February 21, 1957

LIB

Hector Dupuis

Liberal

Mr. Dupuis:

Mr. Chairman, on numerous occasions reference has been made, in this house and elsewhere, to the proportion of taxes collected throughout this country by the federal government as compared with the proportion raised by provincial or municipal governments. A point which has been overlooked, however, has been that of the responsibilities of the federal government towards these provinces or municipalities.

For instance we need only point out the extraordinary expenditures which fall upon the federal government with regard to social security legislation as applied for the benefit of the people of this country, old age pensions, family allowances, blindness and disability allowances, and so on. Likewise overlooked are the amounts spent by the federal government in the municipalities concerned-as demonstrated by this proposed legislation-in the form of public works, defence production, military establishments, and so on.

Montreal being the metropolis of this country and I a resident and ratepayer of that city, I feel it is my duty to speak in recognition of what the federal government is doing for the metropolis of this country even if the various opposition parties apparently refuse to recognize the federal government's contribution to municipal affairs in the forms of grants and donations in all fields. To prove it, I only have to point out in passing what our government is offering to the universities of my city, its grants to technical schools and to hospitals; it is so much less that the municipality has to pay out.

Here now is a further wise government proposal which will be of great help to municipalities and particularly-in view of its large population-to the metropolis of the country, the city of Montreal.

I understand that federal government properties in Montreal would be assessed at some $30 million, which means that, taking into account the compensation which ought to be paid, the city would perhaps collect more than one million dollars a year, an amount which it has never received in past years. The action taken by the government deserves our commendation. When the opposition tells us that this should have been done earlier, my reply is that it is never too late to do the right thing. Moreover, for many years now, the government has always come up in time with the introduction of beneficial measures when they have become necessary. Therefore, this grant of one million dollars to the city

of Montreal should be a reason for us to commend the government for this generous attitude with regard to the municipalities, and we should more particularly point out the fact that the federal government has never attached any strings in respect of almost all its gifts and contributions ever paid either in the provincial or in the municipal field.

For instance the federal government does not say that the amount of one million dollars of which the city of Montreal is going to benefit should be spent in any particular way. Not at all. The federal government has great respect for municipal autonomy. All it does is to pay a generous- not to say liberal-contribution, as these two words are synonymous. We recognize that now may be the time for the federal government-without encroaching on the autonomy of cities and municipalities-to contribute on a greater scale, notwithstanding what it has done for them so far, to a solution of the problem created by the abnormal expansion of cities, more particularly of the larger ones, like Montreal.

When we speak about the growth of our great cities and about the extraordinary expansion of the provinces, we tend to forget that the central government is largely responsible for the progress now taking place in Canada, a progress which is felt in provincial and municipal budgets, in all our provinces.

Our cities and provinces have never enjoyed such a high level of revenue. In my opinion, it is the result of the progressive policy of the Liberal party, a policy which is strikingly exemplified by the bill now before the house.

(Text):

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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PC

Lewis Elston Cardiff (Chief Government Whip; Whip of the Progressive Conservative Party)

Progressive Conservative

Mr. Cardiff:

I am sorry I was not in the house when the minister explained the resolution, and he may have said things that I want to know now. If he did, I shall be glad to wait and read what he said in Hansard.

There are two airports in my riding and I wonder what effect this legislation will have on the properties in those airports. If the minister does not want to answer it now he can do so later.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

I will.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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PC

Lewis Elston Cardiff (Chief Government Whip; Whip of the Progressive Conservative Party)

Progressive Conservative

Mr. Cardiff:

The minister did not answer it before?

