COLORADO'S BONUS PLAN FOR AGED PENSIONERS

Abstract

this question as well as the large issue of post-war fiscal policy. The federal government at once submitted a far-reaching set of proposals of which the focus was not merely revision of Dominion-Provincial relations according to the recommendations of the earlier Royal Commission, but rather maintenance of a high level of employment and income. The provinces were asked to give! up income taxation and succession duties for a term of years in return foi unconditional subsidies which would vary with gross national production. These subsidies were to be more generous than those given under the wartime tax agreements and they were not, as were those recommended by the Royal Commission, to rest explicitly upon fiscal need. The federal government also offered to carry a larger share of the cost of a social security program, and it proposed a coordinated program of counter-cyclical public investment. The conference dispersed to study the federal proposals, reassembling nine months later on April 29, 1946. Despite liberalization of federal payments, no general agreement could be reached chiefly because of the opposition of Ontario and Quebec. The next step came on June 27 when Mr. Ilsley presented his budget to the House of Commons. He then offered to negotiate with individual provinces agreements to run for five years by which an agreeing province would levy (a) no personal income tax, (b) a 5 percent tax, federally collected, on net corporate income, (c) either no succession duties, or if levied, an appropriate reduction in its subsidies. The in lieu subsidies were to be those offered at the last DominionProvincial Conference.10 Agreements on this basis have been signed by several provinces and all may be expected to sign except Ontario and Quebec. The opposition of Ontario rests primarily on economic grounds. The federal plan would lead to a net transfer of income from its residents to other Canadians. The opposition of Quebec rests on cultural and demographic features which make this province oppose centralization.