1941-05-22

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Mr. J. T. THORSON (Selkirk) moved the first reading of Bill No. 65 (from the senate) respecting United Grain Growers Limited.
Hon. R. B. HANSON (Leader of the Opposition):: Before this bill is given first reading the hon. member should give us some information about it.


Mr. THORSON:: The best explanation I could give would be by reading the general explanatory note as it appears in the bill:
The main purpose of the bill is to permit the equitable operation of the principle which has governed the company since its inception, namely, the principle that its business should be controlled by farmers actually engaged in farming. By 1911, chapter 80, by which the company was incorporated, only "farmers or owners or lessees of farms and the wives of such persons" were eligible to hold shares in the company otherwise than in cases authorized by a two-thirds vote at a shareholders' meeting (section 6); no shareholder was entitled to hold more than forty shares (section 5); and each shareholder had only one vote no matter how many shares stood in his name (section 8). The limitation on the number of shares a shareholder might hold was increased to one hundred by 1917, chapter 79, section 4, and by the same statute power was given to the company to substitute for a general shareholders' meeting a meeting of delegates chosen by local groups of shareholders, each delegate being entitled to one vote (section 6). Apart, however, from the exceptional cases provided for in section 6 of 1911, chapter 80, no transfer of shares held by farmers and their wives can be made to non-farmers. This restriction on transfers has seriously affected the value of shares belonging to farmers who have died or have ceased during their lives to be actually engaged in farming. The result has been an increasing proportion of the total capital of the company in fact the property of non-farmers whether registered as owners of the shares or not and consequently of persons who are not entitled to take part in the direction of the business of the company.
The provisions of the bill are chiefly directed to the correction of the situation thus created by permitting the creation of two classes of shares, one in the nature of preference shares on the ownership of which there is no occupational limitation but which do not entitle the holders to take part in the management of the company, and the other in the nature of common shares capable of being held only by farmers and carrying the right to take part in the election of delegates and to act as delegates.
Motion agreed to and bill read the first time.



FIRST READINGS-SENATE BILLS

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Bill No. 66, for the relief of Vivienne Rhodes Whitaker Storey.-Mr. Emmerson.
Bill No. 67, for the relief of Dora Lemisch Boyer.-Mr. Bercovitch.
Bill No. 68, for the relief of Muriel Mary Murphy Carvey.-Mr. Bercovitch.
Bill No. 69, for the relief of Eileen Henrietta Seville Orchin.-Mr. Bercovitch.
Bill No. 70, for the relief of Edythe Gertrude Dover Schawl.-Mr. Bercovitch.
Bill No. 71, for the relief of Agnes Mary Johnson Messett-Mr. Bercovitch.
Bill No. 72, for the relief of Manson Wilton Roach.-Mr. Bercovitch.
Bill No. 73, for the relief of Gertrud Kohn Storper.-Mr. Mcllraith.
Bill No. 74, for the relief of Frederick William James Hobbs.-Mr. Bervocitch.

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(Questions answered orally are indicated by an asterisk.)

Mr. CASTLEDEN:: .
1.	What was the total cost of the second war loan?
2.	How much was contributed under this loan?
3.	What was the rate of commission paid to canvassers or others?
4.	What sum was paid in commissions for securing contributions to the said loan?
5.	What was the cost to the government, if any, for advertising?
6.	What was the organization cost, if any?
7.	Upon what basis will the 1941 victory loan be made available to the Canadian public?
8.	What rate of commission, if any, will be paid?


Mr. ILSLEY:: 1.	Total cost of selling the second war loan, including commissions to banks and dealers, printing, stationery, advertising, printing interim certificates, engraving definitive bonds, telegraph, telephones and sundries, 82,730,155.38.
2.	Cash subscriptions allotted, $300,000,000; conversion subscriptions, $24,945,700; total $324,945,700.
3.	Total commission paid to banks and approved dealers was at the rate of J of 1 per cent of the amount of the loan issued, of which dealers allowed j of 1 per cent to sub-agents.
4.	$2,414,400.75.
5.	$125,728.85.
6.	Expenses of the national subscription committee amounting to $4,362.17, were deducted from the commissions paid to dealers.
7 and 8. These questions are receiving the consideration of the government.

Questions as Orders for Returns



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. POULIOT:: 1.	Are government motor cars and chaffeurs available to members of the Ottawa staff of the Department of National Defence at all hours?
2.	If so, (a) how many cars; (b) of what make; (c) when purchased or rented; (d) at what cost in each case; (e) what has been the total cost of upkeep, repairs and garage rent of such cars since the beginning of the present war; (f) to what particular members of the said Ottawa staff are they available?



NATIONAL HARBOURS BOARD-EMPLOYEES

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Mr. PARENT;
1.	Has the national harbours board made any changes in the scale of wages of its employees at the port of Quebec?
2.	If so, what classes of employees have been reduced, if any, and what was the reduction in each case?
3.	Has the national harbours board increased the salaries of some of the employees in the offices of the board at Quebec?
4.	If so, (a) to whom have such increases been given; (b) what amount; (c) what was the previous salary of each employee who has received an increase?
5.	What is the scale of wages of each class of employee of the national harbours board at Halifax, Saint John, Quebec, Montreal, Chiooutimi, Three Rivers and Vancouver, respectively?
6.	What are the respective salaries of office employees, engineers and port managers under the jurisdiction of the national harbours board?

[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: I should like to direct a question to the Prime Minister, notice of which I sent him this morning. Has he any comments to make with regard to the holding of Canadian seamen in French Guinea by the Vichy government, and will he indicate what effect this action will have, if continued, upon the relations between Canada and the Vichy government?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: The French minister to Canada has been asked to cable the French government at Vichy to ascertain the position of the Canadian seamen in French Guinea. Until I receive the reply to that cable I shall not be able to give my hon. friend a full answer to his question. I have no doubt I shall receive the reply shortly.
[Mr. Dsley.l



SCRAP IRON


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On the orders of the day:
Mr. C. E. JOHNSTON (Bow River):: I should like to direct a question to the Minister of Munitions and Supply, and in his absence bring it to the attention of the Prime Minister. Release No. 338 issued by the Department of Munitions and Supply has the following to say with reference to the Dominion Bridge company:
The company plans to move its furnaces and rolling mills from its Calgary plant, which has been in operation some time, to Vancouver.
The Vancouver mill will consume only the scrap available in those areas, namely British Columbia and western Alberta, where it can be collected at an economic cost, and where dealers have been facing the problem of disposing of scrap which has been accumulating since the beginning of the war.
Will the minister state why this action is permitted, in view of the fact that this question was brought to his attention many weeks ago before all this scrap iron was shipped to the coast? This is a serious situation and it seems to me it is quite unfair-


Some hon. MEMBERS:: Order.


Charles Edward Johnston: -to have this mill moved from Calgary to Vancouver.


William Lyon Mackenzie King: I must say to my hon. friend that I do not think his main motive in rising has been to ask a question; it has been rather to express his own point of view.


Charles Edward Johnston: I am asking why it was permitted.


William Lyon Mackenzie King: I am afraid I cannot answer my hon. friend's question as to why, but I shall ask the minister to make a reply later after he has read the question.



LIFE INSURANCE ADVERTISING


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On the orders of the day:
Mr. THOMAS REID (New Westminster):: I should like to bring to the attention of the government advertisements which have appeared in certain newspapers on behalf of insurance companies. These advertisements make use of parts of a speech made by the President of the United States, a copy of which I hold in my hand. The type used in the advertisements is all of one size, and from

Nova Scotia Coal
the picture of the president, standing out as it does in bold relief, one easily gets the impression that the President of the United States is advocating life insurance. The same kind of advertisement also appeared recently containing part of a speech made by the Prime Minister of Canada (Mr. Mackenzie King). This kind of advertising is not only unbecoming, it is despicable as well. It is unthinkable that companies of this kind should use such methods in an effort to induce people to invest in life insurance, especially in these troublesome days.


William Lyon Mackenzie King: After listening to my hon. friend the leader of the opposition (Mr. Hanson) the other evening, I must say that I am glad to find myself in such good company.



DECENNIAL CENSUS


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On the orders of the day:
Hon. J. A. MacKINNON (Minister of Trade and Commerce):: Two days ago, as well as on a previous occasion, the hon. member tor Broadview (Mr. Church) made inquiry as to the advisability of getting the census information sheets into individual hands prior to the enumerators making their rounds. I consulted the census authorities on this, and they advise me that it would not be practicable because it would mean that the enumerators would have to go over the whole ground twice and quite probably the questions would not be properly answered when they got the forms back. I am informed also that only four or five of the questions on the population schedule might cause any difficulty. These deal with racial origin, nationality and occupation. Copies of the forms covering the population schedule can easily be made available to any who desire them.
Ten years ago some 800,000 forms were sent out to farmers some weeks ahead, but my officials say that this did not help at all and the enumerators had to do the full work when they reached the farms. Forms have already gone out with the advertisements to all the newspapers, but our officials say that it is up to the newspapers to decide whether or not they will publish the questions. Some have done so already. In connection with advertising the schedules, our officials state that this would be difficult and very expensive, considering the fact that all our advertising has gone out. They point out also that without lengthy explanation, the mere printing of the questions would not be very helpful.



NOVA SCOTIA COAL


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On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: I should like to direct a question to the Minister of Transport, based upon the following telegram which I received this morning from D. C. McLeod, board member of the mine workers' union in Inverness, Nova Scotia, a copy of which I sent the minister:
Local union here desirous you discuss with department concerned future operation No. 3 mine which largely depends on orders from Canadian National Railway during summer. Understand these orders have been cut which means short time for men employed.
In view of the fact that the future operation of this mine depends on orders from the Canadian National Railway during the summer, have the orders from the railways to this company been reduced? If so, is there a possibility of placing orders for coal with the people operating that mine so as to assure its continuous operation for the future?


Hon. P. J. A. CARDIN (Minister of Transport) :: My hon. friend was kind enough to give me notice of his question, and I took advantage of the presence in Ottawa of Mr. Vaughan, the purchasing agent of the Canadian National Railways, to ask him for information. He tells me that there may have been some temporary dislocation of deliveries of Nova Scotia coal, but that it is the expectation of the railway management that the same quantities as were taken last year, if not more, will be taken by the Canadian National Railways this year.
The vice-president is unable to say offhand exactly what the situation is in regard to No. 3 mine referred to in the telegram just read by my hon. friend, but he has undertaken to supply me with a more complete report which will be available in the course of a few days.



WAYS AND MEANS

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. The house in committee of ways and means, Mr. Vien in the chair.

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6. That there shall be imposed, levied and collected an excise tax of three cents per imperial gallon on gasoline imported, or produced or manufactured in Canada; and that where the gasoline is imported, such excise tax shall be paid by the importer or transferee who takes the gasoline out of bond for consumption at the time when the gasoline is imported or taken out of warehouse for consumption, and where the gasoline is manufactured or produced and sold in Canada, such excise tax shall be paid by the manufacturer or -producer at the time of delivery of such gasoline to the purchaser thereof.
[Stage Direction]
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Mr. DOUGLAS (Weyburn):: When, the
house adjourned yesterday the minister had promised to take 'this resolution under consideration with a view to considering the advisability of granting exemption from the tax on gasoline to primary producers. Has he given further consideration to the matter, and if so what decision has he arrived at?


Hon. J. L. ILSLEY (Minister of Finance) :: Mr. Chairman, last night I
promised that I would bring to the attention of my colleagues the remarks of the leader of the opposition. I did so, and the matter has been considered again, but I have to inform the committee that for the reasons I have stated on several occasions since the resolution came before the committee, the government does not feel that it would be justified in providing for a refund or making provision for exemption, of any class in the community.
I do not know that I can add anything to what I have said before. It is admitted that there are arguments on both sides. All I can say is that the government is strongly of the opinion that the arguments for no exemption or refund are stronger than the opposing arguments.


Richard Burpee Hanson: Is it not true that all the provinces have some system either of refunds or of selling gas of a different colour to farmers for power purposes?


James Lorimer Ilsley: I believe they do.


Richard Burpee Hanson: All of
them?


James Lorimer Ilsley: I believe so.


Thomas Clement (Tommy) Douglas: Both the
minister and some of the members who have voiced objection in the past few days to granting this exemption to primary producers seem to be under the misapprehension that we are asking for some special concession. The thing we have been trying to convey to the committee is that the principle of granting exemption from taxation to producers in respect of commodities used in their production is a principle which the government itself has recognized in practically all its taxation. A number of examples might be cited.
We pointed out the other day in connection with the use of electricity that the eight per cent tax which applies all over Canada, even in districts where electricity costs as much as twelve cents per kilowatt, is not imposed on industries which can show that the electricity is used for the production of their commodities. In that case they are exempt. This government almost every day in the year is rebating large amounts of money to manufacturers in respect of sales tax paid by them on materials used in their production.

I understand that even in the imposition of this gasoline tax the government proposes to allow the provincial governments and the employees of provincial governments to get their gasoline tax free. In other words, in Saskatchewan, for instance, where the farmer will have to pay three cents a gallon more for the gasoline he requires in order to carry on his farming operations, the provincial government inspector driving down the road will not have to pay the three cents a gallon tax, if I understood correctly the minister's statement.


James Lorimer Ilsley: Just a minute. There is no personal exemption to any employee of the provincial government. It has been a well settled principle of all our tax legislation that the dominion government does not impose taxes on provincial governments, which in turn would have to raise those taxes from their people through provincial taxation measures. It is only on sales to his majesty in the right of the province that there has been an exemption from the sales tax and excise taxes. I think there should be a similar exemption in this legislation. But that is a different thing from granting a personal exemption to an employee of a provincial government.


Thomas Clement (Tommy) Douglas: The minister will understand that I am referring to an inspector using gasoline not for his personal purposes but in carrying out his governmental duties. If I understood correctly the minister's statement the other evening, gasoline purchased by the government of Saskatchewan for use by its employees will be tax free. Is that not so?


James Lorimer Ilsley: It is my intention that the section now in the Excise Tax Act shall apply to a transaction of the kind. If we departed from that principle we would be inviting strong, and as I look at the matter now, justifiable protests from all provincial governments. See what it might lead to. If the dominion government imposed taxes on his majesty in the right of the province, the incidence of which fell on the taxpayers of the province, it would mean that we would be taking or could take an advantage there which certainly would not be regarded as justifiable.


Richard Burpee Hanson: May I have the floor for a moment? I have given a good deal of consideration to this problem-


Mr. COLD WELL:: Mr. Chairman, I protest. The hon. member for Weyburn was on his feet and sat down only when the Minister of Finance rose to make an interjection.

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Richard Burpee Hanson: I have to catch a train and would like just five minutes.


Major James William Coldwell: The hon. member for Weyburn courteously gave way to the Minister of Finance who wished to answer his argument. The minister then took his seat and the hon. member for Weyburn proceeded. I object to the manner in which the leader of the opposition told the hon. member for Weyburn to keep his seat. The hon. member for Weyburn had the floor, and I suggest that he should follow the rules.


Richard Burpee Hanson: If anything I said could be construed in that way,
I sincerely apologize. I think I am usually very courteous, especially to hon. gentlemen in the east end of the chamber. I want to be courteous; but there has been some misunderstanding. I just wanted a few minutes because very shortly I have to catch a train.


The CHAIRMAN:: On the point of order raised by the hon. member (Mr. Coldwell), the hon. member for Weyburn has the floor.


Thomas Clement (Tommy) Douglas: If the leader
of the opposition has to go, I will quite willingly yield my place.


Thomas Vien: The hon. gentleman
yields.


Richard Burpee Hanson: I did not appreciate the fact that the hon. member for Weyburn had the floor, otherwise I certainly would not have risen. May I say briefly what I intended to say? In regard to the question of taxation by the crown in the right of the dominion on the crown in the right of the province, I believe there is a legal difficulty. I have not prepared any brief in the matter, but has the minister or have the officials of his department at any time considered this aspect of the question, whether there is the right to tax the crown in the right of the province? It has given me some difficulty. I doubt very much if there is the legal right of taxation by the crown in the right of the dominion on the crown in the right of the province. If the minister has any opinion on the point, I should like to have it made clear.
Before I sit down, may I thank the hon. member for Weyburn.


James Lorimer Ilsley: I have no reasoned opinion
to express on the legal point raised. All I know is that we do it right along. The crown in the right of the province pays customs duties imposed by this parliament, and which have been imposed upon them, I suppose, ever since confederation.


Richard Burpee Hanson: Then, if
I may be permitted the observation at this point, the argument which the minister has advanced against the contention of the hon. member for Weyburn falls to the ground. You impose customs duties, and the money comes from the taxpayers of the provinces through their treasury. You refuse to tax them on gasoline because of the reasons alleged, and it will come out of exactly the same people. The minister's position is inconsistent.


James Lorimer Ilsley: It is only superficially inconsistent. The general purpose of the customs tariff is protective.


Richard Burpee Hanson: What?


James Lorimer Ilsley: It is protective.


Richard Burpee Hanson: And this
from my hon. friend from Nova Scotia!


James Lorimer Ilsley: I am not expressing any
views on the theory. I am merely stating a matter of fact. We have a protective tariff in this country. Nobody has denied that.


Richard Burpee Hanson: I agreeand the highest we have ever had in Canada.


James Lorimer Ilsley: That is another point; I do not want to start an argument on it. I am simply saying that, in a purely revenue measure, where the sole object is the raising of taxes, I believe it has always been a principle of the legislation not to impose a tax on a province.


Richard Burpee Hanson: With
great respect to the minister, it seems to me that that is a distinction without a difference, and one which will not carry conviction to the people of this country.


Thomas Clement (Tommy) Douglas: The point that I was starting out to make was that those of us who were asking for the exemption of farmers and fishermen from this gasoline tax were not demanding any concession; we were merely requesting the government to apply a principle which it has recognized in its taxation measures, which it recognized in the electricity tax, which it recognizes every year in the sales tax, and which the minister himself has said it is now going to recognize in the application of this tax with reference to the provincial governments. I am not quarrelling with that attitude, but I am pointing out that the provincial governments and their employees enjoy rebates or at least have tax-free gasoline in respect of this particular impost. Now, this committee has no assurance that there will not be abuses under those conditions. We have no guarantee that provincial government employees will
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not use tax-free gasoline for their private purposes. The people are going to know that inspectors driving provincial government cars are using tax-free gasoline, while they themselves have to pay a tax of three cents a gallon on the same kind of gasoline when they use it in carrying on their farming operations.
The Minister of Finance is not very familiar with the situation on the prairies, but I can tell him that in Saskatchewan one of the things we have more than anything else is inspectors. As a matter of fact if in looking for a source of revenue he put a tax on inspectors he could raise a considerable sum. I do not know whether it would be wiser to ask them to buy a licence plate each year, or put a tax on the farmers and have an open season on inspectors like a duck shoot.


Mr. MacNICOL:: Are they mostly political heelers?


Thomas Clement (Tommy) Douglas: I would not say that all of them are political heelers, but a good many of them certainly find it difficult to differentiate between their government duties and their political duties. In my own constituency, throughout the political campaign last year, a government inspector driving a government car attended almost every meeting I held, and had a shorthand reporter with him to take down my speeches. I do not know whether he was using government gasoline.


An hon. MEMBER:: Perhaps he was one of the hon. member's supporters.


Thomas Clement (Tommy) Douglas: I am afraid not. He was working, I believe, for the Minister of Agriculture.
The point I am making is that the government has already granted exemptions, so that the danger of abuse, if any there be, has already arisen. The minister is not on very good ground in saying, when we ask that the same principle be applied to the primary producers, that his only reason for not granting what he admits to be a just exemption is that there will be-to use his own words- wholesale evasion.


James Lorimer Ilsley: Well, that is not the only reason.


Thomas Clement (Tommy) Douglas: The minister gave that the other night as his main reason- that there would be wholesale evasion. Personally I do not take that kindly. I do not believe the people throughout Canada will take it very kindly. The industrialist is exempt on his electricity tax. That must mean that the minister is not afraid he will cheat.


James Lorimer Ilsley: No danger.


Thomas Clement (Tommy) Douglas: The manufacturer is to be given a rebate. Presumably there is no danger of his cheating.


James Lorimer Ilsley: Practically none.


Thomas Clement (Tommy) Douglas: The provincial civil servants also enjoy exemption. Apparently there is no danger there.


James Lorimer Ilsley: Very little.


Thomas Clement (Tommy) Douglas: But the farmer and the fisherman, who are going to use this fuel to produce goods which this country needs in time of war, are not to be granted any exemption, because they are not trustworthy, because the minister thinks they are going to evade the tax and illegally use gasoline. It is discriminatory legislation; it is a discriminatory tax. I do not believe that the farming or fishing population will take it very kindly; they will look upon it as a reflection on their honour.
The other evening the minister asserted that in one province where purple gas is used there have been as many as one to two hundred convictions a month. The only province in which purple gas has been used over any period of time is Saskatchewan, so that the minister could not have referred to any other province. All the information I can obtain- and the same thing was said yesterday by the hon. member for Rosthern-is that the figure the minister gave is very high. In my opinion it is incorrect. The hon. member for Rosthern said yesterday that there had been in the neighbourhood of thirty convictions a month.


Mr. MARTIN:: Why does the hon. gentleman say the statement is incorrect?


