1957-04-03

AGRICULTURAL PRODUCTS MARKETING ACT


Right Hon. J. G. Gardiner (Minister of Agriculture) moved: for leave to introduce Bill No. 403, to amend the Agricultural Products Marketing Act.
Motion agreed to and bill read the first time.



FERTILIZERS


James Garfield Gardiner: the first reading of Bill No. 400 (from the Senate), for the regulation and control of agricultural fertilizers.
Motion agreed to and bill read the first time.



STARRED QUESTIONS


Mr. Argue: 1.	What grants, not repayable, have been made by the federal government in the province of Saskatchewan to assist in the building of limited dividend projects for senior citizens?
Location Assiniboia ... Balcarres ....
Carnduff ___
Estevan ....
Kamsack ....
Macklin	
Maple Creek Meadow Lake Middle Lake
Ponteix	
Saskatoon ... Shaunavon .. Swift Current
Tisdale	
Unity	
Wadena	
Watrous	
Total ....
2.	What was the location of each project, the number of units provided for, and the amount of the federal grant in each case?
3.	What was the total cost of each project?


Hon. Robert H. Winters (Minister of Public Works):: Mr. Speaker, the limited dividend technique was developed by the federal government to assist local initiative to provide low rental accommodation. Under the National Housing Act the Central Mortgage and Housing Corporation is authorized, with the approval of the governor in council, to make loans of up to 90 per cent of the lending value of the project. In these loans there is a contribution in the form of a low interest rate and an unusually long amortization period of up to 40 years. In many instances private citizens, charitable organizations and local levels of government may also make contributions to the project to keep the level of rentals as low as possible.
Loans have been approved in Saskatchewan for 17 projects, comprising 438 self-contained housing units and 348 hostel units. Then, sir, I have here a list of localities in which projects have been built, the number of units and the amount of the loans. With unanimous consent I shall table it to save the time of the house.


Mr. Speaker:: Is unanimous consent given?


Some hon. Members:: Agreed.


Robert Henry Winters: The table is as follows:
Number of self-	Number of	Federalcontained units	hostel beds	loan amount.48	48	$ 367,21414	14	114,72420	20	185,29624	24	212,50820	20	186,86410	-	55,15220	20	179,73920	20	185,08330	-	147,88816	16	139,70848	-	220,01720	20	179,11074	74	582,47518	16	158,08520	20	184,00016	16	155,87020	20	187,357438	348	$3,441,090
Questions



BALTIC STATES


Mr. Michener: 1.	Has Canada at any time extended diplomatic recognition to (i) Latvia; (ii) Estonia; (iii) Lithuania?
2.	Does Canada today recognize the above three states as sovereign states?
3.	Has Canada by any diplomatic or political action acknowledged the de facto incorporation of the above three states into the U.S.S.R.?
4.	To what government does Canada look at the present time for diplomatic exchange with respect to the geographical areas formerly known as: (i) Latvia; (ii) Estonia; (iii) Lithuania?
5.	Was Mr. Benidickson speaking for the government of Canada in the reply which he gave to similar questions on May 17, 1954, as reported in Hansard, page 4770?


Hon. L. B. Pearson (Secretary of Slate for External Affairs):: The answer to the three parts of question one is yes.
In answer to the second question, I would call attention to the fact that a reply to a similar question asked in this house in May, 1954, is valid also for this question. There has been no occasion when the government of Canada considered it necessary to reaffirm or withdraw formally de jure recognition of these states.
The answer to the third question is as follows. In 1947, in the course of an action in the Exchequer Court of Canada, the Secretary of State for External Affairs informed the court that the government of Canada recognized that Estonia had been de facto incorporated into the U.S.S.R. but did not recognize this de jure. No similar action has been taken with respect to Latvia or Lithuania.
As to the fourth question, I would say that if by "diplomatic exchange" the hon. member means the conduct of business concerning these three areas and their inhabitants, Canada would have to look to the government of the Soviet union which has de facto control of these areas at the present time.
The answer to the fifth question is yes.



AXEL WENNER-GREN

Mr. Castleden: 1.	Was Mr. Axel Wenner-Gren ever placed on the list of those persons deemed by the Canadian government to be enemies of Canada?
2.	If so, when and for what reasons?


Hon. Roch Pinard (Secretary of State):: The
answer to these two questions can be found in order in council P.C. 845 of February 3, 1942, and in the list of specified persons annexed thereto, both of which were published in the Canada Gazette on the same date.



C.B.C.-REPRESENTATIONS BY MINISTER OF TRADE AND COMMERCE

Mr. Knowles: 1.	Has the Minister of Trade and Commerce made representations at any time, by letter, memorandum, telephone or conversation, to the Canadian Broadcasting Corporation concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, when I became minister of marine in 1935 I found myself responsible for the Canadian Radio Broadcasting Act and the Canadian radio commission which was administering the act at that time. At that time I had conversations with Mr. Hector Charlesworth and his colleagues. A year or so later, as minister of transport, I brought in an act establishing the Canadian Broadcasting Corporation and over a period of time I had conversations with Mr. Leonard Brockington, the chairman, and with Mr. Gladstone Murray, the general manager. So I would assume that the answer to the first question is yes. As far as the second question is concerned, I have no comment.



C.B.C.-REPRESENTATIONS BY MINISTER OF AGRICULTURE

Mr. Knowles: 1.	Has the Minister of Agriculture made representations at any time, by letter, memorandum, telephone or conversation, to the Canadian Broadcasting Corporation concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


James Garfield Gardiner: Mr. Speaker, in December of 1955 I took exception to a news item. I telephoned the local station and was referred to and telephoned the Toronto station, and there was no correction. I wrote to Mr. Dunton, and the correction was made two or three days later.
C.B.C.__REPRESENTATIONS BY MINISTER OF



NATIONAL HEALTH AND WELFARE

Mr. Knowles: 1.	Has the Minister of National Health and Welfare made representations at any time, by letter, memorandum, telephone or conversation, to the Canadian Broadcasting Corporation concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. Paul Marlin (Minister of National Health and Welfare):: Mr. Speaker, I have made no representations concerning any radio or television program broadcast, or proposed to be broadcast, over the facilities of the corporation.



C.B.C.-REPRESENTATIONS BY MINISTER OF NATIONAL REVENUE

Mr. Argue: 1.	Has the Minister of National Revenue made representations at any time, by letter, memorandum, telephone or conversation, to the Canadian Broadcasting Corporation concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, the answer to the first part of the question is yes. I take it that is exactly why I am the minister responsible to parliament for the C.B.C., and that I have the duty to make representations to the Canadian Broadcasting Corporation with reference to any matter. If I were not making those representations I would not be carrying out the duties of that particular position.
I have made those representations as an intermediary and directly. As an intermediary I receive hundreds of letters from people throughout Canada, some of them commending programs and others severely criticizing them. Those are either passed on by my office or I take them up directly. All the conversations I have had with reference to programs and the like have been personal conversations with the chairman of the board, his general manager and his director of programs. As I said, some of these have been as an intermediary and some of them have been direct.
The second part of the question reads:
If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?
Well, I could not detail at the present time what the programs were, but the representations were verbal. There are very few communications that pass between me and the broadcasting corporation by letter, because I find it much easier to do business by talking to them directly than by having a long series of correspondence. Throughout the years many of the representations which I have made have been not with reference to programs but with reference to business matters such as the buying of sites. I am continually admonishing the C.B.C. that they are too expensive; that they are employing too many people; that I think a lot of these things ought
Questions
to be cut down; that their spending program ought to be curtailed as much as possible.
Let me say with reference to the C.B.C. and its development that we are away ahead of the schedule we originally started to carry out, with television particularly. We have gone ahead because of public demand, but that has required expenditures that we did not contemplate at that time.



C.B.C.-REPRESENTATIONS BY MINISTER OF LABOUR

Mr. Argue: 1.	Has the Minister of Labour made representations at any time, by letter, memorandum, telephone or conversation, to the Canadian Broadcasting Corporation concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, while I have transmitted representations originating from public bodies and from private persons to the C.B.C., in so far as I can recall I have never made representations as Minister of Labour to the C.B.C. designed to influence their programming.



C.B.C.-REPRESENTATIONS BY SECRETARY OF STATE FOR EXTERNAL AFFAIRS

['Mr. Speaker, the answer to the two questions is no.']
Lester Bowles Pearson: Mr. Speaker, I understand this question does not include the international service of the C.B.C., concerning which my department has a special responsibility. On the understanding that that is excluded, I have, Mr. Speaker, made very strong representations to the C.B.C. once about the quality of the picture of myself which they were showing on the television screen.


Mr. Knowles:: What did you do about it?


Lester Bowles Pearson: I think other hon. gentlemen must have made similar representations. Action was secured after a long delay, Mr. Speaker. I have made no other representations to the C.B.C. within the meaning of the question.

Questions



Mr. Knight: 1.	Has the Minister of Public Works made representations at any time, by letter, memorandum, telephone or conversation, to the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Robert Henry Winters: Mr. Speaker, except for discussions about programs in which I myself have participated from time to time, I have no recollection of having made representations to the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation.


Mr. Hamilton (York West):: How was your picture?


Mr. Gauthier (Nickel Belt):: It was good.


C.B.C.-REPRESENTATIONS BY MINISTER OF VETERANS AFFAIRS
Mr. Knight: 1.	Has the Minister of Veterans Affairs made representations at any time, by letter, memorandum, telephone or conversation, to the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. Hugues Lapointe (Minister of Veterans Affairs):: Mr. Speaker, the answer to the first part is no, and that also applies to the second part.


C.B.C.-REPRESENTATIONS BY MINISTER OF FINANCE
Mr. Sfewart (Winnipeg: North):
1.	Has the Minister of Finance made representations at any time, by letter, memorandum, telephone or conversation, to the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. W. E. Harris (Minister of Finance):: Mr. Speaker, the answer to No. 1 is no, and No. 2 is not applicable.


C.B.C.-REPRESENTATIONS BY MINISTER OF MINES AND TECHNICAL SURVEYS
Mr. Sfewart (Winnipeg: North):
1. Has the Minister of Mines and Technical Surveys made representations at any time, by letter, memorandum, telephone or conversation, to

the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2. If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. George Prudham (Minister of Mines and Technical Surveys):: Mr. Speaker, the
answer is no.


C.B.C.-REPRESENTATIONS BY MINISTER OF NATIONAL DEFENCE
Mr. Nicholson: 1.	Has the Minister of National Defence made representations at any time, by letter, memorandum, telephone or conversation, to the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Mr. Paul Hellyer (Parliamentary Assistant to the Minister of National Defence):: Mr. Speaker, the answer to the first part is no, and the second part is therefore not applicable.


Stanley Howard Knowles: How do you know?


C.B.C.-REPRESENTATIONS BY MINISTER OF NORTHERN AFFAIRS AND NATIONAL RESOURCES
Mr. Nicholson: 1.	Has the Minister of Northern Affairs and National Resources made representations at any time, by letter, memorandum, telephone or conversation, to the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: Mr. Speaker, the answer is in the negative.


C.B.C.-REPRESENTATIONS BY MINISTER OF TRANSPORT
Mr. Castleden: 1.	Has the Minister of Transport made representations at any time, by letter, memorandum, telephone or conversation, to the C.B.C. concerning any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2.	If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Hon. George C. Marler (Minister of Transport):: The answer is in the negative, Mr. Speaker.


C.B.C.-REPRESENTATIONS BY SECRETARY OF STATE
Mr. Campbell: 1. Has the Secretary of State made representations at any time, by letter, memorandum, telephone or conversation, to the C.B.C. concerning

any radio or television program broadcast or proposed to be broadcast over the facilities of the corporation?
2. If so, what was the nature of such representations, when and how were they made, and to what program or programs was reference made?


Roch Pinard: Mr. Speaker, the answer to the two questions is no.



QUESTIONS PASSED AS ORDERS FOR RETURNS


INCORPORATION OF COMPANIES


Mr. Knowles: 1.	What documents are required by law to be filed with the Department of the Secretary of State at the time of incorporation, and for each year subsequent thereto, in the case of: (a) dominion companies incorporated under the Companies Act both public and private: (b) companies incorporated by special act of parliament?
2.	What information is to be supplied in each of these documents?



FEDERAL LEGAL SERVICES, QUEBEC CITY

Mr. Gagnon: 1.	What are the names of the lawyers of the city of Quebec who have acted as agents for the different departments or boards of the federal government, during the year 1956?
2.	What amount of fees has been paid to each of them, and in what case?



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 21-Mr. Nowlan:
For a copy of all payrolls for work, labour and services performed, as well as a copy of all accounts and vouchers for goods and material used or supplied in connection with repairs, additions or construction of the government breakwater and wharf at Hunts Point, Queens county, Nova Scotia, for the months of September and October, 1956.
Motion agreed to.

[Stage Direction]
Motion No. 23-Mr. Knowles:
For a copy of any letter written by the Prime Minister to the chairman of the board of governors of the Canadian Broadcasting Corporation, regarding any C.B.C. program, dated at any time since January 1, 1956; and also for a copy of any reply thereto.
Walter Edward Harris: Mr. Speaker, lor the reasons given by the Prime Minister last week it will not be possible for us to agree to this motion.


Stanley Howard Knowles: Would you put the question, Mr. Speaker?


Mr. Speaker:: Those who are in favour will please say yea.


Some hon. Members:: Yea.
82715-190J
Motions for Papers


Mr. Speaker:: Those who are opposed will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


Mr. Speaker:: I declare the motion lost.



C.B.C.-CORRESPONDENCE BETWEEN CABINET MINISTERS AND CHAIRMAN

[Stage Direction]
Motion No. 24-Mr. Knowles:
have some similarity with No. 23 and No. 24. If I am wrong I will put the four motions.
Mr. Fulton:: On that point, Mr. Speaker, may I say this. No. 25 which stands in my name calls for such correspondence between any minister other than the Minister of National Revenue and the C.B.C. On that point it is different from the others. I specifically excepted the Minister of National Revenue because he is the minister in charge of the C.B.C., and I felt that there might be some possible justification if the motion were opposed on the ground that the correspondence would be in the nature of interdepartmental correspondence and therefore privileged. It was for that reason that I drew this motion accordingly. No. 26, however, relates to correspondence between the broadcasting corporation and the national Liberal federation, such correspondence being in the possession of the corporation. I think it is quite different from the others.


Mr. Speaker:: I see the differences. The only things that might be construed as being similar are the two motions No. 24 and No. 25. If the hon. member for Winnipeg North Centre asks for correspondence between the C.B.C. and any minister, it would certainly include all the correspondence that the hon. member for Kamloops would like to have by his motion under No. 25.


Walter Edward Harris: Mr. Speaker, for the same reason that we could not accept No. 23, we are not able to agree to No. 24.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. My point of order is based on the first sentence of citation 278 of Beauchesne's third edition. It reads as
For a copy of any letters written by any cabinet minister, other than the Prime Minister, to the chairman of the board of governors of the Canadian Broadcasting Corporation, regarding any C.B.C. program, dated at any time since January 1, 1956; and also for a copy of any replies thereto.
follows:
It has been admitted that a document which has been cited ought to be laid upon the table of the house, if it can be done without injury to the public interest.


Mr. Speaker:: It strikes me that No. 24, No. 25, No. 26 together with No. 23 have a great similarity. Could there not be some simplification of this matter?


Stanley Howard Knowles: Mr. Speaker, as between the two that are in my name may I point out that No. 23 and No. 24 are different. No. 23 referred to the Prime Minister's correspondence. No. 24 refers to the correspondence of all ministers except the Prime Minister. I therefore submit that No. 24 is different from No. 23, and that I should be allowed to make the motion.


Mr. Speaker:: Oh, yes. I am merely asking for hon. members' sympathetic consideration of the fact that No. 25 and No. 26 seem to

I have sent for the dictionary that lies on the table of this house, namely the Concise Oxford dictionary. I find that "cite" is defined as follows:
Summon to appear in law court; quote (passage, book, author) in support of position; mention as example.
I draw your attention to the fact that several cabinet ministers today have mentioned, as examples of their answers to questions that were asked earlier, representations that were made.	The Minister of
Agriculture, for example-


James Garfield Gardiner: That question does not
apply to mine at all.


Stanley Howard Knowles: The Minister of Agriculture mentioned as an example the representations he made in December, 1955.


James Garfield Gardiner: That question does not
apply to 1955.


Stanley Howard Knowles: Other ministers have
referred to examples of representations they have made to the Canadian Broadcasting Corporation. Therefore, unless it can be alleged that the tabling of these documents would produce injury to the public interest -an allegation which I am sure cannot be substantiated-I submit that these documents ought to be laid on the table of the house.


Walter Edward Harris: On the point of order, Mr. Speaker, may I just briefly point out that we do not debate these things. The point of order raised is one for the purpose of debating whether or not the documents ought to be tabled.


Mr. Diefenbaker:: Another of the blackouts on information.


Stanley Howard Knowles: I register my objection to the remarks of the Minister of Finance, Mr. Speaker. He knows better.


Edmund Davie Fulton: I had intended to raise a point of order, or at least I presume I may be compelled to raise a point of order on No. 25.


Stanley Howard Knowles: If you can get the permission of the Minister of Finance.


Edmund Davie Fulton: If, Mr. Speaker, it was your
intention to deal with Nos. 24 and 25 together, perhaps I should raise it now. The point is applicable to all these motions, and I would therefore appreciate an indication from Your Honour at what point you would like me to advance the material I have in mind.


Mr. Mclvor:: On the point of order, Mr. Speaker, I would say there is one thing all these resolutions have in common, and that is that the request is going to be refused-


An hon. Member:: Sit down.


Daniel (Dan) McIvor: -so why waste the time of
the house?


Mr. Speaker:: Would the hon. members
be good enough to allow these motions to stand?


Some hon. Members:: No.


Mr. Speaker:: Well, it looks as though I
have to make a ruling now. I would have liked very much to ask the house to give me an opportunity of looking at the authorities before making a decision. You sometimes come across a pertinent section in the authorities, but when the question is raised in the house it is difficult to find that section.
Motions for Papers
In Campion's "An Introduction to the Procedure of the House of Commons", there is a paragraph which says that the house, no matter how ample its powers may be, is not entitled to all the documents it requests. May says the same thing; perhaps I can find it more precisely.


Walter Edward Harris: May I interrupt to say that
so far as we are concerned we have no objection to allowing the motions to stand, if Your Honour wishes.


Mr. Speaker:: The point is simply this. I
know for a fact that in all the authorities there is this statement, and I am repeating almost word for word the statement that appears in May. No matter how ample its powers may be, there are certain documents to which the house is not entitled, and that is those a cabinet minister refuses to produce on his own responsibility. The only point that may be debatable is the ground on which the minister refuses to produce the document. One may argue it can be done only on the ground of public interest. Others may argue, quite successfully, that they may do so not only on the pure ground of public interest, but they may simply do so on their own responsibility. The only way of dealing with that type of refusal is to argue the matter out at election time and let the people decide.


Stanley Howard Knowles: Then would you put the
question on the main motion?


Mr. Speaker:: Those in favour will kindly
say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will kindly
say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays
have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.
And the members having been called in:


Mr. Speaker:: While the members were being called in I had a chance to find the authorities I had quoted from memory. Campion's "An Introduction to the Procedure of the House of Commons", at page 169, reads:
The rule as laid down by May is, "A minister is not at liberty to read or quote from a dispatch or other state paper not before the house, unless he is prepared to lay it upon the table."
The rule is akin to the rule of evidence in courts of law, and is a recognized standard for ministerial practice. It only applies to direct quotation from a paper, not to a mere summary of arguments contained. Nor is it always enforceable in the case of actual quotation. In the first place it may be

Motions for Papers
overridden by considerations affecting the public interest. Nor does it apply to private memoranda or correspondence or generally to any papers the production of which would, but for it, be refused to the house as being beyond its jurisdiction. The conclusion from these divergent considerations is that papers which cannot be laid in toto should not be read or quoted in extracts.
Then May's fifteenth edition, at page 258:
Returns may be moved for, either by order or address, relating to any public matter, in which the house or the crown has jurisdiction. They may be obtained from all public offices, and from corporations, bodies, or officers constituted for public purposes, by acts of parliament or otherwise: but not from private associations, such as Lloyd's, nor from individuals not exercising public functions. The papers and correspondence sought from government departments should be of a public and official character, and not private or confidential. The opinions of the law officers of the crown, given for the guidance of ministers, in any question of diplomacy or state policy, being included in the class of confidential documents, have generally been withheld from parliament. However ample the power of each house to enforce the production of papers may be, a sufficient cause must be shown for the exercise of that power; and if considerations of public policy can be urged against a motion for papers, it is either withdrawn, or otherwise dealt with according to the judgment of the house.


John George Diefenbaker: Mr. Speaker, on a point of order, is it quite proper for Your Honour, after the vote has been called, to explain the reason the government has taken the stand it has? I submit with great deference that what you have just done is not in accordance with parliamentary practice. The government has taken its stand; the vote has been called; then after the whips have returned to the house you proceed, on an ex parte basis, to enunciate the reason to justify what the government has done.


Mr. Speaker:: I have no doubt the Leader of the Opposition is sincere in the point he has advanced. Is it the contention that it is not proper for me to substantiate, by quoting from the authorities, the ruling I made just a few minutes ago, and which I did substantiate merely for the sake of the record? If the hon. gentleman is quite content to take my word whenever I say there is in Campion or in May a certain statement, that is all right. If he recalls what I said, I said it from memory; and what I have just read I think proves that my memory served me well. What May says he did not say to justify any government whatever. He wrote what he wrote in his fifteenth edition, and so did Campion, in his own words, merely to establish what is the theory with respect to these motions.
Far be it from me to try to justify the position of anyone. As I said, if hon. members do not wish to have me take care to make sure that whatever rulings I make are substantiated-because according to standing

order 12, when I make a ruling I am supposed to give the authority applicable to the case- if the hon. gentleman feels that at this moment I should dispense with that because he is so much in agreement with what I said from memory a minute ago, I am agreeable to that. But I do not think it is improper on my part to substantiate, by citing the authorities, the ruling I made earlier, in which I said May had said so and so and Campion had said so and so, but I was just speaking from memory.


John George Diefenbaker: Mr. Speaker, so there will not be any misunderstanding, it was not the excerpts you were reading that I was challenging; it was the untimeliness of the intervention on the part of yourself after the vote had been called and the whips had come in.


Mr. Speaker:: I will take note of the hon. gentleman's contention, though I may say, subject to being overridden by the house, I do not agree with it.


Mr. Casselman:: Is there any precedent
for it?


