Legislative Assembly

At the end of October, 1966. the Tax Structure Committee and the lenary session of the Federal-Provincial Conference reconvened in Ottawa to reso ve the problems in respect to the allocation of public financial resources, and to receive several proposals made to the provinces by the Government of Canada. Major changes were proposed in the following fields: the occupancy of tax fields or fax sharing; provincial revenue equalization arrangements; provincial revenue stabilization ar- rangements; federal financial assistance in respect of post-secondary education: a new form of federal compensation to the provinces in respect of well-established shared-cost programs in the health and welfare field: and finally, a new federal program for the occupational training of adults in lieu of the technical and vocational training agreements which expire on March 31, 1967.

After much serious discussion, the conference recognized that it was not pos- sible to arrive at a tax-sharing arrangement which could be regarded as fully satis- factory to both the federal and provincial governments. However. a new tax collec- tion agreement to prevail for two years was offered to the provinces by Canada.

There were two exceptions made to the use of the equalization formula pro- posed in September. In the transition from the old formula to the new one, equaliza- tion payments to the Province of Saskatchewan declined from $38 million to zero: consequently, it was decided that they should be gradually phased out over the period 1967-72. Saskatchewan will therefore receive $27 million during the fiscal year 1967-68. Secondly, with the implementation of the new formula. the Atlantic Provinces’ Ad- ditional Grants were discontinued. Consequently, the Government of Canada guar- anteed that no Atlantic Province shall receive less under the new formula than the amount it received in total in the last year of the former arrangement plus an amount equal to its 1966-67 share of the Atlantic Provinces Additional Grant. This guarantee is relevant only to Prince Edward Island since the increases in the equal- ization payments to other Atlantic Provinces are relatively large.

At this same October Conference the Prime Minister and Premiers discussed the rapidly increasing needs of higher education in Canada which are imposing so great and growing a burden on the provincial governments. In the light of the re- cognition that the federal government must assist the provinces in providing the financial resources needed for the general support of post-secondary education the Government of Canada proposed fiscal assistance through a special arrangement of fiscal transfers related in amount to the operating costs for post-secondary education; this would replace the present university grants program and much of the assistance for technical and vocational training under the present agreements which expire March 81, 1967. The amount of the federal transfer would be based on fifty per cent of post-secondary costs as a contribution toward both the operating costs of higher education, and the capital costs of providing the necessary physical structures. An optional per capita measure of expenditure was also proposed which will amount to not less than $15.00, which would expand in proportion to the growth in the total operating costs of post-secondary education in Canada generally.

The new arrangements include the termination on March 31, 1967 of the agree- ments under which operating and capital grants have been paid in respect of voca- tional high schools. technological institutes, trade schools and other facilities for technical and vocational training. Several provinces were strongly of the view that the proposals first made by the federal government for transitional arrangements in respect of capital grants were inadequate and did not take into account commit- ments they had made in the expectation that the agreements would be continued. After reviewing the matter, the Prime Minister proposed on October 26, 1966 that the transitional arrangements should provide that capital grants would be available. without limit as to time, for the purposes covered by the present agreements, until they had reached for each province $800. per capita of its population aged 15-19 as of 1961. For your information, Mr. Speaker, in this Province there were 8,875 in the

15-19 age group in 1961.

The Government of Canada outlined to the Conference proposals relating to the training and retraining of adults for participation in the labour force. The proposals include acceptance by the federal government, as of April 1, 1967, of full financial responsibility for allowances paid to enable adults to undertake full-time training for employment. As of the same date, the federal government has under- taken to pay the provinces in full for the costs of occupational training to adults.

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