1941-05-28

Right Hon. ERNEST LAPOINTE (Minister of Justice):: It is with regret that on behalf of the Prime Minister (Mr. Mackenzie King), I have to inform the house of the death of one of our most esteemed colleagues, the member for St. Mary, Montreal, Doctor Hermas Deslauriers. Doctor Deslauriers was one of the deans of the house, having come to parliament twenty-four years ago and having been reelected at every subsequent general election. This remarkable tribute of confidence from one of the largest constituencies of the metropolis of Canada speaks more eloquently than any words of the sterling qualities, the fine character and the public spirit of our late friend.
In his extensive medical practice Doctor Deslauriers came in daily contact particularly with the working men of Montreal, and he was always ready to defend their interests and present their claims to the proper solution of social problems.
In this parliament Doctor Deslauriers has always been a loyal, conscientious, courteous and genial colleague, and his passing will be deeply regretted.
(Translation) Mr. Speaker, to Mrs. Deslauriers and her children I wish to convey the sympathy of the house in their sad bereavement, and I ask Your Honour to do so on our behalf.


Hon. R. B. HANSON (Leader of the Opposition):: My colleagues and I desire to be associated with the tribute which the right hon. Minister of Justice (Mr. Lapointe) has just paid to the memory of the member for St. Mary, Montreal. We wish to join as well in the expression of sympathy which is to be conveyed to his widow and family.

Doctor Deslauriers was a familiar figure in this house, although in recent years his voice was not often heard. As the Minister of Justice has said, he has been continuously a member of this house since 1917, a very long record indeed. It is a tribute to his popularity among the people whom he represented.
In performing this sad duty, one cannot but reflect on the high mortality rate exacted by public life. Since the last election, five of the members of this house have been called in death. This sad fact indicates only too clearly the strain and stress placed upon those who undertake public service. It is, if I may say so, a reminder to all of us here that by tolerance and moderation in this house we may help to relieve in some measure the strain which is incident to public service.


Mr. M. J. COLDWELL (Rosetown-Biggar):: On behalf of the Cooperative Commonwealth Federation group I express our deepest regret at the death of Doctor Deslauriers. He served this country in the capacity of a member of this house for twenty-four years, and, as the right hon. Minister of Justice (Mr. Lapointe) stated, he did so to the benefit of the community which he represented. We wish therefore to join in the expression of regret at the loss of a member of this house and of sympathy to his bereaved family.


Mr. J. H. BLACKMORE (Lethbridge):: The members of the Social Credit group also desire to associate themselves with the government and the opposition in their expressions of regret at the loss of this good man. We desire to extend to his bereaved ones our sympathy in their hour of grief.
Hon. PIERRE F. CASGRAIN (Secretary of State): I wish to add a few remarks to the truly appropriate words with which the Minister of Justice (Mr. Lapointe) expressed the sorrow felt by the house at the death of the member for St. Mary's.
Doctor Deslauriers was a personal friend of mine; we entered parliament on the same day. He was one of the senior members of the house. The immense majorities by which he was returned at every general election show how highly his constituents approved his conduct as a public man and appreciated his great worth.
Deslauriers had no enemies. Humble, modest, deeply devoted to the cause of the people, he was also the poor man's doctor. Innately kind and compassionate, he was ever ready to do a good turn to all who knocked at his door.

Privilege-Mr. Cockeram
By the people among whom he lived, his passing will be deeply felt. He will be long regretted. To his bereaved family and to his electors whom he loved, I offer my most sincere sympathy.
Mr. JEAN-FRANCOIS POULIOT (Temiscouata) (Translation): Mr. Speaker, it is with deep sorrow that I learned this morning of the death of one of my neighbours in this house, Dr. Deslauriers, who has just been spoken of in such eloquent words of well-deserved praise. He was not an old man, having died in his sixty-second year. Born in a family of farmers at St. Charles de Richelieu, a parish of patriots, he owned a model farm in the eastern townships and nothing gave him greater pleasure than to show to his colleagues the magnificent ears of wheat he produced on it.
He was the right-hand man of Hon. Mederic Martin, at one time a member of this house and mayor of Montreal, and now a member of the Legislative Council of the province of Quebec, whom he succeeded as member for St. Mary's division in the House of Commons. The majorities by which he was returned bear witness to his popularity. His constituency had elected a Liberal member ever since 1896. The largest majority given prior to his election was 2,177, for Mr. Martin, in 1911. In 1917 Dr. Deslauriers was returned by acclamation; in 1921, by a majority of 10,757; in 1925, by 10,704; in 1926, by 11,957; in 1930, by 10,444; in 1935, by 5,639, and finally in 1940- a striking tribute to his popularity-by 18,400, one of the largest majorities, probably the second largest, in the whole country. He was, as has been noted, an excellent physician and throughout his constituency he was known as the poor man's doctor. However, his reputation extended beyond that. He also performed wonders in the field of agriculture. The immense majorities he obtained were doubtless due to the fact that, as a doctor, he had brought into the world quite a number of his electors who showed him their gratitude by voting for him.
Dr. Deslauriers took an active interest in social matters. He never lost sight of the interests of his electors, whom he met each weekend, and he will be remembered as a conscientious member of parliament, ever faithful to his duty, and a model Liberal. His passing is regretted by all who knew him. I offer my sincere sympathies to Mrs. Deslauriers and to her children, one of whom is a fellow-member of the bar.



PRIVILEGE-MR. COCKERAM STATUS OF MEMBERS OF PARLIAMENT WHO ARE OFFICERS IN HIS MAJESTY'S FORCES

Mr. ALAN COCKERAM (York South):: Mr. Speaker, I rise to a question of personal privilege, to discuss a matter which I am convinced involves a principle of the utmost importance. I am a member of this House of Commons; I am also an officer in his majesty's forces, in the Canadian active army. In my capacity as a member of parliament I attended a meeting of the political party to which I belong in the riding which I represent. I was asked to discuss the status and development of Canada's war effort as I saw it and the present military situation in Canada. As a member of parliament, answerable to the people of this country and the people of my riding, I believed that it was my right and my duty to comment on the situation as I appreciated it.
What I said did not meet with the approval of the Minister of National Defence (Mr. Ralston). He wrote a letter to me which raises a very important question as to my personal privileges as a member of this house, and also in regard to the status of every member of parliament who wears his majesty's uniform. The issue raised thereby and therein is of the utmost importance to me and to every member who now wears or may in future wear his majesty's uniform of any of our armed forces. As it affects others besides myself, and as the course to be followed is one which should be clearly understood, I place the facts before the members of this house and ask for their guidance.
I have deferred raising this question before, partly on account of my military duties and partly because, as I am free to confess, it seemed to me that the minister's letter was more or less of an ultimatum demanding that I resign my commission, or keep quiet-that is, unless I undertake to avoid any discussion of the most important of all subjects for discussion at this time. After considerable thought I have decided that this is a question of great principle and magnitude, upon which I should not compromise, and I rise therefore not only for my own benefit but for the benefit of other members of parliament now in uniform or who may be in uniform in the future, so that they will know what their position really is.
I will now read the letter written to me by the Minister of National Defence. It is dated April 16, and was delivered to me on April 22. The ietter is as follows:
Ottawa, 16th April, 1941. Dear Major Cockeram:-	_
A newspaper report of a speech which you made in Toronto was brought to my attention
Privilege-Mr. Cocker am

the other day. I felt that it called for some notice by me.
I am writing you now not as Minister of .National Defence but as a fellow member of parliament and as one who has occupied the dual position which you now hold, namely, representing a constituency in the legislature and at the same time being an officer in his majesty's forces.
I know it is hard to define the line between these two functions, but I really think that there is a line and a very definite one between them. Your duties as a member of parliament entitle you to express your opinions in the fullest possible way on all public matters, but your obligations as an officer are governed by King's Regulations and Orders which require that an officer restrain himself from any expression of opinion regarding the administration of the army otherwise than through the recpgnized channels, namely, by way of complaint to superior officers.
Obviously, an officer who is not a member of parliament cannot, consistently with his obligations and while serving, express himself publicly as you have done at a political gathering and if an officer, simply by being a member of parliament, is not bound by the regulations, then officers who are so bound have a right to feel that they are being discriminated against in requiring that they adhere to the rules.
In this respect, the two functions, if you want to exercise them to the full, must inevitably come in conflict, and the only way in which a man can carry out his functions is to decide that the exercise of his rights as a member of parliament will be limited by his obligations to the service.
If be cannot do that, then obviously the 'man-fashion" thing to do is to abandon the attempt to hold both positions. The army obviously cannot make "fish of one and flesh of another" and there is nothing in king's regulations which excepts members of parliament, or anybody else for that matter, from the age-old restriction which prohibits officers discussing publicly matters which affect the administration of the service.
I think that it is possible for a man to perform his duty to his constituents and at the same time to refrain from exercising special privileges as an officer which are not open to his brother officers, but the individual must, of course, decide whether he is willing to do that.
I have already had before me the case of a member of parliament who did not happen to be of your political faith, who expressed opinions in public regarding administration and who was dealt with promptly and told that, if he felt that his duties as a member of parliament prevented him from observing Ins obligations as an officer, then there was no alternative but for him to choose which function he felt he should perform and that in so far as there was conflict, the rules governing the conduct of officers would have to be observed while he remained an officer.


Mr. TOMLINSON:: I wonder if the hon. member would mention the name of the officer?


Alan Cockeram: I do not know the name; this is the minister's letter. To continue:
I just mention this to let you know that you are not being singled out in any way for this note of caution.

I want to believe that you did not understand just what the situation was, but, as I say, I am writing you as a fellow member of parliament to give you the views I have just expressed for your consideration as a citizen of Canada.
I trust that you can adapt yourself to the situation so that you can carry on in both capacities, but I did think that I should remind you of what you must realize and of what you may have inadvertently overlooked in the instance in question.
For obvious reasons, I have not discussed at all the merits of what you are reported to have said. If you are a member of parliament, these things will be discussed in the proper place, but if you are an officer, the subject is not open for discussion.
Yours very truly,
J. L. Ralston.
I do not intend to discuss the viewpoint expressed in the letter, which speaks for itself. I merely wish to point out one very contradictory aspect of this letter. It starts by stating that it is not being written to me by the Minister of National Defence in his capacity as Minister of National Defence, but merely as a member of parliament. It then goes on to say, however, that disciplinary action has been taken against another member of this house. The Minister of National Defence, who in his letter first assures me that he is not writing as such, then makes this comment:
I just mention this to let you know that you are not being singled out in any way for this note of caution.
This comment makes it abundantly clear that the Minister of National Defence did not intend me to treat this letter merely as an expression of his opinion as a private member, but that he did intend it to be received as a note of caution and warning from the Minister of National Defence in his capacity as such. And as Minister of National Defence he then went on to lay before me the alternative that I must remain silent upon the general public aspect of military matters, although they are an inseparable part of Canada's war effort, or resign my commission.
I challenge that position. The Minister of National Defence says that at least one other hon. member has been similarly threatened. I believe it is my duty, therefore, Mr. Speaker, to lay the facts before you. I think this is a matter upon which there should be a clear understanding on the part of every hon. member of this house. It is a subject which will assume increasing importance as time goes on. I think it is a matter of supreme importance that the democratic principle of the right and duty of members of parliament truly to express themselves on public matters must prevail. I have not criticized my superior officers. I have criticized matters of public policy, but

Privilege-Mr. Cockeram
have not divulged any information that has come to me in my capacity as a member of the armed forces; and on that basis my remarks are wholly in order and fully justified.


Hon. J. L. RALSTON (Minister of National Defence):: I had not the faintest idea, Mr. Speaker, that this matter was to be brought up to-day. I have seen the hon. member quite a number of times, but he has never mentioned this matter which I do feel was something with regard to which some notice should have been given if it were to be discussed.
I say to the hon. member quite frankly that before I wrote him the letter I did have some consultation, though not with anyone in authority in the Canadian forces; I endeavoured to find out what had been the practice in Great Britain. I was informed that there, in a case which seemed to me somewhat similar, the course which I adopted with regard to my hon. friend had been taken by the then minister; that is to say, not to write him an official letter, not to- give instructions to officers that he be brought up on the carpet, as it were, to answer for anything that had been said, but simply to write- him a note in, a personal capacity in- order that he might have the views -of one who happened to be a member of this house and who also happened to occupy the position of Minister of National Defence; and who, some years ago, was in somewhat the same position when he happened to be a member of the- provincial-legislature and at the same time an officer of his majesty's forces. And I wrote the letter in that spirit.
My hon. friend says the letter was not written as the letter of a private member at all, and that it was intended as a threa-t. I say to my hon. friend that if a threat had been intended I would not have bothered to write the letter; I would have taken the usual military procedure in -this connection in order to have the matter properly dealt with by the military authorities. But I did not do that in this case; I wrote the hon. member.


Alan Cockeram: Mr. Speaker-


Some hon. MEMBERS:: Order.


James Layton Ralston: I wrote my hon. friend
what I thought was a courteous letter; what I thought was a letter which might go from one member of this house to another; what I thought might be regarded as a letter from one officer and gentleman to another officer and gentleman. And I am a little surprised that without notice at all my hon. friend should bring up the matter in this house in this way.
I am not going to deal with the merits of the case this afternoon. I do not know what
disposition my hon. friend desires made of this matter. But I am going to say that I recognize, as well as anyone in this house, the difficulties which confront members who happen also to be officers of his majesty's forces; and I think I have been just as tolerant as I possibly could be in that respect, having regard to what I consider to be the public duties of members. But I do feel that my hon. friend and members of this house generally ought to realize that there cannot be discrimination between those who are members of his majesty's forces; that a member of parliament cannot put on the uniform and still transgress or infringe upon the usual regulations that govern officers in regard to the discussion of what may be regarded as matters of administration and policy. It seems to me that would not be fair to the officers in the forces generally; and I really do not believe my hon. friend asserts that as a proper principle upon which he might insist. As I said in my letter I believe an officer can reconcile the two positions. I realize that he has to be a bit careful about it, because there may be questions on which he would like to express an opinion but which may contravene what are regarded as the usual military regulations, and regarding which he may have to keep silent; but that is a matter to be decided by himself. He has selected the two positions.
The other position-and perhaps this is the position that ought to be taken by the department, though I do not think they have ever been forced to take it in England and I would hope we should never be forced to take it here-would be to call upon a member of parliament to choose one or the other, whether to continue as a member of his majesty's forces, or to continue as a member of parliament. I do not think there is need for that. But if my hon. friend feels that an issue should be made of it at this time, and some rule laid down, I suppose that will have to be done.
Since I have taken this matter up I find that a practice has existed in the British parliament which might be of assistance to hon. members in this house-I am speaking now not to my hon. friend alone, but also to any other hon. members who happen to be officers in the army-under which the Secretary of State for War endeavours to meet members who happen to be officers as well, to discuss any problem with them frankly and clearly, but not in the public way in which my hon. friend sought to discuss matters of policy in the speech to which he has referred. That may be the way out. It is only a compromise, of course, but it is one which, it seems to me, seeks to give a fair and reasonable opportunity for the expression of opinions on the

Privilege-Mr. Cockeram
part of a member representing a constituency, and eliminates the discrimination which would otherwise exist if a member of parliament who is an officer were allowed to express his opinions, while other officers were not.


Mr. HARRIS (Danforth):: They have a national government over there.


James Layton Ralston: What is the difference?


Mr. POULIOT:: They had no election.


James Layton Ralston: I am sure that that interruption does not add very much to the debate. I do not know what it has to do with the matter.


Richard Burpee Hanson: As a matter of information, would the minister allow me a question? Is it not true that members of his majesty's armed forces in Great Britain who are also members of parliament have raised in the House of Commons questions of national public policy with respect to the defence of Great Britain, both before and since the war?


James Layton Ralston: In the House of Commons,
/es.


Richard Burpee Hanson: I do not know that there is much distinction. There may be. They have, as I understand it, raised questions of public policy with respect to the defence of Great Britain and the armed forces, and in regard to public policy generally. But I am not aware of the question having arisen with respect to speeches made outside the House of Commons. I am frank about that.


James Layton Ralston: I think that is quite correct. There have been occasions on which officers have raised questions of public policy in the House of Commons, when they have stood in their places as members of parliament. But I have no information as to members of parliament who are officers in his majesty's armed forces and who have gone outside to political meetings and discussed matters of policy with regard to the armed forces and the war policy generally.
I say to you again, Mr. Speaker, what I said at the outset: I realize the difficult position in which hon. members are placed. I recognize their desire to serve. I know, too, that as members of parliament they have certain duties. But I repeat that I believe those duties and the duties incumbent upon them as officers can be reconciled, if one who is an officer and a member desires to do so. The letter which I wrote, and which my hon. friend has read, I think in every line will indicate my desire that my hon. friend should see the possibility of that reconciliation. There was not in any clause of the letter a threat that my hon. friend had either to shut his mouth or to get out of the army. TMr. Ralston.]


Richard Burpee Hanson: I do not wish to prolong this discussion, but does the minister not think that his reference to doing a man's part was most uncalled for?


James Layton Ralston: I did not say that.


Mr. HOMUTH:: "Man-fashion".


Richard Burpee Hanson: Yes, that is the term I meant.


James Layton Ralston: This is what I said:
In this respect, the two functions, if you want to exercise them to the full, must inevitably come in conflict, and the only way in which a man can carry out his functions is to decide that the exercise of his rights as a member of parliament will be limited by his obligations to the Service.
If he cannot do that, then obviously the "man-fashion" thing to do is to abandon the attempt to hold both positions. The army obviously cannot make fish of one and flesh of another, and there is nothing in king's regulations which excepts members of parliament, or anybody else for that matter from the age-old restriction which prohibits officers discussing publicly matters which affect the administrations of the Service.
Certainly nothing there was intended to be offensive, and I am sure that my hon. friend, having heard it read, will see that there is nothing offensive in it. I wrote the letter as one member of parliament to another. I can say to my hon. friend-and I rather expected my hon. friend might have mentioned it, although he may not regard it as much of a compliment-that he is the first officer to whom I have addressed a personal letter of that kind. It is done generally through the officers of the department. But my hon. friend was a senior officer in the Canadian army, and I thought perhaps he would not mind and that perhaps it was due him as an efficient member of parliament that I write him that note.
I believe the position I took will commend itself to hon. members. If I am wrong in this, then of course we shall have to ascertain just what the situation is, and what my hon. friend desires to have done.


Mr. SLAGHT:: Will the minister permit a question?


James Layton Ralston: Yes.


Arthur Graeme Slaght: Did the minister receive from the hon. member who has voiced his complaint, prior to his public statement, any communication with regard to the grievances he claimed on the public platform?


James Layton Ralston: I need hardly say to my hon. friend with regard to the point he is raising that the hon. member did not refer the matter to me or, so far as I know, to any officer in the department-nothing whatever with regard to the fact that he was going to make a speech, or what he was going to say.

Private Bills-Procedure


Richard Burpee Hanson: With
respect to administration?


James Layton Ralston: No.


Richard Burpee Hanson: Or with respect to policy?


James Layton Ralston: That is correct.


Karl Kenneth Homuth: Parry Sound was just trying to help out.


James Layton Ralston: To the hon. member who has brought up the question of privilege I say that the letter was written in the spirit and in the light of the status which was set out therein. I regret that he has brought it up without notice to me or without any discussion whatever, or any reply or acknowledgment of the letter.


Mr. ROSS (Souris):: In reference to the
statement of the minister as to the customary practice in Great Britain with respect to service members of parliament, may I quote Prime Minister Churchill as reported in Parliamentary Debates of November 19, 1940-


Some hon. MEMBERS:: Order.


Mr. SPEAKER:: The hon. member has raised a question of privilege, and was entitled to do so. The minister has replied. But no discussion or debate can take place, because there is nothing before the house. According to the rule stated some time ago, the letter which has been quoted should be tabled, and I ask the hon. member . (Mr. Cockeram) to do so.


Richard Burpee Hanson: It was read into the record.


Alan Cockeram: May I reply to the minister?


Some hon. MEMBERS:: No.



REPORTS OF COMMITTEES


[Stage Direction]
Mr. LIONEL CHEVRIER (Stormont) presented the second and third reports of the standing committee on railways, canals and telegraph lines, and moved that the second report be concurred in.
Richard Burpee Hanson: Why is it considered necessary to print the evidence of this committee taken in connection with a private bill at a time when we are trying to cut down other public printing expenditures?


Mr. CHEVRIER:: The permission of the house was sought to print the evidence, and was obtained.


Richard Burpee Hanson: Why is it asked for the second time? That is the effect of this report.


[Stage Direction]
Motion agreed to.

Mr. W. H. GOLDING (Huron-Perth) moved:: That the fourth report of the standing committee on standing orders, tahled on Tuesday, May 27, in so far as it relates to the petition of Elizabeth (Elspeth) Brown Rattray Selkirk Morphy, praying for the passing of an act to dissolve the marriage of the petitioner, be now concurred in.


[Stage Direction]
Motion agreed to.


Mr. ALPHONSE FOURNIER (Hull) moved:: That, for the remainder of the session, all private bills from the senate when received from that house, shall be deemed to have been read the first time and ordered for second reading, and that standing order 105 respecting the posting of bills be suspended in relation thereto.


Richard Burpee Hanson: I do not recall any motion similar to this having been made on a previous occasion. I assume it is to expedite divorce bills; if so, I have no objection. If there is any other object in view, we should have an explanation.


Mr. MACKENZIE (Vancouver Centre):: It has always been the custom.


Alphonse Fournier: I understand it is the custom to move such a motion toward the end of the session. A similar motion was adopted on April 21, 1939.


Richard Burpee Hanson: It is a
new departure.


Thomas Miller Bell: This procedure seems to be a departure from the usual way of doing business in this house. I could not hear precisely the criticism of the leader of the opposition (Mr. Hanson), but since this motion has come down this afternoon without some members of the house being apprised of the intention to move it, it might well be allowed to stand so that we may examine its implications. There is a responsibility upon all of us to see that the procedure of parliament is not interfered with to the extent of creating an undesirable precedent. I suggest that the motion stand until to-morrow.


Alphonse Fournier: I have no objection to the motion standing.
Motion stands.
Questions



QUESTIONS

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

Mr. MacKINNON (Kootenay East):: 1.	What are the names of all persons who were continuously employed for a period of more than three months iby/or in the office of the government film commissioner during the fiscal year 1940-1941, who were in receipt of government remuneration in the form of salary, fees, allowances or other forms of payment?
2.	How and on what date was each person appointed?
3.	How long was each such person continuously employed ?
4.	What were the duties performed by each of such persons?
5.	What was the total amount paid to each of such persons, (a) in salary, fees and/or allowances; (b) for travelling expenses?
6.	What are the names of each of such persons who are still employed by/or in the office of the government film commissioner?
7.	What are the names of all persons, not continuously employed, who were in receipt of government remuneration in the form of salary, fees and/or allowances from the national film board in respect of personal services during the fiscal year 1940-1941?
8.	By whom and under what authority was each of such persons employed?
9.	What form of service did each of such persons render?
10.	What was the total amount paid to each of such persons, (a) i.n salary, fees and/or allowances; (b) for travelling expenses?


