The White Paper on Taxation: What Else is New?
Publication
The Empire Club of Canada Addresses (Toronto, Canada), 19 Mar 1970, p. 325-343
Description
Creator
Kierans, The Honourable Eric W., Speaker
Media Type
Text
Item Type
Speeches
Description
First, an address concerning current events in the Post Office. A review of the growth and changes in the Post Office operation, addressing some very controversial issues. Then, the White Paper. A suggested approach to reform of tax structures. Some societal considerations when criticizing the White Paper. Looking at objectives of the government. A brief history of income tax, introduced in 1799 by Sir William Pitt. Defining income. Exceptions to income tax payment. The purpose of tax reform. Deriving the revenue that will enable us to resolve our problems. Expanding the definition of income to include capital gains and unemployment insurance payments. Problems and issues with regard to the tax reform. Responding to criticism of the White Paper. Asking the people what kind of Canada we are seeking.
Date of Original
19 Mar 1970
Subject(s)
Language of Item
English
Copyright Statement
The speeches are free of charge but please note that the Empire Club of Canada retains copyright. Neither the speeches themselves nor any part of their content may be used for any purpose other than personal interest or research without the explicit permission of the Empire Club of Canada.
Contact
Empire Club of Canada
Email:info@empireclub.org
Website:
Agency street/mail address:

Fairmont Royal York Hotel

100 Front Street West, Floor H

Toronto, ON, M5J 1E3

Full Text
MARCH 19,1970
The White Paper on Taxation: What Else is New?
AN ADDRESS BY The Honourable Eric W. Kierans, P.C., M.P., MINISTER OF COMMUNICATIONS
CHAIRMAN The President, H. Ian Macdonald

MR. MACDONALD:

I have a special honour and privilege, today, and I would like to ask Mr. Charles Dario, Maitre d'Hotel of the Royal York to stand to receive a citation.

Mr. Dario has been with the Royal York since its official opening on June 11, 1929, which is exactly sixteen days longer than I can remember. Since 1952, he has served, faithfully and devotedly, the Presidents of the Empire Club of Canada, all of whom have been invited to be with us for this occasion. '

Mr. Dario, in making this presentation, on behalf of the Board and members of The Empire Club of Canada, I extend to you our sincerest good wishes for a happy and healthy retirement. I would only add one word to this citation: Godspeed in the years to come. (An engraved silver plate tray was then presented as a memento to Mr. Dario.)

MR. MACDONALD:

During the current season of the Empire Club of Canada, it is my privilege and responsibility to prepare for over thirty weekly meetings. Not infrequently, as was the case this morning, our speaker is scheduled to arrive shortly before the luncheon is due to begin. Similarly, the President must prepare and arrange for the mailing of our notice cards on a weekly basis. You will understand then why have I been afflicted with a recurrent nightmare during the past few months. It assumes one of two forms: either I am standing here gazing out upon a sea of empty tables because our cards did not arrive, or I am at this lectern, confronting a hostile audience, without a speaker. Happily, with the help of the Almighty, Air Canada and the Post Office, my dream has never been translated into reality. The Post Office, in particular, has performed with great reliability. The only exception was a letter which I sent down to the Empire Club office on Bay Street and which arrived, six weeks later, postmarked Moose Jaw. I realize, Sir, the concern of your Government about Western separatism, but routing the mail via Moose Jaw seems expensively zealous!

I am conscious that you are deeply preoccupied with labour negotiations at the Post Office and I am grateful that you have come here to speak today. In fact, I am doubly grateful because it would be difficult to find another Canadian who has combined, so effectively, experience in the academic, the financial, and the political worlds. I recall having the pleasure of expressing our appreciation to you, Sir, at an Empire Club meeting a few years' ago and remarking on the combination of intellectual curiosity, independence of thought, and boundless energy that has been characteristic of your career. That you have brought the same qualities to the Federal Cabinet and to your important portfolio, as Minister of Communications, has been demonstrated almost daily.

Eric Kierans learned the direct approach to a goal and the value of his own input while working his way through Loyola College and McGill University. He enjoyed success in a variety of business activities, before returning to the academic consideration of business affairs as Professor of Commerce at McGill and, later, as Director of the School of Commerce in 1953. His entrepreneurship turned in a different, but equally significant direction, in terms of public service, when he set about the rejuvenation of the Canadian and Montreal Stock Exchanges from 1960 to 1963.

