Mr. Winch:

Come right over here.

Mr. Shaw:

The hon. member for Eglinton (Mr. Fleming) was wrong when he said that under no circumstances are drugs other than those listed here allowed as deductible expenses under the Income Tax Act. He is quite wrong in that because, as I say, if the expense is billed to the patient by the hospital as part of his hospital bill, then it is included.

Let me point this fact out also, Mr. Speaker. I may have a doctor attending me, one who is extremely competent. Suppose he advises me that it is necessary for me to be hospitalized and as a result I am hospitalized. It is my understanding that the hospital gives nothing that the doctor does not prescribe in the way of medications, drugs, et cetera. Yet in certain cases with which some of us are quite familiar, the same doctor says, "Look here, the best place for that patient is right at home; it is not a hospital case; psychologically and in every other way the patient is better off at home. But I will give you the same prescription written with the same hand and with the same authority." Then someone goes to the drug store and presents the prescription and buys the drugs. Since the same doctor is involved, since the same drugs are required and since the person pays, for the life of me I cannot see why they should be treated differently.

I know full well, Mr. Speaker, that you would have to draw the line as to allowing patients just to run to the drug store and buy patent medicines because I suppose there are some people who more or less live on those things. If there is not something wrong with them, they imagine that there is and labels appeal to them, and they probably eat

and drink these things in the main. But surely if you have any confidence whatsoever in a licensed practitioner who is also authorized to practise his profession in the hospital, I think our thinking should go far enough that such prescriptions, whether utilized by the patient at home or in the hospital, should be regarded as included within those allowable medical expenses. I do not know who may be speaking for the government on this resolution but I should like that matter to be dealt with. I should like to secure some evidence to justify that position if it can be justified. Personally, I do not think it can be justified.

We approach this resolution, Mr. Speaker, purely from the standpoint of the principle which it contains. I am impressed by the argument that here in the case of individual contributions to charities, every cent up to a certain ceiling is allowed. Why does not the government say, as it will do in the case of medical expenses, "Under 3 per cent is normal", if that is a sound argument, that contributions to charity are normal up to a certain point? What I mean is that there is a conflict in principle. I am not arguing against allowing all charitable donations to be included for deductibility. But the very same reasoning applies to that sort of thing. Surely we should face up to the matter in quite a different way than we are doing at the present time.

I am not going to occupy the time of the house further with respect to this matter. My colleagues and I have supported the motion in the past. We have supported the principle of it. We intend to do so again. But let me just re-emphasize what I just said recently. I think there are some acute inconsistencies and that there is a good deal of unfairness in the way in which the drugs are handled, giving some people the opportunity to include every nickel spent for drugs, far beyond the five mentioned in the act, even including salves, ointments and so on while others-because they stay at home because it is for the good of the patient-who spend maybe ten times as much as does the patient who is hospitalized, because they were not hospitalized cannot include any of it unless of course they happen to fall within that group of five mentioned in the Income Tax Act.

We certainly hope the government will give consideration to that because after all, Mr. Speaker,-I said this before-I do not suppose anyone likes taxes. If there is anything anyone likes less than taxes it is unfairness and inconsistency within the tax structure. I think this is one of the finest examples we have of inconsistency and unfairness. It is

Income Tax Act

one thing that simply causes taxpayers to dislike taxes more than they would if there were not such things included.

Mr. Elmore Philpolt (Vancouver South):

Mr. Speaker, I wish to make a few comments on this particular resolution. I must say at the outset, not because I have any particularly strong opinions on it one way or the other, I think that, on this resolution, as in a great many of the resolutions moved by the hon. member for Winnipeg North Centre, you have to balance advantages against disadvantages, and in all of these things we have to answer two questions. First, is this a good thing? Second, is it a good thing at this particular time?

I submit, Mr. Speaker, that this is not a good thing at least at this particular time. If I had to try to find arguments to buttress that submission all I would have to do would be to listen to the hon. member for Eglinton (Mr. Fleming), who made it very clear this afternoon that if and when a national health insurance scheme is set up in this country the proposal set forth in this resolution would have to be revised. In other words, it seemed to me that the hon. member for Eglinton this afternoon completely conceded the argument which some of us have made in the last couple of years that this is an entirely different road of approach from the road toward national health insurance. As I read the debates that have taken place in this house over the past several years on this particular matter I am struck by the fact that at least some in this house who have never shown any enthusiasm whatsoever for the cause of national health insurance have been very enthusiastic advocates of this particular measure.

