Mr. ROGERS:

This question has been

taken up, and General Otter has left for Winnipeg to consult with the commandants of the different internment camps, with a view to making suitable arrangements for the release of the prisoners to assist in the planting of the crop. His purpose in going to Winnipeg is to facilitate means by which this work can be carried out in a manner satisfactory to his department and to the people of Western Canada.

Mr. TURRIFF:

Would the minister

state in a general way how he expects to arrive at the amount of taxation due? Will he endeavour to arrive at it from the reports sent in by the various companies who are either liable or likely to be liable under this measure, or by sending out officials to visit the different companies and assessing the amount of the levy at the head office of the company?

Sir THOMAS WHITE:

In the first instance, returns will be called for under the provisions of the Act. Those returns will be examined, and, if necessary, a further investigation made into them; and the assessments will be made subsequently.

Mr. TURRIFF:

If the return looks in a general way to be satisfactory, the amount will be arrived at, at the head office.

Sir THOMAS WHITE:

If the return appears to be correct-so far as we can check it up, it will be accepted. Of course, we have mercantile agencies' reports which will enable us to form an idea as to whether the return is substantially correct or not.

Mr. LOGGIE:

I would call the attention of the minister to the fact that the figures which would be given under the forms set out at the end of the Bill would not prove anything. In the form to be used by incorporated companies there is no column for total liabilities, whereas there is such a column in the form to be, used Iby persons other than incorporated companies. In the form to be used by incorporaed companies there is a column for cost of management, etc., whereas in that for non-incorporated companies there is no such column. I think that .some incorporated companies would have great difficulty in preparing a statement showing the cost of management, etc. I have in mind an incorporated company which has several branches, and the cost of management of each branch is charged up to that branch monthly or perhaps daily. It is evident that the cost of management in this case would Ibe very hard to get at. The company that I have in mind has. been asked several times by its bankers to supply such information, but it has been practically impossible for them to do .so; at any rate, they did not think it was practicable for them to try to furnish that information. Their statements are prepared along the line of the schedule in this Bill in Tespect of partnership companies. The total assets and total liabilities are shown, and the subtraction of one from the other shows the capital and surplus. The figures required by these statements are taken from the balance sheet of the company for that accounting period, and it is necessary to show the total liabilities and total assets in order to ascertain the capital and surplus. Another difficulty that will present itself is that some companies may have $30,000 or $40,000 worth of dry goods in stock, some of which may have been on the shelves for seven or eight yeaTS and may have depreciated very much in value. But the management, instead of going over the stock and putting the actual value on the goods, say to the employees: Put this stock down at cost price. I do not know whether or not the

minister 'has considered the advisability of making an allowance for depreciation in such cases. In the large wholesale houses if a piece of goods depreciates in value the proper value is put on that piece of goods, but that is not done in the retail business. Then, subsection 2 says:

The profits of a non-Canadian company shall be the net profits arising from its Canadian business including both domestic and export business.

The Armour Company at Hamilton do a large Canadian 'business as well as a large business arising from their Chicago house. For instance, they sell large quantities of soap in Canada, and they sell also large quantities of packing house products direct from Chicago. Would the minister consider any profits arising from that portion of the business of Armour and -Company to be Canadian business?

Sir THOMAS WHITE:

Is my hon. friend certain that the 'business is carried on under the name of Armour and Company in Hamilton, or is it under special incorporation? If it is under special incorporation that incorporation would, be dealt with as a Canadian company. If the American house to which my hon. friend has reference has no domicile in Canada, but sells in Canada from outside, it would not be within the power of the Dominion to reach them by direct taxation.

Mr. LOGGIE:

I think each of the

branches of this company is domiciled, if you like, under a separate name. There is the original Armour and Company; there is the soap company. The name of the one in Hamilton, I think, is the Armour-Fowler Company; at any rate, they succeeded Fowler. They are all branches of the same company, Armour and Company, the large packers of Chicago. What does the minister say as to my suggestion with regard to allowance for depreciation of stock?

Sir THOMAS WHITE:

There should be an allowance for depreciated stock if depreciation can be established as a fact. It is a question of good usage in a particular trade or business. With regard to the second schedule, to which my hon. friend has referred, I purpose taking out the words "cost of management, etc." I think that "gross profits" and "net profits" will be quite sufficient.

Mr. LOGGIE:

That would be an improvement, I think.

Mr. SINCLAIR:

Has the minister thought of the fact that there may be companies with their head offices in, for example, the United States or Great Britain, that are doing a large business in Canada and have really no assets in Canada? Shipping companies might have ships registered in Great Britain; they would have offices in Montreal, or some other Canadian city, and carry on a large business and make large profits in Canada. Does the minister expect to get any revenue from companies of that character?

Sir THOMAS WHITE:

If they have assets, then the capital employed would be ascertained under the provisions of subsection 2. If they have no assets in Canada I know of no means whereby our legislation could reach them. They would net be within the jurisdiction of the Dominion Government.

Mr. SINCLAIR:

I thought, perhaps, the minister had some method of getting at their profits so as to obtain taxation on their Canadian business.

Sir THOMAS WHITE:

In the case of British companies, we need have no anxiety as to their paying their share of war taxation, because the Imperial Finance Act No. 2, and the recent Budget of the Chancellor of the Exchequer, impose very heavy burdens on such companies. I have been amazed at the amounts levied on Canadian companies under Finance Act No. 2, which was passed last December. The amounts are very much larger than any taxation we propose.

Mr. SINCLAIR:

I assume the minister has adopted the theory that the place of registry of a ship is the place of its ownership, and, that if a ship is not registered in Canada it is not a Canadian, asset.*

Sir THOMAS WHITE:

While that is a legal question on which I am not quite certain, I think the place of registry would be the domicile of the ship.