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ui cn Op --a Lg gv oa Ee hi of the Dominion-Provincia Conference on the Siroi ARE Ir IS PARTICULARLY IMPORTANT at this critical phase of our n «of Ontario should be given the facts and allowed to base their considerations and judgment on them. --y" s Rep ational life that the people of the Province THE FACTS There is very little doubt that in many instances opinions have been based on speculation, propaganda - \ and rumor, . '| The statements given herewith are taken from the Official Reports of the Conference as published by the ' Dominion Government. : HON. MITCHELL F. HEPBURN, PRIME MINISTER AND PROVINCIAL TREASURER OF ONTARIO, Vol. 1, Pages 14 to 20): "Mr. Prime Minister and Rentlemen during this time of stress aud strain and ruthless warfare 11 ke. For if our effort fa the delegates present at ( dominion-provincial con. . ference, will settle our domestic problems. In this regard the policy of the govergment of Ontario has not changed in any particular. Those of us who represent the central province have been cone sistent in our attitude. Some while ago a former associate of mine in the House of Commons, my good friend the Minister of Finance, journeyed to Toronto, at which time he dis- cussed with Mr. Nixon i cQuvsten, Mr, Walters and mysglf the adv mplementing the recom- mendations of the § s report. Along with my col leagues present, burg yes, almost begged him to use h fluence to prevent this becoming a national issue d g war time. I am satisfied he conveyed my mes- gage to the P ster. I was, therefore, somewhat perplexed when, a rom the Prime Ministe ference would Le call ment was, in effect, days later, I received a letter of Canada advising that a con and, that the federal govern: ommending favourable consider- n of the comm findings. Again, in order to maintain our consistency, I replied as follows: ~~ 'I have your letter of November 2nd, regarding the Bireois commission report. 'I was hopeful that a discussion of this problem could be delayed until after the war so that there could 'be no poss y of any controversial issue a I's whi¢h might impair national unity and the eff. @ prosecution of the war. \ 'However, in view of the fact that a conferénce is to be called it is the intenfion of this government to niake available its représentatives any time that may, be re- quired after the middle of January, as suggested by you." Later still, on December 28, 1940, the Prime Min- ister in a'letter stated in part: 'In view of requests from several of the provinces, a proposed agenda which we will recommend to the 3 conference has been worked out aud is outlined below." Not having been asked for, nor having made any "recommendations, I therefore am free to suggest that further consideration bo given to the following sentence in the letter in question: . o 'T should like to emphasize the view of the govern: ment that the opening session should Le confined to general statements and not to debate on points of detail ar special circumstances.' Public Should Be Informed The following paragraph of the letter informs us-that the conference will then resolve itself into working committees, which will sit in camera. The Ontario delegates desire that we state our case publicly and briefly and at no time a party to a scheme which withholds from the press and the public vital information to which they are justly entitled. We were not informed nor consulted with regard to the terms of reference contained in the order in council passed by the dominion cabinet which gave life to the commission itself. When Ontario's presentation was made we asked for nothing. When the findings were agfeed upon by the commission: Ontario had no representative, Mr. Rowell having long before retired because of ill health, But later on we were presented with a costly five hun- dred thousand dollar report--the product of the minds of three professors and a Winnipeg newspaper man, none of whom had any governmental administrative experience, and whose opinions all of us cannot share. In view of the fact that, in the report itself, it is stated that Mr. Rowell had nothing to do with it, his name, which has been tagged on for purposes.of propa- ganda, can very well be omitted in future, Those of us who believe in democracy abhor the very word propaganda because the circulation of ready- made opinions by any centrally-confrolled power is the most dangerous enemy of civilization. Front this per- spective we sce the evil working of such a vicibus em in Furope, leaving in its wake misery' and suffering which shakes one's faith in humanity" itself. _Can