Thomas Clement (Tommy) Douglas: Because the information I get through talking to policemen and men engaged in legal work is that the number of court cases for evasion of the provincial gasoline tax has been comparatively small. I will say more. Saskatchewan was the pioneer in using purple gas as a means of preventing the abuses of the provision exempting gas used by farmers for productive purposes. After they had tried it for, I believe, some two years, the neighbouring province of Alberta sent its officials into Saskatchewan to study the Saskatchewan system. My information is that they were so much pleased with it and felt that it worked so efficiently that they went back and recommended its adoption, and Alberta has now launched upon the coloured gas system of preventing evasion of the gasoline tax levy. It seems to me, therefore, that the minister is allowing some people who are advising him to convince him

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that this problem would present larger administrative difficulties than, I am sure, are likely to arise.
I am sure that if he consulted the government of Saskatchewan, or the Minister of Agriculture who comes from Saskatchewan, or any of the other members from that province, he would be told that in the main the farming population there have appreciated the fact that they have been given gasoline for productive purposes free of gasoline tax, and that any man in the community who tries to evade it is not looked upon as smart, but simply as doing something which, if he is allowed to continue to do it, will work to the injury of the rest. I know one or two men who have been convicted, and I can assure the committee that they are looked upon with great disfavour by their fellow farmers. The average man there would rather be caught horse stealing than be caught using purple gas in his car, not only because of the legal penalty but because of the social disapproval with which he is met in the community for doing something that is harmful to the standards of the entire farming group to which he belongs.
The minister is not on good ground when he says that his only reason for refusing to exempt the primary producers from the gasoline tax is his fear that they will cheat. That statement is not warranted. The government, if it wanted to do so, could devise the necessary system for exempting farmers and fishermen and at the same time prevent any large-scale evasion.
Yesterday a number of amendments were moved and were ruled out of order. The chairman did say, however, that it might be possible to move an amendment which would be in order. Without seeking to put myself in the class of hon. members who were referred to yesterday by the hon. member for Parry Sound (Mr. Slaght) as trying to make heroes of themselves, I wish to offer an amendment for the consideration of the committee. I am sorry that the minister himself, in consequence of his consideration of the matter, did not bring in an amendment. I felt certain, when the committee rose yesterday at six o'clock, that such an amendment would be introduced, thus obviating the necessity for private members proposing amendments. I therefore wish to move, seconded by the hon. member for Melfort (Mr. Wright):
That resolution 6 of the Special War Revenue Act be amended by adding the following words:
Provided always that a rebate of the full amount of the tax paid by any farmer or fisherman shall be made upon satisfactory proof that the gasoline upon which the tax was paid
was utilized by such farmer or fisherman exclusively for power purposes upon his farm or in his fishing boat, and in lieu thereof that the eneral tax on gasoline shall be increased to a gure sufficient to compensate the treasury for the amount lost by reason of the proposed rebate.
I would point out that I am not proposing a new tax. I am adhering to that clause in standing order 60, section 552, which reads:
. . . these proposals must be grafted upon the financial scheme submitted by the government, and must not affect the balance oi ways and means voted for the service of the year.
In other words, we feel that the people who are driving cars for pleasure could afford to pay enough, in addition to this three cents, to compensate the treasury for what it would lose by exempting farmers and fishermen from payment of the tax. It is not my wish to embarrass the minister or to hold a gun at his head, and if he is prepared to reconsider this whole matter and let it stand I will willingly withdraw the amendment. I do think, however, that the government has brought down this proposal without giving it thorough consideration. Some of the gentlemen opposite who say "Oh, oh" forget that yesterday almost every member who stood up and pleaded with the minister for exemption from the tax for farmers and fishermen was a supporter of the government. I would remind hon. members who say "Oh, oh" that almost every member who has spoken, from west of the great lakes, and some from eastern Canada, have pleaded with the minister along the lines of my present submission.


An hon. MEMBER:: We are a Liberal
party.


Mr. DOUGLAS (Weybum):: You are a Liberal party. Surely, then, it is not too much to appeal to the members of this committee to place the interests of their constituents above party adherence. After all, the function of parliament is to make known to the executive how any piece of legislation will affect the rank and file of the people. That is what we are here for. It has been made known by every group in the house that the imposition of this tax on the primary producers will be looked upon by them as unjust and unfair. If as a result of representations by private members, the minister were to change this tax so as to provide for exemption, it would be looked upon not as a defeat for him but as a victory for democracy. That sort of thing could not happen in Germany and Italy, and unfortunately it happens all too seldom in Canada that members stand up against something which they think will hurt
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their constituents even though they believe it means coming into conflict with the party whip. Unless we are prepared to do as members have done in the past few days, who have opposed their own party and the government, we shall be doing a great disservice to democracy and to those parliamentary institutions for which we profess to be waging a war.


Mr. ROEBUCK:: The hon. gentleman who has just sat down-


Thomas Vien: Before dealing with this amendment, I must express regret if my words of yesterday were taken as an encouragement to present amendments. I simply had in mind the well known rule which is to be found in Beauchesne's Parliamentary Rules and Forms:
108. The Speaker decides the questions of order only when they actually arise and not in anticipation.
When an hon. member suggested that no amendment would be considered, I simply drew the attention of the committee to that rule. The amendment now proposed has, in large part, the characteristics of those submitted yesterday, and in particular it infringes upon the well-known rule that no increase may be considered in either an existing or a new or temporary tax for the service of the year except upon the initiative of a minister acting on behalf of the crown. The proposed amendment, in providing that the compensation shall be made by an increase in the gasoline tax on other classes of consumers, is directly in opposition to the rule just referred to. I must therefore rule the amendment out of order.


Mr. NEILL:: Before you give your ruling, Mr. Chairman-


Thomas Vien: My ruling has been given.


Alan Webster Neill: You did not give us an opportunity to speak.


Thomas Vien: It is the duty of the Chair or the Speaker to rule a motion out of order when the occasion arises. But an appeal can be taken from the ruling of the Chair.


Alan Webster Neill: Yesterday you told us that
while you would give your decision if you took the point as your own, when it was raised by the minister you would afford hon. members the opportunity to give their views. That is a time-honoured practice. Then having given your decision it should be adhered to. We have not been given an opportunity, and I have a point that I should like to submit for your consideration.


Thomas Vien: I have no objection
to giving any hon. member an opportunity to speak, but I recall that yesterday I drew a distinction. When a point of order is raised by a member of the committee, opportunity is given to all hon. members to speak to the point of order. But the position is different when the procedure submitted is ruled out of order by the Chair or the Speaker. When there is no point of order raised, the chairman rules the procedure in question out of order on his own motion. But in deference to hon. members of the committee I have no objection to advising the committee that I am about to render a ruling, and if any hon. member desires to speak I shall be pleased to hear him.


Alan Webster Neill: I thank the chairman and
the committee for permission to speak. I would observe that it is a custom-possibly not the fixed rule-for the chairman not to rule on a point of order until one is raised; then he gives his ruling. However let that go.
The adverse ruling that has been given is based on citation 552 on page 164.


Thomas Vien: Citation 555.


Alan Webster Neill: Well, 552 seems to have
more bearing. Yesterday when the Minister of Finance raised the point of order he did it under 552. While his point of order was well taken on that occasion, he cannot well take advantage of the same rule to obtain an opposite ruling. I point out that I think the chairman contradicted himself in the ruling he gave yesterday. Citation 552 says:
Though it is the function of the committee of ways and means to impose rather than to repeal taxes, examples of the repeal of taxation effected in this committee are to be found upon the journals.
Then it goes on to say:
Proposals for the variation or modification of taxation can therefore be made in the committee;

That, I submit, is exactly what the hon. member for Weyburn has done; he has made a proposal for the variation of a tax submitted by the Minister of Finance. It goes on to say:
-but these proposals must be grafted upon-
That is an unhappy word.
-the financial scheme submitted by the government.
In other words it must be in accord with the scheme submitted by the government. You could not say that in substitution for a tax on gasoline you would put a tax on goats. It must accord with the general scheme submitted by the government-and must not affect the balance of ways and means voted for the service of the year.

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On that point, too, the proposal of the hon. member agrees; it is in accordance with the general scheme submitted by the government, which is taxation on gasoline. As to affecting the balance of ways and means voted for the service of the year, this is not a question of voting money for the service of the year at all, and the whole thing might be thrown out in that regard. The proposal of the hon. member for Weyburn does not affect the total because he proposes only a substitution.
Amendments, therefore, can be proposed to substitute another tax, or equivalent amount,-
The hon. member proposes another tax of equivalent amount for that proposed by the government.

as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty.
The crown in one case wanted to impose a tax on house property, and the alternative was to suggest probate and legacy duty. I point out that the proposed substitute is not one of dollars and cents but of a system. They propose a tax in this form as against a tax in that form. It was argued by the Chairman yesterday that because the exact amount was not given-it certainly could not be given-the amendment was out of order. The clear intention is that as long as the alternative method is submitted, it is up to the government to arrange the other proposed taxation in terms that will produce the same amount. But an alternative method can be submitted. Therefore I suggest that it is in order, that the hon. member complies with all those conditions. He proposes a modification of the taxation; he drafts his proposal on the same kind of taxation, the same method of taxation, namely, a tax on gasoline. He only changes to a comparatively small amount what may be called the incidence of the tax. He puts it on Jones, Smith and Brown, makes them pay a little more, and leaves it off Johnston. He does not affect the total balance at all; he says the equivalent shall be made up. If I had been drawing the amendment, instead of using the words "decrease" or "increase" I should have used the words "change"; and I think that would have met the Chairman's objection, because he is going to say under section 555 that you cannot increase a tax. But we will not say anything about increasing or decreasing; we do not know. We simply say that we will substitute one method for the other, and if there is any change in amount we will make the change to coordinate with the previous amount.
The Chairman says that under paragraph 555-
-no increase can be considered either of an existing or of a new or temporary tax for the service of the year, except on the initiative of a minister acting on behalf of the crown.
The hon. member is not suggesting a new tax at all; he is doing exactly what 552 says he can do-proposing a substitute. If he proposed a tax on horseshoes, that would be a new tax and would not be permissible unless moved by a member of the administration. But 552 is not to be mixed up with 555. Paragraph 555 refers to an individual attempt by a member to put on a new tax; that is illegal. The minister himself quoted 552, and he cannot very well ignore it now. He had the advantage of it yesterday, and properly so, I think, but he ought to accept it to-day.
I submit the amendment is in order because it complies in every respect with the definite specifications laid down by 555.


Thomas Vien: Does any other hon. member desire to speak to the point of order?
The rule is well known that no increase can be considered either of an existing or a new or temporary tax for the service of the year except on the initiative of a minister acting on behalf of the crown. The amendment purports to increase the tax in its incidence upon other classes of taxpayers. I must rule, therefore, that, the effect of the amendment being to increase the burden on the taxpayer, the amendment is out of order as ultra vires of a private member.
In May, 13th edition, page 511, I find the following:
The principle that the sanction of the crown must be given to every grant of money drawn from the public revenue, applies equally to the taxation levied to provide that revenue. No motion can therefore be made to impose a tax, save by a minister of the crown, unless such tax be in substitution, by way of equivalent, for taxation at that moment submitted to the consideration of parliament; nor can the amount of a tax proposed on behalf of the crown be augmented, nor any alteration made in the area of imposition.
That is from May, a recognized authority on parliamentary procedure.


Alan Webster Neill: I submit, sir, that May is resorted to only when Beauchesne does not deal with the point in question.


Thomas Vien: There is a remedy that lies with the committee; that is, an appeal to the house. The other day one hon. member suggested that the Chairman or the Speaker was above everyone else within this house. I should like to state my conception
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of the duty of the Speaker or the Chairman. It is clearly set out in paragraph 104 of Beauchesne's Parliamentary Rules and Forms:
The presiding officer, though entitled on all occasions to be treated with the greatest attention and respect by the individual members, because the power, and dignity, and honour of the assembly are officially embodied in his person, is yet but the servant of the house.
After a ruling has been given an appeal may be taken to the house.


Mr. GARDINER:: On the main motion
which is before the committee-


Alan Webster Neill: Just a moment; I want to appeal that ruling.


James Garfield Gardiner: I am not speaking to the point of order.


Thomas Vien: There is no point of order.


Alan Webster Neill: But I want to appeal from that ruling, as I am entitled to do.


Thomas Vien: Very well, if you will make the motion.


Alan Webster Neill: I am making it.
Mr. Speaker resumed the chair, and the Chairman of the committee made the following report:
When resolution No. 6, Special War Revenue Act amendment, was under consideration in committee of ways and means, Mr. Douglas (Weyburn) moved:
"Provided always that a rebate of the full amount of the tax paid by any farmer or fisherman shall be made upon satisfactory proof that the gasoline upon which the tax was paid was utilized by such farmer or fisherman exclusively for power purposes upon his farm or in his fishing boat, and in lieu thereof that the general tax on gasoline shall be increased to a figure sufficient to compensate the treasury for the amount lost by reason of the proposed rebate."
The Chairman ruled this amendment out of order on the ground that it would increase the proposed tax, and that it was not moved by a minister of the crown. Whereupon Mr. Neill appealed from the ruling of the Chairman.


William Lyon Mackenzie King: I was paired with the hon. leader of the opposition (Mr. Hanson). Had I voted I should have voted to support the ruling of the Chairman of the committee. I might say, in stating my position, that I assume the leader of the opposition would have been opposed to the ruling of the Chair.
And the house having resumed in committee of ways and means:


Thomas Vien: Shall resolution 6
carry?


James Garfield Gardiner: Mr. Chairman, this resolution
has been before the committee now for some hours, and once or twice during the debate it has been suggested that the Minister of Agriculture should have been consulted or should have said something on the resolution. The hon. member for Weyburn (Mr. Douglas), speaking a few moments ago, suggested that if the Minister of Finance had consulted the government of Saskatchewan he would have received certain information, and that if he did not care to consult the government of Saskatchewan he might have consulted the Minister of Agriculture and received the information.
The information with regard to the number of prosecutions which have taken place in Saskatchewan in relation to the use of coloured gas is contained dn a wire which was sent from Regina yesterday. It is to this effect, that in 1939 there were 123 prosecutions for wrongful use of purple gas-1939 was the year in which the coloured gas was first used. In 1940 there were 618 prosecutions.


Major James William Coldwell: That is not 200 a month.


James Garfield Gardiner: In 1941, 58 prosecutions. "Approximate number of licences for trucks and cars, 125,000. Approximate number of farmers, 142,000. Experience in the use of purple gas very satisfactory." That is the complete information so far as Saskatchewan is concerned. I understand that the other day the Minister of Finance made the statement that it was reported to him by a member of a provincial government, not a member of the Saskatchewan government-


Thomas Clement (Tommy) Douglas: One of those using purple gas.


James Garfield Gardiner: -that in one province where the purple gas is used, from one to two hundred prosecutions a month have been made. But he did not say, monthly throughout the year. It is quite possible, and I would say quite probable, that in Saskatchewan, where cars in any considerable numbers are operated only during the six or seven summer
months, there may have been prosecutions running to the numbers which were stated by the member of a provincial government. But in any case the prosecutions in the only full year for which we have statistics were over six hundred, or over fifty per month for a twelve-month year-and we do not, of course, operate any considerable number of cars during the winter months in Saskatchewan in rural districts where coloured gas would be used. I suggest that the figures used by the minister are not so far out as may have been indicated by some of the statements made.
But that is not the reason why I rose to speak at the moment. It was in order to deal with some of the other suggestions which have been made during the debate, relating more particularly to agriculture, and the use of gasoline in gas tractors on the farms, and the effect of this particular legislation upon tractor farming.
One would judge, listening to the discussion, that the method by which a tax was to be put into effect, if it were a federal tax as against a provincial tax, would have no bearing upon this question. But those of us who have had experience in imposing gasoline taxes in provinces know that we met great difficulty in doing so, because provincially a gasoline tax must be put on as a direct tax, whereas when it is imposed federally it can be imposed as an indirect tax. When a province puts the tax on as a direct tax, it must of necessity deal with the individuals who are using the gasoline, and for that reason and because of the very nature of the administration that must be set up, must provide machinery to enforce the tax. There is no additional administration required in a province to enforce the tax. Additional administrative machinery would be necessary in connection with the putting on of a federal tax.
It may be said in reply to that, "But the provincial set-up could be used in administering this particular tax." But the answer is, in connection with the war tax, which after all is put on for the purpose of obtaining revenue for the dominion treasury, the sharing in the cost of a system so costly as a provincial system must be is not a necessity; the tax can be put on through the indirect method much more simply and effectively, and at a lower cost through the federal government than through following the system which we have in the provinces. In other words, as I see it, it is not necessary for the federal government to follow through to personal and individual prosecutions, so long as we do not adopt a plan of allowing refunds or avoidance of the tax.

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Irrespective, however, of the arguments with respect to farming and farmers, and the effect of the tax on farmers, if our object is to get as much as we can out of this tax for the purpose of financing the war, it is better to keep to a system which does not necessitate going down to individuals, either in the placing of the tax, or in the administration, or in order to determine whether individuals are carrying out the intent of the law.


Mr. SENN:: May I ask the minister a question in that connection?


James Garfield Gardiner: I wish the hon. member would allow me to continue until I have completed my remarks, and then, if there is any answer required, I shall be quite prepared to give it.
The second argument was that since we allow a drawback where the gasoline is purchased by a province, there is no reason why we should not allow it to farmers. Well, if one is discussing the question from a merely academic point of view there is perhaps much to be said for that argument. And something might be said in favour of not permitting the exemption even to provincial governments and to municipalities.


Mr. HOMUTH:: There is a lot to be said in favour of it.


James Garfield Gardiner: But whether one is in favour of or opposed to the idea, I do not think it is necessary to go quite as far as the hon. member for Weyburn did in presenting the argument. I do not believe it is necessary, in this committee or in this house, whenever matters are discussed with respect to farming in western Canada, or the western provincial governments, particularly the province of Saskatchewan, to drag in the suggestion that someone who is working for the provincial government may be working for a political party. It may be quite true that men who work for the provincial government attend political meetings in Saskatchewan. It may be just as true that hon. members of this house and persons who work for the federal government attend political meetings which are addressed by members of the government and other hon. members who support the government; but it is not necessary to have that kind of argument in a discussion of this kind. When the proper time arrives for the discussion of such questions we shall be prepared, as we always have been, to deal with them; at least, those of us who have been associated with government in Saskatchewan have always been prepared to deal with them. Probably some of the success which we have experienced is because of the

fact that we have dealt with them, and dealt with them particularly before the people of this country.


Karl Kenneth Homuth: You mean, "politically".


James Garfield Gardiner: But it is not necessary to deal with them in connection with this debate.
I come now to another matter which has been brought up in this- house from time to time. It has been made to appear, on the one hand, that this is a tax imposed on all the farmers of Canada as against the rest of the people, and, on the other, that there is here an issue between the farmers of the west and the farmers of the east. Well, it is neither the one nor the other. It is not a tax which is levied on all the farmers of western Canada as against all the other farmers in the dominion, nor is it one from which all the farmers would be exempt as against all the other people. It is a tax which, even as now proposed, is levied on a very small percentage of the farmers of Canada. From the point of view that it discriminates in favour of the larger group of farmers as against a small group, there might be some argument. But there is no basis for the argument that it discriminates, against farmers as a class and favours other classes.
In that connection may I say that the Minister of Finance did discuss this matter with the Minister of Agriculture. He also discussed it with every other member of the cabinet. It was fully considered in council. It was discussed, as the minister said yesterday or the day before, over many days, in fact over a number of weeks, and the conclusions reached were arrived at after full discussion. I may say in addition that there has not been a single argument produced by any member of this committee which was not advanced by some member of the government while those discussions were proceeding. Not always were those arguments presented by the Minister of Agriculture, as representative of agriculture, because governments do not proceed in that way, but rather by some member of the cabinet in the interests of all the people. Every argument which has been produced in this chamber on either side against this particular tax in its present form was raised in council, and, I believe, by the minister even outside council in discussing the matter with his own officials. It was considered fully, and action was taken after it had been thoroughly considered.
One of the facts apparent to all of us was contained in representations which were made to the Minister of Finance, and to myself as Minister of Agriculture, by persons who

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assemble or sell in this country tractors of certain types. According to an estimate made by the people who produce and sell these tractors, which estimate is, I believe, reliable-


Mr. NICHOLSON:: What kind of tractors?


James Garfield Gardiner: It happened to be the Massey-Harris company which made the representations, but in presenting these figures they are not limiting themselves to any particular type of tractor. They say:
According to reliable estimates there are about 107,000 tractors in use on Canadian farms.
That is the information which this company has, and I presume it is approximately correct. The statement is that "according to reliable estimates there are about 107,000 tractors in use on Canadian farms, of which approximately 50,000 are of the type designed for burning distillate or kerosene." These obviously are not affected by this particular tax-that is, 50,000 out of 107,000, or almost fifty per cent-"and about 23,000 are low compression tractors suitable for burning 57 to 60 octane gasoline." Of course, it is quite possible that in these engines there might be burned some types of fuel oil which will not be affected by this tax. But presuming they all bum gasoline, there are 23,000 of them suitable for burning 57 to 60 octane gasoline, "while 34,000 are of more modern high compression models burning 68 to 70 octane gasoline. It will be noted that approximately one-third of the tractors now in use are of the high compression type." In other words, one could argue that it is not necessary for more than one-third of the number of farmers who are operating tractors on farms to subject themselves to this particular tax. If one assumed that the 57,000 engines were built to bum gasoline, that they were all going to bum it, one could say that only a little more than half of the number of engines that are used on farms in Canada are subject to this particular tax. But when one recalls that there are about 750,000 farmers in Canada; when one remembers that there are 107,000 tractors; when one knows the situation that exists to-day and remembers that on farm after farm in the west where engines are used, more than one engine is in use, one will be convinced, I believe, that after all we are speaking only for a very small percentage of farmers when we are making all the noise that we have been making with regard to tractors.


An hon. MEMBER:: No.


