1957-02-18

UNEMPLOYMENT INSURANCE


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, if I have permission to do so without notice, with unanimous consent I would like to present a motion to the house. Last session I tabled with the Clerk of the house copies of the report of the unemployment insurance commission for 1955-56. If I am given unanimous consent I should now like to move:
That this report be referred to the standing committee on industrial regions.
If this is passed it will provide an early opportunity for that committee, namely the standing committee on industrial relations, to consider alleged difficulties and delays with respect to unemployment insurance benefits. In this way I shall comply with my promise to the suggestion in the question asked last Friday by the hon. member for Winnipeg North Centre. I believe, sir, that all the party whips would give unanimous consent to this.


[Stage Direction]
Motion agreed to.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, I wish to make a short announcement having to do with the sale of uranium. On May 25 last I advised the house that the government was considering bilateral agreements which would permit the sale of uranium to friendly governments or their designated purchasing agencies. I pointed out that such arrangements must be made with due regard to safeguards as to the end use of the uranium supplied and the end use of any special fissionable materials which might be produced from the uranium supplied. In these circumstances it seemed desirable that the final determination of policy with respect to safeguard provisions in bilateral agreements should be deferred until the proposed statute for an international atomic energy agency had been discussed and agreed upon.
The house will recall that the statute for the international atomic energy agency was considered at a general conference in New York which was attended by representatives of all of the member countries of the United Nations. Agreement was reached at the conference on a statute for the international agency, and the statute has been tabled. Article XII of the statute contains the control provisions which are designed to prevent the diversion to other than peaceful uses of any materials, equipment or information which may be supplied by the international agency. These control measures may also be invoked in the case of bilateral agreements where the parties concerned request such action by the agency.
The government is now prepared to negotiate bilateral agreements with friendly governments covering co-operation in the peaceful uses of atomic energy and, in particular, the supply of natural uranium for such uses. These agreements will contain control provisions similar to those contained in article XII of the statute for the international atomic energy agency. The inclusion of such control provisions in bilateral agreements is consistent with the support which Canada gave to article XII of the statute for the international atomic energy agency at the New York meeting. Except for the control provisions, sales arrangements concluded under bilateral agreements will be on a normal commercial basis. Eldorado Mining and Refining Limited, the government's designated purchasing agent for all uranium produced in Canada, will be responsible for negotiating the sales contracts. While the amounts of uranium which can be made available under bilateral agreements at present are not large because of existing contractual commitments, it is believed that these quantities will be sufficient to meet the current requirements of those governments which have indicated an interest in obtaining uranium from Canada.


Mr. Howard C. Green (Vancouver-Quadra):: May I ask the minister if there is any change in the situation whereby all the uranium will be sold by the government to other countries?


Clarence Decatur Howe: There is no change in that arrangement. It is a necessary arrangement as long as the end use of uranium must be safeguarded.

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Howard Charles Green: Then I understood the minister to say that we would be selling the natural uranium. Will there not be any arrangement at least for the partial manufacturing of uranium into the metal form in Canada and the sale of it in that metal form?


Clarence Decatur Howe: Mr. Speaker, in speaking of natural uranium I refer also to uranium in metal form. We are now able to deliver uranium oxide. I think in a matter of some months we will be able to deliver uranium metal which is the form in which we would prefer to sell uranium.


Mr. C. W. Hodgson (Victoria, Oni.):: Is the
opportunity still open and available for mines which are still coming into production to obtain contracts?


Clarence Decatur Howe: If the mines can meet the requirements of Eldorado in that respect I think no door has been closed.



EXCHEQUER COURT ACT


Hon. Stuart S. Garson (Minister of Justice) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Exchequer Court Act respecting the place of residence and the salary of the registrar of the court.


[Stage Direction]
Motion agreed to.


Mr. Stanley Knowles (Winnipeg North Centre) moved:: That, in the opinion of this house, the government .should give consideration to the advisability of introducing legislation amending the Income Tax Act so as to remove therefrom the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes.
He said: Mr. Speaker, the purpose of this resolution is to try to persuade the government to correct a grievance which is felt by the vast majority of the people of this country. Indeed, I would say it is felt very keenly by all Canadians who pay income tax. That grievance is the fact that at the .present time medical expenses are deductible ,for income tax purposes only to the extent to which those expenses exceed 3 per cent of net income.
I dislike having to introduce a matter of definition this early in my remarks, but having referred to net income I think I should

introduce at least one definition without going any further. As I understand it, there are at least three types of incomes that are referred to when one makes out his income tax return: total income, net income and taxable income. Total income is obviously all the income which one receives. Taxable income is the final amount upon which you compute your income tax after you have deducted, amongst other things, the statutory amount of $1,000 or $2,000 or more as the case may be. Net income is almost the same as total income; the only difference between total income and net income is that one is permitted to make certain small deductions, such as deductions for trade union dues and pension fund payments, before arriving at his net income. However, for all practical purposes we can talk about this 3 per cent "floor" as relating to one's complete income.
The grievance which this resolution deals with is the fact that medical expenses are, as I have already said, deductible for income tax purposes only to the extent that those expenses exceed 3 ner cent of the net income. I submit, Mr. Speaker, that there are few income tax issues so widely understood in this country as this one; I submit that there are few income tax matters concerning which there is such wide-felt support as there is for the proposal contained in this resolution, namely, that consideration should be given to removing the 3 per cent "floor" and making it possible for medical expenses to be deductible right from the first dollar.
Mr. Speaker, if one is in business and that business involves the operation of certain machinery, and if the machinery breaks down, the cost of repairing that machinery is deductible for income tax purposes right from the first dollar. But if a human being breaks down and has to pay medical expenses, deductibility does not start with the first dollar, but only after the payments have reached 3 per cent of his income. If an employer has to meet extra costs involved in hiring extra employees to take the place of persons who are away ill, those extra costs are deductible expenses right from the first dollar. But, as I say, medical expenses allowed to employees who are sick are deductible only if they exceed 3 per cent of income. If one is in business there are all kinds of things-telephone, office rent and so on-which are allowed as deductible expenses right from the first dollar, but when it comes to the medical expenses of an individual, or his family, this basis of immediate deductibility is not permitted.
If you are in the brewery or distillery business you can advertise the beauties of

Canada, or you can advertise in street cars and buses the antics of the otter, and get deductibility in respect of these advertisements from the first dollar. But if as an individual taxpayer you have expenses for medical attention during illness they are not deductible on this basis. Likewise, if you are in the brewery or distillery business, you can make contributions to culture; you can make contributions to the drama festival and get deductions in respect of those contributions right from the first dollar. But if as an individual you are faced with heavy medical expenses you cannot get deductibility until those expenses exceed 3 per cent of your income, and then, of course, you get deductibility only in respect of that portion of your medical expenses which is in excess of that 3 per cent figure.
As an individual you can make contributions to approved charities, and although there is a "ceiling" on the amount you can claim, namely 10 per cent of your total income, you get deductibility in respect of those contributions to charity right from the first dollar of the contributions you make. In the case of medical expenses this is not the case. You do not get deductibility until those expenses exceed 3 per cent of your income.
This morning's Montreal Gazette tells us of another way, Mr. Speaker, in which you can get an income tax concession. If you happen to be a former provincial cabinet minister you can make hundreds of thousands of dollars, get it treated as a capital gain and pay no tax on it at all, according to a report on the front page of this morning's Gazette concerning a huge pipe line paper fortune made by Mr. Nathan Tanner, former Alberta mines minister and now president of Trans-Canada Pipe Lines Limited. I base my statement to that effect on the concluding sentence of the report which says:
Capital gains on stock transactions are not taxable in Canada.
I say to you, Mr. Speaker, that when I read that article this morning I felt that I was acting the part of a piker in standing up in the house today and asking for such a minor concession for the average Canadian as is sought in this resolution compared with the freedom from taxation that is now enjoyed by an individual such as the one to whom I have referred in making huge profits of that kind out of stock promotion and stock manipulation. So, Mr. Speaker, because in all these other instances deductibility is allowed, and in all of them allowed not after a certain point is reached but right from the first dollar, we feel, and in this I believe we are expressing the views of the Canadian people,
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that deductibility of medical expenses should be allowed right from the first dollar of those expenses.
As members of the house know, on former occasions when this matter has been debated I have placed on the record a number of examples to show the comparative treatment between contributions to charity and medical expenses. It is not my purpose to repeat the long list of examples I have given in former years, particularly because there has been no change in the income tax rates since this matter was under discussion a year ago. But just so that it will be clear what this means in terms of dollars and cents, so that it will be clear that we are asking for fairness with respect to medical expenses, and also so that it will be clear that really we are not asking for very much, I should like to put one example on the record.
Take the case, for example, of a married taxpayer with two children of family allowance age where the income is $3,000 a year. In that case the income tax to be paid under present rates and before any adjustment would be $105. If this family had medical expenses of $100 their tax would be reduced to $103.50, a reduction of $1.50. The reason the reduction would be so small for $100 medical expenses lies in the fact that only $10 of that $100 would be allowed as deductible since 3 per cent of $3,000 is $90 and medical expenses are not allowed until the 3 per cent point is reached. On the other hand, if that same family were to give away $100 to approved charities the entire amount of such contributions would be allowed as a deductible expense and their income tax for the year would be reduced to $90. In that case the tax saving would be $15.
Let me put the two facts side by side. If the particular family to which I have referred has medical expenses in a year of $100 the tax saving accorded to that family is $1.50. If the same family gives away $100 a year to approved charities the tax saving to that family is $15 or ten times as much. Other examples produce other results, but my point in giving that example is simply this, that we feel that if it is fair, and we say that it is, to grant tax deductibility to a taxpayer with respect to charitable donations right from the first dollar, likewise income tax deductibility with respect to medical expenses should be granted from the first dollar.
As I say, I have already given that example in order to show that in terms of dollars and cents it is not a great deal that the average Canadian would get out of a change such as this. It is more a matter of principle actually than it is one of dollars and cents. If you want to get dollars in

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terms of savings with respect to the income tax legislation, of course the thing to do is to get in on one of these deals where there are huge capital gains such as the one reported this morning with respect to Trans-Canada Pipe Lines Limited.
Let me say again, as I have done on previous occasions when this matter has been under discussion, that the right to deduct medical expenses for income tax purposes is not a wide-open privilege. It has three main limitations. First of all, there are ceilings. There is only a certain amount that you can deduct by way of a total, no matter how much your expenses may be. Those ceilings are as follows: $1,500 in the case of a single taxpayer and $2,000 in the case of a married taxpayer plus $500 for each dependent to a maximum of $2,000, no matter how many dependents one might have.
There are those-and very good examples have been submitted to me in letters-who feel that this is a grievance, and that the ceiling should be removed or should be raised. Generally speaking, I do not find that those ceilings are too onerous and, so far as my resolution is concerned, it does not touch the ceiling provisions. The point of my resolution is that there is a much more serious grievance, namely the floor.
However, before I come to that matter, may I say this. The second limitation on the deductibility of medical expenses is with respect to the definition of medical expenses. That definition provides that you may, of course, include payments made to doctors, dentists, nurses, hospitals and so on; and also that you may include certain specified drugs such as insulin, cortisone, ACTH and one or two others. Beyond those items that are defined in the legislation there are many other types of expenses which one has at a time of illness but which are not allowed. I recognize the difficulty, for example, as to where one would draw the line with regard to the cost of extra foods that are sometimes incurred at a time of illness or the cost of extra help in the home because of illness. But there are other things besides those such as eyeglasses, other drugs and many things of that nature which seem to be in the category of medical expenses but which are not allowed. It is my view that that definition should be greatly broadened. It is my view that that is almost as serious a grievance as is the floor which this resolution seeks to abolish.
But some of us have learned around here that the best way in which to get consideration of a point is to present one point at a time. Hence my resolution deals with the

third of the limiting factors, namely the floor of 3 per cent which, as I say, we feel is a most serious limitation. The result of that floor is that some of the things the government has added to the list of definitions have proved to be something of a hoax to the people affected. For example, I have had letters from people who are users of insulin and who a few years ago were encouraged by the fact that the government added insulin to the list of drugs that could be included as a medical expense. Those people thought that that action was going to be of some help to them. But there are such people who, though they may be obliged to spend a considerable sum of money in the course of a year in the purchase of insulin, do not get any credit for it against their income tax because that total does not exceed the figure of 3 per cent of their total income.
Therefore, Mr. Speaker, it is because under that setup items that are defined as medical expenses do not become deductible we say that this floor is the most serious grievance of all. If you were to remove the floor you would take care of cases such as those to which I have referred, namely, the users of insulin who do not quite get up to 3 per cent of their income, and you would put people generally in the position of getting the same kind of treatment for their medical expenses as they now get for charitable donations.
I suppose the parliamentary assistant, who I imagine will speak on this matter on behalf of the government in the absence of the Minister of Finance, will be saying that some at least of the arguments that I am putting up today are the same arguments that have been put up in former years. That is quite correct. As a matter of fact, this matter has been before the house on a number of occasions and it so happens, Mr. Speaker, that it has had every conceivable form of parliamentary treatment. This resolution has had the experience of being defeated by a division in the house; it has had the experience of being talked out; it has had the experience of being adjourned, a course that some of us felt was in effect the guillotine. It has also had the experience of being passed. I know of nothing else that can happen to a resolution brought before the house outside of these four treatments. I do not know which of them it is going to get today, but one dares to hope that, with the approach of an event that is likely to take place either on May 27 or June 17, it might get better treatment than it gets in off-election years.
In fact, I am reminded that in one of the years in which the resolution was rejected

by the government, namely, in 1953, with an election in the offing action was taken at least to the extent that the then 4 per cent floor was reduced to 3 per cent; and one can only hope that the forthcoming events will cast their shadow over the government's mind and that a different view will be taken of this matter this year than has been taken during each of the years since the last election.
If some of the arguments I have put forth have been similar to those that have been put forth in former years I imagine the replies will be carbon copies of what has been said before. If so, one of the arguments, of course, will be that the government feels that allowance for medical expenses should apply only when people have to spend more than the average. The government is forever finding sanctity in this principle of the average which is written into this income tax provision. What puzzles some of us, Mr. Speaker, is why no such provision applies to charitable donations. Does the same consideration not apply? Is it not just as true that Canadians on the average give a certain amount to charity as it is true that Canadians on the average spend a certain amount on medical expenses? Just as in the case of charitable expenses no suggestion is made that you get deductibility only after you pay more than the average, why should such an argument apply to this instance?


Mr. Benidickson:: There is a ceiling on
the amount paid to charity.


Stanley Howard Knowles: The parliamentary assistant suggests that there is a ceiling in the case of charitable donations, but may I point out to him that in the case of medical expenses we have both a floor and a ceiling; but if a ceiling is sufficient in the case of charitable donations why is a ceiling not sufficient in the case of medical expenses?
Another argument that has been put in the past, and it will probably be put up today, is that if the government has money available-and it is pretty obvious that it has; as this session goes on it becomes more obvious that there is money available for one thing and another-it will be argued that that money should be put to something that provides more general benefits. Why not reduce taxes for everybody, the parliamentary assistant will say, rather than make this special concession in the case of those who have medical expenses? Well, the total amount that this would cost, on the government's own estimate, runs from $35 million to $50 million, and that would not go very far in the direction of reducing taxes for everybody, but that amount applied to individuals in relation to their medical expenses
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would, I submit, mean something to those individuals. If you asked the average Canadian whether he would be willing to forgo a few cents decrease in his normal taxes in return for which he could have the assurance that he would get special consideration for his medical expenses in years when those expenses are heavy he would choose the latter. It is for that reason I say that this is the way in which Canadians would like to have $35 million to $50 million of the government's surplus applied, namely, in making this provision of medical expenses being allowed deductibility right from the first dollar.
Another argument that has been put up in the past which may or may not be repeated today, depending upon how the Minister of National Health and Welfare is getting on with his opposite numbers in some of the provinces, is that this government is going in for a program of health insurance. Well, Mr. Speaker, we do not know when that is to come in; we hope it will come soon. We hope it will come this year, at this session, before the election. But even if it does, Mr. Speaker, the plan before the country at the present time in one dealing only with hospital costs, not with medical expenses as a whole. Indeed, a wide range of costs will still be left on the individual, precisely because the government's proposed hospitalization insurance plan does not touch the other aspects of medical expenses. I submit it is important that all medical expenses that the individual has to bear should be allowed income tax deductibility right from the first dollar. I say this to the government. If they want to prove their earnestness and their sincerity in the field of health; if they want to give the lie to those who think the government is stalling in the matter of health insurance, they can show that sincerity, they can show that concern, by taking this step this year, before the election, of removing this 3 per cent floor and making all medical expenses deductible right from the first dollar.
I have already indicated, Mr. Speaker, that this resolution has had every possible form of parliamentary treatment, including one year when it had the support of the entire House of Commons. In various sessions different members have spoken on the resolution, supporting it in full or supporting some aspect of this matter. They have included, of course, members in all three parties on the opposition side of the house and there have been half a dozen members on the Liberal side who across the years from time to time have had something to say in support of extending the principle of income tax deductibility for medical

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expenses. I hope that that wide range of support that has been shown in this house, which reflects, I feel, the views of the Canadian people, will express itself in the government's being willing to accept this resolution today and to act on it in the forthcoming budget.
I have indicated, Mr. Speaker, that there is wide popular support, which is reflected in editorials across the country; it is also reflected in an interesting resolution that was laid before the government this year by the Canadian Chamber of Commerce in its brief to the Minister of Finance and the Minister of National Revenue on fiscal policy and related matters. I wish to make it clear that the Canadian Chamber of Commerce did not ask for precisely the same thing that my resolution asks for, but it comes awfully close to it. The Canadian Chamber of Commerce asked that the 3 per cent floor be made to apply to incomes after the personal deduction, after the deduction of $1,000, $2,000 or more, as the case may be, rather than before. Well, in the case of most of the people of this country that is going practically the whole way. If you apply the 3 per cent floor only to the taxable income it would certainly be a lot better than applying it to practically the total income, as is the case today.
I was interested in the comments the Minister of Finance made on the submission made to him by the chamber of commerce. He suggested to hon. members that we might study these submissions, that they were very interesting. Well, I hope he has taken note of the extent to which the chamber of commerce thinks the government should go in respect of this matter. I submit that if the chamber of commerce wants to go that far, people generally-and this view is reflected in the submissions by organized labour-will support this resolution that the government go all the way and remove the 3 per cent floor entirely.
As hon. members know, when deductibility for medical expenses was first introduced in the early years of the war it was provided that those expenses be deductible only to the extent that they were higher than 5 per cent. After a while we got it down to 4 per cent. It stayed there for a long time, right down to 1953 just before the last election, and in that year we got it down to 3 per cent. I hope we are not going to have to go through the laborious process of hacking away at it and having it reduced one percentage point at a time. Surely this is the time and the appropriate year for the government to make this change and show the sincerity of its interest

in the health of the people by meeting the just grievance that is felt by Canadians from coast to coast.
Last year, Mr. Speaker, after the debate on this resolution had taken place and after the government had voted it down by a vote of 98 to 66, there appeared a number of editorial comments in some of the newspapers of the country and there also appeared what I thought was a rather interesting cartoon in the Toronto Telegram. The cartoonist of that newspaper portrayed the member for Winnipeg North Centre trying to break down a stone wall of government complacency about this matter of the 3 per cent floor in relation to income tax deductibility for medical expenses. The cartoonist pictured at the top of the wall two well known characters, the Prime Minister and the Minister of Finance, who were pouring down on the member for Winnipeg North Centre the boiling oil of a negative vote. I suggest to the government that the boiling oil of a negative vote of May 27 or June 17 might be something to consider at this time. I suggest to the government that this is a year in which to pay some attention to the real grievances of the Canadian people. This is a minor one in terms of dollars but in terms of what seems right and fair it is an important issue. I hope that this year the government will act in accord with the position that was taken when the resolution to consider this matter was adopted unanimously in 1952. I also hope it will consider what the Canadian people want, namely that medical expenses be allowed income tax deductibility right from the first dollar.


Mr. Hamilton (York West):: Mr. Speaker, I wonder if I might ask the hon. member a question. Would the hon. member include in the amount to be allowed as a deduction an individual's payment of premiums on insurance to protect himself against this type of thing?


