Bill No. 60, for the relief of Auguste Bur-dayron.-Mr. Myers. Bill No. 61, for the relief of Nora Tulloch Carr.-Mr. Bell (St. Antoine). Bill No. 62, for the relief of Alberta Grace Wood.-Mr. Lawson. Bill No. 63, for the relief of Hilda Nice Allen.-Mr. Bell (St. Antoine). Bill No. 64, for the relief of Mary Louise Robinson Reid.-Mr. Bell (St. Antoine). Bill No. 65, for the relief of Elizabth Bernstein Sohmerling.-Mr. Lawson.
On the orders of the day:
Hon. CHARLES STEWART (West Edmonton) :
Mr. Speaker, I received a letter this morning from a western farmer inquiring if it is a fact that a recent order in council has been passed applying a dumping duty to the importation of timothy seed.
Hon. E. B. RYCKMAN (Minister of National Revenue):
Mr. Speaker, a special value for duty was, at the request of the seed branch of the Department of Agriculture and supported by the deputy minister of that department, placed upon timothy seed. It was represented that a large amount of timothy seed was to be shipped into Canada. For those reasons the value for the duty was fixed. Upon further inquiry by the Department of
Agriculture it was found that the situation wa3 not as grave as was apprehended, and in those circumstances, having in the first place relied upon the Department of Agriculture, I relied in the second place upon that department, with the result that the fixation was removed.
On the orders of the day:
Hon E. N. RHODES (Minister of Finance):
Mr. Speaker, with respect to certain phases of taxation proposals contained in the budget, there has arisen some misunderstanding.
I thought I had made it abundantly clear in the statement which I made in the house on the 29th instant, that it was not intended to tax interest on Dominion of Canada or Canadian National Railway guaranteed bonds paid to non-residents.
This exemption was granted because, while there is no doubt of the power of parliament to impose such a tax, as is done in the case of other countries, nevertheless misunderstanding might arise in the mind of the nonresident investor who had purchased dominion securities issued in his own country and payable in his own currency.
In view of the fact that other public bodies and many private corporations have issued and sold abroad securities payable in an external currency with either the implied or stated obligation to pay without deduction, it has now been decided to extend this exemption to all interest payable by any Canadian debtor to non-residents on obligations which by their terms are payable in a currency other than Canadian.
To summarize briefly in order that absolutely no misunderstanding may exist:
(1) The five per cent tax on non-residents does not apply to interest on any Dominion of Canada bonds or bonds guaranteed by the dominion.
(2) The five per cent tax on non-residents does not apply to interest on the obligation of any provincial, municipal, corporation or other debtor payable in a currency other than Canadian.
(3) The five per cent tax on non-residents does apply in the case of interest payable by Canadian debtors (other than the dominion) in Canadian funds and to all dividends.
Hudson Bay Railway
(4) In the case of residents of Canada the tax of five per cent applies on interest or dividends paid by Canadian debtors and cashed in a currency at a premium over par of Canadian funds.
With respect to the requirement that all Canadian residents shall, on and after April 1, file ownership certificates when cashing coupons, I desire to say that suggestions of evasions have given the government some concern and I wish to announce that a special measure will be introduced immediately which will require that all taxpayers shall make a statutory declaration when filing their returns that all such interest has been included.
Hon. JAMES MALCOLM (North Bruce):
May I ask the Minister of Finance (Mr. Rhodes) apropos of the remarks he has just made, what the situation will be when an American holding company, the stock of which is largely owned in Canada, receives its dividends on Canadian securities.
Mr. RHODES:
I am sorry, I was interrupted and did not hear the first part of the question.
Mr. MALCOLM:
I was asking the Minister of Finance how he was going to treat an American holding company which had among its securities large blocks of Canadian government bonds, when the stock of the holding company is owned by Canadians.
I think the statement
which I gave covers the question submitted by the hon. member for North Bruce (Mr. Malcolm) but if not, I will take it as a notice of question and give a succinct answer on Monday.
Mr. CASGRAIN:
Would it be the intention of the government to go after persons who have not made in their returns a statement of the bonds they hold?
Mr. RHODES:
Very much so. That is
not only the object of the announcement made in the budget, and the provision now before the house for consideration in committee of ways and means, but also of the further announcement I made a moment ago with respect to amendment of the Income War Tax Act.
Mr. CASGRAIN:
Will the government go after these people for the years in which they had not declared these bonds
Mr. RHODES:
If they did not pay,-yes.