James Garfield Gardiner: An hon. member says,
"no." I admit at once that gasoline is used on farms which is not used in tractors, but
when we get into classification, we enter a much broader field than has been discussed on the floor of the house in the few hours that we have been dealing with this matter. If we are to exempt from this tax all gasoline used for any purpose whatsoever, on the farm, we get into many of the classifications that would carry us into business. For example, there are men who use trucks entirely in business in the delivery of goods to farms all over the eastern provinces. Men are delivering bread, their entire trade being with farmers; delivering groceries, their entire trade being with farmers; collecting produce, their entire trade being with farmers. When, therefore, you enter upon that argument you eliminate so much of the tax that as a war tax it is of very little use to the government in raising moneys for the particular purpose for which it is designed.
That brings me to this point, as regards the discussion that has been going on. I do not say that this discussion should not be carried on, but it should be weighed for what it is worth. It is a discussion which, in so far as it has been crystallized in the amendments that have been proposed, as it affects farmers, concerns itself largely with the use of gasoline in tractors upon farms; and the number of tractors involved is approximately 50,000. When we consider that there are 750,000 farmers in Canada, we see that it is a very small proportion of the farmers about whom we are speaking. That is why I stated yesterday, or at least implied in a remark I made, that it was hardly right to suggest that this tax hurts all the farmers of Canada or all the farmers of the west. There is a much larger percentage of farmers who do not use tractors at all than there is of those who use them; and when hon. gentlemen across the floor say that, because a man talks in favour of using horses on the farm as against tractors, he is back in the horse-and-buggy stage in relation to agriculture, then those hon. gentlemen are talking against the actual kind of agriculture that is carried on by the great majority of farmers throughout Canada, both east and west.
All these matters had to be weighed in considering what the government would finally do; but the argument which weighs more than any other with me as Minister of Agriculture and as a farmer is that this is a tax imposed for the purpose of raising revenues for the prosecution of the war. The kind of taxes that are being compared with it are those that were imposed for the purpose of financing the building of roads in the provinces. But there is no comparison between the two taxes, either as regards the reason for imposing them or as regards the incidence

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of the tax as it should be imposed) upon the people of the country, or the method by which it will be levied.
In the provinces we have had a gasoline tax for the purpose of building roads and maintaining them, and every time we have imposed a tax we have argued that it should go on and that an amount of money should be spent out of the treasury of the province for the purpose for which the tax was imposed. In most of the provinces that has happened. In the long run-


An hon. MEMBER:: That is not true.


James Garfield Gardiner: It may not be true in actual dollars and cents expended, in some years, but over a long term of years I think it will be found that in most of the provinces the gasoline tax is eventually spent either in building roads or in paying interest on the amount of money that has gone into road building, which is a very large amount, and also for the maintenance of roads from day to day. In any event, the reason given for imposing the tax, and for the method by which it was imposed, was that the money thus collected was to be used for the building and maintenance of roads in the provinces.
The argument immediately arises-why should you make other people pay? Why should you make them pay the tax if they use gasoline somewhere off the road? As a result of that argument being used, methods have been found of allowing people who are not using gasoline for driving cars or trucks on the road to have such gasoline exempted from taxation. But let me repeat, that is not the reason for imposing this tax. This tax is imposed for the purpose of raising funds with which to prosecute the war, and it was considered by the government that the tax levied upon all the people of Canada who use gasoline, no matter for what purpose they use it, would produce most with the least expense of collection. Whether that is right or not is a question which can be and ought to be discussed; but to compare this particular tax with the taxes that are imposed in the provinces, and to say that, because the provinces have exempted farmers, therefore farmers should be exempted by the federal government, is carrying the argument one step too far.
Coming to the question whether this tax should be imposed on farmers, or whether there should be any tax on farmers, I think we shall all agree that the farmer does pay his share of taxation, whether this three-cent tax is imposed or not. I am not arguing the question from that point of view at all. A three-cent tax on gasoline does mean something to many farmers. It does not mean as much as some of us would seem to have

convinced ourselves that it does with regard to many farmers of certain types, but it does mean something to the farmer who uses gasoline in a tractor to have a three-cent tax imposed.
But I think I am in agreement with at least sixty per cent, and probably seventy-five per cent, of the membership of this house when I say there never has been introduced in this house a budget which was so completely a farmers' budget as the budget introduced by the present Minister of Finance. That is recognized by farmers all across Canada. While those of us who are farmers and who represent farmers might feel that we are performing a service in speaking in this house on behalf of the farmer and saying he should not have to pay this three-cent tax on gasoline, I can say advisedly that ninety per cent of farmers in this country-and probably I am low in that figure-upon whom the tax is levied because they use tractors, will pay this three-cent tax believing that they are joining with the remainder of the people of Canada, in so far as they use gasoline, in paying it, knowing that this tax is going entirely into a fund which is to be used for the purpose of properly prosecuting this war at the present time.


Mr. QUELCH:: I do not agree.


James Garfield Gardiner: Whether my hon. friend agrees or does not, he will agree that hon. members are down to ten per cent of the farmers when they are talking on behalf of the men who are going to have to pay the tax in connection with tractors.


Mr. ROSS (Souris):: No, we are not.


Victor Quelch: What percentage of grain farmers?


James Garfield Gardiner: I am not prepared to say that; but I am prepared to point out that the number of farmers who are farming in the three western provinces approaches 300,000. If there are only 107,000 tractors in all Canada, as my friends of the Massey-Harris company say, and if, as my hon. friend knows, many of the wheat farmers who are operating tractors are operating more than one, he will realize that only a percentage of farmers in western Canada, certainly considerably less than half of them, are affected by the arguments he has been putting forward in this committee. With 107,000 tractors in all Canada and approximately 300,000 farmers in the three western provinces, when one realizes that many of them have more than one tractor, I would say it is a very small minority of the farmers of the west to whom

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he is appealing when he is speaking with regard to this matter. I do not say that should change his argument, because if I did I would be agreeing that one of the suggestions made earlier in the debate was correct, namely, that hon. members have been talking to their constituents. After all, I do not think there is any hon. member who, in talking against this particular tax, is talking to a majority of his constituents. He will be talking to a minority.
That being the situation, I say the question probably is being and certainly ought to be considered absolutely on its merits, and the merit upon which I considered it as a member of the government and as Minister of Agriculture is that there is a choice in the matter. It is a choice that would take some time to bring it into effect so far as a certain limited number of farmers are concerned; that is, farmers can avoid this tax, not in a dishonest way but by the method in which they carry on their agriculture. They can avoid it to a degree on the farms where they have engines that will not bum anything but gasoline, provided they have supplementary power in the form of horse-power. They can avoid it in places where they are changing engines, and to that extent companies who are putting out engines that will not bum other forms of fuel might have some complaint. They can avoid it in other ways.
I would, however, suggest to the committee that I think we have taken altogether too much time on this question. We have discussed it until I think every phase of it is before the country. The minister has been absolutely fair in placing the points, even the worst side of the argument, before hon. members who represent agriculture and fishing constituencies. From the point of view of the agriculturist I am prepared to say that the kind of leadership which I was asked last night by the hon. member for Acadia to give to this house I am prepared to give and have given in what I have said now, and that leadership is to support the Minister of Finance to the limit in seeing to it that this legislation goes on the statute books, that the tax is collected, and when it is collected I am sure it will be put to good use.


Thomas Clement (Tommy) Douglas: I desire only a few moments to say something with respect to what the minister has just said; I am not going to take up as much time as the minister-


James Garfield Gardiner: The hon. member has already had much more time than I have taken.


Thomas Clement (Tommy) Douglas: The minister usually takes twenty-five minutes and ends by saying that we have taken too much time.
He bases his entire argument on the fact that this tax is being raised for war purposes, and that the farmers will pay it gladly because it is going to be used for those purposes. The minister knows and every hon. member knows that the farmers will pay anything which they think they justly ought to pay as their contribution toward Canada coming out of this war victorious. The objection that we have made is this. Other taxes are also collected by this government for the purpose of winning the war. The tax on electricity to which I have referred, brought in by this government as a war measure, the sales tax, and other taxes are imposed for the purpose of raising revenue to fight the war." In all of those taxes the government has recognized the principle that commodities which enter into the cost of production ought to be exempt from taxation. Irrespective of whether many or few farmers are affected-I am not going into an argument with respect to that-


James Lorimer Ilsley: Permit me to interrupt. There is no drawback of the duties or sales tax on machinery for use in industrial plants; there is no drawback of sales tax on gasoline for use by manufacturers in carrying on their businesses. The hon. gentleman is entirely wrong and loose in his statements about that being a principle of general application. It is true there is a drawback of duty on materials, and of sales tax-I am not sure of that-but the principle does not carry through to such commodities as machinery, plant, fuel and that kind of thing.


Thomas Clement (Tommy) Douglas: I am quite aware of what the minister has said, but the principle does apply to raw materials which certain manufacturers buy, which enter into their cost of production. We are not attempting to play off the farmer of the east against the farmer of the west or tractor farmers against horse farmers. The minister may be right that it affects a small number of farmers, although personally I do not agree with him; I think the figure is much larger than he computed.
The point is, here is a tax going to be placed upon what enters into the farmers' cost of production. The principle has been recognized in some other respects, as the minister has said, and we ask that it be recognized in this respect. The farmer's fuel is a large item in his cost of production, and if that fuel is taxed, his cost of production is increased by the amount of the tax. He is one of

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the few producers in Canada who is not in a position to-day to pass on an increase in the cost of production. Most of his prices are fixed to-day by government boards or by decree in one form or another. Being a primary producer, he should have the same privileges given him as are given to other economic groups in Canada. He should be allowed to get the fuel that he uses for his farm, and for his farm only, tax-free.
The minister introduces irrelevant material about men delivering bread. In so doing he is going outside the scope of our argument altogether.


James Garfield Gardiner: May I say I was not replying all the time to my hon. friend. It was a remark made on the other side that led me to make that observation.


Thomas Clement (Tommy) Douglas: I am aware of that, but we of this group have never suggested anything of the kind. We have asked that the government should give consideration to granting tax exemptions on fuel actually used on the farm in farming operations.
I have only one other observation to make before I sit down, and I do not propose to press this matter further, since apparently the government is adamant with regard to it. The figures given by the Minister of Agriculture certainly do not bear out the statement made the other evening by the Minister of Finance. This afternoon we were told that in Saskatchewan there were 123 convictions in 1939, 618 in 1940, and 58 so far in 1941. That is a long way from the 100 to 200 a month mentioned by the Minister of Finance. That figure, in relation to the number of farmers in Saskatchewan who drive cars, represents about two-fifths of one per cent.
i Mr. ROSS (Moose Jaw): That does not necessarily represent anything like the total number of evasions; it may be only a very small percentage. That is only the number who were caught.


Thomas Clement (Tommy) Douglas: If the hon. member for Moose Jaw thinks there are many more evasions in Saskatchewan than there are convictions, he is saying one of two things: either that the Saskatchewan authorities have been slack in checking up on people who have been evading this tax, or that there are great numbers of people in that province who are crooked and not to be trusted. I would not want to accept either statement; the hon. member must assume responsibility for them.


Mr. ROSS (Moose Jaw):: In one year there were more than 600 convicted of evading the tax. No matter how many policemen you had looking into these matters, you could never catch all who were attempting to evade the law. My hon. friend knows that as well as I do; there must have been many more evasions than convictions.


Thomas Clement (Tommy) Douglas: I know nothing of the sort; I do not know that there were many more evasions. I only know that the highest figure was 618 convictions in 1940, which represents about two-fifths of one per cent of the total number of farmers with motor licences in Saskatchewan. That is infinitesimal.
The Minister of Agriculture raised one other point which he did not develop but which I think is worth considering. It was suggested that the federal government could use the machinery of the provincial governments in order to make these rebates. The minister merely said that would not do, and did not elaborate the point. Since, apparently, the government is not going to do anything in the way of rebates this year, perhaps the minister might consider, or set up a committee in his department to study, the various provincial systems, with a view to bringing in next year an amendment under which these exemptions may be granted. There is no reason why the provincial machinery should not be used, because the gasoline that is tax free under the provincial government is the same gasoline that would be tax free under the federal government. It would not be necessary to set up two police forces, or to have both provincial and federal machinery to bring evaders into court. A man caught using gasoline that was tax free might be automatically convicted under both federal and provincial statutes. The machinery of the federal and provincial governments could, I should imagine, be brought into harmony without any great difficulty.


James Lorimer Ilsley: Exemptions vary in the
different provinces.


Thomas Clement (Tommy) Douglas: That is so, and it might be necessary to ask some of the provinces to adopt the system of using coloured gasoline, or something of the sort. It seems to me, however, that the government should have explored, and certainly should now explore, the possibility of using the provincial machinery in order that the federal government may grant to the farmers what it is now granting to other groups in Canada, namely, the right to obtain, without the payment of this tax, an item that enters into their

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cost of production. When we ask that, I do not think we are asking anything unreasonable. The farmers are not seeking to be relieved from their share of the cost of financing the war; they are merely asking that they be relieved from an increase in the cost of an item which enters so greatly into their cost of production, which increase they cannot pass on to anyone else.


Mark Cecil Senn: I did not intend to participate further in this discussion, and I can assure hon. members that I am not going to take very long now, since I am convinced that the government intends to adopt this measure without change, in spite of the protests that have been made from all sections of the chamber. I listened with particular attention to the arguments advanced by the Minister of Agriculture. If the truth were known, I believe he was arguing against his own convictions. I think he realizes as well as the rest of us that many of his arguments might be classified as sophistry and nothing else. I shall, however, give him the benefit of the doubt, but for just a few moments I should like to discuss two or three of the arguments he advanced.
The minister gave the number of convictions that have been registered in Saskatchewan. If my arithmetic is correct, these figures show that only about one-tenth of one per cent of the people of that province have been convicted of evading payment of this tax, and, after all, this is a very small percentage. I should like also to support the suggestion offered by the hon. member for Weyburn, namely, that the machinery already set up in the various provinces might be utilized by the federal government in order to refund this tax, if the government saw fit to make such refunds.
For a moment or two I should1 like to compare the statement made this afternoon by the Minister of Agriculture with something said yesterday by the Minister of Finance. Yesterday we were told that approximately one-sixth of this tax would have to be refunded if the government accepted the suggestion that farmers and fishermen should be given rebates in connection with gasoline used for power purposes on farms and in fishing boats. But the Minister of Agriculture told us only a few moments ago that less than ten per cent of all the farmers of this country are using tractors driven by gasoline. It seems to me that if one-sixth of this whole tax is to be borne by less than ten per cent of our farmers, a substantial burden will be imposed upon those few farmers who use gasoline as tractor fuel instead of carrying on their farming operations by other methods. The minister also stated that of the 107,000 farmers
in Canada who use tractors on their farms, only fifty per cent use gasoline as fuel. If that is so, it seems to me that this tax will bring about a decided discrimination in favour of those farmers who use other types of fuel. A good many farmers are using crude oil and other substitutes for gasoline, and I should like to ask just why the farmers who use gasoline should have to shoulder this burden, while farmers using other types of fuel are not. to be taxed. It seems to me most unfair and unreasonable that one section of one particular class should be discriminated against in this way. I was very much interested in the vote that just took place-


James Garfield Gardiner: If I may interrupt for a moment, as I stated at the time I am not in a position to vouch for the absolute accuracy of the figures I used. They are not my figures; they are figures which were issued by the Massey-Harris company, and which happened to be in a letter that I had in my pocket.


Mark Cecil Senn: I do not doubt at all that the minister used those figures in good faith, nor do I doubt their accuracy. The minister used them in his argument, and I suppose he thought they were substantially correct; otherwise he would not have mentioned them. I say, however, that a certain discrimination is being exercised between those farmers who are using gasoline for power and those who are using other kinds of fuel. I was mentioning the vote which took place a short time ago. After listening to hon. members who support the government and who have contended that the farmer should have a refund, I was surprised to see them rise in their places and support the ruling.


Some hon. MEMBERS:: Order.


Mark Cecil Senn: I suppose that was all right
if they saw fit to do it. I am reminded that a short time ago the hon. member for Renfrew North (Mr. Warren) took me to task for doing the same thing. But I find to-day that while he represents an agricultural constituency-


Thomas Vien: I do not believe it is
in order to discuss either the chairman's ruling or the vote of another hon. gentleman in connection therewith. If anything of the kind took place in the past, it was out of order and it does not justify the hon. member doing the same thing now.


Mark Cecil Senn: I shall pursue that no further. I believe the hon. gentleman was out of order then the same as I am now. I do not suppose there is any use in making a final appeal to the Minister of Finance to reconsider his decision in the matter and give the farmers the
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benefit of the suggestions which have been offered here from time to time in connection with refunds on the gasoline they buy. I believe they are entitled to a refund. The minister may think otherwise, but I am of opinion he will be well advised to follow the suggestions which have been made.


Arthur Wentworth Roebuck: Mr. Chairman, the hon.
gentleman who has just resumed his seat made what he called a final appeal to the Minister of Finance to reconsider his proposal and to bring in some measure of relief for the special class which he represents and to which he belongs. The hon. member for Weyburn (Mr. Douglas) has said that all hon. members who range themselves behind the government and who have spoken so far have asked for some such measure as he described.


Thomas Clement (Tommy) Douglas: Not all.


Arthur Wentworth Roebuck: Nearly all.


Thomas Clement (Tommy) Douglas: Most of them.


Arthur Wentworth Roebuck: Most of them. Under
these circumstances I think I should place my position before the committee. There is also another reason. The Minister of Agriculture has stated that every argument pro or con that could be advanced has been heard in this chamber. It seems to me strange, however, that so far I have heard nothing from representatives of industrial communities such as the one from which I come. I was amazed to observe hon. members on the other side who represent constituencies like mine, who come from the city of Toronto, actually asking the Minister of Finance to make a change in this budget which would add to the burden of the people whom we represent. I am going to support this proposal, not because I like this type of tax which increases the cost of living-


Mark Cecil Senn: The cost of production.


Arthur Wentworth Roebuck: The cost of production
and the cost of living generally throughout Canada.


Karl Kenneth Homuth: Would the hon. member
vote against it then?


Arthur Wentworth Roebuck: I hope the time will come when this house will consider the broad, general principles of taxation and see if it is not possible to levy taxes in a less objectionable form than that which we now use. But that time has not come, and the methods of taxation which are now proposed are the traditional methods of this house. This is not the time to go into the broad, general principles involved. That time may come shortly, and when it does I shall have something to

say. In view of the methods that we have adopted, this tax is as little objectionable as any other that has been imposed against production, consumption, trade and so forth. No one will be able to hide behind this taxation and make money out of it, as can be said with regard to some of the other taxes which are levied.
I support this measure because it is a general measure that will apply to everybody. Listening to the debate, one would have fancied that this was a farmer's question. It strikes me that if the farmers of this country had been able to listen in to this debate, had been able to watch their own representatives ask that we make fish of one and tractors of another, they would have felt that they cut rather sorry figures before their own communities. This is a national tax for a national purpose. If they are to be given exemptions, then I shall ask for my own exemptions.


James Arthur Ross: Exemptions are given now.


Arthur Wentworth Roebuck: I suppose the hon. member means so far as the provincial governments are concerned. Perhaps that is taking it out of one pocket and putting it into another. I would not object if this tax was applied to the gasoline used by the provincial governments. I have not noticed any of the provincial governments exempting the federal government from taxation upon the gasoline it uses. It might be fish for one and flesh for the other.


James Lorimer Ilsley: It is exempted.


Arthur Wentworth Roebuck: Then I shall take that back. There is a good reason why we should make that exemption. Generally speaking, this is a national tax for a national purpose, levied upon all people in a like manner. If that is going to be changed, then I shall have an amendment to offer. I should like to see the little storekeeper in my riding-and there are many of them-exempted from paying the tax upon the gasoline he uses in the little car with which he makes deliveries. He will have to add this tax to the price of his commodities, and this will increase the cost of living of the poor people whom I represent. I should like to see the working man exempted from paying this tax upon the gasoline which he uses in the little car in which he rides to work. I think I could make out a very good case on his behalf. I should like to see the working man exempted from paying this tax upon the gasoline which he uses in the little Ford car in which he takes his wife and

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family to the country to visit some of his farmer friends and thus get a little relief from the heat and hard work of the city.
I can make an argument for every class there is in Canada. Let us all be exempt and then we shall all be satisfied. If any exceptions are to be made to this tax, the whole thing may as well be abolished. I am ready to support it for one reason only, namely, that it is a tax of general application. If the Minister of Finance proposes to exempt the members of one community simply because of the noise that has been made on their behalf, then I shall make some noise. If he is going to exempt some classes and then place an increased tax upon the people whom I represent, then I shall say it is most unjust. I do not know whether I shall vote against it or not, but I do not think the minister will give me that chance. I would consider such a tax very unfair and unpatriotic. I am going to vote for this as a national tax, levied for a national purpose upon all citizens. Some of us are farmers; some, city people; some, lawyers and so on, but that is merely the way in which we make our living. Fundamentally we are neither farmers nor workers. Fundamentally in this assembly we are Canadians, and I am going to vote for this because it is Canadian, not because I like the fundamental principle but because it is the best we have before us.


Mr. FARQUHAR:: Mr. Chairman, we have spent two or three days discussing this resolution to impose a tax on gasoline, and several hon. members have spoken in opposition to it, but I do not believe that this tax is nearly so serious as some of these hon. gentlemen have tried to make out. There are thirty-eight farmers in this house, and on the government side only one farmer member has spoken in opposition to this resolution. Those who have spoken against it have been mostly lawyers and businessmen, and the odd clergyman.


Karl Kenneth Homuth: We represent the farmers as well as some of you farmer members do.


Thomas Farquhar: I sometimes wonder why certain members take such a tremendous interest in farmers' problems at certain times. I believe that the farmer members of this house are quite capable of looking after the interests of the farmers, and when any question comes up which vitally affects the fanner, these farmer members can be trusted to speak upon it.
I am a farmer and I run a tractor. I also represent one of the larger rural constituencies in Ontario, and so far I have not had one
protest from any farmer in my constituency against this tax. If there were any serious objections to it by the farmers, I feel quite certain that I should have heard from them, just as I do on other questions that affect their interests. After all, this is a small matter. The average farmer running a tractor will not use more than 300 gallons of gasoline in a season. The extra tax on that would be only $9, and, in any event, it will affect only a small percentage of our farmers. I feel quite certain that the farmers of my constituency are not objecting to this tax.


