Mr. SPEAKER:

I have the honour to

inform the 'house that I have received the resignation of Lionel Bertrand, Esquire, as member for the electoral district of Terrebonne. I have accordingly issued my warrant to the chief electoral officer to make out a new writ of election for the said electoral district.

Mr. FRASER (Peterborough West):

The trouble in regard to succession duties has been that when a person dies the executors make their filing, which goes down to the divisional office of the succession duties branch, and then after months and months and months- and months, as one hon. member beside me suggests-the department send out a notice that they are not satisfied with the return that has been made and they jump the assessment up by perhaps many thousands of dollars; not only that, but they charge interest on the amount from the time of death until the duty is paid. That is not right, because the executors do not know that the department will change the assessment or have different ideas about the amount of the estate. I feel that no interest should be charged on the unpaid balance until after a notice has been sent to the executors. The same thing applies to income tax on estates. I notice it in connection with the deferred tax for 1942. I got my notice the other day that my deferred tax for 1942 was so much, and due at time of death and. interest at eight per cent to be charged from date of death. I think that is very unjust.

Mr. HANSON (York-Sunbury):

I think the hon. member has got two things mixed.

Mr. FRASER (Peterborough West):

No,

I am just saying that as regards succession duty and deferred income tax for 1942, the same rule applies. They go back to the time of death. I say that interest should be charged only from the time the notice has been sent out from the succession duty office.

100-338J

Mr. HANSON (York-Sunbury):

The minister should give some explanation as to why in the case of succession duties and income tax, interest is charged from a date anterior to the making of the assessment, rather than from the time of ascertaining what the liability is. This is an obnoxious feature of both laws -the charging of interest on an unascertained amount prior to assessment. I object to it. On principle it is bad. Under no statute I know of other than these two statutes, under no process of law that I know of, does interest begin to run, except by contract as in the case of a promissory note, or of special contract in the case of a special contract, until the liability at least is ascertained. That is a sound principle. This is a violation of that principle; it must be done simply for the purpose of screwing a little more money out of the taxpayers, and I object to it.

Mr. BENCE:

I should-like to repeat the

protest I made when this matter was being discussed on the resolution, against the practice which is followed at the present time with respect to the use of the Dominion Succession Duty Act to force the filing of income tax returns. Have the officials of the department in charge of this particular act the right, once it is determined that an estate is not taxable, to refuse to issue the certificate until the personal representative has filed whatever income tax returns the income tax division feels justified in calling upon him to supply?

Mr. HANSON (York-Sunbury):

There is

no legal justification for that.

Mr. BENCE:

I suggested before that if the matter of the income tax form and the administration of that department has to be tightened up it should be done under the provisions of the Income War Tax Act. I object most strenuously to this indirect method of forcing people to do something which they were not forced to do before this act was brought into effect. The question of dominion succession duties has nothing to do with income tax. I suggest that the administration is merely taking this indirect method of doing something which, if it is done, should be done in a direct way. Is the department within its legal rights in refusing to issue the certificate merely because the income tax division wants to have certain income tax forms filed by the personal representative?

Mr. GIBSON:

Of course the succession duty department is within its rights, as it only issues the certificate when the estate has been cleared up. The outstanding accounts of the estate are not definitely known until the income tax liability has been settled, and con-

Succession Duty Act

sequently the estate is not closed up until all outstanding accounts are provided for, and until the outstanding income tax liability is determined the estate cannot be finally settled. So that the succession duty branch has no other course than to make sure that all debts owing by the estate are accounted for before the estate is wound up.

Mr. HANSON (York-Sunbury):

That is just-let me say-buncombe. There is no legal sanction for that in the statute, but they use their position, as being the same branch covering the two agencies, to force something which otherwise they could not force. Where is the legal sanction for the position the minister takes? There is none. I want an answer: is there any legal sanction for the position the minister is now taking? Point out the section of the statute which gives him the right. It is not there.

The CHAIRMAN:

If I may be allowed, we are dealing with bill No. 166, and I called section 1, which deals with "definitions".

Mr. HANSON (York-Sunbury):

I thought that was carried. There must be some place where succession duties can be discussed under this measure.