July 20, 1942

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes. I 'have not taken that into account in what I have said about the Anglican clergyman. He would have a credit. He will be paying less than he did last year. I think the hon. gentleman had better write and tell him to cheer up.

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

I will send him a copy of Hansard to-morrow.

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CCF

Angus MacInnis

Co-operative Commonwealth Federation (C.C.F.)

Mr. MacINNIS:

I am certainly amazed at the words of the leader of the opposition in the remarks he made-at least those that I heard. I shall refer in a moment to what he said, but as the matter of taxation appears

Income War Tax Act

co me we are in a war and that war has to be fought and paid for. Certain people are doing the fighting and certain people doing the paying, and the only way in which we can tell whether we who are doing the paying are doing much or little compared with those who are doing the fighting is to compare our respective positions. The leader of the opposition referred to the fact that he could not pay his taxes out of his present revenue and that he would have to draw on the savings of a lifetime. Do my hon. friends when they talk about this war understand that men are falling in flames from the sky every day- men whose lives have not yet really begun? What are my hon. friend's savings of a lifetime compared with that sort of thing? Those are the things that are important, and if we are sincere in our talk in this house we shall have to discuss matters from that point of view.

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

The two things are not comparable at all.

Mr. MaeINNIS: Of course they are not.

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Why bring it up?

Mr. MaeINNIS: I say that my hon. friend's savings of a lifetime are not-

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

The two positions are not comparable at all, and you cannot make a comparison between them. I admit that the sacrifice of a soldier cannot be measured in terms of dollars and cents, but if we are to have anything left in this country, then I say, do not tax us too heavily.

Mr. MaeINNIS: Can the young man who is taken into the army say, "If you are to have any people left in the country after the war. do not take us away"? Every word the leader of the opposition said is based on "our property"; "You are taking our property away." Not a word about the lives of the young men which are being taken away and which it is advocated should be taken away more completely-

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

I deny that. I will not let that go unchallenged. The minister has to have money, but I say he has gone the limit in one method he has devised and he must devise some other method. Page the hon. member for Lethbridge (Mr. Blackmore) as to the other method.

Mr. MaeINNIS: But the leader of the opposition does not accept the ideas of the hon. member for Lethbridge. He says we should borrow money. Well, if we can borrow

money, surely the money must be here. Either that, or we are going to allow people to create money and then lend us that money at so much in interest. It is one of two things: either the money is here to be borrowed, or it is not here, but it can be created and we can borrow that created money. If we borrow created money, I submit that the government can create the money for itself at no or very little cost, and without paying interest. If the money has to be borrowed, we have to find it in one of two ways. As I say, either it is here and we borrow it from the people who have it. or it is not here and someone creates it. and for the privilege of creating it we pay them interest forever. That is the position we are in.

We are taxed heavily, but we have not begun to sacrifice in this country. Let us compare our sacrifices with what is going on in the desert in Egypt to-day, and we shall have some understanding of what we are paying and what others are paying. There is only one thing that is important in this matter of taxation, and that is that the burden should fall as equitably as possible on the whole population. In so far as I think the minister is taxing equitably I shall support him. When he is pressing too hard on people whose incomes are already too low I will protest, but only under those circumstances.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I want to follow up the case of the rector. By September 1 he will have paid $32 of the $53 tax in national defence tax since the beginning of the year. For the next twelve months his actual rate of taxation will be less than half the rate he has been paying on national defence tax.

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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

That is only for this year.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes, but just think of it.

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PC

George Russell Boucher

Progressive Conservative

Mr. BOUCHER:

If the minister checks

up he will find that clergymen in the last year have not been granted exemption for mileage in their travelling, whereas other professionals have been granted that exemption. There is a discrimination there. The doctor or the business man, the commercial traveller, is allowed exemption in that respect, but I do not believe the clergyman is receiving that exemption. The work of clergymen calls for a great deal of travelling in their cars if they are to render proper service to the community, and that is something that might be looked into by the minister.