Mr. BLACK (Cumberland):: Has the minister taken into consideration the advisability of having equality of taxation on gasoline as between the maritime provinces and the rest of Canada? It seems most unfair to users of gasoline in the maritime provinces that they should have to pay a tax of thirteen cents a gallon, while in other parts of Canada the gasoline tax is very much less. This principle of equality was recognized by the minister in the income tax resolutions, and adjustments were made with the provinces so that the income tax payers would not have to pay double taxation. The minister relieved them to that extent. What representations have been made, or what has been done to bring about an equalization of gasoline taxes throughout Canada? Have any representations been made to the provincial governments that they might reduce their taxes as a contribution to the war effort and in order that users of gasoline in Nova Scotia and the maritime provinces might be put on a parity with gasoline users in other parts of Canada?
The principle has been enunciated in this house by the minister and by many others that taxation should be imposed according to the ability of the people to pay. If that principle is to be applied in the maritime provinces, the greatest consideration should be given to our farmers, apple-growers, lobster men and fishermen of Nova Scotia and the maritime provinces generally. Will the minister inform the committee what representations he has made to the provincial governments looking towards a reduction in the provincial gasoline taxes to relieve those classes of people who, I think it will be recognized, are least able to pay excessive taxation and who are profiting the least from expenditures arising out of the war?


James Lorimer Ilsley: No representations have
been made. It is not regarded by the federal government as its function to equalize all taxes in all the provinces. Some provinces rely upon some types of taxation, and other provinces rely upon other types. The dominion

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government does not consider that it is its concern to equalize, for example, the profits on liquor sold in the various provinces. It might be the policy of one province to price its liquor in such a way as to secure a high profit per unit, and the policy of another province to get a low profit per unit. Similarly with gasoline, some provinces may as a matter of policy wish to rely largely upon the gasoline tax for their revenue, and other provinces not to so great an extent. If we were in the business of equalizing the varying taxes of the provinces, I do not know just what standard we should adopt. If we took the lowest tax in Canada as the standard, it would mean a great sacrifice of revenue to the province with the highest tax. If we took an intermediate tax, we would be busying ourselves to get the imposition of higher taxes in those provinces with a lower tax. There are some fields of taxation, namely, provincial fields, in which we would probably lie told that we should mind our own business if we started to say that this or that tax should go off or go on, and probably those who told us that would be right. We consider for the reasons we have given that for the duration of the war we should be permitted exclusive occupation of the income and corporation tax fields, and it is for that reason we have made our offer to the provinces, but it does not extend to all taxes.


Percy Chapman Black: In Nova
Scotia the income-tax payer is brought up to the highest tax level of any income-tax payer in Canada, although we have never had a provincial income tax in Nova Scotia. We are now being called upon to pay the highest gasoline tax in Canada. Nova Scotia and, indeed, the maritime provinces generally, as well as, I think, all the other provinces are receiving considerable revenues accruing from war activities, and I believe it would be a fair proposal for the minister to make to the maritime provinces, that they should reduce their gasoline tax-if the minister himself is not able to arrange this through the federal exchequer-to a level with that of the other provinces, thereby making a direct contribu-. tion to the war and relieving the user of gasoline in Nova Scotia-the farmer, the apple grower, the lobster fisherman and the ordinary motorist-from this increased and excessive gasoline tax. Not only is there a gasoline tax of thirteen cents a gallon in Nova Scotia, but there is also a sales tax of eight per cent. In this connection I would ask the minister whether the sales tax will apply on this excise tax which is being imposed. The sales tax ordinarily applies not only on the cost of the goods but also on the amount of duties paid on imported goods.


James Lorimer Ilsley: Sales tax does not apply on this three-cent tax.


Percy Chapman Black: It does not apply on any excise tax?


James Lorimer Ilsley: Not on this one.


Percy Chapman Black: This is being made an exemption, is it?


James Lorimer Ilsley: I do not know. There may be some tax on which the sales tax is applied. One would have to analyse the wholesale price of goods to see whether any taxes are included upon which the sales tax is to be levied. But it is not to be imposed on this one.


Percy Chapman Black: This is an important matter to Nova Scotia. About 74 per cent of the total gasoline consumed in that province is used by fishermen and by agriculturists, so it is a serious increase in the taxation which they will now be called upon to pay. In addition, it applies to all motorists, and I would say that in our province all the trucks, and the larger percentage of the motor cars, say seventy-five per cent, are operated as a matter of necessity.


James Arthur Ross: I, too, am of opinion that the Minister of Agriculture argued this afternoon rather against his own convictions on this matter of gasoline tax rebate in relation to the farm situation. In view of the statement made by him, and also by the hon. member for Trinity, that those of us who are opposing this tax do not speak for a great many farmers, allow me to say that in the province from which I come, the Manitoba Federation of Agriculture, which has a membership of several thousand farmers, is utterly opposed to the imposition of this tax upon the agricultural population. I understand also that the premier of that province and the provincial treasurer voiced to the minister at Ottawa their opposition to the tax and asked that it be not imposed on the agriculturists of their province; and without a doubt they represent a great number of Manitoba farmers.
The Minister of Agriculture stated that we were arguing against the vast majority of farmers, that the majority operate entirely by horse-power. I shall agree with him on this point-


James Garfield Gardiner: Not against, but not on behalf of.


James Arthur Ross: Well, not on behalf of. Officials of his own department have found that those operating with tractor power or with power and horses combined on the most efficient basis constitute only one per

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cent of the agricultural population, but I conceive it to be the duty of the Minister of Agriculture and his department to increase the efficiency of production rather than to try to hold back that small percentage who are operating on an efficient basis as compared with those who, through no fault of their own, are not able to get up-to-date machinery with which to operate. I believe this is a retrograde step, and I was disappointed to hear the minister arguing along those lines.


Mr. WOOD:: If the hon. member's argument is sound, that that method of farming is improving their efficiency, he will surely admit that they can well afford to pay the three-cent tax.


James Arthur Ross: No, because they are still selling under the cost of production. The Minister of Agriculture will tell the hon. member that the average farmer is not getting the consideration which he thinks he should receive at this time.


James Garfield Gardiner: I would not argue that I could improve my position by getting a gas tractor.


Percy Chapman Black: I should like to get the assurance of the minister that no taxation will be imposed on diesel-operated trucks, machinery and tractors. I think we should have that assurance.


James Lorimer Ilsley: The tax is on gasoline alone.


Percy Chapman Black: But in the future, I mean.


James Lorimer Ilsley: Ohl


James Arthur Ross: In view of the statement of the Minister of Agriculture, I should like to know whether in his opinion a bushel of wheat can be produced more cheaply by horse-power than by modem tractor equipment.


James Garfield Gardiner: It all depends, Mr. Chairman, upon what one is speaking about. If one is just going out to produce wheat as long as it can be grown on a piece of land, perhaps he can do that more successfully, over a limited period of years, than he can do something else. If, however, he is going to maintain a piece of land as a home, on which to live, there are other things he needs to do than just tearing the land up and putting seed in it.


James Arthur Ross: I quite agree, and in my opinion the most efficient unit is a combination of horse and motor power, for the man who is making his home on the farm. I am sure that the minister and many members 14873-193J
of his competent staff will agree with me. I am sure, too, that the minister has efficient neighbours who operate on that basis and make a success of it.


James Garfield Gardiner: Not as many as the hon. member's arguments would suggest.


James Arthur Ross: Well, all farmers are having their difficulties in these days. The figures the minister gave us this afternoon indicate that about fifty per cent of the tractors are operating on distillate and tractor fuel, but I venture to say that almost all of them consume some gasoline; they operate with some gasoline before they switch over to the distillate. There is another operation to bear in mind in reckoning the percentage of farmers who never use gas on their farms. What percentage of threshing throughout Canada is done by tractor power? The minister made the statement yesterday that there is no tractor on his farm. Maybe his threshing is not done by tractor. I do not know whether it is or not. He may use horse-power.


George Ernest Wood: Or flails.


James Arthur Ross: But I would venture to say that by far the greatest amount of harvesting in this country is done by tractor power, and therefore it adds indirectly to the cost of production of all these farmers to impose a tax on gasoline. As I have said, however, I believe the minister was arguing at least to. some extent against his own convictions.
May I appeal once more to the Minister of Finance to reconsider this tax? An hon. member said a little while ago that it is only a small matter. That is a matter of opinion; it is some millions of dollars, anyway. The minister's figure as to the one-sixth repayment indicates quite a few millions of dollars, and that is an important factor in view of the depressed situation in which agriculture finds itself to-day. We all admit that it is the last straw which breaks the camel's back. This is a step in that direction. I still believe that these people are entitled to consideration; many are interested directly, and many more indirectly.


George Hugh Castleden: I rise only to answer
some of the statements made this afternoon which I believe, are a bit unfair. Some hon. members are trying to make it appear that everyone who has spoken this afternoon by way of protest is opposed to the imposition of this tax on gasoline. We are speaking on behalf of those whom we believe should be exempted. We think they have a just claim to that exemption.
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Someone spoke about the general application of this tax. He wanted everybody exempted. In most instances those who are using gasoline for business purposes have some means of passing on the extra cost of their operations to their customers. The government however, has set the price at which the fanner must sell his commodity; it has also put a restriction on the quantity which he is allowed to produce. The farmer is not even permitted storage on the grain which he himself grows over and above his quota.
A return was tabled here the other day which showed that a government-built elevator, which cost this country one and a half million dollars, was being leased to a firm for about $70,000 a year. The capacity of that elevator is three and a quarter million bushels, which, at eight cents a bushel, would bring in about $260,000 a year. What I am trying to point out is that the farmer is unable to bear this tax because he is cribbed and confined as regards what he can obtain from the growing of grain, let alone storing it.
The agricultural policy of the government in the last few years has compelled the western farmer to take up larger and larger farming units. The Minister of Agriculture will admit that the cheapest way of growing grain in western Canada is by mechanized farming- tractor farming. This is going to penalize the only farmers who can grow grain economically. I am one of those who regret very much that tractor farming has been forced upon the people of the west. I am one of those who believe that the half-section farm, the home farm, with more horses and cattle and mixed farming in most areas, would be better. But the economic policies of the government have ruined such farms. The Minister of Agriculture knows that drought and horse disease in the west have compelled many farmers to get rid of their horses and their stock and to take up tractor farming.
I do not know where the Minister of Agriculture got his figures with regard to tractors used in Canada, but I suggest that they are very much out of date. I believe the figures given by the bureau of statistics show that in 1936 there were over 81,000 tractors in the west alone, in the three prairie provinces.


James Garfield Gardiner: Eighty-one thousand?


George Hugh Castleden: The figure was 81,600.


James Garfield Gardiner: The figures I gave are the Massey-Harris figures for this year, sent me the other day. I gave them as their figures.


George Hugh Castleden: What year?


James Garfield Gardiner: It is dated May 5, 1941, about as late as one could get it.


George Hugh Castleden: I understand there were
105.000	in Canada ten years ago. We shall probably settle this a little later, but I know that a large number of tractors have been sold in the west this spring, because the farmers are realizing that they cannot get labour at the price they can afford.


John Ritchie MacNicol: Did the hon. member say
105.000	in all Canada or in the west alone?


George Hugh Castleden: In 1931, according to the census, there were 107,000.


John Ritchie MacNicol: In all Canada?


George Hugh Castleden: Yes. I do not think anyone questions the government's need of money to-day; we must have money. The minister will not encounter any argument on that. The only question, so far as Canada is concerned, is as to who can best pay, and we maintain that the farmer who uses gasoline will be affected indirectly in his threshing bill and is, therefore, one of those least able to pay the tax. Who can best pay? An hon. member yesterday said that the west has received a lot of subsidies and now is not satisfied and will not pay this tax. The Minister of Trade and Commerce, speaking last year about the reduction in the price of wheat from ninety cents to seventy cents, said, "We are asking the farmers to make this contribution of twenty cents a bushel as their part in the great war effort." A few months later the Minister of Agriculture put out a pamphlet telling the farmers not to grow wheat, to reduce their income by almost $100,000,000, in order to help Canada win the war. Now the Minister of Finance asks the farmers to make a further contribution. The farmer naturally wonders whether he is bearing more than his reasonable share of the burden, and that is the important consideration. When he takes up the Montreal Gazette, he reads about such matters as the improved showing by Dominion Woollens, their operating profit having more than doubled and their position being strengthened. Their net profit in 1939 was $113,934 and, in 1940, $229,779.


Mr. MULOCK:: Before or after taxation?


George Hugh Castleden: After. On common
shares in 1939 the dividend was twenty-five cents and, in 1940, $1.03. The farmer remembers that industry went on strike in 1939. At that time the government undertook to limit profits on war contracts to five per cent.

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Industry went on strike in 1939 when we vitally needed war equipment. The cabinet set aside the profit limitations bill, and industry is making profits to-day. But it is realized that the farmer is not receiving even the cost of production. This taxation and the regulations placed upon him are taking away every bit of equity he has in his home. When the equity is taken out of the homes and factories of every one. in Canada, then the farmer will figure that he is being treated equally with others. Hundreds of men in the west have enlisted because it is the only way of providing for their wives and families. But the excess profits tax just cuts into seventy-five per cent of what the industrialist makes over and above his average in the past few years. Does anyone expect the Canadian people to support an administration which is so inequitable in its distribution of taxes? I repeat, the policies of the government and the regulations imposed upon agriculture are wiping out the last bit of equity which many farmers have in their homes, and I know what I am talking about. The burden on agriculture is ruining that industry. _
The Minister of Finance was quite considerate of others when discussing the income tax. He said that if you went on taxing these people of high income, it would mean the liquidation of a large number of their homes. There are not more than 290,000 people in Canada, about thirteen per cent of the population, who are paying income tax, but there are millions of farm homes that are being ruined. There is liquidation of farm homes on a large scale. The farmers of the west are not begging. Someone suggested yesterday that we were always presenting the case of the farmers as if they were mendicants. The farmers are merely asking through their representatives for that small share of justice which is their birthright. They will learn from the events in this house how many of those who, they believe, are their friends are really betraying them.
I oppose this tax as being levied upon those least able to pay, those who are going to suffer more than any other group in Canada under the present policies of this administration-the farmers of the dominion.


George Ernest Wood: The hon. gentleman being so
anxious to do something for farmers, why not let us argue this question from the point of view of extremes? If we do so, we shall get a point of view that will show up the ridiculousness of the argument. I am a farmer. Why should I not ask for exemption from the gasoline tax or the added tax that I have to pay on my automobile when I buy one?


An hon. MEMBER:: Is that part of your production cost?


George Ernest Wood: The automobile is just about as necessary to-day as the tractor; it serves a valuable purpose so far as marketing the farmers' products is concerned, just about as valuable as the tractor's contribution to production.


An hon. MEMBER:: Why not use the
horse and buggy?


George Ernest Wood: I do not wish to take time splitting hairs.


Thomas Vien: Order. I would remind hon. members that they should not interrupt the speaker who has the floor, except with leave in order to ask a question.


George Ernest Wood: I do not like to argue if it is possible to avoid it; I would rather trust the people, let them use their common sense. Remember that this law which protects us in the enjoyment of our rights in Canada, including our rights as members of parliament to speak, is the same law that is seeking to get the wherewithal to protect society in the enjoyment of these great possessions against the most violent and vicious enemy that ever befouled this earth. To argue for days and days over the little bit of money that we as farmers will pay in gasoline tax is, it seems to me, straining at a gnat and swallowing a camel. If we as farmers think we should be exempt from responsibility to contribute something to this war effort, why is a claim not made to be exempted for postage; let the farmer frank his letters on the rural mail.


An hon. MEMBER:: Some farmers here
do that.


George Ernest Wood: If an hon. member has any weakness himself he generally blames other people for the very thing of which he is guilty. If we follow the argument of the hon. member for Weyburn we might increase the . postage rate to five cents to the general public and exempt the farmers.


Thomas Clement (Tommy) Douglas: Postage does not enter into the cost of production.


John Ritchie MacNicol: Give him a free suit too.


George Ernest Wood: Or we might ask exemption from the tax on sugar.


Thomas Clement (Tommy) Douglas: Sugar does
not enter into the cost of production.


George Ernest Wood: Or exempt him from the tax on beer. We might exempt the farmer from all these taxes.


Victor Quelch: He does not want that, he is ready to pay his share.
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George Ernest Wood: It seems to me, as I listened to these arguments, that sometimes it is only by bringing up an extreme ease one can expose the foolishness of the arguments.


Mr. BLACKMORE:: There has been a long discussion of this item; a good many hon. members are of opinion that it has been too long; but no discussion that has taken place since I have come to parliament has restored, or tended to restore my confidence in parliament as this discussion has. This is simply a protest against a generally destructive tax structure which is being forced on Canada at the present time. The hon. members who have protested so strongly on this three-cent tax on gasoline have, I believe, merely chosen this as a trench at which to give battle. The whole debate has been of a high order; there has not been overmuch foolish talk, not much pure retort just for its own sake. A short time ago an hon. member said a great deal of noise was being made. How else can hon. members register their protests except by making a noise? It is like what we see going on in the newspapers to-day; some newspapers seem to think that because members of parliament who come to parliament, a place to talk, do talk, they are not doing the country's work. Those papers need to readjust their thinking. Also there was some accusation of axe-grinding. That, I think, is utterly unjustified.
One statement in the remarks of the Minister of Agriculture I was glad to hear, namely, that this is a revenue-producing tax. Since the war broke out, there has been a great deal of what might be called "pussyfooting", an attempt being made on the part of the people in power to show that they are taxing to limit consumption and thereby prevent inflation. The Minister of Agriculture has frankly said that the object of this tax is to gain revenue. Once that is granted, we are on a basis from which we can proceed.
I shall say very little about that now; we may talk about it later.
It has been pointed out that only a few farmers have tractors. Those are grain farmers generally. Grain farmers are the ones who are literally being crucified to-day. The very men that the government and everyone else were kow-towing to in the last war are to-day for the very same kind of national service *being crucified. Practically all the grain farmers, at least those in the west who work on a large scale, are getting tractors; they are forced to or else they cannot compete successfully with those who have tractors.
Something was said about non-farmers speaking for farmers. That is absolute nonsense. If anyone takes the stand that no hon. member can speak for a class unless he fMr. Quelch.]
is a member of that class, then it would be utterly impossible for the people of this country to be represented in this house. Surely there are bound to be lawyers representing miners and doctors representing loggers. Let us have an end to this nonsense of sneering at men who speak for farmers when they do not happen at the moment to be farmers themselves.
The question has been raised whether the tax is on all the farmers in Canada. Does any other class of producer in this country stand to suffer as much as the farmers will as a result of the imposition of this tax? We have not the figures to determine accurately the answer to that question, but certainly it is a thought-provoking question.
The Minister of Agriculture gave what I considered a reasonable speech, effective, as his speeches usually are. He spoke of 107,000 tractors in Canada, and the impression I got was that he was endeavouring to convey to the committee that the measure of the farmers' participation in the payment of this tax was the number of tractors they had. Let us remember that more and more the farmers of this country are getting cars. They must have cars, and all the farmers who have cars will pay this tax. In addition to the cost of production through the tractor, the amount a farmer has to pay to go to town to see his banker will certainly be represented in his cost of production.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


John Horne Blackmore: When the committee took recess, Mr. Chairman, I was commenting upon the remarks of the Minister of Agriculture, in the course of which he had pointed out that there were only 107,000 tractors in Canada, apparently thereby intending to imply that the cost to the farming population by reason of the three-cent tax on gasoline was not such a serious matter as a number of the opponents of that tax appeared to consider it. I pointed out that apparently the minister had overlooked the fact that every farmer who owns a car which he uses in his business also pays, on the gasoline which he uses in that car, a tax which enters into his cost of production as well as into the cost of living. I was about to point out that not only do farmers keep cars nowadays but that practically every farmer, of any importance, in the west at least, must have a truck. Generally that truck uses gasoline, and on the gasoline

