 upon net income of $75,000; and 53 per centum upon the amount by which the income exceeds $75,000 and does not exceed $100,000 or $45,265 upon net income of $100,000; and 56 per centum upon the amount by w'hich the income exceeds $100,000 and does not exceed $150,000 or $73,265 upon net income of $150,000; and 59 per centum upon the amount by which the income exceeds $150,000 and does not exceed $200,000 or $102,765 upon net income of $200,000; and 63 per centum upon the amount by which the income exceeds $200,000 and does not exceed $300,000 or $165,765 upon net income of $300,000; and 67 per centum upon the amount by which the income exceeds $300,000 and does not exceed $400,000 or $232,765 upon net income of $400,000; and 72 per centum upon the amount by which the income exceeds $400,000 and does not exceed $500,000 or $304,765 upon net income of $500,000; and 78 per centum upon the amount by which the income exceeds $500,000. 2. That the additional rate of tax applicable to all persons other than corporations and joint stock companies in receipt of income in excess of $5,000 in the amount of five per centum, be repealed. 3. That the war surtax of twenty per centum as enacted by sections two, three and four of chapter 6 of the 1939 statutes (second session), be repealed. 4. That the statutory exemption of a married person and other persons with dependent relatives as set forth in paragraph (c) of subsection 1 of section five of the act be reduced from $2,000 to $1,500. 5. That the statutory exemptions of all other persons except corporations, be reduced from $1,020 to $750. The Budget-Mr. Ralston



