February 18, 1935


The house resumed from Thursday, February 14, consideration of the motion of Right Hon. R. B. Bennett (Prime Minister) for the second reading of Bill No. 8, to establish an unemployment and social insurance commission, to provide for a national employment sendee, for insurance against unemployment, for aid to unemployed persons, and for other forms of social insurance and security, and for purposes related thereto.


CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Prime Minister):

I do not propose to trespass at any length on the time of the house. The subject matter of the bill, the second reading of which I moved some days ago, is apparently well within the minds of most members of this house. There have been universal expressions of approval of the principle of a national unemployment insurance measure; that muoh at least can be gathered from the discussions that have taken place. No hon. member, so far as I could hear, except possibly one, the hon. member for Labelle (Mr. Bourassa), indicated other than approval of the general principle that underlies the measure. In fact, only a very brief discussion took place in any part of this chamber with respect to the bill itself. There being therefore a universal approval of the measure, the question that was discussed at some length was whether or not it was within the competence of this parliament to enact this legislation.

It is an amazing thing that hon. gentlemen opposite should cheer so vigorously every possible reference to the impossibility of this parliament passing this legislation. Just why they should be so vigorous in their approval of every word that was said against it, and then suggest that they favoured it, I cannot understand; neither do I understand it yet. One would think that in dealing with a matter of this character every member of the house would be astute to discover some means by which the measure could be made operative if it is so much desired-and there has been universal expression of the desirability of enacting this legislation. I find it

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difficult therefore to understand just why this chorus of approval of any reference by any speaker to the impossibility of parliament passing this legislation should be coupled with such a vigorous expression of approval whenever hon. members said that they were in favour of it. What was desired in the way of leaving an impression on the public mind? That the legislation would be good if enacted by somebody else, but bad because it was suggested by this government?

The leader of the opposition suggested that there were reasons why he could not enact it during his term of office. None of these reasons had to do wuth constitutional grounds except one: the Senate stood in his way. That was the lion in the path. And yet I observe that that stalwart, Sir Allen Ayles-worth, was one who voted against the old age pensions measure.

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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

I spoke of

provincial jurisdiction.

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

If the Senate was the

lion that blocked the pathway in those days, is it not now presumable that it would be in our power to enact the legislation if the Senate were agreeable? There were other reasons, financial in their character; the right hon. gentleman referred to difficulties he had encountered when he assumed office, and the difficulty in discharging the obligations that rested upon his party. Well, these difficulties having been removed, that lion having left the path, there was yet no evidence of any effort to introduce legislation of this kind. And the last reason, as to its being within the competence of the provincial legislatures to enact the legislation, being the explanation of the fact that his party took no steps in the matter is one which it is somewhat difficult to take seriously in view of the fact that no effort was made to amend the British North America Act which, according to statements now made, it would be very necessary to do if we were to be competent to enact this legislation.

I mention these things because it does appear very difficult to understand why in one breath hon. gentlemen should laud and approve the legislation, and in the next breath laud and approve every possible effort made to prevent its being enacted. The constitutional difficulties urged against the measure are somewhat complicated; they are complex. And yet I submit that in the end they are rather simple of understanding. Away back in 1928 when I was sitting where the right hon. gentleman now sits-I trust he will long enjoy that seat-his government introduced a measure involving the approval

of a trade treaty with Spain, I think it was -I speak subject to correction as to the country-and I raised with the Solicitor General the question then as to how far under our constitution this parliament could go in infringing upon provincial rights in the making of treaties. It will be within the memory of this house that when the sockeye salmon treaty was ratified by this parliament-not having yet been ratified by the Senate of the United States-I pointed out that many of the clauses of that treaty impinged upon provincial rights; and it will be recalled that the question as to how far we might go in interfering with the exclusive powers of the provincial legislatures, by reason of the making of a trade agreement or treaty with a foreign country, w'as a matter about which we had no definite decision. I remember very distinctly directing attention to it, because I thought it was rather important to arrive at some conclusion with respect to the question, and I find that on April 16, 1928, I made this statement:

That is the problem to which I direct attention, that and none other. I am not expressing beyond the casual arguments that occur to me any considered and careful opinion, because I have not had the time to look up the authorities, and I am speaking solely from memory with respect to them, but with respect to the last authority I have very peculiar knowledge, and if it follows the Tennant and the Union bank principle, that any community which is not a sovereign state may negotiate a treaty the effect of which is to deprive one of the component provinces which has exclusive jurisdiction to deal with the matters therein mentioned of the powers conferred upon it, that is a problem not yet settled, and I submit it to the committee for the purpose of engaging the attention of the law officers of the crown.

