June 27, 1935


On the orders of the day:


LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):

I would like to

401P

Pensions for the Blind

ask the right boa. gentleman about the progress of negotiations with the United States on trade matters. Is there anything further to report at this date?

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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 said that if negotiations resulted in any conclusions being arrived at, I would communicate them to the house. Negotiations are still continuing; that is as far as I can go.

PENSIONS FOR THE BLIND On the orders of the day:

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LAB

Abraham Albert Heaps

Labour

Mr. A. A. HEAPS (North Winnipeg):

Is the Prime Minister prepared this afternoon to give a statement to the house in respect to the intention of the government regarding pensions for the blind?

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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) :

If I omit from the statement I am making anything which should be said, I shall give it at a later date, but I have been in the committee until late and in council from two till three, and I can only say this, that so far as dealing with the blind by a special act by which the dominion would undertake the paying of pensions is concerned, it is concluded that no such action be taken this session by this parliament. I do not know that I need amplify that statement beyond saying that as a number of the provinces have not taken advantage of the Old Age Pensions Act, to provide that payments might be made to a given category of persons by those provinces that had adopted the provisions of the Old Age Pensions Act, would be to make an invidious distinction against which very strong opposition has manifested itself. On the other hand to set up machinery to deal with payment of pensions to the blind in every province by the federal government would also involve something that the government at this session is not prepared to do.

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FARMERS' CREDITORS ACT


Hon.E.N.RHODES (Minister of Finance) moved the third reading of Bill No. 114, relating to the application of the Farmers' Creditors Arrangement Act, 1934, in the province of British Columbia.


LIB

Ian Alistair Mackenzie

Liberal

Hon. IAN MACKENZIE (Vancouver Centre):

I do not want ito detain the house. I think the objections which some of us on this side have to this bill were very carefully stated in committee yesterday afternoon. I merely desire to say that I am entirely opposed to this legislation for several f Mr, Mackenzie King.]

reasons. In the first place it is distinctly and viciously sectional in nature. It is an absolute and inevitable corollary of the other bill which appeared on the order paper dur- ' ing the present session and which sought to give a special electoral system to one province. It is a companion bill to that moved by the Secretary of State (Mr. Cahan) the other day, to amend the Dominion Franchise Act in respect to .certain situations which arose in one constituency, .that of St. Law-rence-S't. George.

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CON

Charles Hazlitt Cahan (Secretary of State of Canada)

Conservative (1867-1942)

Mr. GAHAN:

That is not true.

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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

I am

also opposed to it because the government's failure to defend their own legislation is an open admission on their part that it is ultra vires. In the next place not only does it remove from British Columbia the benefit of this legislation which we all supported last year, but regardless of what the Prime Minister said yesterday, if there is to-day a declaration by the Supreme Court of British Columbia that this legislation is ultra vires of the federal parliament, this will absolutely imperil the existence and validity of this legislation in every province.

Further, legislation which excludes or seeks to exclude any one province from the scope of the pact of confederation, or legislation which seeks to give special! effect in only one province to certain terms of this parliament, is vicious in principle. In my humble judgment this will only tend to emphasize and accentuate that feeling of restlessness and anxiety which at the present time prevails in our province with respect to the pact of confederation itself. Therefore, I move the following amendment:

That on the .motion that Bill No. 114 be read a third time now, the word "now" be struck out and the words "this day six months" be added at the end of the question.

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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 am going to make merely this observation, that if any province in this confederation speaking for the people of that province, desires to launch litigation in the form of that which was launched before a single judge to obtain an interim injunction, I conceive it to be the duty of a federal government endeavouring to do what the Farmers' Creditors Arrangement Act is doing, to permit that province to have its way. To do otherwise is to cast some doubt upon our own action which I believe is quite sound and is supported by law.

