April 1, 1953

PC
LIB

William Alfred Robinson (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Shall clause 11 carry?

Topic:   EXCISE TAX ACT
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

No. Just before the committee rose last evening I was drawing to its attention the terms of the note on clause 11 which, after explaining that the excise tax on radios was being separated from the excise tax on television sets, winds up with this sentence:

The Item has been further clarified by using more descriptive terms.

I said last night that my understanding was that that was a considerable understatement because according to my information this section in fact extends the operation of the act. That is my information. If it does, then it is in effect and in fact a section whereby money is being raised or, in other words, a money bill. The parliamentary-assistant shakes his head when I say that the effect is extended. I therefore ask very definitely whether it is not extended at least to the extent of bringing within its purview the articles on which an appeal was made to the tariff board and concerning which the tariff board said that they were not covered. The phraseology in question is "telecast receiving units". I am proceeding on the assumption and on the belief that this section does extend taxation, and that it is therefore a money bill. I am pointing out, Mr. Chairman, that it is not supported by any resolution. I go further on that basis, Mr. Chairman, and I point out that it is improperly before the committee because, if

it is in fact a money bill, and if in fact it is raising money, it should have been preceded by a resolution, and that is not the case.

Therefore, following that, I wish to ask whether in fact on February 19 notices were sent to the relevant officials advising them that the additional materials brought under the act would from that day on be subject to tax. I would like to have that question answered first, if I may.

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

Mr. Chairman, I respectfully differ with the opinion of the hon. member for Greenwood. I have to express the opinion, which is the opinion of the law officers of the crown, that the tubes, sets and apparatus to which my hon. friend has referred are subject to tax under section 6 as it was, and as it can be read on the page of the bill opposite section 11. The apparatus is described as radio broadcast, telecast and music receiving sets. The installations are mostly in private homes. The sets are imported completely manufactured and include some seventeen tubes in addition to the cathode ray television tube and the loud speaker. The value, duty free, is around $216.

Now, let us look at what the old section says:

Phonographs, record playing devices, radio broadcast or telecast receiving sets or tubes therefor, apparatus for receiving radio broadcast and music . . .

The opinion of the law officers of the crown has been and is that all the apparatus, the sets and tubes which I have mentioned as being included in these rediffusion sets, are covered by section 6 as it was; and that the new words of subsection (b) of new section 6 are only for clarification purposes. The law officers do not agree with the decision of the tariff board. A tax has been levied in the past. There was an appeal to the tariff board which was granted for these rediffusion sets as they apply to television but yesterday a request for leave for appeal was heard by a justice of the exchequer court who has reserved his judgment. The legal position now, at the time I am speaking, is that in the opinion of the law officers of the crown the new wording does not extend the taxation, it only clarifies the section.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I find that very hard to understand, but let me ask this definite question. Does the parliamentary assistant agree that the tariff board did reach a conclusion that certain of the articles now covered by this wording on which taxation had been collected were not properly taxable? Is that a fact?

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

That is not a final decision; it is being appealed from.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Does the decision not take effect from the time it is made?

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LIB
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Perhaps I can relieve my hon. friend's doubts about the legality of the matter. Conceding, for the purpose of argument, that it does extend the tax, if he will look at the terms of the resolution upon which this bill is before the house he will see that it reads, resolved:

That it is expedient to introduce a measure to amend the Excise Tax Act-

And I pause there.

-and to provide, amongst other things: and it enumerates a number of things.

The opinion of the law officers is and has been for some time that it is quite sufficient, in order to comply with the provisions of the British North America Act, that the resolution should be merely in the terms "resolved that it is expedient to introduce a measure to amend the Excise Tax Act". That justifies any amendment that it may be desirable on the part of the crown to introduce. As a matter of practice it has been usual to enumerate in the resolution the principal changes; but I am pointing out to my hon. friend that even if this provision did extend the ambit of the section, which, as my parliamentary assistant has indicated, we do not believe, the resolution preceding the introduction of this bill is quite sufficient in law to justify such action.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Do I understand the minister to say that the general words of the section to which he has referred would authorize an increase in taxation to any limit?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Quite. To any limit at all.

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PC
LIB
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I am taking the minister's word but may we have an opinion from the law officers? I would be interested to hear what they would say.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

If my hon. friend would take the trouble to see the law clerk of the house he would reassure him of that very quickly.

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LIB

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

Liberal

The Chairman:

Shall section 11 carry?

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Section agreed to. Excise Tax Act On section 12.


LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

Mr. Chairman, there has

been quite a lengthy discussion on tires and tubes for replacement purposes on farm trailers. At page 3114 of Hansard for March 19, for instance, the hon. member for Huron North said:

There is going to be some difficulty about this. The tires for a trailer or any farm machine are not suitable for speeding on the highway. They just cannot be used on a car because if you used them at any speed you would wear off the tread in a few moments. There is a great difference between a tire used for farm work and one used on the highway.

My answer at that time was:

I will say again what I said this afternoon, that according to the proposed amendment the test of the exemption would not be on the tires and tubes themselves; it would be on the vehicles on which the tires and tubes are to be used. Following the representations made by my hon. friends this afternoon, I said that speedy consideration would be given to the possibility of applying the test to the tires and tubes.

Consideration has been given and the officers of the Department of National Revenue have been in touch with the representatives of the manufacturers of tires and tubes to discover whether it is possible to have a test on the make of the tires and tubes used on farm machinery. It has been possible to find a wording which, I believe, will cover the situation. If my hon. friends will look at section 12 as it reads now I will tell them the purpose of the amendment which I will ask the Minister of National Revenue to move. The intention of the amendment is to make three exceptions in line 36 after the word "therein". We will there make a special paragraph which will be numbered (i) which will read as follows: When used exclusively for the original equipment of such self-propelled machines, automotive vehicles, trailers or other wheeled attachments,

Then, (ii) reads:

When used exclusively for replacement purposes on machinery designed for and used only for farm purposes.

Then, the addition is in (iii), which reads: When designed and catalogued for farm machinery and used on farm trailers used exclusively for farm purposes.

I believe that covers exactly the problem that was raised by hon. members. May I repeat the important words:

When designed and catalogued for farm machinery and used on farm trailers used exclusively for farm purposes.

May I add it appears from the discussions the officers of the Department of National Revenue have had with the manufacturers of tires and tubes that there are no tires and tubes which are made especially

Excise Tax Act

for trailers. The situation is that tires are made for farm machinery, and those tires are bought by some farmers for use on their trailers. I see that the hon. member for Battle River is nodding his head, so he approves of my statement of the position. I believe he is one of those who have made representations in order to obtain such an amendment.

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SC

Robert Fair

Social Credit

Mr. Fair:

That is the point I was going to make. It is clear, then, that tires and tubes for farm trailers will be sold without the tax?

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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

When designed and catalogued for farm machinery; that is what was requested.

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April 1, 1953