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

No, I did not.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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PC

Lewis Elston Cardiff (Chief Government Whip; Whip of the Progressive Conservative Party)

Progressive Conservative

Mr. Cardiff:

One member who spoke a little while ago said that the municipalities were the creatures of the provinces. That

may have been true some years ago, but the minister said a few minutes ago that the taxing powers were an improvement on taxation. Well, if that means that the federal government is going to take away all the powers from the municipalities and the provinces, then it is true.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

We have not taken any away.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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PC

Lewis Elston Cardiff (Chief Government Whip; Whip of the Progressive Conservative Party)

Progressive Conservative

Mr. Cardiff:

Just wait until I get through with a few figures I have. In 1939 the municipalities were getting 39 per cent of the tax dollar; the provinces were getting about 26 per cent; and the federal government was getting about 35 per cent. In 1949 it had changed, and the dominion government took 48 per cent of the tax dollar, the provinces 22 per cent and the municipalities 30 per cent. In this year the government is taking 77 per cent of the tax dollar, the provinces 12 per cent and the municipalities only 11 per cent. If that trend keeps on in the next 25 years we shall all be a charge on the state; the provinces and the municipalities will not have any say in it at all.

I am not opposed to this resolution; it is only giving back to the municipalities something which they should have had long ago.

As far as the taxation of those properties is concerned, the federal government is retaining the right to make the evaluation. In our county we have a valuator who goes around and tries to equalize the evaluation on the properties in the town and countryside. In this particular instance, if we are to be given anything on the properties in the airports, I think the evaluator of our municipality either should be taken in by the powers that be who are going to make the evaluations, or something should be done in that regard. If the government is going to pay taxes on the property, the property should be evaluated in the same way as other property is evaluated in that particular municipality. I would be glad to have the minister answer those questions.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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LIB

Samuel Rosborough Balcom

Liberal

Mr. Balcom:

Mr. Chairman, since I come from Halifax where there is such a concentration of defence property of the navy, army and air force, I think I should tell the committee how welcome these proposed changes are to the municipalities.

It seems to me that the old formula for these grants was sound, but it has been examined and now we have changes made which are going to benefit us greatly.

In the last year or so Halifax has undertaken to make new assessments at considerable expense so that the tax load will be spread over a little more evenly than in the past. I know this will benefit the federal treasury to a large extent. In 1945

Municipal Grants Act the grants to Halifax amounted to $827,359. The tax already paid to Halifax in 1956 amounts to $815,000, but this is only a part. More is to come, and the total will be greater by a large figure than the 1955 amount.

I should like to mention the municipality of Dartmouth. I understand that Dartmouth is the fastest growing town in the Dominion of Canada. In 1956, Dartmouth received $92,638. In addition to this, as in the city of Halifax, they are, of course, receiving cash in lieu of other taxes, or they are being paid for services and such things. But we have the county of Halifax which received $23,151 in 1956 under section 8. In addition to that they received $30,000 under the rural regulations. It has been only within the last two or three years that the county has received any consideration. It also happens that some of the most valuable property in and around Halifax, in the Bedford Basin, is now taken up with military properties, and we are hoping that when this amendment comes into effect they will be given the usual kind of consideration. We have to remember that rural municipalities must provide roads, schools and services for all of their people. They have not any large stores, corporations or head offices and really very little industry from which they can extract any taxes. If it so happens that they do obtain some industry the neighbouring city will try to annex that industry and if the rural people try to protest there is always the cry that you cannot stand in the way of progress. Therefore, 1 ask special consideration for the county.

At the same time I should like to draw the attention of the minister to this fact. I do hope that in the future when a municipality is short of money they will be provided with loans at a very low rate. I am not suggesting that they should be interest-free, but at a low rate when they are needed for essential services.

It was recently suggested by someone that the national harbours board has done too little for too little. I think it was suggested that the national harbours board had not done anything for Halifax but my observation would be that in this instance we are receiving in lieu of taxes too little for too much. I do not know whether the hon. member for Edmonton East said today that he welcomed this legislation or was glad to have it, but anyway he said that they were sending back more to the federal treasury than they were receiving. My information is that in Nova Scotia it is quite the reverse. For something like $50 million that is taken from us in taxes something

Municipal Grants Act like $250 million is returned to Nova Scotia in one way or another in grants and in all of these other things that seem to be coming in all the time.

The people of Halifax are hopeful that when this amendment goes through we will receive a considerable increase in the grants that are paid under the Municipal Grants Act.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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SC

Alexander Bell Patterson

Social Credit

Mr. Patterson:

Mr. Chairman my intervention in the debate at this time will be very brief. I believe that my colleague the hon. member for Edmonton East presented the views of our group in a capable manner and he also placed on record a number of figures which substantiated the points he emphasized. However, I would like to express appreciation of the fact that this government is beginning to recognize perhaps in a greater measure than heretofore the desperate position in which many of our municipalities find themselves because of the ever-increasing costs they meet in providing desirable and necessary services.

