House of Commons, 4 May 1905, Canadian Confederation with Alberta and Saskatchewan

5425 May 4, 1905


THURSDAY, May 4, 1905.

The SPEAKER took the Chair at Three o'clock.



Mr. LEFURGEY‚ÄĒby Mr. A. Martin‚ÄĒ asked:
1. What work does the government contemplate with regard to the further carrying on of the herring industry experiments at Canso, Nova Scotia ?
2. Has the work thus far been satisfactory, and is it the intention to have the fishermen of that locality and elsewhere instructed in this industry ?
3. Is there a Mr. Cowie employed by the government in connection with this industry ?
4. If so, at what salary, and how much has he received up to date ?
Hon. RAYMOND PREFONTAINE (Minister of Marine and Fisheries) :
1. Continuing the experiments of year.
2. Yes.
3. Yes.
4. Five dollars per day whilst engaged in connection with the work. Mr. Cowie has received, up to date, $1,585.
¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† TRADING STAMPS. ¬† Mr. STOCKTON‚ÄĒby Mr. Taylor‚ÄĒasked:
1. Is it the intention of the government to introduce legislation during the [present session, with a view of suppressing what are known as trading stamps (timbres de commerce) ?
2. If so, when will the Bill be introduced ?
Rt. Hon. Sir WILFRID LAURIER (Prime Minister). The question is under consideration. An answer will be given at an early day.
Mr. BENNETT asked:
1. How many dredges, dredging scows, and dredging plants were imported into Canada in the years 1902, 1903 and 1904 ?
2. By whom, respectively, were such dredges and dredging scows imported ?
3. By what names, numbers or other method were such dredges and dredging scows described in the entry ?
4. What was the valuation placed on each dredge and dredging outfit ?
5. What was the amount of duty paid on each dredge or dredging scow ?
Hon. WILLIAM PATERSON (Minister of Customs). Dredges, dredging scows and dredging plants imported into Canada have not been classified in the Trade and Navigation tables under these headings. Dredges, dredging scows and dredging plant are not mentioned under these terms in the customs tariff, and when entered for duty are classi 5425 5426 fied as 'manufacturers of wood,' 'machinery,' &c., according to material. The extent of the importations in 1902, 1903 and 1904 could not be ascertained without a lengthy examination of entries at various ports covering these years. It is not usual to disclose the particulars of individual entries made at the custom-house.
Mr. BOYCE asked:
1. What was the total amount expended by the government upon purchase, construction and extension of the government dock at Sault Ste. Marie, and to whom were such amounts paid, respectively ?
2. How was the contract for construction of extension (1904) let ?
3. It by tender, were there more tenders than one, and was the lowest tender accepted ?
4. Was the contract let to the firm or person whose tender was accepted ?
5. Was the work carried on and completed by the person or firm to whom it was let ? It not, why not ?
6. What was the contract price, and did it include timber ?
7. Who was the contractor, and who supplied the timber ?
8. Were any extras allowed ? If so, what was the amount of same, and of what did such consist ?
9. Was any dredging included in said contract or incident thereto ? It so, what amount, at what rates; and was such dredging performed according to plan and specifications ?
10. Under whose immediate local supervision was the work performed ?
11. What salary or remuneration was paid for such superintendence ?
12. During construction of extension of dock was a wharfinger employed? If so, who was he, and at what rate was he paid ?
13. Does the government maintain a cartage system in connection with the dock ?
14. Has the government granted exclusive privileges to any person or corporation of draying and carting freight delivered on the dock ? If so, to whom and upon what terms, and when was it granted ?
15. What applications, if any, have been made to the government by steamship lines or other persons or companies for privileges of (a) landing and storing coal on said dock, (b) landing passengers and freight ? If so, upon what grounds were applications based for storing of coal on said dock ?
16. Have any such applications been granted ? If so, upon what ground, to whom, on what date, and upon what terms ?
17. What rates of dockage are charged on freight landed at the dock ?
18. Is there a dockage tariff now in existence? It so, when was it framed ?
19. What were the running expenses and revenue of dock during years 1900, 1901, 1902, 1903 and 1904 ?
20. Has any application been made to the government for construction of a warehouse or other building on said dock ? If so, when, and by whom ?
21. Is it the intention of the government to erect any such warehouse, offices or other buildings thereon ? It so, has any contract for such been let, to whom and upon what terms?
Hon. RAYMOND PREFONTAINE (Min-  ister of Marine and Fisheries):
1 Total expenditure to date, $49,415.32. Paid W. H. Plummer, purchase price, $7,000; Joseph Battle, on contract, $41,500; advertising, &c., re  contract, $441.32 ; G. A. Boyd, inspector, $474 ; expenditure incurred from date of taking possession of wharf, in 1888, and the letting of contract for extension in 1904, $9,894.78.
2. Contract given by public tenders.
3. Twelve tenders received ; contract given to lowest tenderer.
4. Yes.
5. Yes.
6. $65,000; yes.
7. Joseph Battle; contractor supplied timber.
8. Yes; $1,200; quarter oak walling not provided for in contract.
9. No.
10. Under supervision of Geo. A. Boyd.
11. $3 per day.
12. The wharfinger appointed by the Department of Marine and Fisheries was retained in office. George A. Boyd. He was paid at the rate of $142 per month during the season of navigation, to be paid out of the fees collected by him. The Wharfinger pays for all necessary assistance.
13. No, so far as the Marine Department is concerned.
14. No, so far as the Marine Department is concerned.
15. None, so far as the Marine Department is concerned.
16. No, so far as the Marine Department is concerned.
17. The rates fixed by the tariff of tolls contained in the regulations for the government of wharfs, piers, &c., under the control of the Department of Marine and Fisheries.
18. Yes; 1892.
Collections. Expense.
1899-1900 .. .. $1.612 98 $1,017 85
1900-1901 .. .. 2,093 18 1,253 75
1901-1902 .. .. 4,163 75 3,498 71
1902-1903 .. .. 3,126 21 1,759 98
1904 .. .. 1,321 30 1,211 68
20. Yes, by town council, on the 15th February, 1905.
21. Matter under consideration.


Mr. BENNETT asked:
1. Who is the postmaster at Waverly, Ontario ?
2. Does he personally conduct the office ?
3. Does he reside at the post office premises ? If not, how far therefrom ?
Hon. Sir WILLIAM MULOCK (Postmaster General) :
1. Mr. John Anderson.
2 and 3. The department has no information as to whether the postmaster personally conducts the office or resides at the post office premises or elsewhere.
5427 5428


Mr. BENNETT asked:
Who are the tenants of the government dock premises and storehouses thereon at Midland ? What rent is annually paid therefor ?
Hon. RAYMOND PREFONTAINE (Minister of Marine and Fisheries). The storehouses at Midland are occupied jointly by Playfair, Preston & Company and the Wharfinger. The rent is $100 per year, fixed in accordance with value thereof, as estimated   by resident engineer.

                     REPORTS PRESENTED.

Report of the Board of Civil Service Examiners for the year ending December 31st, 1904. Sir Wilfrid Laurier.
Report of the Secretary of State for the year ending December 31st, 1904.‚ÄĒSir Wilfrid Laurier.


Sir WILFRID LAURIER. Mr. Speaker, some few days ago my hon. friend from Leeds (Mr. Taylor) asked me a question with reference to a rumour to the effect that all the shipping space available in the harbour of Montreal for the shipping of cattle had been obtained by the Armours, of Chicago. The inquiry I made leads me to the conclusion that there is no foundationfor the rumour. I have received information to this effect, dated 28th of April. Regarding the cattle situation, there is no space let to American shippers, either on the Canadian Pacific Railway line, the Allan line. the Dominion line, the Donaldson line or the Manchester line. For the month of May there is available at the present time 9.000 spaces, and probably 100,000 for the season.
Mr. TAYLOR. I may say in reply to the Prime Minister that he deals altogether with the shipping of cattle. I spoke of freight space.
Sir WILFRID LAURIER. I understood the hon. gentleman referred to the space for cattle alone.
Mr. TAYLOR: No; freight space.


Mr. GILBERT H. McINTYRE (South Perth). Mr. Speaker, I would like to take up the time of the House for a moment on a question of privilege, to deal in the matter relating to myself. The question is as to the accuracy of the report of the proceedings of this House. I find in the Votes and Proceedings that the motion for the second reading of the Autonomy Bill last night was declared agreed to on the same division reversed as the amendment. As I heard the decision of the chair here in my 5429 May 4, 1905 ¬† ¬† ¬† place‚ÄĒand this chamber is not an easy one to hear in‚ÄĒI thought that the decision was that the main motion was carried on division. It is well known in that House that I expressed myself in opposition to the main motion. There was no call for the yeas and nays, nor did I feel especially called on, or desirous indeed of opposing the government though I did call 'lost' when the second reading was put. But, if as a matter of fact, the form in which the question was decided was that the main motion was agreed to on the same division reversed, it unfortunately places me in the position of apparently speaking one way and voting the other, which was not my intention nor did I do so in fact. It may be that, some time before I get through with my political life, I will be guilty of doing that. If I have apparently done so at this time, it was inadvertently.
Mr. SPROULE. The hon. gentleman succeeded admirably in doing it this time.
Mr. A. B. INGRAM. In the case of the vote taken last night, when the main motion was put to the House, according to the ' Hansard' to-day it says, 'Carried,' without saying whether it was carried unanimously. It leaves it to be understood that it was carried unanimously. Every one knows that the division took place on the amendment, and the main motion was carried on the same division reversed exactly. Now the Votes and Proceedings show the names of the first division, and according to the practice usually adopted in this House the names should have been recorded on the second division, because every hon. gentleman in this House should be placed on record exactly as he has voted. It is a well known fact that according to the custom of this House the hon. member for South Perth voted for the Bill, as every hon. gentleman did who voted against the amendment. Therefore I say that the Votes and Proceedings ought to be amended so as to show the names twice instead of only once, as they are now shown.
Sir WILFRID LAURIER. As I remember, the suggestion was made to declare the motion carried on division, and then I think the leader of the opposition said, 'Carried on division reversed if there is no objection,' and no objection was made. But with regard to my hon. friend from South Perth (Mr. McIntyre). it is well known that he had stated that he intended to vote against the Bill, and his position is quite correct and well understood.
Mr. SPROULE. I always understood it was the right of any member of this House to have a vote if four other gentlemen stand up with him, then a division must take place. It is assumed that when no. person stands up to vote no one desires a division, and therefore the question goes.
5429 5430
Mr. R. L. BORDEN. I would think that the case is even stronger than my hon. friend from East Grey (Mr. Sproule) has put it. As a matter of fact, the method which was adopted last night is often adopted purely for convenience. We have adopted it in this House on many occasions, particularly in the numerous divisions which took place in connection with the government Bill relating to the Transcontinental Railway. It was declared 'Carried by division reversed' or 'Carried on the same division.' However, the system has been adopted purely for convenience. As last night we were here until about a quarter to two o'clock in the morning, I suggested that the main motion should be carried   on the same division reversed, purely as a matter of convenience, not having in mind my hon. friend from South Perth, and that was done. It did not need five gentlemen to rise and call for the yeas and nays, all that was necessary for my hon. friend from South Perth to have done was to stand up and call for the yeas and nays, because the division had already been granted by the Speaker. Therefore it was a matter for himself to determine whether we should have another division or not. There may be some excuse for him as a new member, but he could, simply by raising his voice, have had a vote taken in the way in which he says now he would like to have had it taken.
Sir WILFRID LAURIER. I think my hon. friend the leader of the opposition is hardly correct. The hon. member for South Perth could not have exacted the yeas and nays, because he was alone, though he could have objected to the motion being declared carried on the same division reversed, and he could have insisted on having it carried by division. But at all events, I think the hon. gentleman has made his position clear, and we all understand it.
