June 22, 1948

PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

I know the answer is that there is a similar enactment in the Bank Act, but why there should be such stringency of administration in relation to a savings bank which does no commercial business at all, and which is almost a domestic concern, is a little baffling to one who has no more information than I have. I wish the minister or his parliamentary assistant would give some other reason than that a similar provision is in the Bank Act.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   AMENDMENT AS TO LOANS WITHOUT COLLATERAL SECURITY, ETC.
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LIB

Gleason Belzile (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. BELZILE:

There is a provision in the Income Tax Act to the effect that if any corporation sets aside as reserve a larger proportion of its income than is deemed necessary for the operation of the corporation, the minister may value, for income taxation purposes, the excess amount so put aside. This rule has been introduced into the Bank Act, as the hon. member knows; and I understand the intention of section 3 is to get all banks and similar institutions into line with the special provision of the Income Tax Act so that the minister may at any time, when it is apparent that an amount has been set aside in excess of that which is necessary for the operation of the institution or corporation, value the excess amount so that it will come under the income tax provisions.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   AMENDMENT AS TO LOANS WITHOUT COLLATERAL SECURITY, ETC.
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

I do not wish to pursue the argument into an unduly controversial field, but every day we see the tentacles of bureaucracy pushed further into the heart of private enterprise and business denied any final discretion in the operation of its own affairs.

I thank the hon. gentleman for telling me about the income tax. It is possible that I was aware of that, but it is not necessary that the Department of Finance arrogate to itself

Customs Act

the determination of what is sufficient reserve to enable the minister to collect his taxes. The Minister of Finance or the Minister of National Revenue will collect such taxes as, in the discretion of his department, may seem proper. But here we find something totally different. We find a government official determining when a surplus should cease to be a surplus, and I submit that this government official does not know. He has not the training or the experience to determine what, in the circumstances of any particular case, should be the reserve necessary for the protection. and w'ell-being of the institution. The government official is not responsible to anybody for the sufficiency of protection for the shareholders and depositors of a bank, especially a savings bank.

The other day, as a matter of policy, at the decree of the government or one of its creatures, interest rates went up and the market price of bonds fell. Institutions such as these, and others, saw their reserves impinged upon to the extent of thousands or hundreds of thousands or even millions of dollars. How helpless is the institution in the face of conditions over which it has no control; yet this act will deny an institution the right to determine what safety measures should be taken against these unknown and all-pervading influences of uncertainty and chaos.

I cannot but express my profound regret that the government has found it necessary to assume a further measure of control over a purely domestic institution, well administered, concerning which there is no control and no complaint. So far as I am concerned there is no reason for the enactment of this amendment, unless it be to enable the government further to determine what shall be, in the realm of what used to be free enterprise.

Topic:   QUEBEC SAVINGS BANKS ACT
Subtopic:   AMENDMENT AS TO LOANS WITHOUT COLLATERAL SECURITY, ETC.
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Section agreed to. Sections 4 to 6 inclusive agreed to. Title agreed to. Bill reported, read the third time and passed.


CUSTOMS ACT AMENDMENT

PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE


The house resumed from Thursday, June 3, consideration in committee of Bill No. 229, to amend the Customs Act-Mr. McCann-Mr. Macdonald (Brantford City) in the chair. On section 5-Valuation of imports prejudicially or injuriously affecting Canadian producers.


LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Hon. J. J. McCANN (Minister of National Revenue):

When this bill was last considered by the committee it was approved with the exception of sections 5 and 6. Section 5 seeks to amend section 43 of the Customs Act by striking out the reference to the British preferential tariff or any lower tariff. This would make the section non-discriminatory, and is in accordance with our commitments at Geneva.

Some lion, gentleman suggested that we should defer discussion of this section until after consideration of the report of the banking and commerce committee on the general agreement on tariffs and trade. That report has not yet been tabled. If that is still the feeling of the committee, the government is prepared to withdraw this section. However, I would point out-and I think this is important-that an emergency might arise in which Canadian producers or manufacturers were prejudicially or injuriously affected, and it would be desirable to have the power to impose values under this section against any country.

