May 20, 1941

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Well, three cents a gallon means $25,000,000; we would have to pay the provinces that $25,000,000, which would leave us just where we were before.

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NAT
LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

To give anything less would not mean much.

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NAT

Douglas Gooderham Ross

National Government

Mr. ROSS (St. Paul's):

The hon. member for Essex East suggested that the gasoline tax was originally imposed in Ontario for the purpose of building roads; he also said that road building in Ontario had stopped or practically stopped, and that the cost of maintenance of roads is now down to a minimum. If that is true, what is happening to the eight cents a gallon which is being collected by the province at this time? I think we would be well advised, as members of this house, to urge on the provincial governments that they do something to cut down their own expenses and, therefore, reduce the necessity for the gasoline tax that they collect at the present time.

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NAT

Heber Harold Hatfield

National Government

Mr. HATFIELD:

I would point out that it is unfair that government officials driving round in government cars should be exempt from this tax and that farmers should not be. In New Brunswick we have the lowest farm income of any province, and we have a thirteen cent gasoline tax.

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NAT

Douglas Gooderham Ross

National Government

Mr. ROSS (St. Paul's):

I should like to ask the minister a question. He did not answer me in connection with the question of collection of the tax. The provinces now have the machinery for its collection. It is proposed that the federal government shall collect this tax, with all the ramifications involved. Why was it decided that the tax should be col-

Special War Revenue Act

lected from the refinery and not through the agencies of the various provinces who now have the machinery?

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

We have the machinery also. The sales tax organization is in existence; the excise division of the Department of National Revenue is-I was going to say a perfect organization-an efficient organization.

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NAT

Douglas Gooderham Ross

National Government

Mr. ROSS (St. Paul's):

But how are you going to find out how much gasoline each province uses? For example, a road inspector for Ontario is going along in his car; he stops at a gasoline station and gets so many gallons. Here is a tractor on the road; it gets so much gasoline. Here are various other provincial vehicles, motorcycles; all these are going to be free from the gasoline tax. How are you going to find out what those exemptions will be?

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Section 105 of the Special War Revenue Act states: '

A refund of the amount of taxes paid (under certain parts) may be granted to a manufacturer, producer, wholesaler, jobber or other dealer on goods sold to His Majesty in the right of the government of any province of Canada, if the said goods are purchased by His Majesty for any purpose other than purposes of resale or of any railway, commission, board or public utility which is operated by or under the authority of the legislature or the lieutenant governor in council of the province.

The point is, refunds of sales tax are made to manufacturers now upon production of evidence that the sale was made to his majesty in the right of a province.

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

What is proposed to be done to check the use of provincial government gasoline, because it is a fact that it is not all used exclusively in connection with the business of the government as such? There is a tremendous amount which is used in flying round the country that is not business.

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LIB
NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Well, it

is substantial, and the government will hear about that if it does not take some steps to check t'he use by the provincial governments, and especially by their officials. Every provincial government has an army of cars; everyone has a car, just as everyone in the federal service has a car. If I understand the situation correctly, that evil, if I may call it that, of providing motor cars for all government officials from the Atlantic to the Pacific has grown substantially in the last five or six years. There are too many cars provided by governments for their officials.

Nobody walks to-day. This is particularly true in the militia. Let me tell the minister something. Just opposite my home is a military hospital. There are never less than ten cars on the street in front of my home or in the yard of the hospital, and I have never yet seen anyone walk to that hospital except a buck private. I suggest that when the minister has this provision put through, as he seems bound to do, the excise division should set up some check on the provincial government's consumption of gasoline. Perhaps he will not lose as much revenue as I think he is losing to-day.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

They check that now.

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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

Why does the minister

propose to exempt provincial governments and their employees?

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

What

contribution do they make to the war?

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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

There is no equitable principle behind such an exemption. One province may have a small army of such public servants, and their ratio of expenditure for gasoline may be entirely out of keeping with that of another province, and just to that extent by exempting it we are going to be grossly unfair. Why not let them pay their shot, take care of it themselves just as fishermen, farmers and all other drivers of cars do?

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Quite

right.

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NAT
LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I can consider that, but it

would mean the introduction of a new principle; we would have protests from every province. I do not know of a single instance where the federal government steps into a province and lays a tax on the province which will be paid out of the taxes that it imposes on its people. It would be introducing a new principle.

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Let the

minister sleep on it.

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May 20, 1941