Mr. R. L. BORDEN. What I thought was that when a division had once been assented to by the Speaker any hon. member could call for the yeas and nays on that division.
Mr. INGRAM. What I would like to know particularly is if the Votes and Proceedings of yesterday can be amended in order that the names of hon. gentlemen may be recorded as having voted on two different occasions, because it is a subject that will be referred to very frequently in the future, it was one of the most important votes ever cast in this House, and every member of this House should be placed on record so that there will be no dispute as to how he voted? I think the Votes and Proceedings need to be amended.
Sir WILFRID LAURIER. I doubt if we can do that now.
Mr. SPEAKER. I do not see how the Votes and Proceedings, which are now correct as a matter of record, can be amended.    5431                     COMMONS             They state exactly what occurred, and any one reading them can ascertain exactly how the division came about. As a matter of record, the Votes and Proceedings are correct.
Mr. INGRAM. Do I understand you to say that it would not be correct to have the names appear twice on the Votes and Proceedings ?
Mr. INGRAM. The record is correct as far as it goes, but it does not go far enough. because it only shows the names in one division, whereas there were two divisions.
Mr. MCINTYRE. I have no doubt, Mr. Speaker is entirely correct in what he says ; I have made inquiry and find it is so. I only regret that I did not hear the motion distinctly put, and being somewhat ignorant of the proceedings with regard to divisions‚ÄĒ we have had so few of them this session‚ÄĒ‚ÄĒ I was not aware that I had such privileges as the leader of the opposition says I had.
Mr. R. L. BORDEN. I may be permitted to make a suggestion to his honour the Speaker. The question came up once before on, I think, a precisely similar matter, and the decision was‚ÄĒI am speaking from memory‚ÄĒthat as the method adopted in the House was one purely of convenience, a record of the Votes and Proceedings should be made precisely in the same way as if the division had taken place. It was only a method of saving the time of hon. gentlemen in this House. But when it comes to recording the names, they should appear as if the division had taken place ; that is to say, that you should have a record as if the House had actually voted, because every one in the House is supposed to consent to the course adopted.
Mr. FIELDING. 'I am not quite disposed to agree with the leader of the opposition. If you were to record the names, you would place the hon. member for South Perth in a false position. Probably the best way we can do is to let the matter go as it stands, because if the names were again recorded and his name was re corded as voting for the Bill when in reality he wanted to vote against it, it would only make the matter more difficult. I think that as a matter of record the other form would be more convenient.
Mr. INGRAM. What about the other ninety-eight members in this House ? Have they no rights at all ?
Mr. FIELDING. They have not expressed any dissent.
Mr. SPROULE. I suppose that if any member of this House desires another vote he has to show that desire by standing up and asking for a division, and when he does 5431 5432 not do that, and no other member has done it, we assume that he is satisfied.
Hon. DAVID TISDALE. It seems to me that if we are to declare this record correct, we must hereafter always have the two divisions, because I am quite certain that the gentlemen on this side of the House would have insisted on another vote if they thought they were not to be recorded again. Of course the Speaker must decide that. If the practice is that we must have a new division under these circumstances in order to get a record of the names, then we must always put the House to that trouble. I had always understood, though I have not bothered my head much about these rules, that when it was a division such as was agreed to last night, the names were recorded the second time, and that when we consent to the division in that way the names are always to be recorded, because the object of the division is to have a record of the names. But if that is not the case, then my hon. friend from East Elgin (Mr. Ingram) is right, and the minutes ought to be amended, if we have power to amend them. I do not know myself what proceeding we ought to take.
Mr. HAGGART. Mr. Speaker, you surely ought to be informed as to what the practice of the House has been. This has occurred a hundred times in the House and in my opinion such votes have always been recorded as if the vote had been given at the time. You can very well find out what the practice has been and if the practice has been as I state then it is your duty to see that the Minutes of the House are revised and printed in accordance with the practice.
Mr. SPEAKER. I desire to inform the hon. member (Mr. Haggart) that I have asked the clerk what the practice has been and he states that the practice has been to record the vote as it has been recorded and not as the hon. gentleman suggests.
Mr. U. WILSON. I would have asked for a division last night on the main motion had I not understood that these names would be recorded again, only reversed, because I want it distinctly understood that I am opposed to the Bill from beginning to end.
Sir WILFRID LAURIER. I think we understand it.
Mr. U. WILSON And I want the people to understand it.
Mr. LENNOX. Mr. Speaker, I think it is pretty evident to the House that the hon. Minister of Finance (Mr. Fielding) proposes to dispose of this matter altogether too lightly. It is an important matter and an important question of practice. Although I have not been a great many years in this House, I feel that 5433                      May 4, 1905 on this point I do understand the practice. I wish to protest very distinctly against the proposition suggested by the hon. the Minister of Finance. I believe we are entitled, after what occurred last night, and it was the understanding of the House generally at that time, that the votes of members should be recorded as reversed from the former division. It is the right of every hon. member to have his vote so recorded. It would be unfair and a dangerous practice to depart from that position to-day. I know it to be perfectly clear, so far as the last four or five years are concerned, that upon an occasion of this kind the practice has been such as is asked for by my hon. friend from Elgin (Mr. Ingram). The hon. Minister of Finance says, forsooth, that because of the inconvenience it might occasion to the minority of one, the hon. member for South Perth (Mr. McIntyre), to have the vote recorded in that way we should depart from what has been the practice of parliament. The practice of parliament must be well understood by the older members of this House. I think it is well understood on this point by almost every member of this House, and I think it is the right of the House to have the vote recorded in the way my hon. friend from_Elgin has proposed.
Mr. FIELDING. I only speak again, Mr. Speaker, with your permission. I am afraid the hon. member for South Simcoe (Mr. Lennox) has entirely misunderstood my point. I rather agree as a matter of intelligence and convenience with the suggestion made by hon. gentlemen opposite as to recording the names the second time. I think it would be the better way, whether that changes the practice of the House or not. But when my hon. friend declares that we must have the practice of the House and not what the Minister of Finance suggests, he is wrong and I am right because Mr. Speaker has told us this is the practice of the House. The particular point that I was drawing attention to was that if we recorded the names in the way suggested you would place my hon. friend from South Perth (Mr. McIntyre) in a position which would be unfair. That was the only point of my observation.
Mr. LENNOX. If you will allow me, Mr. Speaker, a word in reply to my hon. friend the Minister of Finance (Mr. Fielding), I wish to make it very distinct that, with all deference to what Mr. Speaker may have suggested, having regard to the practice which has been followed for the last five years, what was suggested by my hon. friend from Elgin has been the practice in matters of this kind.
Mr. HENDERSON. Mr. Speaker, as has been remarked, this is rather an important matter, and no doubt all of us on both sides of the House are desirous that our votes 5433 5434 should be correctly recorded. I draw attention to the 'Votes and Proceedings' of yesterday and also to the 'Hansard.' In the ' Votes and Proceedings ' we find that :
The question being put on the main motion, it was agreed to on the same division reversed.
That certainly expresses the intention clearly and without equivocation, but when I turn to 'Hansard'‚ÄĒand I am not reflecting upon 'Hansard' at all, because, it is not recording words spoken by an hon. member‚ÄĒI find that 'Hansard' reports it thus :
Motion agreed to, and Bill read the second time.
In the country that might be quoted against me. I may be told that because I did not vote against the Bill I voted for it and I think, Mr. Speaker, that you should direct, that, in the Revised 'Hansard' the wording should be changed so that it will convey the intention, at least of the House.
Mr. R. L. BORDEN. It is perfectly clear that a change will have to be made in the 'Hansard ' report. I did not observe that before, but obviously it conveys an entirely wrong impression, and it is the document which is more likely to be used in connection with this vote than the formal record of the proceedings of the House.
Sir WILFRID LAURIER. I agree with the suggestion that 'Hansard' ought to be revised and can be revised, and it will convey exactly what took place, but I do not think we can change the "Votes and Proceedings.'

¬†¬† PROVINCIAL GOVERNMENT IN THE ¬†¬†¬†¬†¬†¬†¬† NORTHWEST‚ÄĒSUBSIDY TO ¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† ALBERTA.

House in committee to consider the following proposed resolutions providing for the payment of an annual subsidy to the province of Alberta.‚ÄĒSir Wilfrid Laurier.
1. Resolved, That the following amounts shall be allowed as an annual subsidy to the province of Alberta, and shall be paid by the government of Canada, by half-yearly instalments in advance, to the said province, that is to say :‚ÄĒ
(a) for the support of the government and legislature, fifty thousand dollars ;
(b) on an estimated population of two hundred and fifty thousand, at eighty cents per head, two hundred thousand dollars, subject to be increased as hereinafter mentioned, that is to say :-a census of the said province shall be taken in every fifth year reckoning from the general census of one thousand nine hundred and one, and an approximate estimate of the population shall be made at. equal intervals of time between each quinquennial and decennial census; and whenever the population, by any such census or estimate. exceeds two hundred and fifty thousand, which shall be the minimum on which the said allowance shall be calculated, the amount of the said allowance shall be increased accordingly. and so on until the popu 5435                COMMONS        lation has reached eight hundred thousand souls.
Mr. SPROULE. I think we ought to have an explanation from the right hon. First Minister (Sir Wilfrid Laurier).
Sir WILFRID LAURIER; Resolution (a) provides, for the support of the government and the legislature, $50,000. That is based upon the figures of the British North America Act. It is the same as Manitoba. Then, in regard to the proposed subsidy of 80 cents per head of the population, I may say that by the British North America Act it is enacted that Ontario should be paid 80 cents per head of the population of 1861, which was then in round numbers 1,400,000 souls, or 1,396,000 souls. It is distributed equally. Quebec received 80 cents per head of the population upon the census of 1861, which showed a population of a little over 1,110,000. Then, all the other provinces, that is to say, Nova Scotia, New Brunswick, Manitoba, and so on, were paid 80 cents per head until they reached the maximum of 400,000 souls. It was obviously impossible to accept this maximum for the provinces of Saskatchewan and Alberta, because already the two together have a population which exceeds the minimum limit of 400,000 souls, so we have suggested that the gradation should go on until they have reached in each province a population of 800,000. You have to fix some arbitrary figure, but it seems to me that the figure that has been arrived at is as near justice as can be expected.
Mr. R. L. BORDEN. It seems to be a very arbitrary arrangement after all. Do hon. gentlemen know on what it is really based? If I remember aright in Nova Scotia at the time of confederation when the people were very much opposed to entering confederation. the cry was that we were being sold for 80 cents a head.
Mr. FIELDING. The price of a sheepskin.
Mr. R. L BORDEN. Yes, for the price of a sheep skin. How is this 80 cents a head arrived at? Why is it that the allowance now is so much smaller in this instance ?
Mr. FIELDING. Eighty cents a head was simply an arbitrary rate reached in order to allow what was thought to be a reasonable sum on the population to assist in the maintenance of the local government. There has never been any particular question about that because it was 80 cents all around; the real difficulty that has from time to time arisen with the provincial governments is with respect to the limitation on population.
Mr. R. L. BORDEN. That is what I was asking about.
5435 5436
Mr. FIELDING. That is the real difficulty, and I confess I have never been able to understand the precise reason why these limitations were put on the provinces. It would seem reasonable that if the provinces were to receive a proportion of their income from the federal treasury, their needs would increase with their population, and that whatever that population might be in the future, they should be paid an allowance per capita, although not necessarily the same allowance, because one can conceive that if the population increased very largely a proportionately smaller rate per head might serve as well for the purposes of government as a larger rate would in a thinly populated country. The reason for the limit of 400,000 souls in Nova Scotia and 800,000 as we are now making it in these provinces in order that it may correspond with the general principle of the Act, has never been made very clear, and I do not know if any of my hon. friends have ever heard a reason given. It is the cause at this moment of very considerable dissatisfaction in all the provinces and it has been proposed from time to time that that limitation should be removed, and that as the provinces increased in population the amount of their allowance should also increase. But; inasmuch as in the past there has been a fixed limitation in the provinces we are making this analogous to it, making a liberal allowance for the growth of the provinces.
