1926-05-26

NATIONAL RAILWAYS AND SHIPPING COMMITTEE

[Stage Direction]
Mr. W. D. EULER (North Waterloo) presented the first report of the select standing committee on Railways and Shipping *owned, operated and controlled by the gov... ernment, as follows:
Your committee recommends that its minutes of proceedings and evidence be printed from day to day for the use of the members of the committee and of the House, and that rule 74 be suspended in reference thereto.
Mr. EULER presented the second report of the select standing committee on Railways and Shipping owned, operated and controlled by the government, as follows:
Your committee recommends that it be granted leave to sit while the House is in session.
He said:	I move that the first and second
reports of the select standing committee on Railways and Shipping owned, operated and controlled by the government be adopted. It may be necessary to give notice of this motion, but we desire to meet to-morrow, and the reports deal only with the printing of the evidence and the permission to sit while the
House is in session. Perhaps the House will adopt the reports.
Sir HENRY DRAYTON (West York):: I think the motion might be adopted, but I should like to point out to the chairman of the committee that there is not much use sending out notices of meetings which reach the members after meetings are held. I do not know when the notices were sent out, but I know that I got mine this morning. Notices for meetings of committees should be sent out in time, so that members will be, able to make arrangements to be present. However I do not object to what is now being done.


[Stage Direction]
Motion agreed to.
[Stage Direction]
Annual report of the Civil Service Commission of Canada for the year 1925.-Hon. Mr. Lapointe.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Hon. Mr. STEVENS:: 1.	How much grain of all kinds have been exported during the present crop season through the port of Vancouver; (a) through each of the public owned elevators, (b) through each of the privately owned elevators?
2.	Has the harbour board made any representations or proposals to the Dominion government for authority to lease or sell any of its elevators? If so, what elevator is it proposed to lease or sell, and to whom, and what are the terms?


Hon. Mr. CARDIN:: 1.	(a) Through the Vancouver harbour commissioners elevators as follows:
Exports
Bushels
Vancouver Harbour Commissioners
elevator No. 1	 11,787,841
Vancouver Harbour Commissioners
elevator No. 2	 7,495,120
(b) Through privately operated elevators, as follows::
Vancouver Terminal Grain Company	19,612,375
Burrard-United Grain Growers,
lessors	 8,438,640
"Columbia-Columbia Grain Company Limited, owners	 918,224
Total	 48,252,200
Information supplied by elevator concerned.
2.	No.
Questions


DODGE MOTOR COMPANY-TORONTO PLANT
Mr. ARMSTRONG (Lambton):: 1.	Did the Dodge Motor Company purchase the land on which their plant is erected in Toronto from the Dominion government ?
2.	If so, what was the amount paid to the government for this property, and what w'as the date of said purchase ?
3.	When negotiations were under way for the purchase of this property, did the government or any member of the cabinet give any assurances to the representatives of the Dodge Motor Company to the effect that the tariff on automobiles would remain where it was at that time?


Hon. Mr. LAPOINTE:: 1.	No information.
2.	and 3, Answered by No. 1.


MR. CLOVIS T. RICHARD
Mr. DOUCET:: 1.	Was Clovis T. Richard, barrister of Bathurst, New Brunswick, in the employ of the government at any time since January 1, 1922?
2.	If so, in What capacity?
3. What remuneration was paid to 'him for the years (a) 1922-1923, (b) 1923-1924, (c) 1924-1925, (d) 1925-1926?


Hon. Mr. LAPOINTE:: Department of Customs and Excise.
1.	Yes.
2.	Solicitor for the department in a case re violations of the Special War Revenue Act.
3.	(a) Nil.
(b)	$50.
(c)	Nil.
(d)	Nil.
Department of Justice.
1	and 2. Mr. Richard has acted as agent of the Minister of Justice on several occasions.
3.	The remuneration was paid by the departments concerned.
Department of Marine and Fisheries.
1.	Yes.
2	and 3. (a) 1922-1923-$70 for professional services in connection with prosecutions for violation of the Fisheries Act. (b) 1923-
1924-	$15 for professional services in connection with prosecutions for violation of the Fisheries Act. (c) 1924-1925-Nil.	(d)
1925-	1926-$145.65, commissioner to investigate charges of political partizanship.
Post Office Department.
1.	Yes.
2.	A commissioner to investigate charges of political partizanship.
3.	(a) 1922-1923	-
1923-	1924 $608.50.
1924- 1925	-
1925-	1926 $ 89.55.


PURCHASE OF SCREENINGS
Hon. Mr. ROGERS:: 1.	What quantity of screenings were purchased by the Department of Agriculture during each of the respective years from 1917 to 1921, inclusive?
2.	From what firms were these screenings purchased and how much from each, during each of the said years?
3.	What was .the purchase price, and what was the sale price of the said screenings during each of the above mentioned years?
4.	What was the total profit or loss to the country on the purchase and sale of such screenings?


Hon. Mr. MOTHERWELL:: Ton3
1.	1917-18	 5,661.8
1918- 19	 12,931.482
1919- 20	 3,363.375
1920- 21	 Nil.
2.	1917-18
Name	Tons
Bole Grain Company	 15.48
Canadian	Government Elevator,
Fort William	 50.52
Canadian Government Elevator,
Saskatoon	 33.
Canadian Pacific Railway Co		393.105
Consolidated Elevator Co	 425.34
Davidson & Smith	 37.395
Empire Elevator Co	 422.185
Fort William Grain Co	 206.405
Grand Trunk Pacific Elevator Co. 703.69
Horn, David & Co	 33.
Mutual Elevator Co	 173.79
Northern Elevator Co	 230.535
Northwestern Elevator	Co	 352.
Ogilvie Flour Mills	 280.68
Ogilvie Flour Mills	 441.25
Port Arthur Elevator Co	 1,240.925
Sask. Co-operative Elevator Co. ..	260.
Thunder Bay Terminal Elevator Co. 66. Western Terminal Elevator Co. ..	296.5
Bole Grain Co	 63.79
Canadian Government Elevators ..	794.335
Canadian Feed Manufacturing Co. 317.07
Consolidated Elevator Co	 1,150.865
Davidson & Smith	 135.1
Empire Elevator Co	 602.08
Grand Trunk Railway Elevator Co. 143.225 Grand Trunk Pacific Elevator Co. 2,272.06
Mutual "Elevator Co	 548.08
National Elevator Co	 38.385
Northwestern Elevator Co	 745.325
Ogilvie Flour Mills	 803.49
Port Arthur Elevator Co	 1,682.705
Robin Hood Mills Limited	 65.903
Saskatchewan Co-operative Elevator Co	  1,570.604

Questions
1918-	19
Name	Tons
Sellers, M. & Son	 173.704
Thunder Bay Terminal Elevator Co. 453.43 Western Terminal Elevator Co. .. 1,371.331
1919-	20
Consolidated Elevator Co	 450.5
Western Terminal Elevator Co. ..	277.
Mutual Elevator Co	 100.
National Elevator Co	 35.025
N. M. Patterson Company Limited 60.
G. T. P. Elevator Co	 203.
3.
1917-	18	
1918-	19	
1919-	20	
4.	Loss, $146,752.41.


CANADIAN NATIONAL RAILWAYS-DIVISIONAL HEADQUARTERS
Mr. MacNTJTT:: 1 Is it a ifact that locomotives are now run right through between Halifax and Mulgrave, on the Canadian National Railways, instead of changing at Truro, as formely, and that divisional headquarters have been moved from Truro and Bridgewater to Halifax?
2.	If so, what has been the effect of the change, and the exact financial saving, if any, thereby?


Hon. Mr. DUNNING:: 1.	Yes.
2.	Increased efficiency in operation, and saving of $52,000 per annum.


CANADIAN NATIONAL RAILWAYS-PASSENGER CARS
Mr. DOUCET:: How many steel passenger cars have been added to the equipment of the Canadian National Railways during the years ending March 31st, 1923, 1924, 1925 and 1926?


Hon. Mr. DUNNING:: Year ending March 31, 1923-nil.
Year ending March 31, 1924-74.
Year ending March 31, 1925-66.
Year ending March 31, 1926-21.


KINGSVILLE HARBOUR MASTER
Mr. GOTT:: 1.	Has Mr. J. A. Donaldson of the town o.f Kingsville, Ontario, who acted as returning officer for the south riding of Essex in the federal elections of 1925, been appointed to the position of harbour master at the port of Kingsville, Ontario?
2.	If so, under Whose recommendation was he appointed?
3.	Was an application for same position received from Mr. Ernest Harris of Kingsville and why was his application not favourably received?
4.	Was said Donaldson duly qualified to fill the position of returning officer?
Ogilvie Flour Mills Limited		297.
Saskatchewan Co-operative Elevator
Co	 462.
Canadian Government Elevator Co. 34.0
Port Arthur Elevator Co	 256.85
Northwestern Elevator Co	 284.5
Eastern Terminal Elevator Co. ..	122.
Empire Elevator Co	 182.50
United Grain Growers Limited ....	388.
Thunder Bay Elevator Co	 145.5
C. P. R. Co. Elevator	 25.
Fort William Elevator Co	 40.
Sale Price
$35 and $42.50 per ton 25 to 45.20 per ton 25 to 45.20 per ton
5.	What qualifications are necessary for the position of harbour master?
6.	What examinations were passed 'by Mr. Donaldson, or were any required?
7.	What salary' is paid for the position?


Hon. Mr. CARDIN:: 1.	No.
2.	Answered by No. 1.
3.	No.
4.	The Department of Marine and Fisheries has no information.
5.	Applicant must be of good character; be physically able to perform the duties of harbour master and have a fair knowledge of reading, writing and arithmetic.
6.	The department has no information.
7.	None.
PRINCE RUPERT ELEVATOR-^STAFF


Mr. COOTE:: 1.	What officials, if any have been appointed by the government or the Board of Grain Commissioners in connection with the government elevator at Prince Rupert ?
2.	When were these appointments made and what is the salary of each official?


Hon. Mr. ROBB:: 
James Alexander Robb: 
INCOME TAX
Hon. Mr. MANION:: 1.	How many individuals in Canada paid personal income tax in the fiscal year 1924?
2.	How many individuals paid income tax on incomes below $10,000 in the same fiscal year?


Hon. Mr. BOIVIN:: 1.	225.514.
2.	218,474.


DR. J. F. McQUAY
Mr. McGIBBON:: 1.	Is one Dr. J. F. McQuay a member of the Board of Pension Commissioners ?
2.	If so, when was he appointed?
3.	What is his salary?
4.	When did he join the Canadian Expeditionary Force?
5.	What date did he leave Canada?
6.	What date did he leave England for France?
7.	What unit or units was he with in France?
8.	Was he in any engagements in France?
9.	What service had he in the front line?
10.	When did he return from France to England; (b) front England to Canada?

11.	Were there any other applicants for the positiom at the time of his appointment?
12.	If so, what service did they have?


Hon. Mr. ELLIOTT:: 1.	Yes.
2.	December 2, 1921.
3.	$6,000 per annum.
4.	February 24, 1916.
5.	June 24, 1916.
6.	Did not serve in France.
7.	8, 9 and 10(a). Answered by No. 6.
10(b). Invalided to Canada for medical
treatment on March 28, 1918.
11 and 12. No information.


QUESTION PASSED AS ORDER FOR RETURN REMISSION OF SALES TAX
Mr. EDWARDS (Frontenac):: 1.	What was the amount of the sales tax remitted in each fiscal year since 1921?
2.	When and to whom were such remissions made 7


UNOPPOSED MOTIONS FOR PAPERS
Hon. Mr. STEVENS:: For a copy of the report on Chinese immigration made by His Honour Mr. Justice Murphy of Vancouver, and known as the "Murphy Report/' also for a copy of all correspondence in connection with the alleged improper entry of orientals during the years 1910 and 1911, and also for a copy of all correspondence in connection with the alleged improper entry of Chinese immigrants as merchants or students into Canada during the years 1917 to 1921, inclusive, more particularly all correspondence passing between the mover of the resolution and the Minister or Deputy Minister of Immigration.


