Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697721972873.pdf (Canada)
2324 HOUSE OF COMMONS Private DH!s he required to state that this credit polley will cosl the <lpplicant 2 per cent per month, the nprrnprbte r:lte of npproximntcly 24 per cent per annum.

The cnrd hus sorr.e ether lhin~s to ~ay: 13endid.11 FinJ"ce Sj'st~m's cash-creuit card-a v:Ii""hlc (,.'"tr..

at no'l ""lea cost!

rlh;o-~ This ""clusi,·" c(lr<!

1(!

"ntiJi~s Y"U !rllll'le,liatel.v 011 Ill" mor" than %0 "mliat"d ncncf\('i.11 Finllnce and in C,'nndn.

United S,v~kll'l H:lwail.

With it.


ynu may s::ct ""tr.1 ":Ish in a this hurry_dth"r v"luabl~ ,,"nl only at Benefielal Fina,,<·c Syst-;,m om,·cs.

..

I hnmc nr nw ... y.

You Slntcs l:ct I sl")ultl like hon.

members to listen care· fully to this sentence as I read it again: This e"cl,,~i;'c "1:d id"ntlfles you Imn,,,diately at the more than %~ ... lfiliat"'d Bencfklnl Finance Syst"m offi"es and H"waiL in Can"da.

tinltcd States In other words.


thi~ company which is asking parliament at this time for a change in its name from the Personal Finance Com pany of Canada to the Beneficial Finance system is in fact already using the latter it has not had name despite the fact that I can remember the approval of parliament.

the many inst:mces of hon.


members of government announcing government policy the house and saying that outside of the government intended to put particular pro posals before parliament, but before those proposals wcre placed before parliament the facts of those proposals had become the law af the country.

Many of us have said it was an affront to parliament that the government inaugurate a by statement should in fact :hange in the law.

But here is an affront ta ;J3rliament by a private company.
This com pany has the effrontery to come to parlia ment now and ask to have its name changed when in fact the company has already been using the new name in the normal course of its business.

I wonder if one of the reasons the com· p<lny felt it could use this kind at advertising and could use this name in its Canadian literature is because D. K. MacTavish is a member of the company and appeared as the legal counsel for the company in proposing this bill when it was of Commons.
the board of directors or the House brought first to An hon.

Member: Who is he?

a Mr.

Argue: Someone says "Who is he?"

I have here statement made by Harvey Hickey in the Globe and Mail of March 2 in which he rcfers to Duncan K. MacTavish as an Ottawa the n.. tional Liberal and president of federation.
lawyer this company has used the The fact new name the approval of parliament for the official change that in its advertising without (Mr. Arl/U", I the whole subject of small should be sufficient reason for us to seriously the bill which is now before the comider house.

We halle already had this subject rderred to the han king and commerce "am.

I expect and mittee by wny of Bill No.

51. r hope that loans cDlnpunies will be thoroughly studied by han.
members of parliament who serve on the brmking and commerce committee.

After we this entire h" ve hnd a thorough study of field l'Ie would be in 0. much better position to judge whether or not 0. bill like this should in fact be passed by this house.

If we say that we approve of this change at this time I wonder if we are not tying our own hands as far ns the committee is concerned.

We ShOllld have the opportunity to permit the bank:ng and commerce committee to study this whole question thoroughly.
By so doing we would be able to judge in a much more intelligent manner whether or not it is advis able in fact for this bill to be passed.

Without having had the opportunity to learn the facts of the case from witnesses I certainly intend to vote for the six months hoist and later to vote against second rending of the bill.

Some hon.

Members: Six o'clock.

Mr.

Argue: Mr. Speaker, may I move the adjournment of the debate?

On motion of Mr.

Argue the dcbDte was adjourned.


At six o'clock the house took recess.

AFTER RECESS The house resumed at eight o'clock.

THE BUDGET A~NU"L FINANCIAL STATEMENT OF THE MINISTER OJ" FINANCE Hon.

W, E, Harril.

moved: (Minis!er of Financel That Mr.

Speak"r do now leave th" chair for th" house to go Intu "",nmillee of ways and means.
He said: Mr. Speaker, on the first day of spring one cannot help feeling buoyant and optimistic, and I think that what I have to sa)" tonight will bear out that we have had a buoyant and optimistic year.

The world economic situation has during the past year shown nothing but solid progress in almost every civilized country.

While the increase in economic activity has been most in apparent creases have also occurred in the United Kingdom.

continental Europe and other parts of the world.


and the ft.ow of world trade has been very considerably enlarged.

For many in North America.

substantial MARCH 20, 1956 2325 countries, this improvement came on top of an impressive growth of economic activity in previous years.
and consumption expenditures Continued rapid expansion in both invest· ment has brought on a renewal of inftationary pressures in many countries; but it is highly encourag· ing that tendency has been to counter these pressures by fundamental mone tary and fiscal policies which, in our judg· ment, go to the root of the trouble, rather restrictions than by a relapse into ph}'sical and controls.

the general As for our own economy, hon.


members will recall that the situation at the time of the It was last budget was somewhat clouded.

clear that we were beginning to recover from the recession of 1954, but the rate of recover)' was still uncertain.
To me it seemed that the prospects for economic expansion were rea sonably good, and I based my revenue fore Casts on the expt:('tation that there would be an improvement of at least 5 per cent in pro the gross national prodUct duction, and that would reach an annual rate of about S26 billion by the end of the year.

There were many who felt that such a view was altogether too sanguine.
As a matter of fact, at a later time during the year, someone wrote that he could only conclude that some of the optim ism of the Minister of Trade and Commerce had rubbed off on the new Minister of r would like to say that I would be Finance.

happy if other qualities of the Minister of Trade and Commerce were o.lso to rub off on me.

Mr. Fleming: Be careful.


Mr. Harris: Since the average cost of the Canadian In the event, economy advanced rapidly and continuously throughout 1955 and total production for the year as a whole was about $26~ billion.

This was some 10 per cent greater than 1954 and than the level of nearly 9 per cent higher 1953. living re mained fairly stable.

there was a significant increase in the wealth and welfare of most Canadians.
More people were at work than ever before, unemployment was greatly re duced, wages and incomes were higher and the consumption of goods Increased substanti ally.

By virtually every standard, 1955 was a year of exceptional economic advance.

Nevertheless, some sectors of industry and acriculture have not fully shared in this rate of progress.

For example.
For example.

wheat farmers had a much better than average crop, but during the first part of the crop year were unable to deliver as much as all of us would like to ha~e seen.

However, this has changed ma terlally since the session be"an and sales h • • ave greaU)' improved.