Mr. SPROULE. There have been many applications from Quebec and the other provinces for a readjustment of their subsidies and we know that from the maritime provinces in the last few years there have been representations of this kind. In the finrst instance, as I understand, they all received 80 cents a head and they were to receive that up to a limit of population; that was regarded as a fixed and proper sum which each should have, In view of these repeated applications from the different provinces does the government think that they are justified in fixing the new provinces at the same sum now? If the experience of the past has proven that that is not enough. would this not be the proper time for them to consider what is a proper amount and fix it at that sum for the new provinces at the present time, rather than have to go over the whole question when applications are received from the various provinces for an increase of their subsidy ? If you consider applications from Nova Scotia. New Brunswick, Prince Edward Island, Quebec, Ontario and Manitoba, you would have to consider the case of the Northwest Territories as well, and this may occur next year. It seems to me that our experience ought to enable us to determine very well whether this is the correct sum or not, and if it is not a large enough sum we should strike the present rate for the 5437          May 4, 1905             new provinces at what in our judgment is a correct amount, and then let the others level up to that.
Sir WILFRID LAURIER. For my part I would not concur with the view just now enunciated by the hon. member for East Grey (Mr. Sproule). Speaking for myself personally, I think that the whole system of giving subsidies to the provinces is one subject to very serious objection, but we have adopted it at the time of confederation and wrong or right we have to abide by it and live up to it, although it is wrong in principle. As has been said by the hon. Minister of Finance (Mr. Fielding) it is not a system satisfactory to the provinces. I agree with the Minister of Finance to this extent that if you adopt this principle of going by estimate-it is wrong, but you have adopted it, you have put it in your Bill, and the reason for it was that the Dominion took away from the provinces their sources of revenue, customs and excise. If that be the case there is strong reason to support the view of the Minister of Finance that there should be no limitation to population, that there should be a system of adjustment which would work automatically, whereby the subsidy of 80 cents per head would increase with increasing population. That is a view of the case which is well worthy of consideration. The province of Quebec has complained against the present system it is true, but the province of Quebec is not alone in that complaint; all the provinces have complained, and without at all committing the government, speaking for myself, I think it is one of the questions which will have to be taken up by the federal government in conjunction with the provinces at no distant date. but I do not think at this present time, as we are legislating within the corners of the British North America Act, that it would be advisable to depart in favour of these provinces from the principle which has been applied to the other provinces. There is in the other provinces a limit of population beyond which their subsidy does not increase and so long as this is the case for the other provinces, I think there ought also to be a similar limit imposed upon the new provinces which we are about to create.
Mr. SPROULE. I am not objecting to the limit of population because that seems to be on the same principle throughout, but I want to draw attention to what the hon. member himself has admitted. What is the cause of these repeated applications from the provinces? They are made because we took away from the provinces their sources of revenue. Need I draw attention to the fact that their sources of revenue were customs and inland revenue, and what they could make from their timber. lands and mines? We did not take from the other 5437 4538 provinces their timber, their lands and their mines, but we have taken these assets from these new provinces, and whereas we took away only a portion of the sources of revenue from the other provinces, we are taking the whole of the sources of revenue away from these new provinces. and yet, notwithstanding that, we only allow them the same proportionate rate as we allowed to the provinces which retained part of their sources of revenue. It is true that we give them for the land‚ÄĒ
Mr. FIELDING. We are allowing them for the land besides.
MR. SPROULE-it is true we give them something in lieu of the lands, but we are assuming that they have a certain number of acres of land and we are putting an arbitrary value on that which would be about the lowest value you could put on land in the Northwest; not the value of lands there at the present time. The estimate of the land is not at all the amount of land that is within their territory nor is the arbitrary value the value that the lands could be sold at in that territory to-day, because if the lands were left in the possession of the new provinces and they could sell them at the price which they might fairly realize for them to-day they could secure a very much larger sum for them. But after a while, when a portion of the lands are sold, the crowding of population becomes greater and the lands increase in value to $10 or $15 or $20 an acre, and yet there are millions of acres of land in their territory unsold, but held by the Dominion government, what about these people ? They are not allowed the advantage of the revenue derived from those lands nor are they receiving any part of their enhanced value. That will be a source of annoyance to them in the future, and will probably be a reason why they will come back here and ask a readjustment of the subsidies. Therefore I think we should fix the subsidies on some principle that will be a finality. I remember on two different occasions, when this question was being considered in this House, and additional subsidies were being granted to the provinces‚ÄĒI think it was in 1884, when we granted additional subsidies, that we were told that the arrangement then made was to be a finality; as the previous arrangement was understood to be ; and yet the matter was brought up again afterwards, and the Hon. Edward Blake said this was a finality of a finality, and it was never to be taken up in this House again. And yet we are likely to take it up again, and the right hon. the First Minister himself is admitting the justice of the claim. Is it not better to settle the matter on some basis that will be a finality, and let the provinces understand that they must adopt some other means of raising a revenue and keep their expenditure within that revenue, otherwise they cannot expect to come back to the 5439 COMMONS Dominion government from time to time and ask to be recouped in the form of an increase in their subsidy which might represent‚ÄĒI do not say it does‚ÄĒextravagance rather than a wise and economic expenditure or money. I think we should adopt some principle with reference to the new provinces that would not be subject to the same difficulties and drawbacks that have occurred in regard to the other provinces. I think experience has proved that the principle we have acted upon is not a good one, and we should learn from that experience and shape our policy accordingly.
Mr. FIELDING. The lands clause will come up a little later, when that question may very well be considered. I mentioned, in the remarks which I addressed to the House on the second reading of the Bill, that I might desire to make some changes in the financial clauses, not as affecting their amounts, but as to their form ; and when we come to the land clauses, I will have a suggestion to offer which may perhaps in part meet my hon. friend's views in reference to the lands. We are hardly in a position to-day, however, with this measure before us, to take up the general question of a readjustment of provincial subsidies. That is a very large question, and will require very careful consideration.
Mr. BERGERON. Is there any proposal to do that ?
Mr. FIELDING. The provinces have no question in their own mind that they want it, but there is no proposal at present with the government to deal with the matter, although it is constantly agitated. My hon. friend the Premier has expressed the opinion that the day is not far distant when that question will have to be considered, not merely on behalf of Quebec, but on behalf of all the provinces ; and if a change is made, it must be on some principle that will apply to all. The essence of the proposal of the provinces was that the limitations with regard to population should be removed. In the resolutions which were adopted by the provincial premiers some years ago in Quebec, I think they included a provision that they should receive eighty cents per head up to a certain population, but that where a population was thickly settled and its needs would not be so great as those of a population sparsely settled, the subsidy for the additional population should be sixty cents a head.
Mr. BERGERON. When was that?
Mr. FIELDING. I think that was at the conference in 1887, and it was adopted by all the provinces. I think their demand is now practically a revival of the demand of that conference. The last conference was about a year or eighteen months ago, when the provincial premiers of the day, Colonel Prior of British Columbia, Mr. Roblin of Manitoba, Mr. Ross of Ontario, Mr. 5439 5440 Parent of Quebec, Mr. Murray of Nova Scotia, Mr. Tweedie of New Brunswick and Mr. Peters of Prince Edward Island, met here. Although the record will speak for itself, my impression is that they simply revived the resolutions of the Quebec conference, the substance of which I have stated. To take up that whole matter and determine it finally is a large question, and as the Prime Minister said, some of these days we may have to do it, but I do not think the House is ready to do it to-day. In the meantime, it is admitted that we must proceed with this Bill with regard to the Northwest provinces, and we might as well deal with them in the same way as we have dealt with the other provinces ; and if, one of these days a change is made, it must be made on some principle that will apply equally to all.
Mr. HENDERSON. While I do not agree generally with the hon. Finance Minister, I quite agree with him that the principle of granting subsidies to the provinces is all wrong. There was no other reason why eighty cents a head was paid to the different provinces than the fact that the revenues of the different provinces, which they derived from customs and excise had been taken away from them; and, in order to make good to them the revenues which they had lost by coming into confederation, they were paid eighty cents per head of their population, fixed I may say in a rather arbitrary manner, because. so far as the subsidies for Ontario and Quebec are concerned. they still remain on the basis of the population of 1861, while the subsidies to the other provinces are not so fixed. I am not complaining of that. The Minister of Finance has said that a country sparsely settled requires more per head than a country thickly settled. Assuming that the province of Quebec doubled its population, I do not ' know that it would cost very much more to govern it than it'does at the present time, because the population might not be increased by reason of more territory being populated, but by reason of the population becoming more dense in the ctities, towns and villages. However, what I want to draw attention to is this, that the principle is bad. I do not blame the fathers of confederation for the system they adopted in 1867. Possibly it was the only way out of the difficulty that they had to deal with. But we are on a different basis to-day. We are dealing with a province which has neither customs nor excise revenue. Why apply to such a province the same principle that was applied to the old provinces ? It seems to me that an opportunity is oflered now of getting rid of a bad principle, something we do not approve of, but the only one which so far as we can see could be acted upon in 1867.
I do not see anything in the argument that the principle which we think is not the best should be applied to the new provinces un 5441   May 4, 1905         der entirely different conditions, I think there ought to be some other way of getting out of the difficulty and that a splendid opportunity presents itself for adopting another principle and possibly one that by- and-by might be applied to the older provinces when the whole matter is brought under review by the government. We propose to take away the lands, or rather retain the lands. I should prefer myself to use the expression 'take away the lands,' because we are taking the lands which belong to the provinces and giving them a consideration in return. When we do this can we not, on some broad principle, come to an arrangement by which this plan of handing over in a bulk sum eighty cents a head to these people would be got rid of ? I do not say for a moment that we should be niggardly in starting out these provinces in their new sphere. I think it would never do to adopt any plan which would not give these people sufficient revenue, but we must admit the principle that where one government is collecting the revenue and another government is spending it, there is not the same inducement to the spending government to act with economy as if they were collecting it and directly responsible to the people from whom they took it. If we can in some way hold those people responsible to those who contribute the money, we would be making a radical change which might be taken advantage of at some future day possibly with regard to the other provinces. At any rate I think we would be starting out on a basis that would conduce more to economy than the principle we are adopting at present. I do not think that in the province to which I belong, the province of Ontario, it was ever conducive to economy in the administration of that province to have simply one million or one and a half million dollars taken out of the pockets of the people generally, chiefly through customs revenue, handed in a bulk sum over to its local government. The local government of Ontario are not responsible to the people of that province for the taxa-. tion by means of which that money was raised, and consequently could not be called to task, as they should be, for any extravagance in the expenditure of it. I would hope that the right hon. gentleman, who no doubt has given great consideration to this question, could by some means or other devise some other plan which would be in   advance of that which the fathers of confederation felt compelled to take, and more   especially as we are now told that the conditions in those new provinces are quite different from those which prevailed in the ' older provinces in 1867. I must confess however, that although I have thought over , the matter a good deal, I am not prepared to make any suggestion. Neither should I be called upon to make one because I am not one of the governing party in the country. We are in a minority of eighty-one 5441 5442 and look to the other side to provide a policy. I would be glad however, to make a suggestion, and I submit this suggestion to the right hon. gentleman for what it is worth. We are starting out these new provinces under new conditions, and I believe we can devise some plan under these new conditions, which would be more acceptable and perhaps more profitable in the end to the people in that new country as it would throw them upon their own resources entirely. If they were permitted to know now just what their revenues will be and had to work out their own destiny with what we give them now for all time, and if they were not in a position to come back time after time and ask for more, the new local administrations about to be established would naturally be more economical in the administration of their affairs, and that of course would inure largely to the benefit of that great country.
