April 27, 1950

CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. Coldwell:

It applies to everything, I understand, except these. If the exceptions are placed on Hansard, then it is clear.

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John Ewen Sinclair

Mr. Sinclair:

I am very glad to have the help of the hon. member for Rosetown-Biggar because if the other list were placed on Hansard it would be a list as thick as Hansard.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

I am glad to have that admission from the parliamentary assistant, that the list would be a list as thick as Hansard. Does he mean as thick as Hansard of March 28 or of yesterday? In that connection may I point out that at page 30 in the budget papers appended to Hansard of March 28 the Minister of Finance has indicated that of the total revenues of the federal government last year 49-8 per cent were derived from direct taxation and 39-9 per cent from indirect taxation, the remainder of 10-3 per cent being attributable to non-tax revenue and special receipts and credits.

This amount of 39-9 per cent of indirect taxation includes excise taxes; and by looking at the figures in the table higher up on page 30 they would seem to run to more than half of the so-cailed indirect taxes. It seems to me if we are going to get away from these indirect taxes, which do not bear any relationship to ability to pay, that a very good place to begin would be by way of a further elimination of the sales tax.

Since the parliamentary assistant feels it is not wise to put on Hansard a volume as thick as Hansard, may I ask him if he has any information concerning the percentage of purchases made by Canadian people that have the sales tax applied to them?

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John Ewen Sinclair

Mr. Sinclair:

That would be difficult to obtain. When I referred to a list as thick as Hansard, I would say to the hon. member that he need only step into a jewelry shop, look around him and see all those articles

displayed, every one of which has a sales tax on it, to realize why the exact description of these articles would fill many pages. On the other hand, to give at least the headings in schedule III, might I point out that almost all foodstuffs are exempt, almost all things used in farming, mining and quarrying operations, and equipment for marine and fisheries are exempt, and things connected with religious, charitable and educational activities. A very large list of building materials is exempt.

Perhaps it might be helpful to readers of Hansard if this list were placed on Hansard.

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CCF
LIB

Louis-René Beaudoin (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Has the parliamentary assistant permission to place the list on Hansard?

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Some hon. Members:

Agreed.

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John Ewen Sinclair

Mr. Sinclair:

It is as follows:

SCHEDULE III Foodstuffs

Barley; bread; butter; cheese; cream; eggs, egg albumen and egg yolks; glucose; honey; ice; lactose; lard; rice; salt; soups; split peas; sugar; yeast; yogurt; ... , .

Bakers' cakes and pies including biscuits, cookies or other similar articles;

Cereal breakfast foods not including beverages;

Fish and edible products thereof;

Flour including pastry, cake, biscuit, and similar mixes;

Foods prepared and sold exclusively for feeding infants;

Fruit, fresh, canned, frozen, dried or evaporated;

Grain grits and meals;

Jams, jellies, marmalades, and preserves;

Malt syrup, except when sold for beverage purposes;

Maple syrup; corn syrup; table syrups, molasses, and materials to be used exclusively in the manufacture thereof;

Meats and poultry, fresh, cooked, canned, frozen, smoked or dried;

Milk, including buttermilk, condensed milk, evaporated milk, and powdered milk;

Peanut butter and shortening and materials for use exclusively in the manufacture thereof;

Spaghetti, macaroni, and vermicelli;

Vegetables, fresh, canned, frozen or dehydrated, not including pickles, relishes, catsup, sauces, olives, horseradish, mustard, and similar goods;

Vegetable juices; fruit juices which consist of at least ninety-five per cent of pure juice of the fruit.

Farm and forest

Bees: casein; fertilizer; hay; hops; shorts; straw:

Alfalfa meal;

Animals, living; ,

Baling twine for baling farm produce, and articles and materials to be used or consumed exclusively in process of manufacture thereof;

Beet pulp, dried;

Drain tiles for agricultural purposes;

Farm produce sold by the individual farmer of his own production, not to include flowers, flowering plants or bulbs, when the sales thereof exceed five hundred dollars per annum;

Feeds for fur-bearing animals whose pelts have commercial value:

Forest products when produced and sold by the individual settler or farmer;

Furs, raw;

Gopher poison, and materials for use exclusively in its manufacture;

Grain or seed cleaning machines and complete parts thereof;

Grains and seeds in their natural state;

Harness for horses and complete parts therefor, and articles and materials to be used exclusively in the manufacture thereof;

Hides, raw and salted;