The Budget-Mr. Harris Geography and climate impose upon us a substantial amount of winter unemployment but conditions are distinctly better this year than they were last winter.
Part of this improvement is due to the response of in dustry and commerce to the program of pro moting more winter employment initiated by my colleague the Minister of Labour.

in However, admitting some unevenness the rate of expansion, it is clear that Canada as a whole enjoyed an extraordinarily active the and encouraging year in 1955 and that momentum of expansion is still carrying us forward.

least Perhaps I may be permitted to emphasize certain features of this expansion.
The prog ress we have made over the last year or more can be related to at three important factors: a high level of exports, a large pro gram of capital investment.

including residen tial housing.

and a continuing increase in consumer expenditures.

These were the things Lhat caused production, employment and in comes to grow so rapidly.

But behind all lhese things lay something less tangible, but fundamentally important and essential,-the confidence ot Canadians economic future of our country.
in the The particular forces which encourage eco nomic expansion are so inter~related that it is difficult to single out the one which was of imporlance in 1955.

However, most think that the renewed growth of I would put exports first on my llst.
I and companies-and of Canada's abillty to produce and export is a measure of the enterprise of those Canadian individuals non residents too--who have explored and de resources, or planned veloped our natural these new or enlarged mills factories and mines, and of the workers and'technical statts who build or operate them.

On the demand side, the briskness of the United States economy in 1955 was the biggest single factor in the expansion of our exports.
Our exports to the United States increased by $250 million out of a total increase in exports of about $400 million.

However, the increase in our exports to our other traditional markets overseas in 1955 was also impressive.

There was a 20 per cent increase in our sales to the commonwealth, to western Europe increased 11 per cent.
exports and With a very large program of capital in vestment taking place in Canada, and with consumption expenditures running at higher levels, imports also rose sharply in 1956.

But it should be noted that fully two-thirds of our increased imports are accounted for by in creased raw materials, machinery and equip ment for Canadian factories and industries.
Over $400 million of the $600 million increase 2326 HOUSE OF COMMONS The Bltd(Jct-Mr. Harris in imports consisted or such items as indus trial mal:hinery and equipment, primary iron and stL'CI, aircrilft and automobile parts, farm machinery, crude petroleum and rubbcr, raw cotton and relW wool.
Our heavy expansion of capital investment, part of which was made possible by foreign investment, not only made neCeSSi)ry these lilrge imports of c<lpital goods and raw materials, but also created many tbousands of new jobs all over the country in secondary trade and industries which benc lited Crom ail this increased purchasing power.

The result of a greater increase in imports was a deficit on commodity trade of $185 million.
This was mainly responsible for thc increase in the tot<ll current-account delicit, which mnounted to $665 million last year.

into long-term capital The net Can<lda was Jess in 1955 than in 1954" the net inflow of short-term capital was greater, and there was no marked ch<lnge in Canada's official rcserves of gold and dollars.
The value in Canada rose of the United States doU<lr from approximately 961 cents Canadian at the end of 1954 to approximately 99i1 cents Cana dian at the end of 1955. inflow of Changes in the relative levels of interest rates in Canada and the United States madp.

the Unit,~d States market less attractive for the issue at new Can<ldian securities than was the case in earlier years.

This factor also stimulated a greater volume of repur chase by Canadians of Canadian securities held abroad.
in and comprised II per cent The !

::::cond dynamic element in the econ omy last year was the sharp growth in the amount of new capital expenditure.

Here, the optimistic expectations of the eorly too, part of last year were more than confirmed by events.

New capital expenditure rose by over to a total exceeding $6 billion and absorbed 23 per cent of our total national output.

Investment one housing quarter of all new investment.
Parliament has attached a great deal of import<lnce to residential COi'!struc the encouragement or housing tion legislation 0.1 1954 made provision for further g()vernment encouragement and assistance by me;Isures that are familiar to all of us.

The success which attended these efforts has In the last ten yenrs been most encouraging.

almost a million new homes have baen built and our cities and towns are bcing visibly transformed.

by the growth of new suburbs.


J955 was the first full year or participation by the chartered banks in the financing or insured residential mortgages and their entry into this field has considerably broade:lcd the market for new home financing.

127,000 new ownership.

The home [Mr. Harris,J dwelling units were completed during the year, an increase of 25 per cent over the prcvious y:::ar.

increase, Another important stimulus to the expan.


:;ion of the economy in 1955 was, of course, the increase in consumer expenditures on goods and services.

This was particularly strildng in the case of durable goods.

Total sales of consumer goods and services in cre3£ed by nearly 7 per cent or almost tWice the increase of the previous year.

Allowing for the growth of population, this means that the average individual the consumption of showed a 4 per cent the largest annual increase since the war.
A significant portion of this increase wos the resul t of a wider usc of instalment credit.

but the prin-' cipal explanation is the growth of employ ment and the increases in wages and salaries.

A year ago I referred to the part played by lederal welfare and income maintenance policies economic activity.
During 1954 when busincss and employment in many sectors were foiling to such measures as rise, or even declining, unemployment family allowances insurance, and the like automatically served to main tain incomes and employment.

I have heard the tax reductions of my last it said that b1.idgct helped as well.
stabilization the of in During 1954 the polley of the Bank or Canada was directed towards easy monetary conditions and the positive encouragement of enterprise so far as the availability of credit was concerned, and this policy was still in force at the beginning of 1955.

As the slack in the economy was taken up, monetary policy shifted to one of neutrality and then to one of restraint.
With the rapid growth of production in almost every direction, the possibility of shortages of such items as steel, cement.

building materials, and of certain kinds of labour began to appear, and in these circumstances the Bank of Canada's opera tions were directed towards moderating the rate of expansion in the use oC credit.

increasingly Looking now to the rear ahead I feel that th2 evidence points to a contilll.
:ation of the the economy enjoyed in 1955. progress that Both in the United States and overseas, the economic situation remains favourable so that we can anticipate a further growth in exports.

Within Canada itself there are many other that 1956 should be a year of indications further expansion.
The present investment intentions of industry, business and govern ments are much higher than they were last yeor, according to the survey tabled by my colleague the Minister of Tradc and Com merce (Mr. Howe) recently.

We rannot expect.

howe'/er.

to see a physi cal rate of growth this year equal to that of MARCH 20.
19~6 2327 1955 when we had a certain amount of slack to begin with so I think that for purposes of revenue forecasting I should not count on an increm;(: in the total national product of more than 5 per cent over last year, this being about the average annual rate of increase in recent years.