As we all know and as has been emphasized a number of times today the taxation field in which the municipalities are permitted to operate is very limited and at the present time in many of these areas property taxes are reaching a point where any additional assessment would be disastrous to property owners.

One of the main issues raised by speakers from this group at the time we were discussing the dominion-provincial fiscal arrangements was that in the formula submitted by this government there had been a complete failure to properly appreciate the difficulties confronting the provincial and municipal governments. The result was the drafting of a plan that fell far short of finding spontaneous acceptance on the part of the provinces of Canada. I believe that if we are to properly understand the position in which the municipalities find themselves at the present time and provide the necessary alleviation then we are going to have to go even much further than is indicated in the resolution currently before us. A great many organizations have referred to the position of the municipalities and have urged the federal government to give consideration to this particular matter. I have in my hand the submission to the Minister of Finance and the Minister of National Revenue prepared by the Canadian Chamber of Commerce and dated February 5, 1957. I want to read part of a sentence found on page 5 of this brief:

. . . the most urgent added demands are in the area of municipal and provincial responsibility and if at all possible it is desirable that the federal tax collector should make some room for unavoidable increases in municipal and provincial taxation.

[Mr. Balcom.l

Here we have the Canadian Chamber of Commerce recognizing the position in which our municipalities find themselves as they endeavour to cope with the problems that are theirs in the provision of municipal services. Another interesting statement can be found in the preliminary report of the royal commission on Canada's economic prospects. On page 96 we read:

It is suggested also that senior levels of government should accept the principle of an assessment on federal and provincial properties in order to compensate the municipalities for the services which they provide.

Throughout our economy we find various groups, individuals, organizations and commissions calling attention to the situation and requesting that some definite proposals be brought in by the federal government to take care of it.

In introducing this resolution the Minister of Finance stated that the purpose of the measure was not to alleviate the serious situation in the municipalities nor was this the motivating principle behind its introduction. Despite the motivation of this resolution I believe the implementation of its proposals will result in definite assistance to the municipalities. I think that must have been taken into consideration by the minister and his advisers when they were considering the drafting of this resolution.

The minister also stated that the fiscal needs of the municipalities are a provincial matter. I would suggest that the federal government should have recognized that fact and should have been willing to adopt a dominion-provincial fiscal policy that would have been more in keeping with the realities of the present situation. As I intimated before, we felt that in the presentation of their formula the government revealed a complete lack of understanding of the needs of the municipalities and the result was that they brought in a policy or formula which, as I said before, came far short of finding general support.

The hon. member for York Centre this afternoon referred to the opposition members who were calling on the federal government to take this question under advisement and he stressed the fact that this was a provincial responsibility. Perhaps some of these things may have been provincial responsibilities but we must recognize that when the federal government insists on taking out of the provinces and municipalities the greater portion of the taxation dollar then the provincial and municipal authorities are going to find it absolutely impossible to fulfil their obligations.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Where would we get our revenue if we did not do that?

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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?

Mr. Pallerson@

That is all very well, but

when you take so much of the revenue out of the provinces and municipalities there is not going to be much of the taxation dollar left with which the municipal and provincial authorities can carry on and discharge their responsibilities. You certainly take a great deal out of my province and although I heard what was said by the hon. member for Halifax the same certainly does not obtain in the province of British Columbia. I suggest that we must go further than what is envisaged in these proposals. Good as these proposals are we will have to go further if we are going to provide the provincial and municipal governments with the necessary funds with which to carry on arid discharge their responsibilities in the field of providing services to their people.

One hon. member who participated in the debate this afternoon referred to the fact that these grants were really a return of some of the money the federal government has already drained off from the taxpayers in the provinces and municipalities arid I agree with that statement.

In speaking on the Municipal Grants Act on March 17, 1955 the hon. member for Peace River, the leader of the Social Credit group, as reported at page 2112 of Hansard for that date, stated:

And I suggest the government of Canada will never reach the point where it can say it is being fair and just in this matter until it is paying by way of grants sufficient to equal the taxes which would be paid to the municipalities at present rates of assessment.

