February 17, 1937

LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. gentleman's time has expired.

Constitutional Rejorm-Mr. MacNicol

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. J. R. MacNICOL (Davenport):

Mr. Speaker, in rising to support in a general way what I believe to be the objective of the motion moved by the hon. member for Broadview (Mr. Church), I propose to confine my remarks chiefly to the effect which the present very high cost of government in Canada has on business, and through business, on employment in industry and in business. The hon. member in his motion refers to overgovernment and overtaxation, both of which we have in Canada, and both of which in my humble opinion, which I shall attempt to back up with facts, have had and do now have a very serious effect on employment.

I am pleased particularly with that part of the hon. gentleman's motion in which he suggests the appointment of a select committee of this house or of a joint committee of both houses of parliament to consider the subject matter of this resolution. I am glad that he suggested a committee, and not a commission, because this country has at present sixty commissions, if not more, the majority of which are overstaffed and overpaid, and the great majority of which are costly millstones on business in this country, and through business on employment. I am convinced, as the hon. member has said, that the members of this house and of the senate should do a lot of the work which is now being done by these sixty or more commissions that have been inflicted on the country.

A word or two on the cost of government in Canada. We have ten parliaments; we have a council in the Yukon; we have one senate, and I believe we have one legislative council. There are approximately 884 legislators of one kind or another, 764 of whom are elected and 120 appointed. If one looks into the administrative structure of the very large institutions in the United States, infinitely larger than anything we have in Canada, handling far more money than does the government of this country, and having many, many thousands of employees, I do not know of a single instance-and I have looked into the structure of many of them-where they have such an enormous and costly staff as this country has, including members of this parliament and the legislatures, to run our business. I am convinced that the cost of government in Canada could be very materially cut down.

I read a few days ago-and I confirmed it to-day-a statement issued by our own bureau of statistics, that the debt of Canada and of its provinces and municipalities, direct and indirect, but not -including the indirect debt of the municipalities, now totals almost seven

billions of dollars. This is an enormous debt for eleven millions of people to carry. It is a staggering millstone on production in this country, and is one of the major reasons why industry has slowed up. It is one of the major reasons why so many industries which I knew but which are not now in operation, have been compelled to close their doors.

I think the hon. member for Broadview was correct when he said that the provincial governments are doing or attempting to do much work which this parliament should do, and which is only interfered with by the legislatures. Just how that can be remedied I do not know, but perhaps a joint committee of this house and the senate, in association perhaps with a committee from the provincial legislatures, could bring about reforms along that line.

The bureau of statistics -tells me that the provincial debts of the nine provinces are very close to $1,700,000,000, and that they are ninety-nine per cent higher than they were ten years ago. This is something for business men to stop -and consider because we cannot go on in the way we are going. It imposes too overwhelming a coat on industry, and through industry on employment. That is what I am mostly concerned -about. All my working days I have been studying the question of employment, and I know that every cost of this kind which is -added to industry reduces employment. When we come to the third branch of government in this country, the municipalities, I find that the 4,200 municipalities in Canada also have a debt amounting to about a billion and a half. To try to carry on under the triple burden of federal, provincial and municipal .taxes, industry and business are faced with a very difficult task. Business in Canada has had inflicted upon it taxes which it is now almost impossible to bear, and I will mention a few of these taxes. I say they have been " inflicted " upon business, and I think that is the right word. Perhaps some of them are absolutely necessary, perhaps most of them are; but at any rate they have been inflicted to a large extent upon employment itself. For instance, we have the sales tax, the excise tax, the income tax, the stamp tax, the tax on cheques, the business profits tax, a small one in connection with the radio, the corporation tax, the municipal business tax, the tax on capital, taxes on gross revenue, taxes on branches of industry. If a company has its head office in Montreal and branch offices in cities throughout Canada additional taxes are inflicted upon these branches, notwithstanding that they give employment. Then we have other t-axes-the poll tax, the property tax,

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Constitutional Reform-Mr. MacNicol

the gasoline tax, the picture show tax, soft drink and hard drink taxes and a hundred and one varieties of other taxes and licences.

A considerable number of these taxes are either duplicated or, as sometimes happens, levied from three directions. Take for instance the income tax. In Ontario we had a municipal income tax and a federal income tax, and now the province itself has taken the right to inflict an income tax on the people of Ontario. The gasoline tax is imposed in Canada in at least two ways and in the United States sometimes in three ways. If there are three gasoline taxes in the United States it will not be very long, if that tax is not now collected in Canada by three different taxing bodies, before every gasoline user will be compelled to pay taxes three times on his gasoline. When I was in the state of Mississippi last summer I had to pay a state tax of six cents on gasoline, a municipal tax of two cents and a federal tax of one cent. I do not know how many other states have it three ways, but every state in the American union has it two ways, federal and state.

All these taxes, whether we like them or not, do add to the cost of production, as every industrialist knows if he has trucks, and cars for his selling agents. Every one knows that these taxes add to the cost of production.