Stanley Howard Knowles: Mr. Speaker, that is one of the items included under the general heading of definitions. I think some change might be made in that regard provided the government did not give the right to deduct premiums and take away the right that is now granted of deducting what is paid for one's medical expenses by an insurance fund. The point 1 tried to make in my remarks is that there are times in this house when you have to turn your fire on one point in order to make headway on that point. There are three limiting factors as far as the deductibility of expenditures is concerned, the ceiling, the definitions and the floor. My hon. friend is right in suggesting that the definitions need

to be changed. Some hon. members think the ceiling should be changed. However, I think my hon. friend would agree we should concentrate on one point at a time, and in my view the important point is the floor.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, this resolution is not new; it has been before the house on previous occasions that are now numerous. The positions of the various parties in this house on the resolution are a matter of record and are well known. As far as Her Majesty's loyal opposition is concerned our position is unchanged and we shall support the resolution.
The resolution is, I believe, in identical terms with that introduced at the 1956 session. It asks the government to give consideration to the advisability of introducing legislation amending the Income Tax Act so as to remove therefrom the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes. The effect of the resolution if legislation were introduced to give effect to it would be to allow as deductions from taxable income all medical expenses as defined by the act instead of only the excess of those medical expenses over 3 per cent of taxable income.
The history of the legislation now to be found in section 27 (1) (c) of the Income Tax Act begins with the year 1943. It was in that year that the progenitor of the present provision was first introduced and for the first time taxpayers were allowed a deduction in respect of that portion of their medical expenses in excess of 5 per cent of taxable income. In 1944 the percentage was changed to 4 per cent, and it continued at that figure for the next nine years. Something very significant happened in 1952, sir. You will remember the day, March 26, 1952, when a resolution in form almost identical with the one now under discussion but proposing at that time to eliminate the 4 per cent figure, was actually carried in this house. No voice was raised against it. The present Minister of Fisheries (Mr. Sinclair), who at the time was parliamentary assistant to the minister of finance, spoke following the hon. member who introduced the resolution and indicated that he and the minister for whom he spoke had no objection and the resolution was passed unanimously, so far as the record was concerned.


William Moore Benidickson: No objection to giving
it consideration prior to the budget.


Donald Methuen Fleming: The present parliamentary assistant to the Minister of Finance will have his opportunity to work sleight of hand on the plain terms of that resolution as he
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may choose to attempt. Let him wait his turn and practise his arts in due course.


Mr. Winters:: That was the clear understanding then, though.


Donald Methuen Fleming: That is the understanding
that embarrassed members of the government sought to attach to their attitude a year later, but that is not the attitude they expressed in plain terms in this house at that time. I should have thought the expressions of that time were the really significant ones and those which really expressed the true meaning and thought of the government.
It is very clear that at that time, March 26, 1952, the parliamentary assistant, speaking on behalf of the Minister of Finance, did not attach the qualification that is now uttered by interrupting members to your right, sir.


William Moore Benidickson: That is not so.


Donald Methuen Fleming: The following session when the Minister of Finance spoke on a similar resolution on January 12, 1953 he made it quite clear-you will find his words on page 900 of Hansard of that date-that his parliamentary assistant in speaking as he did on March 28, 1952 had his full instructions in the matter and that the then minister of finance, Mr. Abbott, had informed his parliamentary assistant he had no objection to the resolution being carried.


William Moore Benidickson: I do not think my hon. friend has read page 822 of Hansard of March 26, 1952.


Donald Methuen Fleming: I have read all those pages. I ask the hon. gentleman to be good enough to take his seat and wait his turn and refrain from these quite superfluous interruptions. The fact is that the minister of finance made it perfectly plain, if the English language means anything to my hon. friend, at page 900 of Hansard of January 12, 1953, that his parliamentary assistant speaking on March 26, 1952 spoke with his authority and on his instruction and that he, the minister, had made it quite plain to the parliamentary assistant that he had no objection to the resolution.


Robert Henry Winters: No objection to considering it.


Donald Methuen Fleming: No objection to the resolution is the way it was put, and it passed. On January 12, 1953, we entered upon an era of recantation on the part of the government, an era of second thought, an era of the reinterpretation of the position the government had taken on March 26, 1952. This second thought was accompanied by an attempt to quibble on the word "consideration".

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Every hon. member of this house knows that a resolution introduced by a private member must be so qualified if it has any bearing at all upon the expenditure of money or the balance of ways and means. Had such words not been incorporated in the resolution it would have been ruled out of order at once. There was no play upon this word on March 26, 1952; there was no statement that, after all, all that was intended was consideration in the ordinary sense of the word. No. That is why it belongs to the period of recantation. No matter what the parliamentary assistant may say, no matter how much trouble it gives him now, that qualification was not introduced. All that the parliamentary assistant said on March 26, 1952 was that there were matters coming before the minister of finance all the time for consideration with regard to the writing of his budget proposals. That is what he talked about at that time. There was no play made at that time on the word "consideration", as has been attempted since and as apparently is being attempted today by the parliamentary assistant to the Minister of Finance (Mr. Benidickson).
So we may take it that the government through the parliamentary assistant to the Minister of Finance is preparing now to say that they are against this and that in saying that they had no objection to the motion being passed in 1952 they meant something quite different. We believe that the treatment given to the resolution on January 12, 1953 was not to put it on the basis of consideration in the sense in which the government is now asking that that word be understood. No. What the government did was to apply the guillotine to the discussion, when a motion was introduced by the then minister of finance to adjourn the debate. Of course that motion was passed with the assistance of the submissive government majority by a vote of 109 to 42.
A few weeks later in his budget proposals the same minister of finance included a reduction from 4 per cent to 3 per cent in the figure about which we had been speaking. That of course was welcomed and accepted as at least being a step in the right direction and as being at least an instalment on performance, but it did not fully meet the needs of the situation. The figure has remained at 3 per cent since. In the annual debate on this subject the lines have been quite definitely drawn without exception. The government has opposed the resolution and the parties in opposition have all supported it. That was the position when it was last before the house on January 30, 1956, when in the face of the government's determined opposition to the resolution it was defeated by a

vote of 98 to 66. The vote was remarkably close having regard to the political complexion of the house.
There are some matters pertaining to this subject which require some comment. The first is the matter of the ceiling. As has already been pointed out by the hon. member who has introduced this resolution, that ceiling contemplates in the case of a married man with a maximum number of permissible dependents an aggregate of $4,000 on the deductions he may make. The resolution as such does not contemplate any interference with that so-called ceiling on the total deductions. It may well be that that subject needs to be reviewed in relation to a number of other matters upon which I should like to touch briefly under this general subject as it now appears in section 27 of the Income Tax Act. Obviously a ceiling in some form would need to be retained having regard to the general principle of the equitable treatment of taxpayers.
The second matter that calls for consideration is the premiums paid by taxpayers for sickness and accident insurance. It will be remembered by the house that the late lamented hon. member for Winnipeg South, Dr. Owen C. Trainor, introduced a resolution on February 13, 1956, dealing specifically with that subject. This will be found on page 1114 of Hansard of that date and is in these terms:
That, in the opinion of this house, the government should give consideration to the advisability of amending the Income Tax Act so as to provide that the taxpayer shall at his option be entitled to deduct from his taxable income either (a) his medical expenses as now determined; (b) the premiums paid by him for insurance against sickness or accident or both; (c) the specific provincial tax paid by him under any provincial scheme of health insurance.
During the course of the debate an amendment was moved by the hon. member for Winnipeg North Centre, which amendment was accepted by the late Dr. Trainor. The resolution as amended would have read:
That, in the opinion of this house, the government should give consideration to the advisability of amending the Income Tax Act so as to provide that the taxpayer shall at his option be entitled to include in his deductible medical expenses either (a) any amounts billed and paid under a contributory insurance or hospitalization plan, as is now provided, or (b) any premium or tax paid by him for insurance against sickness or accident or under any plan of health insurance.
This subject does present some difficulty in view of the fact that in some provinces by reason of public insurance schemes of this kind it might not be possible, unless the scheme involved a specific contribution, to determine the precise amount that a taxpayer under those circumstances might contribute by way of premium to a public hospital insurance plan, and it was pointed out

at that time that there might be problems with respect to differences in treatment as between citizens of different provinces.
The house, rallying around the negative attitude of the government, defeated the amendment introduced by the hon. member for Winnipeg North Centre by a vote of 89 to 61, and then to prevent the resolution introduced by the late Dr. Trainor coming to a vote the present Minister of Finance introduced a motion to adjourn the debate, the familiar guillotine, and it was carried and the debate was adjourned.
But, sir, before debate was adjourned in that way the Minister of Finance had given what he himself referred to as an undertaking, and I will read two passages from the remarks he made on that occasion.
At page 1128 of Hansard of February 13, 1956, before the amendment was put, he ended his speech with these words:
For that reason, sir, I am going to suggest that while I intend to vote against this motion it is only because of what has already occurred and of which I have given an example, and it does not indicate that we are not giving careful consideration to all methods which affect the taxpayer, especially those who are obliged to spend considerable sums of money with respect to medical expenses.
And then, sir, after the amendment had been voted down and the minister was about to apply the guillotine to the discussion on the main motion, he used these words, reported at page 1133:
We have heard expressions of opinion from, I think, all the opposition groups and from the government side. I have made an engagement to give serious consideration to the amended resolution or motion. Of course I fully appreciate the fact that hon. members expect us on all occasions to consider the 3 per cent floor or ceiling, as you will.
That, I take it, sir, was an undertaking in clear terms on the part of the Minister of Finance to give serious consideration to two things: first, the removal of the present 3 per cent limitation on the right to deduct medical expenses-the subject matter of the present resolution-and, second, the proposal to permit deductions also, at the option of the taxpayer, of contributions made by him whether in the form of payments to a private insurance scheme or to some form of public hospital or health insurance plan. So far as that undertaking by the minister is concerned I suppose that the minister's parliamentary assistant, if he utters the time-honoured-I should not say "honoured"-if he expresses the invariable negative attitude of the government on this matter, will repeat those assurances.
We want something more than those assurances. We have not yet seen any tangible result of whatever consideration the minister has been pleased to extend to this subject.
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But if we were given an undertaking that something might be looked for when the minister brings in his budget, that would certainly be received with very great interest.
The third matter that calls for some mention is the question of the introduction of a scheme of hospital insurance. If and when such a scheme is introduced and becomes effective, undoubtedly this whole subject embraced now within the scope of section 27 of the Income Tax Act will require some reexamination, especially if conditions are going to vary as among different provinces. That is a bridge that we can cross at that time; in the meantime, let us deal with the situation as we find it.
The fourth matter which I should like to mention is the subject of the scope of "medical expenses", as that expression appears in section 27 of the act. As now defined, it is my submission to the house that that expression is too narrow in scope. This is not the first time I have directed the attention of the house to this matter. Indeed, I have done so on many previous occasions.
Let us look, first of all, at the subject of drugs. It should, I think, shock the conscience and the intelligence of most Canadians to think that with only five exceptions whatever is expended on drugs for medicinal purposes is not treated as medical expenses under this section of the act. Why should that be so? Surely outlays by a taxpayer on the purchase of necessary drugs are just as essential, in the course of seeking relief and applying medical knowledge, as the skill of the physician who prescribes the drugs themselves? And yet this statute, without any pretence of logic and, in my view, with no regard for elementary considerations of fair play and justice, does not, in general, permit the deduction of expenditure upon the drugs.
It is true that by special amendments exceptions were made, in the first place, for four drugs, and in a later session, for one more drug. Thus we have the curious, the anomalous situation today that expenditures on these five drugs-insulin, cortisone, ACTH, liver extract injectible for pernicious anaemia, or vitamin B-12 for pernicious anaemia are deductible as medical expenses, but expenditures on all other types of drugs for medicinal purposes are not allowed as deductible. By what curious logic, by what extraordinary demonstration of the art of reasoning do we single out these five drugs and deny similar treatment to all other drugs used for medicinal purposes? These exceptions are proper. They should be allowed. They were approved by all

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parties in this house. But, Mr. Speaker, on what theory, by what justification, do we stop there? There are many other drugs that any physician will tell us are required in considerable quantity by chronic sufferers from various maladies, and expenditures by such sufferers in the course of necessary treatment can amount to a very considerable sum. And yet we deny any form of relief to those who require such drugs.


William Moore Benidickson: What about the decrease in the floor from 5 per cent to 4 per cent? It was explained that that was for drugs.


Donald Methuen Fleming: Mr. Speaker, that decrease from 5 per cent to 4 per cent was made in 1944. The exception in favour of the five drugs was made in quite recent years. I think the parliamentary assistant has quite overlooked that fact. What he has said does not touch in the least the point I am making-that you deny in general any right to deduct expenditure on drugs, but you recognize the right with respect to five of them. Where is the sense or logic in that? If you admit the principle is sound of allowing a deduction from taxable income for tax purposes with respect to these five drugs, how can you maintain the principle that expenditures on other drugs properly prescribed should be denied?
Now, Mr. Speaker, there is another matter to which I have referred on previous occasions, and it relates to the method of prescription. In the case of the physician who does his own dispensing and includes the cost of medicines and drugs in the account he renders for his own services, the Department of National Revenue accepts the physician's account, including, in that case, the cost of drugs used. But in the case of an urban physician who does not do his own dispensing

a physician who writes his own prescription which is then taken to a pharmacist

any right to make a deduction in respect of those drugs and medicines is denied. Where is the logic there, sir? I do not think there is any. The whole matter is shot through with anomalies, and this government, though knowing of these anomalies, and having heard them discussed in this house, year by year, has done nothing to correct the situation in all the T2 years I have been a member.
If the government will not listen to reason in this matter, perhaps they will at least listen to the voices of the women of the Liberal party. Today's newspapers carry an account of some resolutions which were passed on Saturday the 16th of this month

at a meeting of the National Federation of Liberal Women of Canada held in the city of Toronto.
We read that among the resolutions passed by these worthy ladies was the following one, and I quote from today's Globe and Mail: It was also urged that the Income Tax Act be amended so that the cost of medical prescriptions required outside of hospital confinement be added to the list of exemptions for medical expenses allowed under the act.
I do hope due attention will be paid by the government to that expression of opinion on the part of these worthy Liberal women. If the government will not listen to reason, then at least let them listen to the voices of the Liberal women expressed in this resolution passed on the 16th day of this month.
The other matter, and it is not a new one, relates to the anomalies that arise with respect to certain aids that the act permits to be included within the scope of the deduction while denying inclusion to others. The provision with regard to the inclusion of certain aids for disabled persons was introduced into the act in recent years. The inclusion extends to an artificial limb, an iron lung, a spinal brace, a brace for a limb, an aid to hearing or a wheel chair for the taxpayer, his spouse or any dependent. These are all sound and proper expenditures to include within the scope of medical expenses which a taxpayer should be allowed to deduct.
But, sir, having recognized the principle in the form of the aids within that list, by what reason or logic are aids to sight excluded? If it is reasonable, and I think it is, that hearing aids should be included within the scope of medical expenses, on what basis of logic are aids to seeing excluded? The matter of expenditure on aids to sight is a very serious one in many families where children may have inherited certain visual defects from their parents. I have argued before and I assert again that aids to sight, whatever forms they take-glasses are the commonest form-should be included within the scope of permissible medical expenses.
Again I put it to the house and particularly to the government that if it is sound to include under medical expenses a hearing aid, an artificial limb or these other aids, then certainly there is no logic to sustain the exclusion of spectacles and other aids to sight.
From this partial review of the anomalies in the present section 27 of the Income Tax Act it is quite evident that what is urgently needed, what is long overdue, is a general review and revision of the whole subject matter of this section to eliminate anomalies and introduce good sense.
Then there is a final matter that should be mentioned. It is the subject of other

deductions. I am not going to attempt to take the debate afield, but 1 do say that this whole subject must be considered in relation to the other deductions that are permitted under section 27. In the case of blind and disabled persons I think we ought to be more generous than we have been in clause (d) of subsection 1 of section 27.
I come now to my conclusion. The burden of the cost of illness and accidents in this country is a very heavy one and it is growing. The cost of hospitalization, the cost of medical assistance, the cost of drugs and medicine, the cost of aids and all the things that enter into the expenditure that must be borne by those who are confronted with the misfortune of illness or accident, are all increasing, and we fail in our duty if we do not take into account this growing cost, this increasingly heavy burden.
Admittedly, if the resolution were passed and amendments to the Income Tax Act were introduced to give effect to the purpose of the resolution it would extend the administrative work within the Department of National Revenue. That is admitted. There would be a great many more medical receipts to be checked by those who do the preliminary checking of income tax returns. It would not involve any change in method. It would simply involve an increase in the number of receipts to be reviewed. Therefore it seems to me that the administrative difficulty is one simply not of method but of quantum.
Finally, I say that while the resolution is not the complete answer to the problem, while the problem has a good many other aspects to it, some of which I have attempted to sketch here, while the whole problem will need to be reviewed and re-examined if and when any scheme of hospital insurance comes into effect, nevertheless this is a resolution that should commend itself to the consideration of the house.
The principle that the Minister of Finance argued for when this matter was last under discussion is undeniably sound, that in extending the benefits of tax reduction and tax relief we should seek to spread them as far as possible and as equitably as possible. But, sir, that is a poor, hollow and shabby excuse for turning one's back upon proven inadequacies and anomalies in the act. This is not simply a matter of tax relief. This is a matter of seeking to redress a situation which as it stands today smacks of unfairness and certainly of serious anomalies.
Therefore, sir, thinking that the type of provision sought in the resolution will be of very wide benefit and will assist the taxpayers of the country, we consider the resolution to be one that fully qualifies within the
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general principle of taxing legislation which was supported by the Minister of Finance. We desire that any form of tax relief should be extended as widely as possible. This is one form of belated redress that will bring wide benefits and at the same time will correct serious anomalies and undeniable injustices that exist in the present act.


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, resolution No. 1 simply asks the government to do a certain thing, namely, to give consideration to a certain proposition. Inasmuch as the resolution asks the government merely to give consideration to something, I find it very difficult to understand why the government would oppose it. I realize that the government assumes that simply because it is asked to give consideration to a certain proposition therefore everyone is suggesting that the government is committed to doing that thing. What is it that the resolution asks the government to do? It asks the government to give consideration to the advisability of introducing legislation amending the Income Tax Act so as to remove therefrom the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes.
The resolution is not new. We have had it in similar form before, prior to having it in almost identical form. About the only change there is is to 3 per cent. For example, when it was 4 per cent, it asked for 3 per cent and so on. We favour the principle of this resolution and I hope to be able to point out two or three reasons for it. It seems unnecessary to go into great detail. Those who preceded me in debate have advanced sufficient arguments, I believe, to warrant our favourable consideration of that proposition.
I may say to the hon. member for Winnipeg North Centre (Mr. Knowles) that, from the way things have been going, I think he can look for a solution to the problem which is brought forth in this resolution in just about eight years from now. I mean that is what he can look forward to at the rate things have been going. But of course in assuming that it will take eight years to solve the problem, I must proceed on the very fantastic assumption that the present government will be in office at that time.
It has been pointed out, Mr. Speaker, that back in 1944 the 5 per cent floor was reduced to 4 per cent. The year 1944 was close to an election year. After 1944 we find the motion being defeated in 1951, the motion being carried in 1952, debate being adjourned by the minister in 1953 but the budget reduced it from 4 per cent to 3 per cent in an election year. Working on the assumption that this is an election year, we can hope for a reduction from 3 per cent to 2 per cent. Then, of course,

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there will be resolution debates at the end of which maybe some motions will be carried and others will be defeated, but about 1961 you could hope that the percentage would be reduced from 2 per cent to 1 per cent and of course four years beyond that from one per cent to nothing.


Stanley Howard Knowles: The government will be
down to nothing then.


Frederick Davis Shaw: With the present government in office, that would be the picture. But I am sure no other government would take that long.
Reference has been made today to the fact that certain drugs are deductible under the Income Tax Act. I have before me the income tax form for the year 1956. I find it extremely hard to reconcile with fact what appears on that form. Not only do I find it difficult to do that but I find inconsistencies throughout it all. For example, I think it is under section 27 of the act-it is not mentioned by number here-these are the instructions given to the person filling out this form. The form states:
The following are the types of expenses you may claim:
2. Payments for injectible liver extract or vitamin B12 for pernicious anaemia, insulin, cortisone, ACTH, and oxygen, if prescribed by a medical practitioner, and payments for an artificial limb, spinal brace, brace for a limb, hearing aid, wheelchair, or iron lung.
The only one with which I am concerned at this moment is drugs. There is below a paragraph which states:
The following may not be claimed as medical expenses:
. . (d) Payments for drugs or medicines, other than as indicated above.
That is in the form from which I am now reading.
I am suggesting that that is wholly incorrect if not wholly false, and I am going to point out why. Here is a patient who may be at home; here is a patient who may be in a small hospital; and here is a patient who may be in one of the large hospitals having its own dispensary. What is the situation? For the patient at home-and that patient may be at home for very good reasons; the doctor may indicate that that patient is not a hospital patient and that it is far better for the patient to be at home-drug bills may run as high as $100 a month. There is a patient who in the course of say 12 months incurs $1,200 in expenses for drugs and who cannot count one single cent of it-unless it is one of those mentioned in the act, but I am talking about drugs other than that such as morphine et cetera-by way of deduction. Then here is the patient in the small hospital that does not have a dispensary, and this is the common practice. The hospital, learning

from the doctor the drug required, will order it from the local drug store or pharmacy where it is billed to the patient and paid by the patient as an account quite separate from that of the hospital. There is no deduction for that. We now come to the patient in a hospital where they have a dispensary. There may be hundreds of dollars involved as costs for not just drugs but salves, ointments, et cetera, but they are provided by the hospital through its own dispensary, and are billed through to the patient as part of the hospital cost and the whole thing is deductible.
Can anyone suggest to me that there is any fairness whatsoever to a situation of that kind? I can produce evidence to back up what is happening in that case. While I do not like to do these things, I do not have to go very far beyond personal experience.