CANADIAN NATIONAL RAILWAYS-MONT-JOLI
Alexandre Joseph Doucet: For a copy of all correspondence, telegrams, reports and other documents exchanged between the civil authorities of Mont-Joli, Quebec, and the Department of Railways and Canals regarding the change of status of Mont-Joli^ as terminal point or divisional point.


KINGSVILLE CUSTOMS AND EXCISE OFFICERS
Mr. GOTT:: For a copy of all papers, reports, letters, telegrams and other documents, exchanged between Customs and Excise Department and the Civil Service Commission or other sources, including the G.W.V.A., relative to the appointment and dismissal of Mr. C. R. McCallum of the town of Kingsville, Ontario, as customs and excise officer at the port of Kingsville, Ontario. Also copy of all paperst reports, letters, telegrams and other documents pertaining to the appointment of Mr. Allen D. Pearsall to the position of customs and excise officer at the port of Kingsville, Ontario. Also a copy of all letters, reports, telegrams and all other documents relative to the dismissal of Mr. Ernest McKay from the position of customs and excise officer at the port of Kingsville, Ontario.


SOUTHEAST SHOAL LIGHTSHIP
Eccles James Gott: For a copy of all papers, reports, letters, telegrams and other documents in connection with the sale of

Further Legislation
the southeast shoal lightship to Captain J. S. McQueen of the town of Amherstburg, Ontario. Also a copy of all correspondence passing between him and the department, or any other persons interested either in, or outside the department, who acted in any way as advisers.
PEACE RIVER-RAILWAY FACILITIES Mr. KENNEDY (Peace River):
For a copy of the joint report of engineers of the Canadian National Railways and the Canadian Pacific Railway with regard to the construction of a railway from the Peace River country to the Pacific coast.
TRIBUTE TO CANADIAN ARTIST On tihe Orders of the Day: iMr. SPEAKER: I wish to draw the attention of the House to three examples of real Canadian art, the calendar, the seal and the inkstand of the House of Commons, made by a young Canadian artist whose name is well known and who is intimately connected with some of the beautiful iron work which has been done in this House of Commons. I refer to Mr. Paul Beau, ironmaster.
PENSION ACT AMENDMENT On the (Orders of the Day:


Hon. ROBERT ROGERS (South Winnipeg) :: Has the government had an opportunity of considering an amendment asked for by the Canadian Legion in respect of the Pension Act and, if so, when will the amending legislation be brought down?


Hon. J. C. ELLIOTT (Minister of Labour):: Certain recommendations have been received from the Canadian Legion and are under consideration. No decision has yet been reached.
EXPORTATION OF PULPWOOD On the Orders of the Day:


Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Does the government
intend to do anything with respect to the exportation of pulpwood or is the matter still under consideration?


Right Hon. W. L. MACKENZIE KING (Prime Minister) :: It is still under consideration.
INQUIRY FOR RETURN On the Orders of the Day:


Mr. A. U. G. BURY (East Edmonton):: I would like to call the attention of the Secretary of State to the fact that on the 22nd March an order of the House was passed for the production of documents in connection with Mr. Potvin, former postmaster at Bonny-ville, Alberta. The return has not yet been brought down and I have not been able to get the papers. When may I expect them?


Ernest Lapointe: I am sorry my hon. friend has not already received that document. I will make an inquiry and if possible table the return to-morrow.



BUSINESS OF THE HOUSE


[Stage Direction]
On the Orders of the Day:
Arthur Meighen: Will there be any legislation this session other than what is now on the order paper and, if so, what?


William Lyon Mackenzie King: I think there are some
amendments to the Criminal Code. With that exception and with (the possible exception of some very minor bits of legislation there is nothing else that I am aware of in contemplation.


Arthur Meighen: What will be the nature of the amendments to the code? Can the government indicate the subject matter of the other legislation?


Ernest Lapointe: The bill to amend the Criminal
Code will be introduced perhaps to-morrow, or in a couple of days, and I will then give the necessary explanation.


Arthur Meighen: What about the minor
legislation?


William Lyon Mackenzie King: I will give an answer in a day or -two as to any legislation which is further contemplated.


Arthur Meighen: Can the government say
Whether they purpose dropping any legislation that is now on the order paper?


William Lyon Mackenzie King: I had better
answer that question at the same time.
PEACE RIVER ELECTION On the Orders of the Day:


Mr. A. E. ROSS (Kingston City):: When
the prosecution of the various deputy returning officers in connection with the Peace River election has been completed, will the Chief Electoral Officer make a report to this House?


Ernest Lapointe: Under the Dominion Elections Act
the Chief Electoral Officer is reporting to the House on everything that comes before him.


Arthur Edward Ross: May I ask
that his report be brought down?,


Ernest Lapointe: Any report of the Chief Electoral Officer will be tabled.
Geneva Conference



GENEVA CONFERENCE ON DISARMAMENT

[Stage Direction]
On the Orders of the Day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Was Canada invited to have a
representative at the Geneva Conference on Disarmament? Was Canada consulted as to policy, and has the British representative, the Chancellor of the Duchy of Lancaster, been instructed to speak for Canada?


William Lyon Mackenzie King: I would like to look over the files before I answer my hon. friend's question. I will give him an answer tomorrow.



SADDLE LAKE INDIAN RESERVE

[Stage Direction]
On the Orders of the Day:
Ambrose Upton Gledstanes Bury: May I ask the Minister of the Interior whether he now has the full information which I asked for on the 19til April in connection with the sale of lands in the Saddle Lake Indian reserve? The reply given by the minister on that date stated that the report had not yet come in. That reply left some of my questions unanswered.


Hon. CHARLES STEWART (Minister of the Interior):: I did not have the complete
information on Friday last, but I have not inquired since then. I will make inquiry and answer my hon. friend to-morrow.


Ambrose Upton Gledstanes Bury: Will the minister expedite
the sending in of the report by the agent in Alberta? The sale took place on the 3rd March.


Charles A. Stewart: I am well
aware of that, but I would not want our agent to be criticized because of the date. At the date of my hon. friend's question the matter had not been sent to the agent for final adjustment and I am waiting for his report now.



SOLDIER SETTLEMENT ACT AMENDMENT

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved the third reading of Bill No. 17, to amend the Soldier Settlement Act, 1919.
Motion agreed to and bill read the third time and passed.


[Stage Direction]
The House in committee of Ways and Means, Mr. Duff in the chair.

Customs tariff-British preferential tariff
The CHAIRMAN:: Shall the resolution
carry?


[Stage Direction]
Resolution agreed to.
Customs tariff-Schedule A.
Henry Lumley Drayton: I understand
that we have passed all the items embodied in this resolution and it now merely remains to consider the resolution as a whole. In the course of the discussion of the various items the hon. member (Mr. Cahan) and I both asked that the minister provide, in relation to the items affected by the West India treaty, that those items should1 come into effect only upon the ratification of that treaty. We urged that they be left in abeyance until such time as action one way or the other might be taken upon the treaty. The minister declared that he was following precedent in the course he proposed to take. I admit that he will find precedent for that course, but I assure him that he will not find any precedent for a situation analogous to the present. Under the former treaty with the West Indies, so far as I know, no damage was done to any Canadian industry, and everyone was in favour of the treaty. To-day the claim is seriously put forward that Canadian industry will suffer as a result of the tariff it is proposed to enact in relation to the West India treaty. At the moment I am referring particularly to the increase in duties on cocoa beans, and in order that my objection may be stated as concisely- as possible, I am going to read a letter which I have received from one of the manufacturers. The minister, I think, is perfectly familiar with the circumstances:
When the West Indies treaty is ratified we will have to pay two cents per pound duty on foreign grown cocoa beans, one and a half cents per pound on British grown cocoa beans, exclusive of West Indies kinds, and West Indies kinds wiW come in free.
We will not be able to use cocoa beans grown in the West Indies, except in very limited quantities. The price of Trinidad cocoa beans is always several cents per pound higher than Accra cocoa beans which are grown in British West Africa. We will, therefore, continue to bring in Accra cocoa beans, and will have to pay the duty of one and a half cents per pound on them. Cocoa beans from Jamaica we cannot use except in very limited quantities, because of their poor quality.
I pause here to ask the minister whether there is anything in the foregoing statement of fact with which he disagrees. I do not think there is; the minister does not reply. So that we have no issue on the question of fact that the manufacturers will now have to pay a duty of one and a hail-f cents per pound on the cocoa beans which they import from British West Africa; nor is the fact denied

Special War Revenue Act
that they will be unable to use the beans which will come in from the West Indies. The writer continues:
On from 80 to 85 per cent of the cocoa beans we will use, we will be forced to ipay a duty of one and a half cents per pound or tiwo cents per pound. Now, from 100 pounds of cocoa beans we only gat from seventy-five to eighty pounds of cleaned cocoa beans.
He goes on to indicate what the effect will be on the trade. We have had the discussion as to whether this tariff should be enacted or not, and all I intend to do now is to ask the minister to assure the committee that these duties will not be put into effect until the West India treaty becomes operative.


James Alexander Robb: Perhaps I might call my hon. friend's attention to the trade agreement between Canada and the West Indies, article 3 of which provides:
The Dominion of Canada undertakes to withdraw the benefit of the British preferential tariff from any British country which produces cocoa beans if that country does not extend a preference, satisfactory to the Governor in Council of Canada, to goods the p-oduoe or manufacture of Canada over like goods imported into such country from any foreign country.
We made that stipulation in our agreement with the West Indies: the preference will be withdrawn from British West Africa when this treaty becomes effective.


Henry Lumley Drayton: It will not be
rione until then


James Alexander Robb: No.


Arthur Meighen: Looking down the list
of items in this resolution I notice quite a number of increases in the tariff, .general and intermediate, in some cases, I think, even in the British preference; at any rate there are increases in the general and intermediate tariffs on such items as meats, bananas and so forth. Is that all in pursuance of the policy of free foodstuffs?


James Alexander Robb: My hon. friend will observe
that there is a corresponding reduction in the British preference column.


Arthur Meighen: Then the free foodstuffs chart was only for the purpose of meeting the wishes of Australia?


James Alexander Robb: Oh, no.


Arthur Meighen: Or has the chart really
been pitched away?


[Stage Direction]
Resolution agreed to.
Customs tariff-Schedule B
William Duff: Shall the resolution
carry?


[Stage Direction]
Resolution agreed to.
5.	Resolved, that any enactment founded on the foregoing resolutions number two and three shall be deemed to have come into force on the sixteenth day of April, one thousand, nine hundred and twenty-six, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that day, and to have applied to goods previously imported for which no entry for consumption was made before that day.
Resolution agreed to.
Mr. FORKE:: Mr. Chairman, what are
you considering? We do not know down here.


Arthur Meighen: I may inform the hon.
member we have just been advised that the chart has been thrown away,-


William Lyon Mackenzie King: Oh, no.


Arthur Meighen: -notwithstanding the
Saskatchewan Liberals and the Progressives and that the resolutions so often passed in the Saskatchewan legislature are now ignored, forgotten, and never moved in this House, where they belong.


Mr. ARMSTRONG (Lambton):: Mr. Chairman, do I understand that resolution No. 5 is carried?


William Duff: Yes.


Ernest Frederick Armstrong: I was expecting to hear some word from the Minister of Finance in regard to item No. 469. I wanted to ask him whether he had considered granting the sugar beet growers a bonus, in lieu of the large amount of protection which they enjoyed previous to this legislation going into force.


James Alexander Robb: I am not in a bonus humour to-day, but when we come to the sales tax resolution my hon. friend will find that I am making some concessions to the oil men to whom he referred a few days ago.


Ernest Frederick Armstrong: Might I
ask if he would not consider abolishing the duty on piping material?


James Alexander Robb: It is too late for consideration in this budget.
Resolutions reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 114, to amend The Customs Tariff, 1907.
Motion agreed to and bill read the first time.