I was struck by an editorial that appeared in the Kingston Whig-Standard1 some time ago. This is an old, reliable newspaper, a supporter, I believe of the government of the day, and some fine editorials appear in it. It is a famous newspaper going back very many years, and the editorial in question, with which I very largely agree, refers to the present government of Ontario, though what it says is applicable to many other provincial governments. For my part I do not want to apply it to the present federal government. However, this is what it says:

We do not mean to reflect upon the capabilities of the members of the government, but not one of them has to-day any actual business connection, so far as we are aware, nor has any one of them had the difficult task of piloting a business through the depression and endeavouring to keep men at work. The government is composed of two doctors, four lawyers, one engineer and three farmers. Naturally, when any matter comes up affecting manufacturing, or wholesale or retail business, or even the capitalists of the province who finance business, there is no one to put forth their side of the question.

As I say, I do not wish to refer to the present government, nor in what I am saying have I any reference to the previous government ; but apart from those two I am convinced that it may be said quite truthfully of all governments in Canada that they have

had far too few business men in administration. I am not suggesting that a high class lawyer like my hon. friend from Middlesex West (Mr. Elliott), who is looking at me, knows nothing about business, but I would ask him to say whether he has been engaged practically in giving employment to five hundred or a thousand men in his time. What I say is that the man who provides employment, who is associated with the strenuous business life of the country, who is buying and selling and processing material and having it distributed throughout the country, always anxious to see that it gives satisfaction, is the type of man we too seldom find in the government of the country.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE (Quebec East):

When he gets into trouble he goes to his lawyer.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

And many a time his lawyer has misdirected him, as I have seen.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE (Quebec East):

But he keeps on going.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

I am not one of those who believe that lawyers are infallible, because, as I have observed too frequently, if you go to five different lawyers they will give you five different kinds of advice. What the Whig-Standard says with regard to government I endorse, and that is not making any reflection on any hon. member.

Before I conclude I want to show exactly what has been the result of the high cost of government and the intolerable tax burden that has been imposed by government on business; and so as not to mention any Canadian business concerns, many of which have been forced out of business, I will refer to one that interested me intensely last summer-the Amoskeag concern, one of the greatest textile manufacturing companies in the United States. That company had been operating 700,000 spindles. It had 20,000 looms and its 22,000 employees-that was the maximum number-turned out in five days enough cloth to go around this world, a length of 25,000 miles. To-day that business is closed, and the closing was due among other things to the cost of government. This was the statement of the board of directors to a commission sent to investigate. The plant is situated on the Merrimac river in the state of New Hampshire. It had ample power, not unduly expensive, but during the last two or three years the A.A.A. set up by the United States government took out of that concern for processing tax close to 13,000,000. When they closed they had, I believe, over 12.000 employees; the number had been reduced from the high point, but even 12,000 is a large

Constitutional Reform-Mr. MacNicol

number. This industry was the mainstay of that fine city of Manchester and one of the great business enterprises in New Hampshire. The commission reported that the high taxes were an important factor in the inability of the plant to operate at a profit. It is so easy to inflict taxes on industry. People who know nothing about giving employment to hundreds or thousands of men, and the tremendous difficulty of keeping them employed, are ready to pile up taxes on industries. I am not defending the industry that exploits people, as some do; the great majority of industries do not, but unfortunately all suffer because of one that does not play the game. I have often wondered why the government cannot take care of the industrialist who does not play the game. In my opinion the government can, but why should all industry be attacked because one offends?

The commission recommended the repeal of the stock in trade tax and easing of local taxation, especially on buildings not now in productive use. There is a point; a plant may have a dozen buildings, several of them perhaps not in use for one reason or another, perhaps not fit for operation; yet the tax is imposed on the whole plant whereas it should be imposed only on the part that is actually operating and giving employment. The commission found that the federal processing tax imposed by the A.A.A. under the cotton control scheme wrought serious injury. The tax amounted to $2,500,000 in two years. The commission recommended the reduction of local and state taxation and insisted on the necessity of economies in state and local government.

After all, the purpose of government, and the object of all who really love their country, should be to provide employment, in either the primary or the secondary industries. In Canada I believe about a million men and women are engaged in the secondary industries, processing what has been produced by the primary industries. Any legislation or taxation which interferes with industry reduces employment, and that cannot be beneficial to the country. Employment is the major problem of any government. Later on, when the Minister of Labour (Mr. Rogers) brings in his report about employment, we shall have a lot more to say in that regard. But it is the purpose of government to promote and ensure the employment of the people. Every man or woman has an inherent right to employment, and that which obstructs employment is not good for any country. In Canada the high cost of government tends to restrict opportunities of employment for our artisans. That great plant of which I have spoken is

much larger than any I have in mind in this dominion; it stretches for several miles up and down both sides of the Merrimac river, in many cases two or three rows of fine buildings, standing vacant, a warning to all those who seek to provide employment.