Sir WILFRID LAURIER. For my part I agree very largely in everything said by   my hon. friend from Halton (Mr. Henderson. If we had a condition of things with which we could deal ourselves on the line he believes to be right and I believe to be right, I would agree at once to his suggestion: but unfortunately we are confronted with the same difficulty as confronted the fathers of confederation in 1867. The principle he has laid down that those who have the spending of the revenue should also have the responsibility of collecting it. is so obvious and true that it is a matter of surprise to those who look through the debates of 1865 and the Act of confederation as it is. that the fathers of confederation should have consented to depart from a principle so true and obvious. Why then did they depart from it? Simply because it would have been impossible to get any one of the provinces to enter confederation unless it was given a subsidy to meet its own expenses. The people of this country are afraid of taxation, and especially of direct taxation, and it was the spectre of direct taxation which forced those who were responsible for framing the Act of confederation to agree to the plan adopted. Some forty years have elapsed, and since then I   do not think that the people of any of the provinces would be disposed to part from the principle there laid down, and agree to release the federal treasury of the subsidy they receive every year. The conditions are exactly the same in the new provinces of Alberta and Saskatchewan as they were in the older provinces. It is true that these new provinces have not to surrender their excise and customs to-day ; but if they were not in confederation, they would be free to collect their own excise and customs. Therefore when they came into confederation they surrendered, as did the provinces of Quebec, Nova Scotia and New Brunswick, the right to collect excise and customs duties, 5443                      COMMMONS      and are consequently, for all practical purposes, in the same condition as were these in 1867. Whenever a province enters confederation, that very day it surrenders its right to collect excise and customs and places itself in the same condition as that in which were the older provinces. Suppose you were to say to-day to the provinces of Saskatchewan and Alberta: Will you agree to come into confederation without compensation or subsidy at all? They would reply no. Of that there can be no doubt, and the gentlemen who represent these provinces to-day will agree in what I say. What is to be done under such circumstances ? We are not introducing a new principle but simply applying that which was accepted in 1867.
Mr. SPROULE. And which has been found a failure for the object in view.
Sir WILFRID LAURlER. I will not discuss that now. But suppose it were a failure, where would you apply the remedy ? Would it not be where the failure had taken place? That failure has not taken place in the new provinces, but in the provinces that exist to-day. If you are to introduce the principle of reform, you ought to introduce it, not where there has been no failure, but in all the provinces generally. 1 agree with my hon. friend (Mr. Sproule) that it may be that the question of principle may have to be taken up at some future day. For my part, I think we shall have to revise the subsidy question. If I propose the present plan, it is not because I am satisfied that it is the best that could be. It is not the ideal. But we have to conform to the measure the people will accept, no more. But the day may come, probably at no distant time. when the whole subject of the provincial subsidies will have to be taken up in a more radical way than any in which we can deal with it to-day. But, as a matter of fact, it is not possible to take it up today. We have to legislate within the four corners of the constitution, not only within the good elements, but within the blemishes also. Even though there may be a blemish, we must accept it and carry it out loyally. I have to repeat what I had occasion to say on introducing this Bill, that confederation was, above all things, a compromise. It was almost a superhuman effort to get the several provinces of Nova Scotia, New Brunswick, Quebec and Ontario to agree to surender their identity and merge it in a common whole. And those who wanted that conclusion had to sacrifice a good deal to gain it.
Mr. BERGERON. I may not quite understand it, but it seems to me that the entry of the original provinces into confederation and the entry of the Northwest Territories into confederation are not the same thing 5443 5444 at all. Confederation was a union of sovereign provinces who made a compact. They existed before confederation, and they had their sources of revenue, and. before they gave these up, they exacted something from the common government, demanding so much per head of their population. It was fixed at 80 cents per head. I do not know why it was fixed at that figure, but it was the consideration agreed upon. But the Northwest Territories are not, in the proper sense, provinces coming into confederation. They are Territories, they are lands we have bought. We, the Dominion of Canada, the province who form confederation are the buyers, or the owners, if I may use that word, of these provinces which were for a long time Territories. Those Territories are peopled by some who were formerly inhabitants of the older provinces and also by many immigrants who have come in from all over the world. We are deciding to-day to erect them into provinces and to give them autonomy. But we are not in the same position with regard to them as we were with regard to the older provinces. So, it has struck me, as it has struck my hon. friend from Halton (Mr. Henderson) that we do not owe these new provinces 80 cents per head on their population for the same consideration that we owed that money to the older provinces. I would not say that I am opposed to giving it, because I can imagine that some strong consideration must have actuated the government in deciding upon this proposal. But it seems to me that the argument of the hon. member for Hilton is a very strong one. As to any change in the allowances to the provinces generally, we have heard of that for many years. I should have thought that my hon. friend the Minister of Finance would have been able to give something of the reasons for the demands made upon the Dominion government to increase the allowance, he having taken part in the conference of some years ago. I think the allowance proposed was to be $1 per head.
Mr. FIELDING. My hon. friend (Mr. Bergeron) may be right. It was a good many years ago.
Mr. BERGERON. The reason why I think it was $1 per head was that I recollect it being stated that $1 at the time of the conference was about the same as 80 cents at the time of confederation. There must have been an answer from the Dominion government to the demand made by the conference. What was the answer ? I think that was in 1888 or 1887.
Mr. FIELDING. It was in 1887.
Mr. BERGERON. The right hon. leader of the government (Sir Wilfrid Laurier) at that time was sitting on this side of the House. Since he has been in power I can 5445                   May 4, 1905          understand, though. of course, I do not know, that the same demands have been made again upon the government, and this government must have given about the same answer as the previous government gave.
Sir WILFRID LAURIER. They gave no answer at all.
Mr. BERGERON. That is more embarrassing. Apparently they could not find an answer.
Mr. LEMIEUX. It was completely ignored by the government.
Mr. BERGERON. I do not wish to express an opinion now, as I understand the question may come before the House. But it seems to me that it is a question to he handled with a great deal of care. The fathers of confederation, when they fixed the powers of the provinces on the present basis had in mind that the provinces would impose just what my right hon. friend Sir Wilfrid Laurier) said a moment ago they were so much afraid of‚ÄĒdirect taxation. That is why they were not given a great deal of power. I understand that one man who was looked upon as a great authority on the Liberal side at that time, Mr. Holton, expressed the opinion that it was the duty of the provinces, and their safeguard, to impose direct taxation. I imagine why the government came to the conclusion of granting the provinces their demand. It would be only for a few years. But it is the way in which they carry on their finances, that is the cause of the difficulty in which the old provinces are to-day. Of course, that is not the subject under consideration, and I do not want to discuss it any further. But I wished to say that, in my opinion, there is a good deal in what my hon. friend from Halton IMr. Henderson) said, that if we gave 80 cents per head of population to the older provinces it was because we were taking something from the provinces, but that we are taking nothing in the same way from the new provinces.
Mr. R. L. BORDEN. There is force in the remark of the hon. member for Halton (Mr. Henderson) and the hon. member for Beauharnois (Mr. Bergeron) that these are not sovereign political entities, and therefore up to the present they have not had the right to collect customs and excise revenues for themselves. But, looked at from the practical standpoint, as to the giving to them of revenue derived from the Dominion, I agree with the Prime Minister, and would not make any distinction between the position they occupy and the position of the older provinces. If they were created into provinces by the imperial parliament outside of this confederation, we should find them collecting excise and customs as the older provinces did. So, whether we give 80 cents per head or not, 5445 5446 we must give them something equivalent to what was given to the other provinces. Behind that altogether is the very important point which was raised by the hon. member for Halton and referred to by the hon. member for Beauharnois. the question of the principle on which to determine the allowance to the different provinces. And the Prime Minister has made the very important statement, if I understood him correctly, in suggesting that it may be the duty of the government in the present year to consider the position of the subsidies to the provinces, which now constitute the confederation. I should have thought that, if that is the position of the government, it would have been extremely desirable to deal with the question at least concurrently with the measure now before the House. There will not be so good an opportunity in the history of this confederation to deal with this question as that which now presents itself.
In the creation of these new provinces you have the best possible opportunity of dealing once and for all with the question of what shall be the subsidy to be allowed by the Dominion to the provinces. I quite agree with the Prime Minister in his criticism of what was done at the time of confederation, though I am disposed to admit that I do not see exactly what could have been substituted for that arbitrary allowance. It seems to be entirely arbitrary. It is said that it was in lieu of the customs and excise. Well, then, surely it was illogical to fix an arbitrary amount and to fix the limit of population. I submit that for two reasons. The province of Nova Scotia is limited to 400,000, and the province of New Brunswick is limited to 400,000. The province of Nova 'Scotia may reach a population of 800,000, and when it does, the amount which it will contribute to the customs and excise will be very much greater than the amount which it contributes when it has a population of only 400,000. The same is true with regard to the population of Quebec and Ontario, and with regard to the amounts payable to them. But there is another reason why this allowance made to the different provinces is absolutely illogical. Every one who has made the slightest study of political economy knows that the producing power of money varies from time to time. Therefore, 80 cents per head of the population of the provinces in 1905, is an absolutely different thing to what 80 cents per head was in 1867. In this connection I may say that one of the provinces of confederation is at the present time making a claim which, perhaps, may be entitled to some consideration, whether we agree with it or not; the province of British Columbia is making a claim at the present time, as I understand, upon this government for the reason that it costs so much more to construct public 5447 ¬† ¬† ¬† ¬† ¬† ¬† ¬† COMMONS ¬† ¬† ¬† ¬† ¬† works there than it does in the eastern provinces, and also because the cost of living and the rate of wages are much higher than they are in the east. We should not be unmindful, in dealing with these two new provinces, of two considerations, one of which is that probably it will cost more there to carry out public works‚ÄĒas it does now in British Columbia‚ÄĒthan it costs in the eastern provinces; in addition to that, we have to remember the sparse population and the necessity of spreading out public works over a large area. These are considerations which we ought to take into account. But what I want to come down to is, after all, the practical question, that is, the entire absence of any principle which, apparently, has been found to guide the government in fixing the subsidies for these provinces. Along what lines have they proceeded, upon what principle have they acted in selecting the figures of 800,000 of a population as the limit upon which they fix the allowance ? There may- possibly have been considerations which would have induced them to fix that at a larger amount, such as the higher cost of public works and the sparse population spread over a great area. They have departed from the limit of population fixed for the maritime provinces, and they have departed also from the limit of the population fixed for Ontario and Quebec, and they have adopted a somewhat middle course. But I cannot see upon what principle they fix that particular limit of 800,000 population for the new provinces. Is it based on any principle whatever, or is it simply arbitrary, as was the limit fixed for Nova Scotia, New Brunswick, Quebec and Ontario, in the first instance? How is it arrived at? Is it simply a guess at the amount which should be considered proper, or is it fixed as a sort of half-way house between the 400,000 for Nova Scotia and New Brunswick and the 1,400,000 for Quebec ?
Sir WILFRID LAURIER. That is a fair question. When we came to discuss this clause we would have been glad to know what principle the population limit had been fixed for Nova Scotia and New Brunswick at 400,000, and for Manitoba at 400,000. The record shows us nothing at all about that. But looking at the history of the case, we found that this sum was given, as has been stated already, to start the provinces with, to give them some compensation for what they were losing in entering confederation. The first thought evidently of those who framed the Quebec resolutions was to take the basis of the population as it was in the census of 1861. They did that for Quebec and Ontario. But at that time the population of the maritime provinces, Nova Scotia and New Brunswick, was very small, if I remember right about 100,000 each.
5447 5448
Mr. FIELDING. 330,000 for Nova Scotia and 250,000 for New Brunswick.
