February 8, 1949

CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

My hon. friend suggests that the senators' offices might be moved to the printing bureau. To say the least, space might be found in the east block for members of the other place; they would be somewhat closer to the Chateau Laurier. But speaking seriously, this is a matter that does require consideration.

I could make a case for the greater space needed for members on the opposition side of the house. Were I to do so, it might be regarded as a case of self-interest. May I add however that it seems to me to be unfair and poor business when so many parliamentary assistants, who have certain extra duties as a result of their appointments, find themselves crowded in the matter of office space.

I urge the government to give consideration to this matter, particularly because of the way in which the problem will be aggravated when these new members come from the province of Newfoundland. I would ask the government to do the fair thing and to tell us, either from the floor of the house or informally, what ideas they have, and to indicate whether or not progress is being made toward implementing those ideas.

[Mr. Church.l

If the government wishes to have my suggestion, then I have already made it, namely, that space be found in the east block for the offices of a number of senators, including those we now have and the new ones who may be appointed within the- next few months, and that members of the House of Commons be permitted to move into some of the offices thus vacated. As a matter of fact, in the light of the number of vacancies in the other place at this time, it seems to me only fair that this working section of parliament should be entitled to some of the vacant space on the other side of the building.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
PC

Gordon Graydon

Progressive Conservative

Mr. Graydon:

The government will not need much space after this.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
PC

Gordon Knapman Fraser

Progressive Conservative

Mr. Fraser:

The C.C.F. want to go into the red.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

My hon. friend's remarks are understandable. They are the observations one would expect to be made the morning after the night before.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
PC

Gordon Graydon

Progressive Conservative

Mr. Graydon:

What a day!

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

I move on to say a word about the other matter I mentioned at the opening of my remarks. It has been touched upon by the hon. member for Broadview (Mr. Church), although I must confess I was not able to hear his remarks well enough to get clearly the point he was making.

I too am concerned about the relationship between the measure now before us and chapter 80 of the statutes of 1947, an act to incorporate Quebec, North Shore and Labrador Railway Company. I understood the hon. member for Broadview to point out that there had been inserted in that act a saving clause as set out in section 7 to the effect that all the things parliament was permitting this company to do should be done only up to the border of Labrador, and that from that point on, permission would have to be secured from Newfoundland. The reference is not to the government of Newfoundland, to the provincial government of Newfoundland or to any government in the future. I raise the question as to what now happens when Newfoundland becomes a province of Canada. My point is of particular concern in view of the fact that section 20 of the Quebec, North Shore and Labrador Railway Act says that-

The works and undertakings of the company are hereby declared to be for the general advantage of Canada.

We all recall the arguments in the house at the time this bill was before us. Hon. members will have in mind our opposition, lest this act be made a means whereby private interests would have the opportunity to exploit a great natural resource in the northeastern section of this continent, a resource

part of which was in Canada and part in another country, namely, Newfoundland. I am wondering whether the action we are taking today, without some kind of assurance or saving clause, does not give to the company -provided they exercise the right within the five-year period set out in section 19 of the act to which I have referred-the right to go in and exploit for private gain the iron ore resources and other great natural wealth to be found there.

That wealth can mean great things for the people of Newfoundland, if properly developed in the interests of the people. It can mean great things for the people of Canada as a whole. I should hope that when we reach the committee stage on the bill and are dealing with the section concerning natural resources, the ministers piloting the various sections through the committee might be in a position to give us at least their opinions as to what the situation would be with respect to the act to which I have referred. As hon. members are aware, we are vitally concerned that the great natural resource be developed for the good of the people of Canada as a whole, including the people of Newfoundland, and not for the advantage of private interests.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. Speaker:

Is it the pleasure of the house to adopt the motion?

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
?

Some hon. Members:

Carried.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. Speaker:

Mr. St. Laurent moves that I do now leave the chair and that the house resolve into committee of the whole on said bill.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

Mr. Speaker, I thought the Prime Minister intended to speak on the second reading.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Mr. St. Laurent:

I had intended to say something about the points that have been raised, but I did not insist because I thought I could make those remarks as soon as the house got into committee. Then if what I said suggested further questions, those questions could be answered during the committee stage. While Mr. Speaker is in the chair I could say what I intended to say but I do not think that that would be of any particular advantage to hon. members.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

