Manitoba Hansard — Sitting 4 (26th Legislature, 4th Session)

26-4-4

Manitoba — Debates (Hansard)

Legislative Assembly Of Manitoba DE BATES and PROC EE DI NGS Speaker The Honourable A. W. Harrison Vol. VI No. 4 10:30 a. m. Wed. Octobe r 18, 1961. 4th Session, 26th Legislature Printed by R. S. Evans. Queen's Printer for the ProvJnce of Manitoba� Winnipeg

INDEX Page Speech from the Throne, Hon. E.F. Willis, Q.C. . . • . . . . . • .. . • . . . • . . . • • . . • • • . . . . 1 Felicitations: Mr . Roblin, Mr. Molgat, Mr . Paulley, Mr. Froese, Mr . Campbell, Mr. Gray .....•...•............ ; . . . . . . . . • . . . . • . . . . • . . . • 1 Motion re Sittings: Mr. Roblin, Mr. Molgat, Mr. Paulley, Mr. Froese . . • . • . • • . . • . 2 Motion re Committee: Mr . Roblin, Mr.

Molgat . . . . . . . . . . . . . • . • . . . . . . • . . • . . . . • • • . 6 Committee of the Whole: Resolutions . . • . . . . • . • . . . . . . . . • . . . . . • . . . . . . . . • . . . . . . . . 8 Report of Committee: Mr. Molgat, Mr. Roblin, Mr . Paulley, Mr. Prefontaine, Mr . Hryhorczuk, Mr . Campbell, Mr. Roblin, Mr. Hillhouse . . . . . • . . • . . . • • 12 Division . . . . . . . . . . . . . . . . . . . • . . . . • . • • • . . . . . . . . • . . . • . . . . . • . • . • . . . . . . . • • 15 Income Tax Bill: Mr.

Roblin . . . . . . . . . . . . • . . . . . . . . . . . . . • . . . • . . . • . . . . • . . • . . . . . • . 17 Metropolitan Act: Introduction, Mr . Lyon . . . . . . . . . . . . . • . . . . . . . . . . • . . . . • . . . . . . . . . 27 Income Tax Bill: Mr . Molgat; Mr. Paulley (amendment) . . . . . . . • . • . . . • . . . . . . . . • . . . 28 Division on amendment . . . . . . . . . . . . . . . . . . . . . . . . • • . . . . • . . . • . . . . . . • . . . . . • 40 Mr . Groves, Mr. Wagner .. .... ............ .•. : . . . .. . . . . . . • . . . . . . . . .. . . 44 Metro Bill: Mr. Lyon, Mr . Schreyer, Mr. Dow, Mr .

Lyon . .. . . . . . . . . . . . . .• . . . . . . 50 Income Tax Bill: Mr. Hryhorczuk, Mr . Scarth, Mr. Froese, Mr . Cowan, Mr . Orlikow . . • . . . . • . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . • . . . . . • . • . . . . 55 Mr . Roberts, Mr. Reid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • .• • • . . . . . . . . • . . . 71 Throne Speech Debate: Mr . Molgat, Mr. Johnson (Gimli) . . . . . . . . . . . . . . . . . . . . . . . . . 79 Income Tax Bill: Mr . Hillhouse, Mr.

Alexander . . . . . . . . . . . . . . . . . . . . . . . . . . • . .. . • . 90 Throne Speech Debate: Mr. Gray, Mr. Paulley, Mr. Desjardin, Mr . Hutton . . . . . . . . 92 Income Tax Bill: Mr. Guttormson, Mr. Campbell, Mr. Shoemaker, Mr. Dow, Mr. Prefontaine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . 108 Mr. Tanchak, Mr . Johnson (Assiniboia) . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . • . 123 Throne Speech (amendment): Mr. Lyon, Mr. Guttormson, Mr . Roberts . .. . . . . . . . . . . 126 Income Tax Bill: Mr.

Roblin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . • . . . . . . 141 Division (amendment) .............. ..... .. •....... .•... ·. . . . . . . . • • . . . . . • 151 Throne Speech: Mr. Hillhouse . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . 152 Division on amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . 153 Mr. Paulley, Mr.

Schreyer . . • . . . . • . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . • . . • • 153 Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . • • . . . . . . . . • . . . . . . 161 Committee of Whole: Bills 2 and 3 . . • . . . . . . • . . . . . . . . . . . • . . . . . . . . . . . • . . . . . . . . • . . 163 Income Tax Bill: 3rd Reading: Mr. Molgat, Mr. Prefontaine, Mr. Paulley, Mr. Froese, Mr.

Campbell . . . . . • . . . . • . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170 Division . . . . . . . . . . . . . . . . . . • . . . . . . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Metro Bill, 3rd Reading . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . • . • . . . . . . . . . . . . . . 175 Prorogation . . • . . . . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . . . . . . . . . . . . . . • . . • . • . . . • . . . • . 176

THE LEGISLATIVE ASSEMBLY OF :MANITOBA 10:30 o'clock, Wednesday, October 18th, 1961 Openlng Prayer by Wtl'. Speaker l'JCR. SPEAKER: P"resenting Petitions Reading and Receiving PetltloruJ Presenting Reports by Standing and Special Comm ittees Notice of Motlon Introduction of Bills Orders of the Day Adjour ned debate for second reading of the pr•oposed .... MR. MORRIS A. GRAY (Inkster): l vrr. Speaker, may I direct one or two questlons to the Honourable Minister of Health--if I' m in order. Number one ls, how many persons are in de fault tn payment of the hosp itallzation tax of 1961 to date?

Second question ls: \Vhat were the deflolts of each hosp ital or of all the hosp itals ln Manitoba during the year 1960? Number three: Vv"hat was the total soc ial aid cases , aid case load, for the latest year where the figures are available? Then I have another question directed to the Honourable Minister of Ind ian Affairs. I read in the Hansard that scholarships were granted to the Indians in almost every province except in Manitoba. I understand there are some Indians here. Is it poss ible that no one was entitled to a scholarship?

If the answer could not be given now I could refer this to anyone that I'm assigned to, and they could have the Hansard before him and bring in ·an answer at any time. HON. DUFF ROBLIN (Prem ier}(Wolseley) : Mr. Speaker, I'm not clear what my honour able friend is talking about when he's talking to the Minister of Indian Affairs.

I'm happy to :::.olmowledge that my colleague the Minister of Health and Public Welfare has achieved some quite lnteresting successes in improving the conditions of Indians in Mani'toba but he has not cny responsib ility, I believe, for the kind of scholarship that my honourable friend speaks of. I think probably that inquiry should be addressed to the federal administration, unless the Min ister of Education here has got so mething further. HON. GEO. JOHNSON (Minister of Health & Public Welfare)(Glmll): May I take these three questions as an Order for Return ? MR. SPEAKER: Orders of the Day.

Adjourned debate on sec ond reading of Bill No. 2. The Honourable Member for Ethelbert. MR. M. N. HRYHORCZUK (Ethelbert Plains): Mr. Speaker, I do not intend to touch on some very pertinent matters such as the Rowell Sirois Report, the equallzation principle or . any of the other pertinent matters in regard to the report of that particulax: Commiss ion. What I hope to do is to restrict myself entirely to the Bill and its implications as I see tP.em.

The substance, or the alleged substance of this Bill, has been built up over the months 'through every media of dissemi nation of new s that we have ln the Province of Manitoba. The papers have been full of it; we've had reports of it on TV; and all the radio stations in the Province of Manitoba carried the fact that sooner or later we'd be called into a special session for the pur pose of considering some legislatlon�which would in effect replace or reduce the hosp ital prem iums . Throughout all of this publicitY there were two things that were pointed out.

Firstly, that the premiums would be reduced; and sec ondly, that the principle of ablllty to pay would be brought into play. Now after the First Minister had his say on this bill, the newsp apers came out quite flatly stating that this was a hosp ital levy. It was a 1% income tax for the purpose of reducing the premiums which the government cons idered were too big and too heavy. And even the Speech from the Throne, Mr. Speaker, states: "And to provide the means to glve effect to a reduction in the hosp ital premium rates". To me, Mr.

Speaker, when you have a redundancy of the same argument over and over again, lt begins to look as if that is not the reason for us being here today nor is lt the reason for the contents of this bill. I do not agree, and I'm sattsfted that this blll has not been introduc ed for either to reduce the premiums or to invoke the prin ci ple of abllity to pay. I have to base my argument on assu mptions ln some instances which, of course, is unavo idable, and on facts know n to all of us in others.