Mr. MacKINNON (Edmonton, West):: 1.	Ross McLean, Stuart Legg, Jean McIntyre, Janet Seellen.
2.	Under Section 12 (1) of the National Film Act.
Ross McLean-January 13/40.
Stuart Legg-October 18/39.
Janet Seellen-October 19/39.
Jean McIntyre-December 18/39.
3.	Continuously throughout 1940-41, except Stuart Legg whose resignation took effect January 15, 1941.
4.	Ross McLean-General assistant to the commissioner.
Stuart Legg-Supervisor of war films executed for Director of Public Information. Jean McIntyre-Stenographer.
Janet Seellen-Secretary to the commissioner.
Ross McLean	
Stuart Legg	
Jean McIntyre.... Janet Seellen...
Travelling Salary expenses 13,000 00 $ 573 93 2,845 16	1,111 72
870 00		
1,440 00		
6.	Ross McLean, Jean McIntyre, Janet Seellen.
TMr. A. Fournier.]
7.	Graham Mclnnes, Lois Rae, Jane Marsh, Margaret Bjornson, J. F. C. Wright, Cecil Hyndman, J. Cunningham, Morley Callaghan, R. A. Farquaharson, J. McCook, Lou Golden, Grattan O'Leary, T. C. Daly, Stuart Legg.
8.	Under authority of Government Film Commissioner acting on behalf of National Film Board, Director of Public Information and other departments for whom film plans were prepared.
9.	Script research and contributions to scripts except C. Hyndman who was borrowed from CBC for a special liaison job.
10-	Travelling
	Fees	expenses
Graham Mclnnes.	$2,535 00	$1,015 77
Lois Rae		290 00	
Jane Marsh		35 00	
Margaret Bjornson	125 00	119 55
J. F. C. Wright...	365 00	
Cecil Hyndman...	238 32	341 68J. Cunningham...	600 00	277 73Morley Callaghan.	628 30	R. Farquaharson..	30 00	J. McCook	30 00	Lou Golden	40 00	Grattan O'Leary..	75 00	T. C. Daly	245 00	Stuart Legg	250 00	373 99


DEPENDENTS' ALLOWANCE BOARD
Mr. GREEN:: 1.	Who constitute the board which rules on the application of a member of the forces for payment of dependent's allowance to his mother?
2.	How many such applications have been received?
3.	How many have been granted?
4.	How many have been rejected?
5.	How many mothers are receiving such allowances?
6.	What is the aggregate amount now payable each month as dependent's allowance to mothers ?
7.	Can an application for enlistment ascertain whether an allowance will be payable to his mother or must he first enlist and rely upon a future recommendation of the board?


Mr. RALSTON:: 1.	The Dependents' Allowance Board consists of Mr. A. H. Brown, acting chairman; Colonel S. H. Hill, Lieutenant-Colonel J. G. Raymond, LieutenanGCommander A. E. Fort-ington, Flight Lieutenant G. W. Dunn, Flight Lieutenant J. H. Hollies.
2.	The total number of applications for dependents other than wives and children is available and is given in answer to question No. 3. This includes fathers, sisters and brothers, as well as mothers. Applications for dependents allowance to mothers are not segregated from applications for dependents allowance to all dependents

Questions
other than wives and children. To obtain the information in regard to mothers alone would mean the examination of applications in over 17,000 cases.
3.	Total number of allowances awarded to dependents other than wives and children to March 31, 1941, 17,410.
4.	Total number of applications for dependents other than wives and children rejected, as of March 31, 1941, 6,558.
(This figure includes rejections of applications which have been subsequently approved on reconsideration following changes in the regulations or reinvestigation or review.)
5.	Number of accounts in pay to dependents other than wives and children, as of March 31, 1941, 14,115.
6.	Aggregate monthly amounts in pay to dependents other than wives and children, as of March 31, 1941, $305,139.
7.	The recruit is advised of the provisions for the payment of allowances to dependents of the forces prior to his attestation for service. His application for dependents allowance is received by the paymaster of his unit upon being taken on strength. Decision on an application for a dependent mother is made by the Dependents' Allowance Board following upon receipt of the application and the investigation report which is ordered by the paymaster at the time the application is received by him.


DIRECTOR OF HUMAN AND MATERIAL RESOURCES
Mr. DOUGLAS (Weyburn):: 1.	What was the former occupation, experience and address of the director of human and material resources in the Department of National War Services?
2.	What are the duties of this office?
3.	What qualifications had this gentleman for the position which he now holds?
4.	How many reports have been filed by this official and with what departments were they filed?


Mr. GARDINER:: 1.	(a) Barrister and solicitor, (b) Professional and business. Honour graduate in law from Osgoode Hall, Toronto, 1921, from which date he practised law in the city of Brantford as senior member of the firm of Waterous & Wallace, until coming to Ottawa in September, 1940. Appointed king's counsel in 1935. Practised a great deal of industrial law as solicitor for and/or director of a number of manufacturing companies. Was president of the Brant county bar association. Military- Served three and a half years during the war of 1914-18 in Canada, Great Britain and France with Canadian artillery. In 1932 reentered the militia to organize and command a battery of artillery which, some three and a half years later, won first place award for field batteries
in the dominion. He is a graduate of the militia staff course and counter battery staff course. Served two years on the executive of the Canadian artillery association. Civic and social service-For the years 1938, 1939 and 1940 was mayor of the city of Brantford. He is a past president of numerous civic organizations such as the Kiwanis club, and a past member of the executives of the Ontario and Canadian mayors' associations, (c) 167 Eagle avenue, Brantford, Ontario.
2.	To administer the division of human resources and to administer the division of material resources, as set up under order in council P.C. 4748.
3.	All the qualifications indicated in the answer to 1 (b).
4.	No actual count of the reports has been kept, but they would number possibly several hundred, and were filed with the Department of National War Services.
ARTICLE IN Life-"vacation news about Canada"


Mr. ROY:: 1.	Was the article by Lowell Thomas, appearing in the magazine Life, on May 19, 1941, entitled ^Vacation news about Canada , paid for by the dominion government?
2.	If so, has the government taken steps to prevent further advertisement being given to said magazine?


Mr. CARDIN:: 1.	Article in question formed part of the advertising programme arranged some months ago by the Canadian travel bureau, through an advertising agency, for the purpose of attracting United States tourists to Canada, and was paid for from the travel bureau appropriation.
2.	The 1941 contract with Life has been completed. Any question of renewal will have consideration when further United States advertising is being planned by the bureau.


USES OF HORSES IN MILITARY FORCES
Mr. BLACK (Cumberland):: 1.	How many horses, owned by the government, were in use in Canadian cavalry units or other military forces in Canada on, (a) September 1, 1939; (b) March 31, 1941?
2.	(a) How many of such horses were sold,
and (b) what was the total amount received for same?	_
3.	Were any of such horses given outright, without payment, to any officers of the Canadian active or reserve forces?
4.	If so, what are the names of officers who received these horses, and when did they receive them?
5.	Are these officers entitled to use such horses in their particular military employment?
6.	What are the names of the officers, if any, who paid for such horses, and how much in
each case?
Questions


Mr. RALSTON:: 1.	(a) 314; (b) 9.
2.	(a) 192 were sold; the balance of 111 were overage and unfit for service, and therefore were destroyed; (b) $16,304.
3.	Yes. Two officers were allowed, for sentimental reasons, to retain their regimental chargers in order that they could be placed out to pasture for the rest of their natural life on giving an undertaking that they would not be used for work in any capacity and would be well cared for. These horses were overage and unfit for further service and were to be destroyed.
4.	Captain de L. H. M. Panet, R.C.A. (Permanent Force), 31st October, 1939; Major G. F. Berteau, R.C.D. (Permanent Force), 20th August, 1940.
5.	No.
6.	None.


SALES OF EVAPORATED MILK TO BRITAIN
Mr. CRUICKSHANK:: 1.	How many cases of evaporated milk have been sold to Great Britain for delivery between April, 1941, and April, 1942?
2.	How many eases have been allotted to each milk company?
3.	How many cases have been allotted to each
of the following:	(a) Carnation company;
(b) Nestle company; (c) Borden company; (d) Libby company?


Mr. GARDINER:: 1.	509.000 cases. This amount will be increased, as arrangements are not yet completed.
2-	Cases
Carnation Company Limited. .. 100,000
General Milk Products of Canada
Limited	 75,000
Libby, McNeil & Libby	 75,000
Borden Company Limited		75,000
Silverwood Dairies Limited.. ..	4,000
Fraser Valley Milk Producers Assn	 180,000
Total	 509,000
3.	Answered in No. 2.


ORDER AFFECTING MANUFACTURE OF MILK PRODUCTS
Mr. CASSELMAN:: 1.	Has any order, or request, either verbal or in writing, been given by any board or branch, under the Department of Agriculture to farmers, cheese factories, condensaries or other milk manufacturing plants, with respect to the products which may be manufactured by said organizations or individuals?
2.	If so, to whom was the said order or request made and by whom?
fMr. P. C. BJack.1
3.	Has the said order or request had the effect of restricting the manner in which farmers may market their produce?
4.	If so, in what way?
5.	What was the request or order?
6.	What is the basis of the authority of the order?
7.	Has the order been equitably enforced among all producers?


Mr. GARDINER:: 1.	(a) No order has been issued or any request made by any board or branch under the Department of Agriculture to farmers with reference to dairy products which may be manufactured.
(b)	Orders have been issued to cheese factories with respect to the size of cheese which may be made, whether they may be white or coloured, waxed or unwaxed.
(c)	Manufacturers of concentrated milk products have been requested to restrict sources of milk supply to those from which milk was secured in 1940 No order has been issued to this effect.
2.	All orders issued or requests made have been by the dairy products board. This question otherwise answered by 1 above.
3.	The request that condensaries restrict their sources of milk supply has had the effect of restricting the manner in which some farmers might market their milk.
4.	By manufacturers of concentrated milks not purchasing from some producers from whom such manufacturers did not purchase in 1940.
5.	Answered by 1 above.
6.	Order in council P.C. 2138 of the 23rd May, 1940, as amended.
7.	No order has been issued to producers.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. CHURCH:: 1.	What has been done by the government to provide a supply of coal for Canada during next fall and winter, in view of the heavy demands for fuel for industry, brought about by the war?
2.	Will the government make a study of the matter for the information of the house, after consulting labour and industry?
3.	Was coal rationed by the government during the coal famine in 1917? If so, under what legislative action or rules and regulations?
4.	Will further study and consideration be given to resolution adopted in the house in 1922-23, regarding a national coal supply, so that more coal can be used, mined and coked under the British flag, from Nova Scotia, Alberta and Wales?
5.	What study is being made, or action taken, regarding the use of other forms of heating, as a substitute for coal?


Mr. McLARTY:: Return tabled.

Special War Revenue Act


FOOD AND DRUGS REGULATIONS-GIN
Mr. POULIOT:: 1.	Was it brought to the attention of the Department of Pensions and National Health that some distillers producing gin were not complying with the regulations under the Food and Drugs Act?
2.	If so, on what dates, and what distillers were not complying with said regulations?
3.	Did the above mentioned department issue several circulars to that effect?
4.	If so, when and to whom?
5.	Did the department make a distinction as between gin and blend?
6.	If so, what was it?
7.	Were there specific instructions given by the department to distillers, manufacturers or companies?
8.	If so, when and what were they?
9.	Were there any extensions granted to distillers, manufacturers or companies to comply with departmental regulations?
10.	If so, (a) what were they; (b) for what distillers, manufacturers or companies; (c) through the intervention of whom or what counsel; (d) for what reason were they granted?
11.	Did the said distillers, manufacturers or companies finally cpmply with departmental regulations?
12.	If so, when in each case?



MOTION FOR PAPERS


Jean-François Pouliot: For a copy of the account of Mr. L. A. Forsyth, K.C., for fees and expenses in the Bren gun probe, as mentioned at page 3813 of Hansard of May 10,	1939, showing the
said account, (a) as rendered amounting to $11,144.08; (b) taxed and paid as $8,644.68.


James Layton Ralston: I have the return called for by this motion, and I shall table it now.
Return tabled.



THE MINISTRY


[Stage Direction]
On the orders of the day:	[DOT]
Richard Burpee Hanson: I had intended to direct a question to the Prime Minister (Mr. Mackenzie King), but in his absence I shall ask the right hon. gentleman who is leading the house (Mr. Lapointe) to communicate the question to the Prime Minister.
May I ask the Prime Minister whether it is customary, and, in his opinion, desirable, that announcements of important cabinet changes should be made, while this house is in session, at a calf auction rather than in
this house? Will the Prime Minister lay on the table of the house any letters of resignation or other correspondence in connection therewith between himself and the retiring Minister of National War Services?


Ernest Lapointe: I have no doubt that the Prime Minister will be highly pleased when he sees the question of my hon. friend.


Richard Burpee Hanson: The answer is the point.


Ernest Lapointe: He will certainly deal with it at the proper time. Meanwhile may I tell my hon, friend that there has been no change in the government portfolios or anything of the kind to which my hon. friend has referred in such picturesque language. It is largely a matter of imagination.


Richard Burpee Hanson: What did happen, then?


Hon. J. G. GARDINER (Minister of Agriculture) :: As the minister concerned perhaps I may be permitted to say that yesterday when speaking at a calf sale, and following my usual practice of agreeing, perhaps a little too fully with the press, I did refer to press statements to the effect that a certain change would take place, and probably agreed to an extent which made it possible for some persons to interpret it as an announcement. But there was nothing more than a passing reference.


Mr. CHURCH:: Call it the department of ghosts behind the scenes.



SPECIAL WAR REVENUE ACT


[Stage Direction]
On the orders of the day:
Joseph Henry Harris: Mr. Speaker, I should like to direct a question to the Minister of Finance. The telegrams on which the question is based have just reached me, and the minister has not had an opportunity of going over them, but I will pass them over to him and perhaps he can give me a reply to-morrow. This wire is signed by Clifford Sifton and many others asking for reconsideration of the tax on the admission price to skating carnivals and other sporting events, and particularly that consideration be given where the proceeds or part of the proceeds go for charitable purposes.
Labour Conditions-Oshawa



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: I should like to direct a question to the Minister of Labour based on a letter from the secretary-treasurer of the Canadian Hosiery Workers' union.
The letter makes reference to the conciliation board sitting at the present time on the question of wages at the Schofield woollen mills at Oshawa, and the union protests the appointment of Mr. John Robinette, of Ontario, to investigate a previous dispute which culminated in a strike in that plant, which strike the Department of Labour declares illegal. The workers returned to work, taking advantage of the conciliation machinery, and a board is now sitting for the purpose of considering wages in that plant. The union representative makes the statement that the investigation instituted by the department into the previous dispute is interfering with a proper presentation to the board of the matter now in dispute. Is the investigation into the previous dispute being carried on with the full knowledge of the minister, and will he inform the house as to the necessity for the investigation being carried on by Mr. Robinette?


Norman Alexander McLarty: The hon. member for Cape Breton South (Mr. Gillis) was kind enough a short time ago to send me a copy of the question he proposed to ask. I think the information in one respect might mislead the house as it has the hon. member. A board was appointed and is now sitting to investigate the grievances alleged in connection with the Schofield woollen mills. Prior to that a strike had taken place without any application for a board, and it was entirely an illegal strike. The commissioner, Mr. Robinette, is sitting to determine the matter of responsibility and culpability in promoting that illegal strike. There is no reason why there should be any conflict between the work of the commissioner and the work of the board. The board is there to endeavour to adjust grievances such as may exist, and the commissioner is there to determine on whose shoulders the responsibility should rest for promoting and inciting an illegal strike.


Karl Kenneth Homuth: If the board should find that unfair wages were paid and that the workers had reason to strike, and if the commissioner should find that the strike was illegal, are the workers to be prosecuted?


Norman Alexander McLarty: I do not wish to prejudice the situation by any advance statement, but I might clear the air a little by saying this: the question in the one case is the right to conduct an illegal strike. The workers could perfectly properly and quite reasonably have applied for a board, and it would have been appointed. They elected, however, to go out on strike. The hon. member for Waterloo South will appreciate the fact that there is a wide difference between justification for an application for a board and justification for going out on strike prior to any board being applied for.



SIR JOHN A. MACDONALD STATEMENT WITH RESPECT TO UNVEILING OF TABLET AT ST. PATRICK, QUE., ON FIFTIETH ANNIVERSARY OF HIS DEATH

[Stage Direction]
On the orders of the day:
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): May I ask the Minister of Mines and Resources what decision he has reached regarding the unveiling of the tablet at St. Patrick, that wonderful summer resort in the lower St. Lawrence where the late Sir John A. Macdonald chose to spend his summers for so many years? The tablet is in front of what was his summer residence.
Hon. T. A. CRERAR (Minister of Mines and Resources):: Mr. Speaker, since my hon. friend the member for Temiscouata raised this question a few days ago I have had an opportunity of looking into the matter and learning what the practice has been in the past. As my hon. friend stated the other day, a few years ago a tablet was erected to commemorate the fact that Sir John A. Macdonald spent a good many summer holidays at St. Patrick in the beautiful county of Temiscouata, represented in this house by my hon. friend. It has not been the practice in the past to celebrate in a national way the erection of tablets to commemorate incidents that are more or less local in character.
I understand the practice has been, where silch celebrations have taken place, to have the attendance of the representative from the province concerned on the Historic Sites and Monuments board. There is much merit in the suggestion which has been made by the hon. member for Temiscouata, and I have decided to invite Mr. Justice Surveyer, who is the representative from Quebec on the board, to be present to unveil the tablet and pay a tribute to Sir John A. Macdonald, possibly at the same time as the ceremony takes place at Kingston or on some later occasion.

Pension Act-Mr. Bruce



TORONTO VOCATIONAL SCHOOL


[Stage Direction]
On the orders of the day:
Mr. D. G. ROSS (St. Paul's):: Has the Minister of Labour come to any decision with respect to the application of the school board of the city of Toronto for assistance in connection with their new building for the training of air mechanics? We are getting near the end of the session, and as this is a very important matter I should like to know whether anything is being done about it.


Norman Alexander McLarty: I had the privilege of meeting a delegation from Toronto, including the chairman of the board of education and some members, with regard to the extension of the vocational	school-the	Central technical
school, I think. I am afraid I am not particularly optimistic as to getting the government to agree. I hope to have a definite answer within a few days, although I think I can assure my hon. friend that he will not find it an entirely helpful answer.



BACON BOARD


[Stage Direction]
On the orders of the day:
Mr. M. C. SENN (Haldimand):: I would like to ask the Minister of Agriculture a question, which perhaps he may not be in a position to answer to-day. A short time ago the bacon board made public announcement, which appeared in the newspapers, that the use of pork in Canada would be limited from now on. Does the minister care to make a statement either now or to-morrow as to the implications of that order and how it is to be enforced?


James Garfield Gardiner: I would prefer to make a statement to-morrow.



PENSION ACT


[Stage Direction]
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health) moved the third reading of Bill No. 17, to amend the Pension Act.
Thomas Langton Church: Before this bill is given third reading I have a question to ask of the minister arising out of his
reply to me yesterday with respect to returned soldiers' insurance. The minister said:
The question of soldier insurance has yet to be considered by the committee, and doubtless there will be a recommendation with reference to it.
Will the committee meet, and will it have a recommendation ready for this session? I should like also to know something as to the northwest veterans' assistance.


Ian Alistair Mackenzie: I cannot possibly forecast any recommendations of the select committee. This matter will be considered, but what the recommendations will be I cannot state at the moment.


Thomas Langton Church: Thank you.


Hon. H. A. BRUCE (Parkdale):: As I was unable to be present yesterday when the bill was considered in committee, and as I happened to be a member of the pensions committee, I should like to say a few words now on the subject.
First of all, I wish to refer to a statement made by the leader of the Social Credit group in this house (Mr. Blackmore) when he said that the report represented a "callous betrayal" of the veterans' cause. In my considered judgment, having spent many hours as a member of the committee and listened sympathetically to briefs so ably presented by representatives of many organizations, men and women, this statement is a totally unjustified slur upon the integrity and sympathetic understanding of the veterans' problems by a committee composed almost entirely of veterans themselves. As one member of that committee I resent this totally false and unwarranted statement.
The minister of pensions stated1 yesterday that there had been 12,786 discharges as medically unfit since the present war began, and out of this number 687 pensions had been granted. I wonder if hon. members realize what this means. It means a very inefficient medical examination, and the responsibility must be placed upon the medical services of that time. I think I am justified in making that statement, having had exceptional opportunities of knowing what took place in the last war and of what, I am sorry to say, has happened in the present war. At the beginning of this war no X-ray examinations of chests were made, and as a consequence a great many cases of incipient tuberculosis were enlisted. These have since had to be eliminated, and, I am afraid, will be a charge upon the taxpayers for some time to come.
Secondly, I should like to say a word on a subject which has an intimate connection with this matter, namely, the question of
Pension Act-Mr. Power

records. I emphasized the importance of accurate records in my remarks to the house some months ago, from the experience I had had in the last war. Members will realize the vital importance of this subject, and I should like to ask the Minister of National Defence or, since he is not in bis seat, the Minister of National Defence for Air (Mr. Power), to see to it that every possible care is taken with regard to records. It will be apparent that after the lapse of years the written record of a man's service is all that the pension commission has to depend upon in order to adjust his pension.
The bill that is now before the house for third reading represents the considered views of the majority of the committee, all of whom were sincerely anxious to do everything possible for the veteran and his dependents. We must also remember, however, that we have a responsibility to the taxpayers. This bill is undoubtedly a great improvement on any previous act, and will adjust many of the grievances pointed out to us in the committee. Three or four members who spoke yesterday, I notice, disagreed in one or two particulars. I give place to no one in my desire to do everything possible for the veterans who served in the last war and for those who will return after this war. For them I have every sympathy and respect, and I very much hope that they will be satisfied with what we have been able to accomplish in this bill. For if it does not give them all they ask, it is at least a serious and sympathetic attempt to do them justice.
In conclusion may I pay a tribute to the unfailing courtesy and ability of the chairman of the committee, and express the hope that the committee may be continued under his chairmanship during the present war, so that if any matters arise which need adjustment they can be referred to it at any time.


