Mr. Hollett I give notice that I will on tomorrow
ask that the Commission of Government lay on
the table copies of the following documents:
Letters Patent of 28 March, 1876
Letters Patent of 17 July, 1905 and
Letters Patent of 30 January, 1934.
Mr. Chairman, I have here a reply to a question
which I tabled sometime ago. Would it be in order
to read that?
Mr. Chairman If it is for the information of the
House, Mr, Hollett, of course.
Whereas under Annex IV, page 16,
[1] of the
"Proposed Arrangements for the Entry of
Newfoundland into Confederation" dated at
Ottawa, Canada, October 30, 1947, under
heading "Probable Expenditures", there is an
item titled "Other Departmental Expenditures, $9,400,000" which it is understood is
meant to take care of the cost of extending
existent services to Newfoundland in a typical year should Newfoundland enter into
confederation;
Now therefore will the said Department of
External Affairs inform this National Convention at the earliest possible moment as
to
the following:
Are the "Existing Services" referred to,
those outlined under heading "Public Services provided by Canada", sections 3 to 6
inclusive, excepting always of course, section 4, sub-sections (1) and (2) and section
5
sub-section (1)? If so, what are the allocations in respect of each several service?
Or
generally, it is desired that an understandable
breakdown be made of the amount of
$9,400,000.
And the answer is as follows:
(a) With one exception the "Existing Ser
vices" referred to are those outlined in the
question. The exception is an estimate of the
cost of operation of the telegraph system,
which is not included in this table. Since
revenues derived from the system are expected roughly to balance expenditures, it
was not thought necessary to include estimates for either. (See succeeding answer.)
(b) "Ordinary" Expenditures of the Dominion Government in Newfoundland.
The following items listed below, comprising the $9,400,000 estimated for "Other
Departmental Expenditures" (as shown on
p.16 of "Proposed Arrangements for the
Entry of Newfoundland into Confederation"), were compiled chiefly from reports
submitted by various departments of the
Dominion overnment. They represent estimates of the additional cost of extending
"ordinary" Canadian services, supplied by
these departments, to Newfoundland in a
"typical" year.
The figures must be regarded as tentative
estimates only, and not as commitments by
the Dominion government. Actual expenditures might prove to be higher or lower than
the estimates, depending upon circumstances
which cannot now be foreseen. Since these
figures are estimates of additional expenditures in a "typical" year and do not take
into
account the abnormal conditions prevailing
at the present time, it is anticipated that additional expenditures during the first
few years
of union might be considerably higher than
the estimates shown.
It should be emphasised again that these
estimates relate to the additional expenditure
arising from inclusion of Newfoundland and
therefore do not include any part of the existing departmental expenditures, even
though
such existing expenditures may be of benefit
to Newfoundland.
Estimates prepared in the several departments for the information of members of the
Canadian Cabinet Committee appointed to meet
the Delegation from the Newfoundland National
Convention. [See bottom of next page]*
That is the breakdown, and I would appreciate
it if that reply could be handed to each member
of the Convention.
Mr. Smallwood Mr. Chairman, I too have
replies to some questions I directed to the
Government of Canada, some at the request of
members of the Convention, and some others of
them at my own instigation.
First question: To ask His Excellency the
Governor in Commission to ask the Government of Canada whether the recent published
statement of Honourable Mr. Duplessis,
1028 NATIONAL CONVENTION January 1948
Premier of Quebec, on the Labrador boundary, modifies in any particular the letter
and
enclosure of October 29, 1947, of the Right
Honourable the Prime Minister of Canada,
particularly in clause 2 of the enclosure,
which reads as follows: "The Province of
Newfoundland will include the territory of
Labrador defined by the award of the Judicial
Committee of the Privy Council in 1927 as
Newfoundland territory."
Answer: It is not clear from the question
what statement of the Honourable Mr.
Duplessis is referred to, but in any case the
letter of October 29, 1947, from the Prime
Minister of Canada to His Excellency the
Governor of Newfoundland, with its
enclosure, is not modified thereby in any
particular either with regard to clause 2 of the
enclosure or any other clauses.
Another question I submitted was this:
To ask His Excellency the Governor in
Commission to ask the Government of
Canada to state whether, in the event of union
and the consequent operation of the Newfoundland railway and steamship system by
Canada, it would be the policy of the Government of Canada to continue in their employment
all the employees of the system at the
time of union, with the rights and privileges
with respect to continuity of employment
that are accorded to employees of the
Canadian National Railways.
And to that question the Government of Canada
has sent the following reply:
As provided in clause 17(1) of the
"Proposed Arrangements", if the Canadian
National Railways were to assume responsibility for the operation of the Newfoundland
Railway and its steamship
services, employees of the Newfoundland
January 1948 NATIONAL CONVENTION 1029
Railway system would be offered employment with the Canadian National Railways
with the rights and privileges with respect to
continuity of employment accorded to
employees of the Canadian National Railways.
And then I sent this question:
Whether there exists a federal shipbuilding bounty, and, if so, to give an outline
of
the plan.
To which the Government of Canada sent the
following answer:
At the moment no federal shipbuilding
bounty exists in Canada. The recently—established Canadian Maritime Commission may
be of interest to the National Convention in
connection with shipbuilding. A copy of the
Canadian Maritime Commission Act, 1947,
is attached. Paragraphs 6 and 7 of the Act are
relevant to the question of shipbuilding and
related problems.
Another one:
I give notice that I will on tomorrow ask
His Excellency the Governor in Commission
to ask the Government of Canada if they
would assist the National Convention in its
consideration of the proposals for union by
explaining in some detail the basis of computation of the table in Annex IV showing
"Probable Federal Revenue" from Newfoundland in the event of union.
To that the Government of Canada has sent the
following reply:
Probable Federal Revenues
Personal Income Tax — $3,200,000.
In the absence of detailed statistics relating to the distribution by income classes
of
Newfoundland taxpayers it was necessary to
make a number of assumptions which appeared
to be reasonable as to the relationship
between income distribution in Canada and
income distrubtion in Newfoundland. The
estimates of the probable number of taxpayers in each income group was then multiplied
by the average tax paid by Canadians in
the same income goup in order to arrive at the
total figure of $3,200,000.
It was explained that these figures are
tentative and subject to adjustment. If the
detailed statistics of distribution by income
classes can be provided for a recent year,
estimates of revenue could be made with
greater certainty.
Corporate Income Tax — $7,500,000.
The Canadian rate of corporate income
tax, applying in 1948 in provinces which
enter into tax agreements with the Dominion
government, was applied to the latest estimate of taxable income of companies now
paying taxes to the Newfoundland government. Estimates of taxes on dividends and
interests, rents, banks, and insurance companies, were based on the latest figures
of
Newfoundland collections, corrected to take
account of any differences between Newfoundland and Canadian rates.
Succession Duties —— $320,000.
The total amount of death duties paid in
Newfoundland for the years 1940-46 in each
category and the rates of tax for each
category, were used to determine the total
value of estates taxable during the six-year
period. This figure was divided by the number of years in order to arrive at the average
value of estates becoming taxable each year.
The Canadian composite rate of taxation, as
applicable in 1948, was applied to this
average value and the figure of $320,000 was
the result.
Customs Duties and Import Taxes —
$2,000,000.
The estimate of $2,000,000 additional
customs revenue which would accrue to the
federal government as a result of union is
based primarily on an analysis of Newfoundland trade in the years 1943 to 1945.
Goods now imported from Canada would,
of course, be duty free. In addition, there is
every reason to believe that Canadian goods
will be available at a price level which will
induce a substantial shift in imports from
outside countries to Canada, particularly in
those lines where Canadian goods are now
closely competitive with foreign goods in the
Newfoundland market. Finally, it was necessary to apply Canadian rates (which are
substantially lower) rather than Newfoundland
rates to the remaining foreign trade. On the
basis of the 1943-1944 Newfoundland
figures (the latest complete data available at
the time the estimates were prepared), estimates of potential Canadian customs
1030 NATIONAL CONVENTION January 1948
revenue varied from $2,400,000 with no
diversion to Canada, to $1,000,000 with the
maximum diversion to Canada that could be
anticipated. Weighing all possibilities, it was
concluded that a figure of $2,000,000,
though probably on the high side for the year
1943-44, was a fair estimate, having in mind
the increase in trade since 1943—44,
Since the time the estimates were
prepared, trade has been sustained at a higher
level than had been anticipated, and probably
if the data were to be reworked a figure
somewhat higher than $2,000,000 would
emerge (though this might be offset to some
extent by reduction in duty pursuant to
Geneva Agreement), but such adjustments,
either upwards or downwards, are inevitable
and would apply to all the estimates of both
probable expenditures and probable
revenues.