6. That a tax of five per centum be imposed upon Canadian residents with respect to all interest or dividends paid or payable by Canadian debtors in a currency which is at a premium in excess of five per centum in terms of Canadian funds. 7. (a) That the income accrued or earned during the life of any deceased person shall, when paid, be taxable income in the bands of his executors or trustees. (b) That income received by executors or trustees and capitalized shall be taxable income of such executors or trustees. 8. (a) That the qualifications of personal corporations as set forth in the aot shall be extended to include revenue derived from the hire of chattels or from charter party fees. (b) That a company shall not be deemed to be a personal corporation if it carries on an active commercial or industrial business. 9. That as a means of insuring the collection of tax from non-resident transient persons who earn salary, fees, commissions or other remuneration in Canada, there shall be withheld an amount of fifteen per centum of such remuneration as a credit against the tax found due upon the filing of the income tax return of such person. 10. That the rate of tax applicable to rents and royalties payable to non-residents of Canada shall be on the gross amount thereof, and in the case of non-resident corporations the rate shall be fifteen per centum, and in the case of non-resident persons other than corporations the rate shall be five _ per centum, and the Canadian debtor shall withhold such tax before making payment to the non-resident. 11. That the rate of tax applicable to corporations shall be eighteen per centum (in the case of consolidated returns, twenty per centum) on the profits of the year 1940, and in the case of fiscal periods ending in 1940 prior to December 31, the said rate shall apply to that proportion of the profits thereof which the number of days of the said fiscal period in the year 1940 bears to the total number of days of such fiscal period. 12. That the section of the act in respect of depreciation be amended to provide for the elimination of duplicate depreciation in respect of assets after their transference to persons who have substantially the same equity or interest in the said assets after their transfer as they had before the transfer. 13. That the distribution of otherwise tax free profits of a family corporation made after 31st December, 1942, shall render such profits so distributed liable to income tax. 14. That the act be amended to prevent evasion by giving power to the treasury board to direct that a taxpayer be assessed without regard to any transaction or reorganization which in the opinion of the treasury board, is of a specious character designed to avoid or minimize tax, whether any such transaction or reorganization was entered into with persons or corporations resident outside or within Canada. 15. That in order to prevent evasion the Minister of National Revenue (hereinafter called the minister) shall have power to determine what are reasonable disbursements for advertising, repairs, salaries and other operating and administrative expenses. 16. That the amount paid by proprietors of a business, other than a corporation, by virtue of the Excess Profits Tax Act shall be allowed as a deduction from their incomes for purposes of income tax in proportion to their interests in the said business. 17. (1) That the definition of income be clarified and extended to cover the amount of annuity payments made to life annuitants under purchased annuity contracts. (2) That the exemption now accorded to dominion government annuities and like annuities sold by provincial governments and insurance companies shall not apply in respect of all contracts issued subsequent to June 24, 1940, nor to contracts or extensions of contracts made since that date to holders of options or contractual rights in existence at that date. (3) That purchasers of annuities be entitled to deduct the annual amounts paid out by them in purchasing annuity contracts not to exceed $300 per year. 18. (1) That in addition to the income tax there be imposed a national defence tax on all persons in respect of their income, (a) in the case of married persons, of two per centum on the total net income if the income exceeds $1,200 per year; (b) in the case of single persons, of two per centum on the total net income if the income exceeds $600 and does not exceed SI,200 per year; or three per centum if the said income exceeds $1,200 per year. Provided, however, that if the effect of such tax would be to reduce the income of any person below the relevant amount specified above, then to the extent it would so reduce the income the tax shall not be exigible; Provided, further, that there shall be allowed a tax credit on an amount of $400 at a rate equal to two per centum in respect of each dependent child or grandchild, brother or sister of the taxpayer under twenty-one years of age, and each child, grandchild, brother, sister, parent, or grandparent over twenty-one years of age dependent on account of mental or physical infirmity and resident in Canada; (2) That every employer be required to deduct the tax imposed in respect of earnings of the employee earned or accruing due during and after July, 1940; (3) That every employer remit the tax collected at the source on the sixteenth day of September. 1940, and on the fifteenth day of each month thereafter; (4) That incorporated companies paying interest on bonds or other like obligations registered as to interest, or paying dividends, irrespective of the amount, to persons on record in their office or that of their agents, be required to deduct and collect the taxes imposed from each payment made to residents of Canada, paid in the case of interest, and declared and paid in the case of dividends, after the twenty-fourth day of June, 1940; (5) That each incorporated company remit the tax collected at the source in respect of interest and dividends on or before the fifteenth day of the month immediately following the date of payment, the first remittance however to be made on the sixteenth day of September, 1940; (6) That every person liable to taxation in respect of whom the deduction of the nationa" defence tax on the full income has not been made be required, on or before the thirtieth day of April in each year, to deliver to the minister a return of his total income during the preceding year and pay the tax as in the Income War Tax Act provided; The Budget-Mr. Ralston (7) That the national defence tax be applicable to the income of 1940 and all subsequent years except that in respect of the income of the year 1940 the tax shall be imposed only on one-half of the income if the income for the whole year exceeds the relevant amount specified in resolution No. 18(1); (8) That the income of the following persons shall not, except as in this resolution provided, be liable to the national defence tax (a) incorporated companies; (b) persons and institutions mentioned in paragraphs (a) to (i) inclusive and in pararaphs (p) and (q) of section four of the ncome War Tax Act; (c) members of the Canadian naval, military and air forces shall be exempt from tax while such members are on active service beyond Canada or are on active service in Canada and whose duties are of such a character as are required normally to be performed afloat or in air craft, but only to the extent of their service pay and allowances. 19. That the resolutions numbered 1, 2, 3, 4, 5. 6, 7, 8, 9, 11, 12, 14, 15, 16, 17 and 18 hereof shall be applicable to the income of he 1940 taxation period and fiscal periods ,-nding therein and of all subsequent periods. 20. That the resolution numbered 10 hereof be applicable to payments made after the 24th June, 1940.