Provinces and Dominion Both Win? * Let us guard carefully for fear a similar franken- stein does not appear in our midst: In the first flush of public reaction the propaganda machine made it appear that to implement this 'document would make the provinces richer and, at the same time, make the dominion richer by the simple process of transferring debts and revenues to the ceatral government. . smuch as there are only two parties to the deal, surely one need only to have an elementar nowledge of economics to appreciate the fact that th cannot win. Unless there are transferred with the debts sufi: elent existing provinela] revenues, the dominion will have to dncrease taxes or debt or probably dath, This does, however, offer an opportunity to explore every possibility of reducing all governmental costs in Canada and, to this end, Ontario is hrepared to cooperate to the limit at the right time. That Is a domestic problem to which we can devote time and effort as a post-war jroblem, and much belter be it 80 too, because the ancisl problems of to-day may have very little rela- tionship with those of a year hence. - . 3 1 am convinced that the commissioners were genu- Inely sincere, and others alto, when months ago they stated that by ing the cost of loyables on relief the dominfon would render a financial favour to the provi an ° icipaljties. But anyone who says 50 today, if conversant with jhe true facts, is ity of unadulterated 'humbug', . Unemployables Major Problem Hon. Mr. Howe said some while ago that, since the report was written, more than half the employables ve secured jobs and' that the other hall would be absorbed in Industry during this year. I believe Mr, Howe. In fact, if we are going full' out in this war effort, it is a reflection on the government not to put to work immediately the physically fit adult males of all QOanada; But the énd of employable relief problems does not by any means solve the issue. There is still left the army of ubemployables, who to-day make up the vast burden of relief and; generally speaking, will con. tinue to do so. * Under p t Arr the contrl- butes forty per c towards the cost of food, clothing and shelter, If this report is adopted In its entirety, the dominfon will contribute nothing and its former aha will have to be borne by the Toviness and munieip . s after revenues, out of which these costs were for: have been surrendered to the dominion. I tod and. if m 4 Be sor Hr ues n me ry. al Bt! ar "Bervices i ted, inister of , #0, that the federal government has Already a Fuel Controller nas been appointed and he has the power to regulate the distribution of gaso- line. As a war measure, he could deprive us entirely of revenues from the licensed vehicles and gasoline. We should then have to go to the domiuion authorities with a tin cup in our bands saying--'either contribute to the extent of our loss of revenue or pay for the social services of Ontario'--and, believe me, they are many and varied in this age of growing paternalism. When the Prime Minister addressed to me on Novem: ber 2nd, 1940, a letter with reference to this.proposed conference, he said in part: 'While the cost of umemployment relief has been reduced, the war has cast additional burdens on govern. ments and taxpayers alike. It has inevitably increased the competition between governments lo secure rev: enues, and has aggravated the overlapping, eumber- some and discriminatory character of much of our tax strycture.' Ontario Co-operates on Income Tax I take this opportunity of referring to the actions of, the goverument of the prov of Ontario with resp he Income Tax f ain that the Income Tax Act of 0 respect--that we allow as a deduction from the income of the Ontario taxpayer the amount of tax paid to the dominion gove nent under the Income War Tax Act before we imp our own lax. . Is that interfering or competing with the dominion, especially as il had been admitted by former ministers of finance gt Canada that for the dominion to levy an income tax at all is to invade provincial fields of taxation! . To make such an allowance as I have set out is not competing with the dominion; it is taking a secondary position to the dominion. Furthermore, let me state that the province of Ontario was the first province in Canada to arrangd with the dominion 16 save the cost of 'collection of the income tax and the economic waste of time of taxpayers; -Outario arrang with the dominion government that the Ontario tax shold be by the same dominion of rs and at the same 5 the dominion tax is col . [8 That is not competition. That is cooperation, ad- mitted by all, and due eredit