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the farmer buys for that truck he must also pay a tax which enters into his cost of production. I was going to remind the minister that many of our farmers use gasoline engines for other kinds of farm work, such as running choppers and so forth, and that on the gasoline used for those sources of power they will also pay a tax which also will add to the cost of production.
I should now like to turn to the question in a general way. I think what is principally wrong with the minister and his advisers, in connection with this gasoline tax and a good many other taxes that are being imposed in this budget, is that they have failed to distinguish between gasoline as a luxury and gasoline as a necessity. I do not think any of those who have opposed this measure have argued that a tax should not be collected on gasoline used as a luxury. Some have even advocated a higher tax, up to six cents a gallon. I am not in a position to offer any suggestion in that respect, but I think it is fair that gasoline used as a luxury should pay a tax. On the other hand, gasoline that is used as a necessity is in an altogether different class. So far as the farmers in my area are concerned-and I can speak for no other area-the result of the imposition of this gasoline tax, and a great many of the other taxes imposed this year, will be demoralizing; they will bring about a deterioration and disintegration on the part of those people. I think one hon. member who spoke just before I rose pointed out that a great many farmers, driven to desperation by the conditions under which they have been forced to struggle, are giving it all up and enlisting in order to make a living.
I would point out to the committee that a farmer is one of the most precious possessions a state can have. Once that farmer is destroyed, he cannot be readily replaced. While I am on this point, may I add that apparently there is altogether too great a tendency on the part of some people to take a short-range view of this war and to assume that probably it will be over in a year. If we assume that, Mr. Chairman, we are taking a serious responsibility upon ourselves. This war may go on for ten years. I shall talk about this at greater length later on, but we must be prepared for a time when perhaps, in order to get a pound of butter to Britain, we shall have to send three pounds from Canada. Still it will be our duty to supply that butter; if we now destroy the men who are in a position to produce the butter, the bacon, the wheat and all the other farm products that may be required, the day will come when we shall
repent in more than sackcloth and ashes. The men who are designing the tax structure which is producing this deterioration will stand condemned before this and all future generations. We must distinguish between the gasoline that is used as a luxury and the gasoline that is a necessity.
The next misapprehension under which the minister is labouring-I would go so far as to call it an absolute delusion-is that all the money this government obtains must come from taxation and borrowing. I make no further comment than that; but I do say that if the minister sternly-I would almost say stubbornly-adheres to the idea that all *the money he needs to run this war must come from taxing or borrowing from the people of Canada, then he is making one of the greatest errors ever made by a man occupying his position in this country.
I wish now to point out that the minister is forcing on inflation. The other day I received in the mail a fine article, apparently inspired by someone interested in the welfare of the Liberal party in Canada, pointing out how we were financing this war without inflation, and so on, and so on. I would point out to the minister that the steps he is taking now are forcing on inflation in spite of everything that can be done to prevent it; for by the taxes he is imposing in this budget he is forcing up the prices of practically all kinds of commodities as they come into the hands of the consumer from one end to the other of this country; and that, sir, is inflation, a rise in prices. Once or twice already I have pointed out, and I am going to point out again with all the sincerity and earnestness of which I am capable, that inflation or a rise in prices can also result from a scarcity of goods. If, as a result of these iniquitous measures which are being taken to-day, the ability of Canada to produce goods is impaired, then by the same measures the danger of future inflation in Canada is being enhanced. This tax on gasoline will tend to increase the prices of commodities and destroy the productive power of Canada. Possibly, as the hon. member for Temiscouata said the other night, the men who are devising the tax structure of Canada are a group of experimenters. Probably to some extent they have to be; but they need not be reckless; they need not be stubborn, and they need not be callous.
I now come to deal in some detail with the effect of this gasoline tax on the farmer, and it is of the farmer I speak because my constituency is, in the main, a farming district. I have said something already about the increased cost of transporting farm goods. Let it be understood by 'hon. members of this
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committee, Mr. Chairman, that in my riding there are many farmers who cannot take their children to school without using a car; and the gasoline tax will have the effect of increasing the cost of giving those children an education. Let it be borne in mind that many of them have no other means of going to church or to any other social gathering. The days of the horse and buggy have passed; we must recognize that fact. There may be other parts of Canada in which that is not the situation, but it is the situation in the west. In my travels I have seen a few horses and buggies in Ontario and Quebec, but I have not seen one for years in my constituency. The car has taken their place. An increase in the cost of gasoline means an increased cost of living for the farmers so far as transportation is concerned. As I pointed out this afternoon, if the farmer comes to town to buy some goods, to see his banker or to attend upon any other matter of business, he must pay this tax. Thereby he has increased, not only his cost of production but his cost of living. That is a serious matter.
I have referred already to the use of trucks. Many of the farmers in my riding simply could not market their products without trucks. Some of them have not a wagon, and many of them have not teams capable of going on the road. The result is that, no matter how much they might desire to do what the hon. member for Brant (Mr. Wood) advocates they should do, they cannot. We must make allowance for this fact in a country like Canada. In many instances our farmers live altogether too far from their markets, altogether too far from their social centres to use teams and wagons, even if they had them. Horses are not to be found, and if they could be found the necessary pasturage would be lacking. That is how conditions have changed in wide areas of Alberta and Saskatchewan.
I have also commented upon the use of gasoline in washing, running pumps, grinders, and all that sort of thing, a daily necessity to many farmers. The hon. member for Brant hinted that if farmers could afford to buy all these appurtenances or aids to easier living, then they should be in position to pay a higher tax. But these farmers have simply moved into a condition of life where pumps, grinders and so forth are necessary. If they do not have them, their economy is thrown off balance and they are not able to make it go.
There is another aspect to this tax which is of considerable concern and which has not been stressed before the committee. I refer to the effect of this increase upon the truck 
and bus companies. One of the most serious disabilities from which a number of provinces are suffering is high railroad rates, and one source of relief from this condition in Saskatchewan and Alberta, and I believe also in Manitoba, is the truck and bus companies. A further tax upon gasoline will unquestionably bring about higher rates and thereby injure those people who have had to depend upon such companies for transportation. This will also increase the cost of living. It has been argued by some that we must conserve gasoline. I was going to say something about that, but the Minister of Agriculture has said that this tax is being imposed in order to raise revenue. Therefore I shall not say much about consumption.
In passing, however, I would ask: If we are concerned about conserving gasoline, why should we not go to work to produce alcohol in this country? Some people will say that that cannot be done economically. The day must come in Canada when we all will realize that what is physically possible is financially possible. If we can produce potatoes in great abundance and make alcohol therefrom, then our Canadian economy can afford to do it. If we cannot afford to do it, then it devolves upon the people in charge of this country to see that such conditions are brought about as will enable us to do it. How can we in Canada say that we cannot afford to produce motor fuel from potatoes when certain countries which we all have in mind can do so?
I understand that alcohol can be made from wheat. The process is a little expensive, but it can be done. If we are really concerned about saving gasoline, if we are afraid that we may run into a shortage, then it is high time that we began to plan to produce fuel from one or another of the products of which we have an abundance or of which we can produce an abundance.
I think I have had my say in this matter. With many of the statements that have been made, I heartily agree. I do not wish to be critical, but I urge the minister to get away from the idea that all the money required to run a first-class war in this stream-lined age can be raised by borrowing or taxation.
If the minister persists in following that line of thought, he will be treating this magnificent country as an inexpert driver might an automobile or any other high-class machine. He will mismanage it until it finishes up a hopeless and chaotic wreck on the side of the road.
I am sure the minister does not want that to occur, but it is quite possible to bring this country to the condition I have indicated.
I urge the minister to reconsider this gaso-

line tax and several of the other taxes, about which I shall have something to say as we go along.


Alexander Malcolm Nicholson: Am I right in understanding that this tax will not apply on distillate or diesel fuel?


James Lorimer Ilsley: 
Alexander Malcolm Nicholson: How about diesel fuel?


James Lorimer Ilsley: It does not include diesel fuel.


Victor Quelch: It will not apply to
kerosene?


James Lorimer Ilsley: No.


Alexander Malcolm Nicholson: Should a mixture of so-called white gasoline and distillate be produced, I suppose the definition given by the minister would determine whether or not it would be subject to the tax?


James Lorimer Ilsley: Yes.


Mr. MacGARRY:: In this particular crisis when economy is the slogan of the times, I have refrained from taking up any of the time of this committee by participating in this debate. I have listened to the speeches that have been made since this resolution came before the committee, some of them eloquent, some of them bordering on the heroic and some of them possessing other attributes which I need not mention at the present time. I am rising to-night, first, to relieve myself of the trying ordeal of attempting to be an appreciative audience to all these speeches and, second, to give the reasons to the committee and to my constituency why I have not risen in protest against this impost on gasoline.
Ninety-five per cent of my constituents are farmers and fishermen. These people are suffering all the burdens and trials being borne by the farmers of the west or central Canada, but I have not received one protest from them against the imposition of this tax. The members of this house may think I have been delinquent in carrying out the desires of my constituency; but I take second place to no one, Mr. Chairman, in representing as well as I possibly can my constituents, and if I had 14873-194
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received even a fraction of a protest from my constituency against this tax I would have risen in my place before to-night. Not a single protest, however, have I received from farmers or fishermen in my constituency. Therefore I am not going to pose before the parliamentary footlights as a champion defending the people against an impost which they in fact welcome and approve. They are absolutely willing to assume and desirous of assuming this tax as a little part of the war effort in order to carry us through to a successful victory in this war against insecurity.


Mr. CRUICKSHANK:: Having listened to the speeches delivered in this committee in the last few days, I regret exceedingly that the Minister of Finance will not take my advice. He erred once in not taking my advice when he passed certain items.
Does the minister see what I have in my hand and what I am going to speak of? I think I am perfectly in order in congratulating a member of this house who has been honoured in a signal way. Although I am not familiar with Beauchesne, I think it is quite in order to congratulate or console a member of this house upon an added honour or burden that may have been placed upon him. The other day a friend of mine went to the town of Waterloo, and in order to assist the Minister of Finance in this troublesome period he conceived the idea of selling old-fashioned mottoes such as, "If it does not rain to-day, it will be fine to-morrow." He also sold a motto of universal support and popularity! -"Forgive us; we did not know what we were doing." One of the most popular members of this house has been accorded a great honour to-day, I can speak, if not on behalf of the party opposite, certainly on behalf of the rump, when I extend to the hon. member for Peel (Mr. Graydon), our hearty congratulations and our sincerest sympathy with him with regard to the extreme honour which has been conferred upon him to-day. I saw in the Ottawa Journal to-day that the most popular member of the party to my left and one of the most esteemed gentlemen in the house has been appointed Conservative organizer for the dominion. I also saw in the Ottawa Journal a reference to "23" being that hon. gentleman's lucky number. It reminded me of the days of my youth when I used to see in the paper a little cap advertised as "23 skidoo." I salute, congratulate and sympathize with the hon. member for Peel; sympathy he will need.


[Stage Direction]
Resolution agreed to.
[Stage Direction]


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[Stage Direction]
7.	That the excise tax on playing cards be increased from ten cents per pack to fifteen cents per pack.
Karl Kenneth Homuth: Does this mean we don't get a new deal?


[Stage Direction]
Resolution agreed to.
8.	That the excise taxes on wines of all kinds, except sparkling wines, containing not more than forty per cent of proof spirit be increased from fifteen cents per gallon to forty cents per gallon, and that the excise tax on champagne and all other sparkling wines be increased from one dollar and fifty cents per gallon to two dollars per gallon.
Mr. MoIVOR: It has been reported in various parts of this country that everything is taxed to the limit except beer and spirituous liquors. I ask the Minister of Finance to declare if it is true that everything but beer, wines, liquor and liqueurs are taxed.
James Lorimer Ilsley: 
Mr. McIVOR:: I think this will satisfy hon. members who know of the tax, as well as those outside who only partly knew of it; and I thank the Minister of Finance.


Alexander Malcolm Nicholson: I am sorry that I cannot share the views expressed by the hon. member for Fort William. To my mind, the increase the minister has mentioned in the tax on wine up to forty cents a gallon is entirely inadequate in comparison with the tax which has been placed on gasoline. What I really rose to ask was whether the minister had any statement to make regarding the delegation which waited upon representatives of the government with respect to this particular field of business? I had on the order paper some time ago a question *which stated that a delegation, representing the Roman Catholic church, the Church of England, the United church, the Baptist church and a number of other churches waited on the government-


Karl Kenneth Homuth: Not all of them.


Alexander Malcolm Nicholson: -with a view of
having the consumption of beer, wine and spirituous liquors decreased; and I was not well satisfied with the information given. Is the minister in a position to inform us as to the attitude of the government to that delegation?


James Lorimer Ilsley: No. I was not one of the
members of the cabinet who received that delegation, and I do not know what representations they made. I have not a clear recollection of the circumstances.


Alexander Malcolm Nicholson: To my mind, this is
a luxury commodity, and a tax of forty cents a gallon is entirely too low. The tax on spirituous liquors is also insufficient, in view of the fact that most people who purchase these commodities can afford to pay a substantial tax. I suggest that the minister would be well advised drastically to increase the items under consideration at this time.


James Lorimer Ilsley: In past years we have
invariably had strong representations from the farmers, growers of grapes, who protested against the increase of these taxes. This year they have not made those representations. There were, I believe, some objections, but I understand it was the feeling of the growers that under the circumstances, it being a war tax, they should not make representations.

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That was my appreciation of the situation. They did make representations that the customs duties should be increased in the same proportion as the special war revenue tax was increased, and we have done that; I have provided for that by a supplementary resolution. But we run there, just where we run often, into the farm problem, the problem of farm income.


[Stage Direction]
Resolution agreed to.
9.	That there shall be imposed, levied and collected an excise tax of twenty per cent on the admission price to a moving picture theatre, payable by the moving picture exhibitor.
James Lorimer Ilsley: On this resolution I wish
to make a statement to the committee, and to have the following amendment moved:
Resolved, that it is expedient to amend the resolution proposing amendments to the Special War Revenue Act. introduced on April twenty-ninth, one thousand nine hundred and forty-one, by adding to resolution 9 thereof the following words:-
"and a like tax of twenty per cent on certain other forms of amusement, the said tax to come into effect on a date to be proclaimed by the governor in council."


William Pate Mulock: I so move.


James Lorimer Ilsley: The committee will, of course, ask at once what other forms of amusement it is proposed to tax. Let me say at this point that all this will be set out fully in the bill, but I will tell the committee what I intend to have written into the bill.
My proposals are: to impose a tax on amusements for which an admission fee is charged and in which those admitted do not themselves participate. This is not to cover persons who pay to go into a place to bowl, or something of that sort; it relates to the type of amusement where those admitted are admitted as spectators. The twenty per cent tax, if this proposal is accepted, will apply to all of those amusements, with power, however, to the Minister of National Revenue in his discretion to exempt from the tax amusements which are not held regularly or in accordance with a prearranged schedule, or where there is no gain or profit to those promoting, organizing, conducting or sponsoring them, or where the entire proceeds are devoted to charitable, religious or patriotic purposes. I believe that sums up almost completely the proposals which the government is placing before the committee regarding the extension of this tax to other amusements.


Mr. GRAYDON:: Does that mean the net proceeds?


James Lorimer Ilsley: The language will be much more specific than that. All I ask the committee to do at the moment is to pass this 14873-194}
amendment to the resolution which is in the terms I have read. Members of the committee realize, I assume, that a resolution does not need to be too specific-I am told that resolutions down through the years have become increasingly specific-when the resolution is for the purpose of giving notice of legislation, and so long as it is in terms wide and general enough to cover the legislation. The specific details may be contained in the legislation rather than in the resolution.
With regard to this matter of the amusement tax, it was found that attendance at motion-picture theatres, which are the most general form of amusement and which cover the nation, is increasing rapidly. I cannot give the specific figures to the committee. It was found also that extensive plans were being made for the building of large numbers of new motion-picture theatres, and it was also found that there was an increasing demand on the part of the public that the federal government, in this time of war and great need, should obtain some revenue from the vast sums of money which are being spent by the people of Canada on this general form of entertainment. Therefore this tax, which is the heavy tax of twenty per cent, was suggested in the budget.
The majority of admissions to motion-picture theatres in Canada are at the rate of twenty-five cents, and this tax means that thirty cents will be substituted for the present twenty-five cent admission charge. It was regarded by the motion-picture industry as very heavy, but my belief is that to charge the public thirty cents, instead of twenty-five cents, for going to picture shows is not, under present conditions, unreasonable or excessive. Moreover, I very much doubt whether it will greatly curtail the attendance. Our experience of recent months in the imposition of taxes has been astonishing. Last December we imposed taxes on automobiles and on a wide variety of consumer durable goods, expecting that the consumption of these- goods would thereby be materially curtailed, but it did not seem to have that effect. Retail sales all over the country are up substantially, and I am inclined to think that, even with this additional five cents on the twenty-five cent ticket, there will not be a substantial reduction in attendances at the motion-picture theatres.


John Ritchie MacNicol: What will be the addition to a thirty-five cent ticket?


James Lorimer Ilsley: Seven cents. It would be forty-two cents. The motion-picture people said at once that we should not single them out. They said that this was the poor man's amusement and that we were taxing the poor man and not the rich man.

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Mr. CASSELMAN:: They were right in that.


James Lorimer Ilsley: I do not think it is fair to describe the motion picture as the poor man's amusement. I believe all classes of society go to see moving pictures. Some people take the loges; some, the orchestra; some, the balcony, but all go to see the moving pictures, and I am unable to accept the argument that it is the poor man's form of amusement. The motion-picture people, however, did so describe it, and they made a strong plea to have the tax extended to other forms of amusement.
To make a general rigid application of this twenty per cent tax to all other forms of amusement would create tremendous difficulties. The kinds of amusement that are ordinarily cited as being those that should be taxed are the theatres, which are to some extent in competition with the motion-picture shows and where the tickets cost much more than the motion-picture tickets. There was not much difficulty about the theatres except that there are theatrical performances which are put on by dramatic leagues, by girls in ladies colleges and by little amateur groups of one sort or another who get out of the admission fee only enough and sometimes not enough to pay expenses.
We realized when we were dealing with that type of theatrical production that we would be dealing with something entirely different from the motion-picture industry, where the tax is collected from well-established and, in many instances, corporate entities, who keep books that can be audited, where little difficulty about the collection of the tax is anticipated, and who are on a strictly profit-making basis. It was realized that if the tax were to be extended to theatres, there would have to be some power of exemption, and I think the classes of exemptions which could be granted, but which need not be granted if the minister in his discretion thinks they should not be granted, are of a kind regarding which the minister should have the power to grant exemption. They are pretty well summed up under the three headings I have already given, namely, where performances are not held regularly or in accordance with a prearranged schedule, where there is no gain or profit to those promoting, organizing, conducting or sponsoring them, or where the entire profits are devoted to charitable, religious or patriotic purposes. I do not say that in the administration of the legislation the minister will grant exemption in all these cases, but I think he should have the power to grant 
exemptions in the cases indicated; otherwise there will be hardship particularly with regard to small, sporadic, non-profit making amateur theatrical productions. I am quite sure there would be. We had, therefore, to take that power of exemption.
The same considerations apply to athletic contests. I do not think that in all instances admission should be taxed. Hon. members will have in their own minds country baseball leagues where teams from two towns put on a game. They charge an admission fee; it may be ten or fifteen or twenty-five cents for a man and his wife, and the proceeds of the game are no more than sufficient to pay expenses. There may be something over out of which baseball bats, mitts, uniforms and so forth will have to be bought; but for the federal government to step in, in all these cases which do not come within the class of amusements which the public desire to have taxed, or which would not yield much revenue, or the taxing of which could not be satisfactorily administered, would, in my opinion, be a mistake. There is, therefore, power in the minister to grant exemption there, and under the same headings and for the same reasons I mentioned with regard to theatres. We could go down the line.
Mr. MacNICOL; Weekly bingo games.


James Lorimer Ilsley: In the bingo games the
spectators participate. I know that we are walking right into a field in which the discussion is going to be quite interesting and extensive and one man's opinion will be equal in value to any other's, with the result that the debate may go on for days. I would, however, ask hon. members not to try to get one hundred per cent complete equity in this matter because it can never be attained. It may be that there are some bingo games to which admission is charged where it would be more proper from every point of view for us to take twenty per cent of the proceeds than it would be from some hockey game. I do not know. I am sure, however, that it would not do for us to take general power to reach out and take money everywhere that people are amusing themselves. I do not think that would do at all. We had better stick to the line between the kind of performances in which those paying admission are spectators and those performances in which the people paying admission participate. I am willing to answer questions.


Mr. ROWE:: Why does the minister think it is fair to take the gasoline tax from everyone and not the amusement tax? What

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about taking a tax from the man who pays two or three dollars for a ticket to a hockey match?


James Lorimer Ilsley: He will be taxed.


Mr. BOUCHER:: Where do local fairs,
school fairs, exhibitions, church socials and other such amusements come in?


James Lorimer Ilsley: I cannot be too specific, but there is power of exemption there for one or another of the three reasons given. Probably the fairs which the hon. gentleman has in mind would come under one of those heads.


John Ritchie MacNicol: Would they have to
make application?


James Lorimer Ilsley: To the Minister of National Revenue.


Mr. STIRLING:: Are we to understand
from this wording that the date at which the tax will come into operation applies only to the tax referred to in the amendment?


James Lorimer Ilsley: Yes.


Grote Stirling: Can the minister give
any undertaking or state his opinion as to how long delayed that date may be? The motion-picture people may suffer inequality for a considerable time if some statement is not made as to the date.


James Lorimer Ilsley: It may be a few weeks- as soon as it can be organized. I do not admit that the motion-picture people are suffering by reason of the fact that others are not taxed. It is not a question of their suffering but of their feeling that if they are paying other people should pay. It is not a matter of their losing business as a result of others not being taxed. I am satisfied of that.


Mr. TUSTIN:: First I must congratulate the minister upon giving some consideration and taking some of the discrimination out of this item. Let me say that theatre owners in Canada do not object to paying a tax, but they do object to paying a tax that is an impossible tax. In his budget speech the minister indicated that he was trying to stop public spending in order that the people in the lower income brackets may have more money to invest in war savings stamps and certificates; yet in the very next breath he takes seven or eight millions out of their pockets by placing a twenty per cent tax on the gross income of theatres. The minister has already stated that he does not agree that the moving-picture theatre is the low-salaried man's recreation. I can say to him from twenty-five years' experience that the motion picture is the labouring man's recreation; there is no
doubt whatever about that. If the moving-picture theatre operators had to depend upon people in the higher income brackets, they certainly would not be in business very long.
I understand that representations were made to the minister immediately after his budget speech. I feel certain that it was the minister's intention, when he brought in this budget, that this twenty per cent tax should be paid by the motion-picture exhibitors and not passed on the patrons of the theatre.


James Lorimer Ilsley: No; that was never my intention.


George James Tustin: Well, I accept that, but I wonder whether the minister did not spend many weary hours considering this particular tax. If hon. members look through the whole of the resolutions, they will not find one other line of business that is taxed to anywhere near the extent of twenty per cent of the gross receipts.


James Lorimer Ilsley: What about cigarette paper tubes?
Mr. TUSTIN. That is one exception.


James Lorimer Ilsley: And wines?