EXCESS PROFITS TAX ACT


Resolved, that it is expedient to reenact the Excess Profits Tax Act and to provide: 1. That the option of using rates "A" be deleted, and that the excess profits be the difference between the profits of the year of taxation and the profits of the standard or base period. 2. That the standard profits be determined with reference to the average profits of the standard or base period being the years, 1936, 1937, 1938 and 1939, except as provided in resolution 5 hereof. 3. That the rate of tax on the excess profits be increased from fifty per centum to seventy-five per centum. 4. That on all profits a minimum tax be paid by every taxpayer under the Excess Profits Tax Act, such minimum to be a tax of twelve per centum on the total profits of the business before deducting income tax, and to be payable in all cases unless the tax provided in resolution 3 hereof is greater than the said minimum tax, in which case only the greater shall be paid. 5. That a board of referees (hereinafter called the board) be established with discretionary power, subject to the approval of the Minister of National Revenue (hereinafter called the minister), to ascertain a standard of profits for new businesses or businesses depressed during the standard period subject to the following: (a) in the case of a business depressed during the standard period the minister may direct that the board ascertain a standard of profits at an amount which they think just, being a return of not less than five nor more than ten per centum of the capital employed; (b) in the case of a new business other than that of the operation of a gold mine or an oil well, if it has been commenced since January 1st, 1938, the minister may direct that the board ascertain a standard of profits at an amount which they think just, provided that the said amount represents a rate of return on the capital employed by the taxpayer equal to the average rate of return of taxpayers in similar circumstances engaged in the same or analogous classes of business; (c) in the case of a taxpayer engaged in the operation of a gold mine or an oil well which has come into production since January 1st, 1938, the minister may direct that the board ascertain a standard of profits at such an amount which they think just on the basis of a presumed volume of production during the standard period equal to the volume of production in the taxation year and a presumed selling price for the product during the standard period equal to the average selling price of the said product during the standard period. 6. That the minister may adjust the standard profits so as to ensure the comparison of like with like in the following cases: (a) where the accounting period in the taxation year is longer or shorter than the standard accounting period; (b) where the capital employed in the taxation year has been substantially increased or decreased over that of the standard period by the contribution or withdrawal of capital; (c) in the case of gold mines and oil wells where the volume of production in the taxation year has been substantially increased or decreased over that of the standard period. 7. That there be exempted from the tax imposed under the said act: (a) small businesses where the profits before any salary or drawings by proprietors or shareholders do not exceed five thousand dollars per annum; (b) personal corporations which act solely as investment-holding agencies of individual Canadian taxpayers; (c) non-resident-owned investment corporations. 8. That sole proprietorships or partnerships be allowed to claim as a deduction such reasonable amount for salaries paid to the proprietor, or partners as the minister may determine, not to exceed five thousand dollars per year for each. 9. That in the case of a taxpayer who acquired a business as a going concern since January 1st, 1938, the minister may direct that the standard profits of the predecessor may be added to those of the taxpayer if the minister is satisfied that the trade or business of the predecessor and the taxpayer is not substantially different. 10. That the definition of average profits during the standard period be revised to provide that only the profits of the standard period shall be taken into account when determining the average of the years during the standard period when the taxpayer was in business. 11. That, in order to prevent evasion, power be given the minister to: (a) disallow the deduction of disbursements by the taxpayer which the minister in his discretion may determine to be in excess of what is reasonable and normal for the business; (b) assess without regard to specious transactions or reorganizations which the treasury board has found to have no reasonable business purpose other than that of avoidance or minimization of taxation. 12. That capital be redefined having regard to the cost price of the assets presently employed by the taxpayer less depreciation or depletion thereof, and deducting borrowed money and debts, with a proviso that non-productive The Budget-Mr. Ralston



assets, assets not actually employed in the production of profits, and assets producing tax-exempt income, shall not he included. 13. That there be allowed a tax credit in respect of the amount of excess profits tax or similar tax paid to the government of the United Kingdom or to the governments of other members of the British commonwealth of nations or to the governments of allies of the United Kingdom, if such governments allow a reciprocal credit for Canadian-paid excess profits tax. 14. That the act shall apply to the profits of the year 1940, and in the case of a fiscal period ending in 1940 prior to December 31, that the act shall apply to that proportion of the profits thereof which the number of days of the said fiscal period in the year 1940 bears to the total number of days of such fiscal period.