being given by all tax- payers atfected. Further, the, dominion government on September 13th, 1939, added a surtax of 20 per cent. applicable to income of 1039 and subsequent periods. This meant a lesser amount of income left.in the hands of the tax- payers to be subject to th itario tax. The province of Ontario agreed to absorb s loss in revenue. Ontario Suffers Revenue Loss On August 7th, 1910, the 20 jer cent. surtax and all the old rates under the Dominion Income Tax Act were repealed a { rates were enac were cut, These of 1939. Desi National Defence earned from July imposts was to s prov fiscal year which begins on April 1, 1941, the provinee of Ontario will suffer a loss of revenue of upwards of two million dollars. We have turned over the Elgin lospital--a seven million dollar institution--and many other provincial properties, without payment or reward and will con- tinue to do so. We have curtailed our capital expenditures and have delayed necessary works--works that would have Leen profitable "and. would have yielded additional revenue. > Then, too, in an effort to encourage the incoming of American tourists who "will bring with them much needed American dollars, 80 necessary to enable the dominion to save exchange and prosecute the war, the province of Ontario has Nndertaken to expend on pub- icity and advertising for tourists. this year the sum of three hundred thousand dollars. That, according to officials of the dominion. govérnment, is cooperation, not competition, alr And in respect to the Corporations Tax, it will be within the memory of the representatives of the various provinces: here that the authorities of the dominion goverment have appointed a board to be presided over by the Hon. Charles P. McTague, Justice of the Su- preme Court of Ontario; board has been formed to determine the amount of obsolescence and deprecia- tion that may be allowed taxpayers write-off against profits which - will be subject to taxation. The government of the province of Onta has Announced that it will accept without question the findivgs of this dominion-created board. 5 \} Ontario Not Competing Time does not permit a lengthy recital of othér acts of cooperation on the part of the government of the province of Ontario, but I challenge anyone to success- fully charge the- government of Ontario or; for that matter, any other province, with competition for revenue in fields that do not frclueively, belong to the provinces, or with any lack of cooperation whatsoever. On the other side of the picture, even Although th organization of Resources Committee, patferned afl + their places newer and hi and at the same time, exen nges were applicable to the incomes these cha in rat the new i! : to incomes . The effect of these added y reduce the revenues of the was set up by our Ontario Legisla animous vote--the nucleus, with power to add, consist. ing of His Honour Li t-Governor Matth Colonel Drew and myself--and even although will over a year ago we journeyed to Ottawa and perionally pledged, on behalfsof the organhation, the fullest.inea- sure of cooperation in every possible war effort, the secretary of the organization now advises me that not a single veques} or communication has been received from the federal government. Any just eriticisnd that may be levelled against the government of Ontario for its conxidered judgment on this izaue my colleagues and I accept without com- as jta credit closely approaches that of the dominion. A feature of the arrangement not generally realized ia that in the case of Alberta the dominion would assume not only the provincial debt, but the defaulted i HON. J. B. McNAIR, K.C., PRIME MINISTER OF -~ NEW BRUNSWICK, (Vol. 1, page 23): "At the Suk], I must say that we do not concur the Ho] on the same. This had reached $3,400,000 by 1937 and stands now at a much higher figure. Ontario's federal taxpayers provide nearly half the dominion revenue out of Which this gilt to the bondlolders would be provided." That shows the changing opinion of that great pub- lication. Why! Because that and other newspapers, sensing public opinion, are reflecting the growing sus- picion of the awakening Jublio mind. As a political observer I say that there is a fast developing body of opinion, not without cause, now promoting the idea that behind this untimely move, ostensibly as a war measure, is a well cooked, nefarious deal to make good the losses in depreciation of certain bonds held largely by financial hous! o collect unpaid interest on Alberta bonds and to ca a sharp appreciation in bonds of certain provinces, which bonds were, because of cir- cumstances