In introducing this resolution some few days ago the Minister of Finance indicated that this is what the federal governinent is now prepared to do. Of course he also indicated that there were some exceptions under this plan.

At six o'clock the committee took recess.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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AFTER RECESS The committee resumed at eight o'clock.


SC

Alexander Bell Patterson

Social Credit

Mr. Patterson:

Mr. Chairman while I was speaking prior to the dinner hour, the Minister of Finance, I believe, asked where the federal government would get the money necessary to finance its operations if the suggestions that I had made were carried through. We, of course, acknowledge the fact that revenues are necessary and required for the conduct of government, but I may say this: that if the federal government were to leave a greater proportion of the tax dollar in the municipal and provincial treasuries, fewer demands would be made upon the federal treasury.

Municipal Grants Act

In saying this, however, I do not mean to imply that taxes should not be paid, or grants in lieu of taxes not be made upon federal property within the municipalities.

1 do want to emphasize, however, the difficult position in which the municipalities find themselves in trying to cope with the ever-increasing cost of providing the necessary services required of them.

I believe the principle of this resolution is sound and it will of course, be supported.

I believe however, that consideration will have to be given to the wider problem and, through a thorough study of our taxation field and structure, sufficient funds placed at the command of the municipalities to enable them to carry on their work. I would refer to the statement made by the hon. member for Peace River who, speaking on the subject of the Municipal Grants Act last year, declared, in effect, that payments under the present system of grants in lieu of taxes should be equivalent to the amount of tax which would normally be paid.

The decision of the minister in acceding to this suggestion for the removal of the

2 per cent "floor" will be welcomed by all municipal authorities. Another part of the statement made by the Minister of Finance outlined the provision which is now being made for grants in lieu of taxes on defence establishments. I know that this move will certainly be welcomed by a number of municipalities in my own riding because there are extensive defence establishments located in several of them. Application has already been made by the Matsqui municipality, for instance, for grants in lieu of taxes with respect to the air field in that municipality, as well as on the naval station. In the Chilliwack municipality we have, of course, the large Camp Chilliwack. Thus, I feel that when this resolution comes into effect, and the act is amended, definite benefits will accrue to these municipalities.

I would still suggest that consideration be given to the payment of grants in lieu of taxes on property belonging to crown corporations. I do not think that these corporations should have the right to expect the services provided by municipalities without paying full taxes.

There is one other matter I would like to raise at this time, and it is in regard to experimental farms. I do not know just what the system is with regard to experimental farms at present-whether or not some grants are being paid in lieu of taxes -but I hope that when the minister again participates in the debate he will clarify this point for me.

Municipal Grants Act

I intimated at the beginning of my remarks that I was going to be very brief, and I want to keep at least somewhere within the circumference of that promise. We do welcome the resolution and, as I have said, we shall support it. However, we ask that consideration of this entire subject should be continued with a view to including those aspects and properties which are still excluded under the act as it now stands.

(Translation):

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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LIB

Jean-Paul Deschatelets

Liberal

Mr. Deschaielels:

Mr. Chairman, I wish to commend the government and more particularly the Minister of Finance (Mr. Harris) for putting this resolution before the house.

I understand that grants have been , paid to certain municipalities since 1950, but that the act was originally restricted in scope so as to benefit only a limited number of the municipalities, grants being made only where the value of real property held by the federal government was in excess of 4 per cent of all assessable property in the municipality. In this way the city of Montreal, for instance, was not in a position to receive any assistance. The provisions of the act were extended in 1955 but here again the formula was not sufficiently broad to be of any help to Montreal.

This resolution provides for the payment of grants to every municipality in this country in which there is any federal real property, where such property benefits from normal municipal services.

This beneficial measure will therefore mean for Montreal a further revenue of approximately a million dollars or more. I know that all members and specially members representing constituencies of the island of Montreal are very happy about it.