SPECIAL WAR REVENUE ACT


Resolved, that it is expedient to introduce a measure to amend The Special War Revenue Act, and the amendments thereto and to provide, 1. That section seventy-six of the said act be repealed and the following substituted therefor:



"76. (1) Except as hereinafter provided, every manufacturer and every importer of matches shall affix to every package of matches manufactured by him or imported into Canada, an adhesive or other stamp of the value of one cent for each one hundred matches or fraction of one hundred matches contained in such package. (2) When matches are put up in packages containing not more than fifty matches and not less than thirty-one matches each, the tax shall be payable at the rate of one-half of one cent for each package, and when matches are put up in packages containing not more than thirty and not less than twenty-six matches each, the tax shall be payable at the rate of three-tenths of one cent for each package, and when matches are put up in packages containing not more than twenty-five and not less than twenty-one matches each, the tax shall be payable at the rate of one-fourth of one cent for each package and when matches are put up in packages containing less than twenty-one matches each, the tax shall be payable at the rate of one-fifth of one cent per package. (3) No manufacturer or importer shall sell or import matches unless they are in packages." 2. That subsection one of section seventy-seven A of the said act be amended by providing that the excise tax on packets of cigarette papers be increased from two cents to five cents for each one hundred leaves or fraction thereof contained in such packet. 3. That subsection two of section seventy-seven A of the said act be amended by providing that the excise tax on packages of cigarette paper tubes be increased from two cents to five cents for each one hundred cigarette paper tubes or fraction thereof contained in each such package. 4. That subsection four of section eighty-six of the said act be amended by increasing the tax from eight per cent to twelve per cent upon the current market value of all furs dressed and/or dyed in Canada. 5. That the said act be amended by adding thereto after section eighty-eight the following section: "88A. (1) In addition to any duty or tax that may be payable under this Act, or any other statute, there shall be imposed, levied and collected a war exchange tax of ten per cent on the value for duty of all goods imported into Canada, payable by the importer or transferee who takes the goods out of bond for consumption at the time when the goods are imported or taken out of warehouse for consumption. (2) The tax imposed by this section shall not apply to any goods imported into Canada,- (a) which are entitled to entry under the British preferential tariff, or under trade agreements between Canada and other British countries; (b) Which are entitled to entry under Customs Tariff items 360, 460, 690, 690a, 696a, 700, 700a, 701, 702, 703a, 704, 705 705a, 706, 707, 708. 709; or to fish caught by fishermen m vessels registered in Canada or owned by any person domiciled in Canada and the products thereof carried from the fisheries in such vessels. (3) Where the Wartime Prices and Trade Board reports to the government in council that any producer or producers of goods have taken advantage of the tax imposed by this section to increase the price of such goods by an amount greater than is justified by any increases properly arising from such tax in the cost of materials or parts entering into the production of such goods or to maintain prices of such goods at levels greater than are so justified, the Governor in Council may, upon the recommendation of the said Board, impose upon all or any of the products of any such producer an excise tax at a rate not to exceed ten per cent of the selling price of such products for such period of time as he may determine, remove or reduce customs duties applicable thereto for such period of time as he may determine, fix the prices thereof and/or take such other measures and impose such penalties as he may determine." 6. That the provisions of section eighty of the said act levying taxes on articles manufactured or produced in Canada enumerated in schedules I and II to the said act be amended to provide that the taxes mentioned therein shall apply at the time of delivery. 