Fathers of Confederation

Hon. Mr. GALT said,—Mr. Speaker, I trust the House will, on this occasion, extend to me the indulgence with which I have often previously been flavored when I have addressed it on subjects relating to the commercial and financial interests of this province; for I am now required to follow the very able and eloquent speeches of the two Attorneys General, East and West, who have discussed, as none were more able than those gentlemen to discuss, the most important political and philosophical questions which are involved in the Confederation of the British North American colonies; and the material interests of the country upon which it is my province this night to dwell, though unquestionably those which are intended to be served through the political alterations we have to consider, are, nevertheless, likely to prove tedious to the House. Explanations respecting them are, however, imperatively called for when we are considering the question now at issue. (Hear.)

There is one advantage which I feel that I enjoy on this occasion, and it is that this House is not called upon, in dealing with the commercial and financial interests involved in the proposed changes, to consider the form or mode of government by which such interests are to be promoted. It makes little difference to the consideration of this branch of the subject whether the Constitution of the new Government be that of a Legislative or Federal Union—the points with which I am about to deal, are those which concern the public at large, and bear no reference to what may be the creed, nationality or language of portions of the people. The subjects on which I propose to address the House are those connected with the trade, resources and financial condition of the several provinces of British North America, and certain questions present themselves for decision, upon a satisfactory answer to which the determination of the House upon the whole plan that is submitted should depend, I will divide my remarks into five distinct heads:—

First.—Do the commercial and material interests of the several provinces point to their union as an advantageous measure?

Secondly.—Is their financial condition such as to permit of this union being carried into practical effect at this moment, with justice to them all?

Thirdly.—Are the measures proposed in the resolutions before the House fair to each and to all?

Fourthly.—Is there a reasonable prospect that the machinery through which these interests are proposed to be governed, will work smoothly and harmoniously ?

Lastly.—Does the proposed system for the Government of the United Provinces appear likely to prove so expensive as to render it impossible for the people of Canada to consent to it?

In dealing with the first question, whether the material interests of the provinces will be promoted by their union, it may be well for me to offer to the House some few remarks as to the resources of British North America. Possessing as we do, in the far western part of Canada, perhaps the most fertile wheat-growing tracts on this continent,—in central and eastern Canada facilities for manufacturing such as cannot anywhere be surpassed,—and in the eastern or Maritime Provinces an abundance of that most useful of all minerals, coal, as well as the most magnificent and valuable fisheries in the world; extending as this country does for two thousand miles, traversed by the finest navigable river in the world, we may well look forward to our future with hopeful anticipation of seeing the realization, not merely of what we have hitherto thought would be the commerce of Canada, great as that might become, but to the possession of Atlantic ports, which we shall help to build to a position equal to that of the chief cities of the American Union. (Hear.)

But it is not so much by the extent of a country that its power and real greatness are to be estimated, as by its containing within itself the elements of different interests, for it is in the diversity of employment that security is found against those sad reverses to which every country, depending mainly on one branch of industry, must always be liable. (^Hear.)

A most remarkable illustration of this has recently occurred in our own Mother Country. No one would have ventured to say, a few years ago, that England could have lost its immense cotton supply without having its system of commercial industry almost entirely overthrown, and having its people sunk into the deepest misery. Yet we have seen, within the last few years, the cotton supply cut off. We have seen, it is true, a considerable portion of the people reduced to great want, but, at the same time, the wonderful diversity of employment which exists in the country opened new channels for the employment of the distressed operatives, and though there was great pressure for a time, it was only temporary in its operations; and at this moment, after a short pause, we see the industry of England greater than it was at the beginning of the American war. (Hear.)

We may therefore rejoice that, in the proposed Union of the British North American Provinces, we shall obtain some security against those providential reverses to which, as long as we are dependent on one branch of industry as a purely agricultural country, we must always remain exposed. (Hear, hear.) The resources of these great colonies, and the extent to which the industry and intelligence of their inhabitants have developed them, are most significantly shown in the Trade and Navigation Tables, which are in the possession of the public.

I am afraid to weary the House by going at any length into statements relating to them, but I feel that in order to place the question of union fairly before the House and the country, I am called upon to glance, however briefly, at the position in which the trade and tonnage of each of the British North American Provinces at the present moment stands.

