Allan Joseph MacEachen
Mr. A. J. MacEachen (Inverness-Rich-mond):
Mr. Speaker, I have followed the discussion this afternoon on the resolution moved by the hon. member for Winnipeg North Centre, and like my colleague the hon. member for Vancouver South I do not have any strong bias either pro or con, nor do I think I can reach the high level of moral indignation evidenced in some of the speeches we have heard from the other side of the house.
One of the interesting phases of the discussion this afternoon is the reference to the inconsistencies and anomalies which exist in the taxing system and the taxing laws of Canada. One desirable feature of a taxing system is simplicity, but as you give more and more exemptions and expect the taxing system to accomplish more and different things, there are bound to be a greater number of anomalies and inconsistencies in the
Income Tax Act
system. I suppose the historical purpose of the taxing system was to collect revenue and the taxes were revenue producers alone.
However, in recent years there have been other virtues attributed to the taxing system, mainly the possibility of affecting the level of investment and income and employment by the raising or lowering of taxes at the proper intervals. Many people find it anomalous that the government should have a surplus, and certainly it is anomalous if taxes are to be considered as revenue-producing only; but it is not anomalous when the taxing system is used to do something else.
During the discussion it has been made very clear that some hon. members feel that the taxing instrument should be used to achieve objectives other than the collecting of taxes and combating depressions. One of the inconsistencies referred to was the fact that contributions to charitable institutions or approved charities are deductible for income tax purposes. Presumably the purpose of that regulation or practice was not to assist the taxpayer, particularly, but to assist the charitable organizations by encouraging charitable giving.
This resolution attempts to give particular recognition to the taxpayer who in a particular year may spend money on medical bills. The taxing instrument is becoming more complex and has to do more things, and as a result we have what seems to be anomalies and inconsistencies. I am puzzled why it should be felt that donations to charitable institutions or approved charities should be used as an argument for the adoption of this resolution.
I think each of these questions stands on its own feet and should be discussed on its own merits, and I do not believe the case of the hon. member for Winnipeg North Centre is improved by referring to the practice followed in respect of charitable donations.
I think it should be apparent to all of us that the practice at the present time does take into account the fact that individuals may make exceptional or extraordinary medical expenditures in the course of a particular year. The position is that any individual who spends on medical necessities an amount greater than 3 per cent of his total income can deduct the amount that is in excess of 3 per cent for income tax purposes. To go beyond that would be to state that we should give special consideration to medical expenditure and make it completely deductible.
I think it to be true that outlays for medical and dental care are a normal part of a man's spending. It is expected that each year an
individual will have to undertake a certain expenditure for the protection of his health; the consumption of medical or dental services, from the economic point of view, is no different from the consumption of housing or the consumption of fuel or the consumption of clothing. For this reason I was interested in the opinion expressed in the debate last year by one hon. member who said that all expenditures made on medical supplies were a dead loss. It may be that expenditure on food is a dead loss because the food is permanently destroyed in the process of eating. Nevertheless I do not believe that any of us would suggest that expenditure on health does not contribute very positively to an individual's welfare in the course of any year, or that it should be singled out for special treatment. I do agree that in certain instances extraordinary and unexpected expenditures are made by individuals for medical purposes, and the special character of these extraordinary cases is reflected in the present practice which provides for the situation when these expenses amount to more than 3 per cent of income.
The hon. member for Winnipeg North Centre suggested in his opening speech that the adoption of this resolution would mean that the house was paying some attention to a real grievance of the Canadian people. I suppose all hon. members in this chamber are conscious of the wishes of the Canadian people and, in particular, of the wishes of our constituents; and we are particularly conscious of their needs with respect to health care. As far as I am concerned I have received no representations from any voter in my riding over the past four years asking me to support this particular resolution, nor have I in discussion with citizens in my province found that they regarded this as a very real grievance.
I was interested, too, to hear the hon. member for Winnipeg North Centre suggest that the introduction of a universal system of hospitalization would not affect the treatment that should be afforded this particular resolution. I agree that if the present proposals in this direction are implemented they will provide a universal free hospitalization and diagnostic service; they would not cover medical services. But I believe also that the introduction of universal hospital insurance would have a very definite bearing on the capacity of the individual citizen to undertake the payment of his medical expenses, because I think it is true to suggest that hospitalization and medical bills are closely related and often are incurred simultaneously. If the burden on the individual citizen were to be reduced through the introduction of a universal hospital plan, then his capacity to
provide for the payment of his own medical expenses up to this floor of 3 per cent certainly becomes greater. Whether this should be used as an argument against the resolution is another matter, but it certainly is a fact that it will have this particular effect.
There was another subject to which the exemplary research of the hon. member for Winnipeg North Centre did not address itself, and that is what seems to me to be a very important part of this discussion, namely the changing group of citizens who are liable to be affected each year by the scope of this particular resolution. If extraordinary medical expenses were chronically incurred by the same group of citizens over a long period of time, then I would think the case for the resolution would be improved. But it may be that the type of relief projected in this resolution will affect a different group each year, and I suggest that if this is so it reduces the argument in favour of the resolution.
Mr. Speaker, I was impressed not only by the remarks of the hon. member for Winnipeg North Centre in general but also by two other views put forward in the debate. One was that an effort should be made to provide some assistance or some relief to chronic sufferers or to those persons who each year, year in and year out, must buy expensive drugs or undergo extensive medical treatment. I think there is a case for assistance here, and I share the view expressed a year or so ago by the hon. member for Westmorland (Mr. Murphy) when he asked that the list of drugs with regard to which exceptions are made for deductibility purposes should be widened.
In the province of Nova Scotia we are not in a position where we can say that the provincial government is ready to embark on a system of health insurance. The government of Nova Scotia is not yet in that column which lists the names of the governments which have agreed to enter the hospital plan. They have stated that the province will enter the plan if and when it becomes available, notwithstanding the fact that the availability of the plan depends to a great extent on the decision of a province such as Nova Scotia to enter it.
There is one final feature of this resolution that I might mention, because it seemed to me of importance. It emerged during the remarks of the hon. member for Burin-Burgeo. At present the same tax relief is given to all taxpayers; the practice of applying the 3 per cent floor gives the same progressive relief to all those who must pay income tax. I suggest that if the 3 per cent rule were completely removed, though this would, of course, assist all taxpayers, it
Income Tax Act
would assist taxpayers in the upper brackets more than those in the lower brackets, because it is certainly true that the same operation costs approximately the same whether an individual earns $3,000 or $8,000 a year.
I think the adoption of the resolution would help those in the upper brackets more than those in the lower brackets. Briefly, my attitude to the resolution is that at present weight is given in the regulations to the incidence of medical expense beyond a certain level. If evidence had been presented in the addresses this afternoon that the adoption of the resolution would remove what I would consider to be hardship or abnormal burdens, then I would be ready to support it. In the absence of such evidence, I feel that the present system seems reasonable and equitable, and whatever inconsistencies may occur in the system are more the fault of the increasing demands made upon the taxing instrument to do so many different things, with the result that in doing these different things there are bound to be all sorts of anomalies and inconsistencies that might be absent in a simpler tax system and a simpler world.
Subtopic: PROPOSED AMENDMENT WITH RESPECT TO MEDICAL EXPENSES