7. That schedule I to the said act be amended by repealing section one thereof and substituting therefor the following:- "1. (a) Automobiles adapted or adaptable for passenger use, with seating capacity for not more than ten persons each, valued at $700 or less 10 per cent. Over $700 but not more than $900 10 per cent on $700 plus 20 per cent on the amount in excess of $700. Over $900 but not more than $1,200 10 per cent on $700 plus 20 per cent on $200 plus 40 per cent on the amount in excess of $900. Over $1,200 10 per cent on $700 plus 20 per cent on $200 plus 40 per cent on $300 plus 80 per cent on the amount in excess of $1,200. The Budget-Mr. Ralston (b) Automobiles adapted or adaptable for passenger use with seating capacity for more than ten persons 5 per centum Provided that the tax collected under paragraph (b) above shall in no case exceed $250 per automobile; Provided further that the tax on automobiles shall apply on the total price charged for such automobiles, which price shall include all charges for accessories, optional equipment, servicing, financing, warranty or any other charge contracted for at time of sale, whether charged for separately or not, but not to include heaters or radios; Provided further that the tax on automobiles shall apply to any such vehicles in transit to dealers or others; Provided that if a new and unused automobile is on the twenty-fifth day of June one thousand nine hundred and forty in the hands of a dealer and not delivered to another purchaser the tax shall be paid by such dealer when such automobile is delivered. Provided further that the tax shall not apply to automobiles imported:- (i) Under customs tariff items 702, 706, 707 and 708; (ii) by a bona fide settler on a first arrival; (iii) by a beneficiary resident in Canada, under the terms of a will of a person dying in a foreign country." 8. That schedule I to the said act be further amended by adding at the end thereof the following section:- "5. Cameras, phonographs, radios and radio tubes 10 per centum" 9. That schedule II to the said act be amended by repealing section one thereof and substituting therefor the following:- "Cigars:- (a) Valued at not more than forty dollars per thousand, per thousand $1 (b) Valued at more than forty dollars per thousand and not more than one hundred and ten dollars per thousand, per thousand $6 (c) Valued at more than one hundred and ten dollars per thousand and not more than one hundred and fifty dollars per thousand, per thousand $14 (d) Valued at more than one hundred and fifty dollars per thousand and not more than two hundred dollars per thousand, per thousand $20 (e) Valued at more than two hundred dollars per thousand, per thousand $32 Provided that the value on imported cigars shall be the duty paid value as defined in section seventy-nine of this act; the value on cigars manufactured in Canada shall include the amount of excise duty payable thereon." 10. That schedule II to the said act be further amended by repealing section three thereof and substituting therefor the following:- "Tires and tubes:- (a) Tires in whole or in part of rubber for automotive vehicles of all kinds, including trailers or other wheeled attachments used in connection with any of the said vehicles 5 cents per pound (b) Inner tubes for use in any such tires 5 cents per pound Provided the tax hereby imposed shall not apply to the goods mentioned herein when used exclusively for the original equipment of such automotive vehicles." 11. That schedule II to the said act be further amended hy repealing section four thereof and substituting the following:- "4. Carbonic acid gas and similar preparations to be used for aerating non-alcoholic beverages 5 cents per pound." 12. That schedule III to the said act be amended by striking out under the heading of "Farm and Forest, in the eighth and ninth lines the following words: "farm produce sold by the individual farmer of his own production," and substituting therefor the following words: "farm produce sold by the individual farmer of his own production, not to include canned fruits or vegetables when produced in excess of 10,000 cans of one pound each or their equivalent, per annum, nor flowers, flowering plants or bulbs, when the sales thereof exceed $500 per annum." 13. That any enactment founded on this resolution shall be deemed to have come into force on the twenty-fifth day of June, one thousand nine hundred and forty, and to have applied on all goods imported or taken out of warehouse for consumption on and after that day and to have applied to goods previously imported for which no entry for consumption was made before that day.