Logs and round unmanufactured timber;

Milk albumen, when for use exclusively in the production of animal or poultry feeds;

Nursery stock;

Oil cake, oil cake meal;

Peat moss when used for agricultural purposes, including poultry litter;

Poultry, cattle and other stock feeds;

Poultry, living;

Preparations or chemicals sold for disinfecting, dipping or spraying and so used in agriculture or horticulture, and materials for use exclusively in the manufacture of such preparations;

Sap spouts and sap buckets, evaporators and complete parts therefor, when for use exclusively for the production of maple syrup;

Sawdust and wood shavings;

Settlers' effects;

Vegetable plants;

Wool not further prepared than washed;

Woollen rolls or wool yarn milled for a producer of wool from wool supplied by him for his own use;

Engines

Internal combustion traction engines, and portable engines with boilers in combination, for farm purposes, or for use exclusively in the operation of logging, such operation to include the removal of the log from stump to skidway, log dump or common or other carrier, and complete parts of all the foregoing, and articles and materials, not to include plant equipment, to be used or consumed exclusively in the manufacture of the foregoing engines, boilers or parts thereof;

Mines and quarries

Crushed stone or crushed gravel;

Gold and silver in ingots, blocks, bars, drops, sheets or plates unmanufactured;

Ores of metals of all kinds;

Sand, gravel, rubble, and field stone;

Marine and fisheries

Boats bona fide purchased by fishermen for use in the fisheries, and articles and materials to be used exclusively in the manufacture, equipment or repair of such boats;

Carrageen or Irish moss;

Cotton duck and cotton sail twine to be used only in the manufacture of equipment for ships or vessels;

Rope and cordage of cotton, hemp, manila or other vegetable fibre, not exceeding one and one-half inches in circumference, for the fisheries, not including these articles for sportsmen's purposes, and materials for use only in the manufacture thereof;

Materials for use only in the construction, equipment and repair of ships;

Materials used as ingredients in canned fish;

Ships licensed to engage in the Canadian coasting trade;

Sinkers, and floats including trawl kegs, when for use exclusively in the fisheries, not including these articles for sportsmen's purposes;

Religious, charitable, health, etc.

Insulin; radium;

Articles and materials for the sole use of any bona fide public hospital certified to be such by the

Excise Tax Act Amendment Department of National Health and Welfare, when purchased in good faith for use exclusively by the said hospital and not for resale;

Artificial eyes;

Artificial limbs, and parts thereof;

Bibles, missals, prayer books, psalm and hymn books, religious tracts, Sunday school lesson pictures, books, bound and unbound, pamphlets, booklets, leaflets, scripture, prayer, hymn and mass cards and religious mottoes and pictures unframed, for the promotion of religion, and materials to be used exclusively in the manufacture thereof, but not including calendars, parish reports, forms, stationery or programs;

Donations of clothing and books for charitable purposes;

Liver extract for use exclusively in the treatment of anaemia;

Memorials or monuments erected in memory of members of the armed forces who lost their lives in the service of their country;

War veterans' badges;

Printing and educational

Manuscript; newspapers;

Books for the instruction of the deaf or dumb;

Magazines and literary papers unbound, regularly issued at stated intervals, not less frequently than four times yearly, and printing paper and printing ink for use exclusively in their production;

Photographs, paintings, pastels, drawings and other art work and illustrations of all kinds, whether originals, copies or proofs, and printing plates made to reproduce the same, for use exclusively as non-advertising news pictures or for illustrating non-advertising articles or stories in periodical publications enjoying second-class mailing privileges, the pages of which are regularly bound, wire stitched or otherwise fastened together;

Text books, printed, authorized by the department of education of any province in Canada and photograph records so authorized for instruction in the English and the French language, and materials used exclusively in the manufacture thereof;

Diplomatic

Articles for the use of the governor general;

Articles imported for the personal or official use of the heads of diplomatic missions, high commissioners representing other of His Majesty's governments, counsellors, secretaries and attaches at embassies, legations, and offices of high commissioners in Canada, trade commissioners, representing other of His Majesty's governments, consuls general of foreign nations who are natives or citizens of the countries they represent and who are not engaged in any other business or profession; automobiles, cigars, cigarettes, manufactured tobacco, ale, beer, stout, wines, spirits, purchased in Canada by any of the foregoing;

Certain building materials

Bricks; building tile, building blocks, and building

stone;

Plaster; lime; cement;