This government knew a long t!me ago that in order to carry out the solemn pledges made to the people of this province October 18th, 1961 Page 55

(Mr. Hryhorczuk, cont'd. ) .... that there would be no increase in taxes that they would have to find a falrly good excuse to lncrease those taxes. And I say, Mr. Speaker, that this blil is one of the pieces of a ji gsaw puzzle and that the parts are beginning to fall in place and to form the correct plcture. The government has always boasted of being long-term planners. They're always looking far lnto the future. And I say to you, Mr.

Speaker, that they were looking into the future in regard to thls particular matter way back in the early 19 60's. <� Now I am going to make a statement which is based entirely on assump tion, but I'm quite sure, Mr. Speaker, that that assump tion will prove itself a fact wi thin not very much more than 12 months. I say to you, Mr. Speaker, that when the premiums were raised ln 1960 they were not raised because the pian was not carrying itself, but the primary purpose of the raise of those premiums was t.o establlsh a reason and an excuse for the legislation now before us. --(Interjection)--! expected that.

I expected that. We have had the government admit that there was go ing to be no defic it in 1960. Even on the basis of the old premlums, they told us that they expected probably a sm all deficit in 1961 but they did anticipate a heavy deficit which warranted the increase in premiums ln 1962 and on. That's an admiss ion of the government itself and it's in the records of this House. Then there was actually no legitim ate reason for increasing those premiums at that particular time. Now, Mr.

Speaker, the First Minister and the Cabinet knew very well tbat the publlc was going to be shocked by that increase and likely so. They knew it and they took a garcble. It was a gamble that they had to take. They had no choice unless they were" prepared to break the pledges that they made to the people of this provinc e.

They have adm itted during this sessi on that the increase was unwarranted and unjustified by teEing us that they are going to refund to the premium payers the sum of $2 mlllion • I say to you that this government ls not so good at heart that it would part wi th $2 million so easl ly. 1.'/e all know--it's common knowledge this government needs every penny it can raise--but out of the good of their beal'ls they're ready to give premium payers $2 million . I say that it was an overcharge and nobody knows whether that $2 million was the only overcharge in the increase in those premiums.

It wouldn 1t surprise me at all lf that amount is only a part of the overcharge. But why the refu nd ? I think we have the answer to that in the speech made by the First MinistGr the other day. I say, Mr. Speaker, that that move is plainly political appease ment. In effect, what the Prem ier has said is this: We are sorry for having overcharged you. We1re going to make up for this by firs tly givi ng you back $2 million ; and secondly, base future premiums on abil ity to pay. Now just let's take a look at what the First Minister had to say in his speech.

Quoting from Page 22 of Hansard, that is Volume VI, No. 1, here is what we find: "We raised it"-- and he's referring to the premiums --"w ith the greatest of regret, but we determined that at the first possible opportunity we were going to reduce these premiums and to invoke the prin ciple of ab ility to pay at the first possible opportunity". Then again--"but that's not the case wi th a premium of $6. 00 and $3 . 00, and it underlined our determination to introduce the abil ity to pay principle in connection wi th hosp ital premiums at the first opportunity ". Well, Mr. Speaker, is this the first opportunity ?

And where did this opportunity come from? It's the creation of this governm ent. The government was in the pos ition to create that opportunity at any time, and I say to them that they could have brought this opportunity about in 1960 when they increased the premiums. They could just as eas ily have called a sessi on of this nature in 1960 and did what they are doing today. And I say to you, Mr. Speaker, why wasn't it done? Because they were not quite prepared. They were planning for the future and this is the re sult of that planning or part of that result.

Now again on page 23 : "This means, Sir, that while the reduction is retroactive until July of this year, the new tax wi ll not come into effect until January 1st, 1962 , which I think wi ll be apprec iated by those who have to pay it". Now I' m sure that isn't quite what the First Minist er meant. I think he meant that it wi ll be ap prec iated by those that do not have to pay it, not by those who have to pay it. The Premier, in making those statements, was weepi ng crocodile tears.

I think that before I'm through to day, I hope, I'll be able to fit in a few more pictures , a few more pieces of that puzzle into place, which wi ll give us a fairly good picture of what this government is doing. Now the Minister told us that by reducing the premiums from $3 .0 0 to $2. 00 and $6. 00 to $4. 00, it wi ll mean a loss to the plan of $6 1/2 million . In order to replace that $6 1/2 mil lion he asks us to pass the bill before us which provides for an increase in income tax, whlch Page 56 October 18th, 1961

(Mr. Hryhorczuk, cont•d. ) .... w ill mean to the Province of Manitoba the amount of approx imately $5 1/4 million. He also asks us to approve a corporation tax, which is anticipated will raise the sum of $1, 300, 000. In other words, he is trying to replace the loss of $6 1/2 million. But he has already admitted, he has already admitted to this House and to the people of the Province of Manitoba that he has $2 mlllion too much because he ls glv\ng tt back to the people of Manitoba for the year 196L Then actually all he had to raise by way of ta..", lf he had to ralse anything--and I subm it, rJ[r .

Speaker, that he does not have to ralse a soli ta..)' copper to meet hosp ital services costs. He is overcharging the people of this prov ince a neat sum of $2 million to start wi th. If we take that $2 million into cons ideration, and I think it's right that we should, then we do not need the corporation tax at all and the income tax does not have to be as high as lt is . Now, Sir, I think I'm comi ng to the last piece in this puzzle, and that is the poss iblllty of a federal election ln 1962. Now, Mr.

Speaker, men bei ng what they are, and the same applles to poHticians , we can expect that our good friend, Mr. Diefenb aker, will be handing out some goodies. Now what could they be insofar as the Province of Manitoba la concerned? The Pro vince of Manitoba and other provinces , have been fighting pretty hard to get the Federal Govern ment to agree to pay half of the T. B. and mental hosp italizations.

I think the demand on the Federal Governm ent is a reasonable and a fair one and I think that before the next election, and probably quite a bit sooner, we will hear that the Federal Government ls going to com e in and pay its share of these costs which will save this government approxima tely $3 mllllon ln what is now our hospital services costs. But I think that he ls going to go a little further, Mr. Speaker. He is going to go some what further. We have had another very reasonable dema nd on him, not only by this government but by the former government.

We have said for several years now to the Federal Government, we have many patients ln our hospitals that shouldn't be there. The cost of keeping these patients ln hospital has been pretty high and lt isn't war rafit8d. We should provide some other type of care or, if you want, hospi talization say in such places as nurs ing homes. I think that is wi se and I think that the Federal Government is going to agree to come ln on that scheme too.

And that scheme, we cannot say what it will mean to the Province of Manitoba, but lt sure is going ro make up the difference between the $3 million and the $4 1/2 mlllion that this government needs; So where have we come now ? We have come to what this Blll is . This Blll ls nothing more than a means to provide revenues for this government for the general purposes of this government and nothing more nor less. It's very timely; it's been very well planned; but I'm quite sure that the future wlll point out the true and correct reasons for this particular blll. Now I say, Mr.

Speaker, that if my assum ptions are correct, and I think they are, then in all fairness- -then in all fairness to the people of this province and in fairness to the state ments that were made by the First Minister, let us earmark this source of income that we shall get under this particular bill for the purpose of reducing our hosp ital pre miums ; to apply this income to the cost of hosp ital services ; and, Mr. Speaker, then we shall have what the First Minister is so anxious to have, a hosp ital cost based on ability to pay.

Because when the Federal Government comes into these parts of the plan that I've mentioned, and they're going to be here as sure as the sun is going to set today, then we are imm ediately away from the abilit-y to pay principle. We're back to the $2. 00-$4 .0 0, which is not based on the abll!ty to pay. And I say to you, Mr. Speaker, that we should use this money for the purposes that this government led the people of the province to believe that they would be us ed for. That's all I'm asking--nothing more.

I'm ask ing that the people be given what they were told they will receive--in the Throne Speech; in the press releases for the past se veral months; in the statement made by the First Minister in this House day before yesterday. That's all I'm ask ing for.

I think it is a fair and reasonable request because as the bill now stands we have a couple of red herrings in it to make me and others like me believe that it is mea nt to reduce the cost of hosp ital servic es ; but even these reaso ns, these red herrings , lf we look at Page 5 of the bill we notice that there is a part or a division that's headed "Hosp ital Services Tax". Now I say to you, Mr. Speaker, that that type of approach to any respons ibility by the government is below the dignity of any respons ible government. That particular heading means nothing inso far as the contents of this bill is concerned.

