July 17, 1940

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

What, for instance? I should like to have it.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

A luxury tax.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

It has been thoroughly

explored.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That is provincial.

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

James Lester Douglas

Liberal

Mr. DOUGLAS (Weybum):

Not exclusively. There is nothing to prevent the federal government from entering that field.

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

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

It should

be all federal.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Should be, but it is not.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

It should be

and could be, and if the minister wants to make this tax a luxury tax, it could apply to articles that are not necessary from the point of view of either the consumer or the producer.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

That was thoroughly explored. The possible returns from it are very low.

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

James Lester Douglas

Liberal

Mr. DOUGLAS (Weybum):

If this tax is to raise 865,000,000 as has been suggested, it can raise it from only one source, namely the consumer, the person who buys goods, by increasing his costs and consequently decreasing his purchasing power.

The second object is said to be conservation of exchange. I am not convinced that the same purpose could not be attained by rationing exchange, through import boards to which importers would be required to apply for permission to purchase exchange in order to import goods. That is done to some extent now, under the foreign exchange control board, and could be extended.

Special War Revenue Act

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Surely that would raise

prices, would it not?

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

No; what it would do would be absolutely to stop the bringing into this country of anything which the government considered not absolutely necessary. And in war time we should be prepared to do that.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

And throw the market to

the domestic producer.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

In order to keep out things like motor boats or things a man could do without, and so conserve exchange. This tax is a tax on people who have to buy implements of production.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

We may have to do the other also.

Topic:   WAYS AND MEANS
Subtopic:   SPECIAL WAR REVENUE ACT
Permalink
CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

I would be in favour of that. But we could do this first, and attain what purports to be the objective of this resolution, without bringing about any of the harmful effects that this ten per cent increase in the tariff will have.

I rose for the purpose of putting before the committee these facts regarding what is happening to farm implements: the tariff has gone down, prices continuing to rise. I cannot associate myself with the pious wishes of the hon. member for Regina City who feels that the war-time prices and trade board may do something about the matter. The hon. member for Swift Current placed before the committee this afternoon some facts which proved to his satisfaction that from 1930 to 1935 the agreement made by the implement companies and the oil companies had not been kept. I have no more faith that any agreement will be kept now. The effect of this tariff increase will almost inevitably be another increase in the price of farm implements, which are already too high. I appeal to the hon. members who have voiced their objection to this ten per cent tariff particularly as it applies to implements of production, to oppose the passage of this resolution. One hon. member said that this is a time for national unity behind leadership. That is true, provided one knows where the leadership is leading him. We were told yesterday in the midnight broadcast that in the British House of Commons members of a national government, where they have a preponderant majority, and where the opposition are represented in the cabinet, turned down a bill and absolutely refused to pass it in the form in which it was presented because they considered it detrimental to the people, and the minister said it would be amended. That is

democracy; that is retaining our parliamentary rights; that is what we are here for and what the people of Canada expect of parliament. They expect hon. members not merely to indulge in vociferous fireworks but to say to the minister and to the government that this resolution in its present form is not acceptable and we propose to vote against it. If we can we certainly shall ask for a vote on this resolution, in order to show where hon. members stand.

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

Grote Stirling

National Government

Mr. STIRLING:

There is a phase of this resolution that interests me very much, but not for reasons which have hitherto been dealt with in the discussion. The minister proposes this ten per cent tax for two reasons; one is to conserve exchange, the other quite obviously is to get revenue. How the two are to be made compatible one with the other, I do not understand. But speaking as a representative of people particularly interested in the production of fruits and vegetables, I want to return to the startling figures which the hon. member for Lake Centre placed on Hansard a day or two ago. He drew attention to the fact that with regard to the conservation of exchange this measure had been of no effect whatever, as indicated by the carloads of fruits and vegetables which had been imported during the first week this tax was in effect. He referred to one market in Canada, the greatest, Montreal, and in addition there are three other important markets to which such commodities come. The hon. member for Regina City took him to task, pointing out that it was improper to use the figures of importations during the first week because the cars which came to Montreal during that week must have been ordered long before June 26 and consequently could not have had the ten per cent tax imposed. That statement merely reveals that the hon. member for Regina City is not fully acquainted with the customs of trade. It will take only a few moments to explain that point and I wish to do so because it leads to another.

Broadly speaking, Chicago is the receiving point for the whole of the middle west. Cars of fruits and vegetables from California and other producing states roll to Chicago largely on consignment. The Montreal wholesaler does not buy at the shipping point. He buys from Chicago; he may buy when cars have left Chicago on consignment to Montreal; he may even buy on the tracks in Montreal. On June 25 this ten per cent tax became well known in the distributing centre of Chicago, so that any cars which came to Montreal after June 26 certainly came in under this tax. This shows that the ten per cent tax did

Special War Revenue Act

not operate for the purpose of conserving exchange.