I confess I had no clear opinion with respect to that matter. I discussed it with members of the legal profession and with judges in various parts of the empire, and it seemed to be a question which was open for decision and conclusion by the court of last resort whenever a case involving the principle should reach that tribunal. And it was not until 1931 that the matter finally came up for decision.

It will be remembered that the so-called aeronautic case was one thait involved an agreement made between Canada, as part of the British empire, and other parts of the world. It will be remembered that the provisions of the statute passed by this parliament are very, very detailed, embracing almost every activity in connection with aeronautics. It was contended on behalf of the provinces that that legislation was beyond our competence ; it was beyond the competence of

Unemployment Insurance-Mr. Bennett

parliament because it interfered with property and civil rights. The flying of aircraft from the standpoint of caring for crown timber, crown timber lands, with respect to landing, the acquisition of landing sites and matters of that kind, were all said to be solely within the jurisdiction of the provinces and wholly beyond the competence of parliament to enact legislation with respect to them.

When the case reached the privy council the decision was that, having regard to section 132 of the British North America Act, which has been alluded to, Canada as part of the British empire was bound by obligations incurred in the agreement to which reference had been made, and it was therefore declared that the statute was within the competence of parliament. Now that settles distinctly one problem and only one, as has been pointed out. The problem that has been settled is the problem as to the extent to which this parliament can legislate when a treaty is made by the British empire, of which Canada is a part, and to which it is a party, dealing with matters that affect this dominion; and whether or not the rights of the provinces are adversely affected is not a question for consideration. For the supreme power of this parliament to deal with these matters makes it not only necessary but imperative that the powers of the provinces under section 92 shall yield to the power of this parliament.

We thus have settled beyond peradventure or doubt a principle that was acted upon by hon. gentlemen opposite when in office-acted upon with respect to treaties and trade agreements with foreign countries, Spain, Czechoslovakia and other countries-the halibut treaty for example-and the very aeronautic statute itself, which dealt with obligations incurred by the dominion and which were at variance with the exercise of its powers exclusively by the legislatures of the provinces. So let us say that No. 1 is settled: that if there is an agreement outstanding within the provisions of section 132 of the British North America Act, which I will not trouble to read again, this parliament has supreme and complete authority to deal with the matter, and not only has the power but has exercised that power; and in consequence of the exercising of the power we have the judicial decision to which I have referred, which settles, it seems to me for all time, the question of our jurisdiction in connection with such matters.

I shall not now refer, because I did so some days ago, to the reasons given by the Lord Chancellor in delivering the opinion of the judicial committee of the privy council. He summarized in four propositions the powers

of the legislatures and of this parliament. It suffices to say that no one within sound of my voice on either side of the house will, I think, challenge the proposition that where there has been an agreement, where the agreement is made by Canada under a treaty or agreement as a part of the British empire with any foreign state of authority, then the exclusive powers of the provinces must yield to the dominant power of parliament to deal with the agreement in every phase, in all of its ramifications and implications.

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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

While the Prime Minister is touching upon the Lord Chancellor's decision, will he make a reference to the particular part of the Lord Chancellor's decision which he omitted in his original address and which the ex-Minister of Justice (Mr. Lapointe) dealt with in his?

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

I intended to deal with that because it seemed to be so absurd for the ex-Minister of Justice to refer to it. I could not understand why he went out of his way to mention it. The rights of minorities are rights with respect to language, religion and one other matter that comes within the authority of both the provinces and the dominion, namely education. It had nothing whatever to do with this matter. There are no minorities when you come to consider the question of jurisdiction with respect to matters of this kind because the majority rule in parliament prevails. It is not a question of the minority in a province and when the hon. gentleman a few days ago mentioned the point, I confess I could not understand why he was doing so except by reason of his usual endeavour to drag something of that sort into every debate in which he participates.

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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

In the absence of the ex-Minister of Justice, may I give my right hon. friend what I think was the exminister's reason? It was in that part of the judgment which read:

The process of interpretation as the years go on ought not to be allowed to dim or to whittle down the provisions of the original contract upon which the federation was founded'.

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Quite so.

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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

. . . nor is it legitimate that any judicial construction of the provisions of sections 91 and 92 should enforce a new and a different contract upon the federating bodies.

