March 9, 1953


price in the United States at $1,821; in Canada, $2,333. That is a difference of $512. In the case of the Chevrolet car it shows a spread of $509. The Canadian sales tax of 10 per cent and the excise tax of 15 per cent on the small Chevrolet car amount to $368, but there is a United States federal tax of $129 on the same car. This makes a difference of $239 in tax charged in Canada more than in the United States. Deducting this $239 from the spread in price between the Canadian and the United States price of the same car of $509 and we have a balance of $270. I maintain that this difference is brought about by our' automobile industry to a very large extent taking advantage of the customs tariff.


?

An hon. Member:

Six o'clock.

At six o'clock the house took recess.

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AFTER RECESS The house resumed at eight o'clock.


LIB

Robert James Wood

Liberal

Mr. Wood:

Mr. Speaker, when we adjourned for dinner I was giving an example of one of the items that enjoy protection under the customs tariff, and I shall proceed with my observations from that point.

Recently at a dinner here in Ottawa some 60 members of the House of Commons had as their guests three heads of the Canadian automobile chamber of commerce who are, incidentally, the heads of the three principal automobile industries in Canada. We were asked to submit some questions to these gentlemen, with the understanding that they would discuss and answer the questions after dinner. One question I submitted was as follows: Why is it that the automobile manufacturers of Canada are still charging the consumers of Canada a price for their product, apart from taxes in the United States or Canada, which is equal to the United States retail price plus the tariff charges for entering from the United States?

These gentlemen spoke for 30 or 40 minutes after dinner, and the president spoke for close to 15 minutes in an effort to answer the question regarding the difference in retail prices between Canada and the United States. But I am confident that he made very little impression upon those present at that dinner. As I said previously, there are approximately 850 items in our customs tariff, and the same can be said in regard to the price of practically every one of them.

Drawing to a conclusion, I wish to refer briefly to some of the policies of the two small groups in the opposition sitting to my left. I feel that the policies of either group

would bring our trade movements almost to a standstill. On February 11 the hon. member for Macleod (Mr. Hansell) who, I understand, speaks with some authority for the Social Credit group, had this to say at page 1833 of Hansard, in speaking of the Cuban sugar controversy:

I say that free trade is an absolute impossibility.

And at page 1834 in the same debate he said:

Let us remember that the more that nations become self-sufficient, the less they become dependent on foreign trade.

Then the hon. member for Lethbridge (Mr. Blackmore) is reported in this way at page 1847 of Hansard:

I maintain that the sooner we shut out Cuban refined sugar entirely, by a device similar to the one used in 1932-

And so on. I maintain that this theory of self-sufficiency coincides 100 per cent with the policies of the R. B. Bennett government between 1930 and 1935.

As for the C.C.F. socialists, with their controls and their theories of nationalized industries, and their promises of trade boards which would be followed by coupons and all that go with them, I am sure that such schemes would put trade in a strait-jacket. I feel confident that the level of political intelligence in Canada is high enough that the people will not risk our prosperity with either view.

In conclusion I wish again to urge the government to set up a committee of the house to investigate any possible abuses by Canadian industry, and to report such abuses to the house. If no discriminatory practices exist, it will ease the minds of consumers across Canada; but if discriminatory practices do exist, then the government can take corrective measures. *

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. D. S. Harkness (Calgary East):

Mr. Speaker, this year's budget has been described in various ways in speeches made by hon. members in the house, and in newspaper articles across the country. It has been described as an election budget, a shell-out budget, a rich man's budget, a sunset budget, and so on. The minister himself has called it a social dividend budget. That, of course, got more laughs than any other name applied to it, and for obvious reasons. I think it would be more apt to call this year's budget the mirage budget, because it has had the effect of a mirage-that is, something you think you see, but which really does not exist. And, so far as this budget is concerned, that description applies in more ways than one.

Its first effect of that kind was noted in respect of the Liberal members on the night

The Budget

Mr. Harkness it was presented. They thought they could see in it an instrument of election victory, something that would appeal to everyone in the country and would pull the Liberal party out of the public disfavour into which their policies and their taxation, coupled with inefficiency and waste, had very rightly put them in the minds of the public.