It will never be taken into the

interpretation of this bill or Ln the

interpretation of any secti on of that bill. But let's look at the explanatory October 18th, 1961 Page 57

(Mr. Hryhorczuk, cont'd. ) •... note that's just opposite

Section 6. Does it say hospital ser vices tax? No, it does not. It says "Special Tax". Special Tax to raise 1% of income and that is the true nature of this bill. That is the intent and purpose of this bill. Thls is a speci al tax lmposed upon the people of this province so that this government could carry out the promises lt made at the last election. I say that these sections should be ame nded. They now read: "In order to raise of revenue for the purposes of the Government of Manitoba".

I say that the words "the Government of Manitoba" should be stricken out and replaced with thewords "paying the costs of hospital services ". Then we will be on all four with what we have been promis ing and what we have been saying to the people of this province. I also do not like

Section 6 (2) of this bUl which gives the Lieutenant-Governor-in-Council the exc lusive and conclusive right to set the rates of taxation. We have no ldea--I have read it and if you read it you will agree with me, no question about that. Mr. Speaker, I think this is .wrong. I think that there are some people ln this province are going to have a very rude awakening when these rates are set up by Order -in-Council. The fact that this government, intentionally or otherwise, left the imp ression that all this is going to be is a 1% tax, was wrong.

This tax can be almost anything which is required to raise the amount equivalent to 1% of the ta.xable income. I think that the people of Manitoba and this House are entitled to know what these rates are going to be and who they are go ing to be imposed upon. Are all the in come tax payers going to pay this or only a portion of them? That makes a terribly big differ ence, Mr. Speaker, and I think we should know about it. There ls one other

section that I am not pleased with and that is

Section 55 (1). The Prem ier told us yesterday, I believe in an answer to a question or in an aside I don't recall just what it was, that he hadn't signed an agreement yet with the Federal Government. We have no assurance that he will and, if he does, that that agreement will be in existence for any length of time, because this bill is drafted in such a way, and I quote from

Section 51: "The Treasur er with the approval of the Lieutenant-Governor-in-Council may, on behalf of the Government of Manitoba, enter into a collection agreement!' He may--he may not. Now that opens the possibility of a double taxation in the Province of Manitoba and I think that we should take a very careful look at that particular provision. Now in conclusion, Mr. Speaker, I just wish to repeat, let us give the Province of Manitoba, and the people in it, what we have led them to believe they will receive under this bill. MR. W. B. SCARTH, Q. C. (River Heights): Mr.

Speaker, whether we in Manitoba like it or not, we are faced with a $42 ml llion hospital payment per year. We have listened to a lot of words from the Oppos ition benches across the way and, as far as I am concerned, not one of them has said anything yet. One thing I would like to comment upon is the speech just made by the Honourable Me mber for Ethelbert Plains , a former Attorney-General for the Province of Manitoba. If the honourable gentleman would take the trouble to look up some authority on the

interpretation of statutes, he would find that the caption, "Hosp ital Services Tax" is a part of the Act and must be read as such. It ts not like a marginal note of which we need not take notice, but that caption Hospital Service Tax means exactly what it says and it must be read as part of that section. Secondly, the Honourable Member for Ethelbert Plains did not read his mail, or certainly he did not read

Section 6 of the Act throughout. The intention of the Legis lature is clear. I'll read it for him.

Section 6 (1). A tax at a rate necessary to raise an amoun t that is the equivalent of one. per centum of the total taxable income earned in that taxa tion·year in Manitoba, by all individuals, by whom a tax is payable under this Section. Now , Mr . Speaker, I don't know whether the honourable gentleman was sincere in suggesting that the Cabinet could go over that one percent, but certainly if he was sincere in that suggestion, then it is surprising comi ng from an ex-Cabinet Minister. MR. HRYHORCZUK: Mr.

Speaker, I would suggest that the honourable member pay a little more attention to what is being said in the House then he won't be making remarks like he is mak ing right now. MR. SCARTH: Well, Mr. Speaker, I would like later on to hear the Honourable Member from Ethelbert Plains clear up what he said. He indicated that the Cabinet fixed the rate of this tax. Now let him explain that away. But in this Chamber today, Mr. Speaker, as I see our duty, we are not here either to defend the actions of the Federal Government nor to approve of anything we have done.

On our doorstep lies the responsibillty of meeting a $42 ml llion bill Page 58 October 18th, 1961

(Mr. Scarth, cont'd. ) .••. and we must dispose of lt. The responsibility ls on this Legislat ure and this Legislature alone. Baying at the moon, as has been done by certain of the Op position Group, will never accomplish anything for anybody. If the people of Manitoba go for that kind of talk, then really they are not getting their money's worth. It was attributed to the new Leader of the Opposition, I think through the T. V. and the press, that he was going to do away with hospital premiums. The honourable gentleman can correct me if we have got the wrong impressions from press and T.

V. , but I belleve he sug gested that it could be done this way: by a savings--he was not expllcit in that regard; by charging people, each hospital patient, up to a total of $10.0 0 per stay in hospital, perhaps $1. 00 a day ......... ; and then thirdly; a further grant from the Federal Government. Now, on the savings, I am going to ask the Honourable the Leader of the Opposition if he will answer these questions: (

a) Is he going to cut down the number of hospital beds now available; or (

b) Is he going to redl!Ce the wages or salaries of hospital staff; or (

c) Is he going to curtail the acqu isition of hospital _equipment in the future; or (

d) Is he going to do away with the present plan of furthering hospital accom modations? Now, Sir, if it doesn't come under one of those categories, I am going to ask the Honourable the Leader of the Opposition to explain just how he is going to put into effect, or what suggestions he has for putting into effect that savings. And let him answer it. No more smoke screens--we have had too many of those already. The First Minister-has already indicated that since 1958 there has been a sharp increase in the amount of money which \ve, the Province of Manitoba, have rece ived from the Federal Govern ment.

The Honourable -the Leader of the Opposition has suggested that he could. get more mon ey from Ottawa. Well if he believes he can do it, I'll contribute towards his expenses to go down there. But I might say, Mr. Speaker, that if he is going to get more money he will have to do a whole lot better than his Party did up to the year 1957 , when they were ln pow,er and the Liberal Government in power in Ottawa. We want a sharp improvement over that if he is going to reduce hospital taxes. Now we come to some more manoeuverings from across the way.

Yesterday the Honour able the Leader of the CCF, or the new party or whatever we call them these days, what is it? --(Interj ection)--All right the CCF Party. I've got you. This wa s his amendment: "that this bill be not now read a second time, but be read six months hence" , which of course meant a defeat of the bill. The Honourable the Leader of the CCF made this amendment, Mr. Speak er, without any suggestions, without any altermitive suggestions as to how our $42 -mllllon bill must be met. --(Interjec tion)--Well you didn't say anything. MR.

RUSSELL PAULLEY (Leader of CCF}( Radisson): Ob. yes I did--you read Hansard. I said why I was moving that. MR. SCARTH: Oh, you did-say why. MR. PAULLEY: Yes. MR. SCARTH: Well , we didn't understand it from listening to you. MR. PAULLEY: That is very understandable--that you did not understand. MR. SCARTH: I will read Hansard, Mr. Speaker, and get his speech photographed so it will ever remain.in my memory. But anyway, out comes this suggestion.

Then there was a hurried conference between the Leader of the Opposition and the Leader of the CCF and, lo and behold, the Leader of the Opposition went hook, llne and sinker for the motion also and they all stood up, all 11 of them, and voted for it, without an alternative suggestion by any member of the Liberal Party. So whither they're going I don't know. But 1 will suggest this, that an Opposition group is not there to obstruct and obstruct only. It is there to make a few improvements if it can. It is there to put forth ideas and those, Mr. Speaker, we have nothad.

There is another strange inconsistency about the speech of the Leader of the Opposition. He asked that the First Minister would give projections ye ar by year on the effect of this hospital plan over the five-year period. Now for a man who, by the press and by T. V. has got an im mediate cure for all this hospital difficulty, I don't see what he wants a projection of our ideas for. He can cure them just like that, so--(Interjection)--No I wasn't aslee p. We want to know just what the Honourable the Leader of the Opposition is going to do to get over this hospital $42 mUllon item, and nobody has told us yet. MR.