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

That was with respect to the rights of minorities. That was what the Lord Chancellor was dealing with and the rights of minorities under the constitution are

Unemployment Insurance-Mr. Bennett

with respect to religion, language and education. Those observations had nothing whatever to do with the question of the jurisdiction of parliament as distinct from that of the legislatures. It had to do with the question of an endeavour on the part of the federal power to whittle down the contract between the provinces and the dominion. I have heard the right hon. gentleman doubt-and I have agreed with him-as to whether it can be said thait the British North America Act is wholly a contract in the sense in which that term is used. The British North America Act as it now stands is somewhat different from the resolutions upon which it is based. But it is a statute of the imperial parliament accepted by the people of Canada and has become their constitution. When we speak of the rights of minorities we speak of the rights of minorities as maintained to them by the statutes of Quebec and maintained to minorities in other parts of Canada, with respect to language as defined by an act and with respect to education having its maximum .expression in what took place in the house in the year 1896.

Let us leave that proposition which I think all will agree has been established not only by competent authority but by reason, for if the British empire made a contract on behalf of Canada and Canada signed her name to that contract, obviously the draughtsman of the British North America Act when he prepared section 132 had in mind that the power to give effect to any obligation thus assumed should rest in the dominion parliament and not in a combination of the legislatures. It would be idle of course to say that this community speaking as a whole could enforce its views or maintain its obligations by each of the provinces acting even in concert, because the power is the federal power; the authority is the central authority, the national representative of the life of Canada, namely the dominion parliament.

Leaving the first proposition therefore as being firmly and clearly established, we now proceed to the second proposition whether there is within the British North America Act sufficient authority and power conferred upon this parliament to enact an unemployment contributory insurance act. I submit there is and I shall give my reasons briefly. First, a contributory insurance act is a direct taxation act and as direct taxation only is given to the provinces and taxation by any mode or form is given to the dominion, it follows that if you apply a simple test the jurisdiction must rest with the dominion. Let us apply that test. Could any province pass the [Mr. Bennett.J

bill that is now before the house? That is the first test. Could any province enact that measure? Could any province provide that there should be a contribution by the employer, the employee and the Dominion of Canada?

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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

No.

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Of course not. Therefore, if it is a national measure there is only one power, one authority, that can divert moneys from the treasury of Canada for the purpose of unemployment insurance, and that legislature is the dominion parliament.

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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

What case are you discussing?

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

The hon. gentleman is not quite so familiar with the constitution as perhaps he should be. I shall point out to him the reasons. Let us apply this test. Here is a bill that purports to take from employer A twenty cents or twenty-one cents a week, to take from employee B twenty-one cents a week and from the treasury of Canada sufficient money to maintain the administration plus one-fifth of the joint contributions of A and B. Then it is admitted that no provincial legislature could pass that statute. It must further be admitted that no combination of legislatures could pass that statute. All the provinces in Canada uniting together could not pass that statute. Therefore there must reside somewhere the power so to do and that power rests with this parliament.

Let us look at what happened in British Columbia. In 1932 the British Columbia legislature was confronted with this very state of facts: They had competition in connection with the milk business and they found great difficulty in being able to deal with it. It was more profitable to dairy farmers in that province to sell their milk in a fluid form than to sell the products manufactured from it, so the market for fluid milk became glutted. On that state of facts the British Columbia legislature passed the Dairy Products Sales Adjustment Act in 1929, which was amended the next year and again amended the succeeding year, authorizing the appointment of an adjustment committee in any district in which the dairy farmers petitioned for one. Where a committee was appointed the farmers had to make returns to it, and a farmer selling fluid milk had to pay to the committee a levy assessed according to the quantity he had sold; the total of these levies, which together made up the difference in value of the milk disposed of in the two forms, was to be apportioned by the committee among the farmers who had sold milk products. Tb*

Unemployment Insurance-Mr. Bennett

expenses of the committee were to be met by further levy on the farmers. Both levies were recoverable as debts.

It will be observed that in the bill before the house it is provided that the commission to be set up under the statute shall have power to obtain from the employer and from the employee given sums per week for the purposes of the measure, the contributions of the dominion being added thereto.

In the dairy case it was held:

That both levies were taxes, and, as they would tend to affect the price of commodities, they were indirect taxes, and the act was therefore ultra vires the province having regard to section 91, head 3, and section 92, head 2, of the British North America Act, 1867; it was unnecessary to determine whether the act was invalid' also under s. 91, head 2, as being for the regulation of trade and commerce. The act was not in relation to agriculture so as to be within s. 95.

