Document Information

Date: 1969-02-10
By: Secretariat of the Conference
Citation: Constitutional Conference, Federal Briefing Papers (Ottawa: 10-12 February 1969).
Other formats: Click here to view the original document (PDF).

THE CONFEDERATION OF TOMORROW
CONFERENCE PROCEEDINGS, TORONTO
NOVEMBER 27-30, 1967.

COMMENTS BY THE VARIOUS PREMIERS
PRESENT ON THE IMPORTANCE OF A PREVIEW
OF THE CONSTITUTION.

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Mr. Robarts (Ont.) :

“… one over-riding condition of Canadian
federalism; to work it must be flexible.

To achieve this flexibility all governments,
federal as well as provincial, must agree on
what constitutes Canada and then attempt to

work out a system of inter-governmental relations
which best fit the requirements and obligations
of each.” (pg. 7)

“I might say that I don’t think Ontario necessarily
searches or is anxious for a complete revision or

a complete rewriting of the Constitution of Canada.
I have made this statement before.” (pg. 141)

“On the other hand, I would say, as I have said
before, Ontario has no fear of trepidation about
change in the Constitution; and if changes are
necessary, if changes can be demonstrated to be
necessary, then we are quite prepared to play

our part and to examine, even though they may not

be matters which we think are matters of particularly
large concern to us.” (pg. 142)

Hon. Mr. Johnson (Que.):

“Now it is our turn to act on the basis of today’s
conditions, just as some fifty other countries
have done in adopting new constitutions since the
last world war ended.

By this, I do not mean that we should love] the
structures we have so painstakingly erected during the
last hundred years and rebuild from the ground up.

The fact remains that the changes still required, either
as they affect problems which have no direct bearing on
our distinctive cultural traits, are sufficiently
numerous and sweeping to call for a new constitution.”
(pg. 10)

Mr. Smith (N.S.):

“We believe in Nova Scotia that the governments

of Canada, the provinces of Canada and the

federal government, should examine our constitutions
and our institutions in the light of the present
and future needs of all people of our country.

We suggest in doing this it is our duty, if we
want to make any progress, to face each problem
squarely and to seek solutions in the light of
the needs of today and tomorrow Wlt out being
encumbered by the mistakes we have made in the
past or the difficulties which have arisen from
them.” (pg. 15)

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“And Nova Scotia feels that it is a reasonable
request to sit down together, to see if we can
write a new constitution, to give effect to the
needs and the aspirations of our people.

Now it is true that many of us looking at the
question merely from our own points of view do

not feel any great need for a new constitution

to meet our requirements. But that, I respectfuly
suggest, Mr. Chairman, is by no means the end

of the matter, for we all want to preserve and
improve Canada, and if developing a new constitution
will help to do that, then surely it is worth
trying.

Some of us may even have a real attachment for the
present Constitution, but have we not even a greater
attachment for Canada? And which would we rather
do, risk losing Canada, or make an effort to find

a constitution which will give us a better hope of
keeping Canada?” (pg. 73)

Hon. L.J. Robichaud N.B. :

“The responsibilities of government have changed
enormously since the time of Confederation. The

world economy and Canada’s role in it has changed
almost beyond recognition. Surely we must not
hesitate to adjust the structures and responsibilities
of government in Canada so that our federalism

will reflect the realities of our times.” (pg. 20)

“We believe that we need not shy away from reviewing
our Constitution. We do not have to start from zero-
we have a basic Constitution. But we should not
shy away from reviewing it, making amendments or
modifications when they are needed. we need not be
afraid to amend it and revise it for the sake of
helping Canada achieve its cultural, social and
economic objectives in the years ahead.” (pg. 204)

Hon. Mr. Campbell P.E.I. :

“Need we fear a new look at the Constitution?
Perhaps it might be logical for the spokesman of
the “cradle” of Confederation to regard the
Constitution a sacred, but I think we would have to
be realistic enough to admit that the circumstances
of today warrant an acknowledgement that times have
changed, technologies have changed, circumstances
have changed and perhaps, as well, our Constitution
should change.” (pg. 204)

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“From the standpoint of the people of Prince
Edward Island, I might suggest that we do not
believe that constitutional changes are necessary
to accommodate the special need and the special
desires of the people of Prince Edward Island.

But we qualify that statement by admitting and by
saying and by confirming, that if it is in the
national interest to review the Constitution as it
is now, then we are quite prepared to enter that
review, and to be a party to the deliberations …”
(pg. 158)

“… while no one has rigidly opposed the idea of
constitutional change, only a few delegations have
displayed any great enthusiasm for meeting the
problem head-on at this time, and as a matter of
some considerable importance.

I want to make it clear, Mr. Chairman, that Prince
Edward Island considers itself one of those delegations
prepared in the national interest to agree to
constitutional reform.” (pg. 217)

Hon. Mr. Manning (Alta.):

“It would seem reasonable to take the position that
when you have major problems, if you can break

these down and resolve them one by one, which is really
what you do when you make use of an amending formula
or even the principal of delegation, your chances

of success are substantially greater than they are if
you lump them all together as one problem and attempt
to resolve them by rewriting the whole constitution.

In summary, Mr. Chairman, the point I am trying to
make is this. with the greatest respect for the

very real problems and the many considerations which
have led the Prime Minister of Quebec to arrive at

the conclusion that only by the writing of a whole

new constitution are our present national problems

and the legitimate concerns of the people for whom

he speaks to be met ~ with the greatest respect for
his position, 1 submit that there is a need to weigh
the practical possiblity of arriving at a solution

by that course. If what is held to be desirable is
not possible of attainment , and my submission is

it impossible then surely the course of wisdom is to
face that fact and break this problem down and resolve
the parts one by one within a framework that is flexible
enough to permit a solution.” (pg. 151)

Hon. Mr. Smallwood (Nfld.) :

“Before we can reasonably be expected to agree that

there shall be an attempt made to write a new
constitution, before we can be reasonably expected

to agree to that in advance, sight unseen, surely

we deserve to be told precisely that it is proposed

to be put into a new constitution before we agree to even
discuss the question of whether or not there should

be a new constitution.

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I, for one, am obsolutely apposed not only to a
new constitution for Canada, but to any change
whatsoever in the existing Constitution. I will
oppose it flatly if either a new constitution or
changes in the existing one, means when the dust
dies down that there are nine provinces and one
something else and an Ottawa which has been

emasculated.” (pg. 81)

Hon. Mr. Weir (Man) :

“I welcome the spirit and the works of those who

have spoken at this Conference. In my opinion,
Manitoba is willing to consider the process of change
necessa to make our Constitution more effective.”
(pg. 208)

Hon. Mr. Heald (Attorney – General, Sask.), on behalf of the
Prime Minister of Sask.:

“But I repeat Saskatchewan would willingly and
gladly participate and make such contributions
as we can to any future dialogue in respect of
amendment to the Constitution.” (pg. 211)

QUOTES OF THE NEED FOR A TOTAL
REVIEW OF THE CONNECTION

HONOURABLE MR. ROBARTS
HONOURABLE MR. JOHNSON

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The Confederation of Tomorrow
Conference Proceedings, Toronto,
November 27-30, 1967.

Hon. Mr. Roberts:

“I might say that I don’t think Ontario
necessarily searches or is anxious for a
complete revision or a complete rewriting
of the Constitution of Canada. I have
made this statement before.” (pg. 141)

“On the other hand, I would say, as I

have said before, Ontario has no fear

Or trepidation about change in the
Constitution; and if changes are nec-

essary, if changes can be demonstrated

to be necessary, then we are quite

prepared to play our part and to examine them,
even though they may not be matters which

we think are matters of particularly

large concern to us.” (pg. 142)

Hon. Mr. Johnson:

“Now it is our turn to act on the basis

of today’s conditions, just as some

fifty other countries have done in adopt-

ing new constitutions since the last world
War ended.

By this, I do not mean that we should

level the structures we have so pains-
takingly erected during the last hundred
years and rebuild from the ground up. The
fact remains that the changes still required,
either as they affect problems which have

no direct bearing on our distinctive

cultural traits, are sufficiently numerous
and sweeping to c 11 for a new constitution.”
(pg. 10)

-2-

The Constitutional Conference,
February 1968.

Hon. Mr. Robarts:

“Now, I should like to turn for a few
moments to the form of federalism we
should have in Canada and the consti-
tutional changes which may be required
to implement our decisions in this
regard.

We are aware that in many parts of
Canada this issue is viewed with a
certain amount of indifference. we
heard a good deal of evidence to
support this remark during the Con~
federation of Tomorrow Conference.

Some take the attitude that The British
North America Act has served us for

our first century and they see no
reason to change it for our second
century. Others suggest that there

are many more urgent problems in this
country than constitutional change

and we should first get on to a
solution of those other problems. All
I can say is as far as Ontario is
concerned fundamental constitutional
change holds no fears for us. And we
are certainly prepared to make a con-
tribution to this process. we believe
that this is an approach worthy of con-
sideration by all. we think that we must
all be ready to advance suggestions as
well as listen to and examine the suggestions
made by others.” (pg. 45)

“… The Government of Quebec has made

an appeal to all Canadians to make a
determined effort to solve our current
problems. This effort involves first, an
alteration in our traditional approach to

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relationships between the two lang-
uage groups, and as I have said, this
is now taking place. Second, it in-
volves a willingness to consider sub-
stantial change in the constitutional
structure of the country, and we are
prepared to do this as well.” (pg. 47)

“The maintenance of flexibility in our
federal system requires that we take a
searching look at some of our constitu-
tional provisions, practices and insti-
tutions. I suggested in November, as
did the Government of Quebec, that we
review The British North America Act
carefully to see which of its provisions
are obsolete and which ones might be
amended to make them applicable to the
current Canadian situation. we must
then go on to proposed changes which
will reflect current problems and
contribute to their solutions. In
addition to a discussion of the dis-
tribution of powers, this could envolve
an examination of our intergovernmental
machinery. It will, of course, have to
include an amending formula, the powers
of reservationand disallowance, the
residual power, the power of delegation,
the power of the Supreme Court, and,
of course, the position of the Senate.
But I would reiterate that at all times
the objective must be even greater effect-
iveness of our federal system and its
institutions.

The process of constitutional change

must be conducted on a comprehensive

and orderly basis.” (pg. 49)

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Hon. Mr. Johnson:

“Perhaps it has become for some people

a purely academic exercise to ponder
whether The British North America Act

is or is not the result of a pact, but
there is no room for doubt as far as

the future is concerned: in order to

be valid, a new Canadian constitution

will have to be the product of an
agreement between our two nations.”(pg. 55)

“And I believe that we shall all be the
better for it.

To begin with, the new constitution will
be the authentic work of Canadians. For
the first time nn our history, we shall
have a constitution made entirely in
Canada, by Canadians and for all Canad~
ians.

This new constitution of our own invention
will have the further advantage of con-
forming to today’s realities and needs.

we live in an era of extremely rapid
change; so much so that, during the last
few years, almost every great human insti-
tution hes begun the process of self-re-~
examination and self – re definition re-
quired in response to new conditions. In
this context, ours is one of the rare
countries in the world which has not yet
rewritten its constitution; and I can
hardly think of any which,once independent,
wished to retain the constitution it was
given when it was still a colony.

Our constitution will also stand a better
chance of being clear if it is couched in
contemporary language to answer today’s
concerns…

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I simply can not conceive that we
might go on querrelling for another
century over the meaning and scope of
our Constitution. We need every last
bit of our energy and our resources to
carry out desperately urgent tasks,
particularly in the economic sector,
on which the well-being of all
Canadians depends.

This is why we need a constitution
which will be a source of harmony

and no longer of misunderstanding;

a constitution which will describe

the things as they are and meet
problems head on, instead of skirting
them; a constitution with every
provision written clearly and in

full as befits a federal constitution;
a constitution containing its own
amending formula, but sufficiently
sound and permanent to avoid being
constantly challenged; a constitution
which will depend for final interpretation
on a tribunal whose composition will be
such that no one will be tempted

to question its impartiality”. (pgs 57 & 59).

Hon. Mr. A.A. Wishart (Attorney-General for Ontario):

“An entrenched Bill of Rights should not
be considered unless this is done as an
integral part of a complete constitutional

review. If a Bill of Rights is entrenched

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at the federal level, then any ultimate
redistribution of power will have to

be made in the context created by the
Bill of Rights. The expression of
these rights could therefore have a
material and perhaps an unintentional
effect upon the constitutional reforms
that might ultimately be desirable.
Since the entrenchment of individual
rights above the authority of Parliament
has a material effect upon possible
distribution of power in constitutional
reform, the two steps should be con-
sidered together.” (P. 285).

CE DOCUMENT EST LA PROPRIETE DU GOUVERNEMENT DU CANADA
CONFIDENTIEL

DOCUMENT D’INFORMATION

Conférence Constitutionnelle, février 1969

OBJECTIFS DE LA CONFEDERATION

Préambule des principales constitutions fédérales

1. La première étape logique dans l’élaboration d’une
constitution fédérale est de réaliser un con les
divers Etats—membres de la fédération sur ce
les objectifs de‘l’union politique projetée. Lorsque les
Etats—membres se sont mis d’accord, les objectifs sont alors
énoncés dans le préambule de la future constitution afin de
leur conférer un caractère formel.

2. Les principales constitutions fédérales (e.g.
Etats-Unis, Suisse, Allemagne, Indes) possèdent un préambule
qui contient une énumération de certains valeurs fondamentales
auxquelles ces Etats souscrivent. Les principaux concepts
qui sont mentionnés dans ces préambules sont la justice,
l’égalité, l’unité, la liberté, l’ordre interne, le bien-être
de la population et la défense du territoire.

II. Valeur légale du préambule

3. Le préambule d’une constitution ne fait pas
partie de celle—ci et par conséquent n’a pas force de
loi. Il n’a donc aucun effet sur le droit substantif.

4. Cependant, il est généralement reconnu que
lorsque le texte de la constitution est ambigu ou incom-
plet, le préambule devient un critère d’interprétation
très important. Il constitue en fait la clef de l’inter-
prétation de la constitution. Il est beaucoup plus utile
que les autres critères extrinsèques d’interprétation étant
l’oeuvre même du législateur qui a adopté le texte constitu-
tionnel. Il constitue la meilleure preuve des véritables
intentions de celui-ci.

III. Raisons qui motivent l’existence d’un préambule

5. Le préambule d’une constitution est souhaitable
et utile pour les raisons suivantes:

– Il a une valeur éducative.

– Il incite à la fierté nationale et peut
contribuer au développement de sentiments
patriotiques.

– Il constitue une aide précieuse
d’interprétation.

– Il permet de résumer et de mettre en
relief, de façon concise, les objectifs
fondamentaux auxquels souscrivent tous
les membres de la fédération.

– La réalisation d’un consensus sur les
termes d’un préambule cons ue un pas
concret très utile dans l‘eleboration
d‘une nouvelle constitution.

…/2

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– Un préambule, depsr sa naturel traite
/ des droits des individus plutot que de
ceux des gouvernements. La logique
justifie donc de tenter de se mettre
d’abord d’accord sur cette question
avant d’aborder dans le détail les
autres éléments de la constitution.

IV. Projet de préambule

6. Le préambule de la nouvelle constitution du
Canada pourrait tendre à énumérer les principaux
objectifs de la fédération canadienne et les prin-
cipes sur lesquels doit reposer la constitution.

7. Les principaux objectifs pourraient être les
suivants:

1 – Etablir un régime fédéral fondé
sur la démocratie.

2 – Protéger les droits fondamentaux de
l’homme.

3 – Promouvoir le progrès économique, social
et culturel du pays, le bien—être
général de la population et l’égalité des
chances pour tous les Canadiens.

4 – Contribuer à la réalisation de la paix
mondiale et au progrès social de toute
l’humanité.

Conclusion

8. Le Québec, la Nouvelle-Ecosse et l’Ontario se
sont prononcés en faveur d’un préambule de la constitution.

9. Il est peu probably que les autres provinces
s’opposent en théorie au projet de rédaction d’un préambule
qui énoncerait les objectifs de la fédération canadienne
et les principes de la constitution.

10. Cependant, en pratique, il se peut que certaines
provinces s’opposent à ce stade—ci à un projet de préambule.
Elles prétendront, non sans raison, qu’il serait très
difficile de se mettre d’accord sur les objectifs fonda-
mentaux de la fédération et sur les principes de la cons-
titution avant même d’avoir discuté du contenu de celle—ci.
Elles argumenteront que si un projet de préambule était
rédigé à cette phase initiale de la révision constitution-
nelle, il ne pourrait contenir que des généralités et
n’avoir ainsi qu’une utilité limitée.

11. En réponse à ceci, le gouvernement canadien
pourrait soutenir qu’il est logique de tenter d’obtenir un
consensus général de tous les gouvernements sur les grandes
lignes d’un préambule puisqu’un tel consensus serait un pas
concret appréciable dans l’élaboration d’une nouvelle
constitution.

…/3

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12. Le Premier ministre du Canada pourrait suggérer
aux autres Premiers ministres de tenter d’abord de réaliser
un accord de principe sur l’idée de doter la nouvelle
constitution d’un préambule. Une fois cet accord de
principe réalisé, la question du contenu de ce préambule
pourrait être référée au Comité permanent des fonctionnaires.

le 24 Janvier 1969.

CONFIDENTIEL

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OBJECTIFS DE LA CONFEDERATION

APPENDICE

Préambule de constitutions fédérales

Allemagne

“The German Peuple in the Laender of Baden,
Bavaria, Bremen, Hamburg, Hesse, Lower Saxony, North-
Rhine—Westphalia, Rhineland—Palatinate, Schleswig—
Holstein, wuerttomberg-Baden and Wuerttemberg-Hohen-
zollern.

Conscious of its responsability before God
and Men.

Animated by the resolve to preserve its
national and political unity and to serve the peace of
the world as an equal partner in a united Europe.

Desiring to give a new order to political
life for a transitional period, has enacted, by virtue
of its constituent power, this Basic Law of the
Federal Republic of Germany.

It bas also acted on behalf of those Germans
to whom participation was denied.

The entire German people is called on to achieve
by free self—determination the unity and freedom of
Germany”.

Australie

“Whereas the peuple of New South Wales, Victoria,
South Australia, Queensland, and Tasmania, humbly relying
on the blessing of Almighty God, have agreed to unite in
one indissoluble Federal Commonwcalth under the Crown of
the United Kingdom of Great Britain and Ireland, and
under the Constitution hereby established:

And whereas it is expedient to provide for the
admission into the Commonwealth of other Australian
Colonies and possessions of the Queen:

Be it therefore enacted by thc Queen’s Most
Excellent Majesty, by and with the advice and consent
of the Lords Spiritual and Temporal, and Commons, in
this present Parliament assembled, and by the authority
of the same”.

…/5

Etats—Unis

“We, the people of the United States, in order
to form a more perfect Union, establish justice, insure
domestic tranquility, provide for the common defence,
promote the general welfare, and secure the blessings
of liberty,to ourselves and our posterity, do ordain and
establish this Constitution for the United States of
America”.

Indes

“We, the People of India, having solemnly
resolved to constitute India into a Sovereign Democratic
Republic and to secure to all its citizens:

Justice, social, economic and political;
Liberty of thought, expression, belief, faith
and worship;

Equality of status and cf opportunity; and

to promote among them all

Fraternity assuring the dignity or the
individual and the unity of the Nation;

In our Constituent Assembly this twenty—sixth
day of Novenber, 1949, do hereby Adopt, enact
and Give to Ourselves this Constitution”.

Suisse

“In the name of Almighty God! The Swiss
Confederation, resolvod to oonslidate the alliance of
the confederated members and to maintain and increase
the unity, strength, and honor of the Swiss nation,
has adopted the following federal Constitution”.

le 24 janvier 1969.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL

Constitutional Conference – February 1969

THE MONARCHY
BRIEFING PAPER

The issue of the monarchy attracted public attention

and editorial comment in two different contexts in September;

the suggestion of a republic in Quebec propositions and the
Opposition’s observations on the Speech from the Throne. In

the main the press comments were moderate and the issue did not
become overcharged. There were, of course, some strong reactions
such as that of the Sudbury Star which on 25th September declared
the even if Quebec merely mentions a republic as a bargaining point
it should be told-flatly that on this issue there could be “no
bargaining, no discussion, no consideration”.

Fortunately such intransigence was exceptional and
there was an evident disposition to try to put the question in
perspective and even in some cases, to try to distinguish the
two elements of the issue.

When viewed as a symbol of past association the
reaction of monarchy tends to be emotional whereas when
considered as an element in our system of government more
objectivity is possible. The difficulty of keeping these two
elements distinct complicates a measured consideration of the
question. This is evident in the pattern of comments.
which support the monarchy depend largely on symbolism and
emotion. Those who are prepared to contemplate its abolition
are disposed to consider its place in a modern democracy. As
one editorial recalled (Winnipeg Tribune, Nov. l, 1908)

Mr. Mackenzie King wrote in his diary in 1945:

“I find myself, however, in the light of the
world’s problems and the rights and true liberties
of the people, becoming increasingly opposed to the
institution of the monarchy as something that is
foreign to true democracy. it is too much the
worship of power and position”.

On the first point, the symbolic significance of
the monarchy, the government’s position has been made abundantly
clear. The Prime Minister has said in Parliament that the
monarchy is recognized as important to many people in Canada
and the Government would continue to respect it until such time
as the people of Canada expressed a wish for a change. In
Commenting on the Prime Minister’s statement that the subject
should not be debated at this time, the Brandon Sun observed:

“Those who want the issue debated have some
logic on their side. In a democratic society,
anything should be fit subject for debate at any
time. But Mr. Trudeau is astute enough to recognize
that a debate on the issue at this time could have
damaging consequences for national unity. There are
hotheads on both sides. Certainly, there are a number
of young people, both English- and Prench-speaking,
who would say in rather offensive terms that they

– 2 – CONFIDENTIAL

have no use for the monarchy. And this would,
in turn, antagonize those who feel strongly that
Canada must remain a constitutional monarchy.
Because there is no consensus, and because a full-
scale debate in Parliament would only create new
confusions and new anger, the prime minister is
right to say that the monarchy is not a fit subject
for parliamentary debate at this time”.

This attitude is close to that adopted by Quebec in
its presentation to the Continuing Committee where it declined
to give priority to the issue.

Viewed as a question of constitutional theory, the
desirability of Canada remaining a constitutional monarchy
or becoming a republic brings other considerations to bear
on the argument. Some see the retention of the monarchy as
an indispensable guarantee of the continuation of our system
of responsible parliamentary democracy and others see its
abolition as equally indispensable to the modernization of
our political institutions. Neither position is necessarily
correct.

One can easily envisage our system of parliamentary
democracy operating under a Head of State who was not the
hereditary sovereign of the United Kingdom. He could just
as well be appointed, as is the Governor General, but by his
predecessor rather than by the Queen, or elected. The
preservation of our system, we must remind ourselves, does
not today depend on the office of Queen, who is now bound to
accept the advice of her Canadian ministers, but on our
constitutional and conventional institutions. These could
be just as adequately safeguarded if the Head of State were
no longer a hereditary monarch. (The federal propositions
on the central government, which declare the Queen to be
Head of State, would accommodate such an amendment but the
possibility was nowhere mentioned.) On the other hand, it
should not be assumed that the institution of a congressional
system would necessarily require the abolition of the monarchy
at all levels. If what one is seeking is an executive which
is freed from dependence on Parliament, both in respect of
the Head of Government and of his ministers, this could be
achieved while retaining the Queen as Head of State.

The possibility of establishing a republic at the
provincial level is indeed advanced by Quebec. Does this
mean a “republican form” of government (an expression used
by Quebec in one note) which is conceivable, or a formal
republic which would be more difficult to contemplate? But
even here there is the example of the Commonwealth where
republics have retained their association through recognition
of the Queen as the Head of the Commonwealth. would it be
possible to have a republic in Quebec with the Queen remaining
the Head of State of Canada? In theory quite possibly –
although the Federal Government and some provinces have pre-
sented propositions which would prevent this by requiring
certain uniformity of provincial institutions and a certain
conformity to the Federal Constitution. The acceptability
of this or other alternative proposals which may emerge as
discussion of the issue broadens will be clearer if attention
is focused, as the Vancouver Province (October ll, 1963)
has suggested, on the role of the monarchy in our parliamentary
system rather than on the institution of the monarchy itself.

Quotations from Premiers’ statements made on

February 10, 1969, on linguistic rights.

QUEBEC

Summary: Equality of linguistic rights acrose

Canada is not iha solution to Quebec’s problems.

“Ce serait donc rester à la surface des choses

que de ne voir, dans le problème constitutionnel

canadien, qu’une question de droits personnels ou

de droits linguistiques. Je ne dis pas que ces
droits ne sonr pas importants: mais je dis que ce

n’est pas le fond du problème qui nous rassemble ici”…

“L’important, pour les Canadiens français du
Québec, ce n’est pas de pouvoir individuellement
parler leur langue même dans les régions du pays
où elle a très peu de chances d’être comprise; c’est
de pouvoir collectivement vivre en franqais,
travailler en frangais, se construire une société
qui leur ressemble; c’est de pouvoir organiser leur
vie communautaire en fonction de leur culture.”

NEW BRUNSWICK

Summary:

“We believe that there is a national need for
linguistic, economic and cultural equality of

opportunity”…

“New Brunswick accepts fully the language consensus
reachea at an earlier federal-provincial conference.
We accept it in fact, and we accept it in spirit.”

Continued on page 2

-2-

NEW BRUNSWICK (Continued)

“New Brunswick believes that the Official
Languages Bill in its entirety now before Parliament
deserves the support of all Canadians.”

“It would be a tragic development for our country
if the spirit of a consensus reached a year ago
should through misunderstanding become so diluted.
as to become meaningless in practical terms.”

“Over the years, New Brunswick has made important
strides forward in the field of bilingualism
and biculturalism”.

“May I make clear therefore that New Brunswick
looks upon the “Language Rights” concept emerging;
from the Conference of last February as perhaps its
primary achievement of substance and continues to
hope that all governments are moving toward programs
of implementation consistent with their resources,
population needs and distribution. Indeed to New
Brunswick, it is important that the language programme
be given the highest priority, paralleled by every
effort to “entrench” such rights whether alone or in
relation to the proposed Charter of Human Rights;

but whether entrenched or not, every effort should

be made, in our view, to proceed legislatively and
administratively, however difficult or delayed may be

the constitutional issue itso1f”…

“New Brunswick wants to work closely with the
federal government to ensure that complementary federal
legislation is passed, so that New Brunswickers may
enjoy meaningful linguistic and cultural equality
of opportunity at both the federal and provincial levels.”

-3-

PRINCE EDWARD ISLAND

Summary: No stated position but implicitly agrees
to the extension of the rights of the
French language.

NOVA SCOTIA

Summary: Agree that language rights should be protected

“Language rights should be protected”.

NEWFOUNDLAND

“I am quite unable and I have tried -I have been
ranging it over now in my mind and I am not able
to think of anything that could generate such
dividends or Canadian unity and goodwill at such a
truly trifling cost as this proposal of yours to
establish linguistic and cultural equality.”

MANITOBA

“The present constitutional provisions regarding
language rights should continue. Any attempt to
extend language privileges beyond what the publio
will accept violates the fundamental rule of
parliamentary democracy. The B.N.A. Act provides for
French and English to be used officially in the
Parliament of Canada, the Legislature of Quebec, and
supreme and exchequer courts of Canada and courts of
Quebec. Further legislation of language privileges
will not en are their extension. A process of
gradualism will. Such a process is exemplified
by the amendment to the Manitoba Public Schools Act
which permits the use of French as language of
instruction.”

SASKATCHEWAN

“The Saskatchewan Government supports the
development of bilingualism in Canada, because we
believe that it is desirable for both English and
French-speaking Canadians to be at home anywhere in
Canada”.

“At the same time, we believe that bilingualism
can best be achieved through the educational process.”

“We are not convinced,however, that bilingualism
can be achieved effectively by legislation.”

ALBERTA

“Where the minority alienation or inequality exist
within a province it is the primary responsibility
of the provincial government to recognize these
conditions and to treat them. If the problems of
alienation and inequality overlap provincial boundaries
and require national accomodation or intervention, or
accommodation by other provincial governments, then
the province concerned should make representation to
the Federal Government.”

“Although we have reservations about some of the
recommendations of the Federal Government, it is our
hope to make French Canadians feel more at home in
Confederation.”

BRITISH COLUMBIA

“The question, then, is: what are the best means to
foster and develop those ethnic and cultural
diversities with which Canada is blessed? The cold
legal language of a constitution would not, in British

Continued on page 5

-5-

BRITISH COLUMBIA (Continued)

Columbia’s opinion, be the means at all. In point
of fact, the constitution has little effect on how
people live in so far as language and culture are
concerned. Our linguistic and cultural attitudes
are tempered not be legal considerations embodied in a
constitution, but in the final analysis reflect the
personal habits, attitudes, and practical necessities of
the population of the nation. It is when individuals,
encouraged by their governments, come to realize the
worth of another language and culture on their own
merits – it is in that climate that culture and
language will flourish and Canada’s heritage will be
enriched.”

“Moreover, there are very strong doubts as to the
Bill’s constitutional validity. It certainly
represents an extension of section 133 of the British
North America Act, and, if it is not unconstitutional
on that account, it may well be unconstitutional in its
attempt to make Provincial Courts bilingual, bearing
in min that the “constitution, maintenance, and
organization of Provincial Courts, both of civil
and of criminal jurisdiction” is vested exclusively
in the Provinces by head 14 of section 92 of the
British North America Act.”

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMNT OF CANADA
CONFIDENTIAL

BRIEFING PAPER

The Constitutional Conference – February, 1969

OFFICIAL LANGUAGES

(See pages 25-56 of the Secretary’s
Briefing Paper on Discussions within
the Continuing Committee.)

1. The February meeting of the Constitutional Conference
issued a consensus on language rights recognizing “that French-
speaking Canadians outside Quebec should have the same rights as
English-speaking Canadians in Quebec.” The Continuing Committee
established at its first meeting a sub-committee on official
languages to examine the Report of the Royal Commission on Bi-
lingualism and Ciculturalism (Vol. 1), methods of implementation
including the nature of possible federal assistance, and the
form and method of constitutional amendment.

2. Since that time most provinces have taken at least
some steps toward the implementation of the B.& B. Report.
Ontario and New Brunswick have been particularly active in this
regard, while at the opposite pole the three western provinces
have taken action only on the question of the use of French as
a language of instruction in schools. The use of the English
and French languages has been authorized in the legislative
assemblies of Newfoundland, P.E.I., Nova scotia, New Brunswick,
and Ontario. (The right to their use has, of course, long
existed the legislature of Quebec by virtue of Section 133
of the B.N.A. Act.) The federal government has introduced a
comprehensive Official Languages Bill, and Quebec has recently
introduced a measure relating to the use of languages in the
schools.

3. is to constitutional change on this subject, either
through specific constitutional provision or as part of an
entrenched bill of rights, there is no consensus between the
provinces. Apart from Quebec, whoseposition is not clear,
only New Brunswick seems clearly to favour constitutional
provisions on official languages. Ontario has reserved its
position either constitutional or legislative enactment in
this field, while Alberta, Saskatchewan and British Columbia
have vigorously opposed any provision. Indeed the Alberta and
Saskatchewan delegations have expressed the view that the
federal bill would have the effect of amending Section 135 of
the British North America Act. This opposition by the three
western provinces, perhaps with some support from Nova Scotia
and Manitoba, may be expected to be voiced again at next week’s
Conference.

4. Alberta and Saskatchewan are likely also to contend
that our Official Languages Bill (Section ll(3)) invades
provincial authority over provincial courts: the fact is that
“procedure in criminal matters” is a subject of federal
jurisdiction by virtue of Head 27 of Section 91 BNA. Moreover
section ll(3) is permissive only.

5. some provinces (e.g., Nova Scotia) may express
the view that the creation of federal bilingual districts will
tend to force them to follow suit.

6. The federal government has indicated its desire to
provide financial and technical assistance to provinces under-
taking programs to implement the B.& B. Report. However, as

… 2

-2-

requirements and programs may vary widely from province to
province, they have been invited to formulate their respective
programs so that the federal government might consider how

best to assist in each case. As a general principle, provinces
have been informed that federal financial assistance would
relate to initial implementation costs rather than to recurring
operating expenditures.

7. Quebec has proposed the establishment of a

permanent federal-provincial Official Languages Commission to
facilitate exchange of information and to ensure more uniform
decisions in respect to language rights. The federal delegation
has pointed out that the protection of the use of both languages
in the provision of federal public services would be primarily
entrusted to the Commissioner of Official Languages, who would
report directly to Parliament; but that this did not necessarily
preclude arrangements for consultation between governments on
this subject.

The Work of the Languages Sub-Committee

8. Because of the differences between the needs and
intentions of the various provinces, most members of the sub~
Committee on Official Languages consider that the Sub-Committee
should proceed with in—depth examination of the manner in which
certain phases of a language regime might be undertaken. some
western provinces, having no intention to develop official
language programs, do not wish to participate in these further
studies.

9. The Sub-Committee is unable to go any farther in

its report because it is apparent that at the moment no common
ground exists for specific agreement on either constitutional
guarantees for language rights, or on a uniform approach to
legislative protection. In order to continue some dialogue on
the subject of languages the Sub-Committee has turned to

various practical aspects of implementing the Royal Commission’s
recommendations.

10. It seems unlikely that the Sub-Committee can advance
much beyond this point until such time as the review of the
whole constitution ~ including language rights – has proceeded
farther in the C.C.O. and the Conference.

Consideration of Book II of the Royal Commission Report

11. The Conference will have before it for the first
time at this meeting Book II of the B.& B. Report. some
decision should be made as to how this may best be given future
study and consideration. While it might be referred to the
Languages Sub-Committee, there are good reasons for referring
it instead in the first instance to the C.C.O. Unlike Book 1,
it is not primarily concerned with constitutional guarantees.
It involves many very practical administrative problems in the
field of education. The Sub~Committee appointed to deal with
Book I would not necessarily be the one most appropriate to
deal with Book II.

l2. Book II might therefore be referred to the C.C.O.,
leaving it to the C.C.O. to decide whether it will deal with
the Report or refer it to the same or a different sub-committee.
This is a question which should not require the attention or
the heads of government.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA

CONFIDENTIAL
BRIEFING PAPER

The Constitutional Conference – February, 1969

FUNDAMENTAL RIGHTS

Adoption of the Charter
Possible Constitutional Amendment Procedures:

1. We could obtain an amendment from the United Kingdom
Parliament, without the consent of the provinces, adopting a
charter of human rights as part of the constitution. Technically,
this procedure is open to us. However, as a practical matter

it seems unlikely that this procedure could be used with respect
to any significant change in the constitution. It might be
possible to use this procedure without unanimous provincial
agreement, but there would at least have to be substantial
provincial support for its use. Also, if we were to press
forward for an amendment in this area of the constitution

which happens to interest us, it would be hard to resist
pressures from other governments to get particular amendments

on items to which they attach priority. This would be generally
inconsistent with our position in support of systematic
constitutional review and reform. Moreover, it is doubtful

that any major changes in the constitution through a request

for action by Westminster would now meet with public favour

in Canada.

2. With the consent of several provinces we could

seek an amendment from the United Kingdom Parliament. This
would still be subject to the obgections last mentioned,
namely, that it would detract from an orderly approach, could
open the door to demands for other early amendments, and would
be the product of what many regard as an anachronistic system.
The only way in which this procedure might be viable would be
to build into the charter an “opting-in” procedure whereby the
provinces which supported the amendment could allow the charter
to apply to them and a procedure could be provided for other
provinces to opt in at a later date. This might conceivably
make the charter sufficiently distinguishable from any other
amendments so that in future we could reasonably oppose the
introduction of any other piecemeal amendments by way of the
United Kingdom Parliament.

3. We can await the development of a Canadian amending
procedure, to adopt the charter either as part of a whole
new constitution or as a specific amendment to the existing
constitution. In either case the development of a new amend-
ing procedure would have to await the remainder of the
constitutional review. This procedure is probably the most
consistent with our general approach on constitutional reform.
The charter which would be adopted by this Canadian amending
procedure m ,ht still have to contain some opting-in procedures
to permit its progressive application. The main disadvantage
in delaying the adoption of the charter until such time as we
either reach the end of the constitutional review process and
adopt a Canadian amending procedure, or until we abandon the
review and try to salvage some particular amendments, would
be that the interest and enthusiasm which we might be able to
generate now for a charter so as to bring about some agree~
ment on its contents would be lost in the necessarily long
delay before its adoption.

-2-

Opting In

4. Whatever method may be used for making the charter
of human rights a part of the constitution, it may still be
necessary to have an opting-in procedure. This is because it
is quite probable that not all provinces will agree to a
charter applying to them, or at least they will not agree to
the whole of the charter applying to them initially.