GILDAS MOLGAT (Leader of the Opposition)(Ste. Rose): Mr. Speaker, on a point of privilege just to correct the honourable memb�r. He has been going on now for a few minutes October 18th, 1961 Page 59

(Mr. Molgat, cont'd. ) ...• on the wrong tack, and to save hlm some time, the projection I asked for were the returns to the Province of Manitoba from the tax collection agreement and the equallzation plan. That's the projection I asked for. I mentioned nothing about hos pital plans in that request. MR. SCARTH: If I have mi sunderstood the Honourable Leader, Mr. Speaker, very good, but I thought, I understood him to mean a projection of the antlclpated income for the next flve years. Am I incorrect, Sir ? MR. MOLGAT: ..... income to the Province of Manitoba from the Federal-P rovincial tax collection arrangement.

MR. SCARTH: Yes, but may I ask you one question. Were you, Sir, intending the next five years, or the past five years ? MR. MOLGAT: Mr. Speaker, to me, projections mean forward. That's the pos ition of the Liberal Party. MR. SCART H: Then again, Mr. Speaker, lf the Honourable the Leader of the Opposition has a cure-all for it he doesn't need a projection of our plan, and lf he has a cure-all whereby he mystically comes up wi th all this money so there are no premiums, no anything, we wi ll go along wi th it, but we would like to hear his ideas.

So, Sir, again may I remind the House that we have a serious problem before us that the present bill makes common aense--(Int erjection) --well so that you people wU I understand .. It is hard to get into your heads. I suggest, Sir, that we go along wi thout any more of these smoke screens or camouflages and let's get going. Thank you. MR. SPEAKER: The Honourable Member for Rhlneland. MR. J. M. FROESE (Rhineland): Mr. SJB aker, I am happy to join the debate here this morning.

I should have probably done it a little sooner in order to beat some of the other mem bers to it because some of the things I was going to sa y have already been said. However, I wU I probably repeat some items because I think they bear repetition and also emphasis. To me there are several principles comi ng up through this bUI which should be cons idered very thoroughly.

First of all there is the princl.ple of the ..... why the tax agreements were flrst introduced and their purposes and the changes made over the years and there is the principle of increasing ta..xation in years ahead wi thout reason for allocating of the revenues. I think this also is very important because why tax when evidently there is no reason for it. Then there is a third one--that is the impos ition of a new tax act when another act is on the statutes although it is sus pended, so why have two or more Income Tax Acts ?

To go back and point out the reasort why tax rental agreements were first instituted, I would llke to read a paragraph from the Alberta Post War Reconstruction Commit tee final report.

On page 79 of that report we read as follow s, and I quote: "With the outbreak of war on a scale unprecedented in human history and which from the outset was ll kely to make demands on the nation's resources on a scale that wo uld strain an economy that was still suffering from the results of the depression years, the Federal Government sought to llmi t the revenue of the Provinces in order to excer cise comp lete control over the financial struct ure.

Under pressure of war conditions the pro vinces entered into an agreement wi th the Federal Government to surrender to the latter for the period of the war the entire field of in com e and Corporation taxes in return for grants based upon provincial revenues from both sources during the proceeding years. Federal taxa tion in these fields was stepped up to present maximum lim its and concurrently indirect taxation was increased likew ise to yield a maximum revenue to the Federal Government". That is the end of the quote.

It seems to me from that report that these agreements were first instituted more to llmit the revenu es of the Provinces than to give them a greater share of the national tax revenue. However, over the years the purpose apparently has been changed in that the provinces are getting equalization and it is proposed to stable the economy of the provinces so that for the many years now that we have been operating under this rental agreement the pro vinces have benefited by and through the tax rental agreement.

However si nce we now have Bill No . 2 before us, it seems evident that even the Federal Government has only so much re venue at their dis posal and from which to divide and give to the provinces. We see under the present Blll that we wl ll be getting 16% starting in 1962 and that this ls going to replace what we got in former years through the tax rental agreement. Now, lf this 16% is going to be suf ficient to replace that, why add the 1% a year and not alloc ate that 1%. It seems to me that if Page 60 October 18th, 1961

(Mr. Froese, cont'd. ) ••.• 16% is sufficient then that 1% should be allocated to a specl.fl.c item in order to qualify that the increase in that taxation because after all the people of Cana da and Manitoba have to pay that 1% as well. I will be comi ng back to this point later. Then in the Premier's address the other day he said that he concurred in the factor of having the natural resources income included among the revenues for distribution.

Personally, I feel one factor has been left out in draw ing this to the attention of the members of this House and that is that under natural resources income it does not only refer to incom e from resour ces in the way of royalties and fees and so on but it also includes the capital income -- that means that when a province has more natural resources income, naturally they also sell us some of their resources in capital ways so that they no longer wlll be able to draw from these resources.

They are sold and this income is being included as well which I feel not not quite right because after all these provinces that have large incomes from natural resources, surely they introduce policies which helped to develop these resources and did som ething about it. He mentioned that Alberta, I think, had $120. 00 odd -- $112. 00 or whatever it was, the figure, and we were getting somewheres between four and five in Manitoba. Now, I feel that this is not somewheres in between -- it's way down, almost nil. So here I believe this government has been failing the people of Manitoba.

We should be developing our natural resources be cause we have lots of them and there is no reason why one province, the Province of Alberta for instance, has such large resources and such large income from their resources when we have so li ttle. It seems to me that it is also penalizing these provinces that have developed natural resources and we sit here and are happy that they now have included those natural re sources in this income.

I am sure that had some of the money that we are proposing to spend on the floodway been spent on developing natural resources, we would not have a dead asset, we would have a revenue-bearing asset and which would bring in returns for years to come, rather than doing what we are doing at present.

I also mentioned the 1% a year increase from 16 to 20 over the next several years and I feel that this increase in revenue should definitely be used to, first of all, delete the 1% revenue that they are going to tax us next year, and then, after that has been deleted, that the balance go to reducing the premiums -- so that these re venues from the increase of 1% a year be allocated in that way. What else are they going to use it for? Are they going to use it for to pay the interest on the Manitoba debts which has been increasing over the years?

Are they going to give Lt probably to Metro to cover their deficits because they are clamouring for more money, or is it going to be spent for the flood way as already mentioned, creating a dead asset. I feel that it is wrong to increase the tax at this partlculaJ;" time. The farmers in Manitoba are facing declining income, they have had a poor crop and here they are going to up the taxes. Surely this is not going to augur well for any government and certainly any increase in tax is not in any way giving or making the clima te more conducive for industry to come in.

It will also have another deterrent effect -- the skllled and profess ional employees wlll be paying more money in taxes

whereas probably in other provinces this won't be the case, and Manitoba -- we will be, as a result, in a much worse position. Surely there must be alternatives to this matter of taxation and I for one believe one of the principle ones is reduced spending, We should reduce the cost in the Health Department and not require this increase in taxes. Pre sently the budgets drawn up for the hospitals in Manitoba are done so apparently by the govern ment or its branches and they are causing hardships for one hosp ital because the budgets the way they are drawn up go by what they have been us ing in the past.

Now if the hospital has been operating at a very low rate of income and has been trying to run efficiently, their budget is based on that performance and thereby penalizing one hosp ital and its operations against another. Surely this,, I feel, is wrong. There is ..... ..•.•. HON. GEORGE JOHNSON (Minister of Health and Public Welfare)(Gimll): How would you suggest, Sir, that the budget be arrived at? MR. FROESE: I would say that the local hospital boards should have more say ln drawing up hospital budgets. MR. JOHNSON (Gimli): Mr. Speaker, hospi tals are autonomous.

Would the honourable member explain further what he means by the local board having more autonomy. MR. FROESE: I was recently approached by a member of council, in one of the munici palities, and he said that their budget had been presented to them and they had to accept it -- October 18th, 1961 Page 61

(Mr. Froese, cont•d. ) ..... there was nothing they could do about it. So I go by what these people tell me because they're the people that are involved. I also feel that this government is destroying the volunteer effort in the province. I think this is evidenced in various departments and is brought about through its centralization pro gram.

We find that there are less people involved in voluntary work today in hospitals and I think the same goes for schools, in that we're losing volunteer effort in th is regard imd this also, I think, applies to the Credit Union movement which is so wholly dependant on volunteer effort. Because the way the government is treating these matters by increased spending, people feel that there's no longer a need to do voluntary work, that why not get paid for it when everyone else gets paid for his work. Com ing back to

section 6 of Btu No. 2, I feel that the 1% tax or the 1% proceeds from that 1% tax is not going to be a 1% tax increase to the taxpayer. This is wide open and I'm sure in my own mind that it won't be a 1% across the board. I'm sure there will be variances and to many taxpayers it will mean much more than the 1% they are led to believe. Now, before I sit down, I have some questions which I would like to direct to the memb ers of the government.

