The other day I had a call from Doctor Richter, a professor at Dalhousie university, who is interested in the provisions of this bill for research, and he left with me a little memorandum which I should like to read in order to present the matter intelligently. He says:
, It is generally recognized that the productivity of many industries could ibe greatly increased by the application of scientific research.
We are all agreed on that. The memorandum goes on:
Canada lags in that respect behind other countries. The government bill, therefore, aims at encouraging research by declaring as deductible the expenses for scientific research prodded the research is directly or indirectly related to the taxpayers' business. Another restriction is implied by the term "scientific research" as used in the bill: only expenditure for research in the field of natural and applied science is deductible while all types of social research are excluded.
The distinction is arbitrary and unfair and may seriously impair the effect of the clause as a whole. The purpose of the measure is to increase industrial productivity by means of research. Productivity is determined by two factors: one is technological, the standard of plant and equipment and their utilization. The second factor is just as important: the human element in industry, the efficiency of the worker and the contribution which they make to the success of the enterprise.
The bill as it stands is only concerned with the technological elements of production and disregards the 'human factor. This is not in keeping with the repeated statements of the Prime Minister about the aims of the government's labour policy.
The distinction made by the bill will often prove unworkable and may cause some great injustices. The clause applies, for instance, to research on problems of speeding up production. It denies the tax privilege to research concerned with the effects of the speed-up on the worker.
Research on the technological causes of industrial accidents is covered by the clause, research on the causes of accidents brought about by the behaviour of the worker is excluded. This is all the more regrettable as it is mainly the second group of accidents which, according to expert opinion, is capable of further reduction.
The whole field of industrial morbidity which is concerned with health conditions in a particular industry will have to do without the tax privilege and will probably remain as neglected as it is at present.
The clause as it stands militates against the smaller firms. Large industrial concerns have for a long time through their personnel departments _ conducted research on the "working conditions of the employees and have always regarded the expenses involved as deductible.
If, however, smaller businesses join together for that purpose or commission a university to do the research for them, they will be hampered by the present bill.
The proposed amendment attempts to remedy these defects by extending the tax privilege to research on working conditions of employees in the taxpayers industry. The technological and human factors of production are thus treated alike. An unwarranted use of the clause is made difficult by the concise definition of the purposes of research.
The terms used in the government bill are taken from recent British legislation. But conditions in Canada require a different approach. In Britain Lord Nuffield, Lord Leverhulme and other benefactors have made ample provisions for research on the conditions of industrial workers. No such sources for the financing of that type of research exist in Canada and as a result the country lags sadly behind Britain. It is the purpose of the amendment to facilitate the provision .of the necessary funds in this country.
I have an amendment here which I understood was to have been submitted by somebody, but I was not in the house at the time and I do not know just what has happened in regard to it.
The memorandum I have read is from this teacher at Dalhousie university, and while I cannot speak with a knowledge of all the facts I should like to see encouraged the research activities of these smaller universities which coordinate the practical and the theoretical, bringing the activities of the worker and the teacher together. That is a splendid thing and they have been doing that at Dalhousie university for the last two years with beneficial results. It seems to me that anything that can be done to forward the search for knowledge, especially on the practical and humane side, should be done, and I hope that the minister will see his way clear to considering this appeal and, after consultations with his officers, that he may be able to bring in something to meet the conditions outlined in the memorandum.
Topic: INCOME WAR TAX ACT