Mr. Winch:: Come right over here.


Frederick Davis Shaw: The hon. member for Eglinton (Mr. Fleming) was wrong when he said that under no circumstances are drugs other than those listed here allowed as deductible expenses under the Income Tax Act. He is quite wrong in that because, as I say, if the expense is billed to the patient by the hospital as part of his hospital bill, then it is included.
Let me point this fact out also, Mr. Speaker. I may have a doctor attending me, one who is extremely competent. Suppose he advises me that it is necessary for me to be hospitalized and as a result I am hospitalized. It is my understanding that the hospital gives nothing that the doctor does not prescribe in the way of medications, drugs, et cetera. Yet in certain cases with which some of us are quite familiar, the same doctor says, "Look here, the best place for that patient is right at home; it is not a hospital case; psychologically and in every other way the patient is better off at home. But I will give you the same prescription written with the same hand and with the same authority." Then someone goes to the drug store and presents the prescription and buys the drugs. Since the same doctor is involved, since the same drugs are required and since the person pays, for the life of me I cannot see why they should be treated differently.
I know full well, Mr. Speaker, that you would have to draw the line as to allowing patients just to run to the drug store and buy patent medicines because I suppose there are some people who more or less live on those things. If there is not something wrong with them, they imagine that there is and labels appeal to them, and they probably eat

and drink these things in the main. But surely if you have any confidence whatsoever in a licensed practitioner who is also authorized to practise his profession in the hospital, I think our thinking should go far enough that such prescriptions, whether utilized by the patient at home or in the hospital, should be regarded as included within those allowable medical expenses. I do not know who may be speaking for the government on this resolution but I should like that matter to be dealt with. I should like to secure some evidence to justify that position if it can be justified. Personally, I do not think it can be justified.
We approach this resolution, Mr. Speaker, purely from the standpoint of the principle which it contains. I am impressed by the argument that here in the case of individual contributions to charities, every cent up to a certain ceiling is allowed. Why does not the government say, as it will do in the case of medical expenses, "Under 3 per cent is normal", if that is a sound argument, that contributions to charity are normal up to a certain point? What I mean is that there is a conflict in principle. I am not arguing against allowing all charitable donations to be included for deductibility. But the very same reasoning applies to that sort of thing. Surely we should face up to the matter in quite a different way than we are doing at the present time.
I am not going to occupy the time of the house further with respect to this matter. My colleagues and I have supported the motion in the past. We have supported the principle of it. We intend to do so again. But let me just re-emphasize what I just said recently. I think there are some acute inconsistencies and that there is a good deal of unfairness in the way in which the drugs are handled, giving some people the opportunity to include every nickel spent for drugs, far beyond the five mentioned in the act, even including salves, ointments and so on while others-because they stay at home because it is for the good of the patient-who spend maybe ten times as much as does the patient who is hospitalized, because they were not hospitalized cannot include any of it unless of course they happen to fall within that group of five mentioned in the Income Tax Act.
We certainly hope the government will give consideration to that because after all, Mr. Speaker,-I said this before-I do not suppose anyone likes taxes. If there is anything anyone likes less than taxes it is unfairness and inconsistency within the tax structure. I think this is one of the finest examples we have of inconsistency and unfairness. It is
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one thing that simply causes taxpayers to dislike taxes more than they would if there were not such things included.


Mr. Elmore Philpolt (Vancouver South):: Mr. Speaker, I wish to make a few comments on this particular resolution. I must say at the outset, not because I have any particularly strong opinions on it one way or the other, I think that, on this resolution, as in a great many of the resolutions moved by the hon. member for Winnipeg North Centre, you have to balance advantages against disadvantages, and in all of these things we have to answer two questions. First, is this a good thing? Second, is it a good thing at this particular time?
I submit, Mr. Speaker, that this is not a good thing at least at this particular time. If I had to try to find arguments to buttress that submission all I would have to do would be to listen to the hon. member for Eglinton (Mr. Fleming), who made it very clear this afternoon that if and when a national health insurance scheme is set up in this country the proposal set forth in this resolution would have to be revised. In other words, it seemed to me that the hon. member for Eglinton this afternoon completely conceded the argument which some of us have made in the last couple of years that this is an entirely different road of approach from the road toward national health insurance. As I read the debates that have taken place in this house over the past several years on this particular matter I am struck by the fact that at least some in this house who have never shown any enthusiasm whatsoever for the cause of national health insurance have been very enthusiastic advocates of this particular measure.
One point was made by the hon. member for Eglinton this afternoon which seemed to me to be rather amusing. He cited a resolution passed on Saturday afternoon in Toronto by the women's Liberal association suggesting that a certain medicine should be added to the list of those which are now included in the deductible medical expenses. Well, Mr. Speaker, there is no argument on that particular point, and it has very little relation to the actual resolution before us today. I remember in a debate on this particular matter last year the hon. member for Westmorland (Mr. Murphy) made a very strong plea for including in the drugs which are eligible for deductibility the drugs used in the treatment of epilepsy and certain other diseases. If we were dealing this afternoon with a resolution along that line I would think it might get a very wide measure of support indeed, but that is not the resolution before the house today.

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Before I deal briefly with the actual issue before us, Mr. Speaker, may I, as a very humble member in my first parliament, suggest to the opposition that it is not very tactful argument to castigate the government because the government might show a tendency to accept one of those resolutions and then perhaps not deliver immediately. We have had two self-contradictory arguments on that particular score this afternoon. We heard the hon. member for Eglinton chide the present Minister of Fisheries for having accepted this resolution a few years ago when he was parliamentary assistant to the minister of finance. Then we had the hon. member for Red Deer immediately follow him and suggest that the government should accept this resolution without any more delay. Well, Mr. Speaker, I submit it is a poor argument for the opposition to try to pin the government down too closely on the acceptance of these particular things.
Over the past four or five years I have had the experience of time after time supporting motions or even bills submitted by the opposition. I intend to do so, because as long as I am here I intend to support anything from any side of the house which seems to me to be right. I think it is a poor argument for the opposition to use to try to make it a little more difficult for those of us who sit on the government side of the house to give impartial consideration to these things as they come up. And if I might suggest in a friendly way, it is also poor tactics for them to put the government on the spot too acutely if the government shows a disposition, as the Minister of Fisheries did on that particular occasion, to accept a resolution rather than have the matter put to a vote.
There are some things that I should like further information on from the hon. member for Winnipeg North Centre, or from some other speaker, before I come to a final conclusion on this matter today. I have heard it suggested that what is asked for is the removal of the floor but to leave the ceilings as they are. I frankly confess that I am quite unable to see how it would work out. I remember the occasion when I believe the present Minister of Fisheries made the move which is the cause of the controversy-I think it was the same year; certainly it was about that time-he pointed out that if we were to adopt an unrestricted use of the suggestion which is now before us the people who would be the chief beneficiaries would be the people who could not make the trip.


Stanley Howard Knowles: Will the hon. member permit a question?


Elmore Philpott: Yes.


Stanley Howard Knowles: Is he aware of the fact that the point which the present Minister of

Fisheries made, to which he is now referring, was made in 1951, and in order to clear up any doubt on the point I reworded the resolution the next year? He will realize, then, that the resolution now before us is different from what it was in the year in which the minister was able to make that point.


Elmore Philpott: I thank the hon. member for the interjection. It clears up the point which was giving me serious doubt.
Let me again make it clear that my main objection to this resolution at this time is its timing. I think it tends to delay the coming into effect of a national health insurance scheme in Canada. Therefore, I think it is unfortunate that we have had it raised again at this particular session when, as we know, the whole scheme is hanging fire and depending on the accession of the requisite number of provinces if the scheme is to go through. In that regard, we remember that in a parallel discussion last year because, Mr. Speaker, I do not believe we can differentiate too clearly between the two discussions that took place on this general matter last year any more than the hon. member for Eglinton did earlier this afternoon when he intermixed the two; that is, the resolution moved last year by the hon. member for Winnipeg North Centre and a similar resolution in almost parallel terms introduced by the late Dr. Trainor. At that time some of us pointed out that if we were going to have not only unrestricted deductibility of medical expenses with no floor or qualifications but also the exemption of premiums paid under public hospital schemes that was proposed at that time, we would be treading on extremely dangerous ground. Indeed the further suggestion was made this afternoon in the question asked by the hon. member for York West (Mr. Hamilton) of the hon. member for Winnipeg North Centre that premiums paid to private insurance companies be made deductible from income tax, and if this suggestion together with the previous two suggestions were implemented the danger would be enhanced.
I submit that among other things the general effect of the implementation of these proposals would bring about two dangerous situations. It would shove entirely on the federal treasury the burden of the cost of hospital, health and medical schemes in Canada. That is my first objection. The second objection which is perhaps even more important is this. There is an implication that somehow or other we can implement all the proposals that have been made and produce these wonderful benefits without anybody paying

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for them. In all fairness to the hon. member for Winnipeg North Centre, whom I admire for the assiduous manner in which he operates-I think there is no one who burns the midnight oil longer than he or who prepares his homework better-I would point out that if he has a weak spot it is that he tends to create the impression that he thinks all these proposals can somehow be implemented without anybody paying for them.
When I was reading over the debates of two years ago relative to this particular matter, his colleague the hon. member for Vancouver-Kingsway	(Mr. Maclnnis) in
supporting the hon. member for Winnipeg North Centre said some words which I think were addressed as much to his own colleagues who sit immediately around and behind him as they were to those of us who sit on this side of the house. The hon. member for Vancouver-Kingsway said, as reported at page 1134 of Hansard of February 14, 1955:
I am talking as one who does not complain in this house about taxation. I doubt if I have ever spoken against the incidence of taxation in general, though I might have advocated higher exemptions for those in the lower income brackets. Though taxes have been heavy since the beginning of world war II I have not complained, and in truth I do not believe we have been overtaxed. I shall give my reasons for saying that in a moment.
On the next page of Hansard for that date the words of the hon. member continue as follows:
I do not want to reflect on anybody when I say this, but I think there is this possibility. If the whole of the expense for illness were to be allowed as a deduction for income tax purposes it would mean that receipts would be required from dentists, doctors and every other person who does a service on behalf of a sick person. I am quite sure that such a deduction would bring greater revenue to the government, and that the deduction of the whole sickness expense would not be altogether lost. I think that when, as has already been said, we allow the whole amount of charitable donations as a deduction from taxable income, there is no good reason why medical expenses should not be deductible in the same way.
I am not attempting to suggest that the hon. member for Vancouver-Kingsway was not supporting the proposal made by the hon. member for Winnipeg North Centre, because he clearly was, but it seems to me that in those two quotations he was reminding the whole house that you cannot get a benefit without a tax and that someone must pay the cost of these things.
I believe that the general proposal that has been advanced today can be safely left to the government for implementation and proper reform at the appropriate time. It was this government of its own volition that
first introduced the principle of deductibility and on two subsequent occasions lowered the floor.
There is one final objection in my present thinking to this proposition advanced by the hon. member for Winnipeg North Centre. It seems to me that if this proposal benefited anybody it would benefit most those who least need help. It would bring no benefit whatsoever to the very large number of Canadian citizens who are altogether exempt from paying income tax for the obvious reason that they do not receive enough income to qualify for taxation.


Mr. Gillis:: Shame.


Elmore Philpott: It also seems to me, Mr. Speaker, that the net effect of the proposal would be to remove some of the burden from those who are best able to carry it and simultaneously place a greater share of the national burden on those who are least able to bear it.


Harold Edward Winch: Mr. Speaker, it is with some amazement that I rise to speak at this moment following the hon. member for Vancouver South. I find it difficult to actually believe that the citizens of British Columbia would send to this house even a Liberal who would advance his kind of argument in opposition to the resolution that is now before the house.
It would appear to me that the major objection of the hon. member for Vancouver South, which emerged after I sorted the wheat from all the chaff, was that he feels this resolution is untimely. As I interpret his remarks I gather he feels it is untimely because there is a possibility that a health and hospital insurance plan will be implemented at this session. I am certain the hon. member can get a lot of very long odds that we are not going to receive a health insurance plan from this government for a long time to come. You cannot bet on the floor of the house but I am convinced that it would be possible to get long odds on this matter. As a matter of fact, although we are hopeful of health insurance, I think we will be most fortunate if we have implemented a national plan of hospital insurance before this year is out.
The hon. member for Vancouver South advanced the argument that if this resolution were adopted and legislation were introduced it would be untimely and would have a bad effect if we had a plan of hospital insurance or health insurance. Why would it make any difference as far as the Income Tax Act is concerned if we had a health or hospital insurance plan in effect?
We have had a hospital insurance plan in operation in the province of British Columbia

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for many years, but the people have to pay for it and do so by means of a 5 per cent sales tax. If people in that province go into hospital, and many thousands of them do, they receive a slip on their discharge from B.C.H.I.S. indicating the cost of their hospitalization. These patients have already contributed to the hospital insurance plan through the 5 per cent tax. The amount they are required to spend for treatment and hospitalization is deductible from their income tax.
I know this because I already have two such slips in my possession totalling in the neighbourhood of $2,000 for last year and these are deductible from my income tax, because it is something which I have paid for together with all the taxpayers of that province. The only point on which we differ in this respect is that at the present time it is only possible to deduct medical expenses over and above 3 per cent of income, and basically I cannot see any validity in the argument raised by the hon. member for Vancouver South.
I cannot conceive of this or any other government, knowing that the taxpayer must pay directly or indirectly-most certainly in health and hospitalization plans it is directly, up until now at any rate-for the cost of service, not agreeing it should be deducted as a medical expense in connection with income tax in the future.
I admit that I will have to be repetitious to some extent, but I shall be brief. I feel strongly about this matter. I want to add to what has been said by a number of those who have spoken so far and indicate my emphatic support of the motion. I agree with others who have said that because of the regulations and interpretations now in effect with respect to the deductibility of medical expenses it is most important that at least a part of this problem be solved. It is most difficult to understand the thinking of a government which says it is all right to deduct the cost of certain drugs as medical expenses, but not the cost of others. Most of us have had the experience of going to a doctor on behalf of ourselves or our family and finding that in about 99.9 per cent of the cases he writes out a prescription which costs between 50 per cent and 200 per cent of his bill. That is just as much a medical cost as is the doctor's bill. Why that should not be included as a medical expense for the average worker on an average income is something that can be understood only by the mental incomprehensibility of a Liberal, because no one else could possibly understand it.
The same thing can be said with regard to glasses. In advertisement after advertisement

in the newspaper and on T.V. we as Canadian citizens are being told to take care of our eyes, especially the eyes of our children. You go to an optometrist and his bill is deductible under the medical section of the Income Tax Act, but the cost of the prescription which he writes is not deductible and your glasses may cost anywhere between $20 and $45. It just does not make sense.
If you are hurt in an automobile or industrial accident or are faced with an operation and must go to the hospital in an ambulance which costs you from $10 to $15, as far as your family is concerned that is a medical expense but it is not deductible under income tax regulations.
Because of all these things which are not covered I submit that we should give the most serious consideration to this resolution now before us. Perhaps you and I and the hon. member for Vancouver South (Mr. Phil-pott) with our $8,000 a year can stand the cost of an average illness, but I think all of us know, or should know, that to the average family an illness is a mighty serious matter. A brief illness can be mighty serious. In the case of a mother and father whose children are just growing up the cost of a doctor's services, hospital expenses and medicines can constitute a vicious blow to the pocketbook of the average worker in this country.
We should be most vitally interested in the health of our people; we should be ready to assist them in maintaining their health and therefore we should give consideration to the principle of this motion which provides that medical expenses shall be deductible right from the first dollar. I know I am repeating what has been said before, but I think it should be repeated time and time again until it sinks into mentalities such as that of the hon. member for Vancouver South. We all agree that when out of the goodness of our hearts and because it is necessary we donate to charity that should be exempt right from the first dollar, but if we as parents who are concerned for the health of our children, when we as husbands are concerned for the health of our wives, are faced with medical expenses we find that we must start with the 3 per cent limitation.
How can anyone who calls himself an intelligent member of the House of Commons, one of the elite 265 out of 16,600,000 people, say the government is right when it says, "If you give to charity you are from the first dollar exempt, but if you pay for the protection of the health of your family and yourself you must start at 3 per cent"? Just how stupid can some people's reasoning get?

I am not approaching this on the basis of this being an election year; it is a question affecting the expenses and income of the people of the Dominion of Canada. This is a most important principle we are considering. It is not something such as was contained in the concluding remarks of the hon. member for Vancouver South who suggested that the members of the three opposition parties should leave this to the "good judgment of the Liberal government which has always in the past known the right time and place to bring in necessary reform".
That is the very reason why this government should be condemned in the most outspoken terms and votes. We know its history and its record show that it does not do things because they are right and at the right time; it does things because it is forced by public opinion and the pressure of opposition parties in parliament. If it would only do things because they are right and at the right time, that would be different. The right time was years ago. But we would not condemn people too severely because they have not acted in the past if they would just confess their sins and do the job now.
I hope that this motion will pass and that the government will recognize that the opposition are governed by the rules of parliament. We can only move 'consideration' when a matter involves policy or expenditure. The government members know just as well as you and I that when a member of the opposition moves a motion in the only language he can use, or when a private member on the government side of the house moves a motion, and it carries by a majority vote, that it is an order to the government which should be followed if it believes in democracy. Let us see this motion put into effect this session and not just be a promise next June.


Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, I listened with a great deal of interest to the hon. member who has just taken his seat. I admit I heard a great deal of vituperation against this side of the house and against the federal government, but I confess I heard very few arguments in support of this resolution.
The persistency with which the hon. member for Winnipeg North Centre introduces this resolution year after year is such that it is becoming a perennial; in Newfoundland we would call it a hardy annual. This resolution, or resolutions similar to it, have been debated over and over again, session after session, since I believe 1942, and surely everything that could be said on this question
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has already been said. One wonders, therefore, whether any useful purpose can be served by debating the subject again today.
The resolution, of course, calls upon the government to consider the advisability of amending the Income Tax Act so as to remove the 3 per cent floor relating to the deductibility of medical expenses for income tax purposes. The purpose of the resolution is to urge the government to make all medical expenses deductible for income tax purposes. The hon. member for Winnipeg North Centre already has two other bills on the order paper, Bills Nos. 12 and 13, to amend the Income Tax Act, in addition to this resolution which we are debating at the present time. There seems to be no end to the amount of free advice which the Minister of Finance is receiving at this time with respect to the budget which now, we understand is in the course of preparation.
In introducing his resolution the hon. member referred to the fact that an election might be in the offing, and that the present might therefore be an appropriate time for the government to accept the resolution. Surely, Mr. Speaker, no one would suggest that this torrent of free advice with which the Minister of Finance is deluged at this time is in any way related to the possibility that an election may be held this year. I think we should be quite clear on that point, Mr. Speaker, because were this resolution, or the acceptance of it, related to the fact that this might be an election year it would indicate that we in this house seriously underestimate the intelligence and common sense of our constituents.
The average voter knows that the government has no money of its own, and that it must collect all the money it has in various kinds of taxes, of which income tax is one. The average voter also knows that the government is continually being asked to spend more and more money in various ways; for larger old age pensions, more public works, a national health plan and many other things. It is not a very high compliment to the voters' intelligence to try to make them believe that the government can spend more and more money while at the same time collecting less and less in taxation.


Stanley Howard Knowles: Wait until you see the budget.


