1944-07-12

MR. LACOMBE-REFERENCE TO ACTION TAKEN BT THE HOUSE ON JULY 4

Mr. LIGUORI LACOMBE (Laval-Two Mountains):: Mr. Speaker, I rise to a question of privilege. I do not intend to question the decision taken by you, sir, and by the house, but my contention is that I am entitled to give this chamber some explanations I was prevented from giving on July 4.
According to the rules of the house, and Bourinot's Parliamentary Procedure, at page 303, this right is given to members, and is set out in these words:
In the Canadian house, questions of privilege take a wide range, but it may be stated in general terms that they refer to all matters affecting the rights and immunities of the house collectively, or 'to the position and conduct of members in their representative character.
As reported at page 4514 of Hansard this is: what occurred:
Mr. Speaker:	Will the hon. member for
Beauharnois-Laprairie please be seated.
I have already said to the hon. member for Laval-Two Mountains (Mr. Lacombe) that I would not tolerate any further interruptions of the speech made by the hon. member for Beauharnois-Laprairie. It is apparent that the hon. member does not intend to obey the injunction of the Chair, and I will have to name the hon. member.
I therefore name Liguori Lacombe, member for Laval-Two Mountains.
Mr. Mackenzie (Vancouver Centre):	Mr. Speaker, in accordance with the rules of the
house-
Mr. Lacombe: I only put a question to my hon. friend.
Mr. Speaker: Order.
Mr. Mackenzie (Vancouver Centre):	Iu
accordance with the rules of the house, and in the absence of any explanation by the hon. member, I shall have to move, seconded by the Postmaster General (Mr. Mulock):
"That the hon. member for Laval-Two Mountains, Liguori Lacombe, be suspended from the service of the house for a period of seven days."


[Stage Direction]
Motion agreed to.
Mr. Speaker:	I would ask the sergeant-atarms to remove the lion, gentleman.
I did not then have the opportunity of availing myself of my right to give the house some explanation. I quote from page 367 of Bourinot:
. In case, however, a member persists in unparliamentary conduct, the Speaker will be compelled to name him, and submit his conduct to the judgment of file house, in accordance with a very old rule. . . .
In such case the member whose conduct is in question should explain and withdraw, and it will be for the house to consider what course to pursue in reference to him. If the house consider the explanation sufficient, it will be proper for a member to make a motion to that effect, which will be adopted and duly recorded.
And at page 368:
The house in all cases should give every proper opportunity to an offending member to make such a defence as may satisfy the house and avoid a reprimand.
As will appear from the reference to Hansard which I have just mentioned, the procedure indicated by Bourinot has not been followed. That is why my privilege as a private member of this house has been infringed.


[Stage Direction]
The house in committee of ways and means, Mr. Bradette in the chair.
Resolved, that it is expedient to amend the Income War Tax Act and to provide:
1. That for 1944 the total tax oil individuals be reduced by one-half the amount of the refundable portion thereof, less one-half credits
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[Stage Direction]
for savings, and that for 1945 the total tax on individuals be reduced by the full amount of the refundable portion thereof, less credits for savings.
Mr. BENCE:: I should like to express my personal regret that the administration has seen fit to take this step. In the budget debate of 1941, I pointed out that we should have some type of compulsory savings in war time, when so much of our income is required for war purposes and when expenditures should be reduced to the minimum. I indicated that one of the best methods of obtaining this money- and it has been so obtained in the last two years-was through a compulsory savings tax. It is elementary to point out that at a time when we must curtail our expenditures so as to make available large sums of money for war purposes, we should either through taxation or through compulsory savings or otherwise take as much money as possible from the people of the country. I advocated this principle two years ago, and felt at that time that for those in the lower income tax brackets we should make the tax as light as possible, in order that the people might be enabled in the future to enjoy the benefits of the extra time and effort they were devoting in such great measure to war production.
It is most important in the post-war period that there be purchasing power in the hands of the people, particularly the small or common people, if I may so describe them. Under the present system of persuading them to purchase victory bonds and war savings certificates we will obtain a certain amount of money; but certainly the more equitable plan was that of compulsory savings.
I am sure the administration will regret very much having taken this step. If they had approached the task in a more vigorous and forceful manner, perhaps as is done in connection with victory loan and war savings campaigns, they would have given the people a more complete understanding of the full value and meaning of compulsory savings. The minister would have been far better off had he reduced the tax in the lower income tax brackets and retained this feature of compulsory savings to serve as a cushion in the transition from war to a peace-time economy. We would have placed in the hands of people who normally do not save very much a considerable amount of purchasing power, as against the present tendency of concentrating that purchasing power in the hands of fewer and fewer individuals. I regret very much indeed that the minister has seen fit to cancel this provision, which was in force for two years.


Mr. COLD WELL:: May I add my voice to that of the hon. member for Saskatoon City.

I am sorry that the government has not seen fit to accept a suggestion which was perhaps even a little more sweeping, that instead of removing the savings feature in the lower income tax brackets we remove the tax and keep that savings feature. I agree with the hon. member that had we done that we would have collected the same amount of money, and placed in the hands of the people after the war some very much needed purchasing power.
When I read what some of the economists, analysts, and forecasters are saying with respect to the future, as to the possibility of a boom and then a depression, I realize it is essential that ways and means be found to increase the purchasing power of the people in the post-war period, and particularly to encourage persons who are able to do so to prepare for that time.
I know that at this stage it is of little use to make the suggestion I have made, and I do not purpose spending a great amount of time in the discussion. I am sorry we have not done this, because the same amount of money would come into the hands of the government; and then in the post-war period these people in the low income tax brackets, who to-day are feeling the incidence of taxation perhaps as very few other groups in the community are feeling it, would have had some - purchasing power with which to buy the things they need and at the same time promote the industry of the country.
As time goes by the government will probably see the wisdom of a proposal of this kind. As I said before, it would not reduce the amount of money the government would have in hand, nor would it allow any more expansion of purchasing power than is proposed in the budget. These suggestions would have been all to the good, had they been followed.


Mr. HANSON (York-Sunbury):: As the hon. member for Saskatoon City has pointed out, the principle of compulsory savings was advocated from this side of the house, and was accepted by the government on the theory that it would prevent inflation, add to the war revenues of the nation, and create a backlog for the citizens of the country in the days to follow the war. I thought the principle was sound, and I still think so. But I am bound to say that the reaction in' the country was not nearly as favourable as I had hoped. Particularly among the.older ranks of our citizens, there was an astonishing measure of resistance. A person over sixty-five years of age who was compelled to pay this compulsory saving tax took the view, rightly or wrongly, that he would never see

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his money again, and that probably he would be dead before any refund was made. That was the type of resistance offered against the tax.
Nevertheless the government has determined on the measure now before the committee, one which will bring relief to two classes. I referred to this matter in the remarks I made in the debate on the budget. Those in the lower brackets, who had to make compulsory savings, felt they could ill afford to do so, having regard to the enforced deductions from their purchasing power through an already depleted pay cheque. I would like to read lo the committee a letter I received only the day before yesterday, commending the amendment to the budget offered by the official opposition with respect to proposed elevations in the exemptions. That amendment was defeated in the house yesterday. I shall not take time to read the letter, but shall be content to say that it was symptomatic of many communications I have received. I fancy that many of those in the lower income tax brackets who had to pay this compulsory savings did not have compensating factors such as mortgage payments or life insurance payments that those in the higher brackets may have had. The departmental administration will know much better than I whether that is so or not. I always had the idea that the compulsory savings provision bore more harshly on those in the lower brackets than it did on those in the higher, but I may be wrong about that. I should like the minister to tell us concretely what the loss will be in the six months from July 1 to the end of 1944, on this year's figures as far as they are available, and what the loss will be in a full year.
There is a suggestion I want to make, which I have communicated to the minister and to the Department of National Revenue. As I understand the law, these compulsory savings are not assignable by the taxpayer to anyone. I assume that was to prevent the trafficking in these savings certificates, if I may so term them, and I think that is proper. If they were assignable and money could be lent upon them, I can see the possibilities of a grave evil being carried on by speculators and otherwise who would buy them up at greatly reduced values. I am not suggesting that they be assignable for any commercial purpose, but a husband ought to be able to assign his compulsory savings to his wife, and the wife ought to be able to assign hers to her husband, or either or both ought to be able to assign savings to a dependent. This would not give the right of cashing in the savings. I can see a good deal of virtue in the suggestion and I realize also that there may be administrative difficulties in the way. I am not suggesting that these assignees should be able to anticipate payment, but a husband ought to be able to assign to his wife as a gift. It would not be operative as a gift at the time, but it would become a gift in fact after his death or upon the maturity of the term.


Mr. CRUICKSHANK:: My wife gets my money now.


Richard Burpee Hanson: I know
there are some men who have the habit of allowing their wives to go through their poeketbooks every day, but I have never allowed my wife to do that. I am serious about this because I believe it is a constructive suggestion. I ask the minister and his officials to give serious consideration to these suggestions. I do not think there is an insuperable difficulty in the way. Take a man who had possibly $800 accumulated over a period of time. It might be that that is his only estate, and probate would have to be taken with all the accompanying expenses in order to get the government to release the money. If the compulsory savings were assigned to his wife or his issue they would automatically be paid in a proper case. I suggest that to the department in great seriousness.
I do not suggest that it ought to be anticipated in any way or that it could be assigned for collateral purposes. However, the government are now allowing the twenty per cent refundable taxes paid under the excess profits tax to be assigned in a given case as collateral for loans in anticipation of capital expenditures by industrialists in the post-war period for the purposes of providing employment. But in this case the husband ought to be allowed to assign to his wife, especially a man in advanced years who may not live to see the payments come due. This should apply also in the case of the wife. Then it should be extended to take care of dependents.
I offer this suggestion in good faith to the minister. It has come to me from a man who thinks seriously about these taxation problems. He is far removed from political considerations in this country, but he wants to see the law ameliorated as far as possible in the interests of the taxpayer, who after all is more or less the forgotten man in this country.
While I am speaking about the forgotten man, I wonder if you will consider it relevant, sir, if I take this opportunity to say a word on behalf of a group of taxpayers in this country who are indeed forgotten men,
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namely, the private members of parliament. I hope I shall be allowed to say what I want to say on the theory that I have no particular axe to grind. It does not make much difference to me whether the indemnity is $4,000 or $5,000; I am in the red now so far as indemnity is concerned, and I have been living on capital ever since this war started. But that is not the case with a large number of members of this house. For some reason, whether it is modesty or humility or fear or what-not, private members of parliament seem loath to get up and tell the country their exact position.
I can best illustrate the position of the private member by referring to my own case. As a private member I receive $4,000 indemnity if I do not lose too many days. If I lose more than fifteen days I am penalized to the extent of $25 a day. During last session, as well as this session, I was not able to be here every day, and I may be penalized. However, we will leave that out of consideration. According to the records I have established, the government deducts at the source from my indemnity cheque a total of $1,480 per year because I am treated as a single man without dependents. I have lived in Ottawa a good many years, and I think it is the desire of my constituents that I should live in a proper state, a state becoming a member of parliament representing one of the finest constituencies in Canada. I can honestly tell this house and the country-I am not making any plea on behalf of myself-that it cost me $10 a day to live in Ottawa, including gratuities. With a session lasting 180 days that means $1,800. If you do a quick sum in mental arithmetic, that $1,800 plus the $1,480 makes $3,280 to be taken out of my sessional indemnity.
I like to go home once in a while and I have to travel overnight. I am getting so old now that I like to have a compartment, and I cannot go home and back under $25 for the round trip. If I do that twice a month it means $50, and six times $50 amounts to $300. How much is there left from my sessional indemnity?


Mr. SLAGHT:: Do you like to visit your constituents occasionally?


Richard Burpee Hanson: Absolutely, and I like to go home and see the wee wife once in a while. I am putting this forward as an actual case. I know there must be many hon. members who have not a backlog upon which to draw to support themselves in the position in whieh a member of parliament ought to support himself.


Mr. MACKENZIE (Vancouver Centre):: Ninety per cent.


Richard Burpee Hanson: I assume it is ninety per cent. No one has asked me to make this speech, but I did feel that in justice to the members of this house the country should know something of their plight. How do they treat their members down in the United States?


An hon. MEMBER:: Some of us have to keep up two establishments.


Richard Burpee Hanson: I have to keep up two homes, one here and one in Fredericton.	*


Mr. FRASER (Peterborough West):: And
what about the extra income tax they take off that?


George Alexander Cruickshank: Leave him alone. He is making a good job of it.


Richard Burpee Hanson: I have
taken some trouble to ascertain what the position is in the United States. The senators and members of the United States Congress get a yearly salary of $10,000. I suppose -that is subject to income tax, I do not know; I am taking it for granted that it is. In addition, each member of the senate and house of representatives gets free postage and free telegraph service. We get free postage under certain conditions here, but certainly my telegraph bill is substantial. When I had the honour of leading the opposition for three sessions the telegraph bill and the telephone tolls which I had to pay out of my indemnity grew to such proportions that I suggested to officials of the house and to my friend the finance minister that as I was an official of parliament the government should pay the telegraph and telephone tolls, which they did, and for which I thank them. But as a private member I get no such consideration, and I am not at the moment arguing for that here.


Mr. McGEER:: Did they pay them for the C.C.F. too?


Richard Burpee Hanson: I do not know. You will have to ask them yourself. I am not in their confidence.
In addition, the members of the United States Congress get travelling expenses t-o Washington and back home. Of course we have a certificate of membership in this house which carries the members free on the railways. The members of the United States Congress also get a grant for stationery and supplies, and for clerical help-and I want the members to listen to this-for clerical help a j member of the house of representatives gets ^ $6,500 a year and the senators $15,120 a yeayr.
jg Mr. ADAMSON: Free of income tax.

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Richard Burpee Hanson: All those items are free of income tax. The duties of a member of the United States senate and of the members of the house of representatives may be heavier and take up more months of the year than do the duties of members of the House of Commons here. Nevertheless we are here for six months every year, and I can remember when it used to be only three months. I can recall having made a sporting offer to my friend the Prime Minister in the early 1920's that if he would limit the session to two months I should be glad to serve for 12,000 a year, and if for three months I would be glad to serve for $3,000 a year. It would have paid me in those days to take much less if I could have been freed from attendance in Ottawa.	,
The disparity between what is paid by our rich neighbours to the south to the members of congress and what is paid to members of parliament in Canada is so glaring that I thought I ought to call attention to it. The country ought to understand what the situation is, and I invite hon. members, if they will, those who are feeling the pinch of this situation, to get up in their places and fearlessly tell the country just what their financial position is having regard to the extremely heavy income tax imposed upon their indemnities, which they have accepted without a murmur so far as I know because of the exigencies of war.
Let me say this as a tribute to my fellow members of this house, that taking them by and large there is no more patriotic group of citizens in Canada than the membership of the House of Commons. We may differ about principles and practice, about what we should do and would do in a given case, but there is not a man in this house who does not want to see this war won and won as quickly as possible, and who would not give his last red cent if he could help win this war one day quicker. The country ought to understand that.
In addition, in the United States if a member of congress takes ill, if he has to have his tonsils or his adenoids out or be operated on for appendicitis, he is sent to a government hospital free -of charge and gets the best medical care and nursing in the United States, all free of charge, all at the expense of the taxpayer. I am not suggesting that we have that here, although I would like to see the government of this country do something for the health of the members of this house by reconditioning the air in this chamber. That would be a very fine gesture that we could 'make, and I commend it to my friend the Minister of Public Works (Mr. Fournier) if
he is here and is receptive, or to his successor whoever he may be, and I have no idea who that will be. There is no specific authorization for this free medical treatment at Washington, but it is a custom of long standing, and that is something to be taken into consideration, because it costs money to be ill in Ottawa. I know that from personal experience. It costs a lot to die here in Ottawa, too. I do not suppose any of us has had that experience, but if you wrant to find out about it, you had better inquire at some of the undertaking establishments and see what it will cost to be outfitted to be sent home.


An hon. MEMBER:: You are not going to die here!


Richard Burpee Hanson: Not if I
can help it. I am serious about this matter. I commend the situation to the members of the administration, and I do not want them to say:	Oh, this is a most inopportune and
inappropriate time to bring this matter up. It is brought up only because the matter has come to a head.
I will go a good deal further. I will say that it is a perfect disgrace to Canada, the meagre salaries she pays to certain public servants of this country.. When you consider that the salaries of the Prime Minister and of the chief justice of this country are only $15,000 a year, and that you are paying many men I have no doubt down in the Bank of Canada a good deal more than $15,000 a year-[DOT]


Gerald Grattan McGeer: What for?


Richard Burpee Hanson: The member for Vancouver-Burrard asks what for. I suppose I could counter by saying, to counteract the member for Vancouver-Burrard.
It is nothing less than a scandal that the Prime Minister should receive only S15,000 a year-and that is subject to income tax. True, he also gets the $4,000 indemnity and an allowance for motor car, which he more than spends. The salary of a cabinet minister under the present income tax rates is wholly inadequate. I asked one of my friends in the cabinet how much net he had after he had paid his income tax. I am not going to name him, but he told me that it was less than $7,000 a year, and he had to to live on that as a cabinet minister should. You just cannot do it, keep up the position on that salary in the manner that custom, usage and everything else demand. I commend to the members of the treasury benches a serious consideration of the plight of the private member.
You may say that this is no time to do anything about it when everybody else is making sacrifices. I say that there is no other class
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in Canada which is making sacrifice of time and of ability and of capability and of money comparable to the sacrifices made by members of this Canadian House of Commons. I stand by that statement, notwithstanding the criticism that I expect may come to me from certain portions of the public press. I am willing to take whatever criticism comes to me. I can justify the plea I am making on behalf of the private members of this house and on behalf of the cabinet ministers of this country.
I suggest to the members of this house that if they approve the lead I have endeavoured to give them in a wholly non-partisan way, they frankly tell the house and the people of this country what their plight is. The hon. member for Macleod (Mr. Hansell), who is not in his seat, has had something to say on this matter in days gone by. I am sure the thinking people of this country will react properly to a suggestion that some measure of relief be granted to members of parliament, because they know that a professional man cannot leave his business for six months in the year and come down here to Ottawa and perform his duties as a member of parliament without seriously affecting his professional income. A medical man, for instance, might just as well fold up his practice. I am sure that the medical men in this house will bear me out. How much money can a practising lawyer earn at the bar and attend to his duties as a member of parliament? Yet lawyers as a class are sent here in greater numbers than men of any other vocation, because they are expected to have-and have, I assert with great confidence-capabilities and abilities which commend themselves to their constituents who send them here to help make the laws of this country.
I appeal to the Minister of Finance to do something, not for himself but for the common members of this house. They are the people who are suffering most; and I think it is time that somebody stood up in his place in this house and said what I have tried to say, however inadequately I have said it.


Mr. COLDWELL:: I think that this might easily become a political issue-


Richard Burpee Hanson: I hope not.


Major James William Coldwell: -if one group alone expressed the opinion which has been expressed by the hon. member for York-Sunbury (Mr. Hanson). Consequently I am rising to say that I agree with what the hon. member for York-Sunbury has said. I know what the position of the private member of this house is. Not all of us are required, perhaps, to live on the standard which the hon. member

for York-Sunbury as a former cabinet minister is required to maintain in this city; but I think that every one of us fully realizes the position in which private members have been placed during the last two or three years. There have been no complaints on the floor of this parliament. There have been discussions-I have heard them-among members in groups. I have even heard some hon. members say that if this condition were to continue they would have to withdraw from the house when the next election comes. I know too that many hon. members during the past two or three years have been compelled to exist- and I use advisedly the word "exist"-upon the savings of former days, if they have any. I know hon. members who have had to forgo their life insurance, who have exhausted their savings, and have had to do a number of other things which ought not to be expected of the membership of this house.
We are all mindful of the situation in which the rest of the country finds itself at this time, and the necessity for doing everything we can financially in order to win this war. But there is a time when public service should be recognized and when, if it is not recognized, some of the men best equipped to carry on the duties of a member of parliament-


Mrs. NIELSEN:: And women.


Major James William Coldwell: -and women, yes-will be compelled by force of circumstances to withdraw from that service.
As I have said, I rise because I feel that a statement of this kind emanating from only one group in this house might be misconstrued, that the outspoken remarks of the hon. member for York-Sunbury might be used by some as a political weapon; and so far as I am personally concerned I would not under any circumstances allow that to be done. I endorse the plea which has been made by the hon. member for York-Sunbury, a plea which perhaps ought to have been made in this chamber long ago; which, perhaps, because of his own personal circumstances he was in a better position to make than some other hon. members. I appreciate what he has said, and congratulate him upon the courage he has shown in saying it.


