May 28, 1951

PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

I realize that, as -the minister has said, this is a decision of the cabinet, and for that reason he -proposes to stand by the amendment now before us. I would point out, however, that the reduction in time in this instance is very substantial. It is not a reduction from three years to two years or to one year; it is a reduction from three years to six months, or only one-sixth the time that was previously given. It does seem to me that if over the years three years was regarded as a satisfactory time, conclusive reasons should be given, before an amendment is adopted which might very easily deprive some company or individual of a substantial sum of money because, acting in perfectly good faith, they did not know they were entitled to it and failed to give notice. The minister has said the cabinet has decided, but after all I assume the cabinet decides on all these bills that are brought before us.

I urge the minister to reconsider his decision, or in any event to give us a positive and clear example by specific reference which would indicate the reason for such a substantial reduction. It may well be that those on -this side of the house discussing this matter cannot give specific cases in which

they think hardship would arise. In the very nature of things that information is not available to them. Before an existing legal right is taken away in this manner we should have much more information than is before us at the present time.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

Edmund Davie Fulton

Progressive Conservative

Mr. Fulton:

I should like to supplement one thing that was said with respect to subsection 1. The fact is that many cases are test cases, and frequently people who are contemplating appeals will not themselves initiate those proceedings if they know someone else has taken that action, because they are waiting to see what happens. It is a proper and recognized form of procedure to await the outcome of some other case. Now, the 'likelihood is that proceedings before the tariff board or negotiations with the deputy minister-particularly the proceedings before the tariff board or an appeal to a court- will occupy all the six months before a decision is rendered. This would have the effect of precluding those who were awaiting the outcome of the test case from making any application, because the six months would have run out. The six months runs from the time of payment, not from the time of the decision being rendered. I would strongly urge, therefore, there is good ground for suggesting that the period be not reduced so substantially, that it be not reduced from three years to six months but that the minimum time should be one year.

I should like to take up another point dealing with subsection 3 of the amendment, which reads as follows:

Nothing in subsection one or two shall affect or prejudice any refund pursuant to an application pending at the coming into force of this section.

I can appreciate the purpose of this section, and I agree with it. I wonder, however, whether it is completely clear, since you have now changed the definition of the application, making it necessary for the application to be in writing. Then, in subsection 2 you say what shall be deemed to be a written application. Is it sufficiently clear what is meant by subsection 3, that is whether any form of application will be sufficient to bring it within subsection 3, or whether it must now be an application in the form referred to in subsection 2?

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

Subsection 3 means that any applications that have been made to date, whether written or verbal, are not ruled out.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

Edmund Davie Fulton

Progressive Conservative

Mr. Fulion:

What about the point with respect to the suggestion that the waiting period be six months from the date of the decision, or else a year from the date of the payment?

Customs Act

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

Those cases would be given consideration, and in the event of undue hardship an application can still be made for a remission. Under the Consolidated Revenue and Audit Act, that remission could be made. I may say that in practice it is not the minister or the deputy minister who makes the remissions. They make a recommendation, and the recommendation goes to the treasury board; then the remissions are made by order in council. I submit, therefore, that the interests of all taxpayers and citizens who are importers are amply protected by the present provision.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

Edmund Davie Fulton

Progressive Conservative

Mr. Fulion:

But treasury board could not give effect to a recommendation from the minister if the statute contained the six months' limitation. Surely the treasury board could not take compassion upon someone and give him a refund if more than six months had elapsed before he made his application. I am not clear on that, but my first impression would be that even treasury board could not override a statute.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

If it were a case of undue hardship-I am not saying they could override the statute-a remission could still be made.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

Heber Harold Hatfield

Progressive Conservative

Mr. Haiiield:

I want to give an example of a situation in which this section would work a hardship. In 1948 a company of mine imported a production machine from the United States. The duty on it was a substantial amount, and there was about $400 sales tax assessed against that machine. In talking about the price of the machine a year afterwards, I recalled an amendment going through this house to the effect that a production machine was free from sales tax. I took up the matter with the authorities, and we secured a refund. If the tariff board make a mistake, does it ever make a refund without an application? If this provision had been in effect at that time, we would never have secured the refund.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

The tariff board has nothing to do with refunds. It may direct one, or, by virtue of its decision, may put an importer in the position where he is entitled to a refund.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

Edmund Davie Fulton

Progressive Conservative

Mr. Fulton:

I do not wish to cross-examine the minister too closely on a question of law, because I know it is not proper to do that in the committee. As a result of an answer the minister just gave, I am a bit concerned about this matter. As I said a moment ago, I am interested in a test case, and others are perhaps awaiting the outcome of the test case before making an application in the normal way. As I see it, the amendment in its

Customs Act

present form-since most of these cases would take six months to be decided-would preclude those who were awaiting the outcome of that case from making an application for a refund. The minister has said that in case of hardship, on the recommendation of the minister or deputy minister, the treasury board may pass an order in council providing that a refund shall be made. At first sight, that would appear to take care of the type of case to which I have referred. On the other hand I should be quite surprised if, in the face of what will now be a specific provision in the act, the treasury board could in fact have such an order in council passed unless there is a general provision in the Consolidated Revenue and Audit Act. I should like to ask the minister whether there is a section in that act which says that, notwithstanding the provisions of any other act, in cases of hardship the treasury board may pass such an order in council.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

