Mr. Carter:

A person with dependents would have his income tax reduced considerably. The present floor of 3 per cent deductibility in respect of medical expenses follows exactly the same principle. A man who earns $3,000 can deduct everything over $90. A man who earns $4,000 can deduct everything over $120. A man who earns $8,000 can deduct that portion of his medical expenses exceeding $240.

But the principle set forth in the resolution before us today departs entirely from the principle of sharing the burden equally in proportion to means. When I saw that this resolution was on the order paper for today I took it upon myself to try to get some figures. The figures I am going to place on record were given to me over the telephone and are taken from the 1954 taxation statistics. I have not had an opportunity to check them all, but I am not quoting them for the purpose of making a statistical record. I am quoting them merely to illustrate a point.

According to the statistics for 1954, the total labour force was somewhere around 5,393,000 people. Of these, 4,803,000 submitted tax returns. Of the number who submitted tax returns, 1,393,000 were not taxable. I should like to point out that these 1,393,000 Canadians would benefit in no way whatever if the resolution were adopted. They do not pay any income tax at all; therefore they have no exemptions, and if we removed the floor on deductibility of medical expenses they would not benefit one little bit.

When the hon. member introduced his resolution he spoke of it as raising a grievance. I think these 1,393,000 Canadians would have a grievance if the government were to have legislation passed which would benefit people more fortunate than themselves and in such a way that they could derive no benefit from it whatever. The total income of the 3,410,000 people who submitted income tax returns in 1954 and were taxable amounted to $13,379 million. That works out to an average income of $3,433. That is the average income of the average Canadian taxpayer. If we take the larger figure and include those who submitted returns but were not taxable, the average income of Canadians works out to approximately $2,800.

I mentioned a moment ago that the figures I am quoting are for 1954. It is possible that some changes have taken place since then. The total labour force has probably gone up to somewhere around 5.6 million. I do not have the correct figures. It is possible that the average income has also gone up. Therefore I do not think we would be very far out if we took $3,000 as the average income of the average Canadian worker. On that average income of $3,000 he would pay a tax of $140. If he has a heavy hospital bill he he can claim exemption for everything in excess of $90. In other words if his medical expenses were big enough his income tax would be reduced from $140 to $90.

I was interested in finding out how many average Canadians there are. The arguments put forward by my friends opposite seem to be based on the assumption that the bulk of the income tax is collected from rich people. The little research I was able to do revealed to me that there are very few rich people left in Canada. As a matter of fact, in 1954 there were only 376,570 people who had incomes of over $5,000, and an income of $5,000 is not very excessive in these days. When we reached the higher bracket of $10,000 I found there were only 68,670 people who had an income in excess of that amount. Out of a working force of over 5| million that is a small number of people indeed. My point in mentioning the matter, Mr. Speaker, is to emphasize the fact that the bulk of our income tax is collected from the small taxpayer. If we do not collect it from him we do not get it.

I should very much like to be able to see income tax done away with altogether. I think everybody would like it. It would certainly be very popular, in view of the prognostications of my friends on the other side of the house. It certainly would be one way of making one sound very popular. But if we did that, where would we get the money with which to supply all the other things the taxpayer wants?

I do not think the ordinary taxpayer of Canada expects to get something for nothing. I do not think he is foolish enough even to fall for the argument that he can get something for nothing, or that the government can continue to give him more and more and still collect less money with which to pay for it. The money must come from somewhere.

I should like to make it quite clear, Mr. Speaker, that I am not opposed to reducing the burden of medical expenses on anybody. I should like to see it done. But I do not think this resolution is the right way in

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which to do it. It seems to me that there are many ways in which relief can be given to people, the small man particularly, I think there are many ways which are much better than that indicated in this resolution.

One way, of course, is to create an atmosphere where full employment can be maintained, where full wages and better wages can be made possible so the individual will be in a better position to look after his own expenses instead of having the government do it for him. Another way, which I think would be much better than that indicated in this resolution, would be to increase the basic tax exemption. That action would certainly treat every taxpayer fairly, but it would not help the poor man who did not earn enough to pay taxes anyway. Another way would be to extend the scope of medical items which may be deductible. I think a good deal can be done along this line. The hon. member for Red Deer developed that argument at quite some length, but that has nothing whatever to do with this resolution. Much as I should like to extend the scope of medical deductions, passing this resolution will not do it because it has nothing whatever to do with anything except the removal of the 3 per cent floor on deductibility.

Another way-and certainly in my opinion it is the best way of all-is the national health plan, which has been talked about for some time and which seems to be drawing nearer and nearer to becoming a reality. Does my hon. friend want to do it both ways? Does he want to have a medical health plan which will take care of medical expenses and hospital expenses and then, when the income tax is paid, does he want to deduct that amount from income tax? I do not think we can have it both ways.