Liquor and Tobacco Taxes -— $400,000 and
$500,000.
These estimates were based on consumption of liquor and tobacco in Newfoundland,
as indicated by customs returns. Estimates of
present consumption were altered to take into
account trends of consumption indicated by
figures over the past few years, and a probably decline in consumption as a result
of a
return to more normal levels of income and
higher prices due to higher Canadian excise
duties after confederation.
General Sales Tax and Miscellaneous Excise
Taxes - $4,000,000 and $1,500,000.
The above figures are based on revenue in
Canada, reduced in proportion to population
and corrected generally to account for a probable lower per capita national income
than in
the existing provices and probable lower
volume of sales.
Post Office — $750,000.
This figure was supplied by the Post Office Department of the Dominion government
and was compiled on the basis of
available information about the volume of
mail in Newfoundland,
No estimate of revenue from the telegraph
system is included in this figure, nor is any
estimate of expenditures on the telegraph
system made in the additional cost of extending "ordinary" Canadian services to New
foundland. Since on the average these two
items balance out, it was not felt necessary to
include them in either estimate.
Question: For a statement of the changes
that will occur in the tariff and excise figures
as a result of the Geneva agreements and to
apply these changes particularly to the items
listed on pp. 126 to 138 of the Report of the
Ottawa Delegation.
Answer: (Explanation of Excise Tax changes follows list of changes in Customs Tariff)
Canadian tariff concessions which are to
be made pursuant to the General Agreement
on Tariffs and Trade concluded at Geneva on
October 30, 1947, are set forth in Schedule V
of the AGreement. A copy of this Schedule
is attached. Also attached for the information
of the Convention are copies of the following:
The Customs Tariff and Amendments;
Orderin Council, P.C.5270, which brings the
Geneva agreements into force;
Foreign Trade for November 22, 1947, in
which is reprinted a press release on the
Geneva Agreement,
It should also be noted that imports in
general will be temporarily affected by the
emergency measures announced for the conservation of United States dollars. The principal
measures are set forth in the following,
copies of which are attach:
Bill 3 entitled, "An Act respecting Emergency Measures for the Conservation of
Canadian Foreign Exchange Resources";
Votes and Proceedings of the House of Commons, December 18, 1947, (pp. i and ii).
Also attached is a copy of a speech broadcast
by the Minister of Finance on November 17
outlining the measures to be adopted to deal
with Canada's United States dollar problem.
Presumably information regarding changes
in the Newfoundland tariff under the
Geneva Agreement may be obtained from
the Commission of Government.
[There follows a detailed list of changes to be
made to the Canadian tariff as a result of the
GATT agreement, 1947]
It should be noted that the changes which
have been outlined in the excise taxes of
Canada (see Votes and Proceedings of House
of Commons of December 18, referred to
January 1948
NATIONAL CONVENTION
1031
above) are part of the government's plan to
conserve United States dollars and are not the
result of the Geneva agreements. The former
is an emergency measure, designed to overcome temporary difficulties arising from
the
tardiness in recovery of world multilaterial
trading. The latter is a long-run agreement
designed to facilitate multilaterial trade.
[There follows a list of excise tax changes]
In addition taxes at the rate of 25% ad
valorem have been announced as part of the
emergency plan on the following items
which were previously free of tax (see Votes
and Proceedings, December 18, 1947 referred to above)....
[Documents dealing with Canadian trade policy were appended to this answer]
Now these are the replies to some of the questions I have submitted to the Government
of Canada, replies that have just this minute been received. I don't know, sir, whether
you have any information as to when I am likely to receive replies to those other
questions, but those are the replies I have received so far, and I presume that the
secretariat will have them mimeographed or otherwise made available to the members
and for the information of the press and radio, and generally of the public of Newfoundland.
Mr. Chairman On that point, before you go any further I think I would want to consult the Steering
Committee on this matter. Some of the answers take the form of incorporating by way
of reference certain voluminous documents which are appended thereto, and it might
be that it would occasion considerable hardship and considerable loss of time if
the principle of mimeographing all replies indiscriminately were employed... Therefore,
before I am prepared to make any ruling on the point, I think I must refer the matter
to the Steering and Information Committees, so that they may be able to assist me
in determining what is the most satisfactory modus operandi to be employed in fairness
to members in the present circumstances.
Mr. Cashin Mr. Chairman, I am going to take the privilege of announcing some of these ones
I have received here... I am going to give you the whole thing now. I am very sorry
indeed, because it is going to take a lot of time.
I give notice that I will on tomorrow ask the
Honourable the Commissioner for Justice,
that if in the event of Newfoundland becoming a Canadian province it will void and
annul section 45 of the Labrador Mining and
Exploration Act of l938 which states "except
where it is necessary for the Company to
employ technical experts, the Company shall
at all times employ Newfoundland workmen,
provided same shall be available"?
I also ask the Commissioner for Justice
what effect, if any, the entry of Newfoundland into union with Canada will have
upon article II of the agreement made between Canada and Newfoundland on air
transport and dated the 29 July, 1946, which
article provides that wherever possible
priority shall be given to citizens of Newfoundland in the employment of labour at
the
airfield at Goose Bay?
Answer: January 8, 1948.
Dear Sir,
I have to refer to your letter of December
4 addressed to the Secretary for Justice with
which were forwarded copies of notice of
two questions by a member of the National
Convention.
The questions are hypothetical and it is not
usual to give legal opinions upon such questions. I am, however, to convey to you
the
opinion that, subject to any provision in the
formal document which would embody the
exact terms upon which Newfoundland
would become a province of the Dominion of
Canada, clause 45 of the agreement forming
the schedule to the Labrador Mining and
Exploration Company Ltd. Act of 1938,
which sets forth one of terms or conditions
on which a company has acquired property
rights in Newfoundland, would continue
operative and that, subject as aforesaid, the
Air Transport Agreement made between the
Government of Canada and the Government of
Newfoundland on July 29, 1946, would cease
to operate as air transport to and from Newfoundland is a matter which would lie entirely
within the field of Dominion jurisdiction.
Yours faithfully,
W.J. Carew
Secretary.
1032 NATIONAL CONVENTION January 1948
The Secretary of
The National Convention.
Question: I give notice that I will on tomorrow ask His Excellency the Governor in
Commission to ascertain from the United
Kingdom government the latest date on
which the recommendations of this Convention must be submitted to the Secretary of
State for Commonwealth Relations in order
to ensure the holding of a referendum in the
spring of 1948.
In the event of the majority of the voters
in the forthcoming referendum favouring a
form of government other than Commission
of Government, at what time and by what
method will the change to the new form of
government become effective?
Answer: January 8, 1948.
Dear Sir:
I have to refer to the question asked by a
member of the National Convention as to the
latest date on which the recommendations of
the Convention must be submitted to the
Right Honourable the Secretary of State for
Commonwealth Relations in order to ensure
the holding of a referendum in the spring of
1948.
The Right Honourable the Secretary of
State has already informed the Commission
of Government that a period of at least one
month will be required for the consideration
of the recommendations of the Convention.
The Commission of Government have
given consideration to the question of setting
a date for the holding of the national referendum and I have been directed to communicate
their views to the National Convention.
It is hoped that it will be possible to hold
the referendum about the end of the month of
May this year. It is impracticable to hold a
poll during the period from early June to late
September as so many people are away from
their homes and may be disfranchised. Final
arrangements cannot be made for holding the
referendum until the necessary legislation
has been passed and steps in this direction
cannot be taken until a decision has been
made as to the questions to be submitted to
the people.
Members of the Convention familiar with
the difficulties of travel during the spring
months in sections of Newfoundland and in
Labrador will realise that ample time must be
allowed for the distribution of ballot papers
and other materials for all polling booths.
The matters preliminary to the voting will
take place in the following order — delivery
of recommendations by the National Convention, consideration by His Majesty's
Government in the United Kingdom, communication of decision as to forms of government
to be submitted to the people, final draft
and publication of legislation for comment,
passing of legislation, printing of ballots and
other forms, setting up of polling stations and
distribution of election material.
In order to permit sufficient time to complete the necessary arrangements and to ensure
to all qualified electors of
Newfoundland and Labrador the opportunity
of voting, it will be necessary, if the referendum is to be held during the month
of May,
to have the recommendations of the Convention submitted at an early date. The Commission
are unable to give any assurance that the
referendum will be possible this spring if the
recommendations of the Convention are not
received by the end of the present month.
Yours faithfully,
W.J. Carew
Secretary.
