May 3, 1965

RA

David Réal Caouette

Ralliement Créditiste

Mr. Caouette:

-because there is absolutely nothing in the budget to increase the purchasing power of people with an income below $3,000. Absolutely nothing to assist those who need it most.

To take the example given by the minister, let us consider the case of a family head with two children eligible for family allowances and earning $3,000 per year-assuming that he is a taxpayer, because of his low income-out of all his earnings, that man must spend on consumer goods and services $111 more, the amount which is taken off his income by the increase in the consumer price index alone. The Minister of Finance specifically stated, in his budget speech of April 26 last, that in his great generosity, he was granting that man a tax reduction of $3 per year, while he has to spend $111 more to maintain the same standard of living as two years ago.

With the Liberals, the poor are becoming poorer, the situation of small wage earners is becoming more precarious, and times will be harder in thousands of Canadian homes.

With the budget which was presented this year, do the millionaires, or those whose income is $35,000, such as the ministers, or members of Parliament, earning $18,000 a year, need personal income tax deductions? Or would it not rather be the small wage earners, the small taxpayers, the poor people who must receive special care from the government, a government which instead of applying social injustice or an antisocial policy, as the one which is being offered to us now, should see to it that the poorer members of our population, the small wage earners, the families with small income, be granted more attention by the Government? Those are the people upon whom the Minister of Finance should pay attention.

But the social injustice and the antisocial and antifamily policy of the government, which claims that it is "liberal", is even more evident when it grants higher tax reductions to those who have no family responsibilities.

Here are a few instances of this so-called "liberal" policy, which I call antisocial and antifamily: for a single person whose annual

salary is $3,000, the tax reduction is $24 a year; for a married man with no dependants, it is $10 a year, and if he has two dependants, it is $3 per year. A single person earning $4,000 a year will save $40; a married person without dependants, $24 per year, and a married person with two dependants, $15 per year. A single person earning $5,000 a year will save $59; a married person without dependants has a reduction of $40, and if he has two dependants, his reduction is $30.

With such an antifamily policy, it will not be necessary for the government to take direct birth control measures, as is done in other countries. This is an indirect measure to attain the same objective.

In the speech from the throne, much is made about the war against poverty, want and destitution, but the parliamentary secretary to the Minister of Finance told us that the speech from the throne did not necessarily refer to poverty-stricken people, but rather to the lack of opportunities, the lack of education, the lack of training, and actually not to the lack of purchasing power among Canadians.

Poverty and destitution are unknown in Canada.

This is what the parliamentary secretary to the Minister of Finance actually told the house, whereas the speech from the throne referred to war against poverty and destitution as they exist. The Liberals no longer know what terms to use, because they are confused and mixed up.

Is it by favouring the rich and disregarding the poor that the government intends to fight poverty and destitution? Is it by making the rich richer and the poor poorer that the government proposes to set up a socially fair economic order, a system enabling everyone to enjoy the wealth resulting from our national production?

Is it by reducing the purchasing power of the poor that the government policies of the Liberal party will fight poverty? Is it by reducing the taxes of rich people that we shall enrich the poor? Is it by giving to the rich that we shall help the poor, those who need to be looked after by the government, a government which claims to be government of the people, when it is controlled by finance and for finance? Is it by granting reductions to the more affluent classes of society that the government means to establish a socially fair economic order?

On many occasions, we have heard the Minister of Forestry (Mr. Sauve), the minis-

May 3, 1965

ter of the Liberal new guard, the minister who does not get along with others, the minister who wants to smash the old guard of the Canadian Liberal party, who said recently in the province of Quebec that he would not follow the old guard, the old gang of the Liberal party. Has the Minister of Forestry done anything in the house ever since he became a member of the cabinet?

On the contrary, government policies seem designed only to benefit the mighty and the rich and to crush the poor further. In so doing, the Liberal government is paving the way for an unprecedented social and economic disorder, after allowing disorder and brutality to prevail in the political field and in the relationship between the two founding races of our country.

After initiating policies conducive to confusion and national dissension, the Liberal government is in the course of laying down the basis of unprecedented economic and social disorder by allowing the less favoured groups of our population to be reduced to increasingly abject economic conditions.

