July 21, 1942

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

The farmers were selling

tobacco to the manufacturing companies. I do not know what the price was, but I remember that we discussed it at length before the price spreads committee some years ago. It is away below the duty.

Topic:   INCOME WAR TAX ACT
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LIB

Charles-Édouard Ferland

Liberal

Mr. FERLAND:

WThat was the revenue

from the tax on tobacco during the fiscal years 1940 and 1941 from the month of August?

Topic:   INCOME WAR TAX ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

The quantity of Canadian

raw leaf tobacco sold for consumption and the duty collected since the inception of this item was as follows: For the fiscal year

1940-41 from August 1, 1940, rate 10 cents per pound, quantity in pounds, 1,754,173, and excise duty collected $175,417.40; for the fiscal year 1941-42, rate 10 cents per pound, quantity in pounds, 3,458,006, and excise duty collected $345,899.30.

Topic:   INCOME WAR TAX ACT
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Section agreed to. Preamble agreed to. Rill reported, read the third time and passed.


CUSTOMS TARIFF


Hon. J. L. ILSLEY (Minister of Finance) moved the second reading of Bill No. Ill, to amend the Customs Tariff. Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Vien in the chair. Sections 1 to 3 inclusive agreed to. On the schedule:


NAT

Grote Stirling

National Government

Mr. STIRLING:

On several occasions

when this bill was in the resolution stage the minister said that he would give consideration before the bill was presented to certain questions which had been raised. Were there any such in connection with this schedule?

Topic:   CUSTOMS TARIFF
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LIB

Schedule agreed to. Bill reported, read the third time and passed.


SPECIAL WAR REVENUE ACT


Hon. J. L. ILSLEY (Minister of Finance) moved the second reading of Bill No. 114, to amend the Special War Revenue Act. Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Vien in the chair. j Section 1 agreed to. On section 2-"Company." Excise Act Amendment



this type of tobacco, but that was removed by the Liberal government in 1923. When the new tax of 10 cents a pound was imposed in 1940 I made representations to the Minister of Finance and some other ministers of the crown against the tax. At the same time, at my request, the premier of Quebec, Mr. Adelard Godbout, made representations. Then, the farmers' organization, L'Union Catholique des Cultivateurs, and some other interested organizations, made their representations. However our requests were not met. The answer to our protest was that the raw leaf tobacco industry was amply protected through the higher taxation on manufactured tobacco. Last year's tax on Canadian raw leaf tobacco was 10 cents a pound, and on manufactured tobacco it was 35 cents a pound. To-day under the present scheme the tax is increased on all Canadian raw leaf tobacco from 10 cents to 20 cents a pound, and on the manufactured or cut tobacco it is increased from 35 cents to 51 cents a pound. Then, there are increases to the extent of a few dollars a pound on other types of manufactured tobaccos, and on cigars and cigarettes. Of course the difference between the tax on Canadian raw leaf tobacco and that on other types is very great. This great change in taxation is not helpful to the situation faced by the tobacco growers in my district of Quebec. The tobacco industry in that province has been developed under special conditions, and to-day the majority of small dealers cannot carry on their trade. Many of them have been put out of business in the last year. The reason is that some of these people were engaged in the distribution to consumers of pipe tobaccos. Those small dealers have only small capital, and have not had sufficient money to buy their tobacco, to prepare and steam it and put it on the market. They have not had sufficient money to advance to the government to cover the tax. To-day only those tobacco packers under licence are permitted to buy, prepare and steam tobacco. If a dealer wants to buy 5,000 pounds of tobacco he must first pay at least $500 to the farmer. Then he must spend another $500 to prepare and steam the tobacco, and to distribute it to the consumer. Then, on 5,000 pounds at 20 cents a pound he must advance to the government $1,000, making a total of $2,000 expenses before he may expect to receive any profit. From these facts it is clear that those poor, humble dealers who used to make their living by dealing in tobacco cannot afford to invest such large sums of money, and have had to go out of business. There is a further reason for our objection to the tax. The growers of tobacco in my district in Quebec used to produce from 5,000,000 to 7,000,000 pounds of big and small types of tobacco each year. That tobacco was distributed in great part by the small dealer. As I pointed out earlier, those who held the monopoly were not greatly interested in buying these types of tobacco. It is probable tnat the tobacco trusts found there was not sufficient profit . in that business, and therefore in the past they bought only a small proportion of the production. If the farmers lose their markets because of the new tax and the restrictions imposed under the new regulations they will have no market at all. Last year, when the tax was only 10 cents a pound, the farmers were forced to reduce their production, and with the imposition of this new tax they are facing a crisis. I consider it my duty to protest against this tax. It seems to me that the [DOT] Minister of Finance could find some other method of raising revenue and be able to leave this tax at 10 cents a pound. The new tax of 20 cents a pound is unfair and unjust to the farmers of my district and of the province of Quebec. It is' not a liberal way of dealing with a group of farmers.


LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

This is only one item in the Excise Act, and I think it could be more appropriately discussed when we are in committee of the whole-I mean by myself; I am taking no exception to my hon. friend's speech.

Topic:   SPECIAL WAR REVENUE ACT
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Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Vien in the chair. Section 1 agreed to. On section 2-Schedule.


CCF

Alexander Malcolm Nicholson

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

Mr. NICHOLSON:

What are the comparable rates on spirits in the United States, Great Britain, Australia and New Zealand?

Topic:   SPECIAL WAR REVENUE ACT
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LIB
NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

May I ask the hon. member what effect it has on the human race?

Topic:   SPECIAL WAR REVENUE ACT
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LIB

George Taylor Fulford

Liberal

Mr. FULFORD:

Are there not other manufacturers in Canada who sell their products under the name of Geneva gin? I think there is a firm called Melcher's, is there not? I am not sure.

Topic:   SPECIAL WAR REVENUE ACT
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LIB
LIB

Georges Parent (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I would remind hon. members that this is the motion for second reading. We are not in committee.

Topic:   SPECIAL WAR REVENUE ACT
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July 21, 1942