[Stage Direction]
The House in committee of Ways and Means, Mr. Duff in the chair.
Resolved, that it is expedient to introduce a measure to amend The Special War Revenue Act, 1915, and to provide:-
[Stage Direction]
Special War Revenue Act
[Stage Direction]
1. That subsection five of section thirteen of the said act be repealed and the following substituted therefor:-
"(5) On every post card for transmission by post for any distance within Canada and on every letter and post card posted at and intended for delivery through .the same post office, there shall be levied and collected a tax of one cent in addition to postage payable in the form of . a postage stamp to be affixed thereto at or before the time of posting the letter or post card; but such tax shall not be levied or collected on any letter or post card entitled to the privilege of free transmission under the provisions of The Post Office Act. The stamp so affixed shall be cancelled by the Postmaster or other officer of the Post Office Department whose duty it is to cancel the postage stamps affixed to such letters or post cards in prepayment of postage."
2. That section fourteen of the said Act be repealed.
3.	That paragraph (a) of subsection one of section nineteen BB of the said act as enacted by chapter fifty of the statutes of 1921, be repealed and the following substituted therefor:-
"(a) A tax on playing cards for every fifty-four cards or fraction of fif.ty-four in each package,-ten cents per pack."
4.	That section nineteen BBB of the said act be emended by adding after subsection two thereof the following as subsection two A:-
"(2A) In case any person other than the manufacturer or producer or importer or transferee or licensed wholesaler or jobber hereinbefore mentioned acquires from or against any one of these persons the right to sell any goods, whether as a result' of the operation of law or of any transaction not taxable under this section, the sale of such goods by him shall be taxable as if made by the manufacturer or producer or importer or transferee or licensed wholesaler or jobber as the case may be and the person so selling shall be liable to pay the tax."
5.	That subsection four of section nineteen BBB of the said act, being the list of excepted articles not liable to the consumption or sales tax, be amended by adding thereto the following :**-
"pot barley; pearl barley; split' peas; goods enumerated in Customs Tariff items 469b, 700, 701, 702 703 and 704."
6.	That subsection five of section nineteen' BBB of the said act, being the list of articles liable to only fifty per cent of the consumption or sales tax, be amended by adding thereto the following:-
"fish, or products thereof, canned but not medicated."
7.	That schedule two to the said act be amended by striking thereout the last five lines respecting carbonic acid gas which were added to the said schedule by section twelve of chapter seventy of the statutes of 1923.
8.	That a refund of the amount of taxes paid under sections sixteen A, nineteen B, nineteen BB, and nineteen BBB of the said act be granted to a manufacturer, producer, wholesaler, jobber, or other dealer on goods hereafter sqld as ships' stores.
9.	That any enactment founded on paragraph one of this resolution shall come into force on the first day of July, one thousand nine hundred and twenty-six.
10.	That any enactment founded on paragraphs two and eight of this resolution shall be deemed to have come into force on the sixteenth day of April, one thousand nine hundred and twenty-six.
11.	That any enactment founded on paragraphs three, five, six, and seven of this Resolution shall be deemed to have come into force on the sixteenth day of April, one thousand nine hundred and twenty-six and to have applied to all goods imported or taken out of warehouse for consumption on and after that date and to have applied to goods previously imported for which no entry for consumption was made before that. date.
Henry Lumley Drayton: Suppose we
take these resolutions section by section?


James Alexander Robb: Yes.
On section 1.


Henry Lumley Drayton: Listening to what the chairman has read, apparently drop letters and postcards are still to be subject to two cents postage?


James Alexander Robb: Yes.


Henry Lumley Drayton: Then what is
the reason for introducing this at all? What is the change?


James Alexander Robb: Mr. Chairman, becoming
effective on July 1, the rate of postage on all letters will foe two cents instead of three. The postage on drop letters wild remain the same as heretofore. Let me read the notation :
This section will remove (the one cent additional postage on letters for transmission by post for any distance within Canada; the additional cent wilj remain on drop letters and post cards as heretofore; effective July 1, 1926. The estimated reduction in taxation for (the nine months wild be $4,125,000; for the twelve months $5,500,000.


Mr. WHITE (Mount Royal):: Mr. Chairman, it does seem to me that the minister by his explanation has not unravelled this Chinese puzzle. I recall that Talleyrand once wittily said, "Language was given us to conceal our thoughts." I think if a serious effort had been made to give effect to that purpose it could not have been more successfully served than by this clause. If the intention of the government is to make the rate of postage two cents on letters dropped, we will say, in the city of Ottawa for delivery outside of Ottawa, why is it not possible to say so in plain, understandable language? I understand that the intention of the minister, and the effect of this clause, is to retain the rate of postage on local letters; for example, on a letter dropped in the post office here for delivery at a residence within the city the rate of postage will continue to be two cents, instead of reverting to the pre-war rate of one cent on such letters. But I do press upon the minister the desirability of so recasting this clause that a mind less dense than mine may be able to understand it.


Mr. CHURCH:: Mr. Chairman, this impost is nothing but a nuisance tax in a new form and causes the utmost trouble to the public. It is going to cause untold annoyance just at a time when business men are congratulating themselves that some of these burdens and nuisances are being eliminated. I venture

Special War Revenue Act
to say that the people will not use the post card in this form, and that we will get far less revenue than was formerly received. The city of Toronto contributes $6,000,000 yearly to the postal revenues of the country, yet we cannot get an up-to-date post office. With the many amendments to the Postal Act we already have great difficulty in knowing what the law is, and now, when the government say they are reducing taxes and eliminating nuisance taxes, they impose a regulation of this kind which it requires a lawyer to understand. I urge the minister to consider the advice of the heads of the postal service, because this is nothing but a new form of nuisance tax which will place barriers in the way of business in this country. In the larger cities there are many foreigners; who is to explain this amendment to them, and to the people in the rural places as well?
The time has come when the post office should be placed on a proper basis. It is very unfortunate that we have no Postmaster General in the House. From 1899 to the beginning of the wrar we had a surplus from the post office, and all the various postmasters general tried to cater to the public, and give them the proper facilities desired. But now when everyone is hoping for a revival of trade this obnoxious, objectionable regulation is brought forward, which means nothing and which will take a good deal of revenue from the government. I would like the minister to tell us who recommended this change, whether the heads of the postal service have been consulted; what revenue will come out of it and how it will help trade in Canada.


James Alexander Robb: Apparently the hon. member
for Mount Royal (Mr. White) misunderstood the reading of the clause. This legislation was drafted to meet the wishes of the Post Office department, who administer the act. They understand it quite well.


Robert Smeaton White: What about the public?


James Alexander Robb: And the public understand it.
To show that the hon. member for Toronto Northwest (Mr. Church) has not read the clause, he finds fault because the revenue is to be reduced. Certainly it is to be reduced; that is the intention. It is going to lighten the taxes of the people who are doing business. It is quite true that the postage on a drop letter will be the same as that on a letter going to any other part of Canada, but the Post Office Department estimate that, with the requirements of the cities for delivery at each house, it costs just as much to deliver these letters as to send a letter uoil-237|
from Ottawa to Vancouver. So the postage is made uniform, two cents on drop letters and post cards, as before.


Henry Lumley Drayton: My hon. friend interests me very much. He tells us that it costs just as much to look after a drop letter, because there is local delivery here, as to send a letter from Ottawa to Vancouver. I was under the impression that Vancouver also had a local delivery, and that this was general in all cities and towns. I was further under the impression that we have rural mail delivery to-day, which is very expensive, in a large part of the country. I am afraid my hon. friend's brief is not right; I think the Post Office Department has loaded him wrongly there. Certainly the illustration they give is very wide of the mark. Could my hon. friend really tell us why the post office think the reduction should be made in this way; whether it is because they think it will cost the treasury far less than if they were to reduce drop letters and post cards to one cent? Is that not the real reason?


James Alexander Robb: Yes, my hon. friend is quite
right; had we been in a position to lose $2,000,000 more we could have gone back to the conditions prevailing prior to 1915. But under this plan we figure that we will lose $5,500,000 during the year, and that is all we can afford.


Henry Lumley Drayton: The whole thing really amounts to this; the drop letters and post cards are not looked after because the government cannot afford to go further than they have gone?


James Alexander Robb: Yes.


Ambrose Upton Gledstanes Bury: I have one strong objection.
If it is the theory of the government that the one cent on drop letters and post cards is not enough, why add the extra cent as a tax?


James Alexander Robb: My hon. friend fails to understand the regulation. We are adding nothing, but simply amending the legislation of 1915 and removing the extra cent from the letters. We are not removing it from drop letters and post cards.


Ambrose Upton Gledstanes Bury: But the proposed regulation
reads as follows:
On every post card for transmission by post for any distance within Canada and on every letter and post card posted at and intended for delivery through the same post office, there shall be levied and collected a tax of 1 cent-
The effect in the end is the same; on a post card or drop letter you pay your postage of one cent and this extra tax of one cent, which tax is not paid on a letter going
Special War Revenue Act

from here to Vancouver or to anywhere else in Canada. The result is that you draw a tax distinction between drop letters and post cards and other letters than drop letters. Why can you not amend the Postal Act and raise the rate of postage, rather than do this by way of an extra tax?


James Alexander Robb: This is not in the form of
an extra tax; we are repealing certain parts of the legislation of 1915, the Special War Revenue Act. My hon. friend has paid the postage which he now complains of since April 15, 1915, and we are relieving him of this postage on letters.


Ambrose Upton Gledstanes Bury: I am not complaining of
anything in the way of paying. The net result is exactly the same. But I do say this: While you are making this change you are making it in a wrong way. You say that you are not imposing anything. I say that this does impose expressly a substantial tax of one cent. It is there already, I know, but you are removing the tax from the long distance letter and the net result is that you are leaving a one cent tax on post cards and drop letters, while you are taking the cent tax olf the long distance letter. You are doing expressly what I said a moment ago: You are making a tax distinction between the post cards and drop letters and the long distance letters ,and the thing is wrong. If you are not satisfied with your postage, alter the rate of it.


James Shaver Woodsworth: It is enoouraging
the long haul.


Thomas Langton Church: I should like to point out
the objection I have to this resolution. The tax of an extra cent should be passed on to those best able to pay it. I would ask the minister to consider this question of the ability of the working classes, the farmers, and the ordinary people of this country who use post cards, to pay this added cent. Does the minister know that to-day the government of Canada is practically giving the newspapers of this country a bonus of $8,000,000 in the carriage of the newspapers? That is according to the returns I got in the House of Commons last session. The newspapers are carried as third-class matter, and it cost the government to carry these newspapers $8,000,000 more than they received in revenue for the service. So that the post office is practically giving to the newspapers of Canada a bonus or subsidy of $8,000,000. The newspapers of this country are carried practically free, as third-class mail. If you can do that for some of these rich corporations owning newspapers in this country, corporations strong enough sometimes to control parliament and

nominate political leaders, surely you can do something for the poor workingman who has to pay this extra cent on post cards. This tax is unfair to the large centres of population, which are now bearing the greater proportion of the cost of administration of the post office. The revenue of the post office comes largely from the large cities of Canada. Toronto's contribution, $6,000,000, is equal to the contributions of the cities of Hamilton, Montreal, Halifax, Winnipeg and Vancouver put together. I think the working class in the large centres should have the benefit of one cent postage on post cards. To-day they have to pay one cent, plus this additional cent, or two cents to have a post card delivered in their own city, and this tax will largely be taken from the large centres like Toronto, to maintain public utilities here and there in different parts of the country. It is class legislation of the worst kind. There is one class of legislation for the newspapers and large corporations, and a different class of legislation for the working classes. A post card posted in Parkdale, for instance, to be delivered across the road will have to pay a tax of two cents. I say that is class legislation of the worst kind. Furthermore, the returns of the Postmaster General show that the more restrictions you put on mail, the more nuisance taxes you impose upon it, the less revenue you get. That is a well known principle in the administration of the post office. When you remove the nuisance taxes, automatically you increase the number of users of that form of communication. Impose restrictions on that class of mail, and automatically fewer people use that particular form of communication.
What we need, Mir. Chairman, is a Postmaster general sitting in this House, not an Acting Postmaster General. I have every confidence in the ability of the present Acting Postmaster General, the Minister 4 p.m. of Justice, who is very popular, but he has enough to do to look after his own department; he is almost a quorum of the cabinet in himself. What does the British Postmaster iGeneral do when he has a surplus? He hands it back to the people who use the mails, by lessening the charges and giving them increased facilities. In England the radio, the telephone and everything else are connected to-day with the British post office, which is doing everything it can to encourage a revival of trade and commerce. But what are you doing in this country? At this late hour of the day you are imposing restrictions which will retard the use of this particular form of communication. What part of the revenue derived from this tax will

Special War Revenue Act
be used to provide proper postal facilities in the city of Toronto? The revenue Toronto contributes will be used to maintain post offices in other parts of the country. We want a proper postal service, and at the present time we have not got proper postal facilities in the city of Toronto. Now the minister comes along and imposes restrictions on the use of post cards within the four comers and gates of that city. I do not think the public will stand for it.