In a speech delivered two weeks ago before thousands of pilgrims gathered at St. Peter's in Rome, Pope Paul VI said:

We must have the virtues conducive to peace, the capacity to give precedence to human over economic values

Human values, Mr. Speaker, that means the value of all individuals, of every man, woman and child, not only the wealthy and the powerful; the value of the individual must have precedence over economic values, over financial values, over money.

The concern about all human beings, without an exception, taking advantage of riches within reach and designed for them, must have precedence over the concern to safeguard the tyranny of the dollar sign, the tyranny of the makers of money and of credit. [DOT] (4:30 p.m.)

In a joint letter sent on March 22, 1964, that is barely a year ago, to the President of the United States, 22 prominent personalities of the country warned him that if the solutions he advocated were not applied within a short time, which meant as soon as possible, the American nation would be faced with an unprecedented economic and social disaster. And we know that Canada follows in the wake of the United States.

Here are some of the personalities who signed that letter: Mr. Ralph Helstein, of Chicago, president of the United Packing House Workers; Mr. Gunner Myrdal, Swedish

The Budget-Mr. Caouette economist, of the Institute for International Economic Study; Mr. Ben B. Seligman, director of the Department of Education and Research, Retail Clerks International Association; Mr. Robert Theobald, consulting economist, of New York; Mr. Stuart Hugues, professor of history at Harvard University; Mr. Linus Pauling, Nobel Peace prize winner; Mr. John William Ward, professor of history at Princeton University. What did those prominent personalities say? I quote:

As a first step to a new consensus it is essential to recognize that the traditional link between jobs and incomes is being broken.

The economy of abundance can sustain all citizens in comfort and economic security whether or not they engage in what is commonly reckoned as work. Wealth produced by machines rather than by men is still wealth. We urge therefore that society through its appropriate legal and governmental institutions, undertake the unqualified commitment to provide each individual and every family with an adequate income as a matter of right, not a gift.

Mr. Speaker, it must be noted that no longer are full employment and a high employment level being mentioned; but an assured income is being advocated, which is far removed from the present government policies. In fact, what did the Minister of Finance say in his speech:

When this government first came into office we stated a number of economic objectives. Our first goal was a high level of employment for Canadians-

"A high level of employment"; that is the aim of the government as recognized by the Minister of Finance in his budget speech.

On the other hand, we of the Ralliement Creditiste do not believe that the first objective of the government or of the present industrial system is to provide jobs. On the contrary, we believe that the purpose of economic activities is to promote the welfare of the home, of the family, in short, of the consumers.

Mr. Speaker, may I quote from a report submitted to the general meeting of the churches of Scotland in 1962 by a group of theologians, economists and sociologists. Here is an excerpt from this report entitled "Money, a Christian View":

We have come to believe that any job Is better than no job at all and that the main purpose of any economic policy is to create employment. In our opinion, the purpose of production is consumption: and while employment is part of this process, it is not the main factor. From a Christian point of view, man should not have to do a job which a machine could perform.

May 3, 1965

The Budget-Mr. Caouette

Those are the words of economists and sociologists. This is exactly what supporters of what is called Social Credit stand for. We are indeed in good company.

What is the opinion of Rev. Father Georges Henri Levesque, Dominican, a former joint chairman of the Massey-Levesque royal commission? In a pamphlet published by "Les Editions du Levrier" in Ottawa, in 1936, Rev. Father Levesque said this about Social Credit and the policies advocated by its founder, Major C. H. Douglas, and I quote:

But it is not enough for Douglas to set his economics in a spiritual setting or environment and to direct it, as it were, from the outside, toward spiritual values. He incorporates this spiritualistic finality to the very core of his system. This system is entirely based on this great Christian principle: the true purpose of any economic activity is to satisfy human needs and not to create wealth for wealth's sake.

The true aim of production and distribution, as Douglas often says, is consumption. The function of an economic system is to supply adequate goods to the consumers who really need them.

All the reforms advocated by Douglas, adds Father Levesque, spring from the argument regarding the supremacy of the consumers and tend to put the economy at the service of man, of all men.