Now there you have the decision of the privy council, that this levy, which was made by a provincial board, was beyond the power of the province to authorize. Inasmuch therefore as the power must reside either in the province or in the dominion, and the privy council said it does not reside in the province it must therefore reside in this parliament, as it does. There can be no doubt as to the way that matter has been put by the privy council. I am not going to address a technical argument to the house, I merely point out that they held that it was a tax, although indirect, because it was a levy against the producers of milk for the purpose of creating a fund which fund should be available for the purpose of equalizing prices to milk producers.

This legislation imposes a charge against employer and employees with a contribution from the state to create a fund from which payments are to be made as provided by the bill. Now as between direct and indirect taxes the privy council for long years have laid down certain principles which govern. They laid down in the case of Bank of Toronto v. Land a certain rule adopting the language of John Stuart Mill in part as being the correct definition of the difference between direct and. indirect taxation. The tax is indirect if it would be passed on and was not a charge that the individual paid and could not pass along. So with respect to this milk case from British Columbia the judicial committee held that it was an indirect fax. Now direct taxation is the exclusive power of the provinces but taxation by any form or method is the exclusive power of this dominion. Therefore the count held in the Crystal Dairy case that the legislation of the province of British Columbia was invalid because it endeavoured to create a fund through the imposition of an impost that was a tax, an indirect tax, and therefore invalid and within the jurisdiction of this parliament and not that of the province.

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

May I ask a question of

the hon. gentleman?

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

No. Next, sir, may I

direct attention to the fact that in that very case attention was directed by the judgment to trade and commerce. I therefore apply the next test, a very simple test; could any legislature regulate interprovincial trade under our constitution? Could any legislature in any way, shape or form, deal with an enterprise that had branches employing say fifty people in Saskatchewan and sixty people in Alberta and one hundred in Manitoba? Interprovincial trade under our constitution is to be free and untrammelled with respect to customs. The constitution also contemplates that it shall be free and untrammelled with respect to every measure that comes within the jurisdiction of this parliament.

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

What about the Marketing Act?

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Applying that test to the validity of any legislation passed by a province to deal with interprovincial trade, what must the answer be? The answer surely must be in the negative. Neither Ontario nor Quebec nor any other province can undertake to deal with or regulate trade between provinces. If I heard aright the Observations that were made regarding this measure from hon. gentlemen opposite-and I think they all could be contained in two paragraphs-the position is this, that it is highly desirable in the national interest that we should have an unemployment insurance measure, in the interest of trade itself, for it is undesirable that there should be attempts to attract capital to one province rather than another by saying: There they have unemployment insurance, and here we have not; it is undesirable that in one part of Canada we should have one provision of law prevail and in another part shall not have it. Therefore common agreement was expressed in this house that we should have a measure that at least was similar throughout the country in order that there might be freedom of interprovincial trade, uncontrolled as far as legislation is concerned. And legislation to treat or touch upon trade and commerce

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Mr. Bennett

between two provinces is beyond the jurisdiction of a provincial legislature, it is solely within the power of this parliament.

The words trade and commerce have had a restricted meaning placed upon them, beginning with Citizens Insurance Company v. Parsons, but the process of inteipretation has broadened during the years, and the meaning that attaches to them, as suggested in the very Crystal Dairy case to which I referred, is that there must be no interference with trade and commerce by legislation of this character which would be beyond the competence of the provincial legislature.

Now let us come to the third test. It is this. When at Paris we accepted the provisions for the League of Nations it will be recalled that a declaration was made that it was desirable in the interest not only of ourselves but internationally that we should deal with labour in the manner indicated in that treaty. I now propound this third test; Is it possible for any province to deal with international trade? Is it competent for any province to restrict the freedom of international trade? Shall this province do this and another do otherwise? That subject lies solely within the jurisdiction of this parliament. The whole problem of international trade is more or less directly involved with the question of unemployment insurance, because if one province enacts such a provision, competing with another that does not, the problem of exports and imports and international trade in the broad sense in which those words were used in the treaty of Versailles I think w'ould be affected.

