April 14, 1943

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

This merely adds contractual annuity payments to the list of payments that may be offset against the refundable part of the tax.

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

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

This is the item that the minister resisted so strongly a year ago.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes.

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

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

He is now *conceding this to purchasers of annuity contracts. I congratulate him upon that. I think it is a fair thing, and we should congratulate him for having done it. It is just as much a saving as the payment of interest on a mortgage.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I do not wish to argue against my own action, but the reason why I am *doing it is the extreme difficulty of explaining

the difference between contractual annuity payments and these other types of payment.

I think in principle I was right last year, but it is so hard to explain that from the point of view of practicality that I think it is better to do it than to be arguing all the time.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAR TAX ACT
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PC

Joseph Henry Harris

Progressive Conservative

Mr. HARRIS (Danforth):

Consequently, whether this payment originates from capital or income, it will be allowed as a deduction from the income tax payable?

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes; that does not make any difference. I do not think the hon. gentleman appreciates the meaning of the resolution. The payment is a payment toward the purchase of an annuity. The source of the money the annuitant pays in has nothing to do with the problem.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAR TAX ACT
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PC

Joseph Henry Harris

Progressive Conservative

Mr. HARRIS (Danforth):

When the annuitant receives the money, that is taxable?

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

It certainly is.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAR TAX ACT
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PC

Joseph Henry Harris

Progressive Conservative

Mr. HARRIS (Danforth):

Whether the origin of the money in the first place was capital or income?

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That is correct.

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

Donald Alexander McNiven

Liberal

Mr. McNIVEN:

I brought this question to the attention of the minister last year.

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

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

So did many others.

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

Donald Alexander McNiven

Liberal

Mr. McNIVEN:

That may be. In any event the minister indicated then that he was not prepared to give the relief which I then requested. I wish to thank him for having done so now. Whatever motivated him in making the change, it has brought relief to a great many purchasers of dominion government annuities, particularly those who had contracted for annuities many years ago and whose annuities would mature in the early future. They had budgeted for the payment of those annuities and the provisions of last year's budget with regard to compulsory savings bore especially heavily upon those individuals. I know the minister's action now will meet with the general approval of those who have purchased dominion government annuities.

I understand from the press that the minister intends to make some provision in the near future whereby the principal of annuities will not be taxable. May I ask if any such provision is contemplated at this time?

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

In the bill I shall bring forward a section dealing with annuities payable under wills. It will probably not go as far as some hon. gentlemen expect. But I wish to leave that until I bring the bill in, because

Income War Tax

even yet I am not quite sure what I ought to do about it. It will certainly not change the situation in regard to contractual annuities.

Mr. HANSON (York-Sunburyl: To be consistent the minister should make this retroactive to last year.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes, this resolution will be retroactive to last year.

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

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

Let us have it clearly understood then that those who paid on their annuity contracts under the legislation of last year and did not get any allowance for compulsory saving will have a credit on account of the payment last year.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That is correct. It must be understood that it relates only to annuities purchased before June 23 of last year. That was the dead-line.

Topic:   WAYS AND MEANS
Subtopic:   INCOME WAR TAX ACT
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Resolution agreed to. Progress reported. At eleven o'clock the house adjourned, without question put, pursuant to standing order. . Thursday, April 15, 1943


April 14, 1943