November 25, 1949

RENT CONTROL-CORRESPONDENCE WITH PREMIERS OF SASKATCHEWAN AND QUEBEC MINISTER OF FINANCE


Ottawa, November 9, 1949 Honourable Maurice Duplessis, Premier of Quebec, Quebec City. My dear Premier: On October 23, 1948, I wrote to you about rent control, confirming the intention of the federal government to ask parliament for powers to extend rental control for a further twelve months beyond March 31, 1949. In that letter I pointed out that: "The constitutionality of continuing federal rent control has already been questioned and is now before the courts. The federal government does not wish to do anything to prevent any province from making provisions to deal with the situation that would arise should continuing federal rent control be held invalid and is prepared not only to make available to any province federal rental administration with all available staff, but also, subject to parliamentary approval, to pay the cost of any provincial rental administration for one year." An exchange of correspondence then took place between us, but your government did not avail itself of our offer. Similarly, no other province requested us to vacate the field of rent control in its favour. Newfoundland, when it joined Canada, retained its own system of rent control. Accordingly legislation extending rent control to March 31, 1950, was introduced into parliament and received approval. On Thursday last, November 3, I made a statement in the House of Commons outlining the government's intentions with respect to the further extension of rent control. My statement will be found at page 1433 of Hansard for November 3. In that statement I said: "The government has therefore decided to refer the question of the validity of the rental regulations to the supreme court, in the hope and expectation that a decision will be given before the present legislation expires. As I have said, the law officers of the crown are of opinion that the rentals regulations are valid. They are also of opinion that both the law and the facts support the view that it lies within the authority of parliament to extend these regulations for a further period. Counsel will be instructed by the Attorney General of Canada to press this view before the court. The order in council making the reference is being prepared and when approved will be tabled in this house. If no unfavourable decision is given, the government at the next session will ask parliament to grant a further extension of the rentals regulations. The government intends to continue with its program of orderly decontrol as rapidly as conditions warrant, but we do not believe that this program can be completed before March 31, 1950. Let me make it quite clear that the purpose of clarifying the legal position is not to perpetuate federal rent control. On the contrary, the purpose is to confirm our authority to proceed in an orderly way towards the eventual withdrawal of all controls. This has been our firm policy towards wartime controls in general and rent control is no exception. Should the supreme court find that the rentals regulations are now beyond the powers of parliament, then of course a different situation arises. I am accordingly writing at once to the premiers of the provinces acquainting them with our intention and offering to assist in the preparation of what might be termed "stand-by" legislation if they wish to present such legislation to their respective legislatures. After the most careful consideration of all the alternatives, the government believes that this course of action is the best. We believe that gradual and orderly decontrol is the right policy. At any time, however, that policy could be frustrated by an adverse decision of the courts. Such a decision might come at a most inconvenient time when the provinces might not be in a position to act as they see fit in the interests of their residents. By referring the question to the supreme court before the present legislation expires and by giving ample notice of our intention to do so, such a situation can, we hope, be avoided. I should add that the federal government, of course, continues to stand ready at any time to vacate the field of rent control to any province which makes a formal request to that effect. We do not wish to stand in the way of any province which desires to operate in the field of rent control." My purpose in writing to you at this time is to draw your attention to this statement of government policy and to offer to assist you in the preparation of provincial rent control legislation. If you wish to avail yourself of this offer, I shall be pleased to arrange to have Mr. Owen Lobley, the rentals administrator, put himself at your disposal. Yours very truly, D. C. Abbott OFFICE OF THE PRIME MINISTER Province of Quebec Quebec, November 16, 1949 Hon. D. C. Abbott, Minister of Finance, Ottawa. Mr. Minister of Finance: At the first cabinet meeting held since November 10th instant, I communicated to my colleagues of the executive council your letter concerning federal rent control, dated November 9 and delivered at my office the next day. Your letter obviously concerns only particular aspects of this important problem. We respect your attitude in the matter without approving it. Our view is and has always been that rental matters, concerning civil property and our civil code, come under the exclusive jurisdiction of the provinces. We are certain that if the rights of the provinces in this matter had been recognized by the federal authorities the situation would have been considerably improved. For more than eight years the federal authorities have assumed, in this field, powers of an essentially provincial nature. As a result, the situation has become very complicated, and many orders and rulings of the federal rental board have been unfortunate. We are of opinion that had the federal authorities from the beginning consulted the provinces and recognized their rights in this field, we would not today have to deplore an unfortunate situation giving rise to numerous and legitimate protests and causing regrettable confusion. For more than eight years federal bodies have, in that matter, caused many difficulties and disturbances which could and should have been avoided. After all the harm has been done, after the federal authorities have decided everything and the situation has been bungled and worsened, you say that the province may have some rights. As for us, we consider, as we always have, that these rights are unquestionable. Eight years after entering a provincial field, you express the desire to submit to the supreme court the question of the constitutionality of the federal action and, at the same time, you anticipate the judgment of the supreme court and complicate the problem if possible still more. It seems to us obvious that at the approach of winter, when householders are faced with the heavy expense of providing for the heating of their houses, and climatic conditions add considerably to the difficulties, the time is ill chosen to impose additional charges and obligations on the people. Without any desire to criticize, but simply in order to re-establish the facts, we are of opinion that the central government's persistence in controlling rents has brought about a situation for which that government is undoubtedly responsible and which adds considerably to the inherent difficulties of the problem. Ottawa has never offered to restore to us the full exercise of the rights which it has assumed in this field: the offers made to us in this matter are conditional, restrictive and, in the end, subordinate to the decision of the federal authorities. As we declared on several occasions, the present government of the province of Quebec has always been willing to assume its obligations as it has always wished to see the federal government assume its own. During eight years many federal orders in council have been passed and many rulings issued concerning rental control. All those documents are in the possession of the Ottawa authorities. In our view, it would be proper that we be permitted to make ourselves acquainted with their terms so that we might obtain at first hand the necessary explanations and information. We thank you for your offer to place at our disposal the services and advice of the federal rental administrator. Without questioning his good faith and sincerity, we must say that we have greater need, in order to familiarize ourselves with the matter, of obtaining the rulings themselves and the federal orders in council. As soon as we shall have received these necessary documents and have been able to examine them, you may be assured that the Quebec government will without delay take the fairest and most appropriate steps in the circumstances. Yours sincerely, M. L. Duplessis