EXCISE ACT


Resolved, that it is expedient to introduce a measure to amend the Schedule to the Excise Act, 1934, and to provide:- 1. That the duty of excise on malt syrup as defined by paragraph (c) of section six of the Excise Act, 1934, when imported into Canada and entered for consumption be increased from twenty-one cents per pound to twenty-five cents per pound. 2. That the duty of excise on tobacco of all descriptions manufactured in Canada, except cigarettes, be increased from twenty-five cents per pound to thirty-five cents per pound actual weight. 3. That the duty of excise on cigarettes manufactured in Canada which was formerly $5 per thousand when weighing not more than three pounds per thousand be increased to $6 per thousand when weighing not more than two and one-half pounds per thousand. 4. That the duty of excise on cigarettes manufactured in Canada which was formerly $11 per thousand when weighing more than three pounds per thousand shall now apply to cigarettes weighing more than two and one-half pounds per thousand. 5. That a duty of excise of ten cents per pound actual weight apply on all Canadian raw leaf tobacco when sold for consumption. 6. That any enactment founded on paragraphs one, two, three and four of this resolution shall be deemed to have come into force on the twenty-fifth day of June, one thousand nine hundred and forty, and to have applied to all The Budget-Mr. Ralston



goods mentioned therein imported or taken out of warehouse for consumption on and after that day and to have applied to goods previously imported for consumption for which no entry for consumption was made before that day. 7. That any enactment founded on paragraph five of this resolution shall come into force on the first day of August, one thousand nine hundred and forty.


CUSTOMS TARIFF


1. Resolved, that schedule A to the customs tariff, being chapter forty-four of the revised statutes of Canada, 1927, as amended by chapter seventeen of the statutes of 1928, chapter thirty-nine of the statutes of 1929, chapter thirteen of the statutes of 1930 (first session), chapter three of the statutes of 1930 (second session), chapter thirty of the statutes of 1931, chapter forty-one of the statutes of 1932, chapters six and thirty-seven of the statutes of 1932-33, chapters thirty-two and forty-nine of the statutes of 1934, chapter twenty-eight of the statutes of 1935, chapter thirty-one of thestatutes of 1936, chapter twenty-six of thestatutes of 1937, chapter forty-one of thestatutes of 1939 (first session) and chapter two of the statutes of 1939 (second session), be further amended by striking thereout tariff items 209b, 210, 210e, 281a, 281b, sub-division (a) of item 429, 4401, 440m, 440n, 445o, 445p, 505, 505b, 791 and 825, the several enumerations of goods respectively and the several rates of duties of customs, if any, set opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said schedule A: IMr. Ralston.! Tariff Item - British Preferential Tariff Intermediate Tariff208jc Materials, including all parts, entering into the cost of cyanide of potassium and cyanide of sodium, when imported by manufacturers of cyanide of potassium and cyanide of sodium for use in their own factories. Free Free209b Nicotine; salts ol nicotine; non-alcoholic preparations containing nicotine in a free or combined state, for dipping, spraying or fumigating, n.o.p Free Free210 Peroxide of soda; silicate of soda in crystals or in solution; bichromate of soda; sulphide of sodium; nitrite of soda; arseniate, binarseniate, chlorate, bisulphite and stannate of soda; prussiate of soda and sulphite of soda Free 15 p.c.210e Nitrate of soda or cubic nitre Free Free281a Firebrick, n.o.p., of a class or kind not made in Canada, for use exclusively in the construction or repair of a furnace, kiln, or other equipment of a manufacturing establishment Free Free281b Fire brick, n.o.p 5 p.o. 15 p.c.429 Cutlery of iron or steel, plated or not: (a) Knife blades or blanks, and table forks, of iron oi steel, in the rough, not handled, ground nor otherwise manufactured; spoon blanks of iron or steel, in the flat, not further manufactured than stamped to shape; blanks, of iron or steel, for scissors and shears, in the rough, not ground nor otherwise manufactured Free 7J p.c.4401 Aircraft and complete parts thereof, n.o.p., not including engines, under regulations prescribed by the Minister Free 25 p.c.440m (i) Unfinished parts of aircraft, n.o.p., not including parts of aircraft engines Free 15 p.c. Present Rates British Preferential Tariff Intermediate Tariff General Tariff Various Free (subjec Various t to 99 p.c. drawba Free Various



10 p.c. Free /Free \Free 15 p.c. Free 15 p.c. 20 p.c. Free 20 p.c. Free (In part s 7* p.c. (in part subject 121 p.c. ubject to 99 p.c. d 20 p.c. to 99 p.c. drawbac 15 p.c. rawback) 221 p.c. k.)