And in his booklet, Father Levesque added this for the newspapermen and politicians who describe Social Credit in a fantastic and false manner:

Therefore, when newspapermen, well paid by political parties, claim that Social Credit is antiChristian socialism, beware of their theological philosophy. It is usually too rudimentary to give you safe directives. And, in this case, it could not reasonably justify its anathema, especially because it is too interested. When those men become self-appointed theologians, it is in general much less to stand by the revealed truth, than to safeguard the petty interests they defend in their writings. To this end, they will resort to any means.

Beware of them, continued Father Levesque, even when they approach Social Credit from its economic aspect. Reigning politicians see in this movement a growing and threatening political power.

The Minister of Finance is aware of that. I continue:

Bankers see in it the avowed enemy of their valued monopoly. So do not be surprised if their publicists attempt to disprove its doctrine or to ridicule it, which is much easier and requires less intelligence.

Mr. Speaker, in this last part of my speech, I wish to deal briefly with the baneful policy of our present banking system which is the cause of the growing indebtedness of every level of government, corporations and individuals in every class of society. I wish to state that it is precisely on account of the monetary policies of the present government

and the previous ones that Canadians are so heavily taxed and hundreds of thousands of Canadians are destitute and live in abject poverty.

The other day I heard the Minister of Finance speak about our balance of payments with foreign countries, of our international payments. He then blamed the Conservatives as being responsible for the almost intolerable situation existing in Canada.

At this point, I refer to page 45, and more especially to Table 28 of the budget papers tabled by the Minister of Finance.

In looking over this table, we find that in 1956, while the Liberal party was in office in Ottawa, there was a deficit of $1,366 million in our balance of payments. The Liberals were the first to pile up a deficit of a billion dollars in our trade with other countries. And now, they blame others for having exceeded the billion dollar mark after they themselves set such an example.

Mr. Speaker, I want to suggest a few ways of solving this problem by means of the Social Credit policies.

During the fiscal year, according to the estimates of the Minister of Finance, the Liberal government is going "to siphon off" and I use these words advisedly-$6,685 million to say nothing of the non-taxation revenues, which amount to $840 million and the revenues from the old age security tax which amount to $1,145 million.

Such are the amounts of money that the Canadian government is going to take from the pockets of the poor Canadian taxpayer.

And how will those revenues amounting to $8,670 million be chiefly used?

First, for the public debt charges, or the interest paid on the debt: $1,103 million, which is twice the amount that will be earmarked for national health and welfare and almost three times more than the amount that will be spent under the Hospital Insurance and Diagnostic Services Act.

Mr. Speaker, when we advocated not long ago a full tax exemption to every married person earning less than $5,000 and to all single persons earning less than $2,500, I myself met newspapermen who told me: "It would cost Canada $1.2 or $1.5 billion to grant such exemptions."

But those same newspapermen never asked themselves where Canada got $7 billion during the war to help our allies and try to win the peace which we still have not got. Where did the money required come from then? That does not worry the newspapermen.

May 3, 1965

But the moment one speaks of granting exemptions to the Canadian taxpayers, you hear somebody say: "But where will the

money come from?"

Debt charges amount to $1,103 million. That is what the government will pay this year to financiers. And let no one try to tell me that the Canadian people will profit by it. Who holds government bonds at present? In a proportion of 90 to 95 per cent, they are deposited in collateral security in Canadian chartered banks. That is where government bonds are, and the government knows it quite well.

Second, our defence expenditures amount to $1,581 million.

Mr. Speaker, when we, Creditistes, ask that family allowances be brought up to the level of the cost of living index since 1945, here is the answer we get: We have no money, we are unable to find the money to increase family allowances. Some people like the hon. Member for Longueuil, the hon. Member for Drummond-Arthabaska (Mr. Pepin), the hon. Member for Sudbury (Mr. Mitchell), and the hon. Member for Nickel Belt (Mr. Godin) claim that we cannot afford to raise family allowances. And yet Canada finds it possible to give credit to scores of countries but it cannot do anything for its younger population.

Mr. Speaker, I wonder what Liberal members on your right are doing.

