Mr. Paul SI. Pierre (Coast Chilcotin):
Mr. Speaker, the two constants of mankind are supposed to be death and taxes. The minister has contrived to get them both in the one bill for our consideration tonight. Estate tax is what we call it, but what we are really dealing with here is a capital gains tax because an estate is capital; it is stored labour. It differs from other capital gains taxes only in the time of its collection. It is collected after the owner's death from his heirs. To my mind this should be one of the most fair forms of capital gains tax, and it is this broad statement that I should like to expand a little later in my remarks.
The bill itself, of course, is not simple. Very few things involving government or law are simple any more. I suppose we might as well face this complexity as one of the burdens of modern society; there is no point in our lamenting the fact. Some of us may look with some regret to days not long ago when there were simple wills. I can recall one in my riding of Coast Chilcotin which was written with a pencil on one sheet of store newspaper. A rancher left his ranch to his sons to be divided equally between them. The instructions on the sheet of paper were very simple. The eldest son was to draw the line dividing the ranch in half and the younger son was to have first choice of the halves. It worked very well.
Another example occurs to me and I recommend it for study to the minister's staff. This was the case of an Indian who had died leaving all his wordly goods to one of two sons. The will was to be decided in this way. These were the instructions. The two sons were to take their best saddle horses and there was to be a race. The son whose horse was last across the finish line would inherit the entire estate. You may be able to anticipate, Mr. Speaker, what happened: the two sons got on their horses but neither man would move from the starting line. Fortunately there was an old Indian in the village and they called on him to break the stalemate. He looked the situation over and gave some brief instructions. The race was won; one horse came in first, one came in last, and the estate was settled according to the will. The minister has such experts on his staff that I am not going to tell him what the solution was,
except that the old Indian solved the problem with two words. He was not a politician but a man very brief in speech.
In this bill as first presented there were provisions with which I strongly disagreed. The bill, in my opinion, did not reflect some of the realities of life that affect small businesses-farms, ranches, to name a few. I noticed that many of us made complaints about the bill. As a matter of fact, the other day the minister said that slightly more than 100 complaints from government members had been received, and as I recall it the opposition parties also contributed eight. So, members on all sides of the house were concerned about the bill. Speaking for myself and for several others, there were three points to which we took strong exception. One of these concerned the sudden burden placed upon small estates closely held, of which ranches and farms are a typical example. The sudden impact of even moderate estate taxes could be very damaging to such holdings.
It is true that even under the present act it is possible to arrange time payments. The minister says that only about 40 people in the last decade asked for such arrangements to be made and this makes me very doubtful that many people were aware of this provision. In any event, time payments should have been made a matter of right for estates of this nature, which are closely held and which may find it simply impossible to raise estate taxes quickly. The minister has now seen fit to change this section of the act and a five year period in which to make six payments is now to be permitted as a matter of right under the revised bill.
There was another objectionable feature to the minds of many of us, and it was this: Since there are major differences between this new estate tax and the present one, a great many people are going to have to rewrite their wills in order to adapt them to the new legislation. I congratulate the minister for bringing in the changes. They will permit executors, after August 31 next, to elect whether they wish to pay estate taxes under the new or old acts.
[DOT] (9:10 p.m.)
The third complaint many hon. members raised was that, in its original form, the bill would have imposed estate taxes on all estates over $20,000. The philosophy behind this part of the measure escapes me. We are told that estate taxes have two purposes, to
February 17. 1969 COMMONS
raise money for the government and to prevent the pyramiding of family wealth from generation to generation. That is all very fine, but how an estate worth $21,000, by any stretch of the imagination represents the foundation of a family's dynastic fortune, escapes me. I should be surprised if the money the government collects from estates of between $25,000 and $35,000 equals the amount spent on collection.
I commend the minister for changing his mind and for introducing a floor of $50,000, below which no estate will be taxed. I wish I could be satisfied with the $50,000 floor, but I cannot be. For many years the basic exemption level has been $50,000. For several years now we have been suffering from an inflation which has eroded the value of our dollar. This legislation ought to recognize that inflation has greatly diminished the value of our dollar. In large part, the dollar has lost its value because many levels of government for many years have indulged in irresponsible spending policies.
Topic: INCOME TAX ACT AND ESTATE TAX ACT