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Date: 1970-06-25
By: Canada (Parliament)
Citation: Canada, Parliament, Minutes of Proceedings and Evidence of the Special Joint Committee of the Senate and of the House of Commons on the Constitution of Canada, 28th Parl, 2nd Sess, No 7 (25 June 1970).
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THE SPECIAL JOINT COMMITTEE
of
THE SENATE
and of
THE HOUSE OF COMMONS
on the
CONSTITUTION OF CANADA

Senator
MAURICE LAMONTAGNE

Joint Chairmen

MARK MacGUIGAN
M.P.

MINUTES OF PROCEEDINGS
AND EVIDENCE

No. 7

THURSDAY, JUNE 25, 1970

WITNESSES

(See Minutes of Proceedings)

SPECIAL JOINT COMMITTEE
ON THE
CONSTITUTION OF CANADA

Senator
MAURICE LAMONTAGNE
Joint Chairmen
MARK MacGUIGAN
M.P.

Representing the Senate

Senators

1 Cameron,
2 Ferguson,
Flynn,
Giguère,
Grosart,
4 Langlois,
Macdonald
3 Thompson,
Yuzyk—10.

Messrs.

Alexander,
Allmand,
Asselin,
Baldwin,
Breau,
Brewin,
Dinsdale,
Fortin,
Gibson,
Hogarth,
Hopkins,
Lachance,
Lewis,
Marceau,
McQuaid,
Osler,
Ouellet,
Roberts,
Woolliams—20.

(Quorum—17)

Michael B. Kirby,
Patrick J. Savoie,

Joint Clerks of the Committee.

1 Replaced Senator Connolly (Ottawa
West) on June 25, 1970.

2 Replaced Senator Cook on June 25, 1970.

3 Replaced Senator Lang on June 25, 1970.

4 Replaced Senator Phillips (Rigaud), on
June 25, 1970.

ORDER OF REFERENCE OF
THE SENATE

Extract from the Minutes of Proceedings
of the Senate.

THURSDAY, June 25, 1970

With leave of the Senate,

The Honourable Senator McDonald
moved, seconded by the Honourable
Senator Smith:

That the names of the Honourable
Senators Cameron, Fergusson, Thomp-
son and Langlois be substituted for
those of the Honourable Senators
Connolly (Ottawa West), Cook, Lang
and Phillips (Rigaud) on the list of
Senators serving on the Special Joint
Committee of the Senate and House of
Commons on the Constitution of
Canada; and

That a Message be sent to the
House of Commons to acquaint that
House accordingly.

The question being put on the mo-
tion, it was—

Resolved in the affirmative.

ATTEST.

ROBERT FORTIER,

Clerk of the Senate.

[Text]

MINUTES OF PROCEEDINGS

THURSDAY, June 25, 1970
(10)

The Special Joint Committee of the
Senate and of the House of Commons on
the Constitution of Canada met this day
at 4:50 p.m. The Joint Chairman, Mr.
MacGuigan, presided.

Members present:

Representing the Senate: Senator La-
montagne.

Representing the House of Commons:
Messrs. Allmand, Breau, Brewin, Gibson,
Hogarth, Lachance, MacGuigan, Marceau,
McQuaid and Osler.—(10).

Witnesses: Mr. A. W. Johnson, Secre-
tary of the Treasury Board; Mr. C. D.
Allen, Assistant Director, Planning and
Development, Canada Pension Plan, De-
partment of National Health and Welfare;
From the Privy Council Ojfice, Constitu-
tional Review Section: Dr. B. L. Strayer,
Director; and Mr. K. Lysyk, Adviser.

Attending: Mr. David L. McWilliam,
Legal Adviser to the Committee.

The Joint Chairman introduced Mr.
Strayer who supplied answers to questions
in connection with “The Taxing Powers
and the Constitution of Canada”, asked at
the meeting of June 23, 1970.

It was

Agreed,—That the table showing the
share of total revenues collected by the
Federal Government and Provincial-Mu-
nicipal Governments, 1964-65 to 1968-69,
prepared by the Department of Finance,
be printed as an appendix to this day’s
Minutes of Proceedings and Evidence. (See
Appendix “G”)

Mr. Strayer was questioned after which
he was excused.

The Joint Chairman introduced Mr.
David L. McWilliam, Legal Adviser to the
Committee.

The remaining witnesses were intro-
duced. Mr. Johnson made a statement on
“Income Security and Social Services”
after which he and the other witnesses
were questioned.

Later, the questioning being completed,
the Joint Chairman thanked the witnesses
on behalf of the Committee.

Agreed,—That the booklet entitled
“Background Papers on Income Security
and Social Services”, prepared by the Sec-
retariat of the Constitutional Conference,
be printed as an appendix to this day’s
Minutes of Proceedings and Evidence.
(See Appendix “H”)

At 5:35 p.m., on motion of Mr. Gibson,
the Committee adjourned to the call of
the Chair.

Michael B. Kirby,

Joint Clerk of the Committee.

EVIDENCE
(Recorded by Electronic Apparatus)

Thursday, June 25, 1970

The Joint Chairman (Mr. MacGuigan):
Gentlemen, we have a quorum, and I think
we should get underway.

Mr. Gibson: Mr. Chairman, I wish to make
a motion. I move that the Committee give
attention to bringing the British North
American Act to Canada from Westminster as
speedily as possible, and that a study be
immediately begun as to what steps are
necessary to accomplish this objective, and
that the study commence parallel with the
other studies that are being made by this
Committee.

The Joint Chairman (Mr. MacGuigan): You
will pass us a text of the motion, I presume,
Mr. Gibson, but there are two problems that I
see immediately.

First of all, while we do have a quorum for
hearing witnesses, we do not have a quorum
for passing motions. We have not made any
effort to get such a quorum for today, because
we were not expecting any motions.

Secondly, this I would think, is already
automatically and completely included in our
present terms of reference. I do not believe
therefore that it is necessary or even desira-
ble for us to have a special ruling on this, any
more than it would be on any of the other
aspects of our work. I think they are all there
already, and it would not add anything to our
work. I think it might just confuse people if
we start having separate resolutions for each
aspect of our work. I think we might find that
this adds an element of confusion, both for
the members and for the public.

Therefore, while I will not go so far as to
rule the motion out of order—especially in
light of the fact that we will not be able to
vote on it today in any event—I think that
there is really no pressing need for such a
motion.

Mr. Brewin?

Mr. Erewin: Mr. Chairman, I just add to
what you. say about saying that it is out of
order. It is certainly controversial. I think it
puts the cart before the horse, and I would
want to discuss such a motion fully. There is
not a quorum, so I guess we should not waste
time on it.

The Joint Chairman (Mr. MacGuigan): We
will not accept the motion at the present
time, but it is always possible for you to
make it again in the future.

Mr. Gibson: I will renew it at the first
opportunity.

The Joint Chairman (Mr. MacGuigan):
There were several pieces of information
asked for at the last meeting which were not
at that time available.

One of these was a table of federal as
contrasted with provincial and municipal
shares of various kinds of taxes. This was not
available to us before, for more than two
years, I believe. It has now been prepared for
us by the Department of Finance, and it is
available for a range of years, 1964, 1965,
through 1968 and through 1969. I can distrib-
ute this to members here present, and I would
also suppose that we would like it attached as
an appendix to today’s minutes.

It was said earlier that it would be added at
a future time. I think we will add it as an
appendix to today’s minutes, if that is agreea-
ble to everybody.

There was aquestion asked as well, for
which the officials on Tuesday did not have a
ready answer. Dr. Strayer has come before us
today to provide us with the answer to that
question.

I believe it was Mr. Allmand’s question, and
I will let Dr. Strayer, who has already been
introduced to us, give the answer.

Dr. B. L. Sirayer (Director. Constitutional
Review Section. Privy Council Office): Thank
you, Mr. Chairman.

I should say first that I do not feel qualified,
or perhaps even adequately prepared at this
point, to go into many of the specifics of the
constitutions of other federal states.

I did my best to review What we had con-
sidered at the time this paper was being pre-
pared—the paper on taxing power—with
respect to the questions, which I believe Mr.
Allmand raised in the Committee the other
day.

As I understand it, the questions which
were raised, were, first, whether we had
examined other federal constitutions in rela-
tion to taxing powers, secondly, whether we
found any examples of other federal constitu-
tions imposing an upper limit on the collec-
tive taxing power of the federation and the
component units, and, thirdly, whether we
found examples of some sort of formalization
of federal state or federal-provincial consulta-
tion or co-ordination of the use of the taxing
power. If I could make a few general com-
ments on the results of our inquiries at that
time, I shall try to do so.

We looked most closely at the experience of
the United States and Australia, because of
various similarities in background and prac-
tice and kinds of taxation which could be
identified in those two federal states.

In the case of the United States, the taxing-
power is largely concurrent, and therefore
one could say that, to a large extent, the
principle of equal access applies.

There is a major exception to this, at least
major in legal terms, although not perhaps
major in practical terms. That is that the
Congress of the United States has no power to
impose direct taxes except the income tax.
This really results from a provision which
was put in Section 9, subsection 4, of the U.S.
Constitution, which says that any direct tax
imposed by Congress had to be imposed in
proportion to population.

This made it practically impossible to
impose direct taxes, That is, the way that the
tax was done in any particular state would
have to relate to the relative population of
that state.

I believe this was put in the constitution
with the objective of protecting the southern
landowners who were afraid that the northern
congressmen might impose heavy taxes on
private estates in the South, and by framing
the limitation of federal power in this way, it
has made it impossible to impose the property
tax. It also made it impossible to impose
income tax, and this required an amendment
to the Constitution in 1913, the 16th Amend-
ment, to permit Congress to impose income
tax. As a result, there is a very large measure
of overlap between federal and state powers.
As we understood it from our examination of
the situation, there is relatively little in the
way of formalized co-ordination of taxing
practises, and there is very little in the way
of formal equalization by the federal govern-
ment of state revenues. There is a system. . .

The Joint Chairman (Senator Lamontagne):
Except in so far as conditional grants are
concerned.

Dr. Strayer: That is right. There is a very
extensive system of conditional grants from
the federal government to the states, and
these to some extent have equalization factors
built into them. However, apart from that,
there is no general systemoi equalization.

In Australia there again is a fair measure
of concurrency, the main exception being that
the states are Limited in the kinds of taxation
that they can impose on sales.

The federal government has exclusive
jurisdiction over customs and excise. The
term “excise” has been construed rather
broadly to keep the states out of virtually
any form of taxation on transactions in
goods—any place between the manufacturer
and the ultimate consumer.

The situation is very similar in many
respects to ours in that efiect, under the
B.N.A. Act. The states are perhaps somewhat
more limited in the kinds of sales tax they can
use. They cannot use the kind of sales tax
that is very common to the provinces here.

However, Australia has other interesting
features. The states have been essentially
removed from the income tax field, because
the Commonwealth Parliament has occupied
that field and through a senies of measures
back during the second world war, effectively
removed the states from the field of income
tax.

There is a Commonwealth Grants Commis-
sion which is set up by an act of the Com-
monwealth Parliament and which is appoint-
ed by the Commonwealth Government. It
makes recommendations on grants to the
states and tax sharing with the states, par-
ticularly in the income tax field. Its duties are
essentially to make recommendations on the
equalization formula, and on the division of
the income tax to which the states would be
entitled, So that there is a formalized system
of division of revenues there, not through the
constitutional division of powers but through
the operations of the Commonwealth Grants
Commission. The Commonwealth Grants
Commission, of course, makes recommenda-
tions to Parliament which are apparently vir-
tually always accepted by the Commonwealth
Parliament and, of course, this whole thing is
backed up by federal state conferences of one
sort and another at which the states and the
federal government put forth their particular
points of view.

Moving from Australia just very briefly to
two or three other constitutions, the Constitu-
tion of India, with which I do not pretend to
be extremely familiar, does provide in the
Constitution itself for a Finance Commission.
Section 280 of the Indian Constitution creates
a Finance Commission which is appointed by
the President of the Republic of India. The
Finance Commission makes recommendations
on the division of income tax, the income tax
being imposed by the federal Parliament. So
the Finance Commission, of course, provides
the mechanism for division of the income tax
and I think as well certain export duties and
they have worked out various formulae again
related to the needs of the various states and
to some extent their taxaiion capacities.

I might just mention one other form of
co-ordination of taxing practice and policy,
and that may be found in the Constitution of
the Federal Republic of Germany where in
theory taxing powers are concurrent over the
whole field of taxation except for customs
duties. However, in fact, the federal Parlia-
ment, the Bund Parliament, levies most of the
taxes by legislation and the states or Laender
administer the taxes so that most tax
administration is in the hands of the states
although the federal government establishes
the taxing policy and lays down the rates of
taxation. There are exceptions to this. There
are some kinds of local taxes, including
inheritance taxes, which the Laender govern-
ments impose. The Constitution itself pro-
vides for equalization and for sharing of tax
revenues, and as a result of a recent amend-
ment to the federal Constitution made in May
of 1969, the income and corporate taxes
imposed under federal law are divided half
and half; 50 per cent to the federal govern-
ment, 50 per cent to the Laender. This is a
process which is sometimes referred to as
vertical equalization. The Constitution also
requires that the turn-over tax, which is a
kind of sales tax or transaction tax, which is
also imposed by federal law,-be split with the
states by a formula to be laid down by the
Parliament of the Federal Republic. This is a
law which must have the approval of the
Upper House, the Bundesrat. Not all laws to
require the approval of the Bundesrat, but
this kind of law does. The Bundesrat is com-
posed, as you know, of representatives of the
states, and this proves another system of co-
ordination, as it were, of federal and state
policy because the system of dividing
the. . .

The Joint Chairman (Senator Lamontagne):
The system does not work very well, though.

Dr. Strayer: Well, the system has been
altered considerably in the last year and I
have not seen any recent evidence as to how
it is working out, but the Bundesrat approves
the division of the turn-over tax. It also
approves the system of what is sometimes
called horizontal equalization, the kind of
equalization which we have in Canada.

I might just make one other comment. The
Swiss Constitution, as I understand it, has
something of the system of the German Con-
stitution in that the Constitution itself
requires the division of certain tax revenues
and also itself requires equalization, although
it is left to the Council of States of the Swiss
Confederation to lay down the particular
formula for equalization.

I think, Mr. Chairman, that is all I can
report at this time.

The Joint Chairman (Mr. Macc-iuigan):
Thank you, Dr. Straycr. If I may express my
wish, I see one or two hands, that is that
unless you feel a question is very pressing,
we will not have questions at this point
because we are awaiting the presentation of
our primary witnesses today, but perhaps if
you have very brief questions of clarification
or something of that kind, we should hear
them, Mr. Allmand.

Mr. Allmand: I was just wondering whether
there was any comparative study available as
a written document of the taxing powers of
federal states?

Dr. Sirayet: I think I could perhaps better
suggest one or two things which are now
available publicly as books. I think perhaps
one of the best is a book by R. J. May,
Federalism and Fiscal Adjustment, published
by the Clarendon Press in 1969. This I think
is perhaps one of the most up-to-date and
comprehensive examinations of a number of
federal states.

As far as the material which was developed
for our purposes, I do not think it is in a form
which would be particularly useful to the
Committee as it is in bits and pieces.

Mr. Allmand: I was interested in the name
of that textbook. Thank you.

The Joint Chairman (Mr. MacGuigan): I
think we will have to have witnesses who are
specialists on some of these foreign constitu-
tions so if we do not get as clear an under-
standing as we would like at this point of the
German Constitution or the Australian, I
think we can wait until some time next year
and at that point we hope to get it.

Thank you very much, Dr. Strayer.

The Joint Chairman (Senator Lamoniagne):
If I may add, Mr. Chairman, I would like to
excuse myself for last Tuesday but I under-
stand that I will have another opportunity
later on to put a few questions to Mr. Bryce.

The Joint Chairman (Mr. MacGuigan): Gen-
tlemen, before calling on the next witness, I
would like to introduce to all of you our legal
adviser. On Tuesday we approved the
appointment of Mr. David McWilliam as our
legal adviser. Mr. Mcwilliam will be joining
us shortly on a full-time basis for the curren-
cy of our Committee hearings and work and I
would just like to ask him to stand and be
recognized.

Now, I would ask today’s witnesses to come
forward. Our subject today is income security
and social services. The principal witness is
Mr. A. W. Johnson, Secretary of the Treasury
Board, who has been before us already on
another subject. With him is Mr. Bryce, who
has also appeared before us before, and Mr.
C. D. Allen, Assistant Director, Planning and
Development, Canada Pension Plan, Depart-
ment of National Health and Welfare.