MINISTER OF FINANCE


Ottawa, November 24, 1949 The Honourable M. L. Duplessis, Premier of Quebec, Quebec, P.Q. My dear Premier: I acknowledge and thank you for your letter of November 16, in reply to mine of November 9, regarding rent control. May I first comment on one or two of the points raised in your letter. More than a year ago the federal government offered to vacate the field of rent control to any Appendix province which wished to introduce provincial legislation. In my letter to you of October 23, 1948, which contained that offer, I said: "At the same time the federal government is prepared to vacate the field at any time after March 31, 1949, to any province which may decid to undertake rent control. Normally rent control would come under provincial jurisdiction and is peculiarly suitable for provincial or local administration because of the immovable nature of real property. The federal government is anxious not to stand in the way of any province which believes that rent control can be better undertaken and administered locally. "This announcement of policy is being made at this time so that any provincial government which wishes to do so will have sufficient time to prepare legislation for presentation to its legislature before March 31, 1949." Again, in a letter to me on November 3, 1948, you asked the following question: "Does this mean that after March 31, 1949, you will definitely recognize the right and power of the province to establish, or not establish, as provincial authorities judge best, a provincial control on rentals? In other words, after March 31, 1949, will the federal government give the province exclusive power in these matters?" On November 12, 1948, I replied to this question as follows: "The government's policy, as announced, is that if after March 31, 1949, under the proposed extension of rent control, any provincial government formally requests that federal rental control be withdrawn in that province, the federal government will announce that it has received such a request and proceed to withdraw its controls at a date to be fixed by the provincial government in the light of the legislative plans of the province. The responsibility for rental control in that province will then rest with the provincial government and legislature." As you will see, our offer was unconditional, without any qualification whatsoever. I therefore find it difficult to understand the statement in your letter of November 16, 1949, that: "Ottawa has never offered to restore to us the full exercise of the rights which it has assumed in this field; the offers made to us in this matter are conditional, restrictive and, in the end, subordinate to the decision of the federal authorities." The federal authorities entered the field of rent control as part of a national policy of controlling prices and wages during wartime. It is generally agreed, I believe, that action on a national basis was in the general interest and essential to the successful conduct of the war. The government has been removing these controls gradually, as it announced it would, and as, indeed, it was bound to do. Broadly speaking, only rent control now remains, and this is also gradually being relaxed. The reference to the supreme court is for the purpose of establishing whether or not the federal government has the authority to continue with this policy of gradual decontrol. At any time during the past year, however, any provincial government could have requested the federal government to vacate the field of rent control so as to leave that province free to enact its own legislation. The federal government does not venture to suggest whether or not any province should enter the field of rent control. This is a matter which must be decided by the government and legislature of each province in the light of local circumstances. We have tried, however, to avoid standing in the way of any province which decides to do so. The province of Newfoundland retained rent control on a provincial basis at time of union. Within the past few days I have also received a letter from



