Taxing Times But Only Temporary?!

March and April are months when Canadians prepare their federal income tax returns. While “death and taxes” may be inevitable, income tax has not always been a part of Canadian life. Prior to 1914, most federal revenues came from customs and excise duties, with most provincial money gathered from permits and licenses, while municipalities levied property taxes.

The First World War created a tremendous debt for the Canadian government. As a result, Parliament passed the Income War Tax Act in August 1917. It applied to companies, associations, and individuals (including women, who as yet could not vote) with annual earnings of $3,000 – or $1,500 for unmarried persons and widows/widowers without dependent children. The 1917 base rate was 4% with additional surtaxes on incomes of $6,000 or more.

Although income tax was introduced as a temporary measure – Finance Minister Sir Thomas White stated at the time “I have placed no time limit upon this measure . . . a year or two after the war is over, the measure should be reviewed” – the Act remained until its replacement in 1948 by the permanent Income Tax Act.

The Peterborough Museum and Archives holds a completed 1917 income tax return for North Monaghan farmer Harry Giles Webber. While the return is shorter than today’s, apparently the new tax paperwork presented a challenge for this one taxpayer: in the file with his return is correspondence between Mr. Webber and tax inspectors over two years. The first government letter informs him that his improperly-filled-out form is being returned, then continues “If you will pay more attention to the sheet and less attention to trying to figure out the difference between horses and cows it will make matters easier for both yourself and me.” A bit snarky, since farmers would be much more familiar with horses and cows than a newly-introduced tax form.

I certainly will think of Harry Webber in the next few weeks as I am surrounded by tax forms and documents, hoping that the only correspondence I receive from Revenue Canada will be quick and include a refund cheque. Good luck with yours.

By: Don Willcock
The Peterborough Museum & Archives, 300 Hunter St E, Peterborough, 705-743-5180
www.peterboroughmuseumandarchives.ca