I suggest in connection with this section, which deals principally with income taxation, that the minister might clear up a good deal of misunderstanding, and perhaps a good deal of protest throughout the country, if he were to give a statement making more clear the position on this matter than was made, so far at least as its effect, in his speech on March 2.
What I have in mind is this, if I may take a moment to give a bit of background. A year ago, when the income taxation proposals were made, the minister's remarks made it clear to the country that the taxation being applied at that time was in the nature of an increase. The country accepted it, realizing that it was necessary for the sake of the war effort. But it came as a rather pleasant surprise to taxpayers generally to discover that when those increased rates were applied, due to the longer period-in effect, twenty months-which was being allowed to pay the taxes of one year, the monthly' or weekly deductions were not greater after, the new tax of last year than they were before, not substantially greater as far as the average working man was concerned. However, this year, when the budget speech was made on March 2, whether the minister intended it or not, a great deal of publicity was given to the fact that there were no increases in 'the rates, and the general impression gathered throughout the country was that this was a budget which was perhaps rather light in its burden; there was an element of forgiveness in it, and people expected it to be a fairly easy pill to swallow. But the discovery dawned that, despite the fact that there was no increase in rates, due to other factors, such as the bringing forward of the taxation period, the deductions which are to be made
Income War Tax
from workers' pay envelopes and pay cheques per month or per week are actually greater than was the case before.
I know that when the minister was speaking on March 2 he remarked, as reported at page 855 of Hansard, that some would thank it strange that, with no increase in the rates, there would nevertheless be a tremendous increase in the aggregate amount collected through income taxes. But that was put in more or less as an aside; at least it was treated in that way in the country generally. The impression gained, if I may repeat myself, was that this was a budget which did not involve increases in taxation; it had in it with respect to the pay-as-you-earn plan an element of forgiveness, and it would be fairly easy to take. I feel it was because that impression was given that so much misunderstanding has arisen and so many protests have been coming in to the government, man}' of them relating, as the minister knows quite well, to the pay-as-we-earn plan. I feel that that misunderstanding and those protests might to a large extent have been avoided, and I believe that a good deal of that misunderstanding could be cleared up now if the minister were to make it clear that the, purpose of this budget so far as the income taxation part of it is concerned was not to give something easy to the Canadian people, was not primarily to provide forgiveness in connection with the pay^as-you-earn plan, but that its fundamental purpose was to increase the aggregate amount of income tax collected1 from persons.
In the appendix to the budget speech which is found in Hansard of March 2, the minister gave figures showing that the effect which he now refers to as incidental was to provide a tremendous increase in collections. He gave the estimated receipts from personal and national defence taxes for the year 1942-43 as $540,500,000. Then he pointed out that the anticipated revenue from income taxation in the year 1943-44 would be a total of $930,000,000. He made it clear that the increase would be due to the application of the tax over a different time period and that there would have been a certain increase in the aggregate collected even if no changes have been made, but that there was, through the tax changes, an additional increase of $105,000,000. My point is that since the effect of this tax legislation is to increase the collections
from $540,500,000 to $930,000,000, it would look to me as though that was the purpose of this legislation. If it was not intended to make an increase in the aggregate amount collected, one would have expected that changes would have been made to keep that amount down. I am not complaining of this increase, but I say that I feel that if the Canadian people had been told or were told now that because of the war it is necessary to make these increased collections, that that is the primary purpose, and that the forgiving of certain portions of the 1942 tax and the change-over to the pay-as-we-earn plan is not a concession in terms of dollars and cents so far as this year is concerned- it is a concession so far as the future is concerned-there would have been a great deal less of misunderstanding.
I remind the minister that a year ago when he announced that the tax rates were going up the people accepted that, being willing to give all possible support to the war effort. This year I am quite satisfied that [DOT] the same spirit is still there, but somehow it has got off on the wrong track because the press has been able to use the minister's speech and his announcements to create the impression that something easy was being given, that there was an element of forgiveness in it. Because the Canadian people found that they were wrong about that, there is now complaining about the forgiveness of only fifty per cent and other incidental features. I do not think that represents the fundamental attitude of the Canadian people toward the demands of the war effort.
I stated earlier when I spoke on this matter that the acceptance of this increase in taxation deductions, for that is what it means, to the majority of the people, would be much more ready if there were such gestures as an increase in the old age pension, but I am not going to press that just now; I wall do so at the proper time. I merely want to press my point that the minister might clear up a good deal of misundersttanding if he wTould make the kind of emphasis which it seems to me ought to be made about this budget because of its actual effects when put into practice.
I do not know what further statement from me is necessary. I am sure it would be very difficult for me to make a statement that would place just exactly the right amount of emphasis on the forgiveness feature, and the exact amount of emphasis on the increased immediate burden feature. I thought I made that clear in my budget speech, and everything is in that. I pointed
out that this removes an overhanging load of debt from practically all the taxpayers of the nation. I also pointed out that it did, however, mean an increase in the deductions immediately. I gave figures indicating that the total amount of our revenues raised this year would be several hundred million dollars more than the total amount of our revenues raised in the last fiscal year.
Yes; I do not just remember those figures. The figures I have in mind are the figures of our total revenues, not the income tax revenue alone. Some way or another during the last fiscal year we collected something like $2,250 million, and this year we expect to collect $2,750 million. There is a difference of $443 million, some of which will be refundable. I do not think I can make the position any clearer than it is now. I think this is the sound thing to do on both accounts. Both things are sound, I think. The fact that we are moving up the total amount we are collecting from the people to keep step with the greatly increased war expenditures is certainly a sound application of the principle of pay-as-you-go. That is, the nation should pay-as-you-go so far as possible. The other fact that we are putting the earners on a pay-as-you-earn basis is also a sound principle because it removes from them that overhang of undischarged liabilities, that eight months' liability which otherwise would always be over them. That is about the whole story.
Mr. Chairman, we have transgressed the eleven o'clock rule for a considerable time now. I did not want to raise the point when the hon. member for Winnipeg .North Centre was speaking, or while the minister was making his reply, but I feel that we have worked pretty hard during the last few days, and in view of that I do not think that we should be asked to sit longer to-night.
Resolved that towards making good the supply granted to his majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1944, the sum of $33,333.33 be granted out of the consolidated revenue fund of Canada.
Minister is quite correct in asking for help for his ministers in time of war. But I think that instead of a blanket authority being asked for, each individual minister ought to explain to the house the reasons why he should have a parliamentary assistant.
attempted a few minutes ago to have two minutes with the Minister of Finance, the leader of the opposition stopped me and objected to the house continuing any longer. Is it the intention to go on with this debate? If so, I think an injustice was done to me.
do my hon. friend an injustice, and I think he would be the last to accuse me of attempting to prevent him from going further in the debate. I did by acquiescence permit his colleague the hon. member for Winnipeg North Centre to finish his point.
member's own followers is continuing the debate. Personally I am prepared to sit here until we finish, but if it was not right for me to take a few minutes with the Minister of Finance I do not think it is in order to continue this debate.