George James Tustin: On wine it is only forty cents a gallon, which is, I think, nowhere near twenty per cent of the cost of the wine.
I have already taken this matter up with the minister privately; I have made a suggestion to him in writing; I have urged upon him that a sliding scale be applied to theatres. I agree that possibly in some of the large centres where there are large war industries and where great numbers of soldiers are stationed there may be a great increase in theatre attendance. In the small centres, however, the towns and villages where there are no war works and no soldiers stationed, the attendance has not increased; and with this increase of seven cents on the normal thirty-five cent ticket, which is the prevailing price in the small centres, the attendance will suffer. Of that there is no doubt.
I have in my hand a telegram I received to-day from a person who put this tax into effect about two weeks ago, thinking it was compulsory to put it into effect when first announced; he advises me that in the few days that it was in effect the attendance decreased over twenty-five per cent.
I urge the minister to give consideration to the small centres, because in a great many instances the motion-picture theatre is the only recreation that some people have. The minister says that my suggestion may be hard to control or operate. The tax could be easily operated on a sliding scale. In towns of
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5,000 population, 10,000 population, he would have no difficulty whatsoever. Now that he has added these other amusements to the tax list, there is no doubt that his revenue would be even more than it would be if he left the twenty per cent on all the motion-picture theatres.
One other matter I wish to bring to the attention of the minister. In Ontario during the last period when we had a tax on motion-picture theatre tickets, men in uniform in all branches of the service were exempted. I would suggest that since this is a dominion measure, the minister should see to it that the men of our fighting forces, the army, navy and air force, are exempt from this tax.
I do not wish to take further time, but I again urge upon the minister that he give consideration to placing this tax on a sliding scale whereby there will be some relief for theatres in the smaller centres.


Karl Kenneth Homuth: We are perhaps spending, on these resolutions, a good deal of time that might be saved by deferring discussion until the bill is introduced. The very fact that, when a resolution as important as this comes before the committee, the minister, as a result of representations made to him, and of the attitude hon. members took on the budget speech, finds that he needs must move an amendment to it, shows only too plainly to me that perhaps too many of our budget resolutions are devised in a panicky way. Had the minister had some practical-I say that quite sincerely-representations made to him; had some men with practical knowledge of the situation in Canada been sitting in with him, instead of some of the brain-trust that we have had running this country for some time, many of these resolutions might have been more or less modified before they were brought into the house.


Mr. POTTIER:: There would be no taxes
at all if one listened to the fellows who are interested.


Karl Kenneth Homuth: If one listened to the
brain-trust there would be nothing but taxes. The whole situation is that the minister provided for certain forms of taxation. Two days were wasted in discussion of the gasoline tax-


An hon. MEMBER:: Three days.


Karl Kenneth Homuth: Not entirely wasted, because hon. members put their views before the committee, feeling that certain modifications of that tax could be made. As a result of the government's desire to raise revenue they have said, "We must levy a tax of 
twenty per cent on the gross proceeds of theatres." The day the budget came down, that became an immediately effective tax on the theatres of this country. Then, two or three days after, certain protests were made not only by hon. members speaking here on the budget debate, but by theatre owners and those interested in theatres throughout, the dominion. Therefore one day the minister rose in his place and said, "We have to change the date when this tax shall come into force to May 19.'' That enabled these theatre owners, who will not have to pay the tax, to be in a position to pass it on to the public. This shows conclusively that there was not given to the levying of this tax the thought that should have been given. When a province levies an amusement tax, it says to those operating the places of amusement, "You purchase from the government a roll of tickets, for which you pay according to the admission you intend to charge." In that way the government immediately receives the tax represented by that number of tickets. If any tickets are left in the roll, they are returned to the government and a refund is made. In some instances, where a concert or other entertainment is put on and the tickets cannot be obtained at once from the government, the people go to the local theatre and purchase tax tickets there. There has been no difficulty at all in collecting the amusement tax in Ontario.
The federal government has said, "There are many millions of dollars spent in motion-picture theatres in this country each year. This is a waste of money and we must have part of it. We are going to see to it that some of that money comes to us." The minister says that this is not a poor man's amusement. He must know that if in any community, be it a village, town or city, you could rule out the working class or low income group, there would not be enough people left to patronize three theatres in the whole of Ontario. The people who enjoy motion pictures are the people who stand at machines from morning until night or from night until morning, and then go to a matinee in the afternoon. This is a poor man's amusement. Of all those who attend motion-picture theatres in this country, seventy-seven per cent go to theatres where the admission is twenty-five cents or less.
Just to show the inconsistency of the government in connection with this tax, during the budget debate I, together with other hon. members, said, "If you are going to tax the people who go to motion-picture theatres, so should you also tax those who can pay $5

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for a ticket to a symphony concert, or those who can pay $2.50 for a ticket to hear Lily Pons," as some of us were privileged to do; "so should you tax those who go to the racetrack and pay $1.50, $2 or $2.50 admission; so should you tax the people who go to hockey games night after night and pay anywhere from seventy-five cents to $2.50 for a seat."


Paul Joseph James Martin: They are going to be taxed.


Karl Kenneth Homuth: They were not going to be taxed until the amendment was brought down. It is only now that you people who are supporting the government are showing some sense and doing what is right. The man who goes to the grill room of the Chateau Laurier, or any other hotel in this country, and is able to pay a service charge of $1.50 should also pay a tax. These taxes are the easiest thing in the world to collect; at least the government of Ontario had no difficulty in collecting them. This afternoon and yesterday, however, amendment after amendment was ruled out of order because in those amendments hon. members sought to change another tax, and there was no assurance that the changes suggested would bring in the amount it was hoped to realize under the original proposal. But following protests from those operating motion-picture theatres, from members of this house and from others, the government now has signified its intention of extending this tax.


Paul Joseph James Martin: What is wrong with that?


Karl Kenneth Homuth: The government have said, "We budgeted for so much money; this is the amount we require to carry on the activities of this country, in both peace time and war time, during the coming year." They estimated that the revenue from this tax would be so much; but because of the pressure that has been brought to bear, the government is now going to extend the application of that tax, which means that it will have a large sum of money it does not require, if the budget figures are to be believed.


James Lorimer Ilsley: Don't worry.


Karl Kenneth Homuth: Just wait a moment. The minister has budgeted for a certain amount of money from loans and a certain amount from taxation. If he wants to be fair with the people of this country; if he is going to extend this tax-which I think will meet with the approval of every member of this house- then at least he should reduce the tax on motion-picture theatre tickets, and other amusement tickets, to ten per cent. I have no doubt whatever that this could be done and
still bring in the amount of money originally estimated. If hon. members look at the record of the amount of money collected year after year by the Ontario government under its amusement tax, they will see that it amounted to about one-third of the amount you are expecting to collect under this tax. That is only one province; there are eight more provinces as well. The Minister of Finance laughs, as much as to say, "I expected this". All right. I have no interest in moving pictures, or in any other amusement than sitting in this House of Commons.
I wish to say in all sincerity, Mr. Chairman, that I do not know of anything that would be more beneficial in our war effort than to bring amusements of this kind, which are so necessary to the life of a people, especially in war time, within reach of the men and women- yes, and even the boys and girls who are leaving high school and going to work on the farms and in the factories of this country- who are engaged in war work. As I said in my speech on the budget, for a time in the United Kingdom they refused to permit the rebuilding of motion-picture theatres that had been bombed. Over there, a special permit has to be obtained, and cause shown, before any wrecked building can be rebuilt. It is, however, a fact that when a motion-picture theatre is bombed in the old country to-day, a permit is issued automatically for the rebuilding of that theatre, because they know how important it is that the people should have some surcease from the tremendous burdens of worry and work under which they labour from day to day. Therefore I say to the minister that if he has budgeted correctly-and I must take his word that he has-surely he could say to the Canadian people, "Instead of taxing these less expensive amusements so heavily, we will reduce the tax to ten per cent and spread it over a great many more people who otherwise would be exempt", so that they will pay what the poor man would have had to pay if the regulation had not been amended.


John Ritchie MacNicol: I have very little to say, much less than I would have said if the minister had not presented his amendments. I wish, however, to say a word for the motion-picture people. I believe there are twenty theatres in my riding, and I have seen these people donate the use of their theatres on many occasions in order to carry on recruiting meetings and so forth. This was particularly the situation in the last war, and I know, when the time comes in this war for such meetings, these people will give up their theatres freely. They are ready to do their part to carry on in the best interests of the country. Only
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recently a number of theatres in my riding held meetings to assist in the work being carried on by the Minister of National War Services. They will do so again, and for that they deserve some consideration. I have no doubt that they will permit the use of their theatres in connection with the new war loan. We shall be seeing notices thrown on the screen asking us to buy the war loan, and most likely permission will be granted to people to go on the platforms to advocate the purchase of war loan bonds. That is all to the good; that is all in the interests of this dominion, and it is something for which the theatre owners should receive consideration. The hon. member for Prince Edward-Lennox (Mr. Tustin) tells me that the theatres in his riding are now advertising the war salvage campaign. I notice that the minister nods his head, which shows that he appreciates the help being given.
As I say, the minister's amendment eliminates many of the complaints which I have received. I have here four or five telegrams, and I should like to read parts of these to the minister. The first is from the St. Clair theatre, and reads:
If my working class patrons can pay tax, why shouldn't patrons of higher priced amusements pay tax and share the burden?
I understand that these patrons of the higher priced amusements will now be taxed.


William Earl Rowe: Not the same tax.


James Lorimer Ilsley: The twenty per cent tax.


John Ritchie MacNicol: That will eliminate the complaint voiced in this particular telegram. The people living in the immediate vicinity of this theatre are not wealthy; they are honest, thrifty working people.
Here is another wire from the College theatre, as follows:
As a member of the motion-picture industry I have always done everything to help the war effort and always will, but I protest against the unfair discrimination of the dominion excise tax on motion-picture theatres being exclusively directed against motion-picture patrons who are families of moderate means. Legitimate theatre, concert-goers, circus, carnival, dance-hall, baseball and hockey fans escape this tax. My patrons are poor people.
The minister's amendment eliminates most of the complaints voiced by this gentleman.
The next telegram is from the Belmont theatre at the comer of College and Dufferin streets, and reads:
The feeling is that the poor man is called upon to bear a burden not shared democratically by all classes, this mode of entertainment being singled out from all others for very high

taxation. Patriotism of the people unquestionable but demand democratic treatment. The people want and demand common justice to the working class families in the spirit of Canada's constitution.
I understand the minister's amendment provides for the taxation of all other amusements. Will it apply to baseball games?


James Lorimer Ilsley: Yes.


John Ritchie MacNicol: Will race-meets like
those at the Woodbine and other tracks be taxed?


James Lorimer Ilsley: Yes.


John Ritchie MacNicol: Apparently the amendment takes care of this owner's complaints.
The next is from the Adelphi theatre, and reads:
If present conditions warrant taxes on amusements why not on sports, dances, race tracks, bingos, et cetera.
Will weekly dances held by fraternities or other institutions be subject to this tax of twenty per cent?


James Lorimer Ilsley: No; they escape.


John Ritchie MacNicol: Is that fair?
The next telegram is from the Lansdowne theatre, and reads:
The motion picture industry is one hundred per cent behind the government in its war effort. I am not objecting to the tax on theatres, in fairness to the industry and to the public the tax should be on a graded scale-
That is what was suggested by the hon. member for Prince Edward-Lennox. I think some consideration should be given to what he has said. I have attended the show in Napanee, from which town the hon. member comes, and I would imagine that if they get one full show a night that would be the limit. The telegram continues:

and should not be such a burden to the small wage-earner who looks to the motion picture for his entertainment. The tax should apply to all forms of entertainment and not be confined to the motion-picture industry.
Am I correct in understanding that the tax is to apply on admissions of ten cents upward?


James Lorimer Ilsley: Yes. Perhaps that answer
will give the wrong impression. There is really no lower limit; we do not start at ten cents even.


John Ritchie MacNicol: The vast majority of the 70,000 people whom I represent are honest, thrifty, working people. On Saturday afternoons I understand that most of the theatres allow the children in for ten cents. Their mothers send them to the theatres to get them off the streets. The programme on Saturday afternoons is usually made up of educational pictures, funnies, as well as

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patriotic pictures. In my humble opinion there is nothing that will do more to increase the morale, certainly to retain the morale ol our people, than to have their children see patriotic pictures in which the British navy is fighting and British soldiers are winning. Would it be possible to differentiate between the tickets sold to children on Saturday afternoon and those sold to adults in the evening ?
I can see no reason why that could not be arranged because the tickets are sold at a lower rate to the children anyway. The amendment, while not relieving the moving-picture theatre owners from the tax, does relieve them from being the only ones on whom this tax is inflicted. Finally, I would ask the minister if it would not be possible to allow children's tickets on Saturday to be tax-free.


James Lorimer Ilsley: Let me make the situation perfectly clear with regard to that. This tax is twenty per cent of the gross receipts, and it is payable by the motion-picture industry. It is payable by the owner or exhibitor.


William Earl Rowe: It is up to him?


James Lorimer Ilsley: It is up to him. If he wishes to allow anyone in at the old price, he may do so. He may load the tax in any proportions that suit him. He may charge more than twenty per cent increase on the higher priced tickets and nothing on the lower priced tickets. He may lower the price of the lower priced tickets. We are not doing what the provinces were doing, namely, imposing a direct tax on the patrons. The provinces had to impose a direct tax because they had no power to impose an indirect tax. We are imposing an indirect tax, a tax on the owners, proprietors or exhibitors of motion pictures-


Karl Kenneth Homuth: But the minister will admit-


James Lorimer Ilsley: Just a minute.


Thomas Vien: Order.


Karl Kenneth Homuth: I should like to ask the minister a question. If the minister says no, all right.


James Lorimer Ilsley: The answer is, no. I am answering a question of the hon. member for Davenport.


Thomas Vien: The minister does not yield.


Karl Kenneth Homuth: That is all right with me.


James Lorimer Ilsley: There is not very much reason why I should not have yielded except that I was in the middle of a sentence and was answering another hon. gentleman. I am
quite willing to answer the hon. member's question, but he must have a little respect for the rules of order.
I do not know just where I was in my statement.


John Ritchie MacNicol: The minister was explaining to the member for Davenport that the theatre owner could tax the children's tickets or the adult tickets as he saw fit.


James Lorimer Ilsley: That Was it, and it was an indirect tax. I had not very much more to say.


John Ritchie MacNicol: As I understand it now. the theatre owner has to pay a twenty per cent tax on his gross receipts?


James Lorimer Ilsley: Yes.


John Ritchie MacNicol: That is a pretty stiff tax.
I do not know any other business or industry that is taxed twenty per cent.


James Angus MacKinnon: What about the hon. member's own income?


John Ritchie MacNicol: I am speaking, not for myself but for the people of my riding, the working men.


An hon. MEMBER:: Is the hon. member a working man?


John Ritchie MacNicol: Yes, I am, and there is no other man in the House of Commons who in his lifetime has worked harder than I have.
I like to go to picture shows. I think they are one of the greatest educational institutions in this country, and I hope this twenty per cent tax does not affect the great work of education that is being done by the picture shows. Twenty per cent, however, does seem to me a pretty heavy tax. I know the minister must have the money. I have made the protest which has been sent on to me, and since there is nothing more that I can do, I have done my duty.


Mr. MAYBANK:: It is quite apparent that, in the main at any rate, the minister appears to be receiving more commendation than criticism. I consider, however, that I should express one criticism with regard to the procedure this evening of introducing the amendment without any kind of notice whatever.


Karl Kenneth Homuth: Didn't you caucus it this morning?


Ralph Maybank: Could the minister not work out some form of compensation for a great deal of labour that has been lost? I would not say it is a case of love's labour lost, but at any rate it seems to me that there are indications in the committee this

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evening that a considerable number of well-prepared speeches have been flattened out, and I think the minister might try to work out some way of compensating these poor people who have spent so much time in sharpening for his hide barbs which now they cannot use.


Karl Kenneth Homuth: The hon. member who has just spoken has made a number of statements that certainly are not true. The members of the house are not here to get the minister's hide. From the very start of this budget the members of the opposition have been only too willing to help the minister get his budget resolutions through.


Some hon. MEMBERS:: Oh!


Karl Kenneth Homuth: Oh, yes, and a great deal of the criticism of the budget proposals came from members of the government's own party who had not the courage to vote for what they said in the house.
I rose a few minutes ago, when the minister was answering a question asked by the hon. member for Davenport, to put a question. Usually the minister is not discourteous in the house, and I was sorry that he would not let me put my question at that point because he was just then explaining that the theatre owner had the choice of whether to pass this tax on to only a certain class of his theatre patrons, or whether any of the tax should be passed on to his patrons, or whether the tax should be passed on in varying proportions among the theatre patrons. The minister, however, must admit this, that in view of the representations made to him and the Department of Finance with regard to this tax, he held up its application until such time as the theatre owners could make arrangements to pass the tax on to the theatre patrons, and the result is that the theatre owners are going to pass the tax on to their individual patrons. The minister may have considered that so many millions of dollars were being spent in moving-picture theatres by the people of this country that not only was the moving-picture business prosperous but that the people were spending so much money on picture shows, wasting their earnings, that he should levy a tax to curtail such expenditures. Either the tax must come from the theatre owner or be passed on by him to the public. If the minister's idea was to curtail expenditures by the public, goodness knows he is taking enough out of the low income groups already!
With the extension of this tax to other amusements which were not, prior to this amendment, subject to any amusement tax,
I think the minister might very well consider reducing the tax to ten per cent. There is 
no reason at all to believe that he would not receive the same amount of money that he would have received by taxing motion-picture theatres alone the twenty per cent. If he makes that reduction, he will better the financial position of this countiy. At the same time he must consider that those who pay large fees to see the more expensive sports will be let off lightly in comparison with those who patronize the motion-picture theatres, and that is not fair. The minister should carefully consider reducing the tax fifty per cent and making it a ten per cent general amusement tax across the country, so relieving the people who attend the twenty-five cent motion-picture threatres.


James Arthur Ross: I agree with the
previous speaker that, in view of the amendment which was introduced, and is timely, the minister might consider reducing the tax on motion-picture theatres. It is stated that, according to government records, seventy-seven per cent of those who attend motion-picture theatres in Canada pay twenty-five cents admission fee or less. It is my opinion that the motion-picture theatre people render a service, both educational and recreational, to their patrons. What the present proposal will mean in Manitoba is that those theatres which now operate on a twenty-five cent admission fee will have to make an advance of forty per cent. The great majority of the motion-picture theatres in rural Manitoba have an admission charge of twenty-five cents. There is a provincial amusement tax, on tickets over twenty-five cents and under thirty-three cents, of two cents; over that amount, three cents and up. That will mean, with the twenty per cent federal tax on the price of admission, plus the provincial amusement tax, that people will have to pay at least thirty-five cents where formerly they paid twenty-five cents; that is an increase of forty per cent on the price of admission. I repeat that the minister might very well reduce the amount from twenty per cent to ten per cent, in view of the amendment he has introduced this evening to tax certain other amusements throughout the dominion. I do not know what amusements that is intended to include, and I should like to ask the minister one or two questions on the subject.
I am convinced that the proposed additional tax on motion-picture tickets, particularly in theatres operating in rural districts which have not benefited at all by war industries, will reduce attendance at those theatres to a far greater extent than an increase in the tax on liquor would reduce the consumption of liquor at this time.
Under the amendment, will this taxation cover pool-rooms?

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James Lorimer Ilsley: No. I do not know just
how a pool-room is run.


James Arthur Ross: I do not know much about it myself, Mr. Chairman.


James Lorimer Ilsley: There is no admission charge to a pool-room, is there?


James Arthur Ross: No.


William Earl Rowe: You pay to get out.


James Arthur Ross: This amendment will only cover admission charges to spectators at, say, a hockey match, or a ball game?


James Lorimer Ilsley: That is right.


Paul Joseph James Martin: Or bull-fights.


James Lorimer Ilsley: It must be an amusement. There is a power of exemption in certain instances.


James Arthur Ross: There would not be a tax on admission fees to exhibitions for recreational purposes, such as athletic competitions of any sort?


James Lorimer Ilsley: If the person intends to
participate; if he is paying to go in to play himself, or to dance; if it is his activity, the tax does not apply.


James Arthur Ross: There will be no tax? Mr. ILSLEY: No.


Mr. HATFIELD:: How does the minister propose to collect from night clubs that put on floor shows? They do not charge admission. They get their fees from a cover charge and extra prices for beer and wines.


James Lorimer Ilsley: The tax does not apply to them.


Heber Harold Hatfield: Why should it not apply? Mr. ILSLEY: It would be a little difficult.


Mr. MacINNIS:: My chief objection to this tax is an objection which is applicable to all taxes of this kind: it is not a tax on income, and consequently it is not equitable.
I did not rise, however, for the particular purpose of attacking the tax. I have had a number of protests, as most hon. members have had. I believe the objection on the part of the theatre people was that it was not equitable because it did not apply to other amusements. The amendment removes that inequality so far as the theatres are concerned.
I am not greatly concerned with the tax, because I do not believe the condition of the working class can be improved by a ten per cent reduction in the tax on movies. I do not believe it is the high tax on movies which makes the working class poor. The working class is poor because it is exploited, because people who do not work take the value of the
workers' labour; and there is no way in which the working class can be benefited unless we enable them to take the social value of their labour. Therefore I am not going to engage in any hysterics about improving the lot of the working class by providing cheaper beer or cutting ten per cent off the tax on motion-picture shows.


Mr. FRASER (Peterborough West):: I understand that motion-picture shows for Red Cross purposes are exempt from taxation; but if the man who operates the film receives a fee, is the tax applicable?


James Lorimer Ilsley: The entire proceeds must go for charitable, religious or patriotic purposes.


Gordon Knapman Fraser: The entire proceeds?


James Lorimer Ilsley: That is right.