In this country to a smaller, but still too large a degree, the high cost of government is a serious menace to employment. We have at the present time certain commissions investigating industry in this country. I am not opposed to investigating industries which have been found wanting in honour and lacking in due sense of responsibility to the people, but I am opposed to the practice of withdrawing executives from their offices in large numbers, particularly in times of depression, when they should be diligently, occupied in seeking ways to provide more employment. I am opposed to these constant demands on the executives of industry. I know what it is to be taken away from an office for two or three weeks at a time to answer a lot of silly questions. Sometimes, perhaps in order to find out something, questions that seem silly have to be asked, but to me at any rate many of the questions asked of these men are silly and in many instances work hardship on men who are trying to make business grow and to give employment. In all too many instances these men drop dead in their offices or die from overexertion on returning home. More care should be exer cised on the part of the government aboui asking those who direct business to come to Ottawa for these investigations. The executives responsible for operating a plant should not be disturbed more than is absolutely necessary, for to disturb the executives disturbs employment in some measure at least.

One word in regard to the cost of municipal government. As one goes around our big cities to-day, Montreal, Toronto, Hamilton and elsewhere, one sees wreckers pulling down fine buildings. I have in mind one in Toronto, on one of the main streets of the city, close to a main corner, pulled down not long ago. I inquired why it was being pulled down and was told by those who knew, that it cost too much to keep it standing, the taxes were too high. It had been vacant for a short time, and by pulling the building down they had to pay taxes on the land only. That seems to me a mistaken policy. I cannot see how the national wealth can be increased by destroying such buildings. There should be some way by which municipalities could lower the taxes on unoccupied buildings. This is just one more way by which cost of pro-

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Constitutional Reform-Mr. Lapointe

duction is increased, and every unnecessary cost added to production adds to unemployment. I do not want anyone to think I am stretching that in any manner. Someone may say a tariff adds to the cost of production.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

William Henry Golding

Liberal

Mr. GOLDING:

Hear, hear.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

An hon. member says, "Hear, hear." Very good, but in my time I saw a plant grow under the tariff from a personnel of thirty-seven to a total of nine hundred and twenty-five. That plant was a child of the tariff, one might say. The purpose of a tariff is not to increase the cost in a general way, and the government should regulate the tariff in order to prevent anyone from using it to exploit the people. It would be along that line that I would work if I had anything to do with the formation of tariffs. My sole purpose would be this: if a tariff would give employment by encouraging production in this country I would impose a tariff, but on the other hand I would take strong and vigorous measures to prevent the use of that tariff for the exploitation of the people.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Hon. ERNEST LAPOINTE (Minister of Justice):

Mr. Speaker, the activities of the

hon. member for Broadview (Mr. Church) are very diversified, and this is a sort of omnibus resolution which embraces many different subjects. I am sorry I cannot support the resolution, because I have always had a great liking for my good friend, and especially have I had a high opinion of his judgment since I saw him cheering the Quebec hockey team here in Ottawa last week. I should like to read the resolution, in order to show its wide scope and what would be involved if it were adopted:

That, in the opinion of this house, constitutional, parliamentary, cabinet and law reform are long overdue in Canada-

That sentence is less than three lines in length, but it includes almost everything.

That with a view of increasing the efficiency of parliament and of government in this country and also of considering the whole question of over-government and over-taxation and giving the people a more modern constitution adapted to the solution of Canada's present day problems, a survey and study should be made either by a select committee of this house or by a joint committee of both houses of parliament with a view of having a report presented to both houses of parliament for these very necessary reforms and for legislation accordingly, so as to increase the efficiency as well as the stability of government in Canada.

Any such suggestions as aforesaid to be subject to the existing rights of minorities which are not to be interfered with but preserved.

The resolution, which is expressed in such sweeping, general terms, is not very easy to comprehend or to discuss adequately in all its implications and objects. The scope of the resolution is extremely wide, and it may be said with some truth that if this House of Commons set up a committee to consider all the things mentioned in the resolution it would be an investigation of a formidable character. It is obvious that to achieve the purpose of the resolution the constitution would have to be altered substantially; the British North America Act would have to be radically amended, particularly in regard to the matters in which all the provinces are interested, and such changes could not be attempted without at least some degree of consultation and agreement with the provinces concerned.

As to the various topics suggested by the resolution, I shall say only a word or two with regard to each.

The question of constitutional reform was debated in this house the other day on a resolution moved by the hon. member for Rosetown-Biggar (Mr. Coldwell), who also suggested the setting up of a committee to consider amendments to the British North America Act. Possibly this part of the resolution might have been stated to be out of order, because it deals with a matter already dealt with in a former debate; perhaps, therefore, I need not repeat what I stated when the resolution of the hon. member for Rosetown-Biggar was under consideration. May I say merely that this subject has been considered by a dominion-provincial conference, by a committee of that conference and by a committee of experts which drafted the amendments which ought to be made and which even drafted a bill to be submitted to the imperial parliament for the purpose of giving Canada the right to amend the British North America Act. That work is not yet concluded.