I do not want in any way to seek a change in the ordinary rules of the house. The reason I did not speak on second reading was that I thought the Prime Minister had indicated that he was going to speak. There are certain observations that I should like to make on the second reading, and in view of that I should like to have your consent, Mr. Speaker, to proceed.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Mr. St. Laurent:

That will be quite agreeable to us. After I had moved the second

29087-22J

Newfoundland

reading, if I spoke I would close the debate. I thought that if I were going to close the debate it would be just as convenient to have my intended remarks made in committee, where there would be an opportunity to ask further questions as might be suggested. I think it is the desire of all hon. members of the house that no one be deprived of his right to speak on the second reading. If the leader of the opposition wishes to do so I think we could consider the motion as not yet carried and allow him that opportunity.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

Is this a precedent that might be quoted on future occasions?

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
?

Joseph-Georges-Philippe Laurin

Mr. SI. Laurenl:

If on a future occasion the circumstances are such as they are today, I hope it would be the temper of the house to make the same disposition as I suggest should be made today.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
LIB

William Ross Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Has the leader of the opposition unanimous consent to speak at this time?

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
?

Some hon. Members:

Agreed.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. George A. Drew (Leader of the Opposition):

Mr. Speaker, I should like to make certain remarks on second reading of this bill and explain my position in regard to the agreement which accompanies it.

First of all, I should like to refer to the remarks that I made yesterday when the motion was before the house, and express the hope that the Prime Minister (Mr. St. Laurent) will have something to say on those points before the house goes into committee. I believe that they raise important considerations which should be borne in mind by hon. members when dealing with this extremely important bill.

The bill itself is simple and brief. It merely has the effect of approving the terms of the draft agreement which was settled by the representatives of the Canadian government and by those who had been appointed to represent Newfoundland in those discussions. In effect, the considerations before hon. members on second reading of this bill are very similar to those which were before them yesterday when they were dealing with the motion.

The question before hon. members is really whether or not they wish to proceed with the arrangements which have been made to bring Newfoundland into confederation.

I think it should be pointed out and remembered during the discussions that in a case of this kind there is not the latitude to suggest amendments which can be exercised ordinarily when a bill is in committee. Usually, when a bill is in committee, any changes that are made by way of amendment or deletion affect the legislative' authority of this house

Newfoundland

alone. Therefore if there are any changes in the minds of hon. members, there is no reason why those proposals should not be put forward, by way of argument, by way of amendment, or otherwise within the rules of the house.

But in this case it must be remembered that the government, acting on behalf of Canada, has signed a draft agreement which is now before us as an appendix to this bill. The same draft agreement has been signed by those who were called upon to represent Newfoundland, no matter what their status may have been. Therefore, the house must recognize that if the terms of union are to proceed they must of necessity proceed upon the basis of the draft agreement which has been presented if there is to be concurrence within the terms of that agreement.

The principle involved is to agree or not to agree to proceed with the terms of union along the lines of this draft agreement, but the support of this bill which brings such draft agreement into effect for the purpose of completing the confederation cannot be regarded as approval of every term of that draft agreement.

As I pointed out to the Prime Minister yesterday, there is real objection to the inclusion in an agreement of this kind of a provision which, on the one hand, permits a province to do a particular thing and to carry out a particular type of production and, at the same time, places a limitation upon the sale of that product in other parts of Canada. It matters not that the particular provision may have no practical effect now that the decision of the supreme court has been given in regard to the constitutional authority of the parliament of Canada to place restrictions on the manufacture and sale of oleomargarine. The fact remains that imbedded in this agreement is a principle which, if it were accepted as one which could apply to other types of production within Canada, would produce very unsatisfactory results. It could, in fact, produce the very thing that confederation was intended to bring to an end; that is, any form of trade barrier between the provincial areas within Canada.

For that reason I think this particular provision might well be made the subject of discussion between the government of Canada and the representatives of Newfoundland, with the idea of deleting it so that a principle which may have very serious consequences in some other case might not be established as a precedent which would be contrary to the practice that has been so carefully followed ever since confederation. I strongly urge the Prime Minister (Mr. St. Laurent) to take this suggestion into consideration, because it would seem to me that there is no reason why the dominioh government on the

one hand should wish to put forward any special provision for one province, and on the other hand impose a restriction in relation to that particular provision.

