On the motion of Mr. Stevens: For a copy of all correspondence, letters, telegrams, documents, etc., passing between R. J. Crombie of the Vancouver Daily Sun, Vancouver, British Columbia, and the Prime Minister of Canada or any other minister of the crown, or any officer of the government and having reference to the price charged in Canada for newsprint and the price at which Canadian newsprint is sold abroad, together with all documents and reports made to the government in regard to the same during the years 1922, 1923, 1924, 1925 and to date in 1926.
Mr. STEVENS:
In connection with this *
resolution, Mr. Speaker, I understand that certain matters have been undertaken by the government which the passing of this resolution might adversely affect, and I would therefore suggest that it be dropped for the time being.
Mr. SPEAKER:
Dropped.
Motion dropped.
On the motion of Mr. Culligan: For a copy of any letter or letters written by Mr. H. Boulay, of Sayabec, county of Matane, to the Minister of Militia and Defence at Ottawa, on January 18, 1918.
Right Hon. Mr. MACKENZIE KING:
I understand that the minister desires to know the subject matter of the letters referred to. These letters are indexed according to the subject matter in the department, and perhaps the hon. member would indicate what the subject matter is.
Mr. DOUCET:
On behalf of the hon. member for Restigouche-Madawaska (Mr. Culligan), may I ask that the motion stand until he is here.
Motion stands.
On the motion of Mr. Morand: For a return giving a settlement of all permits issued by the Minister of Immigration, under section 4 of the Immigration Act, showing the names of all persons permitted to enter Canada under the said section during the years 1922, 1923, 1924, 1925; the occupations and former residences of all such persons; the dates and places of entry into Canada; the duration of their stay in Canada as allowed by such permits and whether still in Canada; and if so, their present places of residence; and if not now in Canada, the dates and places when and where they left Canada.
Right Hon. Mr. MACKENZIE KING:
I do not think there will be any objection to this motion, but in the absence of the minister I would be obliged if it could stand.
Mr. SPEAKER:
Stands.
Motion stands.
On the motion of Sir Henry Drayton: For a copy of the report or reports, finding or findings, made by the late Honourable William Pugsley, in his capacity as custodian of enemy property, or any other capacity while in the pay of the government of Canada, since his retirement as Lieutenant-Governor of the province of New Brunswick.
Hon. Mr. LAPOINTE:
May I ask my hon. friend to let this motion stand, as I should like first to communicate with the Secretary of State?
Motion stands.
Mr. T. L. CHURCH (Toronto Northwest) moved:
[DOT]
Whereas it was deemed necessary and expedient to impose an income tax by the parliament of Canada as a revenue measure growing out of the war and to temporarily invade the former exclusive field of the municipalities to collect this form of taxation.
And whereas such taxation has led to duplication and there in an urcent demand for reduction of taxation and to restore to the municipalities their former exclusive rights and prerogatives to this form of taxation. Therefore this House will support the government in any immediate measures it may take to give effect to the principles of this resolution and so rcducc taxation.
Taxation in Canada
He said: Mr. Speaker, at the request of
some of the municipalities I am bringing up this question of taxation. Formerly, income taxation was imposed by the municipalities and provinces alone, but in 1917, during the stress of the war, the federal government initiated income taxation. It may have been a necessity during the war, but it was generally hoped that as soon as the war was over, in view of the increased burdens imposed by the war upon the municipalities of this country from coast to coast, and in view of the further fact that the federal field of taxation was unlimited, this form of taxation would be left as formerly to the municipalities and the provinces.
The main problem before this country today, Mr. Speaker, the one that is discussed upon the public platforms, in the press, by boards of trade, chambers of commerce business men and the working classes generally, is taxation. We spend many days in parliament here, but very seldom do we devote an hour or even half an hour to the most important question before this country to-day, taxation, which affects every man, woman and child in the country. Taxation, immigration, and the taking care of the deficits on the Canadian National Railways are three of the most important problems which the people of this country are facing at the present time. It was hoped, and indeed intimated by the late Minister of Finance and by the present Minister of Finance, that the conference between the federal, provincial and municipal authorities on the question of taxation would result in some equitable, fair and just division of the field of taxation in this country, so that further taxation might be placed on those who were best able to bear it, and that a fair, just and equitable system of taxation would be worked out in which the federal, provincial and muni->
cipal governments would each do its part.
