Mr. Ray Thomas (Weiaskiwin):
Mr. Speaker, when speaking in this debate on February
24 my leader had some very interesting things to say with regard to corporations. I should like to enlarge on his remarks in this connection, because I feel that the Canadian people will be quite anxious to have as much of the truth as possible so they may be able to render a proper judgment on the action of this government in this respect.
The hon. member for Peace River (Mr. Low) said his calculations showed that Canadian corporations in the ten-year period from 1940 to 1950 accumulated undistributed profits of $4,952 million in round figures, and that was after paying all their costs, all their taxes, setting aside depreciation allowances of $6,338 million and paying shareholder dividends of $4,276 million. Doubtless the total of undistributed profits accumulated by the end of 1952 by Canadian corporations reached the $6,000 million mark. As my leader said, the figures are not yet available, but I believe that the $6,000 million estimate will be found to be very close to the actual figure.
Let us remember that the tax relief granted to corporations by the budget now before us dates from January 1 last, while the reductions provided for individual Canadians are not effective until July 1. No one can possibly say that the corporations have not been given preferential treatment over the ordinary citizens. No one can claim, either, that this government has not been aware of the high level of corporation profits for quite a number of years. Those profits have been taken out of the pockets of the consumer in the form of prices.
Against this background of fact we in the opposition feel that we are perfectly justified in making the claim that this is indeed a rich man's budget, and that it offers nothing to the Canadian people in the lower income brackets. Most certainly the people of Canada will now know who the government favours, and they will know perfectly well that it is not the ordinary man.
My leader mentioned in his speech on February 24 that there was no good reason why the sales tax should not have been abolished several years ago. Let us take a look at the figures for a moment to see whether or not that claim is justified. Suppose the government made a levy of only one-eleventh part of the undistributed profits of corporations; what would be the result? Remember that at the end of 1950 these corporations had paid their way, had distributed handsome dividends of $4,276 million, had set aside total depreciation allowances of over $6,000 million, and had left undistributed profits amounting to $4,952 million.
Those undistributed profits represent $353.48 for every man, woman and child in Canada. An eleventh part of those undistributed profits would be $450,181,818, which is more than the total revenue which the government gets from the sales tax. With that amount taken from their total undistributed profits the corporations would have left a residue of $4,501,818,182, and it would mean that the people of Canada would still be contributing to those profits at the rate of $321.34 per capita.
During the eleven years 1940 to 1950 inclusive, corporation shareholders, who of course are the privileged class in Canada, received cash dividends at the rate of $305.22 per capita of Canada's 1951 population. But the government has extended to this group more privileges in this budget by making it possible for them to escape taxation on their individual incomes until they reach the astounding figure of over $9,000 per year.
If the levy I have mentioned were made on undistributed profits of corporations it would be possible for the government to relieve the low bracket taxpayer of $32.14 in the way of taxes, and the government would be merely assisting the corporations to pay back to the taxpayers a small portion of the money the corporations had taken from them in profits, much of which was completely unjustified. This would be a form of profitsharing plan.
Such profit-sharing plans are being tried in various industries. I have here an article from the Globe and Mail of last week headed "Profit Sharing Helps Company Employees: Lush" which I should like to place on the record. It reads:
The lowest hourly rated female employee working for the full year 1952 at Supreme Aluminum Industries, Ltd., received a total from profits of $843-$335 in cash and the balance in retirement credits. This amounts to $16.22 per week for the entire year, or 37 cents per hour for 44 hours of 52 weeks.
The highest hourly rated male employee received during the same period $1,639 from profits. This is equal to $31.52 per week, or 72 cents per hour on the same basis. Of this total, $200 represented past service credits. Over a period of five years, this hourly employee has a balance in his retirement fund of more than $6,000, and in addition has received some $1,500 in cash.
Using these two illustrations to indicate the worth of profit sharing to the individual employee, H. V. Lush, president, told guests at the profitsharing dinner at the Royal York last night that since Supreme Aluminum began its profit-sharing scheme five years ago, employees have received $513,781 in cash and retirement fund credits from profits. During the same period, the company increased its working capital by 80 per cent and its net worth by 63 per cent.
"This enviable record has been largely the result of increased efficiency," he declared. "In our fabricating division, production per wage dollar in 1951 increased by almost 10 per cent over 1950.