You come then to another test, which was applied in a case as old as 1897, in which my hon. friend the Minister of Justice (Mr. Guthrie) was directly interested. The Grand Trunk Railway Company had a provision by which each of its employees contracted to free the company from liability in case of injury; that is the employee signed a contract whereby he waived his right if injured in the service of the company to claim damages from the company for the injury he sustained. Then the Railway Act was amended to provide that a railway company could not do that; that the Grand Trunk Railway Company should not be permitted to ask its employees to contract themselves out of the right to claim against the company for damages in case of injury. Well, now there was a clear interference with property and civil rights. There are few things perhaps more interesting than to observe the ease with which we sometimes seize upon words without realizing the effect of them as they have been judicially construed. Frequently both lawyers

and laymen are found using words in the sense in which we use them colloquially, forgetting that they have had a meaning attached to them by interpretation by the courts. Property and civil rights include contracts, and all matters of that kind are within the exclusive jurisdiction of the legislatures. But there has hardly been a statute passed in this country that has not impinged upon property and civil rights. No taxing measure enacted but in some sense affects property and civil rights. In this case to which I refer the Railway Act was held to be valid, and the power exercised when this parliament took from the Grand Trunk Railway Company the right to ask its employees to contract themselves out of a right to bring an action against their employer, the judicial committee held was solely within the jurisdiction of parliament. It is one of the interesting cases that one reads. As I recall it, the railway company was defeated by the language of its own factum. The railway company was the appellant and it alleged in the factum filed with the court that if they were not allowed to make contracts by which their servants could not sue them for damages suffered in the course of their employment it might create a situation of laxness in the service and the railway company would find itself in very difficult positions. Said their lordships of the privy council, "That ends the case, because that is an admission that this very legislation in its essence is railway legislation." What is the essence of the legislation before this house? It is not railway legislation, but it is legislation to collect a fund of money-which interferes with property and civil rights-for distribution to known persons on the happening of given events under specified contingencies.

Then what about it? Is that not conclusive? If the language used by the privy council were applied to this case it would indeed be conclusive, dealing with it from the standpoint of the power of taxation or from the standpoint of trade and commerce. But there is even a larger sense in which this legislation should be dealt with, and it is that ground to which I now desire briefly to refer, the third part of the argument which I desire to make to this house. In the radio case, which was argued after the argument and before the judgment in the aeronautics case, the privy council decided that the agreement or treaty- and keep in mind the words "treaty" and "agreement", because my hon. friend the former Minister of Justice (Mr. Lapointe) referred to it as a treaty but subsequently amended his language, because it was not a

Unemployment Insurance-Mr. Bennett

treaty but merely a convention.-between, other countries and Canada involved obligations on our part that had nothing at all to do with section 132, that did not in any sense touch section 132. Canada did not sign them or create the obligations or assume the responsibilities as part of the British empire, but assumed them on her own, her own nationality, her own personality, her own position in the world. Canada signed this convention by which she bound herself with Mexico and other countries to do and perform certain things. If the argument ever could be advanced successfully in any court, with power and with effect, it was with respect to radio.

Listen to the argument made at that time. It was that this interferes with property and civil rights in the provinces, as it does. My radio set is my property. The acquisition of it involves a contract to purchase. My setting it up involves no exercise of power with respect to the dominion. It is a matter of property and civil rights, it may be said. There yonder is the system by which we send out, by the power of electricity, these voice sounds that go to other parts of the world, but we could limit that power so that those sounds need not go so far; we could limit them to lesser distances. Then you come to the question of reception, and you ask what the dominion has to do with that. This it has to do with it, that broadly speaking there can be no reception in one province that does not in some way either travel to or pass through another province or a foreign country. So when the judicial committee had to consider the matter finally they determined what? They determined that radio was a matter that, by reason of the very meaning of it, had assumed such proportions that the jurisdiction of this parliament was to be found if necessary within the residual powers of peace, order and good government. Lord Dunedin put it on that basis, if need be, and he referred to the aeronautics case. The other evening, when the hon. member for Shelbume-Yarmouth (Mr. Ralston) was referring to the power of the dominion parliament to interfere with specified exclusive points of jurisdiction mentioned in section 92 he obviously either overlooked or forgot the later decisions which decided clearly that if need be these broad residual powers expressed in the words peace, order and good government, may negative the exercise of the exclusive powers which, under section 92, are vested in the provincial legislatures. So we have the radio case, which decided that it is within the jurisdiction of this parliament, and not within the jurisdiction of any legislature, to deal with these matters.

