Mr. Wright:

I am sorry, Mr. Chairman.

I thought we were on paragraph 3.

The Deputy Chairman:

Shall paragraph 2 carry?

Mr. Fleming:

May I thank you, Mr. Chairman, for your statement, because I thought we were on paragraph 3.

The Deputy Chairman:

Shall paragraph 2 carry?

Mr. Fleming:

No. I was sorry I had not. entered the house in time to ask a question or to make an observation on paragraph your interjection therefore is most timely and I thank you for it.

The Deputy Chairman:

Order. Since the discussion has been proceeding on paragraph 3, shall we consider paragraph 2 as having been allowed to stand? We shall carry on with discussion of paragraph 3 and come back to paragraph 2, provided that the hon. member for Eglinton is the only one who wants to ask a question.

Mr. Quelch:

Will the parliamentary assistant explain what articles are referred to in

[Mr. Wright. 1

paragraph 3? Does that mean that articles of every kind and character bought by an institution are exempt from sales tax, including hardware, clothes and furniture for the use of the insiitution?

Mr. Sinclair:

That is the intention. There has always been a strong feeling that this exemption which was granted to the hospitals should be extended to a group of institutions which are closely allied to hospitals. For example, in my province, and I am quite sure in other provinces also, there are the homes for incurables which are not properly hospitals. But nevertheless they require, for the treatment of these old people, a great deal of hospital equipment such as hospital beds; in addition, they supply medical equipment which would be supplied free if these incurables, instead of being in a home for incurables, were in a proper hospital. As you know, one of the great attempts being made today is to try to clear our hospitals of that type of case and put old people in old people's homes or nursing homes. That is one of the reasons.

The second class to which this section applies is orphanages. It seemed unfair that this sales tax exemption should be given to all hospitals and not to orphanages. There are some hospitals which are in not too bad financial condition whereas no one knows of any orphanage which is in a good financial position. So this resolution, which has been demanded again and again by members in all parts of the house, has been brought forward. It is going to be necessary when the bill is brought down to spell out clearly just what type of institutions are going to be covered so that there will not be any abuse. We have had to do that in connection with the hospitals too. With the hospitals we take the certification of the provincial government as evidence that they are bona fide hospitals. But the group of institutions which are covered in this resolution will be carefully enumerated when the actual bill is brought down, and goods bought by those institutions for use in those institutions will be free from sales tax.

The Deputy Chairman:

Shall paragraph 3 carry?

Mr. Thatcher:

No. There is one point I am not quite clear on. I think this is a first-class amendment. Suppose one of these institutions goes to a retailer or to a wholesaler to buy certain merchandise. How do they get that eight per cent sales tax back?

Mr. Sinclair:

Provision will be made in the act for refund of the sales tax which was paid.

Mr. Thatcher:

Who will refund the money, the retailer or wholesaler?

Mr. Sinclair:

It will go to the institution. The institution itself will file, as do hospitals today, for refund on those things which were bought.

Mr. Thatcher:

Is that on anything they buy, no matter how small it may be?

Mr. Sinclair:

No matter how small or large.

Mr. Browne (St. John's West):

Reading this paragraph, I notice it contains the words "public institution". Is there any provision to exempt private hospitals from the payment of sales tax on similar materials or articles purchased?

Mr. Sinclair:

The distinction is that a private hospital that has been run for gain or profit has never qualified for this. They had to be public institutions which take in the general public and were supported by grants from the public treasury, provincial, municipal or federal.

Mr. Macdonnell (Greenwood):

Perhaps it is run for profit but makes a loss.

Mr. Browne (St. John's West):

Like the one in Montreal; Notre Dame, I think it is. It is nearly bankrupt.

Mr. Sinclair:

Articles and materials for the use of any public hospital certified as such by the Department of National Health and Welfare, when purchased in good faith for the exclusive use of such hospital and not for resale, are exempt.