The Secretary of
The National Convention.
January 8, 1948.
Dear Sir:
Consideration has been given to the question asked by a member of the National Convention
concerning the time and method by
which a form of government other than Commission of Government, if selected by a
majority of the voters at the referendum,
would become effective.
I am directed to say that the question
relates to matters not included in the duty and
function of the National Convention as set
forth in the legislation constituting that body.
I am to assure the Convention, however, that,
if the people voting at the referendum select
a form of government different from the
present form, the necessary arrangements
will be made to give effect at the earliest
possible date to the decision of the people.
January 1948 NATIONAL CONVENTION 1033
Yours faithfully,
W.J. Carew
Secretary
The Secretary of
The National Convention.
January 3, 1948.
Dear Sir,
I refer to your letter of December 5 to the
Secretary for Finance, enclosing seven questions relating to revenue asked by Major
Cashin in public session of the Convention
and approved by the Information Committee.
I attach, as Enclosure I, the answersto questions 1-6 insofar as they relate to revenue
collected by this government in 1946-7.
Those parts of questions 1-6 which relate
to revenue collections in the event of Newfoundland becoming a province of Canada,
and the whole of question 7, have been
referred to the Canadian government. I attach, as Enclosure II, a copy of the replies
furnished by that government.
Yours faithfully,
W.J. Carew
Secretary.
Capt. W. Gordon Warren, R.A.,
Secretary,
The National Convention.
Enclosure I
Replies to Major Cashin's Questions of 4
December, 1947, relating to Revenues collected by the Government of Newfoundland
in 1946-47.
1. The total taxes collected by the Assessor's
Department for the year 1946-47 were as
follows:
| Personal income tax |
$ 2,798,019 |
| Corporation income tax |
7,157,340 |
| Withholding tax on dividends and
interest paid to non-residents |
596,030 |
| Death duty |
193,880 |
| Other revenue |
47,645 |
| Total net revenue |
$10,792,914 |
2. The total customs duties on goods imported from all countries during 1946-47 was
$18,713,607. Information is not available as
to the amounts collected on imports from
particular countries. A very rough
approximation may be secured by applying
the average rate of duty to the quantity of
goods imported from particular countries,
and on this basis the figures required would be, approximately:
| Duty on imports from Canada |
$10,800,000 |
| " " " " USA |
6,500,000 |
| " " " " UK |
1,000,000 |
| " " " " Other countries |
400,000 |
3. Import duties on liquors imported during 1946-47 were as follows:
| From the United Kingdom |
$ 147,054 |
| " Canada |
292,408 |
| " USA |
101,754 |
| " Other countries |
793,194 |
4. The import duties collected on tobaccos,
cigarettes, and cigars in the year 1946-47
were:
| From USA |
$ 2,343,568 |
| " United Kingdom |
16,563 |
| " Canada |
105,986 |
| " Other countries |
15,348 |
5. The excise taxes collected during the year
1946-47 were as follows:
| On beers |
$ 231,831 |
| " tobaccos |
426,135 |
| " cigarettes |
766,100 |
| " butterine (duty removed
with effect |
304,165 |
from 9.11.46. The total therefore represents
collections for the period 1 April to 8 November, 1946)
6. The total revenue collected by the Department of Posts and Telegraphs in 1946-47
was
$1,594,820.10.
Enclosure II
December 30, 1947.
Answers by the Canadian Government to
parts of certain questions forwarded by His
Excellency the Governor of Newfoundland
on behalf of the National Convention of
Newfoundland by letter under date of
December 9, 1947
Question 1:
What was the total amount of taxes collected from the people of Newfoundland for
the fiscal year 1946-47 under the following
headings:
(a) Personal Income Tax (b) Corporate Income Tax and (c) Death Duties.
In the event of Newfoundland becoming a
Province of Canada, what would be the comparative taxes collected by the federal
1034 NATIONAL CONVENTION January 1948
government under present Canadian taxation
rates under:
(a) Personal income tax (b) corporate income tax and (c) succession duties?
Answer (to second part):
In Annex IV of "Proposed Arrangements
for the Entry of Newfoundland into Confederation", are set out the estimates of additional
federal revenues from personal income
tax, corporate income tax, and succession
duties, that would probably arise as a result
of the inclusion of Newfoundland within
Canada in a full year at the rates of tax
exacted in the 1947 federal budget on the
assumption of a continuation of present
levels of economic activity in Newfoundland.
The amounts are as follows:
| Personal income tax |
$ 3,200,000 |
| Corporate income tax (including
withholding tax) |
7,500,000 |
| Succession duties |
320,000 |
Questions 2, 3 and 4:
Give a statement showing the customs
duties collected on goods imported from the
USA, Great Britain, Canada and other
countries for the year 1946-47. In the event
of union with Canada, what would be the
duties collected on the same quantities of
goods and value imported from the USA,
Great Britain and other countries under the
Canadian tariff as it at present exists, for the
year mentioned above?
Give a statement showing the amount of
taxes collected on liquors imported from
Great Britain, Canada and the USA, as well
as other countries, for the year 1946-47. In
the event of union with Canada, what would
be the duties collected by the federal government of Canada under the Canadian rate
of
duty as now existing?
Give a statement showing the total
amount of taxes collected on tobaccos,
cigarettes and cigars imported from the
United States, Great Britain and Canada and
other countries for the fiscal year 1946-47. In
the event of union with Canada, what would
be the duties collected by the federal government of Canada for similar quantities
under
the Canadian rate of duties as now existing?
Answer (to second part of each question):
One of the basic assumptions underlying
the Canadian estimate of additional federal
revenue to be derived from customs duties as
a result of the inclusion of Newfoundland
Within Canada, is that goods imported into
Newfoundland from Canada would be free of
duty under confederation and that a diversion
of Newfoundland trade would take place
from other countries to Canada as a result of
the disappearance of the tariff barriers between Canada and Newfoundland. This
being the case it would be impossible to
compare figures showing customs duties collected in Newfoundland during the fiscal
year 1946—47, and estimates of duties collected after confederation. Both quantities
and values of goods imported are expected to
change.
An estimate of die addition to federal
revenue from customs duties and import
taxes as a result of the entry of Newfoundland
into confederation are set out in Annex IV of
"Proposed Arrangements for the Entry of
Newfoundland into Confederation." The estimate is as follows: Customs duties and import
taxesz$ 2,000,000
Questions 5 and 7:
What were the total excise taxes collected
by the Department of Customs under the
different headings for the fiscal year 1946-47
and, in the event of union with Canada, what
would be the total amount of similar taxes
collected under the present Canadian excise
rates?
In the event of union with Canada and in
the event of Canada supplying from its own
manufacturing plants all our liquor requirements, what would be the total excise tax
collected by the federal government of
Canada annually?
Answer (to second part of each question):
It would be misleading to compare estimates of increases in collections of
Canadian excise taxes as a result of the inclusion of Newfoundland within Canada
with collections of excise taxes in Newfoundland by the Newfoundland government, since,
in addition to excise taxes, the
federal government levies excise duties on
liquor and tobacco. Estimates of additions to
federal revenue from excise taxes and excise
January 1948 NATIONAL CONVENTION 1035
duties as a result of the entry of Newfoundland into confederation are set out in
Annex IV of "Proposed Arrangements for the
Entry of Newfoundland into Confederation".
They are as follows:
| Liquor taxes |
$ 400,000 |
| Tobacco taxes |
500,000 |
| General sales tax |
4,000,000 |
| Miscellaneous excise taxes
& sources of revenue |
1,500,000 |
Question 6:
What was the total amount of revenue
collected by the Department of Posts and
Telegraphs for the fiscal year 1946-47 and,
in the event of union with Canada, what
would be the amount of revenue collected by
the Canadian federal government under their
present system of posts and telegraph charges?
Answer (to second part):
The estimate of the addition to federal
postal revenue arising out of the inclusion of
Newfoundland within Canada is $750,000.
(See Annex IV., "Proposed Arrangements
for the Entry of Newfoundland into
Confederation").
No estimate of either revenues or expenditures in connection with the telegraph service
are included in the tables setting out
estimated additions to revenues and expenditures of the federal government. Since
they
appear to have roughly balanced over the past
years it was not considered necessary to include them.
Question:
What rates of taxation would be imposed
upon amounts received by beneficiaries
under life insurance policies in the event of
union between Canada and Newfoundland?
Answer:
The present law in Canada relating to
income tax and succession duties provides as
follows:
1. When proceeds of a life insurance policy
are received by the insured in a lump sum,
whether through taking the cash surrender
value, or by reason of maturity of an endowment type of policy, the proceeds are not
subject to income tax.