I do not think that at this stage Mr. John-
son needs any further introduction, so I would
ask him to begin his presentation of income
security and social services. Mr. Johnson.

Mr. A. W. Johnson (Secretary of the Treas-
ury Board): Thank you, Mr. Chairman. I will,
if I may, do as I did the last time I appeared,
namely go through briefly the working paper
on the Constitution to which I have been
asked to speak.

It seems necessary whenever one attacks
the subject of social security to try to define
precisely what is meant. In the early pages of
this working paper you will see that some
pains are taken to try to define or identify the
elements that are involved rather than deal-
ing with more general terms such as social
security or social welfare. Some people use
the term social security very narrowly, some
use it very widely. Some people use welfare
services as being synonymous with social
security, others do not. Consequently in this
paper there has been some effort on pages 12
and 14 of the English version to define the
two major aspects of the subject which are
covered in this paper; first, income security
and secondly, social services.

The essence of the definitions, you will
recall from having read this paper, is this.
Income security is a matter of supporting the
incomes of people whose incomes are judged
to be inadequate, or alternatively, of insuring
persons against the loss of income due to
certain hazards. One thinks, of course, of
unemployment insurance, insurance against
disability in the case of the Workmen’s Com-
pensation Plans, insurance against loss of
income due to age or retirement, namely the
Canada and Quebec Pension Plans.

So, under the main heading, and under the
first heading of Income Security, you have
two sets of measures, income support and
income insurance. Social services are spoken
of here in this paper as including the services
provided by the state to individuals or fami-
lies, or paid for by the state in their behalf, to
ensure their health and social welfare. Sever-
al categories occur to one, namely, preventive
or public health services, curative health ser-
vices, and welfare services. These are dis-
cussed in the pages that follow. Then on page
16 there is a summary of the definitions of
income security and social services as I have
spoken to them very briefly.

The next several pages of the working
paper summarize the provisions of the pre-
sent constitution, both the British North
America Act itself and the judicial interpreta-
tions of the constitution. The essence of this
appears on page 18, and if I may take the
liberty of being very general, is says essential-
ly that the present constitution gives to the
provinces substantially exclusive jurisdiction
to legislate in the field of social services. It
gives the provinces exclusive jurisdiction to
establish income insurance plans, except where
the constitution provides otherwise, and of
course the exceptions are substantial and
important ones, notably Unemployment Insur-
ance and Old Age Pensions, Old Age and Dis-
ability Pensions, and associated benefits.

I will not attempt to speak to the judicial
interpretation which has centered really on
income insurance. I will simply complete this
all too brief summary by observing that
income support, involving as it does payments
to persons, has generally been assumed to be
within the competence both of Parliament
and of the Provincial Legislature. This, of
course, is providing that…

The Joint Chairman (Senator Lamontagne):
Because of the undivided spending power.

Mr. Johnson: …because of the spending
power. I was just going to say that, sir.

I would draw to your attention a quotation
from the Deputy Minister of Justice in 1950,
on page 26, which really gives you. a sum-
mary of the major judicial discussions or
deliberations on the issues which I have just
mentioned here very briefly.

Then going on to page 34, beginning on
page 34, having explored the constitutional
provisions, the working paper on the Consti-
tution then presents a perspective of the his-
tory of income security and social services
measures during the 1920’s, 1930’s and
through to the present. Essentially what
emerges is familiar to all of you. During the
1920’s and the 1930’s it was assumed that the
care for people who were not earning suffi-
cient income was a matter for charity, for the
local community, with certain exceptions.
Workn1en’s compensation schemes started
really quite early, in the 1880’s, and the prov-
inces established mothers’ allowanccs pro-
gains, and in the 1930’s and for many years
they have been active in the provision of
mental care.

In 1927 the Parliament of Canada intro-
duced the old age pension scheme, and in
1937 extended this to the blind. It was from
1940 to 1970, essentially in the post-war
period, that one saw the major innovations in
the field of income security and social ser-
vices, with the Parliament of Canada unques-
tionably taking the lead. I will not go through
the summary which has been here presented
because you all know of the measures that
were put in place.

Under the heading of Income Support there
were, of course, the family allowances. There
were old age pensions, disability pensions
which were embraced in the Unemployment
Assistance Scheme in 1955, 1956 which then
became general. There were the old age
security pensions, and the guaranteed income
supplements that were introduced relatively
more recently. On the Income Insurance side
one saw the establishment of the Unemploy-
ment Insurance Scheme, and then after a
period of time the Canada Pension Plan and
the Quebec Pension Plan.

On the Social Services side attention has
focused on the hospital and medical care
plans, although there are some social services
which attach to the Canada Assistance Plan
which was the successor to the Unemploy-
ment Assistance Scheme. The provinces have
not themselves, during this period, taken a
great deal of initiative, although there was
established in 1961 in Quebec a schooling
allowances program which preceded a similar
scheme established by the Parliament of
Canada in 1964. The Government of New-
foundland introduced a Parent Supplement
Program in 1966, and in 1967 Quebec estab-
lished its own family allowances scheme.
These are the major exceptions to what gen-
erally seems, when one reviews the history, to
have been a period during which Parliament
took the initiative.

On page 52 one finds a summary of the
federal and provincial expenditures in the
field of income security and social services. It
is enough for me to remind the committee
that they represent, on the basis of 1967, 1968
figures, some 10 1/2 per cent of the gross nation-
al product. They involve income support
measures of a broad range, income insurance
measures such as those I have described, and
extensive social services.

The proposals for a constitution of the
future are presented on page 58 and through
the balance of the document. The Govern-
ment established, as stated on page 58, what
general considerations were motivating it in
proposing the distribution of powers in these
fields, And I might, if I may Mr. Chairman,
just read briefly this paragraph.

These objectives. ought to result in a
distribution of powers which will enable
both Parliament and the provincial legis-
latures to contribute to the well-being of
individual Canadians. The best—the most
productive—form of income security, of
course, is the creation of jobs and the
stimulation of growing levels of income.
The distribution of powers must enable
the federal government, therefore, and
within the context of the total economy,
the provincial governments, to establish
acros Canada a climate of prosperity,
innovation and growth. Next, and more
directly related to income security and
social services as we have defined them,
the distribution of powers must enable
governments to compensate for deficien-
cies in the distribution of the benefits of
economic growth; to redistribute income
when the impersonal forces of the
economy result in a socially unaccep-
table distribution of: income; and to pro-
vide income to and otherwise care for
individuals and families who somehow
are left out when the benefits of eco-
nomic growth are allocated.

On pages 62 and 64 certain general consid-
erations are set out here which have to do
largely with the legislative competence as
opposed to the spending powers. And on the
basis of those general considerations, the
working paper then proceeds to an examina-
tion of the several elements that I have men-
tioned. First, as to Income Support Measures
on page 66, it is suggested that Parliament,
and I am quoting:

It is suggested that Parliament and the
provincial legislatures ought to have
equal powers to make income support
payments to persons, whether in the form
of “demogrants” (grants to persons fall-
ing into specified age or other population
groups), guaranteed income measures, or
a negative income tax.

It is noted:

This proposition was substantially accept-
ed at the June, 1969 meeting of the Con-
stitutional Conference, where…

Again I am quoting from the Conference
consensus.

. . .most delegations agreed that the pres-
ent power of Parliament to make pay-
ments to individuals. . .should not be sub-
jected to any constitutional limitation.

The rest of the quotation you are familiar
with from the last meeting.

There were several reasons for arguing that
the Government of Canada and the Parlia-
ment of Canada ought to have the power
to make income support payments. One of
them is the view that only the Parliament of
Canada is in a position to redistribute income
between persons. A second reason is that the
sense of community which has come to exist
across Canada has enabled the Parliament of
Canada to tax people in the wealthier regions
to the advantage of those in the poorer
regions which makes for a sense of communi-
ty particularly in the recipient areas, but
hopefully in the donor areas also. It is sug-
gested here that this sense of community
would be blunted if another alternative way
of equalizing incomes were followed; namely,
the distribution of money to governments.
The suggestion here is that individuals are
less likely to manifest the well-springs of
human generosity when paying equalization
payments to governments than when paying
equalization payments to persons.

There are other important reasons for not
transferring to the provincial governments
the whole of the income support field. It is
noted that to do so would be to involve such a
substantial transfer of taxes and such an
increase in equalization payments as to
weaken the federal government’s economic
policy powers.

A third reason for arguing that the Parlia-
ment of Canada should retain its power to
make income support payments to persons
has to do with the mobility of Canadians.
There appear on page 70 some figures which
indicate the really quite remarkable mobililty
of Canadians in the period 1956-61 and one
assumes that this mobility has increased even
more over the years. You will notice that one
note, “nearly 13 per cent of the Canadian
people moved between provinces” in that five-
year period. On page 72 one finds an elabora-
tion of the economic policy reason as it is
presented for not transferring to the provinces
the fiscal resources required for them to make
the payments to persons rather than the Par-
liament of Canada. I think, perhaps the sum-
mary I have given is sufficient.

On page 74, the argument that it would
be logical to have a single jurisdiction
responsible for making income support pay-
ments is dealt with. Essentially it is suggested
that the economies suggested have been exag-
gerated and, in fact, the provinces are quite
able to differentiate in -the services they pro-
vide by building on the base of an income
redistribution which is effected by the Parlia-
ment of Canada. Further, it is suggested that
income support payments being payments to
persons do not really bear directly on the
culture of the people. For these reasons:

..the Government of Canada pro-
poses. . .

the document goes on to say

…that Parliament and the provincial
legislatures should have equal powers to
make general income support payments
to persons.

Then the document considers “Income
Insurance”. I have said all too briefly that the
Constitution as it stands differentiates
between income insurance and income sup-
port and in essence relates income insurance,
except where the Constitution provides other-
wise—relates income insurance to private
insurance; therefore, it describes this as being
a matter of provincial jurisdiction. The work-
ing paper on the Constitution suggests that
this is not really a helpful approach to the
problem in the present day. Rather, it is sug-
gested that the income insurance measures
ure frequently substitutes for income support
measures or vice versa. It is possible to take
the obvious example to have a Canada, and
Quebec, Pension Plan which insures you
ngainst loss of income upon retirement. On
the other hand, it is also possible to have old
age security, guaranteed income supplement
measures which really are designed to
achieve the same purpose.

The Joint Chairman (Senator Lamontagne):
The main difference between the two is re-
lated to the financing of these.

Mr. Johnson: The method of financing,
quite so. The insurance scheme is looked
upon as being essentially a tax-benefit scheme
with you contributing your premiums to a
fund and that fund paying you under pre-
scribed conditions. The income support mea-
sures are financed out of the Consolidated
Fund and your contributions in taxes do not
bear any relationship to the benefits that you
receive. Governments have a choice between
these two approaches in meeting a particular
instance, supporting or maintaining the
income of individuals, therefore, the general
burden of the presentation of the Government
of Canada is that the provinces and the Far-
liament of Canada ought to have concurrent
powers in the field of income insurance, as
they have concurrent or equal powers to
make payments to persons for the purpose of
supporting their income. That is the general
thrust.

The Joint Chairman (Senator Lamoniagnel:
In order to make that change I suppose you
will have to change the beginning, I think, of
Section 92 where the provinces are given
exclusive access to direct taxation for provin-
cial purposes.

Mr. Johnson: I am not sure that would be
involved, Senator.

The Joint Chairman (Senator Lamoniagne):
So far as I understand it, this has been the
blocking element up to now.

Mr. Johnson: Mr. Lysyk would be able to
answer this better than I. I suspect, however,
that what has been involved is the judgment
of the courts, that an income insurance mea-
sure, except it it is provided for explicitly in
the Constitution to the contrary, an income
insurance measure is analogous to a private
insurance measure. This being a matter of
contract it falls within the exclusive
jurisdiction. . .

The Joint Chairman (Senator Lamontagne):
Then these measures, of course, would not be
any more for a provincial purpose in that
sense so then the federal government would
not be limited in its own choice of financing.

Mr. Johnson: That is right; it would not be
limited, that would be the objective.

The Joint Chairman (Mr. MacGuigan): Sen-
ator, you have answered your own question.

The Joint Chairman (Senator Lamontagne):
A difficult process.

Mr. Johnson: Having postulated this gener-
alization, namely, that the Parliament of
Canada should have concurrent powers with
the provinces in respect of income insurance
schemes generally just as they have equal
powers to pay income support payments to
persons, the working paper goes on to deal
with particular forms of income insurance.

First, on unemployment insurance the case
is made for an exception to the general rule
which I have just repeated, that the Parlia-
ment of Canada should continue to have
exclusive jurisdiction over unemployment
insurance. I will not repeat the reasons. They
are largely economic and income distribution
and its kind.

Second, the second exception to this general
rule is that Workmen’s Compensation ought
to remain within the exclusive jurisdiction of
the provinces. I think the paragraph that is
most relevant here is found at the bottom of
page 82:

…the force of history and of precedent
lies heavily on the side of continuing to
treat workmerfs compensation as a
matter of exclusive provincial jurisdic-
tion. Moreover, the fact that employer
contributions are made to vary with the
accident cxperience of individual indus-
tries in the several provinces, and the
fact that rehabilitation services and
safety programmes are such a prominent
element in work.men’s compensation
plans, further suggests that these mea-
sures ought to remain in the exclusive
provincial domain. . .

Then the document goes on to deal with
retirement insurance, specifically the Canada
and Quebec Pension Plans. This has been one
of the more difficult areas, as you will recall
from having seen or read the proceedings of
the Constitutional Conference at which this
document was discussed. So I will spend a
little more time on that, if I may, Mr.
Chairman.

Retirement insurance plans are different
from, let us say, workmen’s compensation
plans by reason of the period of time during
which you earn your benefits. Your benefits
upon retirement are related to the whole of
your working life. It follows that you may
work in two, three or four provinces in the
course of your 35 or 40 years of working life
and have earned your benefits for retirement
in those several jurisdictions. In workmen’s
compensation plans, on the other hand, your
benefits are related to what you were earning
at the time you were injured and therefore
you have no problem of relating benefits to
the full of your working life.

This suggested to the Government of
Canada that some device would be desirable
for the purpose of giving some kind of leader-
ship to provincial pension plans if they exist-
ed, as obviously the Quebec Pension Plan
does exist and as obviously the provincial
governments have the constitutional power to
establish a pension plan of their own.

There were other reasons, however. They
are noted on pages 84 and 86. Given the
mobility to which I have referred, if you are
going to integrate provincial plans, you then
have to have some way of ensuring that the
province which ultimately pays the pension is
adequately reimbursed by the provinces in
which the worker has been employed. Alter-
natively, the worker must expect to receive
several cheques, cheques from all of the juris-
dictions in which he was worked. I do not
want to go into detail here but the essence of
the argument is that from the point of view
of the contributor, to attempt to harmonize
ten provincial plans, or five or however many
there are, would be extremely difficult.
Indeed, at some point it would become an
administrative impossibility.

Moreover, as you go along with the reason-
ing, you find that different provincial priori-
ties could also pose problems. In establishing
the Canada Pension Plan members of Parlia-
ment will recall very well that there were
differences of opinion as to the extent to
which the plan should be funded. If you have
a heavy need for capital as a government,
you are going to tend to fund the plan more.
You may, on the other hand, hold the view
that you want to pay high benefits at the very
beginning of a plan in which case you are
going to fund the plan less. So that differ-
ences in the priorities of the governments
operating pension plans may well contribute
to a further difficulty in the harmonization of
purely provincial plans.

The final point made here is that, in retire-
ment plans, you find a variety of kinds of
cross-subsidization. In the Canada Pension
Plan, for example, it is obvious that provinces
which have a high proportion of old people
relative to total population are “subsidized”
by provinces where the reverse is the case.

Further, where you have a country-wide
plan, it is possible to provide a basic pension
to everybody regardless of his contributions
to the fund, and this is the case with respect
to the basic component of survivors’ and disa-
bility pensions.

Thirdly, you can structure the contribution
rates in such a way as to require relatively
higher contributions from high-income people
compared with loweiuincomc people. Again
one finds this characteristic in the Canada and
Quebec Pension Plans.

So it was for all of these reasons that the
Government of Canada concluded, as is said
here on page 90:

…that the best course would be to put
Parliament in a position to provide lead-
ership in the field of public retirement
insurance. For this purpose Parliament
and the provincial legislatures ought to
continue to have concurrent powers in
respect of public retirement insurance and
associated benefits, but Parliament’s
powers should be paramount (in the case
of conflicts between federal and provin-
cial plans the federal plan would prevail).