Assuming stable prices, aver age crops and no untoward events, this would give a gross national product of close to $28 billion.
finance but activity without The blessings of an economy operating at a high level are pleasant ind<!ed to a minister of the)' bring with them new responsibilities for aU of us.

The objective should be to maintain a steady growth in the process of economic expansion giving rise to inflation and instabil ity.
Consequently, in times like the present when private expenditures are expected to rise still further, the federal government itself has a special its fiscal policies continue to be directed towards economic stability.

The use of the flexible instruments of monetary policy is also being directed towards this objective.

But careful judgment and wise spending policies are not solely matters of concern to public authorities.

responsibility of each They are the normal one of us, role in the economy.
responsibility to see that regardless of his (:OVERNMENT ACCOUNTS, 1955·56 I turn now to report on the government's accounts for the fiscal year which will be closing a few days hence.

At this time I can indicate only approximate figures because it will be several months before our books or account can be finally closed and audited.

Hon.

members will recall that a year ago I budgeted revenues this year at $4,202 mil lion, expenditures Dt $4.362 million, and con sequently a deficit of $160 million.
The result I am glad to say has been considerably beltcr.

In tact, our revenues will be about $4,385 million, or 4 per cent greater than forecnst, our expenditures $4,437 million, or 2 per cent above forecast, and our deficit will be $52 million, or only about one-third of my earlier expectations.

The increase in revenues is a reflection at a rate ot recovery and expansion somewhat greater than I had felt justified in assuming a year ago.
Of the increase in expenditures Over toreeast, which amounted to $75 million, $20 million represents the wheat storage costs absorbed this year in accordance with legisla tion passed a few weeks ago; $5 million is on account of the support of agricultural prices and $15 million represents higher charges for interest on the public debt.
In addition to our outlays for government 8eTVices which are included in the budgetary The Budget-Mr. HarTis accounts, we have as usual made loans and advar:ces and disbursed large sums for a variety of other essential purposes.

During the fiscal year these outlays, all of which of course have been authorized by parliament, will amount to $285 million.

To meet them we will have substantial sums available from non-budgetary sources, details of which arc given in the white paper.
Although the budgetary deficit is $52 mil lion, O:Jr cash balances at the year end will be about $295 million higher than a year ago.

This is the result of receipts of $385 million from annuity, insurance and pension accounts, the repayment of loans and investments and other Ilon-budgetary sources plus an increase of S245 million in our debt outstanding in the hands of the public, less the $285 million paid out tor loans, advances and other non-budget ary purposes.
Our public debt operations during 1955-56 have included the redemption or refinancing ot a large volume of matured or called bond issues.

A Ilotable feature of the year's opera tions has been the net increase of about $710 million in the amount of treasury bills out standing reflecting the government's desire to meet the growing market demand for short term securities.
Net sales of Canada savings bonds series 10 are estimated at $645 million, In addition to the refunding or conversion of treasury bills, new securities were issued Olmounting to $3,230 million and old securi· ties were redeemed or acquired for our sink ing fund or securities investment accounts in the amount of $2,985 million.

As a result, our unmatured debt held outside these gov ernment accounts was increased during the year by $245 million.
Interest rates rose sharply during the year 3t home and abroad, particularly on short term securities.

The average rate of interest on the government's unmatured debt will be ;)bout 2,86 per cent at the year end compared with 2·74 per cent at the beginning of the )·ear.

I should like at this point to report briefty on the operations of the old age security fund during the fiscal year now ending.

As hon.
As hon.

members know, pensions at $40 a month are paid trom the tund, the revenues 01 which arc del'ived from a 2 per cent tax on sales, a 2 per cent tax on corporation profits and a 2 per cent tax on personal incomes (with a maximum individual payment of $60>.

Pen sion payments tram the fund during the ye3r are about $366 million, revenues about $316 million and the deficit lor the year ot about $50 million has been financed by a temporary loan from the Minister of Finance.
Following the pr3ctice introduced last year I propose to in the June supplementary ask parliament 2:128 HOUSE OF COMMONS The Budoct-I'tlr.

Harris estimates for authority to charge the past year's deficit to 1956-57 expenditurAA.

n:O£/lAI.·pnoVI="CfAL R£LATlO~S The subject of federal-provincial relations has taken up a good dc:al of our time during the past twelve months.

There h:a ve been lour meetill~s of premiers, as well as other conferences or ministcrs.
r..1st April wc met to agree on an agenda and to conduct a gen· eral consideration a3 to those Questions which seemed to be 1T'.0st urgent.

In June we laid the ground work for a federal contribution to provincial cosls of providing unemploy ment assistance not covered by unemploymcnt rn insurance October we disc-ussed the whole field of federal-provincial In Janu ary we examined the Question of health insurance.

and oUter relations.

policies.


federal tlscal It was also in January that the Prime Min ister communicated to the provincial govern ments detlnite proposals respecting federal provincial fiscal arrangements, and these were the subject of the last meeting of premiers In commenting upon our eleven da.

)·s ago.

federal-provincial tlscal proposals this eve· ning, I do not need to go into detail, because parliament has been kept fully infonncd.
In broad outline we have proposed: that First, the federal government make unconditional equalization payments to pro vincial governments to bring their yield of certain standard tax rates applied to per~onal incomes, corporation incomes and successions, on a per capita basis up to the average per capita yield in the two provinces wIth the highest per capita yields.
Second, that whenever necessary the fed eral government maltes unconditional stabili· zation payments to provinclal governments to bring their available revenue in these tax fields up to a specified guaranteed minimum.

that the federal government ol'fer tax rental aJreements to the pro· annual payment the standard Third, five-year vincia} governments, being the estimated yield of rnte In thllt province.
the Fourth, in provinces and fields where no tax rental agreement has been made, the federal rate of tax appllcable In that province and field be reduced by the standard rate, leaving free to impose that provincial government whatever rate it deems appropriate.

of at the request Fifth, where a provincial government pre fers to Impose Its own tax, the federal govern ment provincial government would be prepared to enter into tax coliecUon agreement under certain con !
ditions on a fee basis, provided the provincial basis and rate of tax did not differ from the rtandard rate.

{Mr. Harrla.l the first Our in October suggestions made would have provided an increase in provinCial revenues from these source!

: in 1957-58 of about $65 million, or 12 per cl!nt over the estimated payments that would lie payable In 1957-58 were the present agreements renewet!

without change.
without change.

In successive negotiations we have improved our proposals in several wayS including increasing the standard rate o~ corporation incomes from 8!

percentage points to 9 percentage points: putting all calculations on a current year basis instead of a precedina year basis; and offering to withdraw from the insurance premium tax tleld in favour of the provincial governments.
We have also first suggestions impro\'ed considerably our respecting the gua:-anteed minimum to the provincial treasuries.