5. Opting in by Jurisdiction – under this scheme the
charter wou e made imme iately applicable to the federal
government and to such provinces as were willing to have it
apply to them on the occasion of the adoption of the charter.
Other provinces could elect at a later date to have the
charter apply to them. Presumably once they made the charter
applicable to them, its applicability to them could not be
terminated by some unilateral action. This kind of approach
would be useful only if we could assume that at least some
provinces would accept the whole of the charter from the
outset.. This seems unlikely as the guarantees in section 3
with respect to discrimination and the guarantees in section
4 with respect to linguistic rights will be controversial
with respect to most provinces. It will be necessary to
observe the progress of discussions to see whether a signifi-
cant number of provinces might accept the charter in sub-
stantially its present form: if so, this alternative might

be preferable.

6. Opting in by sections of the charter – this procedure
would assume that all of the provinces would be prepared to
accept at least one portion of the charter so that we could
establish the principle of the entrenchment of a charter of
human rights containing some fundamental rights applicable

to all governments. Subsequently it would be open to various
governments to opt in to other sections of the charter. In
terms of tactics this may have some advantages in that it

is more likely that we could establish the principle of
entrenohment by this means, even though we would not achieve
all that we might wish with respect to the contents of the
charter. It would also be difficult for some governments

to oppose the entrenohment of very basic rights, such as
freedom of speech or freedom of religion, even though they
may be able to make plausible arguments against entrenchment
of legal rights for those accused of crimes, or of rights
against discrimination, or of linguistic rights.

7. It would, of course, be preferable if we did not
have to have any kind of opting in but rather could have

the whole of the charter adopted all at once with respect

to all jurisdictions. The latter should be the objective
which should be stressed in the Prime Minister’s opening
comments. However, if it becomes apparent that this goal
cannot be attained then, in order to salvage something out
of the discussion, he could in his comments later in the
discussion hint at the possibilities of opting in. It might
not be necessary to indicate which form of opting in we
would accept. I: it is necessary, the choice should depend
on whether we think that we could get some provinces to
accept the whole of the charter, or whether we could, on the
other hand, get all of the provinces to accept at least

a small part of the charter. But if it is not necessary to
choose which kind of opting in would be best, this question
could be left for discussion by a special committee established
to consider the charter of human rights.

-3-

Method of Proceeding with Further Discussions

8. Our objective should be to get agreement in principle
on the inclusion of some formal guarantees of fundamental
rights in the constitution. It may be necessary to qualify
the principle in various ways. We might have to agree that
these guarantees would not necessarily have to apply uniformly
throughout Canada. This would leave open the question as
to whether we were contemplating a system of opting-in
province-by-province or a system of cpting-in section-by-
section. This agreement in principle would also leave open
the question of the contents of a constitutional charter
of fundamental rights. The question of contents could be
referred to a special committee for study and recommendation.
It is important, however, that we get some agreement in

principle before the whole question is referred to a committee.

If we do not, we will have lost the best opportunity for getting
acceptance of the principle of entrenchment. If we cannot

get some such agreement in a public forum such as the Conference,
it is extremely unlikely that we could get any such agreement
in the closed sessions of some committee of ministers or
officials. In fact, such a committee could avoid ever dealing
with the fundamental principle involved on the grounds that
this would not properly be within its jurisdiction. It might
spend months or years discussing the details of the contents
of a charter only to find that in the end the various govern-
ments would not be able to agree on the principle of having
any entrenched guarantees. Also by referring the matter to a
committee at this stage, we wouldsame various governments from
having to commit themselves on this matter but at the same
time would be giving a misleading appearance of progress.

9. If there is to be detailed study of a charter by
some group, there are various possibilities as to the body
to which it might be referred.

10. The Constitutional Conference could itself give
the charter detai e stu y. is wou d be impractical however
considering the amount of time which would be involved.

11. The Continuing Committee of Officials or a sub-
committee of that committee could carry out the study.
This is unlikely to be productive however as any substantial
further progress will require policy decisions which the
officials would not feel qualified to make. Conceivably
there could be a sub-committee of officials established to
study particular technical aspects of a charter.

12. A ministerial committee could give detailed
consideration to the charter. This is probably the best
procedure as a ministerial committee could more adequately
deal with the policy questions involved. This should
probably be a committee of the Ministers of Justice and
Attorneys General. Such a committee could refer technical
questions to a sub-committee of the Continuing Committee
of Officials.

Conclusions and Recommendations

15. We should try to achieve consensus on the following
points:

-4-

(a) That it would be desirable to entrench in the
constitution puarantees of fundamental riqhts,
leaving open the question as to which rights
might be included. If this general principle
does not appear to be acceptable, we could
qualify it by suggesting the possibility of
making the charter applicable by stages, either
section-by-section or province-by-province.

(b) That a committee of Attorne s General, chaired
by the Minister of Justice of Canada, should be
established to consider

(i) the contents of a charter;

(ii) the method of adoption of the charter
in the constitution and the techniques
of making it applicable to the various
jurisdictions.

14. Apart from this consensus we should proceed on

the assumption that the charter would not be put in the
constitution until such time as we have a general amending
procedure. (If it seemed appropriate during the discussion,
we could indicate that if there were enough provinces
interested in us doing so, we could always request an amend-
ment from the United Kingdom Parliament to adopt a charter
with an opting-in provision betore other questions are
settled in the process of constitutional review. If we do
this, it would be necessary to indicate that this is a
unique situation – because of the “opting-in” approach which
would only make the amendment applicable to those juris-
dictions which so decided. This would make the procedure
distinguishable from other amendments that other governments
might want to press for immediately.)

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL

QUOTATIONS

The Constitutional Conference – February 1969

FUNDAMENTAL RIGHTS

Re: Provinces differing from federal position.
Statements made which indicate agreement
with federal position.

Honourable W.C. Weir (Manitoba):

“The Canadian Bill of Rights enacted by
the Parliament of Canada in 1960 recog-
nizes and declares the existence in
Canada of certain fundamental rights
and freedoms. All these rights and
freedoms now exist and have always
existed in the province of Manitoba,
not because of abstract principles
enshrined in a constitutional document,
but because they are deeply embedded
in the law which we have inherited and
developed, and are strongly supported
by the freedom-loving peoples who have
made Manitoba their home.

Nonetheless, Manitoba is prepared
if this conference thinks it appro-
priate in the national interest,
to participate in devising our Cana-
dian charter of human rights. This
might include clauses covering
political and legal rights as now
generally included in the Canadian
Bill of Rights adopted in 1960.
The propopsed charter would presuma-
bly also include linguistic rights
and would be effective both at the
federal and provincial levels of
government” (February proceedings
1968, page 107).

Honourable G.I. Smith (Nova Scotia):

“I do not suggest for a moment that we
intend to oppose the idea, but we do
feel that it will require, the most
careful examination to make sure, first,
that the assumptions themselves are
justified and, secondly, that it would
improve the situation to put these
rights into an entrenched place in
the constitution” (February proceedings
1968, page 315).

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL
BRIEFING PAPER

The Constitutional Conference – February, 1969
DISTRIBUTION OF POWERS

1. The distribution of powers is one of the
seven items the Constitutional Conference agreed to
examine. Discussions under this heading ultimately
will have to include

(1)distribution of powers
(2)taxing and-spending powers
(3)residual power
(4)the power of delegation

This briefing paper covers only the first of these:
special papers have been prepared on the other items.

2. Position on the Agenda. The federal
government has taken the position that this item
ought to be discussed after the Charter of Human
Rights and the central institutions of federalism
have been considered. The provincial governments,

in particular Quebec, have generally minted to accord
a higher priority to the distribution of powers. The
Atlantic Provinces have implicitly assigned a high
priority to this topic by their emphasis on regional
disparities.

3. The distribution of powers now appears as
item 4 (c) on the Agenda. Presumably it will be taken

up in that place on the Agenda, unless the Conference
were to agree to change the order for the purpose of
discussing earlier the fiscal aspects of the Constitution
(the taxing and spending powers). It is assumed that

a discussion of current fiscal relations will have taken
place at the Ministers of Finance, December 1968, meeting.

4. The Federal Government’s Approach on the
division of powers was outlined in Federalism for the
Future, pages 32-44. It might be summarized as follows:

(1) Exclusive Federal Jurisdiction. It was
suggested that the federal government ousht to
have exclusive jurisdiction over those aspects
of economic olic which have to do with the
preservation, promotion and development of a
common market and monetary union – expressed
in Federalism for the Future in terms of
international and interprovincial trade, monetary
and credit policy, the balance wheel role in
fiscal policy, tariff policy and balance of
payments policy. It was suggested, secondly,
that the federal government ought to have
exclusive Jurisdiction over international
relations, expressed in Federalism for the
Future in terms of “full” responsibility for
Canada’s foreign policy and for the
representation abroad of Canada’s interests”.

-2-

This was meant to include, as well,
responsibility for the defence, trade
and external aid policy areas.

(2) Exclusive Provincial Jurisdiction.

The fields of jurisdiction which should be
exclusively provincial were not spelled out
precisely in Federalism for the Future.
However, it was stated as a fact that “the
provinces have responsibility for education”;
it was suggested that “the provinces must
have the power to provide health and welfare
services”; and it was suggested that “the
provinces must continue … to have responsibility
for the … matters which call for local
rather than national action”, including,
presumably, municipal institutions. The
Government’s policy statement avoided
explicit reference to urban development,
housing, pollution and other aspects of
environmental development which currently
are assumed to be within provincial
jurisdiction.

(3) Concurrent Jurisdiction. The Statement

of Policy also identified a number of fields
which the Government of Canada expected

would fall within the jurisdiction of both
orders of government, saying “We question
whether it is any longer realistic to expect
that some neat compartmentalization of powers
can be found to avoid (a close interrelationship
between the powers of the federal and

provincial governments)”. The areas of
Jurisdiction identified as being concurrent
included economic development (except those
powers noted as exclusively federal), income
redistribution (also spoken of as social
security measures excluding social assistance),
cultural development (no mention was made of the
exclusive jurisdiction of the Parliament of
Canada over radio and television broadcasting),
and research and technological development. The
precise nature of the federal jurisdiction
required in these areas – whether a power to
legislate or a power to spend or both – was not
defined. Nor was anything said about how
paramountcy would be determined.

5. The Positions of Provincial Governments. Only
Quebec has submitted a complete set of proposals on the
distribution of powers: they call for a massive shift of
powers from the federal to the provincial governments,
with the power to re-delegate to the federal government
being available to any provinces which went to use it.
(See para 8 for a fuller outline of the Quebec
propositions). Ontario has in effect suggested “special
status for every province” when it proposed: “The
written constitution should recognize these differences
(in traditions, interests, size, resources, economy)
between provinces and make allowances for them”. It is
unclear whether this would mean a different distribution
of powers in respect of each province; a uniform
distribution of powers but differentiated by the
provinces themselves through the varied use of a power
to delegate legislative powers to the federal government:

– 3 –

or simply the use by the federal government of its
powers in different ways in different provinces

6. The other provinces seem generally to expect
that the federal government will retain approximately
the same powers as it now enjoys, except with respect to
the spending power (see briefing paper re this subject).
They tend also to favour equal status for all provinces,
though some (e.g. British Columbia) favour a free
delegation of powers from the provincial to the federal
government and vice versa. Most provinces have also had
something to say about the provision of adequate fiscal
resources to the provincial governments (see briefing
paper on taxing powers).

7. Probable Nature of the Discussion. A fairly
general discussion of the division of powers is likely,
except perhaps for the fiscal aspects and the regional
disparities question (see separate briefing papersk
Only Quebec has done enough work to be adequately
prepared for a thorough discussion of the division of
powers.

8 Quebec’s Propositions call for a scheme of

distribution of powers under which “the member states
(would) retain all powers not expressly granted to the
government or the union”, and under which the desired
flexibility would be achieved via “recourse to concurrent
Jurisdiction and the delegation of legislative powers.”
The following powers would be transferred from the
federal to the provincial governments-

(a) Education in all its forms, at all
levels and by whatever means must
belong exclusively to the states

(b) Social security, including all social
allowances, old age pensions, family
allowances, health and hospitals,
manpower placement and training,
should come under the exclusive
Jurisdiction of the constituent states.

(0) Establishment of companies and
corporations, except those specifically
mentioned as being under federal
Jurisdiction (banks, shipping,
air lines, railroads).

(d) Securities trading and control
over financial institutions other
than banks (including trust companies).

(e) Exploration, conservation and development
of resources (superseding the present
proprietorship provision).

(f) Labour relations and working conditions
of all private concerns operating
within state territory.

-4-

(g) Road transportation, whatever its
origin or destination.

(h) Marriage and divorce.

(i) And certain other powers.

9. Specific mention is made of international
relations: “Within the limits of Canadian foreign
policy, member states should have a recognized capacity
to negotiate and find their own agreements with foreign
governments on matters subject to their internal
Jurisdiction”. State governments should also be
invited to participate in Canadian delegations at
international conferences, and to attend international
conferences that interest them and in which Canada is
not a participant. Specific mention is also made of
housing, urban renewal, and town planning – all of these
are to remain under provincial Jurisdiction.

10. The concurrent powers in the Quebec scheme
include agriculture, immigration, statistics, censuses,
bankruptcy, radio and television broadcasting, cinema,
and the marketing of agricultural products, food and
drugs.

11. Other Reference Material. Reference might
usefully be made to

(a) Federalism for the Future, pages 32 to

(b) Secretariat’s Briefing Paper on the
Discussions within the Continuing
Committee, section on the Distribution
of Powers

(c) working paper on the constitution
submitted by the Government of Quebec

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANALA
CONFIDENTIAL

BRIEFING PAPER
The Constitutional Conference – February, 1969

PROVINCIAL TAKING POWERS

1. Several premiers made it clear, in their
correspondence with the Prime Minister concerning the
Constitutional Conference planned for December, 1968,

or in their communications via their ministers of finance
or officials, that they intended to place a high priority
on the discussion of fiscal problems. Such discussions
could take one, or both, of two directions: the demand
for a larger share of the individual income tax (via a
discussion of provincial taxing powers), or a demand

that the proposed payments in respect of Medicare be
made to the provincial governments unconditionally (via
a discussion of the federal government’s spending power).

2. Two briefing papers have been prepared, one

on The Spending Power and one on The Taxing Powers. Each
of these papers has been divided into two sections: one
on the constitutional aspects of the question, and one on
the current aspects.

Constitutional Aspects of the Provincial
Taxing Powers

3. The constitutional basis for federal and
provincial taxing powers is to be found in Sections 91,
92, 121 and 125 of the B.N.A. Act (aside from certain
transitional provisions). These Sections provide that:

(1) The Parliament of Canada is given the power
of “the raising of money oy any mode or
system of taxation (Section 91 (3) );

(2) Provincial legislatures are given the powers
Of:

92 (2) direct taxation within the province
in order to the raising of a revenue for
provincial purposes

92 (9) shop, saloon, tavern, auctioneer,
and other licences in order to the raising
of a revenue for provincial, local, or
municipal purposes

(3) Section 121 provides that “all articles of
the growth, produce, or manufacture of any
one of the provinces shall, from and after
the union, be admitted free into each of the
other provinces”;

(4) Section 125 provides that “no land or property
belonging to Canada or any province shall be
liable to taxation”.

4. The current occupancy of Canada’s tax fields
indicates at once how broadly the courts have interpreted
the term “direct taxation”, and how extensively provincial
municipal responsibilities have grown relative to federal
responsibilities,

-2-

(1) Provincial-municipal governments now occupy
approximately 50% of all government revenue
fields in Canada (these are National Accounts
figures):

(2) The major tax fields being cultivated are those
which provincial as well as federal governments
may occupy, as will be seen from the following
table:

* See PDF for Table

Revenue Source Total Revenues of all Govts. 1967-68 Revenue Source as a Percentage of Total Govt. Revenues 1967-68 Prov./Munic. Share of Total Revenues of each Tax Field, 1967-68
$000,000 %
Consumption
(sales) taxes 5,193 27 Q3
Personal income tax 5,115 26 29
(about 40% if all
provinces were to accept
the 17 point offer)
Property taxes 2,591 13 100
Corporation income
tax 2,426 12 25
Customs revenue 747 4 0
Natural resource
revenues 513 3 99+
Estate Tax/
Succession duties 217 1 76
Misc. tax and other
revenues from own
sources 2,779 14 54
Totals $19,581 100

I

(3) It will be noted from the above table that
consumption taxes imposed directly upon the
purchaser or via mark-ups in retail prices
(liquor) are coming gradually to equal the
yield of the federal government’s indirect
(manufacturers) tax.

Possible Provincial Positions
re Taxing Powers

5. Except for Quebec, the provincial governments
so far have contented themselves with two kinds of
generalizations concerning taxing powers – either that
revenue sources should be sufficient to enable provincial
governments to discharge their constitutional responsibilities
(Nova Scotia) or that tax sharing arrangements “must be
adequate to enable each government to discharge effectively
its constitutional obligations” (Ontario). The Government
of Quebec has proposed specifically that “member-states
as well as the Government of the Union should have access
to all sources of tax revenue. Only few fields should be
reserved for exclusive use – property tax and succession
duties by the States, customs revenue by the Central
Government.” (see Appendix “A” for a complete list of the
propositions submitted by the provincial governments).

6. The constitutional issues which could arise
at the conference are these:

(1) Whether the provincial governments ought to
have the power to impose indirect taxes, other
than customs duties

– 3 –

(2) whether the constitution should contain
a formula for “tax sharing” as between the
federal and provincial governments;

(3) Whether the constitution should provide for
an “intergovernmental commission on taxation
… whose role would be to prepare taxation
arrangements for set periods, taking into
account available and forecast tax resources,
programmes planned and oriorities involved”
(Quebec proposition, supported by Manitoba’s
Provincial Treasurer, who seems to be thinking
in terms of agreements on tax sharing).

7. The second issue can be dealt with quite
readily. It would be quite unrealistic to expect that any
particular formula for tax sharing could be lasting in a
dynamic and changing Canada (see for example the “financial
settlements” of 1867). Moreover such a formula would tend
to shackle both Parliament and the legislatures in the
discharge of the responsibilities placed upon them by the
electorate.

8. The third issue – that of an intergovernmental
tax commission is equally unrealistic if carried to its
logical conclusion, but in its generalized form (above)

it tends to attract many supporters. If a Taxation
Commission were able to make binding decisions, it would
mean that the powers of Parliament and of the legislatures
to tax, given to them under the distribution of powers
sections, would be limited by the decisions of a Taxation
Commission (as to how high the taxes of each jurisdiction
ought to be allowed to rise). If this is what Quebec and
Manitoba mean it is a radical proposal – something analogous
to the Australian Loan Council which tells the States how
much they may borrow each year. It would be necessary to
ask:

(1) whether the taxing powers of elected bodies,
under the distribution of powers, ought to
be limited by the decisions of a Taxation
Commission

(2) If so, how the Commission would be composed,
and to whom it would be responsible

(3) How many votes each government represented would
have (the Government of Canada surely should
have as many votes as the ten provinces
combined)

(4) Whether each government would have a veto
over recommendations with respect to its
jurisdiction, or whether the decisions of
the Commission, by whatever majority, would
be binding.

If, on the other hand, the suggestion put forward by
Quebec is simply that governments ought to take one
another’s priorities into account when making their
fiscal decisions, this principle has been advocated for
some years by the Government of Canada (it took the
initiative in establishing the ministers of Finance

-Committee). Whether provision for such meetings should

be contained in the Constitution is another, and more
doubtful, question.

9. The power to impose indirect taxes seems to
be the most likely, and indeed sensible, course of argument
for the provincial governments. The reason is obvious:
provincial governments now have access to virtually all
-4-

tax fields, but one of the most lucrative of them – the
consumption tax field – is difficult to use politically
because of the necessity of imposing the tax directly
upon the purchaser. If the provinces were to enjoy the
power to impose indirect taxes, they would have virtually
the same taxing powers as the Government of Canada.
Moreover, the Government of Canada itself has said to

the provinces that they ought to have adequate access

to revenue fields to enable them to finance their own
responsibilities (see Federalism for the Future, page 40),
rather than expecting the Government of Canada to reduce
its occupancy of particular tax fields. The logical
response to this position would he to seek to make the
present access to the consumption tax field more realistic –
by making retail taxes indirect.

10. There has been a long history of federal-provincial
discussions regarding indirect provincial sales taxes,

which is outlined in Appendix “B”. The essence of this
history is this:

(1) A constitutional amendment providing indirect
taxing powers to the provinces was proposed to
Parliament in 1936. It was rejected by the
Senate on the grounds that provincial
governments would be able thereby to erect
tariff barriers, and the ground that
duplication in federal and provincial sales
taxes would result:

(2) The Howell Sirois Commission was opposed to
sales taxes, though it said the federal
government “should leave the provinces free
to collect those revenues those left to them
by the federal government) in whatever way
appears to them the most efficient even if
the method of indirect taxation should be
involved”;

(3) ln 1945 the Government of Canada said at a
Federal-Provincia1 Conference that it was
“prepared to delegate (to the provinces) the
power to levy a properly qualified retail
sales tax”, if the B.N.A. Act were amended
to permit the delegation of powers:

(4) In 1951 the federal government agreed, at the
request of several provinces, to a constitutional
amendment which would enable the provinces to
impose indirect sales taxes at the retail level.
Certain limits on this power were proposed by
the federal government, including a three per cent
ceiling, and these limitations led to the
rejection by the provinces of the amendment
proposed:

(5) In 1960 the Government of Ontario suggested a
constitutional amendment which would empower
the provinces to levy indirect retail sales
taxes. The federal government agreed providing
the provinces were prepared to support such an
amendment unanimously. Alberta and Quebec
rejected the proposal (Quebec on the grounds
that the whole field of indirect taxation should
be opened up to the provinces);

(6) The Royal Commission on Taxation (Carter
Commission) recommended that “the federal
government should seek to establish with the
provinces a Joint indirect retail sales tax

– 5 –

that would replace the manufacturers

sales tax and the present provincial direct
retail sales taxes” and “that the constitution
should be amended so as to allow the provinces
to levy an indirect retail sales tax on a
common base agreed upon by all governments”;

(7) Minister of Finance, Mitchell Sharp, said in
1966 when indicating the intention of the
federal government to stand firm in respect
of the income tax field:

“For these reasons we have concluded that
we must look elsewhere than to the further
and continuous abatement of federal income
taxes for the solution to provincial fiscal
problems. we must look instead, I think,
to provincial access to all tax fields in
provincial Jurisdiction”.

It will be evident that there is no outstanding commitment
on the part of the present or the previous government to
agree to a constitutional amendment providing for indirect
provincial taxing powers.

Possible Federal Response to Provincial
Proposals for Indirect Taxinx Powers

11. The Government of Canada might consider the
following approach in examining any provincial proposal
for a constitutional amendment providing provincial
governments with the power to impose indirect taxes

(1) In principle the Government of Canada is
anxious to provide provincial and municipal
governments with access to taxing powers
which will be sufficient to enable them to
discharge their constitutional responsibilities.
Because of the rapid expansion in provincial
and municipal expenditures, this probably means
the widest possible taxing powers, subject only
to certain limitations which are in the interests
both of the nation as a whole and of provincial
governments;

(2) The first limitation which both the federal

and provincial governments would want would be
the requirement that the indirect taxes
authorized could not serve as international or
interprovincial tariffs. This would imply that
the provinces would not have the power to

tax in a discriminatory fashion – that is to say
discriminating between imported or domesticly-
produced goods or services;

(3) The second limitation, equally desired by the
federal and most provincial governments, would be
that the provinces could not impose indirect taxes
which would result in the taxation by one
province of the residents of another. This means
that an indirect provincial sales tax would have
to be confined to the retail level (Taxes at the
manufacturers, Jobbers or wholesalers level are
passed on to the ultimate consumer, who often
lives in another province).

(4) The only indirect tax imposed by the federal
government which is of any consequence (outside
of customs duties) is the indirect sales tax. If
this is the tax field the provinces want access
to, what they really would be asking for then is

– 6 –

an indirect tax at the retail level, and one
which could not be imposed in a discriminatory
fashion (as between classes of goods or classes
of vendors). Other indirect taxes are possible,
such as corporation taxes (taxes on places of
business), but corporations can be taxed
directly by the provinces in any event (and
indirect corporation taxes could lead to a

great many abuses). It would also be possible
to consider indirect succession duties – estates
taxes – providing, again, that the tax couldn’t
reach beyond provincial borders. But the really
important power would be the power to impose an
indirect sales tax:

(5) If this is what the provincial governments
have in mind, the federal government would be
quite prepared to discuss, as part of the
general constitutional review, specific
proposals to this end.

12. The case for such a federal response will be
evident both from the reasoning outlined above, and from
the position taken by the Government of Canada at previous
Federal-Prcvincial Fiscal Conferences.

(1) The primary interest of the Government of
Canada in any limitation on provincial taxing
powers is to ensure that Canada functions as
a single economic market. It follows that
provincial taxing powers must not be such as
to enable the provinces to impose interprovincial
tariffs, or to tax indirectly the residents of
other provinces or nations;

(2) Subject to these limitations the Government of
Canada has a positive interest in providing to
the provincial governments sufficient access to
a wide enough number of tax fields that they
(the provinces) can themselves finance their
growing responsibilities.

This approach would be consistent with the existing position
of the Government of Canada, exceot that it would indicate

a willingness on the part of the government to discuss

with the provinces indirect provincial taxes at the retail
level, and would reveal the general rationale for disagreeing
with any indirect provincial sales taxes at other levels.
(Appendix “B” contains excerpts from Federalism for the
Future and from the statement made by the Honourable

Mitchell Sharp to the September, 1966 meeting of the Tax
Structure Committee).

Current Aspects – Tax Sharing

13. The recurring provincial argument that the
federal government ought to abate its direct taxes in
favour of the provinces is too well known to be repeated.
It is sufficient to observe that, for historical reasons
this argument has been confined to the personal income
tax3 the corporation tax and succession duties (the estate
tax .

14. The basis for the argument that the federal
government has a responsibility for abating its income
taxes in favour of the provinces, for the purpose of
assisting them in financing their responsibilities, is
likely to be found in the old Tax Rental Amrecments. Under
these Agreements the federal government paid a “rental fee”
to those provinces which refrained from imposing income

-7-

taxes, with the level of the rental payment being related
to a notional “provincial share” of the personal income
tax, the corporation income tax, and succession duties
The return to the provinces from income taxes, therefore,
could be increased only by an agreement on the part of
the federal government to increase the notional
“provincial share”.

15. Two major policy changes, however, have made

this argument irrevelant. First, provincial revenues

from the personal and corporate income tax are no longer
based upon a notional “provincial share” of these taxes –

a “share” set by the federal government after negotiation
with the provinces, and paid in the form of tax rental
payments. Instead, the provincial income tax revenues

now are based upon provincial tax rates, set by each
province, with the taxes being collected by the federal
government under tax collection agreements (where any
province wants the federal government to collect its income
taxes for it). Secondly, equalization payments which used
to be based upon the notional “provincial share” of personal
and corporate income taxes and the estates tax – again, a
“share” set by the federal government after negotiation
with the provinces – now are based upon average provincial
rates of all provincial taxes and other levies. Consequently,
equalization payments to the poorer provinces now increase
as provincial tax rates increase, not as federal personal
and corporate income tax rates are reduced.

16. The provinces now are advancing three new
arguments in favour of a further abatement of the federal
personal income tax in favour of the provinces. (Provincial
governments now are concentrating on the personal income
tax, and not on the corporation income tax). These
arguments are:

(1) That the accumulated deficits of the

provinces and municipalities now are so large
that the federal government ought to increase
its deficit so as to enable the provincial

and municipal governments to reduce their
deficit. This would be accomplished by means
of a “tax transfer” (a further abatement of the
federal personal income tax):

(2) That provincial/municipal expenditures are
projected to rise much more rapidly than
provincial/municipal revenues, whereas federal
revenues are projected to rise more rapidly
than federal expenditures;

(3) That the federal government is occupying too
large a part of available tax fields, and is
using the revenues to finance programmes which
have a lower priority than provincial programmes
or alternatively to initiate federal-orovincial
shared-cost programmes which the provinces do
not want.

The answer to these arguments (see paragraph 19) may well
have to be given during the week of February the 10th.
when and how they are given, however, will depend upon
the federal government’s strategy with respect to the

tax sharing argument.

Suggested Position for the Government of Canada
in Respect of Tax Sharing

17. The Constitutional Conference was established
for the exclusive purpose of reviewinc the constitution.

– 8 –

It was not intended to replace the Federal-Provincial
Conference for Prime Ministers and Premiers, which exists for
the purpose of examining current federal-provincial problems,
including fiscal questions. The best course of action,
therefore, would be to attempt to persuade the Premiers

that the best solution to fiscal problems would be a
thorough-going discussion of the constitutional aspects

of the taxing and spending powers. The rationale for this
approach is essentially this: it is unrealistic to expect
that provincial/municipal Fiscal problems can be solved,

in the years ahead, by a progressive contraction in federal
programmes and, therefore, a progressive diminution in
federal tax rates, or alternatively by a progressive limitation
upon the right of Parliament to introduce new programmes
which are seen to be in the national interest. If the
?remiers could be persuaded to this approach, it would

then be possible to suggest that the disucssion of fiscal
matters ought to take the form of a review of the taxing

and spending powers, under the heading “Distribution of
Powers”. (see also Spending Power papery

18. If the Premiers persist in examining current

tax sharing problems in February, a Federal-Provincial
Conference should be convened for the purpose – for
example, immediately after the Constitutional Conference.
If the Premiers insist that priority should be given to
current fiscal problems, then the Constitutional Conference
could be recessed for the purpose of convening a Federal-
Provincial Conference on fiscal questions, with the
Constitutional Conference being reconvened after the
Federal-Provincia1 Conference had met. Presumably such
arrangements would be made after at least a preliminary
discussion in the Constitutional Conference of the issues
involved in tax sharing and/or the spending power: in the
course of such a discussion the Prime minister would be
able to make it clear that he was quite able to answer

the provincial arguments, and that his suggestion for a
Federal~Provincial Conference on fiscal matters was not
simply an attempt to evade the issues

19. whatever course the discussion of fiscal
questions may take, the Prime Minister will want to be

in a position to answer the arguments which the provinces
may raise (paragraph 16 aboveL

(1) Shift Provincial municipal Deficits to
Federal Government via a “tax Transfer”

It is true that the provincial/municipal
deficits combined exceed that of the federal
government, and that they have been growing
more rapidly than the federal government’s
deficit. However, the Government of Canada

can scarcely be held responsible for the

fiscal policy of Canada’s provinces and
municipalities. Some of them have been more
prepared than others to impose taxes for the
purpose of financing growing expenditure
responsibilities (a better “tax effort”), and
it would be inequitable for the Government of
Canada not to take account of these differences
in tax effort. Moreover, the higher income
provinces of Ontario, British Columbia, Alberta
and Saskatchewan have a per capita tax capacity
(income and consumption levels) which is higher
than the national average tax capacity upon
which the Government of Canada relies: again,
it would be inequitable to ask the tax payers
of lower income provinces to contribute to the
deficits of hiaher income provinces. In fact,

– 9 –

the Government of Canada has
followed the policy of increasing
its assistance to the lower income
provinces, as is revealed by the
fact that equalization payments
have almost doubled between 1965-66
1968-69, and by the further fact
that a very high priority is being
attached to development programmes
designed to diminish regional
disparities. Indeed, only one

of the four high income provinces
has been financing consistently at
a deficit during the past fifteen
years, namely Ontario: British
Columbia, Alberta and Saskatchewan
have a record of fairly continuous
surpluses.

In any event, the argument that

the federal government ought to
assume the deficits of the provinces
and municipalities is valid only if
provincial governments are prepared
to give to the Government of Canada
the power to control the levels of
future deficits. Otherwise, the
Government of Canada could find itself
in the position of having reduced
provincial/municipal deficits by way
of a tax transfer, only to find that
these deficits were restored to their
former levels by a failure of the
provincial/municioal vovernments to
cover future expenditure increases

by tax increases. Under such
circumstances the orovincial
governments would always be in a
position to argue that the Government
of Canada ourht to assume orovincia1/
municipal deficits simnly because they
were large.

Finally, it would be useful for the
Premiers to recognize that a sizeable
increase in the federal deficit,
particularly at this time, would
have a substantially greater effect
upon the capital market and upon
international confidence in Canadian
economic policy, than would a
continuation of high provincial/
municipal deficits. This may not be
particularly loaical, but it is a
fact of life which both the Government
of Canada and nrovincial governments
must face.

-10-

(2)Provincial/Municipal Deficits are Projected
to Rise More Rapidly Than the Federal
Government’s Deficit

The revenue and expenditure projections being

quoted by the Premiers are those which were made

for the Tax Structure Committee in 1965. Since

that time the federal government has greatly
increased its assistance to the provinces:

indeed, a substantial reason for the very rapid

rise in federal expenditures during the past two
years has been the increase in federal contributions
to the provinces. To illustrate, federal
contributions in respect of equalization,

hospital insurance, post-secondary education and
welfare payments will in 1968-69 exceed the amount
the Tax Structure Committee estimated by $800
million ($2,uoo million compared with $1,589 million).
In addition, the federal government will be paying
$244 million to Old Age Security recipients, under
the G.I.S. programme, and this will contribute
substantially to a reduction of the Canada
Assistance Plan payments which the provinces
otherwise would have to finance.

The result of these and other increases in
expenditures is that the Government of Canada

can no longer expect a surplus in 1971 or 1972

at the tax rates of 1965 (when the T.S.C.
projections were made). The tax increases of

the last two years – some of which have infuriated
certain Premiers – are evidence of the deficit
that would otherwise have occurred (contrary to
the T.S.C. projections).

Moreover, the Government of Canada can scarcely

be charged with having been ungenerous with the
provinces. Federal contributions to provincial
governments now equal approximately thirty per cent
of federal expenditures, and constitute approximately
thirty per cent of gross provincial revenues (see
the paper “Facts and Figures” for further details).
Under the new fiscal arrangements introduced in
1966, federal contributions to the provincial
governments have increased from $678 million
(1966-67) to $1,193 million (1968.69). The
miscalculation by certain provinces of the benefits
of the new fiscal arrangements is illustrated by
the fact that the benefits to Ontario increased

by $62,250,000 (1967-68 over 1966~67) compared with
Premier Roberts’ estimate of a loss of $12 million.

In any event, the governments whose expenditures
are increasing are surely the governments which
ought to raise their taxes – providing, of course,
that the revenues of lower income provinces are
supported by adequate equalization payments (which
is the case under the new equalization formula).
If it is being argued that the provinces

-11-

don’t have access to sufficient
revenue sources, then the
Conference ought to be discussing
the taxing powers assigned to the
provinces under the constitution.

Finally, if the provinces are
arguing that their financial
difficulties are the product

of the Parliament of Canada
having forced them into unwanted
shared-cost programmes, the
answer is that in fact most
provinces supported most of the
major shared-cost programmes
(hospitalization, unemployment
assistance, Canada Assistance
Plan, Trans-Canada Highway,
ARDA and FRED). only Quebec
has consistently opposed shared~
cost programmes, but that
province has nonetheless taken
advantage of them. (see the
paper “Spending Power – Facts
and Figures”).

(3) Federal Government is Occupying
an Excessive Part of Shared Tax
Fields.

In fact, the provincial and
municipal governments now occupy
nearly fifty per cent of all tax
and revenue fields in Canada,

and this figure has been rising
over the years. Moreover, they
are in a position to increase
their share of all the tax fields
they are in simply by increasing
their tax rates (total government
revenues would rise, and the
provincial/municipal share

would increase). See paragraph 4,
page 1, for further data.

what the provinces really are
arguing is that federal taxes
should be reduced, which implies
that federal government activities
should be contracted and federal
expenditures thus contained. But
this really is a matter for
Parliament to decide, not provincial
Premiers. Provincial views on
specific federal programmes would
be welcomed: Finance Minister E.J.
Benson made this clear at the
December, 1968, meeting of the
Ministers of Finance, when he said
that both federal and provincial

– 12 –

expenditure programmes ought to

be the subject of continuing review
both by finance ministers and the
public generally.