With regard to financial questions a subconference was set up under the chairmanship of the Minister of Finance (Mr. Dunning). That was done last year, and it was agreed that an attempt should be made through an amendment to the British North America Act to define clearly the right of the provincial authorities to levy particular taxes and to remove any legal doubts as to certain forms of taxes of which the provinces desired to avail themselves. In pursuance of this recommendation of the subconference, which recommendation was accepted and supported by the various provincial governments as

Constitutional Rejorm-Mr. Lapointe

well as by the dominion government, last year a resolution was introduced into parliament providing for the adoption of an address to His Majesty to amend the British North America Act by way of an enactment of the imperial parliament, in the first place to widen the field of taxation available to the provinces by extending their legislative jurisdiction to include certain forms of indirect taxation, and, in the second place, to facilitate the granting of guarantees to provinces that could not finance without such guarantees. That resolution was adopted by this house but was amended by another house and failed of adoption there mainly on the ground that the proposal to confer on the provinces certain powers with regard to indirect taxation would disrupt the fundamental scheme of the British North America Act. The Prime Minister yesterday made an announcement that a royal commission would be appointed for the purpose of going into this whole matter of taxation between the dominion government and the provincial governments in order that any necessary financial adjustment might be made to enable the provincial legislatures to administer the matters entrusted to them under the British North America Act.

As to parliamentary reform, I do not conceive clearly what my hon. friend has in mind in this regard. If it is change in the representation in parliament, this is a very difficult matter which should not be part of a general resolution of the kind now proposed. If it is a change in the representation in the senate, or the substitution of an elective or partly elective senate for the present one, I might agree with my hon. friend, but he has not mentioned what scheme he would support. I do not know whether I myself could support it, but there might be improvements to be made in the light of the circumstances as they have been since 1867. Does he intend merely to alter the procedure in the House of Commons? He spoke about a committee on the estimates. Such a committee has been proposed many times in this house, but private members do not like the idea that they should be deprived to some extent of the opportunity of saying what they have to say on any items of the budget by letting a committee of their colleagues deal with those matters. I think there would be many reasons in favour of the creation of such a committee, but apparently the suggestion has never met the favour of the majority of this house, let alone unanimity, when it has been discussed.

My hon friend is certainly wrong when he says that this parliament is not a chamber 31111-621

of liberty but is killing liberty. I do not believe that there is anywhere in the world a freer parliament than the parliament of Canada. We have not even the restrictions which free houses such as the British parliament and the United States congress have imposed upon themselves, by way for example, of the "guillotine" and the restriction to one or two days of the discussion of various matters. Here we have perfect freedom. If my hon. friend has anything to complain about, it is not that there is no such liberty; it is perhaps that there is too much. It is certain that this parliament has not killed liberty. I need only refer to the proceedings of the last few days on the motion with regard to military expenditure. May I tell my hon. friends that if such speeches were made, or even if such motions were proposed, in some of the old parliaments in Europe or elsewhere at this time, those who made them would be in gaol instead of listening to me. No; as far as liberty and freedom are concerned we have them in Canada, and we should strive to maintain those privileges rather than express complaints which are certainly unjustified.

As to cabinet reform, there again I fail to understand what the hon. member has in view, because he has not expressed it. Perhaps cabinet reform would mean the change of the present ministers by substitution of others.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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?

Some hon. MEMBERS:

Hear, hear.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE (Quebec East):

I observe that my good friend from Mount Royal (Mr. Walsh) applauds this sentiment, but he is not serious about it. Cabinet reform-is it the number of ministers? Well, the number has been reduced1 from twenty-one to sixteen, and, knowing what I do know of the amount of work that has to be done, I do not think it is possible to reduce it further. It is all very well to say that the United States have fewer ministers than Canada has, but they do not do anything else but look after their respective departments. They do not sit in congress or in the senate; they do not participate in legislative work; they are only administrators of their own departments, whereas ministers here have to attend the sittings of the house and committees and to look after all sorts of additional work. In the absence of any suggestion in regard to cabinet reform, I fail to see what can be done in that regard.

As for law reform, there again what the hon. member has in view is not apparent. Law reform, like parliamentary reform, embraces a great variety of proposals. Does he suggest the amendment or repeal of certain federal statutes, or bringing them into harmony with

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Constitutional Reform-Mr. Lapointe

provincial laws? I do not know. What I do know is that after the last dominion-provincial conference a committee of dominion and provincial officials was convened1 in Ottawa to consider the Dominion Companies Act, and they have succeeded in securing a basis of proposals to the various governing bodies which would make uniform throughout the dominion laws dealing with companies.

As to other questions-and there are many- regarding government and over-government, there again I sympathize with some of the remarks made by the hon. member for Davenport (Mr. MacNicol). There are in Canada many parliaments, but it is the result of overruling circumstances; for without the provincial governments having been retained and maintained it would have 'been impossible to reach agreement on any scheme of confederation; we should not have been able to form a national government in Canada. Possibly it would be in the financial interests of at least some sections of the country if two or three provinces were united into one, but that is their own business, and it would be not only futile but an impertinence on the part of any committee of this house to study the question as to the organization of the provinces.

As to overtaxation, this is a matter which has engaged the attention-

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Hear, hear.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE (Quebec East):

-of the dominion government, and I see that it is engaging the attention of my right hon. friend. One of the questions considered by the subconference on financial questions of the dominion-provincial conference of 1935 was " duplication of taxation and possible reallocation of tax sources as between the dominion and the provinces." A discussion of the evils of duplicate taxation in Canada and of the relative jurisdiction of the dominion and the provinces in the field of taxation resulted in the detailed consideration by the suboonference of the following suggestions:

1. That the dominion should abandon the field of income taxation, leaving this field solely to the provinces.

2. That the dominion should continue to impose a sales tax but should turn over to the provinces all or part of the proceeds of this tax earmarked for unemployment relief.