One point was made by the hon. member for Eglinton this afternoon which seemed to me to be rather amusing. He cited a resolution passed on Saturday afternoon in Toronto by the women's Liberal association suggesting that a certain medicine should be added to the list of those which are now included in the deductible medical expenses. Well, Mr. Speaker, there is no argument on that particular point, and it has very little relation to the actual resolution before us today. I remember in a debate on this particular matter last year the hon. member for Westmorland (Mr. Murphy) made a very strong plea for including in the drugs which are eligible for deductibility the drugs used in the treatment of epilepsy and certain other diseases. If we were dealing this afternoon with a resolution along that line I would think it might get a very wide measure of support indeed, but that is not the resolution before the house today.

Income Tax Act

Before I deal briefly with the actual issue before us, Mr. Speaker, may I, as a very humble member in my first parliament, suggest to the opposition that it is not very tactful argument to castigate the government because the government might show a tendency to accept one of those resolutions and then perhaps not deliver immediately. We have had two self-contradictory arguments on that particular score this afternoon. We heard the hon. member for Eglinton chide the present Minister of Fisheries for having accepted this resolution a few years ago when he was parliamentary assistant to the minister of finance. Then we had the hon. member for Red Deer immediately follow him and suggest that the government should accept this resolution without any more delay. Well, Mr. Speaker, I submit it is a poor argument for the opposition to try to pin the government down too closely on the acceptance of these particular things.

Over the past four or five years I have had the experience of time after time supporting motions or even bills submitted by the opposition. I intend to do so, because as long as I am here I intend to support anything from any side of the house which seems to me to be right. I think it is a poor argument for the opposition to use to try to make it a little more difficult for those of us who sit on the government side of the house to give impartial consideration to these things as they come up. And if I might suggest in a friendly way, it is also poor tactics for them to put the government on the spot too acutely if the government shows a disposition, as the Minister of Fisheries did on that particular occasion, to accept a resolution rather than have the matter put to a vote.

There are some things that I should like further information on from the hon. member for Winnipeg North Centre, or from some other speaker, before I come to a final conclusion on this matter today. I have heard it suggested that what is asked for is the removal of the floor but to leave the ceilings as they are. I frankly confess that I am quite unable to see how it would work out. I remember the occasion when I believe the present Minister of Fisheries made the move which is the cause of the controversy-I think it was the same year; certainly it was about that time-he pointed out that if we were to adopt an unrestricted use of the suggestion which is now before us the people who would be the chief beneficiaries would be the people who could not make the trip.

Mr. Knowles:

Will the hon. member permit a question?

Mr. Philpoit:

Yes.

Mr. Knowles:

Is he aware of the fact that the point which the present Minister of

Fisheries made, to which he is now referring, was made in 1951, and in order to clear up any doubt on the point I reworded the resolution the next year? He will realize, then, that the resolution now before us is different from what it was in the year in which the minister was able to make that point.

Mr. Philpott:

I thank the hon. member for the interjection. It clears up the point which was giving me serious doubt.

Let me again make it clear that my main objection to this resolution at this time is its timing. I think it tends to delay the coming into effect of a national health insurance scheme in Canada. Therefore, I think it is unfortunate that we have had it raised again at this particular session when, as we know, the whole scheme is hanging fire and depending on the accession of the requisite number of provinces if the scheme is to go through. In that regard, we remember that in a parallel discussion last year because, Mr. Speaker, I do not believe we can differentiate too clearly between the two discussions that took place on this general matter last year any more than the hon. member for Eglinton did earlier this afternoon when he intermixed the two; that is, the resolution moved last year by the hon. member for Winnipeg North Centre and a similar resolution in almost parallel terms introduced by the late Dr. Trainor. At that time some of us pointed out that if we were going to have not only unrestricted deductibility of medical expenses with no floor or qualifications but also the exemption of premiums paid under public hospital schemes that was proposed at that time, we would be treading on extremely dangerous ground. Indeed the further suggestion was made this afternoon in the question asked by the hon. member for York West (Mr. Hamilton) of the hon. member for Winnipeg North Centre that premiums paid to private insurance companies be made deductible from income tax, and if this suggestion together with the previous two suggestions were implemented the danger would be enhanced.