Mr. Speaker:: Is it the pleasure of the house to adopt this motion?
Anderson
Applewhaite
Ashbourne
Balcom
Batte.i
Benidickson
Bennett
Blanchette
Boisvert
Boivin
Bonnier
Boucher
Bourque
Breton
Brisson
Brown (Brantford) Brown (Essex West) Bruneau Buchanan Byrne
Cameron (High Park)
Cardin
Caron
Carter
Cauchon
Cavers
Cloutier
Crestohl
Denis
Deschatelets
Deslieres
Dickey
Dumas
Eudes
Eyre
Follwell
Forgie
Fraser (St. John's East)
Gardiner
Garland
Gauthier (Lake St. John) Gauthier (Nickel Belt) Gauthier (Portneuf) Gingras Gour (Russell)
Gourd (Chapleau)
Gregg
Habel
Hanna
Hardie
Harris
Hellyer
Henderson
Henry
Houck
Howe (Port Arthur) Jutras Kickham Kirk (Antigonish-Guysborough)
Kirk (Shelburne-Yarmouth-Clare) Laflamme Lafontaine Lapointe Lavigne
Leduc (Jacques Cartier-Lasalle)
Leduc (Verdun)
LefranQois
Legare
Lesage
MacEachen
MacNaught
McCann
McCubbin
McCulloch (Pictou)
Mcllraith
Mclvor
McMillan
Me William
Mang
Marler
Masse
Matheson
Meunier
Mitchell (Sudbury)
Monette
Pearson
Pinard
Power (Quebec South)
Power (St. John's West)
Proudfoot
Prudham
Purdy
Ratelle
Reinke
Richard (Ottawa East) Richard (St. Maurice-Lafleche)
Richardson
Roberge
Robichaud
Robinson (SimcoeEast)
Rochefort
Rouleau
St. Laurent (Quebec East)
St. Laurent
(Temiscouata) Schneider Shipley, Mrs.
Stick
Thibault
Tucker
Valois
Villeneuve
White (Waterloo South) Winters-113.


Mr. Speaker:: I declare the motion lost.



C. B. C.-CORRESPONDENCE BETWEEN CABINET MINISTERS AND CORPORATION

Walter Edward Harris: No, Mr. Speaker.


Edmund Davie Fulton: Mr. Speaker, on a point of order.


Mr. Speaker:: Order. I am sorry, but I did not hear what was said by the Minister of Finance.


Walter Edward Harris: I said no, Mr. Speaker, we cannot agree.


Edmund Davie Fulton: On a point of order, Mr. Speaker, I submit that there is no power in the government to oppose a motion of this nature, and I do so on the basis of the very citation of May to which you referred just prior to the division after the whips had returned.
At page 258 of May's fifteenth edition the following appears:
Returns may be moved for, either by order or address, relating to any public matter, in which the house or the crown has Jurisdiction. They may be obtained from all public offices, and from corporations, bodies, or officers constituted for public purposes, by acts of parliament or otherwise.
On the first heading it is perfectly within the power of the house to order production of such papers because the C.B.C. is a public body set up by act of parliament. May continues:
The papers and correspondence sought from government departments should be of a public and official character, and not private or confidential.
What is asked for here is correspondence between ministers of the government and the Canadian Broadcasting Corporation. I have not been able to lay my hands on it either, Mr. Speaker, but I am quite certain there is a passage in one of Dicey's works on the constitution which says that no member of the government in dealing with departments or agencies of the government can divorce his private from his public capacity and say: "I am writing this as a private citizen". Dicey is to the effect that any minister dealing with any matter under the jurisdiction of the government cannot say he is doing so as a private citizen.
Then the other passage of May which you have cited, but which I submit establishes the absolute right of the house to these papers, is as follows-
Motion No. 25-Mr. Fulton:
For a copy of all letters, memoranda, or other correspondence and/or minutes of conversations exchanged between any minister of the government (except the Minister of National Revenue) and the chairman or any other officer of the Canadian Broadcasting Corporation since 1st January, 1956, referring to any particular broadcast (whether delivered or proposed) sponsored or originated by the Canadian Broadcasting Corporation.


Mr. Tucker:: Mr. Speaker, I rise on a point of order.


Some hon. Members:: Oh, oh.


Mr. Rowe:: He is speaking to a point of
order.


Some hon. Members:: Sit down.

Motions for Papers


Mr. Speaker:: Let us not get into a procedural wrangle. The hon. member for Rosthern cannot intervene on a point of order when the hon. member for Kamloops is himself speaking to a point of order.


Edmund Davie Fulton: The other passage in May
which I submit establishes the right of the house to these documents is the last part of that paragraph on page 258.


Walter Adam Tucker: Mr. Speaker, on a question of privilege I submit that-


Some hon. Members:: Order. Sit down.


Mr. Speaker:: The hon. member for Rosthern rose on a point of order a moment ago, and now he rises on a question of privilege. The fact that the hon. member uses the expression, "I rise on a question of privilege", makes it obvious that he rises merely because he wants to take the floor from the hon. member who is speaking, which he attempted to do earlier on what he called a point of order. A point of order is now being raised by the hon. member for Kamloops. We have tried to avoid this confusion before and I am hopeful that we shall be able to do so now.


Arza Clair Casselman: He has tried twice.


Edmund Davie Fulton: Mr. Speaker, the passage to which I have referred reads:
However ample the power of each house to enforce the production of papers may be, a sufficient cause must be shown for the exercise of that power; and if considerations of public policy can be urged against a motion for papers, it is either withdrawn, or otherwise dealt with according to the Judgment of the house.
There has been no consideration of public policy urged against this motion. Had that been urged, then I submit what we might be doing now is debating the government's decision, but they have simply said they have the right to refuse it without giving any reason.
I submit to you, sir, on the basis of May's passage already cited, that the house has the power to order these documents; they are of a public nature, and in fact it can only be refused on the grounds of public policy. Further the government, failing to advance the grounds of public policy, cannot simply refuse to produce them. Therefore the motion, being within the power of the house and no consideration of public policy being advanced against it, must be allowed to carry. Further, I base that on the passage in Bourinot on page 246, which says:
Correspondence with persons in the employ of the government and in the possession of a department are ordered.
Such correspondence as is covered in this motion is between persons in the employ
[Mr. Rowe.J
of the government and the chairman and officials of the Canadian Broadcasting Corporation, who are appointed by the government and paid out of public funds. Such correspondence would be in the possession of the Canadian Broadcasting Corporation and/or in the possession of the department presided over by the minister who wrote the letters. So on all grounds I submit that it is not open to the government simply to make a blank refusal to produce such documents.


Walter Adam Tucker: I rise on the point of order which I wished to raise before. I cite, Your Honour, paragraph 47 of the standing orders, which definitely provides:
Notices of motions for the production of papers which the member asking for the same intends to move without discussion, shall be marked by him with an asterisk and shall be placed by the Clerk on the order paper under the heading "Notices of motions for the production of papers". All such notices when called shall be forthwith disposed of; but if on any such motions a debate be desired, it will be transferred by the Clerk to the order of "Notices of motions".
Now I wish to point out to Your Honour that the hon. member for Kamloops, under the guise of raising a point of order, was actually arguing that this motion should carry, and that in so doing he was definitely out of order under rule 47.


John George Diefenbaker: Mr. Speaker, ordinarily I would not rise on a point of order, it having been argued by my hon. friend the member for Kamloops, but this whole question has to be looked at in the light of what took place here this afternoon. The minister does not in any way justify the refusal of the government to accept this motion on the ground that to do so would be contrary to public policy; he simply makes the statement "We will not produce it." That in effect is the same; that is not sufficient.


Some hon. Members:: Order.


John George Diefenbaker: I say we have to look at the matter in the light of what took place this afternoon in order to appreciate the situation here fully.


Some hon. Members:: Order.


An hon. Member:: It is on the same point of order.


John George Diefenbaker: A number of oral questions were asked today and answered by individual ministers as they were individually polled.


Walter Edward Harris: Mr. Speaker, I must raise a point of order that was raised-


William Earl Rowe: Sit down. It is still the same issue. He is still talking on the point of order.


An hon. Member:: No, he is not.


William Earl Rowe: Yes, he is.


Mr. Speaker:: There is no doubt that we are travelling on the borderline.


William Earl Rowe: We certainly are; we are across the line now.


Mr. Speaker:: Hon. members rose on a point of order. The motion itself is an order; what is being discussed on a point of order is the right of the government to oppose such a motion and the method by which it proceeds in opposing it. Now whether or not that should be discussed on a point of order, it is being done now and I would like to listen to the end of it.


John George Diefenbaker: Mr. Speaker, I mentioned what took place this afternoon in order to lay the foundation for the argument I intend to make. This afternoon minister after minister of the government stated that he had not communicated with the C.B.C.-


Some hon. Members:: Order.


John George Diefenbaker: -except for one or two
ministers, the Minister of National Revenue in his capacity as minister reporting for the C.B.C. and the Minister of Agriculture prior to January 1, 1956. This motion simply asks for production of any documents, any letters that were written or communications made. That is not opposed on the ground of public interest. Sir, to accept a simple refusal on the part of a minister, without adding that it is not in the public interest, would create a travesty of parliament and dry the wells of information. The rules of parliament were never designed to permit an arbitrary refusal by a minister-


An hon. Member:: Order applies to you, too.


John George Diefenbaker: -or the concealment of information or the placing of blackouts upon information because of the fact that the revelation of the information might be prejudicial to the government. There is no public interest here that would be contravened. Mr. Speaker, for my hon. friend the Minister of Finance to take a stand such as this, if accepted, means that the wells of information have been closed to the people of Canada by an arbitrary and unjustified denial on the part of the minister. The rules do not cover that and I say, sir, that we are entitled to this information. To hold otherwise would simply mean that we shall receive that selective information which the government, in its kindness toward the opposition, would permit. That is not what parliament is for.
Motions for Papers


Walter Edward Harris: Mr. Speaker, if I have offended my hon. friends opposite by not prefacing my remarks-


Some hon. Members:: Oh, oh; shame,


Walter Edward Harris: -by the same wording I used on the two preceding motions, I now amend that by saying that for the reasons I gave on the two preceding motions we cannot accept-


Edmund Davie Fulton: But there was no public interest alleged there.


William Earl Rowe: Public interest has never been mentioned.


Some hon. Members:: Order.


William Earl Rowe: On the same point of order.


Stanley Howard Knowles: The point of order has been raised to the effect that under the rules and by virtue of what is in the authorities the government cannot oppose this motion without at least stating its reasons. I suggest that this must be done, after which the house, when it deals with the motion, can by vote decide which way it is going to go. However, it seems to me that by virtue of citation 278 in Beauchesne's third edition and by virtue of page 258 in May's fifteenth edition, if he is not prepared to agree to the motion on behalf of the government the minister must say one of three things; that it is a private document, that it would be an injury to the public interest as set out in citation 278, or that it is against considerations of public interest.
The minister says that he gives the same answer as he gave on the previous motions. The only answer he gave on the previous motions was to refer us to last Thursday, but last Thursday we had no answer in accordance with the provision's set down by the rules. I submit, Mr. Speaker, that the authorities, Beauchesne and May particularly, the ones you have quoted yourself today, require the government, if it wishes to oppose a motion of this kind, to give us one of these reasons for doing so.


Walter Edward Harris: I was speaking on a point
of order, and may I say that I think in another parliament we should find a better way of disposing of notices of motions. It is obvious that even to the extent that a minister of the crown rises to indicate government disagreement with a motion, he is theoretically debating it; and I do not know of any occasion when we have not had the kind of procedure we have had this afternoon. On ostensible points of order, but on this kind of fiction hon. members did in fact argue the merits of whether or not the motion ought to be carried. We have had one

Motions for Papers
unhappy experience of deciding that we could not dispose of the motion without a debate.


John George Diefenbaker: Oh, you are going to start closure again, are you; closure on questions?


Walter Edward Harris: No, I am not. We have had one unhappy occasion when we have used the rule cited by the hon. member for Rosthern to provide a debate on a particular matter, and I don't think anybody particularly liked the outcome at that time.


John George Diefenbaker: The government did not.


Walter Edward Harris: You are thinking of something wholly different.


John George Diefenbaker: No, I am not.


Walter Edward Harris: Having said that, in the interests of procedure in the future, having in mind the best way of disposing of the matter should people want to debate it, I want to go on to say that never, so far as I am aware, have we accepted a motion for the production of correspondence from ministers to departments or crown corporations, and for that reason we have always opposed this on grounds of public policy. That is the reason we are doing so this afternoon.


Mr. Speaker:: The motion that has been placed on the order paper is in order, and that is why I have put it to the house. It is opposed and when it is opposed, according to standing order 47 it must be transferred for debate if desired. This has not been asked for, but it has been asked that the minister should say briefly why he is opposed to the motion. At this moment, therefore, the only duty I have is to put the question to the house and let the house pass judgment on it.


Mr. Speaker:: I declare the motion lost.



CORRESPONDENCE BETWEEN C.B.C. AND LIBERAL FEDERATION

[Stage Direction]
Motion No. 26-Mr. Fulton:
For a copy of all letters, memoranda, or other correspondence and/or minutes of conversations exchanged between the president or secretary or other official of the national Liberal federation and the chairman or any other officer of the Canadian Broadcasting Corporation since 1st January, 1956, and in the possession of the Canadian Broadcasting Corporation, referring to any particular broadcast (whether delivered or proposed) sponsored or originated by the Canadian Broadcasting Corporation.
James Joseph McCann: Mr. Speaker, I have not any knowledge that there is any communication or correspondence between the president or secretary of the national Liberal federation and the Canadian Broadcasting Corporation. I should therefore like this motion to stand, with the consent of the mover.


Mr. Speaker:: Shall the motion stand?


Edmund Davie Fulton: Mr. Speaker, do I understand that the purpose of the minister's request is in order to ascertain whether or not there is such correspondence?


James Joseph McCann: That is right.


Edmund Davie Fulton: And then report to the house?


James Joseph McCann: Yes.


Edmund Davie Fulton: Under the circumstances I think the request is reasonable.


James Joseph McCann: I expect the motion will be called again. If there is correspondence we will make a decision at that time.


Mr. Speaker:: Stand.
Motion stands.



BRIDGE CONSTRUCTION COST, LULU ISLAND-SEA ISLAND, B.C.

[Stage Direction]
Motion No. 27-Mr. Goode:
For a copy of all correspondence exchanged during the years 1956 and 1957, between the Minister of Public Works and the government of British Columbia, concerning an offer of federal moneys to the amount of $400,000 toward the cost of a bridge between Lulu island and Sea island in Richmond, British Columbia?
Robert Henry Winters: Subject to the usual reservation about informing the government of British Columbia.


[Stage Direction]
Motion agreed to.
82715-191J
Inquiries of the Ministry

[Stage Direction]
Motion No. 29-Mr. Goode:
For a copy of all letters or other correspondence and/or minutes of conversations exchanged between any members of the official opposition in the House of Commons, and the chairman or any other officer of the Canadian Broadcasting Corporation since January 1, 1955, referring to any particular broadcast (whether delivered or proposed) sponsored or originated by the Canadian Broadcasting Corporation.
He said: May I have the permission of the house for this motion to stand?
Some hon. Members:: No, no.


Some hon. Members:: Agreed.


Mr. Speaker:: Shall it stand? Agreed.
Motion stands.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. In view of the fact that the minister is not the minister for the C.B.C. but the minister who reports to parliament for the C.B.C., does he think it appropriate that he should make representations to the C.B.C. without informing parliament of those representations or seeking the authority of parliament to do so.
Hon. J. J. McCann (Minister of National
Revenue): I did not get the full gist of the question, so I shall take it as notice.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Yesterday I directed a question to the Minister of National Revenue in connection with the defence which is being raised by the C.B.C. against the prosecution to be taken in the courts in Toronto under the Lord's Day Act. Is the minister in a position to reply at this time?
Hon. J. J. McCann (Minister of National
Revenue): Yes, Mr. Speaker, and I was about to do so. With regard to the question raised yesterday by the Leader of the Opposition arising out of the prosecution that has been launched against the C.B.C. for alleged contravention of the Lord's Day Act, I am informed by the C.B.C. that an application
3016	HOUSE OF
Inquiries of the Ministry is, on the advice ol counsel, being made before the supreme court of Ontario for the reasons given in the notice relating to such application, and that counsel has advised that, the matter being sub judice, the corporation should not disclose or discuss the grounds of the application until the court has given its decision.
The notice of application, up to noon today, had not been received from counsel in Toronto. It should be here today or tomorrow.


John George Diefenbaker: I do not want to contravene the rule concerning the discussion of a case that is before the courts, but as the minister-


An hon. Member:: Then why do it?


John George Diefenbaker: -who reports for the C.B.C. does he not think the time has come to take away from the C.B.C. and other crown corporations the right to contravene the laws of this nation, criminal laws and pseudo-criminal laws?


Some hon. Members:: Order.


John George Diefenbaker: In other words, does he not feel that to place the C.B.C. in the position that it may contravene the law is not in keeping with that fairness which should control the actions of the C.B.C. vis-a-vis the private stations which are denied the right to break the law?


James Joseph McCann: I am afraid it would take a Philadelphia lawyer or one equal to my hon. friend to answer that question. It is not a question for the Minister of National Revenue or the minister responsible to parliament for the C.B.C. to answer; that is up to parliament itself, as to what powers the C.B.C. shall have.


John George Diefenbaker: Then I shall direct a
question to the Prime Minister, and ask him whether he does not believe the time has come that the king must be under God and the law, to use an ancient expression of Chief Justice Coke, and that the C.B.C. and other crown corporations should not be put in the position, competing as they are with the private companies, of breaking the law with impunity.


Righi Hon. L. S. St. Laurent (Prime Minister):: Well, Mr. Speaker, I am not going to admit that crown corporations are breaking the law. The hon. gentleman knows that this parliament has already gone a long way in abrogating the privileges that used to be claimed for the crown or crown agencies, and I think it was progress in the right direction.


John George Diefenbaker: Parliament has gone so far as to abrogate certain civil rights, but I am speaking of the criminal law. Does the Prime Minister not believe crown corporations should be equally as subject to the criminal law and the pseudo-criminal law as any other citizen?


Mr.   Sf. Laureni@Quebec East: This is a matter that involves many factors. I cannot assume that crown corporations would be breaking the criminal law. I have not seen this notice of motion and the minister has said-at least I took his answer to imply-he has asked for a copy of the notice of motion so that it could be tabled. I shall be glad to see it and see if there is any ground there for saying they are asserting a right to violate criminal or pseudo-criminal law.


John George Diefenbaker: That is what they are asking, a writ of prohibition.


Louis Stephen St-Laurent: I do not
know. If the hon. gentleman knows he has more information about it than I have. I shall be glad to see what the notice contains and to give the matter the kind of consideration that lawyers who believe as I do-that these ancient privileges that used to be claimed for the crown are matters that are on the way out-should give it. I shall be glad if the hon. gentleman will also look at that notice of motion.


John George Diefenbaker: I have read it, and it is
an application for a writ of prohibition.


Mr.   Si. Laureni@Quebec Easi: I have not read it, and I prefer to read it before making any other comments beyond saying what I have already said. I think the progress that is being made is progress in the right direction.


INQUIRY AS TO MATERIAL CIRCULATED BY SECRETARY OF STATE FOR EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo):: I should like to direct a question to the Secretary of State for External Affairs. My question is based on a publication which I received in the mail, published in Kalamazoo, Michigan, on the front of which there is a card which says, "With the compliments of Mr. L. B. Pearson, Secretary of State for External Affairs, Ottawa."
My question is this. Does the minister really believe it is consonant with the dignity of Canada that he should use the prestige of the Secretary of State for External Affairs to further the advertising program of a pulp and paper company, and incidentally one from the United States?


Lester Bowles Pearson: Yes, Mr. Speaker. As the member of parliament for Algoma East I thought it would be of interest to the members of the House of Commons to see the progress made in my constituency by a very flourishing industry which is giving employment to a good many of my constituents.


Colin Cameron: A supplementary question. Is the minister not aware that he is not described here as the member for Algoma East, but as the Secretary of State for External Affairs?


Lester Bowles Pearson: Mr. Speaker, that was an error on my part for which I apologize. I rather assumed my hon. friend would know that the Secretary of State for External Affairs was also the member for Algoma East.


Mr. C. W. Hodgson (Vicloria, Onl.):: I should like to direct a question to the Secretary of State for External Affairs. Is he taking the credit for the prosperity of the pulp and paper industry in his riding, or on the part of his riding of Algoma East?


Lester Bowles Pearson: No, Mr. Speaker, I am not taking any credit for it, but I am taking a great deal of satisfaction out of it.


Clayton Wesley Hodgson: Is the minister aware that it is done through the energy and legislation of the provincial government?


Lester Bowles Pearson: I am aware that it is done by the energy and intelligence of the people.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron):: Mr. Speaker, I should like to direct a question to the Minister of Finance. It has to do with government control of lending institutions. Why is it not possible for the Canadian farm loan board to lend money to farmers in at least the same proportion as money is lent to urban dwellers to build houses?


Walter Edward Harris: Mr. Speaker, I think there was a debate on that point last year when we had an amendment before the house with respect to the Canadian Farm Loan Act, and I would have to look at the record to see what reasons were given at that time.


Lewis Elston Cardiff: I should like to ask a supplementary question. Is it not true that urban dwellers can obtain a greater loan on a new house than can a farmer on a good 100 acres of land with buildings?
Inquiries of the Ministry


Walter Edward Harris: Mr. Speaker, I do not know whether or not that is true.



UNITED STATES


[Stage Direction]
On the orders of the day:
Mr. E. G. Hansell (Macleod):: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce, or in his absence to one of the other ministers, or to his parliamentary assistant. My question is based upon a news report which came over the air at noon. Can the minister inform the house as to the reliability of reports that the United States is now adopting a policy of trading its surplus agricultural products with iron curtain countries on a system of barter? If so, what will be the position of this government in the light of this development?


Mr. J. H. Dickey (Parliamentary Assistant, for the Minister of Trade and Commerce):: That question will be taken as notice.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of National Defence or, in his absence, to his parliamentary assistant. In view of the press report appearing on page 1 of yesterday's Toronto Star to the effect that conditions of service in the United Nations emergency force are such that Canadian servicemen attached to the force are committing serious misdemeanours in order to be sent back to Canada, has the parliamentary assistant any statement to make to the house in this regard?


Paul Theodore Hellyer: I have not seen the report in question and I would certainly want to read it before I would make any comment at all.


REQUEST FOR STATEMENT ON POSITION OF PALESTINIAN POLICE FORCE
[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, may I ask the Secretary of State for External Affairs whether he has received the information which he promised yesterday to get with regard to the control of the Palestinian police force; whether or not it is under the control of Egypt?

Inquiries of the Ministry
Hon. L. 3. Pearson (Secretary of State for External Affairs): No, Mr. Speaker. We have made inquiries, but the inquiry has to go through United Nations headquarters in order to get the latest and most accurate information on the status of this Palestinian police force under the new dispensation. As soon as we receive the information I will be glad to give it to the house.


Howard Charles Green: Has there been any change in Nasser's position since he was claiming belligerent rights against Israel? Has he abandoned that claim in any way?


Lester Bowles Pearson: I have no knowledge, Mr. Speaker, that he has abandoned his previous claims in that regard.


IMMIGRATION
[Stage Direction]
On the orders of the day:
Edmund Davie Fulton: May I ask
the Secretary of State for External Affairs whether he has received any report on a situation reported in press dispatches, to the effect that there are some 14 stateless persons of whom it was said that they left Australia in 1952 and are now at Malone, New York; and that a statement was made in regard to them by a United States immigration official that proceedings for their deportation to Canada are now under way if Canada will take them. Has that matter been brought to the attention of the minister? If so, can he report to the house on it?


