February 3, 1947

LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. member should ask permission if he wishes to interrupt.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I should like now to come to the question of dominion-provincial fiscal arrangements, the tax agreements. In doing so I shall not attempt to answer all particulars. I may say to my hon. friend, if he will permit me to say so, that I think it is well for a leader to leave some things to his followers, and not to try to take up everything himself.

I know of course that that has been a failing of hon. leaders of the official opposition, because I have sat here a long time and have seen leader after leader opposite attempt to monopolize all points in debate. I hope I have given hon. leaders opposite an example by allowing my colleagues to have their say in debate and in discussing the different questions which may arise. In respect of taxation, and like matters, there are hon. gentlemen on either side of me who are entitled to be heard, and who will be able to answer my hon. friend most effectively.

But on this question of the tax agreements-

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

The right hon. gentleman has spoken for more than four hours in this house, and I have not yet come up to that record.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

And I say to my hon. friend that it all depends upon what one says in that time. I say to him further that if he were to speak for four weeks like he did this afternoon confusion at the last would be even more confounded than it was at the first.

My hon. friend this afternoon drew attention to the length of time that this parliament and the provinces have been discussing

The Address-Mr. Mackenzie King

dominion-provincial relations. I say to him that if he thinks it has been a long time it is going to be a much longer time still before the dominion and provincial governments will cease to discuss with each other the respective powers which they have, and what they would like to have done, because that is one question which is likely to continue so long as there are provinces and a dominion to consider them.

However there have been in the recent past two important conferences. The first- and I am speaking only of those which related primarily to tax agreements-took place in 1941. At that time the provincial premiers, provincial treasurers, officials and others, assembled in this chamber to meet with the representatives of the government of Canada to discuss questions relative to a tax agreement. We met then in a time of war, and we were dealing with an extremely difficult situation, namely that of financing the war. One would have felt that if there were ever circumstances which would have combined to unite all in common agreement, they would be those present in the situation of the country at that time. _

What happened? I shall not discuss the details, but, as hon. members recall very well, that conference was not a success. The government could get nowhere by means of general discussion with the provinces collectively. What were we to do? Were we to abandon all effort to meet the financial situation, or were we to try the only method which offered a possible alternative? We decided the latter. Having failed to reach an agreement by collective conference, we sought to reach the desired objective by meeting the provinces individually. What was the result? The result was that individual agreements were reached with every one of the nine provinces. And it was on the basis of those agreements that the then Minister of Finance carried through the financing during the period of the war.

Those agreements had almost expired-in pome cases they have now expired-and it became necessary to have another conference with the provinces either collectively or individually to see what could be done to meet conditions in this transitional period, and to arrange methods which would be to the advantage of both the provinces and the dominion over the next few years. Some of the provincial governments having changed, in the interval, we thought we would adopt the method of holding another general conference and we had another genera! conference. We lost no time in calling it after this

parliament had been returned. As I recall it, we met in August, 1945; we met again in November; again in January, 1946, and, finally, a little later last year. We had our material most carefully prepared and everything was discussed fully, but what was the result? ; j|

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?

An hon. MEMBER:

You would not bend.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

You can make your speech later.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

The result was that that conference, too, broke up without having succeeded in coming to an agreement. What was the government expected to do then? Was it expected to abandon all effort or to try the other method, the method of conferences with provinces individually?

The then Minister of Finance was faced with having to bring a budget into this house. It was his duty to inform parliament what he would need in the way of revenues and how he proposed to raise them by taxation. This house would not have forgiven the then Minister of Finance if he had said, "I cannot bring in a budget because I cannot get any agreement with the provinces in a general conference?" He had to face the situation as it was, and he brought into the house a budget in which, while realizing that there were great difficulties, he put forth a proposal as a basis on which to arrange individual agreements with any provinces that would like to negotiate with the dominion.

If there were provinces that did not wish to negotiate an agreement they were free to take whatever course they themselves wished. That was the position taken by the then Minister of Finance in his budget speech. Yet what have we heard ever since? We have heard that, in some way, this government is trying to control the provinces.