The sum total of these improvements in our ofTer has been to enlarge the increase in from these provincial sources from the $65 million of last October to Sl09 million in February.
available revenues I should explain that all the ftgu:es I am using relating to 1957-58 are not forecasts but calculations based on an a!SumpUon that total revenues from these three tax fields will Increase by 5 per cent per annum over the 1955 figures.

the prescnt On this assumption our proposals would to the provincial gOV1!rn· make available ments in 1957-58 revenues of $640 million.

In the same year tax.

rental agreements If renewed without change would provide $531 million.
Having regard to our national responsibilities and commitments we cannot see how we can go further.

Under all is the circumstances we believe our ofter eminently fair and that It is reasonable and realistic In the light of federal and provin cial responsibiliUes.

As a result of further consideration since March 9, we are, however, prepared to make an improvement In the stabilization feature of the proposals.
Our ofter hitherto has been the revenue available to a provincial that government under these arrangements will be not less than the highest of, (a) the dollar received or available in the flnal amount year of the the present agreements, or (b) per capita rate paid or available In that year, or (c) 90 per cent of the average of the two preceding years under the new arrangements, We are now prepared to give the further guarantee that the amount available will be that would have not been available it tax rental fonnula had been continued throughout the next five years, nor wtu it be leu than 95 per cent of the average of the two precedIng the new arrangements.
Every years under less than the amount the present MARCH 20.

195& 2329 province is therefore guaranteed that under the new arrangements it can never get less than it would have received had the present agreements been renewed without change, and that above this floor it will have access to the revenues from the insurance premium tax.
Since both the federal government and the provincial governments must have time to make decisions and to set up any conse quential administrative machinery, we pro in this pose to introduce legislation later session to prescribe the nature of and to provide authority for unconditional equaliza tion payments and unconditional stabilization payments to provincial governments, and to to enter into tax authorize the government tax collection agree rental agreements or ments.
The Prime Minister has written to the premiers on these matters, and the letters will be tabled tomorrow.

Before I turn to the question of how we revenues in the should raise our essential coming year, there are two other matters in the field of finance to which I should like to make reference.

recent First, a few words about credit unions and co-operative savings and lending societies.

These have been growing very rapidly in numbers, mem bership and resources during the past fifteen years.
In 1940 there were over 1,000 societies with assets of $25 million.

figures available indicate The most that there are now more than 4,000 societies with over 1,600,000 members and close to $600 million of assets.

Members' savings and deposits in these credit unions exceed $500 million and loans to members $350 million.

Clearly the credit union or co-operative sav filling a most useful and ings rapidly financial in our role system.

We are getting a number ot requests tor a variety of pur.
to treat credit unions, poses, as if they were banks, and particularly to allow them to participate in various kinds of government guaranteed loans.
expanding society is that May I make it clear the federal government has no intention or desire to intervene in the general field of co-operative credit societies, but we are prepared to sit down with interested groups to discuss under What circumstances and conditions we could properly extend to them privileges and oPportunities which are not now open to them.

I hope to arrange such discussions shortly, and I should add, Mr. Speaker, we have already had some informal discussions on the SUbject.
May I repeat that it is not our desire to extend our supervision in this field unless.

The Budget-MT.

BaTTis and only to the extent that credit unions may desire to participate in these government activities.

The second matter is our regulations affect ing trade in gold.

Late in 1931, when the United Kingdom the and Canada went off the gold standard, export of gold was made subject to a system of licensing administered by the Minister ot Finance.
At the same time ,arrangements were made with Canadian gold producers whereby all newly mined Canadian gold was turned over to the royal Canadian mint, and the mint became in effect the agent of the gold mines.

an are fund, of .which we In 1946 and 1947, the international mone active ~ary member.

became increasingly concerned with the serious extent to which gold throughout the world was being diverted into private in line speculative holdings.

fund's with policy, which we fully supported.


ot dis the government gave couraging hoarding, notice that gold imported into Canada after that date would not be granted an export licence.

In March 1948, international monetary the to expect uniformity it was im In 1951 the fund decided that in the practicable measures taken by its members in respect ot their control ove:- gold transactions, and as world-wide monetary conditions improved our regulations have been liberalized from time to time.
For example, in 1951 we allowed Cnnadian gold producers, under certain con ditions, to sell gold in the world markets.

In 1953 we liberalized the conditions under which we would release gold for industrial uses, and last May we undertook to grant licences for gold imported into, or export purchased in, Canada for satekeeping for account of toreign central banks and official international financial institutions.

We now propose to remove all remaining restrictions in this field.
Effective tomorrow, both residents and non-residents ot Canada will be free to buy gold for export or for safekeeping, and the regulations under the Gold Export Act requiring an export licence have been suspended.

Mines agreeing to forgo aid under the Emergency Gold Mining Assistance Act will be able to sell their gold wherever to reporting their production and sales to the Department ot Finance.
subject merely desire they TAX POLICY I come now to the question of an appro priate tax policy for the coming year.

Last year I said that with our proposed level of taxes and a gross national product at $26 billion we could expect revenues to flow in 2330 HOUSE OF COMMONS The Budget-Mr. Harris the rnte of about $4,350 million.

at In the event OUI gross national product went a bit revenues were over $20 biliioll, and our $4,385 million,-'.\'hieh is quite a close fit to my forecas\.
I snid eorlicr I om now ossuming a sross n<ltiOllal product of about $28 billion for 1956, and on that b;tsis I would expect our pre~ent ta:, structure \0 produce revenues of $4,775 million.

This is a very large increase for a lies largely in single year.

The cxplonatiol\ the way in which our corporation income tax rcturf'S flow in.

Under the Income Tax Act tax in monthly corpor.


:ltions must pay their instalments, but first nine instalments may be based either on their estimate of their current rate of profits or on their last year's taxable income.

We know that profits actual in 1955 were considerably higher than in 1954, but our tax receipts are almost exactly the saTile.
During the coming months our inflow of corporation income tax receipts will be abnorffi<llly high as corporations catch up on their 1955 tax liability and at the same time are paying currently on a much higher base.

their H I In.. y huve unanimous consent J shall place in Hansard at this point a table showing the details which go to make up the $4,775 revenue which we would expect million of tax rates to recei\'~ in the coming year if remained unchunged.

Mr. Spealter: Some hon.

Members: Agreed.


Is there unanimous consent?

Mr. Harris: The table is as follows: R::ovenues before tax changes (in millions of dollars) Preliminary 1955-56 Forecasts 1956-57 Personal Income Taxes .