beyond the control of the respective pro- -vincial treasurers, actually sold at much less than par 15 although the coupon rate was abnormally high. possible huge capital appreciation is not even subject to federal income fax. I solemnly warn those who are obviously pressing for such action that they may aggravate that suspicion and destroy completely public confidence in govern ments. Canada Must Be United Now [ come to a subject of even greater importance --nuational unity. We have it today. All Canada is behind the prosecution of the war. We aré a united people. We need be. We have a common foe in the dictators. I happen to know something about religious issues, I can speak feelingly on this subject. as a government, to remedy a simple ob- and -irfequality with regard to school We failed, and the very ones we tried to ious as anyone else 10 have us retrace t a similar situation, on a larger scale 1: help were a our steps. Is developing to Already th are rumblings that Quebec is getting pleferred trea nt. I-know that, to some extent, there are extenuating circumstances. But the fact remains that Quebec is being relieved of some of her municipal debts, while other Aoxinens are not. Quebec is to receive an eight million dollar yearly irreducible sub: sidy, ®hjle others including Ontario, are not to recelve a cemt= Again there are extenualing circumstances. But explanations do not always explain such cages with certain sections of society. The Toronto Telegram is a powerful newspaper and reflects the opinions of many cigizens of Ontario who have a great respect for its considired opinions. The Toronto 1'elegram has dealt with this aspect of the report with great effect. I shall not quote from its editorials--that is not necessary. AN I can say is not to underestimate the power of the press in this regards This new issuo being developed presents a challenge to those of us-who believe in national-unity. To Plind oursglves to the obvious is not fair to Canada, not fair to our neighbouring province of Quebec, especially when Uy this deal, according to the best constitutional advice I can get, Quebec and the rest of us will have to agree to a surrender to a central authority of rights and privileges granted by the British North America Act. I say that go long as my- colleagies and 1 have any say in directing public policy for Ontario and so long as there is a British North America Act in Its present form, which cannot be amended at will by a mushroom government that may in future take office in Ottawa, we shall, as a sister province, stand solidly beside Quebec if at any time her minority rights are threatened. On this sound foundation of national unity we stand as firm and resolute as the Rock of Gibraltar itself, To lay hands on the life work of Sir Wilfrid Laurier and Sir John A. Macdonald is nothing short of national vandalism. Do We Fiddle While London Burns? In the post-war period we may have to open our gates to thousands, yes millions, of European homeless and destitute. If this eventuates, the British North America Act may serve a useful purpose until the pro- cess of assimilation is completed. Is this the time to send a "courier to bomb-torn London with a document in his hand and have him step into the Hall of Westminster and ask theo British in the find! of as set out in chapters V and VI of section F of Volume II, where certain special claims advanced the government of New Brunswick are discussed.' HON. JOHN BRACKEN, PRIME MINISTER OF * MANITOBA, (Vol. 1, page 30): "Manitoba does not think it unreasonable, if it wanted to borrow money on the credit of the dominiol, that it should be expected first to obtain the approval of such National Finance C isi We feel satisfied that we shall have no Sfkety in obtaining the approval of such a body in all cases where our application merits such approval. If a case comes up in which such ap- proval is withheld, that will not prevent us if we think the object is a worthy one from borrowing upon our own credit. It has been suggested that such borrowing upon provincial credit alone will be im- possible" if the c ission's rec dati are made effective. We do not agree. Any province which cap borrow now could still borrow if the commission's recommendations were in force. The success of such" borrowing in either case depends upon the credit of the province which is attempting to borrow. For-ex- ample, with their resources we do not think that either Ontario or Quebec will have any difficulty in borrowing if this report is implemented; some other provinces might have; but is there not a question as*tq whether these latter could borrow satisfactorily even if the report is not implemented! If they could not, then they 'are certainly no worse off after implementation because then they can borrow in proper cases upon the credit of Canads. The fact ix, and the report makes it clear, that in the matter of future borrowing, the provinces are to be left in exactly the same position in which they now are. 