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Premier saw eye to eye on such an adjournment. and were in agree- ment on the uselesstte:s of the House continuing to sit with noth- ing of an important character be. fore it. A Cabinet meeting trad held later. and. following it, the Premier announced: "Tomorrow afternoon I am going to move that the House adjourn. to he re. assembled on a date to be fixed by the Lieutenant-Governor-in-Court. til "In the meantime we are going to try to straighten out our tax prob- lems with Ottawa. There is no use going on under the present situa- tion. I am not prepared to make recommendations on the budget." Mr. Hepburn said he was not ablel to predict the length of the ad-l Journment, adding that Treasury of-l tidal: had no immediate conference} appointment with Ottawa. Mean. time, he said, he proposed to send the members home with halt their Sessional indemnity. In the course of the two-and- half-hour session ot the Home yes- terday. Colonel George Drew. On- tario Conservative Leader. and the The Premier tabled his interpreo tation of a legal report made to him by Attorney-General Conant in connection with Mr. Conant's recent conference with Finance Minister Iisley over the proposed transfer. After citing Ontario's ob- jections to the basis on which the Dominion Government is seeking the sources of revenue. the Premier said: "it is only within the last few days that Ontario has learned definitely that while the Province is being asked to sign away its rights of taxation which are deriv- ed trom the British North America Act, and to pass an Ontario statute validating the suspension of these rights, the Dominion Government has no intention of passing com- plementary legislation but has voted a sum estimated to take care of the amounts covered by the agreement - for the great. Wie, The Premier will present this motion on the grounds that his Government is unable to budget tor the coming fiscal year. or others wise carry on its monetary policies because of the lack of knowledge of what Ottawa plans to do. Adjournment ot the Ontario Legis- lature session until such time a: the financial relations between the Province and the Dominion are rlaritied. will he moved today by Premier Hepburn. Crux ot the dispute between On- tario and the Dominion Government is the proposed transfer from On- tario to Federal Jurisdiction of the corporation and income tax. In many other fields of revenue as well, the Premier told the House, the Province was unable to prepare a budget of approximate income be- cause of the indefinite attitude ot the Dominion Government. which will be made available to im. plement the agreement insofar " payments to the Province are con- cerned tor this year." It was Leaders' Day in the Leg- islature and Colonel Drew, in an address attacking the lack in the Speech trom the Throne of a pro- gram of legislation, urged adjourn- ment of the House. He declared: "t believe this House should adjourn until the Government is ready to place before us measures in keeping with the part this Province must play in the combined war effort of the whole Dominion." To Seek Solution of Tax Disputes, Premier Declares RIGHTS SEIZED "The Province." said the Premier, "raises the objection that the Dominion is tampering with the rights of the Ontario municipalities and that they should not be brought into the scheme at all, or if they are to come into the scheme, it should be as a result of direct negotiation between the Dominion authorities and the municipal authorities. The Province takes a strong stand on this matter, and re- fuses to be a party to taking away the rights ot taxation from the municipalities without their con- sent." He declared the "Province of On- 1ario has co-operated in attending the different conferences held in Ota, tawa and by taking a firm stand has succeeded in ironing out many points of differences. and prevent- ing a number of injustices being imposed upon all ot the Provinces." The House then Was given an out- line of the general agreement under which Ontario is to receive in com- pensation for the surrender of in- come and corporation income taxes, the sum ot $28,961,488. and a further guarantee ot amounts to cover losses in gasoline revenue. The memorandum tabled by the Pre- mier, giving the "Treasury view" of the tax transfer agreement, dealt with the subject at length. It de- clared that the suggestion ot the Dominion Government. that, after 1942. the Provinces will be expected to make provision whereby the municipalities may resort to some alternative method of taxaxtion which will recoup them for the loss ot' revenue through the suspension by them of the collec- tion of municipal corporation tax, "is unacceptable to the Province ot Ontario." He said Ontario has also insisted that a clause be inserted in the agreement declaring that, notwith- standing the agreement. the Prov. inces have neither abandoned nor given over to the Dominion any of their rights as vested in the Prov- inces by the British North America Act. The Premier added: "It is obiee. tionable and unthinkable that the rights ot the Provinces guaranteed by the constitution are to be taken from us by such questionable methods." 