Lester Bowles Pearson: The matter has not been drawn to my attention, but I shall be very glad to look into it.


ROYAL CANADIAN AIR FORCE
[Stage Direction]
On the orders of the day:
Mr. F. E. Lennard (Wentworth):: Mr. Speaker, I should like to direct a question to the Minister of National Defence or, in his absence, to his parliamentary assistant. Is there any truth in the rumour that there is to be a change in policy with respect to the R.C.A.F. airport at Mount Hope? He might take this as notice.


Paul Theodore Hellyer: The
matter is still under review, and as yet no decision has been reached.


STATEMENT ON CRASH AT ST. JAMES, MANITOBA
[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: Yesterday the hon. member for Winnipeg South Centre asked if a further report was now available on the crash of a Mitchell aircraft which occurred at St. James, Manitoba, on February 24.
I might say that I find it somewhat surprising that the hon. member, having spoken to the minister on this subject on Monday, should take the opportunity to raise this matter in the house in the absence of the minister. I should also add that I spoke to the hon. member privately some time ago explaining some of the circumstances arising out of the investigations.
However, since he persists in publicizing the incident despite the information already available to him, my only comment at this time is that the board of inquiry has now completed its findings and that, as a result of these findings, court martial proceedings are being instituted.
In view of what I have just said it should be obvious to the hon. member that further discussion now would be quite inappropriate.


Mr. Gordon Churchill (Winnipeg Soulh Centre):: Discussion is particularly appropriate in view of the second part of my question, which was framed in this way. I asked:
As a result of the court of inquiry held with respect to the crash, are any special steps being taken to provide for greater safety for people living near the St. James R.C.A.F. airport?
That is what I am particularly interested in.


Paul Theodore Hellyer: I told the hon. member before that this airport is operated by the Department of Transport. The Royal Canadian Air Force obeys the rules laid down by the Department of Transport. The court martial proceedings I referred to are being instituted to provide such disciplinary action as may be appropriate.


Stanley Howard Knowles: May I ask a question of the parliamentary assistant to the Minister of National Defence. Can he say whether the inquiry into the crash of the Mitchell bomber near Manotick has been completed? If so, is that report available?


Paul Theodore Hellyer: I would have to take that question as notice, Mr. Speaker.


UNEMPLOYMENT INSURANCE
[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should like to address a question to the Minister of Labour. Now that the benefits of the Unemployment Insurance Act have been extended to commercial fishermen will the minister say whether an announcement will be made at an early date that benefits will be extended to farmers and farm help?


Milton Fowler Gregg: No, Mr. Speaker, I cannot make any promise with regard to that matter, except to state that the possibilities in this field related to some groups of farm wage earners are being studied by the commission.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Robinson (Simcoe East) in the chair.

[Stage Direction]
Resolved that it is expedient to introduce a measure to amend the Income Tax Act and to provide, amongst other things:
1.	That for the 1957 and subsequent taxation years an individual be allowed to deduct, in computing taxable income, the amount of $100 in lieu of claiming any deduction for medical expenses, donations to charitable organizations, trade union dues and professional membership dues.
2.	That the amount of a taxpayer's donations to charitable organizations in a year in excess of the amount deductible under the act be allowed to be carried forward and included with his charitable donations for the immediately following year.
3.	That a taxpayer whose chief source of income is farming or fishing be allowed to appeal his assessment for a year of averaging even if no tax is assessed for that year of averaging.
4.	That the rule for the determination of the capital cost of depreciable farm property sold by a farmer, to his child be extended to include cases in which a taxpayer whose chief source of income is fishing sells a fishing vessel or a fishing vessel and other property used in fishing operations carried on by him to his child.
5.	That for the 1956 and subsequent taxation years, in computing income from an office or employment a taxpayer be allowed to deduct annual professional membership dues the payment of which was necessary to maintain a professional status recognized by statute, even although he is not required to maintain that professional status by his contract of employment.
6.	That for the 1957 and subsequent years the special deduction from income allowed to corporations whose principal business is mining or production of petroleum or natural gas for expenses incurred in searching for minerals in Canada or exploring or drilling for petroleum or natural gas in Canada be extended to corporations whose principal business is processing mineral ores for the purpose of recovering metals therefrom or a combination of processing mineral ores for the purpose of recovering metals therefrom and processing metals recovered from the ores so processed.
Income Tax Act
7.	That for the 1956 and subsequent taxation years payments made for the full-time care in a nursing home of the taxpayer, his spouse or dependant who was throughout the whole of a 12 months' period ending in the taxation year necessarily confined by reason of illness, injury or affliction to a bed or wheel chair may be included in the medical expenses for which a deduction from income may be made for the purpose of computing taxable income.
8.	That for the 1956 and subsequent taxation years payments made for the full-time care in a nursing home of a dependant of the taxpayer certified by a medical practitioner to be a person who, by reason of lack of normal mental development, is and in the foreseeable future will continue to be dependent on others for his personal needs and care may be included in the medical expenses for which a deduction from income may be made for the purpose of computing taxable income.
9.	That for the 1957 and subsequent taxation years donations to certain corporations established for the purpose of providing low-cost housing accommodation for the aged may be included in the charitable donations for which a deduction from income may be made for the purpose of computing taxable income.
10.	That for the 1956 and subsequent taxation years a teacher be allowed to deduct, in computing income, an amount not exceeding $250 paid by him in the year to a fund established by the Canadian education association for the benefit of teachers from commonwealth countries present in Canada under a teachers' exchange arrangement.
11.	That for the 1957 and subsequent taxation years an individual be allowed to deduct, in computing income, an amount paid by him as a premium under a registered retirement savings plan and, for this purpose, that the Income Tax Act be amended to give effect to the inclusion therein, following section 79A thereof, of a new heading and section as follows:
"Registered Retirement Savings Plan
79B. (1) In this section,
(a)	"annuitant" means an individual referred to in subparagraph (i) or (ii) of paragraph (h) to whom, under a retirement savings plan, any annuity for life is agreed to be paid or is to be provided;
(b)	"benefit" means any amount paid or payable under a retirement savings plan, otherwise than as a premium;
(c)	"earned income" means earned income as defined in subsection (5) of section 32, plus any amount deductible in computing income under paragraph (i) of subsection (1) of section 11;
(d)	"maturity" means the date fixed under a retirement savings plan for the commencement of any annuity the payment of which is provided for by the plan;
(e)	"premium" means any periodic or other amount paid or payable under a retirement savings plan, (i) as consideration for any agreement referred to in subparagraph (i) of paragraph (h) to pay an annuity, or (ii) as a contribution referred to in subparagraph (ii) of paragraph (h) for the purpose stated in that subparagraph;
(f)	"refund of premiums" means any amount paid or payable under a retirement savings plan, on or after the death of the annuitant thereunder in the event of his death before maturity, as or on account of, (i) a return of premiums, (ii) reasonable interest on premiums, or (iii) a share or interest in or a bonus out of profits or gains;
(g)	"registered retirement savings plan" means a retirement savings plan accepted by the minister for registration for the purpose of this act as complying with the requirements of this section; and
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(h)	"retirement savings plan" means, (i) a contract between an individual and a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, under which, in consideration of payment by the individual of any periodic or other amount as consideration under the contract, that person agrees to pay to the individual, commencing at maturity, an annuity for life, or (ii) an arrangement under which payment is made by an individual in trust to a corporation resident in Canada of any periodic or other amount as a contribution under the trust, to be used, invested or otherwise applied by that corporation as trustee for the purpose of providing to the individual, commencing at maturity, an annuity for life.
(2)	The minister shall not accept for registration for the purposes of this act any retirement savings plan unless, in his opinion, it complies with the following conditions:
(a)	the plan does not, (i) provide for the payment of any benefit before maturity, except by way of a refund of premiums, or (ii) provide for the payment of any benefit after maturity, except by way of (A) an annuity to the annuitant for his life, or (B) an annuity to the annuitant for the lives, jointly, of the annuitant and his spouse and to the survivor of them for his or her life, commencing at maturity and with or without a guaranteed term, not exceeding fifteen years, or, in the case of a plan entered into before the 14th day of March, 1957, not exceeding twenty years, commencing at maturity;
(b)	the plan does not, (i) provide for the payment of any amount by way of annuity except, (A) equal annual or other periodic amounts throughout the lifetime of the annuitant, and (B) equal annual or other periodic amounts (not exceeding the corresponding annual or other periodic amounts referred to in clause (A)) throughout the period, if any, after the death of the annuitant, for which payment of the annuity is provided for by the plan, (ii) provide for the payment of any premium after maturity, or (iii) provide for maturity after such time as the annuitant attains seventy years of age;
(c)	the plan includes a provision stipulating that no annuity payable thereunder is capable either in whole or in part of surrender, commutation or assignment; and
(d)	the plan in all other respects complies with regulations of the governor in council made on the recommendation of the Minister of Finance.
(3)	The minister may accept for registration for the purposes of this act any retirement savings plan notwithstanding that the plan
(a)	provides for any annual or other periodic amount payable by way of annuity to any person to be reduced by any corresponding annual or other periodic amount that is or may become payable to that person under the Old Age Security Act;
(b)	provides for the commutation of any annuity payable thereunder if the amount so payable, expressed in terms of a monthly rate, is less than $5;
(c)	in the case of an annuity for a guaranteed term, provides for the annuity to be assignable by will, or, in the event of the death of any person to whom any such annuity is payable, to be assignable by the heirs, executors, administrators or other legal representatives of such person in the distribution of his estate, so as to give effect to any testamentary disposition, or to the rights of any person on an intestacy, or to its appropriation to a legacy or a share or interest in the estate; or
(d)	contains such other terms and provisions, not inconsistent with this section, as are authorized

or permitted by regulations of the governor in council made on the recommendation of the Minister of Finance.
(4)	No tax is payable under this part by a trust on the taxable income of the trust for a period during which the trust was governed by a registered retirement savings plan.
(5)	There may be deducted in computing the income for a taxation year of a taxpayer who is an annuitant under a registered retirement savings plan the amount of any premium paid by the taxpayer under the plan during the taxation year or within sixty days after the end of the taxation year (to the extent that it was not deductible in computing his income for a previous taxation year), not exceeding, however,
(a)	in the case of a taxpayer in respect of whom any amount is deductible under paragraph (g) or (h) of subsection (1) of section 11 in computing the income of any other person for that taxation year (or would be so deductible if that other person were a person taxable under subsection (1) of section (2), an amount that, when added to the amount deductible under subparagraph (i) of paragraph (i) of subsection (1) of section 11 in computing the income of the taxpayer for that taxation year, does not exceed the lesser of $1,500 or 10 per cent of his earned income for that taxation year; and
(b)	in the case of any other taxpayer, the lesser of $2,500 or 10 per cent of his earned income for that taxation year.
(6)	There shall be included in computing the income of a taxpayer for a taxation year all amounts received by him in the year as a benefit under a registered retirement savings plan, otherwise than by way of a refund of premiums.
(7)	Where an amount is received by a person in a taxation year under a registered retirement savings plan by way of a refund of premiums,
(a)	the amount so received shall be deemed not to be income of that person for the purposes of this part, and
(b)	there shall be added to the tax otherwise payable by that person upon his taxable income under this part for that taxation year an amount equal to 15 per cent of the amount so received.
(8)	Where, at any time after a retirement savings plan has been accepted by the minister for registration for the purposes of this act, the plan is revised or amended or a new plan is substituted therefor and the plan as revised or amended or the new plan substituted therefor, as the case may be (hereinafter in this subsection referred to as the "amended plan") does not comply with the requirements of this section for its acceptance by the minister for registration for the purposes of this act, the following rules apply:
(a)	the amended plan shall be deemed, for the purposes of this act, not to be a registered retirement savings plan;
(b)	there shall be included in computing the income of a taxpayer for a taxation year all amounts received by him in the year that, by virtue of subsection (6), would have been so included, (i) if the amended plan had been a registered retirement savings plan at the time he received those amounts, and (ii) if those amounts had been received by him otherwise than by way of a refund of premiums, and no deduction shall be made under paragraph (k) of subsection (1) of section 11 in respect of those amounts in computing his income for that year;
(c)	there shall be withheld or deducted from any amount paid to a person in a taxation year as a benefit under the amendment plan, by the person paying that amount, an amount equal to 25 per cent thereof, and any amount so withheld or deducted shall forthwith be remitted to the Receiver General of Canada on account of the payee's tax for the year under this part;

(d)	where an amount is withheld or deducted under this subsection from any amount paid to a person as a benefit under an amended plan, it shall be deemed, for all purposes of this act, to have been received at that time by the person to whom the benefit was paid; and
(e)	where an amount is withheld or deducted under this subsection from any amount paid to a person as a benefit under an amended plan on account of that person's tax for a taxation year under this part, and the amount or the aggregate of the amounts so withheld or deducted exceeds,
(i)	the amount of that person's tax, if any, for the year under this part before making any deductions under sections 33 to 41, minus, (ii) the amount that his tax, if any, for the year under this part before making any deductions under sections 33 to 41 would be if no amount were included in computing his income for the year by virtue of paragraph (b), the amount of the excess shall be deemed, for the purposes of this act, not to have been paid on account of that person's tax for the year under this part, but as a debt due to Her Majesty.
(9)	For the purposes of subsection (8),
(a)	a reference to an amount paid as a benefit under an amended plan shall be deemed to include any amount paid under that amended plan, otherwise than as a premium or an amount that would, by virtue of paragraph (e) of subsection (1), be regarded as a premium if that amended plan were a retirement savings plan; and
(b)	an arrangement under which a right or obligation under a retirement savings plan is released or extinguished either wholly or in part and either in exchange or substitution for any other right or obligation or otherwise (other than an arrangement the sole object and legal effect of which is to revise or amend the plan) shall be deemed to be a new plan substituted for that retirement savings plan."
Mr. Macdonnell:: Mr. Chairman, we have come to the end of the budget debate and I do not propose to try to go over the ground again in any degree, but I understand that it is usual to have some general discussion of this first item, and I propose very briefly to act accordingly.
These resolutions-I refer particularly to the income tax resolutions for the moment- carry out the minister's ideas. We have criticized his budget, and I do not need to cover that ground again. These resolutions are making certain concessions which the minister indicated in his speech. While, as I said, we have made criticism of his budget in general, we accept these concessions, so to speak, on account.
I wish to make one general observation about the minister's budget. While he referred to general conditions both at home and abroad, I think it would be fair to say that by and large he regarded his budget as a statement to parliament of the receipts and disbursements of the federal treasury and the position in which they find themselves. It took one of his supporters, the hon. member for Inverness-Richmond, to outline a conception of the role of the government and the finance department, which I should like to refer to very briefly because it indicates a
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conception which is so far-reaching that I think it should be known that this idea is abroad.
The hon. member for Inverness-Richmond complained when speaking in the debate that I had failed to appreciate the various functions a modern budget can perform, and that these functions could not be confined solely to the collection of revenue and the estimation of expenditure. In my own defence, I would say I was at some pains in my speech to refer to the fact that the government was stepping out a good deal in the matter of crown corporations, monopolies and such, but I do not propose to detain the committee with any extended reference to that. I merely wish to go on and quote a few words used by the hon. member for Inverness-Richmond which interested me very much because they gave such a far-flung conception on what the minister and his department should do. He said, as reported at page 2596 of Hansard:
A modern budget is an instrument that can be used to control the level of income and employment and can be used effectively to control inflation or deflation.
I would recommend to the minister that if he has in the ranks of his followers a man who knows how to do those things he should not hesitate a moment but should at once put him in a position where he can perform these marvels. However I congratulate the minister for not having claimed to be able to do that himself.
The minister has not replied to the budget speech except fragmentarily here and there. He showed some indication of wanting to reply last evening when apparently he was out of order. However, he accepted the ruling without any very great feeling saying:
I do not mind, Mr. Speaker, if there is no right to reply because really no reply is needed.
Those words appear at page 2996 of Hansard of yesterday. I was interested in hearing the minister say that because up to this time I had regarded the minister as a modest man ibut I would say that is one of the most immodest remarks which it has been my experience to hear.


Walter Edward Harris: If you continue the budget debate much longer I will reply.


James MacKerras Macdonnell: I wanted to quote this short comment because it is a very interesting thought that no reply is needed. If no reply to what we on this side say is needed then surely the next step is to say there is no need for us even to speak and of course this afternoon the hon. member for Fort William practically got to that stage because he suggested it was really pointless of us to take up the

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time of the house because we knew we were going to be voted down anyway so why did we not just stop speaking.
The implications of that statement are most interesting because if you carry that idea to its logical conclusion it would really mean that there is no occasion for us to take any serious part in any debate; and if you extend that a little further it would mean there is no occasion for us to foe here at all, that the only thing that needs to be done is for the government members to come 'here to choose the cabinet and then to return home and let them carry on.
If he will allow me to do so I would like to refer to the Minister of Finance very briefly.


Walter Edward Harris: I will if you will allow me to make a budget speech.


James MacKerras Macdonnell: Oh, this is not a budget speech but just one or two brief comments.


The Chairman:: Order. May I intervene here to say that I believe to some extent we are repeating what would more appropriately be said in the budget debate. I have not interrupted the hon. member up to this point because I thought he was laying a groundwork for discussion of this resolution but I must point out to the hon. member that we are now discussing the resolution with regard to income tax which is very confined and set out in numbered paragraphs. I do not believe that a general speech of this kind is in order.
If I allow latitude to the hon. gentleman I of course must allow latitude to other hon. members to reply and we are in committee governed by the strict rule of relevancy. I must ask the hon. member to confine his remarks to the proposals which are set out in this particular resolution.


Mr. Fraser (Peterborough):: Mr. Chairman, are you taking them one by one?


William Alfred Robinson: I understand that in previous years-if my memory serves me correctly-I did call them for discussion paragraph by paragraph. That is up to the committee, of course. If the committee agrees I would be glad to do it in that way but in any event we must confine ourselves to the resolution itself.


Gordon Knapman Fraser: Thank you, sir.


James MacKerras Macdonnell: Well, Mr. Chairman, I will of course abide by your ruling. I did have one other slight digression which would have taken only a minute and which I think the minister might have liked to hear but I shall just pass that by. I have just one other item to discuss which I think, Mr. Chairman,
[Mr. Macdonnell.1
you will agree is relevant because it comes right close to one of the minister's resolutions.
There was one very pleasant interlude in the debate and that was when the hon. member for St. Lawrence-St. George-although I must admit with some legal reservations which made me not absolutely sure what he meant-referred to old age assistance. What I understood him to say was that he thought the increase in old age assistance should have been $8 instead of $6 a month. If I understood him correctly in that I must say it was indeed a welcome thought that there was somebody in the government ranks who was prepared to stand up and be counted giving an independent opinion.
I have spoken in a general way with regard to the income tax resolution and I would now like to take a few moments to speak with regard to the excise tax resolution. I think this will be strictly relevant.


William Alfred Robinson: The excise tax resolution is of course contained-


James MacKerras Macdonnell: Mr. Chairman, whatever you rule, I want to make a few remarks about the excise resolution and the customs resolution.


William Alfred Robinson: Hon. members will see in the booklet on the ways and means resolutions that the income tax resolution commences on page 3 and the excise tax resolution commences on page 8. Merely for the purposes of facilitating the work of the committee, I would think it would be much preferable if at this time we were to confine our remarks strictly to the income tax resolution and then we could proceed to the others later.


James MacKerras Macdonnell: Thank you, Mr. Chairman.


Howard Charles Green: Mr. Chairman, on the income tax resolutions and arising out of this first resolution, I would like to raise one question. This item deals with allowances in lieu of certain expenditures and refers among other things to trade union dues.
On the west coast and perhaps in other parts of Canada there has been a situation arise with regard to income tax which is very worrisome to the trade unions and which I submit could be dealt with by the government without any further delay and I believe without any amendment to legislation. I am referring to the practice which the Department of National Revenue has adopted in recent months of charging income tax on board and lodging of construction workers who are working away from their home centres.

In British Columbia there has been and is and will be a great deal of construction work going on in the more remote centres of the province which involves the removal of many thousands of our construction workers from their home centres out to these jobs. Unfortunately the department is taking the position that these men must pay income tax on the allowance that is made to them by the employer for board and lodging. Most of these men have their homes to maintain in Vancouver, Victoria or in other centres in the province. They have all these living expenses which of course are quite properly not deducted when income tax is being levied but where they have to go away and live for temporary periods the money they are paid for board and lodging should be deducted. They should not have to pay income tax on those particular amounts.
For a number of years it was understood that the law was such that they did not have to pay income tax on these amounts. For example, I understand that on August 13, 1942 Mr. C. F. Elliot, who was then commissioner of income tax, wrote to John W. Bruce, the general organizer of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada concerning this question and his letter contained the following words:
However, If the employer instead pays the expenses of the employee while working out of town, the employee will only be taxed on the wages he receives and not on the expenses borne by the [DOT]employer.
That practice seems to have been followed for many years. It was in question in 1953, because I know I raised it myself in my speech on the budget on March 11, 19.53 and last July 10 the Department of National Revenue issued what it described as "Information Bulletin No. 10". The heading is "Subject: Taxation of per diem and other allowances" and the first two paragraphs of this bulletin read as follows:
This bulletin outlines the requirements of the Income Tax Act with reference to the taxation of per diem and other allowances paid to employees in various industries, but with particular reference to subsistence and commuting allowances paid in the construction industry.
The Income Tax Act requires that, with certain *exceptions, any amount paid to an employee as an "allowance" must be included in computing his income. In the circumstances with which this bulletin is concerned the only exception applicable is that which exempts from tax reasonable allowances for travelling expenses paid to a permanent employee for a period when he is performing his duties away from the municipality in which his employer's establishment at which he ordinarily works is located. In the majority of cases the periodic subsistence and commuting allowances commonly paid in the construction industry do not fall in the exempt category.
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Now that means apparently that the act has been interpreted by the department or the taxation authorities to mean that if a construction superintendent who is on the permanent payroll of a company goes to Kitimat to superintend a construction job there and is paid or is given an allowance for his board and room while in Kitimat he does not have to pay any tax on that amount. On the other hand, the rest of the construction workers who are not on the payroll permanently- and as members know, very few construction workers in work of this type or jobs of this kind are on the payroll permanently- if they went up to Kitimat they would have to pay tax on such allowance as they received for board and lodging. I do submit, that is unfair and that these men should be treated in the same way, for example, as some groups who are exempt, such as railway employees and taxpayers in employment and whose principal business is in connection with passengers and goods transport and so on. This may just have been an oversight on the part of the department but we are now at a stage in the development of Canada when it is necessary for construction workers to go to remote places. I dare say in every single province of Canada that condition prevails and men will have to go, not only within the provinces but to the Northwest Territories and eventually probably into the Arctic islands, north of the mainland of Canada.
There should be no more delay in dealing with this question. The unions on the west coast have made representations, 1 think very reasonable representations, on the point and I have here as a matter of fact a brief presented by the Canadian Labour Congress on December 4, 1956 covering this point and I find that in their conclusion they have this to say:
Neither the construction employee nor employer is trying to avoid the payment of tax on income earned during the taxation year but for the reasons enumerated above emphatically deny that these out of town living expenses constitute income. They, therefore, respectfully ask that the act be amended to exempt the expenses of construction workers only from tax by an amendment in a form similar to the following:
"Reasonable allowances for travelling expenses and out of town living expenses received by an employee of a construction contractor while working on a construction project away from his normal place of residence."
Now that seems to me to be a very proper request. Actually I doubt whether it is necessary to have an amendment to the act. It seems to me that this point could be covered by a change in the regulations, or it may even be that the regulations are all right and merely that this information in bulletin No. 10 is all wrong. I hope that either the Minister of Finance or the Minister of National

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Revenue will assure the committee today that this tax on these allowances is to be dropped.
I do not believe that there is any justification for levying this tax and it is a kind of tax that causes extremely bad feeling because some people do not have to pay it. As I pointed out, the construction superintendents do not have to pay it but the men under them do and this is a very bad situation to have existing in our taxation laws. Finally there is also the fact that this tax is making it more difficult for Canada to carry out construction jobs in the more remote parts of this country. I believe that the future of Canada depends primarily on the way and the speed with which we develop our north country and the more remote areas in the provinces. Certainly this tax, as it is being levied now, constitutes a great handicap to that development and a change should be made right away.


