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Date: 1969-12-08
By: W.A.C. Bennett
Citation: Constitutional Conference, British Columbia’s Proposals (Ottawa: 8-10 December 1969).
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BRITISH COLUMBIA’S PROPOSALS
to the
CONSTITUTIONAL CONFERENCE
December 8, 9 & 10, 1969
OTTAWA
presented by
THE HONOURABLE W.A.C. BENNETT
Premier and Minister of Finance of British Columbia

Introduction

In British Columbia’s Brief entitled “Proposals
of the Province of British Columbia on the Constitution of
Canada” released in December, 1968, I set out in broad terms
the Government of British Columbia’s views on most of the
subject-matters contained in the Constitution and, in addition,
suggested principles that should be followed in undertaking
the constitutional review now under way. I restated those
proposals and principles at the Constitutional Conference
held in Ottawa in February, 1969.

The matters to be discussed at the next meeting
of the Constitutional Conference to be held in Ottawa on
December 8, 9 and l0 deal with certain specific aspects of
the distribution of powers between the Federal and Provincial
Governments. The purpose of this statement is not to
reiterate British Columbia’s Proposals on the Constitution
as a whole but rather to indicate in general terms what
British Columbia’s submissions will be in respect of those
matters on the agenda of this Conference. They are as follows:-

The Taxing Power

British Columbia’s position on the taxing powers
of each level of government is that the capacity of each
government to tax must be sufficient for each level of government to effectively discharge its constitutional obligations.
Accordingly, in British Columbia‘s view, the Federal Govern-
ment should leave exclusively to the provinces the direct
tax fields of personal and corporate income taxes and
succession or estate duties except to the extent necessary
to finance a nationally administered guaranteed annual income
plan.

[Page 2]

Historically, the Province of British Columbia
levied its own personal and corporate income taxes for years
subsequent to its entry into Confederation. It was not until
1917, on the other hand, that the Federal Government, in a
period of national crisis due to the First World War, entered
into this field for the first time. It was to be a temporary
measure.

As in the case of personal and corporate income
tax, a glimpse at history clearly shows that up until 1941
the succession duty field was exclusively occupied by the
provinces and recognized by the Federal Government to be an
area within exclusive provincial jurisdiction. British
Columbia first entered the succession duty field in 1894.

What British Columbia is asking for is a return
to the provinces of those tax fields which were clearly
recognized as being exclusively within provincial jurisdiction
and which only because of the exigencies of the First and
Second World Wars were occupied by the Federal Government.

Lest it be thought that British Columbia’s proposal
would result in the Federal Government being stripped of the
necessary tax revenue to meet its constitutional obligations,
it should be stressed that, coupled with the return to the
provincial governments of the direct tax fields, would be the
giving up by the Federal Government of payments to persons
and governments such as Family and Youth Allowances, Old Age
Security, Guaranteed Income Supplement Plans, Canada Assistance
Plan, Equalization Payments to provincial governments and
Medicare Payments. In their place would be established a
guaranteed annual income for all Canadians. The effect would
be a substantial decrease in Federal Government revenue but
it would be offset by a substantial decrease in Federal Govern-
ment spending responsibilities.

[Page 3]

The Spending Power of the Parliament of Canada

Until such time as the direct tax fields are
returned to the provinces as I have suggested, British Columbia
recognizes that it is desirable for the Government of Canada
to have constitutional power to make conditional grants to
provinces in aid of shared—cost programs in matters of national
interest which, strictly speaking, come under exclusive provincial
jurisdiction. In matters of national significance to all
Canadians such as medicare and hospitalization, British
Columbia is agreeable to the Federal Government implementing
shared-cost programs subject to the following conditions:-

1. There must be a “national consensus“ in favour
of a new shared—cost program as reflected by the
Parliament of Canada and a sufficient number of
the provincial legislatures before a new shared-
cost program is entered upon.

2. There must be adequate safeguards to ensure that
once a program is embarked upon, the Federal Govern-
ment will not withdraw its financial support or so
alter the terms of the program as to shift all or a
portion of the financial burden for its continuance
upon the province.

3. The provinces which decide not to enter upon a new
shared—cost program should not be paid the fiscal
equivalent. British Columbia considers that “opting
out” with the fiscal equivalent is contrary to the
concept of co-operative federalism, and if carried
to the limit, would ultimately destroy our whole
federal system.

[Page 4]

Income Security and Social Services

British Columbia has always recognized and continues
to be concerned with the great disparity that exists between
the average personal income of many Canadians. If we are to
have a strong and united country from coast to coast, then
we must bring those materially less fortunate Canadians up
to at least a minimum level of economic well-being.

Equalization payments from the Federal Treasury to
certain provincial governments have largely failed to accomplish
this objective for the very basic reason that these payments
are made to certain provincial governments whereas what is
needed are payments direct to people.

British Columbia calls on the Federal Government
to initiate a Royal Commission to undertake a full and complete
study, in consultation with the provinces, with a view to the
establishment of a comprehensive program for the rehabilitation
and human betterment of needy Canadians by means of a guaranteed
annual income plan to replace equalization payments and present
welfare programs presently administered by all levels of
government. The vast amount of money that is now being spent
to administer a multiplicity of welfare programs and the
bureaucracy that has developed at all levels of government is
staggering to contemplate.

A whole new concept to provide for rehabilitation
and human betterment is needed. A system void of duplicity
of services with uniformity of standards from place to place,
designed to rehabilitate people and bring them into the working
force of Canada. Such a program would act as a catalyst to the
initiative of low income Canadians wherever they might be in
Canada to go on to develop their skills and improve their lot and
that of their families by their own efforts.

[Page 5]

British Columbia suggests that until such a study
is made, it is premature to suggest what the distribution of
powers should be under a new Constitution on the subject of
income security and social services.

Regional Disparities

The effect of the implementation of my proposal
of a guaranteed annual income would go a long way toward
lessening regional disparities because of the fact that more
people in low income areas would benefit from the plan than
the relatively few who would benefit in high income areas
of the country. I would point out, however, that it is a
high level of economic activity and development in the high
growth areas which generates the federal government revenue
that is essential to meet the needs of slower growth areas.

Unique problems are encountered in British Columbia,
the highest growth area, which must not be overlooked. For
example, this Province has an annual population growth rate
double the rest of Canada of which the largest proportion come
from outside our borders. The effect is that notwithstanding
our high level of industrial activity, the large inflow of
workers from other provinces has been in excess of the capa-
bilities of the economy to provide immediate employment for
all, resulting in a higher unemployment rate than certain other
provinces. British Columbia requests the Federal Government
make low—cost capital available for job-creating projects in
housing, water, sewage, pollution, school and hospital
facilities for the high ratio of people taking up residence
in British Columbia from other provinces.

British Columbia Delegation
The Honourable W. A. C. Bennett
Premier and Minister of Finance
The Honourable L. R. Peterson, Q.C.,
Attorney General and Minister of Labour
The Honourable Waldo M. Skillings,
Minister of Industrial Development, Trade
& Commerce
G. S. Bryson, Deputy Minister of Finance
Dr. G. D. Kennedy, Q.C., Deputy Attorney General
Einar M. Gunderson, F.C.A., Executive Vice President
Pacific Great Eastern Railway;
Director, British Columbia Hydro &
Power Authority
M. H. Smith, Director, Administrative Law,
Department of Attorney General