Arthur Edward Ross: I am somewhat
surprised that the Minister of Finance has not put up the usual reason for this change, namely, that this is another endeavour to keep the boys and girls on the farm. That was the usual justification for changes made in the past. In 1915, whatever tax was put on as a special war revenue tax, it was evenly distributed; it was a fair and just tax. This tax is a discriminatory tax and nothing else. There is not a fair distribution of the tax; it is a tax upon the cities. I suppose the minister forgot his usual reason to justify this change, that it was for the purpose of keeping the boys and girls on the farm.


Mr. SPENCE (Parkdale):: What is the
annual deficit each year on the rural mail delivery service?


James Alexander Robb: I have not got that.


David Spence: Then it is all
nonsense to say it costs as much to deliver a letter from one side of the street to another in Toronto as it does to deliver it in Vancouver. The minister should know what the deficit is before making such a statement.


Mr. HANSON:: I agree entirely with the
observations that have been made with respect to discrimination. I would like to ask the minister a question with reference to the postage on letters going to the United States. We have not the old act before us and are therefore not in a position to say what the law is, but will the postage on letters going to the United States be two cents?


James Alexander Robb: After the 1st of July.


Richard Burpee Hanson: What about letters to
Britain?


James Alexander Robb: I think Britain comes under a different act. My hon. friend will recall that notwithstanding the argument of his colleague, the British postage is higher than ours.


Richard Burpee Hanson: I suppose the discrimination is because so many of our people have gone across the line in the last three years.


Mr. CHAPLIN (Lincoln):: Has the minister considered the advisability of increasing: the postal rates on newspapers? What is the present rate on newspapers?


James Alexander Robb: The carriage of newspaper?
and other mail matter, as my hon. friend knows, is done under regulations by the Postmaster General, and when his estimates are under consideration this information I imagine, will be available.


James Dew Chaplin: I think it comes under an act of this House.


James Alexander Robb: That may be, but an act
passed under the direction of the Postmaster General, not this one.


James Dew Chaplin: If it does not
come under this act, it certainly comes under an act of this House.


James Alexander Robb: I am interested in the
observations of my hon. friend from Toronto Northwest and the hon. member for Lincoln. I think the hon. member for Toronto Northwest was very clear, and I think my hon. friend1 from Lincoln was leading up to the same thing.


James Dew Chaplin: Leave the hon. member
for Lincoln to state his own case.


James Alexander Robb: That would be fair, but I
think my hon. friend will be in a better position to state his case after I have given my experience. My hon. friend from Toronto Northwest has argued that we are carrying newspapers at a loss to the country, and that there should be an increase in the charges for carrying papers. The men who run the newspapers, particularly some of the newspapers that strongly supported my hon. friend in the last election, do not adopt that point of view. They have represented to the government very strongly that we should reduce the charges for carrying newspapers. The government has answered ancf said, "Until we give some concession to the people who are using the mail for letters we think you should pay those charges. We will look into your case, but you are sending advertising matter through the mail throughout Canada, and you have a right to pay for it." I am inclined to agree with my hon. friend from Toronto Northwest that we are carrying some of the newspapers at a loss, but there are other newspapers in Canada which do not take that ground. I want to be frank and say they are not all taking that attitude.


An hon. MEMBER:: Name them.
Special War Revenue Act


James Alexander Robb: I would not like to name any of them, but there are newspapers which have been very decent toward my hon. friend from Toronto Northwest, and which argue that the newspapers should be carried for less. The government does not share that view.


James Dew Chaplin: I can tell the
minister-and he knows it-that we are carrying newspapers for less than cost. We are carrying newspapers on express trains, taking them in bulk to-day, at a less figure than the ordinary freight rate. Further than that, Mr. Chairman, the minister says that the big newspapers, some of those that are helping their party, are in favour of it. How about the newspapers which are helping the other side?


Mr. JACOBS:: Not very many.


James Dew Chaplin: I do not care
what side they are on, they are entitled to pay their share for the delivery of their own goods. That is the stand I took in this House when we changed the rates a few years .ago, and I do not think the minister is doing himself justice when he tries to make out that we on this side of the House are not prepared to tackle the question. Evidently he is not prepared to touch it. The rate given to the newspapers to-day is below cost, and what is happening is this: Under the present system the minister is helping to put the small country newspapers out of business. Today they are delivering some of these large newspapers at a less rate than is granted to the ordinary country newspaper. I venture to say that a large number of newspapers, I I was going to say a thousand, have gone out of business. Certainly quite a large number have ceased operations due to the action of this parliament.


Mr. EULER:: I will agree that newspapers are being carried at a very low rate, but I rise to a point of order. This provision deals with the method of taxation.


Mr. NEILL:: I did not fully catch the
reply of the minister in reference to the rate to the United Kingdom. The present rate to the United States and to points in Canada is three cents and the rate to the United Kingdom is four cents. Is it not contemplated by the government to make a proportionate reduction in the rate of postage to the United Kingdom?


James Alexander Robb: I will have to sumbit that to the post office authorities.


Henry Lumley Drayton: It is not in this bill?


James Alexander Robb: It is not in this bill.


Henry Lumley Drayton: It is not in the budget.


Robert Smeaton White: I submit
to the House in all seriousness that the drafting of this clause is as clear as mud. Look at it. It says:
-there shaiLl be levied and collected a tax of one cent in addition to postage payable in the form of a postage stamp to be affixed thereto at or before the time of posting the letter or post card; but such tax shall not be levied or collected on any letter or post card.
The tax of one cent is distinct and separate, according to the phraseology of this paragraph, from the postage stamp. Why not say in clear easy and comprehensive language that the rate of postage on a certain class of letter shall, after the first of July be two cents? Why not repeal this section, entirely, remove it from the war revenue, and amend your Post Office Act with a very simple and short three or four line section, so that he who runs may read? I know what the minister intends and what the department intends, but the man who, unaware of the intention of the government, undertakes to obtain this information from this paragraph will land himself in an insane asylum before he understands it.


James Alexander Robb: He has bad ten years to get there, because we are following exactly the language of my hon. friend's name-sake who introduced this legislation in 1915, and it was approved by the Department of Justice.
Mr. (NEILL:	I suggest that we hold this
over until we get an answer in connection with the United Kingdom rate of postage.


James Alexander Robb: That is not involved in this
legislation at all.


Ambrose Upton Gledstanes Bury: Section 14 is a purely defining section of the terms used in section 15. What is the idea? Is the idea of j-epealing the statutory definitions to throw you back on the dictionary definitions?


James Alexander Robb: No.


Ambrose Upton Gledstanes Bury: I object to passing section 2
of the resolution until it is explained fully to the House.


James Alexander Robb: We are repealing the receipt
tax and thereby losing $750,000 a year.


Ambrose Upton Gledstanes Bury: 
James Alexander Robb: My bon. friend has the wrong section 14. If he refers to section 14 on page 18 he will find that, for the purposes of this section, the expression "receipt" includes any note. He is quoting from another act.


Henry Lumley Drayton: The reference
here is wrong. We should know what we are doing. The reference is to the main act. What is the minister repealing?


James Alexander Robb: We are repealing the receipt
tax.


Henry Lumley Drayton: This section has nothing to do with it. Section 14 of the act referred to here is the act which refers to the definitions covering packages of perfumery, bottles and that sort of thing.


James Alexander Robb: The section which my hon.
friend was talking about was repealed long ago. The section we are repealing now reads:
For the purposes of this section the expression "receipt" includes any note, memorandum or writing whereby any money amounting .to ten dollars or upwards, or any bill of exchange or promissory note for money amounting to ten dollars or upwards is acknowledged or expressed to have been received, deposited or repaid, or whereby any debt or demand of the amount of ten dollars or upwards is acknowledged to have been settled, satisfied or discharged or which signified or imports any such acknowledgement, and whether the same is or is not signed with the name of any person.


Henry Lumley Drayton: Will the minister refer to the act so that we may know what we are doing?


James Alexander Robb: It has been checked by the
law clerks. The section is section 10 of the acts of 12-13 George V. chapter 47.


Henry Lumley Drayton: I would suggest that we should have the resolution altered so that we may be clear as to what we are doing.


James Alexander Robb: It is quite clear.


Henry Lumley Drayton: Is my hon.
friend still collecting any taxes on perfumeries under the War Measures Act?


James Alexander Robb: That was repealed long ago.


Henry Lumley Drayton: That was my
impression.


James Alexander Robb: This is purely in reference to receipts.


Mr. STANSELL:: I understood from the
clause the minister read and which he said was being repealed that notes were included. Do I understand that stamps are no longer required to be placed on promissory notes?


James Alexander Robb: No. This refers to a note
given as a receipt.


Henry Lumley Drayton: I suppose the
minister could not tell us what the revenue is on receipt stamps.


James Alexander Robb: The estimated loss is $750,000 a year.


Henry Lumley Drayton: How is that
made up?


James Alexander Robb: The Customs and Excise
department have that. I have not the details.


Henry Lumley Drayton: I would ask the Minister of Customs and Excise how he made up his estimate of $750,000.


James Alexander Robb: I am informed that they have kept no separate record, but this is an estimate. We will admit frankly, if it will save time, that the tax has been evaded. It was not uniform; some were paying and some were not.


Henry Lumley Drayton: A few people
who thought the tax was seriously intended started to observe it. When the different kinds of regulations came down which showed how impossible and ill-judged the whole tax was, nobody paid attention to it at all. My hon. friend says that some people did not observe it. He could have gone further and said that nobody was observing it at all. This amount of $750,000 is a guess of the wildest kind. The department have no idea as to what the revenue has been and it is very far short of that sum.


Richard Burpee Hanson: We have the minister's
frank admission that the tax was a failure and the sooner we get rid of it the better.


[Stage Direction]
Section agreed to.
On section 3.
James Alexander Robb: The present tax on playing
cards is as follows:
A tax on playing cards for every fifty-four cards or fraction of fifty-four in each package-when selling at 'twenty-four dollars or less per gross packages, eight cents per pack; when selling in excess of twenty-four dollars per gross packages, fifteen cents per pack.
This provides for a straight tax of ten cents a package.


Henry Lumley Drayton: The minister
will probably get a little more money too.


James Alexander Robb: It is a fair thing to collect
taxes from.


James Dew Chaplin: What is the
estimate?
Special War Revenue Act


Henry Lumley Drayton: I would expect there would be a slight increase in revenue.


James Alexander Robb: I do not think there will be much change. The tax will be a little easier to administer. I have no estimate.


[Stage Direction]
Section agreed to.
On section 4.
James Alexander Robb: I have a memorandum which reads as follows:
This is for the purpose of removing doubt as to whether goods are liable to sales tax when sold under process of law or under a lien. The court of appeal of the province of Quebec in the case of the King versus the Bank of Hochelaga by unanimous decision has ruled that a bank is not required to pay the sales tax on the sale of a stock in trade sold by them in pursuance of a security obtained under section 88 of the Bank Act. Quite sometime ago the Macamic Pulp and Paper Company made an assignment under the Bankruptcy Act and the Bank of Hochelaga,-now the Ban-que Canadienne Nationale,-seized and sold the company's stock in pursuance of a security which they held under section 88 of the Bank Act. The department therefore requested the bank to pay a tax on the sale of that stock on the ground that when a bank assumes the status of a manufacturer or producer and sells a stock which in the ordinary course would have been subject to the sales tax, they should be required to assume the same liability as any ordinary manufacturer or producer so far as the sales tax is concerned. Our view in the matter was upheld by a ruling made by the Department of Justice in April 1923 and I understand that the banks have always been paying the sales tax when realizing under their securities. In this particular case, however, the Bank of Hochelaga refused to pay the tax and the matter had, therefore, to be submitted to the courts for decision. The Superior Court of Montreal gave a decision in favour of the bank which decision was subsequently upheld by the appeal court of the province. In the circumstances I would suggest that section 19 BBB of the Special War Revenue Act be amended so as to provide that in future all sales of stock seized by a bank or any other pledgee or lien holder be subject to the sales tax just as if the goods were sold by the manufacturer or produces* himself.
This is signed by Noel Chasse, departmental solicitor.