3. That the dominion should upon request of any province assume responsibility for the collection of the provincial tax on individual incomes; the dominion to collect the tax for the provinces on the basis of rates fixed by the provinces and to remit such taxes to the provinces.

i. That a study should be made of the possibility of unified collection by the dominion of succession duties, the dominion either to remit the proceeds to the provinces or to retain them as a source of revenue in exchange for

either the transfer of other tax sources to the provinces or the assumption of governmental services now performed by the provinces.

There was a diversity of view in all (these matters and no agreement was reached respecting the proposal to transfer tax sources from one authority (to another. But there was general agreement that where both dominion and provincial authorities imposed the same type of tax, cooperation in the administrative field should be worked out in order to reduce unnecessary cost and inconvenience to the taxpayer and to produce increased revenue to governments.

Following the dominion-provincial conference of 1935, an arrangement was concluded between the dominion and the province of Ontario for the administration and collection of income tax on behalf of that province. The Ontario income tax is now being administered by the income tax division of the Department of National Revenue. A considerable economy in respect to cost of administration is being effected, and the inconvenience to the taxpayer, who is required to make out only one form, is reduced to the minimum.

I have referred already to some of the remarks made by the hon. member. He complains that in connection with parliamentary reform we have been talking too much since the opening of the session and not doing enough. I suppose he excepts himself from that indictment. He must realize that it is pretty hard to restrict the freedom of members who have or think they have something important to tell the house and the country. My hon. friend also says that there is no freedom of the press. I cannot see that. He says there is no freedom in the legislatures and no freedom in our pulpits. Why say that? We are free in Canada to say what we want to say in our legislatures and in our pulpits. The hon. member complains about newspapers giving only one column to parliamentary matters while they give three columns to the discussion of turf matters. I fail to see what a committee of this house could do about that. Newspaper owners publish what they think will best sell their papers to the people, and I do not think we could change that by any legislation or by the recommendations of any committee. The hon. member says that our churches are empty, that there is no longer any liberty in our pulpits. I may say that the church to which I go is far from being empty. I invite my hon. friend to come with me and I know he will see many people there.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

James Houston Spence

Liberal

Mr. SPENCE:

Perhaps you do not go often enough.

FEBRUARY 17, 1937 9S1

Constitutional Reform-Mr. Wood

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mir. LAPOINTE (Quebec East):

That is something I shall discuss privately with my hon. friend.

This resolution involves a number of very important matters were they discussed apart from one another, but I fail to see how they could be a matter of investigation by a committee of this house.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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LIB

George Ernest Wood

Liberal

Mr. G. E. WOOD (Brant):

Mr. Speaker, I regret very much that I did not hear the hon. member for Broadview (Mr. Church) speak to this resolution. I was interested in what the hon. member for Davenport (Mr. MacNicol) said with regard to high taxes making necessary the destruction of so many buildings. Some people are ready to recommend a revision of the British North America Act or some other method of getting us out of these dilemmas in which we find ourselves, but I am inclined to think that we should spend a little more time and energy in an attempt to keep from getting into these dilemmas in the first place. I should like to direct attention to a condition of affairs which exists in many of the municipalities in Ontario. The reason why taxes are so high at the present time is found in the extravagance of the past. We now find that we cannot maintain the standard of living we set up. Not very long ago my attention was called to the annual report of the bureau of municipal statistics. One of the striking features of this report is that the people who do the most complaining about the cost of keeping up our standards of living, live in the very sections which enjoy the highest standards. These people do the most grumbling about paying for these things, and object to the taxes levied therefor.

I find that the total city municipal debt of the province of Ontario is 8343,900,000, while the total municipal debt of Toronto alone is 8188.000,000, or considerably over fifty per cent of the total city debt for the province. Considering this debt on a per capita basis, we find that the debt of Toronto is $302 per capita as compared with a per capita debt of $147 for the whole province. Let me draw attention to the differencebetween city, village and township taxation. The average per capita debt of the citiesthroughout the province of Ontario is $250, while some of our villages and towns have a per capita debt of only about half that, and in the rural municipalities the average per capita debt is only $45. If we couldhave an amendment to the British North

America Act which would instil into the minds of those who are responsible for municipal government the necessity for frugality

and thrift, I think we might accomplish something. But we boast about our liberty and give the people in our municipalities the right to formulate any policy they see fit to adopt, and the result is they have no qualms of conscience in mortgaging the future of the people who live in those communities.

Mention has been made of the moral standard of the people being so much lower. I do not think anything does more to lower the moral standard than debt. There are many people who through no fault of their own are endowed with only minor talents; for the parable of the talents still holds good -some are blessed with ten talents, some with five, and some with only two. And the man with only two talents in the complexity of our civilized life of to-day finds it very difficult to make a living and carry the heavy burden which the state places upon him. The result is that these people are forced to do things they otherwise would not do, and there is no doubt that they have to carry their share of the taxes, because concealed in the purchase of everything they buy for their household is a part of the taxes and the debts. That makes it veiy difficult for them to maintain the standard of living they would like to have. Hunger is one of the things which forces people to do things they otherwise would not do.