2. When proceeds of a life insurance policy
are taken by the insured in the form of an
annuity, pension, or settlement option, the
periodic payments shall be liable for income
tax in the same way as payments under any
other annuity contract, that is, only diat portion of the payments which represents
interest is subject to tax, the portion which
represents return of capital not being taxable.
(See Sec. 3(1) (g) Income War Tax Act,
copies of which have been supplied to the
National Convention...)
3. When proceeds of a life insurance policy
go to a beneficiary upon death of the insured
the proceeds of the policy are included in the
total estate of the deceased and are subject to
succession duties as part of the estate.
If the proceeds of the life insurance policy
are payable in the form of an annuity to the
beneficiary the present value of the annuity
at time of death is included in the estate of the
deceased for succession duty purposes. The
annuity payments will be subject to income
tax in the hands of the beneficiary in the same
way as payment under any other annuity
contract.
Question: What is the population of Canada
as at the taking of the last census?
Answer: The population of Canada as of the
taking of the census of 1941 was 11,506,655.
The population of Canada in 1947, as estimated by the Dominion Bureau of Statistics
on the basis of figures relating to natural
increase, immigration, emigration, etc., was
12,582,000.
Question: Has the Dominion of Canada
recently applied to the United States for a
temporary loan? What was the amount applied for, the amount received and under
what terms was the said loan given?
Answer: On November 17, 1947, the Minister of Finance announced that arrangements
had been made with the Export-Import Bank
of the United States for a credit of $300
million (US dollars). Negotiations concerning this credit are still in process.
Question: The annual revenues and expenses of the Canadian National Railways and
its subsidiaries from the year 1931-32 to the
year 1946-47, both years inclusive, showing
the surplus or deficit each year as the case
may be.
The total advances made each year from
1036 NATIONAL CONVENTION January 1948
the year 1931-32 to 1946-47 by the Canadian
treasury to the Canadian National Railways
on account of deficits incurred or in the way
of loans.
What is the total debt of the Canadian
National Railways including the Canadian
National Steamships also the Trans-Canada
Airlines and any other tranSportation
facilities?
Answer:Attached is a table setting out the
revenues and expenses of the Canadian National Railways for the years 1937-1946 inclusive.
Since the Canadian National
Railways was reorganised at the beginning
of this period the statements of revenues and
expenditures before 1937 are not at all comparable with those for the period shown.
Therefore only the latter figures have been
set out.
Also attached are statements showing the
change in the character of liabilities of the
Canadian National Railways. It will be noted
that loans by the Dominion government to
the Canadian National Railways have increased during the period while the amount
of funded debt held by the public has
decreased during the same period. The explanation for this is that during the recent
war
the Dominion government loaned funds to
the Canadian National Railways to repatriate
liabilities held by the public in the United
Kingdom.
The balance sheet in the annual report of
the Canadian National Railways indicates
the assets and liabilities of the railway system. Also attached is a statement setting
out
the deficits of the Canadian National Railways paid by the Dominion government
during the period 1937-46. From this is
deducted the surpluses paid to the Dominion
government by the railway and a statement
of net payments by the Dominion government is shown.
Also attached is a statement setting out
similar figures for Trans-Canada Airlines
during the period 1938-46.
The annual report of Canadian National
Steamships Ltd., contains the consolidated
balance sheet of that company. A copy of the
latest available annual report is attached.
[1]
Question: What is the per capita tax of the
federal government of Canada?
Answer: A very substantial portion of the
Canadian govemment's revenues is derived
from a graduated tax on personal incomes.
Those below the exempt level pay no income
tax and the weight of the tax rises proportionately to income. Succession duties are
likewise related to the size of estates.
Another substantial source of revenue is the
corporation tax which ultimately affects the
incomes of individual shareholders, most of
whom are in the upper income brackets. Substantially less than half of federal revenues
will this year be derived from what might be
termed consumption taxes, such as customs,
excise, sales tax, tobacco and liquor taxes,
etc., and, even in respect of those, the incidence of the taxes varies greatly as
between
individuals because of differences in income
and other circumstances. Moreover, figures
of tax revenues in Canada include collections
in respect of previous years and do not therefore reflect the current burden of the
rates.
Any attempt to calculate the per capita tax
in Canada by dividing the total tax revenue
in any year by the population is therefore
most misleading, particularly if the figure so
derived is compared with a similar figure for
any other country; indeed, such a comparison
might produce manifestly absurd results.
Apart altogether from the reasons . given
above it should be bome in mind that even
though tax rates in country A are lower than
in country B, if country A had a higher national income per capita it might well have
a
higher average tax per head of population
than country B. The only relevant figures
would be those showing taxes paid by individuals in different countries with the same
income in respect of the same year, but this,
of course, is a most difficult statistical computation.
Question: The annual revenues and expenditures of the Dominion of Canada each year
from the year 1931-32 to the year 1946-47,
both years inclusive, showing the surplus or
deficit each year as the case may be.
Answer: In the attached table is set out a
statement of revenues and expenditures of
January 1948 NATIONAL CONVENTION 1037
the Dominion government for the fiscal years
1923-24 to 1946-47, inclusive, and a statement of revenues and expenditures for that
part of the fiscal year 1947—48 ending on
November 30, 1947. Expenditures are
broken down to show ordinary expenditures,
capital expenditures, special expenditures
(such as relief expenditures, deficits of the
Canadian Wheat Board, etc.,) and War,
demobilisation, and reconversion expenditures. It will be noted that special expenditures
during the depression of the 1930's and
war, demobilisation, and reconversion expenditures during the period 1940-46 contributed
largely to the deficits of the
Dominion Government.
[1]
Question: What is the total national debt of
the federal government of Canada? Give a
statement of the national debt, showing each
specific loan, its date of maturity and where
the debt is held.
Give a statement of the various sinking
funds set aside for the redemption of the
national debt of Canada.
Answer: The most recent complete statement of the public debt of the Dominion of
Canada is that given in the budget speech
delivered by the Minister of Finance, the
Honourable D.C. Abbott, on April 29, 1947.
This statement is contained in the appendix
to the budget, pages 56 to 64 of the "Budget
Speech". This statement gives details of individual loans including dates of maturity
as
at the date of the speech. Copies of this publication have been made available to
the National Convention but an additional copy is
attached to which reference may be made.
The most recent estimate of the public
debt is that of October 31, 1947, which shows
the gross debt as being $17,223,229,733 (compared with $17,698,195,740 of March 31,
1947) against which should be set active
assets of $4,759,131,576 leaving a net debt
of$12,464,098,157.
For purposes of comparison the following
table sets forth the position of the United
Kingdom, the United States, and Canada
with regard to gross debt; net debt, population, and net debt per capita:
**
Due to the fact that a large proportion of
the Canadian national debt is held in the form
of bearer bonds, it is impossible to answer the
question relating to where the debt is held.
The Canadian government meets its debts
as they fall due, but, like the US government,
does not follow the practice of holding sinking funds against specific loans.
Question: What amounts of money were
paid by the Canadian government for each of
the railway systems as follows: the Grand
Trunk, the Grand Trunk Pacific and the
Canadian Northern all three of which are now
included in the Canadian National Railways
system? What was the total amount in dispute
and defaulted on by the Canadian government in respect of the Grand Tmnk bonds
held by English financial institutions?
Did the Canadian Treasury guarantee any
loan to the Canadian Pacific Railway prior to
1940 and if so, what was the amount?
Answer: It has been found that the preparation of adequate answers to these questions
would involve a considerable amount of research. As it does not appear that the information
sought in the questions bears any
significant relation to the question of possible
1038 NATIONAL CONVENTION January 1948
federal union of Newfoundland and Canada,
no answers to the questions are being forwarded at this time. However, should the
National Convention feel that answers are
essential and request that answers be
prepared, every possible step will be taken to
obtain the desired information.
Question: Table a certified copy of the act
covering the operations of the Bank of
Canada as amended to date.
Answer: Attached is a copy of the 1938 office consolidation of the Bank of Canada
Act.
Question: Table a statement of the affairs of
the Bank of Canada as at October 31, 1947,
showing the gold reserves, the amount of
paper issued against such reserves.
Answer: Attached are copies of the Monthly
Statement of Assets and Liabilities of the
Bank of Canada, as at October 31, 1947,
showing the value of notes in circulation.