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NAT

Harry Rutherford Jackman

National Government

Mr. JACKMAN:

When we are talking about the value of the rectory in relation to

Income War Tax Act

the rector's stipend, it does strike me that there may possibly be some discrimination between the Protestant religion and the Roman Catholic religion. In some ways the Roman Catholics may be more efficient in carrying on the work which they do, and I refer particularly to the fact that, owing to celibacy in the Catholic church and the fact that the priest probably does not have a private income, he is not a taxable person. How, therefore, does the department tax the dwelling in which he lives? On account of there not being celibacy among the Protestant clergy they have their own homes, either provided by the church or out of their stipends and they then have to pay a tax on the value of that house. Is there discrimination between the Roman Catholic religion and the Protestant religion with regard to the manse or rectory which the parson or the priest enjoys?

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Rather than hold up the committee I think the answer will have to be given to-morrow or later, because it seems to be rather a long story.

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NAT
LIB

Ralph Maybank

Liberal

Mr. MAYBANK:

Is it the definite intention and desire of the government to discourage individuals from purchasing dwellings? I raise that question because of the date fixed as to when a mortgage will entitle a person to exemption from the refundable portion of the tax. Is it the definite intention to discourage the purchase or building of dwellings?

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I do not see any objection to the purchase of dwellings. Building is different; that is using materials. The government does not desire to see any more of that than is absolutely necessary. It is not the definite objective of the government to discourage the transfer of property.

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LIB

Ralph Maybank

Liberal

Mr. MAYBANK:

It is rather difficult to accept that statement. Of course I am not suggesting that the minister is deliberately giving a wrong answer. But it is pretty nearly impossible for a person in the middle income brackets to be paying the amounts required under this refundable section, and also to commence the purchase of a home. I should think the great majority of people in the middle income brackets will be exempt from this clause, taking a certain percentage of their income, I think it is about $480 for the $5,000 man. I should think most people in that class would be exempt from that requirement; they have life insurance or are buying a home. But many people who were about to buy homes will not be able to pay the $480

to the treasury and also a similar amount on the purchase of a home. If this provision is left as it is, unquestionably, it will chill the alienation of property for the purchase of homes because the people in the middle income brackets or, indeed, in others, cannot do both. Therefore it does give rise to the thought that there is a definite intention to prevent it.

In the land titles office at Winnipeg in May there was a certain number of transfers of property registered, let us say one hundred. On examination of the transfers it was quite apparent that 90 per cent of them were for homes. In June that 100 will be 125, and in July more, possibly 150. In August, after this budget has become known, there will be practically none, because people will realize that they cannot meet the obligation of this budget and also buy that dwelling. By fixing a date as the last day upon which mortgage payments will mitigate the impost of this tax you practically tell the people, "You cannot buy a home; you may have intended to for some years, but now you cannot." I do not wish to be overemphatic about the matter, but I am quite sure that in every city in Canada there were a great many negative decisions made for the month of July and it will be the same for August. I do not think there will be a home purchased by people of the type of whom I have been speaking; I do not see how they can do so. I do not believe it is necessary to fix the date in the way that it has been done. If the desire is just to have the money saved, then whether a home is bought on June 14 or June 30 the money is still saved and it will also be available, although not in the same hands, for future loans. Many thousands of people who have been looking forward to the time when they could purchase a home will be able in spite of the budget to do so, and the government's plans will not be interfered with at all. It might even stimulate the buying of homes. Perhaps that is not desired by the government.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

No, it is not.

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LIB

Ralph Maybank

Liberal

Mr. MAYBANK:

At any rate you cannot stimulate it to the point of doing any damage to the alienation of property, because this mitigation of the impost is only as a result of money payments on homes. It does not apply if I want to buy two or three houses as an investment. It applies only if I am buying a place for my own dwelling. Therefore I cannot see how the government policy

Income War Tax Act

can be injured by leaving it open to bave such payments apply on a home bought from now on equally as to a home already bought.

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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

It would give a very great

stimulus, an undesirable stimulus, to the sale of property for residential purposes.

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July 20, 1942