British Columbia on May 28, 1935, only about three weeks ago:
I called at your office to express the appreciation of the chief administrator of our act for the cooperation you had extended following the visit of Mr. W. R. Kinsman, K.C., in January last, by granting free publication in the British Columbia Gazette of notices, dispensing with law stamps on filings and fees in land registry matters, as well as the use of provincial buildings throughout the province for the holding of statutory meetings.
Further, Mr. Speaker, as briefly as possible I should like to refer to the affidavit in the action pending sworn to by the deputy attorney general of the province. He says:
2. That on the 12th of April, 1935, the Honourable T. D. Pattullo, premier of the province of British Columbia, wrote to the Honourable Edgar N. Rhodes, Minister of Finance for the Dominion of Canada, advising the said Minister of Finance that the government of the province of British Columbia took the position that the "Farmers' Creditors Arrangement Act" did not give any jurisdiction to the federal government to interfere in provincial crown contracts.
3. That by a letter dated the 8th day of May, 1935, the Honourable Mr. Rhodes replied to the Honourable Mr. Pattullo in part as follows:
"I note that you have been advised by the law officers of the crown they take the position that the Farmers' Creditors Arrangement Act does not give any jurisdiction to a commissioner to interfere with contracts relative to the sale of provincial crown lands.
"I presume your officers intend to assume that the board of review under the Farmers' Creditors Arrangement Act cannot alter, in any way, the terms of a contract entered into by the crown in the right of the province.
I may say quite frankly that we assert the right, under the act, to deal with all contracts, including provincial contracts, but I trust that it will not be necessary to have any legal difficulty in this regard for I am certain that you are as anxious as anyone that there be a rearrangement, readjustment and recasting of agreements in default, on a fair and equitable basis. There can be very real cooperation in respect of agreements where the crown, in the right of the province, is concerned."
Then Mr. Pattullo replied on thie 16th May, 1935, in part as follows:
We have thousands of such contracts throughout the province and from time to time adjustments have been made in accordance with conditions. We certainly cannot admit that any outside authority has the right to make adjustments in these contracts. This is a straight invasion of our territorial rights under the guise of the "Bankruptcy Act," and if admitted simply means that we are not free agents in the disposition of our crown lands.
Then there is a reference in the affidavit to the Copeland case which was cited by the minister the other day. Reference is also made in the affidavit to two other pending cases which so far, I think, are only in the
nature of proposals, one that of John Hargreaves of Springfield in the county of Cariboo and the other that of William Smith of Vanderhoof, British Columbia. Now I wish to read paragraph 11 :
11. That in my opinion the board is likely to formulate a proposal in the Hargreaves and Smith cases similar in purport to that of the Copeland case hereinbefore referred to.
12. That such interference and' abrogation of provincial crown rights of taxation in the levying and the collection of land taxes, water rates and grazing fees-
In one case there is also involved indirectly the question of school taxation.
-and in the interference with contracts in relation to the sale and management of its crown lands will result in the non-payment of taxes and moneys owing to the crown by farmer debtors, many of whom have submitted proposals of similar import to those above referred to, to official receivers and to the defendants-
I further understand, Mr. Speaker, that since this disagreement arose a compromise offer was sent by those representing the dominion government to the city of Victoria, suggesting some concurrent action with regard to these difficulties. I wish to read now the reply of the Prime Minister (Mr. Bennett) to the hon. member for Macleod (Mr. Coote), given the other day when the question of school taxes was raised in relation to this very act. It will be found at page 3863 of Hansard:
I am bound to say that I was not aware of the difficulty to which the hon. gentleman refers. I shall, however, look into it. The dominion is no longer concerned about school lands, being only the trustees; the school lands are now beyond question the property of the province. But there are limitations with respect to investments, and I believe it would not be competent for us to do more than confer with the province-
I want to emphasize those words.
-it would not be competent for us to do more than confer with the province as to what action shall be taken. I will look into the matter and be able to make a more definite statement on Monday.