May 9, 1952

PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I want to add just one word to what I said this afternoon on this subject. I was bold enough to suggest that the people of this country do believe that suggestions made by their representatives in parliament are perhaps entitled to a little more weight than just any other representations. The parliamentary assistant rather just swept me out with the dust with the remark, as affecting as it was unexpected, that he did not wish to have his views considered more than those of any other person in Canada, if I understood him correctly.

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

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

On tax matters affecting the individual citizen.

Income Tax Act

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

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

That struck me as very unconvincing. I would, as a matter of fact, rate him higher than that.

I am not going to labour this point. I am just going to say that it is high-minded and quite unselfish for us to raise the point at all. Much the best thing for us to do is to leave it where it is, because I think the public is irritated by what was done. It is only because of our very high sense of duty that we urge the government to do something about it, in their own interest. I think that in this case the public feels that the government has disregarded parliament as if it were nothing.

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

Louis-René Beaudoin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Paragraph 6?

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

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I should like to say a word on this paragraph. I welcome this measure, and I should like to ask a question with regard to municipal taxation. Can the parliamentary assistant tell us whether there is any principle, and also what the practice is, with regard to the payment of municipal taxation by crown corporations?

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

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

That was covered in the statement made by the minister some years ago when the federal government, as such, first began to pay grants in lieu of municipal taxes to municipalities other than Ottawa. For many years, because of special circumstances, Ottawa was paid a grant. Again it is a matter of a national average. It was estimated that across Canada the average federal holding of property in the various municipalities was 4 per cent. Those municipalities which had an unusual concentration of federal property, which is of course exempt from tax, were given relief through the payment of grants based on three-quarters of the tax above that national average. However, that just covered the departments of government and the agency corporations. These corporations, the proprietary corporations, which are-

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

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Were they excluded?

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

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

They are definitely excluded from the original Abbott formula. At that time he said that since those were, to all intents and purposes, commercial businesses it would be up to them to make their own arrangements with the various municipalities. So far as I know, that has been done. I can get a report as to the extent to which this has been carried out. I know that most of them have now completed such arrangements, and I know that such arrangements go a little beyond the list here of proprietary corporations.

There are some agencies of the federal government-I think of the national harbours

board for example-which are not proprietary corporations but which have also made separate arrangements with the municipalities for payment of grants in lieu of taxes for services they get from the municipality.

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

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Then, would it be correct-

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

Louis-René Beaudoin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Order. I doubt very much that it is in order to discuss the payment of municipal taxes by crown corporations on this resolution. The hon. member asked a question, and I allowed the parliamentary assistant to reply but I do not think we should get into a prolonged debate.

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

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Could I ask one more question?

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

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

I think this is interesting because the principle is really the same in payment by federal corporations of both municipal taxes and federal taxes, and since we are breaking new ground, ground which most of us who are not socialists will agree is right ground, perhaps we might continue.

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

Louis-René Beaudoin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Perhaps I might point out that I am not concerned in what might be of particular interest. I am interested in having the discussion relevant to the paragraph which is under study. The hon. member for Greenwood has just asked me if he might be permitted to ask another question. That is quite convenient to me, provided other hon. members will not follow the example and begin a long debate on matters having to do with the payment of municipal taxes by crown corporations.

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

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

May I suggest that, after all, the situation of the companies in respect of municipal taxes will affect their capacity to pay federal taxes. I just want to ask this question. Do the crown companies deal with the municipalities just as any other organization does? They are not in any privileged position?

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

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

That is correct.

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

Agar Rodney Adamson

Progressive Conservative

Mr. Adamson:

I gather that these are corporations such as Eldorado, Polymer-

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

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

I am sorry, I should have given the list.

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

Agar Rodney Adamson

Progressive Conservative

Mr. Adamson:

I think it would be of interest to us if we could have a list, and if the profits are available I think that might be of interest.

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

James Sinclair (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Sinclair:

Of course, this is only going to be applicable for the first time to the profits which will be made in this year. The corporations are those set out in schedule D to the Financial Administration Act which we passed last year, the new financial control act of this federal parliament. Those in

schedule D are the following: Canadian

Broadcasting Corporation; Canadian Farm Loan Board; Canadian National (West Indies) Steamships, Limited; Canadian Overseas Telecommunication Corporation; Central Mortgage and Housing Corporation; Eldorado Mining and Refining Company (1944) Limited; Export Credits Insurance Corporation; national railways, as defined in the Canadian National-Canadian Pacific Act, 1933; Northern Transportation Company (1947) Limited; Northwest Territories Power Commission; Polymer Corporation Limited and Trans-Canada Air Lines.

Members who will recall the debate of last fall will realize that this includes all the proprietary corporations, with perhaps one exception, the Bank of Canada. It is such an unusual position, and in any case its profits in the end are turned over to the crown, that it was not included in the Financial Administration Act.

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

Agar Rodney Adamson

Progressive Conservative

Mr. Adamson:

I was going to ask about the Bank of Canada and the other bank, the Industrial Development Bank.

Topic:   WAYS AND MEANS
Subtopic:   INCOME TAX ACT
Permalink

May 9, 1952