Mr. R. R. Knight (Saskatoon):

Mr. Speaker, I merely wish to say a word or two. I am prompted to do so by what has just been said by the hon. member for Inverness-Rich-mond. It is possibly my misfortune that I am not very well acquainted with my hon. friend, but I could not help wondering as he was talking whether he himself is a married man with a family. Of course that is none of my business at all. I could not help wondering whether his riding was one of those particularly prosperous areas with not too much unemployment, and these cases had not come to his attention. As I say, I have no knowledge of whether or not these be facts.

Mr. Byrne:

Then why refer to them?

Mr. Knight:

I refer to them because that was the distinct impression the speech of my hon. friend made upon me, that here was a man who had not had too much personal experience with the things that other people have suffered.

I rose mainly to draw to his attention and the attention of the house one argument that I have heard advanced in the house not only by the present Minister of Finance, I believe, and certainly by his parliamentary assistant, but also by the former minister of finance, Mr. Justice Abbott, who used to take the stand that a 4 per cent floor under medical expenses represented normal medical expense for Everybody. Thanks to some pressure from

Income Tax Act

various quarters the floor representing average, normal or reasonable medical expense was reduced to 3 per cent.

Mr. Bcnidickson:

An allowance of 1 per cent was made for drugs.

Mr. Knight:

I should like to deal with the fallacy of that particular argument. Of course it is probably a normal and reasonable average across the whole country, just like a certain percentage is normal for fatalities or loss of property caused by lightning. But the point is that the hon. member for Inverness-Richmond said he would support a scheme which would take care of abnormalities, I think were his words.

Mr. MacEachen:

Abnormal expense.

Mr. Knight:

I suggest that to the individual practically every medical expense is an abnormal expense because it is just like lightning. When it does hit you, you immediately assume an expense which is 100, 200, 300 times the average expense across the country. Therefore you have to deal with the individual case of hardship. We have gained some experience in this regard from our now fairly long experience with the hospitalization plan in the province of Saskatchewan. Certainly the average expense is not very great. I cannot quote exactly at the moment what the average cost is per person.

The point is that when sickness strikes and you have an operation and a doctor bill and a hospital bill you get out of the field of averages, and it becomes a case of what has happened to the individual. Can the individual, alone and unaided by his fellow men, handle the situation? For the average workingman the answer is no. I remember a meeting one night in the town of Melville, from where the Minister of Agriculture comes. We had been discussing the hospital plan, and after the meeting a man came and showed me a little slip which was a receipt. His hospital bill had been paid by the Saskatchewan government and had amounted to a good many thousand dollars. He said, "If I had been faced with that bill myself I would have been completely and totally helpless."

I suggest to my friend across the way that there are a great many people, particularly working people, who find themselves in such a situation when sickness strikes. They are simply in the position of the man I met at this meeting. He was an elderly gentleman, a retired railroader, and never during his lifetime would he have been out of debt if he had had to pay the account himself.

Mr. Benidickson:

If they are out of the

field of the average, then the income tax takes that into consideration.

Mr. Knight:

My friend made a remark that the hon. member for Winnipeg North Centre had not put up much of an argument about charity. I am quite aware that the hon. member for Winnipeg North Centre is able to take care of his own argument, but I might suggest there is an old adage that charity begins at home. Speaking about the member for Winnipeg North Centre, one reason I often do not speak in a debate in which he takes part is that he has already said everything and put forward such logical and clear arguments that unless one indulges in repetition there is little more that one can say.

I had not intended to speak at this length, but even if the hon. member for Winnipeg North Centre has put forward all the arguments I should like to subscribe to them by getting to my feet for this moment or two.

Mr. H. J. Murphy (Westmorland):

Mr. Speaker, this year again I should like to say a few words in this debate. I listened with interest to the hon. member for Saskatoon giving us his views on the matter. One thing I like about his party is that one man gets up and tells us what he is going to say and someone else tells us what he has said. Apparently they do not think we understand the first time.

Mr. Knight:

You will learn.

Mr. Cameron (Nanaimo):

It would help if somebody on your side would explain what you say.

Mr. Murphy (Westmorland):

The hon. member for Nanaimo could stand a little advice himself on what he should and should not say. I enjoy speaking in the house and listening to the members of the three opposition parties expressing their views. It is pleasant when we can discuss matters like this quite calmly and without any nasty little digs. I know that I never resort to making nasty little digs at people or calling them names. I do want to say, however, that I sit on the government side of the house and we have the majority by the will of the people of Canada. Before we came here we pledged that if elected we would support the Liberal party, in the same way that members of the other party pledged that they would support their parties.

