June 10, 1941

BUSINESS OF THE HOUSE

SPECIAL WAR REVENUE ACT AMENDMENT-INQUIRY AS TO FURTHER LEGISLATION


On the order: Presenting reports by standing and select committees.


NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Hon. R. B. HANSON (Leader of the Opposition):

Before this order is called I

should like to direct a question to the Minister of Finance (Mr. Usley). In the Votes and Proceedings, No. 89, which has just come to hand, under the heading Notices of Motion, there is notice by the minister that he will introduce a bill to amend the Special War Revenue Act. Unquestionably this must be an emergency measure, and I am going to ask the minister if he will be good enough to introduce this bill to-day, at once, so that we may know what it is and it may be advanced.

Topic:   BUSINESS OF THE HOUSE
Subtopic:   SPECIAL WAR REVENUE ACT AMENDMENT-INQUIRY AS TO FURTHER LEGISLATION
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes.

Topic:   BUSINESS OF THE HOUSE
Subtopic:   SPECIAL WAR REVENUE ACT AMENDMENT-INQUIRY AS TO FURTHER LEGISLATION
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

While I am on my feet may I suggest that if there is to be any further legislation we should have notice of it immediately? I had hoped that the house might close within a day or two.

Right Hon. W. L. MACKENZIE KING

(Prime Minister): I think the amendment

which is to be introduced by the Minister of Finance concerns a minor non-contentious matter arising out of an amendment to the act when it was before the house earlier this

Special War Revenue Act

session. As to further legislation, I know of nothing that is to be added to what is already before the house.

Topic:   BUSINESS OF THE HOUSE
Subtopic:   SPECIAL WAR REVENUE ACT AMENDMENT-INQUIRY AS TO FURTHER LEGISLATION
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

If I have the consent of the house I will introduce the amendment and explain it when the order for the introduction of bills is reached. Perhaps with the consent of the house I might introduce the bill now.

Topic:   BUSINESS OF THE HOUSE
Subtopic:   SPECIAL WAR REVENUE ACT AMENDMENT-INQUIRY AS TO FURTHER LEGISLATION
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LIB

Georges Parent (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order. We have not yet reached the order for the introduction of bills.

Topic:   BUSINESS OF THE HOUSE
Subtopic:   SPECIAL WAR REVENUE ACT AMENDMENT-INQUIRY AS TO FURTHER LEGISLATION
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LIB

Ian Alistair Mackenzie (Minister of Pensions and National Health)

Liberal

Mr. MACKENZIE (Vancouver Centre):

The order for introduction of bills follows the order for motions, on which we may spend most of the day. The Minister of Finance wishes to introduce the bill now, before the order for motions is called.

Topic:   BUSINESS OF THE HOUSE
Subtopic:   SPECIAL WAR REVENUE ACT AMENDMENT-INQUIRY AS TO FURTHER LEGISLATION
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PRIVATE BILLS


Fifth report of standing committee on miscellaneous private bills.-Mr. Donnelly.


SPECIAL WAR REVENUE ACT

EXEMPTION OF CARBONIC ACID GAS USED IN MANUFACTURE OF SOFT DRINKS NOT TO EXTEND TO SUGAR


Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 101, to amend the Special War Revenue Act. He said: No doubt the house would like an explanation of this bill. The explanatory note states that when the budget resolutions were introduced it was the intention to exempt carbonic acid gas when used in the manufacture of soft drinks, but the exempting section was so drafted that it also exempted sugar, et cetera, which was not intended. The purpose of this amendment is to make the necessary correction. It was a mistake in the drafting of the bill. Motion agreed to, bill read the first and second times and the house went into committee thereon, Mr. Donnelly in the chair. On section 1-Exemption not to extend to sugar, etc.


LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

We have not copies of

this bill.

Topic:   SPECIAL WAR REVENUE ACT
Subtopic:   EXEMPTION OF CARBONIC ACID GAS USED IN MANUFACTURE OF SOFT DRINKS NOT TO EXTEND TO SUGAR
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

As I

understand it, this is merely a correction. Perhaps the minister would just state what are the goods mentioned, to which reference is made in the section. Is there anything in addition to sugar?

Topic:   SPECIAL WAR REVENUE ACT
Subtopic:   EXEMPTION OF CARBONIC ACID GAS USED IN MANUFACTURE OF SOFT DRINKS NOT TO EXTEND TO SUGAR
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I do not know of anything.

I assume that the original bill was drafted to accomplish the end that it was desired to accomplish, which was not to exempt sugar from the excise tax. To do so would be a most important, far-reaching and unintentional

exemption. Section 8 of the act to amend the Special War Revenue Act, passed at this session, adds the following subsection to section 80 of the act:

Notwithstanding anything in this section contained, the said tax shall not be 'payable when such goods are exported under regulations prescribed by the .minister, nor in the case of goods purchased or imported by a manufacturer licensed under this part, which are to be incorporated into and form a constituent or component part of an article or product which is subject to an excise tax under this part, under regulations prescribed by the minister.

There are some parts which are subject to these excise taxes we have been imposing, through the War Exchange Conservation Act. Where those parts pay the 25 per cent tax, and the completed goods pay the 25 per cent tax, the first tax should not be payable.

Specifically, this section was drafted to deal with the carbonic acid gas situation. It will be recalled that in the budget we imposed a tax of 25 cents a pound on carbonic acid gas. That tax had been raised from five cents. We intended to provide by this section that when the carbonic acid gas had been purchased by a bottler or by a manufacturer of soft drinks he should be able to buy it tax free, just as he would be able to buy it free of sales tax. This tax of 25 per cent is imposed upon the bottler or manufacturer. It is not in addition to the carbonic acid gas tax, but takes the place of it.

The section was so widely drawn that it included sugar which was purchased for use in soft drinks, and that was never intended. I believe I have explained the purpose of the section.

Topic:   SPECIAL WAR REVENUE ACT
Subtopic:   EXEMPTION OF CARBONIC ACID GAS USED IN MANUFACTURE OF SOFT DRINKS NOT TO EXTEND TO SUGAR
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NAT

Gordon Knapman Fraser

National Government

Mr. FRASER (Peterborough West):

I was told over the week-end that some of these retail distributors of soft drinks sell their product at six cents, and some at seven cents. Is that a legitimate procedure? Are they allowed to do that?

Topic:   SPECIAL WAR REVENUE ACT
Subtopic:   EXEMPTION OF CARBONIC ACID GAS USED IN MANUFACTURE OF SOFT DRINKS NOT TO EXTEND TO SUGAR
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

One important manufacturer has not raised the price of soft drinks to the wholesale or retail trade. This is creating a difficulty, and an undesirable condition in the soft drinks industry. Consideration is being given to that point, and I hope that perhaps the situation may be remedied so that there will not continue to be the complaints there are to-day.

Topic:   SPECIAL WAR REVENUE ACT
Subtopic:   EXEMPTION OF CARBONIC ACID GAS USED IN MANUFACTURE OF SOFT DRINKS NOT TO EXTEND TO SUGAR
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Section agreed to. Section 2 agreed to. Bill reported, read the thud time and passed.


June 10, 1941