I checked ido the statutes of Manitoba and also in lhe Canadian statutes re garding the tax rental agreement and also the Income Tax Act and there are a number of things which to me seem to be confusing but I'm not too sure -- maybe we could have the information on these matters. I will put these questions forward and probably can get the answers. One of them is: Do we have two or more Income Tax Acts at the present time? Sinc9 th ere's one suspended in '42 included in the revised statutes of '54 and suspended under

Chapter I of 1955. Then question (2): Does the Federal Income Tax Act have precedence to the Provincial Act? (3): Do the tax rental agreements die as they expire or do they carry on? (4) : Is there any conflict in the overlapping of the tax rental agreements and Bill No. 2 that is before the House ? Then (5): Regarding the mechanics of Blll No. 2, I find that in

Section 14 (1) (

a) which deals with the income tax to farmers that they will, in future, have to estimate their income tax be fore the year ends and make a rem ittance and then pay the balanc e when they fUe th eir returns by March 31st or Aprll 30th. Then also regarding rem ittances; presently school districts are not required to remit monthly but have the right to remit these tax deductions at source twice a year. I' m just wondering whether there are any changes being effected through this Bill No. 2 in this regard. Thank you. MR. JAMES. COW AN, Q. C. (Winnipeg Centre): Mr.

Speaker, yesterday and today we have heard many comp laints from Opposition mem bers in this House that Manitoba is not to get more money from the Federal Government than is proposed under this agreement before this House. The me mbers on this side of this House agree with them in that respect. The First Minister on numerous occasions has objected to the federal proposals and it is no doubt due in part to his vigourous objection to the proposals of October 1960 that we have a much better agreement before th is House at that time than would have been the case if the proposals of October 1960 had been submitted.

If the Liberals were in power in Ottawa you would have much more to comp lain about, for according to a table on Page 7927 in the July 11th, 1961 is sue of Hansard under the 1957 agreement the amount that Manitoba would have received under that agreement in the forthcom ing fiscal year would be $38, 056, 000. as comp ared with $42 , 296, 000. under the proposed agreement, an increase of $4 ,2 40, 000.00. The Liberals and the people of the Province of Manitoba should be thankful that we have not got a Liberal Govern ment at Ottawa.

Furthermore, we should be appreciative of the trem endous increase in con ditonal and unconditional grants to the Province of Manitoba. An increase from $8 ,3 78, 000 in 1957-58 to an estimated $32 ,6 88, 000. in the present fiscal year, or about a four-fold increase. At the same time, the total grants of the Federal Government increased from $664 mllllon to $1, 283 million or an increase of not quite double. Manitoba has benefited much more than the average Canadian province from the increase in federal grants. Whlle the average increase has just been doubled, the increase to Manitoba has been four-fold.

The federal revenues which are collected mostly in Ontario and Quebec are being distributed throughout Canada not only through the Federal-Provincial agreement but also through these federal grants. Opposi tion me mbers are loud in their praise of the equalization principles embodied in the 1957agree ments and it is the principle for which our Premier fought for but these agreements weren't too perfect either, as is shown by the fact that the Federal Government ln 1958, the .present , Page 62 October 18th, 1961

(Mr. Cow an, cont1d. ) .•••• government gave increased Atlantic Provinces Adju stment Grants to the four Atlantic ·provinces of $25 million a year which are to be increased to $35 million in the next year. So these equalization agreements of the 1957 aren't so perfect after all for we find that people ln all parts of Canada and in all politica l parties agree wi th the justice of giving these increased grants to the rather poor Atlantic provlnces in order that they can bring up the!.r standard of services more ln line wi th the services ln other provinces of Canada. lvlr.

Speaker, I am sure that the people of Manitoba wi ll be surprlsed at the irresponsible action of all of the Opposi tion members yesterday afternoon when they voted against this proposed Dom inion-Provincial agreement when they voted for the motion of the Leader of the Honourable CC F. -- (Interjection) -- No, I am not quoting Flemi ng through Hansard. And I would llke to know , I would like to know what the CCF -- how the CCF Party wo uld have voted lf they had been on this side of the House in respect of those agreements. -- (Interjection) -- How woul d you have voted? MR.

PAULLEY: •..... ..••. forced into it but we wo uld have had a different approach insofar as hospi talization premiums are concerned. MR. COWAN: You wo uld have voted for the bill. MR. PAULLEY: The first part, yes. l'!IR . COW AN: You would have voted for the bill. So we have the fact that the CCF wo uld have acted as responsible people if they had been on this side of the House. MR. PAULLEY: Mr. Speaker, may I just explain to my honourable friend we wo uld have voted for a bill entering into the tax collection agreement, but certainly not the bill that we have before us at the present time. MR.

COW AN: We wou ld have had a responsible vote from the CCF Party lf they had been on this side of the House. Now surely, surely the principles of the CCF Party are such that they don't change their vote just because they are on the other side of the House. Surely .... • . . . -- (Interjection) -- And how would the Llberals have voted lf they had been on this side of the House when that vote came up yesterday. Would have the Liberals voted for the blll if they had been on this side of the Hou se? A MEMBER: Would you have voted against it if you had been on this side? MR.

COWAN: No, I wo uld have voted for the bill. I wo uld have voted for the bUl because if we don't vote for that bill we are throw ing away millions of dollars for the people of Mani toba. The amounts that wi ll be payable is some thing li ke $42, 296,0 00. and by the Opposi tion Parties taking the irresponsible attitude of voting against this bill, they are certainly voting against the welfare of the people of this province. How woul d the Liberty Party have voted if they had been on this side of the House in respect of that bill ? -- (Interjection) -- MR. MOLGA T: .•.•.... not the least bit embarrassing.

We wo uldn't be presenting a bill of that sort. We 'd be ashamed to. MR. COWAN: I'm sure that the Liberal Party wou ld have voted for the bill if they had been on this si de of the House. They wou ld have acted as responsible persons. -- (Interjection) -- ........ not always right -- not alw ays right. The CCF Party don't like the hospi tal pre- miums. There are some 35, 000 needy persons in Manitoba who don't pay hospi tal premiums but the CCF object to the fact that others who don't pay income tax must pay hosp ital premiums.

Surely it is fair that the people who receive hospi tal care should pay some portion of the cost if they can do so. Under the proposals , the people that pay premiums wi ll pay about one-third of the cost.

Only a few years ago, people that we nt into hosp itals paid the full cost, not just one-third, and surely it is fair that they should pay at least one-third of the cost through the premiums. --(Interj ection) -- If we elim inated all of the people in Manitoba who don't pay income tax so that they didn't have to pay a hosp ital premium as the proposal of the CCF, then we would elim inate many people who could we ll afford to pay that premium.

For instance, an unemployed man between 65 and 70's could own $52,0 00 of 5% bonds, and if he's married he wou ld pay no income tax, and he could at the same time ow n a clear title home which might be quite valuabl e, or he might have $86, 000 in a 3% bank account -- (Interjections) -- No, but there are others, perhaps the farmers who can take quite an allowance for capital cost allow ance, depreciation on buil dings in the income tax so that they don't have to pay an income tax and yet they could we ll afford to pay the premium.

There are a number of people who can we ll afford to pay the premium that do not pay an income tax. But lf lt is such a good idea that those October 18th, 1961 Page 63

(Mr. Cowan, cont1d.) .... who don't pay incom e tax should not pay hospitaliza tion premiums, the CCF Party should be able to convince the Saskatchewan CCF Party that this is a policy that the Saskatchewan Government should adopt. After they have put into practice what they preach, then it wi ll make more sense for the CCF to advocate such a policy.

The CCF are pikers com pared to the Liberals wi th regard to hospi tal premiums , for in spite of the fact that the Liberals instituted the hospi tal premium at a higher premium than is now proposed before this Hous e, the Liberals now propose to elim inate the hosp ital premium. The Liberals should tell us and the people of Manitoba wh ere they are going to obtain this $19 1/2 mi llion.

We are told that they wl ll obtain some from the Federal Government but you can only get from the Federal Government what the Federal Government wi ll give you, and the Federal Governm ent have already increased the pa ym ents to Manitoba in the last four years under the conditional and un conditional grants by over $24 ml ll ion and under the Domin ion-Provincial agreement by almost .$8 mi llion -- an increase of over $32 mi llion in payments during the last four years -- so that we cannot get money from the Federal Government because lt refuses to give anymore at the present time, so the Liberals must tell us how they are going to find the money to take up the slack if premiums are done away wi th and the proposed inco me tax is not put into effect.