Arthur Graeme Slaght: I concur in everything that has been said by the hon. member for York-Sunbury (Mr. Hanson) and the hon. member for Rosetown-Biggar (Mr. Coldwell). I do not speak from a personal standpoint.
I do not propose to reiterate any of the considerations which they put forward so carefully and, I believe, so conservatively, but I want to refer to three factors which have not

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been touched oa, and1 then to make a suggestion to the Minister of Finance and his advisers.
My first consideration is that it is, in my view, the duty of a member, in so far as he can do so between sessions, to travel about into all parts and comers of his riding. In city ridings that is not such a task as far as out-of-pocket expense is concerned. In the rural ridings it is different. I am not thinking of myself as suffering in this matter, but in my riding, which extends 150 miles one way and 100 miles the other way, there are many portions which are not accessible by railways or boats, so that you can travel there only by motor car; and in order to perform this very important duty of a member of parliament, to learn at first hand what our people are thinking in order that we may better serve them, there is a substantial cash out-of-pocket outlay, which is made in honestly earning our indemnity. That is one point.
My second point is this. Frankly I believe -and I speak of this matter entirely of my own volition-from informal discussion, that some hon. members are going to find it necessary to retire from public life because they can no longer do their duty to their families or sustain their home obligations if they continue to serve in this parliament. It seeems to me that as we progress we should make service in this house ever more possible for men of integrity and ability occupying the humbler roles in life where they are not blessed with incomes that provide any backlog, where they have not been able to accumulate any savings, and perhaps have a mortgage on their home and are to some extent in honest debt. Our present system with the existing tax burden encourages the well-to-do and even the wealthy man to come to parliament, while to some extent discouraging the common man or the relatively poor man from seeking to find a place in this chamber. There is no one but will agree that that is all wrong, if my diagnosis of the situation is correct.
One other factor. We know that the younger men, from the very nature of the struggle for life, have not been able to provide a reserve of savings, or backlog, as it has been called, to the same extent as older men have been able to do. As one of the members of this house who in years, at least, although I hope not in all respects, must be reckoned among the older men, I recognize that this is more and more becoming a young man's day so far as public life is concerned. That is as it ought to be. It is becoming more and more so in the mother country and in our sister
commonwealth nations of Australia and New Zealand. In the parliaments of those two commonwealths, as far as years recorded on the calendar are concerned, the average is a greater number of younger members than in the Canadian house. These are three points that are worth keeping in mind.
I have a suggestion to make to the minister, and he and his advisers will know whether it can be acted upon or not. If it can, then if there is the courage-well, it is not a matter of courage; it should be the duty of the government to bring it to pass at this session, if they can. If they can properly do it in this way I think the country will be content with it. The suggestion is this. Why should we not divide the present amount-not increase it but divide it-in a fair manner as between what may be regarded as remuneration and what may be regarded as expenses, the latter being an amount to cover the necessary out-of-pocket cash one has to spend. If that were fixed at say $1,500 or $2,000, leaving the balance of either $2,500 or $2,000 as supposed remuneration, only that sum would then be subject to taxation. I leave that with the minister as a modus operandi, if he and the treasury board and the administration believe that this is a matter that ought to be corrected for the reasons that have been placed before the committee this afternoon.


Mr. QUELCH:: The member for MacLeod (Mr. Hansell) spoke on this question on a previous occasion and therefore I will not take up much time discussing it. I could never understand why a member of parliament should be the one individual to pay income tax on his gross income instead of being allowed to charge legitimate expenses against it.


Mr. GIBSON:: All gross income is taxed on salary income.


Victor Quelch: But you are allowed to charge expenses against it.


Colin William George Gibson: Not on salaries.


Leslie Gordon Bell: This is not a salary, surely.


Richard Burpee Hanson: They have made it a salary by the income tax law.


Victor Quelch: Another interesting point is this. If the government thinks that is the right stand to take, why should it not be consistent and deal with cabinet ministers in the same way? Why should the government exempt from taxation expenses on account of cabinet ministers' cars? We have a right to expect cabinet ministers to pay a

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tax on car expenditures. It does not look well to the people to give a special deal to cabinet ministers in that regard. However, the member for Macleod has already dealt with the matter at some length and I do not want to take up the time of the house discussing it now.
Coming to the resolution before the Chair, I am sorry the government has seen fit to introduce this provision. One of the questions of major importance before the country is that of ways and means by which production of goods and services can be maintained at the highest level, and no matter how the government may raise revenue, or how much they may raise, unless production can be maintained at its highest level the war effort is bound to suffer. No one will deny that the heavy taxation of low incomes has in many ways been a detriment to the war effort, a detriment to production. It has meant an increase in absenteeism. I believe the Minister of National Revenue has denied this, but I know it to be a fact. Workers have received cheques and found that when they have been absent one or two days the cheque is larger than when they have worked their full time. The minister has denied this, but I have seen cheques showing this to be the case. Possibly at the end of the year it will be rectified, but at the time the cheque is received the worker finds that after an absence of one or two days his cheque is larger than when he was not absent at all, and that causes workers to be slack. The wiping out of the compulsory savings will not rectify that situation. As a matter of fact, I think the policy of the government should be the opposite. All money obtained by taxation from people in the low income brackets should be credited as savings and the tax wiped out. There are many reasons for this. First of all, it would help to maintain efficient production; secondly it would result in a more equitable distribution of the debt claims against the nation; and thirdly it would help to maintain effective demand after the war. It would build up a large pool of purchasing power in the hands of the very people who will need it most at the conclusion of hostilities. These are three grounds that should be given careful consideration in introducing a change of policy of this kind.
There is no doubt the people of the country are greatly perturbed by the size of the national debt, and perhaps it is a healthy sign that this is so. The people remember that during the depression years they were told by prominent bank managers that one of the main causes of the depression was the war debt. They remember that the debt was only 3-J billions, whereas to-day the direct funded debt

is in the neighbourhood of 10^ billions. The minister has pointed out that the position has completely changed to-day; that the national income has more than doubled although the debt has increased three times. But the minister must realize that there is no guarantee that the national income will be maintained at that figure after the war. We hope it will be, but we notice in the financial papers statements to the effect that it is nonsense to expect the national income to be maintained at the present figure after the war, and that of course is having a bad effect upon the minds of the people. We have no real reason to believe that it will be maintained at that figure. During the war the government has proclaimed that no financial restrictions will be allowed to impede the war effort. Why should they not make a similar declaration with regard to the peace-time period? If the government would declare that the same financial policy will be maintained, so far as the amount of money required to maintain a maximum post-war effort is concerned, a great deal of the fear in the minds of the people would be removed. The government should definitely state to-day that no financial restrictions will be allowed to impede the post-war effort, and we should be given assurance that the national income would be maintained at the present figure. But if the national income is to fall after the war, unfortunately the national debt will not fall with it. While the national income may decrease, the national debt will steadily increase, and of course the burden of servicing that debt will be far heavier than it is to-day.
The minister has also emphasized the fact that the debt is owned internally and that we have a very wide distribution of debt claims. While it is true that we have a wide distribution of debt claims, nevertheless, generally speaking, it is the small bonds that are widely distributed, while the large bonds are held in the hands of comparatively speaking a few people. And of course the bond sales that have been carried out further aggravate the situation. I quoted once before the figures for the third and fourth victory loans, and the same is true of the more recent ones. One-third of one per cent of the subscribers to the loan purchased sixty per cent of the total loan. While it may be argued that among the large subscribers we have insurance companies, nevertheless the fact remains that most of the people who are unable to buy bonds are the same people who are unable to buy life insurance, and that does not help matters. The situation is still further deteriorating owing to the fact that many people have to

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liquidate their bonds. It is all very well for the minister to say that the sale of bonds is voluntary. He knows that in many instances the purchase of bonds is compulsory, because it is all a man's job is worth to refuse to buy bonds in certain plants. If he refuses he may lose his job. Instances have been called to my attention to show that the purchase of bonds is not altogether voluntary. Now what happens? These people buy bonds on the instalment plan and on the date on which the final payment is made they look upon the bond as money and spend it the minute they get it. That happens in many instances.
The minister made a very peculiar argument yesterday when he said he did not think there was any great danger of large accumulations of bonds after the war because, owing to the heavy taxation, if people started buying bonds in large amounts they would have to pay such a high tax on the interest they received. If they invest their money in any concern they will have to pay a tax on the interest they receive. In other words the minister suggests that people will have to stop investing money, because otherwise they will have to pay taxes on the income. That does not apply to bonds any more than to investments of other kinds.


Mr. ILSLEY:: There is a big difference between the situation now and the situation at the end of the last war, when income tax was payable on income from other securities but not on the income from victory bonds.


Victor Quelch: That is true. That is the only way it makes any difference. But the minister also said if people purchased bonds they would have to pay such a high tax that practically all the interest on the bonds would be paid in taxation. That is true of every investment; therefore it will not stop people from buying bonds. As a matter of fact when they find taxation very heavy and as a consequence their incomes small they will seek the safest possible investment for their money in order to safeguard it, and as a result will be more likely to invest it in bonds than in anything else. The minister's own argument proves that after the war there will be a tendency towards heavy investment in bonds.


James Lorimer Ilsley: My whole argument was that there would not be the same tendency as there was after the last war.


Victor Quelch: But the minister did mention the two things, the matter of taxfree bonds and also the fact that the income from bonds would be taxed. I can read his statement if it is desired, for I do not want to misinterpret what he has said. To-day it is
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very hard to know just what the situation is in regard to the holdings of bonds throughout the country, as I am sure the minister will agree. I refer to this fact for the simple reason that there have been so many sales of bonds that might be called fake sales. Sales have been faked time and again, until now we do not know whether a sale is genuine or not. I want to read a letter I received from a prominent Toronto business man in regard to this matter:
In the second last victory loan campaign a special names canvasser called on me and asked what I was prepared to take, and I told him. He immediately suggested that I treble this, and proceeded to give me a high pressure talk to the effect that the bank would lend me the money at the same rate of interest as the bonds carried for a certain period of time, and then, if necessary, at the end of that period the bank would take over all or any part of the excess.
I deliberately let him ramble on, and then I said, "Listen, buddy, if the bank can manufacture money to lend to me to buy bonds, then the bank can manufacture the money, buy the bonds themselves and leave me out of the picture."
To my amazement he promptly answered "right", and then proceeded to divert the conversation and make out the application for what I had said I would take.
This same chap called on me again a few weeks ago-an awfully decent chap, by the way-and in the course of conversation he frankly admitted to me that his bank manager had persuaded him to sign up for $20,000 of this last loan, on the definite understanding that the bank would lend him the money at the same rate of interest as the bonds carry for a period of six months, and that the bank would then take over the bonds in entirety. He was very frank in admitting that the whole thing was rotten camouflage.
Just as long as practices of that kind are permitted we can understand that there is never any danger of a victory loan not being subscribed in full. If the banks are willing to advance money for the purchase of bonds on the definite understanding that within a certain period of time they will take over the bonds, it becomes simply a question of how much money the banks are prepared to create and lend.


James Lorimer Ilsley: Those practices are discouraged by the national war finance committee, and I do not think they are widespread.


Victor Quelch: Why should they be permitted at all? They defeat the very purpose the minister is trying to accomplish in selling bonds. One of the main purposes is to curtail spending. If we are going to allow the banks to create Inoney with which to buy bonds we are not curtailing the spending of the people; we are increasing the amount of money in circulation.	[DOT]
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James Lorimer Ilsley: I join with the hon. gentleman in absolutely condemning that practice; I say it is discouraged by the national war finance committee, and I do not think it is widespread. The hon. gentleman asks why it is not prohibited. Is he suggesting that it be made a criminal offence, or something like that?


Victor Quelch: No, I do not suggest that, but we are having victory loans fairly often, and the sale of war savings certificates goes on continuously. I do not see that anything is gained by a man borrowing money with which to buy a bond. If he has not the money with which to buy the bond let him wait until the next loan comes along, and buy his bond then. Why should you urge the banks to lend people money with which to buy bonds? Let these bonds be purchased entirely out of savings and prohibit the banks from lending money for the purchase of bonds at all. Otherwise it gives an entirely false picture of the situation. If we had only one sale of bonds a year, or one every two years, I could appreciate the need for that, but when we have a loan every six months-and as a matter of fact people can go into the open market and buy them in between loans- what is to be gained by borrowing money for the purchase of bonds? They can just as well wait until the next loan.


James Lorimer Ilsley: Many people are more likely to save money in that way, by paying back the loan out of current earnings.


Victor Quelch: I do not know if that is the actual experience, but I do know many people have borrowed money to buy bonds and they are not paying back that money. They say the banks are not in a hurry for it, and they let it go, at least for six months. I suppose after six months the rate of interest they have to pay on the borrowed money becomes greater than the rate of interest they receive on the bond and after that they may try to pay it back or let the bank have the bond.
I agree with the minister when he says that the internal debt is not harmful provided it is equitably distributed. Unfortunately we have not that equitable distribution. If we had; if everyone owned a proportionate share of the national debt and people had to be taxed to pay their own interest, we could wipe out the debt, which would be a very pleasant situation. But our policies to-day are not even making an approach to that situation. In view of that fact we must consider very carefully the danger of increasing the debt at the present rate. Our debt will continue to increase, not only during the

war but after the war. At no time in our history has the public debt of this nation ever decreased. We hear people refer to the years from 1924 to 1931, when we had a balanced budget. It is true that we had a balanced budget during that period and that the national debt decreased. On the other hand the provincial debt greatly increased, so we came out of that period with an increase in the total public debt amounting to some $250,000,000. In other words we decreased the national debt by around $250,000,000 and increased the provincial debt by about $500,000,000, so that we still had an increase of some $250,000,000 in the public debt. Of course I agree that if we are bound to have an increase in the public debt it is far better to have that increase in the national debt than in the provincial debt, because it is so much easier for. the federal government to finance the debt than for the provinces to do so.
Doctor James, former chairman of advisory . committee on reconstruction, has stated that in his opinion we should adopt an entirely new budget philosophy; that we should have a balanced budget for current expenses and revenues, but that as far as capital expenditures are concerned we should have a longterm budget. He said we should be prepared to see the debt increase probably every year for the next hundred years. I do not know why he stopped at one hundred years, because if the debt is going to increase every year for that length of time that process will go on forever. If the national debt is going to increase year by year I think the minister will agree that it becomes even more important to see that the debt is distributed just as equitably as possible. That is one reason why I am opposed to doing away with the compulsory savings. I am surprised at that statement by the chairman of the advisqry committee on reconstruction, because the minister gave the house a totally different picture last year. He was asked what provision was being made to pay the national debt. Another question was:
If present policy is continued, can this debt ever be repaid?
The minister's reply was that the debt could be repaid under the present policy. I would certainly like the minister to explain to us how the national debt is ever going to be paid under the present policy. I do not mean refunded; I mean paid, because refunding the debt is not paying it. I will quote what the minister said in reply to the first question:
In the budget speech delivered in the House of Commons on February 25, 1937, the Minister

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of Finance, in referring to an issue of perpetual bonds, stated "It was intended as the initial step in a programme which is designed to provide for the consolidation and simplification of our public debt structure. Another purpose which we had in mind was to facilitate the setting up, as soon as the condition of our national finances make it practicable, of a general sinking fund to provide for the gradual amortization of our long-term debt on scientific lines."
During the war period and for some years before the dominion government has been operating at a deficit and it has not been possible to provide for the paying off of indebtedness out of revenue. However the government plans in this respect will be made known at the appropriate time.
That was a year ago. Surely by now the government can tell us what the plans are for paying off this debt which, it states, can be paid under its present policy. The amazing thing is that ever since confederation we have expanded our debt. Doctor James says it will probably increase every year for the next hundred years, while at the same time the minister says that under the present policy we will pay it off. The minister should indicate by what miracle or wizardry he proposes to pay off the national debt.


Richard Burpee Hanson: Did he say "pay it"? Did he not say we could carry it?


Victor Quelch: No, not "carry it", at all. Here is the question: "If the present policy is continued, can this debt ever be repaid?" and the reply is "Yes"-just the one word, yes. I say we should have a reply.


James Lorimer Ilsley: Was that question put on the order paper?


Victor Quelch: This is sessional paper No. 377, tabled June 7, 1943. It stated that in due time the government would announce its policy in this regard. That is over a year ago, and I say that by now we should have that announcement.


Arthur Graeme Slaght: Whose answer is that?


Victor Quelch: It is the answer of the Minister of Finance.
Mr.. ILSLEY: Do I understand it was a question put on the order paper?


Victor Quelch: Yes, and a reply tabled in the house on June 7, 1943.


Gerald Grattan McGeer: But you can always pay debts.


Victor Quelch: Yes, by refunding; but that is not paying off the national debt so far as the country is concerned. We want to know how the national debt can be liquidated. The process of refunding is just transferring the claim against the nation to some other body.


Arthur Graeme Slaght: That is the way Micawber paid.


Victor Quelch: Another thing that puzzles me is that the minister should quote and use the words of a former minister of finance, Mr. Dunning, because if there is one man in this country whose policies have been discredited, it is the Hon. Charles Dunning.


Richard Burpee Hanson: Oh, oh.


Victor Quelch: Someone laughs. But just let him go through the years 1935 to 1939, when we were told time and again we could not put the unemployed to work because there was no money, and that the only monejt available was the money received from taxation. Yet within six weeks after this war started,
8200.000.	000 was created for the government by the chartered banks, and in the past year
8900.000.	000 by the chartered banks and the Bank of Canada.


Richard Burpee Hanson: I was not laughing at the hon. member, because to some extent I am in agreement with what he said about Mr. Dunning.


Victor Quelch: Well, I am glad we can agree on that point.


Gerald Grattan McGeer: And the same applied to Mr. Bennett and Mr. Rhodes.


Richard Burpee Hanson: Well, that may be.


Victor Quelch: It was Mr. Dunning who was quoted in this return, and I am wondering why the minister should quote Mr. Dunning to-day, when the memories of those days are still so fresh in the minds of hon. members.
To come back to the resolution, I would favour wiping out all taxation on people in lower income tax brackets-that is, on those with incomes of $1,000 if single, and $1,500 if married. That is, the amount obtained from those people to-day by methods of taxation could be credited to them as savings, and the tax structure on incomes above that would have to be changed so as to have a fair relationship between pure taxation and compulsory savings. That would be necessary, because the minister said that if we eliminated the tax in the lower income brackets, those in the higher brackets would also benefit. That would very well be taken care of by changing the tax structure in regard to the higher incomes.
I would like to see a far wider application of this whole principle. I would like to see all money that has to be taken out of circulation, in order to prevent inflation, removed by a process of taxation; and then the money obtained from the people in the low income
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brackets by that method could be placed to their credit in the chartered banks and frozen there until after the war. No debt would be incurred, because it would not be a case of the government borrowing their money. That is, the money would be placed at their deposit in the chartered banks, and frozen there for the duration of the war, or for as many months after the war as might be considered necessary, to prevent inflation. Then as the government wished to expand the purchasing power of the people it could release so much of that frozen money at a time as necessary. By this method the government would greatly curtail , the expansion of debt. No interest would be paid, and it would be creating a large pool of purchasing power.
We have been told to-day by the minister, and by others-perhaps I should not say the minister, but certainly by the deputy minister of finance-that in order to maintain full employment at home after the war we shall have to indulge in a large scale foreign investment policy. I think we should indulge in a programme of investments in our own markets, at home. Now is the opportune time to freeze this purchasing power which can be released after the war. The minister may say: Would the people be willing to have this money taken, and receive no' interest? I am satisfied the people would far rather maintain their capital intact, without interest, than have it taxed away from them. If I were faced with the alternative of having S100 taken away by taxation, or having that $100 placed somewhere to my credit and frozen without interest, I would choose the latter. That is what I advocate, as far as those in lower income tax brackets are concerned. Then as a man's income increased the structure would have to be adjusted so that there would be a fair proportion of tax and a fair proportion of compulsory savings.
One other word, and it is this. The minister knows very well that there is at the present time a great deaj of opposition to the way in which he is financing the war. Surely the least he could do would be to make the bonds he issues to-day callable, so that if after the war another government were in power, one which did not believe in the type of financing followed by this government, they would be in a position to call in those bonds instead of having to pay interest on them for the next ten or twenty years.


George Alexander Cruickshank: Mr. Chairman, I am not going to follow the line of argument offered by the hon. member who has just taken his seat. I believe we should clear up one subject at a time. I wish to speak-and I am not afraid to speak, and never have been.

I have never been afraid to speak my mind on anything, at any time, because if the electors of my riding are going to take exception to what I do in the house, then I do not wish to be their member.
I wish to congratulate the hon. member for York-Sunbury upon his forthright and courageous approach to this matter. I believe every hon. member will realize that he was not speaking personally. All those of us who know him will know that he is not in the financial position of many other members. I should like also to congratulate the hon. member for Rosetown-Biggar who, without hesitation, put his party on record, in order that there may be no misapprehension in connection with the arguments advanced. And I would include also the hon. member who spoke for the Social Credit party.
I would place before the committee a point which I believe is most important in this connection. I remember that, speaking in 1940, the Prime Minister said1 that the people he wished to represent Canada were the youth of the country, particularly the soldiers, and those engaged in labour and agriculture. I am not using his exact words, but I believe a check in Hansard will show that I am almost correct. I point out to the Minister of Finance that the kind of representation we have in the House of Commons after the next election is his present responsibility, and his only. What earthly chance is there for the young man now working for $1.50 a day overseas, to come home and stand as a member of parliament? There is no hope for the young man who is coming back and who wants to get married. What chance has he to get into this House of Commons, no matter what party he represents?
None of us know which party is going to be in power after the next election. I have my own ideas as to which one I would like to. see in power, but I can assure you that there is one member coming back here. I can say that . for the simple reason that I am not afraid to talk about this or any other matter. I do not fear publicity in my riding. My riding is either rural or straight labour. There is a certain percentage of labour there, and I can assure the minister that every farming district in western Canada and every labour union believe that the labourer is worthy of his hire.
I want to revert to what I think is the most important part of this question. If the democratic form of government is worth fighting for, surely it is worth having it administered by the rank and file, by the ordinary common man referred to by President Roosevelt and Mr. Churchill and by our own Prime Minister.

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I doubt if there is one of the present 245 members who wants to come back as a stooge for some corporation. Such a man would not have to worry about his costs, but he would be a stooge for some organization. I will put it that way, not confine it just to the financial interests. That is not the type of man our soldiers overseas want to represent them. I do not believe the soldiers will begrudge us, even in this present parliament, getting what we should. Two of the most brilliant young members we have-I am not going to refer to them by name-both soldiers in this war, are having to give up politics. They do not want to do this, but they find they have to. They are married men with young families to bring up and they find they cannot afford to stay in politics. Some of the highest ranking men in public life in Canada have practically begged these men to stay in public life. These young men with excellent education and wonderful attainments are forced to take this step for one reason and one reason only.
I took it upon myself to canvass a lot of people in this connection. As I say, I do not care for publicity and never did. If you are honest in your convictions, if you want to be reelected, that is the course to take. I want to tell the committee that a couple of prominent Liberals have said that the publicity about this would not be good with an election coming on. I want to tell those two members that the action they are; taking will do more to harm their party than any publicity that might come out of this. The publicity about motor car allowances did not hurt the Liberal party in the last election, nor did it hurt the Conservative party in 1935, or whenever it was they were last elected. A cabinet minister receives this allowance even though he does not own an automobile. I agree with the hon. member for York-Sun-bury. I am not quarrelling, over their getting an extra salary, but I am quarrelling with any member of the government who will get up and defend the payment of $2,000 for a motor car allowance when he; does not own a car.