This was the mechanism which was sug-
gested for putting the Parliament of Canada
in the position to provide leadership. In the
course of discussions with the provinces, I
think the Prime Minister made it clear that
this was the mechanism which was familiar
in Canada and it was for that reason that it
was advanced. The main purpose, however,
was to put one government, namely the Gov-
ernment of Canada, in a position to provide
leadership.

The Joint Chairman (Senator Lamoniagne):
Would you say at the present time that there
is an opposite situation?

Mr. Johnson: There is some argument
about that, Senator. There are those who
would argue that the powers are substantially
concurrent and there are certainly those who
argue that the provincial power is paramount.

The section itself, of course, does make
explicit reference to provincial plans prevail-
ing where there is—well, let me quote from
Section 94A;

…but no law shall affect the operation
of any law present or future of a provin-
cial legislature in relation to any such
matter.

Then, on page 92, we find a summary of the
proposals with respect to income insurance
that:

Parliament and the provincial legislatures
ought to have concurrent powers in
respect of public income insurance,
except that:

(1) unemployment insurance ought to
remain a matter of exclusive federal
jurisdiction;

(2) workmen’s compensation ought to
remain a matter of exclusive provincial
jurisdiction; and

(3) in respect of retirement insurance
and associated benefits’ Parliaments
powers ought to be paramount.

Now this, may I just remind you, is in
contrast to the earlier proposal that income
support measures, that is, payments to per-
sons to support their incomes from the con-
solidated Revenue Fund, ought to be equal;
that is, that the federal government and the
provinces ought to have equal powers for that
purpose.

Then we come to social services. I will try
to skip along more quickly, Mr. Chairman.
The document on page 92 points out that:

Income security payments. . . are not con-
tingent upon the regulation or influence
by governments of social or family in-
stitutions. But health and welfare ser-
vices usually are.

And then we go on to say:

… social services include preventive and
curative health and welfare measures,
which necessarily involve the operation
of clinics and hospitals, the regulation of
these and other institutions, the regula-
tion, training and employment of profes-
sional personnel, and the provision of
care and counselling…

that is to say, case work,

. . . services to individuals and families. It
is this distinction which has brought the
Government of Canada to propose a dif-
ferent distribution of powers in respect of
income security on the one hand, and
social services on the other.

The document then goes on to describe in
greater detail the kinds of services that are
involved: the provision of care to persons; the
counselling of persons; the regulation of insti-
tutions; and the regulation and training of
professional personnel.

On page 96, the Government of Canada
concludes that it:

would have no wish to become
engaged in the regulation of such institu-
tions and professions.

It then is pointed out, however, that there
are occasions when social services provided
by the provinces within their exclusive juris-
diction take on a national interest. I will not
repeat what was said in the section on the
spending power but this has to do again with
the degree of mobility, the interprovincial
effect of medical and hospital care programs,
and so forth.

The Government of Canada has concluded,
on page 98, that the national interest in social
services ought to be expressed by the use of
the spending power, per the paper on the
spending power. It concludes that the national
interest should not be expressed by giving
Parliament the power to legislate or regulate
in these fields.

This proposition is explored as applied to
medical and hospital insurance on pages 100
and 102, It is made clear here that there
really would be three or four ways in which
the national interest could be brought to bear
in the field of hospital and medical care
insurance.

One alternative would be through uncondi-
tional equalization grants to the provinces.
There you would be simply hoping that the
provinces would start a uniform medical or
hospital care program.

A second and more familiar alternative
would be conditional grants. Here Parliament
compensates provinces for shifting their pri-
orities in such a way as to achieve national
standards and a national plan.

The third would be for the Parliament of
Canada itself to make the payments to the
doctors and to the hospitals. However, the
document goes on to observe that if that
mechanism is followed, the essence of operat-
ing a medical and hospital care plan—the
provision of the services and the regulation of
the provision of the services—would not be a
part unless you sought legislative power.

Your fourth mechanism would be concur-
rent legislative powers.

The conclusion of the Government of
Canada appears on page 102:

. . .that health insurance ought to remain
a matter of exclusive provincial jurisdic-
tion, subject to the use of the spending
power of Parliament, as proposed above,
for the purpose of bringing about an
adaptation of provincial programmes to
meet agreed national needs.

The document then refers to other aspects
of health insurance which transcend provin-
cial boundaries. It repeats the assertion of
federalism for the future. Parliament should
have powers in the field of research and tech-
nology and further, the Government of
Canada ought to be free to make grants to
the provinces for the purpose of insuring
mobility or portability of benefits.

That is the essence then, Mr. Chairman, of
this document. The proposals are summarized
on pages 106 and 108.

The Joint Chairman (Mr. MacGuigan):
Thank you very much, Mr. Johnson. Since my
Joint Chairman has to leave I might just
invite him if he has a question to ask it before
he has to depart.

The Joint Chairman (Senator Lamontagne):
I have no questions for the time being.

The Joint Chairman (Mr. MacGuigan): Mr.
Allmand.

Mr. Allmand: Mr. Johnson, in the recom-
mendations listed in the booklet, it is recom-
mended that Parliament and the provincial
legislatures ought to have equal powers with
respect to income support payments to per-
sons and that Parliament and provincial legis-
latures ought to have concurrent powers with
respect to public income insurance measures.

What is the difierence between equal powers
and concurrent powers in a legislative sense?

Mr. Johnson: When speaking of equal
powers, Mr. Allmanol, we are speaking of the
power to make payments to persons. That is
the context within which we are speaking. It
is necessary to avoid the use of the term
“concurrent powers”. “Concurrent powers” is
a term which is applied to the power to legis-
late or to regulate and hence it is applied with
respect to income insurance.

Mr. Allmand: They appear to mean the
same thing. I was just wondering why you
use the two different words.

Mr. Johnson: To a layman, to me, they are
terms of art. To a constitutional lawyer, they
have a profound meaning.

Mr. K. Lysyk (Adviser. Consiituiional
Review Section, Privy Council Office): In
Recommendation (2), it is simply to relate it
to the spending power as opposed to the legis-
lative power.

Mr. Allmand: Very good. That answers that
question. With respect to health services, it is
unclear to me whether you meant to include
all health services under the heading of
Social Services and whether there would be
some other booklet of proposals relating to
health programs. In our present Department
of National Health and Welfare, we make the
distinction between health programs and wel-
fare programs. Generally speaking, we include
income support, income insurance and pro-
grams of that nature under the Welfare Divi-
sion. The health division takes care of other
things, such as health grants.

In your booklet at page 64, you express this
doubt about some things. You refer to the
health aspects of air and water pollution for
example. Is there to be another set of propos-
als relating to health or is it intended that the
jurisdiction of all health matters be covered
by the proposals in this booklet?

Mr. Johnson: That is a very difficult ques-
tion ancl one which has caused a great deal of
problems in the preparation of this document.
The answer is essentially that the generality
of health services is intended to be covered in
the proposals in this working paper. Particu-
lar aspects of health which now lie within
federal jurisdiction or which are assumed
ought to lie within federal jurisdiction for
special reasons will be dealt with in subse-
quent working papers as they come out.

You properly point to page 64 as a place
where you would find illustrations of those
elements of health which will be dealt with
separately. To make mention of a couple of
them: Indians and Eskimos, the military,
immigrants, aliens and then there is the
criminal law with respect to marine hospitals,
quarantine, et cetera.

Mr. Allmand: Pollution is one that is
becoming more and more prominent and
consequently, I presume that there will be
some further proposals relating to environ-
ment and maybe pollution as it relates to
that.

Mr. Johnson: Yes, sir.

Mr. Allmand: My last question is with
respect to the statement that is on page 98. In
shared-cost programs, provinces ought not to
suffer a fiscal penalty if they are not
involved. Was any type of formula put for-
ward or have you since come up with one?

Mr. Johnson: Only this one, “Federal-Pro-
vincial Grants and the Spending Power of
Parliament”, no formula different than that
one, Mr. Allmand.

Mr. Allmand: That is the only formula with
respect to programs similar to Medicare or
hospitalization where a province does not
participate and where you would want to
make some kind of fiscal repayment.

Mr. Johnson: Yes, that is the formula that
this document has in mind, Mr. Allmand.

Mr. Allmand: All right. Thank you. Those
are the questions for the moment.

The Joint Chairman (Mr. MacGuigan): Mr.
Brewin.

Mr. Brewin: I would like to try to clarify in
my mind the extent of provincial agreement
or disagreement with the proposals. As I
understand it, the federal government put
forward the proposals that income support be
a concurrent matter with both levels of gov-
ernment having jurisdiction in that field. The
Government of Quebec has disagreed with
that and thinks that generally speaking,
income support is within the exclusive juris-
diction of the provinces. Am I right in under-
standing that most of the other provinces
accept the federal proposition rather than
this.

Mr. Johnson: The conclusions of the third
meeting of the Constitutional Conference read
this way:

Quebec maintained the position that the
provinces should have exclusive jurisdic-
tion in the field of income support. Other
First Ministers accepted the principle
that Parliament and the provincial legis-
latures have and should continue to have
powers to make general income support
payments to persons. Some provinces
expressed the view generally that the
basic income support payments could log-
ically be made by the Federal Govern-
ment.

Only one province is noted as having taken
exception to this general proposition.

Mr. Brewin: Mr. McQuaid has mentioned
Ontario. I am surprised to hear that.

Mr. McQuaid: Did the Province of Ontario
not take exception to this particular proposal?

Mr. Johnson: My recollection, six, is that
Mr. Robarts acknowledged the power of Far-
liament to make payments to persons, like
family allowances and so on.

Mr. Mcouaid: Mr. Chairman, I am probably
out of turn. I will let Mr. Brewin go ahead.

The Joint Chairman (Mr. MacGuigan): I
think Mr. Brewin is inviting you to make this
comment.

Mr. Mcouaid: My understanding was that
the Province of Ontario said that it could not
accept the right of the federal government
alone to define the national interests so far as
it relates to areas of provincial jurisdiction.

Mr. Johnson: Yes, as far as areas of provin-
cial jurisdiction are concerned. That would
apply to programs such as health insurance
where provincial jurisdiction is clear. Here
we are talking about payments to persons
such as family allowance payments and old
age security payments, guaranteed income
supplements where both orders of govern-
ment have the power to make such payments.
I do not believe that the Province of Ontario
has challenged the power of Parliament to
make those payments. It has not said, in
short, that these are or ought to be within the
exclusive jurisdiction of the provinces.

Mr. McQuaid: Of course, the power of Par-
liament to make some of these payments that
you mention, has only come about by reason
of recent amendments that have been made
to the British North America Act, is that not
true?

Mr. Johnson: That comment would apply to
income insurance and the Canada Pension
Plan. The general power of Parliament to
make payments to persons has prevailed really
for a very long time.

The Joint Chairman (Mr. MacGuigan): Mr.
Brewin.

Mr. Brewin: Mr. Chairman, I would like to
pursue this idea. We have dealt with income
support and now come to the field of income
insurance, As I understand, the proposal is
that there would be concurrent powers in this
with certain exceptions—unemployment
insurance being one. Unemployment insur-
ance would continue to be a matter of exclu-
sive federal jurisdiction. Is there general
agreement by the provinces on that?

Mr. Johnson: No exception was taken at
the conference to this proposition.

Mr. Brewin: I take it firom your paper that
there is no controversy on the idea that work-
man’s compensation should be within the
exclusive provincial jurisdiction. Parliament
is not seeking an “in” to that field’ When you
come to retirement insurance, the proposal is
that there would be concurrent jurisdiction
with the federal powers paramount. I gather
the question of paramount federal powers is
one that has puzzled some of the provinces.
Subject to an adequate definition of para-
mount, is there a general agreement with that
proposition or is that going too far?

Mr. Johnson: No, there was no general
agreement sir. There was a good deal of
disagreement.

Mr. Brewin: On the part of various
provinces?

Mr. Johnson: On the part of various prov-
inces. I would not attempt to enumerate them
from memory, but certainly it is true that the
two largest provinces took quite strong excep-
tion to this proposal. If I could read from the
report of the conference:

Doubt was expressed by some that feder-
al pararnountcy in the matter of retire-
ment insurance was required or desira-
ble. It was apparent that there were
different views concerning the meaning
of pararnountcy and the implications of
providing for federal paramountey in the
case of. retirement insurance. It was
agreed that the Continuing Committee of
Officials should undertake a detailed
examination of the application of the
concept of paramountcy, federal or pro-
vincial, in the field of public retirement
insurance.

Mr. Brewin: Perhaps I could stop and ask
you how far that continuing Committee has
progressed. It has not reported back yet?

Mr. Johnson: No, it has not yet reported
back, sir. It will be for the next Constitutional
Conference to receive a report from the Con-
tinuing Committee and to decide what to do
with it.

Mr. Erewin: That obviously is an area of
controversy.

Mr. Johnson: It is an area of uncertainty
first, I think it is fair to say also of some
controversy.

Mr. Brewin: I understand that on the ques-
tion of social services, there is agreement by
all jurisdictions that the legislative power
should be within the inclusive jurisdiction of
the provinces but that the federal government
should have an interest in it which it can
express through the spending power. As we
have discussed in another context, there is
some differences of opinion as to whether the
spending power should be limited by formal
concensus or another way.

Mr. Johnson: Yes sir.

Mr. Brewin: I wanted to get a general
survey of how far there was agreement and
disagreement so we could isolate the areas of
controversy.

Mr. McQuaid: Mr. Chairman, I wonder if I
could ask a supplementary question if Mr.
Brewin has any time left.

Mr. Brewin: I am through anyway.

The Joint Chairmen (Mr. MacGuigan): You
are the next questioner anyway Mr. McQuaid.

Mr. McQuaid: It is in connection with Mr.
Brewin’s question so far as retirement insur-
ance is concerned. On page 90, the Govern-
ment of Canada sets out its position. It says
in the last line:

(in the case of conflicts between federal
and provincial plans the federal plan
would prevail).

Is that not tantamount to saying that the
federal plan is going to prevail? Are we not
almost bound to have conflicts in the light of
what you have said with reference to the two
provinces who take very strong exception to
this?

Mr. Johnson: It depends sir on the manner
in which you define “conflict”. Generally
speaking, the courts have defined “conflict” as
meaning the existence of two laws which the
citizen cannot comply with without breaking
one of the two.

Mr. McQuaid: Could you give us an
example.

Mr. Johnson: I will turn to the lawyers

Mr. Lysky: The most recent example I can
think of was a decision in the Supreme Court
of Canada a few months ago in respect of
insurance. If my memory serves me correctly,
it was a question of the Ontario Insurance
Act and the Federal Bankruptcy Legislation.
The Supreme Court said this was a case of
conflict. The paramountcy Doctrine came into
play. That was the Wentworth case. It is much
easier to give recent examples of cases where
the courts, particularly the Supreme Court of
Canada, have looked at two pieces of legisla-
tion that on the face of them looked to be
very similar and have said that there was not
conflict for the purpose of bringing this doc-
trine into play. There is a line of cases con-
cerned with motor vehicle offences in which
this has been explored. It is a difficult area.
As Mr. Johnson has indicated, there is some
disagreement about the exact scope of the
paramountcy doctrine. What you can get
almost everyone to agree on is that in this
most extreme case, where you have both the
federal and provincial statute in the field and
it is impossible for a citizen to obey one with-
out disobeying the other, this at least is a
conflict that brings the paramouaitcy doctrine
into play and the federal statute therefore
overrides.

Mr. McQuaid: Would it not be fair to say,
sir, that in the event that there were two
statutes, federal and provincial, and taking
the attitude that the Provinces of Quebec and
Ontario presently have with respect to this
matter, there would be, in all probability, a
conflict? Is that not a fair assumption?

Mr. Lysky: You are speaking of pension
legislation particularly.

Mr. McQuaid: Yes.

Mr. Lysyk: You have of course, the Canada
Pension Plan and the Quebec Pension Plan
living together quite happily so far. I know of
no instance where the question of supposed
conflict has come to the courts.

Mr. McQuaid: You really think that there
could be statutes worked out for both, on the
federal level and on the provincial level, the
Province of Quebec, for example, and that
there would not be any conflict.

Mr. Lysyk: Yes.

Mr. Johnson: If I could add to what Mr.
Lysyk has said. I think this was really the
basis of the comments of some of the Premi-
ers. They really were asserting that the
probability of complementary legislation was
sufficiently high that there was no need to
worry about any doctrine of paramountcy or
any other co-ordinating mechanism.