The returns of the trade of Canada in 1863, taking exports and imports conjointly, shew an aggregate of $87,795,000. Taking the census of 1861, this trade represents thirty-five dollars per head of the population. The value of the import and export trade of New Brunswick, for the same year, reaches §16,729,680, amounting to sixty-six dollars per head of its population. The aggregate trade of Nova Scotia for the same period, amounted to $18,622,359, or fifty-six dollars per head of its people. And in the case of Prince Edward Island, the import and export trade amounted to $3,055,568, representing thirty-seven dollars per head of the population of that colony. The value of the total trade of Newfoundland was $11,2-15,032, or eighty-six dollars per head.

The whole of these figures represent an aggregate trade of all the provinces amounting to $137,447,567. Notwithstanding the large population and the very large amount represented by the trade of Canada, when it is divided per head it falls considerably short of the trade of New Brunswick and Nora Scotia, being a little more than half per head of the former, and not more than two-thirds of that of Nova Scotia. All the statistics to which I have had access show that the commercial and financial position of our sister colonies is such as to enable them creditably to seek an alliance with any country on earth ; and it cannot be said that, in seeking or consenting to an alliance with Canada, they have any local, or sectional, or selfish object in view. (Hear, hear.)

Passing from trade, I will turn to another subject—the ship building and tonnage of those colonies—and will take the returns of 1863. In that year, the number of ships built in all those colonies was no less than 645, with a tonnage amounting to 219,763 tons. This statement of the enormous amount of tonnage built in one year is as good evidence as can be offered of the facilities we possess for becoming an important maritime power. The industry represented by those figures shows an export value of nearly nine million dollars! The sea-going tonnage of Canada, including that of the inland lakes, amounts to about nine million tons, a great portion of which, however, represents the tonnage of vessels performing coasting service, many of which frequently clear and arrive in the course of one day.

It is gratifying to know that the trade between Canada and the States on the other side of the lakes is of a nature to give employment to a large portion of this lake tonnage — amounting to 6,907,000 tons — but it cannot be classed in the same category as the tonnage arriving at Quebec and Montreal, which in most cases can make only two or three trips per annum. The sea-going tonnage of Canada amounted to 2,133,000 tons; of New Brunswick, 1,386,000; of Nova Scotia, 1,432,000 tons. Consequently the amount of sea-going tonnage, subject only to a small deduction, was actually about five million tons, of which about 2,133,000 was that of vessels trading between the St. Lawrence and foreign ports.

In making this statement it is due to the House that it should be made aware that some portion of this trade will not be represented after the contemplated union has taken place. At present, the internal commerce between these colonies appears in the returns of each as imports and exports, but I should be glad if I were able to make on this account a large deduction from the figures I hare given. It is matter for regret on the part of all of us that the trade between these colonies—subject all to the same Sovereign, connected with the same empire—has been so small. Intercolonial trade has been, indeed, of the most insignificant character; we have looked far more to our commercial relations with the neighbouring—though a foreign country,—than to the interchange of our own products, which would have retained the benefits of our trade within ourselves; hostile tariffs have interfered with the free interchange of the products of the labor of all the colonies, and one of the greatest and most immediate benefits to be derived from their union, will spring from the breaking down of these barriers and the opening up of the markets of all the provinces to the different industries of each. (Hear, hear.)

In this manner we may hope to supply Newfoundland and the great fishing districts of the Gulf, with the agricultural productions of Western Canada; we may hope to obtain from Nova Scotia our supply of coal; and the manufacturing industry of Lower Canada may hope to find more extensive outlets in supplying many of those articles which are now purchased in foreign markets. For instance Newfoundland produces scarcely anything by agriculture, manufactures hardly an article of clothing, and a considerable trade may thus be expected to arise; while, instead of having payments made, as they are now, through Lombard street, they will be made through our own bankers in Montreal and elsewhere.

