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or not we must make some agree- ment. Our Joh is to make the best agreement possible." DREW ATTACKS Wi5 TRANSFER AS 'i)06liRiM' Declaring that he could see "no practical reason why the Province should give up its constitutional powers," Colonel George Drew, Con. servative Leader. yesterday in the Ontario Legislature attacked the principle of the proposed corpora- tion and personal income tax trans-, ter trom the Provincial to the Fed. eral Jurisdiction. The Opposition Leader's criticism came immediately before the House adjourned to give Treauury oiiiuals an opportunity tor further negotia- tion with Ottawa on features of the agreement which are deemed to be objectionable by the Ontario Govern- ment, and to obtain a clear picture in the light of Ottawa's budgetary plans. of the ultimate fiscal position ot the Province. He charged "this thing has been forced upon us by Ottawa and we were clubbed into agreeing. We were told that if we hold out against it them would he double taxation." In a discussion of the constitu- tional factors involved, Colonel Drew said he could see no reason why the Province should not remain, under powers granted by the British North America Act. the tax collect. ing authority and then. it war financing .equired it, hand. over to the Dominion Treasury certain agreed-upon sums from the taxes thus collected. The discussion arose from a pres- entation by Attorney-General Con. am ot the draft agreement and the Government's objections. "I believe it is a dangerous thing to surrender taxing powers from the constiiuo tional aspect." he said. "I can only think that there must be some undisclosed purpose in bringing about this proposal," he said. ' Questioned hy the Opposition Leader on the Government's stand, Premier Hepburn declared: "Whether we agree in principle or not, the fact remains that the country is at war. and reluctantly Mr. Hepburn claimed that tho Province had no say as to whon the agreement is to mrmmme. " though in prnrrttl mums it is to run one war ant-r the conclusion ot the war. my Stay In Fleid. "I am rumor of tho opinion that the Federal Governmnm intends to come into this livid of taxation. guaranteed under tho constitution to be the sol prrrngativo of the Province, and to stay in tho field and to push us out and to keep us out for good," he said. The Attorney-Gonoral, in criti- cism of that part or tho agreement which places upon the Province an obligation to find revenue for the municipalities in compensation for the loss of municipal corporation taxes, argucd that the Provineo "will simply be in the position ot pulling chestnuts out of the tire tor the Dominion jurisdiction." This Thing Forced on Us, We Were Clubbed Info Agreeingu-Hepburn IN HOUS E DEBATE "We have said fiiGi Th? begin- ning," he added, "that it the.Fed- oral authorities want the munici- palities to vacate that field they musl deal directly with the munici- militias." ner-General, "that it legislation is to he passed hy this Logislature, similar logislation must be passed by the Dominion Government." Maggy than read from a lot- tor which he had received from Mr. Ilsloy at noon yt'sterday. On the qumtion of Dominion validation. Mr. Ilsloy said he intmtdod to discus, with the Minis question "which mo formal ratiti zation for tho into thvso am He stressed also that, while the compensation offered to the Prov- ince. 828.961.488.80. was definitely fixed. the construction of the agree- ment was far from being in so defi- nito a form. He ohjoctod to the definition hy tho Finance Depart- ment of corporation taxes, and pointed out that its definition open- rd wide tt field other than that con- sidered hy tho Province as strictly within that of corporation taxes. He declared that he was "aston- ished" at last Friday's crtntvpettcts with Finauco Minidor llsloy to foam for the first limo "that the Mr. Il.; considcrm Allornoy- dofinit ion "On the basis of this understand- ing." wrote Mr. llsiey, "the Legis- lature of British Columbia has rati- fied the agreement and the Govern- ments of the other Provinces are on the point of presenting their agree- ments to their Legislatures for simi- lar ratification. Impossible to Accept. "I think that Ihis makes it im- possible for me to accept your pro- posal that an entirely different