Mr. McQuaid: I just have one other ques-
tion for Mr. Johnson, Mr. Chairman. I believe
you said Mr. Johnson that one of the reasons
it was not feasible to place retirement insur-
ance in the hands of the provinces was
because of the mobility of people from one
province to the other. People earn their living
in different provinces. Have you any idea
how serious a matter this mobility is? Is there
a great mobility of people as between various
provinces or is it confined maybe to moving,
we will say, from Quebec to Ontario or per-
haps from New Brunswick to Quebec. Does it
involve very many provinces?

Mr. Johnson: Yes, sir, it does. I really
regret that there are not more recent data
available than were published in this book. If
you look at Appendix E, page 124, you will
see, there the figures, province by province,
for the period that I mentioned earlier, 1956-
1961. These show the movement in and the
movement out province by province and for
the Yukon and the Northwest Territories.

Mr. McQuaid: And you think that that
trend is not lessening any since 1961 on?

Mr. Johnson: From any conversations I
have had with demographers in the country,
they would probably assert that it has been
increasing fairly markedly. I know of no
public data later than this, sir.

The Joint Chairman (Mr. MacGuigan): Mr.
Rowland.

Mr. Rowland: To come back to the papers
and statements with respect to the recommen-
dations on the health and social services, I
wanted to begin by saying that I do not agree
with the reasoning behind the recommenda-
tion that the social services in their entirety
and health services in particular remain
under the exclusive jurisdiction of the prov-
inces, First of all, I would not be prepared to
concede that health services are now the
exclusive jurisdiction of the provinces. I think
that is an assertion which requires a little
more proof than the working paper provides
us with. The second thing that occurs to me is
that health services and social services involve
some of the heaviest expenditures of govern-
ments. When the working paper was dealing
with the business of income security, it put
forward a number of arguments for concur-
rent jurisdiction including: income redistribu-
tion, the sense of community, the portability,
and, the economic policy. Just because of the
magnitude of the expenditures in the health
services and social services area, I should
think that all of these arguments would have
equal weight-the magnitude of the expendi-
tures, the efiect on the character of the
nation, the effect on social character, and the
effect on the living conditions of the people in
terms of minimum standards. Just on that
basis, I find that the arguments for income
security measures to be in an area of concur-
rent jurisdiction apply with equal or perhaps
even greater weight than the area of health
services and social services. I wondered if you
would care to comment on that line of
reasoning.

Mr. Johnson: I think the essence of the
position of the Government of Canada is that
the administration of health insurance, hospi-
tal insurance, medical care insurance involves
so much in the way of regulation of institu-
tions and indeed the provision of particular
services that you would necessarily engage
the Government of Canada in the regulation
of institutions and persons if you were to give
them power to legislate in this field.

Let me try this from a somewhat different
angle. If you grasp that there is a similar
national interest in respect of health insur-
ance, as you have said, as applies in respect
of income support, then your question is why
does the Government of Canada say on the
one hand, that we ought to have the power to
make payments to persons for income support
purposes but we ought not to have the power
to legislate in respect of health matters?

Mr. Rowland: Precisely.

Mr. Johnson: The answer presented here is
that it is possible on the one hand to make
payments to persons without regulating insti-
tutions and without entering into the institu-
tional iramework of the local community or
the provincial community, but it is not really
possible to administer health insurance with-
out doing that. Because the Government of
Canada does not want to become involved in
the regulation of hospitals and professions it
says therefore, that it does not seek nor want
legislative power in the field of health insur-
ance. Instead, it would seek to employ the
spending power for the purpose of introduc-
ing the national interest into provincial
programs.

Mr. Rowland: Well, you see this whole area
takes on an aspect of unreality for me when
we relate that statement of employing the
spending power to the federal governmcnt’s
recommendations about how the spending
power could be exercised. We went through
that whole bit the last time you were here.
With an entrenched formula for the accept-
ance of the exercise of the federal spending
power in the Constitution, I cannot see how it
can be effectively employed. That is my posi-
tion. The federal government’s position is
quite the reverse. It gives this whole area of
simply relying on the spending power, given
the federal government’s recommendations
with respect to this spending power, an
aspect of unreality to me.

I would much prefer to see the recommen-
dation ot concurrent jurisdiction in the area
of healvih services and social services for rea-
sons I have already outlined. It would seem to
me that the only valid reason for withdraw-
ing health services and social services from
an area of concurrent jurisdiction and for
making them exclusively provincial is that
they perhaps affect cultural development to a
greater extent than do income support pro-
grams or income security programs. However,
it would seem to me that there is only one
province that is substantially affected.

As I said earlier, I find this whole series of
recommendations to be really a travesty of
logic. That travesty of logic is consequential
upon the iravesty of good sense in attempting
to treat Quebec as if it were a province just
like the others. Mr. Bourassa said with con-
siderable justice «Québec, ce n’est pas une
province comme les autres.» I agree with him
and I think that the portion of this paper,
which otherwise makes a good deal of sense
to me, dealing wiih health services and social
services really takes on an Alice in Wonder-
land aspect.

I expect I am just talking now and really
not trying to gain information from the wit-
ness but I expect it is consequent upon what I
think is an unrealistic position, assuming that
Quebec is a province like the others and
trying to build a constitution around that lack
of factual background. I really do not expect
Mr. Johnson to comment. I got carried away.

Mr. Johnson: I ought not to engage, Mr.
Chairman, in a discussion of statut particu-
lier. I might only say that I felt strongly
about this. Even as a public servant, I pub-
lished an article on the subject some three or
four years ago.

The Joint Chairman (Mr. MacGuigan): Per-
haps we should have a citation for that, Mr.
Johnson. Where was it published?

Mr. Rowland: It is a good article and it
should be cited, I think.

Mr. Johnson: I have not got a copy. It is
called The Dynamics of Federalism in Canada.
and it was published in the Canadian Journal
of Political Science in 1967-68. My staff will
dig it up and circulate it to members of the
Committee.

The Joint Chairman (Mr. MacGuigan): Are
you finished, Mr. Rowland? I just recall that
Mr. Breau had previously signalled his inten-
tion to proceed. Was yours a single question,
Mr. Osler?

Mr. Osler: It is really a single question.
Has anybody got an easy way of showing us
what’cash flow is involved? I tend to suspect
cultural reasons for all these things. Like the
Quebec Pension Plan—there is lots of slag
involved there. What cash flow is there and
what benefit is there to a province in having
their hands on it?

Mr. Johnson: I am sorry but I cannot give
you an indication of the balances in the
Canada Pension Plan or the Quebec Pension
Plan. Mr. Allen, would you know what the
outstanding balance currently is?

Mr. C. D. Allen (Assistant Director, Plan-
ning and Development. Canada Pension Plan.
Department of National Health and Welfare):
In the Canada Pension Plan it is about $3
billion at the moment. I would therefore
assume that the Quebec plan would be about
$1 billion.

Mr. Osler: And it is funded and they are
only working ofi the interest on it?

Mr. Allen: It is building up very quickly,
because we have been collecting the contribu-
tions for over four years, and the benefit side
is building up slowly. So the fund will build
up to a high point and then go down when
the annual outlays on the benefits get nearer
and nearer equal to the annual intake.

Mr. Osler: But is not the use of cash very
considerable?

Mr. Allen: Yes, it is indeed very
considerable.

Mr. Osler: And what would it be in some of
these other schemes that we talked about.

Mr. Johnson: In the case of the other
schemes, this funding does not occur substan-
tially. It does occur in respect of the unem-
ployment insurance fund. Oilhand I cannot
give you the balance in that fund. But in
respect of income support it is paid out of the
consolidated revenue fund. So it is a matter
of your intake and your outgo. There always
has been maintained since the Old Age
Security scheme started a record of the dedi-
cated revenues and a record of the expendi-
tures. But that is not a fund in the same
sense that the Canada Pension Plan is.

Mr. Osler: No.

Mr. Johnson: So, generally speaking, it
arises in respect of the Canada Pension Plan
and the Quebec Pension Plan.

Mr. Osler: But in other things, if there is a
flow through the pipe line of several million
or several hundred million a month, a year,
or a week, would not astute management give
quite a bit of benefit to those to whom it
flows? A trust company or a bank certainly
can use money that they have for 30 days or
10 days that happens to be flowing through.

Mr. Johnson: Yes, although I think that
would apply really to the management of the
consolidated fund generally. For example,
your Family Allowances, your Old Age
Security and your social assistance are paid
for out of the consolidated revenue fund and
you have all the variety of revenue sources
with all of the differences in timing of collec-
tions. So I think what you are addressing
yourself to, sir, is the effective management
of the consolidated revenue fund in its total-
ity, and clearly the larger it is and the bigger
the swing is, the more money you can make
by astute management.

Mr. Osler: So one is not always altruistic
when one talks of the cultural need for
having your hands in money. One does not
have to be altruistic.

Mr. Johnson: One may well have an inter-
est in the temporary use of the fund.

Mr. Osler: Thank you, Mr. Chairman.

Mr. Johnson: May I just add something.
Perhaps I should have reminded you that all
the Canada Pension Plan money is used by
the provinces.

Mr. Breau: The second proposal of the
Government of Canada in respect of income
security is that Parliament and the provincial
legislatures ought to have equal powers to
make general income support payments to
persons, and you have explained that this
meant power to pay. The Canada Assistance
Plan is not an outright payment to people but
a payment to provinces. In such a case just
where would the responsibility for adminis-
tration lic? For example, some provinces right
now, my own of New Brunswick included, is
taking another approach to social assistance.
They are trying to assess if the amount of
money given could not be spent better by
having perhaps more social and group anima-
tion and such programs that would provide
an incentive for people to go to the Canada
Manpower Centre instead of just sitting
around and doing nothing.

If the Parliament of Canada has the power
to give money under such a general income
support program as this one, can we interpret
that as meaning that the Government of
Canada could get into the same type of a
program—it could go out and organize social
animation groups, group education, and give
grants to organizations so that the people
could organize themselves. It may be there
would be certain groups of people in certain
areas that are poor working people because of
a lack of labour organization or some such
thing. Is there not an ambiguity there? How
are we going to determine who is going to
administer the program?

Mr. Johnson: This is a very good question. I
omitted in my summary of the document to
make reference to an important two pages on
just the question you make reference to.

Mr. Breau: I tried to find it.

Mr. Johnson: It is on pages 104 and 106. It
is observed here that you may have, just as
you have said, an income support plan
involving payments to persons, which has
associated with it a panoply of social services.
The working paper acknowledges that at this
point you have a problem. Have you an
income support plan or have you enough
social services associated with it so that in
effect it has become a social services pro-
gram? If I may just quote the document:

The constitutional problem, it will be
seen, for these or similar programmes, is
to determine when a particular income
security programme which otherwise
would fall under concurrent jurisdiction
contains a sufficient ingredient of social
services that it ought in its totality to fall
under provincial jurisdiction.

Then skipping ahead, the conclusion is this:

…the Government of Canada has con-
cluded that this particular boundary line
must be left to judicial interpretation.
This indeed is one of the roles which
Canada’s courts ought to be expected to
play in respect of the Constitution: to
interpret the applicability of its general
provisions to the new and unforeseen
situations of the future, Thus it would be
for the courts to determine when an
income security measure which might
otherwise be within Parliament’s powers
contained a sufficient ingredient of social
services over which the provinces have
exclusive jurisdiction, that the whole
measure was ultra vires of Parliament—
that is, fell within the exclusive jurisdic-
tion of the provinces.

Mr. Breau: In other words, for strict politi-
cal reasons you could have something kicking
around in the courts for a couple of years and
have money relatively wasted by administra-
tive overlap. Is there not any way that it can
be clear-cut? Would Parliament have to give
up its concurrence of power to be able to
draw a line?

Mr. Johnson: If you want to have absolute
clarity, and this paper makes this point ear-
lier on, of course you certainly would assign
the whole of the area you are discussing to
either the federal government or the provin-
cial governments. To exaggerate it, you never
have any duplication or overlapping in a uni-
tary state.

Mr. Breau: But obviously you cannot give
it only to the federal government.

Mr. Johnson: That is right.

Mr. Breau: You would have to get into
education and such things.

Mr. Johnson: Yes. But in the field of
income security and social services a fair
number of pages of this document are devot-
ed to the consequences of taking the other
position, namely that the whole of income
support ought to be assigned to exclusive pro-
vincial jurisdiction.

In my summary I tried to reflect the several
reasons why the Government of Canada came
to the opposite conclusion. They came to the
conclusion that federal power in this field
ought to continue, that is, the power to make
income support payments, but that if, as I
have just said, these income support pay-
ments were to come to have such a large
ingredient of social services which lie within
the exclusive provincial jurisdiction, then the
courts could step in and say no, you have
overstepped the bounds.

Mr. Breau: Thank you.

The Joint Chairman (Mr. MacGuigan): Mr.
Johnson, Mr. Breau has just raised, from a
slightly different viewpoint, the question that
I wanted to bring to your attention. I suppose
the fundamental distinction in the paper is
that between the social services and income
security, and I find this a somewhat nebulous
distinction. In the paper the distinction tends
to be put in terms of the degree of involve-
ment which the granting government has with
institutions, and in that case this is said to be
a social service as opposed to an income
support.

I wonder if we could try to make this a. bit
more precise. It seems to me that the income
support program involves, primarily, the
provision and the payment of money, and
perhaps secondarily the providing of services.
I wonder if we could say that the reverse is
true of the social security area, that there the
primary thing is the provision of services and
only secondarily are you involved with the
paying of money. Is that an accurate
statement?

Mr. Johnson. Yes, I believe it is, indeed.
You could put it a somewhat different way,
that when the state becomes involved in the
provision of health services, for example, it is
providing a service instead of income. There
is that clear a distinction conceptually be-
tween the two areas.

The Joint Chairman (Mr. MacGuigan): Per-
haps it is not fair to concentrate on an area
which is bound to be on the boundary line,
but recently the question has been raised with
respect to unemployment insurance, that cer-
tain ways of granting unemployment insur-
ance verge very much towards the social
security question. Once you get into a situa-
tion where you have a general kind of unem-
ployment, and you no longer relate benefits
so much to the individual’s own situation, to
his contribution, but to the whole social and
economic situation, you are certainly begin-
ning to take a much broader look at the field.
Then at this point you may be losing your
primary orientation.

I suppose this could provide some consti-
tutional problems as well as problems in
administration.

Mr. Johnson: But this is why, sir, if I may
say so, the case is made in the working paper
on the Constitution for treating income sup-
port measures and income insurance measures
in an analogous way. Here, in both cases, you
are providing income rather than service.

The Joint Chairman (Mr. MacGuigan): Yes.

Mr. Johnson: It is entirely possible for a
scheme to be a mixture of income insurance
and income support, and as long as we have
the present constitutional distinction in the
treatment of these two categories, you get
into precisely the kind of problem that you
mentioned.

This kind of constitutional treatment would
not involve questions of that order.

The Joint Chairman (Mr. MacGuigan): Mr.
Osler.

Mr. Osler: Mr. Chairman, we are perhaps
wandering a little off the subject, but surely
the new unemployment insurance package as
proposed, with a concept of sort of feeding
into a pipe-line and co-operating very gener-
ally with Manpower, and for that matter on a
longer-term basis with regional economic
expansion and the whole bit, would cause
problems if you had federal and provincial
politicians who were striving to fight hard
enough against each other. Could it not?

In other words, all the way along the line
the unemployment insurance is contingent
upon either circumstances that are there
regionally or the reaction of a person to those
circumstances. He has to apply for work; he
has to be willing to change his job; he has to
be wining to. . .

Mr. Johnson: I suppose you could have a
constitutional row if there were two orders of
government that had a mind for it, They
could get into an argument as to the bearing
of this measure on the Constitution, or vice
versa. But I would think that the point at
which operating conflict would arise is a bit
difficult to discern because the proposed
unemployment insurance plan provides for
definite benefit periods, as does indeed the
present one. It is really when a person goes
off unemployment insurance and then seeks
social aid that he has shifted from one plan to
another. That is the point at which the ser-
vices provided to the unemployed person
become relevant in provincial terms.

Mr. Osler: But as I understand it, to qualify
at certain stages a man may have to prove
that he is following certain procedures, and
one of those procedures may be that he goes
to Manpower and takes a retraining course.
This thing would then be geared to top up
whatever he was getting from Manpower to
bring him to his $100 a month, if that were
the relevant figure. So there is a kind of
contingency here and there are judgments
along the line that I do not think there were
before, although I am not that fam.’iliar with
the old one. I just studied the new one; I
know it a little better than the old one.

