Canada. Royal Commission on Taxation : The Royal Commission on Taxation was established under Order in Council P.C. 1334, 25 September 1962, under Part I of the Inquiries Act (R.S.C., 1952, c.154) and on the recommendation of the prime minister. The Commission was mandated to inquire into and report on: (a) the distribution of burdens among taxpayers of existing rates, exemptions, reliefs and allowances provided in the personal and corporation income taxes, estate taxes and sales and excise taxes, considering the jurisdiction and practices of the provinces and municipalities; (b) the effects of the tax system on employment, living standards, savings and investment, industrial productivity, and economic stability and growth; (c) provisions in existing laws that may have caused anomalies or inequities or that may require action to close loopholes that permit the use of devices to avoid fair taxation; (d) the effects of the income, sales and excise taxes and estate duties on income and investment flows that affect the balance of international payments and economic relations with other countries; (e) how tax laws can best be formulated to encourage Canadian ownership of Canadian industry without discouraging the flow of investment funds into Canada; and (f) possible changes to achieve greater clarity, simplicity and effectiveness in the tax laws or their administration. The Commissioners were Kenneth Le Mesurier Carter, Chairman, J. Harvey Perry, A. Emile Beauvais, Donald G. Grant, Mrs. S.M. Milne and Charles E.S. Walls. The Secretary was Gordon L. Bennett.
In 1962 the federal government came under considerable pressure from business interests and the press, who were generally in favor of lower income taxes and corporation taxes, more tax incentives, and a thorough review of the tax structure. Criticisms of the Canadian tax system were widespread. For some time, politicians, journalists, in particular the editor of the Toronto Globe and Mail, and organizations such as the Canadian Chamber of Commerce, the Canadian Manufacturers Association, and the Canadian Tax Foundation had called for an overhaul of the tax system. Some criticism was aimed at large government expenditures, but other criticisms were based on concern about the effects of high taxation on incentives and frustration at the complexities and confusion of tax laws and appeal procedures. Evasion of income and estate taxes was also an issue. Critics of the tax system had their own opinion on what was wrong with it, but the debate was hindered by lack of factual information. On 11 January 1962 W.E. McLaughlin, President of the Royal Bank of Canada, called for a royal commission on taxation. McLaughlin's proposal followed an earlier but less detailed one made by the Premier of Ontario, John Robarts, in December 1961.
The need for reform of the federal tax system was acknowledged by Prime Minister Diefenbaker at the opening of his 1962 election campaign. On 5 May he announced that, if elected, he intended to appoint a royal commission "to make a comprehensive review of Canadian taxation." On 27 August the Prime Minister fulfilled his pre-election promise and announced the appointment of a royal commission to review federal taxation and its effect on the national economy, and to recommend reforms and improvements in the tax system.
Shortly after the announcement of the royal commission Pulp and Paper Magazine remarked: "Now pressed by the slower rate of national economic growth, by successive budget deficits and by perennial adverse balance of payments, the government is forced to search for a more sophisticated structure of taxation which will stimulate expansion as well as provide the money to run the country." (See Canadian Annual Review, 1962, pp. 171-172; The Pulp and Paper Magazine of Canada, September 1962, and newspaper clippings, RG33-65, Vol. 151.)
Hearings of the commission were held in St. John's, Halifax, Montreal, Ottawa, Toronto, Winnipeg, Regina, Calgary, Edmonton, Vancouver, Whitehorse and Yellowknife from 8 March 1963 to 24 January 1964. The commission received about 300 submissions. RG33-65 General Inventory