I submit that among other things the general effect of the implementation of these proposals would bring about two dangerous situations. It would shove entirely on the federal treasury the burden of the cost of hospital, health and medical schemes in Canada. That is my first objection. The second objection which is perhaps even more important is this. There is an implication that somehow or other we can implement all the proposals that have been made and produce these wonderful benefits without anybody paying

Income Tax Act

for them. In all fairness to the hon. member for Winnipeg North Centre, whom I admire for the assiduous manner in which he operates-I think there is no one who burns the midnight oil longer than he or who prepares his homework better-I would point out that if he has a weak spot it is that he tends to create the impression that he thinks all these proposals can somehow be implemented without anybody paying for them.

When I was reading over the debates of two years ago relative to this particular matter, his colleague the hon. member for Vancouver-Kingsway (Mr. Maclnnis) in

supporting the hon. member for Winnipeg North Centre said some words which I think were addressed as much to his own colleagues who sit immediately around and behind him as they were to those of us who sit on this side of the house. The hon. member for Vancouver-Kingsway said, as reported at page 1134 of Hansard of February 14, 1955:

I am talking as one who does not complain in this house about taxation. I doubt if I have ever spoken against the incidence of taxation in general, though I might have advocated higher exemptions for those in the lower income brackets. Though taxes have been heavy since the beginning of world war II I have not complained, and in truth I do not believe we have been overtaxed. I shall give my reasons for saying that in a moment.

On the next page of Hansard for that date the words of the hon. member continue as follows:

I do not want to reflect on anybody when I say this, but I think there is this possibility. If the whole of the expense for illness were to be allowed as a deduction for income tax purposes it would mean that receipts would be required from dentists, doctors and every other person who does a service on behalf of a sick person. I am quite sure that such a deduction would bring greater revenue to the government, and that the deduction of the whole sickness expense would not be altogether lost. I think that when, as has already been said, we allow the whole amount of charitable donations as a deduction from taxable income, there is no good reason why medical expenses should not be deductible in the same way.

I am not attempting to suggest that the hon. member for Vancouver-Kingsway was not supporting the proposal made by the hon. member for Winnipeg North Centre, because he clearly was, but it seems to me that in those two quotations he was reminding the whole house that you cannot get a benefit without a tax and that someone must pay the cost of these things.

I believe that the general proposal that has been advanced today can be safely left to the government for implementation and proper reform at the appropriate time. It was this government of its own volition that

first introduced the principle of deductibility and on two subsequent occasions lowered the floor.

There is one final objection in my present thinking to this proposition advanced by the hon. member for Winnipeg North Centre. It seems to me that if this proposal benefited anybody it would benefit most those who least need help. It would bring no benefit whatsoever to the very large number of Canadian citizens who are altogether exempt from paying income tax for the obvious reason that they do not receive enough income to qualify for taxation.

Mr. Gillis:

Shame.

Mr. Philpott:

It also seems to me, Mr. Speaker, that the net effect of the proposal would be to remove some of the burden from those who are best able to carry it and simultaneously place a greater share of the national burden on those who are least able to bear it.

Mr. Harold E. Winch (Vancouver East):

Mr. Speaker, it is with some amazement that I rise to speak at this moment following the hon. member for Vancouver South. I find it difficult to actually believe that the citizens of British Columbia would send to this house even a Liberal who would advance his kind of argument in opposition to the resolution that is now before the house.

It would appear to me that the major objection of the hon. member for Vancouver South, which emerged after I sorted the wheat from all the chaff, was that he feels this resolution is untimely. As I interpret his remarks I gather he feels it is untimely because there is a possibility that a health and hospital insurance plan will be implemented at this session. I am certain the hon. member can get a lot of very long odds that we are not going to receive a health insurance plan from this government for a long time to come. You cannot bet on the floor of the house but I am convinced that it would be possible to get long odds on this matter. As a matter of fact, although we are hopeful of health insurance, I think we will be most fortunate if we have implemented a national plan of hospital insurance before this year is out.

The hon. member for Vancouver South advanced the argument that if this resolution were adopted and legislation were introduced it would be untimely and would have a bad effect if we had a plan of hospital insurance or health insurance. Why would it make any difference as far as the Income Tax Act is concerned if we had a health or hospital insurance plan in effect?

We have had a hospital insurance plan in operation in the province of British Columbia

Income Tax Act

for many years, but the people have to pay for it and do so by means of a 5 per cent sales tax. If people in that province go into hospital, and many thousands of them do, they receive a slip on their discharge from B.C.H.I.S. indicating the cost of their hospitalization. These patients have already contributed to the hospital insurance plan through the 5 per cent tax. The amount they are required to spend for treatment and hospitalization is deductible from their income tax.

