They Marched Up the Hill

Canada’s ten premiers—"The King’s Men" have marched up Capital Hill to debate the Sirois Report. Question: Will they put Canada together again?

M. GRATTAN O’LEARY January 15 1941

They Marched Up the Hill

Canada’s ten premiers—"The King’s Men" have marched up Capital Hill to debate the Sirois Report. Question: Will they put Canada together again?

M. GRATTAN O’LEARY January 15 1941

They Marched Up the Hill


Canada’s ten premiers—"The King’s Men" have marched up Capital Hill to debate the Sirois Report. Question: Will they put Canada together again?


HIGH up on Ottawa’s Peace Tower a light gleams through winter’s mist. Though Parliament is not sitting, myriad windows of the vast grey Gothic pile glow through the night. Within, in highceilinged, imposing rooms men talk, argue, exhort. Others pore over documents, underline passages in huge volumes, study rows of statistics. Outside, muffled figures move up and down the snow-covered walk that leads to the “Hill.” One senses that something big is afoot. Something momentous.

Something big is afoot.

Canada’s statesmen, Dominion and provincial, are pondering the Sirois Report. Re-enacting—though with different stage settings—the Confederation drama of seventy-four years ago. Writing a chapter of history that may remain among our memories and milestones. A chapter which may tell of advance and victory, or of retrogression and defeat. One that only time will assess. What is the Sirois Report?

Three years ago the Dominion Government set up a Royal Commission on Dominion-Provincial Relations. It commissioned this group of men to find out and tell what would “best effect a balanced relationship between the financial powers and the obligations and functions of each Canadian government body.” The objective was “a more efficient, independent and economical discharge of governmental responsibilities in Canada.”

In plainer language, stripped of “officialese,” the Government decided, along with many others, that Confederation, many years old, was suffering from age’s rheumatic pains; asked a Royal Commission to prescribe.

The Royal Commission went to work. Made up of able, impartial men, helped by savants, scientists, economists, it went up and down the land, heard tales and grievances from all classes in all provinces. At the end of two years, in millions of words in three volumes and some twenty appendices, it told what it found. Also what it advised.

The Commission found—or said it found—plenty. It told of inability of some of the provinces to maintain their standard of living; of overlapping taxes and unnecessarily high taxes; of grave inequalities in public health, educational and other public services; of tremendous differences in people’s incomes in different provinces; of municipalities threatened with bankruptcy and municipalities in bankruptcy; of divided power and responsibility between the Dominion and the provinces breaking under the impact of the violent fluctuations of this age’s somewhat intricate economy. It told of other things. All of them grave. The Commission prescribed:

1. That all provincial debts, including all direct debts and debts guaranteed by the provinces, should forthwith be assumed by the Dominion.

2. That the provinces should annually pay to the Dominion the interest received upon their outstanding investments.

3. That the full cost of unemployment relief for all employables should be paid by the Dominion, leaving the cost of relief of unemployables still payable by the provinces.

4. That the provinces should withdraw from certain fields of taxation—give up income taxes, inheritance (succession duties) taxes, and (with certain exceptions) corporation taxes.

5. That old age pensions should be administered by the provinces, but that the Dominion should pay three fourths of the annual cost.

6. That existing subsidies by the Dominion to the provinces should be replaced by National Adjustment Grants (irreducible, but capable of enlargement following enquiry), this to enable a province to balance its budget with its social services maintained at a fair height.

This is the report, these the recommendations, that Canada’s statesmen, Dominion and provincial, are now considering. Politicians and political scientists, economists and statisticians, practical administrators and administrative theorists, they are asking themselves whether the Commission’s diagnosis was right, and whether, if right, its prescription is sound.

The Provincial Line-up

rT"'HEY ASK themselves whether the Commission’s recommendations would strengthen Canada’s war effort. Whether they aren’t necessary to war effort. Ask themselves whether a constitution of 1867 is adequate to the needs of 1941. They talk rhetorically about the “horse and buggy days” of seventy-four years ago; about the “streamlined” needs of today’s tempo. Some of them talk picturesquely about Confederation having its “face lifted.”

They are not all in agreement. Beneath the rhetoric and verbal sparrings are differences of opinion, doubts, hesitations. The old “provincial rights” school still has its

protagonists, men who put “provincial autonomy” above much else. These, allied with honest doubters, with some who disagree with the Sirois Report in detail, have to be reckoned with. They may—though it isn’t too likely—put this conference on the shoals.

Let us look at these men, province by province.

Prince Edward Island’s Premier Thane Campbell, young, able, educated, is not likely to be critical; will probably decide that his little province would be better off for snuggling more closely under the Dominion’s wing.

New Brunswick’s Premier McNair able if not too experienced, is more likely to be difficult. New Brunswick, recently suspicious of some Confederation interpretations, is not fond of centralization. Mr. McNair, speaking those suspicions, yet with little to lose and something to gain, will probably make more for delay than for defeat; will be satisfied to concentrate on details.

Nova Scotia’s Premier MacMillan will be for the report —in the gross. He may want to bargain; may want to amend here and there; but he is too good a Liberal to want to quarrel with Mr. Lapointe and Mr. King. In any showdown he will be for the report.

Quebec’s Premier Godbout will be benevolently neutral. Listening carefully to the pros and cons, concerned mainly with Quebec’s civil and language and religious rights, he is expected in the end to come out for the report. Mr. Godbout’s is not the temperament that makes trouble. Not for a Liberal Government that is fathering this report. Not, above all, for his good and great political friend, Mr. Lapointe.