If we require to find an example of the benefits of free commercial intercourse, we need not look beyond the effects that have followed from the working of the Reciprocity Treaty with the United States. In one short year from the time when that treaty came into operation, our trade in the natural productions of the two countries swelled from less than $2,000,000 to upwards of $20,000,000 per annum, and now, when we are threatened with an interruption of that trade—when we have reason to fear that the action of the United States will prove hostile to the continuance of free commercial relations with this country—when we know that the consideration of this question is not grounded on just views of the material advantages resulting to each country—but that the irritation connected with political events exercises a predominant influence over the minds of American statesmen, it is the duty of the House to provide, if possible, other outlets for our productions. If we have reason to fear that one door is about to be closed to our trade, it is the duty of the House to endeavor to open another; to provide against a coming evil of the kind feared by timely expansion in another direction; to seek by free trade with our own fellow-colonists for a continued and uninterrupted commerce which will not be liable to be disturbed at the capricious will of any foreign country. (Hear, hear.)

On this ground, therefore, we may well come to the conclusion that the union between these colonies is demanded alike on account of their extensive resources, and because of the peculiar position in which they stand relatively to each other, to Great Britain, and to the United States. All these are questions which fall within the province of the General Government, as proposed in the resolutions before the House, and whatever may be the doubts and fears of any one with respect to the details of the organization by which it is proposed to work the new system of Confederation, no one can doubt that the great interests of trade and commerce will be best promoted and developed by being entrusted to one central power, which will wield them in the common interest. (Hear, hear.)

I now come, Mr. Speaker, to the consideration of the second, and perhaps I may say the third division of my subject also—whether the material condition of these provinces is such as to make the union practicable, and whether the details of the measures proposed are equitable to each and to all. In considering this point, it is necessary for us first to review the liabilities of each province, the reasons why they were incurred, the objects which have been sought. In doing so, the House will not fail to remark that the same policy has animated the legislatures of all the provinces, or perhaps I should speak more exactly in saying those of Canada, New Brunswick and Nova Scotia.

The public debt of all these provinces has, with some slight exceptions, been incurred for public improvements, intended to develop the resources of the country, to attract immigration and wealth to their respective shores, to cheapen the means whereby the products of their farms were to be taken to market, and to reduce the cost of freight of articles which enter largely into the consumption of their inhabitants.

Nor will any one fail to observe the intimate connection which all these public works have with each other—a connection which singularly illustrates the natural union which exists between these several provinces. If we consider the public improvements of Canada, her great canals intended to bring the trade of the vast countries bordering on the lakes down to the Gulf of St. Lawrence; if we look at the railway system forced upon us in our competition with American channels of trade, stretching from the extreme west to the extreme east of the province; and if we then look at the public works that have been undertaken in Nova Scotia and New Brunswick, we find that, practically, they form parts of one great whole.

It is through the St. Lawrence that the people of the Lower Provinces will send their fish, oils and other exports to the west, and it is through our canals and river that they will import the necessaries they require from the west. Through these canals and the river St. Lawrence, and along the railway systems of all the provinces, when hereafter connected, a great trade will flow in one uninterrupted stream, enriching in its course not only the cities of Canada, but also swelling the tide of a new commerce we may hope to see called into being in the open Atlantic ports of St. John and Halifax. (Hear, hear.)

I will now proceed, sir, briefly to lay before the House a statement of the present engagements of the several provinces, beginning with Canada. I find that our whole debt, exclusive of the Common School Fund, which does not form a portion of our engagements relatively to the Lower Provinces, amounts to $67,263,995. The debt of Nova Scotia is $4,858,547, and that of New Brunswick §5,702,991; and I may notice, with reference to the debts of Nova Scotia and New Brunswick, that in the case of Nova Scotia a portion of their liabilities, to the amount of nearly half a million of dollars, consists of treasury notes, while the policy has been pursued both in that province and in New Brunswick of retaining in the hands of the Government the Savings Bank deposits of the people, which form, therefore, a part of the liabilities I have named to the extent of $1,167,000.

It must, therefore, be observed that the rate of interest on the debts of these two colonies is not, on the whole amount, higher than that which the bulk of the Canadian debt now bears. Newfoundland has only incurred liabilities to the extent of $946,000, bearing interest at five per cent, while Prince Edward Island owes $240,673. The total liabilities of those provinces are, therefore, $11,748,211, against the interest on which may be placed the net revenues of the railways which are the property of those provinces, and which produced last year a net amount of about $100,000.

In addition to the existing liabilities of Nova Scotia and New Brunswick, there are certain further engagements they have incurred for the extension of their railway system requiring future provision to the extent, in the case of Nova Scotia, of $3,000,000, and in that of New Brunswick of §1,300,000. It must be evident to the House that, in entering into such a partnership as is proposed, some common basis must be arrived at on which each province must enter into the Confederation.