In the early 1960's, when Quebec was alive with change, Eric Kierans was lured by the siren song of Quebec politics. In 1963, his first political venture produced instant success when he was elected to the Quebec Legislature, in a by-election, for the riding of Notre-Damede Grace. His political apprenticeship was brief, before entering the Cabinet of Jean Lesage to serve as Minister of Revenue and later as Minister of Health.

Anyone who knows the parliamentary life of Quebec City is familiar with the dominance of the French language throughout its affairs. It is a particular tribute to Eric Kierans' popular appeal that he was able to make such an impact on his French-speaking colleagues, and a testimony to his determination that he began to learn French, at age 50, mastering the language in record time.

In April 1968, he became a familiar figure on the national scene as a candidate for the leadership of the Liberal Party. As member for Duvernay, in suburban Montreal, he immediately entered the Trudeau Cabinet in July 1968 and became Canada's first Minister of Communications on April 1, 1969.

As Postmaster General, his name has become a household word. As Minister of Communications, he is pioneering in Canadian policies for telecommunications and space satellites. But today he returns to his earlier field of finance and taxation. Recently, I encountered a piece of doggerel by one Gaspard McGuffey called Unrealized Capital Gains, which describes a conversation between a tax collector and a citizen. Here is a sample:

"We're poor and our comforts are with us no more;
They went to the winning of Poverty's War."
He graciously nodded and started his list.
I'll endeavour to leave you enough to exist.
You're overly modest about your estate;
It's worth a great deal at our Government Rate;
For looking around here I'd say that you eke
A much better living than thirty a week."

I suppose all of us here are in that category, so that it is only fitting and proper that we should now hear the Hon. Eric Kierans, as he asks about "The White Paper on Tax Reform: What Else is New?"

MR. E. W. KIERANS:

Thank you very much, Mr. Chairman. As you can tell, Ian Macdonald is an old friend of mine.

Distinguished guests of the head table, gentlemen, members of the Empire Club: I occupy, as you know, a very sensitive portfolio. It becomes increasingly sensitive. I am quite used to remarks about the Post Office, made with all good humour, and I take it in exactly the same way. But I get it all the time. When the members came back to the House after the recent Christmas recess, I met a young member from New Brunswick and I asked him if he had a good Christmas (quite an innocuous question). And he said: "No, I didn't." I said: "Why, what happened--somebody ill?" He replied: "No. I lost a railway station and two post offices."

It has been particularly sensitive in the last week or so. On Tuesday evening after, for as yet unexplained reasons, I was unable to appear before a parliamentary committee, I did appear in the House at nine o'clock with much mail and government documents to examine and sign while waiting for a vote on Benson's Budget. There were the usual quorum of twenty there and not many more. Within minutes, the House began to fill up and, what is more important, the parliamentary press gallery. Your predecessor, Mr. Mayor, came to see me and he said: "Eric, what's going on? Are you going to resign tonight?" And I said: "No, Phil, I am not." "Oh," he said, "you can't tell me that. Look at that gallery up there. Those guys know more than the ministers do, and," he said, "they tell me a hell of a lot more."

He went on to say: "Well, Eric, I want to tell you something. I don't know what is going to go on here tonight. I hear the P.M. is making a statement. I'm glad to see you around, but, the boys have been making book on you all day, and you'd better believe it." After it didn't happen, I was going out and I ran into two groups, one of which was Phil Givens. And Phil looked very despondent. I said: "What's the matter, Phil, did you lose?" He replied: "Yes, yes, Kierans, you're a tough cookie."

I went out and I saw the second group--it was the parliamentary press gallery. They wanted a lot of explanation. I said: "Look, I'm still Postmaster General." And, you know, their faces fell. I added: "What's the matter? Are you missing a headline?" You could see it written in their faces: "Kierans--Did he fall or was he pushed?" and there was just nothing! I tried to console them, although it didn't work. I said: "Well, maybe if I stay, you will have more headlines than if I go, whereas this would only be one headline, and then where are you?"

