March 15, 1927

CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

I know that was the

promise last year, but I am informed that the owners of some of these small portable mills have been compelled to pay sales tax regardless of the extent of their business. I had a letter to this effect the other day.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

The regulations provide very

clearly that small sawmillers selling exclusively by retail and whose total sales are not in excess of $5,000 a year are to be exempt from sales tax.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

The $5,000 maximum

caused the trouble. In some small communities that is not a very high figure for the year's business done by the owner of one of these small portable mills, especially where lumber is high priced, it being roughly only about $400 a month. I would suggest that if the figure were doubled it would not work a hardship to anyone and at the same time would meet with general approval.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

It is rather hard for me to

oppose my hon. friend from Labelle (Mr. Bourassa) and my hon. friends opposite, because I recall that when Sir Thomas White was bringing in the sales tax legislation I myself took the ground that lumber mills might be excepted from its operation. We will look carefully into this matter.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Peter McGibbon

Conservative (1867-1942)

Mr. McGIBBON:

The Wx is collected on

custom work, not on lumber sawn for farmers, which is really not a product of the mill at all.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

I know that the collection of the tax concerns the Minister of Customs (Mr. Euler), but I draw this to my hon. friend's attention. In the community where I live it was complained in the case of a man who failed that one of the preferential claims was that of the government for sales tax. It is suggested that a better method should be devised for the collection of sales tax, and that rather than extend leniency beyond a given date it would be better for the man himself in the long run if you said, "We will not give you credit beyond that date; then you stop business or you pay." The present system involves considerable hardship on other creditors.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

I think the Minister of Customs has that under consideration and is in agreement with my hon. friend.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

At this stage I do not

want to go into the details of unpaid sales taxes, the subject having been discussed in

Special War Revenue Act

this House on more than one occasion, but it is known to the minister that many millions of dollars are in arrear, some extending over a very long period of time. This lends itself to very great abuse. Once you lay down a fixed and settled rule that if taxes are in arrear beyond a given date certain results will follow, then you attain the object you have in view. The result would be much easier for the minister, much better for the country, and in the long run exceedingly beneficial to the person in default. In response to a question from one of the hon. members for Toronto the House has before it a list of unpaid sales tax, the total running into millions of dollars. I am sure the minister will agree with me that the amount involved being so large some action should be taken to prevent a recurrence of a similar condition. Therefore I press the minister to make a declaration that this sort of thing is to be put an end to. It may be said, "some of your friends have received leniency in that regard." But that is not the question. This leniency is a distinct disadvantage to those who promptly pay their taxes, and I think the minister should take action along the lines I have suggested.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

William Daum Euler (Minister of Customs and Excise)

Liberal

Mr. EULER:

Two or three weeks ago I

made some comment on this matter in the House. I think every hon. member knows the difficulty we have now in collecting arrears of sales tax, but I do not think any good would result from my discussing that matter on this occasion. Let me answer my hon. friend's inquiry with regard to current taxes, which I think is what he is referring to particularly.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

Yes.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

William Daum Euler (Minister of Customs and Excise)

Liberal

Mr. EULER:

Very definite instructions

have been issued that henceforth all current taxes must be collected by a certain date, and I think I may assure the committee that in future there will not be any aecretion to the present arrears.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

What do you propose to do?

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

William Daum Euler (Minister of Customs and Excise)

Liberal

Mr. EULER:

One of the difficulties in the prompt collection of the sales tax has been the fact that we have had no power to charge interest on overdue payments, due to an oversight in the drafting of the original act. We have this power of collecting interest on overdue income tax. The omission is to be rectified by legislation in the present session, and I think it will be a very powerful incentive for the prompt payment of sales tax. Under the present conditions many of these defaulters

TMr. Bennett.]

have practically made the government their bankers, withholding payment of their sales tax and thus keeping the money in their business free of interest. We are making every effort to collect the arrears. Those hon. gentlemen who have been in the department know how difficult it is to put every account for arrears into the hands of the law for collection. We are doing that as far as possible, but my hon. friends will know that in all cases it is not advisable to take this course even in the interest of the government itself. However, so far as the future is concerned I can assure the House that there will not be much of an addition made to the present arrears of sales tax.

As to the question raised by my hon. friend from Labelle with regard to the exemption of certain industries, after all it is very difficult to distinguish between those who in a real sense are manufacturers and those who are not. When do we arrive at a distinct dividing line between those who merely make things in a small way and those who are manufacturers on a more or less large scale? Wre have the same difficulty in the printing trade, where the exemption from sales tax is granted to those printers who produce less than $10,000 worth of business a year. Some say that that figure is too high, that it ought to be $5,000. Here is where the practical difficulty arises. Frequently we get a protest from the man who produces $10,500 worth a year on the ground that the man who produces annually only $9,999 worth escapes the sales tax. The former says he is discriminated against. And so he is. The same difficulty arises where the exemption is put at $5,000; immediately the man whose turnover amounts to $6,000 a year complains that he is being discriminated against. I merely point out these cases to show the difficulties that confront us in the practical application of any such rule.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Within what time will the collection be made? The minister said that a certain time had been fixed.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

William Daum Euler (Minister of Customs and Excise)

Liberal

Mr. EULER:

It will be a matter of regulation.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

Richard Bedford Bennett

Conservative (1867-1942)

Mr. BENNETT:

At the present time it is sixty days.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

William Daum Euler (Minister of Customs and Excise)

Liberal

Mr. EULER:

The payment is supposed to be made at present by the end of the month immediately following that one in which the sale is made.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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IND

Joseph Henri Napoléon Bourassa

Independent

Mr. BOURASSA:

The explanation given by the minister is somewhat strange in view of what is contained in the law itself. It cannot

Special War Revenue Act

be difficult to draw a distinction between labourers on a small scale such as I have described inasmuch as there already exists that very distinction. It is no more difficult to draw the line between jobber and manufacturer engaged in the making of sashes and doors than between the man engaged in the sawmill business and the harness maker, and so on. The limitation is there in the law; it relates to those selling exclusively by retail and whose total sales are not in excess of $5,o0o per annum. That means that the manufacturer is limited in the first place as to the amount of his sales in the entire year, and secondly, as to the nature of his commercial operations. If he supplies goods to commercial houses, or if he sells more than So,000 worth per annum, he is taxed. You have two limitations there, and all I ask is that two industries which are in every respect similar, which are operated in the same manner, in the same community and which serve the same purpose, with the exception of a little more service rendered in one case, should be put on precisely the same footing If the minister is so embarrassed about exempting the small sash and door dealers, why is he not embarrassed in the case of small sawmillers? I take the law as it is; I am not suggesting anything new. I therefore move, seconded by the hon. member for Comox-Alberni (Mr. Neill):

That the exemption of the sales tax for small sawmillers should extend to small sash and door makers under the same limitations.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

Is the resolution in-order?

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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LIB

John Frederick Johnston (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

I was just going to call the attention of the hon. member to Sir Erskine May's Parliamentary Practice, thirteenth edition, page 511. There is a paragraph of considerable length bearing on the point, but the following extract will cover it:

Nor can a member other than a minister move for the introduction of a bill framed to effect a reduction of duties, which would incidentally effect the increase of an existing duty, or the imposition of a new tax, although the aggregate amount of imposition would be diminished by the provisions of the bill.

And further on:

Nor can the amount of a tax proposed on behalf of the crown be augmented, nor any alteration made in the area of imposition.

Under that authority the amendment moved by the hon. member for Labelle (Mr. Bourassa) must be ruled out of order.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT, 1915, AMENDMENT
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March 15, 1927