Mr. Winch:: I would like to add my words to what has already been said by the hon. member for Vancouver-Quadra. In my period of occupation I have had actually only two jobs in my life, one in the construction industry and one in public services. On both I found I had to be away from home, so I can speak from almost a lifetime of experience on the principle which has been espoused and explained by the hon. member who spoke before me. Workers in the construction industry have on many occasions to leave their homes and take up employment many miles away. It may seem reasonable at first glance that if a man happens to be employed in an industry where his employer pays for his board, it should be included as part of income. But those who have actually been employed in construction work know they do not receive anything extra as a result of provision for their board being made, if they are normal persons; and most people are normal persons.
I remember when I was occupied solely in the construction industry, sometimes hundreds of miles away from home, I wanted to see my family and make arrangements either for them to visit me where I was working or to leave the job for a few days and go back home. In either case a worker loses some days on the job and, in addition, he has to pay costs of transportation. If it is right that because a construction worker away from home who is paid his board should have to pay tax on this amount, then it is also right that because he is separated from his family and wants to see them once in a while he should be granted consideration in respect of what he spends in so doing. But the national revenue department never thinks of that.
Along with the hon. member for Vancouver-Quadra I was amazed when about a year

ago out of a blue sky, not because of any change in the law but as the result of regulations, a decision was reached that the amount received for board and lodging by construction workers away from home would be charged for the purpose of income tax. I think that is one of the most despicable things that has ever been done by way of regulation by the Department of National Revenue, and I am convinced that if a study were made of the position of a man or woman who is working away from home that regulation would be withdrawn after due consideration.
If the regulation is not withdrawn, then I think that all hon. members of this house who know something about the construction industry have the right to ask the Minister of Finance and the Minister of National Revenue to take into consideration the extra cost incurred by a person who is away from home in returning to see his family or in arranging for his family to see him. If this course is followed-and I think it is the decent thing to do-I believe hon. members will find that the cost of one will just about offset the cost of the other.
There is what is known in law as a question of doubt. Apparently it arises, in particular, in questions dealing with pensions and compensation. If we look at it only in this light, there is a question of doubt about what a man gains by being away from home and receiving an allowance as compared with what he loses, and what his family loses, because he is away. It is a question on which one could speak for a long time, but I wish to say this through you, Mr. Chairman, to the Minister of National Revenue and the Minister of Finance: some of the things they have done in the past are good, and some of the things are bad. But one of the rottenest things they ever did-not by way of law but by way of regulation-was to impose a burden on thousands of people in Canada by discriminating against those employed in the construction industry and saying that any allowance received by these workers when they leave home is going to be charged as income.
I am very happy, therefore, to give my support to what was said by the hon. member for Vancouver-Quadra and ask that this matter should be reconsidered, and that the regulation should be rescinded immediately.


Mr. Hahn:: Mr. Chairman, on behalf of the Social Credit group may I say that we would like very much to be associated with the words spoken by the hon. member for Vancouver-Quadra and others. Every hon. member of this house has in all likelihood received many resolutions with regard to this matter

and spent a great deal of time discussing the question with constituents engaged in the construction business.
It is a very simple matter indeed to deduct income tax from workers, and it is a very simple matter to introduce regulations which make that possible. However, the position is much more difficult for the contractors of this country who have the task of inducing men to leave their homes in order to carry out contract work away from city areas and travel into the interior of, for example, the province from which I come. It is much more difficult for contractors to do this than it is to keep men on the job within the cities.
It is easily understandable, as has been pointed out by hon. gentlemen who have spoken already, that it is not easy to keep men employed in outlying areas, especially if they find that they are not given the right to deduct their expenses and are to be charged for lodging and meals. I say this only because the minister should be made aware of the fact that all parties are in agreement, I think, with respect to this matter. I think he should take this into consideration and see if it would not be possible to change this regulation so as to make it possible for these men to remain on the job, because contractors find it so difficult at present to get men to leave their home areas and take up work elsewhere.


Howard Charles Green: Could we have a statement from one of the ministers on this point?


Walter Edward Harris: Mr. Chairman, as everyone recognizes, this problem is not covered in the amendment before the house, and perhaps for that reason we should not spend too much time on it. I think it is recognized that this was brought about by administrative order and could be altered in the same manner. I do not think, therefore, that any amendment is required in the act.
I want to say at once, however, that this has been a very difficult matter to determine. There is no question but that the construction industry is unusual in this field, yet it is not wholly unique. There are other industries in which allowances for board and lodging are given. I think the best argument that could be made for the deductions that have been mentioned would be the matter of public need, in the sense that if the construction industry were not successful in doing those things that we wanted to do, and if the action which some hon. members have proposed were the means of avoiding that, we would have to give most serious consideration to what has been suggested.
On the other hand it ought to be clear that these benefits are real benefits to the taxpayer
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and that it is necessary that the Department of National Revenue should fix some arbitrary rule for the imposition of the tax, because you will have one employer who will pay his working men, let us say $75 a week, all of which would be taxable as a wage.
You will then have another employer who will pay $50 a week by way of wages and $25 a week by way of allowance for board and lodging. You will have a third employer who will pay the $50 a week and provide the board' and lodging himself in camps and the like.
It is not easy to draw the proper rule as between all three or variations of them. We have been doing our best to find that thing which probably should not follow necessarily in any taxing law, namely a logical approach to everything. I do not think you can be wholly logical. However, we have been doing our best to find a rule which would tax everyone with the same kind of income unless there was a real case to be made for an exception. I think all hon. members of the committee would agree with me on that score, namely that if there are exceptions,-if I am being taxed for one thing that some hon. gentleman opposite is not being taxed for-there must be great justification for that exception to be made.
As I say, there is something to be said for everything that has been said here today. The construction industry may possibly be, by its very nature the exception to the rule that these benefits ought to be taxed. I agree with that proposition. I recognize that that is the best argument that can be made for the exemption that has been advocated. But I would hope that the committee would bear with me to this extent. If exemption is granted for this kind of income I think we want to see that two things will happen. We want to see that the income will be legitimate, that is to say that the amount set aside for board and lodging and fringe benefits, if I may put it that way, will not be out of proportion to what they ought to be so that the construction worker then will receive a tax exemption which no one else will receive. In the second place, we want to see that all other workers who are in about the same kind of situation will have their cases considered on their merits and we will be able to know where to draw the line with respect to the exemption, whether it should be drawn just at the construction workers or whether it should be extended beyond that.
This is not by any means an attempt to magnify the difficulties. I can assure you that they are real and troublesome. As for myself, I have not been able to suggest any other amendment to the law that there ought to be; nor for that matter have I been able to

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satisfy myself that I should tell the maid in the house who pays income tax on her board and lodging that the construction worker ought not to do it because of the circumstances under which he works.


James MacKerras Macdonnell: May I ask the minister a question?


Walter Edward Harris: Yes.


James MacKerras Macdonnell: Does the minister consider that this matter comes within the scope of regulations?


Walter Edward Harris: Yes, there is no question about that. Regulations could be issued interpreting what should be done. I am satisfied on that point. If it turns out that I am wrong by any chance I am quite prepared to consider an amendment that might be made.


Howard Charles Green: It merely requires a ministerial directive, does it not?


Walter Edward Harris: I think that is correct, as far as I know. But I place the case before the committee. I have not anything to add to what I have said. I think every hon. member will recognize the fact that the whole question of the taxation of fringe benefits is an extremely complex one and that, generally speaking, there ought not to be very much advantage to anyone in these things unless they are clearly understood and unless the exemption is understood and extends to all persons under like circumstances. I realize that hon. members may hold wholly different views from those that I hold. I think it is clear that I have no fixed view on this matter. However, I want a consistent tax law. For that reason all I can say is that at the moment I do not propose to make any amendment with respect to the matter. I think we ought to continue to study all these things, including transportation as well as just the board and lodging element of it, in an effort to have a consistent policy.
We have interviewed some of the gentlemen who have been mentioned by name already as representing the unions and we have interviewed the contractors as well in an effort to work out a suitable arrangement which would be agreeable not only to both employer and employee but would not prevent the recruiting of workmen for the more distant parts or for the more immediate parts as well. I have not been able to complete those discussions up until the present time. I feel that perhaps the house might bear with me for another short period of time. We may be able to do something.


Howard Charles Green: There was one point with which the minister did not deal. I refer to the fact that the superintendent who goes

out on one of these construction jobs is not taxed on the allowances for board and lodging whereas the rest of the construction workers are so taxed. I quite agree with the minister that the taxation should be logical. However, it is extremely difficult to see anything logical about an arrangement of that kind. I submit that the two groups should be treated in the same way. If the superintendent gets his exemption, then the men working under him should also get it. The minister has brought in other industries. But I point out to him that this trouble arose only because there was a directive issued by the Department of National Revenue dealing exclusively with the construction industry.


James Joseph McCann: When conditions were entirely different from what they are today.


Howard Charles Green: How do you mean?


James Joseph McCann: Inasmuch as at the time
at which this directive was issued by Mr. Elliot to which my hon. friend referred it was not the practice for workers in Vancouver-if you want to take that city as an example-for instance, or in Sudbury to have employment in jobs outside of where they were resident to the extent that it is the practice today. The regulation has been there for a long while. Regulations are concurred in by privy council. It was last year that attention was drawn to the fact that the regulation was not being put into effect, and directive No. 10 was issued saying that it should be put into effect. I do not see anything very much wrong with it. I listened to the arguments that were advanced by the hon. member for Vancouver-Quadra. However, I know this. I investigated the matter personally. Up in the Sudbury district there has been a big rush from Sudbury to the uranium mines at Sprague.


Howard Charles Green: Blind River.


James Joseph McCann: These fellows up there are
getting $20 to $25 a week extra to take that job. In addition to that they are getting increased rates in the particular job of work they are doing. For instance, if a fellow is a plumber, he gets a better rate per hour because of the fact he has gone to work with the Consolidated Denison construction group. In addition to that he gets $20. He pays only $2 a day or $14 a week out of that $20 a week which he gets. I asked the men themselves and they told me this. They pay $14 a week for their room and board; that is their bunk and their board. Therefore they are "in" to the extent of $6 a week.
I submit to you that the very fact they get the equivalent in money of their board and lodging, and in the instance which I have

cited an extra $6 a week, that that, in addition to the wage or the monthly wage or the hourly wage they are paid, is income in their hands and should be taxed.


Howard Charles Green: Oh, yes, but that is not the
situation. Those men are paying tax on money that they get.


James Joseph McCann: Yes.


Howard Charles Green: Nobody is complaining about
that. That is for wages. If they get a higher rate for going into that area for work, then they pay taxes on that higher rate.


James Joseph McCann: That is right.


Howard Charles Green: And there is not any doubt
that they are entitled to get a good wage for going into work under those conditions. But the point is that the Department of National Revenue is taxing them on the allowances they get for board and lodging and that is what we are complaining about.


James Joseph McCann: That is the situation with
other people. For instance, the men who go into the bush are getting so much a month and they are paid the equivalent, which is low in these times, I think it is $30 a month for board. That is added on to their wages as part of their income for the year.


Howard Charles Green: That may be so.


James Joseph McCann: And deductions at the source are made on that basis as if it had been in cash. I suggest to you that there is no difference between paying John Jones $100 per month and his board which, we will say is worth $30, and paying him $130 per month and asking him to pay $30 to the company for board.


Howard Charles Green: But that can be handled by the department. They can decide what is a fair amount to be allowed for board and lodging. Neither minister has dealt with the fact that the superintendents, the men who are in charge, are getting this allowance and the other men are not. The directive to which I was referring was not a directive issued by Mr. Elliot, but this same directive No. 10. The trouble came up last year when the national revenue officials issued this directive No. 10; that is what made all the trouble. Before that, as I understand it, board and lodging were not being taxed, and that directive No. 10 only referred to the construction industry so that it is the construction industry that is being hurt.


Walter Edward Harris: My hon. friend does not understand that the construction industry was the only one that was getting this tax exemption at that time; that is the point of the directive. Everybody else was being charged for board and lodgings, including the people in the bush.
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Harold Edward Winch: The travelling salesmen are not.


Walter Edward Harris: I will come to that in a moment. That is the answer to my hon. friend's other question. Anyone whose income is fixed on the basis of his income plus his living allowance, with the exception of the construction workers, has been charged for both up to the present time, plus of course the proper determination of the value of the additional benefit. It was found last year that this did not apply to construction workers; that they were getting tax exemptions for their board and lodging. It was for that reason directive No. 10 was issued. I think, therefore, it can be fairly said, subject to what I am going to say in a moment, that now everyone who has a combined income of wages and benefits will be taxed for both.
Then my hon. friend asked why it is this does not apply in the case of the superintendent as well as the working man. The reason is given in the directive. This was an effort to extend the exemption again to those persons for whom a good case could be made, namely the permanent employee, for the reasons my hon. friend has just given that when a salesman goes around the country he is paid his expenses. He is a permanent employee and is someone you can trace in your business. He is a man who can be followed on the books of the company and by the nature of things he is doing something which improves the income of the firm for which he is working. He is on strength the year around, at least until he loses his job. He is a permanent expense, if you will. The case is the same with any permanent employee.
My hon. friend, I think with a little bit of malice perhaps, just used the word "superintendent" instead of permanent employee. This does not apply to the superintendent, it applies to every permanent employee. If there is a carpenter at Kitimat, as my hon. friend has said, who is a permanent employee of the construction company the year round he gets this advantage.


Harold Edward Winch: What is your definition of "permanent"?


Walter Edward Harris: I shall have to let the Minister of National Revenue give that.


Harold Edward Winch: Is it six months or a year or two years?


Walter Edward Harris: As I say, I am only giving an expression of my own opinion, which then will be subject to the correct definition. I think a permanent employee is a person who, in the first instance, is hired for the purpose of working all the time. Some people work the year round for construction companies. It is true they will be laid off because

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of temporary weather conditions but that is another matter. There are some people who hire themselves out by the season or go to a job for three months or four months at a time. They are not permanent employees. We have extended this exemption as wide as we could in order to be consistent by saying that anybody who is on the strength of the construction company the year round can have his exemption because his employer down in Vancouver may say you must go up to Kiti-mat to work for us. The employer does not say so, but the inference is if you do not we will have to hire someone else in your place. This does not apply to the mechanics, carpenters or other workmen who decide there is work to be had up there and who apply for a job for that period of time. They are a little different.
I know hon. members may say they are not different, but what I am trying to say is that the reason we have permanent employees in there getting the advantage of tax exemptions is because we think it is logical they should have that exemption as a great many people working in other lines of industry do have that exemption. We, therefore, gave it to them. The only chap we are quarrelling about is the chap who is hired for a job, so to speak, in the larger cities, and who is taken out to the job knowing that when the job is ended he is not going to have work unless the company hires him another year or for another job. As I say, that is the distinction about which we are talking this afternoon.
I repeat it might not be a distinction hon. gentlemen think ought to be made, but I think you can agree about the permanent employee. We have narrowed the field down to the one I mentioned. I just want to clear this up because I think the hon. member for Van-couver-Quadra is not aware of the fact that the Minister of National Revenue did not single out the construction industry. They were exempt, and other people felt there was an unjust advantage to them; we were giving them something that others were not getting.


Mr, Green:: You mean you were taking something away from them by this directive?


Walter Edward Harris: It is true of the working man who is not a permanent employee. The construction worker is now paying a tax on something it had not prior to this directive, that is true. But under the circumstances, as I have said, we are trying to find the proper approach to this thing. If we felt that this chap should not pay the tax, if directive No. 10 ought to be withdrawn and the tax exemption granted, we would be in a position then perhaps of having to grant

similar exemption to a great many other people who have been paying tax on this for a great many years.


Howard Charles Green: Probably the only practical difference between the superintendent and the carpenter would be that the superintendent would have 12 months work and the carpenter would only have nine. In cold, hard fact, I think in most cases that would be the only difference. The carpenter would work for nine months for this company and then he would not get anything else for three months in the winter. Then, he would go to work again in the next year. I do not think the distinction the minister is drawing is a very fair one. I think the two men are actually in the same category.


James Joseph McCann: There are lots of other
points.


Walter Edward Harris: There are a considerable number of companies with a great many persons on their permanent payroll who are not superintendents, but mechanics and carpenters. There are a number of these people. Therefore, it is not fair to suggest that construction companies generally have a small nucleus of people of a permanent nature in the higher income brackets, if you will, who enjoy benefits that others do not. There are a great many people in the large centres of Vancouver, Toronto, Montreal, and all the other cities, who have permanent places, and these they agree to pay the year around in the first place, and they do, and they are carried over the months when there may not actually be employment. One of the reasons they do that is to keep their organizations functioning with that group of people. I should think my hon. friend would be in favour of that exemption rather than suggesting that it is not a fair one.


Howard Charles Green: I am suggesting that it should be extended to cover the others.


Harold Edward Winch: I was most interested in the remarks of the Minister of Finance. I am going to take his own suggestion and direct a question to the Minister of National Revenue. That was the minister's advice. In the construction industry-I am not discussing superintendents or draftsmen, I am discussing the electrician, the carpenter, the steamfitter, the plumber, the steel worker- what is the definition by the minister's department of a permanent employee?


James Joseph McCann: That is not very hard to answer. There are an awful lot of yardsticks by which a permanent employee is put in that category. For instance, is he eligible for pension benefits? Ordinary temporary employees are not. If he gets to the position

where he is permanent and is getting a salary, sometimes they are put on a minimum salary. We do not recognize them for pension benefits unless the pension benefits are applicable to all employees.


Harold Edward Winch: In the construction industry that is mostly with the union, and not with the company.


James Joseph McCann: That may be, but I would suggest to you that that is one of the yardsticks. A man is a permanent employee if he is head of a certain department; he may be the head man on the works; he may be the head man on construction, the head man on steel erection, and so on. The companies themselves know what their standards are when they designate a man as a permanent employee; and when it comes into us that that John Jones is getting a salary of $5,000, $8,000 or $10,000 and he is a permanent employee of the company, we accept their designation.


Harold Edward Winch: I thought there was something crazy about this entire matter, and now I know it.


James Joseph McCann: The hon. member is smart.


Harold Edward Winch: In other words, the Minister of Finance did not mean to, but he has been trying to lead us down a completely crazy path. Acting on his advice, I have asked the Minister of National Revenue what he means by a permanent employee, and he said it was easy; that there are some yardsticks. He has named the yardsticks, which means what? It means something that does not touch one-half of 1 per cent of those engaged in the construction industry. Therefore, all of this-I do not know just exactly what to call it-is eyewash that we have been handed. That is exactly what it is.
It does mean that the regulation brought in by the Department of National Revenue, as far as income tax is concerned, covers practically everybody in the construction industry of Canada if they are working away from home. If you are in the construction industry, sir-and I was for some time; that is where I started, as a matter of fact when I went to work-you are not a permanent employee unless you happen to be on the administrative staff on an annual salary basis. The plumbers, the steamfitters, the carpenters, the steel men are employed under trade union agreements on an hourly basis, and what the minister said a few moments ago did not include them in any way whatsoever. The minister said they were permanent employees if the employer said they were employed at $5,000, $6,000 or so much a year. Construction men are not employed in that way except in a very few
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supervisory categories. I was very hopeful for a few minutes, from what the Minister of Finance said, that the majority of construction workers would be free of this regulation if they could show, as I took it from what the ministers statement said, that they were permanent employees; but after listening to what the man who collects the money had to say I think we have to point out that the majority of the men on construction, if they happen to be away from their home residences, are going to be caught by this regulation on the matter of board and lodgings.


James Joseph McCann: Nobody denies that.


Harold Edward Winch: I was interested in what the minister said, that sometimes when you go out of town on a job you get extra money. That is correct, but you pay for it in income tax. We are discussing one issue only, and that is a person being charged income tax on the actual amount of board and lodging.


James Joseph McCann: Which is equivalent to money.


Harold Edward Winch: It is not completely equivalent to money. That may be the attitude taken by the Minister of National Revenue.


Walter Edward Harris: How much of it is?


Harold Edward Winch: I say there is something more than money, and that is human relationships, that is whether you are home or away from home; whether you are with your family or away from your family; whether you spend money once in a while to see your family or not. The sooner the Minister of National Revenue gets away from dollars and cents and comes down to human values, the sooner we will have a government that understands the situation, or what should be the situation, in this country.
I say, as one who either as a public representative or as a construction worker has been away from home a great deal, it is despicably unfair when a man is away from home, because it is required in the development of our country, because of his occupation, that he should be charged income tax on the actual board and room valuation away from home. I have not heard one thing yet from the Minister of National Revenue that in any way indicates he understands, or has even the slightest understanding, of the situation, or any desire to understand it. It is a matter of regulation, brought in under his power and his authority, and I hope that within the very near future, as he had the power and authority to bring it in, in the little time he has left with his power he will remove that same regulation.
I appreciate the fact that the Minister of Finance said what he did; that it was not something that required any amendment; it

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was something done by regulation, something that was still, as I gathered it, under consideration, something upon which there are angles for and against. I expected that from the Minister of Finance, but I say that in view of what the minister said he should not have had this regulation made until everything had been weighed in the balance and he knew what was the right decision. The admission of the Minister of Finance himself, in which he put forward various problems and various aspects, is convincing evidence that a decision was made before all knowledge was forthcoming. I hope most sincerely, on behalf of those in the construction industry away from home,-and more and more will be away from home as Canada develops-there will be a change made immediately and made retroactively, that construction workers will not be charged income tax on their actual board allowances paid by their employers.