If the federal government has its responsibilities, provinces have theirs, as does also the metropolis of Canada. We know that the city is ready to go ahead with large projects, for instance the building of a sports centre, but, between planning and doing there is always the problem of available resources. Because of the "jurisdiction" problem, it is not always easy for the federal government to help municipalities as much as it would like to, in carrying on projects such as that one.

Well, if we want municipalities to progress and to discharge their responsibilities, let us give them the maximum of privileges to which they are entitled, every time it is possible to do so.

That does seem to me to be the spirit behind the proposed legislation which will be greeted with satisfaction in all cities and

towns of this country and more particularly in the city of Montreal whose share of the burden has possibly been greater than that of others.

In conclusion, Mr. Chairman, may I point out that this step just taken by the government clearly shows its constant concern with the adequate distribution of the money it collects. It does so honestly, quietly and efficiently so that every part of the country may benefit thereby.

A short while ago the young people of this country were the ones who stood to benefit most from the government's generosity, through the setting up of the Canada Council. Today every municipality in this country is in that position, and soon there may be other classes of people who will continue to benefit from the wise and benevolent measures brought in by this government. (Text):

Topic:   MUNICIPAL GRANTS ACT
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PC

William McLean Hamilton

Progressive Conservative

Mr. Hamilton (Notre Dame de Grace):

Mr. Chairman, it is a sore temptation to someone like myself who has sat on the Montreal city council for seven years and sits there still to deliver a long and detailed speech on this subject. However, I am going to restrain myself because I feel that the ground has been well covered by a number of other speakers on this side of the house who, having expressed appreciation for what is contained in the resolution, have pointed out certain additional requirements not met by the measure before us.

There is, however, one point that I feel should be brought to the attention of the minister and the house. It is a point which has been completely overlooked by the member for St. Mary who spoke this afternoon and the member for Maisonneuve-Rosemont who has just resumed his seat. In each case they lauded the government for this measure and left the impression that the government, particularly so far as Montreal is concerned, was doing everything that it should for that city. If I remember rightly, the member for Maisonneuve-Rosemont concluded by saying that this was just another example of the wise and benevolent measures the government was bringing in. First it was the Canada Council and now it was the municipalities and before very long it was going to be something else.

I think it would not be a bad idea, Mr. Chairman, for them to stop right there and with the Minister of Finance take a look at a particular situation that exists in Montreal and which could very well exist in a number of other cities across the country. I refer to those cases where the national harbours board represents a major portion of government property in the city area.

Turning to Montreal and taking figures as at April 30, 1955, we find that there is some $400 million of tax exempt property in the city out of a total valuation of $1,963 million. Of that tax exempt property the first classification, which amounts to $110 million, is property owned by the city of Montreal. The second classification, amounting to $55 million, is property owned by Catholic educational establishments. Then we have the third classification, the national harbours board, with $42,600,000 of property. It is followed by the fourth classification, other federal government property, amounting to $32,700,000. There are, of course, a number of other items making up the $400 million but we are not concerned with them at this point.

The point I wish to make at this juncture is that while this measure provides for the payment of taxes on $32 million worth of federal property it does not provide anything for the payment of taxes on a larger amount, $42 million, of national harbours board property. It is possible that if I went no further the minister would answer this statement by saying: Oh yes, but the national harbours board is a crown corporation and makes its own arrangements directly with the city for a reasonable grant. When we take that step and examine the basis of the grant we see just how inequitable are and have been the government's negotiations with municipalities across Canada on behalf of the various crown corporations.

I have pointed out that the value of national harbours board property in Montreal is some $42 million. At the time that valuation was taken the tax rate was $3.61 a hundred which, had that rate been applied, would have resulted in a tax on that property of some $1J million. Instead, the national harbours board negotiated with the city a five-year agreement commencing in 1955, under which their contribution is fixed at $150,000 a year or almost exactly one-tenth of what the normal municipal tax would be on that property.

I suggest that at the time the agreement was negotiated Montreal was not one of the cities coming within the terms of this legislation as it then existed. There were then no taxes whatsoever being paid at that time on the majority of federal properties in the city. Therefore it is quite possible that it looked like a good thing, at a time when the federal government was being obstreperous about paying taxes, to negotiate an agreement to bring in $150,000 a year from the national harbours board. But now that we have proceeded, and I think quite rightly, to a basis where we have made federal property in the city taxable we find that the city is bound with a five year agreement affecting

Municipal Grants Act

national harbours board property which yields them only one-tenth of what the proper return should be on the basis of municipal tax rates.