This, indeed, is the positive

aspect of the federal government’s
position in respect of tax sharing

and federal-provincial fiscal
relations generally. It is the job

of the Committee of Ministers of
Finance to examine aggregate levels

of government activity – expenditures,
all revenues and taxes, and government
deficits – with a view to protecting
the interests of the Canadian tax
payer. This can be done by economizing
in the cost of providing public
services, by identifying and reviewing
low priority programmes, and by
reviewing the rate of increase in
aggregate levels of government
activity – with each government
remaining responsible for recommending
to its legislative body the action

it deems to be appropriate. This
approach to federa1-prcv1ncia1 fiscal
relations would be much more fruitful
than the recurring argument as to
whether the federal or provincial
governments ought to impose higher
taxes for the purpose of financing
rising provincial/municipal expenditures

APPENDICES

APPENDIX “A”

Taxing Powers of Federal and Provincial

Governments

Propositions Submitted by
Provincial Governments
December 1968

Ontario
Federal-provincial tax sharing arrangements
must be adequate to enable each government
to discharge effectively its constitutional
obligations

Quebec

To fulfil their constitutional responsibilities
member-states as well as the Government of

the Union should have access to all sources

of tax revenue. only few fields should be
reserved for exclusive use — property tax

and succession duties by the States, customs
revenue by the Central Government.

Nova Sootia

The federal and provincial governments in
Canada must each have sources of revenue
within their control which are sufficient
to enable them to meet their constitutional
responsibilities. In order to assure to the
provinces the attainment of this objective,
the Constitution must include orovision for
full equalization of all provincial revenues
including municipal revenues

The Government of each province must have
sufficient powers under the Constitution to
discharge its responsibilities in respect
of all matters which concern its people as
ooposed to the interests of all the oeople
of Canada includinp fiscal resources
sufficient to discharae its Constitutional
responsibilities

Alberta

To minimize regional dissatisfactions in

the economic sphere, there is need to develop
a more equitable distribution of the financial
means to meet c1early-defined federal and
provincial responsibilities and a formula that
will ensure the basic social requirements of
all Canadians without widespread disoarity in
the standards of service or cost to the
individual citizen.

-2-

Alberta

At the same time, care must be taken to
avoid retarding further growth by unjustly
penalizing those regions of Canada whose
economic development contributes most to
national revenues and to the gross national
product on which the prosperity of the nation
depends.

Saskatchewan

The central government must have adequate
economic and fiscal powers to ensure stable
economic growth, cope with unemployment, combat
inflation and deflation and to promote
equalization of opportunity in the various
provinces and areas of the nation.

Quebec

The Constitution should provide for the
establishment of a standing intergovernmental
Commission on taxation which would be made up
or representatives of all governments and
whose role would be to prepare taxation
arrangements for set periods, taking into
account available and forecast tax resources,
programmes planned and priorities involved.

APPENDIX “B”

“History of Past Discussions to Procure

for the Provinces the Constitutional Right
to Impose Indirect Retail Sales Taxes
and Description of the Present Situation”

Department of Finance
March, 1967
(seven pages)

AVAILABLE TO THOSE RECIPIENTS OF THE
BRIEFING PAPER WHO WANT THIS MORE DETAILED
HISTORY

APPENDIX “C”

Federalism for the Future

It is important that the federal and
provincial governments review seriously the
consequences of proposed constitutional adjustments
in this field, in View of the differences which
currently divide them. we should be frank about
these differences. The governments of the provinces
believe that their powers of taxation are too
limited: the federal government believes that
provincial taxing powers are virtually as great
as its own. The governments of some provinces
do not believe the Parliament of Canada should
use the spending power in the way it has; but in
fact, the use of this power has been responsible
for much of Canada‘s social and economic progress
There have been demands for wholesale transfers of
taxing and spending powers from the Parliament of
Canada; the federal government has replied that transfers
to the provinces of powers of such marnitudes would
make it impossible for it to discharge its
responsibilities for the whole country.

All of these differences are serious
And all of them stem from genuine differences of
opinion over how the powers of government are or
ought to be divided between the Parliament of Canada
and the legislative assemblies of the provinces. The
Government of Canada has concluded that the point
has been reached where the federal and provincial
governments should meet to discuss, formally and
fully, the whole question as to how the powers of
government should be divided in Canada. we should
examine the claims that are made for the transfer or
the clarification of powers, and the consequences of
these claims. These meetings would, of course, involve
difficult discussions of complex and sensitive
questions, including the division of powers, the
spending power, the residual power, and the power of
delegation. But meetings on these questions would
be preferable, in our opinion, to dealing with forever
recurring disputes over particular powers, in a partial
or a piecemeal fashion.

we believe, finally, that the provincial
governments like the federal government must have
taxing powers sufficient to enable them to finance
their responsibilities. However, we suspect that in
assigning to governments the power of taxation — the
capacity for financinp public services in Canada —
the principle of access to tax powers will supersede the
principle of an exact division of tax fields. we would
do well to remember that it is as difficult to predict
what technological or social or international chances
will have increased the role of the provincial or
federal governments in 30 years as it would have been
to predict the changes between 1938 and 1968.

– 2 –

“An Approach to Federal-Provincial Relations in the

fields of Fiscal and Economic Activity”: Statement by the
Hon. H.W. Sharp to the Tax Structure Committee
September 14, 1966

11. Any general appreciation of the objectives of federalism
in Canada, such as this, must lead to a statement of the guiding
principles which flow from it, if it is to be useful in discussions
such as those we are about to begin. The following, than, are

the principles by which we believe we should be guided in trying

to develop a system of federal~provincial fiscal arrangements which
will be consistent with the federalism of the future.

(1) The fiscal arrangements should givs both the
federal and provincial governments access to
fiscal resources sufficient to discharge their
responsibilities under the constitution.

(2) They should provide that each government should
be accountable to its own electors for its
taxing and spending decisions and should make
these decisions with due regard for their
effect on other governments.

(3) The fiscal arrangements should, through a system
of equalization grants, enable each province to
provide an adequate level of public services with-
out resort to rates of taxation substantially
higher than those of other provinces.

(4) They should give to the Federal Government
sufficient fiscal power to discharge its economic
and monetary responsibilities, as well as to pay
its bills. In particular they should retain for
Federal Government a sufficient part of the
income tax field in all provinces – both personal
and corporate – to enable it to use variations
in the weight and form of that tax for economic
purposes and to achieve a reasonable degree of
equity in the incidence of taxation across Canada.

(5) They should lead to uniform intergovernmental
arrangements and the uniform application of
federal laws in all provinces.

(6) The fiscal arrangements should seek to provide
machinery for harmonizing the policies and the
priorities of the federal and provincial govern-
ments.

The Joint Use of Tax Fields

46. The major element of federa1-provincial fiscal relations,
ay far the most important one in the post-war period, is the
devision and use of tax fields by the federal and provincial
governments. What this has come to mean to most of us is periodic
federal-prcvinoial disputes over what share of personal income tax
should be federal and what share provincial. We have come to the
conclusion that it is time to try to recast this whole question of
tax sharing in broader and more comprehensive terms. I say this
both because negotiations over tax shares have increasingly tended
to bo divisive rather than unifying forces in Canadian federalism,
and because this conventional approach to the use of tax fields

is misleading.

47. The real problem confronting us, if we are to take
seriously the projections of government revenues and expenditures
our officials have presented to us, is how the federal, provincial
and municipal governments ~ and particularly the provincial and
municipal governments – are going to finance their continually
rising expenditures. This in turn leads to the difficult question

as to whether the provinces have access to sufficient revenue sources
to finance those increasing expendfitures, for unless they do we
would be forced to the conclusion that they do not possess that
measure of fiscal strength which is an essential element of twentieth
century Canadian federalism.

48. An examination of the tax sources now being used by
the provinces reveals that these governments do in fact have access
to revenue fields capable of yielding the required revenues. The
real question is not whether theywhavs access to such sources but

-3-

rather whether there are practical considerations making it difficult
for them to use their taxing powers. Under the constitution the
provinces have access to the income tax fields, both personal and
corporate, just as the Federal Government has. Indeed their use of
these fields has risen substantially since the war: from five per cent
or personal income tax rirtoon years ago to twenty-five per cent now.
and from 1/10th or the corporation income tax to about one quarter
today. They are now levying taxes on commodities at the consumers
level, while the Federal Government levies such taxes at the
manufacturers level. As I have indicated earlier the provinces now
collect some forty per cent of all commodity taxes imposed in Canada,
including nearly forty per cent of the general sales taxes, some
fifty per cent of liquor taxes, and virtually a hundred per cent

of gasoline tax. The provinces have full access as well to the asset
tax field; they and their municipalities now receive close to

a hundred per cent of all the property taxes collected, and
seventy-five per cent of estate taxes or succession duties. The
provinces also have access to resource revenues, as does the

Federal Government; indeed provincial resource revenues now
represent close to one hundred per cent of the revenues from this
source. Only the customs duties can be said to be exclusively
collected by the Federal Government.

49. The conclusion seems clear: the problem is not lack

of access to revenue resources, but rather the difficulties the
provinces face – in company with the Federal Government – in raising
tax levels that are already high.

50. The conventional approach to this problem, during the
post-war period has been to argue that the Federal Government should
reduce its taxes so as to give the provinces more “tax room”. This

is an understandable argument if federal tax yields are rising more
rapidly than required. But when federal revenues are required to

meet federal expenditures, or to reduce a deficit or create a surplus
for economic reasons, then this approach is unhelpful and even
misleading. For the Federal Government would not be justified in
these circumstances in reducing one of its taxes simply to make it
easier for the provinces to increase the same tax. what would be
involved would be a reduction in one federal tax to enable the
corresponding provincial tax to be raised and then an increase in some
other federal tax to restore the necessary budgetary position. The
end result of this process would be a not increase in this other tax,
with the Federal Government having imposed the increase. The
provinces would get the extra money. Surely a more appropriate

course would be for the provinces to finance their expenditure
increases by increasing the taxes they think should be increased, Just
as the Federal Government is expected to do in financing its
expenditure increases.

51. The proposition that the Federal Government should reduce
its taxes to ease increases in provincial levies must, in circumstances
such as those I have described, be based on the assumption that
Parliament is appropriating money for purposes less important than
those being served by provincial expendituresa That governments
should reduce expenditures is a proper subject for argument – tax~
payers make it regularly, and apply it equally to federal, provincial
and municipal governments. But as cannot accept as a general
principle that federal expenditures are less important than provincial
ones. The principle that call for recognition is a different
one: namely that both Parliament and and provincial legislatures must
accept their financial responsibilities and that each should look

to its own electors for direction as to what money should be raised
and how it should be spent.

52. This is not to say that the Federal Government rejects
the notion of federal-provincial consultation concerning public
policy priorities. we must have such consultations and increasingly
so, in order to ensure a proper concern for the taxpayers’ interests.

– 4 –

Consultations involving discussions about the size and direction of
revenues and expenditures, must be a two-way street.

53. What I am suggesting then, is that we must get away

from what is tending to become a conventional notion that the

Federal Government can and should he expected to ive greater tax
room to the provinces,when they find their expenditures rising more
rapidly than their revenues. This has been possible, and has been
done, in the past decade, but it cannot be accepted as a general duty.
our basic duty is the ancient one – to tax no more than we need, and
to reduce taxes when we can and should.

54. The second convention of federal-provincial fiscal
relations that must be questioned is that there is some particular
share 0% income tax and estate taxes and succession duties, the so-
called shared taxes, which is rightly federal or rightly provincial.
The fact is that both have constitutional rights in these fields.

55. what we must share now is the responsibility for the
total taxes imposed on Canadians, taking into account what each
other is doing. We must find ways of harmonizing federal and
provincial tax actions, to ensure that the interests of the taxpayers
of Canada are protected, both in the way and the extent to which the
several tax fields are used. This must include the determination or
what taxes tend to have national as opposed to provincial
characteristics. The corporation tax is one of these, because
corporation profits may be earned elsewhere than in the province when
the head office is located and profits recorded. I submit too that
the Federal Government must have a predominant share of this tax
field by reason of the importance and the peculiar value of this tax
as an instrument of national economic policy – as we saw in this
year’s federal Budget. ‘

56. There are also compelling reasons for the federal
government to maintain a substantial position in the personal income
tax field. This is the principal tax by which equity is achieved
between the rich and the poor across the nation. This implies that
a substantial share of this tax should continue to flow to the
national government. This tax, too, is one of the central instruments
for regulating total demand in the economy, and Canadian governments
must not allow total federal income taxes to be abated so much that
they can no longer be used for this purpose. This means that the
Federal Government must maintain a strong position in this field,
despite the pressures it will continue to face for reducing its
share in favour of the provinces. we have already made arrangements
with Quebec which have enabled that Province to bring its tax to
levels equalling those of the federal tax. We have made proposals
here which would enable the other provinces gradually to reach the
Quebec position. The position that will have been attained under
those proposals is, we think, a reasonable one for the provinces,
and leaves the Federal Government with a personal income tax
adequate to serve the purposes of equity and economic policy.

57. For these reasons we have concluded that we must look
elsewhere than to the further and continuous abatement of federal
income taxes for the solution to provincial fiscal problems. we
must look instead, I think, to provincial access to all tax fields
in provincial jurisdiction. For access can be limited by practical
as well as legal obstacles.

58. Provincial use of the personal income tax field has been
impeded and provincial responsibility for the use of this tax has been
diluted by the designation under federal-provincial tax arrangements
of a certain provincial income tax rate as being the “standard rate”.
Thus standard rate now 2b per cent has been used in determining
oqualisation payments, and in determining the extent to which the
federal personal income tax would be abated. The provinces have been

– 5 –

free to impose any rate they choose but they have had to recognize
that any rate above the standard rate would expose them to the charge
of “double taxation”. In fact, where provincial rates do exceed

the standard rate, the excess has been called a “surtax”.

59. It is A nice question as to whether the Federal

Government should by inference or otherwise suggest the rate of
provincial tax it considers to be appropriate. We have concluded

thdt it should not. In saying this we recognize, as I have said,

that each of us should take into account in our fiscal decisions the
levels of the other’s taxes. But this need not and should not extend
to the point that either of us states or implies the level of taxes
appropriate for the other. We therefore propose to recommgnd to
Parliament the elimination of reference to standard rates (of
personal income tax) in the Income Tax Act. This would be done at the
time of any major revisions to this Act pursuant to the recommendations
of the several Royal Commissions on Taxation. I should note that

the equalization formula proposed will similarly make no reference

to “standard rates”, but will use instead actual average provincial

rates.

60. I should emphasize that this action would in no way
weaken the incentives which exist in present fiscal arrangements for
uniform tax laws, and should not therefore lead to different
definitions of income or other difforences in our tax laws. Canadians
are justly proud of their accomplislment in achieving uniform income
tax laws across the country, and the Federal Government will continue
to bend every effort to maintain this uniformity. For this purpose,
tax collection agreements will be offered again to the provinces in
the period l967-72, without any charge being made for the collection
of provincial taxes under them. The one condition will be that the
form of the provincial tax laws must accord with the model Act, a
requirement of present tax collection agreements.

61. In all of this I have scarcely mentioned the details

of our tax structure, or the impending Royal Commission reports
which may, with the Quebec Royal Commission report, propose extensive
changes in it. This is not because I attach little importance to
the form and the burden of taxes in Canada, but because I felt the
first question to occupy our attention should be a new approach to
tax sharing. This, indeed, has always been the aspect of taxation
most considered at federal-provincial meetings, and is one upon
which the Commissions were not asked to make recommendations.

62. I regret, as I know some provincial representatives do,
that we were unable to have before us at this meeting the report

of the Royal Commission on Taxation, for it would enable us to

view our problems in the wider perspective which a broad study of
this kind makes possible. I hope that this committee will be meeting
next year to discuss changes in our tax laws arising out of the
revisions that will be undertaken in the light of the commission’s
report. We in the Federal Government expect to receive, and will
wish to receive, the views of many taxpayers, associations and experts
on the conclusions and recommendations of the commission before
making up our minds on the many changes that may be desirable. we
will particularly welcome receiving any views from provincial
governments, whether publicly or in confidence, for we recognize that
they have responsibilities in these fields just as we do. And we
hope that the decisions we and the provinces make with respect to

the form of our respective tax Laws will make it possible to retain

a uniform tax structure. We shall I expect be preparing a draft
bill or bills for preliminary consideration and comment by Members

of Parliament and others before we prepare the measures to place
before Parliament for action. We think it would be helpful to

have a discussion of such proposals in this committee next year.

– 6 –

Should the committee wish to discuss general issues arising out of
this report, and the provincial reports, at an earlier stage, I
would be glad to have a meeting for this purpose but you will
appreciate that 1 will not be in a position to put forward the

views of the Federal Government on tax changes until we can first
express them publicly in Parliament, at least on I preliminary basis
for public consideration.

63. I would hope, in the meantime, that the Tax Structure
Committee will give serious consideration to the new approach to the
Joint use of tax fields which I have outlined. I believe it is the
approach best suited to the long-term requirements of the provinces
and their proper desire for fiscal freedom and responsibility. It
equally will serve to preserve the ability of the Federal Government
to act effectively on matters of national importance.

Intergovernmental Liaison on Fiscal and Economic Matters

64. The fiscal arrangements proposed by the Government

of Canada combine into a consistent whole. They recognize as

a fact of Canadian federalism that there are and must be both

strong provincial governments and a strong Federal Government. Their
purpose is a reform in fiscal arrangements under which both levels
ofgovernment will have, in as balanced a way as possible, the fiscal
strength they require, and the responsibility that must go with it.
They provide a system of unconditional and automatic equalization
payments to give meaning to fiscal freedom in the poorer provinces.
They provide for the retention and the exercise by the Federal
Government of those taxing and spending powers that are necessary to
the proper management of the Canadian economy.

65. Given the nature of Canadian federalism, and the fiscal
system it calls for, it is important to find better ways of harmonizing
the actions, the priorities and the programmes of the federal and
provincial governments. we have for the past three years gradually
been developing intergovernmental machinery designed to facilitate
more effective intergovernmental consultation on fiscal and economic
matters. The meetings of ministers in charge of particular programmes
have been more frequent and are increasingly useful. Conferences of
Premiers and Prime Ministers have been held more frequently, and are
operating more effectively as a means for harmonizing both federal-
provincial policies and the work of the many federal-provincial
committees which have come to exist. The Committee of Ministers of
Finance also is now meeting regularly to examine Canada’s economic
outlook, and to consider the actions and policies which seem

to be called for.

66. It seems to us that greater point and direction would be
given to these many deliberations if specific measures were introduced
to facilitate the harmonizing of federalwprovincial fiscal policies.
The Federal Government proposes, as an important first step, a revenue
stabilization scheme, which would assure to the provinces the
financial underpinning required to enable them to harmonize their
fiscal policies with those of the Federal Government during a regional
or general recession. Under this scheme the Federal Government would
pay stabilization grants to any province whose revenues, at constant
tax rates, were to fall by more than a small percentage.

67. It must be recognized that the provinces can encounter
difficulties in attempting to tailor their policies to broad economic
considerations as well as to provincial needs. Perhaps the most

obvious example of these difficulties is the problem a province would
face if its revenues were to decline. This would be most likely to
occur when there is growing unemployment in the province or the nation,
the very time that taxes should not be increased. Yet the province’s
fiscal position may be such that its ministers find it necessary to
raise their revenues for the purpose of financing expenditures which in-
crease during a recession. The measure we are proposing should make it

_ 7 _

unnecessary for the provinces to introduce such measures which would
counter to the national or regional economic interest.

68. In addition to this major proposal, we would like to
suggest I number of specific measures designed to give greater
substance to our discussions on economic policy. we in the Federal
Government have been making available to the provincial Ministers

of Finance our analysis of the economy, and our views as to the nature
of the economic policies which seem to be called for. I have decided
that we should, in addition, make available to the provinces the
projections made by the Department of Finance of the principal
economic aggregates, including federal and provincial/municipal
revenues and expenditures. Provincial participation in this endeavour
would be very helpful, as the co-operative work in producing
projections of government revenues and expenditures for the Tax
Structure Committee has demonstrated. Since this joo is one which

my officials must undertake anyway I am suggesting that what we do
should be made available to your officials. I am also prepared to
have my Department give your officials access to the use of the
econometric model which the Department of Finance uses in respect

of its econometric work, including economic forecasts. I am sure all
of us will agree that our economists, working together, will be better
able to find new and improved techniques for analysing the economy

of Canada and of its several regions.

69. In addition to these more technical measures, we should
consider how our ministerial meetings might be better used so as to
direct more systematic attention to the questions of public policy
priorities and of economic growth and stability. Priorities are
discussed, at least implicitly, at most meetings of the federal and
provincial premiers and prime ministers, and of the ministers of
finance and provincial treasurers. But these discussions could
probably be made more systematic, and held in a rather more regular
way. This committee might wish to make a suggeetior of this kind to
the Conference of Premiers and Prime Ministers.

70. We have concluded too that it is time to review the

extensive federal-provincial machinery which has been established

for the purpose of harmonizing our policies and programmes. A great

many committees have been established for these puzposes, particularly

in the last decade, but no systematic review has been made of this growing
paraphernalia of federal-provincial relations, with this in mind

the Federal Government has engaged the Institute of Intergovernmental
Relations at Queen’s University to do a comprehensive study of the
machinery for federal-provincial consultations in the fields of

fiscal and economic policy.

Conclusion

71. This completes my outline of the approach the Federal
Government is proposing for future fiscal arrangements. While we
still have a great many detailed problems to resolve, both on fiscal
arrangements and tax structure, it is nevertheless possiolo to chart
our course to a new order of fiscal relations in Canada. do believe
the approach the Federal Government has suggested is consistent with
Canada’s needs today, and with the federalism of the future, as we

see it, involving respect for the Constitution and the traditions of
our federation, a recognition of provincial rights and responsibilities,
and equally of the necessity for dynamic federal action in matters
affecting the whole country. It is consistent too with the philosophy
this Government has attempted to develop in its relations with the
provinces, involving consultation and cooperation with the provinces,
and federal leadership on matters affecting the whole or Canada.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNHENT OF CANADA

CONFIDENTIAL
QUOTATIONS

The Constitutional Conference – February 1969

PROVINCIAL TAXING POWERS

Re: Provinces differing from Federal position.
Statements made which contradict their
stand.

Honourable W. Ross Thatcher (Saskatchewan):

“At the outset may I say without
equivocation that Saskatchewan,

and I think all the people of Sas-
katchewan,favour a strong central
government. In our opinion, the
federal administration must have
adequate financial and monetary
resources.

– To cope with unemployment or
an economic recession;

– To ensure stable economic growth;

– To combat either inflation or
deflation.

Parliament must be financially able
to help equalize living standards
among the various provinces and an as
of our nation.

The Government of Saskatchewan will
not willingly agree to changes in the
Constitution which would deprive the
federal government of vital functions,
essential for it to provide a strong
and effective national government.”
(February proceedings 1968, p. 145).

Confidential

BRIEFING PAPER

The Constitutional Conference – February, 1969

THE SPENDING POWER

1. Several premiers made it clear, in their
correspondence with the Prime Minister concerning the
Constitutional Conference planned for December, 1968,
or in their communication via their Ministers of
Finance or officials, that they intended to place a
high priority on the discussion of fiscal problems
Such discussions could take one, or both, of two
directions: the demand for a larger share of the
individual income tax (via a discussion of provincial
taxing powers), or a demand that the proposed payments
in respect of medicare be made to the provincial
governments unconditionally (via a discussion of the
federal government’s spending powerk

2. Two briefing papers have been prepared, one
on the spending power and one on the taxing power.
Each of these papers has been divided into two
sections: one on the constitutional aspects of the
question, and one on the current aspects

Constitutional Aspects of the
Spending Power

3. The constitutional basis for the spending

power is to be found in Section 91 (3) of the B.N.A. Act,
which gives the Parliament of Canada the power to raise
money by any mode of taxation, and Section 91 (1-A)

which gives Parliament the right to make laws respecting
public debt and property, the latter having been construed
to mean every kind of Dominion asset (including the
Consolidated Revenue Fund). It has been held by most
authorities that the Parliament of Canada is thus

enabled to make payments from the Consolidated Revenue
Fund for any object, providing the arrangements under
which the payments are made do not in substance amount

to legislation on a provincial matter. Others, notably
Quebec’s Tremblay Commission hold that the spending power
is limited to purposes otherwise in the federal sphere.
The former View now seems undoubtedly to be the correct
one (see the reference re Employment and Social Insurance
Act, 1936) (S.C.R. 427, at page 457). This interpretation
of the spending power was supported by the Right Honourable
Louis St. Laurent in a speech on November the 12th, 1956,
when he was defending its use in respect of family allowances
and university grants

4. The philosophy underlying the use by the
federal government of its spending power in fields of
provincial jurisdiction may be summarized five points.

(1) It is desirable to recognize the
Parliament of Canada as the body
which represents the “national
interest”, where provincial
jurisdiction is involved, there
ought to be a method by which

..2

-2-

Parliament can act with the Provinces

to achieve concerted action on what

has become a nation-wide problem.

The spending power is the current

vehicle for doing this (largely shared-
cost programmes). The alternative

is to recognize the Conference of rremiers
as a second body representing the national
interest – acting in cases where there
comes to develop a national interest in
respect of some problem under provincial
jurisdiction.

(2) It is desirable to have some mechanism –
short of constitutional amendment – for
permitting federal involvement in matters
which once were local but which for
technological or other reasons have
become national.

(3) “The Government of Canada … must be
able to act for Canada in strengthening
the bonds of nationhood”; since Canada-
wide social measures have been considered
to fall in this category, the federal
spending power has been used to achieve
this purpose.

(4) It is considered by some to be desirable
to provide some vehicle for bringing to
bear on a province or a group of provinces
which are lagging behind the rest of Canada
in social development the full force of
public opinion in the rest of Canada.

The spending power has been used for this
purpose.

(5) It is considered by some to be desirable
that national standards come to apply in
respect of certain basic public services,
notably health and welfare services, and
this has been achieved through the use
of the federal spending power.

5. The extent of the use of the spending power can
be judged from these two facts: just under 30 per cent
of federal expenditures are based upon it, and just under
30 per cent of gross provincial revenues, from federal
government payments which are based upon the spending
power. (These expenditures are in fields where federal
jurisdiction either does not exist or is in question.)
The principal programmes involved are the equalization
payments, the post-secondary education payments to the
provinces, family allowances, hospital insurance, Canada
Assistance rlan, FRED, the Trans-Canada Highway and the
Health Resources Fund (see paper “facts and figures”).

6. The Position of the Provinces. In principle,

the Anglophone Provinces have generally supported the use
of the federal spending power in fields of provincial
Jurisdiction, for the purpose of establishing national
programmes and for the purpose of maintaining uniform
standards in respect of those programmes, whereas Quebec
governments have consistently opposed the use of the federal
spending power in areas of provincial jurisdiction.
Nonetheless, all of the provincial governments have been
critical, at one time or another, of the use of the federal
spending power for the purpose of establishing shared-
cost programmes. All of them criticize its use

..3

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in respect of general shared-cost programmes, such as
medicare, when they disagree with the program or when
their priorities are upset. They do not criticize its
use in respect of those general programmes where there
is little or no disagreement over priorities: examples
include the Health Resources Fund and unemployment
assistance. Nor do they criticize its use in respect
of individual federal-provincial projects, such as
dams, bridges, causeways and power projects. As for
unconditional revenue equalization payments, the
provincial governments seem not to think of such
payments as being based on the spending power
(excepting Premier W.A.C. Bennett, who said, in effect,
at the November, 1968, meeting of the Ministers of
Finance, that if Quebec wanted to oppose the use of
the spending power on medicare he would oppose its use
for making equalization payment5L

7. The criticisms of the use of the federal
spending power do not extend usually to its use for
making payments to individuals, institutions or
companies. The exception is the Government of Quebec,
which has consistently criticized these uses of the
spending power in the field of education (grants to
universities, bursaries and loans to students, and
even youth allowances). The Government of Quebec

has also said, more recently, that it wants to assume
responsibility for family allowances and old age
security payments. other provincial governments have
not yet supported this position.

8. whatever the provincial governments may
have said about shared~cost programmes they have taken
full advantage of them, as the facts above have
indicated. The governments of Quebec have generally
registered their opposition in principle: Premier Lesage,
for example, said in 1960 “the Province of Quebec is
taking the necessary steps to accept, on a temporary
basis, and without prejudice to its full sovereignty,
all the conditional grants that it is not now receiving”
(such objections are not usually raised in respect of
individual projects, such as the St. Charles River in
Quebec). The paper entitled “The Spending Power: Facts
and Figures” quotes what has been said about the federal
spending power, at one time or another, by several of
Canada’s premiers.

9. A number of questions could be asked of any
province arguing for the abolition of the spending
power

(a) Is it being suggested that the spending
power should be completely abolished?
The consequence would be to eliminate
enormous federal-provincial transfers.

(i) Thirty per cent of provincial
budgets are financed through
the use of the spending power
(ii) Thirty per cent of federal
government expenditures are
based upon the spending power
(iii) The equalization payments of a
half a billion dollars are
based upon the spending power

..4

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(iv) The more than $125 million payed

in unconditional grants for post-
secondary education are based on

the spending power.

(b) Is it being suggested that the federal
government should not have the power to
make income redistribution payments
between persons? If so:

(i) Family allowances would have to

be stopped ($550 million). Quebec

says, in addition, that old age

security payments should be transferred
to the provinces ($1,400 million)

(ii) The provinces would have to consider

whether Parliament would be prepared

to:

– transfer to all provinces the 36
personal income tax points required
to finance provincial family
allowances and old age security
payments (the level of tax Ontario
would require)

– appropriate the additional
$450 million (approximately) needed
by provinces other than Ontario to
make up the difference between the
tax yield and the programme costs
(this amounts to an 80 per cent increase
in equalization payments)

(iii) What is the logic for saying that

Parliament ought to redistribute

income between provincial governments

but ought not to redistribute income
between persons?

(iv) What is the logic for saying that

Parliament ought to be able to

redistribute income between persons

via tax exemptions or tax credits

(benefiting tax payers) but not via

payments (benefiting non-tax payers)?

(v) Would the federal government likely be
able to launch or maintain a comprehensive
programme for overcoming regional
disparities if it couldn’t make income
redistribution payments to persons?

(c) Is it being suggested that the federal
government ought not to be able to make
payments to organizations?

(i) Payments of nearly $80 million are
involved, and economic policy measures
such as the Area Development Grants and
the General Incentive Grants for research
and development would be involved

(ii) What is the logic for saying that
Parliament ought to be able to stimulate
economic growth by making tax concessions
(to companies with taxable profit), but
not by making payments (to companies
without taxable profit)

(iii) What is the logic for saying that
Parliament ought to be able to stimulate
economic growth by the use of tariffs
but not by the use of subsidies?

..5

-5-

(d) Is it being suggested that the spending
power could be used for unconditional

grants to provinces, but not for conditional

grants? If so the provinces should consider:

(i) How would provinces which don’t
qualify for equalization but do
receive conditional grants feel?

(ii) What programmes would be
eliminated? (see paper on “Facts
and Figures”)

(iii) Parliament was prepared to appropriate
over $1.5 billion for shared-cost
programmes – would it have been
prepared to appropriate the same
amount for unconditional grants?

(iv) The people of Canada have benefited
from the social and economic progress
which conditional grants have
contributed to what would their
reaction be to a removal of the power
under which similar progress could
be achieved in the future?

(v) How would national standards be
achieved in respect of major
programmes such as hospitalization?
(It has been difficult enough to
obtain agreement between the premiers
on uniform residence requirements in
respect of Canada Assistance Plan).

Current Aspects – Medicare

Summary of the History of Medicare

10. The first official public statement by the
federal government on health services following the
publication of the Hall Commission report was contained
in the throne speech of April 5th, 1965, and read as
follows:

“My government believes that public policy
should be directed to improving the quality
of health services and to ensuring that all
Canadians can obtain needed health care,
irrespective of their ability to pay.
Accordingly my government will at an early
date meet with the governments of the
provinces in order to discuss with them

the way in which federal and provincial
action can most effectively contribute to
programmes that will provide health services
to Canadians on a comprehensive basis”.

11. A few days after the throne speech the Prime
Minister wrote a letter to all premiers to propose that

a federal-provincial conference be held to take up the
matter of a medical services insurance scheme among other
matters, and to indicate that as a preparatory step a
group of federal officials would tour the provinces to
discuss “the main concepts and objectives which can be
expected to influence our decisions (at a Plenary
Conference).”

..6

-6-

12. Between April 8th and May 8th, 1965, a team
of federal officials visited all provinces. The team
reported back, when they had completed their
consultations:

“The provinces agreed with the broad
principles set out in the Prime Minister’s
letter and indicated in most cases that
they coincided with provincial thinking
… The majority of provinces stated that
their ultimate aim was complete health
services available to everyone, but
stressed importance of priorities, phasing
and timing, which would depend to a
considerable extent on federal financial
participation”.

It should be noted that the principles referred to in

the above quotation were very general in character;

they were not the four principles which appeared
subsequently in the federal medical care act. It should
also be noted that the ministers and officials with

whom the federal team consulted were all Health Department
people: it is unlikely that they were in a position to
speak for their governments in respect of the relative
priority which would be accorded to health as opposed to
education or other measures

13. The Federal-Provincial Conference met in
July, 1965, with medicare as one of the principal items
on the agenda. At the conference the Prime Minister
proposed a medical care plan substantially in the form
it subsequently was legislated. The plan provided that
the federal government would share the costs of provincial
medical care plans which conformed with four criteria:

(1)comprehensive services
(2)universal coverage
(3)public administration
(4)portability of benefits

Three premiers opposed the Prime Minister’s proposal,
Messrs. Roberts, Roblin and Manning. Mr. Robarts and
Mr. Roblin objected not to the principle of medicare,
but to the priority the federal government wished to
accord it, while Mr. Manning objected to the principle

of medicare as such. Premier Lesage made it clear

“from the outset that constitutional Jurisdiction in

this field lies with provincial governments”; subsequently
he said Quebec intended to start its own medical care
plan, in any event, and that “we agree with the financial
participation of Ottawa”. The other premiers
either supported medical care or were non-committal.

14. Subsequent to the Federal-Provincial Conference
of 1965, there were a number of consultations with
respect to medicare:

(1) a meeting of Ministers of Health in
September, 1965

(2) a meeting of Ministers of Health in
February, 1966

(3) a technical conference of officials
on medicare in February, 1967

(4) a meeting of Ministers of Health in
April, 1967

(5) a further technical meeting in November,
1967

..7

-7-

In addition, medicare was discussed by the Tax
Structure Committee in December, 1965, and in January,
1968, and by the Ministers of Finance in November,
1967. In the course of these consultations it

became apparent that the new government of Quebec
opposed medicare, both on constitutional and financial
grounds, and the governments of New Brunswick and

Nova Scotia Joined the premiers of Manitoba and Ontario
in opposing the priority being accorded this programme

15. The current position is this: Saskatchewan
and British Columbia have started qualifying programmes;
Nova Scotia, Manitoba and Newfoundland have announced
their intention of starting plans on April the 1st, 1969;
New Brunswick has introduced legislation, with no
indication as to when the plan will start; P. E. I. says
it cannot afford to proceed; and Ontario, Quebec and
Alberta remain opposed.

The Case Against Medicare

16. Ontario, Quebec and Alberta (Joined sometimes
even by other provinces which have indicated their
intention of starting medicare) argue that the Government
of Canada has no right to use its spending power for the
purpose of establishing shared-cost programmes in fields
of provincial Jurisdiction, unless the provincial
governments concur (Quebec argues against such shared-
cost programmes without qualification). Prime Minister
Bertrand insists that the 2 per cent social development
tax should not be collected in provinces which are not
receiving federal medicare payments, while the Government
of Ontario has argued that it is entitled to unconditional
grants equivalent to what the province would have received
had it started a qualifying programme. The Government of
Quebec supports the position of the Government of Ontario
as an alternative to its position. A further dimension to
the medicare dispute will be referred to in the briefing
paper concerning tax sharing: both the governments of
Ontario and Quebec are arguing that if the Government of
Canada can afford to appropriate $370 million for the
purpose of making medicare payments to the provinces
It can afford to increase the personal income tax
abatements by an equivalent amount.

Suggested Federal Arguments

17. There are several answers to the Ontario –
Quebec – Manitoba assertions. The following might be
considered:

(1) Medicare is being started under the
present constitution, and while it
might be argued that the constitution
should be changed so as to circumscribe
the power of the federal government to
start shared-cost programmes in fields
of provincial Jurisdiction, the
present constitution must be accepted
until changes have been agreed to

..8

-8-

(2) Is there any suggestion that the
programmes started as a result of

federal initiatives are not good ones,

and ought to be discontinued? In

fact the provinces have thought them

to be worthwhile, and have came into

the programmes. In 1968~69, for example,
over $1.5 billion will be paid to the
provinces under shared-cost agreements.
Not only have all the provinces participated
in shared-cost programmes, but many have
supported both the principle of shared-
cost programmes, as well as particular
programmes. (Again, the paper “Facts

and Figures” presents some useful
quotations). To give some examples, all
provinces but Quebec supported the
Unemployment Assistance programme and

its successor the Canada Assistance ilan –
indeed many of them pressed for these;

all provinces, again excepting Quebec
supported the Trans-Canada Highway
agreement; all provinces, including Quebec,
have argued for the extension of the
hospital insurance agreement to include
mental and tubercular hospitals; and

there has been uniform support, as well,
for the ARDA – FRED agreements.

