Federal Politics: Did You Know That Income Tax Was Supposed To Be A Temporary Measure in 1917

By on July 18, 2011

Submitted by Helen Witt: Did you know that in 1917, Canada brought in Income Tax as a “temporary measure” to help pay for Canada’s involvement in World War 1.

From, before its birth, as a so-called nation, in 1867, the people who invented Canada decided that the provincial legislatures and not the federal parliament of Canada would have “exclusive jurisdiction” to make laws with respect to “direct taxation’ within the province.

“Income tax” was then considered, and continues to be considered, by economists and legal scholars, to be a “direct tax”.

This division of legislative powers was enshrined in Canada’s first constitutional document, the British North America Act, which divided legislative powers between the provincial legislatures and the federal parliament.

In the First World War, WW1, Canada’s Federal Government, charged with responsibility for national defence found itself without adequate funds to fight the war and brought in Canada’s first tax on incomes. All the legal scholars of the day, the judges, the lawyers and the politicians, knew that “income tax” was a “direct tax” and, therefore, outside the taxation powers of the federal parliament during peacetime.

So, the Government of Canada, under the leadership of Robert Borden, introduced the Income War Tax Act using its powers under the British North America Act to make laws for the purpose of national defence and, considering that Canada was fighting a war on behalf of England, the Governor General, as the representative of King George V of England, , was only too happy to provide Royal Assent to the legislation, on behalf of King George V, who was also the King of Canada at a time when Canada was still an official colony of England.

Click here to view Government of Canada web site confirming the Income War Tax Act received Royal Assent on September 20, 1917. cas-ncr-nter03.cas-satj.gc.ca/portal/page/portal/tcc-cci_Eng/About/Full_history

This issue of Royal Assent is important because a law, passed by Canada’s Parliament, is not legal unless it receives Royal Assent and, if you keep reading the above web site and other web sites like it, you will not find any refrence to the date when Royal Assent was provided for the Income Tax Act, 1948, the law that replaced the Income War Tax Act, 1917. The absence to any reference to the date Royal Assent was given for the Income Tax Act 1948 is evidence supporting the view that no Royal Assent was ever provided – otherwise, the Government would be sure to publish it.

After the First World War, when the war debt was paid, there were repeated calls, in parliament and elsewhere, for the federal government to repeal the Income War Tax Act because it was illegal, the war effort was over and the war debt was paid.

However, the Government class had grown, in size and in power, and the citizens’ calls for a return to constitutional values were ignored.

Also, the Second World War, WW2, came along, England and Germany resumed their family quarrel, Canada, again, sent its young men off to die for God and country, and the Income War Tax Act, passed in 1917, continued in force to fund
the second war effort.

About David Murray


  1. Bob Patrick

    October 30, 2013 at 2:49 pm

    Imagine no federal income tax. That is true freedom! Affordable housing would increase!

  2. TD

    August 9, 2014 at 8:00 am

    I believe you’re looking for “Income Tax Act of 11-12 George VI, assented to 30 June 1948″ as mentioned in Heckendorn v. Canada, 2005 FC 802

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