I should like to point out also that in relation to the financial arrangements there is a restriction which does not apply to any other province. As I pointed out yesterday, there is a specific undertaking that, even though new financial arrangements are made with other provinces, that is not to be taken as a ground for any claim by Newfoundland for similar consideration by way of adjustment of their position. Again, it seems to me, that is imposing a particular restriction on a single province, which is not consistent with the uniform type of arrangements which have applied to the other provinces of Canada.

As will be recalled, this provision is not something which can have only a theoretical importance. It is related to events which actually occurred in regard to the adjustment of financial arrangements with other provinces during the past two years. When the then minister of finance, Mr. Ilsley, announced in this house in 1946 the terms the dominion government would put before the provinces as the alternative to the retention by the provinces of their major taxing powers, no provision was made for any changes to follow. But very shortly after those proposals, or I should say those arbitrary terms, had been stated in this house, negotiations took place between the dominion government and different provincial governments. As the result of arguments advanced by one provincial government, some changes were made; and those changes were passed on to the other provinces. Then certain very advantageous terms were placed before British Columbia. I am not suggesting that those terms were not quite properly demanded by that province, because British Columbia has found even the present terms inadequate. Nevertheless there was an immediate demand from the premier of New Brunswick and other premiers that they should receive equally favourable terms, and so the bidding and the consequent adjustment went on. It was a form of horse trading between governments, such as had been anticipated by Sir Wilfrid Laurier so many years ago when he condemned this very practice in such vigorous terms, saying that such arrangements usually were merely the payment of a note given in return for political treachery. I remind hon. members that those are the words of Sir Wilfrid Laurier, not mine; but this type of horse trading over the subsidies that should be paid in return for taxing powers has produced precisely the result anticipated so many years ago by Sir Wilfrid Laurier.

At this point may I interject that when I was premier of Ontario and was putting forward the position of my province, I did not refuse to deal with subsidies as part of the arrangement. I mention that because of certain remarks made during the debate on the address prior to its adjournment last Friday evening. I would remind hon. members that the proposals I put forward at that time are a matter of record, and that we in fact proposed a system of subsidies on a basis which would adjust itself to the requirements of the provinces, with a national adjustment fund, which was the key recommendation of the Rowell-Sirois report. We stated that we wished to enter into arrangements of that kind under a transitional agreement which would also provide for an examination of the whole combined taxing system of Canada by competent experts of all the governments and other experts who would be brought in to examine this extremely important subject.

We pointed out that there is only one group of taxpayers in Canada, who pay taxes to the dominion government, the provincial governments and the municipal councils. We pointed out that there is no magic by means of which money can be drawn from any obscure source. There is no question of generosity on the part of the dominion government involved in any of these proposals or, if one chooses to use the term preferred by the minister of reconstruction (Mr. Winters), no question of beneficence. There is nothing of that kind. The dominion government is merely the collecting body which draws from the people of Canada taxes for the purpose of undertaking certain responsibilities. If the dominion government requires more money for the purpose of making payments back to the provinces, the money comes from the very same people; it comes from the taxpayers of Canada as a whole.

What we recommended then, and what I still recommend, is that there be an examination of our whole taxing system so that the taxes required by the dominion government, the provincial governments and the municipalities may be adequate for the responsibilities they are called upon to assume. In this way we may be enabled to establish in Canada the most scientific tax system possible, adjusted to meet the modern conditions in which we live, so that the taxes called for by these three levels of government may be imposed upon the people of Canada in a way that will place a less onerous burden upon them and place the least possible restriction upon personal effort and upon production in every part of this country.

I think it is appropriate that I should recall my recommendation in that respect, because certain comments have obviously been made

Newfoundland

without knowledge of what we actually recommended. I also refer to that proposal because it has a very direct bearing on the terms that are included in this draft agreement between Canada and Newfoundland. The representatives of Newfoundland have accepted terms similar to those which were placed before the provinces of Canada in this house in 1946. This restriction has, of course, been placed upon Newfoundland that they cannot apply for an adjustment in consequence of a subsequent adjustment with any other province. I suggest, Mr. Speaker, there is a particular reason for that restriction being included.

This agreement also does something that I recommended, and recommended very strongly as premier of Ontario at these dominion-provincial conferences. I urged that, in addition to the taxing systems we proposed and the subsidy payment provided by a transitional agreement, there be also an immediate recognition of the recommendations in the Rowell-Sirois report that a national adjustment fund be set up. We urged that such a fund be set up on a basis very much higher, however, than that recommended in the Rowell-Sirois report. This would enable those provinces still needing additional financial support, over and above the ordinary subsidy payments during the transitional period, to obtain funds from this national adjustment fund. Perhaps I should interject that it is a matter of record that I also said I was prepared to agree to any form of distribution of that fund, which was acceptable to those provinces receiving contributions from it.