Sir WILFRID LAURIER. Well, the limit of population was fixed for them at 400,000, beyond which their subsidies could not be increased. Therefore it did not seem unreasonable that we should fix a limit double that amount for these new provinces, which have so much larger an area, so much more territory, and which already start with an estimated population of 250,000 each. With regard to Manitoba, the case is absolutely hopeless. Everything with regard to Manitoba seems to have been done in a purely arbitrary manner, without any principle which we can discover. Therefore the best thing we could do was to say that we will give these new provinces subsidies on an estimated population double that which has been fixed as the limit for Nova Scotia and New Brunswick. Can the hon. gentleman suggest anything better than that ?
Mr. R. L. BORDEN. We do not claim on this side to have given the matter the same consideration which the government have given it in framing this Bill. Only by way of criticism can we endeavour to arrive at some better conclusion, it any can be found. But it would seem to me that the reason which the right hon. gentle man advanced is not so much one which would lead us to fix their limit at 800,000 as it is one which would lead us to give them a larger per capita allowance in the first instance, when the population is sparse and the territory very great. I do not see that you will logically reach the result claimed by the hon. gentleman, if you follow the statement of the case which he has made. In the commonwealth of Australia there is an appropriation for customs and excise by the federal legislature, but if I recollect rightly, the provinces receive, not an arbitrary sum, but a proportionate part.
It may be impossible-I am not suggesting it would be possible‚ÄĒto carry that out here because goods to a very large amount, entered in one province, are eventually consumed and indirect taxation upon them is possibly paid, to some extent, at least, in another province. I do not know that you could get a great deal of comfort out of that, perhaps, but still the basis of proportion, would naturally appeal to one as a somewhat more logical basis than the arbitrary basis which was adopted by the fathers of confederation and which has been followed ever since. The difficulty, of course, is to suggest what we would substitute, but that only brings me back once more to what I pointed out in the few remarks that I made a moment ago, and that is the extreme importance of dealing with the whole question as far as all the provinces are concerned, if it is really proposed to deal with that question, at 5449 MAY 4, 1905 ¬† the time we are creating these new provinces. We would not want in the slightest degree to be unjust to the new provinces. I am not suggesting that. We want to be generous to them in every possible way. They are deserving now only of fair but of generous treatment from this parliament. I am merely suggesting this for the purpose of convenience, because when, parliament is creating these new provinces, it would be much more convenient, it seems to me, to treat the whole subject from the standpoint of some better principle, if it can be found, than it will be years afterwards, or even one or two years afterwards, when these provinces may be calling upon this government to make good certain claims which my hon. friend the ex-Minister of the Interior (Mr. Sifton) foresaw in respect to the question of lands, for example. I do not know whether the government have taken the question of the revision of subsidies sufficiently into consideration to give to the House any information as to what their proposals are at this moment. I would infer not, from what my right hon. friend has said, but I can only express my regret that the government have not been able to overtake that question, if they do propose to deal with it, in time to present it to the House concurrently with the question we are now considering. It may be that it is impossible to do so. I know how much poitical duties interfere with administrative and executive duties on the part of any government, but still I think it is a matter for very great regret that the question is not dealt with at this time if it is proposed to deal with it in the near future.
Mr. BERGERON. I hope my right hon. friend the Prime Minister has some other reason than the one he gives, because it seems that he wants to give the committee to understand that he came to the conclusion to double the limit of population of the Northwest Territories because these new provinces were starting with double the population that Nova Scotia and New Brunswick had at the time of confederation.
Sir WILFRID LAURIER. More than double the territory.
Mr. BERGERON. I understood my right hon. friend to say that we are going to double the limit of population in these Territories because they are starting with a great deal larger population than the maritime provinces which were limited to 400,000. He was reminded immediately by my hon. friend the Minister of Finance, that Nova Scotia and New Brunswick had together more population in 1867 than the new provinces have to-day. Therefore, my right hon. friend must have another reason than the one he gave for doubling the limit of population in the Northwest Territories.
Sir WILFRID LAURIER. Perhaps I did not express my idea correctly. The popu 5449 5450 lation of these two provinces must eventually be much larger. They have each a population of 250,000 now and they are only commencing to keep house. They have ten times the territory that the maritime provinces have, and therefore, as they must have a much larger population, they require more revenue.
Mr. BERGERON. That is later on, but my right hon. friend will remember that they have not so many people today as the maritime provinces had in 1867.
Mr. FIELDING. It must be admitted that there was no logical reason for adopting the 400,000 limit in the original Act of confederation and there is no very logical reason for adopting the 800,000 in this. It is an estimate of the probable growth, and we know that in these Territories the growth is likely to be much more rapid than in the maritime provinces, but my own judgment is that before this arrangement has been in operation a few years the whole question will have to be considered in the light of what has been said to-day, and then perhaps the system will have to be general in its application. In the meantime, with all the weakness of the system, what can we do to-day but conform to the principles laid down in the British North America Act ?
Mr. SPROULE. I wanted to ask the hon. Minister of Finance if he had collated any data regarding the finances of the different states, as to what they do in regard to their financial arrangements and whether, in view of our experience‚ÄĒbecause it was an experiment for us and our experience has not been perfectly satisfactory‚ÄĒthe government have considered any other plan for supplying a revenue, and if there is any correspondence between Mr. Haultain and the government of the Northwest Territories and this government in regard to the subject?
Mr. FIELDING. I think I am correct in stating that in the United States they have no system in regard to subsidies at all but that each state has to regulate its own finances. I admit that there is something to be said in favour of the provinces doing so here if we could start afresh. I want to say a word in defence of the fathers of confederation. and I am not very much given to defending the fathers of confederation in reference to the financial arrangements that were adopted at the time of confederation. If we had been dealing with the provinces as we are now dealing with the provinces of the west we might have demanded from them such terms as we pleased. We might have said : Get your taxation in any way you please. But. that was not the condition in 1867. Each of these provinces was an independent body when it was asked to come in, and the fright at the idea of direct taxation which 5451 COMMONS my right hon. friend the First Minister (Sir Wilfrid Laurier) has referred to undoubtedly had a great effect on some public men. They said : Each of these provinces levies excise and customs duties, and if you take away from us our excise and customs duties you must give us some portion back. I do not think that was an unreasonable thing.
Mr. BERGERON. Not for the old provinces.
Mr. FIELDING. If we admit that it was a reasonable thing for the old provinces, what position are we in today ? Shall we say to the new provinces: We gave a portion of the excise and customs back to the old provinces but we will not give it to you ? We collect customs and excise from the old provinces and we give them some back; we will collect the excise and customs from the new provinces and we will in the same way give some back. This is the uniform practice to-day. My hon. friend (Mr. Sproule) wanted to know if any other plan has been suggested. and I am frank enough to say, that, notwithstanding that there is something to be said in favour of some other plan, I have no expectation that you can arrange the finances on any other basis. There is no province which is willing to give up its subsidy. The system is a part of our constitution. It is provided for by the British North America Act wholly beyond change by ourselves and we would be obliged to go to the imperial parliament to change it. I believe that the provinces would be rivalling each other to get their delegates on the other side in opposition to the proposal if we asked for anything of the sort. I fully anticipate that if any revision is made it will have to be on the lines of the present system. We may devise some system, which, while adopting the present principle, will work the details out in some other way.
Mr. SPROULE. The hon. gentleman said that originally, at the time of confederation, we dealt with provinces that were sovereignties having the power to levy taxation. Or. in other words, there were two parties to the contract. Then the one party might offer, but the other party might not accept, and it would be for the other party to make a counter offer and, between them, try to reach an agreement; that is to say, one would accept what the other would be willing to give; but in this case there is only one party to the contract. There is only one party, because the federal parliament is the owner of the Territories, and they are only establishing an outlying portion of those Territories which they may call provinces. and they are giving these provinces certain powers. They have scarcely consulted the representatives of those Territories in regard to other features of these Bills, although those gentlemen have been hanging around this parliament for three months. They did not even deign to take them into 5451 5452 consultation in regard to many other features, and why should they do so with regard to the financial feature? I asked if any correspondence has been received that would indicate that they had foreseen some trouble in regard to this feature, or that they were satisfied with the government's proposals. I understood the minister to say that there was no conference.
Mr. FIELDING. There was no correspondence.
Mr. SPROULE. Well, correspondence. I take it that if there were conferences, there would be some correspondence leading up to them.
Sir WILFRID LAURIER. There is correspondence. including the Haultain Bill. which has been brought down.
Mr. SPROULE. if there is correspondence with regard to it, they must have set out the various features of what would be satisfactory to them; the financial question is one of the important ones, and therefore I assume that if there is any correspondence with regard to the introduction of the Bill. there would be correspondence in reference to that aspect of it. Therefore, I say that that justifies what I have said, that there is no similarity between what we are doing today and confederation, because at confederation there were two contracting parties, but today only one party has the power and can withhold everything from the provinces that are being created. We have been carrying on an experiment for thirty years in this matter, and I say that the experience of time, has shown that the experiment is not a good one. Am I not justified in supposing that a wise and intelligent government, having to deal with the same question with regard to the new provinces, would endeavour to settle on some sound principle that would not require to be changed from time to time ? It seems to me that would be the part of wisdom and what you would expect from very astute business men. Experience must teach us something, and our experience with our system of division of revenues for thirty years should enable us to judge whether it is a success or a failure. The Minister of Finance admits it is a failure.
Mr. SPROULE. I understood him to admit it was a failure, because the provinces are always coming back for a readjustment. notwithstanding it was declared a finality ten years ago. They have come back in the past time after time, and are coming back now, and are likely to come back in the future, and does not this suggest that the part of wisdom would be to adopt some new and sound system which would avoid the necessity of readjusting these subsidies from time to time, as we have been obliged to do in the past?
5453                       May 4, 1905          
Mr. FIELDING. I understood my hon. friend to ask if there was any correspondence from the Northwest government in regard to suggesting any other methods than this, and it was to that question I replied there was no correspondence. The government of the Northwest, in the Haultain Bill, has suggested precisely the same method of dealing with this matter as that which we have adopted. I do not understand that the principle of this matter has been a failure. What is the principle? That the provinces shall receive some portion of the revenues which the people pay to the Dominion government. I do not think that principle has been a failure, and there is not a province in the Dominion today that would be willing to abandon it. The working out of the details has not always been satisfactory and the amount not always sufficient, but the principle that the government at Ottawa shall pay a subsidy to the provinces is a principle that has not been a failure. No province will admit that it is a failure, though they will all be glad to have a larger subsidy.
Mr. R. L. BORDEN. It is then a success pro tanto ?
Mr. FIELDING. That principle will certainly be retained, the only change that might take place being a re-adjustment of details. As to the point that we are not bound now in dealing with the Northwest as we were bound in dealing with the provinces which had the power to enter into a contract and to bargain, I admit my hon. friend's argument, that if we followed the principle to its logical conclusion we would not give the Northwest anything. We would say: You are not in a position to bargain, and we will give you nothing. That would be manifestly unfair, and I am sure my hon. friend would not pretend to take that view. Inasmuch as that principle has been adopted, and inasmuch :as we give back a portion of our revenue to the provinces already constituted, it is only reasonable that we should give a portion to these new provinces in like manner.
Mr. HENDERSON. I do not think the minister is justified in inferring, from anything that has come from this side of the House, that we do not propose to give the new provinces anything; that we do not propose to be generous to these new provinces.
Mr. FIELDING. I am not seeking to make that point.
Mr. HENDERSON. No, but the remarks of the hon. gentleman might convey the impression that those of us who have taken part in this debate were not inclined to deal fairly with these new provinces.
Mr. FIELDING. I certainly did not so intend.