Taking all the engagements, present and future, of Nova Scotia and New Brunswick, it was found that, relatively to their populations, they amounted to about $25 per head, and this amount, as applied to Canada, would entitle us to enter the union with a debt of $62,500,000. Some difficulty might have occurred in reducing our debt to this amount had it not been apparent, on examination, that a considerable portion of it was connected with local advances, such as the Municipal Loan Fund, which does not properly belong to the same category as debt contracted in connection with our system of public improvements, and the management of which is intended to be confided to the General Government, but rather partakes of a local character, and should more properly be left in the hands of the local legislatures.

It will therefore be found provided in the resolutions, that in assuming for itself, apart from the General Government, the surplus of debt of about five millions ($5,000,000), the Province of Canada became entitled to withdraw from the general assets all those items which were of a local character, and for which a portion of its debt had been incurred. Had not this means been adopted, it would have been necessary to permit all the Lower Provinces to increase their obligations beyond those for which their legislatures have hitherto had to provide, and bring in larger debts to the Confederation than they will now do, and a most unnecessary and prodigal expenditure of public money would have been the consequence.

It was wise, then, to confine the liabilities of the General Government simply to those debts which had been incurred for purposes of general improvement, and to provide locally, in this country, for the assumption of the surplus, together with the assets which had been created by it.

Hon. Mr. DORION—Do the $07,203,005, stated as the debt of Canada, include the original seigniorial indemnity given to Upper and Lower Canada, under the Act of 1854 ?

Hon. Mr. GALT—Yes; that amount does increase the indemnity, and among the arrangements contemplated by the Government, assuming that Confederation does take place, they will submit, for the consideration of this House, a project for the assumption by Lower Canada of the seigniorial indemnity provided by the Act of 1859, whereby it will be rendered unnecessary to give an equivalent indemnity to Upper Canada, thus saving upwards of three millions of dollars. (Hear, hear.)

I would desire again, Mr. Speaker, to refer to the position of the Lower Provinces, and to call the attention of the House to the fact that both in the case of Newfoundland and in that of Prince Edward Island, their liabilities are very much less in proportion to the population than those of the three larger provinces; and in order to permit of their entering into the union upon fair terms, it was necessary to provide that they should be allowed to receive from the general exchequer a sum equal to the interest upon the amount of debt which they had not been obliged to contract. By this means provision was in fact made for the maintenance of their local governments, while at the same time a cause of future complaint was removed. (Hear, hear.)

It now becomes my duty to submit to the House a statement of the resources which the several provinces propose to bring into the common stock, and I may add that for the purpose of this statement being more readily verified, the financial returns of 1803 have been taken as the standard. From these returns it would appear that the income and expenditure of the several provinces stood in that year as follows: Nova Scotia, with a population of 338,857, had an income of $1,185,629, her outlay being $1,072,274 ; New Brunswick, with a population of 252,047, had an income of $894,830, and an outlay of $884,013; Newfoundland, with a population of 130,000, had an income of $480,000, the outlay being $479,420 ; Prince Edward Island, with a population of 80,000, had an income of $197,384, the outlay being $171,718. The total revenue of all these colonies amounted to $2,763,004, and the total expenditure to $2,608,025—the united surplus over expenditure for 1803 being $154,979.

It will be observed that as regards these provinces their income and expenditure are such that they will enter the Confederation with a financial position in no respect inferior to that of Canada. If an objection were made with respect to any province in regard to its financial position, it would be against Canada. The Lower Provinces have been and are now in a position to meet, from their taxation, all their expenses, and cannot be regarded as bringing any burthen to the people of Canada. It is not necessary for me to say anything in reference to the financial position of Canada in 1803, but it must be gratifying to the House to know that the deficiency which unfortunately existed during that year was removed in 1864, and that, therefore, we are not obliged now to propose to enter the Confederation in an inferior position, in this respect, to that of our sister colonies. (Hear, hear.)

The revenues of each of these provinces are, as the House is well aware, collected under different systems of taxation, suited to the local industry and the wants of their several populations. It is, therefore, manifest that one of the first duties of the General Legislature will be to consider the modes by which the burden of taxation can be most easily borne by the industry of the whole country, and to assimilate the several sources of revenue which are now in existence in such manner as will least interfere with the profitable exercise of the industry of the people.