Hon. C. G. POWER (Minister of National Defence for Air):: I rise simply to keep up
an uninterrupted record of over twenty-three years of having always spoken on a pension bill, and to endorse what has been said by my hon. friend who has just spoken (Mr. Bruce). For many years in dealing with pensions it was brought home to me as it was to all other members who had something to do with pension legislation, that one of the great difficulties in seeing to it that justice and fair play was given to the men lay in the fact that faulty records had been kept in a great many instances in the last war. I remember making special reference early in this war to the question of records, in my conversations and, I believe, in some written communications to the then minister of

national defence. I also took the trouble, I believe on the day war broke out, to write to the then minister of national defence, now minister of pensions (Mr. Mackenzie), asking him to be particularly careful about the medical examinations which were held on enlistment. Perhaps he may return the letter to me now. On the other hand, I think I can boast that, so far as the Royal Canadian Air Force is concerned, there will be very little to complain of on the ground of incomplete and faulty medical examination on enlistment. In fact, the complaint is and has been that the medical examination is perhaps more severe than it should be.
I might refer to some observations made by the leader of the Social Credit party. I was not in the house at the time, but if I am to judge from what appeared in the press he referred to the scandalous treatment of exservice men. I have in my hand the comparative scales of pensions indicating, and it is well known, that in some cases, in fact, in almost every case, the scale of pensions awarded to Canadian ex-soldiers is higher than that paid anywhere else in the world.
I wish to refer to the expression "scandalous treatment," as applied, I presume, to the treatment of soldiers since the last war. May I point out that ever since 1918 there have been committees of this house, composed of members representing all political parties, dealing with the problems of ex-soldiers. These committees were headed by men such as Mr. W. F. Nickle, of Kingston, who in the early days of pension legislation spent almost all his time and devoted a great deal of his admittedly great legal talent to laying down the principles of the pension legislation to be drafted. There was Hon. Newton Wesley Rowell, a man eminent for his judicial knowledge and his desire to be of benefit to his fellow man in the way of social service and welfare. There was the late Mr. Hume Cronyn of London, than whom no man ever devoted more time and energy to the good of the ex-soldier. There was the late Sir Herbert Marler; and all down the line hon. members of this house, year in and year out, gave their attention and time and energy to endeavouring to assist the ex-soldier. Time after time the house has unanimously passed the reports and recommendations of these pension committees. Time after time association after association of returned soldiers has endorsed the recommendations and legislation brought down by these committees.
My hon. friend, upon giving this matter further consideration, will perhaps inquire of his own conscience whether he was deliberately intending to discredit all the work which

Pension Act-Mr. Cruickshank
has been done by this House of Commons during the past twenty years, or whether he thought it a convenient opportunity to hang upon pension legislation a dissertation on his favourite theory. It appears to me, now that I think of it, that part of that favourite theory of his had something to do with pensions which have never been granted to the people of Alberta. I have never said that was a scandalous betrayal of the people of Alberta.


Mr. MacNICOL:: But it was.


Charles Gavan Power: I close with those words.


Mr. G. A. CRUICKSHANK (Fraser Valley):: I want to say a word on pensions
and to say it before we have a thesis on social credit. I was a member of this committee, and very proud of it. I have been on a few other committees, and with all respect to them I can say that none of them ever worked harder than the pensions committee. But there were one or two things in the report as regards which I was not of one mind with the committee. I desire to quote Hansard, page 3190, from the speech delivered yesterday by the hon. member for Renfrew South (Mr. McCann). I do not think this is in accord with the desire of the returned soldiers of the last war or of the Canadian Legion.


Mr. McCANN:: Is it not a rule of the house that hon. members may not quote from a former speech in the same debate?


Georges Parent: This is a continuation of a debate upon a bill which has received second reading and is now receiving third reading. The hon. member is free to quote from a speech in the same debate.


George Alexander Cruickshank: I had never known
before of an hon. member being, afraid to be quoted in this house. I am certainly not afraid to have anything I say quoted. The hon. member said:
But I am equally sure that there must be many people receiving pensions who are not as much entitled to them at present as when the pensions were awarded. The proof of that is that we have men enlisting in this war who are pensioners from the last war; they got a pension because they had some disability as a result of the last war, and up to the date of enlistment in the present conflict they have been receiving that pension and are receiving it now, yet they have been passed as A-l.
That does not make sense. That is one thing I took exception to.
The only other point on which I was not unanimous with the committee was spoken of by several hon. members the other day; I refer to the question of the date. If a few of us had not strenuously objected it would, 14873-203
in so far as this war is -concerned, have gone through first as seven years, and then as fifteen years, as the time limit for marriage following the present war; yet to-day we are opening up across Canada a recruiting campaign. Owing to our objection that provision was withdrawn. But there is still a deadline for the last war. I speak for the generation to which I happen to belong. I am not the only one in this house, but I say that this provision amounts to nothing less than legalized birth control. Just the other day, according to the daily press, a man was put in charge of the immigration policy of this country overseas, and yet we are told that we must no longer respect marriages and the birth of children to Canadians who fought in the last war. To me it is utter nonsense, to which I will never agree.
Naturally I am going to vote for this bill; it is an excellent bill compared to the last one. I quote the statement made by the minister yesterday as reported at page 3200 of Hansard:
Mr. Mackenzie (Vancouver Centre):	There
is the reason which I stated before the committee. This has been in force now for eight years. Between 1933 and 1939 would have been the proper time to lift it, if at all.
Because the committee in those days did not do its duty as it should have done to the young men who fought in the last war is no argument for the minister or anyone else to use in favour of its not being done now. Surely as members of parliament we are not going to state that there is finality in connection with war pensions. There can never be any finality so far as pensions to veterans, their widows and orphans, are concerned, so long as there is a soldier of the last war or this war still alive.
As I stated before, naturally I am voting for this bill; I think it is a wonderful improvement, but I want it definitely on record that the recommendations of the committee were not unanimous. I speak not only for myself, but also for other hon. members who are absolutely opposed to this deadline. I speak even for the Minister of Pensions and National Health. Surely the most sacred thing in this world is motherhood and the birth of a child. The minister himself is in favour of that, and I quote him. Pie says there should be no deadline. To my office came this book from no less an authority than the present minister. It is entitled "Canadian Mother and Child," compliments of the Hon. Ian Mackenzie, and deals with their problems. I do not see how the minister, in view of that publication, can consistently say there should be a deadline.
I want to go on record as saying definitely, as a returned soldier from the last war, that

Pension Act-Mr. Blackmore

the only reason, there is a deadline-for the first and perhaps the last time in my life in this house I am in agreement with the leader of the Social Credit group-is that St. James street says it must be on a financial basis. It was not the desire of members of parliament, and most emphatically it is not the desire of the taxpayers of Canada, as I see it to-day.
Mr. J. II. BLACKMORE (Lethbridge): Before this motion carries, Mr. Speaker, I should like to say a word following the remarks of the hon. member for Parkdale (Mr. Bruce), because I think he misunderstood the position. I did call the bill a callous betrayal, and I repeat it; it is a callous betrayal of the soldiers of the last war and of this war. But in saying that I had no intention whatever of casting any slur on the committee in regard either to its sympathy or to its industry. I would ask the hon. member for Parkdale (Mr. Bruce) now if he felt that the committee got all it wanted. Was the bill as good as the committee wanted it to be?


Herbert Alexander Bruce: I have no hesitation in
answering that question. It is as good a bill as we thought we could give them at this time. I would like to ask the hon. member this question. If his remark was not a reflection upon the members of the committee, upon whom was it a reflection?


John Horne Blackmore: I would say that probably it was a reflection on the individual whose will set bounds on the ability of the committee to achieve its desire.


Herbert Alexander Bruce: Nobody ever set any bounds on my wishes in respect to my independence on that committee.


John Horne Blackmore: I think I will leave my statement at that, Mr. Speaker, with the support I gave it in my remarks last evening. If the hon. member will read my last night's speech right through; if he will take the declarations made between 1914 and 1917 by the then leader of the government to the men overseas; if he will consider also the statement made by the pension committee in 1937, together with the fact that we Canadians have never done anything to betray our promises with respect to our bonds, I believe he will have to agree with my statement. We have paid our bond interest, whether we could or could not; we have kept our bonds up to date whether we could or could not. We did not stop to think whether we could do it; we were going to do it, and we did it. We are still going to do it, and we are doing it. We have never stopped to ask if we could afford to do it. We simply said it was the right

thing to do and that we were going to do it. Of course, if we say it is the right thing to give a man a square deal, we could do that also.


Mr. CLEAVER:: And we have.


John Horne Blackmore: -not. I think I have said enough on that point.
Now I am going to say one other thing to the hon. member for Parkdale. Surely he will not say that the bill is as good as the act which was in force in 1939, when the war broke out. This bill does not compare favourably with the former bill, as was acknowledged by the Minister of Pensions and National Health (Mr. Mackenzie) himself yesterday. And the reasons were pointed out. Surely the hon. member for Parkdale would not contend for a moment that in 1939 we had perfect pension legislation, or that we had an act which gave a full measure of justice to these returned men. In this country we have men who receive large pensions and who at the same time occupy positions which yield large salaries every year. These men are scarcely more worthy than many men who get no pensions, who can get no positions, who have become objects of public charity and in many cases are practically kicked about from pillar to post. My firm, definite, and I believe immovable stand is that while there is in this country a man who wore the king's uniform, who fought in France for our liberty, who at the present time cannot get work and is suffering by reason of that fact, the mere presence of that man in this country so suffering is a reflection on Canada and constitutes evidence that this bill is a callous betrayal of that man.


Hughes Cleaver: I would ask the hon.
gentleman to name one man in the position he has just mentioned. I challenge him to do so.


John Horne Blackmore: It is an easy matter to name men of this kind, but the hon. member has no right to challenge me to do it. If he would just give me time to go to my office I could almost fill Hansard with the names of these men. There is no question about it. All the hon. member has to do is walk down the streets of Ottawa instead of driving around in a taxi, and he will see plenty of these men. The trouble with the hon. member is that he spends his time in taxis and high class hotels; consequently he does not know the condition that exists on our streets and in ou'- parks, where these men are to be found.


Hughes Cleaver: Does the hon. gentleman say that I, an ex-secretary of the Canadian Legion in my home town, know nothing about the problems of the returned men?

Pension Act-Mr. Quelch


John Horne Blackmore: I was pointing out to the hon. member for Parkdale that the 1939 act was certainly far less than the veterans of Canada had a right to expect from this country. So that if the present bill is inferior to the 1939 legislation, I think further comment is unnecessary. The Minister of National Defence for Air (Mr. Power) spoke of my having used the word "scandalous." I did not use that word, but I do not know that I would particularly mind if I had done so. The words I used were "callous betrayal," and I stand by those words. I think every year that passes will make more evident the truth of my statement, and bring the people of Canada even more generally to the realization that I am right.


Douglas Gooderham Ross: If I might ask one question of the minister, is it intended that the report of the committee in connection with rehabilitation will be given to parliament before the recess?


Ian Alistair Mackenzie: I cannot say with any certainty, but I expect a further report from that committee.


Mr. VICTOR QUELCH (Acadia):: Mr. Speaker, I had not intended taking part in this discussion, but in view of some of the statements that have been made I believe I should say a word. We are continually hearing that the pension committee is a nonpartisan committee. We would all like to see it so, but I think it is more correct to say that it is probably less partisan than any other committee. As a committee, of course, it is still partisan. I make that statement for this reason. I do not believe >the report of the committee truly represents the feelings of the majority of its members. Why do I say that? For the very simple reason that when we are discussing matters of great importance in open session we find that a very large number of those on the committee are in favour of certain action being taken. But when we hold a meeting in camera we are told by the minister that he is agreeable to the committee going so far and no farther. Then we find that the viewpoint of many of these hon. members is moulded and changed to meet the stand taken by the minister.


Mr. GRAY:: On a point of order, Mr. Speaker, I resent that imputation.


Victor Quelch: I don't care if you do resent it.


Ross Wilfred Gray: I believe that every hon. member on the committee, whether it met in camera or in open session, had every opportunity to say what he believed. There was 14873-2031
no suggestion by the minister or anyone else as to what should be done by any member of the committee.


Victor Quelch: When the hon. member says the minister made no statement he is saying something that is not based upon fact. When we were discussing the question of the deadline-


Ross Wilfred Gray: I suggest to the hon. member that he had the fullest latitude, as I had and as every other member of the committee had.


Victor Quelch: That is not a point of order.


Georges Parent: Order. The hon. member for Acadia has the floor.


Victor Quelch: The point I was emphasizing, to which apparently the hon. member objects, was that while we were discussing the bill in camera the minister said he could not agree to certain amendments; and the amendment I am referring to particularly was the amendment with regard to the deadline. Until the minister made that statement I believe we had a very good chance of bringing about that amendment. But just as soon as the Minister of Pensions and National Health said he would not agree to the deadline, we saw it was useless even to try to get it, because he was dominating the Liberal members in the committee.


Some hon. MEMBERS:: No.


George Alexander Cruickshank: Am I to understand the hon. member is telling me that I was dominated by anybody?


Victor Quelch: Without any hesitation I
will agree that the hon. member refused, as one, to come into line with that ruling. He was one who would not agree to a unanimous report from the committee. But unfortunately he was only one of a larger number. I wish there had been more Liberal members who had taken the same stand as the hon. member for-


George Alexander Cruickshank: Fraser Valley.


Ross Wilfred Gray: On a question of privilege, I
do not intend to have the suggestion go out that any hon. member on the committee, whether he was the hon. member for Fraser Valley or the hon. member who has just spoken, did not speak his mind freely. There was no suggestion of domination by the minister. Every member had his views, and expressed them, the same as the hon. member who has just spoken.


Victor Quelch: I am not saying for one
moment that every member of the committee, whether in camera or in open session, did not
Pension Act-Mr. Quelch

have the right to express his feelings in full. The point I make is that the committee was dominated by the Minister of Pensions and National Health in so far as the deadline was concerned. I say that because after the minister made the statement that he could not accept the suggestion, hon. members felt- and I am not criticizing them unduly-that as they were not going to be able to get certain things they wanted, they would get the best they could. Nevertheless, in spite of that I feel that the members of the pensions committee should have held to whatever views they had, and that they should have drafted a report asking for this or for that, even if they knew the minister was not agreeable to granting their requests. Then they should have let the house decide whether or not their requests were in order.
All hon. members opposite know that what I say is true, but for certain reasons they may feel it is not wise to make the admission. That, however, is one of the weaknesses of the system under which we are operating. It is a two-party or three-party system, whatever you wish to call it; but hon. members are not free to stand up to their convictions. I am sure hon. members opposite would not say for one minute that they are in accord with everything the government formed from their party has done. But under our political system, they do not raise their voices in protest ; on the contrary they consider it expedient to remain silent while certain things are done with which they do not agree. It would be futile for any hon. member opposite to object to that statement.
The injustices under this bill are the deadline respecting children, the deadline respecting applications for pensions which expire in 1942, and the deadline with regard to marriages. These are injustices. I cannot see why a young soldier should be penalized, or why we should say to him, "Unless you marry before a certain date your wife will have no chance to receive a pension later." We are penalizing the younger soldiers.
Many hon. members emphasized the point that at least we are removing the deadline in so far as soldiers of this war are concerned. But, Mr. Speaker, we know very well that long before the twelve-year deadline period expires a committee will be arranged to make changes. And what will be their excuse for doing so? The excuse will be that we recognized the justice of a deadline so far as soldiers in the last war were concerned, and if it was just to have a deadline for them, *it is just to have one for soldiers in this war. That is why I opposed it. The hon.
[Mr. Quelch. J
member for Fraser Valley (Mr. Cruickshank) also opposed it in committee, and refused to make the report unanimous.
One hon. member has objected to the statement that even to-day there are soldiers who are not receiving any consideration. I could tell him of a number of cases. I could tell him about a returned soldier who is bedridden and cannot obtain a dollar of assistance by way of pension. He is on relief. Why? Because he falls on the margin. He did not serve in a theatre of actual warfare, and therefore he cannot get the war veterans' allowance. Yet I believe he should receive some consideration. There is no way in which that man can obtain any help, either under the Pension Act or under the War Veterans' Allowance Act. Perhaps when we are discussing that act I may enlarge upon this point. We know there are still some loopholes in the War Veterans' Allowance Act, and we must take care of those loopholes so that the soldiers who are veterans but who did not serve in an actual theatre of war may receive some consideration. I do hope that when the committee meets to discuss the War Veterans' Allowance Act we shall be able to make pensions available at least to the widow's of veterans who during their lifetime were receiving some form of financial consideration from the government.
Motion agreed to and bill read the third time and passed.



DOMINION SUCCESSION DUTY ACT

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved the second reading of Bill No. 79, to authorize the levying of duties in respect of successions.
Richard Burpee Hanson: Mr. Speaker, I desire to make a few observations respecting the principle of this bill, and I do so without any intention whatsoever of obstructing its passage.
The minister has made it plain that the government has adopted this form of taxation without any regard whatsoever to the fact that this field of taxation is one which heretofore has 'been reserved to the provinces. I do not desire to debate the question whether or not we should have succession duties, because at this late date in my opinion it would be futile to do so. We have them; we shall always have them. In passing, however, I should like to express my regret that in its desire to increase the revenues the government should have invaded this field without having endeavoured to come to any accommodation whatsoever with the provinces, either in respect of the quantum of the tax or in

Succession Duty Act-Mr. Hanson (York-Sunbury)
respect of the matter of invading the tax field. Personally I had hoped that an effort would be made to have the provinces vacate the field of succession duty taxation. While this procedure would probably bring no relief to the taxpayers, I do believe the tax would be assessed, levied and collected on a much more even and equitable basis than it can be where the tax is assessed and levied against property by one, two or perhaps three jurisdictions. Of course in centralizing the tax there would be some saving in costs of collections and in administration. Probably not much more than that could be hoped for. Nevertheless by reason of the decision of the government we are obliged to consider the position as it is, not as we should like to have it.
I take direct issue with the minister's statement that the field had not been covered fully by the provinces. I am content to leave the matter there because he has the power to proceed, notwithstanding anything I may say. It is, however, my firm conviction that the provinces have covered this field of taxation fully and that it ought not to be invaded by the federal authority without the gravest consideration. The invasion of that field and the levying of further taxes in addition to those levied by the provincial administrations can be justified only on the basis of the doctrine of necessity. When one comes to weigh this doctrine in the balance and investigates what the minister proposes; when one investigates how much new revenue will be obtained from this source; when one has regard to the other sources of taxation which are open to the minister; when one has regard to the fact that new taxes which have been imposed by this and previous budgets will yield much larger sums than were estimated, I submit that he might very well have left this field to the provinces, for a period of time at least. I think the minister will agree that it will be some time before any large amount of money will accrue to the treasury from this source, a time which could have been occupied in exploring the whole position and endeavouring, if possible, to arrive at an accommodation.
The minister stated in effect that the rates imposed by this measure, when taken with the rates imposed by the provinces, brought the total levy up to within striking distance of those imposed in the United Kingdom. With that statement I am in agreement, but the two situations are somewhat different. In England the succession duties have been raised from time to time, not only for the purpose of producing revenue but with the social idea in mind that by levying such taxes some of the old landed estates which had existed through generations and, in some
instances, through centuries would be broken up. That is a condition which does not obtain-in Canada, and no such object can be said to lie behind this measure. Since the days of Elizabeth, since England became a great maritime nation, family wealth has been passed on from parent to child over long periods of time. That has been unearned wealth, but that condition does not obtain in Canada, at least to the degree which it does in the United Kingdom. A comparison cannot be made between the situation which obtains here and the one which obtains in the old country.
I do not, however, wish to base the position I take to-day upon the suggestions to which I have referred. I ask hon. members who are doing me the honour of listening to me to direct their attention to the future, to the time when this war shall have ceased, to the time when this country shall have resumed the paths of peace, to the time of reconstruction. Every dollar available for investment must be used if we are not to have the return of the condition that existed subsequently to the last war and of the results of the economic war which culminated in the month of October, 1929. In other words, I am endeavouring to advance the theory that there should be retained in Canada for the benefit of future generations a substantial amount of capital wealth which would be available to carry on the peace-time pursuits of industry and commerce in order that in the days which are to follow this terrible conflagration through which we are now passing we may be relieved to a large degree of the miseries which were attendant upon the periods to which I have referred.
I know it is not popular, especially with certain hon. gentlemen in this house, to defend capitalism, and I am not going to constitute myself a defender of that system. I would, however, point out to hon. gentlemen that we do live under that system. One of the objects of the dictator of Russia under the communistic system, one of the objects of the dictator of Germany under the national socialism system, and one of the objects of the dictator of Italy under fascism in effect is to destroy the capitalistic system. What do they offer us in its place? They offer us national regimentation. If you destroy the one, the other is the only alternative left open to you. I visualize the alternative that will be presented to Canadians in the event that this system of capitalism perishes.
I hope I have arrived at a time of life when I can reason things out with myself, when I am still not too old to learn, when I can commune with myself as I ask hon. members to commune with themselves. I ask them to consider the alternatives; I ask them
3224	COMMONS
Succession Duly Act-Mr. Hanson (York-Sunbury)
to consider the effect upon the present situation of the underlying principle of this measure. May I here and now declare my conviction that sensible Canadians, if properly led and properly educated, if given the right to think for themselves, will reject the proposals which have been enunciated in continental Europe, will reject the doctrines of those whom, for lack of a better term, I shall designate as the "have-nots". I am convinced that they will cling to a capitalistic system, purged and cleansed, as I think it must be, of the many evils that have been attendant upon that system or that are attendant upon any system. In other words, I visualize for Canada and this north American continent a system of capitalism as it should be, not as we have sometimes found it to be-a system, shall I say for lack of a better definition, of controlled capitalism but one which will still allow to me and to you and to people in this country who possess brains and ability the opportunity to go out and be creative not only in the interests of private initiative and private gain but to the everlasting benefit of the nation as a whole.
Having said that much, may I direct attention to the implications of this measure and what it means? I wish to do this in a wholly judicial manner and not to raise any storm of conflict, and what I have said hitherto in the course of this discussion I think has been within the ambit of my desire. I wish to draw attention to the implications of what this departure in federal taxation means.
The duties proposed by the Minister of Finance give rise to certain questions which I think this house should consider either in this debate or when the bill reaches the committee stage. I should like first of all to make this observation.
Having regard to the rates in the provinces- and from my examination I think I am safe in saying that, roughly speaking, they are all on the same level-I believe the rates contemplated by this measure will roughly double tlm succession duty on the estate of a deceased resident, in the case particularly of the estate of a man who had been engaged in business on his own account. The rates proposed by the dominion, added to those already in effect in various provinces-take, for example, the great province of Ontario, where there probably is more concentrated wealth than in any other part of Canada, notwithstanding other views that may be held-will mean a very large and substantial capital levy. I venture the suggestion to hon. members-and I do so with some hesitation-that it is a question whether this capital levy may not be so large 
as absolutely to discourage, or at least seriously discourage, any and all private enterprise. Granted at once that private enterprise is an essential part of the capitalistic system, just how far should we go as sensible businessmen-and I am trying to approach the consideration of this subject from that standpoint and from no other-in a long term view, a view that will visualize conditions after the war as they are bound to arise? In my judgment, notwithstanding anything that may have been said by certain people, I do not think fundamental conditions after the war will be greatly different from those that obtained before the war in so far as the internal economy of this country is concerned. It is true that we are being regimented to-day, but in my humble opinion-and I say this with deference to the opinions of others- a large amount of regimentation is absolutely necessary in the interests of government in war time, but I express the profound faith and conviction that that is only a temporary situation and that it will not obtain within a reasonable time after peace is declared.
Having made that assertion, may I suggest to the membership of this house who are doing me the honour of listening to me this afternoon that we consider whether we are not carrying this imposition too far, having regard to the long view, and whether we should not, while there is yet still time, reconsider the whole position and at least limit this federal impost for the duration of the war, based on the doctrine of necessity. In any event, under the rates proposed, the minister is not going to get any substantial sum from this source. His estimate is $25,000,000, if I recall it.


Mr. ILSLEY:: I thought it was $20,000,000 a year.