Mr. Monteith:: I would like to say a word on this subject. I would like to start out by admitting-and I think we all agree-that any individual's home living expenses are not deductible for income tax purposes. The reason for the payment of the living expenses and travelling expenses in the first place of a salesman or of any other individual is simply that there are out-of-pocket expenses incurred in order to earn income or salary. I can understand, as the Minister of Finance said, that there could be agreements, there could be conniving in some instances between employer and employee as to how much should be expenses and how much should be considered salary, and so on. I can understand where an individual or, shall we say, a person taxed as a single person, should not have these expenses deducted from his income for taxation purpose, but I cannot understand why anybody keeping up two homes, or keeping a family at home while he has to be away earning income and has to pay out-of-pocket extra expenses, should not be allowed those out-of-pocket expenses as a deduction from income for tax purposes. I think frankly the two-home idea, or the keeping up of a home by an individual at a place other than where he is earning his money, might well be the yardstick to follow.


Mr. Ellis:: Mr. Chairman, I think the importance of this matter can be gauged by the numerous representations made to the government regarding bulletin 10. I was quite amazed at the comments made by the Minister of Finance, because in the last few days I had wondered whether the department had seen fit to change its regulations, since I could not quite reconcile the facts as I know them with the picture presented to the committee by the Minister of Finance.

Let us get down to some specific example. I have taken from my files a particular example, which I think points up the absurdity of the position taken by the minister. In my province men engaged in construction work have done work 12 months of the year. They work, and they work regularly for a particular company. Many of them have worked for a great many years.
Perhaps they might get in seven months work this year and eight months the next year depending on weather conditions. Of course they are expected to live on the salary which they obtain over a period of perhaps seven, eight or nine months.
Let me illustrate my point by referring to a specific case. A constituent of mine works for a grain company. His job requires him to travel around the province of Saskatchewan building grain elevators, annexes to grain elevators and doing maintenance work for the particular grain company by which he is employed. This man has been working for this company for a number of years and as I say his job requires him to move about the province to a considerable degree.


Walter Edward Harris: May I just interrupt the hon. member to ask if the gentleman to whom he refers is a salaried employee or a subcontractor?


Alfred Claude Ellis: I am not exactly certain how he is paid, but the man is working for a well-known grain company in this country. His foreman has appended a statement of the places in which he was required to work in the normal course of his job. I might say that in the last year for which he filed an income tax return he has worked in 15 different communities in the province of Saskatchewan for a total of 256 days. That constituted the basis of his salary for the year.
In the 1955 taxation year he received a total remuneration of $2,671 and he worked eight months that year. In the last taxation year he got in only seven months work. I imagine this was due largely to weather conditions over which neither he nor the company has any control and his total remuneration was $2,184. For the taxation year 1955 he submitted a claim for away from home expenses of $640 which amount was allowed and I think quite rightly so.
This gentleman is married and maintains a permanent home in Regina. In order to earn a living with the company for which he works he is required to travel around the province of Saskatchewan but he is not a casual employee. He works for that company for as long a period during the year as that particular type of work can be carried on and yet when he filed his income tax

return for the taxation year 1956 his total away from home expenses amounted to only $533.50 which I think you will consider quite reasonable in view of the fact that the man was away for a period of 256 days.
I do not think by any stretch of the imagination anyone could suggest that this man is claiming too much. As a matter of fact, one wonders just how these men are able to live away from home and submit claims for such modest amounts. The fact is that this year this man's claim was disallowed and he is being charged income tax on his away from home expenses. He still maintains his home in Regina and has a wife to support. This government expects that when he goes out to earn his living he is going to have to pay income tax on his actual expenses while away from his permanent residence. I have cited this example and I would like to have the minister comment on that case.


Walter Edward Harris: I do not think it is customary in the house to try to comment on individual cases. I am quite sure from listening to my hon. friend that if this chap is a permanent employee as we have discussed and is not some kind of contractor paid on a job basis, it would seem that the allowance ought to have been granted. But I do not think the hon. gentleman expects either the Minister of Finance or the Minister of National Revenue at this time to go into a case to find out if the circumstances would have justified that or not. Let us just talk about the principle involved.
I think I have made it clear, as has the Minister of National Revenue, that so far as we are concerned permanent employees of companies who work out of town are allowed expenses whereas non-permanent employees are not. I think my hon. friend would agree with me that we would only waste time discussing a particular case but I am sure my colleague would look at it to see if it was within that definition.


Alfred Claude Ellis: I was not dealing with this particular case with a view simply to obtaining justice for this one man. I am citing this specific example to illustrate the type of administrative decisions that are being made by the government. I certainly would not be satisfied even if the minister gave me his assurance that justice would be done in this single case because, as I say, this is merely an example and there are many other cases of this type. I think we should get down tc something we can get our teeth into, some example which points up the folly of the government's attitude toward this problem.
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I know it is true in my own province and throughout the country generally that a great many employees do not work twelve months of the year. There are many who take on jobs which last only from early break-up in the spring until the frost sets in in the fall and yet these people are actually permanent employees even though they are perhaps not paid on an anual basis. Obviously if they are working for a company under a set of conditions which they understand when they accept the employment the company does not offer them an annual salary. Perhaps the companies should say, "We are going to pay you a certain annual salary." The amount of remuneration paid to the employee during the year will depend on the number of months he has worked in the locality.
In the illustration I cited the employee worked seven months one year and eight months the next so there was a difference in the annual remuneration he received. In this case I do not think it can be argued that the man is not a permanent employee. What I am suggesting is that there are many other cases like this. I do not want the minister to think that this case in itself is the end-all of this problem.


Walter Edward Harris: No, but does my hon. friend not agree with me that whether or not he agrees with our principle-and I am ready to concede there is a wide difference of opinion about that-in the interpretation of the rule that we grant this exemption to permanent employees there will be some who will be found to be non-permanent employees? We cannot just say that all permanent employees will have a tax exemption and grant it on the assumption that he is a permanent employee. There has to be some decision.


Alfred Claude Ellis: I am not concerned about the definition of permanent employees. I would hate to think for a moment that the question of permanency was to be determined on the basis of the way in which the man is paid and that because he is working on an annual salary basis he is a permanent employee whereas if he works on an hourly basis he is not a permanent employee.


Walter Edward Harris: As the Minister of National Revenue has told you, there are many definitions.


Alfred Claude Ellis: Yes, but it seems to me that most of the definitions he dreams up are designed to exclude taxpayers from receiving benefits under these regulations.


Howard Charles Green: Hear, hear.

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Alfred Claude Ellis: Many people who should be receiving consideration are not receiving it because the minister has enough of these jokers up his sleeve that he can always pull one out at any given time when an occasion arises.


James Joseph McCann: If you met a fellow for the first time and he told you that he was working for Jones and Company how would you find out if he is a permanent employee? What would you ask him?


Alfred Claude Ellis: I think the employers in this country are in a position to supply that sort of information.


Walter Edward Harris: That is the answer.


James Joseph McCann: That is exactly what I told you.


Alfred Claude Ellis: I wish to bring out the point that there are a great number of cases where deductions have been disallowed; people working for reputable Canadian corporations or Canadian companies employing a great number of employees. That is not argument to suggest that because one employer, a small contractor, may hire one or two employees and may arrange something in order to meet these regulations that there is any reason why many thousands of Canadians should be excluded.


Walter Edward Harris: Agreed.


James Joseph McCann: Even in the government we have qualifications as to permanency. You are not made a permanent employee the first week you come in.


An hon. Member:: Even you are not.


Alfred Claude Ellis: Let us not confuse the term permanent employee.


James Joseph McCann: That is what you are doing.


Alfred Claude Ellis: You are referring to civil servants and the question as to whether or not they are permanent employees, but that has nothing to do with the question as to whether or not a man such as I suggest should be allowed deductions for time spent away from his home. This is not a question of permanency but should, I think, revolve around the question as to whether a man in the normal course of his job is required to be away from his normal place of residence.


Walter Edward Harris: I do not think my hon. friend really means that, does he? There are a great many people who do not have to leave their permanent place of residence.


Alfred Claude Ellis: That is quite true, but if John Smith is working for an electrical contractor, and it may well be that most of his work is being done in his own city, in his own home

town, and that contractor gets a contract to do the electrical work on a hospital in a town say some 200 miles away and the employer says to his employee, "We are moving out to this particular town in the early part of next week to get started on this new job and we may be gone for a month or so", that employee is away from his permanent residence.


Walter Edward Harris: And he gets tax exemption.


Alfred Claude Ellis: Oh.


Walter Edward Harris: Because you just said that the employer said to the employee who is working for him, "We are going to the hospital to do a job" and so he gets tax exemption.


Alfred Claude Ellis: I just stated to my hon. friend right at the outset that there has been a case of an employee of a grain company whose job required him to be out of town during the construction season and yet his claim was disallowed.


Walter Edward Harris: I did say to my hon. friend a long time ago that we ought not to waste the time of this committee in trying to agree on a case in connection with which he is in possession of the facts and we are not. We do say that a permanent employee does get taxation exemption. My hon. friend may be arguing one particular case-


Alfred Claude Ellis: And many other cases too.


Walter Edward Harris: All right, and many other cases too. The position was that he was not a permanent employee and that is a matter of complaint to the Department of National Revenue for that particular decision, but my hon. friend, a moment ago in a somewhat rhetorical manner, said that an employer said to his employee, "We are going out of town a couple of hundred miles to do this job and build this hospital." I am saying that if these employees are permanent employees- however you describe them-they do get tax exemption and let me add that a great many get it. Surely my hon. friend does not mean to suggest that we do not grant this exemption or that in fact a great many people do not get it?


Alfred Claude Ellis: Used to get it.


Walter Edward Harris: And are getting it now, right at this moment. I do not want to stop my hon. friend from presenting the case he has in mind at all, but if it is in detail I wonder if he would take it up with the Minister of National Revenue or his department, because we never do follow this practice of discussing individual cases. I did not at the outset suggest that we were out of order in talking about something that is not in the resolution, and I do not intend to do it now. However,

I would like to get this particular resolution agreed to and I think that the committee ought to accept my assurance that I recognize two things: firstly that directive No. 10 in so far as it relates to non-permanent employees is unacceptable to many people. I also recognize that there can always be differences of opinion as to interpretation of permanent employees but that is a matter of specific complaint about a specific case and not a general matter of amending the Income Tax Act.


Alfred Claude Ellis: This is not a question of a
specific case. As I pointed out several times to the minister, I have used this example because I think the use of one example will do a great deal to facilitate the debate or the discussion but I do insist that the fact that the minister has received so many representations from trade groups in all parts of the country, including groups from my own city, indicates that this dissatisfaction with directive No. 10 is very widespread.
The other point I would like to inquire into is this. Why was it found necessary to change the interpretation in connection with this administrative change which denied the man working on the same job and under the same working conditions exemptions this year, when he received those exemptions in former years? Who made the decision to make this administrative change-and why? That is the question I would like to have answered.


Harold Edward Winch: Mr. Chairman, I have
appreciated that all the Minister of Finance has said up until now has been almost restricted to the question as to whether or not one is a permanent employee and I think I know what is in the mind of the Minister of Finance in that regard. However I would like to carry it further, because I think it is completely wrong in all its aspects, not just on the definition of whether or not a person is a permanent employee.
I started in the construction industry when I was 17 years of age and I think I know it. If you are in the city of Vancouver and there is a job going on in Kitimat or in any other part of British Columbia, it is a big job, it is a union job. I stress that it is a union job. A certain contractor gets that job and he gets in touch with his own office and the men are sent out on that job for one month or two years; they are sent away from their homes or residences.
Such an employee may never have worked for that employer before. I worked for Hume and Rumble Limited for years and for C.H.E. Williams Company Limited, but if when I worked for C. H. E. Williams there
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was no work for me-and that is where I served my apprenticeship-if the Hume and Rumble organization had a job 200 miles from Vancouver I might have gone into the union and they would have said, "There is a job for you 200 or 300 miles away from here for Hume and Rumble." Now I was not a permanent employee of Hume and Rumble but I was a permanent employee of C. H. E. Williams. I am saying it is wrong- being sent away on a completely new job, away from my home city, away from my residence and from my family-that I should be charged income tax on my room and lodgings while away.
I am not just discussing this on the basis of whether or not one is a permanent employee; I am saying that as far as I am concerned, in the construction industry since 1924 it has been basically wrong to charge a construction man away from his home income tax on his board and lodging. I hope you will consider it on the basis of principle and not just alone on the basis as to whether or not one is a permanent employee.


Walter Edward Harris: May I just answer that point? I recognize the argument on principle, which perhaps the hon. member does not agree with, but with which the hon. member for Perth did, that perhaps this law ought not to apply to a single man. The hon. member for Vancouver East made his argument thinking of a married man who has a home from which he goes and to which he returns. That is a social ground. The hon. member even went so far as to suggest that on some occasions when he wants to go to visit his family perhaps his transportation costs ought to be considered as an expense-I do not know whether he went that far.


Harold Edward Winch: I did. If you are going to impose income tax on board and lodging you ought also to consider an exemption on the other side of the picture.


Walter Edward Harris: Quite so, and I appreciate the whole social argument that there is something to be said for an exemption to our general rule being considered because by the nature of the hiring in some cases, though not in all, when the workers live in the larger centres and have a permanent home there to which they intend to return. They do not wish, for instance, to return to Kitimat and live there permanently unless they decide to quit the job and settle down as storekeepers, or something of that kind.
The hon. member for Perth appreciated, perhaps, that this does not apply to the single worker. But this whole discussion has underlined the difficulty of arriving at a correct

Income Tax Act
solution. As has been pointed out, a great many construction workers are hired by the union, not by the employer. As one hon. member said, the employer indicates that he wants a certain number of men at a certain place on a certain date, and the employing union provides them. In the following year he may get a wholly different group. From year to year they may never work for the same employer twice.
I agree that this is unusual, though it is not a situation wholly confined to the construction industry. On the other hand, the basic fact is that we do charge income tax in other lines of industry on this kind of income. I think the hon. member appreciates my difficulty in arriving at a proper solution for these problems. I am free to confess that perhaps I should have been able to do it earlier than this. It is remarkably involved, in particular as to the manner of hiring which has been mentioned. If after full consideration we came to the conclusion that it might not be possible for a great number of these people ever to become permanent employees-


Howard Charles Green: That ought to be pretty obvious right now.


Walter Edward Harris: It is not obvious. The hon. member's peculiar situation in British Columbia is that there there is much more likelihood of finding non-permanent employment at the present time due to the present rate of expansion in the province, but this position does not exist to the same extent in other parts of the country, it is confined more to certain lines of industry or to certain union groups.
However, as I say, that is one of the circumstances that might be taken into account. The hon. member argues, in any event, that on social grounds it is desirable that full income tax should not be charged to men who are away from home because they ought to have a home life and be able to return home and have some money with which to do it. I recognize both these arguments and I can assure hon. members that the subject is not closed. It is one of the problems to which we have to find a proper answer, but I am not prepared to make any recommendation to the committee at the present time. I have opened my mind to the committee, and hon. members have been as frank with me. We have had full discussion with the employers and with the employees' union representatives, and I hope we can come up with an answer which will be fair to everyone.


Mr. Nowlan:: I do not want to accept entirely what the minister has said with respect to this being, perhaps, a problem confined primarily to the province of British Columbia.


Walter Edward Harris: I did not say that.


George Clyde Nowlan: I think this presents a real problem in some of the smaller centres and in some of the smaller provinces and, naturally, I am thinking of my own province where one finds employees going out to work on relatively small jobs.
I mention as an example a large number of bricklayers who were formerly employed in the brick manufacturing plant. That plant closed down, and those bricklayers now go all over the maritime provinces as employees of relatively small contractors building relatively small buildings, school houses, for example. When they have finished one job, they go to another. In no way could they be termed permanent employees. At least, they have not been called that in the past. They might work for three, four or five contractors during a year, and they are charged income tax on their expenses during that period. I really think that this puts men living in smaller areas at a greater disadvantage and imposes a greater penalty upon them than is imposed upon people living in larger centres.
For instance, I suppose that a bricklayer in Toronto may never have to leave his home town. He can work 365 days a year, minus Sundays on which you cannot work in Toronto, for a whole lifetime without paying for board and lodging outside his home. But if he is living in a smaller area which he has to leave to find work, this penalty is imposed upon him.
Also, possibly, it is somewhat ironic if one considers that a lawyer could perhaps devise a way by which this tax could be avoided. I am not sure what the position is today, but I know what the situation was six or seven years ago. I recall the case of bricklayers who went to Halifax to secure employment. They charged their expenses, but the Department of National Revenue disallowed them. They went to a certain lawyer, whom I know, in the following year and got advice, as a result of which they were not employed by the contractors at so much a day but were given a sub-contract to lay so many bricks. This brought them into the category of contractors. I know, because I happen to be the one who drafted the contracts, and after that they never had to pay any income tax, because income tax was not chargeable against a contractor, though it was against men working on the contract.


Stanley Howard Knowles: Should the hon. member be telling this? They will probably change the law now.


George Clyde Nowlan: That was seven or eight years ago, and I should think that by now that loophole has probably been plugged. But when

a situation like that can develop it does suggest that there has been some inconsistency and that there is, as the minister has admitted, a problem here. I was glad to hear the minister say that it has not been determined as far as he is concerned, and I think he should reconsider this whole matter.


The Deputy Chairman:: Before I call it six o'clock, would the minister indicate the business proposed for eight o'clock?


Walter Edward Harris: I noticed the hon. member for Vancouver East rising, and I hoped, if he was going to ask me a question, that we might continue. I indicated last night that I could not be here tonight; and we will go on with the excise tax resolutions.


James MacKerras Macdonnell: And customs?


Walter Edward Harris: And customs. But I would like to complete this part of the business so that tomorrow, when we go back to the income tax resolution, we can proceed with it.


Ernest George Hansell: Do I understand that the various sections of this act-


Walter Edward Harris: We shall discuss those tomorrow, but I would like to feel that this part of our discussion had been completed so that we might not need to go back to this particular point.


Harold Edward Winch: I can put my question quite briefly. Is the present situation a matter of government policy, or is it the policy of the Department of Finance or a decision of the Department of National Revenue? I ask that because of the answer which the Minister of National Revenue gave to a question asked on February 19, to be found on page 1421 of Hansard, when the Minister of National Revenue said:
With regard to the other matters as to whether consideration is being given to the representation and the decision that has been made, these are questions for the Minister of Finance because they relate to a matter of policy.
I would like to be clear. Is it a matter for the minister, or who else is responsible? I certainly do not know yet.


Walter Edward Harris: I think I said at the beginning that the directive, known I believe, as No. 10, was set out by the Minister of National Revenue or under his authority.


Stanley Howard Knowles: Information bulletin No. 10.


Walter Edward Harris: Yes. I think it is correct to say he could send out information bulletin No. 11 altering that interpretation.
The reason that is so is because earned income is defined under the income tax law as including certain benefits, and this has been interpreted to include this particular
Income Tax Act
benefit. It is also the case that government policy, in so far as the amendment of the act is concerned, is in my hands.


Harold Edward Winch: And regulations under the amendment?


Walter Edward Harris: No. So the answer made is quite correct, that if government policy were that board and lodging away from home should not be taxed, I would have to propose in the house an amendment to the Income Tax Act to say so. I hope I have made myself clear on that point.


Alfred Claude Ellis: Under whose authority was the change made?


Harold Edward Winch: This was brought in by a regulation. Therefore why do you require an amendment to wipe out a regulation?


Walter Edward Harris: Because up to that time, as my friend the hon. member for Vancouver-Quadra has pointed out, board and lodging for construction workers away from home was not being taxed by way of income tax. That was also being done as a result of a directive many years ago. This directive altered that directive. So, as I say, another one in the future could alter this one.


Alfred Claude Ellis: Why not bring in another one now?


Walter Edward Harris: For the reasons I have tried to explain for the last hour and a half, namely that I am not satisfied that the tax law can be made in such a manner that this fairly vexed question will apply across the board to most people. I do not mean taxes across the board to most people. I think that we can in fact arrive at a proper taxing system for benefits of this kind applicable to all those who ought to be taxed and not applicable to those who in our best judgment-and subject to the opinion of the House of Commons -ought not to be taxed. That is the position we are in today. As I have said, our conclusions are not firm. We were trying to work this thing out properly. I have not mentioned many other things, in the knowledge that these other things are in my hon. friends' minds as well as in my own and that we did not need to protract the debate, but I say that the matter must be thoroughly studied in order to try to improve the situation as we have it now.


Edward Turney Applewhaite: It being six o'clock-


Walter Edward Harris: No, not yet.


Mr. Barnett:: I assure the minister that I am not going to take very long. From some of the things the minister said I am inclined to hope that this may be a case of things having to get worse before they can get better. I made reference to this matter in

Income Tax Act
my budget speech. I said I thought this bulletin which is under discussion was extending the discrimination that I have been attempting to draw to the attention of the minister at the budget stage for the last several sessions. I welcome the statement which the minister has made in part, because up until this year the only thing I have been able to get in the way of an answer from the opposite side of the house has been a few inconclusive words from the minister's parliamentary assistant on this subject. The one point to which I want to make reference, seeing that the discussion has gone this far, is this.
I agree in part with what the minister has been saying, namely that this problem is not something which is unique to the construction industry. As far as I am concerned, it applies equally, and as seriously, for example to the logging industry. In my opinion from the study I have made of the matter over the past several sessions, this whole question can be resolved only by a suitable amendment to the Income Tax Act, one that will remove what to me is a discrimination that now exists against the expenses that are incurred by those on wages and salaries in the course of earning a living. I think I have covered the particular points that to me are most important. I know that it is past six o'clock and I will therefore not say any more.


Howard Charles Green: May I make a suggestion to the minister? May I suggest that he and the Minister of National Revenue give this question some consideration before the house sits tomorrow or, if they require further time, before the income tax amending bill is brought in. Then perhaps at that time they might be able to announce some change which will meet the situation. These representations today have been made in great earnestness, in the belief that there is an extremely serious problem which ought to be settled and that the department should send out a new directive altering the one which was sent out last year.


Walter Edward Harris: I am grateful to hon. gentlemen opposite for allowing us to continue past six o'clock. As I understand it now, we will proceed with the excise tax and customs tariff tonight. Should that business be completed, my parliamentary assistant will indicate what legislation might be proceeded with until ten o'clock. If it is not completed, we shall go on in the morning with whatever is uncompleted in excise tax and customs tariff and then we shall revert to income tax.


James MacKerras Macdonnell: Succession duty?


Walter Edward Harris: Yes; and then we shall revert to income tax.


Edward Turney Applewhaite: For the information of myself and the chairman, may I ask the minister whether he is referring to the Excise Tax Act only or the Excise Tax Act and the Excise Act?


Walter Edward Harris: Both.


Edward Turney Applewhaite: In which order.