It would be entirely out of place for me, sir, to attempt on this occasion to indicate what the policy of the General Government may be, but one thing must be evident to all, and that is, that where the taxation is about equal per head, the adjustment of it cannot be attended with any injustice to the people of any of the several provinces. Reductions may be made in our customs, on the one hand; and, perhaps, on the other, some portions of our commerce may be relieved from the exactions to which they are now subjected.

Apart from the advantages which will manifestly flow from the free trade which will hereafter exist between us, it must be clear to every member of the House that the credit of each and all the provinces will be greatly advanced by a union of their resources. A larger fund will be available as security to the public creditor, larger industries will be subjected to the action of the Legislature for the maintenance of public credit, and we will also see removed some of those apprehensions which have latterly affected the public credit of this country. (Hear, hear.)

It must be evident, for it is proved by the fluctuating quotations of the securities of these provinces in London that the apprehension of war with the United States—which has, unfortunately, affected the prices of Canadian bonds—has not to the same extent effected those of New Brunswick and Nova Scotia, which are less exposed to hostile attack; and we may therefore hope that the union, while it affords us greater resources, will at the same time, carry with it a greater sense of security. (Hear, hear.)

I must now enquire whether the proposed system of general and local governments, as regards the interests to which I have already alluded, is likely to work beneficially; and this brings me to the consideration of the question of the means that will be at the disposal of the general and local governments.

It must be admitted that having the power of taxation in their own hands, it will be the fault of the General Legislature if any embarrassment is felt in meeting the expenditure of the General Government. Before, however, passing to the consideration of the means at the disposal of the local governments, I would take this opportunity of replying to the honorable member for Hoehelaga, in reference to the export duty on timber in New Brunswick, and the royalty in Nova Scotia on the produce of the mines. This has arisen from the circumstance that in the former province it was found both expensive and inconvenient to attempt to levy their timber dues in the forest, and they therefore adopted the plan of causing them to be paid in the form of an export duty upon the clearances of vessels at the custom house.

If, therefore, provision had not been made for securing to New Brunswick the payment of these dues, that province would have been deprived of the large amount which its territorial timber contributes to the revenue, and the General Legislature would have been required to increase the proposed grant to that province by an amount equal to those dues—somewhere about $90,000 per annum. In the case of Nova Scotia—not possessing any public lands or timber to any extent—her territorial revenue is almost wholly derived from her mines, and collected in the form of royalty. Her representatives at the Conference pointed out that if the policy of the General Government should be to impose an export duty on her coal, it would virtually oblige her either to relinquish the royalty, which now forms a large source of her revenue, or submit to be placed in a most disadvantageous position in competing in the American markets with the coal of that country.

For these reasons an exception was made in the case of both of these provinces, such as has been alluded to by the honorable member. (Hear, hear.) In the case of Newfoundland, an arrangement has been made whereby the whole of the territorial rights of that colony have been ceded to the General Government, and I will take the opportunity, when adverting to the means of supporting the Local Government of that colony, to explain the manner and the consideration for which these rights were so ceded. (Hear.)

I now propose, sir, to refer to the means which will be at the disposal of the several local governments to enable them to administer the various matters of public policy which it is proposed to entrust to them, and it is evident that unless ample provision is made in the arrangements, great danger will arise that the machinery whereby the local wants of the people are intended to be met will speedily become impaired, causing complaint on the part of the inhabitants of the respective localities, and involving considerable danger to the whole machinery of government. (Hear, hear. )

In the case of Canada it will be remembered that the sum of nearly five millions of the public debt has to be borne by Upper and Lower Canada. It will hereafter be for the House to decide how this sum shall be apportioned, but the probability is that the Government will recommend that it shall be divided on the basis of population. (Hear, hear.) It must be remembered that Canada will have at its disposal a large amount of the local assets, including especially the sums due to the municipal loan fund, which will produce an income for the support of their local institutions.