Richard Burpee Hanson: I have not looked up the exact figure but I thought it was $20,000,000 for this year and $25,000,000 for a full year. That is not a large sum of money in a billion dollar budget.
Let us apply the tax to a specific case. Take the case I have already suggested of a single individual leaving an estate all invested in his own business. I suggest that the impost visualized by this bill, added to the duty in the province in which that man happened to reside at the time of his decease, will constitute an impost that is so large as to discourage other people from seriously embarking on private enterprise. It is important to bear in mind that the income tax, no matter how large it may be, none the less recognizes the principle of the maintenance of capital. No income tax is paid unless it is paid out of income as we visualize and understand it. But the danger of a succession duty tax is that it

Succession Duty Act-Mr. Hanson (York-Sunbury)
does not recognize that principle. Of course, this is not by any means a new statement. Everyone has recognized that truth from the day that this impost began to grow and get larger and larger. That has always been argued against the succession duty tax from its very inception, but that objection has been waved aside on the theory, I think, that this taxation is easy money for the treasury.


Ross Wilfred Gray: Does the hon. member suggest that it has destroyed the initiative of the private individual?


Richard Burpee Hanson: No; I do not suggest that up to date it has destroyed the initiative of the private individual, but I do suggest that when you press the thing to such a high level you will destroy the initiative of a private individual. What individual is going to embark on a new enterprise in this country if he knows that in the event of his sudden decease his estate will be called upon to pay to two treasuries, and perhaps three, .a very large portion of his total capital which may be invested in one enterprise which he cannot sell on the nail? That is an illustration I should like hon. gentlemen to consider. I do not say that up to date the rates have been so high as to destroy private initiative, but I do say that this tax superimposed on the tax imposed by the provinces brings the impost to a position where it will distinctly have a detrimental effect on private initiative, and that is not a good thing for a young country like Canada.
.Not many businesses here are running into the third, fourth and fifth generations; on the contrary, business mortality in Canada, taking it by and large and over the whole field, is exceedingly high. Especially is that true in the retail field. If any gentleman cares to look into the statistics he will find that I am correct in the suggestion I have made. At the present time we have this income tax burden, and all, I believe, will cheerfully bear it because of the cause of the great increase in income tax. I have not heard anyone within my acquaintance who has raised any objection to high income taxes for war purposes. There are, of course, those who question the way in which the money is spent. That is another aspect of the position to which I do not wish to refer; but no one who is loyal to the state at this time objects to the payment of heavy tax imposts in connection with the war. Indeed, I think it is a matter for congratulation that our citizenship is bearing these high imposts without any protest whatever. There may be protest as to inequalities and inequities; but on the general principle involved there is little or no protest so far as I am aware, even though in
many instances there is the question of double imposts, having regard to the taxes imposed upon earnings of corporations before such earnings are distributed as dividends.
I suggest, however, that the income tax imposts have grown to such a height that at the present time taxes on income are so heavy that the ability of the individual to save enough out of income to pay succession duties has greatly decreased if it has not already vanished. That is with respect to income tax.
I know that the answer will be, or I suggest that it is, that any person in that position will be able, by taking out life insurance, to solve that difficulty. That is not possible in every case. It is not possible in every case for the business to take the necessary cash out of working capital to buy that form of protection, and I further suggest that the depleted income to which I have referred makes that solution, if it be a solution, increasingly difficult. Very often a concrete example illustrates a point in an argument better than any description by way of words.
I have before me an example of succession duties which'will be collected by the dominion and a provincial government, which I shall not name, on an estate which passes, two-thirds to the wife and one-sixth to each of two children over eighteen years of age. The scale is fixed, I believe, on the basis of dutiable value. The amount is a million and a half dollars, and I suggest that there are not many estates in Canada which work out a net million and a half for duty purposes.


Ross Wilfred Gray: It is not an average case.


Richard Burpee Hanson: No; there are not many of them. I could give round figures, reducing it, and that would make the rate lower. However, taking this as an illustration, of a capital levy, we find that, on that basis, the widow's share would be $1,000,000 and the children's $500,000. The provincial tax on the widow's share would be $212,750, and the dominion tax, as I understand it-perhaps this is subject to some modification-would be about $200,000, or a total tax on the widow's share of $412,750, which is something over forty-one per cent of her total share.


Mr. MARTIN:: That is Ontario.


Richard Burpee Hanson: This is
Ontario, really. The hon. gentleman is familiar with it. The tax on the children's share of $500,000 would be, to the province, $89,125 and to the dominion, $100,000, or a total of $189,125, or a grand total of the two taxes of $601,875, out of a total of $1,500,000. In addition, there may be imposed, if certain
3226	COMMONS
Succession Duty Act-Mr. Hanson (YorTc-Sunbury)
of the assets are situated in other provinces, a further tax on those other provinces. That, I suggest, does constitute in effect a capital levy.
Let us pursue the illustration further. Suppose that all the assets of a million and a half dollars have been invested in a private business which the deceased owned and controlled, and that he had no other assets or had not been able to make provision for the payment of this tax of $600,000. I put this question to the minister and the house: Can that business survive the death of the owner or what will be the effect of realizing succession duties payable in cash because they have to be paid right on the block? The tax collecting authorities will not take your promissory note; they will not take even bonds of their own province. Has the Minister of Finance ever considered whether he would accept bonds of the dominion in payment of this impost? That is a thought in passing. The question, I repeat, is: Can the business survive, or will it have to be liquidated in order to pay this huge impost? Just ask any banker or any business man what the answer will be, and anyone will tell you the answer to that question, as to what will be the position of a business suddenly called upon to provide such an amount. It is clear that in the case of a one-man business there is no other source, subject, of course, to the amount of life insurance, if any, carried to provide cash required for succession duty. There is no other way of getting it than by liquidation of the business, with the resulting effect upon the community life that may depend upon that business. The question inevitably arises, in considering the position which will be created-


Ross Wilfred Gray: The hon. gentleman is taking an extreme example.


Richard Burpee Hanson: Am I?
That is a matter of opinion. It may be the hon. gentleman is right; but there are cases where a one-man concern has been built up by the lifetime effort of that individual, who has confined his activities wholly to the opportunities that have presented themselves through that one outlet.


Ross Wilfred Gray: I may be mistaken, but we have got away from the million and a half to the individual who built up this estate.


Richard Burpee Hanson: I have
already said what I wish to say about that, namely, that in order to satisfy this capital levy-because in essence that is what it is- that business must be liquidated.


James Lorimer Ilsley: That is not necessary. In many instances a bond issue would be floated; the money would be borrowed from the public 
to pay the succession duty, and the business would still continue in the control of the family.


Richard Burpee Hanson: Then the minister's answer, as I understand it, is that if they cannot borrow the money from the bank, they will borrow it from the public by means of a bond issue?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Then what happens? Suppose, as has happened in my own experience, a second death occurs within twelve months, and the million dollars that I am using as an illustration is subject to a further impost in the succeeding six months. What has happened to the million dollars? The government has got most of it.


Ross Wilfred Gray: That is not the average estate.


Richard Burpee Hanson: No. Of course that is mentioned in passing, and is a thought I advanced myself at the resolution stage. I was prompted to do that because in New Brunswick they do make allowance for quick succession, leaving the matter entirely to the discretion of the lieutenant-governor in council. I suggest that it is not unfair to ask that a similar provision be included in this bill. It may not be the general practice throughout the dominion, but at least in the little province of New Brunswick consideration has been given to that aspect, so that estates may not be entirely swallowed up by taxation. I think it is a reasonable request. I am not going to pursue the point any further.
In a consideration of the position which will be created by the double succession duty, the question inevitably arises whether this is a new and perhaps a decisive deterrent to the principle of free enterprise which we have enjoyed under the capitalistic system. I must say I was surprised at the minister's announcement that the tax is not for the duration of the war. Let there be no misunderstanding about that; the minister's intention is that this shall be a permanent feature of our taxation system. Having regard to that, will this new departure not be perhaps a decisive deterrent to free enterprise? Why should men engage in business and take the risks incident to business when they have staring them in the face the idea that governments, not one but two or maybe three, will, on their decease, take a very substantial part of their estates, and that the most liquid part? That is a question I want hon. members to think about if they will be good enough to do so.


Paul Joseph James Martin: The provinces may be
forced to abandon the field.

Succession Duty Act-Mr. Hanson (York-Sunbury)


John Horne Blackmore: They will be no better off if they do.


Richard Burpee Hanson: I am not going to get into a discussion with the hon. member for Lethbridge. I am going to follow up the suggestion. It has occurred to me, as doubtless it must have occurred to many hon. members, that the minister has entered this field with the idea of, shall I say, compelling the provinces to abandon the field. He shakes his head, but I am sure the minister in his heart will agree that there should be only one impost. That theory was advanced in the Sirois report.
It was one of the features of the report that I favoured, one of the points that I thought might be discussed last January. But because of the failure to consider the report, no accommodation has been reached, and here we are, the people of Canada told that from now on for evermore we are going to have a dominion as well as a provincial succession duty tax. I do not know what the reaction of the provinces will be. I think that in Quebec, where they have a very large revenue accruing from this impost, there will be a certain amount of resentment. The succession duty returns in Quebec have been used in large measure, according to the information I have, in taking care, in a degree at all events, of the social services in that province, and I do not think they will willingly part with this source of revenue. Certainly, unless there is a change in the constitution of this country, they cannot be obliged to do so.


James Lorimer Ilsley: We are not asking them to.


Richard Burpee Hanson: I know, but I suggest that before the minister embarked on this field he should have endeavoured to arrive at some accommodation with them so that there will not be this double taxation. We all agree that the same dollar should not be taxed twice if it is possible to avoid that being done. One's reason, one's intellect rebels against that sort of thing. Therefore I think the minister should not impose this tax unless it is absolutely necessary. And it was not necessary, in view of the small amount which the minister says he expects to have available from this source at the moment.
The whole history of the imposition of succession duties in Canada, England and the United States, has been that it has been a most prolific source of income for the treasury. No minister of finance, no chancellor of the exchequer, no provincial treasurer has ever receded from the theory of getting this money in this way, and they never will, because they know that it is, shall I say, a sure shot. There is a measure of uncertainty as to the amount 14873-204
that will come in this year; but if it does not come this year it will come next year or the year following, and therefore it is a sure source of revenue. I suggest to the minister that the Dominion of Canada for a paltry 820,000,000, in a billion dollar budget, even in war time, could very well have left this field of taxation to the provinces unless some accommodation was reached. I suggest that the imposition of this tax, and what will follow-that is what I am more concerned about than anything else; it is not the size of this tax but what will follow-will have an extremely deterrent effect on free and private enterprise; people will not willingly incur business risks if they know that sooner or later, come death, their gains, based in many instances upon their personal efforts, not upon invested wealth, but upon enterprise and ability to see opportunity when it knocks and take advantage of it, are to be taken by the government. They will say, what is the use of saving money ? We hear that in certain quarters to-day: "What is the use of adding to your income? You only put yourself in a higher bracket for the income tax." I do not sympathize with that point of view, because if you have a higher income there is still something left to you of the increase. My colleague, the hon. member for Rosedale (Mr. Jackman), suggests that the amount retained by the individual as a result of his effort does not correspond in any degree with the amount the state takes or may take.
At the moment, because of the war, the government has been obliged to regiment business. To-day there is no free enterprise. No one would think of embarking on a new and perhaps hazardous enterprise, because he could not be sure that the government would allow him to proceed. More than that, the government itself has to see to it that the war production effort gets priority; and of course in war time the interests of the state must be paramount.
Therefore to-day free enterprise is suspended. Is it to be resumed at the end of the war? That is a question which I should like hon. gentlemen to ask themselves. What will happen when peace comes? I suggest to the minister and to hon. gentlemen that free enterprise will not reappear overnight. A.t the best, and under the most favoured conditions, it will icome only gradually. The months and perhaps years of regimentation and control will have had their effect on the whole business community. If added to this we have the situation that a man proposing to enter a new business faces not only extremely heavy personal and corporation income taxes, but also the fact that on his death there will become immediately payable



Succession Duty Act-Mr. Hazen
an amount equal to perhaps forty per cent of the value of his assets, then is it reasonable to expect that he will go ahead? Will he not say, "This is virtually a capital levy and in fact probably more than that, inasmuch as it is hardly possible that my business can be sold on very short notice in order to pay anything like this levy".
Suggestions have been advanced by the minister, in the course of his discussion of this subject, that valuations will be moderate and that time for payment will be given. That, of course, is reassuring, but it is not in the bill; it is not in the covenant or the bond. We do not know what will be the administration of the law. I am not going to advert to the administration of the law in the provinces; I have said what I have to say about that matter and I need not return to it to-day. But the personal element is there; -the desire to get money for the treasury is there, and the matter is in the hands of a bureaucracy. I do no-t say that in any derogatory sense at all, but it is a bureaucracy whose desire it is to protect and get money for the crown. I suggest that this house should give some consideration to what is to happen -after the war, in the long-term view. Should we adopt this measure as a permanent part of our system of taxation, or should we give expression to the- view that it ought to be limited to t'he duration of the war and justified only on the ground of war necessity?
_ If I have said anything which will stimulate interest .in this very important subject I shall have been amply repaid f-or the thought I have given -to it and for the time spent in expressing my views here this afternoon; and I do not propose to take any more of the time of the house.
Mr. D. KING HAZEN (St. John-Albert: I should like to say a word about one or two sections of the bill, unless it is too late to ask the minister a question.


James Lorimer Ilsley: If the hon. gentleman proposes to discuss particular sections of the bill, I think it would be more in accord with the rules if he did so in committee of the whole. A discussion of the principle of a bill is in order at this stage, bu't a discussion of particular sections comes later.


Mr. HAZEN:: Then I shall not refer to the sections I intended to mention, but will save that for later on. While I am on my feet, however, I should like to say that in my opinion this is the most objectionable tax the minister has seen fit to impose under his budget, and I wish to go -on record as having made that statement. This tax is objectionable not only because it is a tax on capital; it is objectionable also because the people who must pay it are left with a feeling of injustice. 
I make that statement for this reason. They already have to pay a succession duty tax to the provincial government. In addition to paying that tax to the government of the province in which they live, they must pay a second tax to the governments of any other provinces in which the deceased may have invested money during his lifetime. The dominion government now comes along and imposes a third tax on these same people. The result is that people who come under the provisions of this legislation will be left with a feeling that an injustice is being done them.


Thomas Langton Church: I wish to speak on the general principles of this bill on the second reading. This is a gross invasion of provincial rights and of property and civil rights in the provinces, and seems to suggest the imposition of a system of forced taxation on the province of Ontario that has never been introduced in any other British legislature with the exception of British Honduras. I protest against this being done under the pretence of helping our war effort. There is a great difference of opinion in this country to-day as to what the minister means when he speaks of our war effort. An examination of the budget will disclose that it contains many things tha-t do not affect our war effort any more than the snap of my fingers would affect it, to beat Hitler. Where did this principle of taxation come from? How did it arise? Who suggested it? Why was it introduced like a bolt from the blue, without any authority being given by this house? Two or three people in the department must have persuaded the minister to adopt this big-stick system against Ontario.
On the second reading of a. bill the principle involved comes under review and discussion; and the principle of this bill is of great importance to the provinces and municipalities and their future, as is all this series of bills. It appears to me that this is an attempt to force upon Ontario, to which this legislation largely applies, in an indirect way, the recommendations of the Sirois report, against the wishes of several of the provinces and the municipalities; and this is done under the guise of war necessity. Is section 92 of the British North America Act to be suspended for the duration of the war in order to permit the introduction of this forced system of taxation over their heads as a war measure? For the remainder of the present fiscal year the minister stated in his budget that it was hoped to realize S10,000,000 under this new tax, and that the estimate for the full year was $20,000,000.

Succession Duty Act-Mr. Church
I wish to object to this tax on principle, because I do not know how the provinces and the municipalities are going to get along with all this federal seizing of their revenues. How are they going to live, if they are deprived of their taxation fields on every side? This is not the only time this budget has upset the basis of confederation. This is not the first time the present minister has invaded provincial taxation. The fifteen per cent tax on earned interest of Americans here is also assailed, and will have a marked effect on the sale in the United States of the bonds of provinces and municipalities. Now parliament comes along and unloads many of its burdens on the shoulders of the municipalities. These raids on municipal revenues and impositions of federal burdens purely, amount to nearly three mills on the dollar in the Toronto tax rate.
The federal government has not been satisfied to invade the income tax field and load federal debt on real estate, but seizes income tax which was the exclusive right of the municipalities. It now comes along and attacks personal estate as well as real estate. Not by the widest stretch of the imagination could it be said that this form of personal estate under section 92 of the British North America Act belongs to the federal power, and that it should be seized by the federal parliament as well as other forms of taxes on real and personal estate the way it has been in the last month. Where are the provinces to land? Three or four of them are already in bankruptcy, and this legislation will force the sovereign province of Ontario, one of the most solvent in the empire to-day, very soon into dire straits. How are the provinces going to fulfil their functions, as set out in the British North America Act? This type of taxation was not found necessary in the last war; no proposal of this kind was made. This bill and its principle contain confiscatory powers on the provinces, and those powers will be used in an arbitrary way. I say they are outside the jurisdiction of the house.
The big-stick methods the minister has used all along the line, and the using of what I call Poo-Bah methods, smack to me of high-pressure showmanship and salesmanship to balance the dollar. The right to possess private property and personal estates is derived from nature, not from man, as I said the other day; and the state has no right to confiscate it, or abolish it, but can only regulate its use.
I am not permitted in debate on second reading of the bill to refer to the various sections. I would point out, however, that the provinces of Ontario and Quebec, to which this measure will apply in greatest measure,
now pay 80 per cent of all the cash taxes and receipts of the whole dominion. The penalties imposed by these various new and urgent forms of taxation will affect the credit not only of the municipalities but of the provinces as well, in the dominion, empire, and the United States, and their bonds. Especially is that true of this tax on real and personal estates, affecting the credit of the provinces and municipalities.
We rejoiced in the great speech delivered last night by President Roosevelt, and what it will do toward gaining ultimate victory. I would point out, however, that we have not taken real advantage of what has been offered by the great nation to the south of us in the passage of the lease-lend bill. Before the war no one ever dreamed that federal power would invade the exclusive fields of municipal and provincial taxation established under the British North America Act, or have attempted to take from them revenue to which they are justly entitled. With Canadians, security is better than opulence.
The chairman of the United States senate committee on foreign affairs, on signing the lease-lend bill, said that it would apply to the dominions, to China, and to other democracies fighting against Hitler, and it was stated by the chairman that the effect was, to quote the words of the late Calvin Coolidge, that they were just leasing and lending by it or hiring out money.
I can say that I am opposed to the government's policy in this regard. While I oppose in several respects what is done by the Ontario government, yet I believe they deserve a great deal of credit for having investigated more thoroughly the payment of succession duties in some few of the estates they did. It was stated by one of the judges that fraud had been used in some of the returns. I do not say that that was so in all cases, but certainly it was true in some. I was not a supporter of the Ontario government then, but I believe the present premier of that province is right when he attempts to avoid any invasion of the rights of municipal institutions which he has sworn to protect. And he is right in the opposition to the 15 per cent tax and to defend the unjust invasion of Ontario in this way and of provincial rights. As one representative in the House of Commons, I must protest against this method of taxation in contravention of the sovereign rights of the provinces and against the great depletions of municipal and provincial revenues. I believe such procedure will lead finally to the utter abolition of private property, an unfair injury to real estate and personal estate, and the adoption of a socialist, Marxian, totalitarian state in Canada.
3230	COMMONS
Succession Duty Act-Mr. Blackmore


John Horne Blackmore: Mr. Speaker, I should like to associate myself in some measure with the leader of the opposition (Mr. Hanson) in regard to his attitude respecting private business of the country, and I would support, too, much that has been said by the hon. member for Broadview (Mr. Church). It must be laid down as a fundamental principle upon which all our thinking and acting must be based that this country must be made safe for industry. It must be made such that industry can thrive and increase throughout the land.
One point which fills me with anxiety regarding the minister's whole tax structure- and I say this nqt without sympathy for him in the difficulties with which he is faced-is that practically every move is along lines which make industry more difficult. It is impossible for me to see how the country can be great and strong unless its industries are great and strong.
I said the other night, and I shall now repeat, that not only must industries abound throughout the country, but small industries must have a chance.


Clarence Gillis: They will not, so long as it
is not safe.


John Horne Blackmore: I believe these restrictions and taxes are tending to destroy smaller industries for the benefit of the larger ones, which means that there will develop in Canada a centralization of industry that in due time will result in suffering, misery and frustration which to-day it is impossible to foresee.
It may be asked: How would you get along without these taxes? It is possible to get along without them, but it is not in order at this time that I set forth the ways in which that can be done. Several times in past years I have risen in my place in the house and endeavoured to set forth those principles. The majority of hon. members apparently have taken the view that I was wrong before I started, and that consequently nothing could be learned from me. I am, however, telling hon. members now that they are going to learn by experience which will be bitter beyond the greatest bitterness ever experienced in Canada, unless they begin to become somewhat broader in their thinking, and unless they begin to realize that money can be obtained without taxation which will destroy the very basis of our life, namely, our goods and services producing power.
In the closing days of the session I would urge that the minister set about at once, with his experts, to find a way of relieving the people of Canada of a large measure of the onerous taxation he has imposed upon them

since the beginning of the war. If he has not upon his staff experts who can tell him how to do that, then I humbly suggest to him that he procure other experts. There are such men to be found in this world. I protest against the burdensome, devastating, disintegrating taxation which has been placed upon the people of Canada by the operations of the budget introduced this year.


Mr. W. C. MACDONALD (Halifax):: Mr. Speaker, I had not intended to speak on this particular bill, but I was interested in the remarks of the hon. leader of the opposition (Mr. Hanson). I know he has devoted a good deal of time to a consideration of this legislation, and I tried to follow him as closely as possible. I think we all realize that money must be raised in some way. Just a few moments before this motion was put we approved amendments to the Pension Act, and no doubt at the next session we shall be considering amendments to the War Veterans' Allowance Act. Money must be raised with which to carry on these services, to say nothing at all of the expenditures occasioned by our direct war endeavours.
The question has been raised as to whether this is a direct tax upon capital. I submit that no one has an inalienable right to transmit property to his descendants. The natural law is that a man should part with his property at the time of his death. The fact that dependents or relatives are entitled to come into possession of his estate is wholly dependent upon the laws of the country and the facilities that are provided for the administration of estates. We have heard something this afternoon of the hardship that will be imposed upon an estate made up largely of good-will or other business assets. After observing estates for many years, my experience is that considerable money is lost by neglecting to dispose of assets shortly after the death of a business man. Many times an estate is allowed to remain in abeyance and is disposed of a considerable time afterwards when conditions have changed. Instead of a hoped for improvement in business having occurred, many times it is found that a serious depreciation has taken place and the estate is forced to suffer a considerable loss.
This tax may not be as equitable a tax as the income tax, but we cannot raise all the money required by income taxation. I suppose this tax is really a modified capital tax in the sense that part of an estate is taken in the form of taxation. We are, however, faced with an emergency, and I think capital should be prepared to make a modest contribution or concession. Otherwise forces that exist in this country to-day may destroy capital. We are not considering this matter

Succession Duty Act-Mr. Macdonald (Brantford)
on the basis of an ideal set of circumstances; we are faced with certain facts. The statement was made by President Grover Cleveland many years ago and often repeated in this house that what we have to face is a condition, not a theory. There is no doubt that taxes are distasteful to all of us; nobody likes the surgeon who comes to cut him up. In order, however, to keep our national life going, we must have taxes. I think in all the circumstances that this tax does not invade the provincial field too greatly, as has been suggested. It is a reasonable tax and one quite attunable to present conditions. I may have a word to say with respect to one or two details when we are discussing the bill in committee, but at this stage I merely wish to express my complete concurrence in the bill.