Chesley William Carter: In the estimates tabled this session it is shown that we are spending over $13 million more on family allowances, simply because of the increase in our population. At the same time we are spending another $13 million extra on old age pensions, not because the rate has been increased but because, due to our improvement in health standards, more

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and more people are living to the age of 70 and drawing these benefits.
We know this resolution emanates from the great humanitarian feelings which motivate the hon. member for Winnipeg North Centre who introduced this motion. For those feelings we all admire him, but we all have humanitarian instincts, and if we were to take nothing else into consideration we would collect hardly any taxes at all. Unfortunately it costs money to run a government, and the more demands we make on the government the more money the government must have. Therefore, much as we would like to do all sorts of things for our constituents, whether an election is on the horizon or not, our humanitarian feelings must be governed by the hard realities of economic fact.
Someone has estimated that if the Minister of Finance acted on all the advice which has been tendered to him this session his expenditure would be increased by nearly $2 billion a year or almost 40 per cent, while at the same time his revenues would be decreased by about $500 million. The average Canadian is intelligent enough to know there must be taxes. He knows that the social security and other things which he is demanding of the government cost money and that they must be paid for, and I believe every Canadian who is in a position to pay taxes is willing to bear his fair share of the tax burden according to his means. The whole basis of the taxation policy followed by the federal government is to distribute the tax burden among the people of Canada as fairly as possible.
For that reason a married man whose income is $2,000 or under pays no income tax at all. A married man with an income of $3,000 pays a tax of $160. A married man whose income is $4,000 pays $340 in income tax, and the man who has an income of $8,000 pays an income tax of $1,140.


Stanley Howard Knowles: May I ask the hon. member if he is quoting the rates for 1956? I think those are the rates for 1955 he is now quoting.


Mr. Murphy (Lamblon West):: It is a
wonder it was not 1945.


Chesley William Carter: Whether they are 1945 or 1955, they follow exactly the same policy the government has always followed, of distributing the burden as fairly as possible; and when reductions are made those reductions are made so everyone can get a fair share of the tax relief.


Clayton Wesley Hodgson: Too much in any case.


Stanley Howard Knowles: It still would be a good idea to have the figures correct.


Chesley William Carter: The figures I mentioned were for married persons with no dependents and I chose them deliberately because these people would have the maximum tax that would have to be paid.


Clayton Wesley Hodgson: Still too much.


Chesley William Carter: A person with dependents would have his income tax reduced considerably. The present floor of 3 per cent deductibility in respect of medical expenses follows exactly the same principle. A man who earns $3,000 can deduct everything over $90. A man who earns $4,000 can deduct everything over $120. A man who earns $8,000 can deduct that portion of his medical expenses exceeding $240.
But the principle set forth in the resolution before us today departs entirely from the principle of sharing the burden equally in proportion to means. When I saw that this resolution was on the order paper for today I took it upon myself to try to get some figures. The figures I am going to place on record were given to me over the telephone and are taken from the 1954 taxation statistics. I have not had an opportunity to check them all, but I am not quoting them for the purpose of making a statistical record. I am quoting them merely to illustrate a point.
According to the statistics for 1954, the total labour force was somewhere around 5,393,000 people. Of these, 4,803,000 submitted tax returns. Of the number who submitted tax returns, 1,393,000 were not taxable. I should like to point out that these 1,393,000 Canadians would benefit in no way whatever if the resolution were adopted. They do not pay any income tax at all; therefore they have no exemptions, and if we removed the floor on deductibility of medical expenses they would not benefit one little bit.
When the hon. member introduced his resolution he spoke of it as raising a grievance. I think these 1,393,000 Canadians would have a grievance if the government were to have legislation passed which would benefit people more fortunate than themselves and in such a way that they could derive no benefit from it whatever. The total income of the 3,410,000 people who submitted income tax returns in 1954 and were taxable amounted to $13,379 million. That works out to an average income of $3,433. That is the average income of the average Canadian taxpayer. If we take the larger figure and include those who submitted returns but were not taxable, the average income of Canadians works out to approximately $2,800.

I mentioned a moment ago that the figures I am quoting are for 1954. It is possible that some changes have taken place since then. The total labour force has probably gone up to somewhere around 5.6 million. I do not have the correct figures. It is possible that the average income has also gone up. Therefore I do not think we would be very far out if we took $3,000 as the average income of the average Canadian worker. On that average income of $3,000 he would pay a tax of $140. If he has a heavy hospital bill he he can claim exemption for everything in excess of $90. In other words if his medical expenses were big enough his income tax would be reduced from $140 to $90.
I was interested in finding out how many average Canadians there are. The arguments put forward by my friends opposite seem to be based on the assumption that the bulk of the income tax is collected from rich people. The little research I was able to do revealed to me that there are very few rich people left in Canada. As a matter of fact, in 1954 there were only 376,570 people who had incomes of over $5,000, and an income of $5,000 is not very excessive in these days. When we reached the higher bracket of $10,000 I found there were only 68,670 people who had an income in excess of that amount. Out of a working force of over 5| million that is a small number of people indeed. My point in mentioning the matter, Mr. Speaker, is to emphasize the fact that the bulk of our income tax is collected from the small taxpayer. If we do not collect it from him we do not get it.
I should very much like to be able to see income tax done away with altogether. I think everybody would like it. It would certainly be very popular, in view of the prognostications of my friends on the other side of the house. It certainly would be one way of making one sound very popular. But if we did that, where would we get the money with which to supply all the other things the taxpayer wants?
I do not think the ordinary taxpayer of Canada expects to get something for nothing. I do not think he is foolish enough even to fall for the argument that he can get something for nothing, or that the government can continue to give him more and more and still collect less money with which to pay for it. The money must come from somewhere.
I should like to make it quite clear, Mr. Speaker, that I am not opposed to reducing the burden of medical expenses on anybody. I should like to see it done. But I do not think this resolution is the right way in
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which to do it. It seems to me that there are many ways in which relief can be given to people, the small man particularly, I think there are many ways which are much better than that indicated in this resolution.
One way, of course, is to create an atmosphere where full employment can be maintained, where full wages and better wages can be made possible so the individual will be in a better position to look after his own expenses instead of having the government do it for him. Another way, which I think would be much better than that indicated in this resolution, would be to increase the basic tax exemption. That action would certainly treat every taxpayer fairly, but it would not help the poor man who did not earn enough to pay taxes anyway. Another way would be to extend the scope of medical items which may be deductible. I think a good deal can be done along this line. The hon. member for Red Deer developed that argument at quite some length, but that has nothing whatever to do with this resolution. Much as I should like to extend the scope of medical deductions, passing this resolution will not do it because it has nothing whatever to do with anything except the removal of the 3 per cent floor on deductibility.
Another way-and certainly in my opinion it is the best way of all-is the national health plan, which has been talked about for some time and which seems to be drawing nearer and nearer to becoming a reality. Does my hon. friend want to do it both ways? Does he want to have a medical health plan which will take care of medical expenses and hospital expenses and then, when the income tax is paid, does he want to deduct that amount from income tax? I do not think we can have it both ways.


Stanley Howard Knowles: Let me tell the hon. member that if the government will bring in a complete health plan, covering both hospital and medical expenses, I will withdraw this resolution immediately.


Chesley William Carter: I will point this fact out to
my hon. friend. If we pass this resolution we make it more difficult for the government to put in a health plan, because we are reducing the revenue the government needs for that purpose.


Stanley Howard Knowles: By how much?


An hon. Member:: That is a weak one.


Stanley Howard Knowles: Would the hon. member
permit another question? Did I understand the hon. member a few moments ago to say

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that one cannot expect the government to increase expenditures and reduce taxes at the same time?


Mr. Mclvor:: That is right.


Chesley William Carter: If I said that, what I meant
was this. The government cannot spend more and more money and collect less and less money.


Stanley Howard Knowles: That is precisely what the
government will do this year.


Chesley William Carter: If the government spends
more than it takes in, it will have to borrow or suffer a deficit. I am not advocating that the government do deficit budgeting. I said earlier, Mr. Speaker, that the majority of Canadians were little people, with an average income of about $3,000, and that in 1954 the average taxable income was about $3,300. The amount of individual income tax collected from these people is quite small because it is scaled down in accordance with the taxpayer's ability to pay. If we remove this 3 per cent floor, we at the same time are doing something that will not benefit a great many Canadians but which, as was pointed out by the hon. member for Vancouver South, will benefit those who do not need the benefit. When a person earns over $5,000 he is in a position to make provision, through health insurance plans, to take care of his individual medical expenses.
Let us consider the position of the man who earns $5,000. He can deduct medical expenses over $150. Suppose he has a heavy medical bill. I may say right here that people with bigger incomes are less likely to have big bills than are poor people, because they are in a better position to find better shelter and better food and to take better preventive measures to ward off disease. But disease and illness can come to anyone. However, a man who has an income of $5,000 is in a position to take out some kind of health insurance which will pay his medical bills for him. Therefore, actually he does not have any bills to pay. In spite of that he can deduct them from his income tax. He can take the full deductibility and, as the hon. member pointed out, deduct something which has not cost him anything at all. It is a free gift from the federal government to the man with the high income at the expense of the man who is on the small income.


Joseph Warner Murphy: Will the
hon. member permit a question? I am sorry to interrupt. It is a very simple question. At the beginning of his remarks about 35 minutes ago the hon. member referred to the

sponsor of this motion and said it was a perennial motion or, as the hori. member said it was called in his province, a hardy annual and was unnecessary. Does the hon. member recall that it took several years to pass various pieces of legislation? I will just recite one instance. We in this party argued for taxation on crown companies from 1945 to 1949.


Mr. McCann:: That is not a question.


Joseph Warner Murphy: Has the hon. gentleman any objection to that?


Chesley William Carter: I did not get the hon. member's question.


Stuart Sinclair Garson: On a point of order; what
relevancy has this question to the speech the hon. member is making?-It has no relevancy whatsoever.


Joseph Warner Murphy: Yes, it has,


Mr. Speaker;: because if you will look at Hansard tomorrow you will find that the hon. member who now has the floor suggested quite emphatically that this subject which is being brought up by the sponsor of the resolution has been brought up annually and perennially and, as I take it, it did not amount to anything. I am suggesting that this same objection could be taken to the resolution on taxation of crown companies which was pursued from 1945 to 1949 to a satisfactory conclusion.


The Acting Speaker (Mr. Applewhaile):: The hon. member for Lambton West asked permission to ask a question, and I assumed that the hon. member for Burin-Burgeo who has the floor acceded to his request. At the same time I regret to say that so far I have not been able to hear the question. I thought the hon. member was making an observation, and the hon. member for Burin-Burgeo would be going rather far afield if he were to reply to it at this time. I am not trying to restrict this debate, because I do not think the house wishes it to be too closely restricted. But if the hon. member for Lambton West has observations to make, perhaps it would be better to have him make them at the conclusion of the speech of the hon. member for Burin-Burgeo.


Joseph Warner Murphy: Mr. Speaker, thank you very kindly for your observation. I was just trying to make a very simple point. I thought it was a very important one. It is this. The hon. member from our newest province who has the floor rather criticized the sponsor of this resolution-


The Acting Speaker (Mr. Applewhaite):: Order. I think the hon. member has just made the point that I was trying to make.

He has the right to ask a question for clarification or information, but he has not the right to make a point in the middle of the speech of the hon. member for Burin-Burgeo. He certainly will have that right when the hon. member has concluded.


Joseph Warner Murphy: Thank you
very much. Then I ask if the hon. member does not know that from 1945 to 1949 we pursued the same policy-


Stuart Sinclair Garson: So what; what difference
does it make?


Chesley William Carter: If my hon. friend will ask
his question when I finish I shall be glad to give him an answer.


Joseph Warner Murphy: I am afraid
you could not.


Chesley William Carter: Mr. Speaker, most of the
arguments made in support of this resolution today were based on the fact that charitable donations are fully deductible and that industries are permitted to deduct the cost of repairs to machinery. As far as deductions for repairs to machinery are concerned, I think they perhaps help the workers to earn better wages and thereby put them in a better position to pay their medical bills.
I said, Mr. Speaker, that there is a better way to handle this problem than the way suggested in this resolution. The best way of all is a national health plan, and I think that is the solution we should be working toward. When it comes to humanitarian feelings, we have as great a humanitarian in the Minister of Finance as any member in this house.


Stanley Howard Knowles: The applause at that point is pretty weak.


Chesley William Carter: And he does not need to be pressured by this house to do anything that is financially possible, having regard to all the demands, all the commitments, and all the priorities that must be given to those demands that are possible within the budget. I think it is much safer to leave it in his hands than to pressure him by passing this resolution. He may just find it possible to reduce the percentage of deductibility, I do not know; but it may not be possible to remove the floor altogether. Let us leave well enough alone; let us leave it to the Minister of Finance.
As far as I am concerned, Mr. Speaker, this resolution will not help 1,700,000 Canadians. It will not help the 1,393,000 Canadians who do not pay taxes, and it will help very few of the other 3 million who are in the $3,000 income bracket, who make up 50 per cent of our taxpayers, because 50 per cent of our 82715-88
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taxpayers are included in the range of $3,000 and under. Were I to vote for this resolution I would be voting for something which would benefit me personally but would benefit hardly any of the people I represent.


Clarence Gillis: Mr. Speaker, I do not wish to take up any more time than is necessary on this resolution, because it is a debate that has been carried on in this house for a long time and has been listened to by most hon. members. My colleague the hon. member for Winnipeg North Centre introduced it, and I agree with everything he said on the matter. There is no need for me to repeat it. However, the hon. member who just took his seat was very honestly mixed up, because I believe he did a lot of home work on his speech.


Mr. Cardiff:: Are we not all?


Clarence Gillis: A lot of people are mixed up but not honestly. I believe the hon. gentleman who just took his seat was honestly mixed up. He obviously did a lot of work on his speech, but I just could not follow his argument. If he is going to run in the next election I would not advise him to use the low Canadian average income as an argument against this resolution. He emphasized several times that over 1,300,000 Canadians work for incomes that keep them under the income tax exemptions.


William Moore Benidickson: We have higher exemptions than any other country.


Clarence Gillis: Well, the exemptions are not so high.


Stuart Sinclair Garson: They are the highest in the world.


Clarence Gillis: The incomes of that group are small and if I sat on the government side of the house I would not use them as an argument.


Mr. Pickersgill:: But this hon. member, as you said, is honest.


Clarence Gillis: That is what I said a moment ago; I said he was honestly mixed up. He is doing the best he can with a bad cause.
I think a lot of government members are mixed up concerning the question of the proposed national hospital insurance, which they feel is the cure for the ills described in the subject matter of this resolution. Hospital insurance will not have anything to do with the situation dealt with in the resolution. If the type of hospital insurance that is talked about is brought in it will merely be hospital insurance, and it will have no effect on the question of the exemption of medical expenses for income tax purposes.

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There is no one in this house who is foolish enough to think you can get something for nothing in this world, or that you can continue demanding more and collecting less to pay for it. Everyone realizes that.


Robert Henry Winters: Except the hon. member for Winnipeg North Centre.


Clarence Gillis: Two points have been raised here today. One is the exemption of over 3 per cent of all medical expenses including drugs. The hon. member for Red Deer pointed out that this is not only a hardship on some people, but there is also a piece of rank discrimination in the administration of the act in so far as hospital expenses are concerned. Those who are hit the hardest in this respect are those who live in the big cities. You do not have to go out of Ottawa to find an illustration. There are hundreds and thousands of people in the larger centres who are paying hospital insurance at the present time and who cannot be admitted to hospital because there is no bed space available.
If a person enters a hospital in a large centre which has its own dispensary and complete pharmaceutical set-up, the cost of drugs required by the patient is included in the total hospital bill; but people who are on waiting lists and have been ordered to hospitals by doctors but cannot be admitted through lack of space, who have to be treated at home perhaps for months, who have to hire a nurse and purchase their required medicines and drugs from commercial drugstores, are not able to include these costs in their exemptions for income tax although medical expenses incurred in that way are a legitimate deduction. The hon. member for Red Deer described this situation very clearly this afternoon. The same might be said of the smaller hospitals that do not have their own dispensaries but which purchase their drugs from outside and charge the patient for them. In instances like this there is no provision for exemption for income tax purposes.
Regardless of whether or not the government are prepared to lower the 3 per cent floor, I think they should take cognizance of the element of discrimination that was so thoughtfully described by the hon. member for Red Deer, who unfortunately had a personal experience of this nature in the very recent past. The government should take into consideration those people who are paying hospital insurance but who cannot be admitted to hospital and are obliged to undergo treatment at home. In some cases a chronic case is kept at home for psychological reasons. The expense involved in maintaining a miniature hospital in the homes of such people should be given careful study by the

government. This is a matter that has never been poined out before to my knowledge, and the hon. member for Red Deer deserves commendation for his excellent presentation of the problem this afternoon.
Someone on the other side suggested that this resolution's effectiveness is open to question. I suggest that this is the only way a private member can achieve a discussion on these matters. You cannot bring in a resolution that would involve the expenditure of money; all you can do is ask the government to give consideration to a certain problem.
Private members' day provides a forum where opinions can be exchanged and the good sifted from the bad. In this way those ministers who are responsible for estimates and changes in regulations at times receive a bit of good advice, and if nothing more it certainly provides them with an opportunity to make a speech in rebuttal and serves as a good mental exercise. The only way a private member can instigate a discussion of a problem is by introducing a resolution; in fact, the consideration of the resolution of private members is one of the important functions of parliament.
I do not think anyone should criticize the hon. member for Winnipeg North Centre for proposing this resolution year after year. He thinks it is right and many of us agree with him. Some of us have the courage to say so and others have not, depending on where we are sitting in the house, of course. The hon. member in my opinion is to be commended for digging into this kind of problem and giving us the benefit of his research. You know, research is his recreation. While some of us are looking at television he derives a great deal of pleasure from reading Beauchesne and probing into dark recesses containing musty tomes of facts, figures and statistics.
I merely rise at this time because I want to say for the benefit of my colleague that I appreciate his efforts and am willing to support him. I have argued in favour of the principle of this resolution on several occasions, and there is no need to repeat what I have said previously. I am sure that at this time every hon. member in the house is ready to vote for this resolution, and I do not want to hold up the vote any longer.


Mr. Ambrose Holowach (Edmonton East):: Mr. Speaker, I wish to speak briefly in this debate and join with those hon. members who have strongly supported the resolution:
That, in the opinion of this house, the government should give consideration to the advisability of introducing legislation amending the Income Tax Act so as to remove therefrom the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes.

Sir, in my view this resolution merits the support of every conscientious member in this house because it has as its broad objective removing once and for all a discrimination of the worst kind, namely a tax discrimination, which in reality penalizes those who have medical bills to meet. One might ask by what moral precept does this government retain in the Income Tax Act a provision which in practice penalizes those people who are restoring themselves to good health. One might ask what is -the purpose of a law which is so lacking in common sense and is in contradiction to the will of the people themselves. I just cannot imagine why the department itself has not brought in an amendment to remove this inequity. One arrives at the sad conclusion that while we members can rise on the floor of the house and ask that help be given to our people, the government does far too little in this respect.
The resolution before us proposes in an extremely practical way to make all medical bills deductible for the purpose of income tax.
We feel very much that it has a humanitarian concept, that it is morally right, that it will help those in the lower income groups who can least afford a continuation of high taxes and receive little relief from them.
The facts and history of this resolution are well known. It has been introduced year after year and on every occasion either has been voted down or talked out by Liberal members. Those are the same members who run up and down the country expressing themselves as being sensitive to the needs of our people. One of the disheartening features of this stubborn opposition to the adoption of this reasonable recommendation is the fact that the government is constantly inconsistent in its own policies.
One of the great social needs of our civilization is the necessity of inducing our people to endeavour to maintain good health. We believe the best way to do that is to assist them to provide for themselves. Surely no one will quarrel with that statement. On the one hand the government claims it is interested in implementing a national health scheme which if all the provinces participate will cost about $400 million per annum; yet on the other hand the government is indifferent and stingy when it comes to making a tiny concession to individuals so they may be encouraged to make voluntary efforts for the betterment of their health.
It is ironic that last week we should have debated the setting up of the Canada Council to promote the arts and humanities in Canada, 82715-88i
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and yet see this government remaining indifferent to the fact that basic to the enjoyment of the arts, basic to the creative efforts of our people, is sound health. I submit that the most glaring inequity is demonstrated by a recent decision of the Exchequer Court of Canada to the effect that membership dues in social service clubs paid by large corporations on behalf of their officials may be deducted. Surely if a tax write-off is justified for the promotion of business contacts it should be allowable for the essential business of keeping in good health. The following article appeared in the Montreal Gazette of January 23, 1957:
Court Allows Tax Deduction For Club Fees
The Exchequer Court of Canada yesterday ruled that social and service club membership fees paid by the Royal Trust Company on behalf of its officers can be legally deducted from its income tax.
The judgment, given verbally by Mr. Justice J. T. Thorson, reversed a decision of the income tax appeal board.
The judge said the company encouraged its senior officers to join social and service clubs, having paid 78 memberships in 48 clubs throughout the country in 1952.
The company had submitted the policy was consistent with good business practice and was carried out by other trust companies.
Mr. Justice Thorson said that during the court hearing one of the company officials claimed he had gained many valuable investments for his Arm as the result of a luncheon meeting with a client at a club. Similar examples were given by other senior officials.
The basic issue was whether the policy was good business practice, he added.
We in the Social Credit group strongly support this resolution. We want to see a halt called to some of the insensible features of our income tax law. In this present instance we believe these provisions are inhuman and represent a long-standing injustice.


