July 15, 1942

NAT

Thomas Langton Church

National Government

Mr. CHURCH:

-conduct proceedings in public? That is the law, by statute and usage and custom.

Topic:   L. P. Duff.
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LIB
NAT

Thomas Langton Church

National Government

Mr. CHURCH:

I remember that an opinion was given to me years ago by, I believe, the Department of Justice. An inquiry under the Inquiries Act is a public proceeding. I should like to get an answer, Mr. Speaker. I moved for these papers last Wednesday.

Topic:   L. P. Duff.
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WAYS AND MEANS

INCOME WAK TAX ACT


The house in committee of ways and means, Mr. Vien in the Chair.


LIB

Thomas Vien (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

We were considering resolution 1, part I, normal tax.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

I have not heretofore addressed the house either in the budget debate or in the discussion of any of the resolutions

Income War Tax Act

arising from the budget, and therefore I desire for a moment to pay a high tribute to our Minister of Finance for the manner in which he has conducted the financial aSairs of this country during the last fiscal year. He has in my view done a real job in that capacity, and a difficult capacity it has been. When I deal with two or three matters to which I shall confine myself, I desire it to be distinctly understood that there is no criticism of the minister, but merely criticism of some of the methods by which under this budget he proposes to raise revenue. I wish to conclude my tribute to him by pointing out this extraordinary fact, that in his budget of a year ago he estimated for this parliament the sources of revenue and the probable amount of revenue for the fiscal year ahead. Now that that year is ended and we have the reality, we find the actual figures of revenue received were $1,480,000,000, or in round figures almost one and a half billion dollars, or within four and a half million dollars of his estimates made a year in advance. I venture to say that never since confederation has a finance minister shown the vision and the control of finance which is evidenced by the reality as compared with his estimates the year before.

I want to deal with two or three matters. First, apropos of the items under discussion, I suggest to the minister-and I wish it understood that any suggestions I make are not destructive or critical, but are intended to be constructive and helpful, and that alone -that even though it be necessary to increase the burden of these items, or perhaps to adopt another method to which I shall refer later, in order to gain the additional revenue required, he increase his estimates of the amounts required to support the army for the coming year by an item of $4,500,000 in order that our soldiers may be placed upon a minimum payment of $50 a month, the amount that the United States private soldier is receiving.

The second item to which I refer has been touched upon by the leader of the opposition and other hon. members, but I have tried to run it to earth a little farther than they have done. It was suggested to me that this is what might be called a bachelor's budget. We have in this house twenty-two eminent bachelors, and I am sure they would be the first to join me in desiring to have the burden of taxation placed so that it would bear fairly upon the bachelors in Canada as well as upon the married men.

I will take only a moment to illustrate what I believe is a discrimination which operates unfairly against married men, particularly

married men with children, and in favour of the bachelors. I remind you, Mr. Chairman, and I deal for illustration first with an income of $3,000 a year, that on that income the bachelor is taxed $1,064 and the married man is taxed $884. In other words, the difference allowed the married man on which to support his wife for a year is $180. I had thought that we desired to discourage bachelorhood and endeavour to bring about unions of marriage in this country in order to become a growing and virile nation. The very opposite result is the effect of the figures I shall give, because a bachelor who might say to himself, "I am tired of this single blessedness;

I am going to marry", on looking over this budget will find that it is an expensive process for him to enter upon. The sum of $180 a year to keep a wife means exactly 49 cents a day for everything she requires, upon which to furnish her with food-

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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?

An hon. MEMBER:

You cannot do it.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

An hon. member says that you cannot do it. I fancy he is right.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

As a married man you ought to know.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

There is something even more spectacularly discriminatory as against the married man with two children. The same income, $3,000, works out in this way for him. He is taxed $668 instead of $1,064. In other words, the state is allowing him $396 with which to maintain a wife, a boy of, let us say, ten, and a growing girl of twelve, or, in other words, $396, as against the bachelor's tax, to maintain those three persons. If we divide this amount by three, it allows him $132 a year on which to maintain each of the three. If we bring that down to a daily quota, he has the magnificent allowance of 36 cents a day on which to maintain the wife, 36 cents a day for the boy of ten, and 36 cents a day for a girl of twelve. If we divide that again, then aside altogether from food, he has practically nothing left to buy clothes, shoes and all these other things-

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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?