5453 5454
Mr. HENDERSON. I am glad to hear the hon. gentleman say so, but his words will be read. Permit me to say that I would favour no plan that would not deal reasonably, generously with the people of the west, for the reason that if we did not do so we would be immediately called upon to do something more, and there would be a continuous agitation. I am inclined to believe that we will require to be more than generous at the start if we are to have peace and contentment in that western country, because the people who live there are a people who will stand up for their own rights. Therefore, I wish it to be understood that I am not going to be parsimonious; I do not propose anything of that kind, but I simply reiterate what I said before, that I think some new plan might now be suggested by which we could adopt conditions which would throw the responsibility on the people of these new provinces of conserving what they do get, would make it more to their interest to protect and conserve their revenues, and to economize with the moneys which come into their hands for the purpose of carrying on the government. It might be said that would perhaps be a sort of parental care, that we are a little too anxious. I think in the administration of the older provinces we have had some examples of lack of care to conserve the assets and revenues of the people. You may take, as an example, the province of Quebec ; I am afraid that in past years the people of Quebec received a severe lesson. There certainly was a time when they overrode all principles in their expenditure, when they were reckless and seemed to throw money right and left, until they accumulated a very large debt indeed, which is an undesirable thing for a province having a fixed revenue. A debt is a less serious matter to the Dominion, because we have a variable revenue.
Sir WILFRID LAURIER. Hear, hear.
Mr. HENDERSON. If we require more money we simply have to adopt the plan of the Minister of Finance, reduce the taxation and get more revenue. That is. we adopt a tariff for revenue only instead of a protectionist tariff in the interest of the people of this country. We simply adopt a plan to take more money out of the pockets of the people, and therefore a debt is not so serious a matter to the Do minion as to a province with a fixed revenue. What I said with reference to Quebec applies pretty much to Ontario, which has now a considerable nucleus of a provincial debt, as has recently been disclosed. I am sorry I cannot assist with a suggestion as to what direct method should be adopted. I believe it could be worked out on the principle of allowing the provinces to retain their lands and work out their own destiny, instead of our acting the paternal part of taking care of their 5455              COMMONS         lands and using them for Dominion purposes and giving the provinces a money consideration instead.
Sir WILFRID LAURIER. Retaining their lands in Quebec and Ontario has not made them more economical.
Mr. HENDERSON. I think this case is somewhat different. The new provinces have the example of Quebec staring them in the face, and will possibly be warned by that. But leaving that aside, I think if they are asked to hew out their own destiny that properly belongs to them, the result will be better not only for the provinces, but for the Dominion. We must look forward to the time when these enormous subsidies are going to be a very heavy charge on this country. What is to become of the Dominion if we are going year after year to increase the revenues of the provinces out of the Dominion exchequer? I look forward to a time when possibly the revenues of the Dominion, which have been swollen of late years, will not increase so rapidly, and when we may possibly be ca lled upon to increase the debt of the country for the purpose of providing these large subsidies. I have made no calculation as to what additional sum would require to be paid by the Dominion on account of the creation of these new provinces, but I am under the impresgion that the amount would be somewhat alarming. I would be glad if some hon. gentleman who has made the calculation would inform the committee just what it is at the present time; and it is not to the present alone that we must look, but also to the near future. The population of that country will increase from year to year, and when it reaches 800,000 in each province, the subsidy at 80 cents a head will amount to $640,000, or double that for the two provinces. a very considerable provision, apart from the allowance which we have to make to them because of the fact that they come in without a debt and that we have to pay them for the lands, with respect to which I shall have something to say when we reach the subclause. Having received the assurance of the Finance Minister that he did not wish to convey the idea that we were acting in an unfair manner to these provinces, I have nothing more to say at the present time.
Mr. SPROULE. I was about to say, when the hon. gentleman rose, that I did not mean to imply that we were not in favour of giving assistance to the Northwest Territories in the way of subsidies. That was not my intention at all; but the hon. member for Halton (Mr. Henderson) has put that matter right. I was directing my attention to another matter which I think ought to be considered at the present time, that is, whether our system has been a success or a failure. The Minister of 5455 5456 Finance does not admit that it has been a failure: he claims that it has been a success. But I remember distinctly that some years ago the Hon. Edward Blake declared it to be a failure. Sir Richard Cartwright said the same thing. He said over and over again that he was opposed to the principle, because it only created an ambition to beg for more. He also pointed out that it would inevitably lead a political party in a province, when the same party was in power in the Dominion, to appeal to the electors for support on the ground that they were going to get the provincial subsidy increased or get the Dominion to assume a debt which they had improvidently rolled up: and thus they would have a powerful lever in their hands to induce the electorate to return them to power. Is it not a fact that a political party in the maritime provinces have run the elections more than once on that ground, declaring that if they were returned, their friends being in power in the federal parliament, they would have a better chance of getting the provincial subsidy increased than if the Conservative party were in power? And the result was that they were successful. The same question was raised in the province of Quebec and the same party succeeded. We have had it knocking at the doors of the federal parliament for an increase in the subsidy, and we have had the declaration of the First Minister to-day that we must deal with that question in the near future. Is not that an evidence that the principle is an unsound one ? We should adopt a principle which would be a finality and under which we would not have this menace constantly before us. It is for these reasons that I draw attention to the matter today; and when we are forming these new provinces, it seems to me a fitting time to adopt a correct principle with regard to them, and then try to deal with the other provinces on a similar principle. I asked if there was some correspondence, because I assumed that if there had been no correspondence before the financial details were announced, there would not be much trouble at the present time. The financial arrangement is quite liberal now, in view of the small population. At the present time, when each province is supposed to have a population of 250,000, it will give at least $1,100.000 to each province. Then a province of 250,000 people would be getting $1,124,000. That would be regarded as rather lavish taking into account the smallness of the population. But when they reach the maximum of 800,000. their revenue will be $2,200,000. How much did we give the Territories last year for government ?
Mr. FIELDING. I cannot say off-hand. but perhaps some hon. member from the Territories can recollect it.
5457           May 4, 1905             
Mr. TURRIFF. We do not get the maximum when we attain a population of 800,000, but when we attain a population of 1,200,000 in each province. When we get the maximum, or a little over $2,000,000, if the people of the Territories will then be paying as much revenue to the Dominion per capita as they are now, the Dominion government will be receiving from each of these provinces a sum of about $10,000,000 or $12,000,000, so that I do not think the debt of the Dominion will be increased by the subsidy.
Mr. R. L. BORDEN. 800,000 is the maximum of the province we are speaking of.
Mr. ARMSTRONG. Would the Minister of Finance be good enough to give an estimate of the amount that will be required to supply the necessary buildings to carry on legislation ?
Mr. FIELDING. There is a clause later on which deals with that, subsection 4, which will be reached in a moment. The whole sum paid to the government of the Territories in 1903 was $802,466. There are several charges in which the Territories share but the grant to the government itself was that amount.
Mr. SPROULE. Did you not spend a lot on public works in addition ?
Mr. FIELDING. The Territories have shared in the various expenditure by the Dominion. I am speaking of the sum paid the territorial government and which was under their control.
Mr. SPROULE. What is the cost of the government there today ? I remember pointing out last year what we spent. What we gave them to spend reached a little over a million, which would be at least $600,000 to each of the two. Now we make it $1,124,000. but this covers the administration of justice and everything else which entails a great deal of additional expenditure. Having regard to what it costs us to govern that country to-day, this is not a very extravagant amount to give them. But ten years hence, when there will be over a million people there, they will be back for a readjustment of their provincial subsidies, which seem to be lavish to-day ; and because of this fact we ought to devise some better principles than are embodied in this Bill.
Mr. R. L. BORDEN. It would be interesting to have a statement along the lines my hon. friend has mentioned. The government of Canada, by means of an allowance to the government of the Territories and appropriations for public works and otherwise, is spending a certain amount. How does that compare with the amount which the Territories will receive under this Bill ? It would be well to have a comparative statement in respect of their housekeeping in that regard. Will they be much 5457 5458 better off, or in the same position or worse off ?
Mr. FIELDING. The figures which I gave were taken from the public accounts of 1903, and. they show that we paid something over $800,000 to the government of the Territories in that year. Last year the sum was larger. I think my hon. friend from East Grey is right in saying it was something over a million; and if you add the various charges which the Dominion bears in the Northwest, it will be still more. It is not easy to make up such an account as my hon. friend the leader of the opposition suggests because the Northwest shares in all the expenditure of the various branches of the Dominion service.
Mr. SPROULE. I was referring to those items they will be obliged to provide for the future and which we have provided heretofore.
Mr. R. L. BORDEN. How much does the government of Canada provide for the expenditure which must be paid in future by the government of the Territories out of the allowance we make ?
Mr. FITZPATRICK. The figures I had at the time, given me by the representatives of the Territories, were as follows: The total revenue for the eleven months of their financial year ending the lst of January, from January to November, was $1, 104,842.07. Of that amount they had received from the Dominion $961,936.42. Therefore the amount collected from local sources was $142,905.65. I have since ascertained that the total amount received during the ' whole year, both from Dominion and local revenues, was $1,121,000 and their expenditure to the first January last was $1,053,000.
Mr. R. L. BORDEN. Will they, under the new conditions, have to provide out of their subsidies to meet expenditures which are now provided for by the federal government in its general administration of Dominion affairs, and how much ?
Mr. FITZPATRICK. There are certain expenditures now made by the territorial government, the money being largely supplied to them for that expenditure by the Dominion. Then there are certain other expenditures now made by the Dominion government on account of services that will be under the control of the provincial governments. Take, for instance, civil government. It is estimated that the total amount required to be paid in this connection will be $101,540, which is based on the actual expenditure by the territorial government. Then they give an estimate of the amount required. for legislation. These two amounts are expended directly by the territorial government. To that must be added the administration of Justice, part of which is now provided for by the 5459 ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬†¬† COMMONS ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† Dominion government, but expended by the local government. And, in that connection you have an additional $65,000, this being paid by the Dominion government over and above what is expended by the local government. There are other expenditures now made by the Dominion government, such for instance, as court house, sheriff's ofiice, Regina jail, and Prince Albert jail and all which will be required to be paid by the provincial government in the future. Then there is the item of public works. There is now paid for public works by the territorial government out of money supplied by the Dominion government, somewhere about $680,000. In addition to that, I need hardly say, there is a large amount expended by the Dominion government, but that expenditure by the Dominion is for works that will remain under the control of the Dominion government. Then we have the details of what will be required for education and for agriculture and statistics. In the latter, in addition to what is expended by the territorial government, there is $7,000 paid out by the Dominion government. Under the head of government in the Northwest Territories we have expenditures for lieutenant governor's office, registrars' offices and schools unorganized districts, and so on‚ÄĒthese are met by the Dominion government, but hereafter will be a charge upon the provinces. I think I cannot do better than give a summary of the expenditure made by the local and by the Dominion government for purposes which hereafter will come under the control of the provinces.
MR. R. L. BORDEN. That is what we want.
MR. FITZPATRICK. The figures are as follows for expenditures now made by the territorial government:
Civil government.. .. .. .. $101, 540
Legislation.. .. .. .. .. .. .. 21,375
Administration of justice .. .. 29,000
Public works.. .. .. .. .. .. .. 680,000
Education.. .. .. .. .. .. .. .. 345,125
Agriculture and statistics .. .. 47,600
Hospitals, charities and public health.. .. .. .. .. .. .. .. .. 20,000
Miscellaneous.. .. .. .. .. .. 68,175
Total.. .. .. .. .. .. .. .. 1,312,815
To this you must add the expenditures being made by the Dominion government in connection with the same services:
Administration of justice .. .. $ 200,290
Public works.. .. .. .. .. .. 215,000
Agriculture and statistics.. .. 57,000
Government of the Northwest Territories through the Lieutenant Governor 124,380
Total.. .. .. .. .. .. .. .. 596,670
Adding these sums together you get a total of $1,909,485. This, according to the estimate prepared by the territorial author  5459 5460 ities, would approximate the total amount. In this they have included something like $200,000 for purposes that we thought were not necessary and that were deducted. There was $3,000 in connection with the administration of justice; $8,000 in connection with the Edmonton jail, which will have to remain under the control of the Dominion government, because Edmonton jail is really a penitentiary; $100,000 estimated for police service which cannot be included; $38,000 in connection with roads and $100,000 for the construction of a proposed fence along the international boundary line of the territories. There is also another item which I cannot explain just now. The deduction of this amount of about $200,000 would leave about $1,700,000 which was the basis upon which we practi cally settled.