(3) Medicare was proposed as a consequence

of the report of a Royal Commission
appointed by the Diefenbaker administration,
and was approved almost unanimously by

the House of Commons during the Pearson
administration. Much has changed since
1965 when medicare was proposed, including
some provincial governments (notably
Quebec), but that doesn’t mean that the
actions of past governments, undertaken
under the circumstances of the day, can

be reversed.

(4) Public medical care would undoubtedly
benefit the individual citizen. For
example, the Hall Royal Commission’s

study found that subscribers to all private
group insurance plans paid $1.37 in premiums
for every $1.00 in benefits whereas in
Saskatchewan, with public medical care,
administrative costs have been consistently
about six per cent of total costs (1962

to 1965 fipures). Another example:
between 1963 and 1967 per capita payments
for physicians‘ services in Saskatchewan
increased only 4.9 per cent annually,
while for the rest of Canada the increase
was 7.9 per cent annually. This is

aside altogether from the more obvious
advantages of universal and comprehensive
coverage for the middle income earner

and for the sick.

(5)It is not for the federal government to
suggest how the provincial governments
should finance their share of medicare,
but assuminz they were to use the Premium

..9

-9-

method, the premiums paid by insured
residents could almost certainly be
reduced from their present levels. Here
are some examples of the premiums
presently being charged a family of three
or more:

B.C. Medical Services Plan $12.50 per month
(less for people with taxable income
of less than $1,000)

Alberta Health Plan $16.66 per month
less for people with taxable income
of less than $1,000)

Ontario Medical Services Plan$1h.75 ner month
(less for people with taxable income
of less than $1,300)

Physicians Services Inc. (Ont.)$19.40 per month
(effective April, 1969)

Maritime Medical Care (group plans) $12.00 per month

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL

Constitutional Conference – February 1969

INSTITUTIONS OF FEDERALISM

BRIEFING PAPER

The main points of interest in this field are the
two general questions: the preservation of the Monarchy and
the relative advantages of the congre cnal and parliamentary
systems of government. Both are examined in separate papers.
As far as the institutions of the central government are
concerned, propositions on the Senate attracted the most
attention and this is also discussed in a separate paper.

The Federal Government submitted comprehensive
propositions covering the existing constitutional and the
main conventional elements of the present system of responsible
parliamentary democracy. Quebec submitted a few propositions
of a general nature concerning the institutions of the central
government which would preserve essentially the existing
system if their suggestion for the adoption of a congressional
system was not adopted. There were several other general
propositions from other provinces.

With the exception of the three topics
mentioned earlier there was little disposition to discuss the
proposals in any depth. There was some sign of reluctance on
the part of the provinces to become too deeply involved in a
consideration of the federal institutions although it was
brought out that since these served all Canadians, in was
legitimate for the provinces to be directly interested in them.
The provincial delegations appeared nevertheless to be prepared
to leave the initiative to the Federal Government.

Again leaving aside the Quebec suggestion that the
adoption of a congressional system at the federal level should
be considered, a suggestion which, by the way, was not pushed
with much vigor, there seemed to be general satislaction with
the existing federal institutions.

The federal propositions which proposed the enunciation
of certain constitutional conventions were greeted with caution.
The desirability of having a meaningful constitution was
acknowledged but there was some hesitation about spelling out
the conventions. It seemed to be the general consensus that
the Constitution should in any event only concern itself with
the chief elements of federal institutions; those that should
only be susceptible of change by the process of constitutional
amendment.

On balance, leaving aside the three specific points
mentioned above, the provinces would not be expected to raise
fundamental objection to the general nature of the federal pro-
posals regarding the institutions of the central government.
These seem to meet the common expectation that the present
system would be preserved.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL

Constitutional Conference – February 1969

INSTITUTIONS OF FEDERALISM – SENATE
BRIEFING PAPER

The federal proposals on the Senate were greeted in
the Continuing Committee with considerable interest and some
surprise. However there had not been an opportunity for
provinces to examine them before the meeting of the Continuing
Committee and provincial delegations had little to offer by way
of considered criticism or detailed suggestions. Several
provinces had examined the question of the Senate in a general
way but they appeared to expect the Federal Government to take
the lead in proposals for change.

It seemed to be generally accepted that the bicameral
system should be maintained although Quebec, Ontario and to
a lesser extent, New Brunswick, were prepared to contemplate
abolition of the Senate if it could not be effectively reformed.

The election of senators was not proposed and the
federal proposal for some appointments by provinces was greeted
with favour, subject to reservation depending on the proportion
that would be suggested. Quebec alone sought total provincial
appointment although obviously others would accept this if
they thought it was attainable. The possibility of difficulties
arising from the fact that there would be two types of senators
was mentioned, as was the alternative possibility that the two
authorities would compete with one another to make the best
possible appointments. There was some concern lest the
inclusion of provincial appointments might frustrate the
operation of the central government, although the limitation
of the Senate’s legislative authority to a suspensive veto
would largely eliminate this risk. It could, nevertheless, give
rise to difficulties if appointments were totally or in the
majority in the hands of provincial governments.

There was general acceptance of the idea of a
limited term of office for senators. The Quebec delegation,
however, took the view that even six years was probably too
long. On the other hand, a shorter period could reduce the
effectiveness of the Senate by reducing the opportunity for the
development of any institutional cohesion in the chamber or for
the development of individual identity with policy. It would
seem likely that a 6-year term would ultimately attract general
support, particularly if appointments were staggered, say
one-third every two years.

There was considerable interest in the question of
the distribution of Senate seats, a matter in which the
provinces were clearly prepare to concern themselves. The
pattern of views offered no surprises. British Columbia
and Saskatchewan made the case for greater weight being given
to population and the Maritimes stuck to the regional principle.
No specific formula was advanced nor forecast.

-2- CONFIDENTIAL

The federal proposal regarding senate approval of
certain classes of appointments appeared to come as a surprise
to the extent that some provincial delegations questioned the
desirability of thus diminishing the executive authority of the
central government. There was also a question whether it was
appropriate to introduce this technique into our parliamentary
system. It is applied in the United States in order to give
the legislature a voice in these matters, of which it is
otherwise deprived by the independence of the executive from
the legislature. while this is so the proposal is advanced here
to meet another need, that of associating the provinces directly
with appointments of concern to them. Thus the proposal would
have no purpose unless the provinces had a hand in the selection
of senators.

The proposal that the Senate also have special
responsibility in the area of language riqhts and human rights
was favourably regarded.

There seemed to be general agreement in regard to
the limitation of the Senate’s legislative power to a
suspensive veto which was also proposed by Quebec.

There was considerable reaction to the proposal that
appointments to the Supreme Court should have Senate approval.
This is examined in the papers on the Judiciary.

Ontario advanced the idea that the Senate might also
have responsibility in the area of Federal-Provincial relations
but there was no elaboration of what this would mean. If the
appointments are made by both orders of government, the Senate
would be in a position to bring both federal and provincial
points of view to bear on any question which came before it.

Discussion on the Senate is likely to focus on the
two main points, appointment and powers. Quebec may attract
support for its claim for total provincial appointments, but
despite the difficulty of presenting a convincing argument in
principle against such a system, the provinces may judge that they
would do well to accept anything of the order of 50% of appoint-
ments.

It is true that in no other federation are senators
appointed by the Federal Government. But if the role of the
Senate is to be two-fold – to represent the diversity of
regional and provincial views and also to be an influence for the
unity of Canada, there is a case for federal as well as provincial
appointments. It can also be argued that total provincial appoint-
ment would create a Senate which could seriously hamper the oper-
ation of the Federal Government even if the legislative power
were limited to the suspensive veto. The Senate, after all, as
an institution of the central government, deals with matters which
are exclusively within the jurisdiction of the central government
and it should not, therefore, be wholly appointed by provincial
governments. On the positive side, as has been mentioned above,
having two sources of appointment could create a healthy compe-
tition in the excellence of appointments, whereas exclusive
provincial appointment might reduce the chances of bringing
forward appointees of national stature. Moreover, the long
Canadian tradition of federal appointment should not be
completely discounted. It has undoubtedly conditioned the
country to accept a federal role in Senate appointments despite
the desire for some change.

On powers, the federal proposals would probably carry
with the possible exception of that relating to the appointment
of judges of the Supreme Court.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL

BRIEFING PAPER

The Constitutional Conference, February, 1969
THE JUDICATURE

Introduction

1. The constitution and jurisdiction of the Supreme
Court of Canada and to a lesser degree the other Judicature
provisions of the British North America Act in recent times
have been exposed to criticism chiefly by commentators in
the Province of Quebec. The main problems raised by the
criticism relating to an ultimate Judicial tribunal
(referred to here for simplicity as the Supreme Court)
revolve around,

(a) its structure, that is whether it should be
transformed into a specialist body dealing
only with constitutional questions or dealing
with various questions in separate chambers;

(b) specific issues on its Jurisdiction, including
the question of the restriction of civil law
appeals; and

(c) the method of appointment of its members,
particularly with reference to the concern
to reflect Canada’s federal structure.

In addition, claims have been made on the existing federal
power of appointment to provincial, superior, district and
county courts. While this problem is separate, it is never-
theless closely related to that concerning the Supreme Court
and will undoubtedly arise in connection with any discussion
of the Judicature.

2. The problem of the Supreme Court is best considered
against a background of the theoretical role that has been
ascribed generally to supreme courts in a federal context.
The basic element is, of course, the maintenance of the
supremacy of the constitution and the determination of the
respective limits of Jurisdiction of the central and local
governments.

3. Judicial review is the mechanism that is most widely
employed, and probably the only one that would find acceptance
in Canada, for the maintenance of the supremacy of the
constitution and the resolution or jurisdicational questions.
Judicial review not only implies the striking down of ultra
vires legislation, it involves a law-making function related
to ever-changing circumstances in which we live. The consti-
tution in this context is continuously under review and
continuously evolving.

-2-

4. In order to perform the function of Judicial review
a supreme court must not only be neutral but must appear
to he so. Further, it must be accepted as ultimate inter-
recer of disputes under the constitution. In relation

to the proposals on this it is, thus, important to have in
mind the necessity for a general acceptance of the actions
of the Supreme Court in any new situation.

5. In analyzing the problems relating to the Supreme
Court some assistance can be derived from the experience of
other federal states. This experience is, however, only a
frame of reference and Canada’s own history and peculiar
circumstances are those factors which must ultimately govern
the decisions to be made. The federal states from which

most assistance can be derived are the United States,
Australia, Switzerland, Germany and India. The one significant
lesson to be drawn from their experience is probably that,
with the exception of Germany, there is no specialization

and that in most cases the appointment of Judges is ultimately
a federal responsibility .

6. Finally, any consideration of the Judicature must
proceed from an understanding of the present arrangements
under the British North America Act. The Supreme Court was

created by federal statute passed under the authority conferred
by section 101 of the Act. This provision, which was
anticipatory only, authorized the establishment of a general
Court of Appeal. It also authorized the establishment of
additional courts for the better administration of the

laws of Canada, under which authority the Exchequer Court

is presently constituted.

7. The other judicatureprovisions of the British North
America Act, sections 96 to 100, deal with the appointment

and tenure of judges of superior, district and county courts.

It is by these provisions that the Federal Government (in the
strictest sense the Governor General on the advice of Council)
obtains its appointing authority and by them that the
independence of the Judiciary is secured. The provisions
guaranteeing Judicial independence do not extend specifically

to judges appointed to courts established under section 101.
They should be specifically provided for in a new constitution.

Structure of the Supreme Court

8. There are three broad alternative structures for a
supreme court that must be considered:

(a) a supreme court constituted as at present as a
body of integral or entire jurisdiction;

(b) a supreme court that would only have jurisdiction
to decide constitutional issues; and

(c) a supreme court divided into common law, civil
law and constitutional law panels or chambers
with jurisdiction on appeals divided amend them.

9. A supreme court constituted as a tribunal with general
jurisdiction would most clearly mirror the diversities and
interrelationships in the Canadian legal system. It is difficult

-3-

if not impossible, to isolate issues where there may be
involved in one appeal questions of, say, civil law and

federal statute law as well, possibly, as common law comparisons
to be made. In addition, it has been found important under our
system of law to relate decisions to all the factors involved

in each case including all the facts and the other relevant law.
An artificial division, while possible, might not be conducive
of the sound development of law and of the constitution.

lo. Thus, while not impossible of implementation, the alter-
native of a constitutional court with Jurisdiction on appeal to
decide only questions of public or constitutional law is
initially unattractive. Its disadvantages become more
significant in relation to its practical consequences. If it
were to involve appeals on constitutional points from, say, the
magistrates court level, the delays in the administration of
justice would be considerable. As it is now, all courts decide
on all legal issues including constitutional ones. This results
in a fairly expeditious handling of actions, only the most
contentious or nebulous constitutional issues being appealed.
Neither would this alternative necessarily ensure a better
adjudication of matters of purely common or civil law. Certainly
it would involve decided disadvantages for the courts if the
usual appeal process, in which the issues and points of law are
carefully sorted out and examined, were not a precursor to an

ultimate decision.

11. It must be said, however, that if a purely constitutional

tribunal is feasible, it must almost of necessity be unwieldly.
If, however, political realities are such as to force a move away
from a body of integral jurisdiction, instead of a constitutional
tribunal, the alternative of panels may beworth examining as a
middle ground. It must be remembered, however, that a highly
structured panel system might also prove unwieldly since it
would probably possess most of the disadvantages of a tribunal
of fairly strict Jurisdictional limits, that is issues would
have to be unnaturally isolated from other relevant issues and
the facts of the case. At the present time there is an ad hog
panel system operating and it is not inconceivable it could be
extended and recognized in the constitution without at the same
time laying down fine jurisdictional lines.

12. Generally speaking, the experience of other federal states,
with the exception of the German Federal Republic where very
different circumstances applied after World war II, does not

seem to support, any more than do our own traditions, the concept
of limited and specialized Jurisdiction:

“It seems unwise to contemplate a division of the
Supreme Court into a constitutional chamber and a
general appellate chamber. The function of

deciding constitutional questions cannot realistically
be divorced from the function of interpreting federal
laws and considering other non-constitutional grounds
of decision. Constitutional decisions may be avoided
or precipitated depending on the interpretation given
to a statute, and conversely the interpretation which
a particular construction would produce. It seems
unwise to separate functions which are so

-4-

closely interrelated. Judges are given more
scope for resourcefulness in reaching wise
accommodations if such an artificial division is
not imposed. Furthermore, in the decision of
highly charged constitutional issues it would be
advisable that all the Judges of the Supreme Court
participate, lest the decision be thought to turn
on the particular panel serving in the case. At
the least, it would seem unsound for the Constiv
tution itself to require a division into a
constitutional and a non-constitutional chamber.”
(Bowie and Friedrich, Studies in Federalism, 1954,
p. 117.

l3. This alternative is, however, one that may have to be
explored further depending on the political exigencies of the
moment. If a more numerous court were envisaged, it is
certainly not beyond the realm of possibility to develop a
workable panel system. This would not technically be as
satisfactory a solution as a supreme court generally free to
limit itself, as does the United States Supreme Court, and to
organize its judicial work having regard to time, resources,

and the nature and significance of the issues brought before it.
Our propositions are based on a body of integral Jurisdiction but
with clear provision for minimum civil law representation on the
Court and provision for ag_hgg,civil law Judges in certain
circumstances.

Specific Issues relating to the Jurisdiction of the Supreme Court

14. At the present time the jurisdiction of the Supreme Court
is set out in the Supreme Court Act. There is every reason to
favour the setting out of the main lines of its Jurisdiction in
any new constitution, the details to be completed by Act of
Parliament. It would be only normal to make provision to this
end the more so if the structure and appointing authority were
established by the constitution. The Supreme Court should be
thought of as a Canadian rather than a federal body. Setting out
its general jurisdiction would lend more credence to the Court’s
role as a constitutional arbiter without eliminating the
flexibility that now exists and a proposition to this end has been
submitted. The extent of the Jurisdiction thereby conferred is

a question that has been canvassed above in relation to the
structure of the court. There are, however, three other matters
that bear on Jurisdiction that must be kept in mind.

15. The first relates to the suggestion that matters of purely
provincial law should be decided finally by provincial
courts of appeal. This would eliminate one aspect of the
criticism currently directed at the Supreme Court. If such a
restriction involved only cases where solely a point of common
or civil law were in issue, it is doubtful if it would have a
significant effect. Further, unless the Supreme Court in
subsequent cases involving the same as well as other points were
to accept the decision of the provincial court of appeal on the
point in the previous case as valid and binding, it is possible
that such Judgments could ultimately be overruled. Thus, the

-5-

suggestion, if it is to have meaning, would probably involve
the Supreme Court being constitutionally bound to accept all
findings on matters of common and civil law in the court
appealed from. Its freedom of action to consider all issues
on appeal would be severely limited giving rise to some or all
of the difficulties outlined above.

16. There is, secondly, the matter of the Supreme Court’s
current reference Jurisdiction. While it has been argued that
this has, in practice, given the Federal Government some control
over the determination of constitutional issues, it is difficult
to see how it can be eliminated if provincial governments will
still have recourse to their appellate courts to obtain opinions
by way of reference. The alternative of opening up to all
provinces the referencejurisdiction of the Court would not appear
practical. Unless there be admitted some restriction on references
to certain classes of subjects and in certain circumstances, it
would not appear appropriate to concede any restriction in the

current power.

17. There is, finally, the question of the binding nature of
previous decisions which might be considered to limit too strictly
the scope of the Court as final constitutional authority in its
interpretation of the constitution as a living document. The
House of Lords has declared itself no longer bound by precedent.
For greater certainty, there is every reason to provide that, in
appropriate cases, the Supreme Court is not required to follow
precedent. It could not then be argued in the future that its
Jurisdiction and freedom are fettered in any way and there would
be a clear mandate for it to treat the constitution as an
evolutionary instrument. A proposition has been put forward

on this.

Appointments to the Supreme Court

18. One of the recurring themes of criticism in relation to
the Supreme Court has been the exclusive federal power of
appointment to the Court. It has been argued, not without some
Justification, that in appearance as well as in fact the ultimate
constitutional tribunal in a federation should not be the
creature of one of the Jurisdictions involved. While our
traditions of Judicial independence make any bias toward an
appointing authority highly improbable, the argument which poses
the problem of philosophical predisposition of appointees is

not without at least some theoretical Justification.

19. There exist but three broad alternatives in the appointing
process:

(a) federal appointment,

(b) provincial appointment, and

(c) partial federal and partial provincial appointment.
Purely provincial appointment would not appear to be a practical
alternative in the current context. It is, however, probably

logically less dangerous than the alternative which has found
some favour with commentators, the provincial nomination of a

-6-

number of members of the Supreme Court and federal nomination
of the remainder. If one assumes the validity of the criticism
giving rise to this suggested change (that is, that a federal
bias results), then it must follow that the idea of provincial
nomination is founded on the premise that Judges appointed by
the provinces will reflect provincial interests. This would
lead inevitably toward a representative court.

20. A representative court would tend to act in the way that
other representative bodies, such as boards of arbitration, do.
The essential judicial character of proceedings before the
Supreme Court would be eroded. Questions, particularly those
posing the most difficult juridical decisions, would, in the
final analysis, tend to be determined in favour of the interest
with the largest number of representatives. The concept of
judicial independence which founds the system would in this
context tend to become irrelevent. Neither is there any real
precedent for such a method of appointment.

“The appointment of federal Judges, it is every-
where recognized, should be in the hands of the
federal government. At the same time the wishes

of the member States might well be consulted. In

the United States the voice of the States is expressed
through the power of the Senate to confirm the
nominations made by the President. There are various
other ways to provide safeguards on such appointments
by the federal government. Thus it could be required
that judges be selected from lists presented by
specified agencies, such as law faculties, the
supreme courts of the member States, or even by

the members of the Supreme Court itself. Nomination
by the Court itself, however, is open to the serious
objection that the Court would to that extent be made
a self-perpctuating body, more removed from the
currents of popular sentiment than is necessary to
assure its independence from outside intervention.”
(Bowie nd Friedrich, Studies in Federalism, 1954,
p. 121.)

21. This passage suggests some of the ways in which the legi-
timate provincial interests in the final constitutional authority
in our federal system can be reconciled with a strong and
independent supreme court. The solution that has been proposed
by the Government of Canada would see federal nominations
reviewed by a reconstituted Senate where there would be an
important provincial component. The concept of vetting nominations
in this way has disadvantages as well as advantages. But to

the extent that it acts as a fetter on exclusive federal
authority, it may go part way to meeting Quebec’s demands in

this area. It’s real significance may, however, be in the want
of viable alternatives.

22. In relation to the suggestion that there be some sort of
consultation with the Provinces on appointments to the Court,

the question immediately arises consultation with whom and to
what purpose? If it be with the provincial government or
provincial ministers, then the nature of consultation is all
important. If the Province has a veto on prospective appointees,
it is clear that every possibility exists that the Court will be

-7-

weakened if not rendered a representative institution and,
consequently, unacceptable. If the Province has no veto, it
is not very clear what real advantage there is over the present

situation.

23. A possible compromise may reside in some scheme for the
creation of selection committees or panels. They might be
constituted on a regional or on a provincial basis when an
appointee is to come from a particular province or region.

They might be composed of, say, the Provincial Attorney General,
the Chief Justice of the Province, the head of the local bar
association with, perhaps, the Minister of Justice as an

ex officio member. The task of the panels would be to submit

a list of names of potential appointees from which list the
Federal Government would be obligated to make its nomination.
The scheme may be satisfactory from the provinces’point of view
but there is a potential danger that the quality of nominations
may suffer. This alternative has not been proposed but neither
had the Government rejected it as a potential fall-back position.

24. It must also be noted that it would not be proposed to
replace any of the existing members of the Court immediately but
to integrate any new scheme as they retire from the bench. This,
of course, assumes a court of nine, which is probably the most
satisfactory size and which number has been proposed by the
Government. The greater the number of judges the more difficult
become the problems of co-ordination of the work and the
judgements of the Court, and the more tenuous become the lines

of continuity of its decisions. A move toward a system of
chambers on the Court or an attempt to increase representation of
one province or area would involve a commensurate increase in
total membership of which the two most frequently mentioned numbers
are thirteen and fifteen.

Appointments to Superior, District and County Courts

25. It has been suggested, notably by Quebec, that appointments
to provincial Superior, District and County Courts be made by

the Provinces concerned. There is some logic in this approach

and it obtains support from the practice in certain other federal
states. It will be impossible, because of iLs inappropriateness,
to make the point that such a system may lead to a decline in

the quality of appointments. By the same token it may be
difficult to put the case for appointment by the central authority
as constituting a uniform bond and as the best guarantee of
judicial independence.

26. Outside Québec, it is doubtful if there is any real demand
for the authority to appoint provincial court judges, although
alleged delays in appointments by the federal government might
cause Ontario to support Québec. However, the power, if offered,
could hardly be refused. If the power were given up, it should
probably not be considered as a trade from some arrangement on
the Supreme Court. A demand for active provincial participation
in relation to the Court would in the long run be hard CO resist
in such circumstances.

27. As the federal power of appointment in this area has not
been attacked as strongly as has the current status of the
Supreme Court, it is conceivable that it will be easier to meet

-8-

the challenge. There is an overriding national interest to
be served in this area. That interest is in a strong and
independent Judiciary which administers in the provincial courts
both federal and provincial law as well as constitutional law.
Appointments to the provincial courts consequently should be as
good and as uniform as circumstances and the national purse will
permit. The Government of Canada has therefore proposed that
this power of appointment be retained by it.

Conclusions

28. It is unlikely that any consensus can be achieved in
respect of the Judicature at this meeting. Nevertheless, it would
appear in order to attempt to secure general agreement at least

on the principle of laying down in the constitution the main
aspects of the Supreme Court’s structure and jurisdiction as well
as the appointment system. It might be attempted,although it

may not be possible in view of the expressed opposition of at
least one Province (Saskatchewan), to extend this consensus to
include some reference to removing any fetters that may remain

in respect of adherence to precedent.

29. It would probably be the most appropriate tactical move
to put forward the federal position as tentative on the more
contentious issues such as the structure of the Supreme Court
and the appointment process. This would imply both that the
Government of Canada has an open mind on any other proposals and
that it may be unlikely that such other proposals would have
much chance of general acceptance. In addition, there will
probably be some fairly deep divisions amongst the provinces
on these issues and it may be as well, to underline the nature
of the Federal Government position, and, consequently, to
reinforce it if those divisions could be allowed to appear.

30. Finally, it might be possible to secure some general
agreement concerning the issue of the disposition of civil law
matters by the Supreme Court. It is unlikely that there will be
objection to a minimum civil law representation of three on a
court of nine (or five on a court of fifteen). Thus, it might
be also quite possible that the proposal for ad hoc civil law
Judges might not be found objectionable. If such general
agreement could be obtained there might appear to be some real
progress in this area even if the positions are fairly far apart
on the issues of the structure of the court and the appointment
process.

*See PDF for handwritten note

COMPARISON OF 1968 PROVINCIAL TAX RATES

*See PDF for table

NOTES FOR THE PRIME MINISTER

Agenda Item 4(e) – Regional Disparities

Objectives for the Conference

1. Attempt to demonstrate the concern of the Government
of Canada to reduce regional disparities

(a) The objectives of Confederation must contain
reference to regional disparities problem
(federal objective # 2).

(b) The Parliament of Canada must have enough
economic powers to mount economic programmes,
and powers to redistribute income between
persons and governments.

(c) The Government of Canada will be integrating
and extending present programmes to attack
regional disparities, now.

2. Engage the support of the Atlantic Provinces for
linguistic equality goal by recognizing early the
need to attack regional disparities more effectively.
But avoid specific commitments at this stage.

3. Direct the Continuing Committee in its study of the
distribution of powers to take into account the powers
required to alleviate regional disparities.

Suggested Procedure

1. Invite Honourable I.G. Smith of Nova Scotia to lead off
the discussion of this item of the Agenda, but seize
an early occasion for making clear the general support
of the Government of Canada for his point — recognizing
the alleviation of regional disparities as a goal of
Confederation.

2. Invite Honourable Jean Marchand, at some point, to
speak of the progress being made in integrading present
programmes and developing new approaches to regional
disparities.

3. At end of discussion link the regional disparities
question to the study of the distribution of powers.
Avoid a special committee on regional disparities
(unless you’re prepared to have current federal
programmes reviewed by it!)

Talking Points

The Government of Canada has from the beginning seen
the Constitutional significance of alleviating regional
disparities (see Federalism for Future).

(a) in economic development (p. 4 of Briefing Paper
for quotes)
(b) in living standards (p. 5 of Briefing Paper
for quotes)
(c) in public services (p. 4 of Briefing Paper for quotes)

2. The Parliament of Canada has devoted an increasing
amount of its resources to the alleviation of
regional disparities:

(a) economic development of regions and areas —
some $1 billion has been committed since 1962
($500 million for Atlantic Provinces)

(b) living standards – Youth allowances, Canada
Pension Plan, Guaranteed Income Supplement for
OAS recipients, the Canada Assistance Plan,
improved Unemployment Insurance benefits all have
been added since 1962.

(c) public services – equalization payments almost
doubled since 1965, to $566 million. Lower income
provinces now receive from 32 to 62 percent of
their gross revenues from the Parliament of Canada.

3. The creation of a Department of Regional Development
is evidence of the intention of the Government of Canada
to place an even higher priority on solving the
regional disparities problem — and on rationalizing
and making more efficient the assistance presently
being given.

4. At the same time, recognize that in a dynamic, growing
economy there are bound to be sectors and regions which
grow faster than others. These must not be starved in
the interests of the slower growing regions or the whole
nation will be impoverished (there would be no high
incomes to redistribute!)

Expected Reactions from the Provinces

1. The Atlantic Provinces will press hard for an explicit
recognition in the Constitution of the obligation to
reduce regional disparities — and even may suggest
certain constitutional guarantees (in respect of
equalization grants for example).

2. Quebec has recognized, too, that the Government of
Canada must have adequate economic powers to attack
regional disparities. It wants disparities in personal
income to be attacked by the provinces, with Parliament
giving larger equalization grants to the lower incmne
provinces to enable them to do the job (no “payments
to persons” by Government of Canada).

3. The higher income provinces in particular British
Columbia and Alberta will warn that an excessive diversion
of resources from fast growing regions to slow growing
regions will reduce Canada’s economic growth, and hence
the ability of higher income provinces to contribute
to lower income provinces.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA

Confidential

BRIEFING PAPER

The Constitutional Conference – February, 1969

REGIONAL DISPARITIES

1. One of the subjects the Constitutional Conference
agreed should be examined is that of “regional disparities”.
The discussion which led to this decision was led primarily
by the Atlantic Provinces, who made reference to three
categories of “regional disparities”:

(1) disparities in public services arising
out of disparities in fiscal capacity,

(2) disparities in the economic growth and
development of different regions,

(3) disparities in standards of living,
and in particular the adequacy of the
incomes of persons in the lowest income
brackets.

Ontario and Alberta supported the Atlantic Provinces in
their argument that the alleviation of regional disparities
ought to be regarded as one of the fundamental goals of
Confederation; at the same time Alberta and British Columbia
warned against too serious a reduction of the rates of
economic growth in the faster growing regions of Canada
through an excessive transfer of resources from those regions
to the slower growing ones.

Regional Disparities and the
Objectives of Confederation

2. The Government of Canada and five of the provinces
(Newfoundland, Nova scotia, New Brunswick, Ontario and
Alberta) have submitted “propositions” concerning regional
disparities (see Appendix “A”). The proposition submitted
by the Government of Canada was one of the objectives
proposed for inclusion in a preamble to the Constitution:

“To promote national economic, social and
cultural development and the general welfare and
equality of opportunity for all Canadians, in
whatever region they may live, including the
opportunity for gainful work, for just conditions
of employment, for an adequate standard of living,
for security, for education, and for rest and leisure”.

The propositions submitted by the provincial governments
called for “balanced regional economic development” and the
“alleviation of regional economic disparities”; they called
for the equalization of provincial revenues and public
services; and they called for the alleviation (sometimes
elimination) of disparities in “living standards”. Alberta
warned that “care must be taken to avoid retarding further
growth by unjustly penalizing those regions of Canada whose
economic development contributes most to … the prosperity
of the nation …” The Newfoundland proposition recocnizes
that a strong central rovernment is required to tackle the
regional disparities problem.

What is Meant by Regional Disparities

3. The governments or the provinces seem to agree that
there are three kinds of disparities which ought, as an
objective of Confederation, to be ameliorated:

(1) public services
(2) economic growth and development
(3) adequate standards of living, or
perhaps more clearly extremes in
income distribution.

The provincial governments also seem to recognize, fairly
clearly, that the amelioration of these disparities would
lead to the equalization of opportunity for individual
Canadians, including “the opportunity for gainful work”, the
provision to all Canadians of adequate public services,
including education, and a reasonable assurance of adequate
standards of living, including minimum incomes under Canada’s
social security system. (See the proposition submitted by
the Government of Canada).

4. There tends, however, to be some confusion in the
minds of certain provincial ministers and officials in
respect of four aspects of the regional disparities question.

(1) Relationshio between the Three Categories of
Disparities. Occasionally representatives
of the At antic Provinces tend to talk as if
the amelioration of disparities in provincial
revenues would result in the amelioration of
the “adequate standard of living disparity”
and the “economic development disparity”.
This likely arises out of the preoccupation of
the Atlantic Premiers with the equalization of
provincial revenues. Increasingly, however,
there is a recognition that balanced regional
economic development would lead to improved
fiscal resources and, in consequence, that
primary emphasis should now be placed on the
economic objective.

The Government of Quebec, on the other hand,
has submitted propositions which suggest that
at least the “adequate standard or living
disparity” and to a considerable extent the
“regional economic development disparity”
ought to be tackled via the transfer of
fiscal resources from the Government of
Canada to the governments of the provinces.
Thus the provincial governments would be
exclusively responsible for income redistribu-
tion and social security standards, and would be
in a strong (dominant?) position in respect of
regional economic development.

(2) Elimination versus Amelioration or Disparities.
Occasionaly provincial ministers and officials
speak of “eliminating” regional disparities.
It has been found useful at Continuing Committee
meetings to warn of the implications of this
kind of slogan:

(a) “Elimination” of disparities in public
services would mean that the rural
areas of the Atlantic Provinces would
have the same public services as metro-
politan areas such as Toronto – including
clover-leaves, expressways, etc.
Obviously no-one really means to “eliminate”
these disparities (or could afford to).

(b) The “elimination” of disparities in
standards of living would mean absolutely
equal per capita incomes as between all
regions in Canada or even as between all
people in the country. Obviously the
goal is to alleviate disparities in minimum
standards of living; to eradicate the
extremes in income redistribution through
economic development and through social
security measures.

(c) The “elimination” of disparities in rates
of economic growth would mean that all
regions, and perhaps even all sectors and
all industries of the economy, ought to
be made to grow at the same rate. If this
were to happen, economic growth would
virtually be brought to a standstill.
(Growth is achieved as much – if not more –
through the shift of resources from slow-
growing to fast-growing industries,
sectors, regions or areas, as it is through
increasing the rates of growth of individual
industries, sectors or regions). Again,
this goal must be expressed more in terms
of the”amelioration of disparities in
growth rates” or “balanced economic growth”,
than in terms of “eliminating disparities”
or “closing the gap”.

(3) “Disparities in Rates of Growth” versus
“Disparities in Absolute Terms”. It has seen
useful to distinguish, in the meetings of the
Continuing Committee, between the alleviation
of disparities in the rates of nrowtr of the
economy, as opposed to the alleviation of
absolute levels of economic activity
is obviously impossible to equalize the
absolute level of income or of economic
activity in all regions (e.q. in per capita
terms). In a dynamic economy there will
always be richer and poorer areas and industries,
as new industries, technology, resource
discoveries, etc., replace the old. It is
even impossicle to “equalize” rates of economic
growth, since this would require all rouions
to grow at the same rate (it is mathematically
impossible to bring slow growth areas up to the
national average rate of growth without crinving
the fast growing regions down to that level).
The most one can reasonably hope for is “adequate”
rates of growth in all regions, and the
prevention of excessive or widening disparities
in rates of growth.

As for disparities in public services and
standards of social security, on the other hand,
one is obliged to speak more in absolute terms
than in terms of rates of growth. In the case
of these disparities, rates of change have tended
to apply to the so-called “catch-up” in the
quality of public services in low income provinces.

Statements of Policy by the Government of Canada
concerning Regional Disparities

5. The Government of Canada has made a number of
general statements of policy concerning each of the three
categories of regional disparities. The principal state-
ments are referred to in the paragraphs which follow.

6. Disparities in Provincial Revenues and Public
Services. The Honourable Mitchell Sharp stated in 1966
that one of the objectives of federalism should be the
equalization of provincial public services.

“The fiscal arrangements should, through a
system of equalization grants, enable each
province to provide an adequate level or
public services without resort to rates of
taxation substantially higher than those of
other provinces.”

In Federalism for the Future it was stated:

“The Government of Canada must have the
power to redistribute income between persons
and provinces, if it is to equalize opportunity
across the country … (This involves) the
right to make payments to provinces for the
purpose of equalizing the level of provincial
services.”

7. The Government asserts that it has substantially
accomplished this goal through the new equalization formula.
Under this formula the revenues of all provinces are
equalized to the national average – assuming the application
of national average provincial tax rates in each province.
Any additional measures for the alleviation of regional
disparities should, it is argued, he in the economic
development field (an example is the FRED programme).

8. Certain provincial governments have responded
that the equalization of provincial revenues will remain
incomplete until municipal revenues are equalized (included
in the equalization formula). The Government of Nova
Scotia, indeed, has proposed this in one of its constitutional
propositions. The response of the Government of Canada has
been:

(1) That it would be inappropriate to
equalize municipal services (e.g. clover-
leaves in Cape North, Nova Scotia, as
well as in Torontc?);

(2) That the provinces themselves have not
equalized municipal services;

(3) That there are serious (almost insurmount-
able) difficulties in measuring the municipal
property tax base (the tax capacity) by
reason of the diverse municipal property
valuation techniques across Canada;

(4) That it would cost another $100 million,
and that the higher income provinces
would be loathe to pay this additional
amount given their enormous expenditures
on their metropolitan agglomerations.

9. Disparities in Rates of Economic Growth. The
Government of Canada recognized at the 1968 Constitutional
Conference that balanced economic growth is one of the
conditions of nationhood.

“Individual Canadians contribute … towards
national programmes designed to increase the
economic wellvbeing of areas and regions
that are poorer than their own. This is the
sort of thing that happens when there is a
sense of community (across Canada).”