Lumber; sash; doors; shingles; lath; siding; stairways;

Plaster boards, fibreboard, building paper and materials, other than wallpaper, manufactured wholly or in part of vegetable or mineral fibre for wall coverings or building insulation;

Paints, varnishes, white lead and paint oil;

Prepared roofings;

Shower baths, bath tubs, basins, faucets, closets, lavatories, sinks and laundry tubs, not including repair parts therefor, nor pipes and pipe fittings;

Cast iron soil pipe and cast iron fittings therefor;

Glass for buildings;

Furnaces, hot water and steam radiators not to include fittings, for the heating of buildings;

Locks and lock sets;

Excise Tax Act Amendment

Structural steel to be used exclusively for the framework and support of buildings;

Articles and materials to be used exclusively in the manufacture or production of the aforementioned building materials;

Coverings

Usual coverings to be used exclusively for covering goods not subject to the consumption or sales tax and materials to be used exclusively in the manufacture of such coverings;

Fire Brick, Refractories, Etc.

Fire brick, plastic refractories, high temperature cement, fire clay and other refractory materials for use exclusively in the construction or repair of a furnace, kiln or other equipment of a manufacturing establishment, and materials to be used or consumed exclusively in the manufacture of such fire brick or refractory materials;

Processing Materials

Materials (not to include lubricating oils) consumed, otherwise than by waste or wear, in the process of manufacture or production of taxable goods;

Machinery and Apparatus to be Used in Manufacture or Production

Machinery and apparatus, as defined by the Minister of National Revenue, and complete parts thereof which, in the opinion of the minister, are to be used directly in the process of manufacture or production of goods;

Provided that this exemption shall not apply to office equipment or motor vehicles, except diesel powered self-propelled trucks, mounted on rubber tired wheels, for off-highway use exclusively at mines or quarries, and complete parts thereof;

Miscellaneous

British and Canadian coins and foreign gold coin;

Electricity;

Fuel for lighting or heating, but not including fuel when for use in * internal combustion engines; crude oil to be used in the production of fuel;

Natural gas and gas manufactured from coal, calcium carbide or oil for illuminating or heating purposes;

Goods Enumerated in Customs Tariff Items

173, 209b, 236b, 352a, 364, 406, 409, 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409h, 409i, and complete parts thereof, 409j, 409k, 409q, 439c, 440k, 460, 476, 476a, 480, 480a, 538, 663b, 666, 667, 682, 692, 692b, 693(i), 695a, 695b, 696, 696a, 698, 700, 701, 702, 703, 704, 708, 786, 848;

Articles and materials which enter into the cost of manufacture of the goods enumerated in tariff items 409, 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409j, 409k, 409o and 439c, when imported by manufacturers for use exclusively in the manufacture in their own factories of the goods enumerated in the aforesaid tariff items, under regulations prescribed by the minister;

Articles and materials to be used exclusively in the manufacture of goods enumerated in Customs Tariff items 173, 406, 409, 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409h, 409i, 409j, 409k, 409q. 410b, 411, 411a, 411b, 439c, 440k, 476, 476a, 480, 480a, 538, 663, 663a, 663b, 666, 667, 696, 848;

Materials not to include plant equipment consumed in process of manufacture or production, which enter directly into the cost of goods enumerated in Customs Tariff items 406, 409, 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409h, 409i, 409j, 409k, 409q, 410b, 411, 411a, 411b, 439c, 440k, 476, 476a, 480, 480a, 538, 663, 663a, 666, 696.

1948, c. 50, s. 14; 1949, c. 21, s. 12.

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CCF

Robert Ross (Roy) Knight

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knight:

The parliamentary assistant has mentioned exemptions in respect of educational equipment. I am thinking particularly of books. I do know that books on the curricula of recognized universities and schools are exempt from sales tax. I also believe that that sales tax, however, is applied to reference books which professors in universities and teachers in educational institutions require for reference either in connection with work in the curricula or for the improvement of their own standard of education.

This seriously affects professors and teachers who in view of their qualifications, as a class, are not particularly well paid, as compared with people in business, or other vocations. I believe we need more rather than less books. For example the number of books per capita read in Canada compares very unfavourably with the record in other countries, notably Great Britain. It should be the policy of the government to encourage rather than to discourage the reading of books by such a device as placing taxes upon them. I am referring to books of an educational nature entering the country. This should be brought forcibly to the attention of the government. I know it has been asked for in the past, but I do not know to what extent the government has given it consideration.