I think that the best comment of all was really from one of my colleagues who said: "You know, Kierans is a very religious man. Every night he goes home and he thanks God that he is still Postmaster General. He will also go home one night and he will thank God that he is no longer Postmaster General. But he won't blame God for anything."

Well, I am supposed to talk on the White Paper on Tax Reform, and when I told Ian that I would like to talk on this, I intended to spend all of my time on it. But I feel you would want one or two words about what is really going on in the Post Office.

The Post Office has not changed in a hundred years. And that is your fault here as much as it is mine. The people who work in the Post Office are doing things exactly today the way their grandfathers did. They are carrying the mail and they are sorting the mail in exactly the same way.

In the last year and a half we have set about changing that, but you don't change an old institution with 48,000 people, without having to do a lot of heaving and pushing around.

The kind of state into which we, as citizens of Canada, have let the Post Office fall can be summarized, I suppose, in a couple of little figures. About six or seven years ago it happened to be a Tory year, although it could have been a Liberal year, for they are neither better nor worse--the Post Office, which at that time had 41,000 employees, had in its budget the magnificent sum of $15,000 for management training. I suppose that is a cup of coffee apiece in today's inflated age. But that is all we had. And, with some 8,000 post offices, we spent the magnificent sum of something of the order of $315,000 on capital equipment. That would not even buy a conveyor belt for all the post offices that we had.

If the provincial governments had fallen down in the same way after the Second World War when the traffic began to speed up, and if they had not built the throughways and the 401's and the 27's and the interchanges, you would get some idea of what is happening to the Post Office today. Because the provincial government did do it, and the federal government did not do it.

Now, with more than five billion pieces of mail in a year, 25 million pieces a day, all sorted manually and carried on foot, we have reached a point where things can no longer just be done in exactly the same way.

Similarly, our whole approach to a post office was something much more political than it was social, or economic, or efficient. We built post offices as part of a winter works programme. And that was fine, or it was not so fine really. To give employment, we built hundreds of post offices across the country where there was no need for them. And, while they might individually have cost twenty-five or thirty thousand dollars apiece, the carrying charges for something that you don't need--which includes, among other things, three, four, five and six men to man them, staff them, and give them service, where really very little service is required--continue to be with us.

Post offices were traditionally established all across the country according to what was in the political interests of local members rather than what was in the interests of an efficient post office. Now we have begun to close them down. I expect we will close down about two thousand by the end of this year or even by the fall. We have already closed down about 1,360 up to the moment. You do a lot of pushing around of members of parliament and colleagues and mayors of local small municipalities when you do that. Their expectations have been built up, and there is no longer any justification.

When you have four post offices--small ones--all within a distance of 2.8 miles, the total annual sale of stamps of which is roughly (all four together) about $300, and when you look at the results and figure out that you can accomplish the same kind of service or an even better service by adding 2.8 miles to a rural route that already exists in the area, you make a local member of parliament very unhappy as well as, I suppose, the residents of the communities.

I may say this has earned me the name of "Computer Kierans." But the opposition will, grudgingly, admit that the computer has not built-in programming for political bias. I may say I went down to speak at one of those election-fund dinners that Nova Scotia Liberals gave in Halifax. Unhappily for me, we had decided to close down two of three small post offices in the Wentworth Valley only about three days before. It so happened that two of the postmasters were Liberal and one was Conservative. It also happened that the Conservative was in the centre of the three, and the computer picked the Conservative as the one that should survive. Well, the dinner that night took a very peculiar turn!

We have done a lot of other things as well. We are really turning that post office inside out, and we don't accept the kind of "sacred cows" that have been foisted on us in the past, even such prestigious operations as your President has referred to in Air Canada. When I feel I am getting hosed, I let people know I am getting hosed, and I feel that we are paying far too high rates there. Such is the kind of effort that we are making to bring down our costs and to make ourselves more efficient.

I may say here that our regional General Manager McKay--gave me the report of some research when I came in today. I am sure that all of you will agree that this is the right approach to handling a post office. But the results of this research is something that you may not agree with because it is going to affect you. Toronto is where we are zeroing in on now--if we survive Montreal.