I mention that for this reason. In the draft agreement with Newfoundland the principle of grants in aid, recommended by the Rowell-Sirois commission, is recognized. Over and above the ordinary subsidy payments, there are substantial grants in aid which are related to the recognition of special financial requirements. I find it difficult to believe it was not in the mind of the dominion government that, when this new province shall receive these special grants, there may well be demands from those provinces that have accepted these unsatisfactory terms. In some cases the provinces are not satisfied and there may well be a demand from them that they receive similar consideration. It would look as though the dominion government had decided that this type of horse trading would have to stop some place. Therefore they decided, after further negotiations, that they would say to Newfoundland, at that point it stops; you cannot claim any more.

If that is the purpose, and I cannot see any other purpose in placing such a limitation

Newfoundland

in the agreement, then right at the outset we are accepting the inclusion in the agreement of something that the people of Newfoundland, within a comparatively short time, may consider unsatisfactory, having regard to the speed with which those adjustments took place after the terms of the dominion-provincial agreements were announced in the House of Commons in 1946. I therefore come back to my comments of yesterday on this subject. I suggest to the Prime Minister that consideration be given to the unsatisfactory results that might follow the inclusion of a limitation of that kind, and that, through negotiation with the representatives of Newfoundland, this particular restriction be deleted.

In so far as these arrangements are concerned, it is appropriate to point out that the representatives of Newfoundland have concurred in these terms. Whether the authority of those who represented Newfoundland was adequate is, as I said yesterday, something to be determined by the people of Newfoundland and the government of the United Kingdom. The mere fact of concurrence, however, does not constitute a reason for opposing the terms under which the union goes forward. I wish to make it clear that I see very serious objections to the provisions I have mentioned. I think it would be desirable that these grounds of possible objection be removed. It could be done by consultation; and, if it is done, at least two reasons for misunderstanding in the near future may have been withdrawn from the terms of union.

There is in this agreement a provision that the subsidy payments may continue, not for the shorter period in which they are payable to the other provinces but, on the option of the representatives of Newfoundland, for an extended period of eight years. This is not a ground for opposing the terms of union, although I do object in principle to such an arrangement. It has been agreed to by certain provinces. I think it is an unsatisfactory arrangement, but that is for them to decide. The whole problem, of course, can be solved when there is a resumption of the dominion-provincial conferences and the dominion government and provincial governments sit down, as they should, and discuss the whole relationship of the dominion and provincial governments in the tax field, with particular reference to the financial requirements of the municipalities in Canada from the Atlantic to the Pacific.

The very terms of this agreement once more emphasize the need for the revival of that conference, which only stands adjourned by the dominion government and can be

recalled at any time by them. This action has been requested over and over again, not only by myself, but by other premiers of the provinces of Canada. The terms of the agreement emphasize as well the need for a conference which will set up a continuing, integrated, functional relationship between the dominion government and the governments of the provinces, so that the very type of discussions which are suggested by some of the terms of this agreement could, from time to time, be dealt with by the representatives of those governments who are working together within this federal structure, and who can deal with practically any problem that may arise, without the necessity of any constitutional change, so long as they work together in a spirit of co-operation and good will.

I should like particularly to remind the people of Newfoundland that, in supporting this bill which embodies these terms, it will be my aim, as it will be the aim of those associated with me in this house, to bring about such a conference at which Newfoundland and the other provinces will be present, where the combined constitutional authority of all these governments can be brought together most effectively for the advantage of the people of Newfoundland, of every other province of Canada, and generally for the welfare of Canadians.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
LIB

William Ross Macdonald (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

I must remind the

house that if the Prime Minister speaks now he will close the debate.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink
LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Right Hon. L. S. St. Laurent (Prime Minister):

Mr. Speaker, when I asked a few moments ago for the unanimous consent of the house to hear the remarks of the leader of the opposition, I did not realize what I was letting the house in for. But I am sure we have all found it most interesting to hear him extol and congratulate himself on the high statesmanship of his attitude in respect of dominion-provincial relations.

Topic:   NEWFOUNDLAND
Subtopic:   APPROVAL OF TERMS OF UNION WITH CANADA
Permalink

February 8, 1949