Ah, but it went further, and it is that point to which I direct the attention of my hon. friends opposite in particular. It went much further. I was rather surprised that they should belittle the extent to which it goes, because there was a decision that completely justified the observations, for instance, made by the right hon. gentleman opposite when we were dealing with treaties. He pointed out that in 1867 no one was thinking of the treaty power. The right hon. gentleman said:

There is just one point with regard to what my hon. friend has said. I agree with him that in negotiating any treaty the federal government should' have the utmost regard for all matters reserved to the exclusive jurisdiction of the provinces, but I think my hon. friend will agree that as to the dominion and the empire as a whole, at the time the British North America Act was drafted the position with respect to treaty-making powers was not as clear as it is to-day. It is now conceded with respect to matters of primary or exclusive concern to the dominion that we have the full right to negotiate, sign and ratify a treaty which formerly might have been held to belong to the British empire as a whole. The powers of this parliament with regard to a treaty such as we are now discussing are complete in all particulars, and are not affected by the wording of the section as it appears.

That was the observation made by the right hon, gentleman in 1928, when we were discussing in the most friendly way the relative jurisdiction of this new country, exercising new powers. As Lord Dunedin pointed out in 1932, in his judgment in the radio case, when the British North America Act was being drafted in 1867 one could not have in contemplation the exercise of the treaty power now being exercised by this dominion. He went further and said that now, under the statute of Westminster, whatever difficulties may have been experienced in the past it is now clear that the parliament of Canada has the power ito deal with those matters. And if, in dealing with them, either under peace, order and good government or under the exclusive power of trade and commerce, it is necessary to impinge upon, to lessen or restrict the rights of provinces, those rights must fall for, as was pointed out by Lord Dunedin, it is clear that the great body of Canadians cannot speak through the voices of the provinces, whether they speak in unity or not; it is this parliament that speaks for and represents the people of Canada; it is this parliament, representing all the people of Canada, and not the voice of the provinces united in terms of resolutions, whether or not they agree. It is not a majority of all the provinces that constitutes jurisdiction. With respect to national matters jurisdiction is found in this parliament.

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Unemployment Insurance-Mr. Bennett

exercising all the powers that can be exercised in the fullness of the jurisdiction conferred upon it by the act of 1867, and more by the decisions that have grown up under it and still more by the customs and the practices that have grown up as well. So that applying the last test I have mentioned to this legislation I say it must be agreed that in all points it falls solely within the jurisdiction of the parliament in Canada.

Now let me go further. The main part of the arguments against this legislation had to do with opinions expressed by people from time to time, including opinions of my own that were quoted. As one of the hon. gentleman was proceeding, two cases came to my mind. I quite understand members of this chamber rvho are not lawyers wondering what it is all about, quoting something one man thought yesterday and something else he thinks to-day. Law is a progressive science; there is no science more so, and I am going to give two illustrations that happened in my own practice. I do so because it happens that I am able to speak with authority with respect to them. In the early thirties in the province of Ontario they passed a law dealing with chattel mortgages and the rights of those who purchased after a chattel mortgage had not been renewed. That legislation was re-enacted with some slight variations in Manitoba, Saskatchewan and Alberta. About 1925, I think, I was acting as solicitor for a client who came in and said, "We failed to file the renewal statement of our mortgage, and someone else purchased the property. Have we a right to recover from him the price, on the ground that he knew the mortgage was there and that the property had been mortgaged?" The decision of one judge in Alberta was that he had no right. The decision of one judge in Saskatchewan, and ultimately of the appellate court of that province, was that he had no right. Then came the province of Manitoba, in which a full court decided he had no right. I thought that was bad law. I advised that we go ahead with the action. The chief justice decided in our favour; the appellate division decided against us. They felt bound by the decisions. I then went to the Supreme Court of Canada, and during the progress of the argument one of the learned judges said, "The judges of Ontario have decided this and we are very proud of our judges. They have decided adversely to the appellant's position. It is a very bad thing to change law that has been in force in the mari-tiimes and in the west for sixty-five years."

Nevertheless, largely governed by a suggestion made to me by a younger associate with whom I discussed the case we pressed the appellant's case and the Supreme Court of Canada decided we were right. The result was that there was overruled, and made bad law, law which had prevailed for years.

I have used that to illustrate the point I desire to bring [to the attention of the house, namely that when opinions are expressed by counsel they express those opinions because of one of two reasons, either that such and such is the law by decisions, or that "this should be the law, as I read the decisions." The client determines then as to whether or not he is willing the second course should be pursued. In the first instance you give your opinion that the decisions are settled beyond all question, and that is the end of it. In the other case you say, "I think these decisions are unsound"-and you press your case before the courts.