We have 1,962 street letter-boxes. A typical number of clearances, according to this research which I only saw a few minutes ago is 8,371 in a typical day. But 2,609 of those 8,371 have nothing in them. We are parading around with the trucks making the clearance anyway, even though the volume is zero. For 2,176 additional ones, the total clearances picked up in that day were one pound.

Looking at it in this way, I would say, Mr. Mayor, that the Post Office in Toronto has approximately two to three hundred mail boxes too many, and also some clearances too many. There is one clearance that we do in those 1,926 boxes in which, for one particular clearance run, as McKay told me the other night when I was in Toronto, 1,800 of them had nothing in them. Such a report leads me to believe--you know, you don't have to hit me on the head--that it is an unnecessary run.

This is the kind of work we are doing. In Montreal we did something else. In Montreal, for 15 years, we have been handing out the mail contracts on what is happily called "temporary arrangements." The postmaster--I am not too clear on this, and I don't think Justice is either--can give contracts up to one year and no longer unless he goes to tender. So, we have been giving contracts year after year on a one-year basis. We decided to cut this out, and last fall we decided we were going to tender. Last September the cabinet approved the policy. We advised the unions; we advised the companies. Indeed they both knew six months before that, or over a year ago now, that this is what we intended to do. We also re-organized Montreal--divided it up into five divisions. As a result of those tenders, when they came in, we had four new contractors for the five new divisions, with one contractor getting two. We were to save approximately two million dollars.

However, something happened on the way to the contract date. The existing contractor did not bid. His reasons for not bidding were that the productivity of the people that he had working for him, plus the kind of contracts that they had negotiated, or had imposed on them, would not have given to him enough flexibility to compete. And this is where the problems started.

Since then, there have been two schools of thought. One is that the new contractors, who have contracted according to the terms of the contract and who bought their own vehicles and set about to create their own labour force--that is, to choose the people who would work for them, and to choose people who would make their own enterprises successful--began to be under some pressure (but not from me) to take over the existing body of men according to a seniority list and to recognize the existing union.

Now, there are several things that occurred there. I certainly do not believe that I can ask people to do that, because I believe that a man in business has the right to choose his own employees. Those employees have the right to organize themselves thereafter. I would believe that if we, in the Post Office, did this, such a practice would spread throughout the public sector--and by this I mean not only the federal government but also the provincial governments--and from thence it would spread into the private sector. What one union gets another wants, and I personally believe that this would have damaging effects on the Canadian economy both pervasive and enduring.

I have a great sympathy with those who have acquired rights, but acquired rights are exercised with respect to a given employer; they are not transferable. Perhaps they should be some day. I don't know. But my position is quite simply that, until this is thoroughly aired and is put into legislation, these rights are not transferable; in particular, these acquired rights cannot be transferred, or made transferable as an ad hoc response to violence. Until people are convinced that violence will not work, there will be continual violence.

Now, I suppose I could get a hand on that sort of statement and position here in the Empire Club. I am not so sure that I will get the same hand--I have not got the same hand--for adopting this kind of position with the CNTU. On the other hand, the CNTU might think, after you listened to the main part of what I am going to say, that it would be worth a hand, and you may not. So now, we come to the White Paper, and what else is new?

I think the basis of my approach to this subject would be to read to you a quotation from R.H. Tawney which, while it is couched in old-fashioned language because it was written years ago, defines as well as anything I have ever read, or could have written myself, my own philosophy.

Tawney wrote:

"It is not till it is discovered that high individual incomes will not purchase the mass of mankind immunity from cholera, typhus and ignorance, still less secure them the positive advantages of educational opportunities and economic security that slowly and reluctantly, amid prophesies of moral degeneration and economic disaster, society begins to make collective provision for needs which no ordinary individual, even if he works overtime all his life, can provide himself."

Now, that is the basis, I believe, of any approach to reform of tax structures, or any of our social institutions.

This age is an extravagant age. Our young people are vocal and vociferous, but I think this age is characterized by a new understanding of, and respect for, the dignity of man, and the dignity of the individual. What people, especially our young people, are looking at today is an examination of those social institutions and structures which seem to stand in the way and obstruct the movement towards new values and beliefs. Essentially what any tax reform programme must be based upon is an understanding of the social objectives which are lying within the community, which are considered desirable, and which it therefore becomes the government's responsibility to finance.