I would also draw attention to the fact that the major portion of our total income tax assessment comes from industrial and financial centres, and they are the ones who seem to have made the poorest use of their opportunities. The city of Toronto, for

example, has an income assessment of $49,000,000, while the total for the province is only $86,000,000; in other words, Toronto's assessment is about 60 per cent of the total.

Coming back to the counties of which I was speaking a few moments ago, I see that there are seven counties listed here, out of a total of thirty-eight, which have no debt at all. I should like to take this opportunity to pay tribute to the hon. Deputy Speaker (Mr. Sanderson) who represents one of those counties, the county of Perth. It has furnished a very striking example of frugality in the province of Ontario. If you will go through this list you will find that the per capita tax in those counties is such that men can still make a fair living without having to share too much of their income with the tax collector.

Speaking of this virtue of thrift, I am very proud to say, and possibly the Toronto members may take a leaf out of the book of some municipalities outside their own, that in

9S2 COMMONS

Constitutional Reform-Mr. Wood

the county of Brant in the last six years we have paid off $140,000 of our regular debentures. That included, of course, interest and principal. On top of that we paid $99,756 cash on our twenty per cent share of the cost of provincial highway construction, which amounted to nearly $1,500,000. From 1930 to 1937 our county debt has been decreased considerably, and it is now about twenty per cent less than it was seven years ago at the beginning of the depression, in spite of the heavy commitments of the twenty per cent obligation in respect of highway construction.

The sponsor of this motion (Mr. Church) might well pay heed to what other municipalities have done instead of criticizing everything that comes along. The other day, for instance, I noticed that he was very militant on the housing legislation, and said that Toronto had received under the home improvement scheme only $103,000. Well, if I were in the lending business and observed the financial record of some of our municipalities, I think I would be reluctant to extend credit very much further to those who do not make a better showing in administering their own affairs.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
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CON

Thomas Langton Church

Conservative (1867-1942)

Mr. CHURCH:

Mr. Speaker, I ask leave

of the house to withdraw my motion.

Motion withdrawn.

Topic:   CONSTITUTIONAL REFORM
Subtopic:   PROPOSED SURVEY OF LEGISLATIVE AND LEGAL
Sub-subtopic:   SYSTEM, LOOKING TO INCREASED EFFICIENCY AND STABILITY OF GOVERNMENT
Permalink

PROBLEMS OF WESTERN CANADA

PROPOSED APPOINTMENT OF ROYAL COMMISSION TO STUDY AND REPORT ON ECONOMIC AND PSYCHOLOGICAL CONDITIONS

SC

René-Antoine Pelletier

Social Credit

Mr. R. A. PELLETIER (Peace River) moved:

:

Whereas, the western Canadian provinces have materially increased in wealth and population since entering confederation;

And whereas, the geographical location of Canadian financial and industrial centres have prevented friendly understanding of western Canadian life leading to an accumulation of grievances either justified or psychlogical, tending to disrupt the harmony of confederation,

Therefore be it resolved,-That this parliament would serve a great need and greatly enhance Canadian unity by appointing a commission to investigate broadly the various problems of western Canada, both from an economic and psychological point of view and to bring in recommendations to this parliament

He said : Mr. Speaker, on February 1 last, speaking to a resolution moved1 by the hon. member for Rosetown-Biggar (Mr. Coklwell) I took the opportunity to make to the house a statement regarding certain problems of western Canada, and at that time I laid down two rules which I think will bear repeating.

The first rule is this: The vitality of national life, being dependent upon the harmony of its component parts, is capable of resisting temporal erosion in proportion to the degree in which harmony exists.

The second rule is: The deterioration of a political entity, subject to the diversity of its constituent elements, is slow or rapid in proportion to the fractional facets of its local problems.

It would appear that many others hold these views because since I last spoke on this question I have come across various suggestions more or less in line with the ideas expressed in my resolution. For example, a letter was addressed to the Prime Minister (Mr. Mackenzie King) by the Canadian Chamber of Commerce, over the signature of Henry W. Morgan, dated January 28, 1937, and reading in part as follows:

The Canadian Chamber of Commerce is at one with the government in recognizing that unusual financial difficulties are presently facing the prairie provinces. The chamber therefore notes with satisfaction that the government is in close touch with these emergent financial conditions, which with governmental concurrence, are now being reviewed on the ground.

And further on:

However necessary the above recommended survey may be to remedy effectively these special western problems, the Canadian chamber is unanimous in pressing strongly for the immediate naming by the dominion government of a national commission, whose functions, inter alia, will be federally and provincially, (1) to clarify the inter-relation of financing and taxing powers, (2) to survey the duplication of public services, (3) to redefine legislative policies and (4) to establish administrative responsibilities. Many of the actual relationships between the federal and provincial governments have, we believe, become out-moded and need readjustment. . . .

Because of the peculiar financial, economic, social and constitutional problems before the dominion, the present time seems particularly fitting for the empanelling of such a national committee.