defi- nition ot corporation tax be inserted in the Ontario att"et?rttent. If I agree to your suggestion. the other Prov- inces might accuse me of doing something which Rave Ontario cer- tain advantages which they were not given an opportunity tor considering themselves." b Mr. Ilsley claimed also that the definition which Ontario proposed was too restrictive in so far as the future operations of the municipal" ties are concerned. Under the Do- minion's definition. he said. the municipalities would have freedom to propose new franchise taxes on public utiiities and also to impose business taxes on various classes of [mutant-e on Validation. Thom is in the agrcomo taking of the insistence should he validated by l laturo, and he slrcxwd llsltty on Jan. 15. hy lotto: rd. "in order to avoid an delay. mu may wish lo kt formed of the loaislation l propow in order tn Carr, prorisions of the agronmc "Wo must twist." sid , nry-Getuual. "that it lo: dating tho zagl't'r'mont." "t say." ho added. "that nntPcan. not avoid tho impression that good faith is not indicated. and I would go further and say it is not an in- dication of good faith." He declared that he was " ishod" at last Friday's cont, with Finance Minister 1lsh loam for the first time "tht Dominion Govornmont nm'm templntod passing legislation dating the "groanwntf' F EBRUARY It) tl lor to avoid any possihle may mm to keep me in, the legislation which you' 'm the agreement no miss the insistence that it validated by the Logis- inislor of Justivo the tich you raised about alilioation and authori- 10 Dominion to ontor agreements with the mind Mr. Conant, Pm of Justice is no othm' departments Lion. we am going mo before we find streamed that Mr hy letter, suggest to carry out the agroomnnt." d tho Attm lation vali- ('m'l- ', In reply to a question hy Colonel Drew. the Attorney-General said that, while all the agreements worn supposed to he the same "in their oc,ontial parts." tho ratification of na2li as between the Provint-e and tho Dominion was an individual matter. , "The Province of Ontario might, {agree to transfer to tho Dominion 'complete control of its taxing lau'hority in corporation and income Ltaxes and then find an entirely dif- tie-tent set of agreements with the iother Provinces," said Colonel Drew. I He declared that, in his personal (opinion. "it would he an extremely (dangerous practice" to transfer this ltaxing authority under the terms l proposed. a "Wo have," he declared. "a eer- ;tai.t type. of constitutional struc- lture in the Dominion which may be fright or may be wrong. That is not the point. But in 1867 it was decided that each Province was sovereign ttl jits own sphere and that each of tho _nine Provinces. operating .with the {Dominion were partners and equal ibet?re the courts. t "I don't think," said Colonel (Drtw, "that this Province should be (prepared to repudiate that relation- ship until this Legislature has come tto the conclusion that the whole principle behind that relationship " Cs,:',',.':,'",.',.' l In Guise of War Measure. business and corporations. They would not have the freedom lo do so under Ontario's definition, he said. "I am perfectly sure of tho now-s- sity of Ottawa passing validating legislation," he said. adding that hs was not so certain Ottawa had the mnstitutinnal-right to raise taxation for Provincial purposes. "We have to b? sure of tho con- stitutional right of the Dominion to enter the Provincial tax field." Mr. Conant then read from the roport of the special York Counlv Committee investigation of the "in- vasion hy the Dominion Government irto Provincial and municipal sourtps of taxation and its effect on municipal revenues." May Become Permanent. The report. dated Feb. 5, 1942. opposed the tax transfer on the ground that it might become per- manent, just as the Income War Tax Act of 1917 was never repealed. that it was contrary to the Constitution. ard that, "under the guise of war m cessity. tho Dominion Government is making: an invasion into the Pro- vincial and municipal revenues which is unwarranted." In reply to a question by Colonel A voice from the House broke in thar the proposal was a war mea- sure. The Conservative Leader agreed that it was made in the guise of a war measure. "But," he stress- ed, "I have seen no suggestion at all why the Province should not re-