Also:

“(The Government of Canada) must be able to
undertake measures for stimulating the growth
of the economy, some of which inevitably and
some of which intentionally will affect
regional economic growth. Without such powers
Canada’s federal government would be unable
to contribute to many of the central objectives
of federalism, including the reduction of
rerional disparity.”

The Government will go on record at the 1969 Constitutional
Conference as believiny that one of the objectives of
Confederation is

“(The promotion of) national economic …
development and … the equality of
opportunity for all Canadians, in whatever
region they may live, including the
opportunity for gainful work … for an
adequate standard of living, (and) for
security.”

10. (Any other important policy statements on
this question).

11. It will be noted, in these statements, that the
Government has spoken of stimulating regional economic
growth and reducing disparities in economic growth as
between regions. This objective has more often been stated
in terms of the well-being of the individual, namely the
equality of opportunity for all Canadians in whatever
region they may live. The greatest precision that has
been given to this goal is the statement that “opportunity”
means, or includes, the opportunity for gainful work (i.e.
the reduction of levels of unemployment in low-income
regions), and an adequate standard of living and security.
(Presumably meaning that personal income must be sustained
at acceptable levels through economic development and
social security measures).

12. Disparities in the Adequacy of Living Standards.
The Government of Canada recognized at the 1968 Constitutional
Conference that

“The existence of a Canadian community is to
be found, too, in the concern individual
Canadians feel for one another … Canadians
across the nation now contribute to sustain
the income of their fellow citizens, wherever
they may live.”

Also:

“We believe that the Government of Canada
must have the power to redistribute income
between persons and provinces, if it is
to equalize opportunity across the country.
This would involve, as it does now, the
right to make payments to individuals for
the purpose of supporting their income levels…”

The Government will go on record at the 1969 Constitutional
Conference as believing that one of the objectives of
Confederation is

“(The promotion of) equality of opportunity
for all Canadians, in whatever region they
may live, including … an adequate standard
of living (and) security.”

13. It will be noted,in these statements, that the
Government has, again, spoken in general terms. It has
sought to avoid the pitfall of seeming to “guarantee” an
annual (minimum) income, or of seeming to suggest that
per capita incomes in low-income regions can be “equalized”
with those of higher-income regions.

Relationship of Regional Disparity
Question to the Constitution

14. The Premiers who are pressing hardest on the
regional disparities issue have not always been clear as
to what constitutional provisions are called for. The
one matter upon which all seem to agree is that the
alleviation of regional disparities ought to be stated as
an objective of the Constitution. Only Newfoundland and
Saskatchewan have said that this objective calls for
adequate economic powers for the Parliament of Canada.

15. The Government of Canada, in turn, will seek
to be quite explicit about the relationship between the
regional disparities question and the distribution of
powers.

“This third objective, like the others, must
find its realization through the institutions
which are provided for in the Constitution.
In this case we must look to the division of
legislative power between the two orders of
government, to provisions for effective inter-
governmental consultation, and to the protection
of language rights.

“The Government of Canada must be given
sufficient powers in the Constitution to enable
it to stimulate and expand the economy, and to
manage the economy in such a way as to maintain
high levels of employment. It must have the
power to co-operate with industry and labour
so as to maximize the efficiency of the common
Canadian market. It must be able to promote
growth in all of the sectors and regions of
the economy, if disparities in income and in
rates of economic growth are to be diminished.
It must have the power to redistribute income
and to maintain reasonable levels of livelihood
for individual Canadians, if the effects of
regional disparities on individual citizens are
to be minimized. The provincial governments
in turn must have the power to promote and to
rationalize the development of provincial or
regional economies. In the context, of course,
of the interests of other regions and of the
economy as a whole. They must be able to
provide an adequate standard of public services
to their citizens and to support the incomes of
those who are in need.”

Present Policies and Programmes

16. It is possible that present programmes designed
to attack regional economic disparities may come under
discussion at the Constitutional Conference, or that the
Prime Minister may have occasion to make reference to
them in the course of the meeting. For this purpose, a
summary of the programmes and their magnitudes appears in
the paragraphs which follow.

17. The Government of Canada has, for many years,
played a role in initiating and implementing programs
desivnen to stimulate the economic growth and development
of regions and areas within Canada. The effort has been
particularly marked since 1962. Since then, more than $1
billion has been committed to such programs. Of this
amount, close to $500 million has been committed to the
four Atlantic provinces.

18. The programs are in this paper divided into:

(a) those begun since 1962 that apply throughout Canada;
(b) those begun since 1962 that are restricted to the
Atlantic region; (c) those that pre-date 1962.

Programs of National Scone

19. The Area Development Program (ADA). This is
one or the main instruments used by the Government of
Canada to assist in the economic expansion of designated
areas of high unemployment, slow growth and low incomes
across Canada. There are currently 94 such areas (Canada
Manpower Centre areas, or counties) distributed as follows:
26 in the Atlantic provinces; 34 in Quebec; 12 in Ontario;
10 in Manitoba; 7 in Saskatchewan; 2 in Alberta; and 3
in British Columbia. The number of designated areas at
the time the program was first introduced in December 1963
was 35.

20. The program provides incentives to encourawe
manufacturing and processing industries to locate, or to
expand their operations, in areas of low economic activity.
The main incentives under the current program are: 1) a
capital development grant of up to one-third of the cost of
new machinery, equipment and buildinas to a maximum of
$5 million per project: 2) a similar grant for the expansion
of an existing facility, provided the cost is in excess of
$10,000; and 3) accelerated capital cost allowances. These
benefits are availableto eligible firms in the designated
areas whose projects were not committed prior to July 1,
1965. The plan is scheduled to remain in effect for
projects coming into commercial production up to March 31,
1971.

21. As of November 30, 1968, there were approximately
990 active applications under the proaram representing
proposed capital investments of about $2, 140 million. These
projects would create an estimated 00,000 direct job opport-
unities and require federal government incentives totalling
some $425 million. Figures for the Atlantic region alone
are approximately 300 projects, $850 million in capital
investment, 21,000 jobs and 130 million in incentives.

22. As firm commitments, the Government of Canada had
by November 30 last approved projects in all ten provinces
involving total incentives of more than $200 million, of
which approximately $75 million is in the Atlantic region.
In addition, the federal povernment had forevone revenue of
an estimated $165 million ($32 million in the Atlantic
provinces) as a result of the tax holiday which was the major
part of the incentives program in its first two years,
from 1963 to 1965.

23. As announced by the Minister of Forestry and Rural
Development, in the house on September 25, 1968, major
improvements in the existing program will he proposed this
spring after discussions with the provinces. The purpose of
these changes will be to increase the effectiveness of
these incentives in attracting new industries to slow-growth
regions and in stimulatinn the expansion and modernization
of existing industries.

24. The Agricultural and Rural Development Program
(ARDA). The object of this program is to make public
assistance available in meeting the problems of physical,
economic and social adjustment in rural areas. It provides
for the establishment of federal-provincial programs of
alternate land use, soil and water conservation, rural
development and research aimed at alleviating the problems
of low incomes in rural areas.

25. The program has operated under two federal-
provincial agreements, the first covering the period from
1962-65 and the second the 1965-70 period. It is the
responsibility of the provinces to initiate and implement
ARDA projects and programs. The federal government undertakes
to share in the cost (usually 50 per cent) of approved
projects up to a specified total financial commitment for
each province.

26. Under these agreements, the Government of Canada
has made available $175 million to the provinces — $50 million
in the first agreement and $125 million in the second — of
which more than 837 million is allocated to the four Atlantic
provinces.

27. Total expenditures under the program are expected
to be about $73 million by the end of the 1968-69 fiscal
year and of that amount $12 million will have been spent in
the Atlantic region. In addition the federal government
will have spent under the agreement approximately $25 million
on the development of comprehensive plans, pilot research
studies and the Canada Land Inventory.

28. The Fund for Rural Economic Development (FRED).
This program was developed to meet, in a comprehensive way,
the problems encountered in areas of concentrated and
severe rural poverty which could not be effectively tackled
under the more limited approach of the AHDA-type program.
Under FRED, the Government of Canada can enter into an
agreement with a province for the joint undertaking of an
overall development plan designed to increase incomes and
employment opportunities in a rural area of special need.

29. A FRED agreement can cover the planning, co-
ordination, implementation and funding both of standard
programs operated by various agencies of the federal and
provincial governments and of special programs begun to
meet the needs of a particular area. Costs are shared with
the provinces.

30. Four agreements have been signed since the Act was
passed in 1966, two in New Brunswick and one each in Quebec
and Manitoba. They are:

* See PDF for table

FRED spending to the end of the 1968-69 fiscal year will
total $7.4 million for the two New Brunswick projects, $4.5
million in Manitoba and $2.5 million in Quebec. A fifth
FRED agreement, covering the province of Prince Edward
Island, is under consideration.

31. The Canada NewStart Program. This program
recognizes that economic expansion in disadvantaged areas
is hindered by low levels of education and the lack of a
skilled labour force. The federal government therefore is
prepared to undertake in each province, in co-operation
with the provincial authorities, one pilot research
project in an area where people have little opportunity
either for education or for normal employment experience.
The projects are designed to find ways in which people
can be introduced to the kinds of skills they require
if they are to have the opportunity to participate in
Canada’s growth and prosperity. Responsibility for
conducting a project rests in the hands of a “NewStart
Corporation” which is specially established for this
purpose.

32. NewStart Corporations were created in 1967
to carry out projects in Alberta, Saskatchewan, Prince
Edward Island and Nova Scotia. A federal-provincial agree-
ment was signed in October 1968 for the incorporation or
a similar project in New Brunswick. Total spending to
March 31, 1969 will be about $4 million, of which half
will be in the Atlantic region. A sixth agreement is
under active negotiation with Manitoba.

Atlantic Region Programs

33. The Atlantic Development Board (ADB). This
Board was established to strengthen the economies of the
four Atlantic provinces and to improve their rate of
economic expansion, by long-term economic planning and
by investments in the infrastructure of the region. The
Government of Canada has spent, or is committed to spendinv,
approximately $195 million in the region by the end of
fiscal year 1968-69. of this amount, $190 million has been
committed to building the region’s infrastructure, that
is to say to provide the foundation for expansion.

34. This expenditure on infrastruurure includes $55
million to help the Atlantic provinces upgrade the standard
of their main trunk roads. Other commitments include a
$1.75 million relocation program for the residents of Bell
Island, Newfoundland, and a $2 million contribution to
the Sydney (Nova Scotia) steel plant.

35. The operating responsibilities of the Board will
be absorbed by the new department responsible for rovional
development once the legislation establishing the department
has been approved by Parliament. The responsibilities
of the Board for advising the government on development
problems and policies for the Atlantic region will be
maintained in their present form through the proposed
creation of an Atlantic Development Council.

36. The Cape Breton Development Corporation (DEVCO).
This is a federal Crown Corporation established in 1967
to meet problems created by the decline in the Cape Breton
Island coal industry. The Corporation has acquired the
assets of the Island’s largest coal producer and is operating
the mines with a view to rationalizing production. The
Corporation is promoting and assisting in the financing
and development of new industry in order to broaden the
base of the Island’s economy and to reate employment
opportunities outside the coal industry. To the end of
1969, the Government of Canada has committed $67.5 million
to this programme.

37. Other programmes. In the search for development
opportunities in the renion the Government of Canada
has undertaken a number of investivations. These have
included studies on deep harbours, mineral resources,
electrical energy, water resources, industrial opportunities.
For example, the Atlantic Tidal Power programming Board
was established in 1966 to examine the feasibility of
exploiting the tidal power potential in the Bay of Fundy.

It is currently carrying on these investigations and to
March 31, 1969, $1.4 million will be invested in this
program.

Programs Pre-dating 1962.

38. The programs described above are those which
have been created in the 1960’s in an effort to bring
greater regional balance to Canada’s economic growth. In
addition, there are several earlier programs concerned with
the development of regions within Canada.

39. The Prairie Farm Rehabilitation Administration
(PFRA). This program was introduced in 1935 to promote
the welfare of Prairie agriculture in response to the
longest and most severe drought in the history of Western
Canada. Since that time, PFRA has acquired an international
reputation for its work and expertise in the fields of
land utilization and water development and conservation.

40. In terms of land utilization, PFRA has turned
approximately 2.5 million acres of marginal and sub-
marginal land into community pastures providing grazing
for some 165,000 head of cattle belonging to over 6,000
patrons who pay a daily fee per animal to cover the
operation and maintenance costs of these pastures. The
total cost of this program from its inception to March 31,
1968 has been slightly over $40 million.

41. PFRA has also been instrumental in the construc-
tion or large irrigation and water storage projects in
all three Prairie provinces. Close to $260 million has
been spent since 1965 on major undertakings of this nature,
the best known being the South Saskatchewan River Project
and the Shellmouth Dam and Portage Diversion Project. In
addition, some 100,000 individual projects have been
completed for irrigation, stock watering and domestic
supply purposes at a total cost to the federal government
of approximately $62.5 million.

42. The creation of tree shelterbelts has been
recognized as an important aspect of agricultural
rehabilitation ever since the inception of PFRA. From 8
to 10 million seedlings are distributed free of charge
each year for this purpose to farmers in Manitoba and
Saskatchewan. The total cost of this program has been
slightly over $2.5 million.

43. The Atlantic Provinces Power Development Act
(APPDA). This Act was passed in 1958 to provide for long
terms loans to any of the four Atlantic provinces for the
construction of thermal electric power plants and high
voltage, interconnecting electrical transmission lines.
In addition, the Act also provides for Subvention Payments
on eastern Canadian coal used in electric power production
in plants located in the Atlantic provinces. To date loans
of approximately $223 million have been approved and by
the and of the fiscal year some $22 million will have been
paid to Nova Scotia and New Brunswick in coal subventions.

44. The Maritime Marshland Reclamation Act (MMRA).

This Act was passed in 1948 to assist the Maritime
provinces in protecting and reclaiminp apricultural lands
of high potential fertility which are subject to salt water
intrusions. The federal government signed agreements with
all three provinces in 1949 by which it undertook to
accept responsibility for the construction and reconstruction
of dykes, breakwaters and other works required to protect
the land. The federal government also undertook to provide
the necessary design and surveying services.

45. A special agreement was gin April 1966
with the three provinces by which they agreed to assume
the operation and maintenance of the protective works by
April 1, 1970 on the understanding that the federal
government would upgrade them to a satisfactory standard
before the transfer was made. In addition, the federal
government undertook to provide on a continuing basis
engineering services to all three provinces for soil and
water conservation programs which would otherwise be
eligible for assistance under the ARDA programme.

46. Total expenditures for this program from its
inception to March 31, 1969 will amount to approximately
$19.5 million.

The New Approach to Regional Development

47. Background. As described in the previous paper,
existing federal policies and programmes for regional growth
and development have taken many forms in an effort to spur
economic expansion in the disadvantaged areas of Canada.
It is generally agreed, however, that these programmes, which
were largely developed on an ad hoc basis in response to
specific problems, have done little to get at the root causes
of regional economic disparities

48. The Economic Council of Canada, in its Fifth
Annual Review, described the situation in these terms:
“… One might hazard the view that federal policies have,
on balance, probably prevented interregional disparities
in per capite income from widening … On the other hand,
it must be said that there is little indication that these
(policies) have contributed to a stronger basis for self-
sustaining growth in the lagging regions of the country”.

49. The federal government has recognized this
criticism. It has recognized the importance of dealing
more effectively with the problem of reducing regional
economic disparities, in order to promote a more Just society
in a united Canada, by establishing the new department of
regional economic expansion. Implicit in this decision is
acceptance of the fact that broad national policies plus a
variety of area plans and agencies, however useful individually,
are not enough in themselves to achieve significant progress
in reducing regional disparities. That involves more
fundamental changes in the economic structure of Canada,
based on co-ordinated federal and provincial planning and
action designed to meet regional needs.

50. Philosophy. Three categories of “regional
disparities have been identified in discussions with
provincial governments:

(1) disparities in public services arising out of
disparities in fiscal capacity;

(2) disparities in the economic growth and development
or the different regions in the country: and

(3) disparities in standards of living and, in
particular, the incidence of poverty.

51. While these three categories of regional disparities
are interrelated, the new department will place primary
emphasis on accelerating the economic growth and development
of disadvantaged regions, that is to say upon the more basic
causes of regional disparities

52. To the extent to which efforts for regional
economic development are weak or ineffective, the federal
government will have to do more to make disparities tolerable.
In other words, it will have to spend more on transfers
to the poorer regions, in the form both of direct transfers
to individuals and as assistance of one kind or another to
provincial services. It will also be under increasing
pressure to provide grants to help the poorer provinces
with development efforts of their own. Those transfers are
not only a burden to the federal treasury and the national
economy. They tend to lessen the federal capacity for
leadership and the federal ability to appeal to the
Canadian people in a way which will bring the federal
government closer to the people, enhance federalism
and secure Canadian unity.

53. The ideal of regional development is that
Canadians should have good opportunities to earn their
living at roughly comparable standards wherever they live
from sea to sea. This, like all other ideals, is not
an absolute. It does not mean that opportunities and
living standards should be equalized at whatever points
in Canada people happen to live. A good degree of mobility,
in response to better opportunities in some areas, is
essential to economic efficiency. But, while concern for
efficiency rules out the pursuit of absolute equality, it
is equally true that extremes of inequality cannot be
accepted in the name of efficiency.

54. The goal of regional development therefore is
that economic growth should be dispersed widely enough
across Canada to bring employment and earning opportunities
in the slow-growth regions as close to those in the rest
of the country as proves to be possible without an
unacceptable reduction in the rate of national growth. It
must be emphasized that this goal relates to regions. It
does not mean moving jobs to all the places where people are.
It does not mean an absence of migration, including some
migration out of the slow-growth regions. It does mean
that there must be more new opportunities at some points
in all regions, so that economic growth takes place mostly
by movement and change within each region, rather than by
attrition of some regions.

55. If priorities could be set on purely economic and
social grounds, regional development programs would at
present be concerned almost entirely with Canada east of,
roughly, Trois Riviéres. west of that, there are areas,
communities, people in need of help for development. But
their problems, serious as they are, are secondary to the
massive problems of unemployment and under-employment in
eastern Canada.

56. Politically, however, it is important to avoid
treating regional development as being purely for the east.
It would be in the power of Ontario and the four western
provinces, if they so wished, to do much to offset federal
programmes for eastern development by engaging in competitive
bidding for industry through incentives and assistance. The
programmes of the new department, therefore, should be
structured in Canada-wide terms. The operational problem
will be to do this while putting the actual emphasis of
effort very heavily in eastern Canada. A rough rule is that,
if the department performs as it should, something like
80 per cent of its expenditures will, at least for some
years to come, take place east of Trois Riviéres.

57. Programmes. In order to accelerate growth in ways
that will improve employment opportunities in the slow-growth
regions, the first thrust of the regional development effort
must be to encourage more manufacturing and processing at
industrial centres in the slow-growth regions. The main
difference between the fast-growth regions and the slow-
growth regions v between particularly Ontario and the
Maritimes – is that in Ontario there have been, and in the
Maritimes there have not been, plentiful new employment
opportunities, in growing industrial centres, for people
to move to from rural areas. without these opportunities,
the people remaining in rural areas are generally too
numerous and too poor to carry out the basic technolozical
and other changes that are required if agriculture, logging,
fishing and so on are to produce incomes per capita which
can now be accepted as adequate.

58. The best instrument to encourage industrial
growth is the development grant as presently provided
through the ADA programme. The grant lowers the cost of
starting production in a slow-growth area and provides the
entrepreneur with a known basis for rational calculation
as to whether the location will be economic. The aim, of
course, is to encourage production which would not start
without the incentive but which, once started, will be
viable without continuing government assistance.

59. The present incentives programme, by assessing
relatively small areas according to the severity of their
unemployment and the lowness of their incomes, has excluded
those communities, within the slow-growth regions, which
have the greatest attractiveness for industry. A regional
development policy should have the opposite emphasis. It
can benefit the slow-growth regions most by providing incentives
particularly at those points within the region that have the
best chance for growth. It is by people moving into these
centres that the largest improvement in opportunities for
the region as a whole will be achieved. Ehe new department
intends therefore to provide stronger incentives than are
available at present for new production at “industrial
centres” selected by agreement with the provinces according
to certain guidelines

60. In addition to industrial incentives, the provision
of an adequate infrastructure is essential to the encouragement
of industrial prowth in the disadvantaged regions. While
this is almost entirely a provincial-municipal responsibility,
the poorer provinces – in the Atlantic region particularly –
cannot be expected to assume it unaided on the scale necessary
to provide appreciably faster economic growth. At the same
time, caution must be exercised on the federal side to ensure
that assistance for infrastructure does not develop into an
extensive and costly programme that relieves provincial and
municipal budgets without doing much new to encourage
industrial growth. This assistance should therefore be
confined to those few industrial centres that, on the basis
of economic analysis by the federal and provincial authorities,
are recognized as the key points at which major industrial
development is most likely to take place. Economic plans
expressed in federal-provincial agreements, could then be
formulated for the development of these centres over periods
of up to five years.

61. During this phase of concentration on industrial
incentives and on improving infrastructure in industrial
centres through federal-provincial plans, no major impetus
will be given to the initiation of further comprehensive
FRED – type programmes for rural areas. Until this phase
is completed, major rural adjustment programmes are not
likely to be effective and would absorb resources that can
be put to better use elsewhere. The one exception, of
course, is Prince Edward Island, which is a special case
because it is the one major area whose main asset is
undeveloped agricultural potential.

62. In Ontario and in western Canada, where the
application of federal industrial incentives will be much
less significant, the department plans to maintain its
involvement in rural development, at least on the present
scale of PFRA and ARDA. A careful review of the most effective
directions of rural development programmes will be undertaken
in preparation for future policy decisions.

63. Some new contributions must, however, be made
soon to the problem of the northern parts of the
Prairie Provinces. More and more Indians, it is to be
hoped, will move to live and work off the reserves and
therefore cease to be direct federal responsibilities in
a territorial sense. But the problems involved in such
a transition are still very much a federal concern, and
they will have an important bearing on the extent and nature
of federal regional development policy for the Prairies
region. Consequently, it is important to begin to take
part soon with the provinces in researching and developing
broader strategies to help Indian and Metis people
participate in economic development.

64. Insofar as the other existing regional development
programmes are concerned, the decision to wind up the
Maritime Marshland Rehabilitation programme has already
been taken. The federal government does not wish to
continue the present open-ended loans programme for new
power projects under the Atlantic Provinces Power Development
Act. On this point, further negotiations with the Atlantic
Provinces will be necessary and it should be stressed that
the federal objective is to develop more effective ways of
helping the provinces to improve their economic structures.

65. Scope of Programmes. No one can say precisely,
at this point, how large an effort should be made for
regional development. The new department, which will have
an important research, analysis and planning function, will
need to assess the regional and area aspects of a very
broad range of problems and issues, working in close liaison
with other federal departments and in full co-operation with
the provinces. In advance of this analysis and planning,
there is no intention to pre-judge the future scope and
directions of regional development policy. The positions
the new department proposes to take, as outlined above,
are on the basis of experience to date and existing analysis
Further experience and analysis may indicate retreats in
some directions: they may call for major new policies in
other directions. What is proposed meantime is a substantial
effort, but it is deliberately structured to avoid entering
into new, open-ended programmes before they can be evaluated
and their costs carefully estimated.

66. This caution does not mean that the new department
is assuming that a major effort for regional development
can be made without, in time, large increases over the
existing levels of expenditure. The prior need, however,
is to develop, in co-operation with the provinces, much
better planning and evaluation of development objectives,
priorities and programmes. It is on that basis that more
ambitious proposals will be made as experience develops.
The intention is to mount an effort that, if it is serious,
should extend over a period of the order of fifteen years.

67. Federal-Provincial co-operation. By its very
nature and scope, regional economic development is a process
that crosses Jurisdictional boundaries and is therefore of
close concern to both levels of government. This means that
federal efforts must not and will not be undertaken in a
spirit of competition with the provinces. They must start
from the basis of broad federal responsibility for a national
economy, and through that, for the development of opportunities
for Canadians from coast to coast. But they must proceed
through close collaboration with the provinces. Regional
development cannot be approached on the basis of rigid
jurisdictional spheres of action, for that could only result
in the continuation, if not aggravation, of existing
interregional disparities.

68. The need is for closer federal-provincial
co-operation, both in planning and in implementation,
than has hitherto been the case in most fields. The
new department’s proposed programmes are being, and
must be, structured for such co-operation. This will
be discussed with the provinces before final decisions
are taken.

69. In that spirit, the federal and provincial
governments together can meet the expectations of people
in disadvantaged regions for a better chance to share in
the growth and development of Canada as a whole.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL
BRIEFING PAPER

The Constitutional Conference – February, 1969

AMNDING PROCEDURE AND PROVISIONAL ARRANGEMENTS

Timing of Discussion

1. Discussion of an amending procedure started at the
federal-povincial level in 1927. In October, 1964, the Prime
Minister and Premiers announced agreement on the Fulton-Favreau
formula, details of which are discussed in the Appendix to this
paper. The formula was subsequently approved by the legislatures
of the nine other provinces but in January, 1966, Premier Lesage
of Quebec advised Prime Minister Pearson that he intended to
postpone indefinitely further consideration of the formula.

2. Various reasons can be suggested for the failure of
the formula to achieve universal acceptance. Theprocedure for
adoption of the formula was based on the same premise as that
contained in the formula itself – that for an important change
in the constitution there would have to be unanimous approval
of Parliament and all of the legislatures. The system of
delegation provided would require the agreement of four provinces
before it could be used in any particular case. This potential
rigidity caused concern both among those who feared that it
would be an obstacle to “centralizing” amendments or delegation,
and those who feared that it might prevent “decentralizing”
amendments or delegation. The difficulty of getting unanimous
legislative agreement, given the constantly changing political
currents in the eleven jurisdictions of Canada, was illustrated
by the inability to achieve unanimous agreement on the formula
itself.

3. The formula was the result of 37 years of sporadic
public and governmental discussion of this problem, including
consideration by federal-provincial conferences in 1927, 1955,
l950, 1960-61 (meetings of Attorneys General), and 1964. These
discussions were held in the context of the existing constitution:
the failure to reach agreement on means for amending that
constitution is no doubt one of the causes of the widespread
desire for a general review of the constitution itself. There
seems to be little point in taking up once again discussions
commenced 42 years ago which have failed in the context of the
existing constitution to achieve any results.

4. It would appear much more sensible to give priority

to the review of the substance of the constitution and after we
have a much clearer idea as to what the contents of the revised
or new constitution might be we can then discuss much more
intelligently an appropriate amending formula. For example, if
we were to adopt a system of concurrent powers in many of the
key areas in the new constitution, there might be much less
need for flexibility in the amending procedure.

5. The question of “provisional arrangements” closely
parallels that of the amending process. The “provisional
arrangements” presumably would be those which would provide

for the adoption and coming into force of a new or revised
constitution including interim arrangements. Until we have a
better idea of the concepts to be embodied in the new constitu-
tion, it would be inappropriate to consider the method of its
adoption. If, for example, we are proceeding in the new
constitution on the basis of some theory of popular sovereignty,
as a substitution for the ultimate sovereignty in constitutional
matters of the United Kingdom Parliament, we would perhaps

wish to consider some system of referendum for its adoption.

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If discussions should lead to a conclusion that there should be
five provincial legislatures rather than ten, would it be
appropriate to make the adoption of the constitution subject to
the approval of the existing ten? If the Senate is to be
reformed, we may or may not wish it to have a role in the process
of adopting the new constitution or amending it. For these
reasons discussion of provisional arrangements should also follow
after discussion of the substance of the constitution.

6. The Prime Minister might therefore make the point

that he had not proposed this matter for the agenda originally
because it had not yet been discussed in the Continuing Committee
of Officials and because the federal government considers it

more appropriate that this matter be left for serious discussion
until after the review of the remainder of the constitution is
much farther advanced. He could, however, mention, in passing,
various possibilities which we will have to keep in mind with
respect to the provisional arrangements and the amending procedure.
Some of these will be examined briefly below.

Possible Provisional Arranwements and Amendment Procedures

7. Possible Provisional Arrangements – These arrangements
would provide the means for the replacement oi‘ the existing
constitution with a new or very extensively revised constitution.
The need for such arrangements would not arise if in the end

we are only concerned with a few specific changes in the constitu-
tion which would presumably be made under whatever amending
procedure is decided upon.

8. we could adopt a new constitution by some purely
Canadian means without any involvement of the United Kingdom
Parliament. It is unthinkable that the United Kingdom would
object, and as long as the new constitution is developed and
promulgated by some process fairly representative or most Canadians,
it would no doubt be generally acceptable to the Canadian public.
This kind of procedure would be based on the premise that the
basic norm of the Canadian constitution is that it now rests,

not on the “command” of the United Kingdom Parliament, but on

the will of the Qnadian people. Quebec in its proposition
4.26.48 stated that “ultimate sovereignty rests with the Canadian
people”. In the federal publication “The Constitution and the
People of Canada”, we refer at page 6 to the maintenance of a
society “in which the ultimate sovereignty of Canada is to be
found in the people which comprise it”. This attitude no

doubt most closely corresponds to the general assumption of

the Canadian people: that is, that if we can decide as to what
kind of constitution we want, we have every right to adopt it
without reference to any external Parliament. Popular sovereignty
of this sort need not be inconsistent with constitutional
monarchy. The constitutional monarch derives his authority from
the constitution and laws, and the constitution in turn is
derived from the will of the people expressed either directly
through a referendum or through elected representatives in the
various governments or assemblies.

9. The adoption of a new constitution by a Canadian
procedure without any concurrent action by the United Kingdom
Parliament might however create unnecessary difficulties.

Quebec in the proposition referred to (supra) implies that there
should be no action by the United Kingdom Parliament. However,
until Section 2 of the Colonial Laws Validity Act, 1865, and
section 7 of the Statute of Westminster, 1951, are repealed by
the United Kingdom Parliament, it is strictly speaking the
law both of the United Kingdom and of Canada that the British

-3-

North America Act is supreme and that neither Parliament nor

the provincial legislatures can legislate in any manner in-
consistent with that Act except with the sanction of the United
Kingdom Parliament. This fact might not concern many laymen

but it would certainly create some difficulties for the judiciary
who are obliged to uphold the laws of all of the relevant
legislatures, including that of the United Kingdom. If Canada
simply announces that it is going to ignore these provisions

we will have a situation somewhat similar in kind, if not in
degree, to that which has arisen in Rhodesia where the judges
have had to decide which system of law to apply. At best,

the failure to repeal these laws could give rise to troublesome
litigation. while no one would expect the United Kingdom to
object to making the necessary repeal (of Section 7 of the
Statute of Westminster, 1951), and while there would be no
thought of abandoning a new constitution simply because the U.K.
did object, nevertheless it would be legally much more correct

if at about the same time or shortly after we adopt a new constitu-
tion the United Kingdom Parliament were asked to make this change.
This would in no way detract from the fact that the new constitu~
tion would be “made in Canada”: we would simply be tidying up
some historic relics.

10. The greatest amount of continuity could be provided

of course if we asked the United Kingdom Parliament to amend the
British North America Act to provide for a procedure for the
adoption of amendments to, or a replacement of, that Act. This
was in essence what was contemplated in the Fulton-Favreau
formula with respect to providing an amendment procedure, and

a draft Act was prepared for passage by the United Kingdom
Parliament. This would provide the smoothest legal transfer

of the power to amend or replace the constitution because the
United Kingdom Parliament, still technically sovereign in this
area, would be delegating irrevocably its functions to some
Canadian agencies such as the Canadian Parliament and legislatures,
or a provisional assembly, or the people acting through a
referendum. Without this we would simply have an abandonment

of its powers by Westminster, and a new Canadian procedure
unsanctioned by that body which was theretofore recognized as
having the power to deal with our constitution. In such a

case the constitutional purist could question the legitimacy

of the new constitution~making agency, since it would not be a
direct heir of the previous agency. However, these objections
are not likely to find much support in Canada as long as the

new scheme appears to be adequately endorsed by most Canadians
directly or through their representatives. On the contrary,

the adoption of a new constitution by use of machinery supplied
by the United Kingdom Parliament would not be acceptable to

many Canadians, and would be a matter of indifference to the
others. The appearance of continuity could perhaps be maintained
by having the United Kingdom Parliament provide that its repeal
of Section 7 of the Statute of Westminster should come into
effect when the Governor General of Canada has advised Her Majesty
that a new constitution has been adopted by the people of Canada,
and when Her Majesty has made a suitable proclamation to that
effect. This would tie the British participation to a small
revision of one of their own statutes but it would carry with it
an implicit recognition of legitimacy of the new constitutional
structure in Canada.

11. As for a suitable means for the adoption of a
constitution in Canada, various possibilities exist. we could
base it on the agreement of all governments. conceptually this
has difficulties if our primary concern is the expression by
the constitution of the popular will. Governments should be

-4-

created by the constitution and the constitution by the people.
Politically, this also creates difficulties because experience
has shown that it is very difficult to get unanimous agreement
among all governments at any one time on any given matter. A
variation would be to require the unanimous approval of all
legislative bodies but many of the same criticisms apply here.
The political problem is even more acute at the level of
submission to the legislatures, as our experience with the
Fulton~Favreau formula has indicated. This is not to say that
governments and indeed legislatures should not be heavily
engaged in the process of devising a new constitution, for it
is they who have the most expertise and experience.

l2. For ultimate adoption of the constitution, however,

we may wish to consider seriously having a referendum. Conceptually
this would be most consistent with the notion of the ultimate
sovereignty of the people which has been suggested by the federal
and Quebec governments. A variation on this procedure would

be the use of a constituent assembly to which the public would
elect representatives in order to adopt a new constitution.

The purpose of such an assembly would presumably be to debate

the details of a constitution and this perhaps may better he

done by a body such as the Constitutional Conference and its
associated committees because it is here that the combined
expertise and experience can best be applied.

13. Possible Amending Procedure – Because this matter can
better be dea t wit once we have developed the substance of a
new constitution, it is only possible to speculate as to various
possible formulae.

l4. We could, of course, try the Fulton-Favreau forumula
once again since it was the first amending formula after 57

years of discussion to achieve at least the approval of the heads
of all governments. However, the rigidity of that formula did
not commend it to centralists nor, apparently, in the end, to
decentralists either. Conceivably in the context of a new kind
of distribution of powers it might be acceptable but it is
premature to make that Judgment.

l5. Moreover, we must keep in mind that in that formula
the amending procedure was tied to a system of delegation. (See
the Appendix for details.) we may wish to review our position
on delegation. For example, the technique as provided in the
formula was cumbersome, but if it were modified to permit
delegation to or from individual provinces it could be used to
further special status and the implication of that would have

to be considered.

l6. Since the Fulton-Favreau formula did, however, achieve

a fair measure of support or acquiescence, it may provide the
basis for further development. Instead of requiring the
unanimous consent of all legislatures for important changes,

we could simply require the approval of all governments which
history shows us is at least possible to achieve on occasion.

As a variation, we could leave it to each province to decide

in what way it would signify its assent. A more drastic variation
would be to apply the procedure permitting certain amendments

by the consent of two-thirds of the provinces, representing at
least 50 per cent of the population, to a wider range of subjects
including most of the distribution of powers except for things
such as language, education, and the bill of rights. If any

form of special status is to be contemplated, we could combine
this latter procedure with the right of Quebec, or perhaps

any other province, to nullify any federal law made pursuant to
any such amendment bearing on matters such as “property and

-5-

civil rights”. Another possibility would be to require the
consent of all provinces in at least three out of the four
Senate divisions, with at least one province in the fourth
Senate division also consenting. This would provide a veto for
both Ontario and Quebec.

17. Another possibility would be the use of a referendum.
In Australia, for example, amendments require the approval of
one or both the Houses of the Commonwealth Parliament plus the
consent through a referendum of a majority of voters in each

of a majority of the states and an overall national majority.
Although even this procedure is not easy to use – about five
amendments have been adopted out of 23 or 24 attempted – some
very major changes have been made in the Australian constitution
through this means. This might provide a means of effecting
necessary changes and avoiding obstructions by governments with
vested interests in the status quo. The conceptual basis for
the use of the referendum would be the same as noted above with
respect to the adoption of the constitution.

18. In any event, it is too early to discuss seriously

the details of an amending formula. it may be useful to suggest
these various possibilities in a general way without exploring
them further at this time.

19. Interim Amendments – The question may arise as to
whether we can make any amendments to the existinr constitution
during the course of what may be a very prolonged constitutional
review. It can be argued that certain matters ~ perhaps the
spending power or the taxing power, for example – rejlire early
change and should not have to await the inevitable delays
involved in the review process.

20. The appropriate answer to this question would appear
to be that if any such amendments are required, we should use
the existing methods of constitutional amendment. Any alternative
would require the development of a new constitutional amendment
process and for the reasons set out at the oeginx mg of this paper
it seems futile to try once again to achieve such a formula

in the context of the existing constitution.