Gordon Knapman Fraser: What cabinet minister does not own a car/


George Alexander Cruickshank: You can make your speech, but I am making mine now.


Gordon Knapman Fraser: I am just asking a question.


George Alexander Cruickshank: I have no time to answer a question now.


Gordon Knapman Fraser: You do not want to answer that question.


George Alexander Cruickshank: You can ask the cabinet about that. I do not care if he does
own a car, and I want to make that point clear. I am simply following the line taken by the hon. member for York-Sunbury. I do not begrudge the payment of $2,000 to the cabinet ministers, but- I do think it is a disgrace to Canada that a man sitting down in a plush seat in the Bank of Canada should draw twice the money paid to the Prime Minister of Canada. I think it is a disgrace to Canada that any two-by-four moving picture actor who is brought up here to peddle bonds should draw more money than any member of the government.


Gordon Knapman Fraser: Ten times as much.


George Alexander Cruickshank: Ten times as much.
I am not begrudging the members of the government what they get, but I think they should have the courage of their convictions and be ready to stand up on the floor of this chamber, as the hon. member for York-Sunbury and the leader of the C.C.F. have done, and give some reason other than "this is not the time."
I wonder if any member of the government knows how much it cost the member for Fraser Valley to-day for one long distance call to Vancouver on business, two telegrams and some air mail stamps? The cabinet members get those free, but we private members do not. I do not say that they should not have those expenses paid, but I do contend that the cabinet should take these things into consideration. I have to pay those charges. If you want just old or wealthy members to come here to represent young Canada, and the men who are fighting for our vested interests, I can tell you one way to do it. Instead of requiring $200 as a deposit, make it $270,000 and in that way you can keep out the ordinary working man from the next election. The people of Canada do not want that. The soldiers do not want that. The government should endeavour to justify themselves to the soldiers overseas by seeing that their fellow soldiers, instead of having to withdraw from parliament this session, can stay in parliament and bring up their families in a reasonable and1 honest manner. So far as I am concerned the answer, "Now is not the time to approach the public", will not go down with the people of my riding, and that applies to the three parties that may be running in the next election. Now is the time to face the issue in order that when the men who are fighting to save democracy come back they will find not a rich man's government but a democratic government which really represents them.


Gordon Knapman Fraser: Mr. Chairman, I would like to take this opportune
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ity to add a few words to the appeal which has been made by the hon. member for York-Sunbury and the hon. member who has just taken his seat in connection with the sessional indemnity-I should like to emphasize the word "indemnity"- paid to members of parliament. I heartily endorse what the hon. members who have just spoken have said regarding the position in which members of parliament find themselves when they are forced to spend from five, six or seven months in Ottawa.
It would seem to be the irony of fate, or perhaps a lack of appreciation on behalf of the powers that be, that as a commercial traveller I can go into a hotel in Ottawa, present my commercial traveller's certificate and receive a consideration of fifty cents per day on the amount I must pay for keep. If I go into the same hotel as a member of parliament the clerk at the desk looks at me with suspicion. After all is said and done, sometimes members of parliament are looked upon with suspicion. He says, "Well, Bill, you are not a commercial traveller, you are a member of parliament." Instead of paying $5.50 per day, I must pay $6 simply because he is suspicious of me as a member of parliament.


Richard Burpee Hanson: You look like a capitalist any time.


Gordon Knapman Fraser: The difficulty with this question is a lack of courage on the part of the powers that be. Within the last twenty-four months the Minister of Finance and his colleagues have had presented to them by a number of hon. members from each group a recommendation that members of parliament should have $1,500 exempt from taxation in order to cover their expenses while living in Ottawa. I submit that there is not one person in Canada who would object to or criticize that action. I repeat emphatically that it is a lack of courage-there are three words in my mind I could use but they do not come within the concept of parliamentary language-that an order in council has not been put through extending consideration for the members who sit in this house, representing anywhere from 30,000 to 80,000 people. We are doing arduous work, and working long hours, with no union regulation but working day and night, Sunday, Monday, Tuesday, Wednesday, Thursday, Friday and Saturday for $4,000 a year, all subject to taxation. I challenge the Minister of Finance to get up on his feet here and now in this house and defend that position of the government, particularly when every member of every party of the house will support what I say in this regard.

I want to go further in my endorsation of the statements made by the hon. member who has just taken his seat (Mr. Cruickshank). You are sabotaging the public life of Canada when you penalize decent honest-to-God Canadian citizens who have the ambition to discharge what they feel is their duty to their fellow Canadian citizens when you assign to them a remuneration that is less than that of a truck driver. I am not submitting; I am demanding that the Minister of Finance and his colleagues take action in this matter now, even if this is the fourth year of the life of this parliament. I go further and challenge any member of this house to get on his feet and either defy, criticize or support and supplement what I say in that connection. There is not a member of this house who does not endorse what I am saying, and the Minister of Finance knows it but-shall I use those three words?-he lacks what is implied by those three words when he does not take action in this matter. If this government is afraid of public criticism over such action, this government has become politically, academically-shall I say?-anaemic to the wishes of the members of this house and to the wishes of the people of this dominion.
I hope, Mr. Chairman, that my few mild words on this occasion will clarify the atmosphere. As my good friend who has just taken his seat has said, we may not perhaps be doing all that we would like to do here; we may not perhaps be as effective as we would like to be. Nevertheless as a humble member in the ranks of my beloved leader I believe-perhaps I am just kidding myself because of my ego-I am making some infinitesimal contribution to the maintenance of democracy in this country as we know it. I may be wrong in that, but at all events I kid myself into the belief that by spending my time in this chamber at a temperature of 98 degrees I am contributing in some infinitesimal way to what the boys in France and Italy are fighting for. We have 245 decent honest-to-God men in this house who are trying to do their very best. Every member of us, I do not care whether he be C.C.F., Social Credit, Progressive Conservative or Liberal, is doing his utmost to maintain democratic principles for the people of Canada, and to maintain for the boys overseas the way of life for which they are fighting and suffering and giving their lives to-day.
In concluding what I have to say on that subject I challenge the Minister of Finance to tell this chamber why he has not had courage enough to come across and make sure that the next group of members of another House of Commons will get a decent, square deal at truck driver wages.

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I have one or two other observations to make. In some respects the taxation of Canada has become impossible. The hon. member for York-Sunbury made some reference to that in his speech on the budget. There are features in our taxation system in Canada that are not only impossible but abortive; they defeat themselves. Take, for instance, small private businesses in this country which have struggled on through the years of depression and prospered through the years of prosperity, businesses which have followed sound and conservative methods of accounting, businesses which have followed a policy of building up by not distributing their annual earnings. I want my hon. friend the leader of the C.C.F. party particularly to bear this in mind-and I say particularly, having heard what he has said on many occasions with respect to relations between employers and employees. I want to tell him that employers are not all wrong. They are not all without consideration for their employees. They are not all failing to cooperate with their employees. So far as I personally am concerned, and I am only a horizontal out of the employers in this country, I pride myself on having in my employ families who have been with me for two and three generations. Many businesses in this country have built up through the years by not distributing their earned surpluses. They have an appreciation of sound accounting methods, a conception of the up-and-down curves, and many of these private businesses over a long term of years, ten, twenty or thirty years, have not distributed their earned surpluses. But if the principal of such a private business should die to-morrow, his successors would be confronted with the succession duty and income taxation laws of this country and the business would be bankrupt, regardless of the thrift and foresight and sacrifice and the long hours of work that had gone into building up that business. Under the taxation laws as they stand to-day the earned and nondistributed surplus of that business would have to be paid out to meet the succession duty and income tax demands, and the business would be bankrupt. I have discussed this matter privately and in detail with the powers that be, and once again I challenge the Minister of Finance to give any reason or excuse why the undistributed profits of a private business should be taxed to the extent of ninety-two per cent for succession duties and income tax under the present laws.
Perhaps the excuse will be: We have been too busy; we are fighting a war. Perhaps the excuse will be: We should set up a commission or a committee to consider this matter. The
fact remains that such laws are on the statute books of Canada, and there was absolutely nothing in the budget speech of the minister that promised to relieve the present impossible taxation situation. Once again I ask the Minister of Finance to try to explain why that situation is permitted to remain under the laws of this dominion.
Those are two situations, Mr. Chairman, with which I wish to deal. One has been dealt with by several members this afternoon. The second one was referred to by the hon. member for York-Sunbury. That situation should be corrected now. The matter should not be shoved aside. We should not be told:	We
will do it to-morrow or the next day. Action is required now. It is a surprising fact-and I want to put this on record-that if the undistributed profits of a private corporation to-day were paid out in the form of dividends to pay the succession duties on the estate of the proprietor of that private business, they would be taxed under our taxing act- ninety-two per cent. You could not get either the succession duties or the income tax. Let us correct this. Let us face both these issues. Let us provide at least a living wage possibility for candidates in the next election, so that they will be able to live decently. As the hon. member for Fraser Valley said a few minutes ago, there should be provision to maintain decently two homes, by allowing the exemption which I get as a commercial traveller, on the expenses involved in living in the city of Ottawa. Also, let the minister now .-not to-morrow-take cognizance of the fact that he is in many cases devastating the estates of privately-owned corporations which were built up by initiative, sacrifice and hard work and a cooperative attitude toward their employees, in order that when the owners die their families might not be made paupers, in order that their private businesses should be perpetuated, providing employment and continuing to be an asset in the economic, commercial and financial life of this dominion.
I am making these two requests frankly to the Minister of Finance. Let him answer.


The CHAIRMAN:: Before we proceed, I
know that the hon. member for Northumberland does not want to use unparliamentary language. According to standing order 41, citation 299, Beauchesne, 2nd edition, no member will be permitted "to impute want of straightforwardness or courage" to another member.


James Lorimer Ilsley: It is all right, Mr. Chairman. The hon. member need not withdraw it. I do not want it withdrawn; I want to deal with it.

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Gordon Knapman Fraser: If it is against the rules I will use other language.


Joseph-Arthur Bradette: I Tule that it is against the rules, and unparliamentary.


Gordon Knapman Fraser: I willingly withdraw it because it is contrary to the rules of the house; but I am quite satisfied that the Minister of Finance has that abstract commodity that I refer to, and will reply to my challenge on the basis on which I have made it.


Alfred Henry Bence: I should like to say a word or two in connection with the subject which has just been discussed by the hon. member for Northumberland, Ontario, and the hon. member for Fraser Valley. I am not going to demand anything from the minister. I doubt whether if I demanded it I would be successful, in any event, by that method; but I suggest that the minister is far less reasonable than I believe him to be if the logic which has been expressed by the hon. members who discussed this matter this afternoon does not appeal to him.
I tell him that so far as some of us are concerned the situation is completely intolerable. In the first place, I understand it is a principle of taxation that those expenditures shall be exempt which are required in order to earn the income, whether it is a salary or income from a business. The Minister of National Revenue has said, "Oh, no; expenses are not allowed to be deducted in connection with salaries." But this is a very unusual type of salary. It is probably the only type of salary of which it can be said that people have to spend money out of their own pockets in order to earn it. Others who are earning salaries have to pay only their ordinary expenses of living, whereas members of parliament have extraordinary expenditures.
The position of ministers of the crown is not the same as that of private members. Ministers take up their residence in Ottawa; they have only their ordinary living expenses to look after, and probably tie whole of their income should be taxed, since the expenses of their offices, their telegrams, long distance telephone calls, and all that kind of thing, are covered by government allowances. So far as private members are concerned that is not the situation. Personally I keep up a home in the city of Saskatoon, where I have a family and a large house and all the expenses which go with it. In order to earn that $4,000, if you call it "earning it", I have to come to Ottawa and live on a scale which is very high, considering the charges which are made in this city as compared with those in other parts of the country. Members of this com-

mittee know as well as I do that the costs of living down here are out of proportion to those which obtain in most other parts of Canada. Aou pay a very high rate for rooms, fairly high rates for meals, and the longer the session lasts the less money you have as far as your ordinary expenses at home are concerned.
This matter has been taken up at this time, unfortunately, because of the fact that the pinch of taxes has made itself felt in this connection. Actually it is a principle which should always have been operative. Of course as a younger and one of the more recent members I never had an opportunity to take it up, nor do I know whether I would have done so or not. But older members must recognize that in the past they have been derelict in their duty with reference to the position of future members of parliament. In the days when taxation was not high, when it was not necessary to live here for more than about three months, when one could get quarters at reasonable rates for one's family and bring them down if one liked, it was not a matter of very much importance. But at the present time, when in order to earn this indemnity, which is supposed to provide for our out-of-pocket expenses and compensate us for absence from home, we have to pay substantial sums of money out of our income, it is a matter of importance, and I suggest that something be done about it.
I believe it would be a great mistake to propose any increase in the indemnities of hon. members at this time. That would be the worst possible approach to the problem.


Mr. ABBOTT:: Why?


Alfred Henry Bence: If we did that, every other class of citizen in this country would be demanding similar consideration, because all of them find their burdens very heavy. But there are very few citizens who realize that we are not entitled to deduct for taxation purposes the expenditures we incur in order to earn this indemnity. I have discussed the matter with literally dozens of people in my own constituency, and they were dumbfounded to know that I was not entitled to deduct the cost of telegrams sent to them to tell them something about their own affairs, or the expense of a stenographer when I am at home to take care of the affairs of my constituents, or any part of my living expenses in the city of Ottawa, despite the fact that my family and personal expenses are going on at home just the same.
I do not know why it is necessary that this matter should be taken up in the house. Surely it has been brought before the cabinet

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on previous occasions. From what I have been able to pick up from other hon. members, it has been discussed; surely it should have been settled upon the principle of taxation which I believe has always been applicable in this country, despite the fact that there may be one or two decisions of law which are a little complicated, and probably faulty, and were determined when conditions were not the same as they are now. In any event, whether there is a judicial decision on the subject or whether there is not, I suggest, in view of the arguments which have been advanced publicly this afternoon by hon. members who have done so at the risk of jeopardizing their positions- I say this advisedly-and of being misunderstood outside the house, because unquestionably it is seldom that the full import of a member's remarks ever gets to his constituents, the administration should consider this matter very seriously indeed. I repeat that the situation is intolerable for a number of members who are required to continue to live in the city of Ottawa under the circumstances which exist at the present time.


Arthur Graeme Slaght: To revert to the interesting discussion that ensued when the hon. member for Acadia indicated to the minister the state of affairs that exists in connection with the sale of victory bonds, reading a letter and mentioning a certain incident, the committee will recall that he cited a case where a salesman had induced a purchaser to purchase bonds, borrowing the money for six months through an arrangement with the bank that at the end of that time the bank would take the bond off his hands and would become the purchaser. The minister said he deprecated that type of transaction and asked the hon. member for Acadia how it could be cured; whether a gaol term should be provided. With the permission of the hon. member for Acadia I should like to be helpful and to tell the minister how he could avoid it without a gaol term or any harsh or drastic course- and he would avoid it for all time. He can join with those of us who want to amend section 59 of the Bank Act by doing away with the right of private banks to create new money without having cash reserves behind it and, as the minister once put it to the house, to carry on the business of banking by lending seven, eight, nine and ten times more money than the banks have in their cash reserves; because, if that transaction was consummated [DOT]six months later, it was that very practice, described in that last phrase, which the bank carried out when they took the bonds off the hands of the original purchaser.
If the minister really disapproves of the banks acquiring bonds by purchase in that
100-300J
manner, then his course is simple. He can amend section 59 of the act by requiring the banks, so far as their deposit accounts on loans, not including savings accounts, are concerned, to have 100 per cent cash reserve. Let me suggest that it is not merely the transaction that the hon. member for Acadia mentioned that we must consider. There is a much more serious state of affairs in that our Minister of Finance has, in the past two or three years, increased the borrowing for the government of Canada through the chartered banks partly by short-term loans and partly by securities exceeding two years to run, so that now this country is indebted through him to the chartered banks for an amount on which we are paying interest to the extent, on April 30 last, of S2,696 million, or, roughly speaking, $2,700 million, every dollar of which, instead of having interest-bearing securities lying in the vaults of the ten chartered banks for that amount, could have been issued into existence through the use of public credit through the Bank of Canada by amending section 59 as a protection against inflation. If we had done this we would not have been canying an intolerable burden of $40 million every year and down through the years to come in order to finance that type of borrowing.
I commend to the minister this course that I am suggesting. He does not need to gaol anyone. Simply take back for the people of Canada the privilege which they were given under the British North America Act, so that they themselves, the government, shall issue and control the currency and credit of this country which our forefathers gave away to the chartered banks in their charters and which the chartered banks are again to-day seeking to retain in the form of a monopolistic privilege when they ask us to renew their charters without amending section 59 of the act.
That is a simple course to take and I beg the minister to give it full consideration, because if he comes to the banking and commerce committee and says that he believes in using the credit of the country in the terms laid down by his leader, the Liberal Prime Minister, in 1933 and 1935-in terms of public need and not in terms of bankers' greed- this is a remarkable opportunity he has, this tenth year, to come into that committee if he withdraws his opposition to the amendment of section 59. He has not yet declared himself, but I am making a bad guess if he has not yet seen the light to the extent of joining with others in asking that this be done. He will save the country $40 million a year for the next twenty years. He will save much more
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than that, because there is a gap between what we can get by taxation plus the sale of bonds and what is obtained by borrowing. Either he will go and borrow more money next year from the Bank of Canada, issuing it into existence as new money, without an interest-bearing load, or he will go back again with his hat in his hand to the chartered banks and borrow from them at the low rate of interest which he has been able to obtain. Why not issue the money into existence interest free, by using our own credit, instead of appointing the banker as a toll-gate to exact interest from the people of Canada in order to lend money for public need into existence with an interest debt upon it?


Joseph-Arthur Bradette: We are in committee of ways and means, and I would point out that standing order 58, section 2, reads:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
The hon. member for York-Sunbury (Mr. Hanson) asked the consent of the Chair and of the committee, which was accorded him, to discuss the question of parliamentary indemnities, but since then some other questions have arisen altogether foreign to the clause which we are supposed to be discussing. I trust the committee will find it possible to confine its remarks to the clause before the Chair.


Gerald Grattan McGeer: This discussion on the first resolution under the Income War Tax Act proposes to reduce the provision for accumulated savings, and it has brought on a debate which involves in its wider sense the responsibility of parliament to the taxpayer. I venture to suggest that this debate has already indicated that our Department of Finance has a very limited idea of where it is to-day. It has a vague idea of how it got there, but I do not think it has the foggiest idea of where it is going to land this nation if it continues on its present course. I make that statement because we have arrived at a point where the government is faced with a revolt led by the leader of the official opposition, supported by the two junior parties in the house and, I believe, by a majority of hon. members sitting behind the treasury benches, in regard to the policy of taxation which has gone so far that it has been declared by one government supporter to be a sabotage of the public life of the Dominion of Canada.


Douglas Charles Abbott: Nothing like relieving ourselves from taxation.


Gerald Grattan McGeer: My hon. friend chirps up with his usual bright remarks, which are just about as foolish as the financial policy he supports.


Douglas Charles Abbott: About as bright as most of yours.


Gerald Grattan McGeer: My hon. friend can continue with interruptions of that kind if he wishes, but it is a very easy matter with which to deal. I do not know of any time in the history of the House of Commons of Canada when a more serious charge was made against any responsible ministry than that made this afternoon by the hon. member for Northumberland, Ontario, that the government is sabotaging the public life of Canada. How did we get to that position? We got to it by ignoring the advice of every Minister of Finance who has held that portfolio in this house. From time immemorial we have been advised that it was essential that any sound budget should be balanced out of taxation. Since 1914 we have gone on increasing the public debt, until in financing this war we have carried on, as we did in financing the depression, a deficit system of financing, increasing the burden of debt and taxation until to-day the repayment of our national debt has become a public joke, and we assume that for all time to come generations yet unborn will have to carry on under the slavery of an involuntary load of interestbearing public debt.
Therefore we ask what we must do. Tax the people at the source? I heartily agree with every word uttered by the hon. member for York-Sunbury, that taxation for the needs of war knows no limit; but does anyone think for a moment that we have to tax single people whose earnings are below $100 a month, or a family whose earnings are below $1,800 a year, to finance this war or to meet any other obligation of the country, when we have at our disposal a national institution that can put into circulation the best money the Canadian people ever used as a medium of exchange? Anyone listening to the Minister of Finance yesterday when he explained how easy it would be for us to carry this debt would have thought we were in a comfortable position of security. If the minister is right, then how terribly wrong have been all his predecessors in office. Do not, however, make any mistake about the position he took. He said that the time would come, with a pyramiding national debt, when an intolerable strain would be placed upon the economy of the nation. He did not tell us, because he does not know, when that intolerable strain is going to arise. He did not tell us, because he did not know, what the remedy would be when that intolerable strain

Income War Tax
of an immense debt load became evident. I say to you, Mr. Chairman, and to this parliament that this intolerable strain has already arrived, and that we are financing by following a false course, by putting into circulation a medium of exchange which is merely an appalling discount of the rights and wealth of the people of to-morrow.
We have been told a great deal about the necessity of taking money away from the people in order to avoid inflation. If there was ever any justification for a single word of all those arguments, then the ending of compulsory savings is one of the most unsound things this government has ever done through its Department of Finance. It would have been far better to relieve from taxation those earning less than $100 a month, which would include most of the young men who are accumulating for their to-morrow, and families whose earnings are less than $1,800, at the same time accumulating savings for them to be used by the country during the war and to be made available to the people when the war is over, than to have this provision which I venture to say will meet with the approval of but a very small percentage of even the people who are supposed to benefit under it.
Let me point out something else. When are those accumulated savings to be repaid? How are they to be repaid? What guarantee is there that some government in the future, not the one creating the obligation under a vague and general law but a government forced to carry on and service the enormous debt load created by this government which imposed that provision-what guarantee is there that some new parliament, under the debt-load obligation it will have to carry, will feel itself bound to pay back even the accumulated savings? The people whose money it is have never been given a statement; they .'have never been issued a certificate, or even a book in which to record the savings that have accumulated on their behalf. A great many people throughout the country tell me quite frankly, "Oh, we will never get back those accumulated savings." I venture to say that if they had been given some concrete form of security in exchange for them, very few would not have been glad even now to continue to accumulate. I do not think many people in this country would fear the danger to the finances of the government if that course were taken; in fact, from my discussions with hon. members in all parties in this house I am satisfied that a majority are in favour of such a course. There is one other thing I wish to say: The responsibility is only in the first instance that of the ministry. The-responsibility is on parliament,
and it is for parliament to say whether its overwhelming will shall rule, or whether it shall be the will of one department.
If we endorse, as a great many members have, the statements made by the hon. member for York-Sunbury, those made by the leaders of the C.C.F. and Social Credit parties, and by the hon. member for Northumberland, Ontario, whose will is going to rule? This issue involves not merely the question of taxation upon lower income earning brackets. The issue raised to-day involves not merely the right of a member of parliament to be indemnified. The charge of sabotaging the public life of Canada could exist only if what the hon. member for Fraser Valley has said was true, namely, that two brilliant young soldiers have found it impossible to carry on as members of parliament in Canada, because of the taxation policy of the present ministry of finance.
Yes, what is involved is the sovereignty of parliament. The time has come when members of this parliament should unite to restore something that has been taken away from them, and that is the right of parliament to have its will carried out by the ministry. The thing that must be changed is the right of the ministry to impose its will upon parliament, whether parliament agrees or not. This goes to the very root of democracy; it is the issue upon which this war is being fought. And that is the issue raised to-day.