Let us look at the situation as it is at this moment. There is no agreement at the present time finally concluded with any of the provinces though several have signified their intention to sign agreements already negotiated. Are they precluded from doing what they wish in their own jurisdiction because of that? Every one of them is free to go ahead and attend to its own affairs in any way the constitution permits. If it can find something better through making an individual tax agreement with the dominion government it is free to do so. What is the sense, therefore, of talking about the dominion government trying to take away the rights of the provinces, trying in some way to control the provinces?

I noticed this afternoon that the leader of the opposition kept saying that the dominion is

The Address-Mr. Mackenzie King

trying to centralize, that the dominion is trying to take away the autonomy of the provinces. I wish he or anyone else opposite would tell me where in one particular we have taken away any autonomy of any province, or where we intend to take away the autonomy of any province. It is easy enough to talk in general language, and say that the dominion is trying to take away the autonomy of the provinces, but I would like someone, here and now, to stand up in this House of Commons and state, as a fact, where that is being done. I have not heard it yet.

Then there is the matter of centralization. Where is the centralization? No province is obliged to alter its plans. What we have tried to do is to work out some plan that will help to minimize the cost of collecting taxes either by the provinces or by the dominion, help to prevent the duplication of taxes and, above all, help to work out some scheme which, instead of taking away the autonomy of the provinces, will make the provinces wholly autonomous in the sense that they will be provided with enough revenue to discharge the functions which they are expected to discharge under the constitution. That is what we are seeking to do. We are not seeking to take away from the provinces. We simply realize that, with the situation as it is today, some of the provinces, if there is no agreement, will not be able to carry out and discharge those duties which the constitution of this country imposes upon them.

Conditions have been changing over the years. Conditions changed considerably during the period of the war. There is a need of assistance to some of the provinces, in others a need to prevent duplication of taxation. We have been facing these realities. We have been trying to find out how best they can be met, met in a way that will be of service to both the dominion and the provinces. That is the purpose of the present agreements.

As I said, we failed in general conference. When I say "we failed" I mean the conference failed because all the provinces and the dominion were not able to come to agreement together. It was not the dominion's failure, it was not the failure of some of the provinces; it was the failure of the general conference to arrive at a conclusion.

How has the other method worked out? I am happy to be able to tell this House of Commons tonight that, at the present time, six out of the nine provinces in Canada have expressed their willingness to enter into agreements with the dominion. If I am not mistaken, it will not be long before there are 83166-5

seven. I shall not be surprised if there are not eight before very long, and I shall be equally surprised if before the period of these agreements runs out all nine of the provinces have not made agreements.

That will be a pretty good showing. I do not see how we could do much better. I do say that to have been able to make agreements that are satisfactory to six provinces out of the nine and to have presented to the other three terms that are equally fair, is as much as could be expected of any administration.

My hon. friend has given us a lecture on how these things should be done, what our duty is, and so forth. I want to quote to him some of his own words with regard to other conferences. Before I do that, however, I should like to draw the attention of the house to this fact: Where you are in conference with others, whether there is a conference between two persons or between two dozen persons, there should be, I submit, at least some measure of confidence, some measure of regard, some measure of readiness to believe that the persons with whom you are conferring are equally anxious to do what is right and equally desirous of serving the public.

I am one who believes that attitude is a very important thing in life. I think most of the trouble today is caused by people having got into a nasty way of talking, a nasty way of acting, a nasty way of behaving, a habit of thinking they are doing something smart by making trouble in national or international gatherings. This is not confined to municipalities or to small towns, this kind of thing has got abroad in the world today. I think it is natural, in some respects, because men and nations have been fighting each other for the last six or eight years. Men have been taught to put their reliance on force. They have been taught to hate. They have been taught to believe that the other man is bad, that they must destroy him. You cannot breed thoughts along that line for a number of years and then suddenly expect to see them all change. I am afraid that a lot of that sort of thing is going to continue for some time to come. It is an extremely nasty spirit. No progress will be made except by those men and women of good will who are strong enough to be able to overcome that kind of thing on the part of others.