I had another case which was much more difficult, a case the memories of which still linger in the courts. For a few months I was Minister of Justice in this country, and during that time there came before me the necessity for appointing judges, under a statute that had recently been passed by the legislature of Alberta. Reading the statute I came to the conclusion that I had a complete and unfettered right to make such recommendations as I thought desirable. I proceeded to do so. I changed the positions of two of the judges, one being the chief justice of the trial division and the other the chief justice of the appellate division. I changed their former positions. The statement was made that my action was illegal, and when we went out of office the then Minister of Justice stated a case for the opinion of the Supreme Court of Canada. The supreme court, divided, but was of the opinion that the action was illegal. I then obtained leave from the privy council to appeal, and during the hot days of July we argued the case. In October of that year the privy council decided that we were right.

I believe I have illustrated clearly the point I wish to make here. I have no hesitation in saying to this house that with respect to this matter I gave it careful and, shall I say, continuous consideration when I concluded that we had to deal with it as a concrete matter.

Then, I should like to say a few words with respect to one other phase of the subject. I wrote a letter in September last. Of course I did. I wrote a letter inviting the premiers

Unemployment Insurance-Mr. Bennett

of this country to come here to discuss this question. It is said I referred to their exclusive jurisdiction. So I did, for that is the position they had taken. That is the position which they had taken

excepting one of them-with us on former occasions. The question which was to be considered was the very question which the ex-Minister of Justice read. My statement of it did not say that was my view. It was an indication of what we had to discuss. I have still to hold that one's views must be modified by the circumstances and facts of each particular case which comes before him, when he is dealing with a question of law. The facts were as the letter stated. The Prime Minister stated their positions as they had put them-and as I suppose some will continue to put them. Yet, when the province of Ontario presented its case before the privy council, through its deputy attorney general, it presented a view which was quite the opposite to that which was presented by some of the other provinces.

Topic:   UNEMPLOYMENT INSURANCE
Subtopic:   MEASURE TO ESTABLISH AN UNEMPLOYMENT AND SOCIAL INSURANCE COMMISSION
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LIB

Charles A. Stewart

Liberal

Mr. STEWART (Edmonton):

What case was that?

Topic:   UNEMPLOYMENT INSURANCE
Subtopic:   MEASURE TO ESTABLISH AN UNEMPLOYMENT AND SOCIAL INSURANCE COMMISSION
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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

The case in which the question of a convention came up, in which the late Mr. Bayly, acting as deputy attorney general for the province of Ontario stated his position that when a convention made by the Dominion of Canada was ratified, then the dominion had complete and absolute jurisdiction with respect to it. That is the position I desire to try to make clear to this house.

The legislation which is submitted to parliament is legislation which we believe to be constitutional, for the reasons which I have given. Then, further, I had almost forgotten to mention that we have been asked why we did not ask for the ratification of a convention passed in Geneva in 1934. The only reason is this, that the convention does not come into force-because it was drafted only in June 1934-it does not come into force until twelve months after two countries have ratified it. Therefore, so far as we are concerned, we would be dealing with a convention which was not in force. The order does not expire until June, 1935. The terms of the convention itself are those which make provision for a unitary state, but provide also for the enactment of legislation with respect to three matters of social concern. But there was another reason, namely the difficulty of separating insurance from the other branches of the convention, and the undesirability of leaving any doubt with respect to the constitutionality of the statute, upon the grounds to which I have referred.

I can only say that there are other grounds to which I might refer. There are numerous other authorities which I could draw to the attention of hon. members in this house but I believe by doing so I would be serving no useful purpose. Legal decisions are constantly expanding, in view of the various implications and various sets of facts. One set of facts involves one decision; another set of facts involves another decision. The principles that govern are eternal, but the application of those principles is as variable as time itself. There have been so many illustrations of that point I shall not do more than bring to the attention of hon. members one more outstanding case in which property and civil rights was summarily dealt with, namely that connected with the Scott Act. There you had this parliament legislating in the smallest detail under the Canada Temperance Act, known as the Scott Act. Well, the privy council held it was intra vires of the power of this parliament, and a proper exercise of its powers. Some years later we find the McCarthy Act, in which Mr. McCarthy endeavoured to enact a statute which would deal with the licensing in the hands of the dominion. When it was referred to the privy council they decided it was ultra vires and not within the powers of this parliament. So you have commencing away back many years ago, with the King v. Russell, which came from the city of Fredericton, down to to-day, an ever expanding body of law, the application and interpretations of which have been modified by the conditions under which we live, expanding at times, and contracting at times. The change has been always constant in this respect, however, that the supremacy of the central power must continue, even though provincial rights for the moment may be in the ascendency. There has always been, in every decision of the supreme court or the privy council, the realization that the voice of Canada is the voice of this parliament, and not the collective voices of its provinces. When we consider, as we must, that the collective legislatures could not enact this legislation-could not enact it-when we consider that they could not by any possibility secure a contribution from the dominion treasury, and could not by any possible stretch of their powers enact taxation legislation by collecting contributions and placing them in a pool so that the sum might be made available for the unemployed; when you go farther and realize and admit, as you must, that neither interprovincial nor external trade can be affected by a provincial act, and when you go farther and realize that property and civil rights must