Gordon Knapman Fraser: No
allowance can be made for the man who is putting on the show? Supposing he were paid $10 for exhibiting amateur motion pictures, or 16 mm. motion pictures, on behalf of the Red Cross-perhaps he had travelled ten or fifteen miles for the purpose-would the tax apply?


James Lorimer Ilsley: I would not say that reasonable expenses might not be allowed. That would be a matter of administration. It might be a reasonable thing to make an allowance. That would seem to be a little different from putting on a performance for profit.


Gordon Knapman Fraser: That is what I had in mind, also that the society might have to pay a few dollars for the rental of a hall. The wording of this resolution is, "admission price to a moving picture theatre". That, of course, would cover everything. Suppose the theatre were rented by the Red Cross; would they have to pay the tax? According to this, they would.


James Lorimer Ilsley: I am proposing an amendment authorizing the minister to make an exemption where the entire proceeds are for charitable, religious or patriotic purposes. It is not in the resolution as printed, but it will be in the bill.


Gordon Knapman Fraser: The
minister also said that there has been an increase in attendances at motion-picture theatres. I went to a motion-picture theatre last night which was not a quarter filled. This was the only Wednesday night when the theatre had not been filled. May I say, also, that it was a really good show, one of the best I have seen. I suggest, therefore, in view
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of the fact that other amusements have been brought under the tax, that the tax on motion-pictures be reduced to ten per cent.


Mr. LOCKHART:: Did I understand the minister to say that no arrangement could be made for the exemption of soldiers? I have in mind one particular camp area. It is the only form of amusement for these men, and I was wondering whether they could be exempted. Would the tax have to be absorbed by the owner of the picture show?


James Lorimer Ilsley: Yes.


Norman James Macdonald Lockhart: I assume that even
before the minister brought down the original resolution, he gave the whole subject mature consideration. Is it his opinion that as a result of this amendment he will double the amount of money he expected to receive originally? I see possibilities of that happening. All summer sports will be taxed.


James Lorimer Ilsley: I have no estimate, but I should be very much surprised if the tax doubled the amount to be received, or if it went anywhere near that mark. I may, however, be wrong. There will be many exemptions, and one cannot make an estimate. I think that the field outside motion-picture theatres is, generally speaking, so irregular and so small compared with the main amusement industry of the country that it would be surprising if any result such as is suggested were realized.


Norman James Macdonald Lockhart: I have made a slight calculation, going over in my mind the number of moving-picture shows in my particular area, and I have also taken into consideration arenas and other forms of amusement which are definitely in existence in that district. I am fairly familiar with the admission tickets bought in the other types of amusement, such as arenas, and I still suggest to the minister that if he would post someone to make a careful investigation he would find that my calculation is correct, particularly in the larger areas. If he had some qualified person make a survey of the situation, he would find that 90 per cent of the people in the lower bracket incomes are affected. I concur in the statements that have been made here. I believe that in broadening the field of application of the amusement tax, with which I am in accord, consideration might be given to a reduction so that it would not fall so heavily on the middle-class people, as they are sometimes termed, and on low bracket income people, as we know them in our urban and larger centres. I urge that because I am quite 
certain the minister will find that the field he has opened up will yield double the amount he expected to receive from the tax.


Mr. FAIR:: I have had letters and telegrams of protest, but no invitations to have further taxes imposed on other forms of entertainment, because where I come from we have now more taxes than we can pay and we are not asking for any more. The conditions under which theatre operators in my part of the country carry on are entirely different from those cited by hon. gentlemen who have already spoken. In a good many instances, the theatres cited are operated six days and nights a week, but in my own case some operators cover as many as five or six towns; and because a number of men have enlisted from those towns, the theatre operators are having to cut out some of the towns altogether. It has been suggested that in some districts 150 or more men have enlisted. It has been the practice of a number of these men to take their lady friends to the pictures; but now that the men have gone, the girls have not the salaries, which are small even here, to enable them to attend the moving pictures, and they must stay at home. That works a hardship on the motion-picture operators there.
I do not know whether there is any use in protesting against the tax, because we know what happened in connection with the gasoline tax. This one, while not as unjust, does not apply in the places in which it should. Here in the city of Ottawa the civil servants get $60 a month to start with, and those in employment for more than six months have been given a boost of $5 a month. First, they have been accustomed to the lower national defence tax, and now it is five per cent, so that I do not know whether we are in a much worse position out there than here, because, while the government causes a little bit of money to be given to people, they find some means of deducting it, and the deductions are, in many instances, far greater than the amount given.


Thomas Clement (Tommy) Douglas: I believe there will be general approval of the amendment brought in by the minister. There is a feeling that if the government must raise revenue by taxing amusements, it should not tax just one branch and let other branches go scot-free. Personally, I think it is unfortunate to have to tax amusements, because they are a large factor in building up public morale; but the government must find revenue, and if they are going to tax amusements, the tax should apply to all. In spite of what the minister

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says, the fact remains that people in the low income brackets do use the motion pictures almost exclusively as their sole form of recreation. I like to go to prize fights; but why should I pay seventy-five cents to see a prize fight and not pay a tax, while others pay twenty-five cents to see a moving picture and pay a tax? The minister's amendment will meet with approval, and if he finds that he must tax amusements he should apply it to all forms.
I agree with him that there should be certain exemptions, but I am wondering how he is going to take care of them. Probably there will be some details in the bill; but it seems to me that if an application must be made to the Minister of National Revenue every time a group of people wish to put on an entertainment, there will be a great many difficulties. Many of these entertainments are got up in a hurry, and in many of the rural areas the ladies who put them on know little or nothing about the tax. Throughout my constituency in the country places the ladies of the Red Cross and of other organizations get together and put on a social in a few days. Are they liable to prosecution if they do not charge the tax? I am offering a suggestion to the minister. Would it be possible in the bill to make a blanket exception for certain classes of entertainment put on for charitable, religious and patriotic purposes? Second, would it be possible to give the minister power to declare exemption in special cases? As I understood him, any group of people putting on an entertainment will have to make application, provided they come in one of the three categories mentioned.


James Lorimer Ilsley: That is what is proposed.


James Lester Douglas: Would the
tax be easier to administer if the minister said that all entertainments put on for the purpose of raising money for charitable, religious or patriotic purposes are exempt, -without making application, and that in cases which do not come under those three classifications they must apply to the minister? I realize there will be many border-line cases, -and the minister will have to have wide discretionary power. I realize that there is not a blanket clause to cover all these small fraternal and patriotic societies and charitable institutions. There will be scores of entertainments put on as to which either the people putting them on will not have to make application or they will not know of the tax. The minister will have endless confusion. Would he give some consideration to my suggestion?


James Lorimer Ilsley: Yes, I will give consideration to that suggestion. I may say that my first thought was to do just that, to make a statutory exemption of amusements the whole proceeds of which were to go to a charitable or religious purpose, and give the minister discretion in the other classes. But this gives the department greater control, and there may be instances where opinions will differ widely as to what purposes are charitable, or patriotic, or perhaps even religious. I do not know. There is so much scope for difference of opinion regarding this that it would make for more thorough administration to require application in all instances.


James Lester Douglas: How long in
advance would an organization have to make application in order to secure a permit?


James Lorimer Ilsley: That is a matter of detail
which would have to be worked out. The national revenue department has an extensive organization all across Canada, and it may be that there could be quite a degree of decentralization.


George Russell Boucher: I am not sure that this
question is quite fair in so far as the exceptions introduced by the minister cannot be fully comprehended at this moment while the discussion is going on. I asked him as to the position of fall fairs, for instance. I do not see that they can be included under the classification of exemptions enunciated by him as being charitable, patriotic or religious. There is a broad field that might be called educational which would be equally entitled to exemption. There are church socials, garden parties which might be held by social, fraternal or even economic societies, on which a tax of twenty per cent would be extremely onerous.
I suggest with all deference that the resolution might be framed a little more clearly, and that hon. members should have a copy before them before they are asked to pass it even in the committee stage, because I believe many complications could arise with the resolution in its present form. Hon. members should have a definite, clear-cut resolution and time to consider it before discussion is ended. The discussion so far amply illustrates that point. It is difficult for hon. members to delve into the realm of imagination and conjure up all the circumstances that might arise under this tax. The difficulty is that the tax is twenty per cent. There is even a problem whether a religious, patriotic or charitable society might put on some form of entertainment on a profit-sharing basis. That also should be considered. It is not every society that could put on an entertainment to raise
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money for charitable, religious or patriotic purposes that could produce the entertainment without paying something to the personnel engaged in putting it on. I believe much time would be gained if the discussion of this resolution were deferred until a more clear-cut proposal is before the committee.


James Lorimer Ilsley: The resolution commits the committee to just two things: first, that a like tax of twenty per cent be imposed on certain other forms of amusement. I take it that all members of the committee are in favour of that; all who have spoken are. I think; second, that the said tax is to come into effect on a date to be proclaimed by the governor in council. It is not the place of the committee to settle the exact terms of an enactment. The bill is always, or practically always, much longer and more detailed and exact than the resolution. This resolution is to give notice, to settle the principle, and to give hon. members time to gather themselves together and criticize the bill when it comes down. I do not think the committee should ask that the resolution be held up for the reason stated by the hon. member.
To the question of fairs I have given some thought. I do not think there will be much difficulty in working it out. The speeches that have been made show why we were diffident in entering this other field of amusement, because hon. members could speak for days about it; some would have in mind certain things that must be let off, and more and more they would think of other things that must be let off. Yet, theoretically and in general, they would urge that the whole field of amusement be covered. Those are two conflicting points of view that the government has to struggle with in this matter. I ask hon. members to be a little tolerant about this. We cannot just tax something that is far away and does not hurt us; we must have rules, and the rules will get close to us once in a while.


Percy Chapman Black: Is it clearly understood that admissions to agricultural exhibitions, county exhibitions, are excluded from this tax?


James Lorimer Ilsley: I cannot make any commitment about a particular exhibition. There might, I suppose, be a profit-making fair.


Percy Chapman Black: I refer to agricultural exhibitions such as are held all over Canada, certainly in Nova Scotia and in my own constituency, annual exhibitions carried on by agricultural societies, farmers' clubs and such organizations.


James Lorimer Ilsley: I would think there is power to exempt them under what I have proposed.


Percy Chapman Black: What would be the process for such an exhibition to ascertain whether they get the exemption? Will there be some local authority, or would that application have to be made to the minister at Ottawa?


James Lorimer Ilsley: I would expect it would be made to the local collector of customs. The national revenue department has an organization all across the country, and usually applications can be made to the nearest or any collector of customs.


Percy Chapman Black: It should be understood that such agricultural exhibitions would be exempt from this tax.
Would the minister not consider an amendment which would exempt from this tax theatre tickets for children, and matinee admissions? I think it is recognized that these low-priced tickets should not be subject to a tax if that can be avoided ; and I should think this could be done in view of the fact that the proposed amendments will greatly increase the revenue accruing to the department in comparison with what was contemplated when the minister brought down the budget. If the minister could give such an undertaking, it would meet with approval in this house and throughout the country, particularly on the part of those having large families and those who are able to attend only the less expensive theatre performances.


James Lorimer Ilsley: I do not know whether the hon. gentleman was in the chamber at that time, but that matter was discussed. I pointed out that this was an indirect tax on the proprietors of these places of amusement. It is not upon the people who attend. The proprietors may pass on the tax, or they may not. Of course they will pass it on, but they can pass it on in such proportions as they wish, and to whomever they wish. It would be meaningless to insert an exception of that kind; and moreover I would not be in favour of it. I am not in favour of relaxing or modifying that twenty per cent. I have seen scores-I was going to say hundreds-of telegrams which have been received by members of parliament from operators of theatres all over the country. Most of these telegrams take no exception to the tax or to the amount of the tax. I can well understand that hon. members might say they do not care what the motion-picture people think; that they desire to urge a lower tax in the interests of the patrons of [DOT] the moving-picture theatres. This is a heavy tax: it is designed to be such. It is said that it will injure the morale of

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this country; but the need of maintaining morale is not so obvious here as it is in Great Britain. What I sense in a great many parts of Canada is just a little bit of the boom spirit, which is not the kind of morale we want at all.


Percy Chapman Black: It seems to me that a rebate such as I suggest could be administered very easily on the basis of the number of low-priced tickets sold by the theatre operator, if the minister would agree to that principle. This is a heavy tax for central Canada, but, as has been pointed out by the hon. member for Souris, it is an especially serious tax in that province and also in Nova Scotia. In my province we have a provincial tax as well, and with this dominion tax the rates paid in Nova Scotia will be:
* Per cent
10-cent ticket	 40
18-eent ticket	 33J
23-cent ticket	 30$
25-cent ticket	 28
This double taxation violates the principle that has been laid down, namely, that there should be uniformity of taxation. Of course, part of the revenue accrues to the province; but, as I said this afternoon in connection with the gasoline tax, Nova Scotia imposes a tax on theatre admissions and a heavier tax on gasoline, but does not impose an income tax. The income tax is levelled up by means of rebates to compensate provinces for what they may lose by only the federal tax being imposed. Nova Scotia and New Brunswick do not impose provincial income taxes, so they will get no provincial rebates, but they pay proportionately heavier taxes as a result of this budget. This violates the principle of equality of taxation, because this theatre tax is a double tax in Nova Scotia, I should like to see a rebate allowed on cheaper tickets, tickets to children. The minister has, however, stated his opposition to any such rebates, and therefore I suppose we must accept his ruling.


Mr. PERLEY:: I have listened patiently to this discussion this evening, and I intend to take only about one minute to make a few observations. The minister has seen fit to amend this resolution, and I think his amendment will meet with the approval of all hon. members. I only wish he might have been convinced so easily with respect to the gasoline tax. Like many other hon. members, I have received a great many telegrams from theatre operators in the west, particularly in my own neighbourhood. One telegram has come from a man who operates five theatres, and another from a man who operates four. This is a popular, cheap form of amusement
in the rural parts of western Canada, where the farmers come to town on Friday or Saturday night. Most of the theatres in the rural sections of the west are operated only two nights a week, on Friday and Saturday; and if the minister could see the number of people who gather at these shows on those evenings, I think he would be convinced that this is a real source of amusement for the western people. The protests contained in the telegrams I received were to the effect that twenty per cent of the gross receipts was too much; they thought it should be reduced to something like ten per cent. That was the opinion of the man who operates the five theatres.
I do not think I need labour the point further. I hope the minister will take that suggestion into consideration and reduce the tax to ten per cent, at least in connection with those theatres operating in the rural sections. I presume any reduction would have to apply to all theatres, but it is in the rural sections that it would be most appreciated.


James Arthur Ross: I should like to urge upon the minister that in working out these amendments he keep in mind the fact that agricultural fairs are not profit-making organizations. In the past, certain classes of fairs have received federal grants; others have received provincial grants; and still others, municipal grants. If these fairs were taxed in any way, I believe many would cease to operate. It is true that admissions are charged, and that the fairs are partly educational and partly entertaining; but at the same time they render a service to the community. Therefore I hope the minister will keep this point in mind.


James Lorimer Ilsley: Yes.


Heber Harold Hatfield: Why is there not a tax on night clubs putting on floor shows? I am afraid we are going to drive people from the theatres to the night clubs, and I do not think we want them to go there.


James Lorimer Ilsley: There is no admission charged to night clubs.


Heber Harold Hatfield: They put on entertainment, though.


James Lorimer Ilsley: The difficulty of administration would be very great there.


Thomas Clement (Tommy) Douglas: There is a
cover charge, is there not?


James Lorimer Ilsley: Sometimes there is a cover charge, and in some clubs there is a cover charge on certain nights and not on others
Special War Revenue Act

They have all sorts of ways of making money, but I think their chief revenue comes from the sale of beer and food. I think those are the main sources of revenue in night clubs.


Heber Harold Hatfield: That is where the people are spending their money to-day.


James Lorimer Ilsley: We are taxing them on the gasoline that they use to get there; we are taxing them on the beer that they drink when they are there, and we are taxing them on several other things. There is no admission charge upon which we can tax them, and we did not think we could go into that.
Mr. O'BRIEN: Could that tax not be imposed on the same basis as the hospital tax in Quebec?


Victor Quelch: I have just come from
another committee, and therefore I am not familiar with the discussion that has taken place. I take it that the main object of this tax is to conserve foreign exchange. Could some exemption not be granted in so far as British films are concerned?


James Lorimer Ilsley: The question of exchange has not been mentioned as yet in the discussion, and that is not the main object of this tax. I am doubtful whether any foreign exchange will be saved because the films will come in just the same whether or not the people are taxed.


Robert Fair: How long will this tax be in
effect?
Mr. ILSLEY': I do not know about that.


Robert Fair: Will it cease with the end of the war or before?


James Lorimer Ilsley: I cannot say.
Mr. O'BRIEN: I asked the minister whether the tax on night clubs could not be collected in the same way as the hospital tax in Quebec, but he did not give me an answer.


James Lorimer Ilsley: There are fields into which we could go if we went to enough trouble. I do not know how the hospital tax in Quebec is collected, but I have the impression that one pays a cent or two on meals, or something like that. We do not intend to do that. It certainly is a wonderful experience to have hon. members urging us into more fields of taxation, but I am afraid that once we got it established, the applications for exemptions vould be tremendous.


[Stage Direction]
Amendment agreed to.
Resolution as amended agreed to.

10.	That there shall be imposed, levied and collected an excise tax of five per cent of the total amount of bets made through the agency of a pari mutuel system on any horse race run at a lawful meeting, such tax to be payable by the person conducting the race meeting.
James Arthur Ross: What will this tax
bring in?


James Lorimer Ilsley: About 81,000,000 in a full year.


James Arthur Ross: Should this tax not be increased? No one likes a horse race better than I, but at the same time I think I should be willing to pay at least ten per cent when I bet money on a horse race. We are taxing gasoline which is used for productive purposes, to the extent of 15 per cent; we are taxing moving picture theatres used for educational and recreational purposes, to the extent of twenty per cent, and I cannot see why horse racing, which certainly is not essential, should not have a higher tax imposed on it. This is not a poor man's game, and I think there should be parity of taxation. I would suggest increasing this tax to ten per cent and reducing some of the other taxes.


James Lorimer Ilsley: We are not the only ones in the field here; the provinces are in it as well. It must always be borne in mind that we cannot crowd the provinces out of all these fields of taxation. Hon. gentlemen are continually talking as though we were the only taxing authority. We are branching out when we go into this amusement field. I have not the slightest desire to be unfair to the provinces. It is a matter of judgment as to how high this particular tax should be. It must be remembered that there is a provincial tax as well as a charge on the betting for the benefit of the owners of the track. I think, in the interests of revenue, we have gone about as high as we should.


James Arthur Ross: I would remind the minister that the provinces also tax gasoline and moving-picture theatres.


James Lorimer Ilsley: That is no argument for taxing everything else.


James Arthur Ross: I grant the minister that, but he has taxed the poor people on something which is essential to the life of this country to a much greater degree than horse racing. He has gone into the provincial field in those instances.


James Lorimer Ilsley: We are taxing the admission.


Alexander Malcolm Nicholson: I should like to support the remarks of the hon. member for Souris (Mr. Ross). According to the minister, approximately 820,000,000 will change hands

Special War Revenue Act
30S3
in Canada during a year, five per cent of which will give us about $1,000,000 in revenue. We have placed a fifteen per cent tax upon gasoline and a twenty per cent tax upon entertainment, and I see no reason why the tax under this resolution should not be twenty per cent, regardless of what is collected by the provinces.


[Stage Direction]
Resolution agreed to.
11.	That paragraphs (a) and (b) of section one of schedule I to the said act be repealed and the following substituted therefor:
"1. (a) Automobiles adapted or adaptable for passenger use, with seating capacity for not more than ten persons, each valued at $900 or less-25 per cent.
Over $900 but not more than $1,200-25 per cent on $900 plus 40 per cent on the amount in excess of $900.
Over $1,200-25 per cent on $900 plus 40 per cent on $300 plus 80 per cent on the amount in excess of $1,200.
(b) Automobiles adapted or adaptable for passenger use with seating capacity for more than ten persons-5 per cent" and that the first proviso to the said section be repealed, which reads as follows:
"Provided that the tax collected under paragraph (b) above shall in no case exceed $250 per automobile;"
Resolution agreed to.
12.	That the tax on toilet articles provided for in section two of schedule I to the said act be increased from ten per cent to twenty-five per cent.
Resolution agreed to.
13.	That the tax on lighters provided for in schedule I to the said act whether or not combined with pencils, cigarette or other cases, be increased to twenty-five per cent.
Resolution agreed to.
14.	That section five of schedule I to the said act be amended by striking out the words
"Cameras, phonographs, radio broadcast receiving sets and tubes therefor" and replacing them by the following words
"Cameras, phonographs, record playing devices, radio broadcast receiving sets and tubes therefor."
Resolution agreed to.
15.	That paragraph (b) of section six of schedule I to the said act be amended by inserting after the word "refrigerators" the words " including coils, condensing units, cabinets, boxes, evaporators and expansion valves therefor."
Resolution agreed to.
16.	That paragraph (d) of section six of schedule I to the said act be amended by inserting after the words "permanent waving machines" the words "and spacers or clamps, rods and heaters therefor."
Resolution agreed to.
17.	That section two of schedule II to the said act be amended by repealing paragraphs (a) and (b) thereof and substituting therefor the following:
"2. Sugar, etc.:
(a)	Materials enumerated in customs tariff items 134, 135, 135 (a), 135 (b), 139 (except glucose and grape sugar), 140 (except molasses) invert sugar and syrup-two cents per pound.
(b)	Glucose and grape sugar (except when for use exclusively in the manufacture of leather and artificial silk)-one cent per pound;"
and striking out the proviso thereto reading as follows:
"Provided that the tax hereby imposed under paragraph (a) shall not apply to the materials enumerated in customs tariff items 139 and 140, when sold in packages containing not more than ten pounds each."
Gordon Graydon: Mr. Chairman-


Some hon. MEMBERS:: Hear, hear.


