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Maps, plates, charts, etc., may be filmed at different reduction ratios. Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Les cartas, planches, tableaux, etc., peuvent dtre filmds d des taux de reduction diffdrents. Lorsque le document est Vrop grand pour dtre reproduit en un seul clichd, il est filmd d partir de I'anple sup6rieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images n6cessaire. Les diagrammes suivants illustrent la mdthode. 1 2 3 1 2 3 4 5 6 \o u^ NATIONAL LIBRARl CANADA BIBLIOlll QUE NATIONALE aJa Uy' SERIOUS LOSS OF REVENUE TO THE COUNTRY, >Q*. OLASSIFlCATiON > CDMI'iriBD bY THK \^o. Tobacco Association of Canada, V f.* H I U -.-*^ .--^ ■1 ■ V_7 I SERIOUS LOSS OF REVENUE TO THE COUNTRY, COMPILED BV THE Tobacco Association of Canada, flfpIP Hi- t ( 20 • 8 Al T6 ^■* -^ wm. SERIOUS LOSS. HALF A MILLION DOLLARS LOSS OF REVENUE TO THE (lOUNTRY FROM THE WANT OF EFFICIENT LAWS TO CONTROL THE GROWTH OF HOME-GROWN TOBACCO. In approaching this vexed question, it might be premised thai, ewr since the imposition of an Inland Revenue duty on tobacco, there has been a steady growth of the manufacture of illicit tobacco in the Province of Quebec, and the various augmentations of duty since im- posed have but served to stimulate the illicit trade — there- by throwing the onus of taxation on the other Provinces, although, from the first inception of the law, there has always been a discrimination in favour of the Province of Quebec — the laws having been so framed that the styles of tobacco exclusively used there, i. e. leaf tobacco (tabac role and taba(! en torquette=^) have only had one- half the amount of tax imposed as upon other tobacco ; but, in the face of this distinct favouritism, the law has become a dead letter from inherent vagueness. As an example of the faultiness of the law, the census of 1871 shows that tobacco was grown in the Province of Quebec to the extent of nearly one million and a quarter of pounds, and for that year, as shown by the following statistics, there was only 55,000 pounds returned * Tobacco rolled loosely and twist tobacco. 4 for duty ; and of coiirs(\ as it became known that the business was a prolitablc one, the orowth increased until, tor the hist year, it was estimated that the crop couhl not he less than 5,000,000 i)0unds. and the quantity returned, by some conscienre-stric/ien parti/, was ten povmds — netting' the immense revenue of one dollar. From the follow- inu' it will be seen how steadily the amount returned has decreased, viz : FOR THE PROVINCE OF QUEBEC. For 1871-72 r)5,000 pounds returned for duty. " 1872-73 24,000 " " " 1873-74 1,700 " " « 1874-'Tr) 10 " " THE EFFECT ON THE TRADE. The effect on the manufacture of cut tobacco and tobacco trade generally, has been nothin<>- short of disas- trous. In former years Canada did support twelve steam eut tobacco factories, and a larfj,e number of smaller ones, working by hand, besides what many concerns eut who did not make a speciality of that grade of goods ; but now, all the smaller c iucerns are no more, and of the larger there are only four, who eke out an existence, and are surely expiring from over-competition with an article which is currently sold at a price below the f)are amount of duty. The general trade are not now doing a tithe of the business which was once done in the Province, for the same reason ; and many of the wholesale groci'rs seriously contemplate abandoning the keeping of tobacco of all descriptions as a part of their stock-in-trade. COMPARATIVE STATISTICS. By many in authority it is broadly asserted that it is an utter impossibility that there can be anything like the (jUiintily grown as hciv stated; but a scrutiny of tho lollowiiio- lio'ures will convince the most sceptical that there is something- seriously wrong. The United States, with a population of forty millions, shows an Internal Uevenue on tobacco of over thirty-nine millions ol' dollars, or nearly one dollar per capita, with a tax ol" 24 cents per pound; and Canada, with a popuUi- tion ()[' four millions, and a tax of 20 cents per pound, should return five-sixths of the population the amount per head, of the United States. Viz.:# But as there are more cigars used in the United States than here, deduct one-fifth for Canada. (which would amount for the United States 16,666,000) Actual Canadian revenue for the year 1874-75 Leaving an apparent delieiency of $3,333,000 $666,000 1,435,000 1,232,000 3,333,000 Now, this deficiency denotes either that the people of Canada do not use as much tobacco by nearly one-half as those in the United States, or else that there must be some flagrant 1)reach in the law which allows so much to escape. It may perhaps be pleaded that we have a larger district over w^hich tobacco