We are told a deterrent of $1 0. 00 a case, and we have this survey made by the Hosp ital Services Plan which shows that the saving would only be $9 17, 167 a year, less than a ml llion dollars , and that doesn't go very far to make up the $19 1/2 million in costs that have to be mad e up. Then they tell us to reduce costs. Well , they should tell us where the cost s are to be reduced. They should itemize these costs; what salaries are to be cut; what beds are to be closed up, and tell us where the costs are to be reduced.

Or perhaps you approve of all the present ex penditures for hos pital services in Manitoba. You approve of each item of expenditure for salar ies, for food, for orderlies and equipment and so on, but you don't like the total. What kind of a policy Is this ? The people of Manitoba w ill see through such nonsense and the Li be;:als wi ll comp letely lose the respect and su pport of the people of this province. MR. DAVID ORLIKOW (St. John's): Mr.

Speaker, for 25 years all politica l parties ln this province, indeed all political parties in Western Canada have been 2.dvocatlng and expound ing the basic principle that the tax revenue derived in the Dom inion of Canada paid for by the people of various provinces should be shared on an equitable basis between the Domi nlon, the Federal and the Municipal Governments. Provincial Premiers, beginning wi th Premier Bracken, followed by Premier Garson, Cam pbell and the present Premier have been eloquent in their advocating of this policy. I had thought, Mr.

Speaker, that all parties and all members 2.greed wi th th is, but I must say that having list ened to som e rather re markable speeches from that side of the House yesterday and today I am some what confused. The Honourable Member from St.

Vital last nig ht wanted us to believe that he thought it made sense, it was jus tified for the First Minister of the Province of Manitoba to be requesting from the Federal Government som ething in the nature of $25 mU li on a year more in revenues and at the same time it made sense for the Prime Minist er of Canada to say to the First Minister of this province that he was ask ing for too much. Now how both positions can be jus tified I frankly cannot understand.

The Honourable Member for River Heights this morning tells us that we are irresponsible when we vote against this bill because all that's before this House is a bill which the govern ment is presenting. What nonsense, Mr. Speaker.

What's before this House is not only this bill which we are discuss ing today, what's before this House is the culm ination of negotiations between the Federal Government and the provinces and this bill only spells out the agreement which has been reached in principle, and the questi on which we have to ask ourselves and which the people of this province have to ask themse lves is , "Is this agreement a good agreeme nt?

Does this agreement meet the needs of the people of this province?" If lt does, and the bill spells out what we are going to get and how we are going to get it, then it's a good agreement; if it doesn't, th€m it's a bad agreeme nt. And I want to say, Mr. Speaker, that lf we are irres ponsible on this si de of the House for saying that it doesn't meet the needs of the people of Manitoba, then much more irresponsible was the present First Minister when in the years gone by he spec ified what he needed, what he wanted, what this province required -- and I'll come to that in a few moments.

He list ed in detail -- and it's a good thing that we have Hansard to day -- he listed in detail what he required and now when we see what we are getting, when we comp are what he said he required wi th what we're getting, for the mem bers on that si de to say Page 64 October 18th, 1961

(Mr. Orlikow, cont1d.) . 0 0 0 o that we are lrresponsible, Mr. Speaker, I think is nonsense and they are going to have to dec ide one of these days who they're going to follow politically , he or the First Minister of this province or the Prime Minister of Canada. They can't have lt both ways and square this with the people whom they represent. Now, Mr.

Speaker, we make no apologies for the fact that we have always advocated the policy whereby a more equitable share of the tax collections in the Dom inion of Canada would be given back to the provinces, including the Province of Manitoba, through tax rental and tax sharing agreements. One only has to look at the picture in Canada, one only has to look at the profits made by the large corporations which do business in the Province of Manitoba but which have their head offices in the central provinces to see the situation with which we are faced.

The Honourable Leader of the Oppos ition spoke about the auto industry yesterday. I have a few figures to show what some of the comp anies other than autos who do a substantial amount of business in the Province of Manitoba and which mak es, I'm sure, substantial profits, what kind of profits they're making. Imper ial OU which makes a profit out of almost every car driver and every user of farm equipment in the Province of Manitoba had a profit in the year 1959 of $54 1/2 mi llion. Massey-Harris Ferguson Compa ny which did some business with the farmers of Manitoba had a profit of $2 1 million.

Safeway Stores which purchase a good deal of farm com modities from the farmers of Manitoba and sold them to city people in the Province of Manitoba had a profit of $5 1/2 million. Dom inion Stores had a profit of $6 3/4 ml llion. Canada Packers a profit of $4 1/2 mi llion. Now I'm not suggesting that these profits are too high at the moment. All I'm suggesting is that the bulk of the profits are paid to the head of fices in the Province of Ontario and that the people of Manitoba unless there is an adequate tax sharing agreem ent, will not get the ir fair share of these revenues.

And it ls this principle which all mem bers of all parties in this House have for some 25 years fought. Now the present Prime Minister of Canada, whUe he was in the Opposition and for a year or two after he became the Prime Minister, made some very specific promises to the people of Manitoba and I think that we ought to understand what those promises were before we try to assess whether we' re getting a good deal or not. And here is what Mr.

Diefenbaker said when he was the Leader of the Op position in the year 19 56, and members can find this quotation on page 6370 of Hansard of that year, and I quote: "T he governmen t" -- he's talking about the St. Laurent Government -- �'simply said; "These are our terms". No opportunity was given for am endment, or for am elioration of any term. The recipe for a divison of taxation was as final as the laws of the Medes and the Persians .. 0.... There was no opportunity for negotiation; there was simp ly the attitude of a feudal lord bringing into being a modern feudal ism and laying down the laws to the vassals.

" Well , Mr. Speaker, what has Mr. Diefenbaker done ? Exactly the same thing. In 1957, speaking in Truro, Nova Scotia, Mr. Diefenbaker said a Conservative Governm ent would im med iately convene a Dom inion-Provincial conference with representatives of the provinces and the munic ipalities, to restore once again the ,opportunity for the provinces and municipali ties to exercise their functions under the terms of Confederation. That was in 1957 , Mr. Speaker -- four years ago. Have we had such a conference? Have the representatives of munic ipalities had a chance to say what they're thinking?

Well, the people of Urban Metro Winnipeg certainly don't think so. One can hardly walk down the street without being approach ed and told how heavy the taxes are. Sometimes the local governmen t is blamed; sometimes the school district is blamed and now we have a new scapegoat, Metro, but in fact the people are comp laining bitterly, and I think justifiably, about the high cost of local taxes, which Mr. Diefenbaker promised would be taken care of partly through further grants from the Federal Government. And, of course, this has not been done. AprU 1957 , Mr.

Diefenbaker said in Toronto, "We intend to form a government to im med iately convene a Dom inion-Provincial conference to bring about a settlement of these pro blems, not in a spirit of arrogant dom ination as displayed by the present government but in the spirit of unity and amity and with mutual tolerance and respect. " Well, Mr. Speaker, these were brave words and they were words which were taken into consideratim by the people of this country and they were words which were promp tly forgotten once Mr. Dlefenbaker took office. Now, Mr. Speaker, what about this government, and what about our Flrst Minister?

He's October 18th, 1961 Page 65

(Mr. Orllkow, cont'd. ) ..... an astute politician; he's a comp etent Premier; he knows what he wa nts to do. He knew, Mr. Speaker, that the progra ms whi ch he was promis ing to bring into being would cost a substantial am ount of money. He made promises that there would be no increase in provincial taxes. The only way, Mr. Speaker, ln which those promises could have been lived up to obviously were if the Prime Minister of Ca nada had lived up to his pro mises.

I think that the First Minist er had a right to expect that the Prime Minister of Canada, the Leader on the national scale of the same Party which the First Minister leads in this pro vince, would live up to his promises. Well, Mr. Speaker, he has been sadly dis appo inted. Now we have been accused of irresponsib ility on this side of the House. We have been told that we are aski ng for too much. Well, Mr. Speaker, we are not aski ng. I wa nt to say that the First Minister is a very compet ent actor.

