Mr. COLD WELL:

Mr. Chairman, I protest. The hon. member for Weyburn was on his feet and sat down only when the Minister of Finance rose to make an interjection.

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Mr. HANSON (York-Sunbury):

I have to catch a train and would like just five minutes.

Mr. COLDWELL:

The hon. member for Weyburn courteously gave way to the Minister of Finance who wished to answer his argument. The minister then took his seat and the hon. member for Weyburn proceeded. I object to the manner in which the leader of the opposition told the hon. member for Weyburn to keep his seat. The hon. member for Weyburn had the floor, and I suggest that he should follow the rules.

Mr. HANSON (York-Sunbury):

If anything I said could be construed in that way,

I sincerely apologize. I think I am usually very courteous, especially to hon. gentlemen in the east end of the chamber. I want to be courteous; but there has been some misunderstanding. I just wanted a few minutes because very shortly I have to catch a train.

The CHAIRMAN:

On the point of order raised by the hon. member (Mr. Coldwell), the hon. member for Weyburn has the floor.

Mr. DOUGLAS (Weyburn):

If the leader

of the opposition has to go, I will quite willingly yield my place.

The CHAIRMAN:

The hon. gentleman

yields.

Mr. HANSON (York-Sunbury):

I did not appreciate the fact that the hon. member for Weyburn had the floor, otherwise I certainly would not have risen. May I say briefly what I intended to say? In regard to the question of taxation by the crown in the right of the dominion on the crown in the right of the province, I believe there is a legal difficulty. I have not prepared any brief in the matter, but has the minister or have the officials of his department at any time considered this aspect of the question, whether there is the right to tax the crown in the right of the province? It has given me some difficulty. I doubt very much if there is the legal right of taxation by the crown in the right of the dominion on the crown in the right of the province. If the minister has any opinion on the point, I should like to have it made clear.

Before I sit down, may I thank the hon. member for Weyburn.

Mr. ILSLEY:

I have no reasoned opinion

to express on the legal point raised. All I know is that we do it right along. The crown in the right of the province pays customs duties imposed by this parliament, and which have been imposed upon them, I suppose, ever since confederation.

Mr. HANSON (York-Sunbury):

Then, if

I may be permitted the observation at this point, the argument which the minister has advanced against the contention of the hon. member for Weyburn falls to the ground. You impose customs duties, and the money comes from the taxpayers of the provinces through their treasury. You refuse to tax them on gasoline because of the reasons alleged, and it will come out of exactly the same people. The minister's position is inconsistent.

Mr. ILSLEY:

It is only superficially inconsistent. The general purpose of the customs tariff is protective.

Mr. HANSON (York-Sunbury):

What?

Mr. ILSLEY:

It is protective.

Mr. HANSON (York-Sunbury):

And this

from my hon. friend from Nova Scotia!

Mr. ILSLEY:

I am not expressing any

views on the theory. I am merely stating a matter of fact. We have a protective tariff in this country. Nobody has denied that.

Mr. HANSON (York-Sunbury):

I agreeand the highest we have ever had in Canada.

Mr. ILSLEY:

That is another point; I do not want to start an argument on it. I am simply saying that, in a purely revenue measure, where the sole object is the raising of taxes, I believe it has always been a principle of the legislation not to impose a tax on a province.

Mr. HANSON (York-Sunbury):

With

great respect to the minister, it seems to me that that is a distinction without a difference, and one which will not carry conviction to the people of this country.

Mr. DOUGLAS (Weyburn):

The point that I was starting out to make was that those of us who were asking for the exemption of farmers and fishermen from this gasoline tax were not demanding any concession; we were merely requesting the government to apply a principle which it has recognized in its taxation measures, which it recognized in the electricity tax, which it recognizes every year in the sales tax, and which the minister himself has said it is now going to recognize in the application of this tax with reference to the provincial governments. I am not quarrelling with that attitude, but I am pointing out that the provincial governments and their employees enjoy rebates or at least have tax-free gasoline in respect of this particular impost. Now, this committee has no assurance that there will not be abuses under those conditions. We have no guarantee that provincial government employees will

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not use tax-free gasoline for their private purposes. The people are going to know that inspectors driving provincial government cars are using tax-free gasoline, while they themselves have to pay a tax of three cents a gallon on the same kind of gasoline when they use it in carrying on their farming operations.

The Minister of Finance is not very familiar with the situation on the prairies, but I can tell him that in Saskatchewan one of the things we have more than anything else is inspectors. As a matter of fact if in looking for a source of revenue he put a tax on inspectors he could raise a considerable sum. I do not know whether it would be wiser to ask them to buy a licence plate each year, or put a tax on the farmers and have an open season on inspectors like a duck shoot.

Mr. MacNICOL:

Are they mostly political heelers?