On April 30, 1940, an Order-in-Council
(the Exchange Fund Order) was enacted,
providing for the sale of the Bank's gold
holdings to the Foreign Exchange Control
Board and for temporary suspension of the
Bank's minimum gold reserve requirement,
as referred to in section 26 of the Bank of
Canada Act. Since that time the Foreign Exchange Control Board has been the
repository for the gold reserves formerly held
by the Bank. Under the Foreign Exchange
Control Act of 1946 this provision was extended until 60 days after the commencement
of the first session of Parliament commencing in the year 1949. Copies of the 1946
annual report of the Foreign Exchange Control Board are attached. On pp. 24 and 25
of
that report is set out a statement of the assets
and liabilities of the Board including stocks
of gold and foreign exchange. In the statement to the House of Commons on December
16, 1947 (see answer to question on the
amount due by Canada to the USA as balance
of trade as at October 31, 1947), the Minister
of Finance stated that the Canadian holdings
of gold and US dollars at that time amounted
to approximately $500,000,000.
[1]
Question: Table a statement showing the
amount due by Canada to the USA as balance
of trade as at October 31, 1947.
Answer: Copies of the Monthly Summary of
Foreign Trade of Canada, November 1947,
are attached. This summary contains statements of the Canadian balance of trade with
all countries, with the United Kingdom and
with the United States. Exports of foreign
goods are covered in the statements but
movements of gold are not.
Copies of the official report of the House
of Commons Debates of Tuesday, December
16, 1947 are also attached. On that date the
Minister of Finance made a statement in the
House of Commons (pp.323-340) concerning the Canadian balance of payments with
the United States. This statement may be of
assistance to the National Convention.
Question: The total amount of loans raised
each year from the year 1931-32 to the year
1946-47 both years inclusive, showing where
such loans were raised and what interest is
being paid.
Answer: Since the composition of the
Canadian public debt is constantly changing
— some loans being paid off, some refunded,
and the ownership of some being changed —
only the last statement of the composition of
the debt should be used. The preceding
answer contains this statement.
Questions: (a) Effect of Canadian austerity
programme on Newfoundland.
(b) Newfoundland - United States trade.
(c) Sales of newsprint.
(d) Transactions in US dollars.
(6) Canadian bank notes in Newfoundland.
Answer: (a) The provision of US currency
for travel purposes is being more closely
controlled.
(b) The latest figures available for imports and exports are those for the year ended
31 March, 1947:
| Imports from the USA |
$25,800,800 |
| Exports to the USA |
24,611,500 |
| Excess of imports |
1,189,300 |
(c) Payment for Newfoundland
newsprint is required in US dollars in the case
of exports to non—sterling areas (except
Canada).
(d) (i) Total sales and purchases of US
dollars by authorised dealers in New
January 1948 NATIONAL CONVENTION 1039
foundland are notified periodically to the
Department of Finance.
(ii) The government is not involved in
such transactions and receives no remuneration in respect thereof.
(e) Under the Currency Act (no.ll of
1939) notes of the Bank of Canada issued and
valid under the laws of Canada pass current
and are legal tender to any amount in Newfoundland and its dependencies. The volume
of such notes in circulation in Newfoundland
is not known.
Mr. Smallwood I must rise to a point of order.
Are we now going to debate these replies in
formal sessions, or are we merely to give the
replies without comment? I avoided very
scrupulously one word of comment on these
replies, because I did not think it was proper.
Mr. Chairman Any personal comment on the
replies at this time is entirely improper.
Mr. Cashin Mr. Chairman, as the one who
asked these questions I have the right to draw the
attention of the members to the answer given me
when that answer is evasive and not correct.
Mr. Cashin Will I have to write the comment on
these questions which are not properly answered?
Mr. Chairman I am ruling now that you have
no right to comment on the question, and please
don't do so any further.
Mr. Cashin Well then, Mr. Chairman, I am not
going to read any further questions. I feel that
under the circumstances I have a perfect right,
and I want to point out that the answers are not
correct, and furthermore I want to point out that
there are some answers not given at all.
Mr. Chairman You have no right to comment
on the questions at this time.
Mr. Cashin But I have the right at question time
to draw your attention to the fact that on a certain
date I asked specific questions and they have not
been answered.
Mr. Chairman Not at this stage. You have the
right to deal with any questions you have
received at the proper time.
Mr. Cashin I know that when a question is not
answered, or answered improperly, that I have
the right at this stage to question it, and to point
out to you that question is not properly answered.
Mr. Chairman No, I say that at this time you
have the right to deal with the answers, and to
comment upon them if and when we go into
committee of the whole
[Mr. Cashin alleged that a number of his questions had been improperly answered]
Mr. Chairman I want to make it clear, Major
Cashin, that you will be given any opportunity
you like to discuss these matters fully and at
length, and in ruling that it is improper now, I
hope you will not feel that I am trying to abridge
your rights in any way now. You will be given
the fullest scope to express yourself on these
matters when the proper time arrives, I can assure
you of that.
[Mr. Cashin went on to make further observations on the answers]
Mr. Smallwood Mr. Chairman, as I was saying
last year when I was so rudely interrupted, on the
question of taxation of property raised by Mr.
Hollett, I was saying this: that if we become a
province of Canada there would be people in
Newfoundland who then would have three different governments over them. The people
of St.
John's, for example, would then have three
governments. They would have the government
of St. John's, known as the city council, they
would have the Government of Newfoundland,
known as the provincial government, and they
would have the Government of Canada, known
as the federal government. In Windsor, Wesleyville, Port-aux-Basques, in Grand Bank,
Fortune, Harbour Grace and certain other places the
people under confederation would also have
three governments over them.... In other parts of
Newfoundland, where they have no town council, those people would have only two governments
— the government of the province, and the
Government of Canada.
Now, as to taxing their property — and by a
tax on their property I mean a direct tax on their
1040 NATIONAL CONVENTION January 1948
houses, or their land that their homes stand on, or
their outhouses and barns and buildings, their fish
stores, flakes, and fish stages, their schooners and
boats and fishing gear - that is what I mean by
property. As to a tax on that property, if we
become a province it must be made very, very
clear, in the first place, that the federal government does not collect any taxes
whatsoever on
property. The Government of Canada has no
property tax. It never did, not for the last 81 years
since the Government of Canada began in 1867.
The Government of Canada has never collected
a dollar, or a cent in property taxes from anyone
in any of the nine provinces of Canada, and if
Newfoundland becomes a province then the
Government of Canada will not collect any
property tax from anybody in Newfoundland.
Now that I hope I have made very, very clear...
Now as to the provincial government, that is
the next government you come to, the government of the province. Will they collect
any
property tax in Newfoundland? I, of course, not
being in that government of the future, none of
us being in it, that government of the future still
not being in existence, I cannot and you cannot,
and no man can answer finally for what they will
do and what they will not do, but this we can
answer, that the government of the Province of
Newfoundland is not obliged to collect any
property tax, is not compelled to collect any
property tax, is not forced to collect any property
tax. If they do so it will be of their own free will.
If the government of the Province of Newfoundland decides to collect a tax on one's
homes
or gardens or animals or boats or fishing gear or
schooners, if they decide to collect such taxes it
will be they who will decide it, and who will they
be? They will be the elected members of the
House of Assembly, elected by the people of
Newfoundland. There is not a man sitting in this
chamber today who, if he were a member of the
future House of Assembly of this island would
even dream of agreeing to putting any property
tax on the people of Newfoundland. No one
would dream of it.... Now remember they have
not got to put them on. There is no law which says
they must put on property taxes. The Government
of Canada does not say, and cannot say, "You,
the provincial government of Newfoundland,
must put on property taxes." They have no law
that gives them the right to say it. The Parliament
of Canada cannot say it. If our future government
does it, it is because they decided to do it of their
own free will, and that they are not likely to do.
Someone may say to me, "But what about the
other provinces that are in the union now, there
are nine of them. And these nine provinces collect a tax on the property of the people
of their
provinces." Some do, some do not. I wrote a letter
to the Premier of the Province of Nova Scotia on
28 October last, and I asked the Premier to tell
me what taxes the government of the Province of
Nova Scotia collects on property, and here is the
reply:
Halifax, November 12, 1947.
Dear Sir:
The Honourable the Premier has asked me
to reply to your letter to him of October 28
with reference to the revenue derived by the
provincial government from taxation on land
or from real estate.
In this province, real and personal taxation is the principal source of revenue of
the
municipal governments, but the provincial
government as such does not impose any
direct taxation on land or on real estate with
the exception of a tax imposed by the
province on wild lands and a further tax for
a forest fire protection fund.
The land tax, so called, amounts to one per
cent of the appraised value of the land and is
imposed in respect of all holdings in excess
of 1,000 acres... This tax produces about
$70,000 a year.