He knows what he needs; he knows what this province needs; and I want to say that I couldn't put the case, and I am sure that nobody else .on this si de of the House could put the case for what this province needs any better than the First Mi.nister of this province has done every year until yesterd;:ty. Let's just look in case the members on that si de of the House have forgotten and from what they have sai d for the last few days I must assume that they have forgotten what the First Minister here has said. Let's just look at what he asked for in years gone by.

I am not now talking about what he said when he was in the Oppos ition because there may be some truth in the idea that when a political party is in the Oppos ition that they don't quite know -- (Interjection) -- I said there may be -- there m ay be some truths in the idea that when a political party is in the Opposition they don't quite realize the impli cations of all the promises which they are making. But these are promises which the present First Minister made after he was elected to office. So let's just look at them and let's watch, Mr.

Speaker, how progressively from year to year as the realities of dealing wi th the Federal Governmen t have sunk in on the First Minister how he has scaled down his requests . In his budget speech made Monday, March 16 , of 195 9, here are things which the First Minister suggested the Federal Government ought to do.

(1) Call an early conference of Pre mi ers.

(2) He would ask for an imme diate increase in the provincial share of personal income tax from 13 to 15% ; Corporation tax from 9 to 15% ; and a payment equal to at least 50% of the amou nt the former federal success ion duties would have provided,

(3) He would ask for long term aid for soil and wa ter conservation projects.

(4) Aid toward the $85 mi llion floodway protection program.

(5) Federal aid to universities and technical schools.

(6) More ass ist ance for northern road development.

(7) Extend hospital plan to cover persons who are men tally ill or suffer from T. B. A pretty good program. Nothing more radical then we have asked for on this side, yet we are accused of being irresponsible -- (Interjection) -- Not very much -- not very much. On July 16th of 1959 the First Minister is quoted in the Free Press as saying: "Manitoba wa nts a greater share of the tax dollar from the Federal Treasury and we wi ll be in their fighting for it, Premier Duff Roblin told the Free Press Monday as the conference of Federal and Provin cial Treasurers assemb led.

" Fighting -- fighting -- well, the fight's gone a long time ago. If he thought it was in the back rooms, Mr. Chairman, certa inly there was no public pressure on the Government of Canada. Well, Mr. Speaker, I could go on and on but I wa nt to just give one gem. On July 29, 1960 Mr. Roblin had a press interview and he is quoted in the Free Press as saying he would be happ y to get $25 mi llion a year from the Federal Government. And he spells it out. He isn't satisfied wi th that -- he spells it out.

He said from the new tax rental formula he wa nts $16 mi llion a year and an expansion of federal conditional grants from $5 to $10 mi llion. Well, Mr. Speaker, what have we heard yesterday and today, beginning wi th the First Minister and going back to the back benchers. Why we have so much in the conditional grants that really the fact that we are not getting any more from the tax rental agreement isn't very im portant. -- (Interjection) -- Well, I'm sorry. The Member from St. Vital said that the Prime Minister of Canada was jus tified in turning us down. We were "gimmies" -- we were ask ing for too much.

I hope he goes back and tells the local taxpayers in the munic ipality of St. Vital that they are going to have to pay more money in local taxes because there is no money com ing from the Provinc ia l and Federal Governments. If he does he won't be here after the next provincial election, this I can guarantee. Page 66 October 18th, 196 1

(Mr. Orlikow, cont•d. ) ..... Mr. Speaker, these are the kind of promises which were made -- the kind of demands which were made until yes terday by the First Minister. Well I could go on; I could talk and could quote how the First Minister talked about the need of getting aid for capital development for roads and all the rest of it. All this is gone of course; all this ls out.

None of this is available under the new agreement, I don't know why we had a bit of a hassle about the possible projections of what we wou ld have got under the old agreement; what we would have got under the agreement as amended in 1958; and what we get under the new proposal; because lf mem bers want to take the trouble to turn to the budget speech which the First Minister made during the regular sessi on, they wi ll find a whole page in which these projections are listed. Let's just look at that, and let's com pare it wi th the $25 milllon a year which the First Minister was saying we required.

Here are the figures, and they are not my figures and they are not the figures of the Honourable Leader of the Opposition, they are the figures presented in this House by the First Minister, I presume on the advice of his technical experts, and I, for one , accept them. Well under the old agreement, Mr. Chairman, if it had been continued unchanged for the years from 1962 through for the five years to 1967, we wo uld have received $210 milli on. Under the agreement that was amended in 1958 we would have received $225 million. Under the new agreement, Mr. Speaker, we wi ll receive in the flve years $228 million.

Well, Mr. Speaker, I must say I always thought the First Minister was a good negotiator, a tough nego tiator, a hard-headed business man, but when he asked for $25 million a year and comes back wi th $750 thousand a year, I just have to wonder what happened to that shrewd, hard negotiator. He has sure been taken in by "Dief", is all I can say. Well, Tommy at least has the com mon sense and the courage to say that he is getting a bad deal, which ls more than the First Minis ter of this province has sai d. Mr. Speaker, I have a great deal of respect for the First Minis ter.

There is nobody who can make a better fighting speech; there is nobody who can go into orbit faster when he has got som e kind of case than the First Minister; and I wa nt to say that yesterday 's speech by the First Minister was the quietest, meekest, defensive speech which I have ever heard him make. ' MR. ROBLIN: I return the compliment. MR. ORLIKOW: Mr. Speaker, I want the members of thls House on both sides to try to imagine for one moment what kind of speech the First Minist er would have made yes terday if instead of a Conservative Government in Ottaw a we would have had a Liberal Government in Ottawa.

Boy, his speech wou ld have been long and it would have been bristling and it wo uld have been full of the inj ustice which has been done to the peopte of this province and to the government of this provinc e, and everybody else. But we didn't get much of that yesterday naturally . After all, Duff has to protect Dief and Dief tries to protect Duff I suppose. Well, Mr. Speaker, let's have a look at this agreement which we are now Initialling. What's wrong wi th this agreement?

I think what is wrong wi th it is very obvious, Under the new agreement, which wi ll, in fact, give us practically no more money than we have been rec eiving under' the old agreement, under the new agreement we wi ll equalize payments up to the per capita: return on the national average instead of as in the old agreement up to the per cap ita. return from the two richest provinc es. This is a very substantial change and a very detrimental change to the people of all the provinces except the Province of Ontario.

This change in the allow ance for one -half of resource revenue should result, at least in the early years of the agreement, in lower equalization payments to Manitoba and Saskatchewan. The new agreement provides for a floor so that the payments wi ll not be less , but they certainly do not give to this province the money which it requires. The new proposal, despi te what the First Minister says, means a return to the tax jungle which we had in the 1930's. Let's just look at how this works. Let us suppose, Mr.

Speaker, that because of increased services in every province, and every government no matter what its political stamp is thinking in terms of improving and increasing services, and so costs are going up. Now what this means, Mr. Speaker, is simp ly this, and I give you three provinces as an illustration, that to collect $10. 00 more per capi ta for in creased needs in the Province of Newfoundland, the Province of Newfoundland wo uld have to raise its income tax rates by 28% ; the Province of Saskatchewan by 15%; while Ontario would only have to raise its income tax by 7%.

So we have a situation that those who have wi ll re ceive more, and those who haven't wi ll get it in the neck as they usually do . October 18th, 1961 Page 67

(Mr. Orlik ow , cont'd. ) . . . . . , Now, 1\tir. Speaker, the proposal of the Federal Government, whlch we are acc epti ng lf we approve this bi ll, abandons the principle of equalization in fact, and replaces lt by a prin ci ple of averagizatlon. Unde1 • the existing ag;reement the inco me tax revenues of all the pro vinces are equalized to the level of returns in the two richest provinces. This ls be ing scrapped and replaced by the much less equitable measure of a national average tax dePJ.

It is true that the provinces can, and indeed we in this province are increas ing our own income ta..._ , but this is not a reasona ble subs titute for an adequate tax sharing program wi th equaliza tion. Other provinces made proposals and I am sure this province made proposals. Pre mier Lesage proposed that equalization payments be mai ntained at least at the level they would have been at under the current arrangements which we are now going to leave. This v.o uld have made sense to provinces like Manitoba which needs a subs tantially inc reased ta..

"< room which the Federal Government held out as an advantage of the new proposal. But of course this was rej ected by the Federal Government. The Federal Government is wit hdrawing from the income tax field in the steps which it proposes begi nning next year wi th 13% and increas ing up to 20% , but this wi ll mean no real new revenue to this province or most of the other provi nces . Not only that, under the new agreement, if Ottaw a is to collect the provincial tax, the provincial ta." rate must be identical at all times wi th the federal definition.