I know this because I already have two such slips in my possession totalling in the neighbourhood of $2,000 for last year and these are deductible from my income tax, because it is something which I have paid for together with all the taxpayers of that province. The only point on which we differ in this respect is that at the present time it is only possible to deduct medical expenses over and above 3 per cent of income, and basically I cannot see any validity in the argument raised by the hon. member for Vancouver South.

I cannot conceive of this or any other government, knowing that the taxpayer must pay directly or indirectly-most certainly in health and hospitalization plans it is directly, up until now at any rate-for the cost of service, not agreeing it should be deducted as a medical expense in connection with income tax in the future.

I admit that I will have to be repetitious to some extent, but I shall be brief. I feel strongly about this matter. I want to add to what has been said by a number of those who have spoken so far and indicate my emphatic support of the motion. I agree with others who have said that because of the regulations and interpretations now in effect with respect to the deductibility of medical expenses it is most important that at least a part of this problem be solved. It is most difficult to understand the thinking of a government which says it is all right to deduct the cost of certain drugs as medical expenses, but not the cost of others. Most of us have had the experience of going to a doctor on behalf of ourselves or our family and finding that in about 99.9 per cent of the cases he writes out a prescription which costs between 50 per cent and 200 per cent of his bill. That is just as much a medical cost as is the doctor's bill. Why that should not be included as a medical expense for the average worker on an average income is something that can be understood only by the mental incomprehensibility of a Liberal, because no one else could possibly understand it.

The same thing can be said with regard to glasses. In advertisement after advertisement

in the newspaper and on T.V. we as Canadian citizens are being told to take care of our eyes, especially the eyes of our children. You go to an optometrist and his bill is deductible under the medical section of the Income Tax Act, but the cost of the prescription which he writes is not deductible and your glasses may cost anywhere between $20 and $45. It just does not make sense.

If you are hurt in an automobile or industrial accident or are faced with an operation and must go to the hospital in an ambulance which costs you from $10 to $15, as far as your family is concerned that is a medical expense but it is not deductible under income tax regulations.

Because of all these things which are not covered I submit that we should give the most serious consideration to this resolution now before us. Perhaps you and I and the hon. member for Vancouver South (Mr. Phil-pott) with our $8,000 a year can stand the cost of an average illness, but I think all of us know, or should know, that to the average family an illness is a mighty serious matter. A brief illness can be mighty serious. In the case of a mother and father whose children are just growing up the cost of a doctor's services, hospital expenses and medicines can constitute a vicious blow to the pocketbook of the average worker in this country.

We should be most vitally interested in the health of our people; we should be ready to assist them in maintaining their health and therefore we should give consideration to the principle of this motion which provides that medical expenses shall be deductible right from the first dollar. I know I am repeating what has been said before, but I think it should be repeated time and time again until it sinks into mentalities such as that of the hon. member for Vancouver South. We all agree that when out of the goodness of our hearts and because it is necessary we donate to charity that should be exempt right from the first dollar, but if we as parents who are concerned for the health of our children, when we as husbands are concerned for the health of our wives, are faced with medical expenses we find that we must start with the 3 per cent limitation.

How can anyone who calls himself an intelligent member of the House of Commons, one of the elite 265 out of 16,600,000 people, say the government is right when it says, "If you give to charity you are from the first dollar exempt, but if you pay for the protection of the health of your family and yourself you must start at 3 per cent"? Just how stupid can some people's reasoning get?

I am not approaching this on the basis of this being an election year; it is a question affecting the expenses and income of the people of the Dominion of Canada. This is a most important principle we are considering. It is not something such as was contained in the concluding remarks of the hon. member for Vancouver South who suggested that the members of the three opposition parties should leave this to the "good judgment of the Liberal government which has always in the past known the right time and place to bring in necessary reform".

That is the very reason why this government should be condemned in the most outspoken terms and votes. We know its history and its record show that it does not do things because they are right and at the right time; it does things because it is forced by public opinion and the pressure of opposition parties in parliament. If it would only do things because they are right and at the right time, that would be different. The right time was years ago. But we would not condemn people too severely because they have not acted in the past if they would just confess their sins and do the job now.

I hope that this motion will pass and that the government will recognize that the opposition are governed by the rules of parliament. We can only move 'consideration' when a matter involves policy or expenditure. The government members know just as well as you and I that when a member of the opposition moves a motion in the only language he can use, or when a private member on the government side of the house moves a motion, and it carries by a majority vote, that it is an order to the government which should be followed if it believes in democracy. Let us see this motion put into effect this session and not just be a promise next June.