Mr. W. ROSS MACDONALD (Brantford City):: Mr. Speaker, before we go into
committee I should like to express briefly my views on this bill. I do not consider that this is an invasion of provincial rights. The fact that the dominion has not taken advantage of this form of taxation in the past does not mean that it did not have the right to do so. I find myself to some extent in accord with the points raised by the leader of the opposition (Mr. Hanson) with regard to the effect upon incentive. We are getting near to the point in connection with taxation where we shall discourage people who otherwise would bring advantages to this country through their energy. We are inspired to make efforts by two things: first, in order to help the state and mankind generally, but I am afraid that this is not always enough. There must be a certain amount of profit incentive, and if we take away all the profit we are likely to destroy that incentive.
Our forefathers came to this country from the lands beyond the seas because they felt that there were greater opportunities here, not only for themselves but for their children and their children's children. Those opportunities were here for them and for their children, and we must make sure that they will still be here for their children's children. They were hemmed in in the old land; they could not advance and improve their positions in the world.


Paul Joseph James Martin: That is not why they
left.


William Ross Macdonald: My hon. friend says that that is not why they left, but I suggest that that is one reason why many of our forefathers left the old land. They wanted to have greater opportunities for themselves, for their children and for their children's children. They did advance themselves; they brought much happiness to
themselves and to those who came after them. We must be energetic and full of enterprise, but if all profit is to be taken away I am just afraid we shall not have the same enterprise and enthusiasm. The hon. member for Lethbridge (Mr. Blackmore) has said that industry must be great and strong.
I can go that far with him, but I cannot agree that the theories which he advances will make industry great and strong. I am afraid that they will have the opposite effect.
This bill is introduced for the purpose of raising money for this war.


Richard Burpee Hanson: It is not confined to that.


William Ross Macdonald: The leader of the opposition says it is not confined to that. We do not know. Only the future will tell. At the present time we need and must have money to obtain equipment of all kinds to supply our fighting forces.


Mr. JOHNSTON (Bow River):: The minister does not agree with that.


William Ross Macdonald: I am sure the minister will agree with that.


Mr. JACKMAN:: I do not know.


William Ross Macdonald: I am expressing my view, and I have found myself at most times in accord with the minister. We must have all the necessary supplies to ' defeat the enemy, and we must have the wherewithal to get those supplies. This is one of the means whereby we can get the money to purchase those supplies. I have not had one objection from my district against this tax or any other tax which has been put into effect by this budget. Everyone is in accord with the idea; raise the money-we are prepared to pay-give the troops what they need in order to win. If this tax is going to help in any way to do that-and I am sure it is'-then I am in complete accord with it and with every tax which is imposed for that purpose.
My only warning, Mr. Speaker, is this. Let us not forget that this country has become great under the system which has been in effect here, where a person who works gets a reward and the reward is not all taken from him. I am confident that Canada can go forward in the future, after this war is over, only if we continue that system. Let the worker be worthy of his hire, and let us not take all his earnings from him.


Mr. G. H. CASTLEDEN (Yorkton):: Mr. Speaker, I rise to support the principle of this bill-perhaps something unusual for me. So long, however, as the wealth and natural resources of this country can pass, as they do
3232	COMMONS
Succession Duty Act-Mr. Castleden
now, through corporate organizations into the hands of a few people, thereby preventing large numbers of labouring people from exchanging their labour for decent standards of living, there must be some form of taxation whereby the wealth that to-day accumulates in the hands of a comparatively few, can be drawn back into the coffers of the nation. It is because this bill institutes such machinery in the federal field that I rise to support it in principle. It is only through such means as this that we can prevent the complete domination of this country by wealth and power.
Statements have been made this afternoon that taxation of this sort kills initiative. I take exception to that. I do not know of anything that is more deadening to initiative than to compel over one million people to live on relief. When labour cannot be found, initiative dies. I am afraid there have not been enough people in this house in close enough contact with those who have not been able to find work, and who know what a degenerating effect it has upon any man to be unable to provide for his wife and his loved ones, to find himself trapped so that no matter where he looks he cannot find work to provide for those whom he loves and desires to protect. Take the case of a young man wishing to start out in life and finding no opportunity, who finally comes to look upon himself as an unwanted member of society. If you want to kill initiative, that is the way to do it, and that lis what has been happening in Canada, a young nation, for far, far too long, for far, far too many people.


Clarence Gillis: That is what made Hitler in Germany.


George Hugh Castleden: Somebody said a short time ago that no nation can be healthy which is not healthy industrially. I agree, but there should not be that degree of control which industry has maintained over the lives of the people of this country. It should not be possible for large corporations and big concerns through cutthroat competition gradually to kill small business and prevent competition. Yet that is what they do. They employ labour from an overflowing labour market and drive the price of labour down to a point at which a man can scarcely make a living-drive labour at whatever speed they wish to, drive it until everything that is good within them is ruined, and then labour is cast out on the ash-heap of humanity and the employer takes no responsibility, the one motive behind the whole organization being nothing but profits and dividends-how their stock will stand in the stock market-with no concern for the humanitarian side of it. That profit motive 
must go. Apparently at the present time we are not in a state where we can drive that motive out entirely, but if this measure creates a check upon that kind of expansion in industry, and if it will do anything towards preventing too large an expansion of these big corporations and the wealth of individuals-


Harry Rutherford Jackman: Corporations never die.


George Hugh Castleden: Unfortunately that is so. They also have no heart and no soul.


Clarence Gillis: And they breed nazism.


George Hugh Castleden: The next step from a national organization of industry is the international organization; and when you get that form, which spreads its control over the whole world, you are bound to 'have trouble.
Under the system we now have, this type of taxation should not only be brought in, but be extended, and I believe that it will be extended very largely. I am glad to support the principle of this bill.
Motion agreed 'to, bill read t'he second time, and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


The CHAIRMAN:: Section 1 is under discussion. Shall the section carry?


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Mr. McCUAIG:: In a former discussion the minister said that he would explain in the bill the meaning of the term "funeral expenses." I do not find anything in the bill to show what expenses are indicated. The question was raised whether tombstones were included.


James Lorimer Ilsley: I said it would include tombstones of reasonable value, but on inquiry afterwards I found that that is not the law. Tombstones are not included in funeral expenses. In Nova Scotia there is provision in the probate act for an allowance for tombstones, but I do not know of any such provision in the other provinces.


Duncan Fletcher McCuaig: There is no provision in the Ontario statute?


James Lorimer Ilsley: No. We are using "funeral expenses" here, and I believe it is the same term as is used in the other succession duty acts. It is a matter of administration and will have to be left to the commission.

Succession Duty Act


Richard Burpee Hanson: Does
"child" in paragraph (b) include a step-child?


James Lorimer Ilsley: No.


John Ritchie MacNicol: It includes an adopted child.


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Why is there the limitation of age in the definition of "child"?


James Lorimer Ilsley: The usual provision is to extend the definition to children if adopted under the age of twelve. If adopted over that age, they can hardly be said to be adopted in the ordinary acceptation of the term.


Richard Burpee Hanson: Does it mean legally adopted or adopted by action?


James Lorimer Ilsley: Legally adopted.


Richard Burpee Hanson: The limitation seems to me to be too narrow. It is not only the limitation of twelve years of age but the limitation of under eighteen years of age at the date of the testator's death. That latter limitation should come out. The child must be adopted before it is twelve and must be under eighteen at the date of the testator's death; otherwise it is not considered a child. That is a very narrow construction.


James Lorimer Ilsley: That provision applies not only to adopted children but to all children.


Richard Burpee Hanson: That is all the worse.


James Lorimer Ilsley: That is the definition of
"child."


Richard Burpee Hanson: On the
broader principle, why in the world is a child . under eighteen a child and over eighteen not a child?


James Lorimer Ilsley: It is merely for the purposes of the legislation.


Richard Burpee Hanson: The idea is to get more money; that is the whole answer.


James Lorimer Ilsley: Oh, no; not at all. There is no doubt about the rights of children of a deceased who are over eighteen. They come in a certain class of beneficiaries, and the rate applicable to them is set out. The rate and exemptions applicable to children are given.


Richard Burpee Hanson: Is this
the English definition, or is it taken from some of the provinces, or is it new?


James Lorimer Ilsley: It is a new definition.


Richard Burpee Hanson: I thought so. In none of the other jurisdictions of the country is there such a limitation.


Ian Alistair Mackenzie: There is in the Pension Act.


Richard Burpee Hanson: The minister says it is a new definition; that is the answer I got. If it is a new definition I am right in assuming that there is no other jurisdiction in the country in which there is such a definition. I have not examined all the statutes, I am bound to say, but I have examined a good many and I have never seen such a definition before. I suggest that it is not fair.
. Mr. ILSLEY: My hon. friend does not understand it. His criticism has reference to draftsmanship and not to rights. That is all.


Mr. MacINNIS:: I have had a little experience in social affairs, although not in a legal way, and as the word "child" applies in social legislation it usually means a child not over sixteen. In the Pension Act the age is sixteen; in the mother's allowance legislation it is sixteen; in the provinces it is sixteen. Surely, when the government gives a leeway of two years, that ought to be sufficient. Either that, or the age in the other acts ought to be raised from sixteen to eighteen.


Harry Rutherford Jackman: Surely, if there is any reason behind this apart from securing more revenue, it must be the assumption that a child receiving an inheritance will use part of the principal to maintain himself until he reaches an age when he can go into the world himself; otherwise, why is there the discrimination between children under eighteen and children over eighteen, one being in class A and the other in class B? What is the purpose of it? Is it the assumption that a young child, until it is more mature, will eat into principal?


James Lorimer Ilsley: They are more dependent.


Harry Rutherford Jackman: In other words, the whole bill seems to confirm the idea, which is prevalent on this continent, that people live off capital and not income. The whole thing seems to have root in that idea. The idea in the old country is that people should live off income, but this seems to suggest that if a certain amount of money is left a child, the child will need that money to maintain and educate itself until it finally goes into the world. Such an idea is unsound and does not obtain in the Ontario statute.


Angus MacInnis: I was under the impression that people lived off labour.
Succession Duty Act


James Lorimer Ilsley: A young child needs more money from the estate than one who can earn for himself.


Richard Burpee Hanson: Is the
definition of "aggregate net value" the standard definition found in most of the acts? Is it a new definition, or is it adopted from some other jurisdiction?


James Lorimer Ilsley: I could not say whether that is the standard definition or not. There are many acts. This may have elements of originality, and it probably has.


Richard Burpee Hanson: I think
this is all right myself.


Duncan Fletcher McCuaig: Paragraph (i) refers to
"personal corporation" as defined in the Income War Tax Act. Would it not be simpler to have a definition in this bill; otherwise anyone having this measure before him will have to go to another act for the definition.


James Lorimer Ilsley: Those who are applying this definition will know pretty well what a personal corporation is. There are not very many personal corporations, relative to the number of people in the country, and those who incorporate them do so for specific purposes which are well understood. I do not think the definition need be put in here for popular convenience, because the people at large are not going to want to know what a personal corporation is. Those concerned know very well what personal corporations are and the advantages of incorporating themselves into personal corporations. The definition is a long one found in the Income War Tax Act.


Richard Burpee Hanson: In the note opposite page 2 of the bill it is stated that "the definition of 'succession' is the same as that contained in the English Succession Duty Act, 1853." It would have been of considerable help if we could have had a similar notation with respect to other definitions and other parts of the bill. In days gone by, there have been decisions in various courts of law on particular sections. Here we are dealing with a new statute which in a degree I suppose has been put together by the use of scissors and paste, but has a considerable amount of original work in it. In a consideration of this bill it would have been of great benefit to know whether these are standard sections, and if the draftsman had told us where they came from. There are innumerable decisions under the English statutes and in cases of contest one would have been entitled to go back and see what the corresponding act was which governed those decisions.


James Lorimer Ilsley: I agree that for lawyers it would have been advantageous.


Richard Burpee Hanson: This is going to be a great bill for the lawyers; make no mistake about that.


James Lorimer Ilsley: It might be advantageous
to have information in some form, a pamphlet or otherwise, as to the origins.


Richard Burpee Hanson: When I retire I shall write a monograph on it.


James Lorimer Ilsley: Probably the income tax
division could make up something on that.


Richard Burpee Hanson: That is a valuable suggestion.


[Stage Direction]
Section agreed to.
On section 3-Dispositions deemed to be included.
Richard Burpee Hanson: This is an important section. Is this a standard section based, say, on the English act? Lawyers will be familiar with the terms used in paragraphs (b) and (c) and the rest. I should, however, like to know whether there is anything new in this section apart from what will be found in standard acts in Canada or England. It will be recalled that after the privy council decision, I think in 1932 or 1933, in the Alberta case, the question of movables and that sort of thing was given a new orientation -that perhaps is not the right word-and we all had to go back to school on succession duty to relearn the underlying principles in the light of that decision, especially in respect of personal property. Is this section a standard section used in all the principal acts with which we are familiar?


James Lorimer Ilsley: It is not, I believe, exactly the same as any other section. Most of it is based upon the corresponding English section; some paragraphs are based upon sections of United States acts.


Richard Burpee Hanson: Which
ones?


James Lorimer Ilsley: Paragraph (a) is taken from the United States federal revenue act of 1916.


Richard Burpee Hanson: The explanatory note says that "subsections 2 and 3 are aimed at evasions of taxation by way of the artificial creation of debts or extinguishment of debts payable to the deceased". Those subsections seem to be new. Has the minister any explanation with regard to them?


James Lorimer Ilsley: Both of them are taken from the English act amendments of 1940.


Richard Burpee Hanson: What gave rise to them?

Succession Duty Act


James Lorimer Ilsley: My own thought was that what we used to call a confession of judgment might be included as a debt. Formerly in Nova Scotia it was quite ordinary for a person, instead of giving a mortgage, to give a confession of judgment to create a lien or encumbrance on bis property.


Richard Burpee Hanson: I am
familiar with those. Unless they are filed and made a judgment in fact, they create no lien.


James Lorimer Ilsley: It might be an entirely artificial thing.


Richard Burpee Hanson: The minister means, in effect, a fraud.


James Lorimer Ilsley: It is an artificial creation by a person of a right enforceable against him personally. Giving a promissory note without consideration is another example. It might be said to be worthless because there was no consideration. That perhaps could be raised only by the maker of the note, but the crown coming in might find the promissory note, which is, in effect, a disposition of property or a debt deductible from the estate.


Arthur Graeme Slaght: What considerations moved the minister to make the period in paragraph (c) three years, namely, the period to which he can go back and tax gifts? Were there considerations for arriving at the three years, or is that an arbitrary period, thought to be in ease of what has been criticized in some provinces as an unjust length of time?


James Lorimer Ilsley: Various periods appear in
provincial statutes, and I believe that three years is the shortest of any of them. We put in three years as being a reasonable period within which we would not allow gifts to be made without calling them successions. There was no particular reason for taking three years rather than two, or three years rather than four, except that three years appears in some of the provincial statutes. Some of them have five years; some of them have long periods.


Richard Burpee Hanson: On the
question of dower and curtesy, I do not believe I have ever seen that in a succession duty act.


Paul Joseph James Martin: What subsection is that?


Richard Burpee Hanson: It is
paragraph (1) at the foot of page 4. In recent provincial legislation in New Brunswick, curtesy, I understand, is abolished. I was astonished to learn, from one of my former partners, that the necessary implication of legislation passed by the legislature within the last two or three years is that that
has now been abolished in New Brunswick. I suppose that under the old system dower is an interest in land; so is curtesy; it arises under certain conditions; it therefore has a value, and, of course, it is a property passing. I never saw it in a statute like this before. I wonder whether it is a common provision.


James Lorimer Ilsley: It is in the Ontario act,
from which this is taken. I believe the reason for it is that it might be argued that the dower does not belong to the deceased; that if a husband dies leaving a widow, the dower interest belongs to the widow, not to the husband.


Richard Burpee Hanson: It is an
inchoate right that does not arise until the death of the husband.


James Lorimer Ilsley: No. I make a lot of mistakes about my law because I have not practised for a long time, but my recollection is that dower arises with a marriage and is inalienable by the husband; only the wife can alienate it.


Richard Burpee Hanson: That is true. It is inchoate until the death.


James Lorimer Ilsley: That is right. My recollection about curtesy is that curtesy arises at the death, not at the time of marriage.


Richard Burpee Hanson: True.


James Lorimer Ilsley: And that if land were devised by the wife, it would not be subject to curtesy in the husband, that she can deprive her husband of curtesy without his concurrence. The law may be different in the various provinces.


Richard Burpee Hanson: I think
the law is different in New Brunswick. But there is another condition, namely, that there must be issue of the marriage before curtesy can arise.


James Lorimer Ilsley: Whatever the law is, it
is interesting, but it does not get us very far.


Richard Burpee Hanson: I am
wondering why curtesy is in there; that is all.


James Lorimer Ilsley: The reason is to make sure
that the land itself belongs to the person who owned it, and that part of it will not be held to be the property of the wife; or, if the decedent is a married woman, that part of it will not be held to be the property of her husband.


Richard Burpee Hanson: I never
heard the point raised.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
Succession Duty Act
[Stage Direction]
On section 5-Property valued at death. The CHAIRMAN:	Is the section carried?
Richard Burpee Hanson: All this
is important. Let us not rush it through.


Thomas Vien: I am not rushing it.
I should not like any suggestion to be made that I am rushing it. It is, however, the duty of the chairman, when nobody raises his voice, to call the section carried.


Richard Burpee Hanson: Maybe. I am not finding fault with the Chair at all.


Thomas Vien: I should not like the implication to remain unchallenged.


Richard Burpee Hanson: After all, most hon. members have had this bill before them for only twenty-four hours. I have had it a little longer than that, and I gave it one good reading, but one cannot master a bill of this kind with one good reading. I believe we shall make just as much haste if we go a little slower, and I suggest that that be done.
This, of course, is a standard provision, that the property shall be valued at the date of the death; it expressly asserts that principle, and will not allow anything for appreciation or depreciation. So far as I am concerned, it is all right.


[Stage Direction]
Section agreed to.
On section 6-Duties on successions.
Douglas King Hazen: In connection with this section, the schedule is set out at the back of the bill. Is this the time to refer to it, or shall we take it up later?


James Lorimer Ilsley: Now, if the hon. gentleman wishes.


Douglas King Hazen: I have referred to this matter before, but, looking at this schedule at the back of the bill, let me put this illustration. Suppose a man dies leaving an estate of 8100,000. He makes a bequest of, say, $25,000, to a person who comes under class C. If I understand the bill correctly, the person who receives that bequest of $25,000 has to pay a tax of 2-5 per cent.


James Lorimer Ilsley: It is 2-45 per cent. Take the bottom of page 25 of the bill instead of the top of the next page.


Douglas King Hazen: Yes-2-45 per cent. Then we add to that 3-5 per cent. Am I right in that?


James Lorimer Ilsley: That is correct.


Douglas King Hazen: That makes a tax of 5-5 per cent which he has to pay?


James Lorimer Ilsley: 5-95 per cent.


Douglas King Hazen: That is the tax which has to be paid by a person in class C who receives a bequest of $25,000. If, however, that same person were left a bequest of $25,000 by a man who leaves an estate of $25,000, then, instead of the tax being 5-95 per cent, he would pay, if I understand this schedule correctly, 4 per cent.


James Lorimer Ilsley: That is correct.


Douglas King Hazen: It seems to me that that is hardly fair. Why should a man who gets a bequest of $25,000 have to pay a larger tax because the estate in one case is larger than in the other? Why should the same tax not apply in every case in respect of a bequest of the same amount, if the beneficiary comes within class C? I cite that as one instance, but on going through the schedule, one finds that in every case the tax which the man who gets a bequest has to pay depends, not upon what he receives, but upon the value of the estate.


James Lorimer Ilsley: It depends upon three
factors: (1) the value of the estate; (2) the value of the succession; and (3) the relationship to the deceased.


Douglas King Hazen: Could this not have been worked out in a much more fair and equitable way by having the tax fall on the estate and the man who obtains the bequest receiving the sum left to him, whether the estate is $100,000 or $25,000? The man or, we shall say the widow, is penalized.


James Lorimer Ilsley: The hon. member is right on a fundamental and important point of principle. I had to explain that point once before, and I do not know whether I did it very well or fully.


William Ross Macdonald: The minister did very well indeed.


James Lorimer Ilsley: The hon. member for Brantford City raised the same point; only he made a much more flagrant case of discrimination, if I might use that word. He took an estate of $5,000,000 and compared it with an estate of $25,000. But this feature is found in all the provincial acts.


Richard Burpee Hanson: On the
theory that they would get more money; there is no doubt about that.


James Lorimer Ilsley: No, not necessarily. It
depends altogether upon the rates. If hon. members will bear with me for a moment,
I shall explain the law as best I can.
There are three types of succession, death or estate duties acts. There is the straight estate duty which is a duty on the estate

Succession Duty Act
graded in proportion to the estate, the rate proportion rising as the amount of the estate rises. That would be a graduated estate duty. There were those who thought that the Dominion of Canada should adopt that form of death or estate duty. It is very easy to administer; it does not require the valuing of contingent interests. The commissioner of income tax told me he thought he could almost administer it with his existing staff, if we were to adopt the simple estate duty. But that is much more unjust than the measure before the committee, if the element which the hon. member has mentioned is an element of injustice, because then, out of an estate of $100,000, perhaps 10 per cent would come off, and we would get $10,000 from the estate, regardless of whether it goes to ten people or to one person, and also regardless of the relationship. That would be a straight estate duty. In that instance the government is coming in and taxing the estate. It is taxing the small estate at a small rate, the larger estate at a larger rate and the big estate at a high rate, having no regard whatsoever to the amount going to any individual.


Richard Burpee Hanson: And
irrespective of the incidence of the tax.


James Lorimer Ilsley: Yes, irrespective of the
incidence of the tax on individuals. There are those who argue strongly that that is perfectly just, because they say that a succession duty is not like an income tax, where one ascertains what the entire income of a person is, and then grades his tax in accordance with his ability to pay. The $25,000 legatee may have had tremendous ability to pay. He may have been a millionaire, or he may have had nothing. We do not know about that. We do not go into that field at all.
There are those who say that we should look just at the estate, and take part of the estate of those who die, a larger part of a large estate and a smaller part of a small estate. That would be a graduated estate tax.
There are those who hold the contrary view, namely, that we should have a pure succession duty act, and that in such a measure we should perhaps tax purely in accordance with the amount received, so that the man who received $25,000 from a $5,000,000 estate would pay exactly the same tax as the man who received $25,000 from a $25,000 estate. That would be a pure succession duty act, and there may be pure succession duty acts in some parts of the world. There were those among my advisers who argued for that style of tax.
We decided finally not to take either one, but to do just what the provinces have done,
and to combine the two forms of taxation. Therefore this is partly an estate duty and partly a succession duty.