There is a general provision of that kind. So far as the matter of notification is concerned, all the party has to do is write a letter to the department and indicate that he proposes to appeal pending the decis-sion of the tariff board.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

The more I think about this six months' period, the more it seems to me the possibilities for great unfairness are substantial. We all admit there has to be some limit. We cannot have things outstanding for ever, but this provision would cut the time down to one-sixth. Let us consider what may happen. A man pays his rate, and he is not very well satisfied. The amount involved may not be very large, and after all there are always expenses in connection with making applications. As a matter of fact, he does not make an application. Other applications along the same line have been made, and his six months expires on a certain day. The day after the six months have expired, a ruling is made which makes it quite clear that if it had been made two days earlier he would have been entitled to a refund.

If I followed the minister, he had the feeling that that was wrong-I want to be fair in what I am saying. The minister seemed to think it was unjust to the public that other people should come in, if I interpreted him correctly.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

I was just describing an incident. .

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Very well, but I shall put my own interpretation on it, and the minister can alter it. It seems to me that to cut this down to six months is

IMr. Fulton.]

very harsh and oppressive. Six months sounds like a long time, but we all know that in business it can be a short time. Various things may happen and it may be difficult to reach a decision, particularly perhaps if the amounts involved are small, or perhaps if they are large. I suggest that the very greatest kind of hardship can arise if I have described the situation correctly. Here is a man who is in doubt. He lets the six months period elapse, and the very next day it turns out that he did have a right which is now established by the action of somebody else. I take it that the minister will say: Why

should he profit by the action of somebody else? I think he should profit by being entitled to have his rights, according to what the law is now determined to be.

I now come back to the question of what is reasonable. I do not suggest that it should be ten years or twenty years. We all know that there must come a time when things are finished. But I suggest that three years was not an excessive time, and I suggest that one-sixth of three years is a very short and unfair time.

May I just say this also. I tried to listen carefully to what the minister said, and I did not observe any suggestion of any kind that there was any loss or hardship being suffered by the government. It did not seem to me that the minister made any case for this proposal. The more I think . about it, the more it seems to me to be harsh, oppressive and unnecessary.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

Mr. Chairman, just let us

compare the two procedures. If we find that there has been an error in the matter of paying customs duty, we go back not more than a month and attempt to collect where there was an error; it may be an error in computation, or it may be an error in classification. We go back a month. We allow the importer to go back six times that amount. We allow him to go back six months; and if he makes a written application within that time, his case for remission will be considered. If you are going into multiplication tables, one is six times the other; and the six months that we propose now, in comparison with the former length of time of three years, is just the same thing, namely six times.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

The minister will not wring any tears out of me by that sad story. In the first place, I am not commenting on the decision to make it a month, whether it should be that long or shorter. I am not commenting at all on that matter. All I am saying is that the minister and the department have a purse which is

limited only by the pockets of the people of Canada, whereas to the subject, to the man who is at the other end of the line, this may be a matter of vast importance. The department has thousands and thousands of cases, and they average out. The government, I presume and hope, have made a wise decision in adopting the month's limit, but that does not seem to me to have any bearing on this matter at all. It is a question of what is fair between the crown and the subject, to use those old-fashioned words. I again suggest that cutting this period down to six months is harsh, unnecessary and-I had a third word.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

I know of no instance in which it has ever been passed on to the consumer. It is a gratuitous gain for the importer. He has added it on to his costs. Probably he has disposed of the goods in that length of time; when he makes an appeal he gets the money by reason of the change and in no instance that I know of has that money ever been passed on to the ultimate user of the imported article.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I have two comments to make on that, with great respect. First of all, that is none of the minister's business. He is not the keeper of the consciences of the importers; I hope their consciences are good. Nevertheless that has nothing to do with the legislation, and the fact that the minister introduces it convinces me more strongly than ever that this has been decided on an unsound basis. It is irrelevant.

The second thing is this. The minister says: I know of no cases. To me that is not very effective evidence at all. I am sorry he said it, because it implies that there are no cases. He does not know, and he cannot know. But I repeat that as a reason for cutting down this three years it is utterly irrelevant and, what is worse than that, it is improper.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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IND

John Lambert Gibson

Independent

Mr. Gibson:

I am just wondering about this amendment. I will be specific with the minister. As he knows, we are having a little bit of difficulty out in British Columbia on this interpretation of tariff item 411a as applicable to logging trucks. I am wondering if this six months period will be sufficient, by the time the matter has been taken to the tariff board and a decision has been arrived at. For instance, if you collect higher duties on tires and on some logging trucks for a period longer than six months before we actually get a decision from the tariff board- I understand the case will be up on June 12- I am wondering if six months will take it back; I do not believe it will. I think there

Customs Act

will be some proper claim that will go back a great deal longer than six months.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCann:

The matter to which my hon. friend refers is now before the tariff board and will be heard. It was not initiated by the importers; it was initiated by the department.

Topic:   CUSTOMS ACT
Subtopic:   AMENDMENTS TO CLARIFY ACT AND TO FACILITATE ADMINISTRATION AND ENFORCEMENT
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May 28, 1951