The Deputy Chairman:

Shall the paragraph carry?

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

No. I would suggest that the government should give consideration to a revision of that section to enable private institutions which are really being operated for charity, such as those institutions or hospitals which are conducted by the Sisters, to get this advantage.

Mr. Sinclair:

Those are covered in this, as are the hospitals.

Mr. Benidickson:

They could be certified.

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

But they are private institutions, are they not?

Mr. Sinclair:

They are not private institutions in the sense that they are run for gain or profit. Such hospitals have been covered in this previous section and it is the intention to cover in the bill such religious hospitals, orphanages or old people's homes. In the bill it will be necessary to spell out carefully exactly the type of public institution to which we are going to give this aid. We

Excise Tax Act Amendment do not intend this aid to be given to old people's homes which are run for profit or hospitals which are run for profit.

Mr. Rowe:

Old people's homes that are run by a municipality will be included?

Mr. Sinclair:

If they receive grants from the provincial government by way of assistance, that qualifies them.

Mr. Shaw:

I for one support paragraph 3 in its reference to these institutions and the exemption from sales tax. I notice it refers to the aged, infirm or incapacitated persons. This brings to my mind an important matter which I have brought to the attention of this committee upon previous occasions. We have in Canada, for example, an organization known as the Red Cross which solicits funds and does excellent work for the unfortunate in cases of flood, fire, disaster and so on. After working hard to procure the money, from which it gets no personal benefit since it is used for the assistance of the unfortunate, the government jumps into the picture and grabs sales tax on many of the commodities which it purchases and gives to the unfortunate. I have often wondered what justification there could be for the government grabbing this slice.

Mr. Sinclair:

The slice to which my hon. friend refers could best be referred to as a crumb. All items used in Red Cross hospitals are exempt, just as are those in any other hospital. Most of the aid given by the Red Cross, as I recall it, is in the nature of food, and food is exempt from sales tax, or medical equipment; and you will find that most medical equipment is also sales tax free.

Mr. Shaw:

It is all a question of whether you kick a man hard or not so hard. There is a principle involved. While I appreciate the fact that many things are exempt, it is true that certain things still bear that sales tax. It was a matter of principle, not so much a matter of dollars. If there is such a small amount of money involved, there should be all the more reason for the government cutting the sales tax out there, because a moment ago the parliamentary assistant emphasized the necessity for procuring revenue as his reason for the government not giving favourable consideration to the other matters which I brought up a few moments ago. This was just a matter of principle.

Mr. Sinclair:

The matter of principle goes a little beyond the Red Cross. There are many good charities in this country; there are some doubtful charities.

Mr. Shaw:

I suppose so.

Mr. Sinclair:

The thing is, any act applied to charities would have to indicate very care-

1976 HOUSE OF

Excise Tax Act Amendment fully the qualifications of the charity, and that is a very difficult thing to do. It is much easier, as far as administration is concerned, to see that the principal thing is handled by the Red Cross, and all things handled by Red Cross hospitals are sales tax exempt.

There are many old folks homes that may be operated for gain. How will this repeal apply to the Salvation Army, which operates old folks' homes?

Mr. Sinclair:

The Salvation Army today have their hospitals classed as public institutions and if they run their old folks' homes -and I am sure they do-in the same fashion, they will get it. The type of old folks' homes which will not be exempt are fairly common on Vancouver island. They are places to which people who have some means actually go and pay for their care. People live together in a small community in pleasant cottages, and these cottages are classed as old folks' homes. They are not in the same category as hospitals run by the Salvation Army or by a municipality or a province.

Mr. Knowles:

I should like to know if institutions which at present can pass these other requirements and receive aid from institutions like the Red Feather will qualify?

Mr. Sinclair:

I would ask the hon. member to wait until he sees what is actually in the bill. Let us not discuss it in too much detail just now.

Mr. Wright:

Before the resolution carries I want the parliamentary assistant to answer the question I raised with regard to United States contractors coming into Canada with equipment and bidding on contracts against Canadian contractors who have to pay sales tax, excise tax and customs duties on their equipment.

Mr. Sinclair:

I would ask the hon. member to hold that question until the third group of resolutions on the customs tariff are up. It is a very interesting question. I myself would like to have the answer to that. If the hon. member will ask the question when the third set of resolutions on the customs tariff are up I shall have the answer then.

Resolution 3 agreed to.