Now we are told that the Federal Government wi ll only collect the tax if it is expre sse d as a perc entage of the provin cia l rate. There is no guarantee to this province or any other province that we wi ll be notified in advance of changes in the federa l tax rates so our rates can be adjusted; or, if this is im possible, that the province wi ll be comp ensated for any changes in the federal rate. Provin ci al receip ts will change wi th every federal ta.. "'l: change while our perc entage :t"ates must be cons tant throughout the year.

All this, while the Federal Government can change its rate whenever necessary. How this Provincial Treasurer, or :my other Provincial Tl·easurer can sensibly drop a budget in the years to come, I leave to the present Treasurer to explain. Now, Mr. Speaker, we moved the motion which we did yester day and we vote against the bill, not because we are opposed for one moment to a reduction of hosp ital premi ums , on the contrary, we were the first ones to say publica lly that the $6. 00 and the $4. 00 rate was too high; and was too high for those people in the low income groups.

We we re the first ones to say publica lly that what was required was some system whereby there would be taken into con si deration ability to pay. When we vote against the bill, we are voting against the bi ll, because we think that the tax agreement which is being concluded between the Dom inion of Canada and the Province of Manitoba is not adequate to meet the needs of the people of Manitoba; it doesn't meet the promises made by the Prime Minister of Canada; it doesn't meet the requests of the First Minister of this province. But there is another imp ortant factor, Mr.

Speaker, we are going to raise out of this tax on personal in come tax and on corporatio ns, about $6 1/2 mi llion acco rding to the First Minis ter and the whole of the $6 1/2 million is to be allocated to the reductions of hos pital premiums . We support the idea of the reduction of hosp ital premi ums, but let us remember, Mr. Speaker, that this government is comm itted to a whole series of other programs. This government made some pro mises to the people of Manitoba that the steadi ly increas ing munic ipal taxes wo uld be stabilized as a result of programs initiated by the Provincial Government.

This government made some promise s and I don't wa nt to bring in Hansard to prove again what the Minister of Education sai d, I have done it on three occas ions or more before. This government told the people of Manitoba that school costs wou ld be reduced, or certa inly held at the level of a cou ple of years ago , to increase contributions by the Provincial Government. This government insti tuted a Soc ial Allowances Act, which the Minister of Health said was the best act which any province in Canada had.

Well, I said then, and I sa y again, it may be the best act, but as long as the act is only on paper and until the act is proclaimed in full, it lsn1t wo rth the paper it is wr itten on; and when it is proclaimed in full, Mr. Speaker, I predict again, as I predicted in the past, that the cost for he alth and we lfare services in this province wi ll be about $10 mi llion a year higher than they are at the present time .

This province has made som e very im portant commi tm ents in the field of cap ital costs. $200 mi llion plus for roads, new hos pita ls , new power developments, new schools, all this has been promise d by this government. Now, Mr. Speaker, if we are to take the entire 1% tax -- and I want to talk about that in a momen t -- and Page 68 October 18th, 1961

(Mr. Orllkow, cont1 d. ) •.•. devote it to hospi tal premi ums, and lf we are not to get more money from the Federal Government, through Dom inion-Provincial tax sharing program, how is this program, which not we on this si de but you on that si de, the First Minist er promised to the people of Manitoba, how wi ll it be instituted? Mr. Speaker, I still believe that the First Minister believes that what he has promised, he could do. I still believe that the First Minister wi ll do most of the things which he promised. I wa nt to predict, Mr.

Speaker, that if he does that, and in view of the fact that in the next five years he is not going to get more money from the Federal Government, that this income tax and corporation tax which we are voting on in this session is only the first step and that what we are going to see in the next four or five years , if this government stays in office that long, is a success ion of increases of taxes to meet the pr omises which the First Minist er made in past years.

There is no other alternative, either the First Minister cuts down on the promi ses which he made or he raises the taxes in order to pay for the things which he has promised. There is no other wa y in which this can be solved. Now, Mr. Speaker, I wa nt to spend just a few minutes talking about this so-ca lled 1% tax. Most of the people I have met -- the ordin ary people on the street -- have an idea that all that's going to happen to them when this tax comes into effect, is that they are going to pay 1% more in tax than they paid last year.

I am not saying that the First Minister said quite that; I am not certain quite what he did say; I am not sure quite what his blll says because I don't claim to be a tax expert, but I could tell the First Minister that I spent three or four hours wi th lawyers and accoun tants who work full time at tax matters and that they couldn't explain the provis ions of the bi ll. One thing is obvio us, that to get 1% of the taxable inco me, is going to require subs tantially more than a 1% increase in the income tax which people paid this year.

The estimate I have been given is that if the 1% in taxable income is to be raised by so me uni form rate that the income tax which people paid last year w l1l be increased not by 1% but wi ll be increased by some figure between 4 1/2 and 7%, and this is the figure which I have been given from what I consider reliable sourc es , and if it is wrong, I think that the First Minist er owes it to the people of this prov ince, if not to the members of this Hous e, to explain precis ely what he has in mind. This would be bad enough, Mr.

Speaker, but in fact the legislation is much worse, because the legislation doesn't spell out what the tax actua lly wi ll be; it leaves it to the Lieutenant-Govern or-i n-Council to set the rate and there is no indication, either in the bi ll or in the speech which the First Mi nister made, up until to now , as to what these rates wi ll be. Now yesterday's editoria l in the Winnipeg Free Press suggests that higher income groups may have to pay, and I quote: "several hundred or even thous ands of dollars".

There is no mention in the bill of a ceili ng such as the maximum of $60. 00 for the Federal Old Age Pension Tax. Well, Mr. Speaker, as usual I don't agree wi th the suggestion of the Win nipeg Free Press, because if there is a maximum at the top, and if the First Minister had suggested 1% of the taxable inc ome in total, then the only place he can get it is by increas ing the tax to be paid in the lower incomes , or in the mi ddle incom es, and I, for one, believe in getting the money from those people who have it -- and the people who have it are the people at the top. So, Mr.

Speaker, I think that what we require is a good deal more explanation from the First Minister as to preci sely what he has in mi nd. I think the people of this province are en titled to know what this new tax wi ll mean to them and even after that, Mr. Speaker, I think that this House and the people of the Province of Manitoba are being asked to accept a very bad deal. Now maybe it's the best deal' which the First Minister could make.

I think it is and I think that's the reason why the First Minister was so quiet, so subdued, in introduc ing this bi ll, and I don't blame him because in fact every Prov inc ial Premier is faced wi th either you take this or you go out on your own, which is even worse. But if that's the case, Mr. Speaker, I wi sh in caucas that he had told the me mbers in the back bench: "Look boys, I don't like this, it's the best I can do, so I'm accepti ng it", then maybe they wouldn't have been so quick to de fend Mr. Di efenbaker in what is obviously, Mr. Speaker, a bad deal for the Province of Manitoba. MR.

STAN ROBERTS (La Verendrye): Mr. Speaker, I beg to move, seconded by the Honourable Member for Gladstone that the debate be adjourned. Mr. Speaker presen ted the moti on and after a voice vote declared the motion ca rried. October 18th, 1961 Page 69

Mr. Robl!n pres ented Bl ll No. 4 -A n Act for granting to Her Majesty certain further sums of money for the public services of the province for the fiscal year ending the 31 st day of March, 1962, for second reading. Mr. Speaker presen ted the motion and after a voice vote declared the motion carried. MR. ROBLIN: Mr.

Speaker, I see that the next item on our paper is an address by the Honourable the Leader of the Opposition, in which he wl ll no doubt give us his views on the general character and calibre of the government and unless he can do that inside of the next ten minutes, I presume it would be more agreeable to him lf he comme nce this afternoon, but I consult his interests in the matter. MR. MOLGAT: The com mendable features of the government, I could do very eas ily in much less time than that. The remai nder of my com ments wl ll take subs tantially more. MR.

ROBL IN: My honourable friend wa s never yet able to do ju stice to most of the sub jec ts he discus ses, so I quite understand it. So I wi ll move, Sir, that the House· do now adjourn. Mr. Speaker presented the motion and after a voice vote declared the motion carried and the House adjourned until 2:30 in the afternoon. Page 70 October 18th, 1961

Document details

Collection	Manitoba — Debates (Hansard)
Citation	26-4-4
Type	hansard
Volume / chapter	26th 4th hansardpdf 4.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	24077feff850b9013bc5c4ba44c2ec21962f6f7a

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