With the exception of Creditiste members, no one speaks against the tribute-money that Canadians are forced to pay to bankers; no one protests against the $1,103 million we will have to pay in interest this year.

When it is a question of increasing the national debt by $346 million as in 1961, by $791 million as in 1962, by $691 million as in 1963, by $1,150 million as in 1964 and by approximately $479 million as in 1965, according to the table published in the budget papers which I have here, no one gets alarmed, no one takes exception, no one objects. When it comes to paying interest on bonds, no one stands up to proclaim how nonsensical it is for Canada and the Canadian people to run more and more into debt in a country so rich in natural resources, in goods and services of all kinds. This is an illogical situation, a nonsensical situation of which not only the Creditistes are becoming aware but also high officials of the U.S. administration.

On September 21, 1964, just seven months ago, the banking and credit committee of

The Budget-Mr. Caouette the House of Representatives in the United States introduced a report published by the U.S. government and available in the publication department of the U.S. government. This document, entitled "Money Facts", is made up of 169 questions and answers on the subject of money.

Question No. 69 reads as follows: e (4:40 p.m.)

If the government can issue bonds, why can't it issue money and save the interest?

Here is the answer given by that same committee:

A few clear-headed and firm individuals, such as Abraham Lincoln have insisted that the government should. The late Thomas Edison stated this matter this way "If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good also."

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LIB

Lucien Lamoureux (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order. I must interrupt the hon. member for Villeneuve to remind him that his time has now expired, unless he has the unanimous consent of the house to go on with his remarks.

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LIB

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

Liberal

Mr. MacNaughi:

Mr. Speaker, I would like to have permission to explain briefly to the House why I must object to the extension of time, and I want to assure the hon. Member that there is nothing whatever personal in this. This is a debate the time of which is fixed. There are a great number of Members on all sides of the House anxious to speak. If we extend the time of each speaker by three, four or five minutes we are going to deprive those Members of a right that they have under the rules. Therefore with a great deal of regret I must refuse consent to this extension of time.

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SC

Bert Raymond Leboe

Social Credit

Mr. Leboe:

Mr. Speaker, on this point of order, if it is one, I would just like to say that the leaders of the other parties were granted extra time, and it seems to me if the Minister would just state that this refusal applied to everybody else, then the rest of us would be quite happy.

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LIB

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

Liberal

Mr. MacNaughi:

Could the hon. Member for Villeneuve (Mr. Caouette) tell me just how much time he needs to finish this portion of his remarks?

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RA

David Réal Caouette

Ralliement Créditiste

Mr. Caoueiie:

It may take me about five minutes.

May 3, 1965

The Budget-Mr. Caouette

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LIB

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

Liberal

Mr. MacNaughi:

Then I will consent this occasion to the five minutes.

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LIB

Lucien Lamoureux (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Of course this requires the consent not only of the Minister but of all the Members of the House. Is there unanimous consent to the hon. Member's continuing his remarks?

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PC

Michael Starr (Official Opposition House Leader; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Starr:

May I speak on this point of order. I want to say I agree entirely with the Acting House Leader, and in this case to the five minutes extension, because it affects the Leader of the Ralliement Creditistes, which would be acceptable; but from now on there should be no extension of time to anyone else.

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SC

Alexander Bell Patterson

Social Credit

Mr. Patterson:

I understand the situation as it is at present, but just a few minutes ago the hon. Member for Bow River (Mr. Wool-liams) was granted an extension of time. However, I think the hon. Member for Villeneuve (Mr. Caouette) should be allowed to continue.

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LIB

Lucien Lamoureux (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

It is the understanding of the Chair that the hon. Member for Villeneuve (Mr. Caouette) will be allowed an additional five minutes. Is this agreed?

Topic:   THE BUDGET
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?

Some hon. Members:

Agreed.

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RA

David Réal Caouette

Ralliement Créditiste

Mr. Caouette:

I thank very sincerely the hon. members for their courtesy. On the other hand, may I point out, Mr. Speaker, that each time we have been asked whether we agreed to allow a Liberal member the latitude he required to complete his speech, we agreed. Each time a Conservative member was concerned, we agreed, as well as in the case of N.D.P. members. In my case, however, a five-minute limit is set, whereas others amongst the Liberals took 20 additional minutes.