Mr. Benidickson:: Excise Tax Act first.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Tax Act and to provide, among other things:
1.	That the sales tax on the following goods be repealed:
(a)	certain building materials which are in addition to those already exempted, viz: chimney caps; circulating pumps for use in forced hot water heating systems for the heating of buildings; door and window screens; precast concrete shapes when purchased by municipalities for bridges in public highway systems; septic tanks; structural steel when purchased by municipalities for bridges in public highway systems;
(b)	desks and chairs specially designed for use in class rooms when sold to educational institutions;
(c)	printing produced by school or university when for its own use and not for resale;
(d)	gasoline powered self-propelled trucks, mounted on rubber tired wheels, for off-highway use exclusively at mines or quarries, and complete parts thereof;
(e)	seventy-five per cent of the sale price if manufactured in Canada, or seventy-five per cent of the duty paid value if imported, of trailers for use as homes;
(f)	potted, flowering or bedding plants, dormant flower bulbs and cut foliage;
(g)	geophysical surveying precision instruments and equipment as enumerated in customs tariff item 431h;
(h)	goods enumerated in customs tariff item 695d;
(i)	tanks for collecting milk, not including chassis or cabs;
(j)	railway ties;
(k)	certain foodstuffs which are in addition to those already exempted, viz: baking powder; baking soda; bases or concentrates for making beverages other than soft drink beverages; cocoa; cocoanut; dessert powders; edible gelatin; flavouring extract; gravies and meat extracts; meat tenderizers; pickles, relishes, catsups, sauces, olives, horseradish, mustard, and similar goods; pie fillings; prune juice, grape juice; salad oils, mayonnaise and salad dressings; sandwich spreads; spices, condiments and seasoning; tea, coffee and substitutes therefor; vinegar;
2.	That equipment specially designed for use directly in road making, road cleaning or fire fighting, but not including automobiles or motor trucks, when sold to or imported by municipalities for their own use and not for resale, be exempted from the sales tax when the price is in excess of five hundred dollars ($500) per unit, instead of the present exemption for units priced in excess of one thousand dollars ($1,000) per unit.

3.	That the excise tax on the following goods be repealed:
(a)	soft drinks and imitations thereof;
(b)	carbonic acid gas for aerating non-alcoholic beverages;
(c)	candy, chocolate, chewing gum and confectionery; (d) motor cycles and all other two-or three-wheeled motor driven vehicles including motors for attachment to bicycles;
(e)	ash trays and certain smokers' accessories, not to include tobacco pipes, cigar and cigarette holders and cigarette rolling devices;
(f)	fountain pens; ball-point pens, ink pencils; propelling pencils, desk sets and all other desk accessories;
(g)	gold-plated or silver-plated ware for the preparation or serving of food or drink;
(h)	articles of cut glassware, crystal glassware, cut or not, etched glassware, or metal decorated glassware;
(i)	articles of china, porcelain, earthenware, marble, stoneware, or other pottery ware;
(j)	Canadian raw leaf tobacco.
4.	That any enactment founded upon this resolution be deemed to have come into force on the 15th day of March, 1957.
James MacKerras Macdonnell: Mr. Chairman, I should like to make a few very brief general remarks about the Excise Tax Act, with sales tax features, because I think it is a matter of great importance. I should like to recall to the memory of the committee that in his budget speech of two years ago the Minister of Finance announced that he proposed to invite a small committee, including experienced persons in the business world, to study this technical problem with us and to make recommendations. I have in my hand a copy of the report of that committee, to which I should like to refer very briefly. I believe that it has not been possible yet, in any comprehensive way, to give effect to the report of the committee and, therefore, having regard to the background and the fact that the minister has asked for this report and that he got it, I am going to make some very brief references to it. I would ask the parliamentary assistant if he would be good enough to sum up in a general way what the situation is, and let us know where we stand.
So far as the detailed changes that are proposed this year are concerned, they are not very sweeping. I would be glad if the parliamentary assistant would indicate to us, if it is possible to do so, whether they in any way fit into a scheme, either that outlined by the committee or otherwise. As I said, I wish to refer very briefly to the report of this committee which is entitled, "Report of Sales Tax Committee, Ottawa, January 1956". It is addressed to the minister. It refers, first of all, on page 11 to the fact that there are three general levels in the marketing process; (1) manufacturer to wholesaler; (2) wholesaler to retailer and (3) retailer to 82715-192
Excise Tax Act
consumer. The committee makes this observation immediately following:
For the purpose of sales and excise tax levied at the manufacturer's level, it is unfortunate that ail goods do not follow these steps. Manufacturers not only sell to wholesalers but also to retailers and direct to consumers. Wholesalers sell to consumers as well as to retailers.
Now, I skip over some pages and then refer briefly to some recommendations in the report. I shall ask your leave, Mr. Chairman, to come back to the report perhaps later, but in the meantime I would refer to a few of the recommendations. The first recommendation is found on page 14:
1.	The existing scheme of valuation be continued for the present with statutory sanction.
2.	Selling price receive a statutory definition.
I shall not take the time of the committee to read the details of that, but just refer to the fact that it is made. Then I go on to recommendation No. 10 which says:
10.	The act contains over 25 references to the minister's discretion. In our views most of these discretions should be replaced by rules of law or by conferring authority on the governor in council to issue regulations.
11.	At some future date after suitable preparation and explanation to the taxpayers, the basis of the tax be changed from the manufacturer's level to the level at which retailers purchase goods. This is the level used for tax purposes in Australia. It follows that the broader base will produce increased revenues at the same rate.
Then, I go on to another later paragraph which refers to appeals. One of the strong points which the committee makes is the necessity of making appeals available, and I read section 19:
In our opinion the following matters among others should be subject to appeal: (1) Valuation (2) Non-arms-length transactions (3) Exemptions (4) Status as manufacturer (5) Penalty assessments.
We recommend that section 57 and subsequent appeal provisions of the act be rewritten to give effect to the foregoing.
Then, I should like to quote briefly from the general sections of the report:
For the purpose of this report we have received submissions from the organizations listed in appendix B and from a number of individual taxpayers.
I may say that the organizations listed in appendix B are very formidable looking. They include such organizations as the Canadian Chamber of Commerce; Canadian Construction Association; Canadian Electrical Manufacturers Association; Canadian Drygoods Association and so on.
In most cases, the persons or organizations concerned have appeared and our records contain transcripts of the evidence and discussions.
We have visited Washington and Australia and are forwarding to you a memorandum of our findings at these places.
I have just given the sketchiest outlines of this report. I have done so really to

Excise Tax Act
raise this important question and I hope the parliamentary assistant will give us a brief summary of the situation as he sees it. This sales tax is of tremendous importance, and I hope he will at least give us the general situation. The minister asked for this report, he got it and it is very far-reaching and comprehensive.
I hope that we may have a brief discussion on the far-reaching points which are raised in this report, and that we may at least have an idea of what the thinking of the Department of Finance is, or, at any rate, to what stage they have progressed in their pondering of this report.


Mr. Blair:: There is one matter I wish to bring to the attention of the minister and that is the sales tax on drugs and therapeutic apparatus for the sickroom. I am perfectly sure that if this matter were thoroughly understood-and I am aware of the fact that it has been brought up in the house before- some relief would be given to those people who have to buy drugs. It will be understood that at the present time some new drugs are becoming pretty expensive. As I understand it, the sales tax is put on at the wholesale level, but nevertheless it is reflected in the price the consumer pays for his medicine. It does not seem fair to me that a person who is ill should be paying a tax in general for people who are well. You can buy the newer drugs in tablet form, but they are extremely expensive. I have talked to the people who own drug stores and they tell me they find it difficult even to convince some people of the high price of these drugs. Sometimes they show them their wholesale rate, but people generally do not understand that there is a 10 per cent sales tax at the wholesale level, and that the druggist reflects that tax in the cost of the goods to the consumer. The same argument applies to the therapeutic apparatus that is used in the sickroom. While a reduction was given in the last budget, I do not think it touches the problem at all, because a person with a chronic illness is paying that high sales tax all the time on the kind of drugs he finds it necessary to use.
I find it peculiar that certain things were taken off the sales tax list, such as edible gelatine, flavouring extract, meat tenderizers, salad oils and sandwich spreads, and that sort of thing. I do feel that this matter of tax on drugs and on therapeutic apparatus used in the sickroom should receive some consideration. The relief given in the budget does not cover these things. The whole matter should receive consideration and some relief should be given. I again draw the attention of the parliamentary assistant to
[Mr. Macdonnell.l
those unfortunately ill people and to those who are chronically sick, the people who pay taxes for the people who are well.


Stanley Howard Knowles: I should like once more to support the plea made by my friend, the hon. member for Lanark. The parliamentary assistant knows that this request has been made by members in various parts of the house on a number of occasions. I hope that the parliamentary assistant will bring to the attention of his minister the strength of our feeling that there should not be these taxes on necessary drugs and medicines. I understand that in some instances we have products which are subject both to customs duty on entry into the country, and then the sales tax on top of that. Obviously, with the pyramiding that goes on, one can see how high the prices of some of these articles become. I hope that in the discussion that will follow the parliamentary assistant will tell us whether the sales tax is still applied to wheel chairs, to hearing aids, to eye glasses, and things of that sort that are necessary for the health of our people. Surely a government that for these many years, shall I say for these several decades, has been professing an interest in the health of our people should not continue to put taxes on these necessities.


Frederick George Hahn: Mr. Chairman, with respect to the goods on which excise tax is collected, I am particularly interested in the article having to do with the making of showcards and signs of a non-permanent nature, namely those of cotton, paper or cardboard used for advertising bazaars and so forth. The interpretation that the department puts on this particular regulation appears to be that where the silk screen process is used the sign should be taxable as such. The fact is, that in most instances the sign painter today finds it more economical actually to use the silk screen process in the making of signs in instances where possibly only 50 or 100 such cards are used. For that reason they are not actually manufacturing. It would take a good deal of time to make 50 or 100 signs by lettering them by hand. The department does say that if they were hand-lettered they would be non-taxable. The fact that time is taken to make a screen and use it for just one particular purpose, because it is not likely that the date of a bazaar would come at the same time each year, or on the same day, should be taken into consideration. Actually I see very little reason for the ruling that the department has seen fit to employ in some particular instances. It is true, possibly, that if the silk screen process were used in the manufacture of many thousands of signs, the sign painter should come under this

tax, but where signs are used in such a small way it does appear to me to be rather undesirable to tax him.
I also find in most instances that it is the smaller manufacturer of the signs who is affected, the man who does not do a great deal of this work. He may be just beginning in this field, and naturally enough, not only is it difficult for him but it brings about a certain loss to the bazaars and other media which are employed for the purpose of helping the community.
One other question that arises is the duty charged on a celluloid type of sign which is not made in this country and which uses fluorescent paint which can be obtained only in the United States. It is a transparent sign that uses fluorescent paint. The particular sign I have in mind was used to advertise the campaign of the united good neighbours in the city of New Westminster, which compares with the community chests drives in some areas. The proceeds of the drive go to charitable organizations. The work is done gratuitously. It seems to me that in such instances the sales tax and the excise tax should not apply.


George Clyde Nowlan: Mr. Chairman, before the
parliamentary assistant or the minister replies to the various matters which have been raised, one by my friend from Greenwood, on the general background of the sales tax, which is a very important matter, and the others which have been referred to by my friends from Lanark and Winnipeg North Centre with respect to the sales tax on drugs, which I think all hon. members are fairly well in agreement with, I would like to draw the parliamentary assistant's attention particularly to one subparagraph of the Excise Tax Act, namely, that dealing with potted, flowering or bedding plants, dormant flower bulbs and cut foliage.
They may seem to be a very insignificant matter in dealing with an over-all budget running into billions of dollars. However, it is something of importance to many in the florist, horticultural and nursery business in this country. Incidentally, Mr. Chairman, I may say, and I suspect your memory goes back almost as far as mine, there is something about this particular item which is vaguely reminiscent of what I think was popularly called the Dunning budget of 1930. I remember at that time there was a reduction in the customs duty on the importation of cut flowers and also on cast iron pipe. Some of us who perhaps were a little bit juvenile and a little smart-alecky toured the country thanking Providence that the government had seen fit to reduce the duty on cast iron pipe so we could hit the government over the head with it, and had reduced the duty on cut flowers 82715-192J
Excise Tax Act
so we could buy the flowers for the funeral. Both results, Mr. Chairman, you will remember were achieved in the election of 1930. It may be that the reduction of the sales tax on flowers on this occasion may augur the same happy result which was achieved in the election in 1930.


James Joseph McCann: You are too optimistic.


George Clyde Nowlan: Well, hope springs eternal in the human breast, I might remind the minister, and sometimes it is justified.


William Moore Benidickson: The happy result you referred to did not last long.


George Clyde Nowlan: To be specific again I would like a clarification on the terminology used in section 1(f). There is a reference there to cut foliage. Does that mean cut flowers? I looked up the word "foliage" in the dictionary and I find it means leaves or flowers with leaves and so if the department follows the Oxford dictionary or any of the standard dictionaries they certainly are exempt providing the flowers have leaves on them.
There is some question about this, as you know. For instance, in my own constituency there is a grower who was selling tens of thousands of cut gladiola. Representations have been made to the department over the past few years. I had hoped that they were successful because though I am not certain I am told that the only primary product which today bears the impact of the sales tax is this matter of flowers and bulbs.
Bulbs are also included in section 1(f). I am wondering if in the future those who sell gladiola bulbs will be exempt from the payment of sales tax or not.
The situation is complicated, as I understand it, by the fact that if you sell less than $500 worth you are not liable to sales tax and therefore a part-time producer or a road-stand salesman who keeps inaccurate records may sell more than $500 but he escapes the incidence of the tax.
The total revenue which the department derives from this is negligible in terms of the over-all budget of Canada. I think it amounts to approximately $1 million a year. I am not for a moment adopting the attitude, "what's a million", but I think it is a very small part of our total over-all budget which amounts to billions of dollars. The cost of administration has been high. I would hope that this matter would be clarified and also I would like to see the term "nursery stock" clarified.
I know, as does the Minister of National Revenue, that there has been a great deal of discussion in the last few months with respect to the growing of certain flowers outdoors

Excise Tax Act
in my own constituency. The argument of the growers has been supported by the horticultural council and the experimental farm here in Ottawa that if flowers are grown outdoors they are nursery stock and therefore are exempt from sales tax because as I understand it nursery stock is exempt. But on the other hand, they are plants and it has been suggested that since they are plants they do not constitute nursery stock despite the fact that they are grown outdoors and therefore are not exempt.
The irony of it all is-and I am sure this will appeal to those who have been brought up in the Annapolis valley where temperatures are so much different from those in the rigorous climate of Ottawa-that according to the department whether a plant is nursery stock or not depends on whether it can survive the rigours of the Ottawa climate; in other words, if it can survive on the experimental farm here. This applies despite the fact that over 90 per cent of all nursery stock in Canada is grown in Nova Scotia, southern Ontario and British Columbia.
It would appear that there has been a tremendous amount of complication and difficulty in administering this section. I had some reason to believe that this new amendment would clarify this situation in that cut flowers, bulbs and other flowers which were grown outdoors but which were sold for the purpose of propagation would be exempt from sales tax in the future. When the time comes for the parliamentary assistant to reply I would hope that he would give us a fairly clear and concise explanation of what is included in that section. I hope he is not going to disappoint me by suggesting that the words are in keeping with the definition in the dictionary.


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, I wish to make a few comments along the same line and concerning the same section referred to by the hon. member for Digby-Annapolis-Kings. I look forward with interest to the explanation of the term "foliage" and am interested in knowing whether or not it means cut flowers.
There are one or two other words in the section which require some clarification. There is reference to potted, flowering or bedding plants, and dormant flower bulbs. A bulb, strictly speaking, means a scaly root as in the case of a lily bulb. If we stick to the ordinary meaning, the word "bulb" would not mean a gladiola or tulip bulb, one of which is a corm and the other is a tuber. I have no boubt these were intended to be included but under the strict interpretation of the term "bulb" they most clearly would not be included.
[Mr. Nowlan.l
Section 1 (f) refers to "potted flowering or bedding plants." Does that mean that potted bedding plants are to be free of tax or do they have to be potted flowering bedding plants? I do not know. I know that some bedding plants have flowers and some do not.
There is also a question concerning the term "bulbs". If you stick to the strict interpretation of the term, does that mean a bulb such as a tulip bulb that one gets in the fall or would it include those in flower pots that you get now? In one part of the sentence in that section it refers to dormant flower bulbs but on the other hand it says that potted plants are free. There seems to be a distinction made and I am not sure what it is.
To get away from the subject of potted flowering plants for a moment I would like to mention briefly that I agree wholeheartedly with the remarks made by my colleague the hon. member for Lanark and my friend the hon. member for Winnipeg North Centre respecting the removal of the tax on certain drugs and medicines. Indeed, a tax on articles such as medicine and drugs seems ridiculous and there can be no excuse for retaining it. If there is one I would certainly like to hear it.
The final thing I would like to mention has to do with the excise tax on cigarettes. At the present time on a 33 per cent package of cigarettes the grower receives 3 cents, the manufacturer receives 12i cents and the government receives 17 \ cents. Every year for a period of several years past the growers and manufacturers of tobacco have sent briefs to Ottawa and have come to see the Minister of Finance about reducing the excise tax on cigarettes and every year they are well received with a broad smile and are told, "We will consider it", and they go away with high hopes. But this year they went away with the highest hopes they have ever entertained. In fact, they were confident they would receive a reduction in the tax on cigarettes but as has been the case every year they did not get it.
The tobacco industry in southern Ontario is having many difficulties at the present time, particularly with regard to the marketing of its product. I realize of course that I cannot deal with that subject under this heading and I do not intend to attempt to do so, but regardless of what marketing method is used by the growers of tobacco a reduction in the excise tax on cigarettes would help the industry generally, both the growers and manufacturers.
In addition to that, as has been demonstrated by figures that have been shown to the

Minister of Finance by the association-I have a copy of them and I know other hon. members have-if the excise tax on cigarettes were reduced it would not lower the total amount of tax the government acquires from the industry at all. In fact, it would make very little difference, if any. At the same time if the excise tax were lowered it would help the industry generally and would probably help use some of the unused land in southern Ontario which at the present time is waste land because it will not grow any remunerative crops except tobacco. In addition to helping the growers of tobacco, the manufacturers and the industry generally, a reduction in the excise tax would help Mr. John Q. Public.
When one describes an article as a necessity of life one generally thinks of bread and water, I suppose, but I think in our modern civilization what would have been considered a luxury a few years ago is now considered a necessity.
These things are relative to the standard of living which we enjoy. It is quite clear that a loaf of white bread which is considered a necessity in Canada would be a luxury in a place like India, for example. So it goes with the standard of living, as the standard changes.
Many people may not like to think of tobacco or cigarettes in particular as being a necessity within the strict interpretation of the word as normally used. However, I think they may be considered as such because a very large percentage of the population in Canada smokes cigarettes every day. This is becoming increasingly so. Since the sales tax was removed on bubble gum, coca cola and other things, including pickles, prunes, pie filling and all the rest of them, it seems to me that it certainly would not have hurt the government, especially in view of the arguments presented, to have cut the excise tax on cigarettes. Five cents may have been too much to hope for, but three cents would have meant that we could have bought a package of cigarettes for 30 cents instead of 33 cents.
I have always understood that one of the main principles of taxation is "the ability to pay" theory but that certainly does not apply to the excise tax on cigarettes because not only the people in the upper income brackets but also those in the lower, and even the lowest income brackets, use cigarettes. Whether you like to think of cigarettes as a necessity or not, they are generally so considered by those who use them.
With regard to the "ability to pay" theory of taxation, this tobacco burden lands on the wrong group. It is the same thing as a tax on sugar, tea and coffee. The government took
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the sales tax off tea and coffee but made no change in the excise tax on tobacco. This again is a thing that hits the little man and I think the government certainly could have done something to help by cutting the excise tax on cigarettes by at least three cents, to help the industry, to help the grower of tobacco and to help the consumer, popularly known as John Q. Public. I believe the excise tax on cigarettes, in relation to the tax on similar things, is away out of proportion and I certainly think the government should consider reducing it.


Gordon Knapman Fraser: I would just like to ask one or two questions in regard to the printing produced by schools or universities. I wonder just exactly what this means because if it was printing done by a school and just used by that school there would be no transaction at all. Does this mean it is printing that is produced for somebody else?


William Moore Benidickson: Done by themselves.


Gordon Knapman Fraser: Well then if it is done by themselves for themselves there has been no transaction and this item is unnecessary, is it not?


William Moore Benidickson: It would be a manufacturing process and would require a licence.


Gordon Knapman Fraser: Not to print on their own premises, surely?


William Moore Benidickson: Yes. Any manufacturing over a certain annual value.


An hon. Member:: You do not think you could print for yourself without being a salesman, do you?


Gordon Knapman Fraser: What I am
getting at is this: I know of one particular school where they do their printing of programs and one thing and another, and I do not think they ever pay taxes on that.


William Moore Benidickson: There is a provision of exemption if a small total quantity is produced, I think in the regulation it is below $3,000; any producer or manufacturer whose total product for the year is less than $3,000 would probably not require a licence under the sales tax act.


Gordon Knapman Fraser: Would potted plants include geranium slips that are sold by the thousands?


William Moore Benidickson: If it is a plant and not a cut flower yes.


An hon. Member:: Well, is it a plant?


Gordon Knapman Fraser: A geranium slip is not a plant; it might come under foliage. A geranium slip very seldom has

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any leaves on it but comes in bundles, sometimes 25, 50, 100, and the hot house man might buy 2,000 or 3,000 or even 10,000 at a time. They run at different prices according to the quality and the different species, and if they are new species they have to pay that much more. Now I just wonder if they come under this heading?
Mention was made of cigarettes and I mentioned this last year. My angle on this was that it not would help sell the cigarettes here in Canada but it would stop smuggling and we still have a great deal of smuggling going on in this commodity. I think if the tax had been reduced a little it might have helped, because there would not toe the incentive for the smuggler to bring them into Canada.


Thomas Speakman Barnett: I would just like to ask one question of the parliamentary assistant with reference to resolution 1 (d) on page 9 which suggests that the sales tax should be repealed on gasoline-powered self-propelled trucks, mounted on rubber-tired wheels, for off-highway use exclusively at mines or quarries, and complete parts thereof. I am wondering if this is the only class trucks under consideration.


William Moore Benidickson: We already have
exempted the diesel-powered trucks for similar use and it was felt that these gasoline trucks should be put on a par with them.


Thomas Speakman Barnett: These are for off-highway use exclusively at mines or quarries and I am wondering, for example, why this particular category has been singled out and why the same provision should not apply to logging on off-highway use.


William Moore Benidickson: I think we will recheck that. I am quite familiar, of course, with the exemption with respect to mines, because it did have an effect on the very large diesel trucks that commenced operations a few years ago. My advisers tell me that they will check with respect to use in logging.


Mrs. Fairclough:: Mr. Chairman, I would like to revert to the discussion which was commenced by the hon. member for Peterborough with respect to 1 (c), printing produced by a school or university when for its own use and not for resale. If my memory serves me well, the parliamentary assistant said that unless a plant produces $3,000 worth of printing in a year it is not required to obtain a sales tax permit and consequently its goods are not eligible for the sales tax. However, here we have a place where a school or university has its own plant-now that may be merely a mimeograph machine, a multigraph machine, or it may be an actual printing press. If it

produces these goods for its own use it does not pay sales tax. The sales tax now runs at 10 per cent, but if that same school or university purchases its printing requirements from a printing plant, it pays the sales tax-is that not correct?


William Moore Benidickson: That is right.