Mr. A. J. MacEachen (Inverness-Rich-mond):: Mr. Speaker, I have followed the discussion this afternoon on the resolution moved by the hon. member for Winnipeg North Centre, and like my colleague the hon. member for Vancouver South I do not have any strong bias either pro or con, nor do I think I can reach the high level of moral indignation evidenced in some of the speeches we have heard from the other side of the house.
One of the interesting phases of the discussion this afternoon is the reference to the inconsistencies and anomalies which exist in the taxing system and the taxing laws of Canada. One desirable feature of a taxing system is simplicity, but as you give more and more exemptions and expect the taxing system to accomplish more and different things, there are bound to be a greater number of anomalies and inconsistencies in the

Income Tax Act
system. I suppose the historical purpose of the taxing system was to collect revenue and the taxes were revenue producers alone.
However, in recent years there have been other virtues attributed to the taxing system, mainly the possibility of affecting the level of investment and income and employment by the raising or lowering of taxes at the proper intervals. Many people find it anomalous that the government should have a surplus, and certainly it is anomalous if taxes are to be considered as revenue-producing only; but it is not anomalous when the taxing system is used to do something else.
During the discussion it has been made very clear that some hon. members feel that the taxing instrument should be used to achieve objectives other than the collecting of taxes and combating depressions. One of the inconsistencies referred to was the fact that contributions to charitable institutions or approved charities are deductible for income tax purposes. Presumably the purpose of that regulation or practice was not to assist the taxpayer, particularly, but to assist the charitable organizations by encouraging charitable giving.
This resolution attempts to give particular recognition to the taxpayer who in a particular year may spend money on medical bills. The taxing instrument is becoming more complex and has to do more things, and as a result we have what seems to be anomalies and inconsistencies. I am puzzled why it should be felt that donations to charitable institutions or approved charities should be used as an argument for the adoption of this resolution.
I think each of these questions stands on its own feet and should be discussed on its own merits, and I do not believe the case of the hon. member for Winnipeg North Centre is improved by referring to the practice followed in respect of charitable donations.
I think it should be apparent to all of us that the practice at the present time does take into account the fact that individuals may make exceptional or extraordinary medical expenditures in the course of a particular year. The position is that any individual who spends on medical necessities an amount greater than 3 per cent of his total income can deduct the amount that is in excess of 3 per cent for income tax purposes. To go beyond that would be to state that we should give special consideration to medical expenditure and make it completely deductible.
I think it to be true that outlays for medical and dental care are a normal part of a man's spending. It is expected that each year an

individual will have to undertake a certain expenditure for the protection of his health; the consumption of medical or dental services, from the economic point of view, is no different from the consumption of housing or the consumption of fuel or the consumption of clothing. For this reason I was interested in the opinion expressed in the debate last year by one hon. member who said that all expenditures made on medical supplies were a dead loss. It may be that expenditure on food is a dead loss because the food is permanently destroyed in the process of eating. Nevertheless I do not believe that any of us would suggest that expenditure on health does not contribute very positively to an individual's welfare in the course of any year, or that it should be singled out for special treatment. I do agree that in certain instances extraordinary and unexpected expenditures are made by individuals for medical purposes, and the special character of these extraordinary cases is reflected in the present practice which provides for the situation when these expenses amount to more than 3 per cent of income.
The hon. member for Winnipeg North Centre suggested in his opening speech that the adoption of this resolution would mean that the house was paying some attention to a real grievance of the Canadian people. I suppose all hon. members in this chamber are conscious of the wishes of the Canadian people and, in particular, of the wishes of our constituents; and we are particularly conscious of their needs with respect to health care. As far as I am concerned I have received no representations from any voter in my riding over the past four years asking me to support this particular resolution, nor have I in discussion with citizens in my province found that they regarded this as a very real grievance.
I was interested, too, to hear the hon. member for Winnipeg North Centre suggest that the introduction of a universal system of hospitalization would not affect the treatment that should be afforded this particular resolution. I agree that if the present proposals in this direction are implemented they will provide a universal free hospitalization and diagnostic service; they would not cover medical services. But I believe also that the introduction of universal hospital insurance would have a very definite bearing on the capacity of the individual citizen to undertake the payment of his medical expenses, because I think it is true to suggest that hospitalization and medical bills are closely related and often are incurred simultaneously. If the burden on the individual citizen were to be reduced through the introduction of a universal hospital plan, then his capacity to

provide for the payment of his own medical expenses up to this floor of 3 per cent certainly becomes greater. Whether this should be used as an argument against the resolution is another matter, but it certainly is a fact that it will have this particular effect.
There was another subject to which the exemplary research of the hon. member for Winnipeg North Centre did not address itself, and that is what seems to me to be a very important part of this discussion, namely the changing group of citizens who are liable to be affected each year by the scope of this particular resolution. If extraordinary medical expenses were chronically incurred by the same group of citizens over a long period of time, then I would think the case for the resolution would be improved. But it may be that the type of relief projected in this resolution will affect a different group each year, and I suggest that if this is so it reduces the argument in favour of the resolution.
Mr. Speaker, I was impressed not only by the remarks of the hon. member for Winnipeg North Centre in general but also by two other views put forward in the debate. One was that an effort should be made to provide some assistance or some relief to chronic sufferers or to those persons who each year, year in and year out, must buy expensive drugs or undergo extensive medical treatment. I think there is a case for assistance here, and I share the view expressed a year or so ago by the hon. member for Westmorland (Mr. Murphy) when he asked that the list of drugs with regard to which exceptions are made for deductibility purposes should be widened.
In the province of Nova Scotia we are not in a position where we can say that the provincial government is ready to embark on a system of health insurance. The government of Nova Scotia is not yet in that column which lists the names of the governments which have agreed to enter the hospital plan. They have stated that the province will enter the plan if and when it becomes available, notwithstanding the fact that the availability of the plan depends to a great extent on the decision of a province such as Nova Scotia to enter it.
There is one final feature of this resolution that I might mention, because it seemed to me of importance. It emerged during the remarks of the hon. member for Burin-Burgeo. At present the same tax relief is given to all taxpayers; the practice of applying the 3 per cent floor gives the same progressive relief to all those who must pay income tax. I suggest that if the 3 per cent rule were completely removed, though this would, of course, assist all taxpayers, it
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would assist taxpayers in the upper brackets more than those in the lower brackets, because it is certainly true that the same operation costs approximately the same whether an individual earns $3,000 or $8,000 a year.
I think the adoption of the resolution would help those in the upper brackets more than those in the lower brackets. Briefly, my attitude to the resolution is that at present weight is given in the regulations to the incidence of medical expense beyond a certain level. If evidence had been presented in the addresses this afternoon that the adoption of the resolution would remove what I would consider to be hardship or abnormal burdens, then I would be ready to support it. In the absence of such evidence, I feel that the present system seems reasonable and equitable, and whatever inconsistencies may occur in the system are more the fault of the increasing demands made upon the taxing instrument to do so many different things, with the result that in doing these different things there are bound to be all sorts of anomalies and inconsistencies that might be absent in a simpler tax system and a simpler world.


Mr. R. R. Knight (Saskatoon):: Mr. Speaker, I merely wish to say a word or two. I am prompted to do so by what has just been said by the hon. member for Inverness-Rich-mond. It is possibly my misfortune that I am not very well acquainted with my hon. friend, but I could not help wondering as he was talking whether he himself is a married man with a family. Of course that is none of my business at all. I could not help wondering whether his riding was one of those particularly prosperous areas with not too much unemployment, and these cases had not come to his attention. As I say, I have no knowledge of whether or not these be facts.


Mr. Byrne:: Then why refer to them?


Robert Ross (Roy) Knight: I refer to them because that was the distinct impression the speech of my hon. friend made upon me, that here was a man who had not had too much personal experience with the things that other people have suffered.
I rose mainly to draw to his attention and the attention of the house one argument that I have heard advanced in the house not only by the present Minister of Finance, I believe, and certainly by his parliamentary assistant, but also by the former minister of finance, Mr. Justice Abbott, who used to take the stand that a 4 per cent floor under medical expenses represented normal medical expense for Everybody. Thanks to some pressure from

Income Tax Act
various quarters the floor representing average, normal or reasonable medical expense was reduced to 3 per cent.


William Moore Benidickson: An allowance of 1 per cent was made for drugs.


Robert Ross (Roy) Knight: I should like to deal with the fallacy of that particular argument. Of course it is probably a normal and reasonable average across the whole country, just like a certain percentage is normal for fatalities or loss of property caused by lightning. But the point is that the hon. member for Inverness-Richmond said he would support a scheme which would take care of abnormalities, I think were his words.


Allan Joseph MacEachen: Abnormal expense.


Robert Ross (Roy) Knight: I suggest that to the individual practically every medical expense is an abnormal expense because it is just like lightning. When it does hit you, you immediately assume an expense which is 100, 200, 300 times the average expense across the country. Therefore you have to deal with the individual case of hardship. We have gained some experience in this regard from our now fairly long experience with the hospitalization plan in the province of Saskatchewan. Certainly the average expense is not very great. I cannot quote exactly at the moment what the average cost is per person.
The point is that when sickness strikes and you have an operation and a doctor bill and a hospital bill you get out of the field of averages, and it becomes a case of what has happened to the individual. Can the individual, alone and unaided by his fellow men, handle the situation? For the average workingman the answer is no. I remember a meeting one night in the town of Melville, from where the Minister of Agriculture comes. We had been discussing the hospital plan, and after the meeting a man came and showed me a little slip which was a receipt. His hospital bill had been paid by the Saskatchewan government and had amounted to a good many thousand dollars. He said, "If I had been faced with that bill myself I would have been completely and totally helpless."
I suggest to my friend across the way that there are a great many people, particularly working people, who find themselves in such a situation when sickness strikes. They are simply in the position of the man I met at this meeting. He was an elderly gentleman, a retired railroader, and never during his lifetime would he have been out of debt if he had had to pay the account himself.


William Moore Benidickson: If they are out of the
field of the average, then the income tax takes that into consideration.


Robert Ross (Roy) Knight: My friend made a remark that the hon. member for Winnipeg North Centre had not put up much of an argument about charity. I am quite aware that the hon. member for Winnipeg North Centre is able to take care of his own argument, but I might suggest there is an old adage that charity begins at home. Speaking about the member for Winnipeg North Centre, one reason I often do not speak in a debate in which he takes part is that he has already said everything and put forward such logical and clear arguments that unless one indulges in repetition there is little more that one can say.
I had not intended to speak at this length, but even if the hon. member for Winnipeg North Centre has put forward all the arguments I should like to subscribe to them by getting to my feet for this moment or two.


Mr. H. J. Murphy (Westmorland):: Mr. Speaker, this year again I should like to say a few words in this debate. I listened with interest to the hon. member for Saskatoon giving us his views on the matter. One thing I like about his party is that one man gets up and tells us what he is going to say and someone else tells us what he has said. Apparently they do not think we understand the first time.


Robert Ross (Roy) Knight: You will learn.


Mr. Cameron (Nanaimo):: It would help if somebody on your side would explain what you say.


Henry Joseph Murphy: The hon. member for Nanaimo could stand a little advice himself on what he should and should not say. I enjoy speaking in the house and listening to the members of the three opposition parties expressing their views. It is pleasant when we can discuss matters like this quite calmly and without any nasty little digs. I know that I never resort to making nasty little digs at people or calling them names. I do want to say, however, that I sit on the government side of the house and we have the majority by the will of the people of Canada. Before we came here we pledged that if elected we would support the Liberal party, in the same way that members of the other party pledged that they would support their parties.
I want to tell that indignant little member for Eglinton that I am not a submissive type of person. I think for myself, and I am a member of the Liberal party. I subscribe to the principles of the Liberal party, though I may differ from time to time with regard to details. I am not obliged to make remarks about members of other parties and what they do.

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I want to repeat some of the things I said last year, and I hope the government will take them into consideration. I refer to the extension or widening of the deductible expenses with respect to drugs. I have had representations made to me from time to time on behalf of persons who have in their family children who have suffered epileptic or other type of brain damage. I am told that in this particular type of sickness, if they are given anti-convulsive drugs they do not take these seizures and that every seizure they take makes the brain damage that much worse. By people who know or by people who have these invalids in their family I am told that the expense of these drugs is considerable.
Another point with respect to this matter is that in some sections of the country we must bring a sick child or sick member of the family to a large city in order to obtain expert treatment. These are all expenses in addition to those that are deductible. I can understand that there must be a dividing line between what would and would not be deductible by normal healthy people. For instance, you cannot deduct for food or for certain types of health food. Somewhere a line must be drawn. But I am suggesting that these anti-convulsive drugs be added to the list. In the case of veterinary service to farm animals, the taxpayer can deduct the cost of the veterinarian and of the drugs, which are perhaps in their make-up of the same type as I mentioned, when he administers to farm animals. I therefore think the children of the man, which are more important to him, should have the same relieving effect on the taxpayer.
I also had something I wanted to mention on this resolution concerning the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes as it could apply to different sections of this country. I am saying that in certain sections of Canada people are a bit more prosperous than they are in others, and that it is more difficult in some places to make a living than it is in others. This may be no fault of the government. As we know, in southern Ontario there are some 240 frost-free days per year, whereas here in Ottawa the number is about half that. In the district I represent there are perhaps 90 frost-free days. It can thus be seen that farmers in my area have a more difficult time in making a living than do those in regions more favoured by the climate.
Since we are talking about income and income tax, I should like to point out something that is contained in the Gordon report,
namely that the average incomes in the Atlantic region are less than those in the rest of Canada. If I may be permitted to do so, I should just like to read into the record something that appears at page 98 of this preliminary report:
3. It is a fact, however, that average incomes in this region-
That is the Atlantic region.
-continue to lag behind the averages for the rest of Canada. In 1926, for example, the average income per capita in the three maritime provinces was 38 per cent below the average for the other six provinces; in 1939 the corresponding percentage was 32 per cent; in 1946 it was 24 per cent; . . .
Farther on in the paragraph it is stated:
In 1955 income per family for the Atlantic provinces was 31 per cent below the average for the other six provinces, compared with a disparity of 37 per cent on a per capita basis.
From these percentages it would appear that there are larger families in the maritime provinces than in the rest of Canada. We know that larger families mean, of course, more illnesses in the family because of their number. If we are to embark upon a program of remedying some of these discrepancies in income between the Atlantic provinces and the rest of Canada, I cannot see any better way of doing it than by starting off with income tax. We all know that a general reduction in income tax is like giving everybody a raise in pay. Relief such as that brought about by lowering the 3 per cent floor on medical expenses would be somewhat similar to giving everybody a raise in pay.
Now, it having been shown that our incomes are slightly lower than those in the rest of Canada, we in the maritime provinces are the people who should have this slight relief through doing away with the floor, or relief in the tax itself. This action would help make up for the low income. Hence I cannot subscribe to the idea that general relief be given to all the nation when one part of the nation has a lower income rate. We know that when the freight rates are increased we in New Brunswick suffer more than do those in Ontario. Consequently, if there is to be a reduction in income tax or if there is to be elimination of the floor on medical expenses, I think it would be only fair that this elimination of the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes be made to apply to the Atlantic region only-[DOT]


Some hon. Members:: Oh, oh.
^Mr. Murphy (Westmorland): -it appearing from the Gordon report that we are the ones who could stand an increase in income.
At six o'clock the house took recess.

Income Tax Act AFTER RECESS
The house resumed at eight o'clock.


Henry Joseph Murphy: Mr. Speaker, before six o'clock I was discussing the effect of the adoption of this resolution on the maritime provinces, and I suggested at that time that perhaps because of the differences between incomes in the Atlantic provinces and those in the rest of Canada such tax relief should apply to the Atlantic region. The Gordon report tells us at page 99-this is really more than a report, it states a duty-
. . . the tact remains that living standards are lower in the Atlantic provinces than they are in the rest ot Canada, and that it is in everyone's interest to reduce this differential if it is at all possible to do so.
I would think this would be one of the ways in which it could be done. I realize that the government must have money to carry on its operations, and that to get that money we must have taxes. We know that if we were to reduce the income tax drastically we would give relief to a great many people but we would not have the money to increase payments on such social security measures as old age pensions and family allowances. We would not be able to build the Chignecto canal, and I know we want to do all these things. That is why I am suggesting that the range of drugs whose cost may be deductible in connection with income tax should be widened. I think this would be the fairer way to do it, and it would take in more people who are perhaps in need of some tax relief.
Actually the relief would certainly be beneficial to those in the upper income bracket. Since I represent a section that is not considered to be in the upper income bracket in this country I am interested in seeing relief given to those in the lower income brackets. I believe the widening of the range of deductible drugs would have that effect.
Recently I read some of the arguments put forward by the hon. member for Winnipeg North Centre in 1955, in which he mentioned repairs to property and depreciation of property. I think the same argument applies in different sections of the country. We know that land is more valuable in the large industrial centres of Ontario and Quebec than it is in some of the towns, cities and country areas in New Brunswick. If we wish to apply as the yardstick the taxes raised from property we know that those properties in those large industrial areas pay more taxes because thair valuation is greater. Therefore when we think of income tax we can use the same sectional yardstick where the income is low and

where the values are low. In those sections some assistance could be granted by way of tax relief.
I listened with interest to hon. members discussing this resolution and they used the double-edged sword by saying that if-and I say "if"-this is granted it is an election dodge, and if it is not granted then this government is either tired, old or refuses to consider it, which means that if we agree with it on this side of the house, we are wrong; if we do not agree with it we are wrong. I am sure the hon. member for Winnipeg North Centre is not suggesting that this would be election bait; yet I am afraid that might be the interpretation others would put upon it.
I feel, as I said last year, that the resolution in its present form should not be supported. The resolution asks for the removal of the 3 per cent floor. If you look at notices of motions numbered 2, 5, 8 and 11 on the order paper you will see that they propose increases in some measures of government assistance. We cannot have both. We cannot have increases in pensions and family allowances and decreases in revenues. Therefore I feel that the subject matter of this resolution is not of as much importance to us at the present time as are increases in social services such as family allowances, old age pensions and other benefits which are accruing to our citizens. I do feel, however, that it would not seriously jeopardize the tax structure if the range of drugs that are deductible as expenses in connection with income tax were widened to include other drugs.


Stanley Howard Knowles: Will the hon. member permit a question? Will he explain how including other drugs in the list would be of any advantage to those in the lower income brackets for whom he has spoken tonight if the 3 per cent floor is still there; or does he suggest that drugs should be put in a category by themselves and allowed deductibility from the first dollar?


Henry Joseph Murphy: My answer to that is this. Most family units have a certain normal amount of medical expenses, and it is not suggested for a moment that people should not have the normal medical expenses. But in some particular families there is a heavy burden because one child, or some member of the family, suffers from brain damage. The drugs that are necessary for treatment in those cases are in addition to the normal medical expenses, and generally speaking much in addition to the normal amount, which is about 3 per cent of the taxable income. As I say, these are additional expenses. I do not say that all

medical expenses should be deductible, but I say those such as anti-convulsive drugs that bite deeply into the incomes of certain families should be deductible.


Colin Cameron: Mr. Speaker, before six o'clock I listened to the hon. member for Westmorland, the hon. member for Inverness-Richmond and the hon. member for Burin-Burgeo, and I have been trying to understand their argument against this resolution. In part at least it seems to be based on the fact that the people in the Atlantic provinces are not on the whole as prosperous as people in the rest of Canada, and therefore we must be very careful not to improve the lot of those who pay income tax in Canada, including the Atlantic provinces, because there are not as many of them in the Atlantic provinces.
I rather gathered from what the hon. member for Westmorland said just now that he felt-and I must agree with him in this- that we should make every effort to even out the discrepancies in income in Canada; but I must ask him this, Mr. Speaker. Does he seriously contend that this particular floor, which I understand brings in between $35 and $40 million a year, would make all that difference; and is he suggesting that the method by which we even out the discrepancies in income in Canada should be to reduce the better-off areas and the better-off individuals to the level of the less fortunate areas and less fortunate individuals rather than vice versa?