Mr. Knowles:

Let me tell the hon. member that if the government will bring in a complete health plan, covering both hospital and medical expenses, I will withdraw this resolution immediately.

Mr. Carter:

I will point this fact out to

my hon. friend. If we pass this resolution we make it more difficult for the government to put in a health plan, because we are reducing the revenue the government needs for that purpose.

Mr. Knowles:

By how much?

That is a weak one.

Mr. Knowles:

Would the hon. member

permit another question? Did I understand the hon. member a few moments ago to say

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that one cannot expect the government to increase expenditures and reduce taxes at the same time?

Mr. Mclvor:

That is right.

Mr. Carter:

If I said that, what I meant

was this. The government cannot spend more and more money and collect less and less money.

Mr. Knowles:

That is precisely what the

government will do this year.

Mr. Carter:

If the government spends

more than it takes in, it will have to borrow or suffer a deficit. I am not advocating that the government do deficit budgeting. I said earlier, Mr. Speaker, that the majority of Canadians were little people, with an average income of about $3,000, and that in 1954 the average taxable income was about $3,300. The amount of individual income tax collected from these people is quite small because it is scaled down in accordance with the taxpayer's ability to pay. If we remove this 3 per cent floor, we at the same time are doing something that will not benefit a great many Canadians but which, as was pointed out by the hon. member for Vancouver South, will benefit those who do not need the benefit. When a person earns over $5,000 he is in a position to make provision, through health insurance plans, to take care of his individual medical expenses.

Let us consider the position of the man who earns $5,000. He can deduct medical expenses over $150. Suppose he has a heavy medical bill. I may say right here that people with bigger incomes are less likely to have big bills than are poor people, because they are in a better position to find better shelter and better food and to take better preventive measures to ward off disease. But disease and illness can come to anyone. However, a man who has an income of $5,000 is in a position to take out some kind of health insurance which will pay his medical bills for him. Therefore, actually he does not have any bills to pay. In spite of that he can deduct them from his income tax. He can take the full deductibility and, as the hon. member pointed out, deduct something which has not cost him anything at all. It is a free gift from the federal government to the man with the high income at the expense of the man who is on the small income.

Mr. Murphy (Lamblon West):

Will the

hon. member permit a question? I am sorry to interrupt. It is a very simple question. At the beginning of his remarks about 35 minutes ago the hon. member referred to the

sponsor of this motion and said it was a perennial motion or, as the hori. member said it was called in his province, a hardy annual and was unnecessary. Does the hon. member recall that it took several years to pass various pieces of legislation? I will just recite one instance. We in this party argued for taxation on crown companies from 1945 to 1949.

Mr. McCann:

That is not a question.

Mr. Murphy (Lamblon West):

Has the hon. gentleman any objection to that?

Mr. Carter:

I did not get the hon. member's question.

Mr. Garson:

On a point of order; what

relevancy has this question to the speech the hon. member is making?-It has no relevancy whatsoever.

Mr. Murphy (Lamblon Wesl):

Yes, it has,

Mr. Speaker;

because if you will look at Hansard tomorrow you will find that the hon. member who now has the floor suggested quite emphatically that this subject which is being brought up by the sponsor of the resolution has been brought up annually and perennially and, as I take it, it did not amount to anything. I am suggesting that this same objection could be taken to the resolution on taxation of crown companies which was pursued from 1945 to 1949 to a satisfactory conclusion.

The Acting Speaker (Mr. Applewhaile):

The hon. member for Lambton West asked permission to ask a question, and I assumed that the hon. member for Burin-Burgeo who has the floor acceded to his request. At the same time I regret to say that so far I have not been able to hear the question. I thought the hon. member was making an observation, and the hon. member for Burin-Burgeo would be going rather far afield if he were to reply to it at this time. I am not trying to restrict this debate, because I do not think the house wishes it to be too closely restricted. But if the hon. member for Lambton West has observations to make, perhaps it would be better to have him make them at the conclusion of the speech of the hon. member for Burin-Burgeo.

Mr. Murphy (Lambton West):

Mr. Speaker, thank you very kindly for your observation. I was just trying to make a very simple point. I thought it was a very important one. It is this. The hon. member from our newest province who has the floor rather criticized the sponsor of this resolution-

The Acting Speaker (Mr. Applewhaite):

Order. I think the hon. member has just made the point that I was trying to make.

He has the right to ask a question for clarification or information, but he has not the right to make a point in the middle of the speech of the hon. member for Burin-Burgeo. He certainly will have that right when the hon. member has concluded.