On the other question as to whether it would interfere with the harmonious relations between the provinces and the federal

Farmers' Creditors Act

power, that is presumably a matter which the provinces are thinking of. But if one reads the record as to the assistance that has been given to British Columbia during the last few years to enable it to discharge its obligations and as to the burden that is cast upon this government by reason of the advantageous terms that were granted to the western provinces, notably in Manitoba, which became the measure of obligation for both Alberta and Saskatchewan and which resulted in the dominion making an interim advance of $750,000 per annum to supplement the subsidy payments received by British Columbia, I think the hon. member for Vancouver Centre will realize that any further statement is beside the mark. There has been a most earnest desire, in face of the situation that has developed in the western provinces, to assist them in every possible way in the discharge of their obligations. In fact, to such an extent is that true that in many quarters it is believed the assistance should not have gone as far as it has, but we have endeavoured to preserve the financial integrity of all the four western provinces. I am not now going to traverse that situation.

When we were dealing with the application of the Farmers' Creditors Arrangement Act, it was made applicable of course to every part of Canada, east and west and north and south. The question of the relationship between the crown in the right of the dominion and the crown in the right of the province was one which by understanding and agreement in the otheT provinces was acted upon in a sense that they were willing to share a part of the loss sustained by others in the adjustments that were being made. It was not a mandatory power of the federal government in respect to taxation that was being invoked, because we have always recognized the autonomous position of the various *provinces. What we have said is that if it is threatened that the crown in the right of the provinces would not deal with a board of review, exercising powers exercised in all the provinces and dealing with creditors of all kinds, with respect to its claims, the desirable thing, of course, is not to endeavour to proceed with it at all for to proceed with it at alii would at once invite the suggestion that invidious distinctions were being made between British Columbia and the other eight provinces, as the other eight provinces were sharing the losses with other creditors and making their sacrifice, if you call it such, in taking less than one hundred cents on the dollar on debts due to them' by debtors, whether taxes or otherwise. The province of

Ontario through its constituted authority has been willing to have such matters dealt with by the board of review; Alberta, the neighbouring province to British Columbia, has been willing that their claims shall be dealt with in that way. Where debts were due to the crown in the right of the province, without in any sense admitting that it had attorned to the jurisdiction in the sense of admitting that the parliament of Canada had a paramount right so to legislate, the other provinces were willing to accept and have accepted the arrangements so made by the board of review. They believed that if the act were to be effective in respect to ordinary creditors, loan companies, banks and private individuals who were compelled under it to accept a much less percentage for their interest than provided in the documents, in many instances compromising at fifteen, twenty or twenty-five per cent reduction, then obviously the province, as a creditor desirous of helping its own citizens to deal with complex and difficult problems in connection with farmers, created many years ago must not rely solely in its strict legal right as the crown with the priorities that attach thereto, and having so expressed their willingness and acted accordingly, if one province says it will not do so and its attorney general launches an action to say that the power of the crown in the right of the province shall not in any sense be interfered with in the sense of making any compromise, voluntary or otherwise, then, of course the duty of the federal power is not to create invidious distinctions between the provinces but to withdraw and leave it for the province itself to make such adjustment with its own citizens as it thinks desirable. We availed ourselves of the provisions of the Bankruptcy Act after the Supreme Court of Canada, as I explained yesterday on a stated case following the decision of the privy council, had concluded we had the right to make certain arrangements without going through bankruptcy proceedings, to enable farmers to secure the benefits which were secured to companies' creditors, preferred and otherwise, as indicated in the stated case. In order that they might receive these benefits we passed this statute; that is that farmers might have the benefit of bankruptcy without going through the bankruptcy court. The crown in British Columbia having taken the view that it has taken, it is not for us to quarrel with them, they are nearer the spot, they are on the ground, they know the views of their fellow citizens. If their citizens desire that they should not have the benefit of this legislation unless

Farmers' Creditors Act

the crown itself shall also compromise with them-because if a loan company in eastern Canada or a private lender or a bank wTith its branch in Vancouver is compelled to settle its claim with its debtor at sixty cents on the dollar, but the crown with its claim says: We must have one hundred cents on the dollar, and is insistent in that regard, then, of course, you have destroyed any possibility of there being a settlement. And as any possibility of settlements being destroyed would result in the act being nugatory, it is felt that the act should not be applicable to that province. That is the position. None other. There is no desire in any sense to lessen the operation of the act from one end of Canada to the other, but to prevent the act, the effect of which is being destroyed by the action taken in British Columbia, remaining there as a standing menace to its successful operation in other provinces which have acted upon the assumption that it is desirable that the crown should compromise as well as other creditors.

