March 29, 1945 (19th Parliament, 6th Session)

LIB

Harry Leader

Liberal

Mr. LEADER:

The first recommendation is:
That the income of farmers for income tax purposes be averaged over a period of four years.
I know the farmers have asked that their income be averaged over a period of five years, and I was rather surprised that our local of the federation of agriculture in Portage la Prairie had cut that down one year. I did not say anything but this just Shows their anxiety to have something done to take care of the losses which they suffer during the bad times. The second recommendation reads:
Whereas the application of income tax to the proceeds of live stock dispersal sales is causing severe hardships; therefore be it resolved that seventy-five per cent of such proceeds of dispersal sales of live stock raised on farms be exempt from income tax as return of capital and twenty-five per cent be recognized as current income.
I believe that is exactly what was submitted by the federation of agriculture two or three years ago, that seventy-five per cent of the proceeds of live stock sales be classed as capital rather than income, but the department persists in classing it as income. I can cite one case, that of a man who over a period of thirty years built up an excellent herd of dairy cattle. When he got older and was unable to get help, he disposed of his herd together with his farm equipment. The cattle brought a return of $5,000, and he is still fighting with the income tax department because they are asking him to pay tax on the $5,000 worth of cattle which he sold. He gathered that herd together over a period of years, and if anything is capital I submit that should be classed as such. Oh, I know the assessors can spread it over a period of five years, but certainly that is not good enough. The farmers have to pay the tax in the long run; there

is a great deal of bookkeeping to it and not very much saving to them. The third recommendation is:
That the farmers be relieved of the requirement of deducting income tax from wages paid to hired help, as past experience shows that the farmer has to bear this tax by paying higher wages.
In the discussion on this point I was given to understand that if a farmer goes out to hire a man-and they are hard to get-offering him the going wages, the man will say, "What about deductions from my wages for income tax purposes?" The farmer replies, "Well, I have to do it," to which the man says, "Then you will have to 'pay me what you deduct." So the farmers claim they are paying higher wages as a result. The assessor comes right back and says that can be charged as wages against your income. So it can, but in many of these cases it will mean that the farm labourer will not pay any tax, and he should not pay any tax, and it all makes unnecessary work for the farmer. The next resolution is:
That discrimination exists between a farm couple who are only exempt $1,200 and a city couple who may claim exemption up to $1,860. Therefore the exemption should be at a parity with the city couple, provided such amount is earned on the farm.
I see the Minister of Finance in his seat, and he may wonder what they are driving at. On the printed form it states that a man's wife can get a job and claim the exemption of $660 which is given a single person, without the husband losing his status as a married man, with an exemption of $1,200. Therefore the total exemption they may claim is $1,860. That is being done right along. The farmer's wife cannot leave home and get a job. They have not a restaurant right around the corner, like people living in the city, and they are allowed only $1,200. But, as the hon. member for Qu'Appelle stated a short time ago, it is the farmer's wife and his small boys and girls who are milking the cows and feeding the hogs, trying to keep up production in this country when hired help cannot be found. They would be glad to pay hired help, but it is unprocurable. So the farmer's wife, his daughters and small boys undertake to do this work, yet that couple are exempt to the extent of only $1,200. If they were living in the city the wife could get a job somewhere else, and their total exemption would be $1,860. Is it not possible to give that to the farmer whose wife stays on the farm and helps maintain production in this country, instead of seeking a job somewhere else? I say it is possible. The farmers

Supply-Revenue-Income Tax
of Portage la Prairie are asking for this, and I endorse their request whole-heartedly. The next recommendation is:
That a fixed price of $1 per day be allowed for board of hired help on the farm.
I think at present an allowance of up to SI a day may be made, but many of these assessors interpret that provision in different ways. They may allow 75 cents a day, 85 cents a day or perhaps SI. They have the authority to allow up to that amount, and the farmers are asking that this be placed on the income tax form, so that the assessors will not be able to interpret it differently, as they are doing now' in many districts.
The sixth recommendation is:
That the income tax should be so clear and specific that all decisions of assessors should be uniform in their application.
These assessors are given discretionary powers, and they make different adjustments. Sometimes these people get together and wonder what is the reason for the difference.
I got this right from the head office in Winnipeg. One man may be allowed only $15 as pin money for his wife, while another assessor may think a farmer's wife should be granted $100 to $150 as pin money. When that situation exists you can see the confusion it causes in the minds of these people. They are asking that this be made statutory and placed right on the income tax form, so that the assessors will not have this discretionary power, though I think they use that power to the best of their ability. From the experience I have had with the assessors I believe they are trying to do their best.
The seventh recommendation is:
That dependent children under eighteen years of age paid up to $400 per year (board included) be exempt. This should be inserted in the income tax form.
That is something a great many of the people in Portage la Prairie did not know a thing about. I believe it was only through my own efforts that they found they could allow as much as S400 to a dependent child, including board, which could be charged against income as expense. Some of them were getting that; others did not know a thing about it.
I do not think the assessors are very much concerned with pointing out these things. They are concerned with how to get hold of the money which they believe the farmers are trying to gyp them out of, in a good many cases. So they are asking that this be stated plainly on the income tax form.
I want to apologize for having said this much, Mr. Chairman, though it really was not such a great deal after all. However, I have only done my duty as I see it, and I thank the committee for its indulgence.

Topic:   DEPARTMENT OF NATIONAL HEALTH AND WELFARE
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