It is to be noted that the Canadian Chamber of Commerce believes in a commission that would make an impartial and a thorough inquiry over the whole of Canada. While it might be desirable to adopt this suggestion, I am primarily concerned with western Canada and its relationship to Canada as a whole. I am not qualified to make a statement with regard to conditions in eastern Canada. The Canadian Chamber of Commerce speaks of these special western problems and I believe the interests of western Canada would be best served by a commission specially set up to study western Canadian problems.

Recently the president of the Canada Permanent Mortgage Corporation, addressing the

Western Canada-Mr. Pelletier

annual general meeting of shareholders in Toronto, said in part:

No one who is familiar with the history of the west will believe for a moment that the problem cannot be solved in a sane and reasonable way. Neither can any one fairly doubt that it is the sincere desire of all thinking men, whether they have a financial interest in it or not, that the problem should be so solved. What is required at the moment is assistance-sympathetic, of course-but, by all means, expert, and the suggestion which has been made that a commission, corresponding to what is known here as the "Duncan commission" of some ten years ago, should be appointed to deal with it seems to be a reasonable and proper suggestion. The future of the west is of vital concern to all of us.

It is also to be noted that this appeal is much more in accordance with the subject matter of this resolution. However, this organization is chiefly concerned with the financial problems of western Canada. A commission set up to study merely the financial problems of western Canada would, in my opinion, not be satisfactory to the west simply because the financial question is not the only one that needs to be solved. I intend to-day to review briefly some of the difficulties I pointed out on February 1 last, but I shall deal with these later.

Yesterday the Prime Minister's statement came to me as a surprise. I have read that statement very carefully. It is proposed:

to appoint a royal commission of inquiry to investigate the whole system of taxation in the dominion; to study the division of financial powers and financial responsibilities between the dominion and the provinces; and to make recommendations as to what should be done to secure a more equitable and practical division of the burden to enable all governments to function more effectively-and, I may add, more independently-within the spheres of their respective jurisdictions.

I do not believe that such a commission would give satisfaction to western Canada. Nowhere in this proposed royal commission do I find that such questions as the tariff and immigration, freight rates and the question of subsidies, are to be studied. It is not my intention to relate once more what I pointed out on February first in regard to the tariff and these various problems. I believe that on that occasion I placed on Hansard a fairly complete analysis of these problems and I should like the Prime Minister to take into consideration the remarks which I made then. In fact, I might say that I should like to make those remarks a part of what I have to say to-day.

Something else took place in this house last week. The Minister of Agriculture (Mr. Gardiner) gave us what I considered a most

able and comprehensive survey of the drought situation and its effect on western Canada. The terrible consequences of this situation were made quite clear. He showed the loss which the drought bad caused to Canada as a whole and how it had aggravated the financial position of the western provinces. It was pointed out that this particular problem, because of its very nature, must be recognized as a national one. I had hoped that the minister would go on to show how the drought 'had compelled an increase in provincial expenditures, while at the same time it restricted the field of provincial revenue. Though this fact is well known to all hon. members, definite records would have greatly assisted all Canadians in obtaining a still more impressive picture of the situation.

But let us come back to the statement made by the Prime Minister yesterday. It appears that the royal commission will be set up as a result of a report made by the Bank of Canada regarding the finances of Manitoba and Saskatchewan. I regret that the Minister of Finance (Mr. Dunning) is not present to-day because I should like him to hear what I 'have to say. It appears further the Bank of Canada believes that unless financial assistance is given to Saskatchewan and Manitoba these two provinces face default, and therefore the dominion is of the opinion that in the circumstances it would be justified in extending temporary aid to the provinces in question pending the report of the royal commission. The Prime Minister concluded his remarks by saying that a recommendation to this effect would be made to the house when the supplementary estimates were brought down.

I wish to join with the leader of the opposition (Mr. Bennett) in protesting with all my might against what I regard as a discrimination. There is no doubt that Alberta faced a financial situation just as difficult as that faced by Saskatchewan and Manitoba, and Saskatchewan and Manitoba are to be saved by this dominion from default. Alberta, however, was allowed to default. If my memory serves me rightly, the reason given at the time this default was allowed to take place was that Alberta would not agree to a certain loan council which was then being proposed. I submit that the situation is unchanged; neither Saskatchewan nor Manitoba is being asked to agree to a loan council scheme. They are to be granted assistance without any strings attached, the reason given being that they face default unless the dominion helps them. Alberta also faced default, but if had to submit to impossible

Western Canada-Mr. Pelletier

conditions which are not now being exacted from Saskatchewan or Manitoba in order that they may receive assistance.

As the leader of the opposition said, no matter what explanation may be given, it is a fact that Alberta was allowed to default and find its own solution, whereas Manitoba and Saskatchewan are going to be saved by this parliament from this course. What happened on April 4, 1936? These are a few gems from the Financial Post of that date. I have before me a clipping from the Financial Post of April 4, 1936, in which the following statement appears:

Rejecting financial salvation in the form of the proposed loans counoil scheme of federal aid, Alberta defaulted payment of principal of bonds maturing April 1.