$1,180 $1,265 Corporation Income Tax .

.

Non-resident tax .

Succession Duties .

Customs Duties .

Excise Duties Sales Tax .

Other Exeise Taxes,.

.

Other Taxes 1,035 67 75 475 245 640 260 16 1,315 70 "485 258 675 265 17 Total Tax Revenue Non-tax Revenue .

.
.

3,993 392 4,415 360 Total Revenue .. $4,385 $4,775 I should like to say again that this fore cast of $4,775 million, which is an increase the year just closing, of $390 million over (Mr.

Harris.)

includes a increased revenue field.

I3rge clement of non-recurring corporation tax [n the time, this does not Wh:le I expect this l<lrge incre~se in reve_ nue, we also have to face very considerable increases in cxpenditure.
The main estim:l.tes tabled in J:'ln\l:\ry ~how an incrcnse in ex penditure of $54 million.

As I explained at that include the 1955-56 deficit in the old uge security fund which in due cour~e be askin1: parliament we will to charge ofT against next year's expenditure.

This will amount to about $50 million (a reduction from the $63 million a year agol.
There will be additional obligations under the Tcm;;>orary Wheat Reserves Act, and also under our ugreements with the provincial governments respecting unemployment assist_ ance.

We must expect some further expendi_ tures in connection with agricultural price supports, and we shall have to find some the Canadian Broadcast further ing Corporation_ funds for th<lt each one per cent I have previously informed the house that some increases in salaries and rates of pay in the public service are about due.
I cannot yet say what this wm cost, but when J point out increase across the board in civil salaries and wages would add about $9 million to our expenditures next year, (including the required matching lump superannuation sum payment account), the house will realize that this may be a very considerable sum.

into the All in all, and alter making due allowance further supplementaries and laps less both for ings, J cannot promise expenditures of than $4,650 million in the coming year.
the gross national product Bdore proceeding, I should like to put this figure in context.

The house wiII be aware that in current dollars has been increasing on the average over the past few years at a rate of just over 5 per cent per year.

Many of the increases in the expenditures of the government flow is most from these r<ltes of growth.
This apparent items of in some of the heaviest expenditure in the statutory category, but it also has a bearing on the scale of service required and other costs that must be met.

In man~" fields the services provided by the federal government have to expand along with the increase in population and national production.
I need only mention such things as the provision of inspection services of all kinds, customs administration, trade promo tion, surveys, research and the provision of transportation facilities, for example.

It these services do not keep in step with public need the expansion of the economy will itself be hampered.

Also the government cannot escape the increases in costs resulting from the rise MARCH 20.

1956 2331 Against in salaries and wages which has taken place in the private sectors of the economy.
this background, the increase of just over $200 million in anticipa~ed expend~­ tUrt!

:s in 1956-57 over the prevJous year IS at a rate somewhat lower than that of the average rate of growth of the G.N.P.

in recent years.

The greater part of the increase in anticipated expenditures pertains to statutory items the public debt 'subsidies and special compensation to provinces, family allowances, and other wel fare payments.
such as the servicing of On the basis of the figures I have been using, what might be called the co~trollabJe expenditures show an increase of a little over 3 per cent, which is considerably less than the rates of growth in the economy generally that I mentioned a moment ago.

This result can be achieved cnly through the continued exercise of effective control, economy nnd efficiency in the operations of the government.
Despite the small size of the projected in crease, a number of new programs have been accommodated.

These include larger outlays for the Colombo plan, and for United Nations technical assistance and relief programs to the extent of $9 million, provision ·for the new five-year census amounting to nearly $4 mil lion and increases of smaller amounts for the atomic trade promotion.
program and energy for The program of public works and other capital items for the coming year has ~n held down to immediate essentials.

The malO estimates which have been tabled indicate the appropriations proposed to cover that expenditures on public works and other capi tal items are down by nearly $10 million from the previous year.
The increased amounts required by the Department of Northern Affairs and National Resources and for the trans-Canada highway are more than ol'fset by other In proposing small expenditures for capital purposes, the govern ment is seeking to reduce the strain on the economy resulting from the very large in~ crease in capital expenditures which private industry is planning to make during 1956. reductions.
As I have projected revenues at $4.775 million and expenditures of $4.650 million, we would have a surplus of $125 milllon under our present tax structure.

This sum of $125 million is about 2. per cent of OUr revenues or our expenditures; it repre lents, therefore, not much more.than a pru~ dent reserve against unforeseen CIrcumstances that may arise in the course of the year.

Moreover.

we had a deficit of $152 ~on last year and a further dcf)cit of $52 million this year.
But of course, an accumulation of :lebt of over $200 million in two years, baving 6750i-U8 The Budget-Mr. HaTTis regard to our record in the past 10 years, is in itself no cause for concern.

But clearly it is only sound and responsible finance to run a medest surplus in times as good as these we are now in.
TAX cRANCES Although for reasons just stated it is Dot possible for me to recommend to parliament a:ty reduction in the general level of income tax this year there will be some changes in certain provisions in the Income Tax Act.

Of these amendments some will be mainly techni in their nature while others will contain cal substance of interest, but on balance there will be no appreciable effect on total rf!'Venues.
There will be some changes in the lax treatment of proceeds from plans under which employers share their profits with employees.

In future under deferred profit-sharing plans, gains and losses resul ting from investment portfolio transactions will be excluded in cal culating the taxable portion.

The dividend element in the income allocated to a member will be recognized for tax credit purposes.

there will be postponement of tax lia Also.


bility for three years on amounts allocated to a member of a plan if the uncon ditional right to receive such amounts has not been assured to the member within this period.

With these changes our tax provi sions for profit-sharing plans will be estab lished on a pretty satisfactory basis.

the first Over the past year my colleague the Min ister of National Revenue <Mr.
McCann) and I have given considerable thought to the general requirements to which pension plans must conform in order to establish the right of tax deductibility for contributions.

We have it is desirable to revise the concluded that blue book which contains the general instruc· tions regarding pension plans.
In particular we have examined with some care the pre> visions relating to limits on the discretion of the trustees in investing funds placed under their administration and we have studied the urgent the removal of some of these restrictions.

Our decision is that we should remove the percent age limitations relating to equity investments so that trustees will be able to govern their own investment policies in the light of the particular pension requirements of the plans under their administration.
representatlons made to us for Members of the professions and others who have been affected by a recent Exchequer Court decision which ruled out a deduction for convention expenses wilt doubtless be inter ested in learning that the act will be amended to allow for 1955 and onward the deduction of expenses for two conventions annually ia Cauada.
2332 HOUSE OF COMMONS The Budget-Mr. Harris The recent decision of the Supreme Court of'Canada in the Home Oil case has created a situation which calIs for some amending legislation.