Henry Lumley Drayton: We are not clarifying the law; we are changing it. The law we take from the courts. We are told by the unanimous decision of the court of appeal of Quebec that the sales tax under these circumstances is not collectable. I do not know that it is right that it should not be collectable; but let us be fair with ourselves. We are changing the law and providing for more sales tax under these circumstances. I do not see any reason why the tax should not be paid by these people.


Ambrose Upton Gledstanes Bury: My view of the matter is that where a company's stock is seized by a creditor it is a hardship on both the creditor and the company for the government to come

in and take out a tax in the form of a sales tax. If a sale has been effected under those circumstances surely there is no need for the government to extend a tax that is vicious in any case. I never heard anybody on general principles support the sales tax; it is in force only of necessity as a war measure. You are going rather far. Where there is seizure and sale under legal proceedings the creditor in nine cases out of ten does not get the whole of his money. I think yod might very well leave the sales tax as it stands instead of extending it to cases where undoubtedly there will be a hardship.


Richard Burpee Hanson: Is there not a danger under this section of 'goods having to pay the sales tax twice? Take the case of manufactured goods in the hands of a trader. On those goods the sales tax has already been paid by the manufacturer, and under this section I can see a great probabilty of their having to pay the tax a second time. I do not conceive that to be the intention of the provision.


James Alexander Robb: Under the present law the
sales tax is collected only once. This provision applies to goods on which the sales tax has not yet been collected and which may have been taken over by a bank. On such goods the government has a right to its charges.


Mr. SUTHERLAND (South Oxford):: How many articles are exempt from the sales tax?


James Alexander Robb: There is a long list of them.


Ambrose Upton Gledstanes Bury: The minister says the government is entitled to the sales tax on such goods.


James Alexander Robb: Just as a law court is entitled to the charges which it levies.


Ambrose Upton Gledstanes Bury: Surely the basis of that contention must be that there is some profit out of which to get the sales tax; but in many cases of seizure there will be no profit and the government will simply be taking the tax out of the pocket of the creditor. That is entirely wrong. If you could prove that there was some profit accruing there might be something to be said for exacting the tax, but there is no justification whatever either in law or in reason for the government to collect the tax out of the pocket of the already suffering creditor who most probably, in any event, will not get the whole of his money.


James Alexander Robb: The creditor has nothing to
do with it.


Ambrose Upton Gledstanes Bury: Why not?

Special War Revenue Act


James Alexander Robb: Ever since the sales tax has
been under discussion all the arguments on both sides of the House have gone to prove that the consumer pays the tax.


Ambrose Upton Gledstanes Bury: If goods are seized under
process of law and are put up for sale by the sheriff, there is no knowing who pays the tax. But it is a safe assumption that in nine cases out of ten it will be the unfortunate creditor who will foot the bill, for he will get so much less. The government is therefore taking the tax out of his pocket.
I care not what has been said in previous parliaments; I have my own sins to bear, and so far as I am concerned the whole principle is pernicious.


Henry Lumley Drayton: My hon. friend's sins are light. It seems to me that when it comes to a question of principle it is rather difficult to defend any tax which you do not want to pay. As the Minister of Finance (Mr. Robb) no doubt knows, we have in the Bank Act a provision whereby banks may make advances in connection; with manufacturing processes and similar enterprises on which they have a very effective lien. Some people contend that this provision should not be retained in the act, but it is a part of our banking system. That lien enhances the bank's position, which is already one of considerable advantage as against everyone else. The bank taking action, the courts of the province of Quebec, at least, have held that it need not pay the tax. We are here really dealing altogether with the banks, and clearly the bank is in a unique position: it may, and as a matter of fact it does in many instances, virtually carry on the business. Now I do not like the tax any more than dioes my hon. friend (Mr. Bury), but in the matter of taxation we must try to deal fairly with all; we should not help one trader as against another. We must try to preserve an equality of taxation among the people from whom we secure revenues, and we cannot do so if the bank, with special privileges, can force the sale of goods without paying anything in the way of fealee tax, while interest must be paid to the bank. That is the feature that appeals to me.


Ambrose Upton Gledstanes Bury: If a bank, having a lien on
certain stock, steps into the shoes of the proprietor and carries on the business it should pay the sales tax. But I am not dealing with such a case. I am suggesting the case of a seizure of goods made by a lien holder and the subsequent sale by the sheriff under proceedings similar to those taken under a writ
of fieri facias. I have not in mind either the case of a bank, such as my hon. friend has mentioned, or the case of a receivership; I am not discussing anything of that nature. I am referring exclusively to cases of seizure by a sheriff under a lien note or a chattel mortgage or a writ of execution. In nine cases out of ten the creditor fails to realize the full amount owing to him and the government proposes now to scoop the sales tax out of the proceeds he receives. If there were any margin of profit over and above the taxable costs of the debt due to the creditor then I would say that the government might be entitled to the sales tax out of that surplus. But I cannot see how the government can fairly assert a preferred claim in respect of the sales tax. It is just that sort of thing that is hurting us in Alberta. I do not know how far it is true of this government, but in that province the government has persistently pressed, in front of the secured creditor, government charge after government charge until the secured creditor does not know where he is. The result is that loans are not made. The principle is a pernicious one, and if the minister would consider the advisability of confining the sales tax to cases in judicial proceedings where there is some margin over and above the just debt, the difficulty might be got over. Where, on the other hand, as my hon. friend has mentioned, the lien holder exercising his rights steps into the shoes of the proprietor and continues in business, then as a trader he is certainly under a moral obligation to pay the sales tax. But that is vastly different from the realization of the whole capital stock at once under a sheriff's sale.


James Alexander Robb: This will apply only to such goods as are liable to the sales tax in the first instance, and there is a great list of exemptions. Supposing my hon. friend has a line of goods upon which he had paid sales tax; the bank sells similar goods, and I buy them, exempt from sales tax; then I sell them in competition with my friend. At once I start with a 5 per cent advantage over him. He will see that we must be fair to all traders. That is the reason for this legislation.


Ambrose Upton Gledstanes Bury: The hon. minister has not met my objection at all. I am talking of realization under a sheriff's sale, where the articles are sold in gross and where there is no possible competition with the other man down the street who is selling the same kind of goods. I stated expressly that I was not citing the case of a creditor exercising his right of lien and selling over the counter the
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stock of goods in the store. In that case undoubtedly he is in the shoes of the trader and he will have to shoulder the burden of the trader in the form of sales tax. But suppose I have a chattel mortgage on the stock in trade of the trader who has not yet paid his sales tax, and who would have had to pay it if the goods were sold in the ordinary way in the course of business over the counter. If the sheriff seizes those goods under my chattel mortgage-as he would do in Alberta- and advertises them en bloc by auction on a certain day, do you mean to tell me there is any question of competition in such a case? There is no competition at all, for the prices paid at an auction of that kind will not be anything like the prices paid on the same goods sold at retail over the counter in the ordinary course of business.


James Dew Chaplin: Mr. Chairman, under this item I wanted to bring a matter to the attention of the minister which I cannot gee any way of doing otherwise. A couple of years ago the minister put a tax on dies, patterns and tools made in the manufacturer's own plant. These the manufacturer never invoices and never sells, but under the law tax is collected upon them. He gets his money out of t'he work produced by those dies, patterns and tools. Under the law a great many manufacturers are being made to pay the sales tax twice, once upon the equipment and again upon the goods therewith produced. Their competitors pay no such tax; you do not reach any of them in the United States, England or anywhere else with that tax. In short, you are putting a direct double tax upon the Canadian manufacturer. I do not know why it was done; I do not know how much the minister makes out of this tax, and I should like to get some information about it. It was first done in 1924.


James Alexander Robb: Mr. Chairman, if my hon.
friend will allow this item to pass, perhaps when we come to the next item the amendment which I shall propose will clear up what he is referring to.


[Stage Direction]
Section agreed to.
On section 5.
James Alexander Robb: Mr. Chairman, I have the following amendment to make to this resolution-


Arthur Meighen: What are we at?


William Duff: No. 5.


Arthur Meighen: Before we pass that I want to ask the minister, now that he is

rivetting more sales tax on the people, has he forgotten the crocodile tears he and all his followers shed over the sales tax of 3 per cent and the fearful burden that it imposed on the great consuming masses of Canada? And how does he now reconcile himself to a tax of 5 per cent on those poor consuming masses while he remits from the large incomes of the wealthy as much as a quarter of a million a year?


James Alexander Robb: Mr. Chairman, I am removing some of the sales tax.


Arthur Meighen: The general level is 5 per cent now. What tears were shed when it was 3 per cent, in fact when it was per cent! I can remember one hon. gentleman- I wish he were in the House; it was the hon. member for Last Mountain-he will not even whisper any objection now, but when the sales tax of 1| per cent was put on, the hon. member for Last Mountain-


An hon. MEMBER:: Long Lake.


Arthur Meighen: Long Lake, is it now? Well, this is a story that will not remind us of Long Lake. He stated you could not expect anything but burdens on the poor from the government of that time, that you could no more expect anything better from them than you would expect the scent of roses if you had a polecat under the table.


Ernest Lapointe: You have a wonderful
memory!


Arthur Meighen: I have a pretty fair
memory. But how fragile is the memory of hon. gentlemen opposite, how short! Now the sales tax is 5 per cent, I want to know if the minister has any of that odour coming around. Not satisfied with the 5 per cent he is rivetting it on in further cases.


James Alexander Robb: No.


Arthur Meighen: Does he remember his
colleague from Cape Breton at that time who pictured the government letting the Queen of Sheba in all her robes and feathers walk by untouched while we knocked the bag of flour out of the hands of the little fellow taking it home to his mother? Does he not remember that? How does the minister feel when he gets some of his followers, including the member who formerly represented Last Mountain, to support not only the 5 per cent sales tax but in addition the rivetting of it on the people, while he remits the tax on the feathers of the Queen of Sheba and all the fine dresses of the wealthy to the extent of a quarter of a million a year? Will the minister give an

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explanation of the change of front and what trouble he has had convincing these hon. gentlemen? How has he got rid of the odour?


James Alexander Robb: By reducing the sales tax.


Arthur Meighen: No, the minister has increased the sales tax. It is now two-thirds higher than it was then-in fact four times as high as it was at the time of the polecat. The minister cannot escape by the mere assertion of what is absolutely incorrect. There are very few articles omitted, merely chaff and straw; the great mass of the sales tax still exists, and the workman has got to pay it on his smock, on his underclothes and on everything he wears; but the Queen of Sheba passes now and pays a quarter of a million less tax than she did at that time. Will the minister kindly explain how he has reconciled his followers to this change of front, and especially how he got the support of the party which egged on the attack at that time?


James Dew Chaplin: And who are
very quiet to-day?


Arthur Meighen: Cannot he recall the
philippics of his leader against the big interests and the alliance of the government of that day with those interests, and against the way the profiteer was allowed to escape clothed in fine linen? Now he takes the great consuming masses, for whom their hearts were bleeding in that day, and he rivets on them a 5 per cent sales tax and lifts off the great burden from those who were said to be the big interests and the favoured few of that time.


James Alexander Robb: Mr. Chairman, I would give a great deal to have the memory of my right hon. friend.


Arthur Meighen: It would be a great thing for the government.


James Alexander Robb: I am not so sure about that. My right hon. friend with his great memory appears to have forgotten that we have removed the sales tax from a long list of articles.


Arthur Meighen: Just what?


James Alexander Robb: I have not them all here.
There were agricultural implements in 1924; boots and shoes were reduced by one-half in 1924.


Arthur Meighen: But they are still half
as high again as at the time of the polecat.