can be grown, but looking to the United States it will be found that there are only a very few States in the Union in which tobacco is not grown, and where the same causes do not exist as in our Canada. * Again, on referring to the able report of the Commis- sioner of Inland ReA'-enue for 1874-75, page xvi, it will be Cauada population of 4,000,000 at 5^6 of on« dollar pci hoad. mgsmm 6 found that although Canada receivi'd an accession to her population oi' 100,000 by Prince Edward Island, and that the revenue was incTeasrd i'roni 15c. for i'ormer years to 20c, the increase of revenue lor the year, i'<*Y 1874-75, over the average revenue for the previous fourvinus, was only 1259,000, which difference is compensated, less 120,000, by the rise of 5c. per lb., which seems to point conclusively to an increased growth and illicit consump- tion of the article, somt^where within the limits of the Dominion. It was of necessity that these comparisons have been made, i\s there was no statistical statements of any kind to which reference can be had. THE IMMEDIATE EFFE(*T ON THE PROVINCE OF ONTARIO. There are other aspects Irom which this subject may be view^ed. Tobacco, in former years, formed a consider- able product in some parts of Ontario, and a large business was done in it by the farmers along the Laki^ Erie shore, but that, too, had to succumb to undue competition. The principal market for it being the Province of Quebec, the increase and low price of the crooked article has nearly exterminated that also, and all who held stocks of it have been only too glad to get rid of it at the least possible loss. To show to what extent that business has declined, the following statistics are brought to your notice : — For 187l-1'2 there was returned for duty 245,000 lbs. « 1872-73 « " « " " 135,000 " 1 " 1873-74 " " " •< " 137,000 «' '* 1874-75 " « « « « 23,000 " Showing a falling off in four years of over 90 per cent. This business in former times was a profitable one to all concerned, and it is doubtful that there could be purchased in all that District to-day 10,000 lbs. of tobacco which was grown in 1876, so greai has been the tailing off HOW THE UUEUEC FARMER IS AFFECTED. On the other hand, it mig-ht bi; naturiilly supposed that th(^ Lovvin- Canadian tarmm* w^ould be a gainer where so mui'h income is lost, but it would not be hard to show that the proHt lies not with hini. He brings it to market, and the very fact of it being contraband, comj^cls him to accept a price which docs not remunerate him, and in many cases he is compelled to take the proceeds in inferior goods at an exorbitant figure to effect a sale. This year in particular may be instanced as showing that view^ of it in the extreme. The last few years, the crooked tobacco business has shown a profit, and many more have launched into the growing, and now so much of a drug has it become, that large quantities can be purchased, manufac- tured, /. e., cut, from seven to fifteen cents per lb., in face of a duty of tw^enty cents. Now, were the growth of the article placed on a proper basis, the grower could put his product in the market and get a fair value in cash for it, as the difference in duty (if used in roll, twist, or leaf is only 10 cents) would pro- cure him a fair remuneration for his tobacco, instead of, as at present, having to dodge from store to store and accept any offer he can get for it. ' THE PROPOSED REMEDY. It might not be irrevelant at this point to state the form in which the law stands at present, and that is that all tobacco grown in the country shall, upon its being sold, be returned for warehouse ; which appears not amiss on the face ; but a farmer may grow and hold for an indefinite period any quantity he may raise, sell it where and to whom he will, and still be under no obligation to inform the Department of the transaction. That is where the trouble arises, and to carry out the law as it now stands would require an enormous staff oi* officials, whose salary would effectaally account for any revenue which might be deriA ed therefrom. There remains, however, one proposition which gives every facility to the farmer, and would also gives protec- tion to the revenue, and consequently to the honest trader, and that is, that the farmer or any party wishing to grow tobacco, should be compelled, under penalty, to request a license to grow it, and that every license-holder should make a swojii return, at some specified term, of tne amount grown under his license to the Inspector appointed to visit him. It might be contended that this would be an infringe- ment upon the freedom of the farmer ; but it would bear no worse on him than on other parties who wish to trade in any goods which are taken cognisance of by the Inland Revenue Department. As the law stands at present, no