Let me come now to the present position. We are attacked first of all for not having another conference, after having given all the opportunity we could to the different provinces and their premiers to speak out and say what

66 COMMONS

The Address-Mr. Mackenzie King

they wanted. We are supposed to take any kind of thing they may wish to say; to meet their wishes with a smile regardless of what their attitude may be.

I should like to quote from a Canadian Press dispatch from Toronto which appeared in the Ottawa Journal of December 8. It reads:

Drew won't be ruled by Ottawa

Toronto, Dec. 17,- (CP)-

Premier Drew of Ontario said to-day there is not the slightest chance that _ the Ontario government would sign a dominion-provincial agreement which would "centralize power in the hands of an incompetent government in Ottawa".

Who would ask Mr. Drew to sign any agreement that would centralize power? Nobody expects it.

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PC

Alan Cockeram

Progressive Conservative

Mr. COCKERAM:

Not a five-cent piece.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I would have to come down to something much smaller than that to put a due measure on the worth of the bon. member who persists in interrupting.

The point I wish to make is this: I ask hon. gentlemen opposite if they were sitting on this side of the house and my hon. friend were the leader of the government and there were a Liberal government in power in Ontario that said it would have nothing to do with an incompetent government at Ottawa, would he rush up with his arms open and ask that government to come into conference to try to settle anything? Human nature is human nature. I wish to say to Mr. Drew that as long as he thinks this government is incompetent he is free to do so, but he must not expect us to further his will and his wish as he may express them from time to time.

We have another province which is also talking about centralization and limitation of autonomy of which, mark you, not an hon. member of this house has been able to give a single instance. I now quote from the Ottawa Citizen of December 18:

Quebec, Dec. 18.

The government at Ottawa is trying to put the provinces under an oxygen tent, charged Hon. Maurice Duplessis, Premier of Quebec.

Listen to this from a gentleman who is asking us to meet in a general conference:

He charged that the Mackenzie King forces were adopting the totalitarianism of Hitler and Mussolini, also Stalin. He said that Mr. Ilsley had treated agreements with the provinces like the Kaiser did his commitments-just scraps of paper.

The article goes on:

Then he charged public officials in Ottawa with making statements "more in the nature

of political propaganda than in citing the facts." Some representations made were even found to be inaccurate.

This is the language Mr. Duplessis uses in suggesting that we should invite him to come to Ottawa to enter into a general conference.

I tell you, Ottawa has broken one agreement after another. I have no confidence in Ottawa.

What confidence can we have in Mr. Duplessis? I say confidence is something that is begotten of mutual respect and regard. When the premier of one province tells you that you are incompetent, and the premier of another province tells you that he has not any confidence in you, that is not a good basis on which to begin a general conference. I say we have succeeded-

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PC

Alan Cockeram

Progressive Conservative

Mr. COCKERAM:

What about Angus L.?

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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I shall have something to say to the hon. gentleman that he may not altogether like if he keeps on interrupting.

May I now come to what the leader of the opposition himself had to say in regard to general conferences and what should be done where they don't succeed. This afternoon my hon. friend pointed in a dramatic way to where he was sitting at the table in a conference in this very chamber in 1941. He was here in 1941 pleading the cause of his province, and urging what was the right course of procedure. He left the impression in the minds of some, at that time, that he had taken the position that was right and one which ought to be followed. What did he say about that conference? I shall quote from the report that appears in the Winnipeg Tribune of January 28, 1941, and which has the full text of what is referred to as the Bracken address on the Sirois report. That is the way it is headed in the paper. I take the Winnipeg Tribune so that I shall not be assumed to be taking a paper which would be apt to misquote my hon. friend. He refers to the different advantages that might have come from that conference had it succeeded. What then did he say about it? He said:

These advantages might all have been had for Manitoba but for three provincial premiers and their governments.

It would all have happened successfully if three other provincial premiers had agreed. We would have got all the advantages enumerated, he says, but for three. A singular parallel in some respects to the subsequent conference. But we have six at the present time, and if we get the other three we shall have the nine.