The Supreme Court of British Columbia, presuming the injunction is made permanent, will not have decided the matter for the rest of Canada. If the injunction is made permanent without a defence, it is the judgment of a single judge sitting in an undefended action, which never has been regarded as being a precedent in any country, in any court, not even in the courts in the province itself in which such a decision is given.

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LIB

Ernest Lapointe

Liberal

Hon. ERNEST LAPOINTE (Quebec East):

If the doctrine laid down by the Prime Minister (Mr. Bennett) is to be accepted I am afraid it may create countless difficulties and involve this country in many troubles. The province is challenging the validity of federal legislation; is doing so before a single judge as the Prime Minister says. But all litigation in our country starts before a single judge, and then goes to higher courts. If because a province acts in that way the federal parliament will legislate that province out of the operation of a federal act, where will that course end? Would the same principle apply to the various pieces of legislation enacted during the course of the present session? I know provinces which claim that our bills passed this session on hours of labour and minimum wages and even unemployment insurance are not intra vires of this parliament. If any one of them starts litigation to have the courts decide on that matter will this parliament exclude that province from the operation of the act? What about taxation? If any province claims that a certain tax which is imposed by this parliament is ultra

[Mr. Bennett.J

vires of the power of this parliament, will that province be excluded from the operations of that act and be exempt from taxation? Well either the present government of British Columbia is right in this matter or it is wrong. If it is right, whatever we do here, whether we exclude it and let the act apply in the rest of Canada, the legislation is invalid and not binding upon any Canadian citizen. If it is wrong why should the citizens of that province be excluded from the advantages, if there are any, of this legislation? The Prime Minister talks about the autonomy of the provinces; yes, but the central government also is autonomous within the limits of its jurisdiction. Our confederation charter has created a distribution of power, within the limit of its jurisdiction the central government is autonomous and its legislation operates directly on the individuals in all provinces, without the help or medium of the local governments. I claim the hon. member for Vancouver Centre (Mr. Mackenzie) is quite right when he says that this is sectional legislation. If we are to take this course in this matter why not in all other matters? I well remember some legislation of this parliament to which the whole population of the province from which I come were opposed, but nobody thought of excluding that province from the operation of that legislation. It is a bad principle, it is a vicious precedent, it does not make for national unity, but for national disruption. Therefore I shall vote for the amendment.

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LIB

Samuel William Jacobs

Liberal

Mr. S. W. JACOBS (Cartier) :

Mr. Speaker, I was not impressed by the argument advanced this afternoon by the Prime Minister (Mr. Bennett). This measure is purely of a punitive nature; that can be gathered from the remarks let drop by the Prime Minister this afternoon. I fear that this long session, which has lasted for more than six months, has frayed the nerves of this house. Legislation of this kind is not usually brought in during the early part of a session, it is the result of too much application to the work of the session during this long period.

I did not find an answer made by the Prime Minister to the remarks of the hon. member for Vancouver Centre (Mr. Mackenzie), who said

and I was very much impressed by his statement-that this was a piece of sectional legislation. As you know, Mr. Speaker, sectional legislation already applies to the province of British Columbia. Who can say that next year, should this government be in power-which God fobid-this sort of legislation will not be applied to the province of Quebec? I well remember when

Farmers' Creditors Act

the legislation with regard to bankruptcy was first mooted. It was brought about through the efforts of the Canadian Bar Association, of which at one time the Prime Minister was president and of which he is now honorary president. The first efforts were in the way of attempting to obtain uniform legislation with regard to bankruptcy for the whole of Canada. We have that right under the British North America Act; in fact the parliament of Canada has the exclusive right to legislate with respect to bankruptcy. If the province of British Columbia is to be deprived of the opportunity of sharing in that legislation, what is it to do? I cannot believe that the Prime Minister has carefully thought out the matter, because as a rule he knows his law perhaps as well as any man in the Dominion of Canada. How is it possible for the people of British Columbia to obtain the advantages of such legislation if the parliament of Canada declares that it is going to give its sanction to the putting through of legislation of this kind? That province becomes practically a stepchild; nothing can be done for it.

