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One Flaw in a Fair Offer


[For the source of this document, see the end of the text.]

The people of Newfoundland now know the terms on which, if they choose, they may join Canada as a tenth province. Their National Convention will debate the proposals, and later a vote of the citizens will decide the issue. It cannot be too strongly emphasized that Canada has no wish either to railroad or to buy the island into Confederation. The fact that discussion of union has been going on for eighty years is evidence of that. This is a matter for Newfoundland to settle for itself.


On the other hand there is no doubt whatever about Canadian sentiment on this issue. The Dominion Government has made its offer strictly on its own initiative, but, this newspaper believes, with the full support of the Canadian public. They want Newfoundland in the union. They have always been ready to welcome its 400,000 sturdy people as fellow-citizens. Today there are two comparatively new but compelling reasons why Canada favors union.


One is the realization that in Labrador, which is Newfoundland territory, there may be one of the richest mineral fields of this continent. The other is the knowledge, dating from the war period, that the island is a vital strategic point in North American defense. Canada is thus not entirely selfless, and could not pretend to be, in its attitude toward Newfoundland's future. Canada would like to take a hand in utilizing Labrador's wealth, believing that development there will be greatly accelerated if Canadian capital and manpower are associated in the job. And Canada likewise believes that North American security will be best served if Newfoundland defenses are fully integrated with those of the mainland.


As these are the views which prevail in Canada, very few Canadians will want to haggle about financial terms of the proposed union. As announced, the proposals are generous, but not excessively so in view of Newfoundland 's special difficulties and needs. The estimated "deficit" which Canada may incur in fiscal relations with the island, $180,000,000 in ten years is trivial when set beside the advantages union can bring - and the estimate may prove too high. We have no quarrel with the money terms except on one score . It was quite illegitimate to write into this bargain with Newfoundland a Dominion-Provincial tax agreement "similar to those accepted by some of the Provinces".


These makeshift arrangements, giving the Dominion possession of the Provincial tax fields in exchange for a money payment, have been rejected by Provinces with more than two-third of Canada's population. The Premiers of two Provinces which accepted them, Nova Scotia and Alberta, clearly said that they did so because they urgently needed revenue and that they were utterly opposed to the wrong principle involved. In any case, it is agreed by the Federal Government itself (or is it not?) that these fiscal bargains are temporary or must soon be abandoned or revised.


Newfoundland , as a condition of entry into Confederation, is required to sign one of these highly controversial tax agreements. No one would object to payment received by the island in consequence; but the procedure is open to the gravest objections. If Newfoundland is to become a Province, it must be a Province possessed from the start of all the taxing powers granted by the British North America Act and by long Canadian usage. Thereafter, Newfoundland should be free to make or not to make tax agreements with Ottawa as it saw fit. By signing away certain tax fields in advance of membership in Canada, Newfoundland will not only come into Confederation as less than a free and equal Province; it will also run a serious risk. The island Legislature may find itself debarred, by its solemn pact with the Dominion, from taxation privileges it would like to use.


In this respect, and this respect only, the financial terms are thoroughly bad. And the  tax-agreement clause is not only unsound constitutionally. It projects Newfoundlanders right into the centre of an unsettled Canadian political controversy in which they have had no part or interest. In fairness to them, and in constitutional logic, let the island join Canada on a completely equal footing with the other nine Provinces.


Source : "One Flaw in a Fair Offer", editorial in The Globe and Mail, November 8, 1947, p. 6.


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© 2004 Claude Bélanger, Marianopolis College