The maturing loan is $3-2 millions of six per cent bonds issued in 1916, and payable only in Canada, against which the province had sinking fund of some $560,900. The province is paying interest. ... _ . .

The dominion government was willing to aid Alberta in meeting the maturity, provided the provincial government subscribed to the loan council plan of financing.

And further on in regard to dominion policy, this statement is made:

This policy has been applied to Alberta with the result that Premier Aberhart has chosen to default. Its next application will be to British Columbia.

It is now hoped that the loans council plan will be of future service in salvaging provinces whose credit has suffered by reason of default.

And so on. But where is the loan council now? Why is Canada going to help Manitoba and Saskatchewan? Not because they have agreed to a loan council, but because the Bank of Canada says they need help.

I quite agree that the western provinces should be assisted, but once more I desire to protect emphatically against what is a serious discrimination against certain Canadians. Furthermore, I would point out that some of the policies adopted by the Minister of Labour (Mr. Rogers) have had a good deal to do with things which have happened in Alberta. It has been pointed out by many people that relief has increased in Alberta, and for that there is a reason which I can give. During the past summer certain moneys were granted by the federal government to Alberta to help unemployment through road relief projects, and one of fee conditions attached was that no one who was not on relief could get employment on that work. What was the result? Everyone who was not on relief but wanted to earn a few dollars tried to get on relief in order to get employment and earn what he could. Therefore this had the effect of increasing relief in

Alberta. That is one feature which merits consideration when the figures are being analyzed.

However, it is not my intention to speak particularly of Alberta. I feel the problems faced by all the western provinces are very similar, and when the Prime Minister announced yesterday that he would set up a commission to study the financial problems of the west, that does not go far enough. It may not be correct to say that he has adopted the suggestion from the Canadian Chamber of Commerce, but after a financial investigation by authorized persons he has come to the conclusion that the west needs financial assistance. Western Canada, however, will not be satisfied with simply an investigation or review of its financial problems. As I stated on February 1, there are many factors in western Canada to-day which are causing difficulty. Many people in the west feel that the east does not understand their problems. Some days ago it was said that eastern Canada responded and responded spendidly to the call for help from the west. I agree that that is a fact, but I also believe that western Canada should be given an opportunity to air all these grievances which have been fermenting in the minds of the people there. As I state in my resolution, some of these grievances may be fancied and others justified. But whether justified or psychological, they tend to disrupt the harmony of confederation.

I do not intend to cover again the ground that I traversed on February 1, but I should like the remarks I made then to be considered as part of what I have to say to-day. At present people in the west live under the shadow of wrongs, real or fancied. They fancy that eastern Canada does not understand them, looks on the west as a burden, a drain on the federal treasury, thinks the east pays the bills while the west lives in irresponsible affluence. When the western people think of what they have gone through during the last few years, the drought they have faced, the plagues of grasshoppers, the hot winds that have blown away their seed many times, and the impossible conditions under which they have had to live, they naturally feel bitter towards those who are not prepared to give them the sympathy which they deserve. Even though this resolution has come up after the statement given to the house yesterday by the Prime Minister, I trust there is still time for the government to reconsider the setting up of this royal commission and to give western Canada a really good hearing.

Western Canada-Mr. McIntosh

Mr. CAMERON R. McINTOSH (North Battleford): In rising to say a few words on this resolution, perhaps I had better touch upon the three main parts of it. The first part deals with the fact that the western provinces since coming into confederation have increased materially in wealth and population. That is a fact which cannot be gainsaid. Then we have the statement that because of the geographical location or centralization of financial and industrial power in eastern Canada since confederation, certain grievances have arisen, and that these grievances, whether justified or psychological, have a tendency to disrupt the harmony of confederation. There is a certain degree of truth about that too. Then in the last part of the resolution rve come to the statement that this parliament should appoint a commission to investigate these grievances and problems and bring in recommendations upon which parliament could act.

In discussing this resolution, my hon. friend made one or two very broad statements, which I think can be refuted as being absolutely without foundation. One statement concerned the matter of government policy in regard to the grievances existing across the country from ocean to ocean, grievances which are nation-wide and are to be investigated by a national commission. The hon. member stated that the dominion in dealing with Alberta adopted a discriminatory policy. Where he gets such an idea, in view of the statement made in the house yesterday by the Minister of Finance (Mr. Dunning), I do not understand. If he will turn to page 922 of Hansard of yesterday he will find in the closing remarks of the Minister of Finance this clear-cut, definite, constructive and, I would think, convincing statement, referring to the question of discrimination raised by the leader of the opposition (Mr. Bennett):

I can say, however, that the province of Alberta has been treated by this government absolutely without discrimination in so far as financial assistance is concerned since this government came into power; and I can go further and say that the government has no intention whatsoever of discriminating against any province in this dominion and is prepared to sit down with any province and discuss its problems and bring forward such solutions as the circumstances may appear to warrant.

Topic:   PROBLEMS OF WESTERN CANADA
Subtopic:   PROPOSED APPOINTMENT OF ROYAL COMMISSION TO STUDY AND REPORT ON ECONOMIC AND PSYCHOLOGICAL CONDITIONS
Permalink

February 17, 1937