21. In referring to the existing amending procedure, we
should avoid conceding that unanimous provincial agreement is
required for any kind of amendment. it true that the Fulton-
Favreau formula would have required such agreement and it is
also true that the acceptance of that formula by the federal
government was in part no doubt predicated on the assumption
that no significant amendment would now be sought under the
existing procedures without unanimous arreement. Nevertheless,
it must be kept in mind that the Fulton-Favreau formula, while
requiring unanimous consent, also provided tor delegation which
was intended to provide a measure of flexibility in an other
rigid system. we therefore are not committed to a requirement
of unanimous consent under any circumstances but only in the
context of that formula. Moreover, consent to that formula was
given on the assumption that all other governments and legislative
bodies would find it acceptable. when the formula failed to
achieve universal approval our commitment to it should be regarded
as having ceased.

22. The existing amending procedures could be used for

a piecemeal introduction of desirable changes in the constitution
as we develop them. For example, we could use it to adopt a

new charter of human rights. However, this conflicts with our

-6-

general approach in favour of a systematic and overall review.

We should therefore regard any interim amendment, unless it is
relatively minor in nature, as being undesirable and inconsistent
with the systematic revision of the constitution. Only in the
most extreme cases would it appear to be justifiable. Otherwise,
all other amendments should be withheld until such time as

we can clearly see that no new or significantly revised constitu-
tion is possible of achievement.

23. Conclusion – Our approach should therefore be that
we do not think it useful or advisable to discuss either

provisional arrangements or amending procedures at this time.
If interim amendments are absolutely necessary, we can make
use of the existing procedures.

24. Also, in talking hypothetically about future discussions
of the amending procedure and provisional arrangements, we could
mention some of the foregoing possibilities as worthy of considera-
tion to see what reaction might be forthcoming.

APPENDIX TO
BRIEFING PAPER

The Fulton-Favreau Formula

1. The Formula as approved by the heads of all governments in

October, 1964, provided as follows.

2. Amendment Procedures

(1)Amendments generally affecting provincial legislative
or executive powers, provincial property, or the use
of French or English required approval by Parliament
and all lerislatures. This probably applied both to
additions to, and subtractions from, provincial
legislative power.

(2)Amendments similarly affecting one or more, but not
all provinces, required approval by rarliament and the
legislatures of the affected provinces.

(3)Amendments relating no education other than
in Newfoundland required approval oy farliament and the
legislatures of all the other provinces; those relating
to education in Newfoundland, approval by Parliament
and the legislature of Newfoundland.

(4) Parliament could by itself amend the Constitution of
Canada relating to the federal executive and the Houses
of Parliament, except with respect to a variety of
matters such as the requirements of annual sessions
and periodic elections, and the allocation of membership
in both Houses.

(5) Provincial legislatures would continue to have exclusive
jurisdiction to amend provincial constitutions.

(6) Generally, all other amendments (including most or all
of the exceptions referred to in (4) (supra), could be
made by Parliament plus the legislatures of two-thirds
of the provinces representing at least fifty per cent
of the population.

(7) The power of the United Kingdom Parliament to amend
the Canadian Constitution was to be terminated.

3. Delegation Procedures

(1) Parliament could enact laws applicable in consenting
rovinces with respect to provincial matters of S.92(6)
(prisons), S.92(10) (local works and undertakings),
S.92(13) (property and civil rights) and S.92(16)
(matters of a local or private nature) if at least four
provincial legislatures consented. (If the nature of
the matter was such that it related to fewer than four
provinces, Parliament could so declare and only the
consent of the relevant province or provinces would then
be needed.)

(2) A legislature could enact laws with respect to any
federal matter, with the consent of rarliament and if
at least three other provinces also enacted similar laws.

(3) Consent could be revoked, termination the delegation,
though a provincial-to-federal delegation would be
terminated only as it applied to the revoking province
and not with respect to the application of the federal
law in other provinces which nad not revoked their
consent.

-2-

After this formula was approved by the Prime Minister and
Premiers, it was submitted to and approved by all provincial
legislatures except that of Quebec. On January 20, 1966,
Premier Lesage in a letter to Prime Minister Pearson
indicated doubts about the way the formula would be inter-
preted, said it had “caused some anxiety in Quebec”, and
referred to other developments which might affect the
adoption of the formula. He said that “in the circumstances,
the Government of Quebec has decided to postpone indefi-
nitely the consideration of the proposal for constitutional
amendment”.

THIS DOCUMENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA

Confidential
BRIEFING PAPER

The Constitutional Conference – February, 1969

MECHANISMS OF FEDERAL-PROVINCIAL RELATIONS

1. The Constitutional Conference of
February 1968 decided to include “Mechanisms of
Federal-Provincial Relations” among the six subjects
it was agreed should be examined. This question is
a perennial one at federal-provincial conference,
and has given rise to a good deal of concern and
sometimes controversy. The premiers speak of
federal-provincial consultation in fairly general
terms, but the subject usually arises in connection
with tax-sharing and fiscal arrangements, shared-
cost programmes, and federal programmes which have
a direct influence upon related provincial programmes.

2. The Tax Structure Committee also has
concerned itself with this question in the fiscal
and economic fields: in its terms of reference,
approved by the Federal-Provincial Conference, this
Committee was called upon to study “Intergovernmental
Liaison on Fiscal and Economic Matters”. Pursuant
to these terms of reference, and with the concurrence
of the provincial representatives, the Canada Department
of Finance commissioned the Institute of Intergovernmental
Relations at Queen’s University to do a study of this
subject, and the Institute’s report was submitted in
October 1968. The two concludinn chabters have been
distributed to all the members of the T.S.C., with a
covering note from the Minister of Finance pointing out
that “the release of this report cannot be taken to
imply acceptance by the Government of Canada of any
statements, conclusions or proposals contained in the
report”. While the report has not been released to
the public, reference may be made to it in the course
of the Constitutional Conference, and consequently an
appreciation of its contents may be helpful. A summary
of the conclusions and recomrendations is attached as
Appendix “A”.

3. The ourpose of this briefing paper is
not, however, to make concrete recommendations with
respect to the mechanisms of federal-provincial
relations, but rather to examine

(1) the relationshio between the Constitution
and mechanisms For federal-provincial
relations,

(2) the present machinery for federal-provincial
consultation and its weaknesses,

(3) the problems which arise because of provincial
attitudes to federal-provincial consultations,

(4) the problems which arise because of the federal
approach to intergovernmental consultation.

The briefing paper will conclude with a suggested preliminary
position which the Prime Minister might adopt in discussing
“mechanisms of federal-provincial relations”.

Relationship Between the Constitution and
Mechanisms for Federal-Provincial Relations

4. There are probably four reasons this
question has been placed upon the Agenda:

(1) because most provincial governments tend generally
to think in operational rather than in
constitutional terms, they attach a good
deal of importance to federal-provincial
consultation;

(2) there seems to be an intuitive if not an
explicit recognition on the part of
provincial governments that the list of
concurrent or overlapping federal and provincial
powers is bound to be large in present social
and economic circumstances, and that in
consequence the need for intergovernmental
consultation will tend to grow;

(3) similarly there is an implicit recognition
that even in the exercise of exclusive powers
the federal government is bound to affect the
programmes of provincial governments;

(4) it is acknowledged that the occupancy of tax
fields by the federal and provincial
governments is now so great as to call for
some attempt to reconcile competing priorities
in determining the rate of growth of the
government sector.

5. The Position of the Provinces. The
provincial governments which have submitted constitutional
propositions in respect or the “mechanisms of federal-
provincial relations” have suggested that “the written
Constitution should recognize intergovernmental consultation
and cooperation as an essential element in the efficient
administration of the Federation” (Ontario). Quebec
has recommended constitutional provision for “an annual
conference of union and member-state heads of government”;
Ontario has suggested “provision for a permanent
intergovernmental affairs secretariat”; and Quebec
has sugg sted that “the Constitution should provide for
reaching intergovernmental acreements which would be
constitutionally binding on all subscribing parties and,
in any case of conflict, could be interpreted by the
Constitutional court”. Provincial representatives on
the Continuing Committee have tended to support views
along the line of these three propositions, though some
of them have reservations about the establishment of a
permanent secretariat.

6. On specific matters the Government of
Quebec argues that “the Constitution should provide for
the establishment or a stunning intergovernmental
commission on taxation … to prepare taxation arrangements
for set periods” (see briefing paper on “Provincial
Taxing Powers”).

The same government has proposed
“The economic policies and their fiscal,
monetary, trade and other components should
normally be arrived at by a continuing and
systematic consultation and consultation by
member-states and the federal government;
they should be implemented by all governments
acting in concert each in its own area of
constitutional Jurisdiction.”

These excerpts give some of the flavour of provincial
attitudes toward intergovernmental consultation:
Appendix “B” contains the propositions which have been
submitted on this subject.

7. The Federal Position. The federal
government’s general position has been stated in
Federalism for the Future:

“We question whether it is any longer
realistic to expect that some neat
compartmentalization of powers can be
found to avoid this. Instead we suspect
that the answer is to be found in the
processes by which governments consult
one another and by which they seek to
influence each other before decisions are
finally taken. This remedy has been
prescribed so often as to appear commonplace.
But there is much to be done even in coming
to understand the processes of intergovernmental
influence, to say nothing of perfecting the
machinery by which intergovernmental consultation
takes place. Nor will we find the “participation”
of provincial governments in federal government
decisions, and vice verse, to be an easy
answer to the problems of consultation. The
federal government must remain responsible
to Parliament, and the provincial governments
to their legislatures; federal-provincial
conferences must, it seems to us, occupy
themselves with the art of influence rather
than the power of decision-making.”

8. In meetings of the Continuing Committee
federal officials have tended, quite unofficially, to
take a sympathetic view of the proposal that the
Constitution provide for a federal-provincial conference
of first ministers, and for annual meetings of that
conference. However, the federal delegation has
questioned the wisdom of attempting to go further than
this, for fear of introducing rigidity in the structure
of federal-provincial consultation and for fear of
imposing an unnecessary restriction upon the federal
and provincial governments in future decisions with
respect to Cabinet portfolios and internal organization.
Provision in the Constitution for the Federal-Provincial
Conference would be based upon the assumption that it
would not have any powers beyond consultation: it would
not limit in any way the legislative powers of Parliament
or provincial legislatures, or their use

The Machinery of Federal-Provincial Consultation

9. The machinery for federal-provincial
consultation is surprisingly extensive and complex.
It consists of some 170 federal-provincial and
interprovincial bodies, at last inventory, most of which
meet regularly once a year. The most important of
these is the Federal-Provincial Conference of
Prime Ministers and Premiers, and the Constitutional
Conference made up of the same Ministers. Also
concerned with overall government activity is the
Committee of Ministers of Finance and the Tax Structure
Committee. Most Ministers of programme departments
also meet regularly in committee, usually in federal-
provincial meetings (Health, Welfare, Manpower, Labour,
Agriculture, etc. , but occasionally in interprovincial
meetings (Education).

10. The ministerial conferences usually
are served by committees of Deputy Ministers or experts:
examples include the Continuing Committee on the
Constitution, the Continuing Committee on Fiscal
and Economic Matters, the Deputy Ministers of Health,
the Deputy Ministers of Welfare, etc. In addition to
these top-level committees there is a wide range of
sub-committees and technical committees, ranging from
the Canadian Association of Administrators of Labour
Legislation through to the Committee on Caribou
Preservation. A complete inventory of intergovernmental
machinery is attached as Appendix “C”.

11. The secretariats to federal-provincial
conferences and committees are almost always provided
by the Government of Canada (usually by the programme
departments concerned). In three instances, however,
secretariats were established after first obtaining
provincial concurrence: the secretariat to the
Constitutional Conference, the secretariat to the
Tax Structure Committee, and the secretariat to the
Committee on Financial Institutions and Securities
Regulation. The only permanent and independent
secretariats are those serving interprovincial
conferences – the Council of Ministers of Education –
and quasi independent bodies – the Resources Ministers
Council.

12. Not all federal-provincial committees
have been established through the auspicies of the
Federal-Provincial Conference of First Ministers;
indeed most of the ministerial committees and the
committees of officials which serve them were established
by the programme ministers themselves. Moreover, a few
of them operate almost as quasi, independent associations –
as professional organizations or special interest groups –
even though they serve as vehicles for intergovernmental
consultation. Examples include the Canadian Council of
Resource Ministers and the Mines Ministers Conference.
some of the committees of officials operate as advisory
councils to federal ministers – notably the Dominion
Council of Health – and include members who are not
representatives from the federal or provincial
governments. There are also some important
interprovincial committees, starting with the
Premiers Conference and ranging through the Ministers
of Education, the Prairie Economic Council and the
Atlantic Premiers Committee.

13. A number of weaknesses are apparent in
this intergovernmental machinery. Perhaps the most notable
is the relative lack of integration as between the
Federal-Provincial Conference of First Ministers and
the other ministerial conferences and the officials’
committees which serve them. A good many ministerial
conferences, indeed, do not regard themselves as
committees of the Federal-Provincial Conference. It
is left to individual governments to harmonize the
views expressed by their ministers at the several
Federal-Provincial Conferences and Committees; and
this is not always fully achieved. Secondly, secretarial
arrangements generally are provided on a quite informal
basis by the federal departments concerned, with the
result that federal-provincial committees often appear
to be dominated by the Government of Canada, and with
the further result that the arrangements often leave
something to be desired. In particular, agendas and
briefing papers (if any) frequently are not sent to
provincial governments sufficiently in advance. and
administrative erranyements for the meetings have
sometimes been rather casual.

14. However, the principal problems of
federal-provincial liaison find their roots not so
much in the machinery for consultation, but rather in
the attitudes and expectations which prevail in respect
of the processes of federal-provincial consultation.
This is the subject of the next two sections of the
paper.

The Nature of Consultation: The Problem of
Attitudes

15. A good many of the frictions in
federal-provincial relations can be attributed
to misunderstandings as to what is meant by intergovern-
mental consultation, differences over what ouvht to
be expected of such consultation, and confusion as to
when and how federal-provincial consultations ought
to be undertaken. This is not to suggest that
intergovernmental liaison in Canada has been ineffective,
or that it is fraught with friction: in fact, enormous
progress has been made in the past decad It nonetheless
remains that federal-provincial consultation is
not meeting provincial expectations.

Provincial Attitudes re Consultation

16. By and large the provincial governments
have an idealistic, even a simplistic view of the
objects of consultation. They expect the federal
government to consult the provinces before it takes
any actions which will affect them, and they sometimes
seem even to expect that the Government of Canada will
be bound by any provincial consensus which emerres from these
consultations. These expectations obtain not only with
respect to the initiation of shared-cost programmes, but
also with respect to the argregate level of certain
federal taxes, and some federal expenditure programmes,
such as economic development measures like ADA. To
understand the nature and the extent of provincial
disillusionment over the mechanisms of federal-
provincial relations one must understand both these
expectations and what lies behind them.

17. “Provincial consensus” and the federal
government. The provincial governments seem not to
distinguish, when discussing federal-provincial
consultation, between matters which lie within the
exclusive jurisdiction of the provinces, matters in
respect of which there is concurrent jurisdiction,
and matters which lie within federal jurisdiction.
The result is that the understandable indig ation
over the unilaterial use by the federal government
of its spending power to start programmes which lie
within provincial jurisdiction tends to be carried
over into policies and proprammes which clearly lie
within federal jurisdiction. The suggestion, albeit
implicit, that the federal government has an obligation
to consult the provinces in respect of such matters
as monetary policy, for example, in turn arouses
federal indignation. Some greater clarity of thinking
as to when there is an obligation to consult and when
it would simply be desirable to consult, and some
greater clarity as to the circumstances under which
the federal government ought to be bound by the
representations of the provinces (e.g. shared-cost
programmes), would do a great deal to resolve some
of the present misunderstandings.

18. Confederalism versus Federalism. When
the provinces argue that a federal-provincial
conference or committee ought to be able to make
a “decision” which will be binding upon the Government
of Canada, they seem to be thinking of Canada as a
kind of “confederal state” in which member-states
are able at intergovernmental conferences to enter
into binding agreements. An example of this confusion
is the suggestion on the part of certain premiers
that the alleged failure or the federal-government to accept
the conclusions reached by the Tax Structure Committee
(the provincial members of the Committee) represented
a breach of faith on the part of the Government of
Canada. It would be helpful if the provinces came to
understand that a decision of the “member-states” as to
how Parliament ought to exercise its Jurisdiction can
have no binding force.

19. The Federal-Provincial Conference versus
Parliament. A related misapprehension on the part of
certain premiers is the tendency to believe that the
federal-provincial conference can make decisions which
will be binding upon Parliament. In fact, of course,
all a premier or Prime Minister can do at a conference
is to undertake to recommend a certain course of action
to his colleagues and to the legislative body to which
he is responsible – a fact which should surely be
recognized after the Fulton-Favreau difficulties. This
misconception as to the role of federal-provincial
conferences is more understandable, on the other hand,
when one considers the nature of most provincial
governments in Canada – majority governments which have
been in power for years, a tradition of strong premiers,
a history of relatively weak politicians in the
legislatures, relatively homogeneous provincial
interests, etc.

20. Lack of Understanding as to how the
Federal Government Operates. Provincial politicians
tend to think of Parliament and the Government of
Canada as being similar to their legislative bodies
and governments. They don’t fully appreciate the federal
character of the Cabinet in Ottawa; they have little
appreciation or the conflicting forces which must be
reconciled in reeohingla decision; they have no feeling for
the complexity and the scale of the processes of
policy formulation in the Government of Canada; and
they cannot conceive of the heterogeneity of the
federal bureaucracy. The result of all this frequently
is a misunderstanding of the federal government’s
motives: unwillingness to make a binding decision at
a federal-provincial conference is regarded as
“unco-operativeness”; the search for solutions which
will reconcile Canada’s conflicting interests is looked
upon as muddy thinking; and the failure to harmonize
federal policies so as to maximize the results in each
region of Canada is looked upon as a failure to
recognize the interests of the several regions.

21. The Assumption “No Political Problems
in Ottawa”. Some of the attitudes and the demands
of provincial ministers and officials suggest that
they look upon Ottawa as a place where political
considerations are or ought to be absent. The
political pressures upon Parliament, for example,
to start new shared-cost programmes often seem to
be forgotten: and the expectation that federal politicians
will raise enormous sums of money to be paid
unconditionally to provincial governments, thus
enabling provincial politicians to “take the credit”,
reveals a simplistic faith in the political purity of
the Parliament of Canada. These attitudes, like others,
may be postures assumed for barraining purposes; on the
other hand it does sometimes seem that they are the
consequence of looking upon the Government of Canada as
a kind of “father figure”.

22. Operational Implications of Consultation.
Another problem in federal-provincial relations is that
provincial ministers and officials frequently have not
thought through the implications of their demands for
consultation. They seem not to take into account the
responsibility of the government to inform Parliament
first of its policy decisions; they are not fully aware
of the need for Cabinet secrecy or Cabinet solidarity
even where discussions with the provinces are involved;
they have no conception as to how federal policy
formation and execution could be paralysed by the
kinds of consultation which are suggested – an example
is monetary policy; and they seem to have no appreciation
of the amount of time which would have to be spent in
consulting with the provinces if all the provincial
expectations were to be realized.

23. The Assumption of “No Reciprocity”.
Provincial governments seem frequently to ignore the
implication that if the federal government ought to
consult the provinces in respect of matters which are
within the exclusive Jurisdiction of Parliament, the
provinces ought to consult the federal government in
respect of matters which are within-the exclusive
Jurisdiction of the legislatures. Examples abound:
many provinces want a voice in monetary policy but
they would be horrified if the Government of Canada
asked for a voice in education policy; the provinces
generally think they ought to be able to tell the
federal rovernment how high its income taxes ought to
be, but they would regard any federal suggestions
concerning the level of gasoline taxes as an invasion
of their jurisdiction: most provincial governments
feel free to comment on the level of social security
payments, such as family allowances, but they would
resent bitterly any federal comments upon the level of
their social aid payments; and the demand for federal-
provincial discussion on “priorities” seems sometimes
to suggest that only federal expenditures ought to be
examined.

24. Mistaking “Handouts for Harmony”. There
is an unhappy tendency for many premiers to reduce
every federal-provincial discussion to a demand for
more money from the federal government, and, if the
money is not forthcoming, to charge that the Government
of Canada is embittering federal-provincial relations
and balkanizing the country. The more positive and ,
far-reaching objectives of federal-provincial consultation,
such as the revision of the Constitution or the
harmonization of fiscal policy, are not of first
interest to the Premiers, it seems.

25. Provincial Homework and Provincial
Proposals. Another reason for provincial misunderstandings
of the nature of the consultative process is the failure of
most provincial governments to do their own homework
and to come up with their own proposals. The consequences
of this assume many different forms. One is that
provincial ministers or officials do not understand
the central issues involved in questions under discussion,
and therefore regard “federal consultations” as having
been inadequate. Another is that advance notice of
federal proposals is demanded to enable provincial
officials to develop a provincial position – that is to
say “provincial positions” take the form of criticisms
of federal proposals. Still another, and probably the
most serious result is the tendency for ministers to
accept uncritically and repeat with conviction
generalizations which cannot be supported by an objective
examination of the facts. Evidence of the failure of
most provincial governments to invest enough effort in
federal-provincial relations is not hard to find: a
large proportion of the provincial propositions with
respect to the Constitution, with the notable exception of
Quebec and New Brunswick, are really quite superficial;
only Nova Scotia and Quebec submitted any positive
proposals when fiscal arrangements were being discussed
during 1965 and 1966; indeed, the great bulk of provincial
proposals tend to take the form of requests for increased
federal aid to provincial governments.

26. Ottawa as the “bete noir”. Related to
the tendency of provincial governments to wait for
federal proposals in order to criticize them, is their
tendency to blame Ottawa for all of the provincial
failures. If provincial governments must raise their
taxes it is because Ottawa has failed to transfer
enough fiscal resources to them. If housing is
inadequate, it is due to the federal government’s
lending policies. If provincial welfare programmes
are inadequate, Ottawa ought to increase its contributions
or alternatively turn over to the provinces full
responsibility for social security measures. The
consequence of this tendency is not only to exaggerate
federal-provincial frictions, but also to convert
federal-provincial discussions from dialorues concerning
the best ways to solve the diverse problems of a country
in which there are diverse interests, into a confrontation
between the federal-government on the one hand and the
provinces on the other.

The Approach of the Government of Canada to
Federal-Provincial Consultation.

27. These are some of the provincial
attitudes which will have to be recognized and
re-examined by the provinces if intergovernmental
consultation in Canada is to be improved. Concurrently,
the federal government must examine its shortcomings
in its approach to federal-provincial relations if
it is to contribute to this end.

28. The Spending Power and The Taxing Power.
It is difficult to exaggerate the effect upon
federal-provincial relations of differences of opinion
concerning the federal spending power and the federal
taxing power. Ministers and officials in Ottawa have
considered it appropriate to use the spending power where
“the national interest” was seen to attach to some
field of public policy. Little attention was paid to
the de facto effect upon the provincial governments
and their constitutional powers. The result has
been an accumulation of resentment that now seems
likely to be overcome only by some limitation on
the right of the federal government to use its
spending power (if not the limitation or elimination
of the spending power itself).

29. As for the federal taxing power, it
is equally difficult to over-estimate the profound
misunderstanding on the part of the provinces as to
the extent of the federal government’s taxing powers,
relative to those of the provinces. It is an accepted
provincial gospel that the Government of Canada has
unlimited taxing powers and unlimited borrowing powers,
and that only perversity on the part of federal
politicians prevents the sharing of this good fortune
with the provincial governments. Not enough effort
has been made, over the years, to dispel these
mistaken notions, through a detailed review, tax
field by tax field, of the potential for greater
federal or provincial occupancy, and the reasons for
a dominant federal position in certain of them.

30. The Heritage of Past Mistakes. Related
to this first point, is the effect upon current federal-
provincial relations of the mistakes of the past. One
need refer only to two or three examples to illustrate
the importance of these mistakes, and the importance of
establishing in the minds of provincial governments the
willingness of the federal government to take a whole
new approach to federal-provincial relations. Probably
the most vivid illustration is the Liberal Party
platforms of 1962 and 1963, and their subsequent
implementation. Promised were a national pension plan,
student loans and bursaries, youth allowances, a
municipal development and loan fund, all of them in
fields of provincial or concurrent Jurisdiction. And
most of them were started without any consultation with
the provinces. A second and a related example was the
establishment of an area development programme, the
main outlines of which were established long before
any consultation with provincial governments (consultation
really took the form of “information”). A third example
was the announcement to the 1966 Federal-Provincial
Conference of a fundamental reform in cost-secondary
education and manpower training programmes, without
the slightest advance consultation. However good the
explanations may be for introducing these programmes
the way they were, the provinces regard these ventures
as evidence of an extreme cynicism on the part of successive
federal governments as to the role and function of provincial
governments. A discussion or the underlying constitutional
principles is fundamental to the “clearing away” of
this unhappy heritage.

31. The Understanding of Provincial Governments.
The third reason the federal approach to intergovernmental
consultation has been less than successful is the
relative lack of understanding in Ottawa of provincial
government – the interests with which provincial
politicians must grapple, the manner in which provincial
cabinets and bureaucracies function, the internal
interrelationships between ministers and between officials,
etc. It is only by understanding provincial governments
that one can come to appreciate why it is they behave
the way they do (a lesson which has been learned better
in the international field than in the domestic). One
must understand, for example, the level of comprehension
of ministers and public servants, in order to perceive
what they mean by consultation, and what kind of
consultation would be effective. To take one
illustration, the fact is that most provincial people
simply don’t understand the functioning of Canada’s
financial markets and of monetary policy, and this
is one of the reasons they make what seem to the
sophisticated to be rather foolish demands for
continuing consultation in respect of Bank of Canada
policy. One must understand the role of provincial
premiers in relation to their cabinets and their
ministers and their legislatures to understand the
expectations of provincial people in respect of federal
government performance. And other examples could be
given. The fact is that the Government of Canada has
only now begun to develop a central information system,
one which ultimately will be able to bring to bear upon
policy formulation a thorough understanding of provincial
governments.

32. An Overall Federal Strategy. It will
be evident from what has been said that one of the
weaknesses in the approach of the Government of Canada
to federal-provincial relations is the seeming absence
of an overall strategy, and of related tactics. There
has been a substantial proliferation of federal-provincial
meetings, and of federal-provincial units in operating
departments in Ottawa, and there is no doubt that
the quantity and quality of consultation has been
greatly improved at these levels. However, the critical
problems lie not in relations between federal and
provincial programme departments, but in the relations
in respect of the central aspects of government.
Provincial ministers and public servants expect to be
able to go to one person in Ottawa, or at least a very
small number of people in Ottawa who will know something
about most provincial programmes, and who will know how
the federal programmes affect them. The absence of
such a person, or few people, is to them remarkable; they
tend to regard this as at least a manifestation of the
too-low priority which the Government of Canada attaches
to provincial governments and their problems. This is
understandable, given the perspective from which provincial
ministers and central policy advisers operate: the
possess an overall perspective of what goes on wit in their
governments (obviously simpler in smaller governments),
and they fail to understand why the same situation does
not prevail in Ottawa. From the point of view of the
Government of Canada, on the other side, the absence in
the past of such an integrated core has undoubtedly
contributed to the failure of the federal government to
develop and apply a unified approach to Canadian
federalism and day to day federal-provincial
problems.

33. The Need to Visit Provincial Governments
Related to the above two points, is the dissatisfaction
of provincial officials with the extent to which
central policy advisers in the Government of Canada
visit the provinces to see what is going on, first
hand. Again, there is a lot of coming and going
between officials and programme departments, and on
the part of the many federal-provincial relations
specialists who have been engaged by most federal
agencies. What is needed is more visits from central
policy advisers who want to learn about provincial
problems vis-a-vis the federal government, and vice versa.
Aside altogether from the grievances of provincial
officials in this regard, the perspective that one
gets from visiting provincial people on their home
ground is greatly different than that which is gained
from sitting behind a desk in Ottawa. It must be
observed, however, that these visits must be from
very senior people: sending relatively junior or
intermediate emissaries would not accomplish the
objective, either from the provincial or the federal
government’s point of view.

34. The Need for Early Consultation. One
of the major provincial complaints is the failure of
the Government of Canada to consult the provinces
early enough in respect of proposed changes in policy
or programme (where the provinces would be materially
affected). Essentially this means, in provincial
eyes, discussions before the final outlines of federal
policy have been determined. Experiments in this
direction reveal both that early consultation is
possible, and that the provincial governments are
relatively easily satisfied: the extent to which
provincial ministers accepted the new equalization
formula, and acquiesced in the main policy lines of
the new white paper on prices and incomes, are examples.

35. The Nature of the Consultations. “Prior
consultation” raises in the minds of federal public
servants the possibility that provincial people will
attempt to take advantage of the consultations by
arguing that the federal government ought not to proceed
until provincial “agreement” is obtained. This is a
danger, particularly with respect to a very few public
servants, and with respect to the more emotionally-charged
subjects. But in many cases consultation with provincial
ministers and officials, where federal jurisdiction is
acknowledged, amounts to little more than an “educative
session”. This is particularly true of areas of policy
such as monetary policy, where the capacity of provincial
people to engage in a dialogue is really very limited.
Indeed, one of the great advantages of this kind of
consultation is that it dissolves grievances which
are based upon rather simplistic notions as to what is
involved in the formulation or execution of certain
federal policies.

36. Consultation With Whom? Some of the
breakdowns in federal-provincial communication are
attributable not to the failure of federal officials
to speak to provincial officials, but rather the
failure of provincial officials to communicate
adequately to their ministers what has transpired at
the official level. This may be due to a failure on
the part of the provincial official to understand
what transpired in such consultations, or it may be
due to a tendency on his part to communicate to his
ministers only what his own prejudices or those of his
minister might dictate. It is important, therefore,
to maintain a structure of consultation which involves
ministers as well as officials, and, occasionally,
consultations between very senior federal officials and
selected provincial ministers.

37. Diplomacy versus Confrontation. Finally,
one of the objectives of consultation must be the
identification and discussion of weaknesses in the
provincial positions. There has been a tendency, at
both the ministerial and official level in Ottawa, to
allow provincial “myths” and “slogans” to be perpetuated,
and even to grow and to come to reinforce one another.
There are occasions when frank and tough discussions
are superior to diplomacy as a method of resolving
federal-provincial frictions

Possible Federal Position at the Constitutional
Conference.

38. It is difficult to predict how extensive
the discussion of “The Mechanisms of Federal-Provincial
Relations” will be. It may be that the Conference
will refer this question back to the Continuing Committee
after a very preliminary discussion, in view of the fact
that the subject has scarcely been considered by officials
There are, however, some points which the Prime Minister
might wish to make in launching the discussion, and some
rejoinders he may feel obliged to employ.

39. First, it would be possible to indicate
at the outset the willinsness of the Government of
Canada to consider providing in the Constitution for the
Federal-Provincial Conference, and to provide for annual
meetings of that Conference. This could well be
interpreted by many provincial governments as a
recognition by the Government of Canada of one of their
longstanding grievances (that the Conference is “a tool
of the federal government, to be convened at Ottawa’s
convenience”).

40. Secondly, the Prime Minister could,
without referring to the Burns’ Report, suggest that
other Ministerial Conferences ought to be recognized
as committees of the Federal-Provincial Conference.
Such a statement would not require elaboration: the
Continuing Committee could be asked to discuss the
details of intergovernmental machinery in order that
the proposal could be elaborated upon. Similarly the
Committee could be asked to consider the structure of
officials’ committees to the same end.

41. Thirdly, and perhaps most important, the
Prime Minister might wish to explore what the Premiers
mean by consultation and what their expectations are.
In doing this, he could use the “check list” of attitudes
outlined in paragraph 16 (page 5) to paragraph 37 (page 11).
This would be relevant to the constitutional discussions
since it would be inconsistent with Canadian federalism
to provide in the Constitution for a Federal-Provincial
Conference which had the “power” to limit the use by
Parliament of its powers (or the use by legislatures of
theirs), whereas it would be consistent to provide for a
Conference the objective of which was to exchange “influence”
in respect of the exercise by Parliament and the
legislatures of their respective jurisdictions.

Other Questions Which May Arise

42. There are in addition to these general
questions concerning federal-provincial consultation,
certain specific ones which may be raised, and in
respect of which some response may be expected.

43. The Secretariat. Proposals have been
made in the past that a permanent intergovernmental
secretariat (or secretsriats) should be established
to serve the federal-provincial conference of prime
ministers and premiers and the other major federal-
provincial bodies. Such a secretariat would be made
up of a staff independent of all governments responsible
to a secretary who would report to the federal-provincial
conference he was hired to serve.

44. There are a number of difficulties
associated with such a proposal:

(1) Formal appointment and direction by the
conference might well come to require
some method of reaching “decisions” –
i.e. how many votes would each delegation
have in deciding who the secretary should
be and what direction he would receive?

(2) Who would direct the secretary – the
Prime Minister as chairman of the
conference? Or would the provincial
governments feel they should be able
similarly to give directions in matters
which concern them?

(3) Would such a secretariat be empowered
to do “staff work” for the conference
and its committees? If so, the
preparation of “policy papers”, even if
the conclusions were implicit, eventually
would put the secretary in competition
with certain governments and their advisers
Even the preparation of “background papers”
would court this danger, where emotionally-
charged subjects were involved.

(4) The more staff work a secretary does
the greater the likelihood that he will
come to duplicate work which had been done
or was proceeding within the participating
governments.

45. The manner in which this issue has been
resolved, so far, has been described earlier – namely,
the provision of a secretary by the federal government
who is known to be acceptable to the provinces. This
is the product of a good deal of progress: from the
time when secretariats were federal officials seconded
from their regular work to serve conferences as they
were convened; to the selection of a federal crficial
acceptable to the provinces who served as secretary on
a part-time basis (the Tax Structure Committee and
the Committee on Financial Institutions): to the
selection of a federal official, after pollinr the
provinces as to his acceptability, who serves full-
time in quite independent capacity (The Constitutional
Conference).

46. The role of the secretary has largely
been confined to the difficult tasks of recording
discussions (sometimes in the form of working papers
submitted by subordinate committees to the main
conferences), making appropriate administrative
arrangements, and, more hopefully, acting as an
“honest broker” between governments where an impasse
has been reached in respect of a particular question.
Few “background papers” have been prepared; one of
them, the Tax Structure Committee projection of
revenues and expenditures, having given rise to a
considerable misunderstanding as to whether the
study was simply an objective projection of public
finances, or whether it was an implicit recommendation
to the federal government (which the federal government
“ignored”).

47. If the question of an independent
secretariat arises, it is suggested that the Prime
Minister might question the premiers as to how these
difficulties would be overcome. He might also ask
whether the arrangements for the Constitutional
Conference are satisfactory, and if so whether this
might not be a desirable pattern for the future. No
decision needs to be reached on this question; indeed,
the Continuing Committee has scarcely discussed it.

48. Interprovincial Meetings. There is a
growing tendency for provincial governments to
establish interprovincial bodies for the purpose of
discussing interprovincial as opposed to federal-
provinciel matters. The first of these was the
Premiers Conference (established in 1960); then the
Council of Ministers of Education; then the Ministers
of Health met in this way: and now Quebec has suggested
a Council of welfare Ministers (Provincial). The
Government of Canada is usually invited to send an
observer. One of these bodies has a full-time
secretariat (Council of Ministers of Education), and
it has been suggested that the Ministers of Welfare
ought to be similarly equipped.

49. In fact, these bodies frequently
discuss federal-provincial matters: indeed the
Premiere Conference has taken, since the departure of
Premiers Frost and Lesage, to passing “resolutions”
and sending wires to the Prime Minister, as a Conference
There is nothing the Government of Canada can or
ought to try to do to stop the Premiers from “gauging
up”, as Mr. Frost used to describe it, but the occasion
may arise when the contribution of such actions to
federal-provincial harmony might be queried. More
important is the tendency on the part of the Premiers
to think of themselves, collectively, as representatives
of the national interest – as a sort of confederal
body. This may not be inappropriate in fields such as
education, where coordination of programmes is clearly
called for. But when the interprovincial apparatus
operates in fields where Parliament has partial
jurisdiction (e.g. the social security field), or
more particularly when it presumes to speak for the
people of Canada in telling Parliament what its
taxation policies ought to be, then that apparatus
is entering into competition with Parliament as the
spokesman of the national interest.