As a matter of account between Upper and Lower Canada and the General Government, they will be charged with the interest on their respective proportions of the five millions against the subsidy which it is proposed shall be given to them, while they themselves will collect from the municipalities and other local sources all the revenue and amounts which now enter into the general revenue of the Province of Canada. The question of the sub-division of the local assets of Canada is not, however, before the House. What we have now to consider is whether the bargain as between Canada as a whole and the Lower Provinces ought to be assented to. If it be assented to the question will arise, how shall we deal with the local matters between Upper and Lower Canada? and a proposition will be brought down which I hope and believe will satisfy both sections, and do them substantial justice.

Hon. Mr. DORION—Will Lower Canada be charged with the municipal loan fund, the seigniorial indemnity, and the educational indemnity?

Hon. Mr. GALT—I must repeat that, no matter what views the Government may have on the distribution of the liabilities as between Upper and Lower Canada, they will be susceptible of alteration in any way the House may see fit, this being a matter solely of local arrangement, and in no respect involving the agreement entered into with the other provinces; but I must point out that, as regards the original seigniorial indemnity and the municipal loan, they are both included in the sixty-seven millions already stated as the liabilities of Canada, and cannot, therefore, form any additional charge against Lower Canada. (Hear, hear.)

Indeed, as regards the Municipal Loan Fund, instead of being stated as a liability, it appears that the sums due under it are, in connection with the question as I now view it, to be regarded in the light of assets, because we are considering now the sums received as assets by Lower Canada. The Municipal Loan Fund being one of them, the sums due to it under the existing provincial arrangements will become payable as an asset to that section of the province. (Hear.)

It will be observed that in the plan proposed there are certain sources of local revenue reserved to the Local Governments, arising from territorial domain, lands, mines, &c. In the case of Canada, a large sum will be received from these resources, but it may be that some of them, such as the Municipal Loan Fund, will become exhausted in course of time. We may, however, place just confidence in the development of our resources, and repose in the belief that we shall find in our territorial domain, our valuable mines and our fertile lands, additional sources of revenue far beyond the requirements of the public service.

If, nevertheless, the local revenues become inadequate, it will be necessary for the local governments to have resort to direct taxation; and I do not hesitate to say that one of the wisest provisions in the proposed Constitution, and that which affords the surest guarantee that the people will take a healthy interest in their own affairs and see that no extravagance is committed by those placed in power over them, is to be found in the fact that those who are called upon to administer public affairs will feel, when they resort to direct taxation, that a solemn responsibility rests upon them, and that that responsibility will be exacted by the people in the most peremptory manner, (Hear, hear. )

If the men in power find that they are required by means of direct taxation, to procure the funds necessary to administer the local affairs, for which abundant provision is made in the scheme, they will pause before they enter upon any career of extravagance. Indeed, I do not hesitate to say, that if the public men of those provinces were sufficiently educated to understand their own interests in the true light of the principles of political economy, it would be found better now to substitute direct taxation for some  form of the indirect modes by which taxation has been imposed upon the industry of the people. (Hear, hear.)

I do not, however, believe that at this moment it is possible, nor do I think the people of this  country would support any government in adopting this measure unless it were forced upon them by the pressure of an overwhelming necessity —the necessity of providing, by extraordinary means, against dangers by which the peace, happiness and prosperity of the country may be threatened, in fact, by some of those great disturbing causes which are frequently the beginning of the most important financial changes. (Hear, hear.)

The local revenue of Upper Canada during the last four years has averaged the sum of $739,000, and that of Lower Canada, $557,239; together they amount to nearly $1,300,000, independent of the eighty cents per head which it is proposed to allow the local governments out of the general exchequer, for the purpose of meeting their local expenditures. These local expenditures include such items as the administration of justice, the support of education, grants to literary and scientific societies, hospitals and charities, and such other matters as cannot be regarded as devolving upon the General Government. The whole charge, exclusive of the expenses of local government and legislation, on an average of the last four years, has in Lower Canada amounted to $997,000, and in Upper Canada to $1,024,622 per annum.

In addition to these sums, will have now to be added such amounts as may be required to meet the cost of the Civil Government of the country and of the Legislation for local purposes. It may be difficult to form any reliable estimate of the sums required for this purpose, but when the House considers that, according to the statements given of the expenditure during the last four years, there will be available in the whole Province of Canada the sum of no less than $1,043,015, it must, I think, be admitted that if  those charged with the administration of local affairs in Upper and Lower Canada exceed this amount they will be guilty of a degree of profligacy and extravagance for which a speedy remedy will be found by the people. (Hear, hear.)