I would simply ask the hon. member who kindly allowed me five minutes to be a little more tolerant and not to interrupt me as he did a few minutes ago, when he could have said simply and obligingly: "Well, we believe he should complete his remarks."

Mr. Speaker, I shall go on with my remarks. [Text]

It is absurd to say that our country can issue $30 million in bonds and not $30 millions in currency. Both are promises to pay: but one promise fattens the usurer and the other helps the people.

However, it has been one of the political facts of life that private banks must be allowed to create the lion's share of the money even if not all the money. Thus there is little opposition to the government's printing bonds and then permitting the banks to create the money with which to buy these bonds: but the proposal that the Government itself create the money instead of the bonds has always set off tremendous political upheavals. For

On example, Lincoln set off a political furore when he insisted upon having the government issue $346 millions in money (the so-called "greenbacks") instead of issuing interest bearing bonds and paying interest on the money.

The following question provides an answer to those who claim that such a solution would cause inflation. It reads as follows:

If the Government issued more money instead of government bonds, isn't there a danger that a government would issue too much money and cause inflation?

This is the answer provided by the U.S. government banking committee:

No. It is no more or no less inflationary for the private banks to create $1 billion of new money than it is for the Government to create $1 billion of new money. Furthermore, as an agency of the Government, the Federal Reserve System decides in any case the total amount of money to be created.

How, they ask, do banks render a service to the government or to the people by buying treasury or government bonds? Here is the answer given by members of the U.S. government committee to this particular question:

No, because they create money, an obligation of government, simply to buy bonds guaranteed by the government. There is no risk involved as there is in loans to businessmen and consumers. Their reward for buying bonds with money they create is the "subsidized" profit they enjoy.

And here is question No. 132, following immediately the above answer:

What is the burden of U.S. government bonds held by the private banking system?

The burden is the heavy bond interest, borne by the taxpayer that goes to the private bankers, when the same amount of money could be created by agency of the government.

Question No. 167 in that same paper, asks which reform is required in the present banking system in the United States. Answers are just in the same vein. We of the Social Credit party have been giving those answers here in Ottawa for a long time. First the reorganization-

The reorganization of the federal reserve board, toward greater responsibility.

May 3, 1965 COMMONS

That is the little gimmick which is going on in Ottawa every Wednesday when controllers of the economic life blood regulate Canada's wealth and purchasing power.

Abolition of the open market.

The actual balance between total credit in circulation and the wealth of Canada.

Co-ordination of monetary with other economic policy.

Financial accountability, via audits. A reappraisal of the "tight money" policies. A lessening of private banks' influence in the Federal Reserve System.

Mr. Speaker, this is exactly what Social Crediters have been demanding for a long time and we will continue to do so until the Minister of Finance and the government understand that it is proper and necessary to help the ordinary citizens who have to live and who are justified in wanting to live in Canada.

[DOT] (4:50 pm.)

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LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

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

Mr. Speaker, I should like to speak briefly to the amendment before the House.

The criticisms that have been made of the budget so far seem to have been directed at single items in the budget proposals, and limited to suggestions that while the objectives set out in the budget speech are desirable the approaches might have been different.

As far as I have been able to detect, however, there has been no comprehensive criticism of basic aims. This is understandable. It would be difficult indeed to criticize in any fundamental way the achievements of the last two years. It would be particularly difficult to criticize Canada's accomplishments in 1964.

The reduction in unemployment in that year was a record of 13.4 per cent, nearly double the rate of reduction accomplished in the United States. The total output of goods and services by Canada last year was 8.9 per cent greater than the year before. This was one third as much again as that achieved by the United States.

The deficit was reduced to $83 million, according to the parliamentary accounts.

DEBATES 853

The Budget-Mr. Gordon There was a surplus of over $300 million, according to the national income accounts. These are the best results for seven years.

I acknowledge the dilemma of hon. gentlemen opposite in attempting to criticize these accomplishments or our plans for ensuring that this phenomenal growth is continued throughout the current year.