James Alexander Robb: In the case of foodstuffs,
certain biscuits, the sales tax was reduced by one-half- on certain fish and canned foods
it was removed altogether. I am not going to be drawn into a long controversy on thh much disputed method of taxation; I will admit at once that it should be our objective to get rid of the sales tax as fast as possible.
I am going to offer a little free advice; when we remove this sales tax it should come down one per cent per year. If you knock it all off at one time it is not quite fair to the dealers who may have paid sales tax on some goods in stock. The objective should be to get down one per cent every year or every six months, or something like that.


James Dew Chaplin: Why not start it?


James Alexander Robb: We have started it by taking off a lot. I challenge the statement of my hon. friend that we have increased the sales tax to any great extent. This has been argued back and forth for some years, but my right hon. friend will recall that under the previous system the sales tax was pyramided. I had a calculation made that it worked out on boots and shoes to 7 per cent; on other items it came to fit per cent and on a few things it worked out to about 9 per cent. I will admit that the sales tax is higher now than I would like to have it.


Henry Lumley Drayton: And more
pyramided.


James Alexander Robb: No, I think not. Now, I
move the following amendment:
Articles and materials, not to include permanent equipment, which enter into the cost of manufacture or production of goods manufactured or .produced by a licensed manufacturer or producer; wrought, seamless, or lap-welded iron or steel tubing, less than four inches in diameter, threaded and coupled, or not, when used only in oil wells, and materials used in the manufacture of such tubing; machinery and apparatus used only in the pumping of crude oil out of wells, and articles and materials used in the manufacture of such machinery or apparatus.


Arthur Meighen: The minister is using
the very best of good judgment in not getting into a controversy, because he could not say a word either for himself or his party. The idea of the minister suggesting that this government have not raised the sales tax; 98 per cent is two-thirds higher than it was when the minister came into power, and for a while it was twice as high. The minister says it was pyramided then, but the pyramiding to-day is necessarily much greater because of the legislation passed by this government. The more you bring the sales tax back to the first transaction; the nearer you bring it to the originating transaction; the larger proportion you transfer to that originating transaction, the greater the pyramiding,
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because from that transaction it proceeds through all the other transactions, pyramiding as it goes. In our day we had a portion of it on the originating transaction and a portion gathered later on. That method proved somewhat cumbersome and rather distasteful to the retail dealers; it all came out of the consumer anyway, and the consumer had no organization, so the minister went back and put it all on the originating transaction. Now the pyramiding is greater than it ever was; it starts at 5 per cent where it formerly started at 3 per cent, and indeed at the time of the worst of the attack it was only lit per cent. The minister says they are going to get good some day and reduce the tax one per cent. How is it that he has reduced the tax on those having large incomes, and the larger the income the greater proportion of reduction,, before he took the one per cent off "the great consuming masses?" We never hear that phrase now from hon. gentlemen opposite; apparently it has been dropped from their vocabulary altogether, but some of us remember it. The minister says his memory is not very good. I know that; it is a convenient thing for their consciences, but it does not add to their value as legislators.


Samuel William Jacobs: I would like to ask my
hon. friend if he ever heard of a politician having a conscience.


Arthur Meighen: I have seen the type
who have none, and I do not wonder that the hon. member, having regard to the company he has been keeping, has despaired of any politicians having consciences at all. When I recall to him the incidents I am now recalling I am sure it is only a tribute to his logic that he begins to despair of politicians having consciences. I do not think he said very much at that time, but I know him and I will guarantee that he recalls the phraseology I am bringing to his mind this afternoon. He heard it all; he did not take very much part in it; he sat back and smiled and only reaped the fruits and thanked God. That was the part taken by the hon. member for Cartier (Mr. Jacobs).


Samuel William Jacobs: I would like to draw the
hon. gentleman's attention to the fact that I have as yet reaped no fruits.


Arthur Meighen: The fruit the hon. member reaped was the representation of Cartier. I know that is the only fruit he has reaped, and I know he is worthy of something greater.


Samuel William Jacobs: They elected me in spite
of party.
	1


Arthur Meighen: I think they must have. Now I think there are some further facts which will be brought out in this discussion, but it is well that the minds of hon. gentlemen should be turned back for a while to what was perhaps as fraudulent, as conscienceless, as unprincipled and as discreditable an attack on a great party as ever disgraced Canadian politics.


James Dew Chaplin: In view of
what the minister said a moment ago about the decrease in sales tax I would like to call his attention to the fact that in 1920 we raised by this tax roughly $15,000,000. In 1921 the amount was $78,000,000; in 1922 $73,000,000; in 1923 $106,000,000 and in 1924 $120,000,000, in round figures.


James Alexander Robb: But we are doing more business.


James Dew Chaplin: Only $95,000,-
000 was raised this year by the same tax, and to that extent less business was done.


James Alexander Robb: But in 1924 we removed a
number of items from the sales tax.


James Dew Chaplin: And the minister never brought any statement to the House of what they were. According to his own words this tax should have been decreasing every year, but the opposite has been the case. How does the minister account for that? A moment ago the minister said a number of items had been removed from the sales tax, but the facts are that the sales tax increased from $15,000,000 in the first year of its existence to $120,000,000 in 1924. It fell off to $85,000,000 in 1925, but this year it has gone back to $95,000,000.


Arthur Meighen: If business has been increasing will the minister explain why he has been collecting less income tax every year?


Mr. POWER:: People are getting wise.


Arthur Meighen: They are wise to the
kind of government we have.


Ambrose Upton Gledstanes Bury: I am delighted to hear th'
Minister of Finance damn the sales tax, but of course he keeps it on. It is not a good thing to have $120,000,000 of a sales tax around the neck of business. If I remember history correctly the sales tax was invented by the Duke of Alva and was enacted for the Netherlands, not so much for the purpose of raising money as for the purpose of crushing the people. Even that brilliant economist. Philip II of Spain, had grave doubts whether it was not an insane tax, and subsequently it was removed. It remains for Canada in the twentieth century to do what Alva and

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Philip il of Spain discovered ultimately was folly, and to put $120,000,000 a year around the neck of the trade of Canada.
I would ask the minister to consider two further exemptions to those which he has already suggested. One is an exemption upon lumber and building materials used by settlers in the erection of their residences and farm buildings. We are asking for settlers to come to this country; we are trying to improve the conditions of the settlers when they come here and make their living as cheap as possible, and yet we stick a sales tax on almost every article they have to use for the purpose of establishing themselves here. I would ask the minister to consider whether the sales tax should not be removed from all articles that come within that category.
There is another smaller line of article that I would like to mention. It is almost ludicrous, but I discover that eggs come into this country, when they are eggs, free, but that when they are blown and there is nothing but the empty shell, they have to pay the sales tax. The way that came to my knowledge was this:	A naturalist in the
province of Alberta who is accustomed to exchange or get in specimens of eggs from the United States, either by purchase or exchange, finds that he has to pay the sales tax the moment the empty shells come in here. It seems to me that naturalist specimens imported for this or other scientific purposes ought to be exempt from the sales tax. I mention these two, but particularly the question of the exemption of all building materials from the sales tax in the interest of settlers.


Mr. MURPHY:: I was very pleased to
hear the minister say that he was going to reduce the sales tax one per cent per year or every six months until it was done away with. Of all taxes that is the one that presses most heavily on the common people of this country, and it should be removed at as early a date as possible. As you read the amendment, Mr. Chairman, I understood it to say that the sales tax was to be taken off casings for oil wells.


James Alexander Robb: Certain casings.


Charles Murphy: I think casings for oil
wells were mentioned. Possibly the minister has overlooked the fact that there are many salt wells in the country which use casings for the same purpose, and I think casings for this purpose should also be added to the list of exemptions.


James Alexander Robb: I will look into that. We
have power under the act to arrange for that, but I should like to look into it first.


Charles Murphy: It is just to bring salt
wells into the same category as oil wells.


James Alexander Robb: I will look carefully into it.
The case mentioned by my hon. friend from East Edmonton regarding blown eggs, I imagine, does not amount to very much; it is rather a small matter.


James Dew Chaplin: I was hoping
that the amendment the minister moved would have had some bearing on the case I brought to his attention a few minutes ago. Would the minister look into it-the case of the sales tax on dies and tools? I presume that the minister has found a great deal of trouble in collecting this tax. There are no invoices for it in the first place, and you must require special collectors; you have to go after that tax in a special way when no invoice appears, because the manufacturer, of course, wall not invoice a,n article to himself. I doubt if the minister is getting very much out of the tax. It is not fair, it is not just, it is not right, it is not decent even, because it is a tax that is collected twice. You collect it on the tool the man works in his factory, and then again on the product of the tool itself; you collect the tax twice. It is almost impossible to get a knowledge of it for the reason that there is no 5 p.m. invoice for the first tax. There is an invoice for the second, and you get your tax in that case, but there is no invoice for the first. I cannot see either the sense or the justice of keeping a tax of that kind on the statute book.


James Alexander Robb: There is very much in what
my hon. friend says. He has convinced me that this is a tax on production that we might very well get rid of. I observe that the minister has the power to determine the value for taxation, and possibly that was placed there with the idea that the minister could provide that it should be very low.


James Dew Chaplin: No, no.


James Alexander Robb: Let me tell my hon. friend
how it came to be put in there. I am advised by the officer that it was put in there at the request of the manufacturers' association. I gather that they must have had in mind that the minister might impose merely a nominal tax, say one or five dollars. I think it is quite right; there should not be any tax on that, and I will have the matter looked into.


James Dew Chaplin: It may be as
the minister says, that after the law was passed the manufacturers' association advised you how to collect it, and the only way you
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can collect it is by making the manufacturer keep a record of the cost of the article. You say to him that the cost must be the labour on the article at $1.25 an hour, plus the cost of the raw material used in the article itself. You are putting the manufacturers to a lot of worry over something that you are not getting anything out of. The thing is not a reasonable propostion because they are paying the tax once anyway.


James Alexander Robb: I am sure my colleague the
Minister of Customs, who administers the act, when he hears of my hon. friend's observations, will look into the matter. I agree with my hon. friend that the tax should be fixed at the minimum.


Ambrose Upton Gledstanes Bury: Will the minister look into the case I suggested, the exemption of lumber and building materials for settlers?


James Alexander Robb: Yes, but I am not sure how we can relieve from taxation the settler who buys lumber and impose a tax on some person else who buys lumber. I am not sure that it might be a good thing to lighten up on the taxes on all these building materials.


Richard Burpee Hanson: Why not wipe out the sales tax on all lumber used for domestic consumption? You do not tax lumber that is exported, and I never could understand why the distinction was made between domestic and foreign sales.


James Alexander Robb: My hon. friend will admit at once that lumber is only one of many building materials. We shall have to look into the whole question before arriving at a conclusion.


Mr. LUCAS:: Would the minister consider putting lumber and shingles in the list of exemptions under the sales tax? We are spending a great deal of money to induce settlers to come here, and practically the only place we allow them to go is on the farm. Lumber enters largely into the construction of houses and outbuildings on the farm, and one of the great problems we have in the west to-day is to keep the boys and girls on the farm. In my opinion one of the greatest things that is driving our boys and girls off the farm is the type of homes we have in the west. Many of them are nothing more than shacks and are not attractive enough to keep the boys and girls on the farm. I think the government would be doing something worth while if they would reduce the sales tax on lumber and shingles, and on other building materials if they can see their way to go that far. That would be doing a great deal to assist the incoming settlers, and to assist the settlers who are already on the land in 
improving their homes. We know that the finances of the country are improving, and I believe that this is a question that the minister might very well consider.


James Alexander Robb: We will look into it very carefully.


Mr. MANION:: I would just point out to my hon. friend from Camrose and many of his friends that they have been telling us ever since this budget was brought down that it was a poor man's budget, that it was a budget for the great masses of the people. Despite the fact that we in this part of the House have pointed out that the only reductions made were in the taxes on high incomes, and a few things of that sort, they still insisted that this budget was going to help the masses of the people. If the Minister of Finance would explain to my hon. friend from Camrose the many ways in which this budget is going to help his friends in the west who are living in shacks, my hon. friend will be able to go back home quite satisfied that this budget is really a poor man's budget. Some of us have been unable to see how it can be so characterized. I made the statement about a month ago that I could not find anything in it for the working man or the small farmer such as my hon. friend referred to, and I have been hunting to find out where there is anything that will benefit those classes. I admit that once a month the ordinary working man saves a cent on a postage stamp and on angostura bitters. That is the only saving he makes.