The Budget-Mr. Thomas And last year, this same department increased its output per wage dollar by a full 10 per cent over 1951."
There you have an outstanding example of what corporations can do under present circumstances. Remember that Supreme Aluminum paid taxes to this government on the high level which this government has been exacting. But in spite of that they have been able to increase their working capital by 80 per cent and their net worth by 63 per cent, while at the same time passing back to the employees very large benefits in the form of cash bonuses and retirement allowances. Supreme Aluminum Industries Limited are to be congratulated on a remarkable achievement. What they have done sets a pattern of what other corporations could do if they had the will to be fair and just rather than merely to become powerful.
It is quite apparent that these corporations do not need the reductions given in this budget nearly as badly as do the wage earners. We say that very little assistance has been given to the wage earners, and practically nothing has been given to the western farmers. Of course there are some things for the western farmers. I am sure they will all be glad and thankful to the minister for taking the tariff off plow bolts. I am sure the wives of farmers will be able to make good use of the straight pin that will be saved in that way during the coming years. That is just about all that they will get.
As for the income tax reduction of 11 per cent, this is effective on July 1 and the actual reduction for the year is only 5-5 per cent. If the Minister of Finance (Mr. Abbott) had wanted to give the people of Canada a reduction of 11 per cent, why did he not make it effective on January 1 as he did with the corporation tax, instead of July 1? This way of putting forward income tax reductions is much the same as the method adopted by loan sharks in attempting to fool prospective borrowers. When they say the rates are only $5 a month it does not sound nearly as big as 60 per cent a year. That is exactly what the minister tried to do but in reverse, of course. He says it is 11 per cent but he makes it effective for only half a year, and he knows very well that a new budget will be introduced within a year and that the 11 per cent will not carry on beyond that time.
Speaking of taxes, I cannot help but protest again, as I did on an earlier occasion during this session, against the gestapo methods employed by some of the investigators of the Department of National Revenue. The investigators of the department seem to be picking on the farmers, particularly in my riding, more than on anyone
2774 HOUSE OF
The Budget-Mr. Thomas else. Their high-handed attitude has certainly antagonized a good many people in my constituency. It is very much like one farmer expressed it to me when I was home. He said: As low as the Canadian dollar
can fall, it will never stoop as low as government officials will go in order to get it. I am inclined to agree with him. The taxpayers of Canada are putting up with this type of collection method, with exorbitant taxes and no relief in sight merely to pay for the waste, extravagance and inefficiency of the government.
The investigation into the army works services is a good example. I know that government members will say oh well, that is a very small branch of only one service of the armed forces. But let us remember that that is the only branch of government that has been investigated for a good many years, and as far as we know this waste, extravagance and inefficiency may be spread throughout the whole field of government operations. Only a change in government will tell us that. On that point I am going to have to agree and also disagree with the hon. member for Eglinton (Mr. Fleming) who on February 26, at page 2431 of Hansard, had this to say:
If they cannot do anything about it, then let them make way for a government that will do something about it.
Then someone interjected "C.C.F.". The hon. member for Eglinton went on to say:
No, it will not be C.C.F. Whatever may be said for my hon. friend, the fact of the matter is that there is only one place for the people of the country to turn to in this situation if they want an end to this extravagance, this waste, an end to these scandalous irregularities, if they want an end to this extortionate burden of taxation, if they want an end to these attempts to fool the people on the eve of elections.
As far as that part of his statement is concerned, I can agree with the hon. member for Eglinton. However, he goes on to say:
There is only one place for them to go and that is to go to the Progressive Conservative party, and go to that party they will at the next election.
Apparently the hon. member for Eglinton has not dug very deeply into the history of Conservative governments in this country. As a matter of fact, it will not take me long to go through the entire history of Conservative power in the House of Commons. I am not going to say in this respect, as has been said by many hon. members opposite, that the Conservative government of 1930 to 1935 caused the depression of the thirties. Far be it from me to say that, because the policies of the prior Liberal government were directly responsible for that depression. But the Conservatives did absolutely nothing to stop us from sinking into the mire of the depression. Neither, as a matter of fact, did the Liberals
when they came into power in 1936. It was not until the war came along that we found ourselves solvent again as a nation.