Mr. E. B. McKay (Weyburn):
Mr. Speaker, in rising to speak on this occasion I feel I should first commend the government for its action in increasing the exemptions for income tax from $750 to $1,000 for single people and from $1,500 to $2,000 for married persons. For the last two sessions this group has been advocating an increase in exemptions and, while it falls far short of what we had hoped for, I feel that we should be thankful for small mercies.
I deplore, however, the fact that, while in some cases the nuisance taxes have been removed, the eight per cent sales tax, an indirect tax, still remains. Without any question this tax is a very heavy burden on the people with small incomes which in the past have been too low to be subjected to income tax at all. As a matter of fact about one-half of our population in this country is in that particular category. The eight per cent sales tax is placed upon most manufactured goods and it forms a very large part of the burden placed upon the homemaker who is attempting to maintain normal living conditions.
At the manufacturers' level this tax is only eight per cent, but retailers advise us that it actually runs from eleven to twelve per cent
at the retail level. If this is a correct statement, anyone can see that this indirect tax, while it may be an easy tax for the government to collect, is nevertheless contributing substantially to the increased cost of living. I am one who firmly believes that had this tax been reduced, or had the government seen its way clear to entirely removing it, it would have drastically reduced living costs for nearly all the Canadian people.
As I said a moment ago, there are many people who do not have incomes large enough for them to pay any income tax. Nevertheless, when they purchase goods in stores, all those people must pay the eight per cent tax which is, as I said, placed upon manufactured goods. This tax is placed on shoes that children must wear, upon their clothing, upon furniture that must be purchased for homes; and even in the case of little children, the penalty is imposed upon the toys that they require in order to have a happy life. It seems to me that it would have been a nice gesture on the part of the government, even if they did not have any particular regard for reducing the high cost of living, had they done something for the little children. It is obvious to all why the government took off the tax on chocolate bars and on pop. It is a tax everyone noticed. But it is much more necessary that the eight per cent sales tax should be taken off toys that little children have to play with, and from'household goods generally.
On the whole, I think this indirect tax, this eight per cent sales tax, is not being publicized widely enough throughout the country. I am satisfied that the government increased the exemptions-and I commend them again for doing so-because of public demand. Most of the public do not realize, I am quite satisfied, that the eight per cent sales tax is the one tax that is probably adding more to the cost of living than any other tax we have in the Dominion of Canada. The government of course will be hesitant about removing the tax without a great deal of pressure. I recognize, as do all hon. members, that the government must have money with which to operate. In many respects the income tax probably is the fairest tax that could be levied. But I believe that some consideration should be given-and if it cannot be done in this session, it should be considered in the next session of parliament-to the entire removal of the eight per cent sales tax. If the government find that they need the $400 million or so that this tax normally brings to the treasury, I would suggest that they reimpose the excess profits tax. I think I am fair in saying that the
excess profits tax rendered to the treasury approximately the same amount of money as the sales tax. If that were done, the government would still be getting from business the revenue that is necessary, and at the same time it would relieve the people in the lower income brackets who are finding it difficult to make ends meet.
I now want to say a word with regard to the necessity for railway construction in western Canada. I recently completed a tour of an area that for a number of years has been advocating the construction of branch lines of railway. The people in that area for twenty-five or thirty years have been waiting for loose railway ends to be completed. In instances where branch lines have not been completed, we have for cattle and grain shipments long hauls that could normally be avoided by the completion of a link of twenty-five or thirty miles of railway. I have in mind a railway in southwestern Saskatchewan one terminal of which is twenty-five miles from another one. People in either case have to travel back to a large centre a hundred miles before they can even start on the main part of a journey. These people not only have to pay extra money out in railway fares but they have to pay out that much more on their cattle traffic, their wheat and other commodities which they raise; and in turn, they have to pay more in freight on the goods which come in. The net result of this is that their cost of living is high.
I would suggest to the government at this time that they do something in the next session of parliament to see that these loose ends of branch line railways in southern Saskatchewan are completed so that the people in those areas will get a much more satisfactory service than they have had in the past.
I move the adjournment of the debate.
On motion of Mr. McKay the debate was adjourned.
Standing Committees STANDING COMMITTEES
Topic: THE BUDGET
Subtopic: DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE