Sir GEORGE PERLEY:

Quite so. I know plenty of people who carry on quite a lot of business and never keep any books. It would take a good while to bring this new rule into force, and does the minister think that a man who offends in ignorance, not wilfully, should not only be assessed by the minister but also be liable to imprisonment? I do not think he does.

Mr. LAWSON:

I would point out that

the subsection provides:

If any person liable to maintain records and books of account for the purposes of this part has, in the opinion of the minister-

Then here is the gravamen-has what?

-failed to maintain adequate records and books of account.

If he has failed' to do so in the opinion of the minister, the minister may assess the tax payable. So, according to this section, the Minister of National Revenue determines whether the man is guilty of the offence of not keeping adequate books, and if the minister, not the courts, decides against him, the man becomes guilty of an offence, and of an offence which is punishable by imprisonment. I only say that if the government wants to pass that kind of legislation, it is on their doorstep.

Mr. ILSLEY:

The language objected to by the hon. gentleman is not new.

Mr. LAWSON:

The prison penalty is new.

Mr. ILSLEY:

That is new.

Mr. LAWSON:

That is the whole gravamen.

[Mr. Ilsley.l

Mr. ILSLEY:

There must be some penalty imposed upon persons who will not keep books they are required to keep.

Sir GEORGE PERLEY:

May I suggest to the minister that the present law as it stands is quite sufficient in its penalties, because the minister has power to assess the tax payable, and the minister can assess it as he thinks best.

Mr. ILSLEY:

But if there are no books, he has nothing to go on. That is the very trouble. How can our auditor tell how much is due if he goes to one of these establishments and there are no books? There may be thousands of dollars due. Without books we do not know, and the man can snap his fingers at the department. We have no sanctions.

Mr. LAWSON:

Oh, no, he cannot, because the Minister of National Revenue may then impose an arbitrary assessment, and under the law the taxpayer becomes liable to pay that arbitrary assessment no matter how unreasonable it may be, unless he oan produce books and satisfy the minister that his arbitrary assessment should be reduced. That is the v-hole idea of arbitrary assessments in income tax and everything else with which the minister has to deal.

Sir GEORGE PERLEY:

I suggest that the minister might drop this last provision the same as he did in the other section, and let the bill go through in that way.

Mr. ILSLEY:

I cannot agree to that. It is unreasonable to expect it. Just think of the position my hon. friends are in. They suggest that we make an arbitrary assessment, which might be a most unjust assessment, which is the most undesirable thing that can be suggested. There is no power, under this section, to make an arbitrary assessment. The minister may assess the taxes that are due, but if he has nothing to go on, what can he do?

Mr. LAWSON; All his predecessors in office have made assessments. As a matter of fact, the routine is that the minister never sees or hears about them because these income tax assessments are made by the income tax commissioner and go out under the minister's signature, and if the taxpayer does not like it he has the right of appeal to the minister. But the minister seldom hears of these cases until they come before him in the form of an appeal. Always the minister has had the

'Questions

power to make an assessment. I put in the word "arbitrary" to indicate that it might be an assessment not based upon any particular calculation. By this act not only can the minister make an assessment where, in his opinion, he thinks adequate records and books have not been kept, but he can go further and take action whereby the man can be put into gaol. Surely the exercise of that discretion should be in the courts, and not in the minister.

The CHAIRMAN:

Shall the preamble carry?

Sir GEORGE PERLEY:

Has the minister given this provision his personal consideration? Is he prepared to insist himself that this shall go through or has this just come down to him from the officers of the department?

Mr. ILSLEY:

I have given it some consideration; I have given it further consideration to-night, listening to the discussion, and certainly I have not been convinced that the provision should be withdrawn. I cannot agree to that. I agreed, however, to withdraw the other one.

Preamble stands.

Progress reported.