If Manitoba were a province that was
trying to pick a fight, and for some reason or
other the Premier of Manitoba was trying
very hard to get people to go to Churchill or
to somewhere else, to some relatively less
desirable place, and he had a pool of unem-
ployed plumbers in Winnipeg and he needed
them in Churchill, the federal government
might quite easily say, “A plumber is near
enough to a welder, so we will give him a
welding retraining job and let him stay in
Winnipeg with his family”. But the Premier
of Manitoba might say, “The heck with it. I
wou.ld like maximum pressure on him to send
him to Churchill as a plumber because that is
where I need him”. Do you know what I
mean?

Mr. Johnson: Yes, quite so. I do not think
you can have both orders of government
involved. You cannot have two orders of gov-
ernment at all without encountering this sort
of problem.

I think what is happening here in the unem-
ployment insurance plan is that you are
making a payment that is at certailn points
conditional, and you are saying to the
individual concerned that there are contain
efforts that he must make himself, and clearly
the sort of situation that you describe might
be possible. The Unemployment Insurance
Commission may say that Johnson should
take a retraiining course when somebody else
might think that Johnson ought to move.

At that kind of meeting point you hope for
sufficient intergovernmental harmonization
that you do not have it escalate into a consti-
tutional row.

The Joint Chairman (Mr. MacGuigan): Mr.
Rowlaxnd.

Mr. Rowland: Mr. Chairman, could I come
back to this social services and health ser-
vices business once again? It would seem that
as a result of the heavy costs involved in
providing these kinds of services, if they
became an area of exclusive provincial juris-
diction it would mean that the province would
have to fund them exclusively, with the
caveat that the federal government could per-
haps through its spending power become
involved at some point. Is there not a danger
in this kind of approach, that you would rap-
idly reach a situation in which there were
wide variances in the standards of the ser-
vices provided as between provinces? And
consequent upon that, is there not a disposi-
tion on the part of the poorer provinces at
least to insist upon the inclusion in any con-
stitution of some form of equalization pay-
ment formula which they would find to be
adequate?

Could you explain to the Committee
some of the difficulties that have been en-
countered in developing that equalization
formula because I think if the recommenda-
tions of this document are not to result in the
kind of regional disparities in health services
and social services which I said could be pos-
sible, then you need that equalization formula.
There has been some difficulty arriving at a
mutually acceptable one.

Mr. Johnson: May I set out, Mr. Chairman
and Mr. Rowland, by saying that is entirely
possible to contemplate a constitutional situa-
tion in which the Government of Canada
relies primarily upon equalization payments
to provincial governments for the purpose of
equalizing certain services. The essence of
this scheme is that the Government of
Canada and the Parliament of Canada equal-
izes the revenues of the provincial govern-
ments and legishrtures. They, in their turn,
decide independently what services to pro-
vide. There is no assurance, therefore, that a
province will choose to put Medicare or hos-
pital care or whatever the case may be at the
top of its priority list. That is one scheme.

If however, in addition to that, you want to
ensure that there will be relatively similar
standards in respect of a service which is
judged somehow or other to be in the nation-
al interest, then you can employ conditional
grants in addition to equalization. This is the
essence of the system as we know it.

As to the difficulty of coming to full agree-
ment on an equalization formula, I might
just summarize what the equalization formula
now provides.

Under present legislation, the Parliament of
Canada is assuring to each province per
capita revenues which are equal to the
national average at national average provin-
cial rates. I can give you an illustration or
two. Let us suppose that the average per
capita yield from the provincial sales tax is
$100 and let us suppose, secondly, that if you
apply the average provincial sales tax base-
retail sales minus food, minus drugs generally
speaking—in the Province of Manitoba, you
arrive at a figure of $80 per capita. The per
capita yield in Manitoba of the average pro-
vincial sales tax would be statistically $80 per
capita whereas the yield in Canada as a
whole is $100. The Parliament of Canada
under the present equalization formula gives
the Government of Manitoba $20.

The essence of this then is that all prov-
inces receive at least the same revenue that
average provincial tax rates produce.

The argument that one encounters and to
which, I believe, you are referring Mr. Row-
land, is (a) that the Government of Canada
ought to equalize more than provincial reve-
nues or (b) that the Government and Parlia-
merit of Canada ought to equalize not only
the revenues but the costs of providing
services.

A word on the (a) part first. The argument
has been whether or not municipal services
should be equalized. The position of the Gov-
ernment of Canada in 1966-67 discussions with
the provinces was that it did not believe
municipal services should be equalized. That
is the job of each province to equalize
municipal services. The Government of
Canada ought not to try itself to equalize the
municipal services in Toronto with the
municipal services in Cape North, Cape
Breton Island, for example. That is one of the
arguments.

The other argument has to do with the cost
of providing services. If you have equalized
revenues, you may find one province which
has a higher cost of delivering education seiu
vices, to take an example, than another prov-
ince. Certainly the equalization of revenues
does not contribute to minimization or reduc-
tion of the disparities in the cost of providing
services. The difficulty here has been that
nobody really knows how to measure dispari-
ties in the cost of providing services. This is
probably why more progress has not been
made in this field in Canada or in the United
States.

Mr. Rowland: I just was attempting to indi-
cate to the Committee once again, some of the
difificulties involved in the proposals put for-
ward in this paper. It is the argument of fiscal
capacity as opposed to fiscal need.

The Joint Chairman (Mr. MacGuigan):
Gentlemen, I think we have given Mr.
Johnson a good work-out. I would like to
thank him on your behalf. He will undoubt-
edly be before the Committee some time next
year but I think we can now give him a rest
of several months before we Call mm in
again. Thank you very much, Mr. Johnson.

Mr. Johnson: It was a pleasure.

The Joint Chairman (Mr. MacGuigan): Is it
agreed to append the material provided by
the Secretariat of the Constitutional Confer-
ence?

Some hon. Members: Agreed.

The Joint Chairman (Mr. MacGuigan): I
would like a motion to adjourn to the call of
the Chair.

Mr. Gibson: I so move.
Motion agreed to.
Meeting adjourned.

APPENDIX “G”

SHARE OF TOTAL REVENUES COLLECTED BY FEDERAL GOVERNMENT AND PROVINCIAL-MUNICIPAL GOVERNMENTS, 1964-65 TO 1968-69

*See PDF for table

APPENDIX “H”

BACKGROUND PAPERS
on
INCOME SECURITY
and
SOCIAL SERVICES

Prepared by:
The Secretariat of the
Constitutional Conference
for
The Special Joint Committee of the
Senate and of The House of Commons
on
The Constitution of canada
June 1970

SECRETARIAT OF THE CONSTITUTIONAL
CONFERENCE

P.O. Box 488
Terminal “A”
Ottawa 2

INTRODUCTION

The material in this booklet was compiled
by the Secretariat of the Constitutional Con-
ference to assist the Special Joint Committee
on the Constitution of Canada. The material
is drawn from the public record of the consti-
tutional review and is related to the specific
subjects to which the Parliamentary Commit-
tee is directing its attention.

Henry F. Davis,

Secretary of the
Constitutional Conference.

TABLE OF CONTENTS

*See PDF for table

QUEBEC—SECTION 1

Extracted from document 3
Brief on the Constitution (pp. 11-13,)

(1) Social security

There are two main reasons behind Que-
bec’s strong insistence on regaining full con-
trol, ever social security: first, because the
simultaneous presence of two governments in
this area thwarts all effective planning, makes
for contradiction between the various pro-
grammes and leads to waste and administra-
tive overlap; second, because social security
measures directly affect our nation in its inti-
mate vitality.

Unfortunately, it is only too easy these days
to demonstrate the absurdity of governments
competition in social fields. Lets only think of
health insurance and the tragic experience we
are all going through in this regard. Whatever
might be the intrinsic value of such a pro-
gramme, here is a federal initiative taken in
an area under exclusive provincial jurisdic-
tion, despite near-unanimous opposition from
the provinces, despite unmistakable signs that
it is economically ill-advised at this time,
despite Open opposition on the part of several
federal Cabinet ministers. In this case, it can
even be stated that, besides attempting to
intervene and decide where provincial priori-
ties lie, the federal government is seriously
neglecting its own responsibility for the coun-
try’s economic health. The fact that such a
situation can arise after so many professions
of faith in co-operative federalism and inter-
governmental consultation clearly points to
the need for constitutional change.

Moreover, amounts earmarked for social
secumity are now so substantial that it is not
enough to eliminate the more flagrant con-
flicts between federal and provincial policies.
We must also make the planning necessary in
order to use public funds with maximum
effectiveness. Social security is a whole, each
part closely linked with the others. For
instance, it is impossible to set up a public
assistance scheme based on the individual’s or
the family’s right to the satisfaction of their
basic needs without being concerned with the
existence of an adequate system of manpower
services and a satisfactory programme of
family allowances. It is also imperative that
all those measures to which one individual
might have recourse at a given time, be so
organized that all people faced with the same
situation will be treated the same way. Final-
ly, attention should be given to the system’s
balance, its relationship with relevant educa-
tion and recreation measures, and its effect on
the economic development of each region.
Planning of this nature is so complex that it
cannot be undertaken unless the necessary
authority is vested in only one order of
government.

Yet Québec has additional reasons for
wanting full control over her population’s
social security. As early as 1956, the Trem-
blay Commission, in its report on constitu-
tional problems in Quebec, stated in the
chapter on social security: “If the Province of
Québec wishes to fulfil effectively its constitu-
tional mission as guardian of French-Canadi-
an culture, it is obliged to conceive and
organize its social life in conformity with the
permanent demands of that culture. It must
at all costs preserve its constitutional jurisdic-
tion in the matter. It must also try alone to
take the initiative in measures whose
administration it has agreed to share with the
federal government, upset as it has been by
events.” This position has always been
endorsed by the majority of French-speaking
Quebecers and all our provincial administra-
tions since then have been inspired by it. It
must be considered as a corner-stone of Qué-
bec’s constitutional policy and an essential
element of any constitutional reform.

Of course, we are aware that the changes
we ask for might raise problems as regards
income redistributionand tree movement of
people anywhere in the country. We feel,
however, that such problems are not insolu-
ble; on the contrary, we are convinced that
the numerous social programmes now admin-
istered by the provinces can point the way
towards finding the solutions needed. As far
as we are concerned—and this is something
which we have clearly stated before and
which bears repeating—we are asking for
Quebecers neither more nor less money than
they would receive under federal pro-
grammes. We fully agree that steps must be
taken to guarantee what is commonly known
as “portability” of social benefits. We have
stated also that, if Québec were to receive a
larger share of taxes, we should be prepared
to do our part in order to co-ordinate eco-
nomic policies, something which would then
be even more necessary than at present.

Extracted from document 81(2)—
Related Propositions

SUBJECT: V—DIVISION OF LEGISLATIVE
POWERS
SOCIAL POLICY

4.17.32 Social secu.rity, including all social
allowances, old age pensions, family allow-
ances, health and hospitals, manpower place-
ment and training, should come under the
exclusive jurisdiction of the constituent
states.

COMMENTS

1. In her Brief on the Constitution, Québec
explained why she believes that it is abso-
lutely essential for the constituent states to
have exclusive control over all social security
matters.

2. The simultaneous presence of two gov-
ernments in this area thwarts all effective
planning, makes for contradiction between
the various programmes and leads to waste
and administrative overlap.

3. Social security measures as a whole bear
directly on the culture of a people, enabling
them to express themselves collectively. Que-
bccers cannot be deprived of their own social
secuity system any more than they can do
without their own legal or educational
system.

4. Through appropriate financial machinery,
attribution of all social security measures to
the member-states can be reconciled with fair
redistribution of income, with manpower
mobility throughout Canada and with effec-
tive economic policies.

5. The proposed provisions for delegation of
powers would allow the States so desiring to
entrust the central government with some of
those functions.

Extracted from document 214—

Statement by the Hon. Jean-Paul Cloutier,
Minister of Family and Social Welfare and
Minister of Health Presented to the Federal-
Provincial Conference of Welfare Ministers,
Victoria, Oct. 2 and 3, 1969

Introduction

This is my third Conference of Canadian
Welfare Ministers. Between the first and
second, a full year elapsed. Now, after less
than nine months, we already feel the need to
resume our discussions. This shortcoming of
the interval between our meetings reflects the
accelerated rate of change in the social prob-
lems confronting our governments.

I am happy to see you once more, Mr.
Munro, as well as our colleagues from various
parts of Canada, and I take this opportunity
to greet the new-comers to our deliberations.
I am especially delighted at the opportunity
this has afforded me—and the other members
of the Quebec delegation—to visit the Pacific
coast and revel in its beauty. And I thank the
Government of British Columbia for the
warm welcome it has extended to those par-
ticipating in this conference.

At our last two gatherings, I outlined the
main factors underlying Québcc’s welfare
problems. I also described the efforts made by
the Quebec Government to shape its policies
to fit these problems, which we have sought
to situate in the broader context of social
policies applied in other parts of Canada.
Even at the 1968 conference, the Quebec Gov-
ernment emphasized the need to set up suita-
ble machinery to handle relations between
our several governments in terms of inter-
governmental co-operation based on a social-
welfare ministers’ conference. Commendable
progress has been made in setting up the
necessary machinery. I hope that this striving
for inter-governmental co-operation will yield
positive results as exchanges between our
governments increase in scope while fully
respecting jurisdictional authority.

The difficulties facing Quebec in the
autumn of 1969 have undergone no essential
change, nor have the means which my gov-
ernment expects to use in overcoming them.
What has changed is the seriousness of these
difficulties and the urgency of their solution. I
have already alluded to the welfare problems
with which we must deal and which are
included within the wider frame of reference
of the socio-economic situation in Quebec and
certain other parts of Canada. These problems
are under-employment; difficulty in adapting
manpower to the contemporary labour
market; the continued low income earned by
certain sectors in the population and con-
stantly depreciated by rising prices; the
degree of social dependency.

Yet unemployment, both structural and
cyclical, occasioned by the lack of jobs and
the increasing number of inadequately
trained workers, is leading to a constant
growth in the number of assistance recipients.
Even if the rate of creation of new jobs
would seem to be higher this year than last,
total unemployment remains disturbing.

Moreover, the anti-inflation policies adopt-
ed by the federal government, whose aims
were indeed imposed by the need to ensure
economic stability in certain parts of the
country, will almost certainly lead to
increased unemployment in Quebec.

In the light of our studies and of experience
gained from the numerous decisions reached
by the Quebec Government in the social
action field—especially in social aid—we have
been able to define more sharply the direction
in which we wish to move. During the pres-
ent conference, we wish to take a more defi-
hite position than ever before on welfare poli-
cies as seen in the broader context of
manpower as well” as social and economic
policies. The purpose of this paper is to make
clear our views on this subject.

The direction in which the government is
moving with regard to social policies.

In recent years, the Quebec Governmentfs
general objective may be summed up as a
major effort to improve social conditions
among its people. Let us summarize this
objective.

We seek an improvement of social organi-
zation to enable various groups to meet their
basic needs within the mainstream of social
life. We seek a development of the whole
range of social security programmes aimed at
prevention and rehabilitation so that they
may allow us to reach our goal without giving
up the essentially residual function of social
aid. Indeed, necessary as they are, our outlays
for public assistance must not, in our opinion,
pre-empt resources which might be used for
other aspects of Québec’s social and economic
development.

Many difficulties confronlt us in our efforts
to attain our social policy objectives. Some
are directly occasioned by the increase in
recipients, others by difficulty in co-ordinat.
ing policies and programmes differently con-
ceived and executed by different orders of
government. Once again we insist that, under
present circumstances, the rational use of
resources available to usis an obligation which
we cannot evade. With your indulgence, I
shall now give a brief outline of theiproblems
we encounter in our fight against poverty,
stressing the importance of giving true weight
to the interdependence we have found to
tors, among them the extension of other social
security policies.

Let us make clear at the outset that the
traditional function of social assistance—
providing income for people whose essential
characteristic was that of remaining perma-
nently detached from the labour market-
becoming relatively less important. This
change is probably the result of serveral fac-
tors, among them the extension of other social
Security programmes such as the introduction
of the guaranteed income supplement for
aged persons and the Pension Plan for the
retired and their survivors.