I admit that the duties of the government are not at all light; the responsibilities are very heavy and their duties onerous. It is the desire of all good citizens to pay their fair share of taxation. I think it is the wish and the endeavour of every honourable mau to do what he can in this respect. The hope was entertained th'at when the conference on taxation took place the government would endeavour to do something for the struggling municipalities of this country. It is too bad that this hope has not yet been realized. We were told in the last parliament that the question of unemployment was solely a matter for the municipalities to deal with; th'at the federal authorities had nothing to do with unemployment. Let me point out, Mr.
Speaker, that meeting the needs of the unemployed and dealing with many other matters entail a heavy burden on the municipal councils of cities and towns, and on the county councils as well. Not only have they to meet the distress resulting from this cause, but they have to maintain hospitals, care for the sick, and provide for many other burdens. Surely it was not within the minds of those who drafted the British North America Act that such a heavy burden should be thrown on the municipalities of this country from coast to coast.
So I say that in 1917 when the federal authorities invaded this income tax field of taxation formerly occupied by the municipalities, they went a little too far. However, the federal government having pursued that course, the hope was entertained that such action could only be temporary, that when the war was over, or within a few years afterwards, it would find some more equitable and just system of taxation as 'a result of which the municipalities would have restored to them the revenue from income taxation exclusively-which prior to that they have always enjoyed. As I figure it out, 80 per cent of the income tax is paid by persons with fixed salary-the small man, the consumer; perhaps it would be fairer, to say the middle-class people of this country. If you refer to the reports of the assessment commissioners of the cities and towns of Ontario, giving the population and the income assessment in each case, and the average tax payable per capita-and I have returns from twenty-six municipalities in my possession- you will find that the great bulk of the income tax levied by civic and the federal authorities is collected from those whose income is fixed and can be readily ascertained, and whose position leaves no possibility of escape from such taxation. I may say that the power of direct taxation on real estate and income is limited in the case of municipalities by the British North America Act. On the other 'hand the Dominion has eleven different methods of direct and indirect taxation. Surely therefore, it can leave to the municipalities the undivided enjoyment of the revenue from income tax which, in the case of the Dominion, has been felt as a great-added burden and double-header tax throughout Canada and has not given the yield it should have done. This is apparent when you remember that whereas the revenue from the Dominion income tax at one time amounted to $119,000,000, it fell last year to $46,000,000. The eleven different methods of federal taxa-
Taxation in Canada
tion now in existence can be enumerated as follows:
1. Customs tariff.
2. Excise taxes on various commodities, such as automobiles, matches, cigars, wines, beverages, and so forth.
3. Income tax.
4. Tax on sales.
5. Tax on licenses.
6. Taxation on corporations and companies.
7. Tax on cables and telegrams.
8. Railway and boat tax.
9. Stamp tax on checks, drafts, bills of exchange, notes and stock transfers.
10. Stamp tax on money orders, letters and postcards.
11. Stamp tax on receipts.
From the foregoing eleven sources the Dominion collects about $346,000,000 of direct and indirect taxes in the country. The income tax has a super-tax feature of taxation as well. It is stifling enterprise and imposing a heavy burden on the people. In my opinion we should reduce the income tax and the super-tax to the United States level, thus encouraging capital to invest in Canada and making an economic surplus available for the development of the country, and increasing the revenues of the country.
The present method of taxation is far from equitable. The tax is levied on some and not on others; there are a great many people who escape entirely and who are not called upon to pay any income tax at all. I know of a case in Toronto where the man enjoys an income of from $50,000 to $60,000 but escapes with the payment of a very small income tax. In connection with his year's operations he voted himself a bonus of $100,000 and by calling it a bonus, not income, he escapes by design. That is one way of escaping taxation. Nobody objects to paying a fair share of taxation. It is the duplication and inequalities that make people dissatisfied, combined with the failure to allot an exclusive sphere of taxation to the respective authorities
the Dominion, the provinces, and the municipalities.