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John Ewen Sinclair

Mr. Sinclair:

I agree with the hon. member that it is an important matter, and it is a point which has been discussed at some length. I might point out, to begin with, that a very great range of books today are free from sales tax and, if they are imported, from customs tariff. They include:

Books which are included in the curriculum of any university, college or school in Canada for use as textbooks or as works of reference, not to include dictionaries; printed books, pamphlets and cards for use in schools to test the degree of intelligence of pupils; all books for bona fide libraries, and being the property of the organized authorities of such libraries and not in any case the property of individuals or business concerns, under such regulations as may be prescribed by the minister; directories for free reference libraries; books received from free lending libraries abroad, subject to return under customs supervision within sixty days.

The great difficulty with the class of books to which the hon. member refers, those in private possession, is to draw the line between what are educational books and what are not. It is a very difficult line to draw, a line which also greatly affects these gentlemen in the taxation division, because obviously they have to keep abreast by buying these very expensive books. At the moment the best division that can be devised as far as tax purposes are concerned is the one I have just read.

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SC

Ernest George Hansell

Social Credit

Mr. Hansell:

I trust the question I am going to ask will not be considered trivial, because I am interested in the welfare of the boys and girls of the country. I should like to know the minister's answer when I ask him how the repeal of the excise tax on ice cream and drinks prepared from fresh milk is passed on to the consumer. The boys and girls still buy ice cream cones that are scooped out of the freezer with the same scoops, and are just as small as ever. They pay the same prices as before. Drinks prepared from fresh milk are still poured into the same size tumblers we have always used, and we still have to pay the same price. It is an admirable thing to repeal the excise tax on these articles, and I am not disappointed with that; but so often these tax reductions or removals are not passed on to benefit the consumer. I should like to know how the repeal of that tax is passed on to the benefit of the consumer. I do not know why this budget should not go down in history as the government's ice cream budget. On the whole it has been cold comfort to most people. When the youngsters cannot get any more ice cream for their money than they got in the past, or a larger drink of malted milk than in the past, certainly it is cold comfort to them, though I do not suppose the boys and girls know very much about budgets.

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John Ewen Sinclair

Mr. Sinclair:

Well, Mr. Chairman, I am forcibly reminded of the debate in this connection last year. At that time the hon. member for Melfort, who is sitting right in front of the hon. gentleman, raised the same point. I told him then our calculation showed that the saving would be about one-sixth of a cent on an ice cream cone and one cent on a brick. As I recall it, the response to that observation, particularly by members coming from Quebec ridings, was that that was all right, because it would be the primary producer who would pick up that extra saving. Obviously it is impossible for the retailer to pass on a saving of one-sixth of a cent, but it does make his ice cream a little more attractive to sell in competition with other goods a child might normally buy with his five cent piece. As far as the saving on ice cream bricks is concerned, I believe in some localities the saving of one cent has been passed on. Once again, however, I do not think the intent here was to aid either the child or the retailer. The plea I heard last year was for aid to the dairy farmer, who had been hard hit by the sale of margarine.

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. Coldwell:

One other way would be to fix a standard for ice cream, and say that the ice cream could be somewhat enriched. It seems to me the ice cream we have been

Excise Tax Act Amendment getting for the last several years has been made very largely with powdered milk, and with very little cream in it. If they put a little more cream in their ice cream I think it would help a great deal.

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John Ewen Sinclair

Mr. Sinclair:

I shall draw my hon. friend's remarks to the attention of the Minister of Agriculture.

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PC

Gordon Knapman Fraser

Progressive Conservative

Mr. Fraser:

Last session I asked the Minister of Agriculture if the cream content of ice cream could not be raised, and shortly afterward I was informed that it could be, and it was raised from 10 per cent to 13 per cent.

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John Ewen Sinclair

Mr. Sinclair:

Thank you.

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SC

Victor Quelch

Social Credit

Mr. Quelch:

Does the retention of the sales tax on schoolbooks also apply to all school equipment?

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John Ewen Sinclair

Mr. Sinclair:

No, it does not apply to all school equipment.

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SC

Victor Quelch

Social Credit

Mr. Quelch:

What is the situation regarding school busses? I believe the excise tax was taken off last year, but does the sales tax still apply?

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John Ewen Sinclair

Mr. Sinclair:

The excise tax was taken off; the sales tax still applies.

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April 27, 1950