James Dew Chaplin: That applies
only to Quebec.


Robert James Manion: My hon. friend from
Lincoln suggests that angostura bitters are to be found only in Quebec and that you cannot use them in this province.


Ernest Lapointe: I am not sure about
that.


Robert James Manion: I was on the point of
asking my hon. friend a question about the searching of rooms, to which I have seen references in the press, but I will not do so. I think the minister should point out to my good friends over here the many ways in which he says the small farmer will be benefited by the budget. Half of my constituents are farmers, and I should like to be able to go back and tell them of the advantages that will accrue to them.


James Alexander Robb: If my hon. friend can find
time to come to the Department of Finance, I will show him the correspondence from all over Canada.

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Robert James Manion: My hon. friend seems to
be able to convince the people of Canada that he is benefiting them when he is not. He keeps on repeating the statement that he has lowered the sales tax when he knows that since his government came into power it has been increased from about 2i or 3 per cent, where it stood when we went out of power, to 5 per cent. They removed the tax from a few small items, but taking it by and large it has been increased. I do not know why the minister invites me to go to his office to get the information in secret. Let him tell the public of Canada how the small farmers are benefited by this budget.


Arthur Meighen: The minister says he
has letters of commendation. 1 wonder if anyone has reminded him that he described his income tax reduction as a reduction all round, when he knew it was only half way round?


James Dew Chaplin: "All along the line."


James Alexander Robb: I will come to that later.
Mr. MEIGHE'N: In a word, misrepresentation followed misrepresentation all through the budget address..


James Dew Chaplin: All along the
line.


Arthur Meighen: These things produce
their momentary round of applause at the time, but the reaction and the disillusionment follow. It has come often in the life of this government, and it is again on the way. I do not think the records will be complete unless I put on Hansard some extracts I was referring to a few moments ago. I will first ask the. committee to listen to this statement, directed against a 1^ per cent sales tax, by the late Solicitor General in this government -the Solicitor General in a government which raised the same tax to 6 per cent:
The tax is simply for the purpose of drawing the line of demarkation more strongly between the millionaires and the profiteers of the country, and the poorer classes, who now get fairly decent clothes.


James Dew Chaplin: Who said that?


Arthur Meighen: terests of the country? Will some hon. gentleman be good enough.to explain how this language can be reconciled with support of the present budget? Will someone be good enough to explain how it is that a three per cent sales tax on the masses and a 66 per cent income tax on the very rich is a rich man's budget, a big interest budget, while a five per cent sales tax on the masses and a thirty per cent income tax on the very rich is a poor man's budget? There is scope for the ingenuity of those hon. members who have become enthusiastic over this budget and especially over the feature which we are now discussing; there is some scope for the ingenuity of the Minister of Finance himself. The language however did not stop with that which I have quoted. I take this from the former member for the constituency of Marquette, then leader of the Progressive party.


Robert Forke: Would the right hon. member mind mentioning the date?


Arthur Meighen: I knew I would arouse the present leader of the Progressive party. The date is the 17th Mlay, 1901. That was when the sales tax was three per cent. He was the leader of the Progressive party then and he was leader when it was increased, but he forgot all about this language when it was increased and so did the hon. member for Brandon. This was the language which the former leader of the Progressive party used against a three per cent sales tax:
Tlie operation of (the sales tax will also ibear heavily upon the poor man. If it raises the prices of commodities^ it limits and decreases the consumption of them. If it limits and decreases consumption, it decreases production, and if it decreases production it brings stagnation to business and unemployment to labour.
Nothing could be worse than that. That was to follow a three per cent sales tax. How are hon. gentlemen able to tolerate a five per cent sales tax and all the dire consequences to the poor and to labour that are bound to ensue? He went on:
But the minister, through the operation of the sales tax, is increasing the cost of living to every person in the country. What aibout the wealthy tnan who spends six months in California, or Florida, or Europe? He >haS not to pay taxes when he is away. But the poor man with the limited income-he may be out of work, without any income at all, just living on the slender resources he may have accum-mulated in the past-finds himself in an altogether different situation. What position is he in? And what position is the returned soldier in? This tax will hit them every day in ,the year; they cannot escape from it; and to that extent my hon. friend has been very unwise in the taxes he is imposing.

This is the sales tax increased to five per cent which hon. gentlemen support while they palliate and applaud a reduction of hundreds of thousands of dollars a year to the richer men of our country.


Robert Forke: Did the former hon. member for Marquette not move an amendment to that budget?


Arthur Meighen: I presume he did right along the lines of his speech. But I was not tied up to his speech and the hon. member for Brandon was. Being tied up to the principles he then espoused, upon which he went to the people, how does he now cajole his party into supporting an intensification of what he then condemned?


Mr. BROWN:: Is it not also true that the hon. member for Brandon and those who voted with him voted against thaA part of the budget for two years-in 1922 and 1923?


Arthur Meighen: Then the conversion
has been rather recent. Is that what the hon. member is making out?


John Livingstone Brown: Not at all.


Arthur Meighen: I do not know that I
am particularly concerned as to the exact date of the metamorphosis. All I know is that it is already perfected in the hon. member for Lisgar. Nothing could be more complete than the shackles which bind him to the Liberal party and as I look across the floor I find him in his natural place.


John Livingstone Brown: I think the hon. member
ought to feel flattered when the member for Lisgar comes where he can hear him best.


Arthur Meighen: And I hope he never
loses the lessons I am giving him now. I do not doubt that in the process of composing the Progressive party and getting them behind this budget or, in a word, making them Liberals or, as I would call it, "Grits," the hon. member for Brandon had a faithful coadjutor in the hon. member for Lisgar. There is no negation of the past; there is no superconversion that the hon. member for Lisgar is not capable of if it will help the Liberal party. The government could have raised the sales tax to 50 per cent; he would still have supported it and he would have brought all the pressure he could bring to bear to get hon. members to my left to do the same. If they wanted to let all the Queens of Sheba in the world pass by with no tax at all he would have supported that too so long as it was done by the Liberal party.	*

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I come now to the words of the former hon. member for Cape Breton North and Victoria, lately Solicitor General in this government. He said:
The Minister of Finance-I am sorry he is noit on his place-
That is the present hon. member for West York (Sir Henry Drayton).
-has shown favouritism to the (millionaires, the trusts and the combines in this country-
How those words used to ring through the parliaments of that time.
-and, as usual, he has kept a heavy hand upon the poor people.
This is in relation to the sales tax:
While he abolished the luxury tax, the only weapon by which he could reach those who are able to travel and who can revel in luxuries, he retains the means for making things uncomfortable for the poor man and of taking from him practically that which he has not. He allows to escape the ladies with the diamonds and sumptuous furs, the silks and the satins; he lets go the Queen of Sheba, while lie chases the little boy with the twenty-five pound bag of flour under his arm.
I need not remind the House that at the time those words were uttered there was not a single tax, not a five cent piece on a twenty-five pound bag of flour. The tax made no difference whatever to the opposition of that day, any thing at all that would raise a wave and storm of prejudice through the country against the government, the falser the charge, the better they liked it. Anything would do if in the minds of the great masses of the people they could get them to think that the government was favouring the rich. What I am calling attention to is that this is the government which now holds the sales tax 65 per cent higher than it was then while it boasts of a reduction in the income tax. I do not think I have finished with the former hon. member for Cape Breton and Victoria yet. He said further:
Now I am teilllirLg the present Finance Minister that while he lets the Queen of Sheba go by in swell array he is having a tax collector stand on the comer, stick in hand, to knock down the /poor fellow that has not paid the tax on his twenty-five pounds of flour. All these things constitute evidence that the poor man is visited with the scourge of taxation, while those who can better afford to pay such taxes are allowed to go scot-free.
I wonder what he would say about the government now who added to this same tax that he describes as bearing especially upon the poor, making it 5 per cent where it was 3 per cent, and who smile in peace and admiration while all the Queens of Sheba in the world pass by. The language used by these gentlemen does not differ substantially. Mr. H011-238
Speaker is not in the chair, but perhaps I may *quote some of his words as the most moderate I can find of the attacks on the sales tax. One never heard any attack on the income tax in those days, for it was impossible to make it high enough to suit hon. gentlemen opposite. These are the views expressed at that time by the present Speaker.
One has not to be much versed in political economy to know that the basic wants of man are threefold: food, clothing and shelter.
One would think, to hear hon. gentlemen opposite now, that the basic want of humanity was a motor car.
These necessities, in a cold country like Canada, should not be taxed. Any tax on the necessities of life are a handicap ito the labourer, to the worker; they press more heavily on the poor man than they do on any other man in the community.
It is fortunate for Mr. Speaker that he does not have to vote in favour of a government which has added mightily to the tax on these necessities in a cold country where they should not be taxed at all. The government has now come to the conclusion that these things are not half so necessary as a luxurious motor car to ride around in. I have some other quotations, but I think I have gone far enough, Mr. Chairman, to show the sincerity which has characterized the Liberal party in the matter of taxation-sincerity which is now so obvious in the present budget. The Liberal party stand to-day convicted of having for years in Canada conducted a campaign in which they had not a particle of belief and which they knew was insincere and fraudulent from the beginning. They stand convicted now of having attacked us for pursuing a course which they knew was right, and for not not doing just what they found essential to avoid doing when they got into office. If what we committed was an offence, what they perpetrated in the same direction was a crime. To-day they sit with no defence whatever; they cannot utter one word in palliation of the language they used at that time. All they say is, "Oh, well, we described the budget in this way and we described it in that, and as a consequence we have received letters from people who believed us." Well, the number of those who have believed them will diminish day by day.


Mr. BOIVIN:: The remarks of the right
hon. gentleman (Mr. Mteighen) whom we are all glad to see back in the House after his recent illness, were certainly very interesting. His memoirs of days gone by were especially illuminating in so far as they related to some members who are no longer here and who will not be obliged to vote upon the resolutions

Special War Revenue Act

now under consideration. But when he read so admirably those extracts from Hansard I was reminded of the reading from Hansard by members on this side of the House of extracts from certain speeches made by the right hon. gentleman himself when it was proposed to reduce the tariff on agricultural implements.


Arthur Meighen: Give some of those
quotations.


Georges Henri Boivin: I do not happen to have them under my hand, and they have been quoted so often that I should not care to repeat them. I do not want to follow my right hon. friend's example and quote from past debates to-day, but if I did I certainly would see that they applied to the question before the committee. My right hon. friend's recital of the story of the polecat is not apropos because the government is not increasing the sales tax at the present time. The story of the polecat and references to hon. gentlemen who have left the House would have been much more appropriate two or three years ago when the sales tax was increased.


Arthur Meighen: They are pretty apt yet.


Georges Henri Boivin: The right hon. gentleman
has tried to convey the impression in his very able and subtle manner that the government is to-day increasing the tax when as a matter of fact it is decreasing taxation. The former government increased the sales tax in some respects, but that government levied the tax at the source. It imposed a sales tax of 6 per cent on practically all commodities, later reducing it to 5 per cent and then to a smaller amount on certain commodities.


Arthur Meighen: What does the hon.
member mean by " the former government "7


Georges Henri Boivin: The government which was in power previous to the last election.


Arthur Meighen: I thought it was still the same government.


Georges Henri Boivin: Well, the government in
power during the last parliament.


Arthur Meighen: It should be the former government.


Georges Henri Boivin: No, I am not at all prepared to admit what my hon. friend seeks to imply. The only one who thinks that the former government ceased to exist at the conclusion of the election is my right hon. friend himself. Parliament has decided against him on many occasions and he does not like to be reminded of the fact.
IMr. Boivin.]


Robert James Manion: The majority of the people in the country were of the same opinion.


Georges Henri Boivin: I am always glad to hear from my hon. friend from Fort William who has the habit of interjecting the right remark at the wrong time. Does the hon. gentleman say that the majority of the people decided against this government?


Robert James Manion: Hear, hear.


Georges Henri Boivin: When?


Robert James Manion: On October 29.


Georges Henri Boivin: I do not want to precipitate that debate again, but if the hon. member will count the votes given to supporters of this government, he will find that they were much more numerous than the votes given in favour of supporters of the opposition.