At present there are $931,512,900 of war bonds outstanding which are free from taxation. Why cannot part of this be commuted and this vast capital put back into circulation and into economic and industrial development, thereby Creating another source of revenue to the country? Canada is the most over governed country in the world. There are two houses of parliament for the Dominion; two legislative bodies for certain of the provinces; and innumerable municipal councils.
Mr. MACLEAN (York):
May I ask the
hon. gentleman who imposed upon the Canadian people the bodies of which he complains?
Mr. GHUR'CH: I cannot say our constitution does. The hon. gentleman has been in the House longer than I have and I will leave it to him to give that information. These taxes were said to be necessary during the war. I am not making any criticism because of their imposition.
Mr. MACLEAN (York):
I am referring
to the institutions which the hon. gentleman mentioned. They have been imposed upon Canada by the British North America Act. We cannot amend them as conditions are at present, so they will continue to be with us until such time as this parliament has the right to amend the constitution.
Mr. CHURCH:
The British North America Act has nothing to do with this method of collecting taxation. The municipalities ought to have the field to themselves. The hon. gentleman wants to amend the British North America Act, but it will be a very sorry day for this country if his method of amendment goes through. It will be good-bye then to the province of Ontario, to property and civil rights within the provinces, to vested rights, to the rights of minorities, and to everything else in this country. That is my opinion. However, that issue is not relative here.
Public bodies all over Canada are complaining about the heavy burden of taxation which is in force to-day. In this connection let me quote the following from a speech by Sir Herbert Holt:
In his address at the annua] meeting of the Royal Bank of Canada Sir Herbert Holt said that taxation in Canada has reached the point where it is retarding the growth of national wealth, increasing the cost of production, decreasing demand-and with it profit and wages-and withdrawing money from productive use. He says the country is over-burdened with government, and the enormous expansion of the public debt is a matter of grave misgiving. Canada is over-governed and over-taxed, and the one is the natural corollary of the other. The political diseases from which we suffer have been diagnosed long ago, not only by business men, but by the ordinary voter as well. Administrative extravagance and incompetence have, been in the saddle too long.
Then, too, Sir Thomas White in a speech before the Canadian Club at Montreal expressed himself as follows:
Foremost among our problems of to-day is the problem of our public indebtedness. The net direct public debt of Canada is seven times what it was beforp the outbreak of war. One favourable feature is that it is principally held by our own people. Another is that it is funded and that consequently our currency is not depreciated. This is the reason why our exchange has been well maintained.
The inherent soundness of our financial position is best illustrated by the fact that the Canadian dollar stands at par. We are virtually upon a gold basis1 and at any time could resume specie -payment. Personally I have no criticism for our not having taken
Taxation in Canada
this tax and I think he has been doing what he can to remove the burden of taxation from the breakfast table and from those least able to pay. I hope he will consider the economic principle of taxation of the ability of the average man. to pay, a principle that is neglected in this method of income- taxation, as I think I Showed a few minutes ago. I pointed out that by these eleven federal forms of taxation 1345,000,000 had been collected from the people, eighty per cent of it being taken from the small wage earners, and as to the income tax the man with a fixed salary pays, while some jobbers and others with large incomes are not paying anything at all. I know of one gentleman in Toronto-I sat on a board of directors with him-who is said to have an income of a million dollars and was not paying a cent of income tax, and yet he is occupying one of the highest positions in the country.
Why should this double tax be collected by the Dominion on the first of May and then about the same time by the municipalities on the 15th of May, making it a doubleheader tax on the fixed wage earner at the same time who is moreover paying taxes on taxes, taxes to the Dominion on the amount of money he pays to the municipality?
The other day the editor of the Grimsby Independent was sitting in his office thinking on political economy and taxation and this is what he says:
Discourse On Taxes
Grimsby Editor Tells a Few Plain Truths to All and Sundry
Grimsby-Editor of the Independent puts on his thinking cap and hands out wisdom so that he who runs may read-
A good many municipal authorities have the idea that a grant from the province or from the Dominion relieves the municipality of just that much expenditure. But it does not. All government money is the people's money, and our old ifrienid, Mr. Ultimate Consumer, supplies it all in some way or other. This problem of taxation is one which requires much intelligent thought on the part of all citizens.
I understand the minister the other day met a deputation of the retail merchants who are complaining very bitterly about the burden of taxation that they are paying under the eleven different forms which I have set out to-day. I believe they went into the matter very thoroughly, pointing out that the federal income tax was not a tax which should continue and they presented him with a memorandum on the subject. I will not go into the memorandum to-day because time will not permit, except to say that it proves conclusively that this tax has been a failure and that by redistribution of the
other ten existing forms of taxation we would collect more than is collected by this income tax.
Since this tax has been imposed central Canada has been paying the greatest proportion of it. Of the $57,000,000 collected in 1924 the amounts collected by provinces are as follows:
Prince Edward Island $ 38,000
Nova Scotia 847,000
New Brunswick 767,000
Quebec 20,148,000
Ontario 26,039,000
Manitoba ' .. 3,526,000
Saskatchewan 891,000
Alberta 1,189,000
British Columbia 3,930,000
Yukon 69,000
Total $57,466,000
The municipalities of the country are today facing a situation that it is becoming increasingly difficult to cope with. The tax rates of Ontario municipalities have risen fiom 12 to 14 mills on the dollar, which they were before the war, to 28, 32, 36 and 38 mills on the assessment, some of them just three times what they were before the war, the reasons being increased costs of labour and materials and money, the higher cost of living, better living conditions, the eight-hour day and many other matters like that brought about since the war. For these and many other reasons which I have not time to discuss now, I trust the income tax will be discontinued by the government and handed back to the municipalities where it always was, or that the minister in his budget will make reductions and thus give relief.
The municipalities have only a limited field of taxation whereas the Dominion government can levy taxes in ten or eleven different directions. Surely the Minister of Finance (Mr Robb) can relieve the burden on the Canadian people in the matter of income tax. I know that he is doing the best he can but it is obvious that something more must be done. The income tax is one form of taxation that has proved a failure: the government has not been able to collect the tax from those who can best afford to pay it; it is being collected from the poorer and the middle classes. The wage earners have to bear the brunt of this tax, which is unfair and unjust. It is easy for the officials of the government to get after the poorer classes and those in the middle walk of life inasmuch as they can go to the office of the business employing these people and ascertain just what their wages are. It is therefore the people who have a fixed income that are always subject to direct supervision. In the case of the others to whom I have referred there are many ways of escape.
Taxation in Canada
In conclusion I beg to move this resolution, which I trust the House will adopt. This field of taxation was formerly the special prerogative of the provinces and
4 p.m. the municipalities and I think they should once more have the right to collect income tax, particularly, as I have pointed out, in view of the fact that their field is so limited. Moreover, increasing burdens and responsibilities are being placed upon the municipalities. For example, they are being called upon to provide for the unemployed, while soldiers who do not benefit by the pension provisions of the Dominion become a charge upon the municipalities. Hospitals and charities of various kinds have also been shouldered upon the municipalities, who to-day are bearing the peak load of taxation. I regret that the conference between the Dominion and the provinces and municipalities proved abortive but I trust that something will be done this year to relieve the situation. If the income tax cannot be entirely wiped out, at least the government might reduce it by fifty per cent, and put this country on the same basis as the United States so far as this particular branch of taxation is concerned. In the United States the income tax has been reduced three times in five years so that to-day the people over there are well off in this regard in comparison with Canadians. If the government could see its way Clear to reduce the income tax to the extent I suggest, it would be the means of stimulating business and increasing production, and would help very materially indeed to solve the unemployment problem, and the $45,000,000 which the treasury would lose could be made up in other directions.