There is a wider question, however, creating a condition whereby one province is, I might say, publicly spanked by this parliament as a warning to others not to indulge in the same way of treating dominion legislation? What is going to happen? I remember that in 1915 and 1916 we were trying to obtain the goodwill of the province of Quebec in the matter of bankruptcy legislation. We had all kinds of meetings; we had conferences; we had hospitality extended by the present Prime Minister and others, in order that the people of the province of Quebec and elswhere might see the sweet reasonableness of our proposed bankruptcy act. We pointed out to the people of Quebec that this was not an encroachment on the rights of the province, that we did not intend to interfere in any way with their civil law, but that it was a matter of dominion application and that it was something for the benefit of the whole country. I well remember how the pundits of the bar of the province of Quebec, Sir Lomer Gouin, Mr. Taschereau and others, looked with a great deal of suspicion on any efforts to bring about this sort of uniformity. They felt that it was the thin end Of the wedge and that in due time the whole province of Quebec would be placed under the jurisdiction of the common law. We made them believe, and they did believe as was the fact, that there was no such intention at all.

Now, however, as my hon. friend the Minister of Finance (Mr. Rhodes) said yesterday, we have a thunderbolt from the blue. In its 92582-2S5

boldness British Columbia has presumed to declare that in certain parts of the act we have proceeded illegally, and that the province of British Columbia has certain rights which it wishes the court to declare and decide. Surely it cannot be an offence to ask the courts of this country to declare what is or what is not illegal; this is the first time I have heard a statement of that kind made in this house. They have the right to appear before the courts and plead their case, and if it should be found that we have proceeded illegally certain measures can be taken. This bill never should have been brought into the house; the matter is now sub judice, but notwithstanding that the Prime Minister and the government declare that hereafter, when a province refuses to conform as it is claimed it should, it will be placed in the same position. I cannot believe that the government is in its real senses in putting a measure of this kind on the statute books. Perhaps the rule of those whom the gods would destroy they first make mad applies here.

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?

An hon. MEMBER:

It is an act of madness.

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LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

It is an act, anyway, with

which we do not agree. This morning, when I considered the position in which we have been placed in regard to this question, I thought of the famous nursery rhyme, which might be paraphrased in this way:

Eight little provinces all in a row,

One would not do as it was told, so it had

to go.

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?

Some hon. MEMBERS:

Nine provinces.

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CON

Felix Patrick Quinn

Conservative (1867-1942)

Mr. QUINN:

Did they have to tell you

there were nine provinces of Canada?

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LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

I think I did know there

were nine, but when this bill passes there will be only eight. When this act passes-and I feel that it will pass, because I have no illusions that anything I may say will interfere with the passage of the measure-we will be reduced to the position of the children in the nursery rhyme. This is something that has never been heard of before. What is going to happen, for instance, if to-morrow the province of Quebec declares that it agrees with the province of British Columbia? Are we going to disqualify the province of Quebec? I do not think we will do that; I hardly think even the Prime Minister is quite so bold as to want to place the province of Quebec in the some category as the province of British Columbia, though it does

Farmers' Creditors Act

happen just now to have a government which does not see eye to eye, on the surface at least, with the federal government.

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LIB
LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

I hope it will happen today. Surely the Prime Minister does not wish to undo the work he has done so effectively during the last eighteen or twenty years in connection with the Canadian Bar Association. We were formed especially for this purpose of bringing about uniformity and non-sectional legislation throughout the Dominion of Canada, but by this very act the Prime Minister is undoing the splendid, constructive work for which he has been given credit by the bar association for all these years. I entreat the Prime Minister to give a little further thought to this matter. Perhaps it might go over until Monday, if we are going to sit that day. Monday is Dominion day, the anniversary of the day when all the provinces were brought together, and I do not really think the Prime Minister can put through a piece of legislation like this at a time when we are about to celebrate the great natal day of the Dominion of Canada.

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June 27, 1935