Canada. Royal Commission on the Taxation of Annuities and Family Corporations : The Royal Commission on the Taxation of Annuities and Family Corporations was established under Order in Council P.C. 8679, 13 November 1944, under Part I of the Inquiries Act (R.S.C., 1927, c.99) and on the recommendation of the Minister of Finance. The Commission was mandated to inquire into and report on (a) the present treatment under the Income War Tax Act of payments to individuals in the form of annuities or other annual or periodic payments received under the provisions of any contract, will or trust; payments to individuals in the form of pensions, superannuation or other periodic payments or single payments received following retirement from or cessation of employment with an employer; payments by individuals under an annuity, insurance, endowment or other savings contract; and other payments in which it is not obvious whether they are income or capital or both; and to consider whether any modification of that treatment is desirable and, if so, what alterations of the law are required for the purpose; and (b) the taxes imposed under laws in force in Canada on income and successions or inheritances arising on the death of a person owning a substantial proportion of the shares of a private corporation or a closely held corporation that has accumulated an earned surplus, and to consider whether under any circumstances there should be an abatement of the tax liability, and, if so, under what circumstances and to what extent. The Commissioners were William Carlos Ives, Chairman, Duncan Alexander MacGibbon, and Maxwell Weir Mackenzie. The Secretary was J.A. Michon.
For several years before the Second World War, the practice in Canada was to tax the whole of the proceeds of an annuity as income. This policy was consistent with the practice in Great Britain. As a result, some taxpayers made representations to the government that part of the proceeds representing the purchase price of an annuity was capital. They pointed out that since it had already borne tax, it should not be taxed again. The tax on the full proceeds of an annuity was alleged to be a second tax (at least on part of the annuity). Concern was also expressed about the taxation of periodic payments under wills and trusts. Serious anomalies existed in provisions for the taxation of pensions as well. In order to obtain information about these practises, and an unrelated problem involving undistributed surpluses of closely held corporations, in 1944 the Government of Canada appointed a royal commission. (see J.H. Perry, Taxes, Tariffs and Subsidies: A History of Canadian Fiscal Development, Toronto: University of Toronto Press, 1955, pp. 401-407).
Hearings of the Commission were held in Ottawa from 22 January to 28 March 1945. The commission received 305 submissions. RG33-24 General Inventory