With reference to the Lower Provinces, the delegates from them to the Conference were asked what reductions they could make in the existing cost of the government of their several colonies, and the figures I am about to give will be found most satisfactory, as showing their disposition to reduce their requirements to the lowest possible sum. In the case of Nova Scotia, the estimate of outlay in 1864 for objects of a local character required an expenditure of no less than $667,000. Some portion of this expenditure was for services that did not require again to be performed, but it is gratifying to observe that they have undertaken to perform the whole service in future for $371,000. (Hear, hear.)

In the case of New Brunswick, in 1864 the estimated expenditure was $404,000, which they have undertaken to reduce to $353,000, and at the same time they have further undertaken within ten years to make an additional reduction of $63,000, thus reducing the whole expenditure in the future to $290,000. (Hear, hear.) Prince Edward Island, with an expenditure of $124,000, proposes to perform the same local duties that formerly required $170,000; and, in Newfoundland an outlay of $479,000 has been similarly reduced to $350,000. (Cheers.)

The House must now, sir, consider the means whereby these local expenditures have to be met. I have already explained that, in the case of Canada, and also in that of the Lower Provinces, certain sources of revenue are set aside as being of a purely local character and available to meet the local expenditure; but I have been obliged in my explanations with regard to Canada to advert to the fact that it is contemplated to give a subsidy of 80 cents per head to each of the Provinces. In transferring to the General Government all the large sources of revenue, and in placing in their hand with a single exception, that of direct taxation, all the means whereby the industry of the people may be made to contribute to the wants of the state, it must be evident to every one that some portion of the resources thus placed at the disposal of the General Government must in some form or other be available to supply the hiatus that would otherwise take place between the sources of local revenue and the demands of local expenditure.

The members of the Conference considered this question with the most earnest desire to reduce to the lowest possible limits the sum that was thus required, and I think the figures that I have already given to the House afford the best possible evidence that no disposition existed, at any rate on the part of our friends from the Lower Provinces, to take from the public exchequer one shilling more than the necessities of their respective communities absolutely demanded. (Hear, hear.)

In the case of Canada, perhaps it will be said that a smaller sum would have met our immediate wants, but it was felt that it would be impossible to justify any distinction being drawn between subjects of the same country. And if in Canada we receive perhaps a somewhat larger amount than we absolutely require, it ought rather to be a subject of gratification to this House that it will possess the means of giving greater encouragement to our (educational system, and greater development to those interests which are peculiarly entrusted to the charge of the local governments, and this, too, without making any greater demand than is at this time made upon the resources of the people. (Hear, hear.)

A subsidy of 80 cents per head was provided, based upon the population according to the census of 1861. The amount, if taken upon the basis of the present population, would undoubtedly be considerably less; and it must be observed that the agreement does not contemplate any future extension of this amount. It is hoped that being in itself fixed and permanent in its character, the local governments will see the importance —I may say the necessity—of their exercising a rigid and proper control over the expenditure of their several provinces. We thus obtain one of the greatest securities that can be offered to us that those influences which, in such a Legislature as we now possess in Canada, are brought to bear for the purpose of swelling the public expenditure, will not exist in the local  legislatures, but will meet with such a resistance, from the mere fact of the inability of the local governments to obey them, as to produce a very considerable saving in the general expense of the whole country. (Hear, hear.)

I have now, Mr. Speaker, only to advert to the last question which I have stated is necessary to be decided on the present occasion; and that is, whether under the proposed Confederation such additional expenses will be incurred as to render it undesirable. In considering this point, I must state that in my opinion the question of expense alone is by no means a fair criterion by which to judge of the advantages of a measure such as that now before the House. If it be looked at in its most restricted sense, the only point in which additional expense can be incurred, must be that of the simple cost of governing the country.

In no other way that I am able to see, can there be additional expense charged upon the people; and looking at it in this point of view, we may well doubt whether the aggregate charge will be greater for the General Government, caring for the general interests of the whole, and for the local governments attending merely to the local business of each section,—we may well doubt, I say, whether that expense will be greater, in any considerable degree, than that which is required for our Government under the present system. (Hear, hear.)

