CANADIAN FINANCES

New Zealand Herald, Volume LXXIII, Issue 22319, 17 January 1936, Page 8

CANADIAN FINANCES

Like other federations, Canada is constantly faced with difficulties owing to the division of powers between the central and district governments. The recurring clash between Federal and State Governments in the United States and Australia has its counterpart in Canada, as between the Dominion and the Provinces. During the depression the checks placed by the constitution on the adoption of nation-wide policies in the social and economic spheres have been severely felt, as they have been by Canada's great neighbour. Even so, the Provinces have been inclined to guard their powers jealously against encroachment from Ottawa, the French-Canadians in Quebec being especially vigilant in defence of Provincial rights. In Canada as elsewhere, however, finance has proved the weakness in the Provinces, whereas the Federal Budget and credit have survived the crisis with comparative ease. The Provinces have had to come to Ottawa asking for subsidies or financial backing, and even to be relieved of some of their formerly cherished responsibilities. Financial dependence is tending to undermine political independence. It rs now announced that the Provinces have agreed with the Dominion on the principle of establishing a Loan Council, apparently on the lines of that which has proved a financial bulwark in Australia. The cause of this acceptance of further centralisation lies in the heavy indebtedness of some of the Provinces. The burden of debt has given risd in certain directions to a Canadian version of Langism. Fortunately Liberal Governments are in power in seven out of the nine Provinces, a fact that should assist in vesting an effective and salutary financial hegemony in Ottawa. The credit of Canada has been shaken by actions, prompted by distress, of some of the Provinces and municipalities. The establishment of a Loan Council should provide a powerful corrective, as it has done in Aus- | tralia.