Mr. A. L. Smith (Calgary West):

Mr. Speaker, over the week end I read in the newspapers that the first live rat had appeared in the province of Alberta. That is a fact

I am not joking about it, and we understand the menace. Strangely enough, it came from the east, and was found in the city of Edmonton. Since we have all received copies of the Edmonton newspapers concerning a certain route for a certain highway, I must say I thought the choice of this animal to blaze a trail through the wilderness was very peculiar.

Hon. Milton F. Gregg (Minister of Veterans Affairs):

Mr. Speaker, I desire to table copies in English and in French of a regulation made under the Department of Veterans Affairs Act by order in council P.C. 1266 of March 10, 1950.

This regulation permits this department to give hospitalization and treatment to veterans who are ineligible under present regulations, but who are covered as to hospital costs by private or provincial government insurance plans; or who, though not insured, have the means to pay for the treatment for which they may apply at D.V.A. hospitals.

The prime responsibility of the hospitals maintained by the Department of Veterans Affairs is to treat those who have pensionable disabilities, and such veterans will continue to have an absolute priority in rights to beds in our hospitals. Treatment under the new regulation will be given to paying veteran patients only to the extent that beds are not required for entitled veterans.

It is the intention to try out these new arrangements for the period of a year, during which their value will be assessed and the appropriate regular scale of rates for the various districts of Canada worked out.

For the immediate future the number of beds available for this purpose will not be great, so that no assurance is given that accommodation will be available for all who apply.

Fuller details on the plan will be available after March 31 next at D.V.A. district offices and through veterans organizations.

Mr. Green:

Will this cover the men of the merchant navy?

Mr. Gregg:

No.

Mr. Wright:

Will the minister file the rates to be charged?

Mr. Gregg:

It will be noted in my statement that the rates are now being worked out. Between now and the end of the month the head of our medical services will consult with all concerned in the districts, and the rates will be determined. The aim is to achieve a rate generally comparable with that charged by civilian hospitals in the various districts.

Mr. Pearkes:

Will the minister say whether the charges made to veterans who have entitlement to hospitalization will now be adjusted to the provincial scheme in British Columbia? Will the veterans who are not able to pay the full amount of the hospitalization charges also be admitted, or will it be extended only to those who are able to pay the full charge made by the D.V.A. hospitals?

Mr. Gregg:

As I indicated in my statement, many of the matters related to the question just asked are now being worked out. To answer the hon. member's second question first, under this regulation only those veterans will be accepted who pay the full amount which will be set for that particular hospital. As to his first question, an attempt is being made to work into the plan those benefits accruing in British Columbia and Saskatchewan under their provincial insurance plans.

Mr. Stanley Knowles (Winnipeg North Centre):

Has the Minister of Veterans Affairs received representations asking for certain improvements in the provisions under the War Veterans Allowance Act relating to widows of non-pensioned veterans? Will consideration be given to those representations before the bill is brought in amending the act?

Hon. Milton F. Gregg (Minister of Veterans Affairs):

I have received the representations referred to, and it is not my intention at the moment to recommend to my colleagues that any amendments based upon those representations be brought forward at this time.

Inquiries of the Ministry INCOME TAX

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

Mr. Speaker, last week a number of questions were asked in reference to order in council P.C. 458, having to do with depreciation. The one of which I received notice was asked by the hon. member for Rosetown-Biggar (Mr. Coldwell), and was as follows, as reported at page 562 of Hansard:

In view of the fact that this order in council was made effective for 1949 taxation and may cause confusion among farmers who, in accordance with the law, filed their interim returns on December 31, will the minister consider delaying its coming into effect for this year?

That, together with other questions, prompted me to say that I would make a short statement on the matter, which I propose to do now.

Under the Income War Tax Act, which applied to 1948 and prior years, no depreciation was allowable except what the Minister of National Revenue, in his sole discretion, approved. The Income Tax Act, which applies to 1949 and subsequent years, provides that allowances in respect of capital costs will be as prescribed by regulation of the governor in council. If the regulation is suspended, the taxpayer will be deprived of his right to make any deduction for depreciation for 1949. It is for that reason I quoted the request for the suspension of the order in council.

Important changes were introduced in the 1949 budget, and, at the request of some members of parliament, the government agreed to amend the law so that certain provisions would not apply to farmers and fishermen. These were specifically the new method of computing depreciation, and the recapture provisions. As soon as possible after parliament approved the legislation, regulations were prepared, approved by the governor in council, and published. The rates applicable to farmers and fishermen are clearly set out therein. These rates have been made uniform with the rates available to all other taxpayers in Canada, having regard to the fact that farmers and fishermen are excluded from certain provisions of the law as mentioned above. For example, the fifteen per cent rate, allowed to farmers and fishermen on the straight-line basis on automotive equipment, results in an asset being depreciated by ninety per cent in six years. The thirty per cent rate, on the reducing-balance basis on automotive equipment, applicable to all taxpayers other than farmers and fishermen, results in an asset being depreciated by 88 -24 per cent in six years.

The comparison, therefore, is rather in favour of the farmer, as I indicated when I was making my reply.