April 7, 1916

CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

I am informed'

that in all our provincial legislation the taxation of companies is administered in the first instance by requiring a form 'to

be filled in. Afterwards, of 4 p.m. course, the department may make such inquiries as are deemed necessary before making the final assessment. I am not able to say off-hand whether this follows the English form or not.

Topic:   TAXATION OF PROFITS.
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LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

Will the minister send out any instructions ih connection with this schedule, or will this schedule alone be sent out? It is a very meagre document, and it strikes me that it would be well to issue some instructions. There may be many people who think that they are not taxable at all under this Bill, and who have an idea that the value of their property does not amount to $50,000. I think the minister should lay down some rules by which people would be guided, and .send them out along with the schedules that have to be filled in.

Topic:   TAXATION OF PROFITS.
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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

It is the intention to send to each parity who is thought to be liable to assessment, a copy of the Act, a circular letter, and the form to be filled up.

Topic:   TAXATION OF PROFITS.
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Section agreed to. On section II-Minister may request further return, production of books, etc: iMr. A. K. MACLEAN: The board makes' the assessment in each case, does it not?


CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

The department makes the assessment, and if anybody is dissatisfied with the assessment he can appeal to the board of referees.

Topic:   TAXATION OF PROFITS.
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LIB
CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

A court of revision.

Topic:   TAXATION OF PROFITS.
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LIB

Frederick Forsyth Pardee

Liberal

Mr. PARDEE:

In the schedule it is provided that the information under the headings of "Values of assets outside Canada" and "Profits of Canadian business" will be required only from companies having their head office or other place of business outside Canada. It appears to me that there should be some provision -whereby we could get at the insurance companies who have their head offices outside, of Canada, but who are doing business in Canada, such as the mutual companies in the Eastern States, which do a very large business here, and do it at a much cheaper rate than our own companies or the English companies can. I understand that they

are not taxed under this Bill and that they are not get-at-able.

Topic:   TAXATION OF PROFITS.
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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

They are not get-at-able.

Topic:   TAXATION OF PROFITS.
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LIB

Frederick Forsyth Pardee

Liberal

Mr. PARDEE:

Is it not unfair that they should escape? Why should they escape whilst they are taking profits from this country. Is there not some method whereby the profits which they obtain by way of premiums could be taxed? Why can it not be worked out the same as in the case of other companies? The letter sent out by the Canada Fire Insurance Federation, St. James Street, Montreal, has no doubt come to the minister's attention. It appears to me that the arguments set out there are fair, and, looking at the matter purely from a layman's standpoint, I think that if these companies are doing business in Canada, making profits out of the people of Canada, a case should be made out against them, particularly seeing that our own companies are to be taxed. I should like to have an explanation from the minister as to whether it would not be possible to tax the profits of those outside companies.

Topic:   TAXATION OF PROFITS.
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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

This matter was discussed last night when my hon. friend was not in the House. This Bill could not be made to apply to those companies because they are not domiciled in Canada, and have no offices in Canada. They are for the most part, New Epgland mutual companies. Even if they had offices here, it is not probable that they would be liable to assessment under this Bill, because being mutual companies they would not have profits. The question is not a new one, it is an old one, and it has been suggested that as the Dominion Government has no power to directly tait those companies, domiciled, as they are, outside of Canada, a tax should be imposed upon the premiums which are paid by the parties in Canada who take out policies of insurance with such companies.

It is recognized that the Dominion cannot reach them directly and it is suggested that they should be reached indirectly by a direct tax upon the insurers here, that is to say, upon the manufacturers and business people generally throughout the country who place insurance with these unlicensed companies. As I pointed out last night when the matter was up in 1910, there was an acute controversy about it. My predecessor was unable to deal with it. A Bill providing for a tax upon the premiums on insurance policies placed with these

companies was passed by the House of Commons but was rejected 'by the Senate. So, the matter is one of acute controversy between the insurers on the one hand and the insurance companies on the other. It would not be possible, under the provisions of this Bill, to deal with the case. As I said last night, there is no doubt a good deal to be said in favour of the position which the insurance companies of Canada ta'ke. They say: We pay a license fee to do business in Canada and we are taxed in Canada; why should we not be protected against the unlicensed companies which take out no licenses, and pay no taxes in Canada?

Topic:   TAXATION OF PROFITS.
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LIB

Frederick Forsyth Pardee

Liberal

Mr. PARDEE:

The minister says that under this Bill it is impossible to get at these companies. When we are imposing war taxes, is not this the very time to get at them?

Topic:   TAXATION OF PROFITS.
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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

You cannot get at these companies. This is a tax upon the business profits of companies doing business in Canada. These other companies have no domicile in Canada and therefore it is impossible to apply this Bill to them. The only way would be by a supplementary measure of taxation taxing the premiums paid by the insurers throughout Canada. Most business people throughout Canada will be taxed specially by this measure. To impose another tax upon them would be to impose an additional measure of taxation. My own view is that this matter should .be dealt with upon a revision of the Insurance Act. If the contention is sound to-day, and there is much to toe said for it, that taxation should be levied tipon insurers in Canada, that was true two years ago, it was true five years ago, it was true before the outbreak of the war and it will be true after the war is concluded. That question is not necessarily connected with the question of taxation now any more than it was with the licensing and taxing of companies before this war broke out. We have brought down this measure of taxation and it is not the intention of the Government to bring down an additional measure of taxation this year. I do not propose to 'bring down an additional Budget. The time to consider it is when the Insurance Act is under revision.

Topic:   TAXATION OF PROFITS.
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LIB

Frederick Forsyth Pardee

Liberal

Mr. PARDEE:

I rather take issue with

the minister upon that. I think the proper time to consider it is now, when you are making extraordinary efforts to raise money

by taxation schemes. If that is so, surely it is not necessary to leave out the people who are making their profits in Canada. It would not be necessary to further tax the insurer; it would only be necessary to say to those companies: if you are to do business in Canada we demand a portion of the profits.

Topic:   TAXATION OF PROFITS.
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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

My hon. friend, I think, misunderstands the situation. How are we going to say to these insurance companies: you must pay us a certain amount of money? The only way we can meet the situation is by taxing A, B, and C by a supplementary measure of taxation, in respect to the insurance that they have taken out in these companies. The burden would not fall upon the companies, but upon the insurer. That is the point.

Topic:   TAXATION OF PROFITS.
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LIB

Alexander Kenneth Maclean

Liberal

Mr. A. K. MACLEAN:

I was going to

suggest to the minister that clause 9, which refers to the establishment of a board of referees, is hardly in its proper place. I think it should be just preceding section 15 and under "Assessment Appeals." Section 9 indicates that a board shall be established, but there is no way of knowing its powers or duties until you get ahead to section 15.

Topic:   TAXATION OF PROFITS.
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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

I do not think it necessary to change it.

Topic:   TAXATION OF PROFITS.
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LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

What period does the

return asked for after the first of July cover? Does it cover the year 1915?

Topic:   TAXATION OF PROFITS.
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CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

The accounting

period which terminates after the first of January, 1915.

Topic:   TAXATION OF PROFITS.
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LIB

April 7, 1916