Appendix Premier T. C. Douglas, of Saskatchewan, stating that it is the intention of the Saskatchewan government to enact rent control legislation in that province, to become effective on April 1, 1950. I have replied to Premier Douglas that the federal government is prepared to withdraw its regulations in Saskatchewan as of March 31, 1950, so as to avoid any possible conflict, and, if it is his wish, to suspend the operation of orders 813 and 814-which make provision for the recently announced changes in maximum rentals-in Saskatchewan so that the status quo will be retained in that province until provincial legislation comes into effect. You ask for copies of our rent control regulations to assist you in reaching a decision on the matter. I have pleasure in forwarding, under separate cover, copies of all the orders, at present unrevoked, made in relation to rent control. Yours very truly, D. C. Abbott


MINISTER OF FINANCE


Ottawa, November 9, 1949 Honourable T. C. Douglas, Premier of Saskatchewan, Regina, Sask. My dear Premier, On October 23, 1948, I wrote to you about rent control, confirming the intention of the federal government to ask parliament for powers to extend rental control for a further twelve months beyond March 31, 1949. In that letter I pointed out that: "The constitutionality of continuing federal rent control has already been questioned and is now before the courts. The federal government does not wish to do anything to prevent any province from making provisions to deal with the situation that would arise should continuing federal rent control be held invalid and is prepared not only to make available to any province federal rental administration with all available staff, but also, subject to parliamentary approval, to pay the cost of any provincial rental administration for one year." On January 28, 1949, you replied saying that "the government of Saskatchewan is desirous that the dominion government continue to exercise its jurisdiction in this field and to extend the legislation relating to rental control for at least another year". Similar replies were received from all the other provinces, except Newfoundland which, when it joined Canada, retained its own system of rent control. Accordingly legislation extending rent control to March 31, 1950, was introduced into parliament and received approval. On Thursday last, November 3, I made a statement in the House of Commons outlining the government's intentions with respect to the further extension of rent control. My statement will be found at page 1433 of Hansard for November 3. In that statement I said: "The government has therefore decided to refer the question of the validity of the rental regulations to the supreme court, in the hope and expectation that a decision will be given before the present legislation expires. As I have said, the law officers of the crown are of opinion that the rentals regulations are valid. They are also of opinion that both the law and the facts support the view that it lies within the authority of parliament to extend these regulations for a further period. Counsel will be instructed by the attorney general to press this view before the court. The order in council making the reference is being prepared and when approved will be tabled in this house. If no unfavourable decision is given, the government at the next session will ask parliament to grant a further extension of the rentals regulations. The government intends to continue with its program of orderly decontrol as rapidly as conditions warrant, but we do not believe that this program can be completed before March 31, 1950. Let me make it quite clear that the purpose of clarifying the legal position is not to perpetuate federal rent control. On the contrary, the purpose is to confirm our authority to proceed in an orderly way towards the eventual withdrawal of all controls. This has been our firm policy towards wartime controls in general and rent control is no exception. Should the supreme court find that the rentals regulations are now beyond the powers of parliament, then of course a different situation arises. I am accordingly writing at once to the premiers of the provinces acquainting them with our intention and offering to assist in the preparation of what might be termed "stand-by" legislation if they wrish to present such legislation to their respective legislatures. After the most careful consideration of all the alternatives, the government believes that this course of action is the best. We believe that gradual and orderly decontrol is the right policy. At any time, however, that policy could be frustrated by an adverse decision of the courts. Such a decision might come at a most inconvenient time when the provinces might not be in a position to act as they see fit in the interests of their residents. By referring the question to the supreme court before the present legislation expires and by giving ample notice of our intention to do so, such a situation can, we hope, be avoided. I should add that the federal government, of course, continues to stand ready at any time to vacate the field of rent control to any province which makes a formal request to that effect. We do not wish to stand in the way of any province which desires to operate in the field of rent control." My purpose in writing to you at this time is to draw your attention to this statement of government policy and to offer to assist you in the preparation of provincial rent control legislation. If you wish to avail yourself of this offer, I shall be pleased to arrange to have Mr. Owen Lobley, the rentals administrator, put himself at your disposal. Yours very truly, D. C. Abbott PREMIER'S OFFICE Saskatchewan Regina, November 16, 1949 The Honourable Douglas C. Abbott, Minister of Finance, Ottawa, Ontario. Dear Mr. Abbott: Re: Rent control This will acknowledge receipt of your letter of the 9th instant. I may say that the Saskatchewan government still holds the opinion expressed in my letter to you of January 28, 1949, that the dominion government should continue to exercise jurisdiction in the field of rent control. Dominion-wide control allows uniformity and other advantages. However, in view of the recent increases that you have announced, we are now of the opinion that if left in this type of dominion control, there will be no effective rent control. Further, you made the statement that: "The government intends to continue with its program of orderly decontrol as rapidly as conditions warrant, but we do not believe that this program can be completed before March 31, 1950." This confirms