one may retail duty- paid leaf tobacco without a license from the Departme^it, which license is obtainable for the asking : and should such an arrangement be enforced in this case, there would not be a pound grown but would come under the super- vision of the Department, and so could be controlled ; and if it is desired to allow the grower to raise what tobacco he requires for his personal use, provision can be made for that, allowing each fifty pounds, which is all any man can use. Should this suggestion become law, an increase of the revenue will surely follow, amounting to not less than half a million dollars, besides placing the burden of government equally on all shoulders. The law, as originally framed, was intended to dis- criminate in favour of the consumer of Canadian tobacco as against the consumer of the foreign article ; but as it 9 fi is enforced at the present time it will be scc.i, from the foregoing- factn and figures, that it merely amounts to a bonus to the Province ol' Quebec of half a million dollars, and a direct burden to the other provinces. This question is not a new one, as it has been agitated for years, and many appeals have been made to the various governments without obtaining redress, but it has now obtained such proportions as to become a matter of ex- tinction to some branross growth. All this tobacco comes into competition with the imported tobacco which, since 1st April, 1874, has paid a duty of twenty cents per pound. In the cities the principal people who handle it are small grocers. By Mr. Dymond : — 5. What is the duty? — On Canadian leaf tobacco ten cents per pound excise duty. 6. You complain that the excise officers don't do their duty in collecting the revenue ? — That is part of our complaint Anothiu- part is, that if they wished to do their duty, the law is not in such a shape as to enable them to perform it. _ By the Chairman : — 7. Have you brought this before the Minister of Inland 11 Beveniie ? — I have informally. I was introduced to Mr. GreolFrion and I mentioned it to him. He asked me to imt it on paper. I did so and sent it to him. When I met him two months afterwards he said he had not had time to do anything in it, and that he could not do any- thing at that time becaus(^ they were on the eve of the Quebec elections. 8. That is sonn; time ago ? — Last May or June. I think it was just after the Session that I saw Mr. G-eofFrion in Montreal. 9 You don't know whether the matter has been formally brought before the Department or not ? — I also, when in Ottawa, called upon Commis ioner Brunei, and mentioned it to him ; he knew of it. ' 13. Is there not a large quantity of the leaf tobacco of Lower Canada consumed bv those who raise it ? — Yes. 14. Under the law are they required to pay duty on such tobacco ? — I think not. , 15. No duty is paid unless it passes from one party to another ? — There are many farmers in Quebec who are growing acres of tobacco ; each acre will contain about 1,250 pounds. I don't think any family will consume two acres of tobacco in one year. I may mention that I beMeve a firm in Montreal was offered through another party (for the sake of a blind) a weekly supply during the winter of 150 barrels, of 75 pounds each, of Lower Canada cut tobacco, each barrel representing a duty of $15. By Mr. Workman : — In 1872 the tobacco returned to warehouse in Upper Canada was 246,000 lbs. ; in 1873, 135,000 lbs. ; in 1874, 137,000 lbs , and this last year only 23,000 lbs. By Mr. Piatt :— 17. What is the reason of that reduction ? — The growth of large quantities of tobacco in Lower Canada, which is I 12 the ]n'incii)al innvkct ibr Upper Canada tobacco. The fact fhat Upper Canada io])acco pays duty had compk>tely closed the .sale of the Upper Canada product. By the Chairman : — 18-10. How does the Lower Canada tobacco compare with the Upper Canada ^rown in Essex and other counties ? — There is no comparison whatever. By Mr. Di/mohd : — 20. What you want is to have the law rij^idly enibrped in regard to the growers oi' tobacco in Lower Canada'^ — There is a defect in the law which prevents ofiicers, even if they wish, from doing their duty. 21. What is the d<4ect in the law ? —The defect in the law is, that a farmer may grow tobacco and keep it in his barn without paying duty, so long as he does not sell it nor remove it from his place. An excise ofh(;er may visit the farm where oOO, 1,000 or 1,500 lbs. of tobacco are stored in the barn. He recjuires the farmer to have it warehoused : the farmer says he is not ready yet, and the officer goes away, and when he returns in a month or so the tobacco is no longer there. There is no remedy against the farmer. I woidd snugest that as by an Order in Council dealers have to take out a license, growers should be put on the same footing, and be