Arthur Meighen: Did this House ever vote confidence in this government?


Mr. CAHILL:: It never voted non-confidence.


Georges Henri Boivin: This House has voted confidence in the present government every time any question has been submitted to its decision.
Mf-. MEIGHEN: The minister said it was not the same government. I thought he would go back on what he had said.


Georges Henri Boivin: I do not intend to go back on anything; nor has this government the slightest intention of doing anything of the kind. If my right hon. friend will consult the majorities cast in favour of the government, he will find that we are going forward vote by vote.


Mr. McGIBBON:: Wait until the people
get another chance at you.


Georges Henri Boivin: My right hon. friend, after endeavouring to create the impression that we were increasing the tax when he knows very well that we are decreasing taxation-


Arthur Meighen: What about section 4?


Georges Henri Boivin: Section 4 is merely for the purpose of securing uniformity in the law in all the provinces of Canada.


Arthur Meighen: Extending it where it was not before.


Georges Henri Boivin: Not at all. Heretofore
there had been differences in the interpretation of the law as between different judges in various parts of the country, and the proposed provision merely seeks to bring about uniformity. It has no other object. There is no increase in the sales tax this year. My

Special War Revenue Act
right hon. friend is suggesting to-day, as I remarked before, in his very able and subtle manner, that this government has reduced the income tax to a considerable extent, particularly as it affects the richest people in the country; and in the same breath he blames the Minister of Finance for claiming that the income tax has been reduced all round. He claims that this statement is not correct. One story or the other must be wrong.


Arthur Meighen: I do not think so.


Georges Henri Boivin: Does my right hon. friend think that both are right?


Arthur Meighen: Certainly.


Georges Henri Boivin: That we are reducing and
increasing at the same time?


Arthur Meighen: Certainly. The hon.
minister understood me before, and so that everybody may know he understood me I will repeat what I said. On all incomes from $50,000 up there is a diminution; only on part of incomes from $50,000 down is there a diminution, on scores and hundreds there is an increase. This government is quite capable of increasing and decreasing a tax at the same time. They increase the tax on the lower incomes and decrease it on the higher.


Georges Henri Boivin: I am quite willing to admit that we do increase the income tax in part on the incomes of those who should have paid the tax before, but who were exempted by hon. members on the other side of the House when they were in power, and who consequently were not called upon to pay the tax that they should have paid.


Arthur Meighen: Why did you not do it
four years ago?


Georges Henri Boivin: Because last year, two years ago, three years ago and four years ago there was no general revision of the Income Tax Act.


Arthur Meighen: Why not?


Georges Henri Boivin: The first revision came this
year. I was not a member of the government three years ago.


Robert James Manion: That is the reason?


Georges Henri Boivin: Not the only reason, but
it might be one reason.


Robert James Manion: I think so. There were a
great many taxes not reduced three yearn ago.


Georges Henri Boivin: The sales tax was increased three years ago and the income tax was not reduced three years ago because this govern-14011-238J
ment was obliged to find funds to pay the debts placed upon the shoulders of the people of Canada by the government of which my right hon. friend was prime minister. That is why the reduction did not take place, and that is why the sales tax was "increased"- that is to say, if reducing it from 8i per cent to 5 per cent can be called an "increase." My right hon. friend says:	Oh, when I was
in power, and the sales tax was originally imposed, there was no great burden placed upon the people and there was no pyramiding of the sales tax; we imposed half of the three per cent at the source and the other half a little further on.


Arthur Meighen: Hear, hear.


Georges Henri Boivin: I am glad that my right
hon. friend says, "hear, hear." I happen to have in my hand a document prepared by the officials of the department, which shows that in the days when my right hon. friend and his supporters were in power, instead of paying 2i per cent on shoes the tax was 8i per cent. When the hides were imported by the manufacturer he paid 2i per cent; when the leather was sold by him to the wholesaler there was li per cent paid on the value of the leather; when the wholesaler sold that leather to the boot and shoe manufacturer there was another li per cent paid; when the boots and shoes were sold by the manufacturer to the wholesaler there was another 1\ per cent paid on them, and when those boots and shoes were sold by the wholesaler to the retailer there was another li per cent paid, making a total of 8i per cent on the boots and shoes. Of course, there is no pyramiding there 1


Mr. KAISER:: How many boots are made out of a hide?


Georges Henri Boivin: That is a staggering question, but my answer is that it would depend a great deal on the size of the hide.


Robert James Manion: And the size of the
boots.


Georges Henri Boivin: But we were talking of the percentage of tax on the price of the hides, on the price of the leather and on the price of the shoes; so the tax in reality was 8i per cent. But that was not the only place where taxes were pyramided.


Arthur Meighen: Surely the hon. minister
is not serious in saying that because there is a tax of li per cent on the hides that means another li per cent tax on all the shoes made out of it? Absurd.

!Pij
Special War Revenue Act


Georges Henri Boivin: No; that would not be so
bad, but there was li per cent on the hide and li per cent on the shoes besides.


Arthur Meighen: No, no, the minister
added the two together.


Georges Henri Boivin: I have added five taxes
together to make the 8i per cent. I added the tax on the hide, the tax on the leather when it was sold to the boot and shoe manufacturer, the tax on the boots and shoes when they were sold to the wholesaler, and the tax when they were sold by the wholesaler to the retailer.


Arthur Meighen: But you would make a
dozen pairs of boots out of one hide.


Georges Henri Boivin: Certainly.


Arthur Meighen: Then why do you add
the percentage for each pair?


Georges Henri Boivin: The percentage is what I
am adding, not the tax itself nor the price. Let us now pass on to clothing.


Arthur Meighen: Hear, hear.


Georges Henri Boivin: I am not in a hurry to
pass on.


Arthur Meighen: I would get away from that if I were you.


Georges Henri Boivin: I would be willing to discuss the matter with my right hon. friend at considerable length.


Thomas Erlin Kaiser: Is the minister convinced
that the final percentage on a pair of boots would be 81 per cent? The hide itself would
make a dozen pairs of boots. The total percentage cannot be 81.


Georges Henri Boivin: What I intended to convey was that under the old system of imposing a small tax on every transaction there was more pyramiding than there is under the system in force to-day whereby one tax only is charged on the manufactured article.


Peter McGibbon: But the minister said the final tax was 81 per cent on the cost of the pair of boots. Absurd.


Arthur Meighen: Yes, absurd.


Ernest Lapointe: It was absurd, but it
was so.


Georges Henri Boivin: It was absolutely absurd
to charge 81 per cent on the cost of the boots, but that is what it amounted to.


Arthur Meighen: Not at all.


Peter McGibbon: The first 11 per cent
'would be probably on thirty or forty cents' [DOT]worth of leather.
JMr. Meighen.]


Georges Henri Boivin: Certainly, the tax on the
first transaction was of course smaller than the tax on the last because it kept pyramiding all the time. Perhaps I should have charged the percentage of profit in each instance on the tax, but I have left that out of the computation, and to arrive at what I term the final pyramid I have only added the rates of taxation on the different transactions. Now
I	come to the sales tax on clothing manufactured in Canada. When the wholesaler sold his wool to the manufacturer of cloth there was a sales tax of 11 per cent; when the cloth was sold by him to the wholesaler there was another 11 per cent; when he sold it to the manufacturer of clothing there was another 11 per cent; when he sold the suit of clothes to the wholesaler there was another
II	per cent; and when he sold it to the retailer there was another 11 per cent, making a total of 71 per cent approximately on the cost of the clothing to the retailer.


Arthur Meighen: Ridiculous.


Georges Henri Boivin: It may sound ridiculous
now. It was wiped out because it was so ridiculous that the people of Canada would not stand for it any longer.


Arthur Meighen: The same process will
wipe out the hon. gentleman.


Georges Henri Boivin: Oh no, it will take a much more strenuous process than that to wipe out any hon. gentleman on this side of the House.


Arthur Meighen: It is ridiculous.


Georges Henri Boivin: I merely bring this to the attention of the committee to show that the sales tax which is imposed to-day, large as it is, and liable to be pyramided as it is-


Arthur Meighen: Hear, hear.


Georges Henri Boivin: I am willing to admit that the sales tax is liable to be pyramided to a certain extent; I do not think anyone on this side of the House ever said it could not and would not be pyramided under certain circumstances, but I say it is not nearly so bad to have one straight sales tax which the consumer knows he is obliged to pay and which is based upon the manufacturer's price of the goods. It is a hundred times better to have this tax than to have a sales tax of one and one-half per cent on every transaction, which was almost tantamount to a turnover tax. There are a great many things to be said in favour of a turnover tax, but if such a tax is to be imposed it should fee a very small tax and should be imposed on all transactions. That is not what hon. gentlemen opposite did when they imposed their sales

Special War Revenue Act
tax which they said was only one and one-half per cent, but which in many eases worked up as high as seven and eight per cent.
I do not want to go into a discussion of the income tax at present, because I know I would be very properly called to order by the Chairman. To-morrow, I hope, the income tax resolutions will be before parliament, and it may then be my privilege to show the people of Canada that the old tax as it was imposed, .was a very unfair tax, by which a great many people did not pay what they should pay, while others paid a great deal more than their fair proportion. But I will say that in connection with the income tax there are at least 35 per cent of the people of Canada who paid income taxes last year who will pay no income taxes this year, and for those people there is certainly a real reduction. I will say also that for those who are between $10,000 and $50,000 a year, it is only in the case where 50 per cent or more of those revenues are derived from the dividends of joint stock companies that there is any increase. When the figure of $50,000 is passed there is a decrease all along the line, but there is not the same proportionate decrease for the big incomes as for the smaller incomes. I am sure that if my hon. friends compare the figures they will admit that statement; they will see that this is really a poor man's budget, and that when this budget was introduced it brought a reduction in income tax to the man with the small income. The hon. member for Fort William smiles again; I know he is going to interject another remark, but before he does so let me tell him that of the $12,000,000 reduction in income tax over $6,000,000 is removed from the people with incomes of less than $6,000 a year. If that is not a poor man's budget I would like my hon. friend to tell me what is.


Robert James Manion: What about, the 90 per
cent of the people who never pay income tax at all?


Georges Henri Boivin: If my hon. friend wishes
us to pay a bonus to those who never pay taxes, that may be good Conservative legislation, but I have yet to learn how we can reduce taxation to those who do not pay taxes.


Some hon. MEMBERS:: Hear, hear.


Arthur Meighen: It is always wise to
do the applauding before the truth is revealed. 1 would suggest to the minister that if he really wants to relieve the poor-those
for whom his heart as well as others bled some years ago; those who never get within striking distance of ability to pay income tax-4he thing to do would be to reduce the sales tax. How is it that the government stand to-day with that tax 66| per cent higher, while they reduced these other taxes and boast of having a poor man's budget?


Georges Henri Boivin: My right hon. friend is very familiar with the law; he knows it very much better than I know it, and he helped frame it. If he will take the Special War Revenue Act of 1915 as amended to date, even without the amendments of this year; if he will read sub-paragraph 4 of section 19 BBB he will find that everything required by a poor man, everything going into a poor man's budget and almost everything really a necessity of life, does not pay any sales tax at all.


Arthur Meighen: The hon. gentleman,
then, is the author of the theory that clothing is not necessary to a poor man, but an automobile is?


Georges Henri Boivin: The automobile pays sales
tax.


William Duff: Mr. Robb moves that section 6 be amended by adding thereto the following:
Apples, dried, dessicated or evaporated; goods enumerated in customs tariff item 105a.
Section as amended agreed to.
On section 7:


Arthur Meighen: What does this do? Is carbonic acid gas a necessity of life, or what?


James Alexander Robb: This is removing taxation; it
will be a loss in revenue of $28,000 a year.


Arthur Meighen: What does this affect?


James Alexander Robb: Soda water.


[Stage Direction]
Section agreed to.
Sections 8 to 11 inclusive agreed to.
Resolution as amended agreed to.
Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 115, to amend The Special War Revenue Act, 1915.
Motion agreed to and bill read the first time.
At six o'clock the House adjourned, without question being put, pursuant to rule.
[Stage Direction]
Peace River Election
[Stage Direction]
Thursday, May 27, 1926.