Manitoba’s Premier Bracken will be the report’s major champion. Experienced, adroit, convinced that the Commission’s recommendations are vital both as a war policy and a peace policy, and desperately necessary to the West, to boot, he will fight for it through thick and thin; may well emerge as one of the strong men of the conference.

Saskatchewan’s Premier Patterson will, it is believed, swing gradually toward the report. He may not relish giving up power, authority, prestige; he will look, though, at Saskatchewan’s balance sheet, examine it in the light of what the Sirois Report would do for it. Which should be enough.

Alberta’s Premier Aberhart is different. Up to the eve of the conference all his statements were antagonistic to the report, and no proof has come yet that he has changed his mind. As the conference proceeds and the delegates take sides, he may well decide to be a nonbelligerent, though giving moral support and comfort to the opposition. We shall see.

British Columbia’s Premier Pattullo is with the opposition. Whether he will remain with it, or change his mind as the conference goes on, accepting the report in the gross, remains to be seen. Worth noting it is, that boards of trade in Mr. Pattullo’s province, plus important newspapers, plus British Columbia’s Opposition leader, are for the report. For it in principle, at any rate.

Ontario’s Premier Hepburn?

Mr. Hepburn is this conference’s big question mark.

Mr. Hepburn has not declared himself definitely or categorically against the Sirois Report. Certainly not irrevocably. He has let it be known, however—by indirect statement and implication—that he is, and will continue to be, against it; that he proposes to fight it.

Hepburn’s Fighting Ground

MR. HEPBURN, if he persists in this attitude, can take up three different positions. First, he can say to the protagonists of the report:

“You tell me that these Western provinces are bankrupt, that they can’t balance their budgets. Well and good. Will you agree, if we give you this report, to put them into receivership; to send managers out there to run them? That is what I did with bankrupt municipalities in Ontario. When they couldn’t or wouldn’t balance their budgets, and were bankrupt, I sent people to run them, to take over their finances. I ask you if you are prepared to do that in the

case of Manitoba, Alberta and Saskatchewan?”

If Mr. Hepburn should take this line (and there are those who expect him to take it), he may prove embarrassing; embarrassing not merely to Mr. King and Mr. Ilsley, but also to Mr. Bracken. Mr. Bracken, it is surmised, would not relish Dominion managers for the finances of Manitoba.

Mr. Hepburn may also say:

“You tell us you want this report as a war measure; that it is vital to the war. Well, I am prepared to give it to you for the war. You can have it on that basis -with hard and fast agreement that when peace comes we shall return to where we were.”

Or he may say this:

“There were two Plans in this rejxxt. The second. Plan 2, suggested merely that the Dominion take over relief of the unemployed, leaving the provinces their debts, more freedom in taxation, more independence in their financial administration. Why aren’t you satisfied with that?”

There will be answers to Mr. Hepburn’s arguments—if he makes them.

Mr. Ilsley (as Finance Minister he will be chief spokesman for the report) will probably declare that there is no need to put bankrupt provinces in receivership; that the report’s recommendations provide

for their difficulties. He will probably declare that it would be impracticable to adopt the report for the “duration,” that provincial debts, once taken over, could not be unscrambled. He will back his arguments by some potent facts.

And Mr. Ilsley, should he decide to become “tough” (he has some hard, keen, able experts advising him), can play some trump cards for the report. He can, for example, say to Mr. Hepburn, and to Mr. Aberhart:

“Our budget needs, this coming year, will top $2,000,000,000. We want that much money; have got to get it. We don’t want it for wharves, or public buildings, or to build roads. We want it for the war. We are going to get it. We are going to get it by taking priority for the Dominion in succession duties; by increasing the income tax; by heavier taxes on gasoline; by taxing amusements; by increasing the sales tax; by, if necessary, resorting to a turnover tax. If or when we do these things, where are your revenues coming from? Where, then, will you get the money to service your debts? To pay for your social services? To take care of unemployment and administration?”

Mr. Ilsley, should he say this, would not necessarily be threatening. He could do what he said, has the power to do it. He might well be compelled to do it. Mr. Hepburn, no fool, knowing what this war is about, would understand. And so would Mr. Aberhart. They would realize that

first, last and all the time, the country is for the war. Would be for money for the war before all other money.

Compromise Possible

MR. ILSLEY may not have to threaten; to use the “big stick.” Mr. King wouldn’t want him to; nor Mr. Lapointe. Mr. King’s theory, and Mr. Lapointe’s, is that we can’t have two wars on at the same time; one with Germany, one at home. They are going to be for reason, for calm debate; perhaps for compromise. And it may just be that Mr. Hepburn, as much for the war as any man, will come to compromise too.

One thing is sure. It is that it is too early yet to be pessimistic of the conference; to confine it to the rocks. It has reefs and shoals ahead, and dangerous eddies and undercurrents, and it is beset by dangerous arguments (such as that the Sirois Report is a provincial bondholders’ ramp), but it may well win out. The pity is that those managing its stage effects did not have more imagination and showmanship; did not invest it with enough of national drama and significance. A greater touch of these things—a sense of showmanship—plus an opening speech such as a Winston Churchill could havemade, might have put it across overwhelmingly.

But it still can win. This writer, at any rate, strings along with those who believe that it will not fail; who believe that the worst that can happen to it will be an adjournment, with promise to meet again. The atmosphere of next June, with heavy realities more clear than at present, might be too strong for defeat. Events have a way of making history—or of altering it.