We must respect our traditions, but we must be alive to the values that underlie them and the possibility also that they may present serious handicaps in obstructing the movement towards a happier community, a happier Canada, and a heightening of the quality of life.

What people will not accept today is that, given their objectives, institutions should be allowed to stand in the way simply because they are age-old, or traditions. Today we have a different world from the world of Sir William Pitt--I will talk about him in a few minutes--because today we have a world in which man has solved the problem of production. We have the capacity to produce the things and the services--the goods and the services--that will banish sickness and poverty and provide an education and health for all of our people. We have that capacity to produce. We have not yet developed, or seem to be slow in developing, the social institutions that will help us to distribute that abundance which we are capable of producing.

One of these institutions is our belief--an eighteenth and nineteenth-century belief--that happiness (to turn back a phrase on the tax critics of my friend Harvey Perry and Carter by that very tacky phrase "a buck is a buck") is equivalent to money. The young people today do not accept this. The people today who criticize the White Paper have every reason to criticize this or that aspect of it, because that is what it is for. As I have said to Mr. Benson, if he made one mistake in the White Paper, it was not to put what he and the Prime Minister have said since--that it is for discussion purposes only--not to have put that in writing on the cover.

What I want to suggest to you is that when people criticize the White Paper, they should also criticize it from the viewpoint of a philosophy of life, a philosophy of the Canadian community and its objectives as they see it, and explain this equally clearly. Is affluence to be the goal, the only goal, or is self-respect of every man, respect for the dignity of every man, to modify the rush towards material wealth? And if they criticize the White Paper solely because it limits their own ability to achieve affluence more quickly, I would doubt very much if they would find sympathy from the majority of Canadians.

The problem that Mr. Benson faces today is that outlining the objectives of the government, which is 'only a reflection of the people, is worthy of the same all-out effort as if we were going to war. Of course, it is much easier to define an objective with the simple word "war" and then to bend all of the energies of a nation to winning a war. But surely the objectives of banishing poverty and banishing ignorance, of distributing all that Canada can offer in a more equal fashion, would present a wide enough challenge. Surely these are worthy of our total commitment, or as total a commitment as the single objective--war.

Income tax, as most of you know, was introduced in 1799 by Sir William Pitt. It was introduced under the strain of England's war against the coalition, a great part of which was fought in the Caribbean. Finally Pitt came to the end of all his resources, which were almost entirely the product of indirect taxes that bore heavily on the people. There were taxes on expenditures but not on income. Under the pressure of that single objective of winning the war, he introduced the income tax.

It is amazing to read that first bill. When you want to know who are the privileged groups in a community, I suppose there are many ways of going and looking for them. Perhaps it is my economic background but, generally speaking, I look at the list of those who get exemptions from whatever a tax bill may be. If you looked at the list that Pitt had to make for exemptions, you find the first one is "ecclesiastical personages gaining their revenue in right of parishes." That was A. But B, I think, will be of interest, although I am sure he already knows it, to Harvey Perry. B was a very funny one. It made me laugh. B was "mining and quarries", and we have it to this day.

I may say also, although I imagine many of Perry's wounds have healed by now, that where there is a bill there will also be an anti-movement against the reform bill. In Pitt's case he introduced the tax in 1799. The reform movement came in 1800. I don't think the first year's taxes had even been passed by then. Certainly the state of the mails being what they were, and the gathering of statistics, it is unlikely much money was collected.

A certain Mr. Beake, who was a thorn in Sir William Pitt's side, came out in 1800 telling everyone ho it could have been done better. I think there are a couple of other "B's" around now--Brown, Bulloch are their names. There were two defects in all of that debate. All through the eighteenth century, or nineteenth century, nowhere at any time in the literature or the law--well, you can find it later on in the nineteenth century or discussions about it--did you find imposed graduation. The other was the definition of income itself that is still living with us--the definition of income which was an extremely narrow one and excluded all of capital gains. Again, that lived on in England until the Sixties and Harold Wilson.

The definition of income was derived by those of the ruling class and the aristocracy of England who were willing to impose taxes on those newly-rising industrial and commercial classes. It was not defined to include wealth, because they were the ones who had wealth, even though they yielded, after some struggle, to a modest tax on income which came from their wealth and investments.