I Free \17i p.c. Free (15 p.c. 110 p.c. ]15 p.c. I (20 p.c. 71 p.c. 10 p.c. 271 p.c. 30 p.c. 25 p.c. 6 6. <M 25 p.c. 27* P-e. 27* p.c. 35 p.c. 30 p.c. 30 p.c. 27* P-e. 30 p. The Budget-Mr. Ralston Tariff British Intermediate General Present Rates Item - Preferential Tariff Tariff British Tariff Preferential Intermediate GeneralTariff Tariff Tariff440m (ii) Direct or inertia starters with or without related operating gear and parts thereof; generators; voltage control boxes; batteries; de-icing and anti-icing equipment and parts thereof, not including parts of rubber; vacuum pumps with related operating gear and parts thereof; landing and navigation lights; propellers; hydraulic jacks and pumps and parts thereof; aircraft wheels; aircraft brakes with related operating gear; aircraft tires and tubes; oil coolers; fuel pressure warning devices; exhaust gas analysers; pressure fire extinguishers; primer pumps; instruments excepting fuel contents gauges; bolts, nuts, cocks, turnbuckles, clevis and pins, swaged wires and tie rods; bars, tubes, extrusions and forgings of aluminum, aluminum alloys and magnesium alloys; steel tubing; all of the foregoing when of types and sizes not made in Canada and imported by manufac- turers of aircraft for use exclusively in the manufacture in their own factories of the goods enumerated in tariff item 4401, under such regulations as the Minister may prescribe, provided that not less than sixty per centum of the factory cost of production of the aircraft is incurred in the British Empire. Free Free 271 p.c. Free 25 p.c. 271 P.c.440n Engines, when imported for use only in the equipment Free 25 p.c. 27J P-c. Free 25 p.c. 27^ p.c.440o (i) Carburettors, magnetos, distributors, coils and spark plugs and complete parts thereof; all of the foregoing when of a class or kind not made in Canada when imported for use in aircraft engines. Free Free 271 P-c. Free 25 p.c. 271 P-c.Free 121 P-c. 15 p.c.(su bject to drawback) (ii) Parts, finished or not, n.o.p., for aircraft engines.. Free 71 p.c. 271 P-c. [Free 25 p.c. 271 P-c.Various Various Various( subject to drawback >445o Acid-free capacitor tissue and paper, plain and gummed; metal cans, extruded, plated or unplated; automatic record changers; parts for pickups; bias cells and holders; frames, yokes, brackets, pole- pieces, gaskets and field covers, separate or assembled for use in speakers with mounting diameter not exceeding 6f inches; cones, spiders, spider sus- o o £ £ o m The Budget-Mr. Ralston pensions, voice coils and voice coil dust covers, separate or assembled; magnetic structures and parts thereof for permanent magnet speakers; glass dial crystals and scales and metal dials or scales made by the silk-screen process; metal cabinet escutcheons without crystals, plain or finished; high frequency circuit switches and essential components thereof; high frequency iron cores with or without inserts moulded therein; motors and gears for automatic tuning; radio frequency ceramics; raw low loss mica; sheets and punchings of low loss mica; tube shields and parts thereof; vibrators; vulcanized fibre in sheets, rods, strips or tubing; high frequency coil forms and tubing having an outside diameter not exceeding one inch; for use in the manufacture or the repair of the goods enumerated in tariff items 445d, 597a, and other apparatus using radio tubes, or for use in the manufacture of parts therefor Free 445p Ceramic parts; copper alloys for welding; getter and getter assemblies; glass parts; metal bulbs and shells and metal headers; mica parts; mica assemblies; wire snubbers, clips and straps; wire of molyb denum and molybdenum alloy; nickel and nickel alloy tubing, wire, ribbon, screen and strip, coated or not, carbonized or not; metal cathodes; nickel, nickel alloy and nickel plated parts, coated or not, carbonized or not; tungsten and tungsten alloy and zinc wire; leads, spuds and welds; iron parts designed for sealing to glass; hooks and supports; base pins; wire and strip of silver copper, chrome copper, chrome iron or plated iron; top cap assemblies; graphite anodes; heaters and filaments; all the foregoing when imported by manufacturers of radio tubes and parts therefor, for use exclusively in the manufacture of such articles, in their own factories Free Planks, boards, deals and other lumber of wood, not further manufactured than planed, dressed, jointed, tongued or grooved, n.o.p 10 p.c. Materials of all kinds for use only in producing or manufacturing preparations provided for in tariff items 209b and 219a, under regulations prescribed by the Minister of National Revenue Free Woven cord tire fabric, wholly or in chief part by weight of artificial silk or similar synthetic fibres, not to contain silk nor wool, coated with a rubber composition, when imported prior to July 1st, 1941, by manufacturers of rubber, to be incorporated by them in pneumatic tires, in their own factories.. Free Free Free 10 p.c. Free 15 p.c. 30 p.c. 30 p.c. 25 p.c. Free /Free. Free \Free 25 p.c. /Free Free \Free 25 p.c. /17J P-c. 22J p.c. \10 p.c. 10 p.c. /Free Free VVarious Various 1 Free 15 p.c. 30 p.c. 30 p.o. 30 p.c. 30 p.c. 25 p.c. 20 p.c. Free Various 25 p.c. 25 p.c. The Budget-Mr. Ralston The Budget-Mr. Ralston



