May 14, 1964



Louis-Joseph Pigeon

Progressive Conservative

Mr. L. J. Pigeon (Jolieiie-L'Assomplion-Montcalm):

Mr. Speaker, a few days ago, I directed to the Minister of Justice (Mr. Favreau) a question which I would like to repeat tonight to the house:

At the request of home builders of the province of Quebec in particular, does the government intend to amend the Bankruptcy Act in order to stem the present wave of fraudulent bankruptcies in the field of housing?

May I say that French Canadians had nothing to do with 86 per cent of commercial bankruptcies in Canada and 72 per cent of those which occurred in the province of Quebec in the first quarter of 1964. This was

Proceedings on Adjournment Motion shown by the economic development council in its bulletin: Le Laissez-passer canadien-frangais.

On the other hand, if I refer to a report from the dominion bureau of statistics, here is what it says:

In 1963, there were 3,678 commercial bankruptcies in Canada (3,190 in 1962). Their total liabilities amounted to $193,771,000 ($149,440,000).

In the housing field, there were 714 bankruptcies in the total amount of $40,137,000.

Mr. Speaker, while Hon. Mr. Fulton was minister of justice, he had instituted, in 1962, I believe, an inquiry on bankruptcies. I am wondering why this government has not continued the excellent work undertaken by the minister of justice?

In my opinion, it is important and urgent- in fact nationally urgent-to amend the Bankruptcy Act so as to prevent as many frauds as possible. There are in Canada people of good faith who lose large amounts of money because the Bankruptcy Act is too vague.

Mr. Speaker, there is another important point I should like to stress concerning bankruptcies. The 11 per cent tax on building materials contributes to the financial difficulties of contractors and subcontractors. It should not be forgotten that a housebuilder's margin of profit is only 10 per cent, according to statistics; therefore, it is not surprising that bankruptcies are on the increase in Canada.

It seems to me that it is necessary and even essential to amend the Bankruptcy Act if we are to prevent as much as possible those frauds which involve great losses for private enterprise.


John Watson MacNaught (Minister Without Portfolio; Solicitor General of Canada)


Hon. J. Watson MacNaught (Solicitor General):

Mr. Speaker, in reply to the question raised by the hon. member I must say I am unable to accept the premise contained in it. His question affirms that there is at present a wave of fraudulant bankruptcies in Canada, particularly in the field of housing. I have made inquiries of the officials in the Department of Justice, in particular of the officials charged with the administration of the Bankruptcy Act, and they inform me there is no evidence in the department that would support the premise alleged by the hon. member that there is a wave of bankruptcies involving fraud at the present time.

Very often we read in the newspapers and hear statements that fraud exists to a great extent in bankruptcy proceedings, but on investigation these prove to be rumours, surmises and not borne out by the facts.

We have had, of course, many representations from responsible people to the effect that


Proceedings on Adjournment Motion the Bankruptcy Act should be amended, particularly in relation to fraud. I am sure the hon. member will realize that there is a conflict of jurisdiction here. The federal government has exclusive jurisdiction in the field of bankruptcy, but the provincial government is charged with the responsibility of the administration of the criminal law, and the line here is rather close and difficult to define. For that reason much care must be given to this subject. I want to assure the hon. gentleman that the problem of amending the Bankruptcy Act is receiving very careful study at the present time.




Gérard Laprise

Ralliement Créditiste

Mr. Gerard Laprise (Chapleau):

Mr. Speaker, last Tuesday, that is on May 12, 1964, I put the following question to the Minister of Finance (Mr. Gordon):

In order to stimulate the Canadian economy, does the minister intend to comply with the wish expressed by the president of the Canadian Manufacturers' Association, Mr. Roy Crabtree of Montreal, who asked recently in Calgary for a reduction of the fiscal burden similar to that applied by the United States government?

Mr. Speaker, everybody knows that our southern neighbours have decided to reduce the fiscal burden by $11 billion this year, in order to stimulate the expansion of their economy.

I am in perfect agreement with the president of the Canadian Manufacturers' Association, and I think that if a tax cut were implemented in Canada, our economy would benefit greatly.

Taxes are designed-I suppose that the Minister of Finance is aware of that-not to take money where there is not any but to remove financial surpluses. But what happens now, under our fiscal system, is that money is being taken where there is not enough and that creates problems for the Canadian consumers. If they are deprived of part of their income, Canadian consumers cannot buy in stores, keep their business going or spur the economy. That increases unemployment and does not reduce in any way the cost of living.

Mr. Speaker, I believe that the Minister of Finance should listen attentively to the requests of the Canadian Manufacturers' Association and of all Canadians.

We know that last year, when the minister levied a new tax or rather when the 11 per cent tax on building materials came into effect, there was an outcry of protests from house builders as well as from Canadian manufacturers.

In my opinion, the minister would be quite popular with Canadian taxpayers if he granted a tax reduction to get business rolling in Canada and to keep it under our control, so that what is now left to us will stay in our hands.

This tax burden which we have to bear has for effect to put a greater part of our business undertakings, of our industries and of our trade under American control.

On February 24 last, Mr. Maurice Huot, editor of the newspaper Le Droit stated in an editorial:

One of the results of the rising government expenses coupled with increasing taxes is to place more and more the country under foreign control.

Mr. Huot also recognizes that this tax load allows foreigners to take over the trade and the business undertakings of the country.

I feel that the minister, even though he had a very busy day with the discussion of the Income Tax Act, should lend a sympathetic ear to those claims and announce a tax cut for all Canadians.


Walter Lockhart Gordon (Minister of Finance and Receiver General)


Hon. Waller L. Gordon (Minister of Finance):

Mr. Speaker, in reply to this question I should first of all like to remind my hon. friend that in the budget speech I gave certain comparisons of the taxes payable by Canadian individuals and by corporations compared with their counterparts in the United States after the United States cuts have gone into effect. Those comparisons showed that in almost all cases except those in the high income brackets the Canadian taxpayer will still be paying less income tax than his counterpart across the line.

I would also remind my hon. friend that in the budget speech I forecast a deficit for this current fiscal year of some $455 million. Since then and following the federal-provincial conference in Quebec the federal government has proposed that very substantial transfers be made from the federal government to the provinces, which will mean quite substantial reductions in the federal government's revenue not in this current year but in the future.

I did notice the proposals of the president of the Canadian Manufacturers' Association. He has been making these same proposals for some time. I saw him shortly after he made his speech in Calgary. I also saw him in Vancouver, but on that occasion it was my turn to make the speech. I pointed out at that time that the Canadian economy is going ahead at a very encouraging rate; that the pick-up over the corresponding situation a year ago is very marked and encouraging.

This is a fact with which I think we can all be delighted. I am not suggesting the situation is as good as any of us would like to see it in every single section of Canada, but taken as a whole the improvement is very encouraging, particularly as the near term prospects are equally good.

14, 1964 3297

Proceedings on Adjournment Motion Mr. Deputy Speaker: Order. I regret I have to interrupt the hon. minister. Pursuant to special order made earlier this day this house stands adjourned until ten o'clock tomorrow morning.

Motion agreed to and the house adjourned at 10.25 p.m.

Friday, May 15, 1964


May 14, 1964