50. “Confederation House”. Another proposal
which may be submitted is Manitoba’s idea of a
“Confederation House”. This would be “a deliberative
assembly” of federal and provincial delegates, chaired
by the “11 governments” in rotation, operated “to
some degree along parliamentary lines”, and having
the purpose of “develop(ing) (a) consensus on subjects
of major importance”. This consensus would be a
“consensus of auidance for decisions which must of
course remain with the responsible Legislatures and
Parliament.” (How the consensus would be determined
is not at all clear from the proposal – which comes
from Honourable Gurney Evans, Provincial Treasurer)
“Confederation House” would be served by an “adequate
staff to carry out the necessary administrative and
research work.” It is difficult to comment upon the
proposal because it is so confused both in concept
and in exposition. If it were simply an institutionalization
of the Federal-Provincial Conference it would pose no
particular problems. If it is designed, on the other
hand to exert pressure upon particular governments
(Evans says of meausing the consensus: “neither
would it be acceptable to have votes based on population”)
then it represents an embryonic form of confederalism
which would be inconsistent both with a federal
constitution and with responsible government.

51. Tax Commission. The Government of
Quebec had suggested the establishment or a Tax
Commission which would “prepare taxation arrangements
for set periods, taking into account available and
forecast tax resources, programmes planned and priorities
involved”. If this question arises it is suggested
that the Prime Minister might raise a series of
questions as to its constitutional role (see also the
Briefing Paper on Provincial Taxing Powers).

(1) Would such a Commission make decisions
which would be binding upon governments,
or simply recommendations to them?

(2) Whichever the case, if the Commission
were composed of government representatives,
as suggested, how would the Commission
“decide” as to its recommendations or
decisions? How many votes would each
government have (it must surely be assumed
that the Government of Canada would have as
many votes as the ten provinces combined,
since it represents as many people)? Or
would each government have a veto over
recommendations with resnect to its
jurisdiction, or its exercise of its
jurisdiction?

(3) If the Commission’s decisions were
binding, this would constitute a potential
limitation on the use by Parliament and
the legislatures of the powers assigned to
them under the constitution. would or
should Parliament or the legislatures –
elected bodies – agree to grant to a non-
elected Commission the constitutional right
to limit their taxing powers, and thus,
indirectly, their expenditure and/or
borrowing powers?

52. Consultation on Economic Policy. The
Prime Minister of Quebec may press for a discussion
of their proposition that there be “continuing
consultation (on) … economic policies and their
fiscal, monetary, trade and other components” (see
paragraph 6 above). If so it could be noted that the
Government of Canada has been trying to promote precisely
this kind of consultation through establishing the
Committee of Ministers of Finance and the Continuing
Committee (of Officials) on Fiscal and Economic Matters
Together these bodies have been meeting almost six
times a year, and the meetinrs have been supplemented
by annual trips of Finance Department officials to each
capital. It is understood, too, that the Bank of Canada
has on occasion sent a senior official to visit
provincial capitals, and that most Deputy Provincial
Treasurers make it a practice of visiting the Bank when
they are in Ottawa. The Government of Canada, it could
be said, remains anxious to improve these consultations,
in the full knowledge that the Provinces would agree
they should be reciprocal, and that neither the Provinces
nor Ottawa would want them to become so structured and
bureaucratized as to paralyse economic policy. The one
thing which must be understood is that each government
must finally remain responsible for its policy decisions
within its area of jurisdiction.

Appendix A

Summary of the Conclusions and Proposals of the Re-
port on “Intergovernmental Liaison on Fiscal and
Economic Matters” by the Institute of Intergovern-
mental Relations at Queen’s University

I. Conclusions

A very brief summary of the major conclusions
of this study is contained in the following points:

1. A substantial improvement in consultation
and cooperation between the federal and provincial
governments is called for. The need for improvement
is greatest at the level where top policy matters
are considered, such as priorities for government
action, and fiscal and economic policies. (The inter-
dependence of governments and their actions in an
increasingly complex modern society is stressed.)

2. Improvements in the machinery for federal
provincial liaison will assist in reaching this
objective, and specific proposals are made for this
purpose (see the summary of major proposals below).

5. At the same time, it is stressed that improve-
ments in the mechanisms will not be sufficient on
their own. Emphasis is placed on the need to develop
the right attitudes to and greater understanding of
the consultative process. There must be a willingness
to consult and to accept the obligations as well as
the advantages which are associated with the process.

4. It is also emphasized that the machinery for
liaison cannot serve as a vehicle for “joint decision
making”, since “decisions” remain the prerogative of
governments and their legislators. The purpose of
the machinery is to achieve cooperation through
communication and understanding.

II. Major Proposals

In general, a more carefully structured and
integrated system for intergovernmental liaison is
recommended. The system would provide for linking
the major consultative bodies together, under the
Conference of Prime Ministers and Premiers, so that
greater coordinion and consistency in the consulta-
tive process would be facilitated. while the report
is centred on fiscal and economic matters, the
major proposals inevitably encompass the general
field of government activity. In very summary form,
the major proposals are:

1. The Conference of Prime Ministers and Premiers –
It is proposed that this body should be constituted
as a continuing and regularly meeting vehicle for
intergovernmental liaison, which would concentrate
on top policy questions, such as priorities, and act
as the apex for the remainder of the system for
liaison. It is proposed, further, that the Prime
Ministers and Premiers should meet in two different
ways, at least once annually:

(a) as a Committee of First Ministers, in
camera and with few advisors present, for
informal discussions;

(b) as a formal Federal-Provincial Conference
of the accustomed kind, which might or
might not be public, depending on the
nature of the discussion required.

2. The Committee of Ministers of Finance and Provincial
Treasurers – This, too, should be constituted as a
continuing and regularly meeting part of the machinery
for consultation, encompassing the roles of the Tax
Structure Committee and the existing Ministers of
Finance meeting, and acting as a staff arm to the
Conference of Prime Ministers and Premiers in the
determination of harmonized economic and fiscal policies
and the integration of these to the total complex
of government actions.

3. Functional Ministerial Committees – Federal-
provincial ministerial committees should be establish-
ed as sub-committees of the Conference of First
Ministers, for all areas of government activity which
involve both levels of government. (In some cases,
such Committees now exist, but with no recognized
link to the Plenary Conference and little consistency
in form or procedure.)

4. Committees of Officials – These should be established
as required to serve the ministerial consultative
groups already mentioned. In particular, there should
be:

(a) a new continuing committee of senior officials
to serve the Conference of First Ministers
directly;

(b) the existing Continuing Committee on Fiscal
and Economic Matters, to serve the Committee
of Ministers of Finance and Provincial
Treasurers. It is expected that there would
be elements of common membership and
considerable coordination between these two
committees of officials.

(c) committees of officials subordinate to the
ministerial functional committees. It is
assumed that there would generally be a
committee at the deputy ministers level, ?nd
other committee’s to report to it as required.

(Many such committees now exist, but the proposed integrated
system would provide for more consistency in form and
coordination of effort.)

5. A Secretariat – A continuing full-time secretariat
is recommended to serve the consultative machinery
already mentioned. It would be expected to serve
directly the Conference of First Ministers, the Con-
ference of Finance Ministers and the two senior committees
of officials. It might not serve the other committees
directly, but would have responsibilities in respect
of the general coordination role. The Report express-
es a preference for a secretariat of a quasi-
autonomous nature (similar to the Secretariat to
the Constitutional Conference) responsible to the
Conference of First Ministers in respect of its functions,
but with an administrative tie to the Federal Govern-
ment. A fully intergovernmental secretariat is not
ruled out,however, if provinces strongly favour it.

6. Research Organization – The Report states that
there is a need for a semi-independent body to do
research on intergovernmental questions, perhaps akin
to the Advisory Commission on Intergovernmental Relations
in the United States.

7. Economic Advice – It is also suggested that con-
sideration should be given to altering the nature of
the Economic Council, by providing for provincial
participation in the appointment of members, so that
it could serve as a source of longer term economic
advice for all governments.

8. Legislative Committees – It is suggested that such
committees within Parliament and the legislatures would
be a valuable part of the machinery. These committees
would act as a counter-weight to the intergovernmental
bodies.

9. Internal Organization – The Report states that im-
proved coordination within governments would be
a necessary component of a system for improved inter-
governmental liaison, and proposes that a coordinating
unit should exist in each government for this purpose,
preferebly attached to the office of the First Minister.

10. Regional Representatives of the Federal Government
in provincial capitals should be considered a another
means of improving communications.

11. Other – Several other recommendations are made
involving:

(a) use of task forces and consultants by the
federal government;

(b) more visits by senior officials to other
parts of the country;

(c) use of modern communication techniques such
as “Telex” and possibly closed circuit
television;

(d) more cooperation in training, exchange or
secondment of staff;

(e) more efficient administration of conferences –
earlier release of agenda materials, etc.;

(f) avoidance of certain procedural irritations
like issuing press releases and leaking in-
formation immediately in advance of Conferences,
presenting “faits accomplis” when negotiation
is expected;

(g) equalizing the costs of consultation (some
provincial delegates have to travel much
farther than others.

APPENDIX B

Propositions submitted
on the subject of

INTERGOVERNMENTAL RELATIONS.

CATEGORY:

VIII – Intergovernmental Relations

BASIC CONCEPT:

The Constitution should provide the basis
for institutions to promote consultation and
cooperation between-governments.

RELATED PROPOSITIONS:

3.20.50 (NB)
3.21.50

The Constitution of Canada shall
reflect, insofar as may be
practical, the formal and informal
experience of all governments in
the matter of federal-provincial
institutions and consultative
procedures, by providing a general
constitutional framework for
their existence but in language
that does not necessarily go
further than to create a basis for
existing cooperative and
consultative procedures, without
unduly limiting or anticipating
forms that such procedures may
take in the future.

3.4.12 (NB) It is a further objective of
Canadian Confederation that forces
and institutions of co-operation
between all levels of ?overnment
shall be developed that will assist
the full development of all regions
of Canada, the overcoming of
regional disparities, and the
solution of both urban and rural
problems.

3.17.46 (NB)
Approval by the Parliament of
Canada shall not be required
where informal processes of
consultation are undertaken as
heretofore, even if such informal
processes lead to the establishment
of ad hoc or permanent machinery
to service such informal relations.

5.16.36 (Ont)
The written Constitution should
recognize intergovernmental con-
sultation and cooperation as an
essential element in the efficient
administration of the federation
but it should not attempt to
prescribe in too much detail the
precice forms of intergovernmental
machinery.

5.17.38 (Ont)
It should be possible for all the
provinces, or for a number of the
provinces, to call a federal-
provincial Conference at either
the ministerial or the official
level.

CATEGORY:

VIII – Intergovernmental Relations

BASIC CONCEPT:

The Constitution should provide for:

– an annual conference of heads of government
– a permanent intergovernmental secretariat
– a standing intergovernmental commission on
taxation.

RELATED PROPOSITIONS:

4.23.41 (Qué)
The Constitution should provide
for an annual conference of
Union and member-state heads of
government.

5.17.37 (Ont)
In the written Constitution,
there should be provision for a
permanent intergovernmental
affairs secretariat.

4.24.44 (Qué)
The Constitution should provide
for the establishment of a
standing intergovernmental com-
mission on taxation which would
be made up of representatives
from all governments and whose
role would be to prepare taxation
arrangements for set periods,
taking into account available and
forecast tax resources, programmes
planned and priorities involved.

CATEGORY:

VIII – Intergovernmental Relations

BASIC CONCEPT:

with due regard to the division of powers, general
economic policies should be developed through
systematic consultation between governments.

RELATED PROPOSITION:

4.23.41 (Qué)
Economic policies and their fiscal,
monetary, trade and other components
should normally he arrived at by
continuing and systematic consulta-
tion and participation by member-states
and the federal government; they should
be implemented by all governments
acting in concert, each in its own area
of constitutional jurisdiction.

CATEGORY:

VIII – Intergovernmental Relations

BASIC CONCEPT:

The Constitution should provide for the making of
formal binding agreements between governments.

RELATED PROPOSITIONS:

3.15.45 (NB)
3.16.45
3.17.45
(NB) The Constitution of Canada shall
make provision for formal inter-
provincial dealings by way of
compacts, agreements and organiza-
tions for their common interest,
and whatever formal agreements or
institutions are established shall
have the approval of the Parliament
of Canada.

4.23.42 (Que)
The Constitution should provide for
reaching intergovernmental agreements
which would be constitutionally
binding on all subscribing parties
and, in any case of conflict, could
be interpreted by the Constitutional
Court.

CATEGORY:

VIII – Intergovernmental Relations

BASIC CONCEPT:

Any dispute between the federal government and one
or more provinces, or between provinces, may be
referred to a Court.

RELATED PROPOSITIONS:
4.23.42 (Que)

The Constitution should provide
for reaching intergovernmental
agreements which would be
constitutionally binding on all
subscribing parties and, in case
of conflict, could be interpreted
by the Constitutional Court.

3.21.51(NB)
3.22.51

Any dispute between the federal
government and one or more pro-
vinces, or between two or more
provinces themselves, may be
referred to the Supreme Court of
Canada.

APPENDIX C

INVENTORY OF THE
MACHINERY FOR
INTERGOVERNMENTAL CONSULTATION.

CE DOCUMENT EST LA PROPRIETE DU GOUVERNEMENT DU CANADA

CONFIDENTIEL

DOCUMENT D’INFORMATION

Conférence Constitutionnelle, février 1969

ETUDE COMPARATIVE SOMMAIRE DES SYSTÈMES
CONGRESSIONNEL ET PARLEMENTAIRE

Introduction

Québec suggère d’étudier la possibilité de
remplacer le système parlementaire canadien par un
système congressionnel. D’autre part Québec songe
à modifier sa constitution interne et à introduire
dans la province un régime congressionnel d’inspi—
ration américaine. Il est donc opportun de comparer ces
deux formes de gouvernement et d‘analyser objectivement
leur valeur respective.

1 — Le système parlementaire

Le système parlementaire existe évidemment
sous plusieurs formes. Nous nous limiterons à le
décrire dans sa forme britannique qui est la plus
classique.

Les principaux éléments du système parle-
mentaire sont:

i) La confusion du pouvoir exécutif et
du pouvoir legislatif

Les détenteurs réels du pouvoir exécutif
(les ministres) font aussi partie du
corps législatif. La séparation de ces
deux pouvoirs n’existe pas.

ii) La responsabilité ministérielle.

Les détenteurs du pouvoir exécutif sont
collectivement et individuellement res-
ponsables au pouvoir législatif de leur
politique.

iii) Caractère représentatif de l’exécutif.

Généralement la très forte majorité de
ceux qui détiennent le pouvoir exécutif
ont été élus par la population.

iv) Le chef de l’exécutif dirige le groupe
majoritaire au sein du corps législatif.

Généralement, même s’il ne possède pas
toujours une majorité absolue, le chef
de l’exécutif est le leader du parti
qui a fait élire le plus grand nombre
de représentants aux élections.

…/2

-2-

v) Pouvoir discrétionnaire du chef de
l’exécutif de convoquer. proroger et
dissoudre les chambres

Les sessions et leur durée sont laissées
à la discrétion du chef du gouvernement.
Il en est de même pour la durée du
Parlement.

II- Le système congressionnel

L’expression “système présidentiel“ est ambigus
et porte à confusion puisqu’elle peut référer soit à
l’origine de le souveraineté (e.g. dans une république
la souveraineté provient du peuple alors que dans un
régime monarchiqueelle provient du monarche), soit à
l’organisation du pouvoir législatif et exécutif.
C’est pourguoi nous préférons utiliser ici l’expres-
sion “systeme congressionnel”.

La forme ou les modalités du système congressionnel
sont très souples et par conséquent varient substantiel-
lement d’un pays à l’autre. Nous mentionnerons ici
les principaux éléments du système américain.

i) La séparation rigoureuse des pouvoirs.

L‘exécutif ne fait pas partie du pouvoir
législatif.

ii) L’exécutif n’est pas responsable au
pouvoir législatii de sa politique.
Sa seule responsabilité est à l’égard
de l’électorat.

iii) Ceux qui partagent l’exercice du pouvoir
exécutif ne sont responsables qp’au
présidant .

Les membres de l’administration ne sont

pas élus mais choisis personnellement par
le président.

iv) L’exécutif ne possède pas nécessairement
la magorité au sein du pouvoir législatif

Son mandat ne dépend en aucune fa on de
la majorité de son parti au Congrès.

v) Les sessions et la durée du Congrès: sont
reglementées par des dispositions statu-
taires

…/3

-3-

Théoriquement la législation ne tire
pas son origine de l’exécutif mais
du corps legislatif lui-même.

L’exécutif n’est pas directement présent
au sein du corps législatif pour présenter
ses mesures législatives.

Le système congressionnel favorise le
bipartisme.

Seuls les deux partis qui peuvent aspirer à
la présidence conservent leur popularité
auprès de l’électorat.

III — Avantages et faiblesses respectifs des deux systèmes.

A. Avantages du système parlementaire

i) Surveillance de l’exécutif par le
pouvoir législatif.

L’exécutif doit toujours s’assurer l’appui
de la chambre des représentants pour se
maintenir au pouvoir.

ii) Cohésion du programme législatif.

L’introduction de la législation directement
par les membres du gouvernement évite les
conflits possibles entre les diverses
mesures législatives.

iii) Efficacité législative.

La majorité que possède d’ordinaire
l’exécutif au sein du corps législatif
lui permet de faire adopter les mesures
législatives qu’il présente.

iv) Pouvoir de dissolution.

Le pouvoir discrétionnaire que possède
l’exécutif de dissoudre les chambres
constitue un instrument efficace auprès
du corps législatif.

v) Les membres de l’exécutif sont conscients
des difficultés legislatives que souleveront
leurs politiques.

vi) L’électorat lors des élections se prononce
sur le choix d’une équipe et non pas d’un
seul individu.

…/4

-4-

vii) Cohésion des partis politique .

Les membres d’une même formation politique
doivent pratiquer la discipline et posséder
une certaine uniformité de vues afin
d’assurer à l’exécutif la majorité qui
lui est essentielle pour se maintenir
au pouvoir.

B. Faiblesses du système parlementaire

i) Difficulté pour l’exécutif de gouverner
avec efficacité si le parti gouvernemental
ne possède pas une majorité absolue au
parlement.

ii) Perte de temps considérable de l’exécutif
qui doit s’astreindre à être souvent présent
en chambre.

Les devoirs parlementaires des membres
de l’administration contribuent à
réduire considérablement leur efficacité.

iii) Choix parfois restreint du Premier ministre
quant a la sélection des membres de son
cabinet

Ce choix se limite de façon générale à
la députation dont la qualité laisse
souvent à désirer.

iv) Non—participation de certains éléments
de la société qui seraient désireux de
contribuer a la chose publique mais qui
refusent de se soumettre au choix de
l’électorat.

v) La présence de l’exécutif au sein du corps
législatif accroit souvent innumént
l’importance de ce dernier.

La présence des ministres en Chambre
donne souvent lieu, principalement en
période de difficultés, à des débats
oratoires passionnants mais tout à fait
inutiles. Il est alors dangereux que
l’exécutif concentre ses efforts à gagner
les joutes oratoires en chambre plutôt
que de résoudre les problèmes qui les
provoquent.

vi) Les tâches politiqués des membres de
l’exécutif réduisent leur efficacité
administrative.

…/5

-5-

C. Avantages du système congressionnel

i) Choix illimité du président dans le
choix des collaborateurs qui exerceront
le pouvoir exécutif avec lui.

ii) Concentration de l’exécutif sur ses
devoirs exécutifs.

Le président et ses collaborateurs
peuvent se consacrer entièrement à
l’élaboration des politiques et ne
sont pas accaparés par les travaux
du Congrès.

iii) Les membres de l’administration sont
déchargés des principales corvées
politiques.

N’étant pas élus ils n’ont pas à se
préoccupér des intérêts de leur
circonscription ou de leurs électeurs.

D. Faiblesses du système congressionnel

i) Difficulté fréquente de l’exécutif de
faire adopter son programme legislatif
par le Congrès.

L’exécutif doit se résigner à faire du
lobbying et à courtiser certains per-
sonnages clefs du Congrès afin de faire
adopter les mesures qu’il propose.

ii) Possibilité d’une impasse entre l’exécutif
et le Congres.

iii) Le président est invincible durant la
durée de son mandat.

Le Premier ministre peut théoriquement
être défait en tout temps.

iv) Le président peut être un candidat
inexpérimenté qui n’a jamais fait
ses preuves en politique.

v) L’exécutif ne rend véritablement de
comÿîes a personne durant la duree de
son mandat.

vi) La formation de tiers partis politiques
est a toutes fins pratiques presqu’im-
possible.

…/6

-6-

vii) L’exécutif et le législatif peuvent
se trouver divisés sur des questions
fondamentales (e.g. déclaration de
guerre, ratification de traité, etc.).

viii) Les élections, dont la date est fixée
statutairement, peuvent survenir a un
moment très inopportun.

ix) La tenue d’élections à date fixe
contribue a ralentir le fonctionnement
de l’appareil gouvernemental durant
l’année de l’élection présidentielle.

Conclusion

I — Commentaires généraux

1. Les deux systèmes évoluent sans cesse et
semblent s’influencer réciproquement sur leur dévelop-
pement respectif. Cette évolution tend à les rendre de
plus en plus semblables.

2. Par exemple les élections dans le système
parlementaire ressemblent de plus en plus aux élections
dans le régime congressionnel. Les élections canadiennes
récentes d montrent que la population vote d’abord pour
le choix du premier ministre et non plus pour une équipe.

3. La séparation des pouvoirs du système
congresaionnel devient de plus en plus théorique et en
pratique est de moins en moins respectée. Les secrétaires
d’Etat américains comparaissent régulièrement devant le
Congrès ou ses comités. D’autre part, presque toute la
législation aujourd’hui provient directement de l’exécutif
comme c’est le cas dans le système parlementaire.

4. La diminution des pouvoirs du Parlement face
à l’exécutif et le déclin des attributions du Cabinet
aux mains du premier ministre font de celui-ci un détenteur
incontesté du pouvoir exécutif. On peut sans doute se
demander si la fonction de premier ministre aujourd’hui
ne consitue pas une plus forte concentration du pouvoir
exécutif que celle de président.

5. Le président dépend de plus en plus d’une
majorité au Congrès pour la réalisation de son programme
politique. Une majorité au sein du corps législatif
devient donc un élément presqu’aussi essentiel dans le
système congressionnel que dans le système parlementaire.

6. Il est peut être opportun de se demander
s’il n’aurait pas lieu d’emprunter aux deux systèmes leurs
meilleurs éléments et de concevoir un nouveau systeme
qui tenterait d’éliminer leurs faiblesses.

…/7

-7-

Il — Arguments en faveur du maintien du système
parlementaire.

7. Le premier objectif du système congres-
sionnel est l’établissement de mécanismes destinés à
empêcher le contrôle du corps législatif par l’exécutif.
Or, le rôle de l’Etat s’accroît sans cesse aujourd’hui
et la population désire plus que jamais un gouvernement
dynamique et efficace. Par conséquent il ne serait pas
opportun de remplacer maintenant le système parlemen»
taire par un système dans lequel l’exécutif n’a pas
toujours les moyens d’action dont il a besoin.

8. Il est vrai que dans un système parlemen-
taire, plusieurs gouvernements minoritaires successifs
peuvent conduire a l’instabilité politique et à l’immo-
bilisme. Cependant ces faiblesses existent également dans
le système congressionnel même si les élections sont è
date fixe. D’autre part la population peut toujours
remédier à ces lacunes du système parlementaire en
élisant un gouvernement majoritaire.

9. L’adoption du système congressionnel
conduirait à la disparition des tiers partis, ce qui
serait malheureux puisqu’ils constituent en politique
canadienne une source d’enrichissement.

10. Il est vrai que dans le système parlementaire
les ministres sont soumis à des tâches très lourdes. Cette
situation peut être améliorée sans pour cela perdre les
nombreux avantages du système parlementaire (v.g. en ren»
forçant le personnel des bureaux de ministres, en nommant
des ministres associés, des sous—ministres politiques,
en déoentralisant l’administration, en créant de nouvelles
sociétés de la Couronne, en allégeant les tâches parle—
mentaires des ministres etc.).

11. Il est vrai que dans le système parlementaire
le choix du Premier ministre quant à la sélection de ses
ministres peut être assez restreint. cette difficulté
réelle pourrait être résolue en mettant de côté, à
l’occasion, le principe de responsabilité ministérielle
individuelle — permettant ainsi au Premier ministre de
recruter un ou quelques ministres en dehors du Parlement.

12. Certains peuvent soutenir que le principe
de responsabilité ministérielle empêche les députés du
parti majoritaire de s’opposer aux mesures législatives
nuisibles è la région qu’ils représentent. Il est vrai
que les intérêts régionaux peuvent s’exprimer plus libre-
ment dans le système congressionnel. Cependant,il faut
ajouter que les intérêts régionaux sont protégés au sein
du Cabinet par les ministres qui sont individuellement
représentatifs de la région d’où ils viennent.

15. Par conséquent il apparait donc plus
opportun au gouvernement canadien d’adapter et d’amé-
liorer le système parlementaire plutôt que de le
remplacer.

le 31 janvier 1969.

THIS DOCUHENT IS THE PROPERTY OF THE GOVERNMENT OF CANADA
CONFIDENTIAL
BRIEFING PAPER

The Constitutional Conference – February, 1969

DECENTRALIZATION OF POWERS IN PRESENT CONSTITUTION

Centralization in the Original Constitution

1. The British North America Act as originally drafted
obviously contemplated a strong central government. The evidence
is familiar: federal appointment of lieutenant governors, federal
appointment and payment of judges for provincial superior and
county courts, the power of reservation and disallowance, Parlia-
ment’s power to declare local works to be for the general
advantage of Canada, and the power to establish a final court

of appeal to hear appeals from provincial courts even in matters
of provincial law. The distribution of powers seemingly would
support strong central government. The phrase “peace, order

and good government” was the traditional phraseology for giving

a British colonial legislature plenary powers subject only to
specific exceptions. The phrase “regulation of trade and commerce”
must have been intended to embrace virtually all commerce whether
local or interprovincial or international, as the Fathers of
Confederation must have been aware of the contrasting power given
to the United States Congress which specifically confined its
jurisdiction to regulation of interstate and foreign commerce.
Considering the narrow construction which has been put on these
and other sources of federal Jurisdiction, it is hard to accept
the contention that the first hundred years of Confederation

has resulted in an unexpected and dangerous centralization not
intended by the framers of the B.N.A. Act.

2. On the contrary, most of the movement in judicial
interpretation has been in the opposite direction, and a large
part of constitutional practice has also been in the direction
of decentralization.

Decentralization through lnterpretation and Practice

3. The main trends in decentralization may be seen in
such areas as the following.

4. The general power over peace, order and good govern-
ment – As a result of the progressively more narrow interpre-

tation given to this power it was, by the l920’s, reduced to
little more than an emergency power which could not be invoked
in any way which might incidentally infringe on provincial
matters except in times of crisis and only in relation to the
crisis. It is true that since world War II there has been
some judicial reconsideration of the emergency concept. The
peace, order and good government power has been used to support
federal legislative authority over such matters as aeronautics,
the expropriation of property for the National Capital, and
offshore mineral rights. It is true that the two latter items
have created some controversy. This controversy should be
viewed however in its proper perspective.

5. In the first place, in contrast to these two matters
which were assigned by the courts to federal jurisdiction, one
can look back tova variety of matters which, while seemingly
related to the peace, order and good government of Canada, were
assigned to exclusive provincial jurisdiction in the past:

for example, the regulation of hoarding and profiteering after
the first World War, the regulation of labour relations in
nationwide industries which were not for other reasons within

-2-

federal jurisdiction, unemployment insurance in time of national
economic crisis, the implementation of treaties involving matters
otherwise provincial, or the regulation of local marketing of

natural products as part of a scheme which would deal with local,
interprovinoial and international trade in one integrated system.

6. Secondly, with respect to the controversial matter

of offshore mineral rights, it is at least difficult for the
provinces to contend that they thereby lost some property and
jurisdiction which they had previously enjoyed or exercised.
That essentially was a decision about jurisdiction and ownership
over resources which had for the first time become subject by
international law to regulation by any government in Canada,

and susceptible of exploitation by anyone.

7. while the general effect of the decisions has been
to narrow the general power, we should not thereby be tempted
to agree, as has been suggested in some quarters, that since
the federal jurisdiction here is so limited the whole residual
power could be given to the provincial legislatures. The
residual power has a potential importance particularly with
respect to new matters that will undoubtedly arise in the future.
If this in any way represents a strengthening of the general
power through reinterpretation it should be viewed against the
background of several decades of judicial narrowing of the
power.

8. In contrast to the narrow interpretation of the
federal general power, we must keep in mind the broad interpre-
tation given to “property and civil rights” which was in effect
turned into the provincial general power. It has been extended
to cover the regulation of intraprovincial trade; collective
bargaining, industrial disputes, and conditions of labour in most
industries; most aspects of social security; workmen’s compen-
sation; the implementation of treaties relating to provincial
subjects; and, until the 1940 constitutional amendment, unemploy-
ment insurance.

9. Regulation of trade and commerce – As noted previously,
this power was worded very roadly. owever, it has been confined
through interpretation to matters of interprovincial and inter-
national trade. It has been held not to cover the regulation

of “particular trades” such as insurance. In contrast to the
corresponding American federal power, ours looks very narrow
indeed.

10. Labour relations – Because this has generally been
treated as a matter of property and civil rights, the federal
government only enjoys legislative authority incidental to the
regulation of certain industries particularly within its
jurisdiction such as railways, banks, etc. In relation to
business structures which are organized on a national or inter-
national basis, it would have been quite logical to support
federal regulation of labour matters on the basis of the trade
and commerce power or possibly “peace, order and good government”.
Instead, in many businesses and industries operating in all

or most of the provinces, labour relations are subject to
regulation by separate systems in each province.

11. Treaty implementation – The Labour Conventions Case,
which denied to Parliament the power to implement treaties
involving matters which could otherwise be within provincial
jurisdiction, seriously impaired the position of the federal
government. This decision, while plausible, was not inevitable,
and was a major step in the decentralization process. It also

-3-

involved a clear reduction in Parliament’s pre-existing powers
which could no longer be supported under S.152.

12. Taxation – While the federal power here remains
virtually unlimited, the legal power of the provinces has if
anything been expanded. Because provinces have been allowed to
impose sales taxes, including taxes on commodities after

import into the province, they have gained most of the advantages
of the excise tax except for the political advantage which

comes from a hidden tax.

13. When the suggestion is made that provincial taxation

powers should be broadened, it is important to question in what
way they might be broadened. One of the major restrictions on
provincial taxation is that it must be imposed within the province.
That is a restriction which surely must be maintained Because as
normally conceived the provinces have no extra~territorial powers.
It is hard for provinces to justify a claim to the right to extend
their jurisdiction outside their own boundaries. The other major
restriction is that provincial taxes must be “direct”. However,
one must ask to what extent the provinces could Be permitted an
unlimited power of indirect taxation. Obviously, they should not
be allowed to impose customs duties. If they are allowed to
impose excise taxes, this will give an undue advantage to the
manufacturing provinces as against the non—manufacturing provinces
and would also in effect permit taxation outside the province

by those provinces which habitually export large quantities of
manufactured goods to other provinces. The provinces could be
permitted to impose an indirect tax within the province but the
chief advantage of this kind of tax over the existing sales taxes
would be that it would be hidden – in other words, the chief
advantage would be a political one.

14. Finally, it may be noted that in terms of legal
powers, the provinces have as much power with respect to income
taxation as does the federal government. This kind of taxation
was virtually unknown in 186? and this tax, along with the sales
tax, has created major sources of revenue which were not even
anticipated at the time of Confederation. Therefore, the
provincial taxation powers have certainly not been reduced in
legal terms since Confederation.

15. Banking and credit policy – The matters of banking.
currency, and interest were ass ned to Parliament by the

B.N.A. Act. These powers continue largely unimpaired. However,
the provinces have been permitted to legislate in a large

and apparently growing area overlapping these matters. A

variety of “near-banks”, such as trust companies and credit
unions, are incorporated and regulated by the provinces.

Matters of “interest” are dealt with almost directly by provincial
legislation permitting relief from unconscionable contracts

or requiring full disclosure in loan contracts. The former
matter – in the provincial regulation of a wide variety or credit-
granting institutions – would appear to detract very considerably
from the original concept in the British North America Act and
represents an important aspect of the decentralization process.

16. Disuse or federal powers ~ Beyond the decentralization

effected through judicial decisions many of the powers of the
central government have not been exercised to their fullest
possible extent. The powers of reservation and disallowance
have as much legal vigour today as they had in 1867. Yet there
has been no exercise of the power of disallowance since 1942,
and none of the power of reservation since 1961. A very narrow
view has been taken, perhaps unnecessarily, of federal

-4-

jurisdiction in matters of social insurance schemes ever
since the Employment Insurance Reference of 1937. The result
has been that the federal role is now seen as one of cost-
sharing only with the implicit assumption that these are
matters of purely provincial jurisdiction. As the federal
government moves more from direct legislation to shared-cost
programs and thence to unconditional grants, decentralization
continues.

17. Some comparisons with other federal states –

Very briefly it may be noted that in the United states the
commerce ower has given a vast and pervasive power to
Congress which has been developed by the courts far beyond
what one might have expected from the original wording,
limited as it was to foreign and interstate commerce. Under
this power, Congress can regulate a variety of local activity
which seems on its face rather remotely connected to inter-
state commerce. It can regulate labour conditions in businesses
and industries involved in interstate commerce and this of
course covers a broad spectrum. In spite of the fact that
Congress was not given the criminal law power, it is able to
regulate a large variety of matters of a criminal nature
related to the interstate and international movement of goods
and persons. The treaty~implementing power of the Senate
stands in sharp contrast to the Canadian situation, although
admittedly the power has been used somewhat sparingly in
recent years in relation to matters of state interest. A very
extensive system of conditional-grant programs exists, and
appears to be growing. Although the original constitution did
not give Congress effective power of direct taxation, a
constitutional amendment in l9l5 gave to Congress this all-
important power: in Canada there has been nothing comparable
by way of additions to the powers of Parliament through
amendment.

18. In Australia there are many parallels with the
American system. Through its express power over “external
affairs” the Commonwealth Parliament can apparently implement
treaties dealing with matters which in other contexts would

be beyond its jurisdiction. It has been held that the Common-
wealth can exclude the states from the income-tax field and
only federal income tax is now imposed. State borrowings

are subject to control by a Loan Council consisting of the
Prime Minister and Premiers. A federally~appointed Grants
Commission fixes the amount of equalization grants to states.

Conclusion

l9. The foregoing illustrates, without being exhaustive,
the major trends toward decentralization. This is only a
partial picture of the development of the constitution, designed
to provide arguments against anticipated suggestions that

a century of Confederation has brought an unrelieved centrali-
zation, and against suggestions for further extensive de—
centralization such as in the Quebec Propositions on distribu~
tion of powers. (See Props. 4.15.27, 4.16.50, 4.17.32,

4.13.33, 4.18.54, 4.20.56, 4.21.58, 4.9.2.39.)

20. There are, of course, also many examples of
centralization in certain areas, and provincial governments

may point to some of these.

-5-

21. with respect to centralization through judicial
decisions, those most frequently referred to have geen aero~

nautics, expropriation by the National Capital Commission,

and offshore minerals. These are emphasized because they are
decisions of the Supreme Court of Canada made since the
abolition of appeals to the Privy Council. while as previously
noted the latter two do raise some difficulty, it would be
difficult for anyone seriously to contend that aeronautics
should have been assigned to the provinces. The decision
assigning broadcasting to Parliament was less contentious until
recently because it appeared not to affect significantly
matters within provincial jurisdiction. More recently its
implications for education and culture have made broadcasting
equally contentious. Admittedly the federal acquisition,
through judicial interpretation, of power over aeronautics

and broadcasting has given the central government a very
important role in areas of new technology. Also, the fairly
generous interpretation of the “criminal law” power has

created a reservoir of federal regulatory power in a potentially
vast area.

22. with respect to centralization through ractice,
the exercise of the spending power and the associated exercise
of the power over direct taxation by the federal government
are at the root of most complaints. These subjects are dealt
with in other papers. Whether justified or not, the spending
power has allowed the federal government an impact in many
provincial areas where Parliament could not have legislated
directly. Other developments, such as the creation of a
central bank and the use of techniques for economic manipulation
unthought of in the nineteenth century, have also given power
to the federal government unforeseen at Confederation.

25. On balance, it can be argued that the predominant
trends have been in the direction of decentralization and
that these trends stand out in contrast to developments in
other federations with similar political and social backgrounds
such as the United States and Australia. Consequently, one
must very critically examine any complaint about an excessive
centralization during the last century, putting it in its
total context. One must similarly View any associated
suggestion for further and formal decentralization in any
new or revised constitution. It might well be doubted that
the federal government could continue to be Viable if any
further and substantial decentralization were imposed.