Gordon Graydon: -I should like to take
this opportunity of thanking the hon. member for Fraser Valley (Mr. Cruickshank) for what he said this evening and the other hon. members for the hearty round of applause which I have just received. I am sure one would be most ungrateful if he did not appreciate such kindness on the part of members of the house. One of the pleasant things about public life is the friendships that are made on all sides, and this is certainly well illustrated by what happened a moment ago.
I want to say to all my hon. friends a very honest "thank you" for the demonstration of friendliness. Perhaps the attitude of the Minister of Finance (Mr. Ilsley) will be softened somewhat too. I only hope that what I am about to say will receive the same enthusiastic support from the committee.


Thomas Vien: We are on sugar.


Gordon Graydon: As the committee will
readily see, this resolution provides for a tax to be placed upon com syrup. The St. Lawrence Starch company, perhaps the largest producer of corn syrup in Canada, is located in Port Credit in my constituency.
I understand that up to now there has been no tax on corn syrup when sold in packages containing not more than ten pounds each.
I believe I am reliably informed when I say to the minister that this tax will interfere severely with the business now carried on at that point.
In addition to the possibility of restricting the sales of this commodity, there is another angle to this matter which I desire to stress at this time. Corn syrup is a commodity used largely by our working people and ' farmers, it is used by the man in the lower income brackets. When a tax is added upon
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com syrup in less than ten pound quantities, the government immediately enters into that field, to the detriment of people with very low incomes. I have spoken to the minister privately about this, but I would appeal to him now to consider further this proposal of placing a tax of two cents upon tins of corn syrup less than ten pounds in weight.
There is another angle affecting another branch of our primary production. Since February, 1941, this plant has processed no less than 200,000 bushels of Ontario grown corn. That radically affects several people, particularly in Essex East and other ridings which are well known for their excellent corn products, and I hope that I shall be able to get some measure of support from hon. members representing those constituencies. In the past, while corn from Africa and the United States has been used, the starch companies are ever anxious to use more Canadian grown corn, and I think the minister will admit that 200,000 bushels of com processed since February of this year is by no means a small quantity. If this tax has the effect, as I am reliably informed it will have, of restricting the consumption of corn syrup, that is going to affect not only the working classes of our country and the farmers who consume this product but growers of corn throughout Ontario, upon whom it will work a hardship.
I should also like to stress another point, namely, that there is discrimination in this tax, which is perhaps one of the worst features of it. Molasses, which is a competitive product with corn syrup, is not taxed, and some other commodities which enter into direct competition with com syrup bear no tax at all. It does seem to me-and I would bring this as sharply to the minister's attention as I possibly can-that if we are not going to tax a wide range of similar commodities, it is not fair or equitable to tax one particular commodity only and leave competitive commodities tax free. That is a principle which should not be adopted by the government even in war time, and I ask the minister whether he will not, in all fairness, restore the conditions which existed so far as this product is concerned before the budget was brought down.


Paul Joseph James Martin: I am sure that the invitation of the hon. gentleman who has just spoken (Mr. Graydon) is one which I as member for Essex county in the corn belt of Canada could not very well overlook.
Before supporting him in the representations he has made to-night. I am certain that I express the views of all members of this house when I offer him sincere congratulations upon the appointment which was accorded

him this morning. I sincerely trust that, as a result of his organizing ability, his party will always remain in second place in the political life of this country.
The corn belt of Canada is situated in the southwestern peninsula of this province. Some five counties are vitally concerned. In the county of Essex and the county of Kent sixty-five per cent of the corn of Canada is grown, and in southwestern Ontario, eighty-five per cent of the corn of Canada is grown. Therefore the farmers of that area, growing corn as a cash crop, are naturally very much interested in an opportunity of increasing their acreage and, consequently, their income.
While the starch company to which the hon. gentleman has referred does not purchase as much corn from western Ontario as it might, nevertheless there is a potential market there, and one which this government, made fully aware of the facts, would, I am certain, wish to encourage. Therefore I cannot help but support the observations of the hon. gentleman.
Honey, molasses, corn syrup-these are things that are found on the table of the masses of the people, and there should be no discrimination in respect to any one of these commodities so far as the tax is concerned, but as the resolution now stands, corn syrup is singled out. It should not be placed in that singular position; it should not be discriminated against, giving other commodities competing with it an advantage. I propose, when the agriculture estimates come up, to discuss this question more fully, but at the moment I strongly support the observations of the hon. member for Peel.


George Alexander Cruickshank: If the hon. member would permit a question, does he intend to discuss the agriculture estimates from a legal point of view or from a farmer's point of view?


Paul Joseph James Martin: I hope to discuss them from a sensible point of view.


Mr. SDAGHT:: The people of my district feel a deep debt of gratitude towards this product of corn syrup. Notwithstanding that, however, I consider I am representing their views by, in the public interest, not opposing this additional impost.


Gordon Graydon: The minister should, I think, outline the position of the government. He has not made any reply to my protests.


James Lorimer Ilsley: The question of whether corn syrup should be taxed has been under consideration for a good many years. It is very hard to draw the line in such a way between these food products as not to give rise to the charge of discrimination by the

Special War Revenue Act
manufacturers of some particular food product. The manufacturers who have had a grievance for many years past have been the jam manufacturers, who have claimed that corn syrup is in competition with jam, and that the jam manufacturers have been subject to the sugar tax, which now is a two cents a pound tax, and that this gives the corn syrup manufacturers an undue and unfair advantage, and the jam manufacturers charge discrimination.
It is true that we are drawing a line between molasses and corn syrup instead of between corn syrup and jam. Naturally, the corn syrup manufacturers immediately enter very, very strong protests and say that they are now the aggrieved parties. We did not extend the tax to molasses because there we are getting into a product a large part of which is used for stock-feeding purposes and a small part for human consumption.


Gordon Graydon: They are two entirely different products.


James Lorimer Ilsley: I am informed that it would be difficult to draw a distinction for administrative purposes. At any rate, there is something to be said for the contention that molasses is more of a poor man's food than corn syrup.


Gordon Graydon: Both are consumed by the poorer classes.


James Lorimer Ilsley: I am not sure about that, but it sounds that way to me, at any rate.


Paul Joseph James Martin: It doesn't taste that way.


Gordon Graydon: May I suggest to the minister that his comparison with the tax which is put on jams is not a parallel case at all, because jams do not consist wholly of sugar, and a two-cent tax on the sugar in the jam is only a tax on a portion of the entire product. When the minister places a two-cent tax on corn syrup, he taxes the whole value of the product; that is not the situation with a two-cent tax on whatever sugar is contained in the jam. It may seem that this is a rather pointed suggestion ; but I submit to the minister that it is a discriminatory tax, and I know that, if he is convinced' of that, he would be the last one to insist upon imposing it. I wish to impress upon him the necessity of avoiding the process of destroying one competitor and setting up another. That is a principle which I do not believe for a moment the government would consider. I hope that between the present time and when the amendment is brought down, he will give this matter some further consideration, and will realize just what he is proposing to do to the corn syrup manufacturers of Canada. I
really believe that here is a serious discrimination. The outcry from these companies, as the minister knows, is very strong. They fear that the proposed tax will prejudicially affect their business, and put their competitors in a position in which they should not be put, at least by government action.


James Lorimer Ilsley: What is the competition they fear? Molasses?


Gordon Graydon: The competition of
molasses is, I am informed, important, especially in the province of Quebec.


[Stage Direction]
Resolution agreed to.
18.	That the tax on carbonic acid gas and similar preparations used for aerating nonalcoholic beverages provided for in section four of schedule II to the said act be increased from five cents per pound to twenty-five cents per pound.
James Lorimer Ilsley: I have to propose an amendment. This tax, as it stands in the resolution, does not satisfy me and has not satisfied me from the beginning. In the first place, it seems to me far too light, when one considers that the amount of money paid for soft drinks in Canada is something like $55,000,000 a year. One sees every day in the streets these large trucks loaded with soft drinks, especially, of course, during the summer months, and in my opinion it is a legitimate object of taxation. The industry itself does not deny this.
In the past we imposed the tax on the carbonic acid gas. That has had certain disadvantages. In the first place, still drinks, so-called, are competitive with the aerated beverages, and it seems unfair to place a tax on the aerated beverages without imposing any on still drinks.


Gordon Graydon: That is the same principle as I raised before.


James Lorimer Ilsley: With regard to corn syrup? Well, yes; but in that other field I do not know where you will move the line, unless you take it off everything, not to have some demarcation; and in this instance, when the tax on the aerated beverages becomes substantial, a discrimination between them and the still drinks exists which should not be there. There is some advantage in a tax on carbonic acid gas, in that it taxes the counter drinks, which some other forms of tax would not do.
Therefore, everything having been taken into account, it has been decided to propose this amendment. It puts a very much heavier tax on the soft drink industry, but it also eliminates a great deal of discrimination. In the representations which have been made tc
Special War Revenue Act

the officials of the department and to myself, the stress has been laid on the undesirability of discrimination rather than on the undesirability of taxation. The proposed carbonic acid gas tax resulted, I will not say in frenzied protests, but certainly in strenuous and repeated protests, delegations, petitions, all sorts of communications by telegram, letter and otherwise, and I think there is considerable ground for them. I am not sure that what I am going to propose will suit the industry any better, but it is going to be a much fairer tax and a much heavier tax. The amendment, which is an addition to resolution 18, reads:
Resolved, that it is expedient to amend resolution No. 18, proposing amendments to the Special War Revenue Act introduced on April twenty-ninth, one thousand nine hundred and forty-one by adding thereto the following: "That schedule I to the said act be amended by adding thereto the following section as section eight:
_ 8. Beverages consisting of unfermented fruit juices and imitations thereof; carbonated beverages or aerated waters; all other compounded or mixed soft drinks put up in bottles for sale-25 per cent and to provide for exemption from the tax on carbonic acid gas in cases where this commodity is used in the manufacture of the said beverages."
That any enactment founded on this resolution shall be deemed to have come into force on the twenty-third day of May, nineteen hundred and forty-one.


Mr. GIBSON:: I so move.


Grote Stirling: It is twenty-five per cent of what?


James Lorimer Ilsley: It will be twenty-five per cent of the sale price by the manufacturer.


Gordon Knapman Fraser: This will not apply to apple juice?


Alexander Malcolm Nicholson: How much was it proposed to raise under No. 18 as it originally stood, and how much will the estimated revenue be under the resolution as amended?


James Lorimer Ilsley: The estimate under the tax as originally proposed, for the full year, was $2,000,000, but I am told that is high and that it would probably not have yielded that much. An estimate of the amount to be obtained under the resolution as amended would be $6,000,000 or $7,000,000.


Grote Stirling: I do not quite follow
this as it is now before the committee. If I understand it aright, the resolution as amended is what appears in resolution 18, and we add this amendment to it.


James Lorimer Ilsley: That is correct.
(Mr. Ilsley.]


Grote Stirling: In that event, it appears to me that resolution 18 imposes a tax on carbonic acid gas and the second paragraph of the amendment exempts it.


James Lorimer Ilsley: Only when it is used in the
manufacture of the drinks which are subject to the twenty-five per cent ad valorem tax.


Grote Stirling: That is what resolution
18 says-"used for aerating non-alcoholic beverages."


James Lorimer Ilsley: Yes, but there is the soda
fountain business. Under this proposal the carbonic acid gas tax will apply on the sale of carbonic acid gas to proprietors of soda fountains. There will be no way of escaping that. But if it is sold to manufacturers of drinks, that is, bottlers who manufacture drinks and put them up in bottles, then they buy it tax free, and the twenty-five per cent tax steps in on the sale price of that manufactured product.


[Stage Direction]
Amendment agreed to.
Resolution as amended agreed to.
19.	That schedule III to the said act setting out the exemptions from sales tax be amended by striking out under the heading "farm and forest" in the seventeenth and eighteenth lines the words "forest products, when produced and sold by the individual settler or farmer" and replacing them by the following words:
"Forest products, not to include lumber, when produced and sold by the individual settler or farmer; "
Mr. O'BRIEN:	Will the minister explain
the new sentence. It seems ambiguous. I spoke to the hon. member for Cumberland (Mr. Black), and although we are both in the lumber business we read the very opposite idea into the sentence. Does it mean that all forest products except lumber are to bear the sales tax, or just the reverse, that only lumber of all forest products will bear the tax?
James Lorimer Ilsley: This is an exemption. Schedule 3 is the schedule of exemptions, and when you insert in any one of these exemptions the words, "not to include lumber," it makes lumber subject to the sales tax.
Mr. O'BRIEN:	Could it not be worded
something like this: "Forest products when produced and sold by the individual settler or farmer, but not to include lumber"?


James Lorimer Ilsley: It is the same thing.
Mr. O'BRIEN:	I am afraid not. Do I
understand that all forest products save and except lumber are free from the tax?


James Lorimer Ilsley: That is correct.
Mr. O'BRIEN:	Then I read the sentence
both ways.

Special War Revenue Act


James Lorimer Ilsley: Not with the commas as
they are.
Mr. O'BRIEN: It depends on the inflexion of the voice.


[Stage Direction]
Resolution agreed to.
20. That the said schedule III be further amended by deleting therefrom the items under the caption "building materials".
Mr. MACDONALD (Brantford City):: With regard to resolution 20, I have been asked to make certain representations. There is a great shortage of houses in the city of Brantford, more particularly working men's houses.
I hold in my hand a copy of the Brantford Expositor of Tuesday May 13, in which there appears an article on the front page under the heading "Housing problem again discussed by council". The housing problem there, being as severe as it is, has been discussed in the city council on many occasions. To-day there are not sufficient houses in the city to house the working people, and the city council had arranged for the building of low cost houses. It was proposed to build these houses under the National Housing Act. It will be recalled that under that act, where the total cost of the house including land is $2,500, the lending company and the government will advance up to ninety per cent of the cost. When the city was making arrangements to build these low cost houses, the eight per cent tax on building materials was not in existence. With the addition of the eight per cent tax on building materials it is absolutely impossible to build a working man's house for $2,500. It puts it beyond the $2,500 class. I may be asked, why not pay the additional money, which is $2,600 or $2,700? My answer is that when you get beyond the $2,500 class you do not get the ninety per cent of the cost of building as a loan; you are limited to eighty per cent.
I also hold in my hand a resolution passed by the council of the city of Brantford in which they refer to the scarcity of houses for rental purposes. The resolution refers to the additional tax on building materials and is to this effect. In the first place, the city requests that the eight per cent tax shall not apply on building materials which go into the construction of low-cost homes. Whether that can be worked out and whether the act could be administered in such a way that the tax would not affect low cost homes, I cannot say, but I know that rebates have been given by the department in other connections. In the second place, the resolution requests that the loan on low-cost houses should apply to any house costing $3,000 or less. The increase in the cost of building is not only in connection with the eight per
cent additional tax but also in connection with other costs which have gone up. When the National Housing Act was brought down, I thought it was quite proper to have the ninety per cent loan applied only to houses costing $2,500, but to-day a working man's house cannot be built for $2,500; the minimum is $3,000. The housing act is administered by the Minister of Finance, and I would respectfully suggest to him that if it is impossible to take off the eight per cent on building materials which go into low-cost houses, he step up the amount from $2,500 to $3,000 so that ninety per cent loans can be applied to that class of houses.
I wish to take this opportunity to congratulate the Minister of Finance not only upon his address of several weeks ago, when he presented the budget, but also upon his patience and the courteous manner in which he has presented these resolutions to the committee. I know we all appreciate it very much. I am sure he will take into careful consideration my suggestion on behalf of the working people of Brantford that some provision be made whereby we can build workingmen's houses.


John Ritchie MacNicol: Houses for the workingmen of every town and city.


Alexander Malcolm Nicholson: I endorse what has been said by the hon. member for Brantford City. On Wednesday May 7 I discussed the question of war-time housing, making special reference to this item. On that occasion I discussed the matter from the point of view of our war industries, pointing out that at the beginning of the last war we had a surplus of from 7 to 15 per cent of vacant houses in Canada as a whole, whereas at the present time we have a surplus of possibly around one per cent. Since I delivered my speech on May 7, I have had communications from many places, from British Columbia, Alberta and Manitoba, stating that in the larger centres where there are war industries and military encampments there is a serious shortage of housing. I was told of one place in British Columbia where twenty-five people are living in one house in which there is just one bathroom. We have a serious problem of overcrowding in nearly all the cities in Canada, especially those in which there are war industries.	*
The minister, in his budget speech, in discussing this question mentioned having refrained during nearly two years of war from suggesting any discouragement to building. He said:
Having refrained during nearly two years of war from suggesting any discouragement to building, it has now been decided to recommend the removal of building materials from the list
308S
Special War Revenue Act

of exemptions under the sales tax. In the meantime, the provision for home improvement loans has been exhausted, the application of the National Housing Act has been narrowed, and the War-time Housing Corporation has been set up to provide for the more urgent housing needs.
On that occasion I pointed out that the appropriation for war-time housing was altogether too small in view of the urgency of the problem. We are embarking upon an expenditure of around a billion dollars a year, and the experience in the United States during the last war indicates that there might very well be a wastage of ten per cent as a result of our not having adequate housing. At the present time we have a surplus of labour in many communities, but as more men enter the army and greater difficulty is experienced in securing housing, these war industries are going to suffer from men being unable to live near their work and find housing for their families.
I think the minister has not given this problem the consideration it deserves. Would he be good enough to make a statement at this time as to the findings of his department in connection with the housing problem in Canada, and as to whether the representations that I am sure have been made to him regarding the removal of building materials from the sales tax exemption is not going to have an injurious effect on the efforts to cope with this urgent problem? As the hon. member for Brantford City has pointed out, I believe we are going to have great difficulty in getting low-priced housing built under the national housing scheme in a great many of these cities where there is great need. Would the minister be kind enough to make a statement now or to-morrow regarding the housing problem as it is viewed by his department?


James Lorimer Ilsley: I am not in a position to make any extended statement; it is five minutes to eleven anyway. The reason why this exemption is being removed is this. Building materials were subject to sales tax until three or four years ago when they were exempted to meet a specific situation. It was one of the steps taken to relieve unemployment. That is now ended; we have not an unemployment situation in the country, quite the contrary.


Alexander Malcolm Nicholson: But we are short of housing.


James Lorimer Ilsley: The reason why building materials were removed from the sales tax exemption no longer exists. I should not think there would be any notable break in the building of housing as a result of making 
these materials again subject to sales tax. A great deal of the need for housing is for housing of the type handled by the War-time Housing Corporation, not the type which goes on under the National Housing Act. The housing corporation is doing it on behalf of the government; the government is owning the houses, and this private building will, I think, go on under present conditions pretty rapidly and successfully whether this tax is on or not.
The tax is a means of obtaining revenue,, an important revenue item, the amount expected to be derived from the tax being $15,000,000 for a full year.
The main representations that I have had recently from the construction industry have-not been in reference to the proposed step; they have been in reference to the necessity of obtaining licences for non-residential building.


Gordon Knapman Fraser: The minister has said that this tax will not affect building. Here is a letter I have received from the city clerk at Peterborough. He says:
I may say that a number of people have been in the last six weeks interested in city lots for the purpose of erecting homes but since the sales tax announcement their plans have been shelved. ^Unless some action is taken in the sales tax it is quite definitely apparent that the building of homes in this district will be-limited this year.
I understand that the National Housing Act has been fixed so as to take care of this sales tax; the valuation has been advanced.


James Lorimer Ilsley: Has it?


Gordon Knapman Fraser: I
understand so from the housing department. But the advance is so much that these people cannot afford it, especially on top of the national defence tax, which is going to raise the price of labour, and that also will have to be taken into consideration.


James Lorimer Ilsley: May I ask the hon. gentleman, what are these persons in his constituency who have changed their plans, going to do instead for shelter?


Gordon Knapman Fraser: Most of them are people in key-positions in war industry. They will have to stay on, perhaps two or three families in a house, which they do not want to do.


James Lorimer Ilsley: It is not the policy of the government to encourage people to build unnecessarily. The policy is to divert as much as possible of the labour and material resources of the nation into the war effort,

Foreign-Language Newspapers
rather than into the building of houses for themselves if that can be deferred. We are looking at things differently now from the way we were in 1937 and 1938, in just the opposite way. Then we had unemployment, and it was desirable to get as many people to build houses for themselves as possible. Now it is desirable for them to make the old house do as far as they possibly can, so as to leave the steel for the radiators free-if it is steel.


John Ritchie MacNicol: Iron.


James Lorimer Ilsley: The iron and all the materials that go into building. Instead of this nation devoting its efforts to the satisfaction of private demands, civilian demands, we want to make those efforts available as much as possible for the prosecution of the war. That is a sound reason for not continuing in our revenue laws an exception which was made to meet a specific situation three or four years ago.


Gordon Knapman Fraser: Yes, but the populations of Brantford and of Peterborough have been continually increasing, and we need new homes. The War-time Housing Corporation is putting up homes, but after the war is over, those homes will be tom down and perhaps given away, at a loss of $800 or $900 to the government in connection with each unit. Under this suggestion the government would not lose a cent. I have here a magazine published in the United States which says:
One thing all investigators agree on: The lack of good housing for defence workers is slowing up America's rearmament programme.
Another publication of the Pan-American Union says that in Costa Rica a housing programme is under way. Even there the government is financing the programme itself. I know it is eleven o'clock, Mr. Chairman, but I shall take only a moment to finish. I believe the minister should give some consideration to this proposal. Let the builders pay the tax on building material, but in connection with these low-cost houses there should be a rebate of some kind. Give some encouragement to the man who is working to carry on, raise his family and own his own home. Give him something to work for. The minister will not be doing that if he does not restrict this tax on building material as it has been restricted in the past. It is not fair to the man who is working.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Friday, May 23, 1941.