James Lorimer Ilsley: The hon. member surely has the right to introduce a want of confidence motion at any hour he wishes.


Gerald Grattan McGeer: And the hon. member is probably now going to be faced with that issue.
I think the minister has done enough harm in the country already.


James Lorimer Ilsley: I am not saying I should do anything.


Gerald Grattan McGeer: If we are to be told again, " Oh, well, you accept my will, or I will resign," as we have been told, then I shall have to consider what I will have to do about that. I say to the minister that many of us supporting the government he represents have to consider what we are going to do about this matter if it continues.


James Lorimer Ilsley: The only point is this: The hon. member says that this goes to the sovereignty of parliament, and that we must do something to make a change, so that the government cannot do things against the will of parliament. What I say is that the hon. member is quite free, at any time, to take the-will of parliament on a specific issue by moving a want of confidence motion. He is quite-
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free to do it. So that there is nothing wrong with our democratic system or the soverignty of parliament. Parliament is perfectly sovereign. As a matter of fact parliament has already pronounced itself on the issue he is talking about, namely compulsory savings and exemptions.


Gerald Grattan McGeer: All right; my hon. friend has the issue put up to him, and he has been invited by the hon. member for Northumberland, Ontario, to make his decision upon it. When that decision comes, the issue will be fairly out as to whether or not the generally expressed will of parliament, which, I take it, in this house to-day is something of no uncertain measure, should be accepted. That issue will, I hope, be dealt with.


James Lorimer Ilsley: How many hon. members, before to-day, have risen in their places and said that they wanted their indemnities free from taxation?


Richard Burpee Hanson: They want it; make no mistake about that.


Gerald Grattan McGeer: I speak only from the information which comes to me, but I believe that there have been committees appointed, and that on more than one occasion those committees represented all parties in the house -Liberal committee, meeting with committees of the official opposition, and the Social Credit and C.C.F. parties-and have returned to the government, and conveyed a unanimous wish on the part of all parties in the house.


James Lorimer Ilsley: There has been a difference of opinion among members.


Mr. ADAMSON:: Mr. Chairman-


Mr. ROEBUCK:: Mr. Chairman, I asked for the floor in the early part of the debate.


Richard Burpee Hanson: The Chairman said that he would next see the hon. member for York West.


Joseph-Arthur Bradette: The hon. member for Trinity was in the committee, while the hon. member for York West was not here. I do not say this in any disparaging way, but unless members are here it is difficult for the Chair to arrange the order of debate.


Arthur Wentworth Roebuck: I wish to congratulate the hon. member for York-Sunbury, and to commend the statement he has made respecting the financial position of hon. members. I refer particularly to the quiet, dignified and statesmanlike way in which he presented the subject. While I approve most highly what he said and the manner in which he said it, I also deprecate the violence of speech and the 
extreme statements which have been made, following his address.


Gordon Knapman Fraser: On a point of order, will the hon. member elaborate on that statement?


Arthur Graeme Slaght: I desire to suggest, also, that I was one of the speakers who followed the hon. member for York-Sunbury. Since the hon. member for Trinity has put his statement in the plural, that he deprecates the lack of dignity of the statements made following that of the hon. member for York-Sunbury, in my judgment he has covered a little too much territory, and I think he had better certify as to whom he means.


Gordon Knapman Fraser: Again on the point of order, the hon. member for Trinity has no right to impute anything of that kind.


Joseph-Arthur Bradette: There is no point of order before the Chair.


Gordon Knapman Fraser: Let the hon. member for Trinity stay within the confines of the order, then.


Arthur Wentworth Roebuck: I did not refer to lack of dignity on the part of anybody, nor did I mention any hon. member who had preceded me. I spoke about the violence of the language and the extreme statements I had heard.


Gordon Knapman Fraser: And I challenge the hon. member to mention who made violent statements; who uttered the violent language?


Arthur Wentworth Roebuck: My hon. friend will put the cap on.
Mr FRASER (Northumberland, Ont.)': He certainly will, but my hon. friend is afraid to say what he was referring to.


Joseph-Arthur Bradette: I must ask for order in the committee; otherwise I shall have to use the power I have to restore order. The debate should be confined to the item before the committee.


Gordon Knapman Fraser: Let the hon. member for Trinity stay within the item, then.


Arthur Wentworth Roebuck: Because the hon. member for Northumberland, Ontario, desires me to do so, I will specify that the statement with regard' to the courage of the Minister of Finance, and the suggestion that his thinking was anaemic, were certainly violent and extreme statements.


Gordon Knapman Fraser: He does not need your help.

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Arthur Wentworth Roebuck: Perhaps not, but I am a member of the house, and I am as free to state my opinion on the floor of the house as was the hon. member for Northumberland, Ontario. And I say to hon. members that nothing is to be gained in the discussion of our own problems by making overstatements or statements which have at least the appearance of anger. Certainly nothing is to be gained by attempts at driving the administration or offering challenges and that sort of thing. This is a subject which should be approached with the greatest dignity, reserve and care. It is for that reason that I feel a duty to speak and also because I think the hon. member for York-Sunbury has understated rather than overstated the case.
I should like to put upon Hansard some figures with regard to this question of indemnity, but first may I say that I am not grinding any axe of my own. Fortunately I have been able to get by, largely because of an earning power, a very small family and the fact, that, like many others in this house, I have a perfect wife. With that combination I have been able to keep going. I am not speaking on my own behalf; I am speaking because it is the duty of a member to express himself on these matters and particularly to defend democracy which is in danger.
Let me give the figures I have gleaned since this debate started. Let us suppose that a member has no other source of income than his indemnity. If he is a married man without a family he will pay a tax of $1,364 on his $4,000 indemnity. That is to say, he will receive by way of indemnity, not $4,000, but $2,636.


James Lorimer Ilsley: Does that include compulsory savings?


Arthur Wentworth Roebuck: It does. I am speaking
of this year's figures and there would be compulsory savings of ten per cent of the gross income. Some day that money will be paid back, but I am reminded of a remark made by someone following the last war. The Russians were starving and some one assured them that they would have a good harvest in the spring. We may be able to wait for some years for the repayment of this money if, like the Russians, we* do not starve to death in the meantime. This net income of $2,636 is the best position in the series I am going to mention. That is the amount left to the member to permit him to live in Ottawa for six months and to maintain himself in his constituency for twelve months and pay the various expenses, including those of regular elections.
If he were a married man he would receive $2,636, but if he were single be would receive $2,406, after paying a tax of $1,594. That is what he would have left to maintain himself. I hope that there are few in this house, although I know there are some, who have to maintain themselves on what is left of their sessional indemnities after their taxes have been paid.
Let us suppose that someone with an income of $3,000 is waited upon by the usual committees urging him to become a member of parliament. Let us suppose that he consents and that he is unfortunate enough to be elected. Let us suppose something which is not always the case, that he is able to retain his income of $3,000. What will be his position?
On his income of $3,000 he would pay an income tax of $884. The expenses of being a member of parliament are offset with an indemnity of $4,000. When the $4,000 is added to the $3,000 he is placed in the $7,000 class, in which case his tax will be, not $884 but $2,985. That is to say, his tax will be increased by $2,101 by reason of his receiving the $4,000 indemnity. After the increased tax has been paid, he will have left out of his $4,000 the sum only of $1,899. That is the situation facing hon. members of this house.
The indemnity is paid not as a salary. It was instituted in the first instance to pay the expenses and thus make it possible for a poor man to be a member of parliament. In this case the indemnity is $1,899 and not $4,000.
Let us go into some of the slightly higher brackets. Supposing the man who is urged to become a member of parliament receives an income of 86,000 a year. Let us suppose that he becomes a member and is able to retain that income. With his indemnity his total income is now $10,000 and he goes into the $10,000 class. What are the figures? In the first instance, he would pay $2,415 on his income of $6,000, but when he goes into the $10,000 class by reason of his added expenses and added revenue, he will pay $4,762. The increase in taxation by reason of the receipt of the $4,000 will be $2,347. That is to say, he will retain out of the $4,000 only $1,653.
If one considers the expense of living in Ottawa for six months in the year and possibly maintaining a house, he can see that many members will be in the red. The hon. member for York-Sunbury confessed that he was in the red so far as his indemnity was concerned. I can match him in that. I, too, am in the red. By the time I have paid my living expenses in Ottawa, without figuring the time spent or the other expenses of my constituency and that sort of thing, I find
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that I am. out of pocket. That is, after I have paid my income tax out of the $4,000, it actually costs me. money to live in this city as a member of parliament, just to room and eat.
I am not speaking on my own behalf. I have no complaint to make with regard to the position I hold. I am intensely grateful to the constituency which paid me this honour and charged me with this responsibility, but I suggest to the committee this thought. The indemnity was established in the first instance in order that democracy might continue. It was the Labour mind of the House of Commons in England that advocated payment of members of parliament. It was not the rich who put it across; it was rather the poor. It was those classes who had public things in mind, and who knew that the poor man could not sit in the house unless his expenses were paid. The people of England came to realize that if the public did not pay, then somebody else would. It was in order to substitute the public man, in its truest sense, for that man who holds a seat in the house for the purpose of serving private interest that the public decided to pay the members' way. It was to substitute democracy for the service of private interest, that caused the English people to give an indemnity to their members of parliament.
The principle is as strong to-day as it was then. If we are to maintain democracy of this house, its high standing in the community and the respect of our fellow men, it is necessary to take this problem into consideration. If the administration feels that this is not the proper time to make a change, it should at all events lay this question before the electors at the next election, and see to it that the impression now abroad that members of parliament grow rich is dispelled. It is not true. Members of parliament grow poor in the service of the public, and our public does not know it. Let it be stated openly and publicly, boldly and without reservation, to the people of Canada and let them be told what is involved in this matter. If you continue the present policy you will restrict parliament to representatives of rich interests, to rich men and to people without responsibility who can live here on less than $3,000 a year.
The issue is clearly put. It is a financial issue. It is necessary in. order to preserve the strength, the credit, the respect of this house that we put our members in a position to pay their way, to be independent of anybody, to look the world in the face and say: "I owe not any man. I am not to be paid and I am not to be bought. I cannot be hired. My expenses cannot be paid by anybody. They are paid by my constituents, by the taxpayers of Canada, and I have but one

duty, the service of the people." I hope that my language has not been driving language. I hope that I have not urged this matter too strongly, because it is a subject for clear thought rather than of emotionalism. The hon. member for York-Sunbury (Mr. Hanson) suggested that we members did not have the courage with which to approach the question.


Richard Burpee Hanson: No; I
asked them to have courage.


Arthur Wentworth Roebuck: All right. I am corrected to that extent. But it has not been lack of courage on our part that this matter has not been raised before. It has been a sense of responsibility. It has been that diffidence to advocate our own cause. It has been a readiness to sacrifice in order that this war might be carried on and that public morale might be maintained. It is a matter of credit to us and not of discredit that this question has not been previously discussed.
As for the Minister of Finance and the suggestion that he is anaemic in thought or lacks courage, let me ask how many in this house would like to substitute for him and to answer the barrage that meets him from both sides of the house, while he carries the responsibility of the raising of billions of dollars. I do not always agree with the Minister of Finance, but I have hfeld my peace knowing the burden that he carries. I have felt that he was not anaemic but rather a lion-heart-in his office.
Just one word on another subject that is related to the one before the house, namely, the abolition of the savings portion of the present income tax. Lest the Minister of Finance and the country think the criticism voiced is the general opinion, because of silence on the part of others, let me express commendation. Many of my fellow members feel that the administration deserves credit for making this change. There is such a thing as riding a willing horse to death. Statesmen must be careful not to go too far in bleeding a country white even in time of war. Caution in going too far and taking too much is wisdom at the present time. The abolition of this tax is intensely popular in the country.
It has been observed on the floor of the house that the change will benefit most strongly those in the lower 'income brackets, because those in the higher income brackets usually are able to offset a portion of the compulsory savings by the payment of insurance premiums and various other'things. It is the low income taxpayers who will benefit. I appreciate the argument that it is a good thing to have money now in order that we may have it to expend after the war is over. But you must take the whole financial policy

together. You must not select single points and emphasize them. While the poorer people will not save as much to expend after the war if this change goes into effect, on the other hand, if the present plans as I understand them are carried out, there will be family allowances. Something like $200,000,000 a year of purchasing power is to be distributed among the low income people of our country in the form of family allowances, thoroughly offsetting the loss of compulsory savings. One offsets the other. Both would give added purchasing power after the war. We now lose the compulsory savings, but on the other hand we gain $200,000,000 in family allowances.


Agar Rodney Adamson: The Minister of Finance has stated this afternoon that this question of indemnities has not been brought up in the house before.


James Lorimer Ilsley: No, I did not say that. I asked the hon. member for Vancouver-Burrard how many members had mentioned it on the floor of the house before. I did not mean to intimate that none had. He was representing that the discussion this afternoon showed a general movement of hon. members in favour of freeing part of their indemnity from taxation, and I asked him how many members [DOT] had brought it up before.


Agar Rodney Adamson: I wish to tell the minister that on three previous occasions this very question has been brought up in the house, once by myself, twice by my room-mate, the hon. member for Northumberland, New Brunswick, not Northumberland in the hills. The hon. member's contention was-and I think it is well founded-that the indemnity is paid to members of parliament to indemnify them for their time, and that under the House of Commons Act to consider this a salary is entirely improper-


Richard Burpee Hanson: And unconstitutional.


Agar Rodney Adamson: -and that if the legal lights could get together they might prove that every act of this parliament was illegal, because under the present taxation system we are put into the position of being employees of the government, and the House of Commons Act definitely states that a member of this house cannot be an employee of the government, with the exception of a soldier, sailor or airman serving his country during time of war. That is a very important point, and one which I think should be cleared up.
With regard to two hon. and gallant members who have intimated, I think quite publicly, that they could not afford to continue
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to be members, I support the contention of the hon. members for Fraser Valley and for Northumberland, Ontario, that the loss of these two members to this country is a serious loss, and represents the sort of thing which may happen all across Canada. I say to the committee through you, Mr. Chairman, that in politics as in everything else you get what you pay for.
There is what I consider to be a particularly mean decision of the treasury board through which both of these hon. and gallant members suffer severely. I know this because I was fortunate enough to be serving overseas with one of them. By a ruling of the treasury board, if you are a member of this house you are not entitled to dependents' allowance; that is, separation allowance. That decision may be legal, but I suggest that it is very mean. It does not affect me now, but it did. I mention it now because it does not affect me. Here we have members -who, because they are such, are penalized, in that if they are married or get married their wives do not receive the separation allowance. It is a penalty illustrative of the mentality of the treasury board in its reaction to the matter of indemnities paid to members of this house.


James Lorimer Ilsley: This is news to me. I discussed it with members, and certainly I am very much surprised. May I ask the hon. member, on what is the ruling based? It may be that it exists; it may be that it is validly based, but would the hon. gentleman give me a little enlightenment on that?


Agar Rodney Adamson: Yes. If you are in the army you get what is called a separation allowance for your wife.


James Lorimer Ilsley: The dependents' allowance.


Agar Rodney Adamson: The dependents' allowance. If you happen to be a member of the house that is automatically cut off, by the ruling of the treasury board, because you cannot draw a salary from two departments at once.


James Lorimer Ilsley: What about your soldier's pay?


Agar Rodney Adamson: You get that, but not while serving as a member of the house. I want to make this very clear, that no hon. member on active service while serving in this house draws two indemnities. He does not draw his army pay and his indemnity as a member of this house if he serves in this house.


Richard Burpee Hanson: While he is in the house.
Income War Tax


Agar Rodney Adamson: He receives leave without pay to look after his parliamentary duties. But whether he is serving overseas or anywhere else he does not receive separation allowance for his wife at any time. I think that is a peculiarly picayune and rather mean proviso of the treasury board. I must say that it is not endearing the treasury board to those who are affected by it.


Mr. HOWDEN:: Which does he receive, his army pay or his parliamentary pay?


Richard Burpee Hanson: He receives his parliamentary pay in full. His wife gets no separation allowance from his army pay, and he loses his army pay while he is here in the House of Commons. I think that is the correct statement.


Agar Rodney Adamson: Yes.


Douglas Charles Abbott: Supposing he were here for six months he would receive his full parliamentary indemnity and no army pay during that period. During the remaining six months he could draw his army pay.


Richard Burpee Hanson: I think that is so. But he gets no wife's allowance at any time.


Agar Rodney Adamson: He would draw no separation allowance at any time. Both these hon. and gallant members have brought this up to me and mentioned it as peculiarly unfair and "small". Both of them are professional men, and married. Before they became members of parliament they lived on the fees which they received for their professional services. That source of income is completely cut off; both of them have found it almost impossible to live, and both have stated that they cannot remain members under these conditions. Because of the ruling I have mentioned we are losing from this house the very type of young men we should have in it.
I wish now to refer to the British budget. As brought down quite recently by Sir John Anderson, it definitely recognizes, or so I understand from the press, that a member of parliament has definite expenses, and gives him an allowance for them. Surely we can follow the lead given in this respect by the British house.
I hold in my hand a bill which shows that the Australian parliament recognizes not only the expenses which have been mentioned, but election expenses as well. I think the committee would be interested in one of the clauses of this act, since we are likely to have an election, I understand, in the very near future. Section 74 of the Australian income tax assessment act as revised this year reads:
[Mr. It. B. Hanson.3
Expenditure incurred in the year of income by .the taxpayer in being elected as a member, or in contesting an election for membership, of the parliament or of the parliament of a state shall be allowable deduction.
That is a very interesting clause, and remember it is put in by a Labour government. I think it is important for this reason. What we have to do in Canada is to see to it that the type of man we get in the House of Commons is truly representative of the people throughout the countiy. We are going to be faced with a good many young men coming back, discharged and demobilized; we hope that the next House of Commons will have a great number of servicemen in it, and unless we liberalize our methods of taxation and our present method of reducing the indemnity until it is impossible to live on it, we are not going to get, after the next election, the type of independently thinking young man in the House of Commons that we should have. Everything should be done under our taxation policy to make it easy for courageous and forceful young men who have fought for their country to become condidates for parliamentary honour. We need that type of young man, but under the present taxation system we do everything to discourage such men, and that is one of my most serious condemnations of the present system.
Several matters have been brought up on this resolution and I wish to say just one word with regard to succession duties.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Agar Rodney Adamson: When the committee took recess at six o'clock, I was speaking in general terms about the peculiar way in which we as Canadians treat our public men. There is in Canada a philosophy, I think one of the most pernicious that could be harboured in any country, that all men who go into public life do so for ulterior reasons; and when a public man is defeated many people continue to bear a personal dislike to that individual. No other country in the world treats its public servants as badly as Canada does. To-day there are living in Canada I think seven gentlemen who at one time or another have been premiers of some of the sovereign provinces of this dominion. All or most of them are living in a degree of oblivion; some have been or perhaps are actually close to destitution. That is something the public man sees in Canada when he looks around. He sees men once great, once leaders of great provinces, elected

Income War Tax
by the public will, whom the fortunes of politics have turned down and who have been treated worse than men engaged in any other line of endeavour. These are the things we see, and they are not conducive to the wellbeing of the state.
We have taken a cynical attitude toward public servants. We have said that no man who enters the public service can possibly be honest. That is the philosophy of the country. When I was elected to this house I was in the army. My colonel said to me, "If you had been in the penitentiary for five years people would have forgotten and forgiven you. Now you have become a politician, and that will stay with you for the rest of your life." That is the philosophy we have spread in Canada, and I say to hon. members that it is a damnable philosophy. We do not consider, as do the English and the other democracies, that a man enters the public service of his country for the same reasons that another man enters the armed service of his country. I submit, Mr. Chairman, that until we overcome these peculiar ideas we shall continue to have the sort of negative government we have at the present time. That is all I have to say with regard to the sessional indemnity.
I should now like to say a word about succession duties, which I believe come under this item. There is a specific item dealing with them, but what I have to say is more germane to this item than to any other. It is a peculiar thing, but we have developed the philosophy that it is a sin to make a success of anything. Once a man has made a success in life he is considered suspect, and the taxing authorities of this dominion regard his estate almost as an enemy of the country. I am going to put on record to-night some specific figures with regard to an estate


James Lorimer Ilsley: Mr. Chairman, we made a bad start this afternoon with respect to the rules. The hon. member for York-Sunbury asked in a polite way for leave to introduce under this item the question of taxation on sessional indemnities, and no one took exception. We have strayed from one field to another, and I think now we should decide to comply with the rules of the house after we finish with some of the matters that have been brought up; not all of them, but I think probably the matter of the taxation of sessional indemnities will have something more said about it. I suggest that we get back to our items and stick with them; otherwise we shall never make any headway. If we have general speeches, appropriate to the debate on the budget, on each resolution the whole discussion
will get entirely out of hand. The hon. gentleman is now propounding his philosophy, or his criticism of the philosophy of others, with respect to accumulations and whether or not they should be passed on at the time of one's death. That has nothing to do with this item, and I raise the point of order.


