January 29, 1958

PC

Charles Edward Rea

Progressive Conservative

The Acting Chairman (Mr. Rea):

Order. We are not discussing-

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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LIB

William Hector McMillan

Liberal

Mr. McMillan:

-ceased casting reflections on any member of this house.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Charles Edward Rea

Progressive Conservative

The Acting Chairman (Mr. Rea):

Order. We are not discussing war records on this bill. I would ask the hon. member to come back to clause one.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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LIB

Leonard T. Stick

Liberal

Mr. Stick:

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

The two things have nothing to do with each other.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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LIB

Leonard T. Stick

Liberal

Mr. Stick:

Inasmuch as I am in favor of the measure and am only sorry that the amount is not $15 million, I have only one question I would like to ask. How will the

amount be paid? Will it be paid to the province on a monthly, quarterly or half yearly basis?

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

That is a matter to be determined by regulations under the act, but presumably it will be monthly.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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LIB

Leonard T. Stick

Liberal

Mr. Slick:

What is the usual way of paying up to now?

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

These payments are all made monthly now under the act being amended by the present bill.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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?

Mr. Marlin@Essex Easl

The payments are made quarterly, are they not?

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

Monthly.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg North Centre):

Mr. Chairman, there is one precise question, although it may take me a few minutes to lay it before the minister, to which I think we are entitled to a clear-cut answer. May 1 first of all remark that it is a matter of passing interest to me that the Minister of Finance has brought before the house two measures which, though related, are quite distinct. Yet he has not only included them within the compass of one bill but within the compass of one clause in that bill. When the Minister of Finance was on this side of the house he used to complain when the former government did things in this way.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

No, no.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg North Cenlre):

However, not a great deal turns on it. Well, if the Minister of Finance did not offer such complaints, certainly other members of his party did when several matters were included within one bill or within one clause.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

If my hon. friend will permit me, what he is speaking about now is a bill that purports in its various clauses to amend different statutes. That is a different matter altogether from what we have here. Here we have one clause which adds two sections to the one act being amended by the bill.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg North Centre):

In

principle there is no difference-

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

There is a big difference.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg North Cenlre):

-but I will not pursue the point. The minister knows that he has also objected in the past to more than one amending clause being included in the one clause in a bill as in the case of the clause now before us.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming:

No, not at all.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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CCF

Stanley Howard Knowles

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

Mr. Knowles (Winnipeg North Centre):

However, Mr. Chairman, I propose to address my remarks and my question mainly to that part of clause one which adds a new section

Dominion-Provincial Relations 12 to chapter 29 of the statutes of 1956. This is how the new clause will read:

In its application to the fiscal year commencing on the 1st day of April, 1958, paragraph (f) of sub-section (1) of section 2 shall, for the purposes of this act and any tax rental agreement, be read and construed as if for the words "ten per cent" therein there were substituted the words "thirteen per cent".

The minister has made it perfectly clear in his remarks that this is an interim arrangement and the wording of the clause confirms the minister's position that this is an interim arrangement. The reference to 10 per cent is found in section 2 of the act, namely the interpretation or definition section. The minister is not by this amending bill changing the definition or interpretation section. It remains as it is. He makes it perfectly clear that this change is just a temporary change for the year from April 1, 1958, to March 31, 1959.

I submit, Mr. Chairman, that that makes it crystal clear that something more, something by way of this same change or another one, will have to be made before April 1, 1959. What we have at this moment is a government which, according to all reports, is just about to go to the country,-apparently it is only a matter of days-but which is refusing to tell the House of Commons or the country what its real position on any long-run basis is going to be so far as federal-provincial tax sharing arrangements are concerned.

A great deal was said about this matter in the election campaign of last year. The Conservatives made the point that they would produce a change. In fact, they have said since the election campaign that there would be a different kind of deal under the Conservatives than was obtained under the Liberals. I submit, Mr. Chairman, that it is most unfair to the country for the government to think of going to the country in another election without having made clear what it really proposes to do regarding federal-provincial fiscal arrangements.

This is an arrangement just for the year. The real, true blue Conservative policy regarding federal-provincial fiscal arrangements is yet to be made known.

There is a divergence of opinion, Mr. Chairman, on this matter as between the Conservatives on the one hand and ourselves on the other, although I must say that a similar divergence exists between the Conservatives and Liberals. We have taken the position across the years that the purpose of federal-provincial tax-sharing arrangements should be to modify the economic structure of this country which, when left to itself, results in a concentration of the tax revenues in the central provinces and leaves Canadians in other parts of Canada at a disadvantage. It

Dominion-Provincial Relations has been our contention across the years that the reason we should have federal-provincial tax-sharing arrangements is so that we could have a really united Canada, so that the wealth which is created in all parts of Canada, in the Atlantic area, in the prairie provinces and in the central provinces, might get back to Canadians in all parts of Canada on a level as close to equality as it is possible to achieve.

Let it be clear, Mr. Chairman, that that is not the Conservative position; that is not the position that Mr. Drew stated clearly time and time again in this house. The traditional Conservative position is that the provinces and the dominion have equal rights to these taxation fields, and that therefore they should be divided. In fact, when that position has been stated most clearly and most emphatically by provincial premiers, such as the premier of Quebec, this position of equal rights has been declared to mean a 50-50 division of tax revenues available in the various provinces of Canada. If that position is pushed to the limit it means that those provinces in which are situated the head offices of corporations are in a much more favourable position than are the other provinces of Canada. In other words, if that position is pushed to the limit, there is no question but that we do not have unity; we do not have equalization so far as Canadians as a whole are concerned.

I am doing my best to point out that at the centre of the arguments we have over this matter, in the centre of all the political crossfire that has taken place as to the way this party voted or that party voted on a previous bill, has been this fundamental cleavage in the approach to federal-provincial fiscal arrangements. Is it simply a matter of dividing the fields, letting the provinces get what they can, which would be a lot in some cases and not very much in others, or is it a case of the provinces and the dominion getting together as responsible Canadian governments to try to share up on some basis of equality our tax revenues so that, as Canadians, we can all enjoy a decent standard of services and a decent standard of living. I say that across the years our position has been clear, and although the Liberal position has not been exactly as ours has been, we do appreciate the extent to which our position has been approached by the equalization formula which the Liberals produced in the last legislation on this point.

We would like to go further than the governments of this country have gone thus far, but at least we feel this should be made clear. The Canadian people should know whether the point that has been reached, the

[Mr. Knowles (Winnipeg North Centre) .1

point of equalization, is going to be maintained and preserved or whether it is going down the drain in favour of the traditional Conservative position of simply dividing the field and letting the wealthy central provinces enjoy a high standard of tax revenue while the other provinces become the poorer members of the Canadian family.

I said a moment ago that rumours are now rather definite that an election is not far away. I confess that for some considerable time I have been making the prediction that it would come on April 14. I am afraid I am now going to lose my reputation as a prophet and it is going to be on March 31, which I suggested as an alternative to April 14, with dissolution only a few days away.

Topic:   DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.
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January 29, 1958