In brief the court decided that under the Income Tax Act and regulations thcreunder as they were in 1949 and 1950 an oil producer was entitled to have the so-called depletion allowance calculated on an indi vidual well basis rather than on the basis covering total operations.
This dccision has affected the basis in law Cor the policy which has been followed for the oil industry during the course of its development.

In 1951 the regulations which had been in force during the years covered by.

the Home Oil appCal were amended by the governor in council with a view to establishing greater legal certainty for the basis on which tax payers in the industry were being, and had in the past been assessed.
The reasons for judg ment given by the court in the Home Oil case have created some uncertainty as to whether the present law and regulations as amended in 1951 are in sufficiently clear terms to sup since 1951. port is to amend the law and proposed, regulations now to ensure that the intent of the the 1951 amendment shall govern tor intervening period and for the future.
This amendment will not deprive any taxpayer of his rights under the Supreme Court decision for the years prior to 1951. assessments made therefore, It In recent months there have been frequent references to foreign ownership and control of Canadian companies.

It has been sug gested that a certain feature of our tax law may be discouraging the Coreign owner trom allowing Canadian participation in his enter prise.
Under our law the standard rate of tax payable by non-residents on dividends from Canada is 15 per cent.

However.

the tax is only 5 per cent on a foreign corpora tion if it owns aU the shares which, under all circumstances, have full voting rights.

Lt might be noted in passing that the tax position of company is not foreign adversely affected by issuing for public par ticipation In Canada other kinds of shares in the Canadian company.
the This general provision in our tax law to which I have just referred has in many cases been modified by tax treaties with various countries in recent years.

For example, in our treaties with Sweden, Ireland and Den mark a company may secure the preferred rate of 5 per <:ent on dividends if 1t has more than 50 per cent ownership of the Canadian company.

Negotiations for tax conventions are currently active In South America, Australia, Holland and Germany.
By amendment treaty with the to our United States six years ago the percental"e ownership required for the 5 per cent rate [Mr.

Banta.]

to 95 per was reduced from 100 per cent cent.

For some time we have had this item.

on our agenda for discussion with the United States administration.

and toward the end of last year the question of a further recip lowering of the percentage ownership rocal I have reason to requirement was proposed.
hope that this proposal will be acceptable to the United States and that an amendment to our tax convention will in due course be effedcd.

Other changes in the Income Tax Act which are contempl:lted will be explained upon introduction of the :lmending bill.

CUSTOMS TARIFF The resolutions which I am placing before the house tonight contain, as usual, some tariff changes.

These are rather fewer than in recent years.


One of the reasons is that tariff negotiatlons arc in progress in Geneva under the general agreements on tariffs and trade.

the results of which will be announced when they are complete.

Many of the tariff changes I am announc· ing tonight are matters of form, to facilitate administration.

rather than substance.

In a the rates certain number o( cases.

however.

of duty are being altered.

While all these individual changes are in a downward.
direc tion, the to13.1 effect on the revenue will not be significant.

to for and parts relates to warrant mention at Only one chance is of sufficient general interest this time.

This agricultural machir.ery equipment.

Government the parts, policy has, of course, been that itself, like the machinery and equipment should entEr Canada duty-frei!.

Howe\'er, certain judicial decIsions by the tariff board.
relatii1g to the wording of particular tariff items, have resulted in important changes and the classification practices, in scope of duty-free entry has been substan.

tially narrowed.

This undesirable result has been brought to my attention by many interested persons and organizations.

The intended fully to action taken tonight restore duty-free entry in this important field.
tariff Is As 1 explained in my last budget, it is my intention to keep our tariff abreast of tech· this nieal and industrial changes and, Cor purpose, to refer tariff items or groups of tariff items to the tariff board from time to time.

Since my last budget I have made three references and have received one report.
Tbe board's report on potatoes reached the government last month its contents were studied and discussed at a joint meeting between our officials, repre sentatives of the growers, and representatives in November; MARCK 20.

1958 2333 of various provincial departments of agri culture. ]

hope to be able to make a state ment to the house on this subject fairly soon.

The next reference to the tariff board was primary iron and steel and the board is now well into its investigations.
These will be followed by investigations into the closely related area of pipes and tubes of iron and steel.

The reference on chemicals will be going forward soon.

in mind for I have two or three new tariff board refer~ ences the coming year.

One covers zinc and manufactures of zinc; an other covers fire brick.

Then if the board's program allowed, I would also think of referring to it a group of tariff items relating to the manufacture and assembly of radio and television sets.
It is clear that the tariff board will con~ tinue to bear a heavy burden.

This point has been brought to my attention both by the chairman of the board itseH and also by concerned with the board's work.

others is our intention to enlarge Accordingly it the membership of the board from three to introduce five; a bill for this purpose.

later in this session I shall SALES AND EXCISE TAXES I now turn from tariffs to sales and excise taxes.
For reasons already stated I am unable to propose any reduction in the general rate of sales tax, or in the standard level of 10 per cent for the special excise taxes.

A year ago I told the house of our intention to appoint a committee to study various aspects of the Excise Tax Act.

This has been done and I am tabling at this time a copy of the committee's report.

I should like to take this opportunity of thanking the com· mittee publicly for the high quality of their work in this specialized field.
It is a tribute to the business community of this country that objective and painstaking studies can be obtained so willingly from those who would otherwise be so busy with their own affairs.

think the country owes them a debt of I their willingness to take on gratitude for these arduous duties in the-public interest.

The committee's report is being given care~ ful stUdy by the departments concerned.
I am unable to say at the moment how far the recommendations made by the committee will find a place in this year's amending act.

Some of the recommendations involve some rather fundamental changes in the structure of the law.

These we shall have to consider care~ fUlly.


this time is that we are adopting some of the Committee's recommendations for greater sim~ Plicity anti certainty through making certain think the most I can say at I 67509-148i exemptions The Budget-Mr. Harris additions to the exemption list.

These, alonr with some other additions, will be found in the resolution which I shall be tabling at the conclusion of this statement.
The most important additional arise out of a broadening of the definitions of building materials and of production goods.

It is reduction in taxes estimated that the total to ~e exemption through these additions schedule will amount to about $12 million in the forthcoming fiscal year.