The ACTING CHAIRMAN (Mr. Golding):: The minister is quite correct in his interpretation of the rules, and this evening I hope hon. members will confine their remarks to resolution 1, which reads:
1. That for 1944 the total tax on individuals be reduced by one-half the amount of the refundable portion thereof, less one-half credits for savings, and that for 1945 the total -tax on individuals be reduced by the full amount of the refundable portion thereof, less credits for savings.
I hope hon. mentbers will try to cooperate and keep to the point under discussion.


Mr. NEILL:: The minister said that we were to finish the subject we had started this afternoon.


James Lorimer Ilsley: That is correct; we shall have to finish that.


Agar Rodney Adamson: I bow to your ruling, of course, Mr. Chairman; but since this afternoon the general subjects of the functions of chartered banks and the Bank of Canada, and the issue of debt-free money were allowed, I considered' that on the first item there would be an opportunity to all members to discuss the general taxation policy. However, if the Minister of Finance wishes to have it otherwise, and if in the future we shall have an opportunity to deal with specific items as they come up, then I shall reserve what I have to say on succession duties until the specific item is before the committee. I understand that I have that guarantee, and I therefore bow to your ruling.


Mr. WOOD:: Mr. Chairman, so far as possible I shall endeavour to confine my remarks to the first item in the resolutions. I believe it is quite in order that we discuss the taxation upon the sessional indemnities of members of parliament. I must point out that I have a great deal of sympathy with my fellow members in the matter of taxation of those indemnities, and I cannot see any rhyme or reason why a member of parliament is not entitled to the legitimate expenses connected' with his being a member of parliament as would be enjoyed by any other Canadian citizen. Some consideration should1 ibe given to that aspect of the situation. We are taxed on the full amount of our sessional indemnity, and I myself find considerable difficulty in paying
Income War Tax

those -taxes. Like the hon. member for York-Sunbury, I find that SI ,400 is deducted from my S4,000 indemnity for income tax. However, I do not expect to go into the red, because in the past I have tried to conduct my business affairs so that this will not happen, if at all possible.
The hon. member for York-Sunbury complained about the high cost of living. If it requires as much to live as he said it does, then perhaps it is a case of the cost of living high, so far as that hon. member is concerned.
But when it comes to the point of increasing our sessional indemnities by rewarding members of parliament and giving them a monetary consideration commensurate with their positions, I am not so sure that this is an appropriate approach to the problem. First, I was nominated as a Liberal candidate in my riding, the constituency of Brant. When I was nominated and elected I knew the indemnity was $4,000. I did not have to take part in the election; this was still a free country. But I have found there are many who, like myself, are anxious to make some contribution to the public service. After listening to some hon. members who spoke this afternoon, one might decide that they were giving their time and attention without any remuneration at all. The indemnity might not be as large as some think it should be; while the House of Commons is as fairly representative a cross-section of the people as can be found, it is still possible that some of the 245 members may not be worth even the $4,000, and would not make that if they had to compete in some other form of life. That is a point which should be considered.
After all, the average member of parliament has a contribution to make when he offers his services at election time. Very often during the campaign his speeches reflect a high plane of thought, when he solicits the votes of his constituents to support him in the contribution he wishes to make to the public service.
There are other compensations besides the monetary one. The first of these is the honour of being a member of parliament-because I consider it a great honour to represent the people of Brant. I have had many predecessors whom I have looked upon with much approval.


George Alexander Cruickshank: You cannot eat
honour.


George Ernest Wood: I did not hear the hon. member. The fact is that some most honoured men have represented the constituency of Brant, and I feel highly honoured in being one of those called upon to represent those

splendid people. That is a consideration which money cannot buy, and which should be kept in mind.
If one places only a monetary value upon his membership in the House of Commons,, then we see at once that there are some in the house who, in many other walks of life,, might earn four or five times as much as they receive here as members of parliament. So that I suggest the matter should not be considered only from a monetary point of view. After all, the member of parliament has a contribution he can make, one which I believe is best exemplified in a book I take a great deal of pleasure in reading, when I want inspiration. This book is called "Self-Help," by Samuel Smiles, and at one page I find this:
Even the humblest person, who sets before his fellows an example of industry, sobriety, and upright honesty of purpose in life, has a present as well as a future influence upon the well-being of his country; for his life and character pass unconsciously into the lives of others, and propagate good example for -all time to come.
If we as members of parliament, in the dying hours of a session, say that we are going to extract more from the taxpayers of this country, I am wondering what kind of example that would be to our fellowmen.
After all, there is this to be said about it, that in these days in which our boys are fighting against tyranny a weapon has been put into the hands of civilians, namely, the weapon of taxation. That weapon is evidenced in various types of controls, price-freezing, pricesetting, gasoline rationing, sugar rationing, and controls of other kinds. Many of these controls can be used as weapons in the hands of civilians. I am sorry to say I have had complaints from some who have been too cowardly to use those controls with a grace which would have been commensurate with the contribution being made by our soldiers.
This is a weapon we have within our hands,, and we must use it to help our boys when they are fighting the forces of tyranny; because, after all, they could not get very far if we as civilians did not back them up. I repeat that when I hear people complain of high taxes, I am bound to remember that we are living in a country which is free, one in which our homes are not bombed, and one in which we enjoy many privileges. We complain of some of the weapons the Minister of Finance is using, the taxation he is inflicting upon us, but I consider it is the right and privilege of a citizen to pay these taxes. We should not overlook that.
It would be unfortunate if we as members-of parliament showed a bad example at this

Income War Tax
particular time. I hesitate to think where it might end. Naturally we all do not like paying taxes; but if we as members of parliament (Jo not show our sense of duty, how can we expect those who are fighting our battles for $1.50 a day to react? What will they think of members of parliament who are looking after their own particular interests regardless of the welfare of our soldiers who are fighting our battles at this particular time? I may be all wrong-


George Alexander Cruickshank: You certainly are.


George Ernest Wood: The hon. member is quite within his right to pass his opinion. I may be all wrong, but I have never reached the point where I consider I never make a mistake.


George Alexander Cruickshank: You never will.


George Ernest Wood: There are those who claim they never make mistakes, but they do not know when they make one. I am not so sure that making it easy for society will produce the best results. There are those who have -admitted that they have enjoyed the fruits of poverty in their success. I should like to quote again from the same book:
Riches and. ease, it is perfectly clear, are not necessary for man's highest culture, else had not the world been so largely indebted in all times to those who have sprung from the humbler ranks. An easy and luxurious existence does not train men to effort or encounter with difficulty; nor does it awaken that consciousness of power which is so necessary for energetic and effective action in life.
We have in this house men who have deserted a particular field to come and work for this poverty-stricken indemnity of $4,000 that is taxed. We do not seem to have any difficulty in finding people to take this truck-driver's job. Truck-driver's pay was mentioned this afternoon, but I do not think that kind of phraseology lends dignity to this house. I do not want to get on too high a plane but, after all, I feel that a member of parliament should set an exemplary example in his community.
Some of those who have spoken have referred to the lack of fortitude and courage on the part of the Minister of Finance in facing this issue. Some of us who come from the simpler walks of life do not feel as strongly about this matter as others. So far as I am concerned, if some of these gentlemen do not think the $4,000 indemnity is sufficient there is no reason why they should not resign their seats and put their energies to other things where they may be better rewarded.
I would be much opposed to increasing the indemnity at a time like this without asking for the confidence of the people whom I have the honour to represent. While it is an
honour to be a member of parliament, it is only right that the member of parliament should deserve that honour and not take advantage of an opportunity to increase his monetary remuneration at a time when the country is struggling so hard. There are people who think we are already getting too much. I believe a service has been rendered to the people of Canada by directing attention to the position in which a member of parliament finds himself to-day.
On page 32 of the appendix to the budget there is a table showing the percentage distribution of estimated revenues and expenditures. One heading covers legislation, which I understand includes the indemnities of senators and members of parliament and the salaries of all officials associated with the two houses. I find that the percentage of the expenditure for legislation is -05 per cent of the total. This is just a bagatelle compared with other expenditures. Of course .war expenditures were the greatest, being 86-28 per cent. However, the principle is still there, and I do not think we have the right to increase our own remuneration.


George Alexander Cruickshank: Who asked for
that?


Agar Rodney Adamson: Nobody suggested this afternoon that it should be increased.


George Alexander Cruickshank: He is talking
nonsense.


George Ernest Wood: I think if you read the hon. member's speech you will find that he referred to the treatment given representatives and senators in the congress of the United States, and the inference was that there should be an increase for members of parliament.


George Alexander Cruickshank: Nonsense; nobody said that.


George Ernest Wood: You are saying plenty, there
is no doubt about that.


George Alexander Cruickshank: How many days
have you missed this year?


William Henry Golding: The hon. member must not be interrupted.


George Ernest Wood: If the hon. member does not want to agree with me, that is his privilege. That is his right, but I also have the right to approach this subject as a member of parliament and I do not intend to be scared away by the hon. member for Fraser Valley. He is within his right to voice his own opinion, but I reserve my right to do likewise. As I pointed out in the beginning, possibly we are entitled to a certain relief from taxation upon the cost of being here. That is quite within
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our rights, but other than that I take the view that we are being paid for at least a part of our time that we spend here and we are not doing it for nothing.
I do not think it would be wise to put a monetary value upon the work of a member of parliament, because it might eventually create a racket. We might have here the type of people who would try to come here just for the monetary consideration and not because of the public service they Could render. During my life I have found that there are many people who have made great contributions to society without receiving any great reward therefor. I would far rather be classed with those people than with those who are extremely wealthy. We have to give consideration to the sentimental aspect of this matter. The hon. member for Fraser Valley may call it a lack of courage, but I do not think *it is. It is a case of doing our duty in accordance with the circumstances as they present themselves and not taking advantage of the dying days of the session to increase our monetary considerations.
There is one other matter to which I should like to draw attention. This was referred to in the speech by the hon. member for Van-couver-Burrard when he dealt with the debt of this country. I notice on page 50 of the appendix-


William Henry Golding: I do not think we should attempt, under this resolution, to deal with the debt of the country.


George Ernest Wood: I shall be glad to bow to your ruling if I am going outside the resolution. If I am out of order, Mr. Chairman, I will resume my remarks later.


Alan Webster Neill: I would not have taken part in this debate but for the remarks of the hon. gentleman (Mr. Wood) who has just sat down. I would not go so far as to say that I -resent them for, of course, he is entitled to his views. But I deprecate them; perhaps that is the better word. Of course, every member and every section of this house and of this country have their own troubles. The hon. member occupies a seat apparently reasonably close to this city which allows him to go home week-ends. There are members of this house who are known as the Thursday-Tuesday people, who disappear at 3.30 p.m. on Thursday and we do not see them again until 10.30 on Tuesday night. They can go home over a long week-end and conduct their business in some kind of way at any rate by this week-end supervision. But those of us who come from the far west are tied down here for the whole session. If the session meets in November there is not time enough 
to make it worth while going home at Christmas. If I had gone home at Easter I would have had exactly two days at home. So that we who come from the far west are tied down here from the beginning of the session to whatever time the powers that be or the lap of the gods decide that we can go home. That makes a difference. I conducted a fairly profitable little business which I had to sell because I could not get home to run it.
Anything I have to say, Mr. Chairman, will come with better grace from myself than from some other members because it is well known that I am not going to run again. Therefore I shall be free of any suggestion such as the hon. member for Brant made that perhaps members had a personal and a pecuniary interest in suggesting that some adjustment should be made in connection with our expenses. It can mean nothing to me. I am only trying to put forward my views for the benefit of those who will come after me and, as I hope to show, for the benefit of the country.


Mr. MACDONALD (Brantford City):: The country will lose a good servant if you do not come back.


Alan Webster Neill: I hope it may be my pleasure in time to come to look down on this assembly and see how it is progressing.


Mr. REID:: It will be nice to have you still with us.


Alan Webster Neill: It is quite true, as the hon. member for Brant said, that nobody asked us to run. On the other hand, the people who sent us here expect us to fight for their rights and privileges, and we have not the courage to fight for our own. If we have rights, surely we are entitled to them.
Somebody says that an adjustment has not been asked for to-day. I will take it upon myself now to ask, on behalf of those members who may come after me, that there should be, not an increase in the indemnity, but fair treatment as regards members' expense accounts. I hope that by putting it on the record it may get out to the public, because many people are entirely ignorant of the real facts. The popular idea is that we live here at the expense of the country. When people read in the papers, for instance, that the restaurant went several thousand dollars behind, they think we got the benefit of all that. We do not. A good many people think we do not pay for our lodgings here and so on. A gentleman, a very decent fellow, once sent me a wire collect. It was a nice chatty wire, beginning, "Dear Mr. Neill" and ending with "Yours sincerely". It cost me $7.50. He thought that was one of my privileges.

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I only ask that we should be treated the same as any other body. Many years ago- I may be wrong in this, but this is my impression from studying the thing at the time-the same question arose in more modified form, and the then Minister of Finance, I think it was Mr. Fielding, but it might have been his predecessor, said that he would arrange it so that members would get some allowance for their expenses.
If I were a real estate agent I would be allowed, when making up my income tax return, to deduct from my profits any expenses that I had incurred in obtaining those profits. I have to maintain an office, rent, fuel, light, telephone, et cetera, and a stenographer all the time to carry on my political work. If I were a lawyer or a doctor I would be allowed to deduct those expenses from my income, and quite properly so. There is no occupation that would not be allowed to do that. But we are not. There is no sense of fairness about that. It does not make common sense.
Some seventeen years ago, being Scotch, and the Scotch can always see a nickel without a microscope, I took up this question with an authority in the taxation branch. The difference was not nearly as great then as it is now. I said to him, "I am entitled to deduct these expenses." He said, "No, you are not." I said, "Oh, yes; here it is in the law. It says that if you are away from home pursuing your business or occupation you can deduct your expenses. If I had been in the contracting business I could deduct my travelling expenses." But he said, "No, you cannot deduct your expenses." Then I said, "How do you get around that- sentence in the law? Is not my business as a member of parliament an occupation?" He said, "No, it is not." Then I said, "What is it?" And he said, "It is an honour." And for that honour I have to pay all these expenses out of my own pocket. That was seventeen years ago.
The question was raised again more recently because the pressure of taxation brought it home to hon. members. Some of them consulted a high official in the taxation branch and he laughed at them. He said, "Of course, you are entitled to make the deduction, but you have been standing for it for so long that it would not look well to make a change now just before an election."
Two years ago I brought this question up on the legislation items in the estimates, which I thought was the proper place, but I got no support, and I left the house rather disgusted. I met some members and said to them, "You know blamed well I was right, why didn't you
back me up?" They said, "That's all very well for you, Neill, but you are not going to run again and we are."
The government has been accused of a lack of courage. The blame is not altogether the government's. It is the members who did not have the courage to demand what was coming to them. They were afraid of public sentiment. It is not good to be afraid of public sentiment. The fear is wholly misplaced in this case. The common people, the working people, the union people never want their members to be cheap. The idea of doing something cheap will not get anywhere with them, and they will always stand for a reasonable explanation.
An election was coming off in Nova Scotia some years ago, and the government of the day, in order to popularize themselves, just as our hon. friend opposite had in his mind perhaps, reduced their salaries by two or three hundred dollars. The next day the newspapers came out with great big headlines-I remember one paper, a Labour paper had this headline: "Legislators cut down their salaries." But the next line read: "Cheap Skates! They knew what they were worth." That is all the applause they got from the working man. The working man wants good wages for himself, and he is willing that those who do good service for others shall get paid for it.
I remember once talking to a group of working men along the same lines. It was at a logging camp. I said that I was not being paid enough and that I would vote for an increase. One of the men said, "You say that you are not getting paid enough. Then why do you run? Nobody asked you to run." "That is perfectly true," I said, "but the reason I run is the same reason that brings some of you to town to get drunk. I get a kick out of it, whether I get paid properly for it or not." I would love to run again, but the state of my health forbids it. Let me tell the committee that I might not be so frank if I were running again; I would be accused of ulterior motives; but I am thinking of the people who are coming after me, good men who may be prevented from running because of existing conditions.
Last year I kept a fairly close record of my expenses. Everyone who knows me-my fellow members and my neighbours at home

know I live in a very quiet way. When a man works thirteen hours a day he has not much time for a frivolous life. My hours at home are eight a.m. to ten p.m., with an hour off at noon, and that does not leave me much time to go in for riotous living. So that I live quietly and inexpensively. But I was just $575 out by being a member of parliament last
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year. I must say that I included in my expenses the sum of $1,000 toward my election expenses, because that generally costs me between four and five thousand dollars, and each year I take off a thousand dollars of my indemnity to make up that amount. Even at that I would be glad to go on doing it, for the honour of it; as I say, it is the only job I know; it has been my recreation and my hobby, as well as my occupation for twenty-eight years.
There is just one other point I wish to make. If we go on the way we are doing a new system will develop ; indeed it is developing now. The hon. member who sits behind me said that he knew of two members who for that reason were not going to run, and certainly there are other members who will be deterred on the same grounds from standing again. I asked a man whom I know if he would run to take my place. He had very good qualifications, but he lacked private means. He said that he would have been *willing to stand, but he could not afford it; he had a wife and family. Here is what we are going to develop-and heaven forbid that it should come in Canada: we are going to have a parliament of rich men or the stooges of rich men; it will be either one or the other. The rich man can afford to be a member of parliament; and perhaps would desire to be one, wholly from a sense of honour and responsibility; nevertheless he is a rich man and, when it comes down to the point, he looks at things through the eyes of the rich man. The poor man looks at things through the eyes of the poor man. Either you are going to have rich men who can afford to be out of pocket, or poor men who will be tools of rich men or companies or interests. It does not necessarily have to be engineered by some company; there may be nothing actually improper; but the man who pays the piper sets the tune, and the man or interest that finances a campaign will have an awful lot to say about its policies.
I therefore think that the proposed change would be a fair thing. I do not ask for any increase of indemnity, although it may be remarked that in the United States their representatives are paid far more, but simply that every member should be entitled to deduct his legitimate expenses, and I would not put them at a high figure so that the system could be abused. Let the allowance for expeness be a reasonable one, taking account of the fact that a man may have to give up his business, as we in British Columbia have to do. I would ask any lawyers from British Columbia what their businesses are worth to-day. This would

be fair for business and good for democracy. I submit also that it would be a good thing for the people, who want to be represented not by rich men or by stooges but by people just like themselves who can afford to come and represent them. I hope the minister will take some cognizance of the suggestion to make some allowance for expenses legitimately incurred, as we all know they must be. I do not believe the government would suffer by it, and I do not think any hon. member who suggests it or votes for it will suffer either, because the people are sound, commonsensible folk, who do not want any more than is coming to them, and they want everyone to get a square deal.


Gordon Knapman Fraser: Mr. Chairman, I am going to surprise -you and also the minister, because I intend to speak on an item. We have been almost four hours on this subject, and I think we should get on an item, unless the minister would like to speak first.


James Lorimer Ilsley: I should like to speak some time on this question of taxation of members' indemnities.


Gordon Knapman Fraser: Speak now, then.