I would note that it relates entirely to values and not to rates. Inasmuch as the change has no material effect upon the British preferential tariff rates, the committee might give approval to the section. However, if they do not care to do so, we are ready to withdraw it.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
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PC

John Thomas Hackett

Progressive Conservative

Mr. HACKETT:

I should like to express my appreciation of the careful study the minister has given these two sections; but I hope the withdrawal is not conditional upon my acceptance of the hatching of another emergency. As the minister knows, my appreciation of that pastime has been frequently announced ; and even though I should be the only one to object to it. I hope h.e will understand my position. But I am glad this matter of the British preferential is to be allowed to remain in abeyance until we have had a further opportunity of finding out exactly what the Geneva agreement means, and have been afforded an opportunity of examining it in further detail.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
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LIB

William Ross Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

Has the minister the consent of the committee to withdraw section 5?

Some hon. MEMBERS : Agreed.

Section 5 withdrawn.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
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LIB

William Ross Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

Does that apply also to section 6?

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
Permalink
LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCANN:

No.

On section 6-Goods exported to Canada through another country.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCANN:

When this section was last considered the senior member for Halifax, the

Customs Act

hon. member for Saint John-Albert and the hon. member for Gumbeirland expressed some concern about its effect on our Canadian ports. I should like to make it clear that in order to get the benefit of the British preferential rates it will still be necessary for goods to be shipped direct from the originating country to a sea, lake or river port of Canada. The new section simply provides that goods bona fide exported to Canada from any country, but passing in transit through another, shall, upon such terms and conditions as to shipment, documentation, warehousing, transhipment or the like as the governor in council may prescribe, be valued for duty as if they were imported from the first-mentioned country. The change by the new section gives direct statutory authority for such valuation rather than merely empowering the governor in council to make such a provision.

The terms and conditions prescribed by the governor in council under both the existing and the new section have been and would be such as are required to establish shipment from the original country destined to Canada, and preclude abuse. In other words, shipment from the original country when destined to Canada would require to be established by the documents. As a general rule, warehousing or remaining in an intermediate country for any purpose other than that of transhipment would void direct shipment from the originating country, and the new section makes no real change in the administration in this regard which has been in effect for over half a century.

The last part of section 6 makes provision for appeals to the tariff board. It consolidates authority for appeal to the tariff board from decisions by the deputy minister both in respect to tariff classifications and valuation for duty, and for further appeal to the courts from the decision of the tariff board.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
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LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

I thank the minister for having placed his statement on the record. I am not concerned about the latter part of the section, but I am concerned about the first part which has to do with warehousing and reshipment of goods through United States or other ports. In view of the statement made by the minister I feel quite sure that no harm will be done to Canadian ports. I trust that this legislation will work in the manner in which he says it will. If this provision has been in force for fifty years I cannot see why it is necessary to include these words at this time. That is the point I made when I spoke previously on this question. Could we not carry on with the elimination of those words and continue to

operate under the act as it originally stood? I think that would satisfy those who are interested in shipping through Canadian ports. I emphasize the point I made before, that I am not a lawyer, and I am willing to accept the minister's interpretation.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
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LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCANN:

This is putting into statutory form what was done previously by order in council.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
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PC

Julian Harcourt Ferguson

Progressive Conservative

Mr. FERGUSON:

The minister says that this has been done for fifty years.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
Permalink
LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCANN:

It was done by order in council, and this merely puts it in statutory form.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
Permalink
LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

Am I to understand' that goods, we will say shipped from Europe, landed in New York, warehoused for perhaps twenty days and reshipped to Canada, would come in as though they had come direct?

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
Permalink
LIB

James Joseph McCann (Minister of National Revenue)

Liberal

Mr. McCANN:

It would depend entirely on what was shown by the shipping documents.

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
Permalink
LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

That is just what I am afraid of. There are free ports in various sections of the world. There is one at New York, another farther south, and I believe one is in operation on the United States west coast. Goods could be shipped to one of those ports, warehoused, repacked and shipped to a Canadian port. Would they come in as they do at present?

Topic:   CUSTOMS ACT AMENDMENT
Subtopic:   PROVISION TO GIVE EFFECT TO UNDERTAKINGS IN GENERAL AGREEMENT ON TARIFFS AND TRADE
Permalink

June 22, 1948