It may very well be, as the minister pointed out in his original statement, that the national harbours board does not make all the demands upon the services of the city that another taxpayer would. On the other hand, every hon. member will remember the debates that have taken place when on two successive occasions the Minister of Transport has risen in his place, on being questioned by me about the provision of a fire boat for Montreal harbour, and has said in effect: We do not need to provide a fire boat or fire protection equipment for Montreal harbour because the city does that and they have fine fire-fighting equipment. If there is a fire they come right along and put it out and there is no need for the federal government to take any steps to provide fire protection for Montreal harbour.

The minister and the government cannot have it both ways. If they are going to argue as they have in the past that the city has to supply them with protection, then they cannot turn around and say subsequently that they are not going to pay municipal taxes, which is exactly what they are doing at the present time. The major services of the city are being provided to the national harbours board, including the provision of water, sewers and fire protection, which I have already mentioned. The harbours board has its own police force which works on harbours board property but the surrounding property which is connected with the harbours board must be protected by the Montreal police force. One can go down the list of services being provided to the national harbours board almost indefinitely.

In conclusion I want to bring this specific point to the attention of the minister and to make a suggestion to him with respect to these long-term agreements-I do not know whether they exist in other cities-such as that which is now in effect in Montreal, which was entered into before the advent of legislation such as this and which places such a ridiculously low value upon the services provided to the harbours board by the city. I want to suggest to him that these agreements should be reopened and that we should not ask cities-and particularly Montreal- to continue over a period of years to receive only one-tenth of what they are entitled to receive.

Having said that, Mr. Chairman, I want to say that this is welcome legislation as far as it goes. It is something that has been needed for a long time. It is encourag-

Municipal Grants Act ing finally to see the government accepting a responsibility which has rightfully been theirs for many years and finally catching up with the advice which has been given to them from this side of the house for eight or ten years and which has been given to them over the same period by such organizations as the federation of mayors and municipalities and every group in Canada which has studied the matter. To someone like myself, Mr. Chairman, it is really encouraging to find that the government have up-dated themselves to the point where they are only about ten years behind the advice being given them by us rather than 15 years, 20 years, or 25 years.

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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LIB

Daniel (Dan) McIvor

Liberal

Mr. Mclvor:

I am going to be like the hon. members on the other side of the house, Mr. Chairman. I am going to get on the bandwagon and congratulate the minister for bringing in this legislation. I am not going to introduce any "buts" or "ifs". The minister is just practising what he professes. He professes to be a Liberal. A Liberal, when he sees what is right and just, will put it across. Therefore he is a real minister practising what he preaches.

We have four large buildings in Fort William. If those buildings were in Ottawa they would look like something. We appreciate greatly the taxes that we will now receive for the protection and the services that Fort William is giving. I was going to ask the minister a question. The dominion government pays $33,000 a year in rents. Will we get any consideration for those buildings that are rented or will we not?

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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PC

Thomas Miller Bell

Progressive Conservative

Mr. Bell:

Mr. Chairman, I want to mention only one special matter briefly here, namely the subject that was alluded to by the hon. member for Greenwood last night when he said that there will be an increasing need to consider corporations related to the crown under such legislation as this. I refer specifically to the situation in the Atlantic region wherein the cities of Halifax, Saint John, Moncton and Charlottetown have not been able to agree so far this year with the Canadian National Railways with regard to payments to them. I am only just mentioning here the difficulty that exists with respect to the several particular agreements with our city and the fact that in the future there must be uniform treatment for all concerned in those matters.

It may be that we should consider bringing such crown property under this legislation or it may be that special acts will be necessary. But I say that it is of increasing importance-and it is also of importance with respect to all our other crown corporations-

that this same treatment be given to them. If this legislation is right in principle-and everybody seems to agree on that point-we should extend it to include all other corporation property that is related to the crown.