Mr. KNOWLES:: Perhaps before the minister speaks I may be permitted to say a few words. The reason why I ask the privilege of speaking first is that I should like to anticipate one argument he may use, in case one of the interjections which the parliamentary assistant made this afternoon reflects some of the thinking of the minister. I do not hold it against the parliamentary assistant for the interjection he made; he may have been provoked by the nature of the remarks at that moment; but what he said was something like this, if I remember correctly, "It is very nice to be relieving ourselves of taxation." If I felt that that was what we were asking for I should be opposed to any such move, just as other hon. members have stated their opposition to an increase in the amount of the indemnity. But what I feel we are doing here to-day is directly in line with the third basic consideration which the minister outlined in his budget speech. As reported in Hansard, at page 4174, he said:
A third consideration is the desirability of relieving cases of special hardship which very frequently arise when tax rates are heavy, and of removing some anomalies which experience has revealed in the working of our laws.
I would say to the minister and the parliamentary assistant that under the terms of that consideration members of parliament, by

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correspondence, by interviews with the minister, by raising cases in the house, have fought hard in connection with a number of anomalies and conditions which they considered unfair and unjust. The minister, in the very speech to which I have referred, made announcements to take care of a number of these anomalies. Let me take a moment to refer to some of them. First there is the proposed change with regard to undue medical expenses, so that the amount over five per cent is now allowable as an exemption, whether expended in Canada or the United States. He made a new provision with regard to the expenses of the blind. He brought illegitimate children and in-laws into the exemption classes. He made provision for exemption in the case of payments of alimony. He suggested a new provision with respect to the maintenance of self-contained domestic establishments.
There are some other matters which the minister has not adjusted as yet, such as meeting a request which hon. members have made for an exemption to parents of student nurses. There was also the matter which I mentioned the other night, namely, that of granting sleeping-car conductors and sleeping-car porters the same away-from-home expense allowance which is allowed to brakemen, firemen, engineers and train conductors.
The point I am trying to make is that in connection with all these cases what members of parliament on all sides of the house have fought for is not relief from taxation; what they have fought for is equity, for an adjustment of what they considered anomalies; and I feel, quite frankly, that we are only at this stage of the game doing something on behalf of ourselves which we have done strenuously on behalf of those whom we represent.
I know that in our own group, when we were discussing this matter one day, my colleague the hon. member for Cape Breton South made the comment that if a case similar to that of members of parliament were brought to our attention from outside the house we would rise in this chamber and fight like the mischief on behalf of such people. So that I do not think we are asking for any concession or any relief from taxation; we are simply asking that the third consideration which the minister laid down in his budget speech should be thought of as applying to these cases.
A .number of sets of figures relative to this matter were given to the minister to-day. I was interested in the figures given by the hon. member for Trinity, but other figures might be added! to those, because he gave the figures for a member who has another income before he comes here, one which is still his
after he becomes a member. There are some of us here who, whatever the reason may be, have no other source of income once we are elected. I am not complaining at all, I am quite satisfied, I may say to the hon. member for Brant and others. Even if no adjustment is made, or even if the taxes are increased, I intend, so long as the electors of Winnipeg North Centre are satisfied, to continue coming here as a member of parliament. I wish to render such service as I can in this capacity, so that there is nothing in the nature of a threat or a promise, as my political opponents might suggest, in this connection. However, may I state, my own case. Apart from any profession I may have followed, I am a member of the International Typographical Union. If I were working at the trade as a linotype operator in Winnipeg, working at the present scale of wages, subject to the taxation now in effect, living in Winnipeg, and having only one home to maintain, it would leave me better off financially than I am under present circumstances. Once again let me say I am not complaining. But I do feel that just as on the one hand I do not want to be better off than the people whom I represent, because of my work as a member of parliament, so I know that the people whom I represent do not want me to be worse off than I would be if I had not gone in for public service in this way. I think the minister should take into consideration the case of members who give their full time and have no other income, as well as cases of the kind referred to by the hon. member for Trinity.
Speaking of interjections, I thought I heard the minister interject at one point that he doubted whether in the past, at some stage of the game, there had been very great unanimity in the house on this matter. If that was so in the past, one of the reasons I am speaking tonight, although as a matter of fact the position of this party was sufficiently well stated by our leader, is to add, what I feel the minister should realize now, that there is practical unanimity on this point. That does not mean that in the view of some of us it was ever right that some consideration along the line we are now urging should not have been given. It simply bears out the correctness of what the minister said in that sentence to which I have referred, that when tax rates are heavy some of these anomalies are brought to light. With the experience of laws of this kind there are revealed things that were not caught before; and because of that experience, because of the way the tax rates operate, members feel the justice of putting up this fight for themselves, comparable with the fight which we
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have put up for others, and to which the minister in many cases has responded. There is great unanimity at the present time. In fact, I believe the committeee is unanimous; the only member who has offered any reservations having been the hon. member for Brant; But even he did not oppose the suggestion that there should1 be some adjustment along this line, and I hope that factor, if it was one that was sticking in the minister's mind, will now be taken into consideration by him, namely, that all parties in the house, members on all sides, are agreed1 that it is a just' request which we are making.


Richard Burpee Hanson: I have no regrets for having brought up this matter to-day, and I do not believe that I have in any way overstated the position. I was rather disturbed at an interjection made by the parliamentary assistant, to which the hon. member for Winnipeg North Centre has referred, because the parliamentary assistant intimated that it was nice for us to relieve ourselves from income taxation. On reflection I do not think he will persist in that position. I do not believe there has been any disposition on the part of anyone to benefit oneself in the course of this debate to-day. Certainly I made no claim for relief myself. I want to make that abundantly clear.


James Lorimer Ilsley: I do not understand that.
I understand that what the hon. gentleman suggests, and what many others have suggested, would relieve members of parliament from many hundreds of dollars of income taxation.


Richard Burpee Hanson: That may be the effect of it, but that was not the motive underlying my position. I am quite content to pay income tax. I have paid it from the beginning and I expect to pay it until I die, but I want to pay only on true income, and members of parliament are not paying on true income. That is the difficulty which the minister has not met.	*


James Lorimer Ilsley: I have not spoken.


Richard Burpee Hanson: Well, I
know the minister must have had this matter under consideration.


James Lorimer Ilsley: Why, certainly.


Richard Burpee Hanson: The government must have had it under consideration.


James Lorimer Ilsley: For years.


Richard Burpee Hanson: I am informed that it has been the subject-matter of discussion within the party itself. I will not go farther than that. It has not borne

so hardly until the war, until the high rates have come into effect, and then it has come home to hon. members that they are being taxed on their gross income without allowance whatever being given to the cost of procuring that income. The net is what should be taxed. I have had this matter up with the department. The department took the view that parliament itself has the remedy and I am trying to get parliament to apply the remedy. I do not want anyone to take from any remarks I made this afternoon that I was advocating an increase in indemnity; I am not. I am asking the government to put the taxation of parliamentary indemnities on the true basis, exactly on the same basis that they put me as a practising lawyer, where I charge for postage stamps. A practising lawyer charges up every item of expense- telegraph and telephone tolls, rentals, and so on; every time he has to move, travelling expenses are charged up. Nobody could earn income on any other basis if he did not do it in the way I have suggested. But a member of parliament, because of lack of courage of members of parliament in the past-I can only put it in that way-is now legislated into a position which is not only an anomaly but much worse than that. It is cruel to members of parliament to tax them on their expenses in earning their sessional indemnity.
I take a constitutional view of this question, and if it were fought I do not think these indemnities would be regarded as income. I know the only case that has been tried in Canada was one in reference to the salary of a lieutenant governor where it was held that the expenses of the lieutenant governor in entertaining, owing to the position he occupied, were disallowed. The expenses which a member of parliament has to incur are on an entirely different plane.
I should like to impress upon the Minister of Finance and the other members of the government that members of parliament do not object to paying income tax on true income. They do object to paying income tax on gross income, without any allowance for the cost of earning that income. Could I state it in any shorter form than that? That is the principle upon which I base my objection. I did not offer any suggestion this afternoon as to quantum, nor do I now. I suggest that consideration should be given by the government to this whole problem. If they do not want to put it into effect for this parliament, put it into effect for the next one, so that this thing which has rankled in the breasts of members of parliament for twenty-three years, to my own personal knowledge, and about which they have been afraid to move for fear

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of criticism, may be rectified. I ask for justice for members of parliament. I am not asking justice for myself in that regard. It does not matter a bit to me; I may not be back in this house. But I should like to see my successor, to whatever party he may belong, who may be a man without private means, in a better position. How can he leave his business in Fredericton, come here for six months of the year and maintain and educate his family as he is bound to do, on S4,000 a year, taxed at the rates in force to-day? The thing just does not add up to common decency, and certainly it is not democratic. I am sure my electors will support the position I have taken. I am sure the electors of this country, if they understand the position, will support any reasonable action taken by the government with respect to this matter. I should like to know of any other class of people in the country who are taxed on gross income. I do not know of any; none comes to mind at the moment.


James Lorimer Ilsley: There are hundreds.


Richard Burpee Hanson: There may be, but none occurs to me at the moment. If there are others, that is another case of injustice, although of course each case has to be analysed and must stand on its own feet. The debate this afternoon has demonstrated the injustice of the present position, and the -government ought to pay heed to what has been said.


Mr. PICARD:: discouraged with the present situation that they feel their duty to their own families compels them to leave public life. At present, unless a man has made a fortune before coming here, or unless he has inherited some money, he cannot carry on. I submit to the minister that some way should be found to lighten the burden upon members of parliament, either by exempting from taxation a certain portion of the indemnity, or by allowing an hon. member to deduct the amount of his personal expenses here in Ottawa. Some way should be found to get around the difficulty.
According to what we have heard here today from members representing all provinces and all parties, such action should be well received by the people. I know some people say that this is the wrong time to do anything like this, while so many of our young men are making great sacrifices in connection with the war. Of course that has to be considered. It may be said that this would be a dangerous time to take such action, but I do not agree. When the time comes I am going to make the same representations in regard to the salaries of judges. I am glad to know that my remarks in that connection are in accord with views expressed by the labour unions, who have already passed a resolution stating that the judiciary should be able to carry on their duties without any fear of financial difficulty for themselves and their families. If I am not mistaken the same resolution also included members of parliament. So that it is encouraging to realize that at least in some quarters this situation has been recognized. I want to go on record as supporting what has been said in this connection to-day by members who have advocated that relief be granted one way or another to members.


Mr. MAYHEW:: I do not think I can add very much to what has already been said, but I wish to go on record as endorsing the proposals that have been advanced by the hon. member for York-Sunbury and others. However, I believe we should look at it perhaps a little differently from the point of view of the advantage it would be to members in the present house. After all, this session is pretty close to an end; I understand there will be an election before very long, so that there may be quite a change in the personnel of this house. Who are they to be? Are they to be the young men who have come home from overseas? Are they to be able to come here and represent their constituents-and probably represent the men alongside whom they have fought overseas? I doubt if they can possibly do so, because it is impossible to break even on the present indemnity.
The way I look at it is this: What class of men are we to have representing us in
TMr. Picard.]
Ottawa in the future? I think of my own riding, and many others, and then I think of the many young men I would like to see coming here to Ottawa, probably in preference to myself. They are welcome to it this time, and I would be glad to support a younger man. But I cannot ask them to take the risk, because there is not sufficient in it for them.
I wonder how many men in this house who have sons would recommend to them that they make politics their business with the present outlook in that career? Unless there is something more than just a living, I am sure we are not going to ask them to do it. And if we cannot ask our own sons to do it, are, we going to ask the sons of other people?
I probably spend more money than some. I know I come a long way from having anything left over, after paying for my accommodation and expenses while in Ottawa. Probably, as the hon. member for Brant has said, the high cost of living has something to do with my expenses; but let me tell the committee that last year I spent forty nights in a sleeping car-and I am not going to spend forty nights in an upper berth, or forty nights cramped up in a lower berth, either, if I can get a compartment. Therefore it cost me a considerable sum of money to come here and to return.
I do not think I am in the poor man's class, nor am I in the rich man's. But for the remainder of the time I have left to me, I think I am entitled to a little bit of comfort. Therefore I think, with the others, that some remedy should be brought about to enable young men to enter this life. When I think of the -hon. member for Comox-Alberni (Mr. Neill) I think of a splendid example of what a man can do in public life, when he devotes his whole time to it. And as one of the three members from Vancouver island I regret very much that he has made a definite decision that he is not going to return to this chamber. I say that because the whole island of Vancouver will lose a very valuable servant.


Mr. NOSEWORTHY:: As one of the more recent members to come to this chamber, and one who must live entirely on his indemnity, I think I should add a few words to those, already spoken. First, to make my position clear, as the hon. member for Brant pointed out, I was under no compulsion to accept the nomination for York South. I may say this, though, that men in that constituency who had given many years to public service-many more years than I had given- were offered the nomination I accepted, and reported themselves unable to accept because

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they could not educate their school-age families with what would be left of the indemnity they would receive by coming to Ottawa.
I, myself, would not have been willing to accept the nomination until I had reached an age in life when my family was educated, and as a result some of my family responsibilities had decreased. On what is left of my indemnity, I could not to-day maintain my home in Toronto, and rear and educate my family, and also at the same time pay my bills in Ottawa.
As the hon. member for Brant said, I realize there is some honour attached to being a member of parliament. Unfortunately, however, that honour is not legal tender in the commercial banks of our country.


George Ernest Wood: Honour is greater than legal tender.


Joseph William Noseworthy: When I wish to make an instalment payment on the principal sum of a mortgage, or to make an interest payment, or when I wish to pay premiums on life insurance I find that those people insist upon being paid in something more than honour. I can understand that anyone who is in business or on a farm, a type of occupation which could be carried on just as profitably in his absence as when he is there, and from which he might receive an income, might possibly afford to live on what he gets at Ottawa.
But I did not come to public life from one of the better paid professions; I came from the lowly profession of schoolteaching. For twenty years I had worked in that profession, had gained promotion, and had reached a point where I was within a very few hundred dollars of being one of the best paid teachers in Canada. That was my position when I came to Ottawa. At that time I was receiving almost identically the nominal amount we receive as indemnity.
I find that living in Ottawa costs me a considerable amount of money. I am not attempting to overstate what I am saying, f am not like the hon. member for York-Sunbury, an ex-cabinet minister, and I have not yet reached the stage where I insist upon travelling in a compartment. But I find that, while receiving almost identically the same salary I received as a teacher, that salary is worth a thousand dollars a year less to me in Ottawa, as a member of parliament, than the same amount would have been to me as a schoolteacher in Toronto. That is the condition, living on the scale on which I live, in one room in Ottawa, and with most of my meals in the cafeteria, at thirty-five cents each.
In other words, I am paying taxes on at least a thousand dollars I never see, except
to pass it out in expenses which I am forced to incur by reason of my work here. And those additional expenses, together with expenses required to get around my riding- and probably to get around some other ridings [DOT]-are not taken into account.


Douglas Charles Abbott: If I may, Mr. Chairman, I should like to say a word. Two hon. members have made reference to an interjection I made this afternoon. Before I proceed, may I say that I think the hon. member for York-Sunbury and most of the other members who have spoken this afternoon and evening have done a real public service by bringing right out in the open and * to the attention of the people of Canada the position of members of parliament at the present time. My difficulty in considering this question is and has been- this will explain the interjection I made this afternoon-that the indemnities we are paid to provide for expenses existed in 1940 when I was elected'. The only difference between then and now is that we in this parliament of Canada have drastically increased the tax rates on a great many other people besides ourselves.
As has been indicated, we may have been proceeding for a good many years on a false basis, but the fact is that the only thing that has changed since 1940 when I stood for election-I knew then that the $4,000 I would receive would be subject to taxation-is that we have raised the taxes. I find it pretty difficult to convince myself that I should take care of my own case when I am not giving relief to other people who presumably are hit just as hard1.


Agar Rodney Adamson: What about the cost of living bonus?


Douglas Charles Abbott: It is for that reason that I am impressed with the suggestion thrown out by the hon. member for York-Sunbury, that whatever action we now see fit to take to correct our own position should be taken not for this parliament but for the next. We have been here for four years, and during two of those sessions the high tax rates have been in force. This is the first time we have had a full-fledged debate on the matter, the first time we have really brought it to the attention of the people of this country. I for one would hesitate to vote myself what would be in effect a reduction in my taxes, but I am in complete sympathy with the opinions which have been expressed-I am speaking personally-by so many hon. members that we are proceeding on a false basis when we consider the $4,000 we receive as income which should be subject to tax.
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George Alexander Cruickshank: I presume the
parliamentary assistant is aware that some of us who came here in 1940 with a given indemnity have had it doubled since then?


Some hon. MEMBERS:: The taxation
doubled.


George Alexander Cruickshank: It is what you have left, not what you pay that matters.


Mr. BRUCE:: Mr. Chairman, I should like to say a word or two in order to associate myself with what has been said so ably by the hon. member for Comox-Alberni, the hon. member for York-Sunbury, the hon. member for Victoria, B.C., the hon. member for Winnipeg North Centre and others. I think they have made out an admirable case that relief should be given to members of parliament. After all, it is not a salary that the members receive; it is supposed to be a sum of money to indemnify the members against losses incurred by their having to leave their businesses to come here. All we ask is that the situation be considered by the Minister of Finance and the government, and necessary relief given.
I am concerned about the type of men who will be induced to run for parliament in the future. Reference has been made to the young men who are serving our country overseas and who will be returning home. Many of these men will be without occupation and some will have a flair and a desire for public service. Will they be able to afford to come to parliament? Will they be able to raise a family in decency, to educate their children and maintain themselves on the indemnity now given?
I would not ask for relief from taxation, but I think it ik improper to tax the expenses of members. I hope that no main will be prevented from entering public life for financial reasons. We do not want this house to be made up only of rich men. I think the quality of the house and of the legislation passed would suffer materially if that were the case. I hope that this house will be representative of every class in the community. We must make it possible for everyone in the community who wishes to do so to offer himself for public service. It is true that this is attended with a certain amount of honour, but the member should be free of financial worry if he is to do his duty to his constituents. We want to attract the best brains in the community to the House of Commons, and therefore I hope that the minister will consider the removal of taxation from money paid out in expenses.


Richard Burpee Hanson: Before the minister replies I should like to crave the
TMr. Abbott.]
indulgence of the committee in order to speak on the legal aspect of this matter. This has not been touched upon before, and I am going to attempt to clarify the legal position, for hon. members. I have before me the Income War Tax Act, office consolidation down to July, 1943, which I believe is the latest edition. If hon. members will look at page 6, part I, section 3, covering taxable income, they will see the following:
3. For the purposes of this act, "income" means the annual net profit or gain or gratuity, whether ascertained and capable of computation as being wages, salary, or other fixed amount, or unascertained as being fees or emoluments. . . .
I skip a few lines which I do not think have anything to do with it, and then, continue:
(d) the salaries, indemnities or other remuneration of
(i) members of the Senate and House of Commons of Canada and officers thereof.
That is a section under which this tax is levied and I call particular attention to the inclusion of the word "net". It is not the gross that should be taxed; it is the net. If I had to stop there I probably would not be able to make out a case, but I call the attention of hon. members to section 5, to be found on page 13 of this consolidation. This section, covers deductions and exemptions allowed, and it reads:
"Income" as hereinbefore defined-
That is in section 3 to which I have referred.	.
-shall for the purpose of this act be subject to the following exemptions and deductions:
(f) travelling expenses, including the entire amount expended for meals and lodging, while away from home in the pursuit of a trade or business.
We are taxed on our indemnity as a trade or business.


James Lorimer Ilsley: What makes the hon. member say that? Why does the hon. member say that we are taxed on our indemnities as a trade or business?


Richard Burpee Hanson: If you did not tax it as a trade or business it would not be taxable.


James Lorimer Ilsley: Under section 3.


Douglas Charles Abbott: It is income by the definition.


Richard Burpee Hanson: What do you call it under section 3?


James Lorimer Ilsley: It is mentioned specifically.


Richard Burpee Hanson: It says, "the salaried, indemnities or other remuneration of members of the Senate and House of

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Commons." Judges are placed in the same category, but they are allowed travelling expenses free from income tax, are they not?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Members
of parliament are discriminated against in the operation of this act.


James Lorimer Ilsley: Members of parliament get their statutory travelling expenses free. That is what the judges get.


Richard Burpee Hanson: I do not know exactly what the judges get. I understand that they get a per diem allowance away from home not limited to actual travelling expenses, but so much a day.


James Lorimer Ilsley: So much a day.


Richard Burpee Hanson: Whether they spend it or not.


James Lorimer Ilsley: So do members of parliament.


Richard Burpee Hanson: No, they do not.


Some hon. MEMBERS:: No.


James Lorimer Ilsley: Just a minute, Mr. Chairman. Members of parliament by statute, if they live more than four hundred miles from Ottawa, get $15 a day when travelling to and from the sessions of parliament, and that is not taxable. That is comparable with the judges' allowance.


Richard Burpee Hanson: They get it once.


James Lorimer Ilsley: Yes, once.


Richard Burpee Hanson: I understand that the position which the department takes, and this ought to be clarified by the minister, is that because of certain English decisions they do not classify membership as a trade or calling.


James Lorimer Ilsley: As a trade or business.


Richard Burpee Hanson: Therefore they deny to members of parliament the travelling expenses that are included in the deductions and exemptions provided for by paragraph (f) of section 5 of. the act. That is the legal position they take. I challenge that position and that that law is applicable to Canada. We have no Canadian decision that is comparable with that. That decision in England is not binding here. I should like to see the English statute upon which these decisions are based because, when you examine legal decisions based on particular sections of a statute, you will always find that the statutes are not identical. I have not seen the English statute. I doubt if it is identical with this. It may be. But I suggest this, that on a
fair interpretation of paragraph (f) of section 5, travelling and living expenses of a member of parliament while away from home attending parliament are a legitimate deduction and should, as a matter of course, be allowed by the income tax division.


James Lorimer Ilsley: I do not know whether there are other members who want to speak on this but I should like to deal with the matter myself at some length, perhaps for fifteen or twenty minutes, if not longer.
I want to make one thing very clear, that members of parliament and ministers, because ministers have been referred to in the discussion this afternoon and evening, are paid exactly what they were paid before the war and are taxed on exactly the same business on which they were taxed before the war. I want to make that very clear at the outset. The only difference in the treatment of members and ministers during the war and before the war is in the weight of taxation, the higher rates of taxation. There is no other difference either one way or the other in respect of either ministers or members. So that what so many members of the house have asked us to do is to change the rules with respect to taxation which have existed from the beginning of the Income War Tax Act or at least for the last twenty years, and I think from the very beginning of the enactment of the Income War Tax Act. They want us to change the rule that applies to the taxation of members of parliament.


Richard Burpee Hanson: So as not to perpetuate a wrong.


James Lorimer Ilsley: If the hon. gentleman will
allow me to proceed. I am afraid that other hon. members are going to interrupt if he does. That is what happened this afternoon.
I bring myself back to what I was saying when I was interruoted. The request is that, because of the weight of taxation, we now alter the rule which has been applied from the beginning. Is that correct or not? Perhaps it will be said: No, that is incorrect. Perhaps it will be said that we are being asked to change the rule now, not because of the weight of taxation, but because the weight of taxation shows the rule to be a bad one. Nevertheless the government and parliament are in that awkward position that while they are applying practically the same rules now to the great body of taxpayers in this country from the Atlantic to the Pacific-certainly the taxpayers that are in our income group such as Salary earners all over the country', to whom we are applying the same rules-


Some hon. MEMBERS:: Oh, no.
Income War Tax


James Lorimer Ilsley: We are applying the same
rules to them as we were before the war, and we are now asked to change the rules with regard to ourselves. That is the request. Let me give the basis for the rule of taxing the salaries of members of parliament. It may be that this should be changed. That I am not arguing now. I am simply stating the facts because a lot of the facts have been overlooked in the discussion this afternoon and evening. Section 3 of the Income War Tax Act reads as follows:
3. For the purposes of this act, "income" means the annual net profit or gain or gratuity, whether ascertained and capable of computation as being wages, salary, or other fixed amount, or unascertained as being fees or emoluments, or as being profits from a trade or commercial or financial or other business or calling, directly or indirectly received by a person from any office or employment, or from any profession or calling, or from any trade, manufacture or business, as the case may be whether derived from sources within Canada or elsewhere; and shall include the interest, dividends or profits directly or indirectly received from money at interest, upon any security or without security, or from stocks, or from any other investment, and, whether such gains or profits are divided or distributed or not, and also the annual profit or gain from any other source including
(d) the salaries, indemnities or other remuneration of
(i) members of the Senate and House of Commons of Canada and officers thereof.
That has always been interpreted by the income tax division as meaning that when the taxation of wages or salary was being considered the wages or salary constituted the net profit or gain or gratuity which was being taxed, and that certainly applied to salaries, indemnities or other remuneration of members of the Senate and House of Commons and officers thereof.