'Ntuestionatties Methods." "To this the Dominion has agreed, although contending that it is not necessary." said the Premier. -"For the reasons which will be stated later, it will be observed that this provision in the preamble of the agreement is of vital importance, and it is believed will prove to be the only protection which the Prov- inces will have from losing per- manently their fiscal autonomy now guaranteed by the British North America Act." The Province, while contending) that the proposals of the Dominion. Government to take over the cor-: poration and income taxes are not! justified. "is willing to enter the! agreement for the duration of the; war." I But before commuting the Prov- incc to this agreement, Ontario raised three objections to the Do- minion proposals. First the defini- tion of corporation tax as proposed by Dominion Government officials is "ambiguous and unsatisfactory, and is bound to lead to discord and mis- understanding." Mr. Hepburn said Quebec was not satisfied with the definition and "yet the officials of the Department of Finance stead- fastly refuse to adopt a simple, sensible definition which will make tor clarity and future harmonious relations in respect e the working out of the agreement.' 'ebruar, tit The Premier tabled a report from Dr. B. T. McGhie. Deputy Minister of Health for Ontario, which told of a conference in Ottawa concerning the problem of returned men and their treatment. Dr. MeGhie said the Dominion's offer was to give a grant of $1,000 per anticipated bed required for the treatment of men- tal patients discharged from the army over the next three years. The Ottawa authorities also indicated they were willing to pay four months' maintenance for all mental patents. irrespective of whether or not they were pensioners, but after the four months period only those receiving pensions would be hos- pitalized at the expense of the Do- minion Government. One of the objections to this offer volt ed by Dr. MeGhie was that the Ontario Department of Health was "The Dominion Government," add. ed Mr. Hepburn, "seeks to impose this agreement upon the Provinces without securing the authority ot the Parliament of Canada, without passing a Dominion statute; but we, the people of this great Province of iOntario, are asked to give up our :rights of taxation, our fiscal inde- pendence. our power of progress and development and to pass legislation validating the proposed agreement, hy the terms ot which we alter for the time being the provisions of the British North America Act. The Premier reviewed Ontario's contribution to the war effort. Buildings valued at $15,000,000 had been placed at the disposal of the Dominion Government for war pur- poses, and the Province had made generous proposals to Ottawa in connection with soldiers who were tubercular. In November, 1939, an agreement was reached with Ob. tawa regarding the care of tuber. cular soldiers in Ontario sanitoria. The Ontario Government, he de- clared, had offered to give free hos- pital treatment to soldiers from On- tario who contracted tuberculosis or mental illness within ninety days of their enlistment. The Premier said it was a "dastardly act" on the part of the Federal authorities to take men into the armed forces, declare them physically fit, and then bring Lhem back from overseas suffering from tuberculosis or mental disease and then refuse them a pension. 'Wc are not, through no fault of ou" own," said the Premier. "We cannot budget when we have no idea of what steps Ottawa intends to take with regard to revenue." Ontario's Contribution. "Subsequent Dominion Govern. ments, not being bound by statute, may delay the passing of estimates providing the necessary moneys to repay the Province of Ontario, or may withhold supply, or may even repudiate the agreement in whole or in part. Can you imagine a state of affairs so charged with threats and dangers to the autonomy ot this Province? Rising to carry on the Throne Speech debate, Premier Hepburn said at the outset that the Leader of the Opposition had raised a most important question; whether the Government proposed to place a Budget before the House. on behalf of the Dominion Govern- ment to pay certain moneys in cer- tain times to the Province of On- tario. The agreement is to be signed by the Minister of Finance, but it is not, I repeat, the intention of the Dominion Government to ask Parlia. ment to pass an act authorizing the signing of the agreement. "And what do we get in return? We get an agreement signed by the Mirlis!er, ot, Finance, undertaking ties. "The amount involved (less than 8300,000 per annum) compared with the total sums of revenue that are to be dealt with is petty," said the Premier. The second point was with rela- tion to the proposal to take over cor- poration taxes from the municipali-