James Allen (Jim) Byrne: Well, that is the socialist
principle.


Henry Joseph Murphy: That is the negative approach.


Colin Cameron: That is apparently what you are considering.


Henry Joseph Murphy: I said they should be brought up with the rest of Canada.


Mr. Speaker:: Order.


Colin Cameron: Income Tax Act
as good-will advertising appear in all the periodicals and in the street cars and buses across the country.
The hon. member for Inverness-Richmond this afternoon took issue with a statement that was made by someone. I am not quite sure who made the statement; possibly it was my colleague the hon. member for Winnipeg North Centre, but apparently it was made by someone who supported the resolution and who suggested that medical expenses are a dead loss. Although the hon. member for Inverness-Richmond took issue with that statement I do not think he had sound ground for doing so.
I think a distinction must be drawn here between two types of medical expenses. There is the type of medical expense entailed in having a periodical check-up of one's physical condition. That is a normal and legitimate expenditure and one which every citizen should be prepared to undertake, but I do not think in the same category come the expenses in which people are involved in order to cure serious physical disabilities. Those are not in the nature of ordinary expenses of life but are an emergency, and in effect they do constitute a dead loss. They are expenditures that have to be made in order that the ordinary citizen may continue to function as a wage earner or salary earner and as a member of society. For that reason I am supporting this resolution, and I have not yet heard any argument that persuades me that it is one that should not be supported.
With great respect I must say that I honestly cannot take seriously the suggestion made by the hon. member for Westmorland that in supporting this resolution and the adjustments in fiscal policy it envisages we may be upsetting the taxation structure. As I have said, the comparison between $35 or $40 million and $5,000 million rules that suggestion out of order altogether. There can be no possibility of upsetting the taxation structure by this very minor adjustment in our fiscal policy, a minor adjustment incidentally that can be corrected, as I said earlier, if the government which these gentlemen support will perhaps have as much tender-heartedness for private individuals as they appear to have for corporations in Canada.


Mr. A. W. Stuart (Charlotte):: Mr. Speaker, I was greatly surprised and in fact I am surprised on every occasion when a resolution of this type is supported by my good friends in the C.C.F. group to my left. At any time the government has suggested a decrease or increase in taxes on a straight percentage basis the C.C.F. group are the first to get to their feet and completely condemn that idea. They
[Mr. Cameron (Nanaimo) .1
point out the unfairness of a percentage increase or decrease, and their comparisons of course bring out the fact that whereas a citizen with a $3,000 annual income would benefit from that increase by only $15 or $20 the citizen with an annual income of $100,000 would benefit by several thousand dollars; and that is the argument I have heard them use since the first day I came into this house 12 years ago.
The resolution that has been introduced here today is directly contrary to any suggestion that ever came from the C.C.F. party in my memory. They are promoting a plan which would create a situation they have condemned for years and years. Although I was aware of the fact that there had been some changes made in what is known as the Regina manifesto I was not aware that it had been completely abandoned and thrown to the dogs. This resolution gives me the impression that in the past few months they have changed their methods and plans completely.
If the resolution which is being discussed at this particular time is passed it will mean that thousands and thousands in the lower income brackets will receive no benefit, while the more fortunate will receive substantial tax reductions. As I have said, the C.C.F. party has always given us to believe that it was the underdog, the person in the lower income bracket, in whom they had the greatest interest; but I am sure this resolution points out the fact that it is not the underdog who will be benefited but the man who is getting an above average income.
I have been given to understand that if this resolution is adopted it will cost the federal treasury approximately $50 million. Apparently the sponsor of the resolution believes that the great majority of the Canadian people would support such a resolution being put into force. If that is true I for one wonder why those same citizens do not make a much stronger plea and put more pressure upon the provincial legislatures and the provincial governments to have them enter the health plan which was worked out by this federal government with the representatives of every provincial legislature in Canada.
I think we must all agree that the health plan would be more generous than the resolution we are debating. The federal government is prepared to support the federal health plan to the extent of at least $165 million, which is three times the amount the taxpayers would receive by way of reduction under this resolution. If that scheme was adopted by the provinces it would to a great extent eliminate the necessity for the resolution before the house at the present time.

When the legislature of my own province of New Brunswick met just a year ago it was most anxious to pass a bill giving the government authority to enter into a health plan with the federal government. Of course last year was an election year, and that bill has been placed in the Tory archives along with many other bills I can remember. It has been pigeonholed until election time rolls around again, and at that time no doubt it will be dusted off once more and used as election bait in the province.
In the case of the old age pension legislation it was dusted off over a nine year period. Since then,- we had a change of government and were able to get old age security. Of course it will be argued in New Brunswick that these plans are not taken seriously because we have not the funds to take care of the situation. I can remember that only five years ago our provincial revenues were 50 per cent of what they are today, and at that particular time it did not seem as though the government needed the revenue it was receiving. Now we find they are unable to take part in this plan which would benefit every citizen in our province.


Mr. Speaker:: May I take advantage of the interruption caused by the hon. member taking a drink of water and tell him that I fear very much he is in danger of embarking upon a field which is completely irrelevant to the resolution now before the house. Let us not go into the administration of provincial governments with respect to social security measures, nor with respect to what finances they might have at their disposal for these purposes. I think the resolution is quite clear. The resolution has to do with the deductibility of 3 per cent of income in medical expenses, and I think we ought to speak to the resolution and allow ourselves as little latitude as possible.


Andrew Wesley Stuart: Mr. Speaker, I shall certainly bow to your ruling. I have been listening to the debate and I thought it had covered a very wide field, and for that reason I was trespassing a little myself. I am sure the ordinary workingman in New Brunswick would be much more interested in the health plan suggested by this government than in the resolution now under discussion.
I want to say that it will not embarrass me in any way to vote against the resolution. In fact it is almost a pleasure and privilege for me to vote against a resolution or bill which in my opinion is introduced to embarrass government members. I am not one who is easily embarrassed, and I am not speaking at this time to talk out the resolution. Any time the bell rings I am prepared 82715-89J
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to stand on my feet to vote against it, or if the bell does not ring the house will know exactly where I stand. This government of which I am a member and proud to be a member-


Stanley Howard Knowles: What portfolio?


Andrew Wesley Stuart: -has a very fine record in the social service field. Every single piece of social legislation to be found on the statute books of this country today was placed there by a Liberal administration. Any such legislation originated in the minds of Liberals to start with. For that reason I am always proud to be a member of this party and to support its policies and follow along with them.
I believe also the citizens of this country know that is the fact. They are confident that when circumstances warrant improvements a Liberal government will be responsible for those improvements. The average citizen to whom I have spoken has indicated that he is not very much interested in promises, particularly by political groups who are power hungry and who in desperation will promise the sun, moon and stars or any other planet which they think might get them votes. I am always proud to be a Liberal, to be a member of this government-


Stanley Howard Knowles: What portfolio?


Andrew Wesley Stuart: -which has done so much for the Canadian people and the Canadian nation. I am still prepared to go along with this government and trust to their good judgment, the judgment of these outstanding citizens who have done so much for this country. In fact they are the greatest builders in our history. I am satisfied that when improvements are possible they will be brought about by a Liberal government, and that promises will not mean too much to the average Canadian citizen.


James Allen (Jim) Byrne: Mr. Speaker, the members of the C.C.F. party are again embarking upon that very popular pastime in the House of Commons of seeking to deride the government for causing people to pay taxes, and at the same time attempting to find ways and means of reducing those taxes. They seem to believe in the axiom I heard when I first came here, that to be sure of re-election never vote against a grant and never vote for a tax bill. From the time the house started its session this year the hon. member for Winnipeg North Centre has supported various suggestions for increasing the amount of the old age pension, and I believe one of the suggestions was to have it increased to $65, beginning at 65 years of age.

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Stanley Howard Knowles: Hear, hear.


James Allen (Jim) Byrne: That would cost the people of Canada, the treasury, about $500 million. Innumerable other suggestions of that kind have been put forward. I suppose one should not impute motives, but I am just a little suspicious that their sponsors are concerned about an election which may be coming up sooner or later, and wish to appear to be the only ones in the House of Commons who have any feeling for the working people-the underdogs, as they choose to call them-in this country.
When hon. members from the C.C.F. party hear a reasoned argument such as was presented by the hon. member from In-verness-Richmond this afternoon, and when they have no answer to such an argument, they resort to personalities; and I may say the hon. member for Vancouver East indulged in such tactics this afternoon when he attacked the hon. member for Vancouver South.
The hon. member for Inverness-Richmond is a professor of economics and has had considerable experience in sociology in his own province; and when the hon. member for Saskatoon found he did not have an argument with which to answer him he decided to inquire into his marital status, which is a personal matter. That is a preposterous diversion. I am sure there are a great number of people in this country, and the hon. member knows it very well, who are. single and who will be single all their lives because they have taken a vow of celibacy; and they are doing excellent jobs in social and welfare work. As I have said, some hon. members resort to this type of thing when argument fails.
The hon. member for Vancouver South faces the facts as they are, and is consistent. It may be noted that the hon. member for Vancouver South has a resolution on the order paper asking that the government take into consideration this session the need for increasing old age pensions. If the hon. member were to get up and support wholeheartedly the suggestion that taxes should be reduced, then he would be taking a position of inconsistency. Consistency, however, has no part in the policy of the C.C.F. party, as is quite obvious from the debates we have heard so far.
The hon. member for Inverness-Richmond and the hon. member for Charlotte have pointed out that if this resolution were passed and a bill introduced it would have the effect of giving greater benefits to those in the higher income tax brackets. It is simple to understand that it is a very extraordinary event for a person with an income

of $3,000 to be faced with a hospital bill which exceeds, say, the $90 which would be required before he could benefit through the present legislation. But a person in the higher income tax bracket might be paying up to $400 in medical expenses and still not benefit from the special provision available at this time.
I do not argue that it would not be a happy situation if everyone could take advantage of this and any other type of exemption which hon. members opposite may think up at the next session of parliament, but it follows that if we continue with this line of thinking we shall reach a point where income taxes no longer bring in revenue and the government must consider all over again ways and means of providing money for the benefits which are at present being provided. There are many other good causes which have claims for income tax exemptions; and rather than accept this one which, broadly, affects everyone from the highest to the lowest without reference to income, I would prefer to seek-and I am sure I would find many- instances where there is discrimination and where something should be done to assist special groups.
There is, for instance, the case of the construction worker who has to leave his home and family and go miles away into the north country or some other isolated area where he has to pay his board and room. These are circumstances which do not occur to people in the general taxation group, and if any one is to be given consideration, here is a group which is, in reality, discriminated against.
We could go from that category to others. For instance, the international union of mine, mill and smelter workers have been proposing this year that special consideration be given to miners who establish their homes in a one-industry town. I invite hon. members to consider the effect upon the community when an ore body is depleted in, say, 15 or 20 years. The miners have paid their taxes while they were working in the town, and they have paid for the homes in which they live. Then the mines are shut down. In most cases it is impossible fcr them to move their homes, and they lose their life savings. The industry is able to write off the investment it has made in homes for officials; it is able to write off its investment in machinery in the course of a few years. The employees have no such advantage. That is just another example of a group of people who suffer today under our income tax provisions, while others are benefited and would further benefit under this proposal.

As the hon. member for Inverness-Rich-mond pointed out, we are trying to do too many things with the Income Tax Act. I am not suggesting that tax abatement for miners would be simple to introduce, but it is just another example of what the general public expects the government to do.
These ideas are fostered by the type of argument we hear from the other side of the house, particularly from the C.C.F. group. Members of the C.C.F. group try to get the impression across to the general public that there will be no difficulty involved in reducing taxes and at the same time increasing benefits and grants to the people of Canada. I am all for taxing capital gains if that would seem to the government to be a way out of our difficulty and in order to reduce personal taxation in the lower income brackets. But again the members of the C.C.F. party, socialist as they are, mislead their supporters and the people generally in this regard. There must be some capital gain if money is going to be available for the development of our great resources.
Last summer during the pipe-line debate the members of the C.C.F. party were very indignant that more Canadian capital was not being invested in this enterprise. Of course they are quite willing to allow capital to be invested, but just as soon as it is invested they would move in and confiscate. Present corporation taxes are quite heavy.


Stanley Howard Knowles: On a point of order, Mr. Speaker, may I inquire if we are now debating the budget? I did not know that the Minister of Finance had brought it in.


James Allen (Jim) Byrne: If the hon. member will just recall the speech he made this afternoon he will remember that he referred to the capital gain made by a certain former cabinet minister in a provincial legislature. He does not refer too often to the capital gains of the cabinet ministers in Saskatchewan.


Mr. Ellis:: What capital gain?


Mr. Casileden:: What capital gain?


James Allen (Jim) Byrne: He should know that we know as much about the capital gains made by ministers in Saskatchewan as he knows about those made by ministers in other places, but this was just another indication of subterfuge and attempts to mislead. The hon. member becomes very angry if someone this side of the house appears to deviate for a few moments from the actual import of the debate, but the hon. member himself is one of the chief offenders when it comes to deviating from and transgressing the rules of this house.


Stanley Howard Knowles: On a point of order, Mr. Speaker, may I point out that it is at least
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ten minutes since the hon. member has made any reference whatsoever to the removal of the 3 per cent floor from the income tax law, which is the subject under debate.


James Allen (Jim) Byrne: Mr. Speaker, this afternoon the hon. member for Winnipeg North Centre sought to point out ways of making up the money that would be lost if the 3 per cent floor on deductibility of medical expenses were removed, but of course I understand that he does not like to have the debate take a turn against his arguments.


Stanley Howard Knowles: Speak to the resolution. Say anything you want about it, but speak to the resolution.


An hon. Member:: Speak.


James Allen (Jim) Byrne: There is another group of people who in my opinion are being discriminated against under the present regulations. It is a small group about whom I have rather intimate knowledge. This group is not even benefiting from the present regulations. The people in the group are members of a medical society called the consolidated employees' medical society. It has about 1,800 members who pay in to the society and in turn the society has a contract with certain doctors. The members of the society are unable to use any receipts from the doctors having to do with the cost of operations or attendances at home or in hospital. On the other hand the members of the medical services association in Kootenay West, employees of the same company, about which I have fairly intimate knowledge, do benefit by producing receints.


Mr. Speaker:: Order. The hon. member
seems to be discussing other cases with respect to which he seems to think improvements could be brought about in the Income Tax Act. We are not talking about any other matter but that set forth in the resolution, namely the removal of the 3 per cent floor in relation to the deductibility of medical expenses for income tax purposes.
I understand that in a debate of this kind certain comparisons may be made and some have been made by the mover of the resolution himself, but the discussion one after the other of cases in which hon. members may find there has been or could be discrimination is not relevant to the resolution now before the house. I understand that latitude has been taken but that is no excuse for any irrelevancy continuing, and I would ask the hon. member to speak about the 3 per cent floor on deductibility of medical expenses.


James Allen (Jim) Byrne: Mr. Speaker, I certainly bow
to your ruling. I want to point out, however, that if we follow the line suggested

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by the resolution there is no reason why we should not continue and take in all other possible contingencies. By so doing we would soon arrive at the point where we would no longer have any revenues from personal income taxes and would, of course, have to start all over again.
Perhaps I should not say that the hon. member for Vancouver East vilified, but he came very close to it when in his remarks he indicated that the hon. member for Vancouver South was stupid in not seeing the arguments presented by the C.C.F. party. The hon. member for Vancouver East said there should be no thought that this resolution could affect in any way any proposed federal health scheme.
Perhaps it would not do so. It has been pointed out that the federal health plan may cost anywhere from $200 million to $300 million. That revenue must be raised in one way or another. If we are to start hacking away at our tax system, then we should stop asking for more federal participation in what are essentially provincial affairs. It must have this effect. If the government are going to face from the C.C.F. opposition this continual harping to reduce the taxes, then they will have to give more serious consideration to the cost of this national health program and other welfare programs they may have in mind.
I have mentioned the fact that the hon. member for Winnipeg North Centre has suggested increasing old age pensions to an amount which would require an additional half a billion dollars. We need another $200 million to $300 million for the national health program. We need more money for pensions for the blind. We need more money for family allowances. We need more money for other social welfare projects. Where is the consistency in this resolution that is before us today? There is no consistency in it. There is only politics in it.


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I am quite interested in the consistency of the speech to which we have just been listening, by the hon. member for Kootenay East. It seems to me that if one were to take his speech and stir it up well with those given by the hon. member for Charlotte and one or two others to which we have listened, we would have a good sample of what I would call Liberal porridge. To me it is a most amazing experience to listen to some of the things that have been stirred into the broth by hon. members opposite in their attempt to fend off what after all is a rather simple little resolution that is before this house at the instance of the hon. member for Winnipeg North Centre. We
IMr. Byrne.]
have even had the Regina manifesto put into the broth. I suppose that is in order to add a little bit of spice.


An hon. Member:: It is all dishwater.


Thomas Speakman Barnett: The thing that always amuses me is to hear these hon. gentlemen such as the hon. member for Kootenay East attempt to portray themselves as well intentioned individuals who are prepared to support measures for the welfare of the common man; yet every time a practical, simple proposal is put forward which will do that, they seem to spend most of their time drawing back and hedging against any support for it.


James Allen (Jim) Byrne: We face the facts.


Thomas Speakman Barnett: The hon. member has been resorting to a favourite tactic in suggesting that we are asking for a lowering of taxes on the one hand and an increase in spending on the other, but he himself made reference to several extremely good sources of extra taxation that could be available. Of course in the rather lengthy discussion in which he indulged with regard to a national health plan he completely overlooked the fact that the hon. member for Winnipeg North Centre this afternoon indicated that he would be pleased to withdraw this resolution entirely if the government opposite would be prepared to announce a health plan in the sense that those of us at least in this group understand a comprehensive health plan.
The hon. member comes from the same province as I, and he knows perfectly well that, as far as the average individual resident of the province of British Columbia is concerned, this much-vaunted health plan about which he is talking, actually is not going to make very much difference. For him to argue that because of the coming into effect of the national hospitalization plan this resolution is thereby somehow or other rendered unnecessary is to me quite illogical. I can understand that argument coming from the hon. member for Inverness-Richmond or from the hon. member for Charlotte, because apparently they do not know much about what a public hospitalization plan can and will provide. It seemed to me-I might say that I am thinking of the hon. member for Inverness-Richmond -that perhaps the reason he has not had any representations on this matter is that not too many of his constituents, by his own admission and on the suggestion of his colleagues from the maritime area, have had any experience in deducting medical expenses, or their inability to deduct.
After all, I think the hon. member for Winnipeg North Centre, in his introduction to this resolution, made it perfectly clear that

in his estimation this is not the most world-shattering suggestion that could be put before this house, but that it is a simple method of taking a rather halting step toward the type of situation that woud exist with respect to medical expenses if we had a comprehensive health plan in this country.
He has put this resolution forward from year to year. The hon. member for Charlotte seemed to imply that this resolution was something new, that it had come as a bolt out of the blue since the last national convention of the C.C.F. But I think the facts, as they stand on the records of the house, will indicate that this is a long way from being the case. As I said, the measure is put forward as a halting step toward what we hope will some day be the provision of full access to health care by every citizen of Canada, regardless of the level of his income. The argument to the effect that if we are going to have a health plan this is not the sort of deduction that should be allowable is one that to me is really quite specious.


James Allen (Jim) Byrne: It is the fact that the health plan must be paid for. You realize that?


Thomas Speakman Barnett: I quite realize that fact. But the hon. member certainly cannot suggest that our realization of that fact has not been made clear on a good many occasions in this house, and that you do not get anything for nothing. It is just a matter of where it is coming from. Of course that is the basic weakness of the whole position taken by members like the hon. member for Kootenay East in this house, when he refuses to face up to the fact of where the money to pay for these things must come from. That is the basic weakness of the Liberal party in its approach to the provision of social security measures, no matter in what particular field we may be discussing them from time to time.
It is all very well to talk about the hon. member being a professor of economics and sociology, but let him get down and do a little real thinking in that field instead of mulling over things that were written by Adam Smith or somebody 100 years ago. Then we might have some of the private members who support this government coming up with something really constructive that would stir the government into some real action. But as long as they are content to go along and simply say "Well, the C.C.F. come up with all these brainwaves and never tell us where the money is to come from", they will not get up and tell the government where they can find some of the money to do these things. We would welcome a little help from them on this matter from time to time. Then we would
Income Tax Act
take some of their pious suggestions about their interest in the welfare of the common man a little more seriously.