Richard Burpee Hanson: Will the minister allow me? What effect does that ruling give to the word "net"?


James Lorimer Ilsley: The word "net" applies to profit undoubtedly and if it is taken as applying to gain and gratuity, it is explained and defined by the following words, "whether ascertained and capable of computation as being wages, salary, or other fixed amount", in which event the net profit or gain or gratuity is ascertained. There is nothing more to be said about it. It is not to be increased or reduced. Then it goes on to say, "or unascertained", in which event one will have to look at the expenses and what it took to earn the income and so on.
Whether that is the correct legal interpretation or not, that is the interpretation which has been placed on that section uniformly ever since the section was enacted, and the income

tax division has been very, very careful not to permit from salaries a deduction for the expenses of earning the salary. They have had hundreds of thousands of claims in the course of their administration for just such expenses by persons, for instance, who have had to move from one place to another in order to take a position and who have claimed the removal expenses as part of the costs of earning the new salary; and claims from persons who find it inconvenient, impracticable, in some cases impossible to move their families from where they have been living to the situs of the new job and who have claimed the expenses which they have had to incur at the situs of the new job as expenses in earning the salary. There are multitudinous cases where claims have been put in by wage-earners and by salaried earners, by those in receipt of fixed amounts, all of which are ascertainable and capable of computation, and they have all been disallowed through the years, just as they have been disallowed in the case of members of parliament. They have been disallowed on this ground, I think, that if I take a job in Montreal, and I continue to live in Ottawa, and have to travel from Ottawa to Montreal and have my expenses in Montreal, I must have taken that into account when I took the job, and the salary of the job is presumed to be sufficiently attractive to cover those additional expenses, which are not allowed as a deduction from salary.
It is an entirely different matter if I am engaged in a trade or business. It may be argued that "trade or business" includes profession or salaried occupation; but here again the income tax division have been thoroughly consistent and uniform throughout in ruling that "trade or business" does not include salaried positions; they regard that as meaning trade or business in a different sense. The line is very fine, but they have tried to draw it between what they called trade or business on the one hand, and salary which is not a trade or business on the other. Most unfortunately it seems to run through the railway employees, and that is the reason for the difficulty which the hon. member for Winnipeg North Centre mentioned this evening, and which involves us in this situation, that persons on a mileage basis are regarded as not in receipt of wages, salary or other fixed amount; yet persons on a monthly basis are regarded as persons in receipt of wages, salaries or other fixed amount; and therefore a deduction is allowed under section 5, subsection 3, in the one case and is not allowed in the other case. I mention that to show how difficult it is to draw a line between those in the class of trade

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or business where the profit, gain or gratuity is not ascertained and capable of computation, on the one side of the line, and those on the other side of the line where that profit, gain or gratuity is ascertained.
That, as I say, has been the practice through the years. As to members of parliament, I am dealing with the matter just as it is, factually, and not expressing any views as to what ought to be done, and whether the law should be changed. But this is the fact, that all of us who have run elections-I have run them since 1926-have done so on the basis that the income tax division was applying that rule of taxation to the sessional indemnity. I knew at the time I accepted nomination in 1926, again in 1930, again in 1935, again in 1940, that I would get $4,000; perhaps for a few years in the thirties we got less. I knew that I was not entitled to any deduction because of my expenses. The fact that I elected to keep up two establishments, one in Nova Scotia and another one here, was the 'basis on which I took the position; it was the basis on which I was elected; it was the basis on which I was taxed before the war and through the war, and there has been no change whatever in the basis of taxation.
The question now arises, should that rule be changed? If it is to be changed there are two ways in which this could be done. We could make a special case for representatives of the public; and I do not think we can confine it to elected representatives of the public, I think it would have to apply to members of the senate and, of course, to members of upper chambers. There is an upper chamber in one of the provinces. I think it would certainly have to apply to members of the lower chambers in the various provinces. Also we have had complaints from municipal councils whose members have to be away part of the time to attend municipal council meetings; they have claimed some deduction as well. I do not think we could apply it to this house alone. Nobody this afternoon had his mind on any body of persons but the body of persons within these four walls.


Richard Burpee Hanson: They did not mention it, but we all recognized it.


James Lorimer Ilsley: Nobody mentioned anybody else.


Gerald Grattan McGeer: Nobody suggested for a
moment that this adjustment should be limited to the House of Commons.


James Lorimer Ilsley: Nobody mentioned anything else.


Gerald Grattan McGeer: I dealt with the incomes of the lower brackets.


James Lorimer Ilsley: The hon. member for Van-couver-Burrard mentioned! the exemptions for the lower brackets, but without any application whatever *o allowance of expenses.
Mr. HANSON (York-Sunbury); I think we all had in mind that they would have to be treated as a class.


James Lorimer Ilsley: AH right.
Mr. ADAMSON; I mentioned the taxation in Australia, I think, as being specifically-


William Henry Golding: Order. I believe every hon. member is anxious to conduct the debate in an orderly manner, and I ask the cooperation of the members in respecting the rules regarding debate. In Beauehesne, 2nd edition, page 103, I find citation 3:12, as follows:
Whilst a member is addressing the house, no one has a right to interrupt -him by putting a question to him, or by making or demanding an explanation. A member will at times allow such interruptions through a sense of courtesy to another, ibut it is entirely at the option of the member in possession of the floor to give way or not to an immediate explanation.
I hope hon. members will try to abide by this rule.


James Lorimer Ilsley: What I was saying is that there are two ways, if anything is done in this matter, by which it can be handled. One is to make a special case for members of public bodies, and1 the other is to make a somewhat far-reaching change in our income tax system. Speaking only for myself, I am not enthusiastic about making a far-reaching change in our income tax system, because I do not see much wrong with that system at the present time or the rule upon which it has operated through the years.


George Alexander Cruickshank: Will the minister permit a question?


James Lorimer Ilsley: Mr. Chairman, I prefer not. I find that when I am interrupted1 I cannot, for some reason, swing back to where I was when I was interrupted. I have listened to everybody-


George Alexander Cruickshank: May I question the minister when he is through?


James Lorimer Ilsley: Yes.


William Henry Golding: The minister does not wish to be interrupted.


James Lorimer Ilsley: It is all right for the hon. member to ask his question when I am through.
I said, I think, that speaking for myself I would shrink from taking a step which would mean a fairly far-reaching change in the prin-

Income War Tax

ciples of the taxation system as laid down in that section and adhered to all through the years. Certainly it is a matter to which very careful attention would have to be given, because there is no essential injustice that I can see in the principles of the system as they exist. It may be that a special case can be made. It may be on the ground that the getting of young men into public life is so important, or because the indemnity is not very generous compared' with the indemnity in the United States, and because it is not an attractive career financially-it may be that for reasons like that we ought to apply a rule here which we do not apply outside throughout the length and breadth of the country. But through this war I have thought that we should be terribly careful before we did things like that.
Since the fall of 1941 we 'have had in effect a ceiling policy with regard to wages, salaries and prices. It has been a bitter fight to try to hold those controls. We are told, when we warn about the dangers of inflation and great and vast price rises, that these can be controlled: "It is evident that they can be controlled, because you controlled them". It has been a most unpleasant and disagreeable task trying to control these things, and we have made all kinds of enemies in doing so; but the fact is that those who were in receipt of certain salaries in the fall of 1941 are for the most part in receipt of the same salaries, and yet we have moved in on them with higher and higher taxes until they are caught between the salary ceiling on one side and high taxes on the other. The general principle of war finance in that respect has been that those upon whom high taxes have been placed should really bear high taxes. They should not be enabled in some way or another to get higher remuneration of one kind or another in such a way as to leave themselves in just as good a position as before, to have their standard of living in the same shape as before. We thought that was necessary, being in the straits we were in so far as the war is concerned. We must be careful that those who are caught in that vise of high taxes and frozen salaries will not say to us, the representatives of the people: "You found an out for yourselves by the simple device of freeing a part of your salary or indemnity from taxation." I should not call it salary, because it is not a salary, but it is treated in the act, so far as I can see, just as if it were.


Mr. JACKMAN:: If we treated it as a salary we would be allowed cost of living expense out of it.


William Henry Golding: Order.


Harry Rutherford Jackman: He allowed me to say that.


James Lorimer Ilsley: The hon. gentleman will develop that later, I hope, because if it were treated as salary then certainly-*	,


Harry Rutherford Jackman: Covering a trade or business, I understand.


James Lorimer Ilsley: That is a different matter. A trade or business is something that yields a profit., which is quite different from a salary. If this were treated as salary it certainly would not be subject to deduction for expenses such as is asked for to-day; that is, if the universal ruling of the income tax division has been correct. I am merely placing these considerations before the committee. I do not think I have shied from this problem from lack of courage. I have been accused of that this afternoon most roughly, while, on the other hand, certain members have been most kind, and in that regard I wish to mention particularly the hon. member for Trinity (Mr. Roebuck). Certainly I have not shied away from it through lack of courage, because I have had to do a great many unpopular things in the last three or four years and I have not refrained from doing them if I thought they ought to be done. I have been, however, very hesitant about this, out of a sense of responsibility, as the hon. member for Trinity observed; and I think we must all have that sense of responsibility. The confidence of the public in their elected representatives must be maintained, and we must not do anything which would give rise justifiably to the accusation that we are treating ourselves better than we are treating the heavily taxed, patriotic public of Canada. If anything is done about this-and I am not shutting out the possibility of it at all-I do not think it should be done for the members of the present parliament. I am giving that as my personal opinion. If I change my mind on that I shall simply have to say that I have changed my mind, but I do not think it should be done on behalf of the present members of parliament. Most of the arguments to-day have been that the reason for the change is to provide that persons coming into parliament in the future, persons now in the armed forces and elsewhere, may find' that it is financially possible for them to do so. That consideration at least will be weighed if any change is made with respect to members of another parliament.

Income War Tax


George Alexander Cruickshank: I wish to ask the minister a question or two, and I think I speak for the house when I say that we appreciate his frank expression of opinion. It was exactly what most of us expected him to say. First of all, I wish the minister would inform me whether any ruling has ever been given by the deputy minister of taxation, stating that members' indemnity is not subject to taxation.


James Lorimer Ilsley: The answer is no.


George Alexander Cruickshank: I should like to give this as a notice of motion, so to speak, because we have that letter. I wish the minister would check up on that and find out if that ruling ha9 ever been given. When he is giving his answer, will he give an explanation for the change in that ruling. That is the first question. I appreciate the fact that he cannot answer it offhand and, as I say. I am giving this as a notice. The second question can also be regarded as a notice, because the minister probably has not the information here. I should like to know whether any of those who are commonly known as dollar a year men, lent by different firms to various departments, have been allowed to deduct living expenses from their income tax? If the minister cannot answer that question offhand I should like to get the answer later.


James Lorimer Ilsley: I think I know the story about dollar a year men.


Richard Burpee Hanson: What
about the first question?


James Lorimer Ilsley: The first question was
whether an opinion had ever been given that indemnities were not subject to income tax. The answer is no. I have never heard of such an opinion.


George Alexander Cruickshank: I did not ask whether the minister had ever heard of it. There are many records that he has never heard of. I asked1 whether a ruling had ever been given by the deputy minister of taxation to the effect I have stated. I do not expect the minister to answer that question now; I simply want to find out whether such a ruling has been given by the official in question, that indemnity is not subject to taxation. I have seen the letter. I cannot produce it now; I do not happen to have it. If any of the hon. gentlemen around me are satisfied with the present rate they can speak for themselves, but I know I am speaking for a good many members of the house. The other question is this: Are what are commonly known as dollar a year men, on loan to departments, paying income tax on their per diem expenses, living expense amounting to $20
100-301J
or $25 a day, or are they allowed to deduct that? I do not ask the minister to answer that now.


James Lorimer Ilsley: I can answer both questions. The answer to the first is no. The deputy minister of taxation is sitting before me; I am touching him now-


George Alexander Cruickshank: Do not touch him too heavily.


James Lorimer Ilsley: -and he tells me that he has never given such an opinion. In regard to the second question, with reference to so-called dollar a year men taxed on a per diem allowance, the answer is yes. If the hon. gentleman says, was there ever a case where they were not-


George Alexander Cruickshank: Be careful.


James Lorimer Ilsley: I do not have to be careful I know there have been cases where they were not, and I covered that whole situation in 1940 and 1941. I made a statement in the house on it and put it in the bill. I think it was in the act-


Stanley Howard Knowles: Last year.


James Lorimer Ilsley: -covering the whole situation, and gave the reasons for it. The situation was that some came in on the understanding that it would be taxed and others came in on the understanding that it would not be taxed. For a period we made good our undertaking with respect to those by whom it was understood that it would not be taxed.


George Alexander Cruickshank: I thank the minister for his explanation, with which I do not agree entirely, for it is not in accordance with the information that was given me by the chairman of the committee, who fought out this matter last year and who produced the letter. That hon. gentleman does not happen to be here at the present time, so that I accept the minister's explanation. You need not read the rule to me, Mr. Chairman; I do not want to be ruled out of order every time I ask a question, but the minister's explanation is not in accordance with the letter I was shown. I want the minister and his deputies to be very careful about this. Do I understand now that in 1942 or 1943 no one was allowed to deduct his living expenses, under written authority from the deputy minister? That is a straight question. If the minister would prefer to have it stand as a notice, I am quite prepared to do so. I am asking him if no one was allowed to deduct living expenses in connection with his 1942 or 1943 income tax. I believe the minister has been misinformed by his deputy.
Income War Tax


James Lorimer Ilsley: The answer I gave in that
regard was not based on anything told me by the deputy; that is in regard to the so-called dollar a year men. My answer to that question was based on my own knowledge of the situation. I covered the whole thing in the house last year by legislation. What was done in administration after that, of course I do not know.


George Alexander Cruickshank: I accept the minister's explanation; in other words, the deduction was allowed. I know it was.


James Lorimer Ilsley: Well, I do not have any
reason for knowing that.


George Alexander Cruickshank: I do. Hon. members need not come in from behind the curtains. I am prepared to stay here, in spite of the provincial election campaigns, even if other hon. members are not. I should preface my next question by saying that I appreciate the fact that the minister cannot give special consideration to certain classes, members of parliament, commercial travellers or anyone else, without changing the whole system of income tax collection, but what I am going to ask has been referred to by several hon. members to-day. Will the minister not agree that action could be taken by giving members of parliament the same consideration in regard to motorcar allowance that is given cabinet ministers, without interfering with the general income tax law. That is a straight question. The minister has very ably brought in the situation of the salaried worker, the man here and the man there in receipt of salaries. The minister asks why we should bring some special benefit only to ourselves. In other words, for the sake of the newspapers, and the bad publicity we might receive, we must discriminate against ourselves; we must always consider these men on salaries. I am asking the minister if he will not give us this consideration, which will not interfere with the general income tax law. I ask him if a member of parliament could not be permitted to regard $2,000 of his indemnity as a motorcar allowance. I am informed by some of the best lawyers, both in this chamber and in the other place, that this could be done without interfering with any existing legislation. The other question I should like to ask the minister-


James Lorimer Ilsley: Do not go so fast. With
regard to the motorcar allowance I repeat what I have stated before, that ministers have been taxed during the war on exactly the same basis and in exactly the same way as they have been taxed ever since the motorcar allowance was put into force, in 1932 or 1933.

Of course, if this parliament wish to carve out part of the indemnity of hon. members, call that a motorcar allowance and make it free of taxation, there is nothing to prevent it from doing so, but the same considerations apply in that connection as apply to setting apart a portion of an hon. member's indemnity as a living allowance.


Richard Burpee Hanson: That
would not be meeting the situation squarely.


James Lorimer Ilsley: No.


George Alexander Cruickshank: I appreciate the minister's remark; but if parliament does not want to do that, then parliament has no complaint and certainly I have no complaint, for the majority must rule. I want to make my point clear. I am not complaining about the salaries of the cabinet ministers. At least five of them could make four times what they are receiving now if they were in private life, so that I have no complaint whatever about their salaries. I am asking why we, as private members, who do more running around in one month than any cabinet minister does in seven, should not be entitled to have half our indemnity classed as a motorcar allowance. The best lawyer we have in British Columbia, one of the best in Canada, who sits in that other chamber I am not allowed to mention tells me it can be done. Why can we not have $2,000 of our allowance classed as a motorcar allowance? If the minister says that he is agreeable, nothing in this world can stop it. If he is agreeable, it will be law to-morrow.


James Lorimer Ilsley: If the hon. gentleman is serious-


George Alexander Cruickshank: I am serious.


James Lorimer Ilsley: To put the position of the member on the same basis as that of a minister, a car allowance would have to be voted in addition to the indemnity. The indemnity could be reduced-


George Alexander Cruickshank: That's it.


James Lorimer Ilsley: -if hon. members wanted to reduce it; but the allowance would have to be voted in addition to the indemnity, and if it were voted in addition to the indemnity and were put in statutory form it would be free of taxation. But just the same you would be changing, during the war, the basis of pay and the basis of taxation that existed before the war.


George Alexander Cruickshank: Would you be
agreeable to that, then? Would the minister be agreeable to having our indemnity reduced by $2,000, and having $2,000 voted as a motorcar allowance?

Income War Tax


Richard Burpee Hanson: That would be doing indirectly what we should do directly.


Gerald Grattan McGeer: Will the minister agree to do it if a resolution is passed by the house?


James Lorimer Ilsley: A resolution-


Gerald Grattan McGeer: Take your whip off and let us resolve on it.


James Lorimer Ilsley: Under our constitution a resolution for the expenditure of money cannot emanate from the house.


Gerald Grattan McGeer: It can if you introduce the resolution.


James Lorimer Ilsley: It certainly can.


Gerald Grattan McGeer: Then why not do it?


James Lorimer Ilsley: That was not the question the hon. gentleman asked.


Gerald Grattan McGeer: I asked if you would do it if the house passed a resolution. Your answer was that no private member can offer such a resolution, that it has to come from the treasury benches. You could introduce it yourself.


James Lorimer Ilsley: The hon. gentleman is simply asking whether the government will-


Gerald Grattan McGeer: Bow to the expressed will of parliament.


James Lorimer Ilsley: I do not know just where it has been expressed.


Gerald Grattan McGeer: You have heard it from all over this chamber to-day.


James Lorimer Ilsley: The hon. gentleman made a sharp turn there. First he asked whether, if this parliament passed a resolution, the government would carry it out. I am pointing out to him that only the government could introduce such a resolution. Then the hon. gentleman switches his position and says, "Will you introduce the resolution?"


Gerald Grattan McGeer: But my sharp turn was only to catch up to your circle.


James Lorimer Ilsley: It is doubtful whether the hon. member caught up.


Gerald Grattan McGeer: Well, anybody who catches up to the minister on a sharp turn will have to go fast.


Harry Rutherford Jackman: The dilemma in which the government seems to find itself may be resolved, if I can put before the committee the following, which I shall attempt at least, by way of two propositions. First of all, the effect of increased taxation since the war where the expense allowance is not incurred, or is not an actual expense. That is the first proposition I wish to illustrate to the committee. Second, where the expense is incurred, but where there is no deduction in arriving at the net taxable income, after allowance for expenses.
The first refers to the motorcar allowance of the ministers, and the second refers to the predicament in which hon. members find themselves. The ministers receive $2,000 as a statutory motorcar allowance. As to the justice or injustice of that, I shall not say anything at the present time, except that probably some ministers cannot spend that $2,000 to-day. They cannot replace their cars, and cannot use very much gasoline.


Richard Burpee Hanson: The ministers can; they have a high rating.


Harry Rutherford Jackman: If they are patriotic-and I would assume they are-they cannot. Most of the ministers cannot possibly spend $2,000. This $2,000 is not $2,000 any more; it is now $6,000. The ministers get their ordinary indemnity of $4,000, and a salary of $10,000, making $14,000. If a man in that bracket wishes to get $2,000 extra which he can spend, he has to get an additional $6,000, or a total of $20,000, in order to have $2,000 extra above the $14,000.
Therefore that $2,000 has become magnified into $6,000, because of war taxation. Now, then, what is the obverse of that, namely, the condition in which members find themselves? It is simply this, that members get along on the $4,000 indemnity prior to the war, even with, let us say $1,500 expenses. It might be said to be $2,000 of legitimate expense, which had nothing to do with the cost of elections. Those were simply out-of-pocket expenses in connection with being in Ottawa and earning an indemnity. We will say it was $1,500. But we now find that the tax on this $1,500, which $1,500 we do not retain, has risen from year to year, so that the tax is $750 on something we do not get.
Therefore we may say that whereas we received $4,000 in years prior to the war, on which we paid a negligible tax, and which was available for members with which to keep themselves both here and in their constituencies, they now find that they have $1,500 of expenses, and on that expense, being bracketed between $2,500 and $4,000, there is a tax of approximately fifty per cent, or $750.
So that the ordinary member who is relying on his indemnity has $4,000 gross, and $1,500 as expenses, reducing it to $2,500. And on that $1,500 expense is a further tax of $750. He has about $1,750 left to keep himself. So that you have a position where the minister getting $2,000 more as an allowance, is to-day getting the equivalent of $6,000, whereas the
Income War Tax

member who was paying out a certain amount of money, for which he got no allowance or reduction at all, finds that the taxation on that expenditure has gone up from nothing to $750, and his situation in those circumstances has been rendered more difficult.
The parliamentary assistant said that he knew he was going to get $4,000 when he was nominated to come here in 1940. That applies to all of us. It was possible at that time, probably, for us to live on that amount. But to-day it is impossible, with the incidence of heavy taxation, to live on what is left. So that no poor man can possibly live on what is left, and members of the house are in the position in which no other worker, whether he be a wage-earner or a salaried man finds himself to-day. If the minister has any information to the contrary, I should like to have it.
This is a situation which cries out for some alleviation-I might almost say cries out for mercy. But, whether or not anything is done for us this year makes very little difference. I might say just this, that the hon. member for Comox-Alberni has said that in coming here he was out to the extent of $575, I believe it was, each year, taking $1,000 off his election expenses, which he paid. I paid my own election expenses, with the exception of $800, which was provided by friends-


Mr. FRASER (Northumberland):: Oh, oh.