With respect to fire tax, so called, the tax
is three-quarters of a cent per acre on all
holdings of 200 acres or more. This tax produces about $25,000 per year.
The total provincial tax on real and personal property is less than $100,000 a year
and the total provincial revenue for the year
ended November 30, 1946, the last complete
year of the province, was $22,500,000, so
that the total direct taxation on land or from
real estate is less than one per cent of the
provincial revenue.
Yours very truly,
C. L. Beazley
Legislative Counsel.
Now that's that tax on wild lands that the Government of Nova Scotia collects...
Now another one:
January 1948 NATIONAL CONVENTION 1041
Premier's Office
Prince Edward Island
November 13, 1947.
Mr. J. R. Smallwood
National Convention
Colonial Building
St. John's, Newfoundland.
Dear Mr. Smallwood,
The following information is forwarded
as requested in your inquiry of October 27:
(a) Provincial revenue from taxation on land and
other real estate
April 1, 1946—March 31, 1947 . . . . $86,495.27
April 1, 1945 — March 31, 1946 . . . . 91,034.46
(b) Rate of such taxation: 40¢ per $100 valuation.
(c) Proportion "property" taxation bears to the
whole provincial revenue
April 1, 1946 — March 31, 1947 . . . . 2.1%
April 1, 1945 —— March 31, 1946. . . . 3%
Any further information that you require
with reference to this province will be
promptly forwarded upon request.
Very truly yours,
J. Walter Jones,
Premier.
PS After current fiscal year, land and road
taxes will be removed if government reelected.
J.W.J.
And since that his government has been reelected, and the last little bit of land
taxation in
Prince Edward Island will be gone for the next
two or three years.
I also wrote the Premier of New Brunswick,
and he said he was having the information
prepared for me, but so far it has not been sent.
Now let's look at Nova Scotia, with a population
of 620,000, just about double the population of
Newfoundland, and what do they collect? The
Government of Nova Scotia collects less than
$100,000 out of a total of $22,500,000, less than
half a cent out of every dollar of taxes they collect
in Nova Scotia. So if we become a province, and
we have our provincial government, number one,
no property tax from the Government of Canada.
Number two, no property tax from the Government of Newfoundland, unless the Government
of Newfoundland itself on its own free will
should want to put on a property tax, and if they
should decide to do it, which is very unlikely, as
I can't imagine any government getting elected
in Newfoundland if they put on a property tax,
unless it would be one on the absentee landlords.
If I had to do it, it would go right on top of that
land that's owned by absentee landlords who live
in England, or the States, or Canada. I certainly
would put a tax on that, but except for that I can't
imagine a Newfoundland government for one
moment even considering putting a tax on
property in this island, but if they did, and if they
followed the example of Nova Scotia, what
would they collect? $50,000 a year, if they followed Nova Scotia. We, with half the
population
of Nova Scotia, would collect $50,000 a year.
That is the great argument that the anti-confederates have up their sleeve to bamboozle
the
people of this country.
Mr. Bailey I rise to a point of order, Mr. Chairman. While Mr. Smallwood is on this tax question
will he please tell us how the people of Nova
Scotia pay $9 million in taxes on this?
Mr. Chairman That is not a point of order.
Mr. Fudge I rise to a point of order. Why is it
that he himself, who is the recognised Chairman,
has given the ruling?
Mr. Chairman My position in the matter is that
Mr. Bailey had a question for Mr. Smallwood. I
had no means of compelling Mr. Smallwood to
answer the question, but I do feel that if he is
piloting this measure that he should bend over
backwards in his efforts to answer all questions
addressed to him, which after all is the responsibility he assumed when he undertook
to pilot
this bill through the House.
Mr. Smallwood Yes. Well sir, at the moment I
am addressing the House on an important matter,
and one of very deep and very intense interest to
the people of Newfoundland, as I know from a
recent visit across the island. I am addressing
myself to a point about which there has been a
considerable amount of misunderstanding, and
even to this moment there is a considerable
amount of misunderstanding, and this is the
point: if we go into confederation and become a
province, and have our own House of Assembly,
will that provincial government he forced to put
a property tax on the Newfoundland people? And
the answer is, "No, it will not", and furthermore,
if anyone asks is it likely that they will do it even
if they are not forced to do it, the answer is, "No,
it is not likely. Not any legislature elected by the
1042 NATIONAL CONVENTION January 1948
people of Newfoundland. Highly unlikely." No
people in Newfoundland would elect members
who would turn around and put a tax on their
property....
As a matter of fact Newfoundlanders already
pay a property tax. Who pays it? The people of
St. John's pay it. They pay it now. They have
been paying it since the 1880s — for 60 years the
people of St. John's have been paying a tax on
their property, on their homes and buildings and
land, on their shops, on their stock of trade in the
shops, the people of St. John's have been paying
that property tax for 60 years. Sometimes it has
happened that the man could not pay that tax.
That has happened in St. John's, and it has happened that the city council has taken
his house
from him and sold it to pay his taxes.... Mr.
Hollett, in the speech to which I am replying, read
out an act of the legislature of Nova Scotia, an act
which authorises city councils, or town councils
in Nova Scotia to collect certain taxes. He did not
read out the act of the legislature of Newfoundland, which authorises the city council
in
Newfoundland to collect property taxes. He did
not read that out. He had a right not to read it out,
a perfect right, but I have a right to point out that
there is such an act in Newfoundland, passed in
this very chamber, authorising — you will have
lots of occasion to applaud before I am through,
and Mr. Fudge, who I believe is supporting confederation, will have lots of time to
applaud
before I am through.
Mr. Fudge Whatever I am or am not is none of
your business. I am as good a man as you are.
Mr. Chairman Take your seat please, Mr.
Fudge. Order, please. Order. You have absolutely no right Mr. Smallwood to refer to
Mr. Fudge
in the way that you did, and he is not put in the
position of proving his honesty.
Mr. Chairman Before you go any further I must
ask you to withdraw that statement.
Mr. Smallwood I would ask you to ask him to
withdraw his handclap.
Mr. Chairman We will take a recess for 15
minutes. Will the members of the Steering Committee and Information Committee meet
me
please?
[Short recess]
Mr. Smallwood Mr. Chairman, when we rose
for the recess I was addressing myself to the
question of property taxes — who taxes what,
and I had got as far as pointing out that if Newfoundland becomes a province, the
Government
of Canada will not collect any property taxes on
the people of Newfoundland.... And I had got as
far also as pointing out that the provincial government is not likely to impose a
property tax. What
we have left therefore are the town councils and
the city councils. We have only one city council,
that is St. John's, but we have at the present time
20 town councils, and we have ten others that are
in the process of being formed. That would give
us 30, and I dare say, in the course of time, we
will have other town councils, because it is the
policy of the government, and has been now for
several years, to encourage the people of the
larger towns and settlements in Newfoundland to
form up their own town councils, and these councils are doing such good work that
we hope to
have more of them in the near future. My friend
Mr. Vincent there is a great enthusiast on this
matter, and my friend behind me, Mr. Miller, is
the chairman of the town council in the Placentia
area, and many people are growing very enthusiastic about these town councils, because
a
town council is formed in a community to do
things for that community which no one else will
do. The Government of Newfoundland can hardly be expected to collect the garbage from
the
homes of the people in St. John's. The people of
St. John's would scarcely expect the Government
of Newfoundland to do that, to use money that
the government collects from all Newfoundland
to collect the garbage from their doors. The
people of St. John's could not expect the Government of Newfoundland to give them
concrete
sidewalks and drains and curbs and light their
streets for them, and to provide parks and other
conveniences and comforts of modem civilisation. The people of St. John's could not
expect
the government to do that, and they don't expect
them to do it, and the government don't do it,
these things are done by the city council; and in
January 1948 NATIONAL CONVENTION 1043
the places outside St. John's if the people want
these conveniences they will have to pay for them
too. I see Mr. Northcott looking over in this
direction.
In Lewisporte the people don't expect the
Government of Newfoundland to use taxes that
they collect from the whole island and Labrador
to provide special conveniences or improvements in Lewisporte, so what the people
of
Lewisporte did was form their own town council,
and so have the people of 20 other places. Now
where there is a town council, the town council
does these things for their people, but where do
they get the money? Well, we know that the
government of the country, to encourage people
to form the town councils, to encourage them, the
government has been helping these town councils
financially, giving them money and lending them
money, but in all these towns where they have
town councils they have the property tax.... As
you study the financial statements of the various
town councils what do you find? You find that
already, here in our own little Newfoundland, we
have the property tax.... Now these town councils
collect that property tax, so much per head and so
much per family, for what? To give it to the
Newfoundland government? No. To spend it in
their own community, and for conveniences and
improvements and comforts that they can't very
well expect anyone else to give them. Now if we
had confederation any community in Newfoundland that wishes to form a town council
is
permitted to do it. That is the way it is now. We
have not got confederation. Today if the people
of any community decide to have a town council
they go right ahead and have it. Of course in
having it they have got to follow the law of the
land. You can't form a town council like that!