The Address-Mr. Mackenzie King

My hon. friend then said:

Never before in the history of confederation have so many eminent men travelled such great distances and at such great public expense, simply to say to the other delegates that they would not sit in with them in the consideration of a report.

Was not that what happened at the last conference?

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An hon. MEMBER:

No.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

An hon. member says "no". He has forgotten what took place. There was a demonstration arranged in Quebec for the reception of the premier of that province two days in advance. As the time drew nigh, with the demonstration planned and the conference still sitting, he would have missed the demonstration unless he had walked out. He walked out; he left. When the conference ceased to have representation from all the provinces naturally there was a movement to adjourn the conference sine die. How could you continue a conference and hope to come to a general agreement when one of the important provinces had ceased to be at the conference table?

My hon. friend goes a little further. He says:

... if the dominion fails to implement the Sirois report or to provide an alternative,-

At that time we were considering similar matters. The quotation continues:

-those of us who are responsible for Manitoba's policies cannot sit idly by and leave Manitoba citizens in a position of inferiority thus artificially imposed upon them by what we shall be forced to regard as an intolerant majority. Having the immediate responsibility of serving our own people, we shall in such circumstances have to take such action within our constitutional powers, as may be deemed wise and necessary in the interests of our own people.

Is that not exactly what the premiers of at least six of the provinces who were present at the recent conference have since said? They do not propose to come and sit at Ottawa and be controlled by one or two provinces or three. They would have to look after their own affairs and deal with them accordingly.

Then my hon. friend said:

Is the dominion to be excused from the discharge of that responsibility by the fact that the premiers of three provinces walk out of a conference ?

We are accepting him at his word. The same is true of one walking out as of three. We still have our responsibilities, and we have assumed them. The then Minister of Finance made his offer in his budget speech, and we have since gone on and negotiated individual agreements.

83166-5J

My hon. friend continues:

The answer to this question is simple and clear. If, in consequence of the dominion government's failure to implement the report, we are to be left in time of war with what Mr. Ilsley has called an "inequitable, cumbersome and wasteful tax system"; if many of the provinces are to be left in a position of critical financial difficulty; if we are not to have, to use Mr. Ilsley's own words, minimum standards of decency and justice in all parts of Canada (something which, as a part of democracy, one would have thought we were fighting for in this war); if we have to face the post-war period with a governmental system which has proven itself incapable of dealing with the far smaller problems of the depression years, the dominion government and not certain provinces must bear the responsibility.

It cannot excuse itself because three premiers would not discuss matters with which the dominion had the full power to deal even without any discussion.

That is the exact position we are in to-day. My hon. friend says that because three premiers are not prepared to settle things with the dominion, the dominion cannot be excused from the responsibility which is ours to make the best settlement it possibly can, and we agree with him in that. But that was John Bracken, the leader of the government in Manitoba speaking, not John Bracken the leader of the Tory opposition in the House of Commons.

In conclusion, may I quote one other observation from what my hon. friend said at that time:

And if several provinces are forced into default in the refunding of their bond issues, what becomes of the dominion's credit? And if the dominion credit is thus weakened, what will be the additional cost of the interest on its United States borrowings?

The other references are not as important as the ones I have given. What I have sought to point out to my hon. friend is that today we are in the same position as the government found itself in when the conference which he attended as the premier of Manitoba broke up in 1941. The recent conference broke up. We have decided that if we can avoid another catastrophe like that of the 1930's we are going to avoid it. We are going to continue to seek to make agreements that will help the situation in the provinces as well as in Ottawa.

I believe I have covered all that I think it desirable to say at present, beyond giving my hon. friend an assurance that the redistribution measure will be brought in at an early date in this session. I still hold the view which I expressed before. I personally would prefer a commission of judges to make

The Address-Mr. Mackenzie King

the redistribution of seats in this house, but I do not believe that the majority of hon. members take that view, and in that particular I am prepared to accept the will of the majority. I hope, however, the day will come when the House of Commons of Canada will see the wisdom of allowing its redistribution to be made by some impartial tribunal and not by the members of the house themselves dealing with the matter in committee as in former years it has been dealt with.