As usual it will be provided that the above commodity tax changes will be effective from midnight to· In accordance with standard practice night.
my colleague the Minister of National Reve nue has asked me to give notice that no claims for refunds arising out of tax reduc· tions in respect of goods on which tax has been paid will be entertained.

to the regarding of National Revenue Mr. Speaker, as usual, but with the utmost sincerity, may I express my appreciation to the Minister (Mr. McCann) and his staff for collecting such a tremendous sum ot money.
For several years past the publishers of Canadian magazines have made representa tions the government increasing inroads of magazines from abroad both into their circulation in Canada and nlso into their sales of advertising.

We have been able to help them to a small extent by some redistribution of routine government advertising.

Nevertheless, their relative posi tion has declined.

A number of Canadian magazines have been abandoned and others haVe!

had to reduce the number of issues per year.


Magazines from abroad have meanwhile extended their activities to such an extent the long run continuation of Canadian that magazines appears to be in jeopardy.

Already.

something like four-fifths of the magazines read in Canada are not Canadian, and the proportion ominously upward.

creeping been has in a few cases, Competition from abroad takes two forms.
First, we have what may be described as normal imports; scores of magazines normally on sale in London, Paris, New York or else in and sold in Canada.

where, are brought Second, the publisher of a magazine abroad has arranged to put on sale in Canada an edition of his magazine that is quite similar to the magaz.ine he sells in his home market but not identical with it.
This special edition will u'sually differ from the home edition both because it prints a few pages of reading material about Canada and also because it sells some pages, often a great many pages, to Canadian advertisers.
We have been considering this problem for some time, and we have decided that, in this field, very exceptional measures can be justi fied-measures that certainly could not be 2334 HOUSE OF COMMONS The Budget-Mr. HaTTis justified in connection with any ordinary line of business or c'Jmmerce.
The publication and circulation oC mngazines by Canadians, Cor Canndians, telling about Canadians nnd what they have to sell, they are doing and what seems to us a basic and essentinl thre<ld in the [abrie of our n<ltional liCe.

And I am talking now, not merely oC the magnines that deal to a gre<lter or lesser extent with broad political and economic aff<lirs, but also about the magazines that circulate among house wives and businessmen and members of trade associations.
I wOl".der whether we could contemplate a time when we would not have a Canadian magazine, when there would not be an oppor tunity for persons with the talent and with the time to sit down and contribute an article at a critical nature on government or scientific matters or on some other if we could contemplate a time when our children could not read a magazine in which there would be Canadian stories based on Canadian history or Canadian fiction.
I doubt very much, sir, if we could look to an occasion like that.

topic, or The government would be very reluctant, however, to interfere with the normal and traditional imports of ordinary magazines into our country but the special editions constitute a very special problem.

They are rel:J.tively new arrivals on the scene.

Each is essentially a by-product of some magazine published abroad and, being a by-product, its costs of production are well below the costs of a comparable purely Canadian magazIne.
It uses its advantage not only to enlarge its circulation but also, and far more serious to Canadian publishers, its advertising services, thus diverting revenues from Cana dian publishing houses.

In recent years this diversion has become very substantial.

to sell Accordingly, we have decided to put a special excise tax on these special editions.

It will be at the rate of 20 per cent and will be levied on all revenues they receive from advertising.
It will not come into effect until January 1, 1957 so that those concerned may have time to adapt their affairs to It.

The tax will apply to all special editions, whether printed in Canada or abroad, in English or in French.

CON"CLUSI0N" This concludes my review of our proposed tax changes, and I can now summarize my budgetary position.
The total reductions in taxes I am recommending to the house amount to $12 mUllan, and my expected revenues for the coming year will be $4,763 mlllion, and my prospective surplus $113 milllon.

I should in figures of again remind the house that [Mr.

Barril.]

these magnitudes there will always be some uncertainty in eslimiltion, and that a variation of as little as one per cent in our estimates .

in either direction is a matter oC close to $50 million.
r should like now to say a further word about federal-provincial relations.

I h<lve secn it sugg·:!stC'd that we have been seeking political rather than economic solu tions in this field.

a hy political solutions is meant taking 3ccot:nt of nation:!1 interests greater than mere dollars and cents, I believe that the objective historical verdict on the past ye;;:r will be that we have in our !cderJl-provineial frequent meetings given first place to the highest politi.
cHl considerations: the unity and welfare of the whole C:J.nadian people.

At these meetings we have laid the founda_ tion for a working Ilrrangement with the provinces for assistance to the unemployed who cannot qUlllify [or unemployment insur_ ance under existing federal law; we have lilid the foundation for a joint federal-provincial plan for hospital care whenever a majority of the provincial governments representing a majority oC our people signify their agreement.
the provinces a more advantageous-tax-sharing plan to replace the tax rental agreements which expire early in 1957.

We have proposed a new-and for This is a record of achievement in this field which will be unmatched [or some time.

Since I became Minister of Finance in July, 1954, fiscal relations with the provinces have been receiving the continuous attention of my department and of the government.
It appeared to me that, with the tax rental agreements running out soon, a very careful review of what had been accomplished by that system was in order.

Hon.

members will recall that there were three main purposes given for the tax rental agreements-and I am referring here only to the post·war agreements.
These purposes were: (a) To eliminate duplication and inefficiency in taxation as much as possible; (b) To place the provincial governments in a more stable financial position, having in mind the necessity for providing a certain minimum standard of provincial services; (c) To give the federal government in co operation with the provinces sufficient control over poilcies to permit the eftective combating of economic difficulties.
of Canada ilscal the The house, of course, knows that when I entered the Department of Finance I had no experience in these particular matters except this party and this as lovernment.

supporter of a MARCH 20.

1956 2335 In considering our fiscal relations with the provinces, we have had the advantage of the unequalled experience and knowledge of the Prime Minister, who has lived with these problems ago he became to the Rowell-Sirois commission.
eighteen years counsel since some We have also had the advice and careful consideration of the Minister of Justice, who in 1937, as provincial treasurer of Manitoba took the initiative which was the real begin ning of all the activities which have resulted fiscal in proposals.

federal-provincial present our It appeared to all of us that the objective of the tax rental agreements with respect to provincial revenues was much the most important.
Today it is inconceivable to think of goIng back to the pre-war situation where the provinces with smaller tax potentials had to fend for themselves.

If all the provinces are to carry out their constitutional responsibilities, there has to be some system of tax sharing, of equalization, which will make it possible for them to provide provincial services.

The other objective: to eliminate duplica tion and inefficiency In taxation is also a valid objective.
The British North America Act gives parliament no power to limit the exer cise of the rights of the provincial legislatures to tax their peoples for provJncial purposes.

What we can do Is to shape our policies so as to remove the need for duplication as much as possible.

