Mr. ILSLEY:
We are dealing with the resolution and perhaps I can explain it. I have not the resolution before me, but I know exactly what it is and it can be explained quite easily. The resolution simply authorizes the addition of certain rates of duty.
Mr. CAHAN:
Has the resolution been
printed and distributed?
Mr. ILSLEY:
I am not sure about that. All these matters were mentioned this afternoon in the budget address, but I do not think there has been time to distribute the resolution. The resolution makes additions to the present rates of duties on the list of articles contained therein. These additions in duty will be covered by the bill which will be presented to parliament.
Paragraph 1 agreed to.
2. (1) That any enactment founded upon the foregoing resolution relating to item (a) shall be deemed to have come into force on the third day of September, one thousand nine hundred and thirty-nine, and to have applied to all goods imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
(2) That any enactment founded upon the foregoing resolution relating to item (b), (c), (d), (e), (f), (g), (h), (i) and (j) shall be deemed to have come into force on the twelfth day of September, one thousand nine hundred and thirty-nine, and to have applied to all goods imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
Mr. WALSH:
What becomes of stocks
which are held at the present time by retail merchants? This measure comes into effect on September 12, and I should like to know how stocks in merchants' hands will be affected.
Mr. ILSLEY:
Goods imported before September 12 would come in under the old rate of duty. Section 3 of the bill to be presented reads:
This act shall be deemed to have come into force on the twelfth day of September, one thousand nine hundred and thirty-nine, and to have applied to all goods mentioned in the preceding section, imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
There is one exception. The increased duty in the case of spirits is to apply on and after September 3.
16S
Ways and Means
Mr. WALSH:
There is no way of preventing merchants from immediately increasing the price on their present stocks in order to cover the cost of replacement?
Mr. ILSLEY:
Not under this measure.
Paragraph 2 agreed to.
Resolution agreed to.
Resolved that it is expedient to introduce a measure to amend the schedule to the Excise Act, 1934, as enacted by chapter thirty-seven of the statutes of 1936 and to provide: 1. That the duty of excise on spirits distilled in Canada be increased from $4 to $7 per proof gallon. 2. That the duty of excise on Canadian brandy be increased from $3 to $6 per proof gallon. 3. That the duty of excise upon all beer or malt liquor brewed in whole or in part from any substance other than malt be increased from twenty-two cents to thirty cents per gallon. 4. That the duty of excise on malt manufactured or produced in Canada or imported be increased from six cents to ten cents per pound. 5. That the duty of excise on malt syrup suitable for the brewing of beer manufactured or produced in Canada be increased from ten cents to fifteen cents per pound and malt syrup imported into Canada and entered for consumption be increased from sixteen cents to twenty-one cents per pound. 6. That the duty of excise on tobacco of all descriptions manufactured in Canada, except cigarettes, be increased from twenty cents to twenty-five cents per pound actual weight. 7. That the duty of excise on cigarettes manufactured in Canada, weighing not more than three pounds per thousand, be increased from $4 per thousand to $5 per thousand. 8. (1) That any enactment founded on resolutions 1 and 2 hereof shall be deemed to have come into force on the third day of September, one thousand nine hundred and thirty-nine. (2) That any enactment founded on resolutions 3, 4, 5, 6 and 7 hereof shall be deemed to have come into force on the twelfth day of September one thousand nine hundred and thirty-nine. Resolution agreed to.
Resolved that it is expedient to introduce a measure to amend the Special War Revenue Act. chapter one hundred and seventy-nine of the Revised Statutes of Canada 1927 and amendments thereto and to provide:- 1. That subsection 1 of section 83 of the said act be struck out and replaced by the following: "1. There shall be imposed, levied and collected the following excise taxes: (a) a tax of fifteen cents per gallon on wines of all kinds, except sparkling wines, containing not more than forty per cent of proof spirit; (b) a tax of one dollar and fifty cents per gallon on champagne and all other sparkling wines." [Mr. Ilsk-y.J 2. That schedule XI to the said act be amended by adding thereto as paragraph 4 thereof the following: "4. Carbonic acid gas and similar preparations to be used for aerating non-alcoholic beverages... two cents per pound." 3. That schedule III to the said act being the list of articles exempted from the consumption or sales tax be amended (a) by striking out under the heading of "foodstuffs" in the sixth line the words: "fish and products thereof;" and replacing them by the following words: "fish and products thereof, not to include canned fish;" ; (b) by striking out under the heading of "foodstuffs" in the tenth and eleventh lines the words: "meats, salted or smoked (not to include the same when chopped, ground, parboiled or spiced);" (c) by striking out under the heading of "miscellaneous" in the first line the word "electricity" and replacing it by the following words: "electricity, except when used in dwellings:" (d) by striking out under the heading of "miscellaneous" in the fourth and fifth lines the words: "gas manufactured from coal, calcium carbide or oil for illuminating or heating purposes;" and replacing them by the following words: "natural gas and gas manufactured from coal, calcium carbide or oil for illuminating or heating purposes, except when used in dwellings;" 4. That any enactment founded on this resolution shall be deemed to have come into force on the twelfth day of September, one thousand nine hundred and thirty-nine and 'to have applied *to all goods imported or taken out of warehouse for consumption on and after that date and to have applied to goods previously imported for which no entry for consumption was made before that date. Resolution agreed to.
Resolved that it is expedient to enact an Excess Profits Taxation Act to provide
1. That an excess profits tax be levied on the profits of all businesses, whether incorporated or not. the said tax to apply to profits in excess of 5 per centum of the amount of capital employed by the taxpayer in the business, and to be graduated at the following rates: On profits in excess of 5 per cent but not exceeding 10 per cent of the capital employed- 10 per cent; On profits exceeding 10 per cent but not exceeding 15 per cent of the capital employed 20 per cent; On profits exceeding 15 per cent but not exceeding 20 per cent of the capital employed- 30 per cent; On profits exceeding 20 per cent but not exceeding 25 per cent of the capital employed 40 per cent; On profits exceeding 25 per cent-60 per cent; and that the said excess profits tax be in addition to the tax imposed upon the taxpayer under the Income War Tax Act, but that any tax payable by the taxpayer under the Income War Tax Act in respect of the profits of the same business for the corresponding period be deductible as an expense for the purposes of computing the profits to be assessed under the excess profits tax. Ways and Means
Mr. LAWSON:
This will come in as an amendment to the Income War Tax Act?
Mr. ILSLEY:
No, it will be a separate measure.
Mr. LAWSON:
But it will be administered by the commissioner of income tax, I assume.
Mr. ILSLEY:
Yes.
Paragraph 1 agreed to.
_ 2. That an alternative excess profits tax be imposed upon the profits of all businesses, whether incorporated or not, taxing at the rate of 50 per centum all profits or income in excess of the average income of the taxpayer for the four years 1936, 1937, 1938 and 1939, or the four fiscal periods of the taxpayer ending in such years;
And that the said alternative excess profits tax of 50 per centum be in addition to the tax imposed upon the taxpayer in respect of the same profits under the Income War Tax Act, but that any tax payable by the taxpayer under the Income War Tax Act in respect of that portion of his profits which is in excess of the aforesaid average profits shall be deductible as an expense for the purpose of computing the net excess profits to be assessed at the aforesaid rate of 50 per centum.
3. That 'the tax proposed in resolution 2 hereof be an alternative to the tax proposed in resolution 1 hereof, and the taxpayer shall have the right to elect to be taxed either upon the basis of the tax proposed in resolution 1 hereof or upon the basis of the tax proposed in resolution 2 hereof.
4. That the governor in council may provide by regulation for the depreciation and amortization of new plant and equipment which may be deemed necessary to fulfil orders for war purposes.
5. That this act shall be applicable to the year 1940 and fiscal periods ending therein after March 31, 1940, and all subsequent periods.
Paragraphs 2 to 5 inclusive agreed to.
Resolution agreed to.