A few days later, however, hon. members supporting the government began to realize that they were still far from being out of the desert, far from the flowing wells they thought they saw on budget night-wells which they realized did not really exist. The mirage effect was felt, too, by the general public. They thought at first that the long days in the desert under the guidance of this government were at an end. But then they got their pencils out and began to figure how much better off they would be after the budget came into effect. The mirage rapidly thinned out and disappeared; there was not a great deal for most of the pencils to do. For that considerable segment of our population which pays no income tax, a pencil was scarcely necessary to make it clear that this budget hardly helps them at all. In fact, those who do not smoke cigarettes or who do not operate radios got absolutely nothing. Those who do buy a few packages of cigarettes each year would save possibly a dollar, or something like that, and there was a saving of another $2.50 for those who operate radios and who had previously paid the radio tax.

Then, coming to the income taxpayers, we find that the married man with two children, and receiving a wage of $2,500 a year, makes the magnificent saving of $2 a year, as a result of this budget.

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

What is the age of the two

children?

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

I do not care what the age of the two children might be.

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

Well, he cares.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

If the two children are dependents, the man is still better off to the extent of $2 a year, and that is all. Then if the wage earner receives $3,000 a year, his relief is $7.

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

Again, what is the age of the children?

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

In spite of what my young friend from Montmagny-L'Islet (Mr. Lesage) says, so long as they are dependents the age of the children makes no difference. I would point out that the vast majority of Canadians do receive a salary or wage less than $3,000 a year. About 75 per cent of all wage and salary earners in Canada come

2764 HOUSE OF

The Budget-Mr. Harkness within that class. The most that any of those people will save, on the basis of a married man with two children, is $7 per year. If that is all, then when that fact sinks into the consciousness of the Canadian people the mirage which they enjoyed for a short time, of a tax reduction that would amount to something, will rapidly evaporate.

What the minister did in effect was to spread what he had to offer so thinly that whilst he could say that all taxpayers received some benefit, that all cigarette smokers and owners of radios received benefit, no one received sufficient benefit to do him any real good except those who are very wealthy and those who are the owners of considerable amounts of corporation stocks. I think in this budget the minister made the mistake of spreading it so thinly that the effect cannot be seen.

I was very interested in listening to the Minister of Finance (Mr. Abbott) trying to defend his budget on "Citizens' Forum" which was broadcast on February 26 of this year. At that time he was asked questions by members of the press and I should like to read a few of the questions he was asked and the answers he gave, and make some comments on them. I will start off with a question which was asked by Anne Francis:

Well, Mr. Abbott, still the fact remains that three out of every four Canadians have an income of less than $3,000 a year and these people are not very much benefited by your budget?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Well, they are benefited, Miss

Francis, to the extent that they smoke cigarettes, they are benefited to the extent that they use radios. They are benefited to the extent that as a result of the general tax cuts, production may be encouraged and increased and they get their goods cheaper.

Can you conceive of a weaker defence of his budget than a statement of that kind by the minister going out over the air to the people of Canada?

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

Keep on reading what he said.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

I will if you will just hold your horses. I am going to read on. A weaker defence, a greater indication of lack of defence, could hardly be imagined. As a matter of fact what the minister has done in. that statement is admit that the majority of the people in Canada are no better off as a result of the budget than they were before. The parliamentary assistant apparently wants me to continue reading it, so I will oblige him. Next was a question by Harvey Hickey who asked:

Well, what about Mr. Coldwell's argument that 70 per cent of the tax cuts go to the wealthier classes?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Well, it is just not correct.

In other words, what we have there is a flat statement. There is no proof whatever produced at this time. The minister simply says that the statement of the hon. member for Rosetown-Biggar (Mr. Coldwell) is not correct. There is just a flat contradiction with no proof to support it. There is good reason for that, because I do not think he could produce any proof to support that statement that it was not correct. I think it was correct, as far as I can read these budget figures. Of course when a man is speaking over the radio and he knows what he says is going out across the country it is to his advantage just to make a flat statement and let it go at that. There is nobody to contradict him or bring him to task. Does the parliamentary assistant want me to continue with this?

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

By all means. Read the whole thing without skipping anything.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

The next is a question by Mr. McKeown.

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

You did not read the whole of the answer.

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PC

Douglas Scott Harkness

Progressive Conservative

Mr. Harkness:

I have the whole thing here. Mr. McKeown asked:

Mr. Abbott, you said a lot of this goes to the payers of income tax but doesn't it go to the people who pay high income taxes? I think 7 per cent of the taxpayers pay about 53 per cent of income tax, so they are the people who benefit. Those 7 per cent get about 50 per cent then of the benefit of the income tax changes.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Well, Mr. McKeown, it is very easy to deal casually with percentages, but in fact the income tax structure, which was devised in 1949, and which increased the exemptions to pre-war, and which lowered rates, is the structure which now prevails.

Is that any answer to a question?

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March 9, 1953