Richard Burpee Hanson: Will the minister tell us why the provinces have been actuated to do that, and why he was so actuated?


James Lorimer Ilsley: Because it is a compromise between the two principles. It adopts one element of each principle. I might branch into another realm, one which will be very provocative, I am afraid, and for that reason I am foolish to mention it. I have heard it argued that a person who reoeived $25,000 from a $100,000 estate is likely to be able to bear a heavier tax than a person who received $25,000 from a $25,000 estate. It is argued that if a person is a beneficiary from a large estate, he is likely to have had benefits in his lifetime, to have lived in circles and to have had expenditures upon him and for his benefit -advantages in education, and that sort of thing-which would render him better able to bear a heavy tax on the $25,000 legacy he would get than the person receiving a similar legacy on a smaller estate.


Richard Burpee Hanson: It seems to me that is pretty far-fetched.


Mr. BLACK (Yukon):: That is only
supposition.


Richard Burpee Hanson: It is an assumption.


Harry Rutherford Jackman: What is the third type to which the minister referred?


James Lorimer Ilsley: The third type is what we call the provincial model, a combination of the estate duty and the succession duty.


Richard Burpee Hanson: Is the
provincial model not based on the theory that by a combination of the two types they will get more money from deaths? Is that not the basis of this bill, and of the provincial acts? I am satisfied that that is so. After 1934 nearly all the provinces remodeled their statutes, and they now have statutes which are pretty much in conformity one with another. But they are all based on the theory of seeing how much the traffic will bear.


Paul Joseph James Martin: The hon. member keeps mentioning that point. Surely that is the objective. The hon. member poses that point, and then the minister says no. It strikes me that the objective must be that of getting more money.


Richard Burpee Hanson: Surely.
Succession Duty Act


Paul Joseph James Martin: Does the leader of the opposition object to the suggestion? Why-does * the minister not say that that is the objective? Surely -that is the only reason there can be.


James Lorimer Ilsley: Because it is not the objective. If we wanted to impose a heavy enough estate duty, we could get more money than we are getting by this measure. It is just a matter of making the rates higher; that is all.


Richard Burpee Hanson: The government could take it all, I suppose.
Mr. ILSLE.Y: Certainly, under either of these plans.
_ Mr. MARTIN: Nevertheless the objective is to get money.


Harry Rutherford Jackman: Section 5 states that "the duty payable by each successor shall not be subject to any increase or decrease by reason of appreciation or depreciation in the value of the property included in a succession after the date of death". Naturally it would be a difficult section if worded otherwise. On the other hand, I am sure the minister is acquainted with some cases, and I can recall one particularly in Ontario where on paper a man was worth several millions of dollars, but by the time the estate got round to probate it was worth only a few hundred thousand dollars. That occurs fairly frequently.
For instance, a fortune rapidly created is usually created because very heavy risks were undertaken. It may be that the tide of fortune may turn quickly against that particular estate, and it becomes worth only a fraction of its former value. This would seem to prevent any discretion whatsoever not only in the department or in the minister, but any other place. It is mandatory that there shall be no change whatsoever, no matter what the hardship may be. I believe in the larger brackets there are sufficient cases which are really worthy of attention, and with regard to which some clemency might properly be granted. What are the provisions of the Consolidated Revenue and Audit Act? We sometimes hear that the provisions of that act are related to extreme cases of hardship.


James Lorimer Ilsley: It authorizes the governor in council to remit duties and taxes.


Harry Rutherford Jackman: Generally, where there is a hardship?


James Lorimer Ilsley: For any reason, or for no reason; it just authorizes the governor in council to remit them.


Harry Rutherford Jackman: Would it not be possible to have a provision here to cover such cases? I could cite the case I have in mind where such circumstances had arisen. There are times when it is utterly impossible to pay duties when the value of the estate has crumbled. We have seen values crumble once in the last decade, and it is quite possible that they may be built up fictitiously again. Should a man happen to die at the very zenith of these values, and probate of the estate is taken in six months or a year, it may happen that his widow will be left with nothing, in fact be in debt to the department. I should think some provision might be made to cover these special cases.


James Lorimer Ilsley: I think the Consolidated
Revenue and Audit Act is sufficient. Instead of putting a provision in this bill at the outset, I think it would be better to see what our experience is. If there should happen to be glaring cases and it is felt that they cannot be dealt with under the Consolidated Revenue and Audit Act, then perhaps we can amend this measure. We have the power under another act, a power which is exercised right along in certain classes of cases.


Harry Rutherford Jackman: This is an overriding
act?


James Lorimer Ilsley: I think it is sufficient.


Harry Rutherford Jackman: Three lines from the bottom of page five of the bill appear the words "shall not". That makes it mandatory. If it were permissive, I would be quite satisfied.


James Lorimer Ilsley: That has no reference to the remission of duties.


Harry Rutherford Jackman: So long as it is permissive, it will be satisfactory.


Mr. BOUCHER:: The question has been raised as to the actual date of fixing the value for succession duty purposes. I believe in Ontario the date of death is taken. It may happen that an estate is made up of stock which is fluctuating on the market, and a beneficiary may not receive his bequest for as long as three years after the death of the testator. He certainly could not get it for at least from thirty days to six months. Some consideration should be given to that class of asset. Considerable increases or decreases may occur in the values, and it would be more fair and equitable if a date were taken nearer to the time the beneficiary received the bequest.


James Lorimer Ilsley: That would be something entirely new if we fixed a date at some time after death. Since this measure combines the

Succession Duty Act
elements of an estate duty and a succession duty, I do not think any date is more appropriate than the date of death. If the assets double in value, the beneficiary will get the benefit of that early date; if they go down, perhaps he will have to pay more than he feels he should. It is the most logical of any date that could be suggested.


Richard Burpee Hanson: I agree with that.


Mr. NEILL:: Would the minister be kind enough to give the definition of "domicile" as used in this bill?


James Lorimer Ilsley: It has a common law meaning. I cannot define "domicile" in a word. It is the place where a person lives with the intention of remaining there, but the meaning is subject to many refinements and qualifications and it would be idle for me to define it to the committee. If I remember correctly, there are Latin phrases such as animus manendi, animus revertendi, and so forth. The subject is tremendously complicated. "Domicile" is covered by a definite branch of the law; there is a vast body of law upon the matter.


George Alexander Cruickshank: The definition is not clear to me, but perhaps that is due to the fact that I am not legal minded. I should like to know what "domicile" or "resident of" means.


James Lorimer Ilsley: "Residence" is not the same as "domicile"; "residence" is an element of "domicile", but it is only one element. Books have been written on this.


Alan Webster Neill: The remarks which have been made in the last two or three minutes indicate the need for the information for which I asked. It now appears that books have been written on the matter, and evidently there is a great divergence of opinion in this chamber. There is no more important word in the whole bill. The disposition of money and other matters will depend upon the meaning of the word "domicile". Surely this is the place to arrive at some definition which the ordinary, common man can understand. Perhaps it is unfortunate that the constitution of Canada does not provide that every member of parliament shall be a lawyer, but since we are not all lawyers I think the ordinary country man or the business man from the small town is entitled to know just what we are passing. We shall have to go home and explain this to people who are not lawyers, and I should think one of the most important things to be done is to define the word which is the very crux of this bill. I know of a recent case where a man had left the old country forty-four years ago. When he died a few months ago, it was discovered that he
had left a few hundred pounds in Britain,
[DOT] and the question arose as to whether he had been domiciled in Canada. It was alleged by a lawyer of some ability that it might be held that he was domiciled in the country of his birth, that he had come to Canada with the view of ultimately returning to the country of his birth. I think some information should be given to the ordinary member to indicate what "domicile" really does mean.


James Lorimer Ilsley: I should be glad to insert a definition of "domicile" if one could be framed, but it cannot be framed. I do not think there is a member of the bar who will deny that. There have been endless cases, not upon the principles that underlie the definition of "domicile" but upon the application of those principles to the facts in the individual case.	Perhaps I could give
hon. gentlemen	my recollection of a
few of the rules relating to domicile. There is the domicile of origin, and then there is the domicile of choice. That is probably the country where a person comes to live, with the intention of staying, not the country in which he was born. But as soon as he begins to drift, the domicile of origin reverts, and even though he is not physically present in the country of origin, he is considered as being domiciled there. I may be wrong about that because it is a most complicated subject. If I were to insert a definition of "domicile" that would cover all the variations, domicile of origin, domicile of choice, and so forth, it would be a very long one. A dictionary definition cannot be inserted. We mean the legal definition of "domicile," which the courts know all about.


Alan Webster Neill: It would appear that the
leader of the oposition is right, that this is going to be a grand bill for the lawyers.


George Alexander Cruickshank: Do I understand
that we cannot have a definition of "domicile"? Do I understand from the minister that his so-called advisers-I repeat, so-called advisers -do not know the meaning of the word "domicile"? I should like to know the definition of it.


James Lorimer Ilsley: I will give the hon. gentleman a dictionary definition.


George Alexander Cruickshank: I am not satisfied
with a dictionary definition. I want to know the definition that is going to govern the Dominion of Canada in administering this measure. Never mind about Webster.


Arthur Graeme Slaght: I agree entirely with the
minister that it would be a grave mistake for us to attempt to put a statutory definition of the word "domicile" into this bill. If the
Succession Duty Act

hon. member for Chilliwack-no, Fraser Valley-they are both very delightful places,' I have been there recently-will accept a suggestion from me, "domicile" is worked out in this way. It is, in cases, said to be determined almost entirely as a question of intention in the mind of the person whose domicile is being inquired into, and that is sometimes a pretty difficult matter to determine.
The question arises frequently in connection with foreign divorces and has to be passed on by our courts. To illustrate, if a man resident in Ontario goes to Nevada for from three to six months and purports to make his residence there, whether it be humble or in a flashy hotel, then applies to the court in connection with divorce, and then returns to Canada and takes up again his residence or his business where he was before, it has been argued that when he went to Nevada he created a domicile there. British courts and Canadian courts will have none of that. They look behind the mere fact of residence for a period short or long and attempt to determine, from whatever evidence may be brought forward in an individual case, whether it was the intention of the man in the case I have mentioned, for instance, to desert his domicile of origin, as the minister outlined, and take out a permanent, real, definite residence in some other place for the rest of his life and, unless something unforeseen occurs to alter his intention, to reside at the place where he is found at the time of his death. That is the nearest I can get to what "domicile" is. There is a great deal of legal lore on the subject, and for us here to attempt to define it will,
I am afraid, create difficulty, whereas, if my hon. friend will have faith in the department and in the working out of the legislation in any particular case, I think there will be no difficulty with domicile.
It is said that some wealthy Canadians have disappeared from Canada and gone to a foreign jurisdiction in order to escape the succession duties. If they should die away from Canada we would have the right to inquire whether their business abroad was of a temporary nature or whether their real and honest intention was to create a new home in a foreign jurisdiction for all time to come, subject to the right to change their mind, bona fide, later on. I have probably beclouded rather than cleared the issue.


George Alexander Cruickshank: I appreciate the remarks of the hon. member for Parry Sound very much-


Paul Joseph James Martin: And it has not cost you anything.


George Alexander Cruickshank: No; it is the first time in the history of anybody in Canada that anybody got anything from a lawyer 
without its costing him something. But I did not ask the hon. member for Parry Sound for his advice or opinion, much as I appreciate it as being valuable coming from that source. I think it is time this house had somebody in it-


An hon. MEMBER:: Order.


George Alexander Cruickshank: Never mind "order." I am prepared at great sacrifice to offer my seat in order that Dorothy Thompson might be elected. I asked a definition from the Minister of Finance of the word "domicile." I ask the minister now direct:	What is
"domicile?" I am not asking a lawyer who knows nothing at'all about the situation.


Mr. HANSON (Skeena):: Since the question of domicile has come up, may I say that I was bom in Sweden, of which I am very proud. I left Sweden some forty years ago as an able seaman to go to any country where I thought I might like to take up my domicile. I came to the United States of America and became a citizen of that country, but I decided that I had not yet found the place where I was ready to establish my permanent domicile. I had read a certain amount about the British tradition of justice and fair play, and I decided to come to Canada. I was married in Canada in 1909, and I have one son and one daughter. My son is in the air force. My son-in-law is in the Canadian army. I myself happen to be too old. May I add that when the former Minister of Finance suggested that British people should finance this war, I said to him, "If you are going to conscript blood you should conscript wealth, and I have a few dollars to dispose of." I do not think we should go into these fine technicalities about "domicile." I have tried to be a Canadian and a Britisher, and I am probably the only one in this House of Commons who has offered everything I have-my son, my son-in-law and my daughter-and I have a grandson of whom I am very proud. I think it is ridiculous to be discussing these technicalities at the present time when we should be doing all we can to win this war.
The hon. member for Fraser Valley is a returned soldier from the last war, and I think he should appreciate this, that when we are all trying to do the best we can in this conflict that we are up against, it is out of order to question anyone's domicile. Let me assure you, Mr. Chairman, and the committee that I am a Canadian, first, last and all the time, and I stand for that fairness, justice and equality for which we are all fighting.


George Alexander Cruickshank: I do not think
either the hon. member for Parry Sound or I said anything that would bear the hon.

Succession Duty Act
member's interpretation. There is no man in this house, with the possible exception of the hon. member for Parry Sound, who has a higher regard for the hon. member for Skeena than I have.


Richard Burpee Hanson: The government is taking jurisdiction to follow the personal property of the deceased, no matter where it may be situated, with respect to all properties in Canada. What about the principle that personalty follows the person?


James Lorimer Ilsley: Under section 6 (a), property not here, apart from real property, is taxed if the deceased at the time of his death was domiciled here.


Richard Burpee Hanson: The second clause.


James Lorimer Ilsley: Where the deceased was
domiciled elsewhere?


Richard Burpee Hanson: Outside.


James Lorimer Ilsley: There is succession duty
upon him in respect of succession to property here.


Richard Burpee Hanson: Would
that cover anything more than real estate?


James Lorimer Ilsley: Yes, personal property.


Harry Rutherford Jackman: There may be a conflict of jurisdiction with double and even triple taxation were this clause to be allowed to stand. I am thinking of companies or individuals who may hold large blocks of securities in Canada not representing material assets in this country but assets throughout the world, such as the N.R.O. companies discussed the other day. Are we going to leave the full tax on that type of property, or has the department made reciprocal arrangements with other taxing authorities so that the estate will bear no undue burden, which might cause its removal from this country? It is possible that an undue burden might fall upon personal property in Canada if there were double or triple taxation, unless we made some reciprocal arrangements.
Mr. ILSLEY': There is no reason why we could not make a convention if that were desirable, and perhaps it would be desirable, to prevent double taxation, on the same property both by this and by some other country.


Richard Burpee Hanson: Is that in the bill?


James Lorimer Ilsley: No.


Harry Rutherford Jackman: There is quite a bit of money held in Canada in the way of shares by people in the old country, in Switzerland and elsewhere on the European continent, and if there is a clause like this in a dominion
statute it may drive that money out of the country unless reciprocal arrangements can be arrived at quickly.


Richard Burpee Hanson: What
about refugee money? There is a practical point. There is a large amount of refugee money in Canada. Will the minister tax that? That is a concrete case.


James Lorimer Ilsley: It is taxable.


Richard Burpee Hanson: Does the minister think that is fair, when it is brought here to escape the ravages of war in Europe? Some consideration ought to be given that sort of thing.


James Lorimer Ilsley: The owner has the protection of our law.


Olof Hanson: Will the minister answer the question I raised?


James Lorimer Ilsley: On the facts stated by the hon. gentleman, I would say that he is domiciled in Canada.


Olof Hanson: I am prepared to take all the consequences in order to win the war.


Richard Burpee Hanson: May I
give the hon. member the definition of "domicile" as contained in the old civil law? Others who are conversant with the code of Quebec will correct me if I am wrong. The domicile of an individual is that place where he sets up his lares and penates, his household gods, from which he departs and to which he intends to return. Under that definition, I am sure the hon. member for Skeena is a good domiciled Canadian.


Mr. BERTRAND (Laurier):: May I tell the committee what "domicile" is according to the civil law as we put it before the courts? It is simply the place where you reside, cum animo domi, with the intention of making your home.


George Russell Boucher: With regard to section 6, following the argument of the hon. member for Rosedale, I might give an illustration which may possibly be contemplated in this provision, namely, the case of such corporations as the Canadian Pacific Railway, which hold property in other countries than Canada. It cannot be said to be entirely a Canadian corporation if there are transfer agents in different places. There are three or four propositions that might be raised under provincial acts. Various interpretations have been given as to what constitutes personal property being located in a province. Some decisions have regard to the place where the actual transfer agent is. Where the transfer agent is, is a strong consideration; where the stock certificate is found at the time of death
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is also a consideration. The actual property of which the certificate is simply a representation cannot be the whole ratio decidendi. Consequently, in my opinion, the hon. member for Rosedale introduced an important point so far as international law is concerned, and it would !be desirable to avoid duplication of taxation on stocks owing to the fact that one particular jurisdiction might hold that the security was located where the transfer agent was, while another jurisdiction might decide that it was where the certificate was found, and a third, where the actual property represented by the certificate was located. Something more definite in that regard might be incorporated in the bill.


James Lorimer Ilsley: I do not know whether a question was asked. I know that sometimes it is difficult to determine what the situs of personal property is. Generally speaking, the situs of shares is the place where they can be effectively transferred. If that could happen in two different countries, perhaps they would be subject to the tax laws of both countries.


Richard Burpee Hanson: That is
quite true where there is more than one registration office. It is an anomalous situation, and I do not think one jurisdiction can settle it without collaboration with the other. The principle set up, namely, that they cannot be effectively dealt with-I think those are the words of the English decision-is based on the theory set up in England a long time ago in respect of shares and followed right down to the present time. It has worked great hardship. Just because there is a place where you can register and unregister, therefore you must pay taxation there although the shares were bought in Canada or the United States and never saw England except for the purpose of registration. It is just a hook to catch the money as it goes through.
The same thing occurs in connection with the registration, in a city like Montreal, of shares or bonds, of, say, a New Brunswick corporation. The stock exchange requirements are that the register must be kept in a convenient place where the shares can be dealt with quickly. Under that theory, shares in a New Brunswick company must be registered in Montreal even if the company's operations are wholly in New Brunswick, and one has to pay the province of Quebec succession duty before he can have the shares released. That, of course, and the situation visualized here in respect of registration in other places, such as New York, are very unfair. Of course, under this measure it cannot happen with respect to Canadian registration, because this is a federal statute; but I have always felt TMr. Boucher.]
that the theory upon which those decisions are based was not applicable to a country like Canada.


[Stage Direction]
Section agreed to.
On section 7-Exemptions.
Richard Burpee Hanson: Under
subsection 1, paragraph (a), the widow is allowed exemption up to $20,000 plus $5,000 for each child that does not benefit. Then, under paragraph (c), there is an exemption of $15,000 for a parentless child or a group of parentless children, brothers and sisters. There is a limitation, I believe, as to age. Surely that exemption is low. If the widow gets $20,000 plus $5,000 and the children get only $15,000, divided perhaps among half a dozen, that does not seem good enough.


Mr. CASSELMAN:: Carrying that a little
further, let me take the case of a mother left with three children. If the children get nothing on the succession there is an exemption of $35,000 under subsection 1	(a).
If, however, the mother is deceased and the three children are left the same as in the previous case, the exemption of the three children is cut to $15,000. In other words, in the same set of circumstances the children with the mother are given over twice the exemption that the orphan children are given. It seems to me an arbitrary stand. Why were those figures arrived at?


James Lorimer Ilsley: In the case of the $35,000
it is the widow who gets the exemption. She gets it presumably because she needs it; she probably has no other source of income, and has the home to maintain. In the case of the orphan children there is no widow to get the exemption.


Frederick Clayton Casselman: Surely the children without a mother or father require more exemption than if there is a mother to look after them.


James Lorimer Ilsley: The widow requires the exemption on her own account. In the $35,000 case she gets only $15,000 on account of the three children, plus $20,000 for herself. In the other case there is no widow, and the three children get the $15,000 exemption.


Richard Burpee Hanson: What my colleague is arguing is that in the second case the children without a parent require more than the widow plus the children. There should be a lifting of the $15,000 limitation. Suppose there are five children; $3,000 each is not enough. In some communities where families are large, there might be more than five children. It is just arbitrary. Consideration ought to be given to an allowance based on the number of children.

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James Lorimer Ilsley: The point that was not appreciated by myself up to a minute ago, or by hon. gentlemen is, perhaps, that paragraph (c) is in addition to paragraph (b).


Frederick Clayton Casselman: In the second part of paragraph (c) it states:
Provided, however, that where more than one child is entitled to exemption hereunder the exemption shall be limited to the sum of fifteen thousand dollars divisible amongst such children in proportion to the value of the property included in each succession.


James Lorimer Ilsley: The "exemption hereunder" is under paragraph (c).


Duncan Fletcher McCuaig: As I read that section, three children without parents would receive the $15,000 plus $5,000 for each child, which would make a total of $30,000.


James Lorimer Ilsley: Correct.


Richard Burpee Hanson: Is that the intention of this?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: That does not seem to be clear.


Frederick Clayton Casselman: That seems to be the intention, if one reads the first half of paragraph (c). But the proviso seems to change it; it puts the limit of exemption at $15,000.


Arthur Graeme Slaght: In addition to paragraph (b).


Richard Burpee Hanson: Then it is understood that in the administration of this statute the liberal interpretation which the minister indicated will prevail?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: If it is not clear in the legislation and there is a decision on it, does the government undertake that it will be maintained?


James Lorimer Ilsley: Yes. There will not be any
contest about it.


William Ross Macdonald: Under paragraph (e) "where the successor is the Dominion of Canada or any province or political subdivision thereof", does "political subdivision" include municipalities, cities, counties, townships?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Referring to paragraph (d), I have had correspondence with people in more than one part of Canada who are anxious about the definition of a "charitable organization". As I understand it, that is a general term used throughout these taxing statutes, and covers not only charitable institutions such as, we shall say, an orphan asylum, but educational, religious and kindred
organizations of a charitable nature. If we could have some definite statement from the minister to put on record of what this means and is construed to mean, it would allay a great deal of uneasiness.


James Lorimer Ilsley: A "charitable organization" will be interpreted and construed as including religious and educational institutions; more than that, the precise definition is just as difficult to make as the definition of "domicile". There are, however, many cases in England defining "charities" and "charitable purposes" and "charitable trusts", and the principle of these decisions has been applied and will be applied by the income tax division to this phrase "charitable organization".


Douglas King Hazen: The minister is taking the legal definition?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: That is satisfactory to me.


John Ritchie MacNicol: Would the minister
explain the full import of the words "active service" in subsection 3 in conjunction with the words in the next line, "in . . . Canada"? What classes are included in the words "active service . . . in . . . Canada"?


James Lorimer Ilsley: This is taken from the
English act. I am not sure that I am familiar enough with the organization of the army to know just what members of the forces would be deemed to be on active service and those who would not be so deemed. I myself thought that the members of the Canadian active service force, w'hether in Canada or abroad, were on active service-


Ian Alistair Mackenzie: That is correct.


James Lorimer Ilsley: That is what I thought- and that they would be entitled to the privileges of this section.


John Ritchie MacNicol: "Active service" would not include the home guard? It would apply only to men who have enlisted to go overseas and are now in training in Canada, and to men who are now overseas?