Mr. SPROULE. That had nothing to do with the Yukon ?
Mr. FITZPATRICK. No. I have the public accounts which show the actual expenditure by the territorial government and also the expenditure by the Dominion government last year. But I have not the figures here.
Mr. FIELDING. I will bear in mind what has been suggested and bring the memorandum so far as it can be done. The Minister of Justice (Mr. Fitzpatrick) says it has been prepared and that he has it.
Mr. R. L. BORDEN. As I understand it, the revenue of each province payable by the government will be $1,030,375, made up as follows :
Civil government and legislation.. .. .. .. .. .. .. $50,000
Allowance at 80 cents per head per capita on 250,000 population.. .. .. .. .. .. .. .. .. 200,000
Debt allowance.. .. .. .. .. .. 405,375
Allowance for lands.. .. .. .. 375,000
Mr. FITZPATRICK. It is based upon the population of 500,000 for both provinces. The allowance for the two provinces would be :
Civil government.. .. .. .. .. $100,000
Per capita allowance at 80 cents per head on 500,000 population.. .. .. .. .. .. .. .. .. 400,000
Debt allowance.. .. .. .. .. .. 800,000
Compensation for lands.. .. .. 750,000
That would be a total of $2,050,000 or for each province, $1,025,000.
Mr. ARMSTRONG. Did the representatives give to the government an estimate of the amount of money they were likely to receive from licenses, subsidies and succession dues ?
Mr. FITZPATRICK. $143,000 from all sources was the estimate of territorial revenue, based upon the figures of the amount received last year, that is for the two provinces.
5461                   May 4, 1905          
Mr. R. L. BORDEN. As I make it, the probable revenue for the new provinces would be $1,124,125 for the first year.
Mr. FIELDING. $1,123,125, substantially the same as the hon. gentleman's figures.
Mr. HENDERSON. When the population reaches 800,000, 1 make the revenue for each province $1,652, 000.
Mr. FIELDING. But at that time the. revenue which will come to the Dominion will be a very large sum, and we can well afford to pay. them an increased subsidy.
Mr. HENDERSON. If the member for Assiniboia (Mr. Scott) is correct, it will reach $10,000,000. But I think that is a mere guess because the population would have to increase very rapidly indeed to bring the revenue to $10,000,000. It would have to increase more than twice as rapidly as it does now; because if we take the revenue per capita of the whole Dominion, which is $8.87, and apply it to a population of 5,000,000, for each of those two provinces, it would not produce quite $5,000,000, which is a long way from $10,000,000, which the hon. gentleman said would be the revenue, possibly, when they reached the 800,000. An increase of 300,000 over 500,000 would not make up the other $5,000,000. So I think we must not bank too much on this enormous increase of revenue to meet the very large expenditure. We will have to make a more careful calculation than was made by the member for Assiniboia.
Mr. INGRAM. As I understand it, the proposition of the Territories was $1,396,000. So there is that difference between the government's proposition and that which the Northwest Territories submitted in their draft Bill.
Mr. FITZPATRICK. They asked altogether for $1,909,485, to include all the services that they are now responsible for, and the services that are provided for by the Dominion government directly. That was their request, $1,909,485. Now when we examine the details of the figures, we find that in that sum they include a sum of     $3,000 in connection with the administration of justice, which they wanted added on, though it is already provided for. They included the sum of $8.000 for the Edmonton jail. That sum of $8,000 for the Edmonton jail will not be a charge on them at all. It will remain with us, because the Edmonton jail is to be treated as a penitentiary for the Territories. Therefore the financial obligations connected with that penitentiary will be upon us. and that sum is deducted from the amount they claim, as the jail will not pass over. Then in connection with the police service, they charged $100,000, which they wanted us to give them in order that they may provide for their police service. We did not think, in view of the fact that the Northwest Mounted Police is to be main 5461 5462 tained by the Dominion government, that we ought to maintain the police, and at the same time give them $100,000 for the same service; because there is a provision in the Northwest Mounted Police Act that if they require the services of the police they can apply for them, and each municipality of the province can pay for such service as they require from the police. Therefore that sum is also to be deducted. Then they charged, in connection with public works, a sum of $13,000, which we did not think ought to be admitted. They claimed in connection with colonization roads, the sum of $25,000, which we did not think ought to be admitted, because it is the intention of the government, so far as these colonization roads are necessary, to continue to make the expenditure ourselves, in view of the fact that a part of the Territories will still remain under our control.
Mr. HENDERSON. Do you continue the construction of these colonization roads in the new provinces as a Dominion work ?
Mr. FITZPATRICK. In so far as it may be necessary to make colonization roads, it is our intention to make them, both in the new provinces and outside‚ÄĒif we deem it necessary to make any. Then in addition, they asked for $100,000 for the construction of a fence along the international boundary. We did not think that was necessary, and if it was necessary to construct it, we should do it ourselves. So we deducted that amount. Then there is another amount of $50,000 to be deducted. which they charged as the result, they claimed, of an examination of the Auditor General's Report of 1902-3. They seemed to think they were entitled to $50,000 more, which we also deducted. So that from this sum of $1,909,485 these deductions have to be made, and if these are taken into account, it will be found that the amount we have given to them to be derived from the different sources of revenue mentioned in the resolution, will practically meet all their requirements, of course, always bearing in mind that they have from their local sources a revenue of $143,000.
2. Resolved, That inasmuch as the said province is not in debt, it shall be entitled to be paid and receive from the government of Canada, by half-yearly payments in advance, interest at the rate of five per cent per annum on the sum of eight million one hundred and seven thousand five hundred dollars.
Mr. HENDERSON. To my mind that is one of the most interesting resolutions in the schedule. I desire to ask the Finance Minister whether, if parliament should grant this allowance to each of the new provinces, that is an allowance of five per cent on the sum here mentioned, he would still hold to the view that he holds in the case of Ontario, that the province could at any time call on this Dominion to pay over that $8,000,000 ? Now if it is not the intention of the govern 5463               COMMONS       ment that there should be a sum actually owing to these provinces, a sum of money which they can call upon the Dominion for at any time, I think we should be extremely guarded in the wording of the resolution. I am not sure that the resolution as worded now will really carry out the intention of parliament. I do not know who the draughtsman was, whether it was the hon. Minister of Justice (Mr. Fitzpatrick) or the hon. Minister of Finance (Mr. Fielding). I would rather have supposed that it was the Minister of Finance.
Mr. FIELDING.Is that because it is so good?
Mr. HENDERSON. It is so good.
Mr. FITZPATRICK. You must remember that my hon. friend the Minister of Finance was not consulted about this Bill according to the theory of hon. gentlemen opposite.
Mr. HENDERSON. My hon. friend the Minister of Justice has forgotten that this clause was not published or given to the House until after the Bill had been introduced, or until after my hon. friend the Minister of Finance had returned from his European trip.
Mr. FITZPATRICK. Not at all.
Mr. FIELDING. I will accept responsibility for it.
Mr. HENDERSON. Well, now we know who the draughtsman is, and I am glad we do, knowing some of the opinions which the hon. Minister of Finance held in regard to an arrangement of a very similar character as between the province of Ontario and the Dominion of Canada, and knowing that the hon. Minister of Finance, in regard to the large sum of $2,848,000 which the province of Ontario alleged for many years was an asset of that province, supported that contention, and that he held that at any time the province of Ontario had the right to call upon the Dominion to pay over that large sum of money. Knowing that fact, I may well suspect that there may be something in even the drafting of this clause that will allow these new provinces to call upon the Dominion for this sum of $8,000,000. Whether that is the intention of the hon. Minister of Finance or not I hardly think it is the intention, or will be the intention, of this committee. I rather think the intention will be to grant this $400,000 from year to year as a subsidy.
In the year 1884, the Dominion of Canada granted an additional subsidy to the province of Ontario of $142,414, based upon a capital sum of $8,848,000, which it was alleged was owing to the province of Ontario by the Dominion of Canada, alleged not as a matter of fact, but simply as a matter of calculation. The sum arose in 5463 5464 this way : From 1867 to 1873, the province of Ontario was charged the interest on five- ninths of the excess of debt which the provinces of Upper and Lower Canada had over the $62,500,000, when they went into confederation. In 1873, a readjustment of subsidies was made and the Dominion government agreed to assume the entire excess of debt of $10,500,000 owing by the old provinces of Canada and to relieve the old provinces from the payment of interest. In other words they practically made the provinces of Ontario and Quebec a gift of $10,500,000, because these provinces were for ever relieved from the payment of interest on that money. This seemed to be a very generous act on the part of the Dominion government, and it is just one of those things that I apprehend will occur in the administration of the affairs of these provinces when a demand is made for better terms. However, we will say nothing more about that now. The provinces of Ontario and Quebec were satisfied in 1873 to get rid of $10,500,000 of debt and throw it on the shoulders of the whole of the people of Canada. Nothing more was said until 1884. when the demand was again made for better terms by the provinces and the government then led by Sir John Macdonald felt constrained to come to the relief of the provinces again. The words quoted by my hon. friend from East Grey (Mr. Sproule), I think, made use of by Mr. Blake, were very apt indeed. These applications came time after time, and we had the continual repetition of the same old story; better terms, better terms and better terms. In 1884, it became necessary to conciliate the different provinces, because, I think, that was really the purpose for which the new subsidy was given, and it became necessary to find a basis on which the new subsidy could be granted. The fact was that the British North America Act provided no means for an increase of subsidy and it was necessary to devise some means. The province of Ontario said: You assumed our excess of debt in 1873 and relieved us of the half yearly payment of interest. We had paid for the first seven years after confederation. Now, if you had the right to assume that excess of debt and relieve us of that interest in 1873, it was right that it should have been done in 1867, and you ought to refund to us the interest we paid during those seven years. A calculation was made, because it was conceded by the government of the day that they would have to do something, and I think, the gentleman who made the calculation at that time was the present Auditor General, he having made it before he became Auditor General. The calculation was made that 13 1/2 half-yearly payments of interest at five per cent up to 1884 would amount to $2.848,000. In 1884, a Bill was passed by this 5465                         MAY 4, 1905       parliament granting new subsidies, or practically new subsidies, on the basis of five per cent on $2,848,000 to the province of Ontario, and the other provinces all got what we commonly call a quid pro quo. No man in this House at that time assumed that that $2,848,000 was a debt to be paid over to the province of Ontario in a bulk sum at any time, but the province of Ontario, in 1894, when their surplus practically disappeared, and being desirous of placing a good financial showing before the electors of the province, adopted the principle of capitalizing this sum of $142,414 and said: The Dominion of Canada owes us $2,848,000 in cash. Year after year the matter was discussed in the province of Ontario, some holding one thing and some the other. I always thought that that $2,848,000 was not a debt owing by this Dominion to the province of Ontario. I was led to believe that from the fact that the Act that created that subsidy in 1884 declared that the $142,414 should be paid in half-yearly payments to the province of Ontario as an additional subsidy. It was so declared in the Act and as it was subsidy and not interest there was no authority for capitalizing it. With other questions in dispute between the old provinces and the Dominion of Canada this same matter was referred to arbitrators. and they declared that the settlement of 1884 should be held intact and that this subsidy should continue to be paid half-yearly to the provinces of Ontario and Quebec. But, this is the point that I wish to draw attention to. At a later period the province of Ontario, still setting up the contention that this was capital owing to them, applied to the hon. Minister of Finance (Mr. Fielding) for an interpretation of the statute and I think we have it on record that the hon. Minister of Finance has given his opinion that the province of Ontario is entitled to call for that sum of $2,848,000. subject to certain conditions, but those conditions were conditions that could very readily be got over. If I recollect aright, the simple conditions were that they could be used in the construction of public works ; so that the conditions were of such a minor character that they would not constitute a defence for the Dominion of Canada in resisting payment of that money. Now what I fear here is that probably these new provinces may make a demand in the same way, and that some day, when the Minister of Finance finds himself a little short of funds, when his surplus may not be quite so large, he will find each of these provinces coming down and asking him for the sum of $8,000,000 in solid cash. I desire to call attention to this matter because I think we should be most explicit in the language and I have never intended to find fault and I am not finding fault with the allowance. I am not 5465 5466 finding any fault with the province of Alberta, or the province of Saskatchewan get ing a yearly allowance, on account of having no debt, of $400,000. I am finding no fault with that, but when we are enacting thls law I think we should be very particular to see that the law is framed so that these provinces will not come down at a later period and make a demand on the Dominion of Canada for something that we never intended to give them, as has been done in the case of the province of Ontario. I have no doubt that the draughtsman will be able to put that language in such definite and explicit form that there will be no danger of uncertainty, but I always thought that the language of the Act of 1884 was extremely definite and very explicit indeed. It declared that the sum to be granted to the province of Ontario at this time, the $142,414 was to he paid as a subsidy and not as interest. Here we find that the resolution declares that there is a sum of interest to be paid half-yearly to this province. I fancy we will find as shrewd men in the Northwest Territories as we find in Ottawa and those men will come down to us and say: You are paying us half-yearly interest at the rate of five per cent on $8,000,000; and if there is interest there must be principal, there cannot be interest without principal, and therefore without accepting your little sum of $200,000 a year we believe we are able to manage our own affairs and we want you to pay over the $8,000,000 at once. Now let there be no uncertainty about this. I would ask the Finance Minister before I sit down what the real meaning of the clause is. Is it to be left open, is it to be left in uncertainty, or is the government of the same mind as the Minister of Finance was of some two or three years ago, and is he of that opinion still, that under the wording of this resolution, the province of Alberta, or the province of Saskatchewan could at any time call upon the Dominion for the capital sum of $8,000,000 instead of getting the allowance of $200,000 per .half year in perpetuity ? I make no objection to the grant of money or to the allowance only I say, do not let us fall into the mistake of 1884, if a mistake was made in 1884, and leave it in uncertainty. There is certainly more room for the contention in this case that the province would have a right to call for the capital sum than in the case of 1884, because the Act of 1884 said that $142,414 should be paid as subsidy; here it is paid as interest and as I said before if there is interest, the people there will say there is principal behind it. I submit this to the Minister of Finance and I hope he will make the matter clear, and if the language of the draughtsman is not sufficiently clear to protect us in the opinion which we desire to express, then I think the clause might be so amended as to place it beyond doubt and not leave us with a con 5467        COMMONS               troversy on our hands, similar to what has existed in Ontario for many years.
