February 13, 1956

LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

I am sorry I misunderstood the hon. member, then. He has cleared up

Income Tax Act

what I thought was an unusual situation in the motion before us. It will be seen, however, Mr. Speaker, that if this motion were to carry it would be impossible, as I said a while ago, to estimate the cost to the public treasury. I know that hon. members opposite will say there will be no cost to the public treasury because the motion calls for consideration by the government of the suggestion put forward.

On that point we had a rather unhappy experience in recent years. There was a time in this house when private members' day was an occasion on which private members might bring forward any motion or bill they had in mind which would benefit the people of Canada. There was a certain practice, and I would use the word "courtesy" as well, that when the hon. member who presented the motion had made his argument, it was generally permitted to pass in the sense that it did not involve the government. It was merely an expression of opinion by this particular hon. member that this was something he felt should be said, and that all hon. members ought to be in the same position and the same consideration should be given because, in fact, they are hon. members and this is an idea they would like to put forward.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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CCF

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

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

Mr. Knowles:

How many times since the end of world war II have such motions been allowed to pass?

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

I could not say at the moment, but I will take your word for it.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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CCF

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

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

Mr. Knowles:

Not very many.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

But times seem to have

changed. Instead of having that type of motion, we now have motions which require the government or suggest the government should give consideration to the proposal, and on the one occasion we tried this out we were told after the event that the house had, in fact, decided this ought to be done. This was a departure from what had been the case in former times, if not immediately before that event occurred.

The government is put in the most awkward position of not being allowed, without some detriment, to extend to hon. members opposite the courtesy of permitting an argument to be made and allowing the matter to rest at that point. For that reason I approach this motion in the same light that we have approached other motions since this unhappy incident I mentioned, and feel that the government has to take-

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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CCF

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

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

Mr. Knowles:

Unhappy on your side.

Income Tax Act

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

It was not unhappy on our side. I have a clear recollection that the parliamentary assistant to the then minister of finance stated that because the motion asked the government to give consideration, the government would in fact do so. I have a clear recollection in the following session, or even later in that session, of being told by the opposition that parliament had decided this particular matter ought to be done.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

Did you believe that?

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

I did not believe it, but I think it is unworthy of opposition members to suggest it under the conditions under which the motion was allowed to pass.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

Why worry about it if you do not believe it?

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

I have not many worries about the opposition generally, but I have some worries about my position as Minister of Finance, sir. So long as we are placed in that position we are bound to consider what we ought to do when a motion of this kind is presented. If we reject the motion it would not indicate that the Minister of Finance or anyone in this house, did not consider this was worthy of consideration. Every form of relief for the taxpayers of Canada is a matter for consideration, and should be on all occasions.

On the other hand it would be unwise to draw any conclusion from a motion which was adopted that the government felt it ought to follow that particular motion immediately, or even in the distant future. For that reason, sir, and particularly because at the moment we have under consideration a health or hospitalization scheme, which as I have said before is going to be most costly to the federal treasury, it seems to me that all matters having to do with medical expenses and income tax in connection therewith should not be decided affirmatively.

For that reason, sir, I am going to suggest that while I intend to vote against this motion, it is only because of what has already occurred and of which I have given an example, and it does not indicate that we are not giving careful consideration to all matters which affect the taxpayer, especially those who are obliged to spend considerable sums of money with respect to medical expenses.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Frank A. Enfield

Liberal

Mr. F. A. Enfield (York-Scarborough):

Mr. Speaker, hon. members will forgive me if I am a little repetitious in my remarks. At this stage of the debate one is bound to repeat arguments that have been so ably made already by hon. members who have

spoken. However, I do want to say a few things about the resolution. I think the mover, the hon. member for Winnipeg South, is to be congratulated on his thought-provoking resolution. Certainly the discussion that has taken place has been to me at any rate most valuable, though I do not think I can agree with the premise, or the principle, on which the hon. member acts.

What is the principle behind his resolution? Well, he said the principle was that the individual be allowed to include in his tax deductions all prepayments for medical expenses. He said the taxpayer could now include medical expenses up to a certain point, but not any prepayment. He pointed out that he thought this would be important to the small taxpayer particularly.

I think he more or less presupposes that we are all in agreement with the real underlying principle of a resolution of this kind. The underlying principle is that there should be a reduction in taxes. This of course puts the discussion on a much broader basis.

With respect to the hon. member, I would have hoped that when he introduced his resolution he would have given us a better case on which we could base our judgment, first of all as to whether a reduction in taxes was necessary at all at this time, and second, whether this was the best type of reduction to make in the circumstances.

Naturally we would all like to introduce measures that would reduce taxes. It is very nice for the taxpayer, a very popular and very pleasant thing to do. I am sure the government was most happy, when the budget was brought down in March of 1955, to pass on a considerable reduction in taxes to the taxpayer, but it is not always easy to decide on the best method of reduction, and I suggest this resolution does not outline a particularly good method.

