June 23, 1947 (20th Parliament, 3rd Session)

LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

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

Mr. Speaker, as hon.
members are aware, the people of Newfoundland some months ago elected a national convention for the purpose of making recommendations to the government of the United Kingdom as to possible forms of the future government of Newfoundland. Subsequently the question of the form of government to be adopted is to be placed before the people of Newfoundland in a referendum.
As announced in this house on April 2 last by my colleague, the Secretary of State for External Affairs (Mr. St. Laurent), the government of Canada has agreed to receive a delegation from the Newfoundland convention to consider and discuss whether there is, in the opinion of all concerned, a fair and equitable basis for federal union of Newfoundland with Canada. Arrangements have now been made to begin discussions on Wednesday, June 25. The delegation will arrive in Ottawa tomorrow. We are happy to have the opportunity of welcoming the delegation on that day since June 24 is being observed this year as the 450th anniversary of the discovery of the island.
It will be recalled that, following the disastrous economic collapse in 1920-30, Newfoundland encountered serious financial difficulties. In 1933, with the approval of the government and legislature of Newfoundland, a royal commission was appointed by the United Kingdom government to inquire into the situation. The commission recommended that responsible government should be suspended and legislative and executive authority be vested in an appointed commission, responsible to the United Kingdom government, until

such time as the island should again become self-supporting. It was also recommended that meanwhile the United Kingdom should assume financial responsibility for the government of the islandi. These recommendations were approved by the Newfoundland legislature and by the United Kingdom parliament. The Newfoundland constitution was accordingly suspended and a commission of government was appointed by the United Kingdom government and assumed office in 1934.
Shortly after the commission was established, most of the Newfoundland debt, which in 1934 stood at about a $100 million, with relatively high interest rates, was converted to a sterling issue at three per cent guaranteed by the United Kingdom as to principal and interest. The United Kingdom also advanced considerable sums for developmental purposes, and up to 1939 met budget deficits totalling over $16 million.
Beginning in 1941, Newfoundland experienced a remarkable recovery. This was due in part to the heavy defence expenditures in Newfoundland and Labrador by Canada and the United States, and in part to the rise in prices of Newfoundland's principal exports, fish and newsprint. Since 1941, Newfoundland has had an annual surplus now amounting to about $29 million. In addition, Newfoundland's debt has been reduced to about $74 million; the public services have been expanded and improved. Revenues which in 1939 were just over $12 million reached $37 million in 1946.
In December 1945 the Secretary of State for Dominion Affairs of the United Kingdom announced that in order "to enable the people of Newfoundland to come to a free and informed decision. . . on their future form of government" a national convention would be elected in Newfoundland in the spring of 1946. The terms of reference of the convention are as follows:
To consider and discuss amongst themselves, as elected representatives of the Newfoundland people, the changes that have taken place in the financial and economic situation of the island since 1934, and, bearing in mind the extent to which the high revenues of recent years have been due to wartime conditions, to examine the position of the country and to make recommendations to His Majesty's government as to possible forms of future government to be put before the people at a national referendum.
It will be seen from the terms of reference that the convention does not itself have authority to decide Newfoundland's future form of government. The convention is empowered merely to make recommendations to the United Kingdom government as to possible forms of future government. It is

Newfoundland
conceivable that the convention may recommend one form, or alternative forms. In any event, whatever form or forms of government are recommended', the decision as to its acceptance is to be left to the people of Newfoundland themselves.
The convention, except for short periods of adjournment, has now been meeting continuously since September last. With a view to reaching an informed opinion on Newfoundland's economic and financial position, the convention has completed exhaustive inquiries into various phases of Newfoundland's economy, and its progress under the commission of government. The convention has come now to the second stage of its inquiry, namely a consideration of Newfoundland's constitutional future. In May of the present year a delegation from the convention visited the United Kingdom to seek information concerning the financial and fiscal arrangements which might be expected to exist between the United Kingdom and Newfoundland' under alternative forms of future government. That delegation has reported1 to the convention.
The delegation which will arrive in Ottawa tomorrow will consist of Hon. F. G. Bradley, K.C., who led the delegation to London, and six other members of the convention. The six other members of the delegation to Ottawa were not members of the London delegation. They are Mr. J. R. Smallwood, secretary of the delegation; Mr. T. G. W. Ashbourne, Mr. C. H. Ballam, Rev. L. Burry, Mr. P. W. Crummey, and Mr. G. F. Higgins, K.C.
I have asked the following members of the government to act as a committee to meet with the delegation from Newfoundland: the Secretary of State for External Affairs, the Minister of Justice, the Minister of Reconstruction and Supply, the Minister of National Defence, the Minister of Finance, the Minister of National Revenue, the Minister of Fisheries and the leader of the government in the Senate.
An atmosphere of mutual friendliness and understanding will, I am sure, characterize the forthcoming discussions. The peoples of Canada and of Newfoundland are closely associated through strong and enduring ties. We owe a common allegiance to the crown and have a common heritage of British political and legal institutions. We have many close personal, professional and commercial associations. We are neighbours in a North American environment. We face many common problems. We have memories of dangers shared and victories won together. These associations afford a broad basis for full and
frank discussion of many of the considerations of which, in the event of union, account would have to be taken by both countries.
The Newfoundland delegates, having, with their colleagues in the convention, studied intensively the problems and prospects of Newfoundland, will be able to throw much light on the questions to be explored. They will have an opportunity to learn at first hand about the working of the Canadian federal system and will thus be in a better position to advise their colleagues on what would be involved for their country in the event of union. As a result of the discussions the Canadian people also will be in a better position to appreciate what would be involved for Canada were Newfoundland to become a province. The Newfoundland delegation will report their views of the situation to the national convention. It will remain for the convention to recommend to the government of the United Kingdom whether the question of union with Canada should be referred to the people of Newfoundland for a decision.
The question of Newfoundland's future form of government is of course one for the people of Newfoundland themselves to decide. It is not a matter in which either the people of Canada or the government of Canada would wish to interfere. Should the question become a matter of referendum, whatever the decision might be, it would be received by the government and people of Canada with understanding and good will.
On the part of Canada no final decision would of course be taken without the approval of parliament. Section 146 of the British North America Act makes provision for procedure in the event of the admission of Newfoundland to the union. So far as Canada is concerned, the action provided for in this section is an address by both houses of parliament.

Topic:   NEWFOUNDLAND
Subtopic:   DELEGATION TO CONSIDER BASIS FOR FEDERAL UNION WITH CANADA
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