'Indeed, they can continue to borrow upon their own credit. In addition, t are given a new and valuable right, exercisable wholly at their own option, of borrowing upon 'the' credit of Canada." HON. T. D.-PATULLO, PRIME MINISTER OF BRITISH COLUMBIA, (Vol. 1, pages 44 and 43) "Money, of course, is at the root of this whole ques- tion. While monetary measures should be based upon the productive capacity of our people, the productive capacity of our people can be amplified by whe mone: tary \ and other consid i We are now told that it is necessary immedidely to imp @ rec dati of the ¢ issiom\sue- cessfully in order to prosecute the war. The gosern- ment of British Columbia disagrees with this view, I am sorry that the winning of the war has been used as an argument to fasten permanently upon the provinces and the Dominion of Canada a changé in dominion- provincial relations which I firmly believe will work to the injury and not to the benefit of the dominfon and the provinces of which it is composed. If there had been no commission, war.measures would still proceed; and right now without any change in our constitution the dominion can take any action deemed necessary to the winning of the war; and the people are "olidly behtnd the government that every resource which we possess shall be brought into action at the earliest possible moment for the purpose of fur- thering our war effort. : Let us face this question fairly and squarely just. as If there were no war, as was the condition at the time of the i t of the ission; and not place those who believe that the proposals are of a Pavmtal character under the indictment that they are hindering the war effort of this dominion. Would Retard War Effort The commission further states: "The immediate effect of Plan I on dominion finan would be adverse, since in some degree provincial ances would have improved at the expense of those the dominion.' I h as the fi of the dominl ing to the {ssi are not i diately to proved but the reverse, it does not seem logical to au gest that the impl ion of this dati of thi ission is ial to our war effort. Rather parliament to pause in its consideration of 1] does' it suggest that during the period of the war the imp). fon of the plan will be a burden on the determiningithe very life of the British Empire in order to debate the question of a new tut for Canada { 3 To me it is unthinkable that we should be fiddling while London is burning. In the heart of the Empire the citizenry--men, women, boys and girls--with their bare hands are beating out the flames spread by ruth. less vandals upon the housetops and the roofs of their homes. Britons, on the shores of the sea and in the streets of their Sitles, will resist the invader foot b: foot with thelr very lives, as their great leader sa! they would. Instantly concerned with their struggle to survive and to save us throughout this Empire and with nothing slsey they are raging a winning fght to-day, the remembrance of which will never die while reedom lives. They have no other concern. . To-day, while these brave people.are shielding their homes , with their bodies and ving the burstin bombs and the hail of machine gun bullets, do we rea that the Lord Mayor of London has paused in his efforts fo save the nation and has called a meeting of dominion's war effort, not alone through the assump- tlon of additional financial obligations but throug the time and effort which must nécessarily be expended - In the setting up of the new organization as proj = by the commission. It would therefore seem the part of wisdom to get on with the war and postpone so far-reaching and contentious a problem until after war." . . " HON. WILLIAM ABERHART, PRIME MINISTER OF ALBERTA, (Vol. 1, page 63): "Qur people will ask, 'Why are they so anxious to raise an issue like this when we all have our hands full th the job of the war!' And the whisper has round, 'It is the money powers." I am folog to speak frankly. I belleve that tie perilous situation which is facing our nation and the empire d ds sincerity of speech and boldness of go! the aldermen to id dj or a of the borough system of the great metropolls 'which is now a beleaguered fortress? j I listen to Mr. Churchil), to Mr. Roosevelt, the two eat democratic