What was one effect of the introduction of the Income War Tax Act in Canada during World War I?

The introduction of the Income War Tax Act during World War I marked a significant shift in Canada's fiscal policy. This act was implemented as a means to generate additional revenue to fund the war effort. One of the primary objectives was to ensure that the government had enough financial resources to support military operations, invest in war supplies, and provide for the needs of soldiers and their families.

As a result, increased government revenue became a direct effect of this legislation. The Act imposed income taxes on individuals and corporations for the first time in Canada, thereby expanding the government's financial capacity. This revenue was crucial in facilitating various wartime expenditures and initiatives, highlighting the government's reliance on taxation to manage the economic demands of warfare.

In contrast, while other options may touch on significant aspects of government policy or wartime needs, they do not accurately reflect the specific impact of the Income War Tax Act in terms of revenue generation, which was its primary aim. Therefore, the choice identifying increased government revenue stands out as the correct response.