The Origin of Federal Income Taxation in Canada

Abstract

The introduction of federal income taxation in Canada in 1917 is commonly described as a war time funding measure. War time finances only partly explains the adoption of the tax, however. More important, perhaps, were the political objectives, The income tax provided the government with a response to unprecedented calls for "conscription of wealth" by opponents of military conscription while wealthy manufacturers prospered from the war. It also effectively undermined one of the principal complaints from the growing separatist movement in the west where farmers argued they shouldered a disproportionate tax burden of the tariffs that supported eastern manufacturers.