Mr. C. W. Carter (Burin-Burgeo):

Mr. Speaker, I listened with a great deal of interest to the hon. member who has just taken his seat. I admit I heard a great deal of vituperation against this side of the house and against the federal government, but I confess I heard very few arguments in support of this resolution.

The persistency with which the hon. member for Winnipeg North Centre introduces this resolution year after year is such that it is becoming a perennial; in Newfoundland we would call it a hardy annual. This resolution, or resolutions similar to it, have been debated over and over again, session after session, since I believe 1942, and surely everything that could be said on this question

Income Tax Act

has already been said. One wonders, therefore, whether any useful purpose can be served by debating the subject again today.

The resolution, of course, calls upon the government to consider the advisability of amending the Income Tax Act so as to remove the 3 per cent floor relating to the deductibility of medical expenses for income tax purposes. The purpose of the resolution is to urge the government to make all medical expenses deductible for income tax purposes. The hon. member for Winnipeg North Centre already has two other bills on the order paper, Bills Nos. 12 and 13, to amend the Income Tax Act, in addition to this resolution which we are debating at the present time. There seems to be no end to the amount of free advice which the Minister of Finance is receiving at this time with respect to the budget which now, we understand is in the course of preparation.

In introducing his resolution the hon. member referred to the fact that an election might be in the offing, and that the present might therefore be an appropriate time for the government to accept the resolution. Surely, Mr. Speaker, no one would suggest that this torrent of free advice with which the Minister of Finance is deluged at this time is in any way related to the possibility that an election may be held this year. I think we should be quite clear on that point, Mr. Speaker, because were this resolution, or the acceptance of it, related to the fact that this might be an election year it would indicate that we in this house seriously underestimate the intelligence and common sense of our constituents.

The average voter knows that the government has no money of its own, and that it must collect all the money it has in various kinds of taxes, of which income tax is one. The average voter also knows that the government is continually being asked to spend more and more money in various ways; for larger old age pensions, more public works, a national health plan and many other things. It is not a very high compliment to the voters' intelligence to try to make them believe that the government can spend more and more money while at the same time collecting less and less in taxation.

Mr. Knowles:

Wait until you see the budget.

Mr. Carter:

In the estimates tabled this session it is shown that we are spending over $13 million more on family allowances, simply because of the increase in our population. At the same time we are spending another $13 million extra on old age pensions, not because the rate has been increased but because, due to our improvement in health standards, more

Income Tax Act

and more people are living to the age of 70 and drawing these benefits.

We know this resolution emanates from the great humanitarian feelings which motivate the hon. member for Winnipeg North Centre who introduced this motion. For those feelings we all admire him, but we all have humanitarian instincts, and if we were to take nothing else into consideration we would collect hardly any taxes at all. Unfortunately it costs money to run a government, and the more demands we make on the government the more money the government must have. Therefore, much as we would like to do all sorts of things for our constituents, whether an election is on the horizon or not, our humanitarian feelings must be governed by the hard realities of economic fact.

Someone has estimated that if the Minister of Finance acted on all the advice which has been tendered to him this session his expenditure would be increased by nearly $2 billion a year or almost 40 per cent, while at the same time his revenues would be decreased by about $500 million. The average Canadian is intelligent enough to know there must be taxes. He knows that the social security and other things which he is demanding of the government cost money and that they must be paid for, and I believe every Canadian who is in a position to pay taxes is willing to bear his fair share of the tax burden according to his means. The whole basis of the taxation policy followed by the federal government is to distribute the tax burden among the people of Canada as fairly as possible.

For that reason a married man whose income is $2,000 or under pays no income tax at all. A married man with an income of $3,000 pays a tax of $160. A married man whose income is $4,000 pays $340 in income tax, and the man who has an income of $8,000 pays an income tax of $1,140.

Mr. Knowles:

May I ask the hon. member if he is quoting the rates for 1956? I think those are the rates for 1955 he is now quoting.

Mr. Murphy (Lamblon West):

It is a

wonder it was not 1945.

Mr. Carter:

Whether they are 1945 or 1955, they follow exactly the same policy the government has always followed, of distributing the burden as fairly as possible; and when reductions are made those reductions are made so everyone can get a fair share of the tax relief.

Mr. Hodgson:

Too much in any case.

Mr. Knowles:

It still would be a good idea to have the figures correct.

Mr. Carter:

The figures I mentioned were for married persons with no dependents and I chose them deliberately because these people would have the maximum tax that would have to be paid.

Mr. Hodgson:

Still too much.