Mr. MANION:

The Conservative government was the one that built it, and the Conservative government of Ontario has done more for mining in this country than any other government. I think the minister would be well advised to change the tax this year. I repeat that if he does not do it this year, he should do it next year.

Special War Revenue Act

Mr. McRAE:

I am rather astonished at

the Minister of Finance mixing up his department with the Department of Railways.

I think he might look after his own department and the Minister of Railways look after his.

Mr. BENNETT:

The Minister of Finance to-night says that he is going to revise the tax upwards, and I suppose the people of Canada will have the pleasure of hearing him say next year: Yes, see bow I have reduced the taxes! It is the old way. How long does he think the people will be fodled by that sort of guff?

Order.

Mr. BENNETT:

That is the only word

that describes it, and for the last five years that is what has been going on in Canada. The Minister of Finance introduces legislation year after year raising taxes and then reducing them, and he says to the people: Look how I have revised the taxes and lessened the burden of taxation! To-night he is going to revise this tax upwards. He says: Wait till next year. Next year he will

say: Look what we did for the mining industry ! We have reduced the tax 25 per cent. How long does he expect the people of Canada to be fooled by that sort of thing?

Mr. ROBB:

Then my hon. friendi will be

able to say: I told you so.

Mr. BENNETT:

We are taking proper

steps this session to provide against a recurrence of such conditions. I suggest that the Minister of Finance explain to his colleague the Minister of Railways, who has been giving uis all this talk about the self-supporting capacity of the railways, how they are going to take care of themselves, and how he has devised during long and tiresome nights a method of extending the railway system without loss of revenue; bow he, the Minister of Finance, is helping to build railways with one-fenth of one per cent of a tax on mining stocks! That is the story my hon. friend is giving the country. The Dominion government got $47,000 out of this tax the year before last and the Minister of Railways is going to build a railway to Chibougamau. He was not able to pronounce the name the other night. That is good' for the Minister of Finance, but I think he should have a quiet little talk with the Minister of Railways, because I am satisfied he will have to impose a good many taxes of that kind before he will be able to build his terminals at Montreal or extend his Gaspe and Oriental to Turkestan, because that is where it is bound for on its oriental mission.

Mr. LANG:

Just another word. A number of hon. gentlemen have spoken since I first rose to discuss this question. The Minister of Finance has read some statements by bankers in Toronto, and something he saw in The Northern Miner. Those, speaking generally, were articles about mining and stock conditions in the country at the time they were written. None of them had any reference whatever to the present proposed mining tax They were written before the minister even thought about this tax, but even if they were written after the minister's proposal had been brought down^ they bad not in mind at all the mining tax that we have or any proposed tax; they had in mind only a condition that exists throughout Canada to-day.

The minister quoted some figures about the revenues of the provinces and of the Dominion under the present tax. I could not catch his figures, but I have some here that might interest the committee. Under the present tax which has been in effect since 1922, in 1927-28 the government collected on the transactions over the Toronto exchanges $615,000; in 1928-29, for the first nine months, the government collected $700,000, which amounts to approximately $950,000 for the year. The present tax, collected in the manner in which it must foe collected, relieves from taxation entirely every cent of value over the par value of a stock, and if you go down that list of shares printed in the article in the Toronto Star, showing the 117 issues that are mostly traded in at the present time, you will find that the great volume of business, so far as money value is concerned, is in stocks that are selling away above their par value. In other words, the government is getting only 3 cents on every $100 of par value of the trading that goes on, when the great bulk of the trading, not in the number of shares, but in the dollar volume of business, is in shares that are selling from two to twenty times their par value. That means, so far as I have been able to judge in the short time I have been able to study this matter, at least two-fifths of the value of the business done over the Toronto exchanges is not taxed at all because it is made up of transactions in stocks selling over par. I have not a doubt in the world that half of the $990,000 that the federal treasury will receive in 1928-29 from this tax applied to the transactions on the Toronto stock exchanges comes from the smaller valued stocks that are taxed, not 3 cents on $100 of value, but sometimes 2 per cent of their value, so that it is a most unfair tax. Surely at this stage of the game, when with a stroke of the pen

Special War Revenue Act

we can rectify this condition and get started off right, we are not in such a hurry to wind up the business of the session that just because this proposal has been put before us by the Finance minister and he says, "I am going to put it through whether it is a fair tax or not," we are not going to accept such an unfair proposal. There is not a member of this house who dare stand up before a body of men who know anything at all about political economy and say that this proposal could by any possibility be a fair tax. It is absolutely unfair, and it cannot be made anything else. On the other hand, an ad valorem tax would be absolutely fair, it could be easily imposed, and be much more easily collected. Any accountant who wants to figure it out will find that if that 3 cent tax was on every $100 of value, instead of on the par value, it would create a revenue four or five times as great as now when it is simply based on the par value.

Why should we hasten through the committee a proposal of this kind? I thoroughly understood from statements made to me by the Minister of Finance that the tax that is in effect now was an ad valorem tax, but when I looked into the matter for myself I found that it was not an ad valorem tax or anything that looked like an ad valorem tax. The only part of it that is an ad valorem tax is the tax on no par value shares, and those shares were not taxed at all, I believe, for a number of years because the department did not know how to tax them. The act did not provide for taxing no par value shares, and finally the shares were taxed' under the present Minister of National Revenue on the basis of value, and that is an ad valorem tax on shares of no par value. But on every other share of stock it has been an absolutely unfair tax, and it has placed an unjust burden on the small investor and on the smaller priced stocks which are used for raising money for the development of new industries, and particularly the mining industry. Surely this committee is composed of mem with business ability enough, with common sense enough- for that is all it needs-to see the unfairness of a tax of this kind. You do not need any business training to see the unfairness of the present tax; all you need is common sense. Any school boy or school girl in this country who knows* anything at all about taxation knows that a tax on value or an ad valorem tax is the one general way of imposing taxation that can be fairly distributed according to the ability of the taxpayer to pay.

I should like to hear from some lawyer as to the interpretation of section 58. I know

the section provides for a tax of 3 cents on every $100, not of value, but of par value, of shares of stock transferred or traded in. Surely any person can see how unfairly it has worked out. It has been absolutely unfair and oppressive upon those who should not be discriminated against. So much for the present tax in effect since 1922; and if this proposed tax is put info effect we shall have for another year a tax that is every whit as bad as the tax we have had since 1922, every bit as unfair, every bit as unjust, inequitable in every respect, and a tax that in my judgment, and I believe, in the judgment of any person who will give it careful study, will not bring in any more revenue to the treasury than the present tax does, because just as soon as such a tax is imposed' those affected are going to seek ways and means of evading it. That is what they did under the old tax to a certain extent. That probably was the reason why quite a number of companies were incorporated with no par value stock; the incorporators saw a possible chance of getting by without any taxation. I think the National Revenue department owe it to this house, when bringing down a change of this kind, to state how the old tax worked out, and when they discovered a way of imposing the tax upon corporations with shares of no par value. Of course, had such companies reorganized and converted their no par value stock into par value stock of $1, a company such as Noranda, whose shares are selling to-day at $54, would not be taxed on the extra $53 at all. A tax such as this is manifestly unfair, no person can make it appear anything else, and when it is so easy to impose a.n ad valorem tax I cannot understand why it is not done. An ad valorem tax of 3 cents on $100 would work out all right and would be fair to everyone. I do not intend to let this proposed tax go into effect so long as I can do anything to hinder it, because it will not be fair to the people of Canada, and therefore should not be imposed.

Mr. LAWSON:

I am indeed reluctant to

have anything further to say on this subject by reason of the length of time I devoted to it last week, but to-night the Minister of Finance has made two statements which I cannot allow to pass. One is obviously an error, the other is misleading. If I remember correctly, in the case cited by him to-night, he quoted figures to show that the province of Ontario had derived something like four or five times more revenue from the transfer of shares than the amount received by the Dominion treasury.

Mr. ROBB:

Perhaps my hon. friend would like the figures on record?

Mr. LAWSON:

$200,000 odd against $40,000. Is not that correct?

Mr. ROBB:

Yes, in 1926.

Mr. LAWSON:

On referring to the Dominion statute in force prior to this proposal I find it reads as follows-I am going to omit words which are unnecessary for my purpose-

No person shall sell or transfer the stock or shares of any association. . . unless in respect of such sale or transfer there is affixed a stamp. . . of the value of 3 cents for every $100 or fraction thereof of the par value of the stocks or shares. . . sold or transferred.

Bonds.

Mr. LAWSON:

I am not interested in

bonds for the time being. The bon. Minister of Finance has given the returns, I understand, from the Standard stock and mining exchange. Now take the Ontario statute-

Mr. ROBB:

My hon. friend, if he is going to argue fairly, must continue and quote the exceptions provided in article 61.

Mr. LAWSON:

I am not quarrelling with

that. I am going to read the Ontario act to show that the statutory provision is exactly the same as in the Dominion statute.

Mr. BENNETT:

The Dominion act is

copied from the Ontario statute.