But on second reading you cannot cross-examine ministers. If the rule is going to be applied strictly, let us have it, but I think there should be enough leeway to air a grievance, and you cannot do it on second reading because, as I have said, you cannot crossexamine the minister.
I believe the point has been stated here; the minister has answered; and I do not think we can allow this section to be used as one upon which the minister or myself can be cross-examined on all matters relating to succession duties. If that were the case, the moment you opened the act on one minor point you would have to traverse the whole subject-that at least is my belief- and I think that is going pretty far.
parliamentary assistant takes that attitude I do not think I can force his hand. But there is no legal sanction in our laws to-day for the attitude and the practice followed by the succession duty branch.
No, the income tax rate is five per cent, and it was reduced to four per cent this year. This is a penalty section as well for income tax payments which are in arrears after the assessment has been made.
I am glad that the definition of "child" contained in subsection (b) has been widened, and I understand that the definition now corresponds to definitions of "child" "which appear in the succession duty acts of the several provinces. Because of that variation between the definitions in provincial succession duty acts and the Dominion Succession Duty Act, duty has been collected on estates where the beneficiaries were children within the meaning of the present definition. I mean that where a deceased had been in the position of loco parentis to a child but had not taken out papers, on his death that child is treated as a stranger and succession duty rates have been very much higher. I have in mind one case where the succession duty absorbed a very large portion of the cash which was in the estate and left the child, then eight years old, dependent upon certain property of doubtful value. What I should like to know is whether, in the interpretation of this clause, there is a possibility of its being regarded as retroactive so as to cover estates which have already been administered or returns filed since the inception of the act; or alternatively, is there any provision in the administration of the department for consideration of cases which have already been dealt with and for the granting of relief? I take it that that could well be done in view of the fact that parliament is now recognizing that the definition of "child" as contained in the original act was much too narrow.
That question was considered, but it was decided that the proposed amendment would not be made retroactive. As things stand at the moment, therefore, it will apply only to estates which devolve from now on. It is pointed out that estates have
Succession Duty Act
been dealt with and the assets distributed on the basis of the law as it stood at that time, and for that among other reasons it was decided that this statute would not be given retroactive effect.
Not very wide, no, although I think it would have some considerable application. Representations were made that this extension should be given, that there were cases, as the hon. member for Regina City has pointed out, where the deceased stood in loco parentis but had never formally adopted the child he had been supporting for years, and it was felt that the benefit of the lower rates of exemptions under the succession duty act should be extended to that child.
In any case where levies are made and have not been paid will they now be cancelled? I have in mind a very bad case, such as the hon. member for Regina City has mentioned, where land of dbubtful value was left to a beneficiary and actually a levy was made on that bequest under circumstances now covered by this act, which means that that beneficiary will ultimately have to pay for the land more than it is really worth. He has not yet paid, but the levy has stood1 against that land for the last five or six years. Will that levy be cancelled?
I want to get the facts correctly. I understand that the estate devolved subsequent to the enactment of the act and that duties were assessed in accordance with the law as it now stands but have not yet been paid. My hon. friend wants to know whether those duties will be remitted if this amendment is carried. My answer would be that since the law is not being given retroactive effect, they could not be remitted. It would be putting that particular taxpayer [DOT] in a better position than one who paid his duty when it became due. I am giving that as my opinion now, rather as a legal opinion, and-1 do not know what the administrative action of the department will be. I doubt, however, whether .it would have legal authority to remit the amount of that tax which had accrued prior to the coming into force of the act.
Generally speaking I am opposed to retroactive legislation, but I think the department might well consider that possibility having regard to this particular definition, in view of the fact that it is apparently the desire of the department to bring their definition of "child" into conformity with the definition of child as contained in the various provincial succession duty acts. For example,
we have in some provinces "child" treated the same as "natural child," where the rates of succession duty are very low, and under the dominion act treated as a stranger and the rates of duty are seven or eight times as great as they would be if the individual were assessed as a natural child.
May I ask the parliamentary assistant whether he has checked up with regard to the facts I brought to the attention of the committee on the nineteenth? I pointed out that I had come across cases where dominion succession duty was levied against an interest bequeathed to a certain person by will and subsequently under the Testator's Family Maintenance Act of British Columbia other parties interested had been able to change that succession. The person to whom the bequest had been made, had his bequest cut down a great deal. There is no provision in the dominion act to cover such a case. The duty is levied just as though there had been no change under the provincial law. That is a very unfair situation and I think some provision should be put in the succession duty act to cover it.
I believe this question was raised the other day when we were in the resolution stage. The practice which is followed by the dominion succession duty authorities, and it seems probably the only practice which could be logically followed, is that they are governed by the provisions of the will or by the provisions of the statute in case of intestacy in the jurisdiction in which the estate devolves. The succession devolves as of the date of death and therefore the dominion considers that the liability to succession duty attaches on the assets of the estate as they existed at that time.