William Moore Benidickson: Mr. Speaker, the mover of this resolution has himself suggested that it has appeared before us many times, and some of the arguments on both sides are, as somebody else has said, almost of a perennial nature. Having regard to that fact I do not intend to speak at any length, because I think if Hansard of the past two or three years is analysed it will be seen that most of the arguments pro and con are contained in it.
I say this type of resolution illustrates only too clearly how easy it is for a member of the opposition to make a suggestion in isolation which on the face of it sounds as if it has many advantages. It is true that this resolution, if adopted by the government, would involve the balance of ways and means. I think even the proposer will admit that it could involve the sum of $40 million or $50 million. My point is that any proposition of this kind, particularly when it involves either a loss of revenue or, as some other resolutions do, an additional expenditure, suggests to this house that our present system of having the executive first give these matters careful consideration and attempt to balance the ways and means is probably something that all of us would in the long run approve.
In terms of tax reduction the hon. member has a proposal that admittedly would be of advantage to a certain segment of our population. I have indicated that it would involve a certain loss of revenue to the crown, but all hon. members know that when that revenue is not received it is not available for something else.
I have looked at some of the things that have been done in this parliament during the time my hon. friend has advanced resolutions in terms similar to this. I indicated that this would be of benefit to a small segment of our population. I would just like to say that in 1952 a married person without dependents earning $3,000 paid income tax of $175 to the federal government. Two years later, in 1954, that tax was $150. Two years after that, in 1956, that tax was $130. Hon. members will recognize that in each of those two-year periods that involves a tax reduction of $20. Now, that applies to all persons of that income tax group all across Canada, whether or not they have any medical expenses.
My hon. friend's proposal as it is before us today was before us in 1952. Its value- and it is of value only to a person who has

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medical expenses-would be $13.50 to a married man without dependents having an income of $3,000. I point out to the house that twice within four years this government has reduced taxation, by an amount of $20, and without any discrimination. I think that has greater value.
I think it can be said that within a period of five years 85 per cent or 90 per cent of our people have had an income tax reduction equivalent to 25 per cent and again, as I say, without discrimination.
The next point I would make is that this has been done without the necessity of asking civil servants to examine a terrific number of individual claims that would be advanced if we accepted the idea of having special exemptions for particular items, such as medical expenses.
I gave an illustration to a couple of my friends this afternoon. I said that if the first dollar of medical expenditure was to be considered by this government on the individual tax claim, and if we took as an example that each expenditure might total $20, that amount would have applied to it the rate of 15 per cent because, as we all know, the first $1,000 of taxable income has a tax rate of 15 per cent applied to it. Suppose the individual taxpayer has medical expenses of $20 during the year. If we apply the tax rate of 15 per cent it will be recognized that it would amount to $3. If he has no receipt attached to his tax form hon. members can realize immediately what it would cost in administration if it has to be followed up by correspondence. Hon. members know how much it costs today to write letters applying to the salaries of the people involved.
The principle of our income tax law is that we have a standard personal exemption, and I take some pride in saying to this house that the total of our personal exemption for any taxpayer in this country, namely $1,000 for a single man and $2,000 for a married man, with some exceptions and some additions, is a greater personal tax exemption than is applicable in any other country that I know of that has a similar social system to our own. It is certainly greater than the exemption provided in the United States, and we know it is much greater than what is provided in the United Kingdom, Australia, New Zealand and in other countries. These things have to be taken into consideration.
I have endeavoured to explain to the house the economy of having a flat rate of personal exemptions rather than the alternative of certain types of deductible expenditures which have to be considered item by item for

tax exemption purposes. We will all agree that medical expenses can be burdensome. We have in existence what has been described as a floor of 3 per cent, and items totalling under 3 per cent of total income are not sent to the tax administration for consideration. I think it will be admitted that our statistics indicate that 3 per cent has been proven to be about the standard of personal expenditure for medical and dental costs across the country.
Medical expense is an important matter. It is very easy to say that a family has to expend a certain amount of money in medical costs and to ask why they have to pay a certain rate of tax on that type of expenditure; but let us consider this problem in a practical way. I think all hon. members will agree that under certain circumstances it is just as important to buy milk and underwear as it is to make the usual outlay for dental, medical and other care, and those things are part of the personal income tax exemption which on a flat rate basis is a convenience in administrative work of a tax nature.
Another point I should like to put forward to the house is this. In the publication prepared by my hon. friend the Minister of National Revenue entitled "Taxation Statistics 1956" but having relation to 1954 tax returns, it is indicated that 3,410,000 Canadians were considered taxable but that an additional 1,393,000 filed returns, and by reason of the exemption of which I have spoken they were considered not to be taxable; in other words, a total of 4,803,000 Canadians filed returns. There were also a great many people who probably did not file returns at all because it was obvious that their incomes did not require them to do so. It is surely very clear that this proposal of my friend the hon. member for Winnipeg North Centre would be of advantage at most only to those who are taxable, and a great many people are not taxable.
I have heard some other suggestions this afternoon and evening concerning the general attitude of this party in the field of social welfare. Again I direct this question to my hon. friends; what would you do if you were handling $50 million? It has already been mentioned that within the last two or three years the Liberal government has made a standing offer that would involve the expenditure of $165 million in the new field of health insurance. I suggest that you cannot have your cake and eat it too.
In considering some other accomplishments of this government I could refer to one or two other measures that have been adopted in the last few years that have involved large

expenditures, and not necessarily to the taxpaying group or the people who are better off; indeed, to the contrary. I think if my friend the hon. member for Winnipeg North Centre would review his proposal he would come to the conclusion that over the past two or three years this government, when it has had a decision to make either to forsake revenue amounting to $50 million or to consider expenditures involving $50 million, has been very considerate to those people whom his colleagues this afternoon and evening suggested have not had proper consideration from this government.
1 have already indicated that approximately 85 or 90 per cent of the people in this country had an income tax reduction of 25 per cent in the last four years. In thinking of other constructive measures undertaken by this government I can refer briefly to the unemployment agreement with the provinces which represents something relatively new in federal-provincial relationships; old age security and assistance, the entitlement age for which recently was brought down from 75 to 65 years; disability pensions, with which we had not been associated until recently, and insurance for health, to which I have already referred. The latter represents a new forward step and involves a tremendous amount of money. If you were to give money away in another form such as is proposed here I question whether you would still be able to do something in the nature of health insurance despite its value.
I could extend the field widely, but I think I have cited enough illustrations to prove my point. The hon. member for Winnipeg North Centre can easily put forward a proposition, as he has done repeatedly, that on the face of it seems to have some merit; but I suggest to this house that over the period during which this or similar resolutions have been advanced the record indicates that this government has undertaken measures the benefits of which have been extended more universally and advantageously than anything that would be provided by a resolution of this kind.


Andrew Wesley Stuart: Mr. Speaker, I should like to ask the hon. member a question if I may. I believe the parliamentary assistant put on the record the exemption of a citizen receiving $3,000 a year; would he have any figures to show what the exemption would be of a citizen with an income of $50,000 a year?


William Moore Benidickson: Well, I have not the exemption figure for an income of $50,000. I do know that for a taxpayer with an income of $100,000 the advantage would be about $1,850; and my friend across the way, the
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hon. member for Winnipeg North Centre, has always objected to anything in the nature of so many percentage points in tax reduction.


Stanley Howard Knowles: Are not my hon. friends neglecting the ceilings that are in the act?


William Moore Benidickson: My figure would apply despite the ceilings.


Andrew Wesley Stuart: I should like to ask one further question if the parliamentary assistant is willing to answer. A question has come to my mind from reading the wording of this resolution. If this resolution were passed could a Canadian citizen having obtained a doctor's certificate go to Florida and stay there for one or two months, and gain income tax exemption for his stay?


Lewis Elston Cardiff: That is a silly question.


Some hon. Members:: Silly.


Stanley Howard Knowles: The parliamentary assistant had better answer that question. If he does not know the answer, the rest of us do.


William Moore Benidickson: The taxpayer might go to a particular place with an attendant or nurse or something like that, but I do not think there is any distinction about the location of his sojourn for health reasons.


Stanley Howard Knowles: Is the parliamentary assistant not aware that the income tax form contains a line which states specifically that travelling expenses incurred to receive medical attention may not be included as medical expenses?


William Moore Benidickson: I was not referring to travelling expenses.


Stanley Howard Knowles: Is the parliamentary assistant aware of the fact that was brought out by the hon. member for Westmorland this afternoon, that if you have a sick cow you can get deductibility for the expenses of a veterinarian right from the first dollar, but if a member of your family is sick, a human being, you cannot get it until you go over the 3 per cent floor?


Mr. A. H. Hollingworlh (York Cenire):: Mr. Speaker, I should like to make a few observations which I hope will be shared by other hon. members of this house. We are torn between two desires, to remove taxes and also provide the best for the country. It seems to me the general principle is that we should keep taxes as low as possible and at the same tim'e have as good social security as possible, a social security system which will be as good as that of any country in the western world. In my opinion we have almost reached that stage.
The two aims are opposed to each other. You cannot have all the social security possible and at the same time keep taxes down.

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I am not criticizing the hon. member tor Winnipeg North Centre because I believe he is sincere in this, but I sometimes wonder whether he really realizes what all these additional social reforms he is advocating are going to cost the country. How are we going to pay for them?
For example, we are expending approximately $800 million a year for old age pensions and family allowances. I have heard the hon. member state in this house on several occasions that we should increase both. Indeed, many hon. members are insisting that the old age pension be increased this year. One can understand that, but how are we going to have an increase in old age pensions? How are we going to have an increase in family allowances? How are we going to do away with this 3 per cent floor? Where do we stop? Those are the questions I ask this house tonight.
In this country we have old age pensions, we have family allowances, we have unemployment insurance and we have disability pensions. We are going to bring in health insurance, God willing, at an early date.


Stanley Howard Knowles: Hospitalization.


Allan Henry Hollingworth: We have heard it stated by the parliamentary assistant to the Minister of Finance that a health plan would cost $165 million if implemented this year. That would be the federal contribution, and that represents only the start. It would increase more and more as additional people came to this country and as the country expanded. I believe it was two years ago when the hon. member for Winnipeg North Centre stated that it would cost only $35 million or $40 million to remove this 3 per cent floor. In the debate last year the parliamentary assistant stated that this amount would be increased to $50 million or $60 million, and the hon. member for Winnipeg North Centre did not deny it.
It is not a matter of $5 million or $6 million, it is a matter of $50 million or $60 million. I submit that that is a considerable amount, and it raises the whole question of exactly where are we going to go. I think the government has shown by this 3 per cent floor that it is interested in helping people who have considerable medical expenses. This afternoon the hon. member for Inverness-Richmond stated, I think quite rightly, that if this was removed it would help those receiving higher incomes rather than those in the lower income brackets.
There are many other things I could say, but I am not going to take up more of the time of the house because I know other hon. members wish to participate in this debate.
.
For example, in my opinion it would be better to provide some allowance for people who have retarded children. I think that is important, but just where are we going to draw the line?
There is another question that arises. I submit with the greatest deference to my hon. friends opposite, with whom I am in complete agreement as to the necessity of providing social security in this country and giving the average Canadian the best possible standard of living, that with the health insurance program, or the hospitalization plan according to the correction of my hon. friend a minute ago, which we hope to bring into being this year or certainly within the near future, this is not the year in which to remove this floor.
With these few observations I would support the parliamentary assistant to the Minister of Finance in his observations this evening.


Stuart Sinclair Garson: Mr. Speaker, I have listened with a great deal of interest to the debate which has taken place upon this subject matter today, if for no other reason than that I was very much intrigued by the spectacle of the hon. member for Winnipeg North Centre coming into this house in the rather unwonted capacity of special pleader for the wealthy of this country. I think I shall be able to show before I resume my seat that the effect of what he has urged would be to create a wholly disproportionate benefit for those who pay the large income taxes in Canada.
By way of introduction to that, perhaps I might point out in re-emphasis of the point which was so clearly made by the hon. member for Burin-Burgeo that, apart from some successful commercial enterprises which it has operated with great skill and at considerable profit, in most cases the government itself produces nothing. The money it spends for social services, for defence, or for other governmental purposes must be obtained from the people of the country in the form of taxes. In other words before the government can put a dollar back into the citizen's right-hand pocket in the form of services or tax dispensations of any kind it must take more than a dollar from the other pocket of the citizen, because there is a certain amount of overhead in collecting and spending money.
One of the tests of a good taxation system, indeed one of the tests of good government, is that this process of collecting taxes and spending them for the benefit of the citizenry should be done as efficiently as possible. In other words, it should be done with a minimum of red tape, a minimum of fuss, and a minimum of work, to the end that as large a

percentage as possible of the amount it takes from the people in taxes should be handed back to them in benefits of one kind or another. Therefore when we address ourselves to the question which is now before us, the first thing we have to consider, it seems to me, since this resolution would involve the giving up of some $50 million or $60 million in government revenue, is whether this particular way of giving back revenue is the best way in the interests of the people of Canada. As I will endeavour to prove in the course of my remarks, I think it is very far from being the best way in which such an amount could be put out to the Canadian people either in the form of new services or in the form of a reduction of taxation.
There is a very simple reason for this, a reason so simple that I cannot understand why a man as clever as the hon. member for Winnipeg North Centre, and as well informed as he is-


An hon. Member:: Hear, hear.


Stuart Sinclair Garson: I am glad to hear his colleague applaud those sentiments but, as I was about to say, I am rather unhappy that the hon. member for Winnipeg North Centre has not given him a better reason for applause.


Mr. Argue:: He is consistent, anyway.


Stuart Sinclair Garson: It is good to be consistent, either by being right, as we are on this side of the house, or by being consistent in being wrong, as his party is. The simple point which has eluded the hon. gentleman and his friends in the C.C.F. party is this. We have in Canada an income tax system which is highly progressive in the sense that it is imposed according to ability to pay, and that it is steeply graduated, having a low rate for the people in low income brackets and a high rate for people in high income brackets. When people start talking in percentage reductions with regard to that kind of tax it means they are handing back taxes to the people not in a progressive form but in a form which is the opposite of progressive. They are handing back very little to the man in the low income bracket and a great deal to the man in the high income bracket.
In all the elaborate research which the hon. gentleman has carried out in connection with this matter-and he has gone all through this study several times-this particular point, which happens to be the nub of the whole matter, has eluded him on every occasion and it still eludes him now.
Let us examine for a moment the income tax system in relation to which the hon. gentleman makes his proposal to benefit the people with whom he and his friends are
Income Tax Act
so deeply concerned, the people in the low income tax brackets. Let us see first of all how they are taken care of under this present income tax system of ours. What exemption do they get for example, as compared with those of other countries? Well, here are the comparisons, all reduced to Canadian dollars. A single man in Canada gets an exemption of $1,000; his counterpart in Australia gets $224; and on income in excess of that he pays tax. In the United Kingdom he would pay tax on amounts above $385. In the great and rich country to the south of us he would pay on everything above $600. Thus, when the hon. gentleman talks about knocking off 3 per cent, why, we give in the income tax itself a difference of 40 per cent before we start to calculate income tax at all, in other words $1,000 in Canada compared with $600 in the United States. And it is in these circumstances that the hon. gentleman saws the air and lectures us about the unfairness of the Canadian tax system.
What about the married man? The exemption he gets in this country is $2,000. In the United States, which has the highest exemption figure of comparable countries, it is $1,200. In the United Kingdom it is $660, and in Australia, which has had the great benefit on various occasions of having a labour government with all its policies, the exemption is $447.
Thus even if, for the benefit of the low income groups for which the hon. gentleman is so solicitous, we were to put his proposal into effect tomorrow, we would be conferring a 3 per cent benefit on people who already enjoy a benefit of 40 per cent in comparison with the United States the most favoured country-while in comparison with any countries which have enjoyed the benefits of labour governments it is substantially more, something of the order, in the case of Australia, of 77 per cent as compared with 3 per cent for a single man. And in the light of this the hon. member asked us to take his statement seriously that we should be criticized because we have not given back this 3 per cent he talks about.
That is not the worst part of it, Mr. Speaker. The worst part of it is that if we gave this sum back in the particular form which the hon. gentleman recommends, we should be giving back a great deal more to the wealthy people than we should be giving to poor people.


Joseph Warner Murphy: May I ask
a question?


Stuart Sinclair Garson: No; but if the hon. member would reserve his question until the end of my remarks I would be very glad to answer it then.

Income Tax Act
Let us consider now the case of the married man. I hope the hon. member for Winnipeg North Centre will check me if I am doing his idea any injustice. A married man with an income of $3,000 would get 3 percent of $3,000 that is, an exemption of $90 on account of his medical expenses. That would be deducted from the income upon which his tax would be charged; and inasmuch as he pays a 15 per cent income tax that would save him $13.50. In the same way a married man with no children and an income of $5,000 would save $28.50 in income tax, and a married man with an income of $10,000 would save $72. For a married man with an income of $30,000 the saving would amount to $432, and for the married man with an income of $50,000 a year the saving would be as much as $795 a year if he were sick enough to use it all up.


Stanley Howard Knowles: Is that not the point, Mr. Speaker? Will the minister not admit that when he puts up these straw men he must get them to stand up?


Stuart Sinclair Garson: These are not straw men. The hon. gentleman does not know the difference between a straw man and a fact, and that is a very great difference.


Stanley Howard Knowles: Will the minister permit a question?


Stuart Sinclair Garson: Surely.


Stanley Howard Knowles: Is the minister aware of the fact that statistics produced by the Department of National Health and Welfare show that illness is more prevalent among those in the lower income groups than among those in the higher income groups, and that the argument the minister is now employing is that these people in the lower income brackets must be denied this benefit because if you give it to them you must give it to others as well?


Stuart Sinclair Garson: Mr. Speaker, I know the hon. gentleman does not like these facts, because this idea of his is strictly a "phony."


Stanley Howard Knowles: Then why did the government with such fanfare reduce the figure from 5 per cent to 4 per cent a number of years ago, and from 4 per cent to 3 per cent in 1953? Was the minister's government producing a "phony" when it did that?


Stuart Sinclair Garson: No, it was not. Perhaps the hon. gentleman would go to the trouble to find out the facts; it is a very good idea to have some of the facts before launching on arguments of this kind. He will see that the United States and Canada, starting out with 5 per cent, have reduced to 4 per cent

and then to 3 per cent, at which point it is a matter of judgment whether any further reductions along that line would be better, than their cost in some other form would be to the people of Canada. My point is that if we are to forgo from $50 million to $60 million of revenue in this country we can do it in a form which will be much more beneficial to those in the lower income brackets than this grand idea of my hon. friend from Winnipeg North Centre.
I have not finished with my analysis, and as these figures are rather complicated I wish my hon. friend would hold his question until I am finished with them. I want to demonstrate how beautiful this idea of his is. Take a married man. In order to exhaust the full benefit of this idea we have to use up the entire ceiling of this medical exemption which is $2,000 for a married man. Then if he has four dependents he can get $500 for each one, making a total of $4,000. For such a man to realize the entire amount of that benefit he has to have medical expenses running up to $4,000 to get up to the ceiling for himself his wife and four dependents; and as far as income is concerned he has to have an income of $133,333.33 per year. That amount at 3 per cent produces a $4,000 exemption.
There are some individuals in Canada who have such an income. If the man is in that position then, in as much as he gets a deduction from his income of the full amount of the $4,000, and as he pays income tax at the rate of 68 per cent, he would enjoy a benefit per year of $2,729 compared with $13.50 in the case of the man in the $3,000 bracket about whom my hon. friend from Winnipeg North Centre is so solicitous.
A married man with no dependents at all other than his wife, who had an income of $66,666.66 per year and whose rate of taxation would be 58 per cent would get a benefit of $1,160. When my hon. friend is going around during the election campaign and expatiating about the great virtues of this scheme of his I hope he will make these comparisons-


An hon. Member:: He will not.


Stuart Sinclair Garson: -between what the poor people he is so worried about will get under it on the one hand and what the very rich people are going to get upon the other.
As I said a moment ago, it is really a very simple business. If we have as we do have in Canada, I will not say a steeply progressive tax, but a very progressive tax, levied according to ability to pay, then when you start knocking off 3 per cent of it you get in favour of the wealthy a steeply progressive reduction

in taxation. This of course brings back great benefits to the people who have to pay large amounts of taxes, namely the rich, and provides small benefits to the people who pay small taxes, namely the poor.
In that connection there is one point that should be emphasized. Of all these countries with which Canada is comparable there is not one which, either in its rates or in its exemptions, is nearly as favourable to people with taxable incomes of $5,000 or less as is Canada. As to those above $5,000, if my hon. friends will examine our income tax provisions they will see that the taxation upon Canadians above the $5,000 limit is somewhat more than in the United States, though not greatly so; but is still a lot less than in any of the countries which, as I have said before, have enjoyed the inestimable benefits of labour governments that really knew how to spend money.
It is for these reasons that, so far as I am concerned, I cannot work up any enthusiasm whatsoever for this brilliant idea of my hon. friend.