Now, if your objectives are ever-expanding--and here, living as we are today in the middle of Toronto, they have to be expanding with all the urban problems that your mayor has, all the pollution of water and air, all the housing problems, the objectives of the nation must therefore expand to encompass them--then the purpose of tax reform is to derive the revenue that will enable us to resolve our problems.

The Economic Council, in its last Report, suggested that the total of the gross national product that presently accrues to all governments--federal, provincial and municipal--is approximately 33 percent, but that to resolve many of the problems facing Canada this might well move to thirty-seven per cent in the next four or five years. And this is true. I am saying nothing here, between distinguished representatives of the Province and of the City of Toronto, about current distribution of that pie. But the three governments are facing these challenges together. The purpose of the White Paper, among other things, is to gain the revenue that we need to accomplish our objectives and to distribute the burden more fairly among the various classes of people. Such distribution, of course, must be--can only be--dependent upon the circumstances of the people who are being taxed, by which I mean their ability to pay.

So you see that the White Paper is now including something that Pitt left out in 1799 and Sir Robert Peel in 1842. We are expanding the definition of "income" to include gains from capital. If we want to conduct the debate on this level, I think we could have a good debate. But let us not start out with the flat position that this is socialistic and communistic and, therefore, the more coupons that are clipped out of the newspapers and sent to members of parliament the better. That is not an adequate or an intellectual response.

Benson has broadened the definition of "income" to include capital gains, plus unemployment insurance payments and why not? A man could be working for eight or nine months and gain six or seven thousand dollars and then for the other three months draw a thousand or fifteen hundred dollars by way of unemployment insurance, but it is all revenue. The definition of "income" is not just aimed at people in the Empire Club; it is concerned with people who have revenue, who have an increase in their capacity to buy goods, whatever may be the source. And so, the man with seven thousand dollars from labour and fifteen hundred dollars from unemployment insurance has an income of eighty-five hundred dollars, and should be taxed accordingly.

What Benson has also done, at the same time as he has broadened the concept of income itself, is to take a look at the word that the tax experts of the nineteenth century ignored, and that was introduced about 1904, or 1906 either under Asquith or just before him. He has taken a look at the use that has been made of the graduated income tax. He has said that, given the broadening of the definition, the gradation of the income tax rates is far too high--and at 80% it certainly is--and he has brought it down to 50%. But of this we see or hear very little.

Of course, there are all kinds of problems--for example, revaluation. He has said: "Well, perhaps, this is too soon." But I think that there is a case that can be made for it. We are willing to hear and we want to hear sophisticated arguments against it, and since this is an honest attempt to invite from you the impact that this particular measure might have on you, I think you owe it to us to tell us your reasons why and not list the members of particular Liberal federations that you happen to know.

Small business? All right, I was a member of that committee. I have been in small businesses. I may be going back to small business, I don't know! I find no difficulty in the one single tax rate. You can argue whether it should be 50%, or something else, but all the arguments for bringing it in are extremely well known. If I were a small businessman, I think I would insist on alternative proposals. Tax me at 50 per cent, but do something about capital cost allowances because a small businessman has his major problems. He probably has all the initiative and enterprise and drive in the world, or he would not be going into it; his managerial and administrative capacities are probably all there. However, his problem is funds. So give him accelerated depreciation or immediate write-offs, and then define a businessman the way he defines himself because some small businessmen go into small businesses and they are very happy to stay there. They have a nice, legitimate income which they can juggle between the 21 per cent that currently exists and whatever is their personal rate, and they are quite happy and content to stay there.

However, that is not particularly the type of person for whom the argument is being made. It is being made for, and on behalf of, young, aggressive and dynamic people who want to expand and cannot because of the drain of taxation. If a man borrows $100,000 to buy capital equipment, then he can charge that off in a year and make $100,000. He can charge it off in two years, if it takes him two years to make $100,000, or he can charge it off in 20 years, if he is only interested in making $5,000 a year. He defines himself to the extent of how aggressive or non-aggressive he is. But the really aggressive one, who is able with an accelerated capital cost allowance and who has a target of $100,000, will run like mad to make $100,000 in order that he can charge off the depreciation. It may take him more than one year. Charge it off in two years or three years. And then, if he does do it, he has a profitable business, he has not paid taxes unless he has done more than that, and his condition with the bank, I would imagine, would be an extremely healthy one. Moreover, he can start it all over again.