I hope that agreement will be reached with the Canadian National Railways and the government over our taxation difficulties in these cities in the maritimes. If agreement is reached, that is all right. However, I say that we shall be obliged to face up to this increasing problem.

In closing, Mr. Chairman, I cannot resist simply saying this. When I hear of the financing difficulties experienced by the municipalities in central Canada, I cannot help mentioning the difficulty we have in the Atlantic region. A short while ago an hon. member referred to the fact that the municipalities are experiencing hardship wherein they are obliged to go to the United States for their bonds investment. We have been going there for many years. In fact it has now reached the stage where we cannot even consider investment plans for the future for our municipalities. If the tight-money policy and the credit restrictions of this government are affecting any area, I say that they are affecting the maritimes which have never even known what inflation is.

Topic:   MUNICIPAL GRANTS ACT
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LIB

Maurice Boisvert

Liberal

Mr. Boisvert:

Mr. Chairman, the purpose of this legislation is to bring in a measure to extend the benefits of the Municipal Grants Act to municipal corporations in Canada. I for one welcome this new legislation because it will improve the former legislation. In my own constituency it will be a great help as well as to the cities which are within a short range of Nicolet-Yamaska. I refer to the cities of Three Rivers, Victoriaville, Drum-mondville and Sorel.

Since the inauguration of this legislation we have seen quite good progress within the scope of the measure. From 1950 to 1954, 48 municipalities received $3 million; from 1954 to 1955, 150 received more than $9 million. With the new legislation, 13 municipalities will get from $16 million to $20 million. I therefore do not agree with the hon. member for Greenwood when, as reported at page 1494 of Hansard, he said this:

I think the government is dealing with this in a grudging way, and that it is another instance of too little and too late. They are really just nibbling at what I consider to be a very important subject.

It is a very important subject but we must bear in mind the fact that these new grants to municipalities will add to the subsidies paid by the federal government to the provinces which in turn are making grants to municipalities and to educational boards or to educational corporations.

I assert that this measure is in the spirit of confederation. This afternoon, when I was listening to the speech of the hon. member for St. Paul's, it sounded to me like a weak echo of what we hear so often in the province of Quebec, namely that the federal government has invaded the field of taxation to such an extent that the province of Quebec is unable to raise money as she would like to do.

Let us go back to confederation. What revenues were available to the province in 1867? There were those granted by statute which today amount to something over $20 million. Secondly, there was direct taxation, and the province could raise money by direct taxation only. Thirdly, there was the disposition of the natural resources which belonged to the province. What has happened since? At that time it was not envisaged that the progress would be so rapid or that we would be met by 'a development so large that people would believe the federal government was too strong. But that is the spirit of confederation.

I wish to quote from the remarks of Sir John A. Macdonald when he spoke during the parliamentary debate on confederation:

Let me again, before I sit down, impress upon this house the necessity of meeting this question in a spirit of compromise, with a disposition to judge the matter as a whole, to consider whether really it is for the benefit and advantage of the country to form a confederation of all the provinces; and if hon. gentlemen, whatever may have been their preconceived ideas as to merits of the details of this measure, whatever may still be their opinions as to these details, if they really believe that the scheme is one by which the prosperity of the country will be increased and its future progress secured, I ask them to yield their own views, and to deal with the scheme according to its merits as one great whole.

This is one of the numerous measures this government has brought forward in a spirit of compromise, a spirit of making this country greater and greater; in a spirit of keeping all the provinces, even the province of Quebec, within confederation.

This is my last word. I hope that in the near future we will see some other legislation which will bring relief to the municipalities and which will help education within the province. In the meantime I hope this will save the spirit of confederation, upon which attacks are made too often outside of this house.

Resolution reported and concurred in.

Mr. Harris thereupon moved for leave to introduce Bill No. 158, to amend the Municipal Grants Act.

Motion agreed to and bill read the first time.

Canadian Farm Loan Act CANADIAN FARM LOAN ACT

Topic:   MUNICIPAL GRANTS ACT
Subtopic:   AMENDMENTS TO EXTEND BENEFITS AND PROVIDE CHANGES IN ADMINISTRATION
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AMENDMENT TO INCREASE AUTHORIZED CAPITAL OF BOARD

February 21, 1957