Office of the Premier Alberta
Edmonton, January 26, 1951 Hon. Stuart S. Garson, K.C.,
Minister of Justice and Attorney General of Canada, Ottawa, Canada.
Dear Mr. Garson:
I am in receipt of your letter of the 2nd instant enclosing proposed amendments to the British North America Act respecting old age pensions and a provincial sales tax. I have also received your further letter of the 20th instant.
With reference to the amendment to section 95, it is suggested that the words "or the legislature of any province" be added after the words "the parliament of Canada" where they occur in line 2 of subsection 2 of section 95 of the proposed amendment.
You will recall that the Prime Minister indicated that there would be concurrent legislation with respect to old age pensions and therefore the amendment should not be placed in section 91 of the British North America Act. In view of the wording of subsection 1 of section 95, and in order that there should be no question but that the legislatures of the provinces will have concurrent jurisdiction and will be enabled to enact legislation dealing with the age group of sixty-five to seventy and possibly to supplement the dominion old age pension at seventy, it seems to me that it is necessary to incorporate these words in the proposed amendment; otherwise the courts might construe the section as giving exclusive jurisdiction to the dominion, which I am sure you will agree was not intended.
The amendment to head 2 of section 92 as submitted appears to incorporate the agreement made at the Ottawa conference, and I have no objection to the addition of the words "and not so as to discriminate between sellers or classes of sellers of the same class of goods" as proposed in your letter of the 20th instant.
Yours very truly,
Ernest Manning Premier
Office of the Premier Province of Manitoba
Winnipeg, January 31, 1951
Hon. Stuart. S. Garson, K.C.,
Minister of Justice,
Dear Mr. Garson:
Your letter of January 3 enclosing drafts of two constitutional amendments to deal with old age pensions and retail sales tax, together with your letter of January 20 suggesting certain additional words to be inserted in the draft with regard to sales tax, have received careful attention in cabinet council. I am therefore writing to inform you of the conclusions which we have reached.
Your suggestion is that the question of old age pensions should be dealt with by adding a new subsection to section 95 of the B.N.A. Act. You will recall that during the discussion of this subject at the conference I made the proposal that old age pensions should be dealt with as a new subsection of section 91. We would like to repeat that suggestion now.
Under the proposal which is now before us, the federal government will be assuming complete responsibility for pensions to persons aged seventy and over and fifty per cent of the cost of pensions to persons aged sixty-five to sixty-nine inclusive. The result will be that the total cost to the federal treasury will be somewhat of the magnitude of $356 million while the total cost to all ten provinces will be approximately $32 million. In other words, the federal government has indicated its willingness to assume more than 90 per cent of the financial costs of old age pension schemes. Under these circumstances it seems to us fundamentally unsound that we should continue ten separate provincial administrative organizations in the field of old age pensions, each one of them overlapping with the federal jurisdiction and each one of them requiring constant exchange of information and constant co-ordination of information and administrative practices. On the grounds of eliminating unnecessary duplication of administrative machinery and of avoiding frequent misunderstandings between different governments, it is our view that one central uniform administrative machinery should be created to deal with the question of old age pensions. For this reason we would strongly urge that the proposed amendment with respect to old age pensions should simply be the addition of a new subsection in section 91 which would read "old age pensions."
If, however, this proposal does not find favour with your government and with the governments of the other provinces, we are prepared to support an amendment which will authorize the federal government to deal with old age pensions while continuing the authority of the provinces to do likewise. We feel, however, that there may be certain confusions created if the proposed amendment is made a subsection of section 95. At the present time section 95 follows a heading which reads "Agriculture and Immigration." It will obviously be somewhat misleading to carry under that heading a subsection dealing with old age pensions, and it may therefore be necessary to amend the heading also or to set up the proposed amendment as a separate section rather than as a subsection of section 95.
We understand that pensions for the blind are to be brought under the same arrangements as are proposed for persons seventy years of age and over. We therefore submit that the constitutional amendment in connection with old age pensions should have added to it the following: "and to pensions for the blind."