First of all, the resolution itself is rather confusing. A little more care could have been taken in its preparation. I again say, with great respect to the hon. member, that clause (a) sets out that he can deduct from his taxable income first of all his medical expenses as now determined. I was completely taken in by this clause when I first read it. I felt that what he wanted there was a deduction of all his medical expenses from taxes. He wanted to take off the 3 per cent limit, which was suggested in a bill brought in by the hon. member for Winnipeg North Centre some time ago.

Apparently that is not so. Clause (a) means that you can deduct medical expenses as they are now determined under present regulations. Of course if you take that option

then the principle is drained completely from the resolution. Fortunately for the hon. member for Winnipeg South, the hon. member for Winnipeg North Centre presented an amendment which does to some extent get around this defect, and it was accepted by the mover. He said you may include in your deductible medical expenses either any amounts billed and paid under a contributory insurance or hospitalization plan, as is now provided, or- and again this is an option-the taxpayer may take any premium or tax paid by him for insurance against sickness or accident under any plan of health insurance.

Clause (b) is most interesting. Presumably the resolution is an effort to assist the small wage earner. Under clause (b) you may take any premium paid for insurance against sickness or accident. This has been mentioned by previous speakers, but I should like to emphasize it. This would, of course, introduce a great inequity into the scheme because the number of policies for sickness and accident are legion. If you can afford it, you can insure yourself for any length of time against almost any type of sickness. Naturally if you were going to be allowed to deduct from your taxable income premiums paid for the most expensive type of sickness or accident insurance, then this would be an excellent way, under the proposed resolution, to gain the effect of health coverage completely at the expense of income tax, and of course not provide any particular benefit at all to the lower income groups.

I emphasize "the lower income groups" because the hon. member who moved it mentioned in the first instance that this resolution would be most important to the small taxpayer. Therefore I would suggest that in clause (b) of the amendment you have a great drawback in the wording of the resolution, and no doubt if this ever reached the point of the introduction of a bill some such limit could be introduced, or would be introduced, I imagine, to protect the taxpayer and the government against what is to me an obvious problem in the resolution as drawn.

I suggest that the resolution is too wide and too broad in its scope. If it were to be of any use at all, certainly it would have to be gone over with great care to take into account what limits one should put on the deduction concerned.

What about the resolution in the light of our pending health insurance scheme? This subject has also been dealt witth in this debate. I think you can accomplish the same purpose the resolution tries to accomplish by providing a health insurance scheme on as cheap a basis as possible. In other words,

Income Tax Act

instead of providing what must be a rather complicated method, a complicated set of regulations, for the deduction of certain allowances, why not say to yourself: Well, we are in a position to save the taxpayer some money. We would like to pass on the saving in as fair and equitable a way as possible. We are contemplating the institution of a national health insurance scheme. The best way to pass on the saving is to cut down the cost of the scheme. Then everybody, regardless of their position, gets a fair share of whatever saving or whatever possible tax reduction you can achieve.

To my mind the prospect of such a health insurance scheme takes away any real necessity for a resolution of this kind at this time. If you did it in that way, naturally you would be able to pass on the saving. You would achieve the same result with less work, less administration cost and less of the bureaucracy that my hon. friends in the official opposition are averse to increasing. In my opinion this would certainly achieve a better result on the whole for the lower income group.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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CCF

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

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

Mr. Knowles:

Will the hon. member permit a question?

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Frank A. Enfield

Liberal

Mr. Enfield:

Yes.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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CCF

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

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

Mr. Knowles:

He is aware of the fact that the plan proposed by the federal government covers only hospitalization. This resolution discusses medical expenses generally. Would he implement the principle he is now advocating by having the government plan include medical expenses as well as hospital expenses?

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Frank A. Enfield

Liberal

Mr. Enfield:

I really do not see that it would make that much difference, because whatever saving you pass along on any type of hospital insurance scheme would be money in the pocket of the taxpayer. Whether the actual scheme itself covers the whole gamut of health insurance and health facilities would not, it seems to me, make a great deal of difference.

For example, you could take the argument a step further and say that we might have a health insurance scheme to cover hospitalization, diagnostic services and medical services, the three things. You could argue whether the same principle would not apply if the health insurance scheme were carried further and covered other aspects of health problems such as loss of income during a period when one is ill.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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CCF

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

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

Mr. Knowles:

You are coming along.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Frank A. Enfield

Liberal

Mr. Enfield:

Well, we all hope that this scheme, if we get one, and we hope we will,

Income Tax Act

will cover a fairly wide field and that taking into account our responsibilities to the taxpayers, we will be able to broaden the scheme as time passes. The point raised by the hon. member was raised earlier by the hon. member for Nanaimo, and I noted at that time that I did not feel it really changed the principle of my suggestion.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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PC

Owen C. Trainor

Progressive Conservative

Mr. Trainor:

Will the hon. member permit a question?

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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LIB

Frank A. Enfield

Liberal

Mr. Enfield:

Yes.

Topic:   INCOME TAX ACT
Subtopic:   SUGGESTED ALTERNATIVE PROVISIONS FOR DEDUCTION OF MEDICAL EXPENSES
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February 13, 1956