The recent Dominion-Provincial Conference in Ottawa, on the admission of several of the provincial premiers, has settled absolutely nothing. Premier Bennett of British Columbia is reported in these words:
"It was a fiasco. Nothing has been accomplished which could not have been done by a letter or by sending a clerk from Victoria down to Ottawa."
The only encouraging sign, in our view, was the stand of Ontario and Quebec (especially the latter) for provincial sovereignty in financial matters relating to taxation revenue. It has been truly said that he who pays the piper calls the tune. And if the provinces allow Ottawa to continue monopolizing all major fields of revenue, and agree to live on federal handouts, as most of them have been doing in recent years, then federal domination of all provincial fields — including health, education, and property — is only a matter of time.
The Institute of Political Action, on the occasion of the Federal-Provincial meeting last spring to prepare the agenda for this recent conference, submitted a memorandum to the representatives of the ten provinces.
The following excerpts are taken from that memorandum:
"It would seem that Provincial Governments meet with no physical difficulty carrying out programs coming under their jurisdiction. No Provincial Government seems to complain that the Federal Government draws so heavily upon the material resources and manpower of Canada that there is not enough of either left available for provincial services and development.
"Contractors, manufacturers, farmers, transportation facilities — the producing system of Canada, generally are eagerly looking for orders, whether such orders emanate from the Federal Government, from some Provincial Government, from other public bodies or from individuals.
"But, if the productive power is plentiful enough to answer readily all public or private orders for goods and services, not so the financial means to pay for them.
"There is no parity between the physical possibilities and the financial availabilities. And this is a source of difficulty for all public bodies as well as for individuals.
"The conflicts between Federal and Provincial Governments arise where the scarcity occurs not in the field of realities, but in the field of finance.
"If whatever is physically possible were made financially possible, there would be no ground for a feud, since the production system shows no physical difficulty filling all orders, wherever they come from."
"Whatever be the accepted nature or form of money or credit instruments, a money system is, fundamentally, a bookkeeping system. Finance is, or should be, a mere reflection in figures of the physical facts of production and consumption.
"A financial mechanism thus geared to economic facts would supply new credits at the rate of new production, and would recall credits at the rate of consumption.
"This would eliminate the purely financial problems, collectively speaking, leaving only production problems. But the latter can be easily dealt with by our modern producing system, if unhampered by financial restrictions.
"With finance made subservient to physical possibilities, the present taxation set-up could be abrogated and a new mode of public finance introduced, to work smoothly for all parties, federal or provincial."
"(We hold) that the representatives of the ten Provinces, meeting at Ottawa on April 26, should insist on placing on the agenda of the coming Federal-Provincial Conference, due later this year, the establishment in Canada of an adequate mechanism, so designed that whatever is physically possible shall be made financially possible, without inflation and without indebtedness to any private institution."
The Provinces did not place the matter of financial reform on the agenda. Consequently, neither they nor Ottawa can solve their problems — which are primarily financial.
Conversely, once Social Credit financial policy is instituted, most of these other problems will solve themselves.
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