But supposing there was any validity in the argument of the hon. member for Regina City, that validity is entirely destroyed when one considers the figures for the week after that, when undoubtedly the ten per cent tax was in operation. During the week from July 2 to July 8, thirty-five carloads of cantaloupes rolled into the Montreal market which, as I say, is only one market in Canada. In that week fourteen cars of cherries were received. The British Columbia crop is just about cleared up, but the Ontario crop of admirable cherries is running strong. Twenty-six carloads of peaches came to Montreal. Within three weeks Ontario peaches will be at their flood; at any rate commercial production will be commenced, but we have twenty-six carloads of peaches bought by consumers in that one market. Thirty carloads of plums came to Montreal during that week, in addition to the twenty-eight carloads which came during the previous week mentioned by the hon. member for Lake Centre, and 111 carloads of tomatoes, with shipments coming already from various points in Canada.

I am entirely in agreement with a measure having as its object the conservation of exchange. It appears to me most unreasonable that in one market, Montreal, during the week commencing June 26, some 856,000 worth of plums should be sold, with another 861,000 worth entering the same market the following week. In various parts of Canada we produce plums of better flavour than those imported; we are most anxious to use the Canadian market for the distribution of our plums, yet consumers in Montreal have an opportunity of buying and consuming between $110,000 and $120,000 worth of plums in a fortnight.

This is a matter which principally concerns three groups of people: the producers, the trade and the consumers. The producer is anxious to have at his disposal the Canadian market during the period of his production. It may be asked what view the trade takes on a tax, a method, an endeavour, to conserve Canadian dollars. If the minister were to go into the matter with the wholesalers of the shipping port of Montreal for instance, there he would find men earning their living in that branch of industry who are just as patriotic and just as desirous of helping Canada in her war effort as we are. I think he would have this story told to him: "The custom of the trade has been for these cars to roll into our market. That is the way in which the people who sell to us deal with us. It is necessary for us to do what we can with

those cars which are sent on consignment. Among our members here is a wholesaler who stocks himself with a certain range of commodities; here is another, and another." The wholesaler says, "If I am to retain my business I must stock up the various commodities which are at our disposal. I must endeavour to sell them. It is the custom of the trade." But he also says, "If Canada is at war and the government is endeavouring to conserve Canadian dollars and not allow them to go out of Canada for luxuries, why is not this stopped? We cannot stop it."

I appeal to the minister to consider those other methods to which his predecessor referred in the budget speech, when he said:

... it may, from time to time, in respect of certain classes of civilian imports, take other methods of a non-fiscal character for the purpose of meeting this vital need as circumstances seem to require.

The remark interjected by the minister a few moments ago induces me to appeal to him to give further consideration to this question. I am not asking for further tariff assistance. That is not necessary. I am persuaded that some other method can be adopted which will enable the minister to arrive at the goal at which his predecessor aimed. Before the budget was brought down, representatives of the fruit and vegetable industry had an opportunity of meeting the minister and discussing with him their problem, namely, that they want the Canadian market at their disposal when their produce is ready. In the course of the amiable discussion which took place on that occasion this matter of the ten per cent duty was raised, and the minister was told by the industry that in their opinion it would be absolutely unsuccessful in achieving its purpose. Other methods were discussed. However, the budget came down and it contains this provision. Now we have presented evidence to the minister showing that in the two weeks immediately after the imposition of this tax we had in one market in Canada a glut of this useless stuff, which had the effect of making it more difficult for Canadian producers to sell their products. I ask the minister to give his best attention to the finding of some other method which will accomplish the end he has in view.

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

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

I desire to make a few observations, and I promise the minister I will not delay the matter beyond six o'clock. First of all, let me ask him why it is that the bills based on the Income War Tax Act and the Excess Profits Tax Act resolutions, all of which I believe were passed last week, have not yet been introduced. In my opinion those bills should have been

Special War Revenue Act

introduced and read the first time at the conclusion of the discussion on the resolutions, when we concurred in them. I hope there will be no further delay, because so far as I am concerned I just cannot burden myself with a multiplicity of these measures at once. It is not fair to the private members, and certainly it is not fair to me, that we should have these measures dumped on us era gros. I trust the minister will bear that in mind.

To some of those who have been talking this afternoon about Liberal doctrine, its practice and its performance, I would say that they must not be surprised at anything that may happen. The profession of Liberal doctrine when that party is in opposition, and its application when that party comes into power, are two different things, especially when the doctrine of expediency makes it necessary, upon taking office, to discard Liberal doctrine. If hon. members do not believe me I would suggest that they go back and read what Mr. Fielding said as long ago as 1922 or 1923, right in this House of Commons.

I believe the minister said in another place this morning that this resolution has to go through in the form in which it has been introduced, plus such amendments as he-and he alone-may introduce on the floor of the house. Whatever I have to say is based on the theory that the government is adamant in refusing to make any changes with respect to policy, as embraqed by this resolution.

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

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

To what "other place" is the hon. member referring?

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

July 17, 1940