James Lorimer Ilsley: I did not think there was any ambiguity about the matter. Perhaps there is. I had in mind all the time the phrase "Canadian active service force". I thought that the members of that force would be on active service, and that the phrase "wounds inflicted, accidents occurring, or disease contracted" might be in or beyond Canada; but if there is any trouble about it, we shall have to amend it. I do not think there will be. As I say, this phrase "active service" wms taken from the English act.

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The hon, gentleman is putting the ease of the home guard, is he? I should not suppose that the reserve army would be on active service.


Paul Joseph James Martin: There is here, I think, a real problem. I may be wrong; perhaps I am just thinking out loud. Subsection 3 reads:
Where the deceased dies from wounds inflicted, accident occurring, or disease contracted on active service with the Canadian naval, military or air force in or beyond Canada, in such circumstances that if the deceased left a widow she would be entitled to receive a pension in respect of his death under the Pension Act.
_ If we bear in mind what the minister has just said, every man who serves in the active service force does not receive a pension, particularly if he is in service in Canada, under the Pension Act as introduced by the minister to-day. Surely there is something wrong.


James Lorimer Ilsley: Why?


Paul Joseph James Martin: Because the minister says that every man comes within the ambit of this if he is on active service with the Canadian naval, military or air force in or beyond Canada.


James Lorimer Ilsley: No.


Ian Alistair Mackenzie: If I may be allowed to comment, I think the section is quite explicit. It covers "active service with the Canadian naval, military or air force in or beyond Canada, in such circumstances that if the deceased left a widow she would be entitled to receive a pension in respect of his death under the Pensions Act." Under the legislation which was passed by the house to-day, under different conditions, the widows of those on active service outside Canada might receive pensions; the widows of those on active service in Canada, under a different classification, might receive pensions. It is only when the pension is payable under this section that this application is effective.


George Russell Boucher: I take it that this section is really dependent upon the Pension Act?


James Lorimer Ilsley: Yes.


George Russell Boucher: In other words, this section would not apply unless the person, if killed, left a widow who, under the then existing Pension Act-


Ian Alistair Mackenzie: That is quite correct.


George Russell Boucher: It may, however, be
changed or modified here or hereafter if the widow would have been entitled to a pension under the then existing Pension Act?


James Lorimer Ilsley: Right.


George Russell Boucher: Then also this would
apply?


James Lorimer Ilsley: Correct.


George Russell Boucher: In other words, it is not a question of whether they were enlisted for active service overseas and are in or out of Canada. It is whether the widow is in the status of one who would or would not get a pension?	,


James Lorimer Ilsley: The two conditions must be there. There must be active service. The wounds inflicted, accident occurring, or disease contracted must have been so inflicted, occurred or contracted on active service. That is condition No. 1. Condition No. 2 is that it must have been in such circumstances that a pension would be payable under the provisions of the Pension Act.


George Russell Boucher: Quite. I was pointing
out that very thing, because I believe the minister is giving the words "active service" two different meanings under the one section of the bill.


James Lorimer Ilsley: No.


George Russell Boucher: I think so.


Mr. GREEN:: I suggest that the word
"active" should come out, because, as the Pension Act stands now, there is no such thing as active service, there is simply service; and by putting the word in this legislation you introduce a feature which conflicts with the Pension Act. Otherwise it will be impossible to determine just what cases are covered by this section. Last evening we had quite a long argument over the inability of the Department of Pensions and National Health to draw a section which would enable them to say which man was and which man was not training to go overseas. They said it could not be done, and because it could not be done they brought in a compromise section basing the entitlement upon entirely different grounds-hardship grounds. In this section of the present bill you again have the same problem of interpreting what is and what is not active service, and if you are going to make it fit in with the Pension Act you have certainly to take out the word "active."


Richard Burpee Hanson: Is there any objection to that?


James Lorimer Ilsley: Well, I do not know.


Ian Alistair Mackenzie: I do not think it changes it.


Richard Burpee Hanson: If anything, it liberalizes it.


James Lorimer Ilsley: There is no doubt about that. But I think it goes away beyond what the English do, and I should like to have the

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section stand and see what we are doing. I do not know, for example, whether the Pension Act applies to the members of the militia.
I realize that this might be raising a contentious point, but there would be no reason for extending the privileges of this to the members of the reserve army. It is the Canadian active service force that is entitled to benefit.


Mr. DOUGLAS (Weyburn):: Except that, under the Militia Act, the government may by order in council place the reserve army on active service in Canada. In that event they would come under the section.


James Lorimer Ilsley: Yes. The expression "active service" means something, surely.


Mr. STIRLING:: May I draw the minister's attention to an answer given by the Minister of National Defence and reported at page 2908 of Hansard? If the minister will look up that page he will see that included in the active service force are the veterans guard, the coast defence and anti-aircraft units, and the instructional staffs and training centres.
I do not know if that is what the Minister of Finance has in mind; but if he is going to let this section stand I would draw his attention particularly to what was said on that occasion by the Minister of National Defence. [DOT]


William Ross Macdonald: If the word "active" were deleted and the word "service" remained, then in the event of the regular army being called up for two weeks military training and a man being killed in that time, his estate would be exempt from the provisions of this measure.


George Russell Boucher: Only if he came under the Pension Act.


William Ross Macdonald: I do not think that is the intention of the legislation. I believe its intention is to give special consideration-


Harry Rutherford Jackman: Not "special"-equitable, probably.


William Ross Macdonald: It is a consideration over and above that given to a person who does not go to war. It is to ;ive consideration to those who offered their lives for their country. If they are killed while offering their lives for their country, then they are to get the extra consideration which this section sets out. I do not think the section is intended to mean that benefits shall be given to anyone who happens to be killed during two weeks military training.


Howard Charles Green: I do not agree with the hon. member for Brantford City. If a man is killed while he is on military training in Canada,
he is dead, just the same as if he were killed overseas, and his family would find themselves in just the same sort of trouble. It is frightfully difficult under the pension law as it stands to-day for a man serving in Canada, even though he may be waiting to go overseas, to qualify for pension. It is frightfully difficult for his widow to qualify for pension. That is what we were complaining about yesterday. We pointed out that some wider provision should be made for men who are in active training for overseas service. But, as the law stands now, it will be very difficult for a man to qualify.
I submit to the minister that if a widow can qualify on the death of her husband, then certainly that should be a case in which she should be entitled to this exemption, which, after all, starts at quite a high figure. I think, if we start drawing fine lines, we shall only be unfair. A man's life is offered for his country if it is given for his country here in Canada. He is a member of our forces, and his family should be entitled to the benefit of this exemption.


Ian Alistair Mackenzie: As the section stands, it is clear. According to the interpretation of the officers of the national defence department it includes everyone in Canada, except those called out under the National Resources Mobilization Act. They are all on active service or on service within or without Canada. Therefore this section applies to all, if they could qualify for pension under the Pension Act as passed by the house-and if not modified in another place. That would be the interpretation of the section as it stands to-day.


George Russell Boucher: It seems to me most
reasonable that if a person is entitled to pension he should be entitled to exemption, and, conversely, if he is entitled to exemption he should be entitled to pension. Therefore I believe it simply follows that one should be the test for the other.


James Lorimer Ilsley: Are hon. members arguing that in a time of peace all the privileges of this section should extend to men whose deaths take place while they are training?


Howard Charles Green: Yes, because under those
conditions it is very difficult for a man's dependents to qualify for pension. There would be very few cases which would arise; and if a man has given his life for Canada, even though it may have been in peace time, he has given it as a result of preparing to defend his country in war time. Surely we are drawing too fine a line when we say that in those circumstances the widow is not entitled to the exemption.
Succession Duty Act


James Lorimer Ilsley: Just a moment; I have asked a question for information. Are hon. members arguing that a man who loses his life while training in time of peace, who has not volunteered for service for any war abroad, should be treated differently as regards succession duties from the man who does not train in a summer camp?


Howard Charles Green: If a man gives his life
while he is out training to defend his country he has the right I have described. I would urge upon the minister that we cannot get away from the Pension Act. He must base his section in the succession duties legislation on the provisions of the Pension Act. Otherwise it will be like a ship without a rudder. There would be no way of determining what active service is.


William Ross Macdonald: The minister has asked for the opinions of hon. members. I dio not' believe that a man who in peace time goes to military camp for two weeks training should get the benefit of this section. He has not offered his life in any way for his country. True, he joined a militia unit-and no one has more respect for the militia units than I have-but he has not offered himself for service outside Canada. He has only offered to take two weeks training at a military camp. I do not believe such a man should receive the benefits of this section. I agree that a man who, in time of war, volunteers for service, joins a unit that is likely to go overseas, and is killed in Canada, should get the benefit of this measure. The minister has asked for our opinions, and I am definitely not in favour of giving pension to men who are called for two weeks training only in Canada.


Douglas Gooderham Ross: Does the hon.
member believe that the. pension law is wrong, and that a man should not receive a pension under the conditions the hon. member has mentioned?	.


Ian Alistair Mackenzie: He can.


William Ross Macdonald: Under the Pension Act as it is drawn, and as it passed this house yesterday, there is provision for a man who is killed during two weeks service. There is provision that his wife shall receive a pension.


Douglas Gooderham Ross: I do not understand the hon. member's argument at all. In one case the man is getting a tremendous benefit, and in the other, his widow is getting a very small benefit. In the case of the Succession Duty Act the benefit is very small, when compared with the pension which would be received.

I suggest that the hon. member should be consistent and argue that the Pension Act as now drafted is wrong, and that the man is not entitled to pension. I suggest that the consideration for the exemption must be the pension. It should not be anything else; the pension is really the consideration.


William Ross Macdonald: As the bill is now drawn, the obtaining of the benefits of the section are dependent upon active service, and a pension. That is the intention of the legislation. I do not think we should widen it, and give benefit to those who do nothing but take two weeks training.


Douglas Gooderham Ross: I suggest that
the hon. member ought to be consistent. He is arguing against the man getting a pension under the conditions he has set out. I do not see how it can be otherwise. I really believe that the consideration must be the pension.


Howard Charles Green: There would be perhaps only one case a year, or one in two or three years in the militia, where a man would be killed while in training. It would not be a matter of involving the country in a great loss of revenue. The principle should be that if a man's widow can establish entitlement to a pension, she should have the right to exemption under the Succession Duty Act.
Mr. CRUICKSHANIv:	Apparently the
hon. member for Vancouver South is in favour of giving a member who stubs his toe in the Jackson building here a government pension.


Howard Charles Green: The hon. member for Fraser Valley could not have had both his ears open. As he knows very well, a member in the Jackson building could not qualify for a pension. His widow would have to show that the death arose out of his service or was directly attributable to his service. If he stubbed his toe, his widow could not qualify.


George Alexander Cruickshank: If he stubbed his toe, he could qualify if we took the interpretation of the hon. member for Vancouver South.


John Ritchie MacNicol: When I raised the question I was thinking of two fliers from my riding who were killed recently. Perhaps hon. members will remember the accident near Winnipeg in which two fliers were killed, and the other one near lake Erie where another two were killed. In each case one of the men resided in my riding. I do not know whether they were married; but if we assume that they were, their widows should qualify under this provision. I believe one man was an instructor and the other was finishing his training.

Succession Duty Act


Ian Alistair Mackenzie: They would be entitled to pensions because their deaths were directly connected with their service.


Thomas Clement (Tommy) Douglas: It seems to
me that there are two criteria by which a person can qualify for exemption. The first is a matter of active service, which is perfectly clear, but the second is a stipulation that there must be eligibility for pension. The Minister of Pensions and National ^ Health may be able to straighten this out. When we consider subsection 3 of section 6 of the Pension Act, we realize that the two are not synonymous any longer. The question of necessitous circumstances now enters the picture. Pensions are now granted not only because of active service but because of the circumstances of the widow. There are now two criteria in the same section, and it seems to me that either one should be used. It should apply either to the active service or to the eligibility for pension.


Ian Alistair Mackenzie: When a case of hardship was being considered under the Pension Act, there would be no estate involved. The applicable section would be subsection 2, which covers a death directly connected with military service. The whole trouble is that the meaning of "active service" has completely changed since the last war. During the last war a certain interpretation was placed upon this, and in this war an interpretation has been placed upon it by responsible officers. A man may be called out under the National Resources Mobilization Act, and he is not on active service. I think the intention of this section was to restrict it to those serving in a theatre of war.


James Lorimer Ilsley: This was drawn to effectuate the intentions of the government. When we enlist a man and put him in a position of danger, my idea was that we could not fairly subject his estate to succession duties upon the old basis of exemptions or the old basis of value. Therefore the values are greatly reduced on an actuarial basis and the exemptions are greatly increased. I do not know what wording is necessaiy to effect that end, but I know there was no intention of making any concession to men on technical grounds simply because they were wearing a uniform in the summer or anything like that. It is all right to say that it will not cost us very much, that we should not draw fine lines, but we must do the just thing. When we tax one man who does not go to camp, on one basis, and another man who goes to camp, on another basis, and there is not any substantial difference in the risk run by the two men-


Howard Charles Green: Except that the one man gets killed and the other does not.


James Lorimer Ilsley: Probably they both get killed.


Howard Charles Green: The man who is killed at
camp is on military service. Surely his position is different?


James Lorimer Ilsley: There is no difference in the risk, so far as I can see. I want this to cover the cases where we are making concessions to men who are fighting and risking their lives to defend us.


James Arthur Ross: I think it is contradictory. As the Minister of Pensions and National Health points out, it is difficult to understand. I do not think the section means just what the minister wants it to mean. It is an absolute contradiction to what was discussed in connection with the Pension Act last night.


James Lorimer Ilsley: I shall ask that it stand.


George Alexander Cruickshank: I resent the use of the word "concessions".


James Lorimer Ilsley: I withdraw that; I did not intend anything by it.


Douglas King Hazen: The same consideration
should be given to the widows of officers and men who serve in our merchant marine. In some cases these men have been running greater risks than many of the men in our armed forces. They have rendered a great service to this country, and I ask that this section be amended by adding a clause to provide for the officers and men in our merchant marine.


Richard Burpee Hanson: Only if they are killed in a war zone.


James Lorimer Ilsley: I shall give that some
consideration.


Richard Burpee Hanson: If subsection 3 is to stand, may I refer again to the $5,000 limitation? I think the minister will find that the cost of collection will be relatively high. I have urged this matter three times, and the minister has never actually said no. His silence, however, may be construed in that way. In a country as wide-flung as Canada there are bound to be hundreds of little estates where it will be difficult to ascertain whether they come within this limitation. The department will be reduced to counting spoons on the cupboard or in the kitchen to determine whether the estate comes within this limitation. I think the minister ought to raise it to $20,000 at the very least, and I do not think the loss in taxation would be very great. I can remember
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that when I first began to practise, $50,000 was the limit. Forty years ago in our province a man with an estate of $50,000 was considered as having been well to do. That is equivalent to an estate of about $100,000 to-day. I beseech the minister 'to raise this $5,000 limitation. From the point of view of administration his officers will get rid of a great deal of trouble, and, perhaps expensive trouble. How will the minister determine whether an estate is under or over $5,000? An estate of $5,001 pays a tax, while an estate of $4,999 pays no tax. The difficulty will be in arriving at a definite figure.


William Chisholm Macdonald: The valuation of a house might make all the difference.


Richard Burpee Hanson: Yes; it might depend upon some one small factor. I suggest that the limit is too low in any event.


Paul Joseph James Martin: It is just possible that the suggestion of the hon. member for St. John-Albert may be allowed to be shelved, but surely he has raised an important aspect of this question, and I rise, even at the risk of repetition, to support him, so that the matter may be impressed more forcibly upon the minister. Surely a man engaged in the merchant marine or serving on a convoy should be given every benefit that is contemplated by this section. One cannot help recalling the case of that brave man, Captain Fogarty Fegen. Under this section, if he was a Canadian, his family would derive nothing whatsoever. The Minister of National Revenue points out to me that the man may be in the naval reserve. I just took Captain Fogarty Fegen as an example. Undoubtedly there will be other cases. I strongly support the suggestion of the hon. member for St. John-Albert, which deserves every support it can receive.


Richard Burpee Hanson: What about this $5,000 limit?


James Lorimer Ilsley: In a great majority of smaller estates the exemption on account of the widow and children would more than wipe out the estate.


Richard Burpee Hanson: That is a partial answer.


James Lorimer Ilsley: In cases where there are no widow and no dependent children, while there may be administrative difficulties, the beneficiaries, strangers for example, should pay a tax.


Richard Burpee Hanson: What about brothers?


James Lorimer Ilsley: I think they should.


Richard Burpee Hanson: I do not think so.
' Mr. ILSLEY: As I say, in the normal case, the exemptions will eliminate the problem.


Richard Burpee Hanson: Let me
give the minister an illustration. I have in my riding four brothers, all bachelors. None of them ever married. They have lived together, one doing one part of the work on a great big farm, and another, another. Under this section every one of them will pay, as they die, taxation on an estate of a little over $5,000 apiece, and when the last one dies, the whole thing will have gone to the government. I do not like the taste of it.


Harry Rutherford Jackman: I would ask the minister to make the provision under subsection 3 as generous as possible. Under the Pension Act a person must qualify in a certain way and in a rather restrictive way, and something comes to them direct from the crown in return for their sacrifice or the sacrifice on the part of a loved one. But the provision here is not of that nature at all. It is merely to prevent the crown from benefiting unduly by the untimely death of some person who has lost his life on account of the war. Therefore I think the crown can afford to take a generous attitude. In Ontario the section allows the government to remove the whole duty if it sees fit. It is not specifically laid down except in those general terms, and I understand from the premier of Ontario that such cases will be liberally treated. Here the government should afford every relief possible to the heirs of a man who lost his life before his time in the great cause for which we are now fighting, and for that reason I would suggest that the provisions of the Pension Act can surely not be applicable. Although I am not at all familiar with them, they must be drawn far more strictly than in equity the provisions of this section should be drawn because the case is of such a different nature.
I would also specifically call attention to the item of 3 per cent. Three per cent would mean setting up quite a large sum which, accumulated at 3 per cent, would, after the expiration of the term of years, equal the amount of the tax. If you made it 4 per cent, which is much more reasonable, it would mean that a good deal smaller capital sum would have to be set up and paid now. The government should give every consideration to the heirs of men who meet their death before their time in this war, and I would strongly recommend 4 per cent, and, if the government had a generous turn of mind, 5 per cent. In these circumstances it would not be too much to ask that the estate go scot-free, but I realize that the minister would not go along

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with me that far. But either 4 or 5 per cent rather than 3 per cent would be more in keeping with what the people of Canada would desire.


James Lorimer Ilsley: Three per cent is put in there because that is the existing market rate.


Harry Rutherford Jackman: But the man who died did not want to make this investment to be improved at 3 per cent yearly. He has sacrificed his life for this country, and thereby the government comes into this tax on his estate before it ordinarily would. The government does not wrant to benefit by that fact. It wants to give him all the consideration it can, and it is quite likely that if he were investing his money he would not be content with 3 per cent but might need 4 or 5 per cent to maintain the family he leaves behind. I think that rather than have the government force the 3 per cent rate on him, they should give at least 4 if not 5 per cent. The minister will realize what a difference there is in the capital sum necessary now to be provided when the rate is 3 per cent compared with 4 or 5 per cent. The government should be extremely generous in these circumstances.


James Lorimer Ilsley: The section is standing
anyway.
Section stands.
On section 8-Allowances in computing aggregate net value and dutiable value.


Richard Burpee Hanson: May I call the minister's attention to paragraph (g) of subsection 2 dealing with duties paid elsewhere? This clause, of course, means that in any province where there are succession duties-and that applies to all of them-we pay a succession duty to the province at a high rate, and we pay a second duty to the federal authority at a relatively small rate, but no allowance whatever is made by the federal authority for the tax paid to the provincial authority.


Paul Joseph James Martin: As in income tax?


Richard Burpee Hanson: As in income tax. You are taxed on the tax you pay the province.
I call attention to another provision. For years in New Brunswick there has been a provision that life insurance may be taken out and assigned to the provincial treasurer earmarked, so to speak, for the payment of succession duties. To the extent that the duties are assessed and levied and paid out of that policy of life insurance, which, in many instances, has been placed for that specific purpose, there is no tax on that insurance. There is no tax to the extent that it is taken up by the assessment, and by doing
that you avoid the tax on a tax. It is a fair provision. Many people have already regulated their affairs to give effect to it, and I suggest that the minister ought to have some such principle in this bill, so that, for instance, a policy might be assigned, say, to the Receiver General of Canada under a provision similar to that which exists in some provincial statutes. He could make provision for this tax without having the estate liquidated, perhaps in a very difficult period. I know of no fund out of which succession duties are paid more easily than out of life insurance if one can afford to carry it. He might incorporate that principle and avoid' for his successors the tax on a tax; for that is what it amounts to.
By this section the government will take a tax on what my estate may have to pay to New Brunswick, or the estates of hon. gentlemen opposite may pay to some other province.
I suggest that double taxation has almost become a racket in this country. It is not fair. It cannot be justified on any basis of equity or common justice, and these two taxing authorities should get together, at least on this point, and give some consideration to the poor taxpayer. Everyone is defending the revenues of the country, but no one is saying a word for the taxpayer. This is not a war measure, I do not care what the minister says; it is an invasion of a field of the province and it could be got along without. I think the minister will find that, with the growing national income, many of the new taxes he has imposed, and some of those he has imposed since the budget began, will take up all the slack he needs. Surely he can exercise some leniency to the taxpayer so that he will not be taxed on a tax. That kind of taxation is an abomination. We have had it for years. I remember years ago when they put a tax on corporations on the same money that went to pay dividends to shareholders who paid income tax on that as well. The minister of the day, who is now sitting quietly in the other chamber, admitted the inequity of the thing but defended it on the theory that they needed money. The minister ought to give consideration to this plea, that the tax paid to a province should not be taxed by his department, and he should add a provision that if a person assigns insurance on his life, payable to take care of this tax, that should not be taxed. That is based on elements of common justice.


James Lorimer Ilsley: The hon. gentleman has
stated several times that there should not be any tax on a tax and that the proposition speaks for itself. I challenge that statement, and I put the simple case of the person who pays the tax on sugar. Everyone in the
Succession Duty Act,

country, I suppose, pays some part of the tax on sugar. The amount in the year is not very much. The average per individual is something like $1 on the one cent basis; it will be $2 on the two cent basis, and for the average family of five it will be, on that basis, $10. I am a householder buying sugar. I have an income. Out of my income I pay so much for sugar, and a tax of so much on that sugar; nevertheless I pay income tax on that same amount which I pay in the form of a tax on sugar. No one thinks that is shocking, but common sense or morals or logic would suggest-


Richard Burpee Hanson: The
analogy will not bear analysis. The position is not the same at all.


James Lorimer Ilsley: That is a simple way of disposing of the argument.


Richard Burpee Hanson: It will not dispose of it in my mind.