Harry Rutherford Jackman: -and unsolicited, may I say to the hon. member for Northumberland, Ontario. I find myself serving, after taxation, at a net loss, each year. That will not influence me in making up my mind as to whether or not I shall ran again, but it is unfair to a general class of people who might accept nominations to enter the House of Commons. If they were given some relief from the present situation, whereby they got part of their indemnity allowed for expenses, more citizens would be encouraged to offer themselves for parliament.
The situation is just as difficult for members as it is easy for ministers of the crown.


Stanley Howard Knowles: I should like to ask a question of the minister.


William Henry Golding: The hon. member for Peterborough West has the floor.


Gordon Knapman Fraser: I was not going to speak on this subject. When that discussion has concluded, I shall speak on the item.


Stanley Howard Knowles: I have a double motive in the question I am about to ask the minister. While he was speaking he said, if I remember correctly, that during the period of the war there had been no change in the application of the rale with regard to deductions for expenses from certain kinds of income. As an example he quoted a case to which I had referred, namely, the distinction drawn between sleeping-car conductors and sleeping-car porters on the one hand and trainmen, firemen, engineers and train conductors on the other. He pointed out that the interpretation given by the income tax division with respect to this rule ran right through a trade in this instance. I regret I have not my files before me, so that I cannot give the year in question, but I know that Canadian National Railways sleeping-car conductors in Winnipeg were allowed these deductions at one time. I believe they were allowed them up to the taxation year 1941, and possibly the year 1942. I cannot say as to the latter. But a change has been made in their case.
I believe the change came about in this fashion, that the Winnipeg office allowed a deduction in those earlier years, but that more recently, either last year or this year, the allowance made in Winnipeg was rejected by the head office at Ottawa. In any event it appears, if my information is correct, that there was a change made in the application of rales, so far as Canadian National sleeping-car conductors are concerned.
I said earlier that I had a double motive in asking my question. On the one hand I am interested in the subject which has been before the committee this evening, and I am asking whether, if a change has been made in one case, why it cannot be made in another. I am also anxious to know if that change was made, and, if so, why it had to be made to the detriment of this particular group to which I have referred.


James Lorimer Ilsley: The deputy minister tells me that it was merely a correction of error in bringing the treatment of certain employees in line with the treatment of others in Canada.


Richard Burpee Hanson: There was an error before?


James Lorimer Ilsley: There was an error in one
of the local offices.


Mr. HAZEN:: Has there been a legal
opinion obtained on the Income War Tax Act as it affects the indemnity of members of parliament? Has an opinion been obtained either by the minister's department or the

Department of National Revenue from the Department of Justice or any other legal branch of the government?'


James Lorimer Ilsley: Yes.
Mr. HA'ZEN: Would the minister have any objection to putting that opinion on the record? I am thinking particularly of section 3 which says that income means the actual net profit or gain or gratuity. To me it is puzzling.


James Lorimer Ilsley: I do not think my department ever got any such opinion, but I believe the Department of National Revenue did. I do not think opinions ordinarily are produced unless the government has no objection and I shall have to talk the matter over with my colleague, the Minister of National Revenue.


Richard Burpee Hanson: I would
rather press the minister to give us that opinion if there is no insuperable objection. I should like to say one word with respect to the suggestion emanating, I believe, from the hon. member for Fraser Valley that, by means of a regulation or some other method, $2,000 of the indemnity could be treated as a motorcar allowance and the indemnity reduced accordingly. I hesitate to associate myself with a move of that kind, because that would be doing indirectly what you were refusing to do directly and I do not like that approach. I do not like the suggestion and I would not favour it.
Mr. FRASER, (Northumberland):	I do
not wish to prolong the debate in connection with sessional indemnities, but I should like to make one or two observations. Apparently this afternoon I made the statement that the minister lacked courage, and I want to say that that was in reference only to this particular question. A woman may be very much afraid of a mouse but still have the courage to face death.


Richard Burpee Hanson: Or her
husband.


William Alexander Fraser: Or her
husband. This is just a case of not having the courage to face this matter. I would be the last one to insinuate that the Minister of Finance has not plenty of courage. I do not suppose there has ever been a minister of finance who has been faced1 with problems that demanded as much courage as those faced by the present minister. I have no intention of making any reflection upon his courage, except as I said a minute ago.
It is galling to members of parliament when they see these controllers and government
Income War Tax
officials who are appointed not by the civil service commission but by orders in council, ex-bank managers, ex-brokers, chaps who havq been square pegs in round holes, many of them receiving far more than members of parliament and working only five days a week and about six hours a day. They are travelling to and fro all the time cluttering up our trains. As was mentioned by an hon. member across the floor to-night, they receive living allowances that are not taxed. I do not think we should blind ourselves to that fact.
Some of us who have spent a part of our lives doing what we thought was the proper thing in connection with public service should not be blamed for prolonging this debate this afternoon and evening in order to place before the public the exact financial position of members of parliament. I think I can say without fear of contradiction that not one voter in a hundred realizes that a member of parliament pays his own living expenses in Ottawa, and, in many cases, maintains two homes.
The minister has stated that to do what is suggested would constitute a change in the application of taxation during the war, but the hon. member for Rosedale pointed out that wyar-time taxation has changed the whole picture. It has shoved many members into different brackets, and it leaves many members with very .ittle wTith which to maintain their homes or with which to pay their expenses in Ottawa. I think the members have a justifiable case, and I suggest to the minister that he scrutinize carefully the whole matter. As I said a minute ago, there are many officials of the wartime prices and trade board who are running around the country like Greyhound buses and who are allowed living expenses exempt from taxation.
I rose simply to make those two observations, the one in connection with the Minister of Finance and the other to point out that we have a justifiable case. I do not think there will be any change, because I believe the minister has made up his mind, but we have served a purpose by informing the people across Canada that members of parliament are at least not overpaid. We have made it known to the voters of this country that we pay an income tax on our expenses in Ottawa, which means that in effect we pay $2 for every $1 we pay to a hotel.


James Lorimer Ilsley: While I was speaking I did not say one word to indicate that I had any appreciation of the difficulties of hon. members, but I certainly have a deep appreciation of those difficulties. I know it is very hard for some hon. members. I was dealing with
Income War Tax

the thing on a historical or factual basis, but I did not say that some change should not be made. However, my present belief is that it should not be made for the present members of parliament.


Gordon Knapman Fraser: If
hon. members are all through I think .it would be wise if we got down to the first item. When hon. members were talking about their indemnity I was surprised that they did not mention the fact that for the last month we have been suffering from the heat in this chamber. It has been almost 100. degrees in here every day and we have had to put up with it. That temperature obtained not only in the chamber but also in the committee rooms and offices. When you went into them in the morning the temperature was almost unbelievable.


George Alexander Cruickshank: It is pretty hot in Africa.


Gordon Knapman Fraser: It is not from the speeches; it is the heat of the building. The first resolution deals with the refundable portion, and the last two lines read;
.	.	. and that for 1945 the total tax on
individuals be reduced by the full amount of the refundable portion thereof, less credits for savings.
Why should "credits for savings" be in there if there is to be no refundable portion? What are you going to take out?


Douglas Charles Abbott: It is really a technical explanation. Section 7A provides for the deduction from the aggregate tax of payments into any superannuation, retirement or pension fund, premiums on life insurance policies and so on. The section makes no difference, so far as the deduction is concerned, between the pure tax and the compulsory savings. In fact, the whole tax is classified as tax. So that if you are taking out a portion of the tax which represents the refundable portion, which is half the tax in the case of the smaller taxpayers and a maximum of ten per cent in the case of the higher taxpayers, you must at the same time deduct the insurance premiums, superannuation and mortgage payments which the taxpayer would otherwise be entitled to deduct as well from his tax. It may be that in revising the section of the law for 1945, another section may be drafted, eliminating this reference to deductions on account of particular savings. It is purely a technical matter. In allowing the removal from the total tax of the savings portion you have also to eliminate the provision for taking members of the house this session. What I credit for the voluntary savings such as life

insurance premiums and mortgage payments made by the taxpayer.


Gordon Knapman Fraser: It is misleading to the taxpayer.


Douglas Charles Abbott: I agree. It misled me when I read it first and I had to ask for an explanation from the officials. The resolution is misleading, but my hon. friend will find that it will be made clear when the legislation comes down.


Gordon Knapman Fraser: The resolution reads, in the first part:
That for 1944 the .total tax on individuals be reduced by one-half the amount of the refundable portion thereof, less one-half credits for savings.
Do these savings have to come in the first half of- the year, or can they be spread over the whole year?


Douglas Charles Abbott: They are spread over the whole year. The tax period is the twelve months period. The savings, therefore, are the savings which are made during the tax period. In other words, if your mortgage payment happens to fall due on November 1, it would still be available but only to the extent of one-half in the year 1944.


Richard Burpee Hanson: A different impression was left on my mind by the minister's budget speech. I am glad to have that point cleared up, because I had the impression that the thing automatically stopped on the first day of July and that you could only offset against that, accruals in the form of mortgage payments, life insurance premiums and so on that occurred in the interim. But the parliamentary assistant has made that quite clear. I think that is a concession.


Douglas Charles Abbott: I think the misunderstanding arose because it is the withholdings which are cut from the first day of July.


Richard Burpee Hanson: 
James Lorimer Ilsley: Mr. Chairman, I will review the debate to-day with my colleagues and with the government give the requests that have been made consideration.


Richard Burpee Hanson: And you will let us know?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: That is
fair.


Harry Rutherford Jackman: Does the minister know of certain other cases where there is an item of expenses that could be a proper deduction in arriving at the true income which was taxable? He rather implied that in the debate this afternoon. I cannot recall any such cases myself. It must be admitted that members have to incur expenses before arriving at the true income from their indemnities. Are there somewhat similar cases? I thought we were exceptional.


James Lorimer Ilsley: There are the cases which I put. There are many cases where persons at least have argued that they have to incur expenses in order to earn the salary that they are paid.


Harry Rutherford Jackman: Are they as clear as our case?


James Lorimer Ilsley: I would think just as clear, yes.


Harry Rutherford Jackman: What are they?


James Lorimer Ilsley: Their case is not quite as clear as some members think, because these expenses that are incurred are living expenses, and living expenses ordinarily are not regarded as expenses in earning an income. I am not making any statement to-night as to what the law is. I am simply going on what the uniform interpretation has been by the income tax division. Even they may have been wrong; I do not know. I think opinions have been given by lawyers that the expenses could be deducted because members of parliament were similar to a trade or business, or for some other reason. But even if that hurdle were taken, the question remains whether hotel expenses and restaurant expenses and room expenses that a person incurs are expenses
incurred in earning the indemnity. I suppose that, strictly speaking, a member could change his place of residence during the time of the session if he wished to do so.


Richard Burpee Hanson: That
would not help him at all.


James Lorimer Ilsley: No.


Stanley Howard Knowles: I should like to ask a question with respect to this item. The minister has indicated' that the withdrawal of the compulsory savings feature will result in an annual loss of revenue to the government of about $110,000,000. That would seem to indicate that there has been some figuring done about this, and I am wondering if the minister can give any break-down of that $110,000,000 among the various income brackets.
The reason why I ask that question is this. The minister and the Minister of Justice, in opposing the idea of raising the inoome tax exemption levels, pointed out, and I say quite rightly, that unless you make adjustments in the tax rates it would mean a greater saving to those in the upper income brackets than to those for whose benefit the proposal was made. The point we tried to make was that if you raise the income tax exemption levels you would have to adjust the rates in the upper brackets, and we asked that that be done. The minister has made it clear that it was not his policy to give greater relief to those in the upper brackets than to those in the lower brackets, and I am wondering if he can tell us how the two classes would be affected here. Is it not the case-or has he figures to refute what I am saying?-that the greater part of this $110,000,000 of relief will go to those in the upper income brackets?


James Lorimer Ilsley: It would be very hard to make an estimate as between income groups. Everyone who is acquainted with the matter believes that it is the taxpayers in the highest income groups who have the offsets.


Richard Burpee Hanson: That is what I tried to suggest.


Stanley Howard Knowles: That may be. That is the reason why I was asking whether the minister had the figures or not.


James Lorimer Ilsley: I think it is true that after you hit a certain medium income taxpayer, for the most part the people above that are not having any compulsory savings deducted, because it is covered by insurance premiums and payments of that kind. Therefore the cash benefit of removing the compulsory savings is, we think, largely in the low income groups.



Income War Tax


Richard Burpee Hanson: That is the theory I advanced myself-although, of course, I had no data to come and go on-for the same reason the minister is now giving. I should like to point out that it is coming under my observation that old people nearing the age of sixty-five, in the higher income tax brackets, whp have no mortgages against their property and no life insurance, have to pay up, and I have the most strenuous objection from that class. I have an instance in my own connection of a lady who most strenuously objected to this income tax because, she said, she would never see the money; she hated to pay it, and she was not going to buy any victory bonds because this money was being taken from her. After all, it is just a guess on the part of the department and the minister. There is no calculation.


James Lorimer Ilsley: No.


Richard Burpee Hanson: But that is the theory, based on the reasons which have been suggested. All right.


[Stage Direction]
Resolution agreed to.
2.	That dependents as referred to in the said act be extended to include parents-in-law, grand-parents-in-law, ibrothers-in-law, sisters-in-law, sons-in-law and daughters-in-law in the same circumstances and subject to the same conditions as parents, grandparents, brothers, sisters, sons and daughters respectively.
Richard Burpee Hanson: I should like to know what considerations actuated the minister in bringing in all this "in-law". I remember pleas made here last year, and probably in previous years, for the mother-inlaw, and in a good many cases there was a great deal of merit in those requests. But why in the world should a taxpayer be permitted an allowance for his son-in-law unless it can be shown that he cannot support himself? I do not believe anybody ever asked that this long list of exemptions be added. My recollection is that it was the older people who could not support themselves and had to be supported by in-laws for whom consideration was being asked. When you get down to sisters-in-law, sons-in-law and dlaughters-in-law I think you are going the limit. I am willing that the older people should be taken care of, that an allowance should be granted to the taxpayer for his mother-in-law or his father-in-law or his grandparents-in-law, but I think the minister owes us some explanation for having taken in sons-in-law. If I had a son-in-law who could not support himself I would kick him out and make him go to work; that is what would happen to him; and to give a tax exemption for a son-in-law, unless there is some specific

class of reasons of which I am not aware, seems to me objectionable. I believe every hon. member who gives consideration to the clause will say that this is opening the door too far.


James Lorimer Ilsley: I am half convinced1 by what the hon. gentleman says. These are made parallel to the-


Richard Burpee Hanson: For the
sake of uniformity.


James Lorimer Ilsley: -parents, sisters, sons and daughters. I should) like to let that stand, to consider that " sons-in-law."


Richard Burpee Hanson: You have gone too far, I think.


Major James William Coldwell: Does it not say, "subject to the same conditions"?


James Lorimer Ilsley: Oh, they have to be
dependent.


Richard Burpee Hanson: Dependent sons-in-law.


James Lorimer Ilsley: That is my trouble.


Major James William Coldwell: May not a son-in-law be an invalid?


Richard Burpee Hanson: He might.


Major James William Coldwell: Is not that the idea?


James Lorimer Ilsley: Let it stand.


Richard Burpee Hanson: What we wanted to do was to take care of the poor old mother-in-law. That is what we were trying to do before.


Gordon Knapman Fraser: With regard to "brothers-in-law, sisters-in-law, sons-in-law and daughters-in-law," after this war, in fact at the present time, a great number of these people are or will be between the ages of eighteen and twenty-one. Under item 2 of the 1943 tax form I find it says, "son, daughter, grand-child, brother or sister between eighteen and twenty-one years of age any time in 1943 who attended a secondary school or university or other educational institute during that year." There might be such cases, and there is no doubt that they should be looked after, because the son or the daughter might be overseas.


Richard Burpee Hanson: Well, the state is looking after those.


Gordon Knapman Fraser: It may be looking after them,, but there are many cases where boys and' girls have returned), and

Income War Tax
in the event of the death of the husband there should1 be some consideration given, for educational purposes.


Stanley Howard Knowles: Before you leave the item it seeems to me that 'this is the only resolution among the number before us on which I can ask a question which was raised by at least three hon. members during the debate on the budget motion; I refer to the question of an allowance to parents of student nurses under the reference just quoted by the hon. member for Peterborough West with regard to educational institutions. It is a matter about which I wrote some time ago to the Minister of National Revenue and also to the Minister of Finance, and as I say, other hon. members joined me in speaking about it during the main debate; they are not in the chamber just now, or I am sure they would support me in asking this question. I know the answer that is made, namely, that these student nurses are supposed to receive certain remuneration and certain assistance while they are in training. But the parents of all of them, at least those who have written me, are terribly conscious of the expenses to which they are put in order to assist their daughters in going through for the nursing .profession. I have in mind also the fact that the government considers in its whole taxation policy the things which are desirable, such as full production and the encouragement of people to go in for professions which are needed1. Here is a very important and necessary profession, and parents who have written me in cases like this feel quite discouraged because they are not allowed an exemption for daughters between eighteen and twenty-one attending nursing schools. They claim that this should be granted under the heading of "educational institutions," and I feel they are right. Could the minister make a statement on the matter?


Richard Burpee Hanson: Representations having been made to me by students, I wrote to the department in fulfilment of a promise I made, and I received the answer, if I recall rightly, that it was a question of degree. When students over eighteen years of age go to college the expense is much more substantial-travelling, clothing, board and lodging. Students in a nursing school get board and lodging free, and washing as well, but the allowance is pitiful. At least, that is my experience in a hospital I know something about. While nurses are in training they do not get enough to clothe them.


An hon. MEMBER:: Some of them do not get anything.


Richard Burpee Hanson: I would be astonished if there were nursing schools now where they do not get anything, because these girls work strenuously and work long hours. I have observed them as a patient in a hospital and I know exactly what the labour is. It is a question of degree of drain on the parents and I quite agree that the situations are different. Nevertheless the principle is the same. Perhaps some limited allowance should be made for this and I should like to know the reaction of the department. I add my voice to that of the hon. member for Winnipeg North Centre because of the insistence of some of my own constituents who have experienced some difficulty in this matter. There is a great shortage of nurses and we ought to encourage nursing. We are encouraging doctors to go into the army, and we might encourage girls to go into nursing schools on the same theory by which we are helping the doctors. There is some merit in the matter and, as I stated, in my opinion, it is just a matter of degree.


Major James William Coldwell: While, as the hon. member for YorkJSunbury says, it is a matter of degree, the girls who go in for nursing are engaged for the whole year, whereas many of the students who go to university are able during the summer vacation to assist in the payment of university fees. The girls who are nursing are employed the full year and they receive a very small amount. If you inquire at the hospitals you will find that it is usually about $10 a month, and out of that there are certain levies that are made by the hospital, which reduces it to about half that amount.


An hon. MEMBER:: In some cases to nothing.


Major James William Coldwell: Yes. If a girl happens to break a thermometer or some other equipment she must pay for it, and quite often the girls find that at the end of the month they have nothing coming to them. The parents have to buy their uniforms when they go in-


Richard Burpee Hanson: And boots.


Major James William Coldwell: -and they must clothe them throughout the course, which is three years. There is a very strong case, apart altogether from the necessity of encouraging girls to go into the nursing profession, for the treatment of girls in training as students in other educational institutions are treated. I add my words to those that have already been spoken in this regard.


Gordon Knapman Fraser: In the budget debate the hon. member for Winnipeg South (Mr. Mutch) spoke on the
100-302i
Income War Tax

matter. I followed him, and at page 4506 of Hansard I read from a letter in which the statement was made that at Kingston the student received) no allowance, so that the parents pay for clothing and other necessities.


Joseph William Noseworthy: That is true of
Toronto.


Gordon Knapman Fraser: There are other places where the nurses get nothing at all. There should be some allowance for that, because the parents have to supply them with clothing and look after their laundry.


James Lorimer Ilsley: There is quite a difference between the responsibility that the parent has to assume in the case of a child' in a university and in the case of a daughter training as a nurse.


Richard Burpee Hanson: Only in degree.


James Lorimer Ilsley: If the daughter goes to university the parent supporting her pays for board and lodging and tuition.


Richard Burpee Hanson: And books.


James Lorimer Ilsley: Yes, and books. Of course, the child going to university gets no pay.


Harry Rutherford Jackman: On holidays of course.


James Lorimer Ilsley: As regards the daughter training as a nurse, she gets board and lodging, and tuition is provided, so that she is not a dependent to anything like the same degree as in the other case. I think I am correct in saying that for a child over twenty-one attending university there is no allowance as a dependent. What I am saying is that you cannot maintain perfection in these things. The speeches to-night would indicate that there should be some allowance. Certainly I do not see why the parents should get the same allowance for a nurse in training as for a daughter going to university. After considering the whole question, we do not think we should extend that, although there is quite a widespread demand for it. We have had a number of letters, but it opens up other classes who sooner or later would probably claim the same treatment as nurses in training. The whole field of apprenticeship comes up there.
Resolution stands.
Progress reported.


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

Thursday, July 13, 1944