Ellen Louks Fairclough: Now what is fair about that? What are you trying to do? Is the department trying to urge schools and universities to put in printing plants to be run by their own students and thereby undercut the printing establishments of the community?


William Moore Benidickson: No, Mr. Chairman. It is for the small amount of printing that is now being done by those schools who have-


Ellen Louks Fairclough: But it has to be $3,000 worth-if it is a small order less than of $3,000 worth they are not eligible for sales tax anyway.


William Moore Benidickson: Relatively small. We did something of this nature for churches, you will recall, a couple of years ago; in the matter of the production of their calendars and so forth.


Ellen Louks Fairclough: Oh no, the parliamentary assistant is wrong. What you did with regard to the production of calendars was to take off the sales tax where they were produced by printing plants. You have not done that here. If I remember correctly, it would be May or June last year. What you did was to take off the sales tax on calendars or church papers or service papers, as the case may be, when they were produced for churches, taking into consideration that churches are nonprofit making institutions. In this case you are saying that the sales tax shall be removed if the goods are produced within the school or the university. What you are doing is trying to encourage schools and universities to put in their own printing plants. Isn't that true?


William Moore Benidickson: Most of them have such arrangements now, and it has been a matter of petition by them that this kind of production was subject to tax.


Ellen Louks Fairclough: It is subject to tax, if my memory serves me well, in that they paid sales tax on 220 per cent of the cost of the paper, or some such amount. A limit was set, and I think it was 220 per cent of the cost of the paper which was used. Nevertheless, if they did not have an overall production of $3,000 they paid no sales tax in any event, so if they used more than a certain amount-take 220 per cent at $3,000, and you have about $6,600 worth of paper-they were eligible for

sales tax, but if they used less than $6,600 worth of paper they would not be taxed in any event.


An hon. Member:: They were "liable", not "eligible".


Ellen Louks Fairclough: All right, they were
"liable". What do I care so long as they paid the tax. The point is that there seems to be a trend here to force schools, universities and eventually, I suppose, commercial enterprises to instal their own printing equipment, whether it be duplicating, mimeograph, multigraph or any other type of reproduction equipment, or whether it be to use their own employees to man an actual printing plant. There seems to be a trend to give them an advantage over established printing houses within their communities. Just precisely what is the intention?


James Joseph McCann: This change is brought about to help schools. Take, for instance, the situation in Toronto. For some years they had to pay a sales tax amounting to upward of $30,000 on their printing. Now the printing is done by the board of education for all the schools in Toronto which come under its jurisdiction. The cost is billed out to them, and in their method of accounting it is shown as having been received by the schools from the central printing office. The Toronto board of education urged upon the minister and the Department of National Revenue the inequity caused by the former system and the extra expense which it represented for education, an expense which amounted last year to over $30,000, according to my recollection. In order to relieve them of that bill and make a contribution toward education we thought it would be advisable to take the tax off printing done in schools for their own use.


Ellen Louks Fairclough: At long last the Minister of National Revenue is beginning to see the justice of removing the sales tax from supplies to municipalities. It is just too bad that he did not see fit to go further and remove the tax altogether from supplies to municipalities. All he has done in this resolution is to encourage the schools and the universities to instal their own printing plants.


James Joseph McCann: What is wrong with that?


Ellen Louks Fairclough: The minister says in
effect that if you buy your printing from a local printing plant you must pay sales tax, but if you instal a printing plant in your school you do not pay sales tax. Who are you trying to do out of a job, I ask you? The printers in the new municipalities? Are you trying to staff your schools with pseudoprinters? Are you trying to say: so long as you mimeograph this stuff you can get out
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of sales tax, but if ever you give the job to a local printer outside the board of education this is going to cost you 10 per cent more?
If the minister does really have the cause of education at heart, and if he even gave a thought to all the people engaged in printing in this country, he would have said that all supplies to boards of education should be exempt from sales tax. That is what he should have said.


James Joseph McCann: I would like to ask the hon.
lady if she is in favour of this change or not.


Ellen Louks Fairclough: I am not, in its present
form.


James Joseph McCann: Would she prefer to see
the tax continued, and the schools taxed to the tune of 10 per cent?


Ellen Louks Fairclough: They have had that all
along.


James Joseph McCann: Oh, no, if a school purchases its printing supplies from a small establishment which is doing business of $3,000 or less-


Ellen Louks Fairclough: Who could live on $3,000? Don't be stupid.


James Joseph McCann: Hamilton and Toronto are
not the centre of the world. There are lots of places-small municipalities-where there are printing establishments who print bills and the like which do not do more than $3,000 worth of business. They do not have to take out a licence and they do not have to pay tax. But if, on the other hand, the school deals with a larger firm-I do not know the names of printers in Toronto, and they charge sales tax, the tax would be added on to the cost of what they purchase for a particular school.
In Toronto the situation there is that they have a printing establishment which does an enormous amount of work, as is apparent from the figure of $30,000 which I have mentioned-and that would probably mean $500,000 of actual printing. This establishment employs printers, not students, and the schools get the benefit of this tax concession when the material is distributed and billed out to them, that is, to the schools which come under the board's jurisdiction in the city of Toronto.


Ellen Louks Fairclough: The minister knows full
well that all he has to do is introduce a resolution saying that supplies to boards of education shall be exempt from sales tax, and that all they have to do is to provide their printers with a certificate saying that the work is exempt from the tax, after

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which they would get their supplies free from this imposition. I say that the present proposal is iniquitous and that it is simply an encouragement to school boards, small or large, to establish their own printing plants so that they might be exempt from this 10 per cent sales tax which they would otherwise have to pay if they bought their printing from any printing shop in their localities. Because it is a fact that any printing shop which does not do $3,000 worth of printing in a year is not a printing shop.


James Joseph McCann: There are lots of them.


Ellen Louks Fairclough: Who can make a living
out of that? Do you mean someone with a little press in the kitchen? Don't be silly. How much revenue could people make out of $3,000?


James Joseph McCann: That is not all of it. That
is on job printing.


Ellen Louks Fairclough: Certainly, job printing. Do you think anyone makes a living out of $3,000 worth of job printing in a year?


James Joseph McCann: I never contended that.


Ellen Louks Fairclough: That is what you have
been saying.


James Joseph McCann: On job printing you don't have to pay tax, and, another thing, Mr. Chairman-are you through, madam?


Ellen Louks Fairclough: No, I am not through.


James Joseph McCann: Another thing is that we
could do as the hon. lady suggested and take the tax off altogether. But that is not government policy.


Ellen Louks Fairclough: You're not kidding.


James Joseph McCann: Do not forget that sales tax
is on a great many things for the purpose of raising revenue; and in many instances where you have in the schedule certain exemptions we believe that by relieving of the sales tax it cuts down in a good many instances the cost of production. There are a great many people in this country who do not pay any other tax than the sales tax. I have always contended that the sales tax or a certain measure of it was one of the just taxes and one of the taxes that produced revenue. With all of the demands that are being made, you cannot run this country without revenue. You must get it from some place. You can divide it among income tax, corporation tax, succession duty, excise duty, sales tax and all the rest of it.


Stanley Howard Knowles: But no capital gains tax.


James Joseph McCann: You will see in the years to come that same principle will be followed

because you just cannot run the country without taxes and without money. It is taxes that make the clock tick.


Stanley Howard Knowles: Tick-tock.


Ellen Louks Fairclough: At least the Minister of National Revenue has said in effect what we have been saying all along.


James Joseph McCann: We have not accepted your view.


Ellen Louks Fairclough: Oh, no, you do not believe it if we say it. But you have said it yourself. You say it here now. You are saying this: "We are taxing everybody who makes $1 in this country" or "we are taxing everybody who buy $1 worth of goods in this country because we think it is right and proper that the person who goes in and buys a dollar's worth of goods should pay into the federal treasury". That is precisely what you have just said.


James Joseph McCann: That is the principle upon which it is founded.


Ellen Louks Fairclough: That is very interesting. The minister has just said that is the principle upon which it is founded. We have said that in the field of duplicate taxation municipalities should be exempt from the sales tax upon their purchases and we have said this repeatedly.


Gordon Knapman Fraser: For years.


Ellen Louks Fairclough: Now the minister brings in a resolution, obviously intended as a sop to a certain small class, which says that if you do your printing in the cafeteria or whatever other place you may have, in a school or university where you can slip in a mimeograph machine, you shall not pay sales tax. The only persons who would ever have had to pay sales tax would have been those schools or universities which use up $3,000 worth of paper at the 220 per cent rate to produce their supplies. Otherwise they were exempt anyway. Hence when the minister starts to talk about little places here and there, may I tell him that he does not touch them at all.


James Joseph McCann: They are free already.


Ellen Louks Fairclough: That is right, they are free already, as the minister says. So now he has got into the larger field of the boards of education which use large quantities of printing and which have heretofore bought that printing from recognized printing establishments which, I presume, used organized labour. Why did he not go one step further and say that any supplies printed for schools or universities would now be exempt from sales tax? Why did he put it

in this way, namely that the printing plants must be within the schools or universities or they would not be exempt? Why did he not go the extra step and say that anyone who supplied printed material to boards of education or to universities would now be exempt from sales tax? That is what he should have done. Why did he not do it?


Frederick George Hahn: I wish to say a few words on that same question, following up what I requested earlier. In the regulations of 1954 I find something to which the hon. member for Hamilton West referred. At page 16 of the regulations I read as follows:
Where persons, firms or corporations produce printed, multigraphed or mimeographed matter for their own use, to a value of over three thousand dollars per annum, they are required to account for the consumption of sales tax on their total production of such goods. The tax is to be computed on the total cost of all materials (including electros, engravings, stereotypes), plus 220 per cent.
That would bear out what the minister had to say a while ago in respect of the $3,000. However, it strikes me, that the situation is as well indicated just now by the hon. member. Just how many printers can you find-those who are legitimate printers-in this country who can possibly get by upon $3,000 worth of job printing a year? I do not know where the minister could find them. I am sure there would be many little printers in this country who would be only too happy if the minister could show them someone who can live on doing $3,000 worth of printing a year. As far as the small printer is concerned, his plea is that he should be entitled to at least $6,000, and that this $3,000 is completely unrealistic.
To follow through on what the hon. member has just said, the minister indicated that the Toronto school board paid $30,000 in taxes. Does he for a moment pretend to tell us that the city of Toronto can find a sufficient number of small printers who do less than $3,000 a year so that the school boards in that area could let their work out by tender to all these various places or just give them to the small printing establishments doing less than $3,000 a year. I do not believe there are enough in the whole country who are doing $3,000 a year and less.
The fact is that it bears out this plea I made earlier here in respect to silk screen processing which comes under the same regulations. As I understand it, these small printers, because they are actually too small, are being unnecessarily deprived of jobs which they would normally get. They come under $6,000. Yes, you find many of them but not certainly those who do $3,000 a year or less. Just off the record I would ask 82715-193
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the minister if he can name one single individual printer in this country who makes his living on $3,000 worth of printing or less.


James Joseph McCann: I never contended that that was their only method or their only work. I personally know of small printing establishments which run a small newspaper but their job printing does not exceed $2,000 a year; and it is on the job printing that they would pay the sales tax. They are not required to take out a sales tax licence on that account. I do not know how long ago that law was changed in that regard but that is what has been in effect for a number of years.


William Moore Benidickson: That came in in 1951, I believe.


Frederick George Hahn: As far as I am concerned, the point is this. How many of these small printers would a school board such as the Toronto school board or the Vancouver school board be expected to let this work to in the way of the small printer? They must be job printers of that size. I do not believe there are a sufficient number. We are actually forcing the school boards to go into the job printing business-


Ellen Louks Fairclough: Certainly.


Frederick George Hahn: -in order to take advantage of this same regulation that we have at the present time. I should like the minister or the parliamentary assistant to the Minister of Finance-whoever wishes to do so-to indicate to me why some of these signs that we cannot get in this country and are compelled to import from the United States are taxable either under the duty or the excise tax as the case may be and the sales tax as well, such as the one I indicated here.


John Borden Hamilton: It is a little difficult to sit here and find that most of the previous speakers have discussed the topics which you intended to discuss. I was listening to the hon. member for Oxford as he listed the candy, cokes and motor cycles affected by this budget and I was wondering if we were going to call it the zoot suit or Elvis Presley budget. It seems those are the articles chiefly covered in it.


Stanley Howard Knowles: By the way, where is everybody tonight?


John Borden Hamilton: I thought that might be an appropriate remark because of the famous visitor in the district.
I have been listening to the remarks of the hon. member for Hamilton West and she was touching on a rather sore spot so far as the government was concerned. There seem to be some signs of faltering steps towards

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removing the burden of double taxation which faces the home owner in the municipality. I was especially interested as well in finding that the Minister of National Revenue indicated his agreement with the fact that of every dollar spent his department gets its percentage. Of course that is not the case when you get down to the municipal level. I might say to the parliamentary assistant that I have no apologies for speaking along these lines again tonight.
There is some indication here that we are trying to remove this double taxation. In the first section of the resolution there is a reference to precast concrete shapes when purchased by municipalities for bridges in public highway systems; structural steel when purchased by municipalities for bridges; desks and chairs specially designed for use in classrooms. Then, in section 2, on the following page, there is a reference to equipment specially designed for use directly in road making, road cleaning or fire fighting, and things of that kind.
The situation, of course, which faces the home owner is this. He earns his weekly wage and the dominion government removes its share at the time he receives it. The government does not lose any time in doing that. In the United States when a home owner pays his personal income tax to the department he is allowed to deduct the amount of his municipal tax bill from his total income for the purpose of computing his tax for the year. This, of course, is not done here. Some of the dollars which have not been taken by the federal government then are paid over to the municipality and we have a situation where these municipal tax dollars are taxed again by this dominion taxing authority when the municipality makes a purchase to carry out its various projects, whether it be road building or fire fighting equipment.
This reminds me that we seem to be always in the position where the government is backing up to a little better situation all the time. At the start we had the position that the government did not pay any tax on federal buildings. Then we got it down to a 4 per cent assessment basis, and after some hammering it was dropped to 2 per cent. Then, after some more hammering this year we got it down to zero, a begrudging recognition that there is a serious problem facing the municipalities.
I think we Should suggest to the parliamentary assistant to the Minister of Finance, and to the Minister of National Revenue who is in the house tonight, that here is an opportunity to follow along the lines of the suggestion made by the hon. member for

Hamilton West. Surely, a municipality could be furnished with a sales tax exemption certificate the same as that which is provided to industry. Perhaps there might be some items on which it would be impossible to calculate the amount of the tax; those would be small purchases, I think. The sales tax licence could be quoted in connection with major purchases by municipalities, the same as business enterprises do. In that way, we would remove this burden from the municipality and we would again make it a little easier for the home owner. We would be taking steps towards spreading out the tax base of the municipality in somewhat the same manner as it is spread out in connection with collections by the federal government, as referred to by the Minister of National Revenue tonight. These are steps that I feel we have got to take and the sooner we take them the better for the whole economy.
I would wish that there would not be such reluctance, such a slow backing up, when we in the opposition make these requests. When the parliamentary assistant answers he might perhaps tell us just how much the loss would be to the federal treasury if some such system as this were brought into effect. Surely the total purchases of the boards of education in the country would be known and how much sales tax would be lost if that source of revenue were not available to the federal treasury. Surely the purchases of the municipalities of these various items must be known, and how much revenue the federal treasury would lose if some such certificate were used. Sooner or later, either the government faces the problem this way or it must bring the provinces back to Ottawa to sit around the table again to properly divide up the tax base.


Howard Charles Green: Could the Minister of National Revenue or the parliamentary assistant to the Minister of Finance tell us approximately the number of schools which are able to produce printing for themselves and also the number of universities? I ask that because it would seem to me to be very unfair if say four universities out of the total number in Canada could produce their own printing and the rest could not. There is also unfairness in respect of schools. I would think that very few schools in Canada could produce their own printing.


James Joseph McCann: A lot of them do.


Howard Charles Green: But there must be quite a number that do not. Surely there is discrimination there, in so far as the schools themselves are concerned.
The school which cannot produce its own printing has to pay a sales tax and the other

does not. I would imagine that one of the departments has obtained these figures and it would be very helpful if we could be given them this evening, or is this a shot in the dark, based on the representations received from one or two boards of education.


James Joseph McCann: We have had representations from a lot of schools and from members of parliament.


Howard Charles Green: Could we be told what information the government has on this?


William Moore Benidickson: No; I have asked and we have no statistics as to the number of universities and schools that would be involved. We have no statistics on them; we have records of those that pay taxes, but we have not analysed them. A great number of representations have been received urging that this was a tax they would appreciate having relief from.


Howard Charles Green: What would be the loss to the treasury if all of the printing purchased by schools and universities were exempted from sales tax? Has there been any estimate made of that figure?


William Moore Benidickson: No estimate made, no.


Gordon Knapman Fraser: I just want to ask a question on this. The Minister of National Revenue said that the school board does the printing. If the school board did the printing, then under this item it would not be covered, according to the way I read it. It says:
Printing produced by a school or university when for its own use and not for resale.
Would you not have to put in there, "by a school or university or school board" to cover places not under the board's control?


James Joseph McCann: The school cannot do it itself; it is the management of the school that does it.


Gordon Knapman Fraser: It does not say that in this paragraph.


James Joseph McCann: It is common sense.


William Moore Benidickson: That thought occurred to me. I think between now and the time of the bill we will get some legal advice on it.


Gordon Knapman Fraser: It is something that should be added because it is not clear.


James MacKerras Macdonnell: I would like to supplement the question asked by the hon. member for Vancouver-Quadra to this extent. Can we have the full picture? After all, why should school boards go into the business of printing any more than into the business of plumbing? Can we find out the extent of 82715-1931
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this? Might I suggest to the parliamentary assistant that it be understood that this item be left over until we get further information about it, and get a clearer picture of the situation as it is?


William Moore Benidickson: Mr. Chairman, we know that this is a relieving section. I am sure my hon. friend would not want to deny the people who benefit from this sales tax exemption. Certainly as far as statistics are concerned I would think only the educational associations would have that. We have not got it in the bureau of statistics. There is no special item for something of that kind.


Ellen Louks Fairclough: I believe the Minister of National Revenue said that representations had come from the city of Toronto. Therefore, I presume the city of Toronto has its own printing plant?


James Joseph McCann: That is right.


Ellen Louks Fairclough: That is the board of education?


James Joseph McCann: Yes; that was our information.


Ellen Louks Fairclough: The board of education of the city of Hamilton does not have its own printing plant.


An hon. Member:: It will have to buy its
own printing plant.


Ellen Louks Fairclough: That is precisely it. My hon. friend says that the Hamilton board of education will have to buy a printing plant. Therefore in order to gain a 10 per cent relief, boards of education will have to establish their own printing plants because the city of Toronto wants 10 per cent relief. Is that the situation?


James Joseph McCann: You can draw that conclusion from it.


Ellen Louks Fairclough: There are only four cities in Canada which are going to benefit. All the other boards of education are either going to have to buy their own printing plants or still pay the 10 per cent.


John Borden Hamilton: I just want to direct this question to the parliamentary assistant. Do I understand now that we come into this house, and he comes in with his experts with a plan to exempt all of these items, but he is not in possession of figures to tell us how much the treasury will lose? Is that the plan? Will the parliamentary assistant say tomorrow, "You people are not going to have to pay this from now on; we do not know how much it will cost the treasury, but you are free anyway?" Is that the position we are in?

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William Moore Benidickson: No; on most items of some consequence of tax loss, from statistics in the Department of National Revenue, we are able to give some idea of the amount of revenue that the crown is willing to forsake by a reduction in taxation, but this is not an item in that category; it is not one of substance.


John Borden Hamilton: Then, we can expect the answer is that possibly when we come to section 1 we will know how much is involved in dealing with paragraphs (a), (b) and several of those paragraphs. Is that right?


William Moore Benidickson: Several of them.


Frederick George Hahn: Unlike the hon. member for Hamilton West, I am not opposed to this particular assistance for the schools but I do feel that all schools should be able to take advantage of the 10 per cent reduction in the sales tax or excise tax, as the case may be. As I see it, the only way to make all schools eligible on the same basis is to make it possible for them to receive a rebate, or not be charged with tax in the first instance when they have a printing job done for them by a printing establishment. If it were done in that way our job printing establishments would be able to carry on as they are today, but our smaller schools would not of necessity have to purchase large printing presses to carry on the work or get the benefit of the tax alleviation that some of the others are to get.


Clayton Wesley Hodgson: I think this is ill thought out legislation. In the first place, the dominion government has taken the big end of the tax collecting privileges from the municipalities and the provinces. We all know that the municipalities are the children of the provinces. The municipalities pay excise taxes on everything they purchase. There is only one fair way to do it and that is to make exemptions for municipalities, including school boards.


Mr. Leboe:: I would like to say a word or two on the subject of price. I notice that the resolution reads;
Resolved, that it is expedient to introduce a measure to amend the Excise Tax Act and to provide, among other things,
The part to which I should like to refer just briefly is part VI, "Consumption or Sales Tax." Under paragraph (f)(ii) we find:
. . . without limiting the generality of the foregoing, any amount charged for, or to make provision for, advertising, financing, servicing, warranty, commission or any other matter.
The thing that I am particularly interested in is the word "financing". I feel that the word "financing" should apply only to that part of

the money that is used in the manufacture of the article, the financing of the operations. I believe the tax is now charged on the financing of the sale of the article, provided the manufacturer or someone dealing at less than arm's length carries on the financing of the sale of the article. But if the finance corporation carries the finance charges instead of the manufacturer, then there is no sales tax on the financing. The manufacturer must borrow the money to finance it in the first place and he has the necessity to finance the charges; on top of that he is going to have to pay the sales tax on the finance charges or the consumer is going to have to pay the sales tax on the finance charges. I think the word "financing" there should be made to refer only to the finance charges in the manufacturing of the article and not in the sale of the article.


George Clyde Nowlan: Mr. Chairman, I would like to say one word further with respect to this matter of printing to which reference has been made by the hon. member for Hamilton West, the hon. member for Vancouver-Quadra and others. Certainly there is something about this which I think would warrant further study and investigation. We have a provision here that educational institutions, schools or universities which produce their own printing for their own use and not for resale are exempt. Well, that is an advantage undoubtedly to many educational institutions, and to that extent we are all for it; we welcome it. But why should there be a differentiation made between the large educational institution or university, shall we say the University of Toronto or McGill, and the small institutions? I am not sure, of course, whether the University of Toronto or McGill has its own printing establishment but obviously some have. Hereafter they can print and not pay sales tax, while smaller ones such as Acadia, Mount Allison, St. Francis Xavier, Dalhousie, or St. Mary's-and I can call the roll all across Canada-which have not any printing establishments-


William Moore Benidickson: Do they not do mimeographing and other types of printing?