James Lorimer Ilsley: It is simple and convincing. Let us take the person who is subject to two income taxes, one payable to a province and one to the dominion. That is shocking to the hon. gentleman, unless the taxpayer is allowed a deduction. The dominion does not allow, as a deduction from a person's income for income tax purposes, income tax he pays to the province. If I receive $100 in income and the province takes $10 and the dominion $10, what is there shocking about that? I have paid 20 per cent of my income, 10 per cent to one taxing authority and 10 per cent to the other. The hon. gentleman says that is a tax on a tax, because one of the jurisdictions-I do not know which one-does not allow the tax paid to the other jurisdiction as a deduction from income for income tax purposes. We have never allowed these income taxes as deductions, but some provinces do. Ontario allows the amount paid to the dominion as a deduction for income tax purposes, bu't some of the other provinces do not. I am applying here, in the Succession Duty Act, the same principle we have always applied in the income tax act. The theory of this is that the estate of a deceased owes two taxing authorities money. One authority takes a certain proportion, and the other authority, another. In a sense it is a tax on a tax, but in another sense it is merely two taxes on the same amount. Part of it goes to one authority and part to the other. Would it make the hon. gentleman feel any better if we took just as much as he paid to both authorities, that is, if we took as much as the total? Suppose the province went out of the field, and we took the amount paid to the province; we would not divide it into two parts and 
allow one part as a deduction before applying the tax on the rest. Yet the amount would be the same.


Richard Burpee Hanson: I will
counter that by reference to the national defence tax. That is a tax imposed at the source. We never get that money where it is taken beforehand, and yet we are taxed on it. Is there anything equitable in that?


James Lorimer Ilsley: That is merely a matter of procedure.


Richard Burpee Hanson: It is a little more than procedure. It is a very important matter.


James Lorimer Ilsley: It is exactly the same, as if a person received it and paid it back.


Arthur Graeme Slaght: If he did not earn it, it would not be taxable.


Douglas Gooderham Ross: Will the minister tell me why in section 1 it says "but not including the charges of solicitors"? That seems to be a debt as much as the rest- surrogate court fees, funeral expenses and so forth. Why not allow as a debt the solicitor's charges?


James Lorimer Ilsley: It is not a debt of the deceased, and it is capable of indefinite expansion.


Douglas Gooderham Ross: Are surrogate
court fees a debt?


Richard Burpee Hanson: They are a tax. Surrogate court fees in my province are a tax paid by probate stamps. Allowance is made for deduction. I convict the minister on his own bill.


Douglas Gooderham Ross: I think it is just as much a tax as anything else and should be allowed. I do not see any reason why it should not.


James Lorimer Ilsley: If these surrogate court fees reach the dimensions of a succession duty we would not allow them.


Richard Burpee Hanson: I do not know what they are in other provinces, but during the Easter vacation I paid $904 to New Brunswick on an estate of just under $300,000. It was a substantial tax for the service rendered. It is a tax based on the gross value of the estate, not the net, because no deductions are allowed except for mortgages. Debts are not allowed to be deducted. It is an important item.


James Lorimer Ilsley: The line is difficult to draw between a charge which is a fee and a charge which is really a tax.

Succession Duty Act


Richard Burpee Hanson: It started as a fee to cover a service, but has proved to be very profitable to the province. Every year for some years past they have carried into the revenue a substantial balance. It is not an important item, but is one with regard to which they always figure on having a credit balance. I cannot ask the minister to include solicitors' fees in the exemption; I do not think that would be fair because it would not be based on a principle. The principle of a deduction is that it is something existing or incurred by the death. You do not really have to have a solicitor to administer an estate.


Frederick Clayton Casselman: You will have to now.


Douglas Gooderham Ross: I take exception to that. I think you do have to have a solicitor, and it is a fee just the same as the surrogate court fees. I am not a solicitor. As I understand it, these solicitors' fees are taxed as well by the taxing officer.


Paul Joseph James Martin: "Taxing" there means
something different.


Douglas Gooderham Ross: I still think it ought to be allowed as a deduction.


Paul Joseph James Martin: The leader of the opposition all day has been pointing out the severity of this particular bill-


Richard Burpee Hanson: No, I
have been dealing with the principle; I have raised no question about the rates.


Paul Joseph James Martin: The hon. gentleman's conclusion in his main speech and his successive observations to-day was, I understood, that this legislation is calculated to lead to the destruction of the system of free private enterprise and so forth.


Richard Burpee Hanson: Together with other taxes.


Paul Joseph James Martin: He has made the observation several times to-night, to which I do not remember the minister addressing himself, that this legislation is not for the purpose of raising money for the prosecution of the war.


Richard Burpee Hanson: I do not say that; I say it is not required for the prosecution of the war. The money could be obtained otherwise.


Paul Joseph James Martin: Apart from the permanency of this legislation, the minister does not say that at the end of the war he proposes to vacate this field, as he has said with respect to the invasion of other tax fields. Nevertheless I think we ought to have it clearly understood, having in mind the fact that the provinces legislate in this field that we are now 14873-205
entering, that this legislation does impose a measure of double taxation which in peace time it might be very difficult to justify. The minister should definitely say that he was persuaded to bring in this legislation because he had to find money to carry on the war and that, in his judgment and in the opinion of the government, this was regarded as a field which might well be explored for that purpose.


Richard Burpee Hanson: That
would be going beyond what he said in the budget speech.


Paul Joseph James Martin: I do not recall that, but
there ought to be some statement.


Richard Burpee Hanson: The hon. member wants a justification to use when he returns home.


James Lorimer Ilsley: I wish to make it clear that
we would not have brought in this measure if it had not been for the war and the need of money; but having once reached the point where we decided to introduce it, we do not introduce it as a temporary measure, for the reason stated in the budget speech:	It may
be that it will be repealed; it may be that my intentions about it or the intentions of this government will not necessarily govern permanently.


Arthur Graeme Slaght: But they do, so far as we can see.


James Lorimer Ilsley: Hon. gentlemen seem to
attach a finality to my statement which is flattering; it seems to imply the permanency of the government.


Richard Burpee Hanson: Don't fash yourself about, that! I am afraid it will stay; it is going to be a money-maker.


James Lorimer Ilsley: In answer to the hon. gentleman, it is introduced in order to get money for the prosecution of the war; it would not have been introduced but for the war requirements. On the other hand, it having been introduced, there are reasons in equity why it should not be introduced to apply for a temporary period only, with a view to repeal at the end of that period.


John Ritchie MacNicol: When the resolutions
were before the committee I asked the minister a question with regard to the words "reasonable funeral expenses." I have in mind the case of a Toronto family, the head of which died some time ago. They had some difficulty with the Ontario government in getting the succession duty adjusted because they had purchased a cemetery lot for which they paid $800, and the succession duty people apparently thought it was too much. The family bought the lot which they thought the

Succession Duty Act

deceased member would have liked. Then they contemplated erecting a tombstone, and again, while I believe the succession duty officers were willing to make some allowance, what they were willing to allow was not at all adequate for the stone the family wanted. What does the minister include in this expression "reasonable" as to a lot in the cemetery and a stone on the lot?


James Lorimer Ilsley: Reasonable funeral expenses are allowed. Whether the commissioner will allow the expense of a tombstone appropriate to the value of the estate is a matter of administration.


Richard Burpee Hanson: Yes; it
all depends on where you die, what reasonable funeral expenses are. If you die in Florida you pay triple rates; if you die in Fredericton you get a decent funeral for about one-third.
Will the minister give some consideration to my suggestion to incorporate at a later date, next year perhaps, if he will not incorporate it now, a provision with regard to life insurance, made payable to the Receiver General of Canada, or earmarked for succession duty. Surely it is a reasonable suggestion. We are quite used to it in New Brunswick; a good many people have already made that arrangement; it works well, and there is no great loss of revenue to the province. I have myself made a provision of that kind, and now I am afraid I shall have to double it.


James Lorimer Ilsley: I am informed that formerly they had that provision in Ontario, and repealed it.


Richard Burpee Hanson: Why?


James Lorimer Ilsley: Apparently they had it in New Brunswick too. I do not know why they repealed it in Ontario. The reason which would occur to me is that the proceeds of a life insurance policy, no matter to whom payable, are part of the estate for succession duty purposes. They are what the man who died bought.


Richard Burpee Hanson: Of course he has made the province the beneficiary.


James Lorimer Ilsley: Yes, but that does not affect the principle that the proceeds of that policy, if the premiums were entirely paid for by him during his lifetime, are his property passing on his death, whether they pass to his wife or to his estate or to the province.


Richard Burpee Hanson: Is there not some practice in England with regard to this matter?


James Lorimer Ilsley: I do not know.


Thomas Miller Bell: I am sorry I could not be in the chamber this afternoon when the second reading was under discussion, but I happen to be on a sub-committee of the defence of Canada regulations committee, and therefore I shall have to leave what I should like to say until, probably, the third reading. I have, however, been listening to the discussions now for some little time, and I am wondering what is really the intention of part, at least, of this committee, whether it is to raise revenue for the war or to find as many methods as possible of escaping payment of revenue under this bill. I hope the minister will give no pledge on behalf of the government that this will be only a temporary measure.


James Lorimer Ilsley: No, I won't.


Thomas Miller Bell: In my opinion these
duties are long overdue, and I regret that they are succession duties; I think they should be death duties, and that the taxes should have been collected on the estate according to its size.


Harry Rutherford Jackman: It is a combination of
death and succession duties.


Thomas Miller Bell: It is a combination. It is a compromise, as the minister said a little earlier. I have admired the way in which the minister has refused to consider changing portions of this and some similar bills which have been before the house, at a time when we need revenue to the extent that we need it now. I believe that if there is one place where we ought to be looking for money, it is from the large estates which are derived from the accumulated efforts of the majority of the Canadian people. I have been sitting here for the last hour or so, moved with some resentment at the obvious desire not to give the government as much money as we can get out of this measure, but to restrict the government's ability to raise revenue from it. I hope the minister will continue as he has been doing and will stand by the proposals which are in this bill, and which I personally think are quite moderate.


Harry Rutherford Jackman: I have no doubt that the hon. member for Rosetown-Biggar was a supporter of the dominion-provincial relations conference. That conference had as one of its main objectives the settling of certain duplicate taxation measures. This country has become so flooded with duplications in taxations that one hardly knows where to turn.
I can say to the chairman that, as a young man, I find it difficult to make a move without thinking of the effects of three or four taxing statutes of one sort or another, or, when I am trying to make provision for a

Succession Duty Act
family, imagining what is going to happen when I die. In this, I am sure, I represent the generation in this country of young men who, perhaps, saw some service in the last war or were too young to have seen any. I certainly do represent the generation which is taking on some of the burdens in this country, and I see no reason why at every step we should be plagued with new acts of parliament. I believe that the Minister of Finance should have considered the matter much more gravely before he elected to put this measure on the statute books, because it certainly must undo a great deal of the work which was attempted to be done through the dominion-provincial relations conference. There, we tried to get some uniformity under one authority with regard to corporation taxation and with regard to income taxes. We know that, most unfortunately the conference did not succeed. Let us, however, assume that it had succeeded; would it have been the situation that inside of four or five months another statute would have been introduced duplicating a statute which now obtains in practically all of the provinces?
Look at the difficulties we have had here. A good many of us have had some legal education; many hon. members are practising lawyers; yet it is most difficult to understand exactly what the incidence of the taxation is, or what is going to be left when one passes away. The ordinary business man simply cannot understand these things, he is so hemmed in by regulations of one sort and another.
I think this bill should not have been introduced. I understand that it is estimated to produce 320.000,000. If more money had to be raised, it would have been better to have placed taxes in some other form than is embodied in the present bill.
The minister has said that the present legislation will be with us for, if you like, all time. Certainly it is not a temporary war measure. I would say to him that, if he will be content to derive revenue from it for the period of the war only, I am sure that, contrary to the opinion expressed by the hon. member for Rosetown-Biggar, that would suit the people of Canada; and if extra money must be raised, let it be raised through some other tax.
The minister has suggested that some inequalities will obtain if estates which fall into the hands of the taxing authority only during the war period are taxed and those that fall in after the war are not taxed. I admit that there may be some slight inequality there, to be accepted by all, but, after all, the war is an emergency time. If we must have money to carry on the war, and also to prevent inflation-although I do not suppose that is the primary intention of this measure-no
undue hardship will result if it falls only on those estates which mature, so to speak, during the war period, and is afterwards withdrawn.
We seem to have in this country no end of taxation measures. It may be true that some people are not very much interested in these matters, but this is a land of opportunity. There is hardly a well-to-do man in this country to-day who did not start with practically nothing. Certainly, if one has regard to those hon. members who are well to do, it cannot be denied that most of them began with little or nothing. Canada in the past has offered some opportunities to its youth. Now, apparently, if our friends to the left have their way, the only opportunity left in this country will be the opportunity of being levelled down.


John Ritchie MacNicol: I wish to ask a question with reference to subsection 2, paragraph (g).
(2) Notwithstanding anything contained in the last preceding subsection allowance shall not be made-	. ,
(g) for any estate, legacy, .	.	. paid or
payable to any province.
Do I understand that if a man leaves by his will 310,000 to his native province, the dominion government will tax that bequest?


James Lorimer Ilsley: Section 8, subsection 2,
paragraph (g), relates only to duties paid to a province, not gifts or legacies to a province. This simply provides that succession duties and similar duties paid to the provinces may not be deducted from the estate before the dominion succession duties are reckoned on that estate.


Arthur Graeme Slaght: I wish to add just one word in reply to the observations of the hon. member for Rosedale. He suggests that the minister and the administration are to blame for bringing in this tax, and he mentions that, wherever as a young man he turns, he finds himself faced with possible taxation. Then he tells us that we must not kill the land of opportunity. I think we all agree, in the main, with those observations. I wish, however, to suggest that this is one of the fairest, most reasonable and best forms of taxation that any government in any country can devise. We all agree that so far as men who accumulate material things in this world are concerned, "You can't take it with you . In the main this is a death and succession duty, and the virtue of it to my mind lies in the fact that it is graded. The hon. member will see that if he will read the schedule. Therefore the estates of those who leave the most to dependents who did nothing whatever to earn it, and who find money coming into their laps in sufficient quantities in some
Succession Duty Act

instances to permit them to live at ease, and in other instances in large enough quantities to foe of great assistance-and I am not attacking the fact that dependents receive
benefits from the estates of persons who die_
are properly taxed. I believe that when we approach this source of taxation, instead of turning to the sales tax and doubling it, we are at least following out Liberal principles and, as I understand it, the principles enunciated by the great party to which the hon. member for Rosedale belongs, namely, that in a system of taxation one ought to strive to let the burden rest most heavily on the people best able to pay.
The dead man is not able to pay anything; he is through. But his dependents who take substantial fortunes are under this legislation substantially taxed. There is a mounting schedule, just as there is in respect of the income tax. I believe, therefore, that as a source of revenue, and based on the principles which have been described to us, this tax must commend itself. We ought to be willing to submit to it, in these stressed circumstances. It ought to be commended rather than reprobated, because every time we reprobate1 a tax, and then impose it, we begin to slow up contributions to the Red Cross, and contributions such as those which are to be made in connection with the victory loan to be subscribed shortly from our people. I wish to record myself as being quite out of line with the thoughts of the hon. member who has spoken.


Harry Rutherford Jackman: The hon. member is entirely in line with them.


Arthur Graeme Slaght: It ought to be understood that in this instance we are seeking to tax unearned increment, and revenue which has come to people who had no part in producing it. From the point of view of the man in this world who must struggle to get along and who has very little to live on, this source of taxation is one of the fairest, best and finest to be devised-if, indeed, one can call any method of taxation fine or fair.


Harry Rutherford Jackman: If I may be permitted to answer-


Paul Joseph James Martin: I am rising to speak right after the hon. member for Parry Sound because if he had gone one Step farther I would have been able to support him fully.
I believe either the hon. member for Rosedale has not fully stated his case or the hon. member for Parry Sound has not fully understood the case as stated by the hon. member for Rosedale.


Harry Rutherford Jackman: It is the duplication to which I object.


Paul Joseph James Martin: What the hon. member for Parry Sound should do is to join with many others in saying that the time has arrived in Canada when the fiasco of the Rowell-Sirois report should not have been permitted to exist, and when the whole field of taxation that is causing some concern and proving burdensome to many thousands throughout this country should be rectified. This is fair legislation. The argument introduced in support by the hon. member for Parry Sound is sound. But this condition of having nine provinces and a federal government in the same field is not sound. To the extent that that expresses the view of the hon. member for Rosedale I unhestitatingly, as a member from a constituency in Ontario, -say that not having succeeded in January in meeting that problem, we cannot delay dealing with it courageously and completely very soon.


Harry Rutherford Jackman: The observations of the hon. member for Parry Sound do not differ from the sentiments I had in mind, if not the sentiments to which I gave expression. I consider that succession duties or inheritance taxes constitute one of the fairest taxes which can be placed upon a people in Canada or in any other country. I am much more interested in seeing that men have some incentive to put forth their best efforts during their lifetime rather than to leave a large fortune, which, in many instances, is not desirable.
I would, however, ask the minister whether any discussion took place with the premiers of various provinces as to whether they could collect some additional succession duties or inheritance taxes through the systems which at present obtain in the respective provinces, instead of drafting a new piece of legislation which the minister promises us will last long after the war, and thereby make matters so difficult that it is almost impossible exactly to understand one's position.
Then, one cannot help having in one's mind what can happen if the legislation is not fairly administered. I have no fears in that regard in respect of this particular measure. We know, however, that in the provinces certain inadvertencies, if they may be so described, sometimes occur in the filing of probate papers, and matters of that description. Something may have been left out. Then there are penalties of $10 a day so long as the default continues. Therefore in the aggregate one does not know where he stands, and he is simply at the mercy of the taxing authorities. There have been a number of cases like that, so much so that one scarcely knows where he stands.
_ I realize that the minister may say it was impossible to approach the various provinces and ask that they increase their rates 25 per

Succession Duty Act
cent or 50 per cent, or whatever would have been necessary to bring in the $20,000,000 he expects to receive from this legislation. Every province has a different taxing statute. Nevertheless we have already made a certain proposal to the provinces whereby if they step out of certain taxing fields we shall return to them from the dominion treasury what they had previously received. After all, the dominion treasury gets it from the people as a whole. It is only a rough justice. There would have been only rough justice if the various provinces had agreed to collect an additional 25 per cent or 50 per cent succession duty tax, and turned it over to the dominion. It could then have been looked upon and treated as only a war measure. It would not have been necessary to set up another department or to have put an additional burden on the Department of National Revenue. Nor would it have been necessary to think of. this measure as well as the provincial succession duty acts, and thus have so many things on our minds. I am sure the minister will have sympathy with me when I refer to that point.
If one is looking after a company he must file any number of returns. I have heard of some companies who have had to file over a hundred forms in the different provinces and the dominion in order to satisfy the statutory requirements. Were any representations made to the premiers or the treasurers of the various provinces in connection with collecting a certain amount of money for the dominion?


James Lorimer Ilsley: No such representations were made. If we had done so, in effect we would have been raising money on a different principle in each province. We would have had enuring to the benefit of the dominion exchequer revenues which were raised unequally and on different principles in nine parts of Canada. It would have been introducing an entirely new principle into dominion law. The hon. gentleman says that in the matter of income tax we are attempting to get the provinces to vacate certain fields, but in that case they are vacating certain fields in order that there may be completely and strictly uniform income tax in all parts of Canada and completely and strictly uniform corporation income tax in all parts of Canada. To institute nine sets of increases in succession duties for our benefit would be a retrograde step and, in my opinion, entirely undesirable. I am sure that unless we made it a dominion tax and made it clear that the provinces were acting merely as agents in the collection of that tax, we never would be able to complete agreements with all the provinces. We would have nine separate agreements to make, and I do not think anyone with any appreciation
of the difficulties would embark upon an experiment or adventure like that, leading as it would to a patchwork, checkerboard system of succession duty taxation.


Harry Rutherford Jackman: I realize that that would work out quite satisfactorily for the Department of National Revenue, but the department is always thinking of itself and never of the taxpayers of Canada who have to meet this imposition and who have to file these returns. It would have been much simpler for the people if they could have paid through the provinces. I agree that the present system has certain merits in that it introduces a new measure which is uniform in application throughout the whole country, but the minister is continuing the inequality in provincial taxation by making the offer which he has made to the various provinces. In effect, he is saying to the nine provinces, "If you will abandon the corporation and income tax fields, we will perpetuate for the period of the war the particular imposition that you have had in your province." He is saying, "How much did you get from that tax? Let us know what you got, and we will give you that much; we will perpetuate these inequalities." I cannot see that there is any less justice in following the suggestion which I made of having the provinces collect the succession duty and making it necessary to file only one return, than there is in containing the old corporation and income taxes under the offer which has been made. Of course, an alternative offer has been made which is once again an indication of the inequality that exists as between the provinces. The minister has agreed to give them the amount which they use to service their provincial debt. I cannot see that the minister has made out a case at all. If he had done as I suggested, it might easily have been looked upon as a temporary war measure and the field would have been left to the provinces.


Douglas King Hazen: I would direct the attention of the minister to subsection 1 of section 8 which refers to surrogate court fees. There is no definition of the words "surrogate court" in the bill. So far as many of the provinces are concerned, these words have little meaning.


James Lorimer Ilsley: I think that is a good criticism. In Nova Scotia no one knows what a surrogate court is; they call it the probate court. There should be some definition to the effect that "surrogate court" includes all courts discharging these functions.


Douglas King Hazen: Either a definition should be given, or the section should read "probate or administration fees", or something like that.
Succession Duty Act


Richard Burpee Hanson: "Surrogate court" includes all courts administering estates.


Douglas King Hazen: The hon. member for
Vancouver South (Mr. Green) informs me that they do not have surrogate courts in British Columbia. Why is a distinction made between funeral expenses, surrogate or probate court fees and solicitor's charges? The hon. member for St. Paul's (Mr. Ross) brought this point out a few minutes ago. Funeral expenses are a debt due, not by the deceased but by his estate. Court fees are a debt due, not by the deceased but by his estate. The solicitor's charges are a debt due, not by the deceased but by his estate. The solicitor's charges are absolutely necessary and they must be paid. I cannot understand why they are not allowed when funeral expenses and court fees are. Some arbitary distinction must have been made. These fees do not amount to a great deal and I think they should be allowed.


James Lorimer Ilsley: The provinces do not allow them. From the administrative angle, a solicitor's bill is not usually sent in until after ihe succession duties have been paid. Therefore the amount payable could not be determined accurately.


Douglas King Hazen: I think the minister is referring to the solicitor's fee for preparing the succession forms and so forth, but I am referring to the solicitor's fee for taking out probate or administration papers.


James Lorimer Ilsley: In my province a solicitor is not necessary in most small estates.


William Chisholm Macdonald: In more than small estates.


James Lorimer Ilsley: In the case of most small estates in my county there is no solicitor. The administrator goes into the probate court and probates the will or takes out administration. Then there is nothing fixed about the solicitor's fee; it might be large or it might be small; it is capable of great expansion.


Frederick Clayton Casselman: It is fixed by the tariff.


William Chisholm Macdonald: Generally
a trust company takes out probate or administration itself.


James Lorimer Ilsley: I might make some change with respect to the surrogate court to meet that point, so the section can stand.
Section stands.
Progress reported.



INCOME WAR TAX ACT

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 87, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 88, to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.
On motion of Mr Mackenzie (Vancouver Centre) the house adjourned at 10.55 p.m.