2. Resolved, tliat schedule A to the Customs Tariff, as amended, be further amended by deleting from The Customs Tariff Amendment Act, 1939, being chapter two of the statutes of 1939 (second session), the following enumerations of goods and rates of additional duties of customs: "Manufactured tobacco of all descriptions except cigars, cigarettes and snuff-5 cents per pound. Cigarettes weighing not more than three pounds per thousand-$1 per thousand. Tea, when the value for duty thereof under the provisions of the Customs Act: (a) is less than 35 cents per pound-5 cents per pound. (b) is 35 cents or more but less than 45 cents per pound-7i cents per pound. (c) is 45 cents or more per pound-10 cents per pound." and by substituting therefor the following enumerations of goods and rates of additional duties of customs: "Manufactured tobacco of all descriptions except cigars, cigarettes and snuff-15 cents per pound. Cigarettes weighing not more than three pounds per thousand-$2 per thousand. Tea, when the value for duty thereof under the provisions of the Customs Act: (a) is less than 22J cents per pound-5 cents per pound. (b) is 22J cents or more but less than 30 cents per pound-7 J cents per pound. (c) is 30 cents or more per pound-10 cents per pound." 3. Resolved, that schedule B to the Customs Tariff be amended by striking thereout tariff items 1042, 1044 and 1063. 4. Resolved, that any enactment founded upon the foregoing resolutions to amend the Customs Tariff or schedules thereto shall he deemed to have come into force on the twenty-fifth day of June, nineteen hundred and forty, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.


APPENDIX TO THE BUDGET, 1940-41


A. Review of Government Accounts, 1939-40. B. Review of Economic and Financial Conditions, 1939-40. A. Government Accounts, 1939-40 Comparative Summary Statement of Revenues and Expenditures 1. As the final figures for the fiscal year 1939-40 are not as yet available, all statements dealing with revenues, expenditures, investments and balance sheet items are estimated. It is expected that when the books of the year are finally closed, any variations from the figures shown herein will be of slight importance. 2. The following tables show, by main categories and in detail, revenues, expenditures and the increase in net debt for the fiscal year 1939-40, together with comparable figures for the four preceding fiscal years:



The Budget-Mr. Ralston


June 24, 1940