Instead, the criticisms-somewhat carping and ungenerous, if I may say so-have been directed at the edges. It is claimed by Opposition spokesmen that despite their sorry record during the six years they were in office, despite the loss of so many of their former leaders-I am thinking of Messrs. Hees and Fulton and Halpenny and Sevigny and Noel Dorion and Fleming, among others-they could do better if only they were to be given a second chance.

I should like to examine three or four of the particular criticisms which have been made. The budget proposes an annual cut of $265 million in personal income taxes. The hon. Member for Digby-Annapolis-Kings (Mr. Nowlan)-I do not want to be unkind to him in any way but I was going to say, speaking to a brief which sounded at times as if it had been prepared, at least in part, by an association of manufacturers with some slight assistance from a well known Senator,-

Topic:   THE BUDGET
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?

Some hon. Members:

Oh.

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LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

-suggested it would have been better to have cut corporation taxes.

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PC

George Clyde Nowlan

Progressive Conservative

Mr. Nowlan:

I acknowledge my own authorship.

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LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

I was trying to let the hon. gentleman off the hook a little.

I have in my hands a table comparing corporation income taxes in Canada and the United States. The Canadian totals include the combined Federal and Provincial taxes in Ontario or Quebec, and also the 3 per cent Old Age Security tax. The United States taxes shown in this table include the Federal tax and a 5 per cent State tax. I should explain that 37 states plus the District of Columbia impose corporation income taxes at rates ranging from 1 to 10 J per cent. The rate of 5 per cent was chosen because it is imposed by the majority of states-more often that any other rate.

The table shows that corporations with a taxable income of $100,000 or less pay lower taxes in Canada than they do in the United States. At $500,000 of taxable income, the taxes in Canada are $249,850 compared with $246,500 in the United States-a difference of $3,350 or just over 1 per cent. At $1 million

854 COMMONS DEBATES May 3, 1965

The Budget-Mr. Gordon of taxable income, the Canadian taxes are $509,850 compared with $499,500 in the United States-a difference of $10,350 or 2 per cent.

Capital cost allowances are more generous in Canada than in the United States. Accordingly, I think it safe to say that, on the whole, corporation taxes here are lower than they are across the line. Certainly to suggest they are higher here is incorrect.

I wonder if the Opposition were aware of these facts when they moved the amendment that is before the House?

In arguing that corporation taxes rather than personal income taxes should be cut, I am curious to know whether my hon. friend would have cut the rate for small companies as well as large ones. The 21 per cent rate which is payable by small companies is lower than the rates paid by similar sized companies in other countries. It is also lower than the rate that will be payable by individuals after the proposed tax cut on any taxable income in excess of $6,000. Yet I cannot believe that even my genial friend opposite would cut the rate for the very large corporations and not do something for the smaller ones.

Does he not think, as I suggested in my speech, it would be best to wait until we get the report of the Royal Commission on Taxation, which was sponsored by my hon. friend, before we decide what should be done in this important area?

Does not my hon. friend think that the extension of the fast write-off allowances to December 31, 1966, will have a much greater effect on stimulating capital investment than anything else that could possibly be done? I believe this, and it is not just idle speculation on my part. We know from the experience of last year the effect which this measure introduced originally in the budget of 1963-I wish the hon. Member for Bow River (Mr. Woolliams) were still here-has had in stimulating capital investment.

The fourth question is this. Corporation profits, as the hon. gentleman knows, are running at an all-time high. Corporations have never been so prosperous. Does anybody really believe that Canadian corporations are being held back by present tax rates? Surely the facts show just the opposite.

Mr. Speaker, may I call it five o'clock?

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PC

George Clyde Nowlan

Progressive Conservative

Mr. Nowlan:

Since I cannot reply at this time, I can only ask the Minister a question. I assume he knows that the budget resolutions are to be debated very shortly, and I will take the opportunity to reply at that time to the questions he has raised.

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LIB

Walter Lockhart Gordon (Minister of Finance and Receiver General)

Liberal

Mr. Gordon:

I shall be delighted. I hope they come before us soon.

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May 3, 1965