Mr. FIELDING. I do not think there is much difference substantially between the hon. member for Halton (Mr. Henderson) and myself with regard to the nature of these payments. His contention as I understand it is that they should be subsidies or annuities, that the sums are marked as interest simply with that intention.
Mr. HENDERSON. I presume that the hon. gentleman's intention is that these sums will be paid as annuities in perpetuity, but I think the language of the resolution is not sufficiently definite to protect parliament in that contention.
Mr. FIELDING. That is the contention I know that my hon. friend has always made in relation to the case in Ontario, and it has always been arguable. There is however a difference between the Ontario case and this case. In the case of Ontario the Act under which these increased sums are granted treated them as capital. I am speaking from memory but I think that is correct. The government of the day carried those sums to the credit of the province of Ontario, and they remained as a debt due by the Dominion to the province of Ontario and were so placed in the public accounts. This parliament passed an Act a good many years ago which declared‚ÄĒI am speaking from memory but I think I am correct‚ÄĒthat where there is a sum available in the debt account of any province that sum may, on the application of the government of the province, be withdrawn for the purposes of public works. Under that Act various provinces of the Dominion did withdraw from their debt accounts sums of money, thereby reducing their capital sum and thereby reducing their annual revenue. When the question was raised in regard to the province of Ontario, my view was that, under the Act, Ontario could under certain conditions, which I shall state later, apply to the Dominion for that money, and that under those conditions the province might receive that money as a payment out of its own invested capital. Of course, I went on to say that it was not a practical question inasmuch as it was not conceivable that the province of Ontario would withdraw money earning 5 per cent when it could go out on the public market and borrow at 4 per cent or less. Therefore it always seemed to me to be rather more of. an academic subject which we were discussing, a matter not likely ever to take practical shape. But under an Act passed away back in, I think, 1874, provision was made that a provincial government might under certain conditions withdraw from its capital accounts at Ottawa sums of money for public works. I think that in the beginning of the matter when that Act was passed it was entirely a matter for executive action between the governments of the provinces and 5467 5468 the Dominion. That is to say if the executive of the province made application for the money and if the executive of the Dominion should see fit to grant it, the money might thereupon be paid out for the purposes designated, always limiting it to public works. Later on, about the year 1885, the Act was amended to provide that a province could only make applications for money out of such funds when so authorized by the provincial legislature ; and, speaking from memory, I think that is the state of the law today. In order to draw money out of that capital fund, there must first be the authority of the provincial legislature supporting the demand of the provincial government, and then it becomes a matter of discretion with the Governor General in Council whether or not he will advance the money for the purposes stated. That was the substance of the answer which I gave to the government of the province of Ontario. As I said a moment ago I treated it rather as an academic question, for I did not quite see how it could practically rise. The money was earning 5 per cent in the treasury of the Dominion, and as I said it was hardly to be supposed that the government of any province would withdraw that money when they could go out on the public market and borrow money at 4 per cent or less. So much on the general subject of the law. In the case of Ontario that sum was carried into the public accounts as a debt due by the Dominion to the province of Ontario. I admit that under the language used in this resolution it is not declared to be capital, and perhaps there is some room to doubt whether under this we could capitalize it. I am rather disposed to take the view that it ought to be regarded as an annuity and not as a capital sum. I understand that is the view suggested by my hon. friend (Mr. Henderson), that he thinks it ought to be an annuity and not a capital sum. There is a good deal to be said in favour of that view and before the matter is finally disposed of‚ÄĒI shall not regard it as final now,‚ÄĒI am inclined to think much might be said in favour of inserting words which would make that clear. I quite realize that these amounts which do not represent an actual debt, represent allowances made to one province or another in accordance with the various conditions of the public debt; that these are all methods of bookkeeping. They were not actual debts ; but, by virtue of the terms on which these grants were made, in some if not all instances. they were carried into the public debt account of theDominion. In that account they stand as debts due to the Dominion by the province, and I am inclined to think that the legal gentlemen opposite will say that if the province saw fit to make application to the Dominion executive. we could pay money out of that fund for the construction of public works. That was 5469 ¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† MAY 4, 1905 ¬† ¬†¬† our view with regard to the case of Ontario. Whether we should use other words to make it clear that this is an annuity and not a capitalized sum is worthy of consideration, and before the Bill is finally disposed of I will return to the matter again.
Mr. HENDERSON. I do not wish to prolong the discussion, but there may not be another opportunity for some days to take this matter up. I never could agree with the Minister of Finance that that was a capital sum. It is a simple matter of bookkeeping. I know that in the Act of 1884 it is stated as capital, but the Act says that the interest at five per cent will be paid to the province as an annual subsidy. The sum of $4,848,000 was never owing by the Dominion to the province. It was practically a scheme to provide a basis on which a new subsidy could be calculated. It was no more a capital sum than the assessment of a town or village; it was simply used for the purpose of determining what the subsidy should be, just as we use an assessment and an assessment roll in order to fix the rate of taxation. I believe that was the opinion of the judges of the Supreme Court when they had that matter under consideration. My recollection is that they decided that when the subsidy had been ascertained as $142,414, the capital sum dropped out of sight and was no more to be regarded as capital. But, as the Finance Minister has told us that he is prepared to modify, if necessary, the language in this resolution to make plain what the intention of parliament is, I am quite satisfied. All we want is to have it definitely understood. so that it will not be said in future years that we made a mistake in our legislation or left it an open question as to whether the province should call on us for $400,000 a year in perpetuity, or come down on us at once for $8,000.000. Perhaps if' they got the $8.000,000, they might use it extravagantly. I do not say that they would, but I think it is better to   give them an annuity in perpetuity. It will be better for them, because it will be equivalent to an investment at 5 per cent. But as the Finance Minister has promised to make the matter clear, I am satisfied.
Mr. INGRAM. Up to the time of the introduction of this Bill I understand that the government of the Northwest Territories acknowledged that they were in debt to the Dominion. I notice in a speech delivered by the premier of the Northwest Territories in 1900, that he admitted $3,000,000 odd, made up of several items. This resolution reads, 'inasmuch as the said province is not in debt.' This would appear rather conflicting with the fact. I would like some explanation with respect to that.
Mr. FIELDING. In our detailed statement in the Public Accounts of expenditures on various public works and services through 5469 5470 out the Dominion there is a column headed ' Northwest Territories,' in which these expenditures for a long series of years are totalled up; but the amount does not represent a debt due by the Northwest government, and we do not claim it as such.
Mr. HENDERSON. How does the hon. gentleman propose to get rid of that in the public accounts?
Mr. FIELDING. It is not a debt and does not appear as a debt. It is only a statement of public services on which we have spent so much money. These are the items of expenditure in detail, but they do not represent debts, and they are not so claimed in the public accounts.
Mr. INGRAM. My object simply was to find out why it was charged to the Territories.
Mr. FIELDING. It is an item for expenditure in the Territories but not a debt due by the Northwest government.
Mr. R. L. BORDEN. There may be one or two little matters that have not been explained in this connection. I am willing this should pass on the understanding that we may ask the explanations on the next item.
Mr. FIELDING. I would like to propose an amendment to the next clause. It does not change the substance of these resolutions but only their form. Resolution 3 deals with the allowances for land. In the form as it is drafted, we have not only given the amounts we propose to allow but. the arguments on which the allowance is founded. That seems unnecessary and I propose to amend the clause as follows:
19. Inasmuch as the said province will not have the lands as a source of revenue, there shall be paid by Canada to the provinces annually a sum based upon the population of the province as from time to time ascertained by the quinquennial census thereof, as follows:
The population of the said province being assumed to be at present 250,000, the sum payable until such population reaches 400,000 shall be $375,000 ;
Thereafter until such population reaches 800,000, the sum payable shall be $562,500 ;
Thereafter until such population reaches 1,200,000, the sum payable shall be $750,000 ;
And thereafter the sum payable shall be $1,112,500.
2. As an additional allowance in lieu of public lands there shall be paid by Canada to the province annually for five years from the time this Act comes into force, to provide for the construction of necessary public buildings the sum of $93,750. '
Mr. U. WILSON. In the original you say twenty-five million acres.
Mr. FIELDING. We leave out both the quantity and the value of the lands and give the population, and the result is the same to the province.
5471           COMMONS           
Mr. U. WILSON. Do you think that will do away with future claims ?
Mr. FIELDING. It simplifes the matter. It is better drafting.   Progress reported.
Sir WILFRID LAURIER moved the adjournment of the House.
Mr. R. L. BORDEN. What may we expect on Monday ?
Sir WILFRID LAURIER. The resolutions and then the Bill.
Mr. R. L. BORDEN. Shall we continue with this measure before the budget is taken up ?
Motion agreed to, and House adjourned at 6.05 pm.


Canada. House of Commons Debates, 1875-1949. Provided by the Library of Parliament.



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