Stanley Howard Knowles: Will the minister permit another question? In view of the research he has done on this matter, can he say what proportion of the $50 million or so that this would cost would be rebated to the wealthy people whom he now wants to tax, and what proportion would be rebated to the people in the $3,000 or $4,000 class?


Stuart Sinclair Garson: Mr. Speaker, I did not think that was relevant to any remarks I was going to make, and I do not have these figures here.
I will say, however, if this is any comfort to my hon. friend, that under the policies of this government, commencing with the policies of war finance during the war and continuing since the war, the financial policy of Canada has been such as to bring about a much more just distribution of the national income than has ever been achieved before at any time in Canadian history. That being so, my hon. friend is making a very good point which I wish he would develop when he gets up to speak, namely-


Stanley Howard Knowles: If I get the chance.


Stuart Sinclair Garson: -that a very large percentage of the Canadian national income is owned by the great mass of the Canadian people, and therefore he is quite right in the implication of his question that more of this money in total would go back to the people in the low income brackets. But that does not make my hon. friend's idea any better, because other ways of rebating it or dealing with the income tax could be pursued under which they would get not only a larger amount in
Income Tax Act
the aggregate but the benefits to every individual would be better relatively than they would be under his scheme.


Joseph Warner Murphy: Mr. Speaker, my question is quite simple. The minister spoke about principle. If the principle that he objects to here is wrong, why was the floor previously reduced from 5 per cent to 4 per cent and then from 4 per cent to 3 per cent?


Stuart Sinclair Garson: I did not undertake today to defend the reduction from 5 to 4 and from
4	to 3, though I have no doubt it was possible amongst the alternatives which were available at that time to show that amongst all those alternatives these two reductions were probably the best. I say that because I have confidence not only in my colleagues in the government but in the experts in the Department of Finance and the Department of National Revenue who would be advising upon these matters. But it does not necessarily follow that because you reduce from
5	to 4 and from 4 to 3 there are not better methods than wiping out the 3 per cent entirely. It does not follow at all.


Joseph Warner Murphy: That certainly does not answer my question. I am talking about the principle.
(Translation):


Mr. Hector Dupuis (St. Mary):: Mr. Speaker, it is only natural that as the member for a constituency made up of workers whose means and income are, to say the least, below average, I should rise to take part in a discussion on the improvement of conditions for those who have barely enough to provide for their families.
As I said, I represent a working-class constituency, and I know what it costs when illness comes upon a family. I know all the problems it means for the majority of the families I represent. That is why it would be unthinkable for the member for a constituency such as mine not to take part in this discussion.
I myself have been sorely tried as, in less than two years, I have required medical attention. I also had to have two particularly dear ones hospitalized and I am therefore in a position to know something of the cost of medical care.
There is not the slightest doubt that I will approve any measure designed to improve the lot of those I represent, specially those whose homes are visited by sickness. Moreover, there is not the slightest doubt that members of this house will bring particular attention to any amendment likely in such circumstances to lighten the burden of people in the low income brackets.

Income Tax Act
Nevertheless I still think that some confidence must be placed in the wisdom of the present government and in that of a party which also represents the people. This party has in the past initiated all the social security measures from which we now draw so many benefits. Yet we have seen the leaders of the various groups who sit on the other side of the house, as well as their followers, oppose the adoption of certain social security measures. In spite of that the government- which in fact represents the Liberal party- has not hesitated to give this country social legislation which many other countries in the world would very much like to have.
Mr. Speaker, demands can always be made of the government; it is always extremely easy for the opposition to ask for all kinds of legislation but, on the other hand, it is also a good thing for the government to study these demands very carefully before following them up.
I would not like to see this matter put off or forgotten, for it deserves serious consideration. I repeat that I am in favour of it and I do not hesitate to congratulate the hon. member for Winnipeg North Centre (Mr. Knowles) for having introduced this measure so that the government may review the situation of those whose burden it is urged to alleviate. I support that measure without any reservation. I will fight for it anywhere but I wonder, as was suggested by some members of this house, I wonder if we could find a still more generous formula for the people whom the hon. member for Winnipeg North Centre wishes to protect.


Stanley Howard Knowles: Would the hon. member
allow me a question?


Hector Dupuis: First, it would be appropriate . . .


Stanley Howard Knowles: Mr. Speaker, . . .


Hector Dupuis: In my humble opinion ... I am sorry . . .


Stanley Howard Knowles: Would the hon. member allow me a question?


Hector Dupuis: Certainly.
(Text):


Stanley Howard Knowles: If the hon. member is sure that his side is right on this issue, would he permit it to come to a vote?
(Translation):


Hector Dupuis: Mr. Speaker, it is no fault of mine if the speeches have been so lengthy and numerous. I would have even wished that each member in this house get on his feet and pledge, by his speech, to support this

resolution which would be such as to alleviate the unfortunate position of those on behalf of whom we are now pleading.
But, to come back to the point I was making a while ago, the hon. Minister of Justice (Mr. Garson) and other members of equal good faith pointed out that it might be appropriate to find a more adequate way of relieving these people.
For instance, why not investigate the opportunity of setting the basic exemption for income tax at a higher level? Why would some governments not" hasten to help the establishment of a health insurance plan? It would tend to improve the situation we are now discussing. Why not, if it can be done, reduce the scale of the income tax? In this way, all classes of our society would benefit by a sizeable amount, without the small man being put in the position just described by the Minister of Justice, in which the big taxpayer would save from $2,000 to $3,000, whereas the small taxpayer would only save a few cents?
(Text):


An hon. Member:: Ten o'clock!


Clayton Wesley Hodgson: Give us the vote.


An hon. Member:: Sit down.


Hector Dupuis: I have never told anybody in this chamber to sit down, and I am not going to sit down before I have finished with my remarks.


Joseph Warner Murphy: You might
just as well.


Clayton Wesley Hodgson: Will you sit down at ten
o'clock?
(Translation):


Hector Dupuis: At all events, I doubt those who tell me to sit down are sincere, because they know very well that, even if we pass this resolution tonight, it will be impossible for us to benefit from a tax reduction in the fiscal year 1957-1958 before the matter has been considered by the government . . . (Text):


Clayton Wesley Hodgson: Give us the vote. Don't talk it out!


Alfred Claude Ellis: Question.
(Translation):


Hector Dupuis: I would rather that we gave more attention to the suggestions that have been made to raise the old age pension and the family allowances, while lowering the age limit when indigent old people may receive a pension from 65 to 60 years, after

which we might turn to the suggestion of the hon. member for Winnipeg North Centre.
It has been mentioned in this house,-I forget by whom,-that certain hon. members did not seem to favour the proposed resolution. Again, I approve it without reservation. However, under the present circumstances, it seems we should be pleased to know that the matter of a wholesale deduction of all medical expenses was again drawn to the government's attention.
Moreover we have shown once more that the members of this house are always interested in improving the conditions of the small people, in increasing exemptions ...


Stanley Howard Knowles: Ten o'clock!
Income Tax Act
(Text):


Hector Dupuis: Is it ten o'clock? Mr. Speaker-


Harold Edward Winch: You talked it out. (Translation):


Hector Dupuis: The idea is not to talk out the resolution, but to give the hon. member for Winnipeg North Centre another opportunity to keep on doing his duty, to call the attention of the government, in and out of season, on any measure which could improve the lot of the small wage-earners I have the honour to represent in this house.
Mr. Speaker, it being ten o'clock, I move the adjournment of the debate.
(Text):
On motion of Mr. Dupuis the debate was adjourned.


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

[Stage Direction]
The following answers, deposited with the Clerk of the house, are printed in the official report of debates pursuant to standing order 39:

Mr. Holowach: 1.	How many persons of Indian ancestry have been evicted or otherwise removed from reserves in Alberta during each of the years 1951 to 1956 inclusive?
2.	How many of these cases were represented by legal counsel?
3.	Does provision in law exist with respect to the federal government providing legal counsel to act for persons threatened with expulsion from Indian reservations under terms of sections 9-12 of the Indian Act?
4.	If not, is consideration being given by the department to provide this service free?
Answer by: Hon. J. W. Pickersgill (Minister
of Citizenship and Immigration):
1.	1951-none.
1952-	none.
1953-	none.
1954-	none.
1955-	none.
1956-	none.
2.	None.
3.	No.
4.	The policy has not been to provide legal counsel for either party involved in protests over Indian status or band membership. However in the case of the recent appeal in Alberta, it has at the request of the appellants been agreed to pay reasonable costs of their counsel; and the department is prepared to take similar action in the case of those who lodged the protest.



PRINCE EDWARD ISLAND


Mr. Kickham: What amounts were paid to the province of Prince Edward Island in each year since 1945 in (a) subsidies on potatoes; (b) subsidies on feed grain; (c) bonuses on hogs and lambs; (d) subsidies on ground limestone and fertilizer?
Answer by: Right Hon.	J. G. Gardiner
(Minister of Agriculture):	
(a)	
1946-47 		. .. $ 17,000
1947-48 		. . . 28,000
1949-50 		. .. 586,000
1951-52 		... 78,000
1954-55 		. . . 2,385,000
1955-56 		. . . 6,000
The above payments were made to producers or organizations in Prince Edward Island for the benefit of producers of potatoes and to assist in marketing the Canadian potato crop, including payments for storage warehouses.
(b)	Amounts paid in freight assistance on shipments of feed grains into Prince Edward Island:
Fiscal year:	
1945-46 			 $ 405,317
1946-47 			 457,543
1947-48 			 422,611
1948-49		 398,528
1949-50 			 363,430
1950-51 			 374,669
1951-52 			 349,383
1952-53 			 398,674
1953-54 			 328,946
1954-55 			 261,903
1955-56 			 417,646
(c)
1946-		 $	67,035
1947-		 75,040
1948- 			 111,332
1949- 			 113,658
1950- 			 130,686
1951- 			 129,613
1952- 			 138,234
1953 			 102,857
1954-	 112,095
1955-	 110,332
1956- 		. 97,289
The above hog premiums	paid to Prince
Edward Island producers were calculated from gradings according to origin.
No bonuses were paid on lambs.
(d) Amount of assistance paid to the province of Prince Edward Island on the distribution of agricultural limestone:
Fiscal year:	
1945-46 			 $ 22,577
1946-47 			 24,077
1947-48 			 18,654
1948-49 			 22,485
1949-50 			 25,192
1950-51 			 23,174
1951-52 			 30,532
1952-53 			 30,431
1953-54 			 34,127
1954-55 			 32,985
1955-56 			 37,563
No information	available on a provincial
basis for subsidies on fertilizers, discontinued in 1947.



LETTER CARRIER SERVICE


Mr. Balcer: 1.	What cities and towns in Canada have letter carrier service at present?
2.	How many letter carriers are there in each of those cities and towns?
Answer by: Mr. Kirk, Parliamentary Assistant, for the Postmaster General:
1 and 2. See following statement.

Questions
Number of letter carriers (not including supervisory
Location	letter
carriers)
Amherst, N.S	 6
Arvida, P.Q	 5
Barrie, Ont	 9
Belleville, Ont	 14
Brampton, Ont	 6
Brandon, Man	 13
Brantford, Ont	 30
Brockville, Ont	 8
Burlington, Ont	 12
Calgary, Alta	 145
Campbellton, N.B	 4
Cap de la Madeleine, P.Q	 6
Charlottetown, P.E.1	 8
Chatham, Ont	 15
Chicoutimi, P.Q	 14
Chilliwack, B.C	 6
Cobourg, Ont	 5
Collingwood, Ont	 4
Corner Brook, Nfld	 6
Cornwall, Ont	 16
Don Mills, Ont	 7
Downsview, Ont	 23
Drummondville, P.Q	 12
Dundas, Ont	 6
Edmonton, Alta	 170
Edmundston, N.B	 5
Flin Flon, Man	 5
Fort Erie, Ont	 4
Fort Frances, Ont	 4
Fort William, Ont	 21
Fredericton, N.B	 12
Galt, Ont	 13
Glace Bay, N.S	 12
Granby, P.Q	 9
Grand Falls, Nfld	 3
Grand-Mere, P.Q	 5
Guelph, Ont	 20
Halifax, N.S	 73
Hamilton, Ont	 126
Hull, P.Q	 20
Joliette, P.Q	 6
Jonquiere-Kenogami, P.Q	 11
Kamloops, B.C	 8
Kelowna, B.C	  8
Kenora, Ont	 4
Kentville, N.S	 5
Kingston, Ont	 24
Kirkland Lake, Ont	 6
Kitchener, Ont	 34
Leamington, Ont	 5
Lethbridge, Alta	 19
Levis, P.Q	 11
Lindsay, Ont	 8
London, Ont	 73
Magog, P.Q	 5
Medicine Hat, Alta	 13
Number of letter carriers (not including
supervisory
Location	letter
carriers)
Midland, Ont	 5
Moncton, N.B	 17
Montreal, P.Q	 770
Moose Jaw, Sask	 17
Nanaimo, B.C	 12
Nelson, B.C	 6
New Glasgow, N.S	 7
New Westminster, B.C	 42
Niagara Falls, Ont	 25
Noranda, P.Q	 3
North Battleford, Sask	 5
North Bay, Ont	 13
Oakville, Ont	 12
Orillia, Ont	 9
Oshawa, Ont	 25
Ottawa, Ont	 150
Owen Sound, Ont	 10
Pembroke, Ont	 8
Penticton, B.C	 7
Peterborough, Ont	 26
Portage la Prairie, Man	 5
Port Alberni, B.C	 6
Port Arthur, Ont	 21
Port Colborne, Ont	 8
Port Credit, Ont	 17
Port Hope, Ont	 4
Preston, Ont	 6
Prince Albert, Sask	 13
Prince George, B.C	 8
Prince Rupert, B.C	 6
Quebec, P.Q	 107
Red Deer, Alta	 8
Regina, Sask	 63
Renfrew, Ont	 5
Rexdale, Ont	 6
Rimouski, P.Q	 6
Riviere du Loup, P.Q	 4
Rouyn, P.Q	 5
St. Catharines, Ont	 34
St. Hyacinthe, P.Q	 11
St. Jean, P.Q	 11
St. Jerome, P.Q	 7
Saint John, N.B	 31
St. John's, Nfld	 21
St. Therese de Blainville, P.Q		4
St. Thomas, Ont	 14
Sarnia, Ont	 29
Saskatoon, Sask	 43
Sault Ste. Marie, Ont	 20
Scarborough, Ont	 37
Shawinigan Falls, P.Q	 14
Sherbrooke, P.Q	 28
Simcoe, Ont	 5
Smiths Falls, Ont	 5
Sorel, P.Q	 9
Stratford, Ont	 12
Questions

Number of letter carriers (not including supervisory
Location	letter
carriers)
Sudbury, Ont	 32
Swift Current, Sask	 6
Sydney, N.S	  16
Thetford Mines, P.Q	 7
Thorold, Ont	 6
Timmins, Ont	 15
Toronto, Ont	839
Trail, B.C	 10
Trenton, Ont	 7
Trois Rivieres, P.Q	 17
Truro, N.S	 7
Val d'Or, P.Q	 5
Valleyfield, P.Q	 9
Vancouver, B.C	 391
Vernon, B.C	 6
Victoria, B.C	 88
Victoriaville, P.Q	 5
Ville Jacques Cartier, P.Q	 33
Wallaceburg, Ont	 6
Waterloo, Ont	 8
Welland, Ont	 15
White Rock, B.C	 6
Willowdale, Ont	 33
Windsor, Ont	 88
Winnipeg, Man	 205
Woodstock, Ont	 12
Yarmouth, N.S	 6
Yorkton, Sask	 5
2.	If so, for what purpose is the building required, and how many junior ranks is it designed to accommodate?
Answer by: Hon. R. O. Campney (Minister of
National Defence):
1.	Yes.
2.	As part of the home station development program, this building will provide canteen and light recreational facilities for corporals and privates. It is of standard design for an establishment of upwards of 800 junior ranks.



INCOME TAX COLLECTIONS

Mr. Hansell: How much income tax was collected in the last full year, for which records are available, on incomes of (a) $3,000 or less; (b) $3,000 to $6,000; (c) $6,000 to $10,000; (d) $10,000 and over?
Answer by: Hon. J. J. McCann (Minister of National Revenue):
Income tax collections are not broken down by the incomes of the taxpayers. Income tax returns filed by individuals however are analysed in this way, and an analysis of returns filed for the 1954 taxation year shows the tax payable assessed as follows:
Income group
under	$3,000
$ 3,000	under	6,0006,000	under	10,00010,000	and over
Income and old age security tax payable $207,428,000
449.531.000
133.303.000
307.130.000



POSTAL SERVICE, RESTIGOUCHE AND MADAWASKA COUNTIES, N.B. INCOME TAX PAYMENT REFUSALS

Mr. Van Horne: 1.	Have rural route and/or suburban mail services been established in communities in Hestigouche and Madawaska counties. New Brunswick, in 1956?
2.	If so, where?
3.	Have rural route and/or suburban mail services been approved for implementation in 1957, in communities in Restigouche and Madawaska counties, New Brunswick?
4.	If so, where?
Answer by:	Mr. Kirk, Parliamentary
Assistant, for the Postmaster General:
1.	No.
2.	See answer to No. 1.
3.	Yes.
4.	Campbellton suburban service No. 1. Campbellton suburban service No. 2.



SARCEE CAMP, ALBERTA  JUNIOR RANKS BUILDING

Mr. Pearkes: 1. Has a contract been awarded to Burns and Dutton Concrete and Construction Company, Limited, of Calgary, Alberta, for the construction of a junior ranks building at Sarcee Camp, Alberta?

Question No. 138-Mr. Hansell:
1.	Have any persons in Canada, during the past three years, refused to pay income tax on the grounds that the Income Tax Act is ultra vires of the parliament of Canada and therefore unconstitutional? If so, how many?
2.	What action, if any, has been taken to collect the tax and with what result in each case?
Answer by: Hon. J. J. McCann (Minister of
National Revenue):
1.	Records of the taxation division are not kept in such a way as to make it possible to answer this inquiry. Occasionally taxpayers have alleged that the Income Tax Act is ultra vires. However, since this question was settled by the judicial committee of the privy council in 1924 in the case of Caron v. The King, this argument has not been accepted by any court.
2.	In any cases where this argument has been raised, the same actions have been taken to collect the tax as in any other cases where the taxpayer had either neglected or refused to pay the tax.



FARM LOANS, NOVA SCOTIA

Mr. Purdy: 1.	In the province of Nova Scotia and by counties, what was the number and aggregate amount of loans authorized by the Canadian farm loan board, for the year ending 31st of March, 1956?
2.	In the province of Nova Scotia and by counties, what was the number and amount of loans made by the Canadian farm loan board, from the inception of the act to the 31st of March, 1956?
Answer by: Hon. W. E. Harris (Minister of Finance):
1 and 2. Information on the basis of counties is not available. For the province of Nova Scotia as a whole the answers are:
1.	Thirty-six loans for an aggregate amount of $123,700.
2.	Fourteen hundred and sixty-three loans for an aggregate amount of $2,673,400.



UNEMPLOYMENT INSURANCE


[Stage Direction]
Question No. 146
Mr. Matheson:: 1. Has the Minister of Labour or his officers, or the unemployment insurance commission, had any indication in the past year of an increased interest in the problem of providing unemployment insurance for paid agricultural workers?
Questions
2.	Has any further study been given to the extension of unemployment insurance benefits to cover these workers?
3.	Is any study being given now to the provision of a scheme of unemployment insurance to cover paid farm workers on a voluntary basis or otherwise?
Answer by: Hon. Milion F. Gregg (Minister of Labour):
1.	Yes.
2.	A study has been conducted for some time to seek a method for covering paid agricultural workers.
3.	Yes, the study is being continued in co-operation with the Department of Agriculture.



MID-CANADA LINE EXPENDITURES

Mr. Nicholson: 1.	How much has been spent by the federal government on the mid-Canada line?
2.	How much will be required to meet outstanding accounts?
Answer by: Hon. R. O. Campney (Minister of National Defence):
1.	Total expenditures on construction to December 31, 1956-$139,404,122.
2.	Estimated additional expenditures on construction-$70,000,000.

Tuesday, February 19, 1957