our belief that while your government intends, if jurisdictionally possible, to stay in the field, it will be in name only. The Saskatchewan government is gravely concerned with this problem, and feels that as long as there is as critical a shortage of housing as there is today, with the resultant grave injustice incurred by the people of this province, equitable rent control is a necessity. We, therefore, believe that rental control should continue; we further believe that it would be most effective if dominion-wide, but as stated, we must express our dissatisfaction with the type of control that your government has indicated it intends to exercise. The government of Saskatchewan is, therefore, willing to accept the responsibility forced upon it and enter the field of rental control. It can, however, do this only if it has the assurance that its legislation will not be declared invalid by the Supreme Court of Canada. The law officers of the crown in Saskatchewan are not at all certain that either you, as the minister in charge, or the federal cabinet, has the power to carry out the offer made in your letter, and I quote: "I should add that the federal government, of course, continues to stand ready at any time to vacate the field of rent control to any province which makes a formal request to that effect. We do not wish to stand in the way of any province which desires to operate in the field of rent control." You can perhaps rescind all rent regulations in respect of Saskatchewan, and you can apparently, by order in council, vacate the field entirely. That is dominion-wide, but you do not appear to have authority to confer legislative jurisdiction on one province simply by executive action in rescinding regulations and orders respecting that province. As a reference is being submitted to the supreme court, I would strongly urge your government to include in that reference a question that will settle this issue of power in yourself or the governor in council to confer legislative jurisdiction on a province by executive action designed to turn rent control over to that province. It would seem that as long as the dominion has its present emergency legislation on the statute books, any single province, or any number of provinces less than all, is barred from the field. In the tentative opinion our law officers have given, they have not overlooked the following provisions: "4. The governor in council may revoke in whole or in part any order or regulation continued in force by or made under this act." "3. (4) Every order made pursuant to the powers conferred by these regulations shall apply throughout Canada unless otherwise provided therein, but may apply to such area or areas in Canada or to such class or classes of persons or to such type or types of real property as such order may designate." If, of course, the supreme court holds that jurisdiction lies in the provinces, none of these considerations will arise. I would further strongly urge that until these matters have been settled, your government should rescind the recent increases announced and retain the status quo while these questions are being decided. The Saskatchewan government, therefore, provided that this assurance of jurisdictional legality is given, would be prepared to enter the field of rent control. While we are at present preparing stand-by legislation, and while it would take some Appendix time to set up the necessary machinery, I would suggest the date of April 1, 1950, as the time at which we could be prepared to enter the field. Yours sincerely, T. C. Douglas MINISTER OF FINANCE Ottawa, November 23, 1949 The Honourable T. C. Douglas, Premier of Saskatchewan, Regina, Saskatchewan. My dear Premier: I wish to thank you for your prompt reply to my letter of November 9 regarding the future of rent control. While the federal government has always believed that its wartime rent controls could not, and should not, be continued indefinitely, it recognized that some provinces might wish to enact measures of provincial rent control under the authority of section 92 of the British North America Act. For that reason the federal government, more than a year ago, offered to vacate the field in any province which wished to introduce its own legislation. This offer, as you know, was repeated again in my statement in the House of Commons on November 3. You have now stated your intention to introduce legislation in Saskatchewan which will be effective as from April 1, 1950. The federal regulations are accordingly being amended to make them inoperative in Saskatchewan after March 31, 1950-or at an earlier date if that is your wish. There can then be no possible conflict between provincial and federal rental regulations in Saskatchewan, for ours will simply cease to be operative in that province. I am advised that there is no reasonable doubt regarding this point and that a reference to the supreme court is unnecessary. You also asked that the recent amendments to the regulations which I announced on November 3 be suspended, pending clarification of the legal position and of the introduction by Saskatchewan of rent control legislation. As I have said, any doubt about the legal position seems to be without foundation. The federal government is, however, willing to amend orders 813 and 814 of the wartime prices and trade board, which provide for the changes recently announced, so as to make them inoperative in Saskatchewan. The status quo will therefore be maintained in Saskatchewan until provincial legislation comes into effect on or before April 1, 1950. You will understand, however, that this action was possible only because of your request to us to vacate the field and will be concurrent with an amendment to the federal rent control regulations which revokes them in their entirety in Saskatchewan as of March 31, 1950. In other words, the position will be similar to what it would have been if your province had acted at an earlier date and was ready to put this legislation into effect now, with this exception, of course, that the federal regulations as they apply to Saskatchewan will remain as they are at the present time, unaffected by the changes recently announced, until your own legislation supersedes them. Unless I hear from you to the contrary before December 1, I shall assume that these arrangements are acceptable to you. May I repeat my assurance that officials of the rentals administration will be ready to assist in the preparation of your legislation, should you desire them to do so. Yours very truly, D. C. Abbott



Saturday, November 26, 1949


November 25, 1949