If social aid is gradually taking on a residu-
ary nature for persons permanently with-
drawn from the labour market, the opposite
is true for other groups. Indeed new recipients
are mainly to be found among people forced
out of the working population, yet who could
reventer the labour market if the employment
level were higher and manpower utilization
conditions better. In addition, it would seem
that social changes which have taken place
during the last decade have markedly affected
the popular attitude towards social dependen-
cy. To put it bluntly, we must accept the fact
that many see nothing unusual in living at
the expense of the community over long peri-
ods of time.

Viewing the social assistance and security
programmes in Canada as a whole, We find
serious inconsistencies, the burden of whose
consequences is borne by welfare recipients
and, in all likelihood, by other groups among
our people. This want of co-ordination is to
be found as much in programmes dispensing
cash payments as in those rendering services.

Thus family allowances cannot be arbitrari-
ly dissociated from other social assistance and
security measures it the object is to come as
close as possible to a real policy of family
income maintenance. In Quebec, family
responsibilities constitute one of the main
reasons for poverty. Hence the present struc-
ture of the federal family allowance pro-
gramme, which is not directed to the needs of
large families, is inadequate to help them
meet their obligations. They therefore appeal
to social assistance. This is why the Quebec
family allowance programme—conceived as
complementary to the federal programme—
has placed its stress on the needs of large
families with modest incomes.

Moreover, we have maintained that the
sums distributed in Quebec as federal family
allowances shouldbe transferred from one
order of government to the other and that a
new scale of payments should then be worked
out befitting the needs of our people.

Speaking more generally, we wish to point
out that, within the limit of her means,
Quebec has already done a good deal to bring
unity and coherence to her social security
policies. Not only have we enacted legislation
on family allowances, but I hope that the
many legal provisions on which our public
assistance programmes are based will be
superseded by the general social aid bill now
before the National Assembly.

This bill makes need the sole criterion in
establishing the eligibility for help of persons
who are without means of subsistence and not
working. Going even further, it will provide
aid for persons receiving income from
employment, when such aid is absolutely
necessary for prevention or rehabilitation
purposes. However, certain sections in the bill
are designed to encourage applicants or
recipients to accept work or take training
courses.

The main lines of Québec’s social policies,
which I have just reviewed and which are
now embodied in the Quebec Family Allow-
ances Act and the proposed Social Aid Act,
tend in the direction of the objectives which
President Nixon set before the American
people and Congress: to ensure the mainte-
nance of a minimum income in such a way as
to encourage citizens to work to provide their
own needs. The differences between Québec’s
policies, expressed in terms of family allow-
ances and social aid, and these American
goals, are found primarily in the means
selected. I am not trying to imply that the
problems are the same in thc U.S.A. and
Quebec. On the contrary—need it be said?—
Quebec’s cultural, economic and social back-
ground is peculiarly her own.

On another level, the partial overlapping of
applicants for unemployment assistance and
insurance is a source of difiiculty for our
services and, above all, for the unemployed.
For instance, because of differences in the
basic principles underlying each programme
and the absence of organic administration
links between them, it is impossible ‘to recov-
er directly, from one government to the other,
funds advanced by social assistance to per-
sons in receipt of unemployment insurance
benefits. Such difficulties could be eliminated
by having individual authorities—responsible
to their provincial governments—supervise
the administration of both unemployment
insurance and assisance programmes.

But the lack of integration between these
two programmes is felt most acutely when it
comes to planning and forecasting require-
ments for rehabilitation and prevention pur-
poses. In fact, an individual seldom qualifies
for unemployment assistance until his insur-
ance benefits have been exhausted. Thus in
most instances we are unable to take any
acton to rehabilitate and restore him to the
labour market until he has been idle for
several months.

Because of the differing jurisdictions
involved in this process, nobody can forecast
needs with the required accuracy. As a result,
a start on rehabilitation measures frequently
must be held up for lengthy periods which in
themselves are sufficient to make it even
more difficult to solve problems with which
the unemployment have to contend.

Continuing in the area of rehabilitation and
prevention, the programmes which provide
for cash payments are not alone. Indeed, citi-
zens still require a host of servces, essential
to round out the financial aid provided to the
blind, the handicapped, the unemployable and
even the employable. In addition—and it is
here that the inter-dependence of pro-
grammes which render services and those
which supply cash is most readily apparent—
the quality and quantity of efforts expended
to make welfare recipients self-supporting
will to a large extent determine the level of
future assistance costs.

Relations between social assistance and
manpower services as they affect endeavours
to get welfare recipients back to work are
such that the population can be made to pay
the price of the overlapping and lack of co-
ordination which are characteristic of both
policies and administrative structures as they
now exist. The present network of manpower
centres, both federal and provincial, entails
costly duplication. Within the Québec Gov-
ernment, we are becoming steadily more
aware of the importance of joint action by
manpower and social aid services. At both
local and regional levels, the Family and
Social Welfare Department’s offices can count
on receiving co-operation from Québec Man-
power Centres in their efforts to rehabilitate
assistance recipients and prevent social
dependency.

One preventive measure has been in effect
since 1965, when the Québec Government
decided to systematize programmes whose
purpose is to retrain as quickly as possible
employees hit—or likely to be hit—by large-
scale industrial layoffs. Without such retrain-
ing, these people stand in danger of swelling
the ranks of welfare recipients.

To sum up, we in Quebec take the view
that the effectiveness of rehabilitation and
prevention measures in the social assistance
field depends on the coherence of social aid
and security policies as well as on pro-
grammes administered on a decentralized
basis; effectiveness also depends on systemat-
ic co-operation between social aid and man-
power services and—equally necessary—
health and psycho-social services.

While the interdependence of social policies
raises serious problems, it should be borne in
mind that economic conditions have much to
do with determining the effectiveness of action
taken under any social aid and security
system. In fact, one important obstacle to
maintaining the residuary function of social
aid has to do with the economic situation
itself. Unemployment and changes in labour
markets can engender low incomes and eco-
nomic insecurity which, in turn, aggravate
instances of poverty and consumer debt.
Finally unfavourable economic conditions
tend to add weight to the tax burden in
poorer parts of the country, thus further
increasing the difficulties which such regions
encounter in creating conditions likely to
attract the investments needed for growth.

The obstacles to keeping social aid per-
forming a residuary role are not insurmount-
able. Our experience with the social assist-
ance programme as well as the research being
carried on by our services in this field sup-
port the belief that these obstacles could be
overcome if governments are sufficiently
determined to review their policies. As for
Quebec, we simply want to call to mind the
optimism justified by the results expected
from decentralization of programme adminis-
tration on a regional basis, the extension of
renabilitatcon services and the progress made
in etfecting co-ordination between depart-
ments. However, before the full benefit of
these efforts can be felt, they must be com-
pleted by cooperation at the intergovernmen-
tal level, which means improving the ma-
chinery for co-ordination and, of necessity,
re-allocating functions and responsibilities
among the various governments. As we
showed earlier, the areas in which we can
strive for the effectiveness which Canadians
expect of us in social matters are essentially
those which encompass the interdependency
of policies and co-ordination in policy
planning.

Let me emphasize that such co-operation
must first be achieved in the formulation of
programmes, then in their administration, if
applicable. In fact, the important thing in a
country which takes in regions whose prob-
lems may very well differ widely is to make
certain that policies and legislation reflect
common objectives, rather than seek coast-to-
coast uniformity in laws, policies and pro-
grammes. In a timely reminder to delegates
attending the last Federal-provinciai Labour
Ministers’ Conference, the Honourable Mau-
rice Bellemare, Minister of Labour and Man-
power for Quebec, pointed to “the danger of
striving for too great a uniformity throughout
the labour world where sociological factors
such as culture, environment and regional
economic context have such an important
part to play”. Moreover, in a television inter-
view on September 5, 1969, the Honourable
Bryce S. Mackasey, Labour Minister in the
federal government, expressed agreement
with that statement, saying that we might be
wiser to confine ourselves to common objec-
tives. The same reasoning can be applied in
such spheres as social welfare. Even though it
may be possible to bring about certain
improvements affecting Quebec’s policies
alone, I believe we cannot do much more to
achieve co-ordination and harmony without
extending our efforts beyond the limit of
means now available to the Government of
Quebec.

Directions in which Quebec social policy is
moving

Without repeating the innovations men-
tioned above, I should like now to inform you
of the main imperatives in Quebec’s social
policy. I especially want to stress the modifi-
cations of existing programmes which hold
out the greatest promise of demonstrably
improving the effectiveness of social policy as
a whole.

With regard to the allowances paid under
diverse social programmes, some major
reforms are imperative. To begin with, unem-
ployment insurance, workmen’s compensation
and the pension plan benefits must be ration-
alized and brought into harmony if we wish
to avoid having to supplement them in many
cases with social assistance, In addition, we
know that the vocational training allowances
can prompt many people to register for this
programme principally because the payments
are higher than those received from other
programmes or even, in some instances,
higher than the income that can be earned by
working.

In the field of rehabilitation, we intend to
give priority to the vocational training and
manpower services set up for welfare recipi-
ents. As well, we plan to continue to extend
our programme of substituting work for wel-
fare allowances and even of examining the
possibility of reserving certain jobs for those
receiving assistance. Moreover, these inten-
tions are in perfect harmony with our desire
to see health services given, with a certain
priority, to welfare recipients in order to
facilitate their reintegration into the labour
market. Finally, the composition of the com-
mittees for retraining welfare recipients
ought to be modified so as to ensure the par-
ticipation of the government officials responsi-
ble for implementing diverse programmes in
the fields of social assistance and security as
well as manpower.

As for the endeavour to prevent social
dependency, I again draw your attention to
the necessity of restructuring the family al-
lowances system and of exerting a concerted
efi’ort through improved manpower and psy-
cho-social treatment services for the recipi-
ents of unemployment assistance. If vocation-
al training allowances reached more of those
receiving assistance, the number of welfare
recipients would surely decrease, in both the
short and long term.

Turning to economic policy, we believe that
the expansion of regional development pro-
grammes should take place within a broader
framework of diversification in over-all eco-
nomic policy, monetary as well as fiscal. We
note in passing that Canada’s Finance Minis-
ter has already declared his governmenstfs
interest in regionalizing economic policy.

These courses of action also require that
everything possible be done to reduce the
fiscal burden which weighs most heavily on
the less fortunate parts of the country. Only
in this way can they find the investment capi-
tal essential for economic and social
development.

Machinery for intergovernmental co-operation

Québec’s pursuit of social policy objectives
can be accomplished without causing any dis-
location in intergovernmental co-operation.
To us, co-operation appears especially urgent
in the planning and elaboration of policy.

In January of this year, I specified that “it
would be important to set up a certain
number of intergovernmental co-operation
mechanisms: a Continuing Intergovernmental
Conference of Welfare Ministers, possibly
including ministers from other departments
involved in social development; communica-
tions between this Conference and advisory
bodies on which provincial representation
would be in the majority; appointment of
specialized intergovernmental commit-tees;
establishment of a Canadian Council of Pro-
vincial Welfare Ministers with a permanent
secretariat”. It seems that we have made
rapid progress in this direction.

During the day, we shall hear reports from
committees which we set up at our last meet-
ing. These committees have done as thorough
a job, as was possible within the limited time
available to them. Not only were officials of
the Family and Social Welfare Department
attached to different working groups, but I
also arranged for an important study already
carried out in Quebec on the cost of social
assistance to be put at the disposal of the
study group concerned with this question. We
shall shortly, discuss the progress made by
these groups and the possible extension of
their mandate. I wish to indicate right now
that Quebec is in favour of continuing this
work. I should also like to see a secretariat
set up for the Canadian Council of Welfare
Ministers.

Before leaving the subject of intergovern-
mental co-operation, I should like to make
some comments on the difliculties that stem
from consultation procedures which may well
be described as “too little and too late” and
then inform you of Québec’s present inten-
tions in this respect.

We favour the greatest possible participa-
tion in the field. of social planning. Like any
such body, the Commission of Inquiry on
Health and Social Welfare has called for
briefs from interested organizations; however,
it has also resorted to certain new techniques
such as setting up committees representing
sections of the public and subjecting their
proceedings to thorough study. In addition,
the reports of this Commission were pub-
lished almost immediately after their submis-
sion to the government. I have followed the
same procedure with work carried out within
the Family and Social Welfare Department.
As soon as it was available, the social assist-
ance cost analysis was sent to all my Canadi-
an colleagues. I am likewise preparing to
make known a position paper on family al-
lowances. I hope that the federal government
will adopt the same line of conduct with
studies it has done on the subject.

Finally, I should like to express my hope of
being able to meet with the federal Minister
to discuss Quebec’s measures in social securi-
ty, welfare and health as well as problems
presented by federal policies and programmes
in their application to Quebec.

Conclusion

In conclusion, I should like to recall a point
already made about the importance of taking
financial and economic priorities into account
in developing a social policy. In this regard,
Québec’s approach has been as responsible as
possible. It has been the aim of our policy to
support Quebec’s efforts in the field of educa-
tion and to avoid the introduction of new
programmes entailing considerable expendi-
tures whose inflationary effects could be fore-
seen as early as 1966. This is why Québec
found it important to delay its health insur-
ance programme. The new social security pro-
grammes which were adopted, that is, “family
allowances and the pension plan, added very
little to the burden of public spending in
Quebec since they are financed either by con-
tributions or by withdrawal of tax exemp-
tions in the case of the family allowance.

Secondly, let me express our feeling that
the objectives which I have developed here
seem to us completely compatible with those
sought by the federal government -and the
other governments in Canada. This does not
mean these common objectives should neces-
sarily give rise to uniform measures. On the
contrary, it may be asked in all seriousness
it is not rather through policies which, though
differing at times, provide adequate solutions
to Quebec’s problems that we can attain the
social and human objectives which we share
with the rest of the country. This is one of
the reasons we are naturally anxious to
reaffirm our will to discharge. within the
framework of Québec’s constitutional pre-
rogatives, our obligations in the field of social
security and manpower programmes. In this
matter, our positions correspond rather well
with the present trend in the American gov-
ernment as recently expressed by President
Nixon in his speech on the welfare crisis:
“For a third of a century, power and
responsibility have flowed toward Washing-
ton—and Washington has taken for its own
the best sources of revenue.

“We intend to reverse this tide, and to turn
back to states a greater measure of responsi-
bility—not as a way of avoiding problems,
but as a way of solving problems. Along with
this should go a share of federal revenues”.

As I have made clear throughout this brief,
lhc Government of Québec has put forth all
the necessary efforts to fulfill its responsibili-
ties subject to the means at its disposal and
within the limits of its constitutional powers.

Extracted from document 214—
Guidelines for a new Quebec Family Allow-
unce Policy (pp. 3-4, 76-81).

SUMMARY AND RECOMMENDATIONS

In his brief to the Federal-Provincial Con-
ference of January 16 and 17, 1969, Jean-Paul
Cloutier, Minister of Family and Social Wel-
fare, presented Quebec’s principal positions
on major social programmes and especially on
family allowances.

These proposals were aimed at increasing
the effectiveness of the family allowance pro-
gramme and suggested such essential
improvements as those listed herewith.

Unifying the Quebec and federal family
allowance systems, Québec to be rcspon-
sible for both.

Continuing a universal family allowance
system.

Restructuring this system in favour of
families of four or more children so as to
cover the whole cost of essential needs
for the fourth and all later children.

Revising payments under other social pro-
grammes, notably social aid, since
restructuring the family allowance system
would completely obviate the need for
any social aid payments for the fourth
and later children.

Eliminating the federal income tax
exemptions for dependent children (as
has already been done in the case of the
Quebec income tax).

Making family allowances taxable at a
graduated rate based on family income
and the number of children eligible for
family allowances.

Financing this restructuring of family
allowances without any over-all increase
in the tax burden;

Within limits, tying family allowances in
with the cost-of-living index.

Finally, this study also lays great stress on
the future and essential development of new
or remodeled social programmes. Specifically,
it proposes:

an appropriate extension of the system to
older children; this will lead to a funda-
mental revision of schooling allowances
and student aid;

Development of such new measures as
maternity allowances to strengthen and
enhance family life.

Chapter VI

A family policy for Québec

Throughout this study, the reader will
surely have noted the special dimension of
Quebec family problems, even though most of
these are to be found everywhere else in
Canada. For some years, Québec, well aware
of the situation, has expressed her firm inten-
tion to develop a coherent and co-ordinated
family policy of her own.

The creation of a Quebec family allowance
system constitutes one example of the policy
thus adopted by Quebec. Yet, however effec-
tive these family allowances may prove to be,
an over-all policy cannot be limited to the
introduction of this measure alone.

