Mr. LIGUORI LACOMBE (Laval-Two Mountains):

Mr. Speaker, I rise to a question of privilege. I do not intend to question the decision taken by you, sir, and by the house, but my contention is that I am entitled to give this chamber some explanations I was prevented from giving on July 4.

According to the rules of the house, and Bourinot's Parliamentary Procedure, at page 303, this right is given to members, and is set out in these words:

In the Canadian house, questions of privilege take a wide range, but it may be stated in general terms that they refer to all matters affecting the rights and immunities of the house collectively, or 'to the position and conduct of members in their representative character.

As reported at page 4514 of Hansard this is: what occurred:

Mr. Speaker: Will the hon. member for

Beauharnois-Laprairie please be seated.

I have already said to the hon. member for Laval-Two Mountains (Mr. Lacombe) that I would not tolerate any further interruptions of the speech made by the hon. member for Beauharnois-Laprairie. It is apparent that the hon. member does not intend to obey the injunction of the Chair, and I will have to name the hon. member.

I therefore name Liguori Lacombe, member for Laval-Two Mountains.

Mr. Mackenzie (Vancouver Centre): Mr. Speaker, in accordance with the rules of the

house-

Mr. Lacombe: I only put a question to my hon. friend.

Mr. Speaker: Order.

Mr. Mackenzie (Vancouver Centre): Iu

accordance with the rules of the house, and in the absence of any explanation by the hon. member, I shall have to move, seconded by the Postmaster General (Mr. Mulock):

"That the hon. member for Laval-Two Mountains, Liguori Lacombe, be suspended from the service of the house for a period of seven days."

Mr. BENCE:

I should like to express my personal regret that the administration has seen fit to take this step. In the budget debate of 1941, I pointed out that we should have some type of compulsory savings in war time, when so much of our income is required for war purposes and when expenditures should be reduced to the minimum. I indicated that one of the best methods of obtaining this money- and it has been so obtained in the last two years-was through a compulsory savings tax. It is elementary to point out that at a time when we must curtail our expenditures so as to make available large sums of money for war purposes, we should either through taxation or through compulsory savings or otherwise take as much money as possible from the people of the country. I advocated this principle two years ago, and felt at that time that for those in the lower income tax brackets we should make the tax as light as possible, in order that the people might be enabled in the future to enjoy the benefits of the extra time and effort they were devoting in such great measure to war production.

It is most important in the post-war period that there be purchasing power in the hands of the people, particularly the small or common people, if I may so describe them. Under the present system of persuading them to purchase victory bonds and war savings certificates we will obtain a certain amount of money; but certainly the more equitable plan was that of compulsory savings.

I am sure the administration will regret very much having taken this step. If they had approached the task in a more vigorous and forceful manner, perhaps as is done in connection with victory loan and war savings campaigns, they would have given the people a more complete understanding of the full value and meaning of compulsory savings. The minister would have been far better off had he reduced the tax in the lower income tax brackets and retained this feature of compulsory savings to serve as a cushion in the transition from war to a peace-time economy. We would have placed in the hands of people who normally do not save very much a considerable amount of purchasing power, as against the present tendency of concentrating that purchasing power in the hands of fewer and fewer individuals. I regret very much indeed that the minister has seen fit to cancel this provision, which was in force for two years.

Mr. COLD WELL:

May I add my voice to that of the hon. member for Saskatoon City.

I am sorry that the government has not seen fit to accept a suggestion which was perhaps even a little more sweeping, that instead of removing the savings feature in the lower income tax brackets we remove the tax and keep that savings feature. I agree with the hon. member that had we done that we would have collected the same amount of money, and placed in the hands of the people after the war some very much needed purchasing power.

When I read what some of the economists, analysts, and forecasters are saying with respect to the future, as to the possibility of a boom and then a depression, I realize it is essential that ways and means be found to increase the purchasing power of the people in the post-war period, and particularly to encourage persons who are able to do so to prepare for that time.

I know that at this stage it is of little use to make the suggestion I have made, and I do not purpose spending a great amount of time in the discussion. I am sorry we have not done this, because the same amount of money would come into the hands of the government; and then in the post-war period these people in the low income tax brackets, who to-day are feeling the incidence of taxation perhaps as very few other groups in the community are feeling it, would have had some - purchasing power with which to buy the things they need and at the same time promote the industry of the country.

As time goes by the government will probably see the wisdom of a proposal of this kind. As I said before, it would not reduce the amount of money the government would have in hand, nor would it allow any more expansion of purchasing power than is proposed in the budget. These suggestions would have been all to the good, had they been followed.

Mr. HANSON (York-Sunbury):

As the hon. member for Saskatoon City has pointed out, the principle of compulsory savings was advocated from this side of the house, and was accepted by the government on the theory that it would prevent inflation, add to the war revenues of the nation, and create a backlog for the citizens of the country in the days to follow the war. I thought the principle was sound, and I still think so. But I am bound to say that the reaction in' the country was not nearly as favourable as I had hoped. Particularly among the.older ranks of our citizens, there was an astonishing measure of resistance. A person over sixty-five years of age who was compelled to pay this compulsory saving tax took the view, rightly or wrongly, that he would never see

Income War Tax

his money again, and that probably he would be dead before any refund was made. That was the type of resistance offered against the tax.