George Clyde Nowlan: Is this the Ontario complex? Is the parliamentary assistant suggesting that smaller universities shall be content with mimeographing and the universities of Toronto and McGill shall have printing? I think a university, whatever its size may be, is entitled to the same treatment so far as the taxation authorities are concerned, whether it does mimeographing or printing. I think that this section should be redrawn so that goods which are supplied to these institutions should be exempt from the sales tax. It is no good for the parliamentary assistant to say, "Well,

if they buy from an institution or a printing plant which does less than $3,000 worth of printing a year they do not have to pay sales tax."
I come from a small town in this country, probably one of the smallest towns which is represented by a member-the town is not- and from which a member of parliament happens to come. We have one or two printing establishments in that town and they are not making any money. I do not think any of them is paying an excessive income tax to the Minister of National Revenue. But I am certainly sure they are all doing over $3,000 worth of printing a year, or they would not be in existence at all. Therefore, this exemption of less than $3,000 a year means nothing.
What is happening by this amendment is that the department is going part way to meet a situation with which it should have dealt realistically long ago. The printing of these national institutions should be exempt from sales tax. I am not sure who is responsible for carrying out this change, whether it is the parliamentary assistant to the Minister of Finance or the Minister of National Revenue; but I do suggest and urge that further consideration should be given to this. Otherwise you are going to have the situation that printing done for the larger educational units in this country-all of which I know are carrying a heavy burden, but nevertheless presumably the larger ones are in a slightly better position to carry it than the smaller ones-are going to be exempt from the sales tax on their printing, whereas the smaller ones are going to be compelled to pay the sales tax because they do not own their own printing establishments. They have to buy their printing from some plant which I can assure the minister will not be one doing less than $3,000 worth a year. I again urge that this matter be given further consideration.


Stanley Howard Knowles: Mr. Chairman, first of all I want to support the suggestion made by a number of hon. members that a happy solution to this problem would be to provide exemption from the sales tax to all municipalities and school boards. If the government is not prepared to do that, I suggest that there is another way by which the problem might be solved. This suggestion arises from a little research I have been doing in some of the volumes that I have under my desk. I find that the Excise Tax Act, which in the main is for the purpose of imposing certain taxes, including the sales or consumption tax, has in it section 32, which reads:
The tax imposed by section 30 does not apply to the sale or importation of the articles mentioned in schedule III.
I find by looking at schedule III in a number of the volumes across the years that
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it has been growing in length. No doubt my friend the parliamentary assistant would like to boast of that fact, but in particular I would point out that the section of schedule III which is headed "Printing and Educational" has been growing in length year by year. I take it that what this proposed amendment would do would be to add another sentence or two to the printing and educational section of schedule III of the Excise Tax Act. I ask hon. members to note that quite a number of items are included in this section under the small capital heading, "Printing and Educational". I would like to give some of them, bibles, missals, prayer books, psalm and hymn books, religious tracts, Sunday school lesson pictures, books, bound and unbound, pamphlets, booklets, leaflets, scripture, prayer, hymn and mass cards, and religious mottoes, and pictures unframed, for the promotion of religion, and so on.
There is another paragraph which lists books, printed and bound, that contain no advertising and are solely for educational, technical, cultural or literary purposes, and so on.
There is another paragraph that starts off:
National manufacturing, industrial or mercantile trade directories.
There is another paragraph that starts off:
College and school annuals.
There is something else included in that paragraph and I will come back to it in a moment. Then I find magazines and such things as "manuscript, phonograph records and photographs", and so one. The item I said I would come back to is newspapers. When one thinks of the amount of printing that is done in this country surely the largest part of it must be in the printing of newspapers. I suggest to the government that this list is now getting fairly long particularly with bulky newspapers like-what one should I mention; I had better be careful-


Mr. Castleden:: The Winnipeg Free Press.


Stanley Howard Knowles: No, I will refer to the Toronto Daily Star or the Sunday Telegram. When you consider the proportion of the printing in this country that is already tax free by virtue of the items that are listed in schedule 3 of the Excise Tax Act, isn't the solution simple? Why not exempt all printing from the sales tax After all, to a large extent the cost of printing is in labour content and what is being imposed here is a sales tax not on goods but a sales tax largely on labour.
I submit that if the government is not prepared to move as fast as it should in the matter of relieving the municipalities of

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the requirement to pay sales tax, at least it might travel in the direction in which it is already travelling, and since the government has extended to newspapers and the publishing of books and many other printed items freedom from the sales tax, why not wipe the slate clean and remove the sales tax from all printing?


Ellen Louks Fairclough: Having had some little experience with the printing business, probably the committee would be interested to know that even in the case of those plants which produce less than $3,000 worth of printing in the year and thereby are exempt from sales tax, by reason of the fact they have no sales tax licence these plants are required to pay sales tax upon supplies which they purchase. Therefore the paper, ink and other products they purchase, by virtue of the fact that they do not have a sales tax licence, are subject to sales tax in their hands.
It seems to me that this is an empty sort of thing because even a school board which produces its own printing and does not thereby require a sales tax licence which would exempt its purchases from sales tax is forced to pay sales tax to its suppliers on the paper, ink and other supplies which it purchases to produce its own goods.


William Moore Benidickson: The previous speaker said that was an inconsequential portion.


Ellen Louks Fairclough: Well it may be inconsequential but this particular section then elevates this thing into a broader field. The minister said the board of education of the city of Toronto pays $30,000 sales tax a year. That would indicate that it buys $300,000 worth of printing. It takes a fairly sizeable plant to produce $300,000 worth of printing so what he is saying in effect is that the city of Toronto which is quite capable of installing a printing plant which could produce $300,000 worth of printing in a year shall be exempt from sales tax whereas a small town or city or an individual university such as those described by the hon. member for Digby-Annapolis-Kings must still pay sales tax upon the supplies which it uses.
The member for Winnipeg North Centre read from the act a list of various articles with respect to printing which are exempted from sales tax. Now those articles are exempted from sales tax regardless of who prints them, so if my memory serves me well I would think that the only things that are now taxable are simply the supplies which are used by the various boards of education and by the universities.


An hon. Member:: Educational supplies.


Ellen Louks Fairclough: We are talking about educational supplies now. Therefore it seems to me that the minister should consider this particular clause and possibly he would agree to letting it stand until such time as we can consider how we will deal with it. Certainly in its present form it solves nothing. For the people who use very limited quantities of supplies it merely gives them a tax relief of 10 per cent of the total cost of their supplies and for those who use a large amount, that is to say, the big people who are in a better position probably to pay, it exempts them from the total cost of sales tax on their supplies. I believe that is grossly unfair. The scales are weighted in favour of the big fellow against the little guy and I personally am very much opposed to it.


William Moore Benidickson: Mr. Chairman, there have been quite a number of questions raised which I should probably deal with at this time. The hon. member for Greenwood, who opened this debate this evening, referred to the sales tax committee report and I think that I could do no better in replying to him than refer to what the minister himself said on budget night, on page 2226 of Hansard, as follows:
In concluding my statement of proposed tax changes I should report progress on consideration of the report of the sales tax committee. Careful study has been given to certain technical changes in the structure of the law and I am confident that some of the deficiencies in the existing legislation can be corrected. But I do not propose to recommend any changes in the direction of basing the tax on the retailers' purchase price.
Now some changes last year in the mending bill reflected the consideration that had been given by the department to the recommendations of the committee. In one or two instances the new bill that will be presented to the house this session will again indicate some appreciation of the recommendations that have been made by this worthwhile committee.
The hon. member for Lanark and the hon. member for Winnipeg North Centre made some references to sales tax on medical and drug items and I must point out to the hon. members that it is not easy, in looking at schedule 3 to the act, just to determine the full extent of the exemptions which are available on drugs and certain appliances that are used by those in ill health. There is the section entitled "charitable and health".
I think a question was raised about hearing aids, which are specially mentioned in this schedule, but there are other items referred to further on in schedule 3. They are the goods enumerated under "customs tariff items". In that respect such things as tariff item 478 includes artificial limbs and other appliances; 480 includes crutches. A question

was raised about wheel chairs, tariff item number 480 (a) refers to invalid chairs, and so on. Those, I grant, are not easy to find in the schedule of exemptions from tax, but they are there.
The hon. member for Comox-Alberni raised the question about exemptions of sales tax on trucks used in the logging industry. This again is covered by one or two of these references in the tariff schedule. Section 411
(a), refers to "logging trucks and trailers", including motor trucks.
The hon. member for Digby-Annapolis-Kings raised some queries about the new items which are in the proposed regulations, dealing with horticultural products. I think he mentioned the definition of foliage and I must say that in contemplating what would be exempted from sales tax, very generally, our feeling was that everything would be exempt with the exception of cut flowers. Foliage was generally considered to embrace holly, cedar boughs, fern, huckleberry and so on.
The hon. member for Peterborough raised a question about geranium slips and I am told that these are already exempt in the Excise Tax Act under bedding plants.


An hon. Member:: What about the bulb item?


William Moore Benidickson: I think that the language of the bulb item is pretty plain.


Wallace Bickford (Wally) Nesbitt: No, it is not. What about gladiolii and things like that?


William Moore Benidickson: There was a question on that and bulbs are not flowers. If they are bulbs, such as gladiolii bulbs they would be exempted from sales tax but if they are cut blooming flowers then they would not be exempt.


Wallace Bickford (Wally) Nesbitt: I would just like to raise one question while the parliamentary assistant is on this point. The word "bulb" means a very specific type of plant life; it clearly does not include things like gladiolii. I would like to know just what is intended by the minister with respect to such things as dahlia roots and tubers and that kind of thing. Will they be included or does he specifically refer to lily bulbs or tulips?


William Moore Benidickson: I think that we will have to proceed by experience in this regard, but I do feel the language is pretty clear. The only thing that is not there would be cut flowers and I think that there will be no difficulty about differentiating between a bulb and other plant life. I believe the term with respect to gladiolii is corms.
Excise Tax Act


Howard Charles Green: Mr. Chairman, may I ask the parliamentary assistant why cut flowers were not included. That again seems to be discrimination. These other products are exempted and cut flowers are not. They are difficult to market because there is such a large percentage of wastage and I am sure that there must have been representations made by florists from all over the country to the effect that cut flowers should be included as well as plants. Why has the department deliberately left out cut flowers and given exemption to the other plants?


William Moore Benidickson: I think it could be said that that, surely, is in the nature of an item of luxury. It is also the equivalent of something that is manufactured and produced in that form. This is a step forward in tax relief. As my hon. friend, I think, said, where the small grower has now a particular exemption of $500, it has been difficult to administer this because of the number of small growers and their premises haying to be checked.
The revenue lost is not too substantial having regard to the cost of administering it, but it would be much more substantial in the case of cut flowers.


Howard Charles Green: Has the department no figures? Surely it must have some idea how much money is involved, and how much the tax on cut flowers has produced as distinguished from that on potted flowers, or potted plants or bulbs or cut foliage; what are the figures for these different items?


William Moore Benidickson: The estimate we have with respect to the items in respect of which sales tax exemption is being provided, is, roughly, $700,000.


Howard Charles Green: How much would be involved if the exemption were to be extended to cover cut flowers?


William Moore Benidickson: Something over $1 million, my advisors say.


Howard Charles Green: Is that in addition to the $700,000?


William Moore Benidickson: Yes, in addition.


Howard Charles Green: Well, I would suggest to the parliamentary assistant that the whole field should be exempt rather than that he should simply exclude cut flowers and retain the tax on them.


William Gourlay Blair: Mr. Chairman, I have been looking over this list and I find it is a very small list which does not cover what I was trying

Excise Tax Act
to talk about at all-artificial eyes, hearing aids, liver extract, vaccine for polio and so on.
The point I was making is that when you are charging for drugs, especially for some of these new drugs, you are imposing a tax on sickness. There is a whole field of these requirements, in addition to the articles which are normally used by sick people. The list I have in mind is a long one. You are making people pay a tax on illness to support people who are well, and the time when they are ill is the very time when they are not earning money. People suffering from chronic diseases are especially burdened by the taxation now imposed. It is true the tax is put on at wholesale level, but it is, nevertheless, reflected in the price charged to the person who is ill. I think this is a very unfair tax on any account. Certainly the list should be enlarged from its present puny length.
Can the parliamentary assistant not realize how ridiculous it is to send down to a drugstore for a hot water bottle for somebody who is ill and discover that there is a 10 per cent sales tax on it? The whole thing is ridiculous. You are charging people who should not be charged at a time of their necessity. I think the whole thing should be revised.


James MacKerras Macdonnell: Mr. Chairman, I want to ask one or two further questions to follow up my previous questions about this report on the sales tax, but, first, I want to make it perfectly clear to the parliamentary assistant that we are very dissatisfied still with this clause about printing and to suggest to him that no answer, so far as I can recall, has been made to the very clear statements which we on this side have made.
We believe that it is discriminatory; that it is imposing a penalty on the smaller people vis-a-vis the bigger, and I hope very earnestly that it will be possible for this matter to be given further consideration.
Having said that, I turn back to pursue my questions about the sales tax report. The minister asked for this report. It was given by responsible people, and I submit that what he had to say about it in his budget speech was just a polite "brush-off". I will read it. It is quite short:
In concluding my statement of proposed tax changes I should report progress on consideration of the report of the sales tax committee. Careful study has been given to certain technical changes in the structure of the law, and I am confident that some of the deficiencies in the existing legislation can be corrected.
Now there you have, on the one hand, quite an admission in that phrase "some of the deficiencies can be corrected," yet on the

other hand there is no indication that I can discern here of anything being done. And we wind up with a blank negation, as follows: "but I do not propose to recommend any changes in the direction of basing the tax on the retailer's purchase price."
It was perfectly competent for the minister to say that, of course, but that was only one of a whole host of recommendations made by this committee which, as I say, was composed of able men who did not rush in without being asked, but who were asked by the minister himself to do the job.
I want to raise one or two questions which I think are worthy of answer because they touch upon very important issues. I draw attention to the fact that the minister, according to this report, has now 25 different discretions, and I suggest that this is a matter which certainly might have been looked into and that we might have had more than a mere casual reference to that. Secondly, I draw attention, just at a venture, to one other point, though there are many others that might be mentioned with regard to the subject of appeals on page 17. I did mention it before. Now, I suggest that these, and probably a good many other things, should be given some consideration, because this field covers one of our most important taxes. The minister-and let us approve his having done so-got competent people to make a report. The report has been in his hands for many months, but I submit it is fair to say that his reference to it in his budget speech was, as I said, a "brush-off". That is not the way to do business in my opinion and I think we should have some further answers from the parliamentary assistant to some of the questions which I have raised.


Mr. Hees:: Mr. Chairman, in an answer
which the parliamentary assistant gave a few moments ago to the hon. member for Vancouver-Quadra asking why someone had decided that potted, flowering or bedding plants, dormant flower bulbs and cut foliage should be exempted from sales tax but not cut flowers, the hon. gentleman said: "I think it was for such and such a reason." The parliamentary assistant should not think it was for such and such a reason, he should know why it was done. That, in itself, is a good example of the slipshot, slap-happy way in which this government goes about its business. They put a man in a position where he should know, and he says he thinks an exemption could be given for a certain reason. I want to know, as does the hon. member for Vancouver-Quadra, why cut flowers are not excluded from sales tax, whereas bulbs and cut foliage are.


An hon. Member:: Elvis is in town.


William Moore Benidickson: The reason is as I gave it, that you cannot forsake revenue on all items, and this was considered an item which could bear tax.


George Harris Hees: Why was this considered an item that could bear tax and not the others? I want to have the reason.


James Joseph McCann: Because the others produce the flowers.


George Harris Hees: May we have the reason?


William Moore Benidickson: I think the minister's answer was a good one. Many items are not taxed until the final product is produced, and this is an example.


George Harris Hees: What is the difference between a product such as potted flowers, or bedding plants and cut bulbs, as compared with cut flowers?


Jean Lesage: Ask your wife, she will tell you.


George Harris Hees: Would you give me an explanation as to the difference?


Jean Lesage: Ask your wife. She knows.


George Harris Hees: That is typical of the kind of nonsense one expects from that shilly-shallying minister of northern affairs. I am asking somebody who is supposed to know the answers to these questions.


William Moore Benidickson: I indicated that cut flowers are an item of extra value which are not considered to be as basic as are the other items mentioned, such as bulbs and so on, which enter into the production of flowers. In addition to that, I think a great number of the cut flowers in this country are produced under glass as, more or less, a business operation, and in a great number of cases the other items are small farmers' products.


George Harris Hees: Does the parliamentary assistant consider that bulbs are not produced under glass in exactly the same way?


William Moore Benidickson: No.


George Harris Hees: How are they produced?


James Joseph McCann: You put them in the ground.


George Harris Hees: Will the parliamentary assistant explain to me how bulbs are produced differently than cut flowers? Will he please explain to me how bulbs are produced differently? Will he please explain that matter?


William Moore Benidickson: My hon. friend knows the answer to that question.
Excise Tax Act


George Harris Hees: No, he does not know the answer. I know that bulbs and cut flowers are produced exactly the same way in greenhouses.


An hon. Member:: Then why did you ask?


George Harris Hees: Because I say there is no difference between the two. It seems that the government has more friends in the bulb producing industry than in the cut flower producing industry. Therefore pressure has been brought to bear in a typical manner on the government by those who produce bulbs, some friends of the government, some persons that produce campaign funds for the Liberal treasury-


William Moore Benidickson: Nonsense.


George Harris Hees: -who may produce bulbs and you do not give the producer of cut flowers who may have turned the government down anything at all. They would be supposed to produce what they have been told to produce. As we all know, people in business are told to produce in the way of campaign funds for the Liberal party. In that way those who produce cut flowers have not been granted sales tax exemption as have those who are friends of the government who prodv 'e as they have been told to produce on th* line by the Liberal party. They are therefore given a sales tax exemption but not those who produce cut flowers. That is the oniy explanation.


William Moore Benidickson: Utter nonsense.


James Joseph McCann: Yes; utter nonsense.


George Harris Hees: No; it is not.


An hon. Member:: Are you a specialist in bulbs?


George Harris Hees: I am a specialist in how the Liberal party operates.


James Joseph McCann: The only thing you ever grew was onions.
The Depuiy Chairman: I recognize the hon. member for Winnipeg North Centre.


An hon. Member:: Why don't you ask Elvis?


George Harris Hees: That is typical of the kind of thing you get.


James Joseph McCann: It is what you deserve.


George Harris Hees: What was that?


James Joseph McCann: You heard what I said the first time.


George Harris Hees: It was so stupid that I hoped I did not hear.

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Edward Turney Applewhaite: Order; I have given the floor to the hon. member for Winnipeg North Centre. I should like him to be allowed to use it.


Stanley Howard Knowles: Thank you, Mr. Chairman. However, I was just standing here and enjoying the program.


An hon. Member:: A C.B.C. program?


John Borden Hamilton: This is culture.


Stanley Howard Knowles: On previous occasions when we have been at this point in the discussion of the budget the parliamentary assistant or the minister has suggested that the government was always giving consideration to the placing of additional drugs or medicinal items on the exemption list. I recall discussions in previous years when we were put off with the assurance that this matter was being considered and that other items would be added from time to time. Will the parliamentary assistant draw to my attention any items in the resolution now before us which relate to drugs and which are being added to the list of exemptions?


William Moore Benidickson: I am sure my hon. friend has read the resolution very carefully. I will agree with him that there are none in this particular resolution.


Stanley Howard Knowles: Then the parliamentary
assistant will understand why we do not like being put off with these assurances that something is being done, that consideration is being given, when a year later we find that it has not amounted to anything at all. I contend that the government should be reprimanded for not giving more serious consideration to the growing list of drug items which are expensive and which people are required to take and which should be excluded from the sales tax. As I indicated when I was on my feet earlier with regard to this matter, some of these items are taxed doubly in that they are subject to customs duty as well as to sales tax on top of that customs duty, so that by the time a double pyramiding process takes place the cost is fairly high in the hands of the consumer.
May I ask the parliamentary assistant a couple of other questions? He will probably recall that the late Dr. Trainor, the former member for Winnipeg South, on one or two occasions raised the question of corrective footwear for orthopaedic cases. Was anything done in response to those representations?


William Moore Benidickson: I think my hon. friend has reference to a tariff item; it was not sales tax. I think it was a tariff item and it was with reference to a specially constructed boot. This matter came up two or three years ago. My
[Mr. Hees.l
impression is that our friend the late hon. member for Winnipeg South was satisfied with the administrative ruling that was subsequently given with respect to that item.


Stanley Howard Knowles: The parliamentary assistant is satisfied that there is no sales tax on that item?


William Moore Benidickson: No, I am not going to say that. I think there would be a sales tax. But the complaint of the late hon. member for Winnipeg South was with respect to a tariff item and the definition of that type of a shoe which, under an administrative ruling, was excluded from a certain benefit. I think that was subsequently corrected.


Stanley Howard Knowles: The complaint of the hon. member for Winnipeg North Centre is as to the sales on this item if it is still there. May I also ask whether there is a sales tax applying to eyeglasses or parts thereof?


William Moore Benidickson: Yes.


Stanley Howard Knowles: Has consideration not been given to removing the sales tax from those items?


William Moore Benidickson: Consideration is always being given to these matters.


An hon. Member:: Oh, that line!


Stanley Howard Knowles: What is the answer to that? This is the reply we get every year. As I just indicated, we were given this reply last year. Yet tonight the parliamentary assistant admits that although there is a list of things like vinegar, prune juice, foliage, slips of one kind and another-but not government slips-from which the sales tax has been removed or is being removed, there is not a single item of drugs or medicines that is being added to the exempted list at this session.


An hon. Member:: For shame.


Stanley Howard Knowles: This again is a mark of how hollow is the interest of this government in the health of the people of Canada.


Some hon. Members:: Ten o'clock.


Frederick George Hahn: I have a question with respect to the printing business again. I would ask the minister or the parliamentary assistant what consideration, if any, is being given to the request that we have been putting forward to have the figure changed, that is with respect to the publishers or job printers who manufacture or produce job printed matters to an amount not in excess of $3,000 per annum. They want that amount raised to

$6,000 so these smaller schools could take advantage of their services, as I suggested to the Minister of National Revenue a while back; so they can get their printing done by them. Would you consider changing this figure and raising it to $6,000?


William Moore Benidickson: I do not recall that this particular point has been raised in debate previously. As I have said before-and I say it most sincerely-there is never an item that comes up for discussion on a budget resolution that is not subsequently discussed by those officials and ministers who review the budget for the following year. On health items that also happens. Usually in tax matters relating to drugs and health the officials of the Department of National Health and Welfare are also consulted. There is sometimes a great deal of difficulty in just pulling out particular items of drugs because many of them pretend to have the same benefit, they are named and priced differently and their content of a certain drug element is different. There is great difficulty reported to us by the officials of all these departments
3, 1S57	3055
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in such matters. But this particular suggestion from the member for New Westminster is new in the debate tonight.


Edward Turney Applewhaite: Order. It being ten o'clock, shall I report progress and ask leave to sit again?


Some hon. Members:: Agreed.
Progress reported.



BUSINESS OF THE HOUSE

Howard Charles Green: Will one of the ministers indicate the business for tomorrow?


James Joseph McCann: Mr. Speaker, my understanding was that the Minister of Finance announced the business when at six o'clock he indicated that he would not be here. My recollection is that we go on with this discussion first thing in the morning and that when it is completed We deal with the Income Tax Act.


[Stage Direction]
It being three minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, April 4, 1957