We have also given consideration to the proposed amendment to section 92, head 2, which would change that head so as to read as follows:
"2. The raising of revenue for provincial purposes by
(a) direct taxation within the province, and
(b) indirect taxation within the province in respect of the sale of goods (except goods sold for shipment outside the province) to a buyer for purposes of consumption or use and not for resale, at a rate not exceeding three per centum of the sale price, but not so as to discriminate between sales of goods grown, produced or manufactured within the province and sales of goods grown, produced or manufactured outside the province and not so as to discriminate between sellers or classes of sellers of the same class of goods."
This proposed amendment deals only with the sale of goods. It would therefore presumably not apply to such things as electrical power, or services provided by laundries, theatres, hotels, restaurants, barber shops and the like. It was our understanding that this amendment should enable the province to impose this type of tax wherever it is a more convenient method of raising revenue from the people in the province who get the benefit of goods and services available in the province. It therefore seems to us that the proposed amendment should make it clear that it covers these other types of industries which provide services directly to the consuming public.
Our advisers have suggested that since the proposed amendment, in prohibiting discrimination between sales of goods local to the province and those from outside the province, makes no specific mention of goods manufactured partially outside and partially inside the province, it might be possible to evade the prohibition by discriminating either against or in favour of goods partially manufactured within and partially without the province. Your government may desire to provide against any such possibility.
Yours very truly,
The Government of the Province of New Brunswick Fredericton, February 2, 1951
Hon. Stuart Garson, K.C.,
Minister of Justice,
Dear Mr. Garson:
This has further reference to your letter of January 2, with which was submitted for consideration by the government of this province two proposed amendments to the British North America Act, one respecting old age pensions, the other a provincial sales tax.
We look upon these matters as quite distinct one from the other and capable of separate action.
As to the first relating to old age pensions, we understand this is being sought in order to make certain that the parliament and government of Canada have authority to implement the old age pensions plan enunciated on behalf of that government at the recent federal-provincial conference on fiscal and social security matters. If the federal government is satisfied that this proposed constitutional amendment is sufficient for such purposes, we are quite willing that the act be amended accordingly.
As to the second proposed amendment involving constitutional changes which would permit the provinces to impose indirect taxation by way of a sales tax, we feel that the proposal advanced will not meet the situation of the provinces, fixing as it does the maximum tax that could be levied thereunder at three per cent.
In our view the main and overriding purpose of such an amendment is to be found in the advantage which would accrue to the provinces through being
able to impose such indirect taxation in lieu of a purchasers' or consumers' tax such as is now found in five of the provinces. In at least two of these, including our own, the existing tax rate is in excess of three per cent. In the light of this situation we can see no advantage to be gained through a constitutional amendment which would limit or restrict a province in the manner suggested.
We would strongly urge that the federal government amend its proposals to permit the imposition of a tax at a higher level; to meet our situation it should be at least four per cent.
If this is done we shall be very glad to give further consideration to the form and content oi the proposed amendment.
John B. McNair
Premier's Office Saskatchewan
Regina, February 5, 1951 Hon. Stuart Garson, K.C.,
Minister of Justice and Attorney General of Canada, Ottawa, Ontario.
Dear Mr. Garson:
The Saskatchewan government has studied the two proposed amendments to the British North America Act respecting old age pensions and a provincial sales tax contained in your letter of January 2, and also the addition of certain words to the provincial sales tax amendment contained in your letter of January 20.
We are satisfied that the wording which you have suggested for the two proposed constitutional amendments will carry out the spirit and intent of the decisions arrived at during the federal-provincial conference of last December.
The Saskatchewan government will submit the proposed constitutional amendments to the legislature as soon as possible with our complete endorsation and support. We feel, however, that on so vital a matter as endorsing important changes in the British North America Act the legislature should place the seal of its approval upon what is being proposed.
T. C. Douglas
Office of the Premier Province Of British Columbia
Victoria, February 6, 1951
Hon. Stuart S. Garson, K.C.,
Minister of Justice,
My dear Mr. Garson:
This is to acknowledge receipt of your letters of January 2 and January 20 with reference to the proposed amendments to the British North America Act.
Please be advised that while the government concurs in the draft legislation you have submitted, it has been deemed advisable to secure legislative approval of same. Consequently a formal resolution will be presented to the legislature within two or three days of the opening of parliament. It is