I wish now, Mr. Speaker, to review the government accounts for the fiscal year which closed on March 31st. In accordance with the procedure which has been followed in the last two budgets, I shall merely at this time summarize the results of the year's operations
and at the close of this address I shall table a white paper which will include all the significant details in regard to our revenues and expenditures, our direct and indirect liabilities, our active investments and our financing operations during the past year.
The house will realize that, while we are now past the end of March, our books for the fiscal year 1940-41 will not be closed for some time. For this reason the figures which I shall present to the house represent merely estimates, although I believe they are close estimates, of our revenues and expenditures for the past fiscal year.
In this connection, my first duty is a pleasant one-that is, to report the fact that our revenues during the past year were of unprecedented magnitude. Our present estimate is that they will reach a total of $871,571,000, an increase over the previous year of over $309,000,000 or approximately 55 per cent. For no earlier year in our history have our receipts approached this huge total. Even the somewhat courageous estimates made by my precedessor last June were exceeded by more than $100,000,000. If hon. members contrast the huge total I have given with the dominion's revenues in the corresponding year of the great war, they will, I believe, find reason for confidence, not only in the increased strength of the dominion to bear the greater burdens of to-day, but also in the different methods which are being followed to finance this war. In 1915-16 the aggregate revenues of the dominion amounted to only $172 million, and even in the closing year of the last war they had risen to only $313,000,000.
The very large increase in our revenues as compared with those for 1939-40 is to be explained by several factors. In the first place, we imposed last year a number of new taxes and we increased the rates on several of our existing taxes. In the second place, the substantial increase in business activity, in personal and corporate incomes, and in consumer expenditures, to which I have already referred, have provided a broader base for all or nearly all our taxes. Finally, there was a much less important factor, the prepayment of income taxes not normally payable until April 30.
In these remarks I shall restrict myself to a brief discussion of our tax revenues and shall make no reference to our revenues from non-tax sources, such as post office receipts, return on investments, and various miscellaneous items. Total tax revenues are now estimated at $778,290,000, as compared with $468 million in the preceding fiscal year. The largest contribution to this total was made by
The Budget-Mr. Ilsley
our various excise taxes which account for aggregate receipts of $284 million as compared with $166 million for the previous year. Sales tax alone was responsible for total receipts of $180,750,000 and the war exchange tax for $62,000,000.
The income tax was the second most important source of revenue. From the graduated tax on personal incomes, the 18 per cent tax on corporate incomes and the special tax on interest and dividends, we received a total of $220 million, or more than 50 per cent in excess of any previous year in our history. The national defence tax produced a total revenue of $28 million, while under the excess profits tax we collected $24 million. In this connection, however, I wish to emphasize that it will not be until after April 30 this year that we will receive the very large returns which we expect from the excess profits tax, as well as from the increases in personal income taxes which were imposed last June. It is not as yet possible to determine with- any precise accuracy the total amount of prepayment of income tax which normally would not have been paid until April 30, 1941, although it is estimated that about 110,000 taxpayers took advantage of the instalment prepayment plan and that prepayments were about $45,000,000.
Despite the important steps we have taken to restrict non-essential imports, our imports have shown a substantial increase and as a result our revenues from customs duties rose from $104 million in 1939-40 to an estimated $131 million in 1940-41. This is larger than in any year since 1931, but still considerably below most of the pre-depression years.
As a result of the tax changes imposed in the two earlier war budgets and of increased consumer incomes, our revenues from excise duties, mainly on liquors and tobacco, increased from $61 million to $89 million.
I turn now to some brief comments on our expenditures for the past fiscal year. We now estimate that our ordinary expenditures will be slightly over $393 million, of which total approximately 70 per cent is accounted for by interest and other charges on. the public debt, civil and military pensions, cost of operating the postal service, and subsidies and special grants to provinces. Although it includes over $11 million additional interest and other charges on the public debt, this total is $5 million less than the corresponding figure for the previous year. Capital expenditures decreased to $3,405,000 from slightly over $7 million in 1939-40.
The largest decrease in our expenditures took place in the category of so-called special expenditures, representing chiefly the cost
of unemployment relief, payments under the Prairie Farm Assistance Act, and provision for losses in respect of wheat. In connection with the last named item, I have thought it wise to set up a reserve in our books of $10,500,000 which is the deficit shown, not previously provided for, in the operations of the Canadian Wheat Board calculated as at July 31, 1940. Including this reserve for wheat losses, our total special expenditures for the year are estimated at $42,613,000, which compares with an expenditure of $89,113,000 under the same category in 1939-40.
As the house already knows, there was also a substantial decrease in losses of, and nonactive advances to, government-owned enterprises, chiefly the government-owned railway system. During the past year our expenditure on this account was $18,182,000 as compared with $42,079,000 during the preceding year.
I come now to the last important category of dominion expenditures, namely, those on war account. By this time hon. members will, I am sure, realize how difficult it is to make precise estimates of war expenditures in advance, even for short periods. Our latest estimates indicate that our total cash disbursements for this purpose charged to the fiscal year which has just closed will approximate $816,150,000, of which $791,862,000 will represent expenditures charged to consolidated fund and $24,288,000 will represent outgo in respect of items which we treat as active assets in our accounts. For the sake of comparison it may be interesting to note that in the corresponding fiscal year of the last war, namely 1915-16, the war expenditures of the dominion amounted to only slightly over $166 million, and even in 1918-19, the last year of the war, to only $447 million.
If we add the amounts which I have given you for the various categories of expenditure charged to consolidated fund together with certain miscellaneous other charges representing chiefly write-down of assets, we get an aggregate expenditure for the year of $1,266,627,000, which total I need hardly say also represents a new record for the dominion. Deducting total revenues of $871,571,000 we reach an over-all deficit for the year of $395,056,000. This is, of course, a very large deficit, but nevertheless it is substantially smaller than that which was estimated by my predecessor last June. It compares with a deficit of $118,700,000 in 1939-40.
As a result of the over-all deficit of $395 million, the net debt of the dominion rose to approximately $3,666,316,000 as at March 31, 1941. Gross liabilities at that date are
The Budget-Mr. Ilsley