[snapping fingers] Mr. Quinton, who is now the
Commissioner for Public Health and Welfare, for
three or four years was what they called Local
Government Officer, and the government passed
a law, and these town councils are formed under
that law, and that law tells them what they can do
and what they can't do. Any community in Newfoundland can go right ahead and form
that town
council. That is the way it is now without confederation, and that's how it will be
with confederation.... They have the right to form their
councils and they have the right not to form the
councils. If the people in any community in New
foundland today do not want a town council then
they don't have a town council.... That is how it
would be under responsible government, and
that's how it would be under confederation. The
people of a community can decide to have a town
council if they want it, and if they are willing to
follow the law, and they can decide not to have a
town council if they don't want it.
Mr. Higgins Mr. Chairman, can we have a little
less repetition in this matter?
Mr. Chairman Well, I am afraid, Mr. Higgins,
I must hold that the point is well taken. I have to
remind you, Mr. Smallwood, that when I gave
you the floor I pointed out that while it was true
Ihad no right to impose a time limit on a speaker,
or any authority to decide the number of times he
could speak, I did however point out, and I again
reiterate, that in view of the fact that you have
addressed yourself on this matter a number of
times it is my right to intervene if you indulge in
unnecessary or tedious repetition, and I asked that
your reply to Mr. Hollett should be as brief as
possible, and your remarks should be confined to
matters of a novel nature raised by Mr. Hollett,
and I will have to ask you to be as brief as possible
and not to indulge in anything which may be
fairly regarded as tedious repetition, because if
my attention is drawn to it I will have to rule you
out of order. Therefore in your own interest I will
ask you to be as brief as possible, and not be
unduly repeating yourself, but to confine yourself
as nearly as possible to matters of a novel nature
raised by Mr. Hollett.
Mr. Smallwood I have heard your comments,
and I will of course, as always, bow to your
ruling. It may be that there are some who would
not want our people to know these things that I
am talking about, and there may in fact, sir, be
some who do not want the people to know the
complete and simple truth.
Mr. Chairman If you don't mind, Mr.
Smallwood, I must ask you to refrain from
plumbing the psychological depths of people's
minds, and confine your remarks to the matter in
hand. You have been indulging in tedious repetition and on that point I will have
to hold that you
have been out of order. I must therefore ask you
not to be repeating the same statement two or
three times when I am sure it would be just as
effective if it were said only once.
Mr. Smallwood You will either have to destroy
1044 NATIONAL CONVENTION January 1948
me and mould me all over again, or sit me down.
My style of speaking is to say a thing once and
then repeat in a different way, and then say it a
third time in a rather different way again, and I
think I have succeeded in making myself understood to the people of Newfoundland,
to whom,
and not this Convention, I am talking.
Mr. Chairman I beg your pardon Mr.
Smallwood, while you are speaking in this House
you are addressing the Chair. I am not concerned
at all with how people listen to the speeches all
over Newfoundland. There has been too much of
that altogether. You are talking to the Chair in the
first place, and I am not going to be concerned by
the probable reaction of the public of Newfoundland to any ruling I may be called
upon to
make....
In fairness to you, Mr. Smallwood, I want to
say this: that if you persist in repeating, then it
may very well be that you are running the risk
that I will have to hold that you are indulging in
tedious repetition and are therefore out of order.
As to the alternative of destroying you or any
other individual here, I don't think I need make
any comment on that. But if you persist as you
have been going, I will have to ask you to avoid
as nearly as possible, if you will, repeatedly stating the same thing, even though
you do say it in
a different form.
Mr. Smallwood May I ask, in connection with
the words "tedious repetition", does that refer to
repeating a certain fact over and over and then
making the statement again in different ways?
Does it mean repeating the same topic over and
over, or does it refer to describing that topic over
and over?
Mr. Chairman If the statements made by you
are substantially the same, whether the verbiage
employed, or phraseology employed may be
slightly different in each case or not, if you are
repeating yourself to the point where it is becoming tedious to the Chair, then, if
any member
raises that point of order, I will have to rule that
this tedious repetition is out of order.
Mr. Smallwood I take it that I will have the
same right to speak on any matter as any other
member of the House?
Mr. Chairman I don't know if you realise the
implications contained in your remark. I am not
making one rule for you and another rule for other
members. I am endeavouring to be perfectly fair
with everyone alike, however far short I may fall
of my objective. As far as I am concerned, Mr.
Smallwood, you need not single yourself out at
all. To the best of my ability I intend to be
absolutely impartial and fair to everyone.
Mr. Smallwood I was not imputing, what I was
inquiring was this: who decides whether a debate
has become tedious, is it the Chairman, or any
member who wishes to object?
Mr. Chairman In the final analysis I have to
decide whether it is tedious repetition or not. Mr.
Higgins has taken the objection, and I think the
objection is well taken.
Mr. Smallwood In my first reply to Mr. Hollett
I was prevented from continuing because at that
time we lacked a quorum.
Mr. Chairman It is not necessary to bring that
up again, Mr. Smallwood.
Mr. Smallwood On the last day we met Mr.
Hollett read out certain items. Is there anything
improper in that, sir?
Mr. Smallwood The question is not as to what
good is to be derived or not.
Mr. Chairman Let us get down to the case and
forget what has happened previously. What went
on in 1947 is water under the dam. It is over and
done with, and let us not refer to it again. A
remark of that kind is only calculated to reflect
on everybody in this chamber and the Chair included. Therefore I must ask you now,
please,
and this is the second time you have done it, don't
refer again to what happened here on the 12th day
of December.
Mr. Smallwood Is that an order, sir? Is that a
ruling? Can't I mention that?
Mr. Chairman I am ruling that the events, and
I do rule here now, that the events which
transpired on Friday, December 12th last have
absolutely no relevancy to this debate and are not
to be mentioned again.
Mr. Higgins We are trying to keep a quorum
here now, sir. That is why I intervened, and that
is the only reason you had no quorum on the 12th.
Mr. Smallwood May I object to that? I had been
speaking ten or 12 minutes on the 12th when I
had to stop because there was no quorum.
Mr. Chairman Let us please not concern ourselves in retrospect with these matters. Let us
kindly get on, in the name of honesty and decency, with the job we are doing. Let
us forget what
January 1948 NATIONAL CONVENTION 1045
is gone and get on with the business before the
Chair.
Mr. Smallwood I hope we will all observe that.
Personally I would have been through by now if
Mr. Higgins had not interrupted. Mr. Hollett, on
Friday the 12 of December, quoted to the House
an act of the Province of Nova Scotia authorising
town councils and other such municipal bodies to
collect taxes in their respective areas, and also
setting forth the penalties which could be imposed by those town councils upon the
residents
in their areas if they refused or failed to pay their
taxes. First let me ask you: this is a copy of the
Newfoundland Gazette, and in it they have published the Town of Curling Act. Am I proper in
quoting from it?
Mr. Smallwood This refers to the town council
of Curling. I assume it is similar to the other acts
that apply to all town councils.
[Mr. Smallwood read the act]
Mr. Smallwood So there is nothing extraordinary, there is nothing unusual, when one of the
provinces of Canada passes a law giving
authority to the town councils in that province to
collect certain taxes. In doing that, if they set
penalties that is quite usual, and that is exactly
what has been done in respect of town councils
and city councils here in Newfoundland. There is
nothing unusual about it. If you are going to give
the town council the authority to collect certain
taxes, you must also set up the right to punish the
man who refuses to carry out the law and pay his
just taxes. Now, what does it amount to? If Newfoundland becomes a province would
the people
have to pay taxes on their homes and boats and
fishing gear, on their livestock and land, gardens
and farms, generally on their property? Will they
have to pay those taxes? And the answer is, "No,
they will not have to pay those taxes".... They will
not pay any taxes on property to the government
of the province, and they will not pay any to the
federal government of Canada. They will pay
property taxes only if they have a town council,
and as to whether they will have a town council
or not is their own business. They decide that for
themselves without any coercion from anyone
else, whether it be the Government of Newfoundland or the Government of Canada, should
we become a province.