910 COMMONS

Unemployment Insurance-Mr. Bennett

yield to peace order and good government, and to trade and commerce, wherever it becomes essential that the supremacy of the central power must be maintained with respect to national matters -and it is apparent that unemployment insurance must be a national matter-then I submit we must realize that this legislation is within the competency of this parliament. Under that emergency and under those conditions I submit to this house that this legislation is wholly within its power.

I realize of course the uncertainties of opinions expressed by counsel learned in the law. Only some few years ago an ex-chief justice of this country standing in this chamber expressed an opinion with certainty as to the constitutionality of the method of construction to be adopted in connection with the Calgary and Edmonton land subsidies. The courts of this country had held that mines and minerals did not pass under the grant made to the railway company, and yet the privy council a few days after that very statement reversed the decision of the court and held that the observations thus made by the law officers of the crown were incorrect. I know the uncertainties; I realize them and I appreciate them, but all I can say is that I believe that men trained in the law who take the trouble to study all the decisions, and realizing the purpose for which this legislation is now offered to this house and the necessity of having it extended to every part of the dominion, and the necessity of having uniform legislation so that benefits of the same character may be conferred alike upon the people of British Columbia and Nova Scotia, and realizing that the peace, order and good government of this country should be maintained by the paramount authority of this parliament, will conclude that the legislation is within our jurisdiction.

Just one other remark. The right hon. gentleman has said that this legislation either consciously or unconsciously was intended to deceive and delude those for whose benefit it is being enacted. I think upon reconsideration he will conclude that that is not correct. He says that they have asked for bread and they are offered a stone. I propose, Mr. Speaker, to ask this parliament to vote, whether or not those who allege that this is a stone are prepared to associate with us on this side of the house, and to declare that this is bread, and very solid bread too.

The house divided on the motion (Mr. Bennett), which was agreed to on the following division;

Ahearn YEAS Messrs: McPhee

Arsenault M anion

Arthurs Marcil

Barber Michaud

Beaubier Mitchell

Belec Motherwell

Bennett Mullins

Blair Mulock

Bouchard Munn

Bradette Murphy

Brasset Myers

Brown Neill

Bury Perley (Qu'Appelle)

Cantley Perley, Sir George

Cardin Pettit

Carmichael Plunkett

Charters Porteous

Chevrier Price

Coote Quinn

Davies Reid

Dickie Sanderson

Duff Shaver

Esling Short

Fournier Simpson

Fraser (Cariboo) (Simcoe North)

Ganong Smith

Gardiner (Cumberland)

Garland (Bow River) Speakman

Garland (Carletoip | Spencer

Gershaw Sproule

Gobeil Stanley

Golding Stewart

Goulet (Edmonton West)

Hanbury Stewart (Leeds)

Hanson (Skeena) Stewart (Lethbridge)

Hanson Stirling

(York-Sunbury) Stitt (Nelson)

Hay Stitt (Selkirk)

Heaps Sullivan

Howden Sutherland

Kennedy Swanston

(Peace River) Tetreault

King, Mackenzie Thompson (Lanark)

Louclcs Totzke

Luchkovich Turnbull

Maedougall Veniot

MacMillan Weir (Melfort)

(Mackenzie) Weir (Macdonald)

Macphail, Miss White (London)

McGillis White (Mount Royal)

McGregor Willis

McIntosh Woodsworth

McKinnon Wright-101.

McLure Mr. McDADE: I was paired with the hon.

member for Laprairie-iNapierville (Mr.

Dupuis). Had I voted, I would have voted

for the motion. Mr. MOORE (Chateauguay-Huntingdon):

I was paired with the hon. member for

Chicoutimi (Mr. Dubuc). Had I voted, I

would have voted for the motion.

Topic:   UNEMPLOYMENT INSURANCE
Subtopic:   MEASURE TO ESTABLISH AN UNEMPLOYMENT AND SOCIAL INSURANCE COMMISSION
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February 18, 1935