Right Hon. W. L. MACKENZIE KING (Prime Minister):

Mr. Speaker, the word my hon. friend has just given the house is the first intimation I have received of the decision of the chief justice in the matter of holding sessions of his commission in secret. I assume my hon. friend's information is wholly reliable.

Mr. HANSON (York-Sunbuiy):

I assume it is; I have not had confirmation from the chief justice.

Mr. MACKENZIE KING:

I assume it is, too. Neither of us apparently is aware of the facts. However, at the time I asked the chief justice if he would undertake the inquiry I gave him the assurance that the government would not wish to restrict him in any particular, and that it would be for him to decide how the proceedings should be conducted, what assistance he would require in connection with the conduct of the proceedings, and in fact all matters with respect to the commission. I assume if the chief justice has decided to hold the sittings of the commission in secret, as was the case with the United States inquiry into conditions at Pearl Harbour, he has evidently had the best of reasons for so doing. I do not know that I can say more than that.

Mr. T. L. CHURCH (Broadview):

Mr. Speaker, I should like to ask the Minister of Finance a question in reference to the invasion of the municipalities' field of taxation. I shall supply him with a copy of it.

The city of Toronto is a municipality contributing huge sums of money in income and corporation taxes. Last June when the appropriation bill was under discussion here I

44o6f-45

suggested that the government should get the opinion of the supreme court of Canada as to whether the federal power has jurisdiction to take away these municipal and provincial revenues and raise moneys for provincial purposes by taxation, which under the British North America Act are allocated to provincial authorities. The point is open to much doubt. The city of Toronto is a large city, and its income and corporation taxes run into many millions of dollars. It is suffering the loss of these revenues, and municipal budgets are all upset, and also the province.

I would suggest that any agreement reached with Ontario herein, when made, be validated1. When it was under discussion last June I made that suggestion. There should be some procedure to validate the taking away from Ontario of these large revenues, especially from municipalities throughout the province. The words, or the definitions of them, are not clear in the appropriation act. I suggest to the minister that when he has the agreement with Ontario completed, he validate what has been done under the agreement; and he should also earmark this money so that the municipal share will go direct to the municipalities, such as Toronto, Hamilton, London, Ottawa and other places. The revenues of the municipalities have been taken away from them so often that we might just as well abolish our municipal institutions.

I would like to ask the minister if he is prepared to recoup Ontario and the city of Toronto for the taking away of the income tax and corporation tax revenues under the appropriation bill of last June. If the agreement based on it is to be validated, then the minister should earmark the money for the municipalities so that they can get the money either directly or through the province. I should like to ask the minister if he has any further statement to make in view of this and of Ontario's objections yesterday. He gave a statement yesterday that the first objection was last Friday, asking for validation. I raised this same question when the appropriation and unemployment insurance bills were being considered last June and argued that the federal government had no power to take away these provincial revenues or impose taxes for provincial purposes.

Order.

Mr. CHURCH:

The only way they could do it is by consent of the provinces concerned, and such agreement needs validation.

Hon. J. L. ILSLEY (Minister of Finance):

The question of the validation of the agreements with the provinces is now receiving

Japanese Nationals

the consideration of the Department of Justice. It was assumed throughout the negotiations that this government had been given the authority to enter into these agreements by the relevant section of the supplementary appropriation act which was passed last spring. Last Friday, Mr. Conant, the attorney general of the province of Ontario, for the first time raised the question that this was not sufficient authority and stated that if the province of Ontario entered into an agreement with the dominion they would like it ratified by the parliament of Canada. I told Mr. Conant directly then and there that he was entitled to ask that we have the necessary authority to enter into an agreement and that I would consult the Department of Justice at once and if an act was required, that act would be introduced.

Mr. CHURCH:

It savours of British

Honduras, the whole programme.

Hon. GROTE STIRLING (Yale):

I should like to ask the Prime Minister (Mr. Mackenzie King) a question based upon a telegram which I received this morning from the city clerk of Kelowna, British Columbia. This reads as follows:

Copy of resolution passed by municipal council of Kelowna on sixteenth.

Whereas under dominion regulations all male Japanese of military age have to vacate areas west of Cascade range by April 1st; and whereas apparently no supervision or restrictions have been made of this evacuation; and whereas these Japanese are steadily seeping into the Okanagan valley seeking to purchase land, residences and to settle, many ol them coming in new automobiles and acting in a very truculent and insolent manner; and whereas public indignation is being roused to such an extent that violence against this infiltration may easily break out and unless stopped almost certainly will break out;

Be it resolved, (1) that all male Japanese of military age be interned by the dominion government; (2) orders in council be issued prohibiting the sale or lease or rental of land and other real estate to Japanese during the present crisis; (3) any evacuation of other Japanese to east of Cascade be under strict supervision of the dominion government only to such areas as may be deemed advisable where strict police supervision can be made at all times and in 'such a manner as not to arouse popular indignation and outrage.

A copy has been sent to the Prime Minister. Is the Prime Minister in position to make a statement which will alleviate the anxiety of those who take charge of the inhabitants of the interior of British Columbia?