And we are doing that just as effectively with our new proposals as with the tax rental agreements.
As for the third objective, it Is still desir though we can hope it will not be able; necessary for a long time to combat grave economic dislocations.

But, under our constitution we cannot con trol the fiscal policies of the provinces; all we can do is to make co-operation as easy nnd natural as possible, and our new policies, just because they do not require hard and fast agreements, will, I believe, make co-operation .

easier.

The situation as we saw it some months ago was this.
One provincial government had steadfastly refused to make a tax rental agreement; the government of another prov~ ince had entered into an agreement which the premier of that province called a stop gap and a second best; and the representa tives of another province were reported to be quite unhappy about being bound by a tax rental agreement.

The Budget-MT.
The Budget-MT.

Harrb Our task was to find a substitute for a system which was not acceptable to the gov ernment of a province containing almost one third of our people, and which had won only the govern the reluctant ~cquiescence of ments of containing two other provinces more than one-half the rest of the people of Canada.

The tax rental system-good as it was and it was a great advance over the pre-war fiscal chaos-had to be improved if at 'Btl possible.
There bas hardly been a week in the past twenty months that we have not given con sideration to alternative plans.

The new proposals were evolved gradually been to remove suggestions have refined and the original greatly modified objections and difficulties.

and This new tax sharing plan is a reaffirma tion of our belief that the government of the nation has a duty to provide some means of sharing tax returns with those provinces which cannot.
without extraordinary meas find the funds to provide a Canadian ures, standard of public services; recognj.

:res that double taxation can be costly and in is a reaffinnation of our efficient; and It belief system has virtues that which, if maintained, wlU benefit us all.

the federal It I am confident tbat every Canadian today believes we should all assist the provinces to provide a reasonable Canadian level of public in all parts of Canada; nationhood would be meaningless if it were not so.
services I am also confident that our tax-sharing plan Is not open to serious constitutional.

or practical objections; though, of course, I do not suggest that it Is perfect or will receive universal approval.

.

But may I make it quite clear that not one provincial premier is on record as $aying that this new tax-sharing plan is not as good as the present tax rental agreements; and I am prepared to go further and say that the almost all of principle of the new plan is better than the present system.
them have stated that As the house will understand, these mat· ters have taken a great deal of time in the past eighteen months-not only our time, but the time of the provincial governments as well.

In all our there has been conferences .complete frankness and a full measure of goodwill.
This, I attribute to the good sense of everyone present and to the fact that, while every one represented those for who~ he spoke vigorously and firmly, all who sat at 233S HOUSE OF COMMONS The Budget-Resolutions the table unhesitatingly conceded the fair the integrity and the sympa mindedness, the thetic the Prime chairman of Minister.

problems of conferences: approach to the the And I believe that what we have achieved will be a lasting tribute to his patience and bis wisdom.
(i) antiques, as enumerated in Customs Tariff item 693 (ii) and (iii); • (jl national manUfacturing, industrial or mercantile trade directories but excluding financial or biographical surveys, statistical, reports, year books or directories, and trans.

portation, street telephone, municipal directories, guides or rate books.

or Resolved, EXCISE TAX ACT to introduce that it is expedient a measure to amend the Excise Tax Act and to provide, among other things: the sales tax on the following 1.
That goods be repealed: (a) boxes for :farm wagons, and articles and materials to be used exclusively in the manufacture thereof; (b) poisons used in agriculture or horti culture; (c) vermiculite; (d) material production of vaccine poliomyelitis; for use exclusively in the prevention of for tar and' asphalt for (e) certain building materials which are in addition to those already exempted, viz.
: additives for concrete; ceiling and acoustical material for buIldings; hard surface composi tion yardage flooring for permanent bonding to floors; material for waterprooftng and moisture proofing buildings; additional struc tural steei for buUdings; soil pipe for build roofing; skylights; ings; ventilators and louvers, not motor operated; (f) certain machinery and apparatus for manufacturing or producing goods which are in addition to that already exempted, vi.z: structures which are adjuncts to or provide access to the machinery and apparatus for manufacturing or producing goods; repair and maintenance equipment used by manu facturers or producers servicing their machinery and apparatus for manUfacturing or producing goods; safety devices and equip ment in the manUfacturing or production of i'oods; systems installed by manufacturers or pro noxious exhausting dust ducers fumes from their manUfacturing operations; equipment used to carry refuse or waste from production machinery; equipment for hospi tals and first aid stations in manufacturing establishments; the prevention of accidents and for for for (g) identification tags or labels for desig nating the grades or quality of meat, poultry, fish, eggs, fruit and vegetables, and materials to be used exclusively in the manufacture thereof; (h) goods enumerated In Customs TarU!
items 409t, 409u and 409v, and articles and materials to be used exclusively in the manu facture <thereof; (Mr. Harris.1 2.

That the excise tax on the following goods be repealed: (a) antiques, as enumerated in Customs Tarif!

item 693; <b) settlers' ef!ects.


3. la) That the exemption from excise tax on the goods enumerated in sub-paragraphs (a) and (b) of item 12 ot Schedule I be re_ pealed when the sale price is one dollar or less; (b) That the exemption from excise tax on the goods enumerated in sub-paragraph (c) ot item 12 of Schedule I be repealed when the sale price is fifty cents or less.
4. la) That levied and there be imposed, collected in respect of each copy of a special edition of a non-Canadian periodical issued to the public in Canada a tax of twenty per cent of the value of the advertising material contained therein; Ib) That for the purposes of sub-paragraph (a) a "special edition of a non-Canadian peri odical" means a periodical printed in or outside Canada for publication in Canada (i) containing editorial materIal at least twenty-five per cent of which is the same or SUbstantially the same as edi contained In a non torial material Canadian periodical, whether in the same or in some other language, and Iii) containing any advertising material that is not contained in such non-Canadian periodIcal; (c) That any enactment founded upon this paragraph shall come into force on the first day of January, nineteen hundred and fi!ty seven.
5.

That any enactment founded upon para graphs 1, 2 and 3 of resolution be deemed to have come into force on the twenty-flrst day of March, nineteen hundred and fifty-six.

this L Resolved, CUSTOMS TARIFF that Schedule A to the Cus toms Taritr be amended by striking out tariff ltems 13a, 172, 206c, 219d, 279, 288b, 326e, 372, 376a, 390, 390a, 390b, 40gem, 409f, 4101, 410u, 410w, 425a, 428g, 437h.
442, 443, 44:im, 47Sb, 476c, 478(2), 549a, 657b and 700, and the enumerations of goods and the rates of duty set opposlte each of those items, and by inserting therein the following items, enum erations of goods and rates of duty: