July 17, 1940

LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

The sooner

the bill gets to the special committee, if it is to go to one, the sooner it will be disposed of in the end.

Topic:   UNEMPLOYMENT INSURANCE
Subtopic:   PROPOSAL TO REFER BILL AFTER SECOND READING TO SPECIAL COMMITTEE
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LIB

Norman Alexander McLarty (Minister of Labour)

Liberal

Hon. N. A. McLARTY (Minister of Labour):

May I just explain that it was

understood that the bill was to be distributed this morning. Through some unfortunate occurrence copies were not available; but they will be available very shortly and will be distributed immediately to all hon. members.

Topic:   UNEMPLOYMENT INSURANCE
Subtopic:   PROPOSAL TO REFER BILL AFTER SECOND READING TO SPECIAL COMMITTEE
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NAT

Thomas Langton Church

National Government

Mr. CHURCH:

That means that for this

session it has been dropped by the government like a hot potato.

Topic:   UNEMPLOYMENT INSURANCE
Subtopic:   PROPOSAL TO REFER BILL AFTER SECOND READING TO SPECIAL COMMITTEE
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WAYS AND MEANS

SPECIAL WAR REVENUE ACT


The house in committee of ways and means, Mr. Vien in the chair.


LIB

Thomas Vien (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

Resolution 5, with

proposed new paragraph 3:

5. That the said act be amended by adding thereto after section eighty-eight the following

section:

"88A. (1) In addition to any duty or tax that may be payable under this act, or any other statute, there shall be imposed, levied and collected a war exchange tax of ten per cent on the value for duty of all goods imported into Canada, payable by the importer or transferee who takes the goods out of bond for consumption at the time when the goods are imported or taken out of warehouse for consumption.

(2) The tax imposed by this section shall not apply to any goods imported into Canada,-

(a) which are entitled to entry under the British preferential tariff, or under trade agreements between Canada and other British countries;

(b) which are entitled to entry under customs tariff items 360, 460, 690, 690a, 696a, 700, 700a, 701, 702, 703a, 704, 705, 705a, 706, 707, 708, 709; or to fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada and the products thereof carried from the fisheries in such vessels.

(3) No person shall take advantage of the tax imposed by this section to increase the price of goods by an amount greater than is justified by any increase in cost properly arising from such tax or to maintain prices at levels higher than are so justified and, where the war-time prices and trade board reports to the governor in council that, in its opinion any person has so taken advantage, the governor in council may, upon the recommendation of the said board, for such period of time as he may determine, impose upon all or any of the goods produced, sold or dealt in by such person an excise tax at a rate not to exceed ten per cent of the selling price of such goods, remove or reduce customs duties applicable thereto, fix the prices thereof and take or authorize the said board to take such other measures under the war-time prices and trade board regulations as the said board may recommend; and, for the purpose of investigation and any recommendation by the said board and for the purpose of preventing any aforesaid advantage from being taken by any person, the said board shall have in respect of any aforesaid person and goods the powers conferred on it from time to time by the said regulations as if such goods were necessaries of life as therein defined, and the taking of any such advantage shall be deemed to be an offence against this act and the said regulations, and the penalties prescribed in said regulations shall extend and apply thereto."

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

Yesterday afternoon and evening many western members protested against this ten per cent war exchange tax, pointing out its implications. I agree with them. This tax means an increase in the price of many articles used by farmers in their work either directly or indirectly. Gaso-

Special War Revenue Act

line, repair parts, implements and other items were mentioned yesterday. Agriculture has suffered in recent years to a greater extent, I believe, than any other industry. The depression has affected us in western Canada more than it has the people in any other part of the country. In various discussions *that have taken place in the house since the opening of the session on May 16, the western producer's situation has been fully placed before the house. The western farmer to-day is producing and selling his products below cost. I would ask what other industry in Canada is allowed to carry on under such conditions without something being done to remedy the situation. Industry generally, particularly in eastern Canada, is producing under a guarantee of costs, with a plus in some instances. I join in the protest made by the hon. member for Lake Centre (Mr, Diefenbaker), the hon. member for Rosthern (Mr. Tucker) and other western members who have spoken against this tax. They made a very strong case for an exemption of implements of production from the levy. Certain other imports might also be exempted.

The hon. member for Lake Centre discussed at some length the importations of fruits and vegetables, pork and other commodities. I am not going ,to burden the house with figures; a multiplicity of figures was given yesterday. I am not a calamity howler but I do submit that the circumstances of the western farmer should be emphasized. I am not going to do any calamity howling on behalf of the western farmer, however. The farmers of the west are ready to play their part to win this war and at any time they will discharge their duty patriotically, even if it hurts. At the same time, I suggest that this additional burden should not be imposed on the western producer at this time. Reference has been made to the surplus of wheat, and this may be a blessing in disguise in t'he long run. Two years hence it may prove to have been providential that we had a surplus.

As I say, the farmer is patriotic but he wants a fair chance. He wants a parity of prices. We have seen the prices of the products of industry rise to a point out of all proportion to the prices of the products the farmer has to sell. I might mention implements, for instance. I will not give any figures at this time with regard to prices, but yesterday the hon. member for Souris put on the record prices and other figures to show the developments in connection with implements since 1932. Under the Bennett government when there was an increase in the tariff generally, and on implements in particular, we voted for it on the distinct understanding that there had been an agreement that there would be no increase in price, and the member for Souris last night gave figures with regard to some of the principal implements of production, nine or ten, showing that from 1930 to 1935 there had been a decrease in prices. I admit it was not as much as we should like to have seen but it was in the right direction. In 1936, following the change of government, there was a lowering of the tariff from 25 per cent to 12^ per cent, and a further decrease in 1937-38 under the agreement. What was the result? We experienced an increase in price.

This war exchange tax will result in a further increase. Not only was there an increase in the prices of implements during the period to which I have referred but there was a very substantial increase in importations and this resulted in some ways to the detriment of the farmer. The Minister of Agriculture went to Saskatchewan in 1938 during the election campaign and said that for two years at Ottawa he had been trying to do something to reduce implement prices for the farmers. He pleaded with the electors to return the Liberal government in that province and promised that he would do something when he came back here. He came back and what happened? I well recall the speech he made in 1938 when he warned the implement manufacturers and importers what might happen if there was not a reduction in prices. They paid little attention to what he said, and since then we have seen increases in the prices charged. We have also seen a substantial increase in the prices of repair parts. In my opinion this tax will work to the great disadvantage of the farmers in regard to repair parts. We may expect to see increases in that direction if the tax goes through.

What consideration, I would ask, has the producer, the farmer, received in this budget? How often has he been named in the budget? If the hon. member for Regina City (Mr. McNiven) last night had looked through it he would have seen that the farmer or producer had received very little consideration The hon. member, however, did stress the assistance assured the farmer by the price of wheat being fixed recently, a graduated price; he claimed that was of some benefit to the producer. Reference was made yesterday to the one-cent increase per month in the price after the beginning of the crop year. Speaking on the budget last year I suggested to the government that they should consider a proposal to add one cent a bushel per month to the fixed price in order to encourage the farmer to hold his wheat on the farm. I believe that will have to come. I also suggested last year-and it was referred to yesterday-that we should have a domestic price

Special War Revenue Act

for wheat and flour in Canada. I believe that will have to come. Last year I suggested $1.20. Under the conditions that have come about since then, that may be a little high, but it certainly should be something over a dollar.

The question of storage charges has been discussed. I am not going into that this afternoon; I do not think this is the proper place. I trust, however, that within the next week or ten days we shall have an opportunity to discuss in general these questions pertaining to the marketing of wheat. The Minister of Agriculture knows well that there is a serious situation in parts of Saskatchewan. I noticed in yesterday's Leader-Post that the forms for application for the bonus have been distributed in that province, and the dead-line date was July 15. I have on many occasions this session asked the minister to make a statement with respect to the Prairie Farm Assistance Act. We have been assured that it is under consideration and that some amendments will be made.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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LIB

James Garfield Gardiner (Minister of National War Services; Minister of Agriculture)

Liberal

Mr. GARDINER:

If the hon. member will permit me I should like to correct the statement just made. No such thing as a form goes out for application under the Prairie Farm Assistance Act. There is a letter that goes to all individuals in an area that may be affected, asking them to send in the acreage they may have, but it is not an application for bonus.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

The Leader-Post said that Mr. Mackie who was in charge of administering that act appeared before the municipal convention and referred to it, saying that these forms had been distributed, and no doubt he assured that convention that the act would be carried out this year in some form or another.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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LIB

James Garfield Gardiner (Minister of National War Services; Minister of Agriculture)

Liberal

Mr. GARDINER:

If the report says that an application form for assistance under the act was sent out, it is not correct. That is not what they are.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

The report said that some three hundred thousand had been distributed.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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LIB

James Garfield Gardiner (Minister of National War Services; Minister of Agriculture)

Liberal

Mr. GARDINER:

That would be about the number, but they are not application forms.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

The fact that Mr. Mackie had made the statement before the convention indicates that the farmers in some parts of the west are at a point where they will more or less have to depend on the bonus. All I wish to say is that we should have that legislation down very soon. If July 15 was the dead-line, any amendments to that act should have been introduced in this house a week before that.

I appeal to the minister to give consideration to the suggestions that have come, from this side of the house particularly, and the protests against this ten per cent war exchange tax as it applies to farm implements. In their present circumstances the farmers cannot carry that burden. I believe that sixty-eight per cent of the implements used in western Canada are imported or are the product of United States firms. The hon. member for Swift Current (Mr. Graham) will recall that when he was counsel before a committee of this house inquiring into the implement business, such figures were laid before the committee.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Has the hon. gentleman the value of the implements imported into western Canada?

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

I have not the figure at hand, but I think it was quoted yesterday by the hon. member for Souris.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

James Arthur Ross

National Government

Mr. ROSS (Souris):

It was $20,000,000.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

I think the hon. member for Regina City also referred to it. I would stress this point, that over sixty-eight per cent of the farm implement business done in western Canada is done by United States firms, and that sixty-eight per cent of that Canadian business represents, I understand, only about four per cent of the total North American business of these United States firms. Therefore it is apparent that we are at their mercy. These goods will continue to be imported from the United States, and this tax will be a very heavy burden.

Speaking on the budget, I placed on Hansard a comparison of farm incomes, using 1926 as the base. It showed that, comparing 1939 with that year, there has been a decrease to forty-five per cent in farm income. What other industry in Canada has had such an experience? When we consider that position of western farmers we should give them every consideration possible.

I want to be consistent in my stand in this house. I have on former occasions, in 1930 and 1935, voted for an increase in the tariff. I did so when there was a guarantee that there would be no increase in prices of goods. I now appeal to the minister to give consideration to the suggestions that were made here yesterday, and the protests against this tax as it applies to farm implements. I therefore offer the following amendment to the amendment, moved by myself and seconded by the hon. member for Victoria-Carleton (Mr. Hatfield):

That resolution No. 5 he further amended by adding thereto the following:

"Provided always that such war exchange tax of ten per cent of value for duty of all goods

Special War Revenue Act

imported into Canada as proposed shall not apply to agricultural implements and parts thereof."

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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LIB

Thomas Vien (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

I think the amendment offered by the hon. gentleman is wrongly worded. We are considering resolution No. 5. The minister asked leave to amend that resolution by striking out subsection 3 thereof and substituting another subsection. That leave was granted. Therefore the resolution now before the committee is the amended resolution, and I suggest to the hon. member that instead of submitting an amendment to the amendment he should submit an amendment to the resolution as amended.

Mr. Perley moves, seconded by Mr. Hatfield:

That resolution No. 5 as amended be further amended by adding thereto the following:

"Provided always that such war exchange tax of ten per cent on the value for duty of all goods imported into Canada as proposed shall not apply to agricultural implements and parts thereof."

Perhaps I might make the correction.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

Very well. I leave that for the consideration of the committee. I hope it will have the support of all hon. members.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
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July 17, 1940