Quebec has already adopted a wide variety
of measures along these same lines. Some are
intended to assure families and their mem-
bers satisfaction of needs recognized as
having prime importance in our society. Here
one might include legislation on education,
health, housing and income support. By way of
example, we might mention programmes for
schooling allowances, student aid, loans and
scholarships, medical assistance and hospital
insurance, public housing, social assistance
and the Pension Plan. Others deal with spe-
cial family and social situations by offering
families a certain range of services. As exam-
ples, we might well cite youth protection
measures, the social welfare courts reception
centres, re-education of juvenile delinquents,
the social service agency network. To all these
may be added still other legislative measures
covering personal and family states. In this
category, we have legal provisions govern-
ing separation as to bed and board alimony,
marriage annulment, parental and marital re-
sponsibilities and divorce.

Yet the very diversity of these measures
and programmes arouses a feeling of confu-
sion and scattered effort. It would seem essen-
tial to try to make this policy more coherent
and to lay down guidelines for its future
development.

From this point of view, the first step to be
taken remains the attainment of a recast
family allowance policy. Once this major
change has been effected, the coherence of the
general social security system will require
proportional reduction in the payments made
under other programmes in order to cover in
whole or in part the expenses arising from
the presence of children in the household.

The Pension Plan, the Workmen’s Compen-
sation Commission, unemployment insurance,
vocational training allowances all represent
programmes whose present payment rates
provide for or take into account family
expenses and which will have to be revised in
consequence. Doing this will raise a certain
number of problems which necessitate com-
plex additional study. Even now, however, it
is possible to ascertain the general effects
produced on certain other programmes by
restructuring the family allowance system.

As far as social assistance is concerned, the
adjustments provided in Chapter V will not
necessarily improve the financial situation of
families receiving assistance. Yet in the event
that they return to the labour market, they
will continue to profit by family allowances.
What these contribute might well be enough
to extricate many families from the clutches
of poverty and thus make it possible to better
their children’s prospects.

Like family allowances, schooling allow-
ances and student aid include school attend-
ance in their requirements and act as power-
ful incentives for families to encourage their
children to continue their studies. Therefore
their amalgamation, or at least making them
closely interrelated, should be given careful
consideration.

Present Quebec Government policy is not
to pay family allowances for children placed
outside their homes. The federal government,
however, pays these allowances to the extent
that the family makes a financial contribution
towards meeting the expenses of their chil-
dren’s placement. The most logical policy is
not to pay family allowances on behalf of
children for whom the state has assumed
financial responsibility, especially if family
allowances are restructured, since in this case
considerable amounts would be paid for chil-
dren late in their order of birth. There is
reason to believe that withholding such allow-
ances could lead families to keep their chil-
dren at home and that maintaining this policy
when children are placed outside the family
would play a serious preventive part, since
the family would then see itself deprived of a
relatively substantial sum of money. In this
respect, the efiects of the family allowance
programme cannot be precisely evaluated.
Only additional study devoted to it can
clarify the matter.

However much the changes proposed above
prove necessary if we are to show a proper
respect for coherence between various social
programmes, we must also look to the devel-
opment of new measures. Thus, following the
example of certain foreign countries which
have shown a special concern for working out
policies on the family, Quebec might consider
whether it would be advisable to institute
allowances for mothers who act as family
heads in the absence of any husband to
assume this responsibility. Allowances of this
type might prove an appropriate means for
solving the problems that beset mothers who
are torn between the demands of holding a
job and their maternal and family obligations.
In addition, maternity allowances might well
replace family allowances for the first child,
as suggested in Chapter IV.

Studies of the same order might also be
conducted with regard to inaugurating a
health and medication insurance plan and ex-
tending public housing programmes. Such
measures would most certainly help us
achieve our objective in the war against pov-
erty.

Yet it remains true that we cannot limit
ourselves to action of this kind in working
out a Quebec family policy. The state has a
duty to play its part in preserving and pro-
tecting the tamily. This consists in seeing to it
that there shall constantly be available to
members of the family all the programmes,
services and institutions which they may need
to preserve the family entity or to reach the
best settlement of problems generated by its
very existence. But this concern on the part
of the state is necessarily even more complex,
since it must take into account any values
that affect the family. These values, whether
they relate strictly to the family or are broad-
ly social, as well as the problems specifically
challenging the contemporary family, include
such matters as family planning, working
members in the family, the part to be played
by the mother and father.

From this viewpoint, proposals to set up
family courts and gather together the various
acts covering the family and its youthful
dependents under codes which would unite
within a single philosophy the whole range of
scattered provisions now in effect would seem
to call, if not for immediate action, at least
for deep reflection to make future effective
action possible.

Finally, the full flowering of the family may
be sought by several supplementary means,
among them the developmcnt—already well
under way—of a policy for the living envi-
ronment—recrcation, sport, participation of
cultural life.

Developed societies like our own—or at
least most of them-long since solicitous for
the well-being of their families, have, in
recent years, had to face the problem of an
increasingly static population. For about a
decade, Quebec in her turn seems to have
been affected by this trend.

From the strictly demographic point of
veiw, the reduced number of births in Quebec
results from a considerable lowering in the
reproduction rate which began to be apparent
throughout the country starting in 1960. Con-
trary to what had been the rule in the past,
the Quebec birth rate has not only become
the same as that in Ontario, for example, but
even is showing a tendency to rank among
the lowest as compared to those in the other
Canadian provinces.

The principal factors that have led to this
reduction in the Quebec birth rate are easily
identified: the increase in urbanization, a
desire for a bcttcifiliving standard, a higher
level of education, more widespread family
planning, new directions in social values, to
which may be added the increased cost oat
children and the economic insecurity in many
families.

Within the framework of a dynamic family
policy, can family allowances play any major
part in changing poplation trends? To this
question, there is no categorical answer, since
specialists are still giving the problem careful
study. Yet certain partial answers are possi-
ble. Like the other components in a family
policy, it is unlikely that, in urbanized socie-
trics, family allowances can produce the birth
rates found in rural environments. All such
measures should rather be regarded as sig-
nificant means to counteract the falling birth
rate.

In the last analysis, this limited result will
almost certainly prove more effective than a
rapidly increasing birth rate in assuring our
socicty’s healthy development, since a family
policy can make possible the full flowering of
our society’s individual members and a nota-
ble improvement in the human assets of the
Quebec community.

ONTARIO—SECTION 2

Extracted from document 203—

Notes from Remarks by the Hon. John P.
Robarts, Prime Minister of Ontario, to the
Federal-Provincial Conference, December 8,
1989 (pp. 1-4, 8-17).

SOCIAL SECURITY AND THE
DISTRIBUTION OF POWERS:
SOME ONTARIO VIEWS

I The scope of the problem

Before we get into the specifics of the inter-
esting paper which the Government of
Canada placed before us last week, I believe
we ought first to discuss some of the broader
principles and issues which underlie this
extremely complex subject of income security
and social services. After all, there exists now
in Canada an enormous number of programs
in this area, all of which involve large expen-
ditures of public funds. What are we really
trying to do in this whole endeavour? Are we
spending our tax dollars in this field in a
suificiently wise and etficient manner? Do we
need more social security programs or less?
Are the present programs really serving the
people of Canada who most need this assist-
ance? Can we afford to keep on redistributing
our wealth before we have actually created
that wealth? Are we takingthe future suffi-
ciently into account in our present proposals
or, to use a well-known phrase, are we plan-
ning to fight the last war?

If these questions have the ring about them
of “have you stopped beating your wife?”,
they are not intended that way. Rather what I
have in mind is that in our approach to the
important issue of social security, as indeed to
all issues in this constitutional review, we
should in my opinion debate the fundamen-
tals and be fluid in our attitudes before we
arrive at final positions as we must do ulti-
mately. What worries me here, and what has
concerned me over the past few days, as I
read the federal government’s document
which we now have before us, is that I sense
we are striking conclusions before we have
surveyed and understood what the problem is
all about and in what direction we should be
proceeding.

Therefore, in my preliminary remarks this
morning, I should like to touch briefly on a
few themes which I think should preoccupy
us before we become too mired in detailed
and immediate proposals. For example, the
Government of Canada in its most recent
Speech from the Throne referred to its inten-
tion to publish a White Paper covering the
whole field of social security. This is likely to
be a most important document, and I would
very much hope that its ramifications and
suggestions can be woven into our “current
discussion of the constitutional aspects of
social security. In fact, in so far as the federal
government proposes that much of the social
security realm should be a concurrent juris-
diction, it will be necessary to compare the
long-term objectives of the federal govern-
ment with our own in order to arrive at an
agreed distribution of responsibilities in this
field.

Therefore, consideration of the constitution-
al aspects of social security must take into
account the wide-ranging debate now taking
place in many countries about the direction in
which future developments in this field
should go. This debate has not been confined
to academic or governmental circles, but has
now become a subject of wide discussion in
the newspapers and other communications
media,

Some Canadians maintain that we have
reached a point where the basic objectives of
social security measures have now been
largely attained. They say that the present
task is not to introduce further large-scale
government programs. They argue that fur-
ther programs are both unnecessary and
undesirable, and that it would be preferable
to consolidate and rationalize the existing’
web of programs to ensure that they meet the
objectives for which they were originally
intended. These Canadians are challenging
the effectiveness of the present programs, and
some have even called into question the vali-
dity of the basic objectives.

Schemes for providing a guaranteed mini-
mum income or for a negative income tax are
being proposed, although their advocates are
divided over the extent to which such pro-
grams should replace all or part of existing
social security programs, or the extent to
which governments have the financial capaci-
ty to introduce programs of this magnitude.
Others are coming forward with far more
radical proposals, envisaging a time when
technological change will have revolutionized
the relationships between work and leisure,
and where the field now known as “Social
Security” will be only part of a larger field of
public endeavour related to the full develop-
ment of individuals. Such an endeavour
would encompass much of what is now
included within educational, cultural, recrea-
tional, economic and taxation programs.

With this wide variety of possibilities avail-
able to us in the future, proposals for consti-
tutional change in this area must surely pro-
vide our federal system with sufiicicnt
flexibility to adapt to future needs. We must
be extremely careful not to accept a distribu-
tion of responsibilities in this field or a defini-
tion of powers within it which is based
simply on present needs.

We might have called our discussion today
“Social Security” or “Social Welfare” instead
of “Income Security and Social Services”.
Any of these terms would serve to bring to
mind the many programs that are now being
provided by the federal and the provincial
governments in Canada. However, most of us
would be hard-pressed to provide a definition
of exactly what is meant by “Social Security”
or “Social Welfare”. Which programs are
social security programs? Which are economic
or income support programs? Into which cate-
gory does a program such as manpower
retraining fit? Is legal aid an income support
program or an aspect of the administration of
justice?

Definitions are somwhat arbitrary, and run
the risk of being so general as to be useless,
or so particular as to be restrictive, Care must
be taken therefore, in this fast-changing field,
to ensure that whatever definitions we choose
prove flexible enough to accommodate future
developments.

In our opinion, this subject: deserves and
must receive a great deal of thoughtful dis-
cussion before conclusions are reached and
firm positions struck. Nothing could be more
destructive of our mutual objectives than the
premature arrival at positions which serve
only to make sensible decisions more diflicult
to reach. Such positions force us to regard
one another as adversaries, when what we
require most is an examination of all the
possible alternative approaches and the bene-
fit of one another’s views. This is not an area
of affairs on which we should be taking
adversary positions.

Wishart—This is the time we should sit,
consult each other and, if possible, come to
an agreement.

III The development of the present jurisdic-
tion over social security

The concept of social security is one that
the Fathers of Confederation did not deal
with in designing our Constitution. They
simply did not consider that this field was or
should be a prime subject of governmental
responsibility and concern. This omission was
not one of ignorance, but was plainly a pro-
duct of the thinking of the time. As a result,
there was and is no substantial mention of
this subject in the British North America
Act, and neither order of government was
assigned jurisdiction over it Reliance for
social services was placed on private institu-
tions and charities, while government invol-
vement was seen to be mainly, if not entire-
ly, at the local or municipal level. The federal
and provincial governments were only in-
volved under special and well-defined cir-
cumstances. For example, in section 91 (11) of
the British North America Act, there is men-
tion of federal responsibility for quarantine
and for hospitals for foreign sailors. In section
92 (7), there is reference to provincial
responsibility for all other hospitals, and for
asylums, charities, and institutions for the
poor.

Early in the Twentieth Century, there
emerged the beginning of what is now in
retrospect a dramatic change in social atti-
tudes regarding tlic role of government in
providing social security. As there were no
specific sections in the British North America
Act assigning jurisdiction in this field, the
actions of the federal and provincial govern-
ments were pragmatic responses to the shift
in public expectations and demands. Provin-
cial governments based their claim to the
field on the specific responsibilities enumerat-
ed in section 92 (7), and on their general
responsibilities for property and civil rights
and over local matters, They were confirmed
in this claim by the courts. The federal gov-
ernment also sought jurisdiction in this field,
basing its claim on such enumerated heads as
criminal law and on its general responsibility
for the peace, order and good Government of
Canada. Although the courts upheld some
federal social security programs, the field was
mainly recognized as a provincial responsibil-
ity. As a result, the federal government
increasingly used its constitutionally unlimit-
ed spending power to act in this field.

In the 1930’s, the depression put this distri-
bution of responsibilities to a severe test.
While the provinces had the major share of
the jurisdiction, they did not have sufficient
revenue to meet the heavy demands that
were placed on them. In order to remedy
this imbalance, a formal constitutional change
was made in 1940, by agreement with the
provinces, by which unemployment insurance
was placed under exclusive federal jurisdic-
tion. Further constitutional amendments in
this field were made in 1951 and 1964, also
by agreement these amendments moved old
age pensions and supplementary benefits re-
spectively from exclusive provincial jurisdic-
tion to concurrent jurisdiction, but para-
mountcy remained with the provinces.

As a result of the experience of the depres-
sion and of Ottawa’s assessment of the needs
of the immediate postwar period, the federal
government of the day undertook to adapt
Canada to the requirements of an industrial-
ized state. Part of this endeavour involved the
commencement of what is now a large and
complex program of social security for all
citizens. Lacking comprehensive jurisdiction
over social security matters, Parliament made
extensive use of its spending power to make
payments directly to individuals. The best
example of this is family allowances. The
Government of Canada also concluded a wide
variety of conditional grant agreements with
provincial governments. In recent years, these
conditional grant programs have included such
major schemes as the Canada Assistance
Plan, hospital insurance and medicare. Efforts
were made to redistribute income between
richer and poorer individuals, and between
richer and poorer regions of the country, and
a minimum standard of social services was
sought for the whole country. In introducing
these programs, the federal government took
the view that this action was in the national
interest. It argued, and rightly so, that in the
early post-war years the failure of the federal
government to act would have meant an
almost complete lack of action in this area.
The provinces simply did not have the neces-
sary revenues, and without added financial
resources they could not even afiord the per-
sonnel or the planning skills that were neces-
sary to bring such programs into being.

The situation is very different today. The
phenomenal growth in the demands made on
the provincial-municipal sector of government
activity during the last twenty years has
necessitated, and here I can only speak for
Ontario, the development of competent and
expert advisers and administrators at the pro-
vincial level. Throughout this period, the pro-
vincial governments have also introduced a
substantial range of social security measures.
Specialized public health programs, hospital
construction, personalized welfare programs,
and many other projects were undertaken.
More recently, such modern concepts as legal
aid and the provision of housing geared to
income have been translated into programs
and added to -the social security services
provided by Ontario.

In the years after World War II, the federal
government was forced to use its spending
power in areas of provincial jurisdiction in
order that the national interest be served.
Such is no longer the case. What has become
an increasing source of conflict in federal-pro-
vincial relations is the fact that we no longer
accept the right of the federal government
alone to define the national interest as it
relates to areas of provincial jurisdiction.
That one government alone should be able to
determine and decide what is and what is not
in the national interest is inconsistent with
the kind of federalism that we believe is
required in the Canada of today.

IV Current Problems

Ontario’s disagreements with the federal
government over social security in recent
years have not primarily been over jurisdic-
tion, but over the manner in which the con-
stitutionally unlimited federal spending
power has been employed-both for payments
to individuals and for shared-cost programs
with the provinces. The views of the Govern-
ment of Ontario on this issue were expressed
in our paper of last June, “The Ontario Posi-
tion on the Spending Power”. In this paper,
Ontario argued that the federal power to
initiate, change or terminate shared-cost pro-
grams in areas of provincial jurisdiction
should be limi’ed to instances when a nation-
al consensus has determined that the power
should be exercised. The federal paper, “Fed-
eral-Provincial Grants and the Spending
Power of Parliament”, accepted this view.
With regard to the federal spending power
and payments to individuals, the Ontario
Paper cautioned that the right to make such
payments should not carry with it the right to
distort or circumvent the distribution of
powers or provincial financial and program
priorities. Nor should federal programs have
these consequences. In other words, Ontario
does not want the federal government to sub-
stitute a program of direct payments to
individuals in instances when there is no
national consensus for a shared-cost program.