That is all I want to say at this time about
property taxes. I hope the other members will
debate the matter. I would not like to see the
matter hidden under a bushel. I would like to see
it thrashed out. I would like the people of Newfoundland to know what the facts are
— the truth,
the whole truth, and nothing but the truth....
Now sir, I turn to another aspect of the speech
of Mr. Hollett on Friday the 12th of December....
Mr. Hollett examined the estimates, or guesses if
you like, that I brought in as to what revenue or
expenditure the provincial government of Newfoundland will have to make, and what
revenue
it will have to get to balance its books — a series
of figures designed to show whether or not the
provincial government of Newfoundland could
pay its way — whether Newfoundland, as a
province, could pay its way officially. Mr. Hollett
thought that we would need $15,138,000 a year
for the first four years, and $15,638,000 a year for
the next four years, and that on to that I should
add something or other, I think it was $4 million,
to bring the total up to around $19 million. It was
Mr. Hollett's contention that the provincial
government of Newfoundland would need $19
million more or less to pay its way, and as I had
shown a revenue to go against the expenditure
from all sources of only $14 million that therefore
we would be about $6-7 million short.
Mr. Smallwood Yes, $5 million short to balance
our budget. We would fail by $5 million. Mr.
Hickman put the figure I believe at $17 million,
but Mr. Hollett upped it a bit and broughtit to $19
million. I want to examine it, because that is a
matter of prime importance. I said when I introduced the provincial budget so-called,
that if the
provincial government of Newfoundland could
not pay its way and balance its budget without
cutting down on the public services, and without
driving up taxation, then that alone was enough
to condemn confederation. I said that at the outset, and I repeat it now. Now we have
a yardstick
to go by, and that is the Economic Report. The
Economic Report gave us an estimate of $30
million revenue per year, and an expenditure of
$25 million per year. The $25 million was to
cover all ordinary expenditures of the Government of Newfoundland — all ordinary expenditures.
It did not include capital, or reconstruction,
or special, just ordinary expenditure, and that
1046 NATIONAL CONVENTION January 1948
would cover it all. That is if we were not in
confederation, if the Newfoundland government
had to provide all the ordinary services that Newfoundland needed. That figure is
a bit more than
Mr. Wild, the Commissioner for Finance, estimated when he appeared before us in a
private
session. I think he estimated something like $23
million, but it is a bit less than the figure estimated by Mr. James, the present
Commissioner.
I think Mr. James has it around $26 million, but
what the Economic Report has done is to take the
$23 million estimated by Mr. Wild and add a
couple of million to it.
I am going to accept that $25 million, at least
for the purpose of argument. If we can accept that
as the amount required under Commission of
Government or responsible government to carry
on this country, to cover all ordinary expenditures and you want to get an idea of
what it is
going to cost the government of the Province of
Newfoundland, if we went into confederation,
the thing to do is this: take that $25 million, and
take off from it those items of expense which, if
we became a province, the provincial government would not have to pay. That is reasonable....
Under confederation the provincial government
has far fewer things to do.
The provincial government would not have a
railway to pay any losses on. The provincial
government would not have any lighthouses, or
public wharves, or breakwaters or dredging, or
what we call marine works.... The provincial
government of Newfoundland would not have to
pay any pensions to ex-servicemen of any war....
The provincial government would not have to
pay any deficit on the Postal Telegraph Department, and I remind you that between
1920 and
1940, that department of ours dropped on an
average of half a million dollars a year loss. The
provincial government of Newfoundland would
not have to pay the expenses of the Fishery
Department — fishery inspectors, bait depots,
and collection and distribution of bait, and
generally what we call fishery matters, because
these would be done by the federal government,
and also the provincial government would not
have to pay any interest on that part of our public
debt which is known as the 3% guaranteed stock
— $60 million odd — because the Government
of Canada would take over that public debt, and
therefore the provincial government would not
have to pay the interest and sinking fund, if there
was any sinking fund on it. Now all these things,
and a number of other things — I won't delay the
house to describe them all, or even to name them
all, because I am trying to save time. I want to be
out of this by the end of January, right out of it
altogether, so I won't take the time to list over
these item by item.
Mr. Chairman If you don't mind Mr. Smallwood, could I take that as an undertaking?
Mr. Smallwood I am not a member of any party
or organisation which would have power to
guarantee any such thing, but I am most eager,
having just come back from a trip to many
thousands of people in the last two weeks, to get
this Convention closed up by the end of January,
but I can't guarantee that. I have been here for
two years almost, and I would not guarantee
anything.
Mr. Hollett May I rise to a point of order? Can't
we get on with that business?
Mr. Chairman Mr. Smallwood, I think you had
better confine yourself to the matter in hand.
Mr. Smallwood I was going straight on and was
interrupted, or I interrupted myself.
Mr. Chairman Well, you are meandering all
over the place. Never mind anything beyond the
point in hand. Let us get down to brass tacks.
Mr. Chairman You are interrupted because
you don't get down to the root of the matter.
Mr. Smallwood I want the people to know me
truth, so that they can decide...
Mr. Chairman I want to make clear again the
fact that the people are going to decide nothing.
The people will decide next spring what is going
to be done, but if you don't mind while I am in
the Chair all members will be subject to the rules
governing debate.
Mr. Chairman And any ruling I make will not
be calculated to placate the public or any section
of the public.
Mr. Smallwood To get back to this estimate of
ordinary expenditure brought in by the Economic
Committee. I could take off from that item by
January 1948 NATIONAL CONVENTION 1047
item what would not be in it if we become a
province, and the total is $11 million. Now that
$11 million off $25 million, and what is left?
What is left is what the provincial government
would have to find and the amount, if my arithmetic is right, is $14 million. On the
basis of the
estimate of the Economic Committee, which I did
not make and which is not my estimate, if we take
off from that those expenditures and expenses
which the Government of Newfoundland would
not have to pay if we became a province, what
would be left for the provincial government to
find would be $14 million, not $17 million as Mr.
Hickman suggested, not $19 million as Mr. Hollett suggested, not even the $15 million
that I
brought in myself.
Mr. Smallwood I will walk out. I will resign
myself. I will hold myself in sir, but...
Mr. Smallwood I don't want to turn on Mr.
Higgins, but ifI do someone will be hurt, and I
won't be the one that will be hurt.
Mr. Chairman Mr. Smallwood, you are not
going to turn on any other member, nor is any
other member going to turn because he wants to.
I quite agree that if the figure is $14 million there
is no occasion for you to go on and say $19
million and $17 million and $15 million...
Mr. Smallwood Sir, I am most eager to cooperate with you. I am equally eager to stand on
my rights in this Convention, and I do represent
a section of this country, but I bow to you as I
have always done.
Mr. Chairman I quite agree, but I still say that
if you are going to avoid the charge of tedious
repetition, in quoting a certain figure it is not four
or five or ten other figures. If it is something come
right out positively and say what it is.
Mr. Smallwood But as I was replying to a
speech made by Mr. Hollett, and as Mr. Hollett
in that speech put it at $19 million, am I not
entitled to point out that it is $14 million and not
the $19 million that Mr. Hollett said — that and
nothing else? That is exactly what I was doing.
I am glad now, sir. $14 million is what would
take for the provincial government of Newfoundland to carry on. Not the $15 million
that I
formerly estimated, not the $17 million that Mr.
Hickman estimated, and not the $19 million that
Mr. Hollett estimated, but $14 million.
Mr. Smallwood Well, sir, I was under the impression that I had. Possibly my memory on that
is defective. We have to find it in one way and
another, some from the people of Newfoundland
in taxation, some as I have shown in other ways
from other sources. Incidentally, it has been
pointed out to me by Mr. Hollett that I have taken
the $28 million cash surplus that we have and put
it on deposit with the Government of Canada at
2.63% interest, and I have taken the interest for
the first four years as $600,000 a year, and then
for the second four years I have averaged it as
$299,000, roughly $300,000 a year. I admit on
the objection from Mr. Hollett that I won't have
$28 million to put on deposit with the Government of Canada. I will go a little further,
and say
that I will have $38 million, which Major Cashin
has told us is the surplus in this country. I will
now take the 2.63% interest on that.
Now sir, it is 5.45 pm, and you have asked me
kindly to rise the House at this time. If we are
meeting tonight...
Mr. Chairman I don't think it is possible to
continue the debate tonight, and perhaps not for
the rest of the week, and I don't think we will be
able to come this evening.
Mr. Smallwood You mean that we can't meet
for the rest of the week in the night, but we can
in the day?
Mr. Smallwood In that case I move that the
committee rise and report progress and ask leave
to sit again tomorrow.
[The committee rose and reported progress. The remaining orders of the day were deferred,
and the Convention adjourned]
