Mr. St. Laurent:

Yes. In the summary there is an indication of what the order refers to.

Mr. McCann:

During the war years this provision was in effect under the War Measures Act. When the War Measures Act lapsed, we no longer had the authority. Since then there have been so many requests with respect to cases to be dealt with that it was thought advisable to give that authority again to the governor in council.

Mr. Fraser:

Where citizens of the United States have tourist camps or summer businesses in Canada, most of them come in with their cars under tourist's permit; but I understand that if they bring a car, a station wagon or a truck, they cannot use it in connection with their business in Canada. If they use the vehicle for the purpose of trucking supplies or transporting passengers or guests from the station to their hotel, then they are supposed to pay duty on it. Very few of the tourist camp owners or others who come to Canada and do business here in the summer understand that. The Minister of National Revenue should have indicated on the permit that a car so brought in must not be used for business purposes in Canada-the tourist business, hotel business or otherwise. People who come to Canada under these circumstances have the idea that they can keep the car here for six months; they do not know that it can be seized at any time by the minister's department. Something should be done to inform all those who come in under these circumstances that they may not bring these vehicles in and use them for business purposes.

Mr. McCann:

We will take the matter into consideration. I can assure the hon. member that our enforcement officers check up fairly well on United States cars that are in here on permit, in order to see to it that they are not in business in competition with our own citizens engaged in trucking or carrying passengers. Such vehicles are admitted under permit for six months, for the personal use only of the owner. If he wants to bring it in when this legislation comes into effect he will have to pay the duty on it, and then he can do what business he likes with it.

Mr. Fraser:

Not only in my own riding but in others across Canada I could name at least fifty American tourist resort operators, both

men and women, who brought cars in and used them in that way and do not know that their cars could be seized. I have had letters from them.

Mr. Cruickshank:

Tell them not to do it

again.

Mr. Fraser:

I believe the hon. member for Fraser Valley himself does not know the regulations.

Mr. Church:

I am afraid that items 1215 and 1216 are going to have a most serious effect. The minister may shake his head, but they are going to have an injurious effect on Canadian industry. What are you getting in exchange for these concessions? You are going to repeal two items in the Customs Tariff, and substitute for them items 1215 and 1216. What will be the effect? We used to have a large trade in automobiles with Australia, New Zealand and other places. At the present time trade and commerce and industry are not getting as many orders, with the result that a large number of people are out of work. In this country we used to have what is called preferential trade with Britain and the dominions. We had trade with the old country on these items. Now you have lost your best customer in many products to which I will not refer today.

This provision applies to used or secondhand automobiles and motor vehicles of all kinds manufactured prior to the calendar year in which importation into Canada is sought to be made. Then there is reference to automobiles given to religious institutions or clergy engaged in religious or welfare work; trucks and aircraft imported as part of the equipment of United States firms engaged in exploratory or development work in the Alberta oil fields. Something might be said in favour of that, but this type of aircraft is not available in Canada for use in prospecting or in the transportation of supplies to remote areas. I fail to see how it is going to aid Canadian industry, because if there ever was a time when the small wholesale or retail man and the small manufacturer wanted help it is now, when taxation is at the peak. We used to spend $36 million on the whole civil government; now we are spending almost that much a day. We have got away up in the clouds-in the billions. I fail to see how this is going to help the manufacturer, small or large, who goes in for this type of work. If you ask me, it is going to have a very serious effect on industry generally throughout Canada.

Mr. McCann:

As a competitive factor with Canadian industry, either in the automobile or in the aircraft business, the effect will be

practically negligible. We have had no protests from either the automobile industry or the aircraft industry against this type of legislation.

Mr. Speaker:

When shall the bill be read a third time?

Now.

Mr. McCann (for Mr. Abbott) moved

the third reading of the bill.

Motion agreed to and bill read the third time and passed.

Hon. Douglas Abbott (Minister of Finance):

Mr. Chairman, if I may, I should like to revert to section 7, on which we had a long and interesting discussion yesterday evening, and which contains certain statutory provisions relating to the proposed new system of depreciation allowance. I want to refer particularly to that portion of the debate which related to the agricultural taxpayer, the farmer, who is taking depreciation on his machinery, equipment and other assets on the former basis. A great many hon. members spoke, some of them farmers, others representing farming constituencies. I think the unanimous view expressed was one of some apprehension that this new basis would not be as advantageous to the farmers as the old basis. I may say without any hesitation that I do not share that view; but curiously enough the representations made in the committee yesterday evening were the first which we have received concerning that particular group in the community. There has been a good deal of discussion with the accountants association, with industry, and so on. Representations have been made, but so far as I am aware, and so far as my officials are aware, no spokesman for the agricultural community has come forward to discuss or to criticize the proposed new basis. That is perhaps owing to the fact that it was not fully appreciated or fully understood;

Income Tax Act

but be that as it may, I am not criticizing anyone for failing to do so; I am simply stating it as a fact.

Mr. Macdonnell (Greenwood):

That shows what parliament can do.

Mr. Abbolt:

This bill has been before the house and available to hon. members for some three weeks, and the announcement has been before the public for some six months. I find that in most other groups, long before parliament attempts to discuss any proposed measure the people who are interested come to the department for information, or put in briefs, or make suggestions as to changes which should be made. It greatly facilitates the work of parliament if they do that sort of thing. I am not criticizing anyone for failing to do it. I am simply stating as a fact that the only representations that were made that this new system would adversely affect the farming group were made in the committee last night. I do not believe that it will. I think that when the farming community understand the basis on which it operates; when they understand that if they overdepreciate, it must be put back, but that, conversely, if they underdepreciate they can get the benefit of the law as a result of underdepreciation, they will come to the conclusion that the new system is better than the old one.

Be that as it may, there is no desire to force the system on the farming community. I can see that it might be difficult for farmers who have not complete records to keep track of the diminishing value, the diminishing balance basis; but bigger farmers would have no difficulty at all. Perhaps the smaller ones who keep their books less carefully would have some difficulty, and, having become accustomed to the straight-line basis, would prefer to keep it. I am not prepared to accept the view that the farmer as such is any more obtuse than any other member of the community; but in any event so far as the department is concerned there is no objection to the farming community continuing for the time being to operate their depreciation on the straight-line basis. It may be that after they have seen how it works for others they will prefer to have a new basis. Be that as it may, I have no objection to farmers and fishermen, who are both given special treatment under the act, as the committee knows, by being allowed to average over five years, continuing to depreciate on the same basis as that which has been followed in the past. To this end I have a simple amendment to section 7 which provides that subsection 1, which relates to

Income Tax Act

the so-called recapture provision, shall not apply to farmers and fishermen. Under the regulations the basis for depreciation in the case of farmers will be the base period, as in the past, namely, the straight-line basis.

Mr. Fournier (Hull):

I move:

That section 20, appearing in subclause 1 of clause 7 of Bill 176, be amended by adding the following thereto:

"(6) Subsection (1) does not apply in determining income from farming or fishing."