Ontario’s disagreement with the federal
government in the field of social security also
has its source in the unwillingness of the
federal government to accept the principle
that revenues should be sufficient to meet
expenditure responsibilities. The federal gov-
ernment has repeatedly refused to permit the
provinces more room in the high growth tax
fields. As a result, the provinces cannot obtain
the necessary revenue to meet their expendi-
ture responsibilities under the Constitution,
without raising the total tax burden on the
individual Canadian taxpayer. While tax-
sharing is not strictly a subject of constitu-
tional discussion, it is indisputably one that
underlies most of the current difficulties. It is
the root of most of Ontario’s objections in
many areas of the distribution of powers. It is
also the source of many of the present ten-
sions in our federation.

Several years ago the Federal-Provincial
Tax Structure Committee, after a most care-
ful study, developed forecasts showing that
under present arrangements the revenues of
the federal government will grow much faster
than the revenues of provincial and local gov-
ernments. Indeed, the forecast shows that the
federal government will enjoy a growing sur-
plus of revenue after discharging its expendi-
ture commitments. All our subsequent studies
and forecasts substantiate this conclusion.
Simultaneously, however, the forecasts show
that this growth in costs of provincial and
municipal programs greatly outpace the
increases in revenues that these levels of gov-
ernment can expect from their present
sources. Until now, the federal response to
our plea for a recognition of this imbalance
beiween revenue and responsibilities has been
the suggestion that the provinces should raise
their own taxes. Such advice ignores the basic
fact that there is only one taxpayer who must
pay federal, provincial and municipal taxes. If
the provinces accepted the federal advice, the
total tax burden of the individual Canadian
taxpayer would be increased to an unaccepta-
ble evel.

The unwillingness of the federal govern-
ment to cooperate in providing provincial
governments with sufficient revenues to meet
their responsibilities rcluclantly forces us to
one conclusion: the federal government would
prefer these responsibilities either not to be
met or to be transferred to federal jurisdic-
tion. The final result will, therefore, be that
the federal government will have both the
revenues and the responsibilities. Is this the
trend the federal government wishes to pro-
mo e? If so, I believe this approach is more
consistent with centralisrn than it is with
federalism.

I have said it before and I shall say it
again: if we do not come to grips with the
issue of revenue centralization and if there is
no change in current atti.udes, then we will
change the face of our federalism and the
substance of our Constitution far more
dramatically than any formal re-writing
could achieve. Let us not, in this connection,
forget the appalling problems of the Ameri-
can cities—problems which have been exacer-
bated largely because of the revenue im-
balance in the American Federal State. Their
example is an object lesson which we would
do well to ponder, so that we do not find
ourselves in the same tragic si.uation. The
provinces must have funds to sustain their
high-growth, wealth-generating cities because
i. is from these urban concentrations, if they
are kept healthy and allowed to innovate,
that the less fortunate parts of our country
will benefit.

Thus, as always I suppos, we come back to
money. We need not, however, be destructive
of one another in our attitude about it. As far
as Ontario is concerned, the current siiuation
could be improved by a formal agreement
regarding the ground rules that will govern
the use of the federal spending power, and
the principles that will govern the occupancy
of the joint tax fields. Co-operation could also
be improved with the development of a more
formal struclure of intergovernmental machi-
nery. Such machinery would help to ensure
that full consultation on important issues
takes place between the two orders of vovern-
ment, so that one government does not decide
unilaterally on a given course of action, and
so that a genuine federal partnership is main-
tained in theory as well as in practice.

V Alternative principles for distributing juris-
diction in this field

Because of the various developments that
are taking place in the rapidly changing field
of social security and because of the scope of
possible changes in the future, it would be
unwise to suggest a dismribution of jurisdic-
tion in this field which is too closely tied to
the present situation. At this time, it would
be preferable to study together the various
options that are open to us. What we must
strive to find is a set of principles on which a
distribution of powers in the social security
field could be based which will provide us
with suflicient flexibility to cope with future
change, and yet be precise enough to allow us
to determine which order of government
should have the res-ponsibility for initiating or
carrying out a particular kind of program.

In suggesting this approach, my intention is
not to imply rejection of the conclusions
reached in the federal paper submitted to this
Conference. On the contary, what I am sug-
ges ed is that the joint character of this exer-
cise should be emphasized and that we should
together undertake the process of reasoning
that led to these conclusions. It may be that
together we will come to different conclusions
or that we will reaffirm what is before us
now. What is important, however, is that the
search for a revised distribution of powers be
a joint one.

For some time now, we have argued that
the only way in which we will successfully
conduct this exercise of constitutional review
is to discuss issues together before we arrive
at conclusions and firm positions. Only in this
manner, in our view, will we be able to
achieve the meeting of minds that is so vital
in a process of this kind,

There are many questions that we should
consider in this regard. We might begin by
asking ourselves:

—In a federation, what responsibility
should the federal government have for
measures of income redistribution?

—What should be the responsibility of
the provincial governments in this
regard?

—Which level of government should have
the main responsibility for providing ser-
vices that require direct contact with the
citizen?

—What should be the relationship
between responsibility for these services
and the financing of such services?

—What balance is required between a
national standard of services and the
expression of regional differences?

—Are there any programs with such par-
ticular characteristics that they should be
excepted from the general principles that
are agreed upon?

What I would like to do now is suggest a
few principles which might be considered as
we search for an answer to some of these
questions.

In the Ontario Legislature this last year, a
large portion of the debates were taken up by
cases of individuals and their experiences in
facing the complexities of modern govern-
ment. I cite this as an example of the cry we
hear from all sides about the need to keep the
relationship between people and governments
us personal as possible. Perhaps the most
elfective way of doing this is by strenghten-
mg the levels of government closest to the
people.

The Smith Committee on Taxation in
Ontario devoted one of the most important
sections of its report to this very question.
How do you balance a closer personal rela-
tionship to government with efficiency in the
provision of government services? The Smith
Committee’s answer to this question was to
recommend a great strengthening of the insti-
tutions of local government in Ontario, The
Committee concluded that this would be pref-
erable to centralizing many local responsibili-
ties in the provincial government. The
Ontario Government fully accepts this princi-
ple and suggests that it underlie our approach
to the examination of the distribution of
powers between the federal and provincial
governments.

We should begin, then, with the premise
that the level of government nearest the
people should provide as many services as
can reasonably be performed by it. Is it not
reasonable then to suggest that services
involving direct contact with people—case
work, counselling and other assistance—
should be handled by provincial or local gov-
ernments? Similarly, those programs which
involve the direct provision of services
through institutions—such as hospital care,
day nurseries and homes for the aged—might
also be provincial or local in responsibility. It
would seem reasonable that schemes for
directly financing these services, such as
medical and hospital insurance, should be
entrusted to the same level of government. I
would think that in time areas such as the
provision of services to Indians and veterans,
which for specific reasons have been federal
responsibilities, should also be handled
through the provincial or local facilities,
although here special arrangements may have
to be made for financing.

Obviously there are some services of a
more impersonal nature which might better
be handled from a central point. In the field
we are discussing today, would it not be rea-
sonable that the federal govern1nent’s main
role might be in the redistribution of income
or the provision of an income floor to all
Canadians or to certain categories of them,
such as the aged or the unemployed? If this
principle is accepted, however, it makes sense
to me that such a floor should not be so high
that it jeopardizes the goals of provincial pro-
grams. Provincial and local governments
should, I think, have ample opportunity to
add to such a floor so that they could express
the peculiar needs, characteristics, social
philosophies and levels of expectation of dif-
ferent regions.

In my view, this is the kind of approach
that we shall have to take in discussing not
only social security, but many aspects of the
distribution of powers.

BRITISH COLUMBIA—SECT1ON 3

Extracted from document 81(2)—
Related Propositions

9.7.20 The Constitution should impose a duty
on the Government of Canada to lessen eco-
nomic disparities among citizens of Canada
wherever they be found, and to the extent
that the duty can be discharged through the
use of a negative income tax, such expendi-
tures should have priority on the revenue
derived from corporate and personal income
tax.

GENERAL SOURCES—SECTION 4

CONSTITUTIONAL CONFERENCE
THIRD MEETING
OTTAWA
DECEMBER 1969

CONCLUSIONS OF THE MEETING

1. Progress and Procedure in the Constitu-
tional Review

The Prime Ministers and Premiers noted
that progress had been achieved in the course
OF 1969 in the “comprehensive review of the
Constitution of Canada” that had been agreed
upon at the Second Meeting. The procedure
adopted in February 1969 provided for work-
ing by means of “more frequent sessions of
the Constitutional Conference”, interspersed
with “informal working sessions”, together
with the reference of particular problems to
special Committee of Ministers, the Continu-
ing Committee of Officials and Sub-Commit-
tees of Officials. The Conference affirmed its
intention to continue this procedure in 1970
and agreed, subject to further discussion at
the Federal-Provincial Conference of Prime
Ministers and Premiers to be held in Febru-
ary 1970, that a Working Session would be
planned for June 1970, and the Fourth Ses-
sion of the Conference for the autumn.

2. Income Security and Social Services
(Agenda Item 1(a))

The Constitutional Conference considered
the distribution of powers in relation to the
fields of income security and social services to
try to determine what would be most appro-
priate to meet the needs of Canadians in the
future.

The Conference recognized that there were
many complex considerations arising out of
the various proposals for distribution of
powers related to income security and social
services and that the views of governments
were necessarily tentative until these consid-
erations could be fully assessed. While there
was not full agreement on the definition, the
discussion was carried out under the follow-
ing categories suggested in the federal
proposal, namely.

(i) Income Support;
(ii) Income Insurance;
(iii) Social Services.

(i) Income Support

Quebec maintained the position that the
provinces should have exclusive jurisdiction
in the field of income support. Other first
Ministers accepted the principle that Parlia-
ment and the provincial legislatures have and
should continue to have powers to make gen-
eral income support payments to persons.
Some provinces expressed the view generally
that the basic income support payments could
logically be made by the federal Government.

(ii) Income Insurance

The Conference considered the Federal
proposal that Parliament and provincial legis-
latures ought to have concurrent powers in
respect of income insurance matters, with the
exceptions that:

unemployment insurance should continue
to be a matter of exclusive federal
jurisdiction;

workmen’s compensation should continue
to be a matter of exclusive provincial
jurisdiction;

retirement insurance should continue to
be a matter of concurrent jurisdiction,
but with federal powers becoming
paramount.

Doubt was expressed by some that federal
paramouhtcy in the matter’ of retirement
insurance was required or desirable. It was
apparent that there were different views con-
cerning the meaning of pararnountcy and the
implications of providing for federal para-
mountcy in the case of retirement insurance.
It was agreed that the Continuing Committee
of Officials should undertake a detailed exami-
nation of the application of the concept of
paramountcy, federal or provincial, in the
field of public retirement insurance.

(iii) Social Services

It was generally agreed that provincial
legislatures ought to continue to have exclu-
sive jurisdiction over social services. Several
provinces proposed that concurrent jurisdic-
tion in this field should be considered. It was
recognized that the federal government could,
for the purpose of achieving national objec-
tives, continue to use its spending power, sub-
ject to conditions to be defined, to make con-
ditional grants to provincial governments in
respect of those services.

There was a question whether federal man-
power programmes had components which
were essentially social services. The view was
put forward notably by the federal govern-
ment that manpower services were an essen-
tial part of the general economic powers and
should be considered further when the subject
of economic powers came up. In addition, it
was agreed, however, that the appropriate
federal and provincial ministers should exam-
ine the question whether the needs of the
country could be more eifectively met if the
social aspects of manpower services were car-
ried out by the provinces.

3. The Spending Power: Federal Grants to
Provincial Governments

(Agenda Item 1(b))

The Conference considered two questions
raised in the federal proposals: the determi-
nation as to when there was a sufficient con-
sensus favouring the introduction of new
shared-cost programmes in fields of exclusive
provincial jurisdiction, and the method which
might be adopted for avoiding a fiscal penalty
on the people of the provinces which decided
not to participate in the programmes.

(i) Consensus—

Most First Ministers agreed that the Consti-
tution ought to require the determination of
consensus, on a regional basis, before the Far-
liament of Canada could enact new and gener-
al shared-cost programmes in areas of provin-
cial jurisdiction. The principal suggestions
were that the legislatures of three out of four,
or three out of five regions of Canada having
a majority of the population, ought to be
required to agree to any proposal from Par-
liament for a new federal-provincial pro-
gramme before it could become effective.
(Where a region contained three or four prov-
inces the approval of two legislatures would
be required.)

The governments of Manitoba and New
Brunswick were of the view that no formal
requirement should exist as to how many
provinces must agree before Parliament could
undertake a new general shared-cost pro-
gramme. Rather the Constitution should
impose an obligation upon the federal govern-
ment to consult all provinces before initiating
such programmes.

(ii) Compensation in Non-Participating
Provinces—

It was recalled that the Constitutional Con-
ference had agreed in June that there should
be no fiscal penalty upon the people of the
provinces whose provincial legislatures had
decided against participalting in a panticular
federal-provincial programrne.

Three views were expressed as to how a
fiscal penalty could be avoided. The first was
that the people in such provinces themselves
ought to be compensated in an amount which
in the aggregate would equal the per capita
federal payments to participating provinces.
The second view was that the governments of
the non-participating provinces ought to
receive unconditional grants equal to the con-
ditional grants they would have received had
they agreed -to participate in the federa1-pro-
vincial programme. The third View was that
taxes imposed by the federal government for
the purpose of financing a particular shared-
cost progarnme should not be levied in a non-
participating province. It was agreed to defer
discussion of this question Luitil further
aspects of the distribution of powers had been
considered.

4. Taxation

(Agenda Item 1(c))

The Constitutional Conference agreed that
the Continuing Committee of Officials and its
Sub-Committees should continue with the
work in progress on the alternative ways of
handling sales taxes and death duties in a
new or revised Constitution.

5. Regional Disparilties
(Agenda Item 2)

The Conference reiterated the earlier
agreement that the objective of reducing dis-
parities across the country should be written
into the preamble of a revised Constitution as
a basic goal of the Canadian people.

It was recognized that both levels of gov-
ernment had responsibility for the achieve-
ment of this goal and that each should have
appropriate powers_for this purpose. Eight
provinces and the federal government agreed
that the federal government should have the
power to alleviate regional disparities in rela-
tion to the income of individuals, inequality
of economic development and standards of
public services. British Columbia and Alberta
advanced the view that, instead, a guaranteed
annual income would remove disparities
between individuals wherever they might be
in Canada and therefore the effect would be
to lessen regional disparities.

There was some support for the inclusion
of a substantive provision in the body of the
Constitution which would set forth the obliga-
tion, not subject to judicial review, of the
federal and provincial governments related to
regional disparities.

Because of the significance of the legal
questions raised in the discussion, the Confer-
ence agreed that the Continuing Committee of
Officials should give further study to the
of placing specific clauses in the

6. Reports from Committees of Ministers

(Agenda Item 3)

(a) The Constitutional Conference received
the Progress Report of the Committee of Min-
isters on Fundamental Rights, and agreed
that the Committee should be asked to pro-
ceed as quickly as possible with the pro-
gramme of work proposed in the Report.

(b) The Constitutional Conference received
the Progress Report of the Committee of Min-
isters on the Judiciary, and requested the
Committee to carry out the work programme
it had proposed in its Report.

(c) The Constitutional Conference received
the Progress Report of the Committee of Min-
isters on Official Languages. It was agreed
that bilateral discussions should proceed as
quickly as possible between the federal gov-
ernment and the provinces concerning the
federal proposal for financial and technical
co-operation in implementing the recommen-
dations of the Royal Commission on Bilingu-
alism and Biculturalism. It was agreed, also,
that the Sub-Committee on Official Languages
zxncl, if it were desired, the Committee of Min-
isters, should meet agatn after the bilateral
consultations had been completed.

7. Future Programme of Work

(Agenda Item 4)

First Ministers agreed :to meet in camera in
Ottawa on the 16th of February to discuss
non-constitutional matters, essentially the
economic situation, pollution and the report
of the Tax Structure Committee.

Queen’s Printer for Canada, Ottawa, 1970

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