An hon. MEMBER:

Penny candies.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

"Penny candies" an hon. member reminds me. I am serious in this. What has this married man? 36 cents a day on which to feed his wife. For breakfast he can allow her 6 cents; for luncheon, 10 cents; and opening his heart at dinner time, he can spend 20 cents with which to buy her dinner. That eats up the 36 cents, and he has. nothing left for any of those necessities which a man with a wife and family must take care of. Why, in a year's time life would be nothing but a shadow on 36 cents a day. The

Income War Tax Act

children could not be furnished with overshoes or warm clothing in the winter and probably would have to stay in bed. I analyse that situation to endeavour to bring home to the minister in the most friendly way that, if his bachelor tax is fair, he ought to increase the living allowance in favour of, at least, the married -man with two children. Somebody says that means loss of revenue under this budget, and of course it does; but if the minister does not see fit to put on the shoulders of bachelors the burden of the loss incurred by treating fairly the married man with children, I have another suggestion to make in that regard. Before I conclude I will show him another method by which he may treat fairly the married men with children and still have just as much money with which to meet the expenditures that are so necessary under this budget.

Let me say at this point that I have no word of criticism of the spending of $3,900,000,000 which the minister proposes to spend. I would go a little farther and increase those expenditures if needs be. But I am going to quarrel in a friendly way with the method by which the minister proposes to raise the money. Just before I pass on to that, may I add a word in support of what was well put this afternoon by a number of hon. members, that we must remove the unfair inequalities which we are permitting if we carry out the budget proposal to tax a lieutenant or captain or officer in the active service forces because he is in Canada and not in England. To my mind that is grievously unfair. Take a young man who gives up his business or whatnot and volunteers for active service anywhere in the world. He lives perhaps in Ottawa or some village outside, and at the moment is on the Pacific coast in the service. He has made a great contribution by entering the active service. As has been pointed out, he has no control over where he goes. Most of the young officers to whom I have spoken are itching to get to England or somewhere where there is active service to be encountered, and that is the experience of probably all hon. members. That being so, how can we tax such an officer on his allowance from the state for his service? Do not misunderstand me. There may be young officers who are serving either in England or in Canada-if they are serving overseas they are exempt, and so they should be-who may have private incomes of their own, quite apart from the amount of money the state pays them. There is no suggestion from anyone, much less from me, that they should be exempt as regards their own private income; but when we come to the amount they are paid for entering into an unusual situation in defence

of the country and of the empire, I want to add the strongest protest I can against this country placing an income tax on the amount they receive.

I have been informed, though I have not checked it up, and military men will correct me if I am wrong, that the slogan used by the Department of National Defence, is, "Join the best paid army in the world." That statement is no longer true, if it was before the United States came into the war, because we are paying our privates $39 a month and they are paying theirs $50.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Colin William George Gibson (Minister of National Revenue)

Liberal

Mr. GIBSON:

What about allowances?

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

All right. Compare the allowances in the United States with those in this country, and you will find that the United States soldier is still better paid than the Canadian.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Colin William George Gibson (Minister of National Revenue)

Liberal

Mr. GIBSON:

Have you the figures?

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

I have not. My hon. friend has, and I challenge him to show that I am wrong.

Let me touch on one or two more factors connected with this matter before I proceed. There is a danger that if we cut these young officers down to the very lowest that they can stand, young men with a clean record may be suddenly brought before a court martial by reason of financial difficulties arising from a low scale of pay. Anyone familiar with the British situation knows that, regrettably, that is happening over there. May I point out that officers in the United States forces not only get better pay but do not pay taxes.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That is not correct.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAK TAX ACT
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LIB

July 15, 1942