CE DOCUMENT EST LA PROPRIÉTÉ DU GOUVERNEMENT DU CANADA
CONFIDENTIEL

DOCUMENT D‘INFORMATION

Conférence Constitutionnelle, février 1969

LE PLATEAU CONTINENTAL

Importance du plateau continental

l. Le plateau continental canadien, qui est
constitué par le prolongement géographique du continent
dans l’océan jusqu’à une distance où la profondeur
atteint approximativement 650 pieds ou jusqu’à une
profondeur où l’exploitation minière devient impossible,
possède des dimensions très imposantes. Sa superficie
couvre environ:

450,000 milles carrés à l’est;

400,000 milles carrés dans la région de
la Baie d’Hudson;

40,000 milles carrés à l’ouest;
580,000 milles carrés dans les régions arctiques.

2. Le plateau continental canadien est donc égal à
à peu près 40% de la surface terrestre du Canada.

II. Position du gouvernement canadien sur les droits miniers
sous-marins

3. Le 2 décembre, 1968, le Premier ministre du
Canada soumettait aux Premiers ministres provinciaux
une proposition concrète du gouvernement canadien en vue
d’en arriver à un règlement satisfaisant de la question
des droits miniers sous—marins.

4. Cette proposition peut être résumée ainsi:

i) Le gouvernement canadien conserve
pleine et entière juridiction sur
les ressources minières sous—marines
(en reconnaissant évidemment la juri-
diction des provinces sur les ressources
situées dans les eaux intérieures).

ii) Le gouvernement canadien a tracé le
long des côtes des lignes pour
fins d’administration des ressour-
ces minières.

iii) L’adminstration des programmes
d‘exploration et d’exploitation
des ressources minières â l’in-
térieur de ces lignes, de même
que les revenus provenant de ces
activités, sont offerts aux
provinces .

iv) Au delà de ces lignes proposées,
les ressources demeurent la res-
ponsabilité ad nistrative du gou-
vernement canadien et 50% des re-
venus qui en proviendront sont
offerts aux provinces.

…/2

-2-

III. Justification de la position du gouvernement canadien

5. La position du gouvernement canadien de
conserver son entière juridiction sur le plateau conti-
nental et sur les ressources minières qui s’y trouvent,
repose sur des motifs de deux espèces.

A) Arguments constitutionnels

Le plateau continental affecte, direc—
tement ou indirectement, plusieurs
champs d’activités qui sont de la
compétence législative du Parlement
du Canada. Les principaux sont:

les affaires extérieures, la défense
nationale, les pêcheries, la navigation,
les recherches océanographiques et enfin
l’installation d’oléoducs interprovinciaux.

B) Arguments économiques

L’administration de la politique nationale
du pétrole est la responsabilité du gou-
vernement canadien. Or toute exploitation
des ressources pétrolifères situées dans le
plateau continental affectera les sources
traditionnelles d’approvisionnement et la
mise en marché de leurs produits. 11 est
donc opportun que l’administration des
ressources pétrolifères continue à être
coordonnée par le gouvernement canadien.
Ceci est d’autant plus important que
l’exploitation des ressources sous—marines
affectera nos marchés internationaux
d’importation et d’exportation.

Toute exploitation rationnelle des richesses
minières sous—marines requiert une règle-
mentation uniforme et cohérente afin
d’obtenir un rendement optimum de cette
exploitation. Une telle réglementation

sera un facteur important dans la compé-
tition internationale qui se fera pour
attirer les capitaux requis au développement
de ces richesses. Il y va donc de l’intérêt
national que la réglementation soit édictée
et appliquée par le gouvernement central.

D’autre part l’existence d’une règlemen-
tation unique évitera toute surenchère
entre les diverses provinces côtières
désireuses d’attirer les sociétés d’ex-
ploitation.

L’exploitation des richesses minières
sous—marines est généralement entreprise

par des sociétés multi—nationales. ll

est souhaitable que les négociations

avec ces sociétés soient conduites par le
gouvernement canadien qui possède en cette
matière un plus grand pouvoir do négociation
que celui des provinces agissant séparément.

…/3

-3-

Enfin, il existe un autre argument très
important. Les ressources du plateau
continental appartiennent à tous les
Canadiens. Les revenus qui en proviendront
devront être distribués équitablement.
Seul le gouvernement du Canada, qui repré-
sente tous les Canadiens, peut procéder

à cette redistribution. Le gouvernement
canadien a donc besoin de percevoir une
partie des revenus provenant des richesses
sous—marines pour s’acquitter de cette
responsabilité envers 1a.population
canadienne.

IV. Les droits miniers sous—marins et la Conférence
constitutionnelle

6. Le logique de la position du gouvernement
canadien est constante vis—à—vis de la révision de la
Constitution. Nous reconnaissons qu’il existe dans
le domaine dei relations fédérales—provinciales
plusieurs questions qui méritent une attention immé-
diate. Les droits miniers sous—marins sont sans
douce parmi ces questions.

7. D’autre part, vu le caractère très technique
de l’administration des politiques sur les droits miniers
sous—marin , il ne serait pas opportun que cette question
soit abordée directement par la Conférence conetitutionnelle.

8. Nous somme d’avis qu’il est essentiel, pour
mener à bien la révision de la Constitution, qu’un
ordre systématique et logique soit suivi. Nous devons
tout d’abord nous entendre sur les objectifs de notre
fédération, sur la protection des droits des Canadiens
et sur les principes de la répartition des compétences,
avant de nous engager dans de pourparlers portant sur
des questions très spécifiques.

9. Il serait par conséquent sounaitaule que le
gouvernement canadien refuse de discuter de la question
des droits miniers sous—marins dars le cadre de la
Conférence constitutionnellle. Le gouvernement du
Canada pourrait cependant suggère qu’une conférence
fédérale—provincia1e soit bientôt convoquée pour vider
cette question.

le 31 janvier 1969.

CE DOCUMENT EST LA PROPRIETE DU GOUVERNEMENT DU CANADA
CONFIDENTIEL

DOCUMENT D’INFORMATION

Conférence Constitutionnelle, février 1969
AMENAGEMENT DU TERRITOIRE

1. Il est probable que certaines provinces
voudront profiter de la révision de la Constitution
pour discuter de questions de frontières ou d’aména-
gement du territoire.

Propositions de la Colombie britannique

2. Dans son mémoire qui devait être présenté en
décembre à la Conférence constitutionnelle, la Colombie
britannique soumet deux propositions concernant le
territoire canadien.

3. Dans la première proposition, la Colombie
britannique déclare que le temps est venu de reconnaître

que les frontières de certaines provinces doivent être
modifiées afin de tenir compte davantage des réalités
économiques. Il est proposé que certaines provinces soient
abolies ou fusionnées et que soient établies cinq provinces
qui corresponderaient aux cinq régions économiques actuelles
du pays.

4. Dans une seconde proposition, la Colombie
britannique suggère que le territoire des provinces de
l’ouest soit prolongé jusqu’à l’extrémité nord du
continent. (En d’autres termes les territoires fédéraux

du Nord-Ouest et du Yukon seraient intégrés aux proÿinces
adjacentes à ces territoires. seules les îles continueraient
d’être le propriété du gouvernement canadien). Une telle
extension, selon la Colombie britannique, serait non
seulement logique du point de vue géographique et écono-
mique, mais de plus elle permettrait un développement mieux
intégré de ces régions. La Colombie britannique invoque

de plus les précédents de 1912 et de 1950 lorsque les
frontières du Msnitoba, de l’Ontario et du québec furent
étendues vers le nord.

5. Si cette question est discutée è la Conférence
constitutionnelle, il se peut que M. Bcnnett invoque
également certains arguments qui furent développés dans

le Rapport Carr.(Le Rapport Carr, publié en novembre,

1968, est le fruit d’une étude commanditée par le

ministère des Affaires indiennes et du Nord canadien et

par le Gouvernement du Yukon). cette étude met en question
la division territoriale qui existe présentement entre

le Yukon et les Territoires du Nord-Ouest.

…/2

-2-

Etude des propositions de la Colombie britannique

A. Fusionnement de certaines provinces

6. Quant au fond, quoique des études approfondies
n’aient pas encore été faites, cette suggestion présente
à la fois des avantages et des inconvénients.

7. Un fusionnement de certaines provinces présen-
terait les avantages inhérents à toute centralisation
politique et administrative. Une meilleure planification
pourrait être exercée au plan régional. Les divers
programmes gouvernementaux seraient probablement mieux
coordonnés. Les ressources humaines seraient regroupées
et par conséquent probablement mieux utilisées. La pla-
nification budgétaire et fiscale serait facilitée par la
disparition de plusieurs gouvernements. La diminution
du nombre de gouvernements pourrait faciliter aussi les
relations fédérales—provinciales. Un certain nombre
d’avantages pourraient également résulter du fait que
chaque province coïnciderait avec une région économique
donnée.

8. Enfin,certaines économies résulteraient peut

être de ces fusionnements — il est cependant impossible

de mentionner des chiffres concrets avant d’avoir entrepris
des études détaillées de cette question.

9′ Quant aux désavantages, ce sont ceux inhérents à
toute centralisation. Par exemple un nouvel aménagement
pourrait donner naissance à une bureaucratie excessive.

Il y aurait danger que le gouvernement des nouvelles
provinces s’éloigne de la population et perde quelque
peu contact avec celle—ci. De plus si le nombre des
provinces était réduit à cinq, les négociations du gouver—
nement central avec les nouveaux gouvernements provinciaux
seraient probablement plus difficiles vu l’importance
accrue de ces derniers (v.g. il est sans doute plus

facile aujourd’hui de négocier avec les provinces
atlantiques séparément qu’il le serait de négocier avec
celles—ci si elles étaient réunies en une union politique).

10. D’autre part, le fusionnement des dix provinces
est une idée intéressante mais qui, pour les raisons
suivantes, semble difficilement réalisable, du moins
pour le moment:

i) Les chefs politiques des provinces
appelées à disparaître ne consenti-
raient probablement pas à se retirer du pouvoir.
Il faudrait alors trouver des formules
de coalition acceptables à tous.

ii) Les provinces affectées ne seraient
pas prêtes à renoncer au siège actuel
de leur gouvernement. Une solution
de compromis devrait être trouvée.

iii) Le principal facteur de résistance
serait sans doute le passé historique
très diversifié de chaque province.
Des provinces voisines n’ont pas
nécessairement une même histoire.
Nulle n’accepterait de renoncer à
ses coutumes ou à ses traditions.

…/3

-3-

iv) La population des provinces affectées
accepterait—elle de voir “son” gou-
vernement s’éloigner d’elle?

v) Le règlement financier de tout
fusionnement créerait des diffi-
cultés difficiles à surmonter. Par
exemple il faudrait d’abord tenter
d’équilibrer les diverses dettes
provinciales avant de procèder
a leur répartition.

11. Il est indéniable qu’un tel projet peut susciter
beaucoup d’intérêt. Cependant,avant de l’appuyer ou de

le combattre le gouvernement canadien doit d’abord laisser
les provinces se prononcer sur la question.

B. Extension des frontières

12. Le gouvernement canadien devrait s’opposer à
toute extension vers le nord des provinces de l’ouest
et maintenir sa Juridiction sur les territoires du Yukon
et du Nord-Ouest. Les arguments suivants peuvent être
invoqués pour justifier la juridiction et la présence
du gouvernement canadien dans ces territoires non-
organisés en province:

i) Les gouvernements provinciaux ont
toujours négligés jusqu’à date les
régions nordiques de leur territoire.
Par exemple les populations isolées
de toutes les provinces, que ce soient
celles du nord du Québec, de l’Ontario
ou de la Colombie britannique, sont
loin de jouir des conditions de vie
dont bénéficient les populations des
territoires qui sont sous juridiction
fédérale. Les seuls endroits isolés
dans les diverses provinces qui
jouissent de services publics adéquats
sont les localités minières où l’a-
bondance des minéraux a permis aux
entrepriseaprivées de fournir à ses
travailleurs des niveaux de vie rec-
pectables. Dans ces cas c’est
l’entreprise privée et non le gou—
vernement provincial qui dépense
des sommes importantes pour améliorer
les conditions de vie des habitants
de ces régions. L’expérience démontre
donc que les régions éloignées sont
mieux desservies lorsqu’elles sont sous
la juridiction du gouvernement canadien.

ii) Il est peu probable que les populations
des territoires fédéraux accepteraient
de Voir leurs régions intégrées aux
provinces adjacentes. Ces populations
a l’esprit de pionnier possédant des
besoins et des exigences très parti-
culiers. Elles s’objecteraient à ce
que leurs destinées soient dorénavant
déterminées par les gouvernements de

…/4

-4-

Victoria, d’Edmonton ou de Régina,
lesquels ont des préoccupations très
différentes des leurs. Il semble
préférable d’augmenter l’autonomie
administrative de ces régions plutôt
que de transférer les pouvoirs de
décisions du gouvernement canadien
aux gouvernements provinciaux.

iii) La fragmentation des territoires du
Nord-Ouest et du Yukon aurait pour
conséquence de morceler les collectivités
qui vivent dans ces régions. Par exemple,
les Esquimaux une fois intégrés à la
population des provinces deviendraient

une minorité dépourvue de toute importance.
Ce morcellement diminuerait considéra-
blement les chances de survie de ces
groupes ethniques.

iv) Il serait très difficile de partager ces
territoires fédéraux d’une façon equitable
pour tous les Canadiens. Le gouvernement
canadien ne pourrait pas, sans causer
d’injustices aux provinces de l’est, se
départir du Yukon et des Territoires du
Nord—Ouest. Ces territoires constituent
une richesse inestimable pour tout le
pays. A quel titre le gouvernement
canadien aurait-il le droit de céder ces
régions sans compenser les provinces

de l’est qui ne bénéficieraient en rien
de cette cession?

v) Il est daz l’intérêt national que ces
régions soient développées et leurs
richesses exploitées. Or seul le
gouvernement du Canada a la capacité de
procéder à ce développement, et ce pour
deux raisons.

D’abord parce que le gouvernement canadien

est moins soumis aux pressions politiques de
tous les jours que les gouvernements provinciaux.
Or il faut un certain courage politique pour
aller investir des sommes importantes dans des
régions ou il existe très peu de voteurs et
par conséquent peu d’avantages politiques.

Si les politiciens provinciaux ont négligé
dans leur province respective les régions
éloignées, c’est qu’ils ont préféré investir
dans des régions plus rentables politiquement.

Deuxièmement, les ressources de ces territoires
difficilement accessibles sont généralement
exploitées par des entreprises multi—nationales.
Le pouvoir de négociation du gouvernement
canadien auprèe de telles entreprises est
beaucoup plus considérable que celui de

chacune des provinces ag.ssant isolément.
D’autre part, la mise en valeur des ressources
exige gén’ralement une planification è
l’échelle nationale. Seul le gouvernement
canadien peut donc mener à bien l’exploita-
tion de ces ressources de façon planifiée

…/5

-5-

13. Si cette question de l’extension des frontières
est soulevée, il serait opportun que la délégation fédérale
provoque la réaction des provinces avant de manifester son
opposition. ll est plus que probable que certaines pro—
vinces endosseront le point de vue du gouvernement canadien.

Le Rapport Dorion

14. Le 24 novembre, 1966, le gouvernement québécois
établissait la Commission d’Etude sur l’intégrité du
Territoire du Québec. Le premier rapport de cette commis-
sion (Rapport Dorion) était ublié en décembre, 1968.

Ce rapport traite des “Problemes de la Région de la
Capitale canadienne”, et contient trentcvsept recommen-
dations. En résumé la Commission recommende:

i) que le gouvernement du québec s’oppose
à tout concept de district fédéral qui
impliquerait le détachement d’une por-
tion du territoire québécois;

ii) qu’une conférence tripartite permanente
(composée de représentants du québec, de
l’Ontario et du gouvernement canadien)
soit formée pour élaborer et mettre au
point périodiquement un plan d’aména-
gement de la région de la capitale;

iii) que les gouvernements provinciaux marient
complète latitude pour réaliser les
aménagements affectant leursterritozres
respectifs;

iv) que la loi établissant la Commission
de la Capitale nationale soit uorogée.

15. La recommandation qui porte le plus à conséquence
est la suivante:

“Que le Québec entreprenne les démarches
nécessaires en vue d’obtenir la cession
des terrains actuellement possédés par
la Commission de la Capitale nationale

en territoire québécois et que ce trans-
fert de propriété soit inconditionnel

et sans compensation financière“ (Rapport
Dorion, Vol. Il p. 111, no. 21).

l6. Il semble peu probable que le gouvernement du
Québec veuille soulever cette question de la capitale
nationale lors de la prochaine Conférence constitution-
nelle. D‘abord parce que la Commission Dorion n’a pas
encore complété tous ses travaux et qu’il serait par
conséquent plus logique d‘attondre le ou les autres rapports
avant de discuter avec le gouvernement canon: n de
l’intégrité du territoire québécois. Deuxièmement. en
soulevant cette question maintenant, le gouvernement
québécois risquerait d’être accusé de vouloir retarder

la révision constitutionnelle en faisant flèche do tout
bois. Enfin,politiquement, la question de la capitale
nationale n’apparaît sans doute pas comme particulièrement
urgente à l’ensemble de la population québécoise.

…/6

-6-

17- Si la question était cependant soulevée, le gou-
vernement canadien devrait dénoncer les recommendations
les Élus radicales du Rapport Dorion. Le gouvernement
canadien pourrait exprimer sa volonté de coopérer davan-
tage dans l’avenir avec les deux gouvernements provinciaux
en cause, mais s’opposer à ce que l’on revienne en arrière
pour défaire ce qui existe déjà.

Conclusions

18. Est—il souhaitable que la révision de la Constitu-
tion serve d’occasion aux provinces pour discuter avec le
gouvernement canadien de plusieurs sujets concernant
l’aménagement du territoire (e.g. la capitale nationale,

la frontière Québec—Labrador, l’extension des frontières

de la Colombie britannique, le fusicnnement de certaines
provinces etc.)?

19. La réponse à cette question doit être non, pour
les raisons suivantes:

i) La position du gouvernement canadien
vis—à—vis de la révision constitu-
tionnelle a toujours été qu’il fallait
d’abord rechercher un consensus sur les
objectifs fondamentaux de l’union cana»
dienne et sur les principes fondamentaux
de la Constitution avant d’aborder des
questions plus particulières. Il est
indéniable qu’éventuellement il faudra
discuter des questions de territoire,
mais cette discussion devrait être
reportée plus tard, â une étape ulté-
rieure de la révision de la Constitution.

ii) Discuter de ces questions à ce stade
préliminaire risquerait de compromettre
le succès de l’exercice en faisant
surgir des difficultés qui sont réelles
mais d’une importance moindre, ce qui
risquerait de détourner l’attention
des questions fondamentales.

iii) Il existe une multitude de sujets qui
sont liés directement ou indirectement
à la révision de la Constitution.
Accepter de traiter de l’aménagement du
territoire serait consentir à de nom-
breuses discussions sur les sujets les
plus variés. Un ordre systématique
et logique doit être suivi si la révi-
sion de la Constitution doit donner des
résultats concrets.

iv) Décrire dans la nouvelle constitution
toutes les frontières du pays risquerait
d’introduire un élément de rigidité qui
n’est pas souhaitable.

le 31 janvier 1969

The Constitutional Conference, Ottawa,
First Meeting, February 1968

Comments by the Various Premiers
on Advancing the Constitutional
Exercise

Hon. John Roberts:

“Now we are here in Ottawa on the second leg of our
voyage, if I may continue the analogy. We have reached the
point where we cannot turn back. Having launched this examin-
ation of ourselves, we must not founder, we must continue it.
We must complete our voyage, and that we have come this far
makes me confident of our eventual success.” (Pages 19-21)

“What sacrifices are we prepared to make to be
Canadians? How strong is our will to remain together as a
country? … How willing are we to make an active effort to
re-think our most cherished prejudices?” (Page 21)

“Now, I should like to turn for a few moments to the
form of federalism we should have in Canada and the constitu~
tional changes which may be required to implement our decisions
in this regard. (Page 45)

“we are aware that in many parts of Canada this issue
is viewed with a certain amount of indifference. … Others
suggest that there are many more urgent problems in this country
than constitutional change and we should first get on to a solu-
tion of those other problems. All I can say is as far as
Ontario is concerned fundamental constitutional change holds no
fears for us. And we are certainly prepared to make a con-
tribution to this process…” (Page 45)

Hon. Daniel Johnson:

“I simply cannot conceive that we might go on quarrel-
ling for another century over the meaning and scope of our
Constitution. We need every last bit of our energy and resources
to carry out desperately urgent tasks, particularly in the
economic sector, on which the we1l-being of all Canadians depends.
(page 57)

“This is why we need a constitution which will be a
source of harmony and no longer of misunderstanding; a con-
stitution which will describe things as they are and meet
problems head on, instead of skirting them; a constitution

… 2

-2-

with every provision written clearly and in full as befits a
federal constitution; a constitution containing its own
amending formula, but sufficiently sound and permanent to

avoid being constantly challenged; a constitution which will
depend for final interpretation on a tribunal whose composition
will be such that no one will be tempted to question its
impartiality.” (Pages 57 to 59)

“… Quebec submits:

1. That the time has come for our country to give it-
self an entirely Canadian constitution made in Canada by
Canadians and for all Canadians;” (Page 67)

Hon. G.I. Smith:

“… The constitution should be fitted to the needs of
the country and its people…” (Page 81)

“If, therefore, the present constitution does not fit
the needs of Canadians, we should search for ways of changing it,
to make it better, and we are ready to take part in such a
search…” (Page 81)

Hon. L.J. Robichaud:

“May I at this point offer a few remarks on this question
of constitutional change. (Page 99)

“Indeed, it is perhaps time for an.honest examination
as to whether the forms and symbols of 1867 are appropriate
to the life, and times, and mood of 1968. (Page 99)

“We can surely all agree that The British North America
Act as a piece of prose, and as an exercise in symbolism, is
deficient to the point of calculated boredom…” (Page 99)

Ron. w.C. Weir:

“… It is our wish that priority be now given to
agreeing on a domestic amending procedure which will enable the
Constitution of Canada to be amended in Canada by Canadians…”
(Page 111)

… 3

– 3 –

“When we speak of the Constitution and the changes
that are needed to adapt it to the needs of Canada in its
second century we should not allow a concern for the instru~
ments themselves to obscure the purpose to which their use is
directed. (Page 117)

“… Change for its own sake is not enough. But where
change is necessary for the continued progress to the greater
Canada which meets the ideals and ambitions of all Canadians,
then Manitoba stands ready to play a positive role in this
search … (Page 117)

“Manitoba pledges itself, Mr. Prime Minister, to play
its full role in the co~operative spirit which has been engen-
dered here – and in the common endeavour of all of us to achieve
a stronger and more united Canada.” (Page 117)

Hon. A.B. Campbell:

“I believe it would be hard to overstate the importance
of what we have come here to do. We may, perhaps, be looked on
as the foster fathers of Confederation in undertaking to complete
the work which the original Fathers began in Charlottetown in
1864. we have to add to the initial structure a superstructure
more in conformity with the apparent needs of the country after
a century of experience; the deep~felt desire of the people of
Canada (and especially minority groups) for a constitutional
guarantee of their liberties, and especially the profound yearning
of French-speaking Canadians for recognition of their rights to
equality of status and of opportunity.” (Page 139)

Hon. E.C. Manning:

“Mr. Prime Minister and Gentlemen: The nature of the
matters that we are here to discuss, and the point in time at
which we are met, in our opinion make this conference perhaps one
of the most important since Confederation. Such an occasion calls
for complete frankness, objective analysis, sound judgment and a
sincere respect for the viewpoints of those with whose conclusions
we may strongly disagree. The responsibility, resting on each of
us, is heavy and inescapable.” (Page 155)

STATEMENTS MADE BY MEMBERS IN THE HOUSE OF COMMONS
ON GENERAL REVIEW OF THE CONSTITUTION

Exerpts from Hansard
from l963 to present

Mr. Brewin – June 19, 1963, p. 1326:

“1. What steps, if any, have been taken or are
contemplated with the View to having the constitution
of Canada repatriated so that it can be fully amended
within Canada?

2. Have any steps been taken or are they contemplated,
to reconvene a conference of the attorneys general of
the various provinces and the Minister of Justice with
a view to working out a procedure for repatriation of
the constitution?

3. What steps, if any, have been taken to secure the
views of other qualified organizations or individuals
with a view to the repatriation of the constitution?

4. Has consideration been given by the government of
Canada to incorporating within any proposed amendment
of the constitution a constitutional bill of rights
which would be binding on legislative authorities?

Mr. Macdonald: “1. None by the present government.
2. No steps have yet been taken, and if and when it
is decided to do so, the government will so indicate
in due course.

3. None by the present government.

4. Not by the present government. (See also pp. 4,8)

Mr. Stanley Knowles – June 1, 1964, p.3784:

“Mr. Speaker, as a supplementary to the question

about when the flag could be debated, may I ask the
Prime Minister whether it was not his intention, by
today, to tell us about the priorities of house
business, with particular reference to the Canada
pension plan and when we are going to get the resolution
that seeks to amend the British North America Act?”

Mr. Heward Grafftey (Brome-Missisquoi) – September 3, 1964,
p. 7607

“I realize this meeting was very short, but I should
like to ask a question dealing with an aspect of this

… 2

-2-

matter apart from the repatriation of the constitution
itself. would the Prime Minister tell us whether any
suggestion was made to hold a federal-provincial conference
to modernize and bring up to date the constitution to

suit the needs of modern times?”

Mr. Pearson: “No. we restricted our discussion to
methods of amending the constitution. But I should add
that in the discussions just completed we agreed to
have another meeting to consider, if possible, a report
from the attorneys general on the amendment of the
constitution and any other questions which the premiers
might wish to bring up. This meeting will be held
immediately following the visit of the Queen to Ottawa
on October 11. There will be a two-day meeting after
that between the premiers of the provinces and the Prime
Minister.”

Mr. Heward Grafftey – October 50, 196%, p.9625:

“Along with many Canadians I believe that before or
certainly by 1967 we must have a modern constitution
suited to modern times. I am not going into the niceties
of whether or not we should completely scrap the one

we have now and draft a new one, or whether we should
simply drastically amend the one we have. I am convinced
of one thing, Mr. Chairman, and I think there is great
support for this in every corner of this house, that much
sooner than later we must have a modern constitution
suited to modern times.”

Mr. Heward Grafftey – November 18, 1964, p. 10220:

“I should like to direct a question to the Prime Minister.
Inasmuch as a committee of the Quebec legislature is well
advanced in its study of the Canadian constitution and
proposed changes thereto. is it the intention of the
federal government to initiate proposals in the near future
to set up a constitutional study conference on a national
basis, designed to propose positive suggestions which will
result in a modern constitution suited to modern times?”

Mr. Heward Grafftey – April 1, l965, p. 13026:

“I should like to ask a question of the Prime Minister.

In view of recent developments is the government now
considering the establishment of an all party parliamentary
committee in order to undertake a complete study of the

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Canadian constitution and obtain agreement on a modern
constitution suited to modern times?”

Right Hon. L.B. Pearson (Prime Minister): “Well, Mr.
Speaker, I do not think I can usefully add anything at
this time to what I have said on this matter in recent

days.”
Mr. Heward Grafftey – April 27, 1965, p. 627

“Mr. Speaker, a supplementary question relating to the
question relating to the question just asked. Because
of the problems the Federal Government is experiencing
regarding jurisdiction and treaty-making powers, and
because of the question just asked, does the right hon.
Prime Minister not consider the time has now arrived
for the setting up of a parliamentary committee to study
our written constitution with a view to obtaining
agreement in all parts of Canada on proposed changes

and amendments?

I ask this question because of the strong possibility
that everybody in Canada recognizes that the Fulton-
Favreau proposition will not get through the Quebec
House in the foreseeable future. Does this not mean
that the time has now come to set up this kind of
parliamentary committee? I am sure the Prime Minister
would agree with me that it will do a lot to help
national unity.” (See also p. 7)

Mr. Raymond Langlois (Mégantic) – September 3, 1964, p. 7607:

“I should like to ask a supplementary question relating
to that asked by the hon. member for Erome~Missisquoi a
few minutes ago. Does the Prime Minister intend to call
another conference later this year between himself and
the ten premiers for the purpose of modernizing the
constitution after it has been repatriated?”

Mr. Pearson: “I think we had better restrict our
consideration at the moment to the subject of amending
our constitution here in Canada. In addition to the
meeting in October, there will be a further meeting
with the provincial premiers, the annual meeting held
late in November or in December. It is a little early
to say what will be on the agenda.”

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Mr. Fairweather – September 30, 1964, p. 8593:

“There is another suggestion I want to make, that when

the attorneys general are meeting they consider a formula
whereby the bill of rights of Canada, a very important ‘
document as it now stands, could become entrenched in the
constitution. It should be incorporated into the constitu-
tion and it should be so entrenched that no change could
be made without the consent of all the legislatures and the
Parliament of Canada. The bill of rights should contain
the basic freedoms of religion, speech, press, assembly

and association. It should also provide for freedom from
discrimination on the grounds of race, colour or creed,
freedom from arbitrary arrest and imprisonment and the
guarantee of free elections within a stated period. I hope
that when this is done, the day will come when concurrent
legislation will be enacted in the ten provinces. Then
this great formula will be very meaningful, in all the
areas of our concern.”

Mr. Brewin – September 30, 1964, p. 8595:

“To these rights should be added other fundamental rights
which, unfortunately, are not embodied in our constitution
and which I consider should be included before any process
is finally accepted. I welcome and second the suggestion
made by the hon. member for Royal that the fundamental
rights and freedoms of individuals, most of which are to

be found in the present Canadian Bill of Rights should

be incorporated in the fundamental document of our constitu-
tion.

Mr. Caouette – September 30, 1964, p. 8604:

“I would like here to draw the attention of the Minister

of Justice on this point. Let us leave that constitution
to England and let us elaborate a new Canadian constitution,
one that will take into account the current economic,
political and social facts in Canada, the possibilities,

the potential at all levels, in all respects, in this
country.”

Mr. Caouette – October 30, 1964, p. 9621:

“More and more at the present time we hear about ..
amendments to the Canadian constitution. These suggestions
do not come from one province only but from the.whole

of Canada. The Ontario premier seems to recognize – and
he is a Conservative – that our constitution must get

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a second sober thought.

Not very long ago Her Majesty the Queen was in Canada
and she said, in Quebec City, that a protocol which
dates back a hundred years is not adequate and does not
meet present needs. This is not surprising. It must
be noted that it is the Queen herself who declares that
the constitution must be changed, and adapted to the
needs of the times.

Mr. Chairman, we are no longer in 1867, but in 1964 and
the Canadian constitution must be suited to 1964 require-
ments, granting as much independence as possible to every
province. On many occasions we suggested in the house
some amendments to the constitution: give the provinces
more latitude, give them the required financial means
not through taxation, but by using new sources of credit
to provide for a normal development of the provinces.”

Mr. Aiken – September 30, 1964, p. 8608:

“I wonder whether I may be permitted to ask a further
question, Mr. Chairman? This question was asked by the
hon. member for Royal, but does the minister anticipate
that.this will accomplish anything beyond making the
constitution a Canadian document? Is there any change
in substance in the B.N.A. Act to be discussed at this
time?

Mr. Gilles Gregoire (Lapointe): – October 15, l964, p. 9071:

“Mr. Speaker, unfortunately I have not yet had time to
analyze and study the release issued after the meeting
between the provincial attorneys general and the Minister
of Justice. I was unaware also that the Minister of
Justice was to make a statement today in this regard.

However, there is at least one remarkable thing about
this. From now on Canada will at least be able to amend
its own constitution and, more important, we hope that
the constitution will be amended in quite a radical

way so that our country will adapt itself to the modern
world.

Her Majesty Queen Elizabeth II stated in Quebec City
that what could be normal 100 years ago should perhaps
be amended or changed today.

… 6

-6-

There is no doubt for us that the constitution should
be amended. Some radical changes must be made to meet
the requirements of our modern times, the progress and
development of Canada as well as the atmosphere prevail-
ing in 1964 in our country.”

Mr. Macquarrie – October 50, 1964, p. 9613:

“I do not intend to discuss amending procedures because

these were ably discussed by some of my colleagues this
morning. Perhaps, in time, the development of legislation
for social needs and the general development of our country
may lead us to a situation where we should take a new look

at the constitution and perhaps even consider a new constitu-
tion.

Mr. Martineau ~ November 2, 1964, p. 9672:

“I also believe that once we have brought home the
constitution, we should also think or revising and modern-
izing it. It is not difficult to realize that the British
North America Act and some other statutes that are part of
our constitution are antiquated, rigid, and do not meet the
realities of today.

It is only normal that after lO0 years there should be
this anxiety-to modernize an instrument which certainly
served us well in the past but is no longer adequate in
the light of today’s needs. And when I say today’s needs,
I do not mean only the legitimate claims and aspirations
of only a section of the population, namely the French
Canadian people, but I mean also all social, economic and
cultural problems which are not mentioned in the constitu-
tion and for which a solution does not seem to be provided.

In my opinion, those are facts about which we, the members
of the Canadian parliament, must think seriously.

In my opinion, to refuse changes when their necessity
has become absolutely obvious and clear is to show a lack
of flexibility, a lack of political realism.”

…7

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Mr. Heward Grafftey (Brome-Missisquoi) ~ December 5, 1966;
pp. 10746-47:

“The main reason for my rising tonight is simply to

say in the clsoing minutes of the debate that many
Canadians are frankly worried about the future of

this country vis-a-vis federal-provincial relations and
constitutional reform. I am not saying for one minute
that (continued on page 10747) we should always be
paying attention to Quebec to the exclusion of the

rest of Canada. But I did ask the Prime Minister today
a succinct question in these terms: In view of the
throne speech emanating from the Quebec legislature
last week, in View of what the government of Quebec

has said about the necessity of constitutional reform,
and in view of what all the other provinces have been
saying to this government about the need for con-
stitutional reform over the last months, has the time
not now come for the government to decide on definite
action in order that this nation in its centennial
year may obtain a made in Canada constitution suited

to modern times?”

Mr. Heward Grafftey (Brome-Missisquoi) – December 15, 1966,

p. 1ll73:

“Hon. members opposite say there is not enough national
unity- in this country to get on with the job of con-
stitutional reform. I say that there is. I say that
in our centennial year there will be enough national
unity in order for us, as parliamentarians, to use it
as a base in our study of the constitution. what I
believe we need is a committee made up of members of
parliament from all parties and from all regions in
this country to study in depth the Canadian constitu-
tion. Let us meet with similar bodies in provincial
capitals, and then, as the leader of my party has said
time and time again:

“After such a dialogue with the other provinces, we
are going to sit here in Ottawa with the premiers
and the members of the other provinces, to get a
modern constitution adapted to our modern days.”

Mr. Heward Grafftey (Brome-Missisouoi) – April 19, 1967,
p. 15090:

“In View of the statement made by the Quebec leader of
the opposition, Mr. Lesage, as regards the necessity

of modernizing our constitution, is the minister now
willing to create a parliamentary committee on the con-
stitution?”

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Mr. Brewin – January 24, 1966. p. 202:

“… In short, I urge upon the Prime Minister that a
committee of parliament be set up to make recommenda-
tions to parliament concerning constitutional changes
that may be required to strengthen Canadian unity, or
that may be otherwise desirable, and to examine how
we can arrive at a constitution truly Canadian,
amendable in Canada and meeting the requirements of

a modern, federal structure.”

Mr. Douglas – January 28, 1966, p. 412:

“… we in this party, therefore, want to see a
revised constitution. we want to see it domiciled

in Canada. we want to see it have a flexible amending
procedure. But, we have opposed the so-ca1led Fulton-
Favreau formula. Apparently we are now getting a
great many supporters in this regard.”

Right Hon. J.G. Diefenbaker. May 24, 1967, p. 522:

“Mr. Speaker, in view of the series of statements

being made in various provinces to the effect that this
nation is a creation of the provinces, and that provinces
have treaty rights and are sovereign entities, does

the Prime Minister not now think the government of
Canada should convene a confederation conference rather
than leaving this matter in the hands of the provinces
.or in a vacuum? will he reconsider his previous refusal
to convene such a conference? Certainly the cocktail
gathering on July 5 cannot take the place of a confer-
ence.”

Mr. David Lewis, February 8. 1968, p. 6492: .

“It became perfectly clear from the first hour of the
conference that there was a need to be concerned with
a comprehensive review of the constitution. In his
statement yesterday the Prime Minister said, on behalf
of his government, that the federal government was in
favour – I think this was the word, and I am taking it
from memory so I will be corrected if I am wrong – of
entering into a total review of the constitution. In
the statement the right hon. gentleman made today he
dalled it a comprehensive review.

…9

-9-

“It has been obvious to some of us for some time that
this kind of review and study of what needs rearranging,
what needs bringing up to date, was essential …”