Nevertheless the government has determined on the measure now before the committee, one which will bring relief to two classes. I referred to this matter in the remarks I made in the debate on the budget. Those in the lower brackets, who had to make compulsory savings, felt they could ill afford to do so, having regard to the enforced deductions from their purchasing power through an already depleted pay cheque. I would like to read lo the committee a letter I received only the day before yesterday, commending the amendment to the budget offered by the official opposition with respect to proposed elevations in the exemptions. That amendment was defeated in the house yesterday. I shall not take time to read the letter, but shall be content to say that it was symptomatic of many communications I have received. I fancy that many of those in the lower income tax brackets who had to pay this compulsory savings did not have compensating factors such as mortgage payments or life insurance payments that those in the higher brackets may have had. The departmental administration will know much better than I whether that is so or not. I always had the idea that the compulsory savings provision bore more harshly on those in the lower brackets than it did on those in the higher, but I may be wrong about that. I should like the minister to tell us concretely what the loss will be in the six months from July 1 to the end of 1944, on this year's figures as far as they are available, and what the loss will be in a full year.

There is a suggestion I want to make, which I have communicated to the minister and to the Department of National Revenue. As I understand the law, these compulsory savings are not assignable by the taxpayer to anyone. I assume that was to prevent the trafficking in these savings certificates, if I may so term them, and I think that is proper. If they were assignable and money could be lent upon them, I can see the possibilities of a grave evil being carried on by speculators and otherwise who would buy them up at greatly reduced values. I am not suggesting that they be assignable for any commercial purpose, but a husband ought to be able to assign his compulsory savings to his wife, and the wife ought to be able to assign hers to her husband, or either or both ought to be able to assign savings to a dependent. This would not give the right of cashing in the savings. I can see a good deal of virtue in the suggestion and I realize also that there may be administrative difficulties in the way. I am not suggesting that these assignees should be able to anticipate payment, but a husband ought to be able to assign to his wife as a gift. It would not be operative as a gift at the time, but it would become a gift in fact after his death or upon the maturity of the term.

Mr. CRUICKSHANK:

My wife gets my money now.

Mr. HANSON (York-Sunbury):

I know

there are some men who have the habit of allowing their wives to go through their poeketbooks every day, but I have never allowed my wife to do that. I am serious about this because I believe it is a constructive suggestion. I ask the minister and his officials to give serious consideration to these suggestions. I do not think there is an insuperable difficulty in the way. Take a man who had possibly $800 accumulated over a period of time. It might be that that is his only estate, and probate would have to be taken with all the accompanying expenses in order to get the government to release the money. If the compulsory savings were assigned to his wife or his issue they would automatically be paid in a proper case. I suggest that to the department in great seriousness.

I do not suggest that it ought to be anticipated in any way or that it could be assigned for collateral purposes. However, the government are now allowing the twenty per cent refundable taxes paid under the excess profits tax to be assigned in a given case as collateral for loans in anticipation of capital expenditures by industrialists in the post-war period for the purposes of providing employment. But in this case the husband ought to be allowed to assign to his wife, especially a man in advanced years who may not live to see the payments come due. This should apply also in the case of the wife. Then it should be extended to take care of dependents.

I offer this suggestion in good faith to the minister. It has come to me from a man who thinks seriously about these taxation problems. He is far removed from political considerations in this country, but he wants to see the law ameliorated as far as possible in the interests of the taxpayer, who after all is more or less the forgotten man in this country.

While I am speaking about the forgotten man, I wonder if you will consider it relevant, sir, if I take this opportunity to say a word on behalf of a group of taxpayers in this country who are indeed forgotten men,

Income War Tax

namely, the private members of parliament. I hope I shall be allowed to say what I want to say on the theory that I have no particular axe to grind. It does not make much difference to me whether the indemnity is $4,000 or $5,000; I am in the red now so far as indemnity is concerned, and I have been living on capital ever since this war started. But that is not the case with a large number of members of this house. For some reason, whether it is modesty or humility or fear or what-not, private members of parliament seem loath to get up and tell the country their exact position.

I can best illustrate the position of the private member by referring to my own case. As a private member I receive $4,000 indemnity if I do not lose too many days. If I lose more than fifteen days I am penalized to the extent of $25 a day. During last session, as well as this session, I was not able to be here every day, and I may be penalized. However, we will leave that out of consideration. According to the records I have established, the government deducts at the source from my indemnity cheque a total of $1,480 per year because I am treated as a single man without dependents. I have lived in Ottawa a good many years, and I think it is the desire of my constituents that I should live in a proper state, a state becoming a member of parliament representing one of the finest constituencies in Canada. I can honestly tell this house and the country-I am not making any plea on behalf of myself-that it cost me $10 a day to live in Ottawa, including gratuities. With a session lasting 180 days that means $1,800. If you do a quick sum in mental arithmetic, that $1,800 plus the $1,480 makes $3,280 to be taken out of my sessional indemnity.

I like to go home once in a while and I have to travel overnight. I am getting so old now that I like to have a compartment, and I cannot go home and back under $25 for the round trip. If I do that twice a month it means $50, and six times $50 amounts to $300. How much is there left from my sessional indemnity?

Mr. SLAGHT:

Do you like to visit your constituents occasionally?

Mr. HANSON (York-Sunbury):

Absolutely, and I like to go home and see the wee wife once in a while. I am putting this forward as an actual case. I know there must be many hon. members who have not a backlog upon which to draw to support themselves in the position in whieh a member of parliament ought to support himself.

Mr. MACKENZIE (Vancouver Centre):

Ninety per cent.

Mr. HANSON (York-Sunbury):

I assume it is ninety per cent. No one has asked me to make this speech, but I did feel that in justice to the members of this house the country should know something of their plight. How do they treat their members down in the United States?

Some of us have to keep up two establishments.

Mr. HANSON (York-Sunbury):

I have to keep up two homes, one here and one in Fredericton. *

Mr. FRASER (Peterborough West):

And

what about the extra income tax they take off that?

Mr. CRUICKSHANK:

Leave him alone. He is making a good job of it.