I want to tell that indignant little member for Eglinton that I am not a submissive type of person. I think for myself, and I am a member of the Liberal party. I subscribe to the principles of the Liberal party, though I may differ from time to time with regard to details. I am not obliged to make remarks about members of other parties and what they do.

Income Tax Act

I want to repeat some of the things I said last year, and I hope the government will take them into consideration. I refer to the extension or widening of the deductible expenses with respect to drugs. I have had representations made to me from time to time on behalf of persons who have in their family children who have suffered epileptic or other type of brain damage. I am told that in this particular type of sickness, if they are given anti-convulsive drugs they do not take these seizures and that every seizure they take makes the brain damage that much worse. By people who know or by people who have these invalids in their family I am told that the expense of these drugs is considerable.

Another point with respect to this matter is that in some sections of the country we must bring a sick child or sick member of the family to a large city in order to obtain expert treatment. These are all expenses in addition to those that are deductible. I can understand that there must be a dividing line between what would and would not be deductible by normal healthy people. For instance, you cannot deduct for food or for certain types of health food. Somewhere a line must be drawn. But I am suggesting that these anti-convulsive drugs be added to the list. In the case of veterinary service to farm animals, the taxpayer can deduct the cost of the veterinarian and of the drugs, which are perhaps in their make-up of the same type as I mentioned, when he administers to farm animals. I therefore think the children of the man, which are more important to him, should have the same relieving effect on the taxpayer.

I also had something I wanted to mention on this resolution concerning the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes as it could apply to different sections of this country. I am saying that in certain sections of Canada people are a bit more prosperous than they are in others, and that it is more difficult in some places to make a living than it is in others. This may be no fault of the government. As we know, in southern Ontario there are some 240 frost-free days per year, whereas here in Ottawa the number is about half that. In the district I represent there are perhaps 90 frost-free days. It can thus be seen that farmers in my area have a more difficult time in making a living than do those in regions more favoured by the climate.

Since we are talking about income and income tax, I should like to point out something that is contained in the Gordon report,

namely that the average incomes in the Atlantic region are less than those in the rest of Canada. If I may be permitted to do so, I should just like to read into the record something that appears at page 98 of this preliminary report:

3. It is a fact, however, that average incomes in this region-

That is the Atlantic region.

-continue to lag behind the averages for the rest of Canada. In 1926, for example, the average income per capita in the three maritime provinces was 38 per cent below the average for the other six provinces; in 1939 the corresponding percentage was 32 per cent; in 1946 it was 24 per cent; . . .

Farther on in the paragraph it is stated:

In 1955 income per family for the Atlantic provinces was 31 per cent below the average for the other six provinces, compared with a disparity of 37 per cent on a per capita basis.

From these percentages it would appear that there are larger families in the maritime provinces than in the rest of Canada. We know that larger families mean, of course, more illnesses in the family because of their number. If we are to embark upon a program of remedying some of these discrepancies in income between the Atlantic provinces and the rest of Canada, I cannot see any better way of doing it than by starting off with income tax. We all know that a general reduction in income tax is like giving everybody a raise in pay. Relief such as that brought about by lowering the 3 per cent floor on medical expenses would be somewhat similar to giving everybody a raise in pay.

Now, it having been shown that our incomes are slightly lower than those in the rest of Canada, we in the maritime provinces are the people who should have this slight relief through doing away with the floor, or relief in the tax itself. This action would help make up for the low income. Hence I cannot subscribe to the idea that general relief be given to all the nation when one part of the nation has a lower income rate. We know that when the freight rates are increased we in New Brunswick suffer more than do those in Ontario. Consequently, if there is to be a reduction in income tax or if there is to be elimination of the floor on medical expenses, I think it would be only fair that this elimination of the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes be made to apply to the Atlantic region only-[DOT]

Oh, oh.

^Mr. Murphy (Westmorland): -it appearing from the Gordon report that we are the ones who could stand an increase in income.

At six o'clock the house took recess.

Income Tax Act AFTER RECESS

The house resumed at eight o'clock.

Mr. Murphy (Westmorland):

Mr. Speaker, before six o'clock I was discussing the effect of the adoption of this resolution on the maritime provinces, and I suggested at that time that perhaps because of the differences between incomes in the Atlantic provinces and those in the rest of Canada such tax relief should apply to the Atlantic region. The Gordon report tells us at page 99-this is really more than a report, it states a duty-

. . . the tact remains that living standards are lower in the Atlantic provinces than they are in the rest ot Canada, and that it is in everyone's interest to reduce this differential if it is at all possible to do so.