leaders wi and out as beacon lights n this bewildered world'to-day. I believe In their sin. cerity, Only an all-out effort will save civilization and christianity. Our central government now, under War Measures Act, has extreme, even dictatorial, power. If there is anything specific that the dominfon govern- ment wants to help In its war effort, say so, and I am sure every province will assist by assing Immediately But if the propagandists believe for a t itu. we will remain silent roadeast deliberately for the 'purpose of brandl y h y with our sister provinces, or gullty of doing anything to block port with tha garments of patriotism and under ths Te ex gencles of war would do irreparable damage to bo I desire to quote one authority as'a case Pol The Toronto Star, a supporter of the\present federal government in its editorial of Novem 20th, 1940,. nays: -. h "The Star believes that the senaral idea 'of the + is a good one, the Idea that the: dominion should be the chief tax collector and, as an offset, assume certain provinelal responsibilities. ' \ That was the then friend! 'of thet paper. What did the Star say In iH ried of tirday, January 11; 10411 I quote: "The re as, natorall Snongh sfron Ing. Great fikncin Soncerns and wealthy IndividuAls io 1) would place the credit of the dominion behind provin« cial securities whose market ¢ orated. A Toronto broker has estimated n report might As much [4 $20,000,000, 40,000,000 and $60 000,! 10 the value of the of Manitoba, téhewsn and Albstts, respectively. 14 gift to the bon. oul niarlo than any other fi 0 would not be Increased in value the y s ¢an be accom- plished without controversy and without upsetting our reasonably well-organized system of government. "Ontario Shall Continue to Help war effort we of Ontario believe we have been nd shall continue to be so, even to the extent billion dollars of debts of other public dominion jreasury in war time. The process of transf f would be fnvolved and ng to-our wh financial system, A transfer of all Yax on active ities of the classes indicated In the report to the central Suthority. could only be niade 'after complicated and far reaching legislation could be enacted. Tha and effort of the federal parliament 4 be dev: in this direction when ounce of effort in he successful prosecution of a wer, u thus obligated yourselves to he last drop of printer's ink ap the neard, confusion, utter conf: [Ll is as ting tax y AE HEE pel is and shall continue to celime 'document, and pos iy it Fiscarely just the time to 5 nd only when the menace to our oi and f) fs removed the ogpe t A even and Matton of the rathless ! Ji HON, A. S. MecMILLAN, PRIME MINISTER OF NOVA SC Ti, (Vol 1, pi 330 TER © sctlon, I maintain that {t would be most unfortunate if the idea soins popular credence that there is a con certed and Lihat attempt being made by the mone, [Rven to increase centralized control -of our nations ife while our i is fully pied with the rosecution of our war effort, and that thereby there s developing an endeavour to obtain an unfair ad- vantage over the people by means of Imposing upon them a erushing debt structure under which they will © be further enslaved. I am sure that every man in this si fathering must be aware that considerable suspicion as been aroused In the minds of many because of the intensity of the propaganda campaign Md the great ipindilute of Jooney and the frantic and inwarranted aste that has n urged .in connection with the adoption of the Rowell-Birois recommendations. no_mlstake about it. Not only the efforts to n the adoption of these recommendations, but the of obviously inspired P da to win sup- port for the "union pow proposals have been 'caus! - wing uneasiness in the minds of many. Whether x s common knowledge or not, we in Alberta are fully \ infor on the Ly n which was taken in Australla TOgAr: ng ibis sinister propaganda. In that B, to have much mora direct mel tters. We note that facilities for they treated . such of . Murely it must be evident to any loyal British sub- Jeot to tit calmly and indifferently by while oo £ Yoodwinked and inveigled into a finan torship or a fascist Mate, at a time Nien we are Yigg fhe 97 our man 00d to the empire an [1 clos er Al 1a Srercome that Jou thing which Al ead in the I n Ban gu - foi order of central control and fo en n erimi; ERE . J, L. ILSLEY, DOMINION MINISTER OF HON lines Va 3, page 80) : . Hh | ate th ration t 0 : recalved Trom the provinces and 1 want to mes fon 1g BLISHED BY THE AUTHORITY OF THE GOVERNMENT OF THE PROVINCE OF ONTARIO pgp he eaoperation md vie Ye apis ¥ " & AFAR STIS) TP ROE AOR EISEN IAL OMA