January 25, 1958

DOMINION-PROVINCIAL RELATIONS ANNOUNCEMENT OF CHANGE IN FISCAL ARRANGEMENTS

PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Hon. Donald M. Fleming (Minister of Finance):

Mr. Speaker, on behalf of the Prime Minister I should like to table copies of telegrams dispatched by the Prime Minister yesterday to the premiers of the 10 provinces on the matter of dominion-provincial fiscal relations. Perhaps in view of the interest of the house in this subject, Mr. Speaker, I might read the text of the telegram:

Government had hoped to reconvene dominion-provincial conference this month but protracted session of parliament has made this impossible. Government realizes that all provincial treasurers are preparing budgets for fiscal year commencing April first and require to know immediately what if any additional fiscal payments they may expect to receive from dominion government during the fiscal year. Therefore as an interim measure only and to assist provinces in meeting immediate problem of preparing budgets and to aid in providing employment through provinces and municipalities the government will ask parliament immediately to approve increase from 10 to 13 per cent in the standard individual income tax in compensation payable to provinces under federal provincial tax arrangements act. The estimated cost to federal treasury is over sixty-two million dollars. This is interim measure pending reconvening of dominion-provincial conference to seek fiscal settlements.

I also report in keeping with decision at November conference that agreement has been reached among four Atlantic provinces on formula for division of Atlantic adjustment grant. Bill to be introduced will provide that in each of next four fiscal years commencing April first dominion government will pay Nova Scotia, New Brunswick and Newfoundland seven and one half million dollars each and Prince Edward Island two and one half million dollars.

Government of Canada hopes this additional assistance aggregating eighty-seven million dollars in fiscal year commencing April first will be useful in helping provinces and municipalities to meet unemployment and other problems.

John G. Diefenbaker

Hon. members will have observed, Mr. Speaker, that there appears in Votes and Proceedings of yesterday a resolution preceding the introduction of the measure that is referred to in the Prime Minister's telegram. I think hon. members would probably wish me to indicate how the sum of money that is mentioned in the telegram will be divided among the 10 provinces in the fiscal year commencing April 1 next. The figures are as follows, sir.

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LIB

John Whitney Pickersgill

Liberal

Mr. Pickersgill:

May I ask the minister a question for information? Are these figures just for the general fiscal payment, not including the Atlantic grants?

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

I shall indicate both figures in the case of the Atlantic provinces, and the aggregate, Mr. Speaker. In so far as Newfoundland is concerned, the Atlantic adjustment grant is $7.5 million, and from the other source $1,595 million for a total of $9,095,000. For Prince Edward Island the Atlantic adjustment grant is $2.5 million; from the other source, $370,000, for a total of $2,870,000. For Nova Scotia the Atlantic adjustment grant is $7.5 million and from the other source $2,627,000, for a total of $10,127,000. For New Brunswick the Atlantic adjustment grant is $7.5 million and from the other source $2,111 million, for a total of $9,611,000; to Quebec, $17,780,000; to Ontario, $21,316,000; to Manitoba, $3,219,000; to Saskatchewan, $3,290,000; to Alberta, $4,335,000; to British Columbia, $5,563,000, for an estimated total of $87,206,000.

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L L

William Moore Benidickson

Liberal Labour

Mr. W. M. Benidickson (Kenora-Rainy River):

Would the Minister of Finance mind repeating the formula which is the basis for the $62 million which is referred to in the telegram? There was so much coughing that I did not hear it.

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

It contemplates the raising from 10 per cent to 13 per cent of the standard individual income tax in the compensation payable-

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L L

William Moore Benidickson

Liberal Labour

Mr. Benidickson:

The same rate that is referred to in the resolution respecting the Atlantic provinces that is on the order paper?

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

Yes.

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CCF

Stanley Howard Knowles

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

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, may I ask the minister a question. I noted from the telegram that was read, and I have also noted from the resolution in Votes and Proceedings, that the Atlantic adjustment grants are to be paid for four years but that the other change is just for the one coming fiscal year. The minister said that this arrangement was on an interim basis. Does he mean that it is interim in the sense that arrangements to be made for future years are yet to be negotiated at a federal-provincial conference, or can there be further negotiations with respect to the amount to be paid by the federal treasury to the provinces in the 1958-59 fiscal year?

Dominion-Provincial Relations

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

We have not put any limitation on what may come out of the dominion-provincial conference, whenever it may be reconvened, with respect to the fiscal year commencing April 1, 1958, or any later fiscal year. We are faced with a situation in which the provincial treasurers in all the provinces are preparing their budgets now. It has not been possible, as we had hoped it would be, to reconvene the dominion-provincial conference in January. Therefore as an interim measure, and an interim measure only, we are asking parliament immediately to make available this additional sum of money for the forthcoming fiscal year. Then when there is opportunity it is the intention of the government to reconvene the dominion-provincial conference with a view, as indicated in the letter, to seeking fiscal settlements. This was put forward, of course, without prejudice to the freedom that the dominion-provincial conference will undoubtedly have to discuss the whole area of fiscal settlements.

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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg North Centre):

May I ask the minister one other question. Will there be any other reply by letter to Premier Campbell of Manitoba with respect to the letter he wrote the Prime Minister on December 18, in which he discussed the whole question of the relationship between changes for all the provinces and special grants for the Atlantic provinces, or will further discussion of Premier Campbell's suggestions be left until the federal-provincial conference is reconvened?

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

I had better not speak too positively without refreshing my memory on the contents of Premier Campbell's letter, but I think it will be clear that the course of action proposed by the government as indicated in the telegram is a fairly complete course of action with regard to the immediate situation. Broader questions can best be considered when the dominion-provincial conference reconvenes.

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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg Norih Centre):

When will that be?

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

If my hon. friend could answer some questions I should like to ask him and his associates, it would be a great deal easier to answer questions like that. Obviously a great deal depends upon the willingness of this house to address itself to the essential business of the house and to expedite what needs to be done. We had hoped, as I indicated, that the dominion-provincial conference could have been reconvened this month, taut the progress in the house has been so slow and there has been so much discussion of two or three

measures that it has been impossible to take up the reconvening of the conference.

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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg Norih Centre):

Was there any suggestion during the election campaign last year that the date of the federal-provincial conference hinged on the length of the parliamentary session?

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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

Order. I think we might return to these matters on the orders of the day. Is there anything else?

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LIB

John Whitney Pickersgill

Liberal

Hon. J. W. Pickersgill (Bonavisia-Twil-lingaie):

I had a question on the same subject, Mr. Speaker. I would like to ask the minister if his statement means that this proposition now put to the provinces is on a take it or leave it basis?

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?

Some hon. Members:

Oh, oh.

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

Nothing could be further from the intentions of this government than ever to follow the former government's practice of adopting a stiff-necked take it or leave it attitude toward the provinces.

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LIB

Walter Adam Tucker

Liberal

Mr. Tucker:

Actions speak louder than

words.

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January 25, 1958