I would think this would be one of the ways in which it could be done. I realize that the government must have money to carry on its operations, and that to get that money we must have taxes. We know that if we were to reduce the income tax drastically we would give relief to a great many people but we would not have the money to increase payments on such social security measures as old age pensions and family allowances. We would not be able to build the Chignecto canal, and I know we want to do all these things. That is why I am suggesting that the range of drugs whose cost may be deductible in connection with income tax should be widened. I think this would be the fairer way to do it, and it would take in more people who are perhaps in need of some tax relief.

Actually the relief would certainly be beneficial to those in the upper income bracket. Since I represent a section that is not considered to be in the upper income bracket in this country I am interested in seeing relief given to those in the lower income brackets. I believe the widening of the range of deductible drugs would have that effect.

Recently I read some of the arguments put forward by the hon. member for Winnipeg North Centre in 1955, in which he mentioned repairs to property and depreciation of property. I think the same argument applies in different sections of the country. We know that land is more valuable in the large industrial centres of Ontario and Quebec than it is in some of the towns, cities and country areas in New Brunswick. If we wish to apply as the yardstick the taxes raised from property we know that those properties in those large industrial areas pay more taxes because thair valuation is greater. Therefore when we think of income tax we can use the same sectional yardstick where the income is low and

where the values are low. In those sections some assistance could be granted by way of tax relief.

I listened with interest to hon. members discussing this resolution and they used the double-edged sword by saying that if-and I say "if"-this is granted it is an election dodge, and if it is not granted then this government is either tired, old or refuses to consider it, which means that if we agree with it on this side of the house, we are wrong; if we do not agree with it we are wrong. I am sure the hon. member for Winnipeg North Centre is not suggesting that this would be election bait; yet I am afraid that might be the interpretation others would put upon it.

I feel, as I said last year, that the resolution in its present form should not be supported. The resolution asks for the removal of the 3 per cent floor. If you look at notices of motions numbered 2, 5, 8 and 11 on the order paper you will see that they propose increases in some measures of government assistance. We cannot have both. We cannot have increases in pensions and family allowances and decreases in revenues. Therefore I feel that the subject matter of this resolution is not of as much importance to us at the present time as are increases in social services such as family allowances, old age pensions and other benefits which are accruing to our citizens. I do feel, however, that it would not seriously jeopardize the tax structure if the range of drugs that are deductible as expenses in connection with income tax were widened to include other drugs.

Mr. Knowles:

Will the hon. member permit a question? Will he explain how including other drugs in the list would be of any advantage to those in the lower income brackets for whom he has spoken tonight if the 3 per cent floor is still there; or does he suggest that drugs should be put in a category by themselves and allowed deductibility from the first dollar?

Mr. Murphy (Westmorland):

My answer to that is this. Most family units have a certain normal amount of medical expenses, and it is not suggested for a moment that people should not have the normal medical expenses. But in some particular families there is a heavy burden because one child, or some member of the family, suffers from brain damage. The drugs that are necessary for treatment in those cases are in addition to the normal medical expenses, and generally speaking much in addition to the normal amount, which is about 3 per cent of the taxable income. As I say, these are additional expenses. I do not say that all

medical expenses should be deductible, but I say those such as anti-convulsive drugs that bite deeply into the incomes of certain families should be deductible.

Mr. Colin Cameron (Nanaimo):

Mr. Speaker, before six o'clock I listened to the hon. member for Westmorland, the hon. member for Inverness-Richmond and the hon. member for Burin-Burgeo, and I have been trying to understand their argument against this resolution. In part at least it seems to be based on the fact that the people in the Atlantic provinces are not on the whole as prosperous as people in the rest of Canada, and therefore we must be very careful not to improve the lot of those who pay income tax in Canada, including the Atlantic provinces, because there are not as many of them in the Atlantic provinces.

I rather gathered from what the hon. member for Westmorland said just now that he felt-and I must agree with him in this- that we should make every effort to even out the discrepancies in income in Canada; but I must ask him this, Mr. Speaker. Does he seriously contend that this particular floor, which I understand brings in between $35 and $40 million a year, would make all that difference; and is he suggesting that the method by which we even out the discrepancies in income in Canada should be to reduce the better-off areas and the better-off individuals to the level of the less fortunate areas and less fortunate individuals rather than vice versa?

Mr. Byrne:

Well, that is the socialist

principle.

Mr. Murphy (Westmorland):

That is the negative approach.