I need not assure my hon. friend that the government has every desire to see only a just and fair redistribution, and that no effort will be made by the administration to have other than the fairest redistribution that it is possible for this house to make.

The speech indicates that certain amendments to the Dominion Elections Act will be submitted for approval. There will also be amendments to the old age pensions legislation introduced at the present session. As regards the questions of immigration, trade, defence, employment and the like, I shall leave these to my colleagues to deal with later on. I could take up the time of the house in discussing them, but I know so far as the leaders of the different parties are concerned we are all anxious to have the debate concluded tonight.

May I close where I began, by a reference to the amendment which my hon. friend has proposed. Before I do so, however, there is one further part of the speech from the throne to which I should like to refer. I stated that in referring to the contents of the speech my hon friend had made one or two significant omissions. There is one omission he made which is very significant. I refer to the part of the speech which relates to Canada itself and to conditions in this country as they are and as they have been brought about under the measures which this government has provided to meet the post-war situation. I read these words, w'hich are significant ones in the speech from the throne:

In our own country, the change-over from wartime conditions has proceeded rapidly. The repatriation and demobilization of the armed forces have been practically completed. Almost all dependents of veterans have now arrived in Canada. The three armed services have been brought under the jurisdiction of one minister of the crown. The navy, army and air force are being reorganized on a postwar basis.

Industry has been converted almost entirely from war-time purposes to peace-time production. Over a million persons have been transferred from the armed forces and war industry to regular civilian occupations. Employment is higher than it has ever been. It is over thirty per cent higher than it was in 1939.

During 1946 Canada's external commerce reached heights unprecedented in peace time. The national income is at its highest [DOT] peacetime level. The outlook for trade and employment for 1947 is most favourable.

Despite the high volume of output in all the primary industries, the demand for the natural products of the farms, the fisheries, the mines and the forests continues to exceed production.

I ask hon. members of this house, when you . have a record such as that, a record of the country's progress that has been unsurpassed in the matter of production, in the matter of employment, in the matter of trade and the like, what more can you ask of the government? A government exists for the sake of promoting the prosperity of the country and the happiness of the people. When an administration is able to point, as this speech from the throne does in truthful language, to a record such as has not been equalled before in the history of Canada, I say that the government is entitled to commendation instead of condemnation, such as my hon. friend sought to give it this afternoon.

I come now again to the amendment which my hon. friend has moved:

We respectfully submit to your Excellency that your Excellency's present advisers do not possess the confidence of the country.

I have not had time to look up the authorities, and while I am not taking exception to my hon. friend's moving the amendment, I am not at all sure that it is the correct thing for him to have done, for this reason. The speech itself provides the opposition with a means of declaring want of confidence in the government. If the speech from the throne is not carried, that is a vote of want of confidence in the administration. This amendment is unnecessary if that is its only purpose. The speech is there; it is the first opportunity which the house gets as soon as the session opens, of expressing confidence or non-confidence, and I would feel that my hon. friend, as leader of a party, might well have thought of that aspect of it.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

I may say that I have very good precedent for that amendment because it is exactly the wording of one which my hon. friend himself moved a few years ago.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

May I ask my hon. friend whether that was on the speech from the throne?

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An hon. MEMBER:

It was in 1934.

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PC

James Arthur Ross

Progressive Conservative

Mr. ROSS (Souris):

Exactly word for word.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

As I said, I have not had an opportunity to consider all the authorities and it may be that some precedent may be found for it, but what I do say, and

The Address-Mr. Coldwell

what I think perhaps my hon. friends who are leading other parties may be interested in observing is this: How far will it leave them room for their particular amendments when their time comes?

That, however, is not the point I wish to make. What I desire to direct the attention of the house to is this. When the leader of a political party drafts a motion and presents it to the house, to the effect that the government of the day no longer enjoj-s its confidence, he is supposed to be in a position to form an alternative government.

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An hon. MEMBER:

You weren't.

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February 3, 1947