Let me come to mining depletion. You know, as I said, Sir William Pitt had to do something about this in 1799, and it has been a "sacred cow" ever since. For some reason there are industries in this world that should be more favoured than others. I don't know whether it is because they contribute more to the welfare of the country. They make that argument. But any industry that I can think of will contribute more to the welfare of the country than it presently does if it had some of the tax privileges that the mining and oil industries presently have.

I think the best remark that I have ever read about this issue has been by one of your guests here today. I suppose he must have been writing about, or talking about, the fact that Canada has to do it because the United States has done it. You know the flak against it down here. I think he wrote something like this: "Because there is a cultural lag in the United States, there is no reason why we have to imitate it up here."

The middle incomes--are these the people who are hardest hit? Well, yes. But, as you know, if we have certain objectives, then this is where the revenue is. I don't think that the emotional argument that the whole middle class is going to move south of the border is a particularly strong argument. I know how I myself feel about it. I feel that if Canada could ever accomplish half of its objectives that our people in Canada want, then this would be a very different country. Not that we would go out and force it on people. We want so very many things that the Americans want. We ape their methods of production and management because they are the best in the world. But there are other things that we can aspire to and want for ourselves that will make this a country where you will want to live, even if that tax table running down does show that there is a difference. Because, while you may gain a few dollars taxwise by moving south of the border, the Canada that we are all thinking of should be one where the quality of life is so much better than in any other part of the world that it will take many more dollars than the difference in those two comparative tax tables to persuade us to give it up.

All I am trying to say, to repeat what the Prime Minister has said, and also what Mr. Benson has said so very many times, is that the White Paper is a good paper in the view of those of us who worked on it, and on the Carter Commission. Certainly, it can be modified in some respects. But, when you bring your arguments to us, don't bring them simply from the point of view of the particular interest that you represent. I think that if there is something that Mr. Benson has accomplished, he has accomplished what I accomplished when I decided to put up the rates on second-class mail. That affected the newspapers of the country. They thought the reform of the Post Office was a good idea until the second-class rates went up.

Tell us what are the objectives that you want to see dropped. Tell us the reasons why mining and oil companies and you can find dozens of them--have never paid a nickel's tax. Ask yourselves should it continue like that, as a burden on other parts of the economy? But most' of all tell us what image of this country we should really be working from. If we start on that level and with the same attitude, then I think that you and I and my colleagues can conduct a very satisfactory discussion about the ways of generating the revenue that will achieve the kind of Canada we are seeking.

I want to say one final thing to you. Perhaps some of you will go away with the idea that Benson isn't so bad after all. I think there is a lot in this. Therefore, if you see him walking down the street, I think you would be well advised to go up and shake him by the hand and ask him how his health is and tell him: "Take good care of yourself, Benny-boy." And then, that night when you see him on television, you, too, can get a little religion, as my colleagues say I have. And you should thank the Lord because, looking at jolly old Ben, I can tell you have every reason to do so. Thank the Lord when you see Ben because there, but for the grace of God and Pierre Elliott Trudeau, goes Kierans.

Mr. Kierans was thanked on behalf of The Empire Club by Dr. Murray G. Ross.

Powered by / Alimenté par VITA Toolkit




My favourites lets you save items you like, tag them and group them into collections for your own personal use. Viewing "My favourites" will open in a new tab. Login here or start a My favourites account.

thumbnail








The White Paper on Taxation: What Else is New?


First, an address concerning current events in the Post Office. A review of the growth and changes in the Post Office operation, addressing some very controversial issues. Then, the White Paper. A suggested approach to reform of tax structures. Some societal considerations when criticizing the White Paper. Looking at objectives of the government. A brief history of income tax, introduced in 1799 by Sir William Pitt. Defining income. Exceptions to income tax payment. The purpose of tax reform. Deriving the revenue that will enable us to resolve our problems. Expanding the definition of income to include capital gains and unemployment insurance payments. Problems and issues with regard to the tax reform. Responding to criticism of the White Paper. Asking the people what kind of Canada we are seeking.