February 6, 1967

?

An hon. Member:

The fellow who wrote them should read them.

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

I have sat here for many years watching hon. members read their speeches word for word.

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PC

Terence James (Terry) Nugent

Progressive Conservative

Mr. Nugent:

Would the hon. member tell us why he could not find a better example than that to follow?

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

The socialists have a reactionary outlook which I believe is 25 years behind even contemporary communism. Even communist Russia today struggles with the problem of reviving an enterprise or profit system,

(Mr. Byrne.]

while trying to retain its special form of government.

Lest I be misunderstood, and whether or not I am misunderstood I know that I will be misinterpreted, I harbour absolutely no ill will toward co-operatives as such. Co-operatives have indeed a place in our society. They are, or at least should be, just another enterprise operating in a free enterprise environment, assisting in but sustaining a government or governments which are required to pour out billions of tax dollars in welfare and other services. Their special status need come only from the desire of a special group of like minds to provide self-help and co-operation. Co-operatives do, however, enjoy a special competitive position which threatens the very existence of corporate enterprise. It is against this discrimination I appeal to government and members of the house at this time.

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PC

Edward Nasserden

Progressive Conservative

Mr. Nasserden:

Will the hon. member

permit a question?

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

Let us, for example, assess the relative position of two competitors bidding for a going concern in which one bidder is a co-operative and the other a corporate enterprise. Let us assume that the firm on the block enjoys net earnings after taxes of $1 million annually, and that the capitalized value of those earnings on the stock market is $10 million. Let us assume the going rate of earnings for that kind of investment is 10 per cent. Let us assume also that before payment of the corporation's income tax, its earnings were $2 million.

If the co-operative regards a 10 per cent return as satisfactory, it can afford to pay as much as $2 million for the firm. It can receive tax free the full $2 million of annual earnings. The other, ordinary, corporation seeking to buy this firm could wisely pay no more than the after tax capitalization value of $10 million. It will be argued I know that patronage refunds do not fall in the category of dividends; that co-operative earnings are not in any way connected with profit. Surely any economist worthy of the name would not say that excess earnings over disbursements are not profit.

From what I have said, it will be obvious to members of the house that while tax exempt co-operatives are not bearing their fair share of the Canadian tax burden, an even more serious result of this practice is the advantage they hold over corporate competitors. This policy, in an age when corporate profits are

February 6, 1967

taxed at an exceedingly high rate, cannot help but mitigate against corporate expansion and conversely encourage unprecedented and overwhelming expansion of co-operative enterprise.

It is time, in my opinion, that co-operatives, having attained the multi-billion dollar business status, should divest themselves from the sort of semi-religious garb under which they have been clothed these many years. In all their literature and protestations designed to seek patronage of the individual and to retain the sympathies of legislators, there rings a semi-religious strain. It follows of course that any criticism in this area of special privilege is looked upon as sacrilegious utterance against the deity.

Let us take a look for a moment at the annual report of the Federated Co-operative Limited and subsidiary companies for the year ended October 31, 1964. I know that I would have the co-operation of the house if I were to table two pages from that report.

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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

You had

better read it.

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LIB

Herman Maxwell Batten (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Does the house give unanimous consent to having this material printed in Hansard?

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PC

Terence James (Terry) Nugent

Progressive Conservative

Mr. Nugent:

I rise on a point of order. Considering the manner in which the hon. member has been proceeding, I would think it only fair to the house he should tell us the name of the author of this speech, so he would not have to bear the blame alone. On that condition, we will allow the material to be read into the record.

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

Mr. Speaker, I have been in this house since 1949. Any utterances I have made have been of my own origin, and I am sure the same cannot be said for the hon. member for Edmonton-Strathcona (Mr. Nugent).

[DOT] (8:30 p.m.)

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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

A point of order, Mr. Speaker.

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

The annual report-

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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

A point of order, Mr. Speaker.

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LIB

Herman Maxwell Batten (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order. The hon. member for Cape Breton South on a point of order.

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PC

Donald MacInnis

Progressive Conservative

Mr. Maclnnis (Cape Breton South):

My

point of order is that there is no reason why

The Budget-Mr. Byrne the hon. member for Kootenay East should reply to a question from this side of the house in the way he did. His reply was inaccurate in any sense of the word.

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LIB

Herman Maxwell Batten (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order. May I ask the

house whether it gives unanimous consent to the parliamentary secretary to have this table to which he has referred recorded in Hansard?

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PC

Edward Nasserden

Progressive Conservative

Mr. Nasserden:

Mr. Speaker, in view of the unwarranted attack which is being made on co-operatives by the hon. gentleman, we cannot give him that consent.

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

Mr. Speaker, in this table-

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LIB

Joseph-Alphonse-Anaclet Habel

Liberal

Mr. Habel:

Mr. Speaker, I rise on a point of order.

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LIB

James Allen (Jim) Byrne (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Byrne:

-if hon. members will permit me-[DOT]

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February 6, 1967