On the one hand we shall be free from the empty parade of small Courts entailed by our present system on each of these provinces, keeping up a pretence of regal show when the reality is wanting; we shall have the legislation of the General Government restricted to those great questions which may properly occupy the attention of the first men in the country; we shall not have our time frittered away in considering the merits of petty local bills, and therefore we may reasonably hope that the expenses of the General Legislature will be considerably less than even those of the Legislature of Canada at the present moment,—while, on the other hand, the local legislatures having to deal rather with municipal than great general questions, will be able to dispose of them in a manner more satisfactory to the people. and at infinitely less expense than now.

I believe, therefore, the simple cost of the Government of the country will not be in reality any greater under the new than under the old system; but there are other items of expenditure for great public objects, the absence of which from the estimates of any country is an indication rather of weakness and of dependence than a subject that ought to form a source of satisfaction. If such items are not now found in the public expenditure, either of Canada or the Lower Provinces, it is the best proof that could be given that our position is one of inferiority, and that we do not possess either the power or the means to undertake such works as make such items necessary.

Let me give one or two points as examples of my meaning ; and first I will instance the great question of defence—(hear, hear.)—the absence of items of expenditure for which can only be an indication that we are lacking in one of the chief elements of national greatness, that we do not properly value the institutions under which we live, and that we are not willing to make the sacrifices that every free people must make if they are desirous of preserving them.

The same argument applies to public works, in connection with which it might be said that great advantage would arise from large expenditure; but with limited resources and an undeveloped territory it might be impossible for any small country to undertake the necessary outlays. Many works of this kind are not directly productive of revenue, although indirectly of the utmost advantage, and if the resources of a country generally cannot be applied to that outlay, the absence of such expenditure ought to be a subject of regret in the community, and not of rejoicing. (Hear, hear.)

In this view let us look at the immense extent of territory that stretches away west of Upper Canada. The reason why we have not been able to assume possession of that territory and open it up to the industry of the youth of this country who, in consequence of the want of some such field for the employment of their energies, have been obliged to go off to the States in thousands, especially to those states possessing the boundless resources of the great North-West, is because there sources of Canada—great as they have been, considering the disadvantages under which she has labored—have been inadequate for the development of this great district.

Now, one of the resolutions of the scheme before the House refers to this same question, and I believe that one of the first acts of the General Government of the United Provinces will be to enter into public obligations for the purpose of opening up and developing that vast region, and of making it a source of strength instead of a burden to us and to the Mother Country also. (Hear, hear.)

Looking, however, to the whole question of expense, I must say that if the benefits of Confederation are to be weighed against the loss of three or four hundred thousand dollars, the House had better carefully consider whether the people of this country will not accept the former at such comparatively trifling cost—whether they will not feel that a union with a million of their fellow colonists is worth much more to them than any small pecuniary question of this kind that may arise. (Hear, hear.)

I trust the House will not permit the question to be judged of in a small, contracted manner. I trust it will keep in view the desire the country manifests for the utmost possible development of its resources. Let us endeavor by this measure to afford a better opening than we now possess for the industry and intelligence of the people. Let us seek by this scheme to give them higher and worthier objects of ambition. Let us not reject the scheme with the bright prospect it offers of a nobler future for our youth, and grander objects for the emulation of our public men. Let us not refuse it on small questions of detail, but judge it on its general merits. Let us not lose sight of the great advantages which union offers because there may be some small matters which, as individuals, we may not like. Let us trust that this machinery, however faulty it may be, will yet under Providence open up for this country a happy career; while at the same time the House must not forget that it will for ever remove the great and crying evils and dissensions which have existed in Canada for the last ten years, and which have threatened to plunge the country into the most disastrous and lamentable state of discord and confusion. (Cheers.)

Surely this last fact alone will commend the project to the House. It should induce the Legislature and the people to make every allowance for the men who have been engaged in the work, and lead them to approach the result of their labors as now submitted, not in a hypercritical spirit so that the public mind may be led astray on mere matters of detail. Let the House frankly and kindly look at it as a great measure brought down for the purpose of relieving the country from distress and depression, and give it that consideration which is due, not to the arguments of the Government, feeble as they may be in view of the great interests involved, but to the fact that the country desires and cries for, at the hands of the House, some measure whereby its internal prosperity, peace and happiness may be developed and maintained. (Loud cheers.)

On motion of Hon. Mr. Brown, the debate was then adjourned.

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