Thirty Years – 1922-1952
The Story of the Communist Movement in Canada

CHAPTER ELEVEN: The Communist Party In the Constitutional Crisis

THE EFFECTS OF THE CRISIS emphasized the need for a thorough-going change in the responsibilities of the various levels of government in Canada. The facts of highly concentrated monopoly-capitalism in 1938 contradicted the assumptions upon which the British North America Act was based in 1867. One of the last acts of R. B. Bennett, as prime minister, had been to enact a series of bills termed collectively "Bennett's New Deal." This "death-bed repentance" legislation provided for the establishment of national unemployment insurance, the eight-hour day and other overdue reforms. One of the first acts of Mackenzie King when he became prime minister again was to refer Bennett's "New Deal" legislation to the Supreme Court of Canada. The public reason given was "to test its validity." The actual reason -was to get rid of it without Mackenzie King, the reformer, having to shoulder the opprobrium of repealing reform legislation. Chief counsel for the federal government in that case was none other than Mr. Louis St. Laurent, K.C.

The Supreme Court disposed of the "New Deal" and, so far as legislation was concerned, the workers and farmers of Canada were back where they started from. They were not "back where they started from" politically, however. Disintegration of the two old parties of Canadian capitalism had started and King's action speeded up the disillusionment of tens of thousands who had previously supported, the Liberal Party. Broad sections of the population were groping for progress. The vote cast in the federal elections had given victory to the Liberals but, politically, it was a vote against the Conservative Party and the policies that it stood for.

Mackenzie King never favored thoroughgoing reform of the constitution, he never advocated any basic change in the division of governmental responsibility provided for in the British North America Act. But a great many municipalities were broke. Those that were not broke were unable to provide even the minimum of relief needed. Several provincial governments were in similar straits. Despite some improvement in the general economic situation there was no improvement, in the conditions of the masses of the people. At the height of the so-called "economic recovery," 925,000 Canadians were still on relief. The crisis in agriculture persisted throughout the "recovery period." After the farmers of the western provinces succeeded in getting a price of 80 cents per bushel set for the 1938 wheat crop, the Dominion government attempted to get it reduced again to 60 cents for the 1939 crop. Eventually a compromise price of 70 cents per bushel was reached.

Canadians were beginning to learn by their own experience that the workers are the only class whose interests as a class are completely identical with the true interests of the nation. As the Communist Party pointed out:

"The essence of the conflict over the minimum price guarantee of wheat is no less than the question of whether or not Canada can afford to allow western agriculture to decay. Every consideration of national welfare shouts no! . . . Our national economy can't operate without production of Prairie wheat, but if western Canada is to remain a wheat producing area there must be a guaranteed price sufficient to enable the farmer to live.... The reason a guaranteed price level is necessary for wheat is to be found in governmental policies which maintain a high price level for everything the farmers buy. . . .
"The time has now arrived when monopoly-capital is taking such a large percentage of the national income in rent, interest and profits, that a redistribution of income is absolutely essential if the people are to live . . . I submit to you that this problem must be dealt with as a national emergency on a national scale. The people of eastern Canada cannot improve their lot unless yours improves also, and vice-versa."(1)

That statement did but emphasize a fact that was acknowledged, tacitly, by Mackenzie King when he appointed the "Royal Commission on Dominion-Provincial Relations." The royal commission was Mackenzie King's roundabout method of "reporting progress" while postponing action to solve the problems of the millions of Canadians who were victims of the crisis and the depression.

Let there be no mistake, the Royal Commission on Dominion-Provincial Relations was of tremendous importance. It received briefs from hundreds of organizations and associations as well as from provincial governments in public hearings. At tremendous cost to Canadian taxpayers the commission produced voluminous studies and a comprehensive report. Its three volumes of summarized findings and proposals did offer Canadian capitalism a mildly liberal program of constitutional reform. The fact that the monopolists rejected that program, preferring to maintain the present constitutional barriers to social reform, emphasizes the arrogance of their reaction. It is probably true that Mackenzie King knew in advance that the monopolists would not accept those proposals but, in his King-esque way, he established a political landmark by securing that plan for social and constitutional changes as the reform alternative to the reactionary program of monopoly-capital.

The only political party which submitted a brief to the royal commission setting forth a documented analysis of the source of the crisis and a full program of constitutional reform, was the Communist Party of Canada. That significant fact mirrored one of the peculiarities in the national life of our country; namely, the contradiction between the material conditions of monopoly capitalism which had rendered the problem of Dominion-provincial relations acute, and the relative political backwardness that the capitalists and their political representatives had been able to maintain. Here was a royal commission set up to study the central constitutional problem of Canadian capitalism. The problem was acute. Any legislation that might result from the work of the commission would have a profound effect for good or ill upon the masses of Canadians - its work was bound to affect their national future. The problem before the commission could be dealt with to the advantage of the masses of the people only by changes to which the monopolists were opposed openly and bitterly. None of the other political parties was prepared to join in a genuine struggle against monopoly-capital, so they ducked the issue. It is an illuminating commentary upon the level of democratic political action at that time that, except among very limited circles of the C.C.F., there was no protest against. that crass betrayal of democratic responsibility by party leaderships.

The Communist brief was acknowledged by many authorities to be the most comprehensive and fully documented of all those submitted by voluntary organizations. That is important today because modified versions of several ideas put forward in it emerged as features of the proposals eventually submitted by the royal commission.

The point of departure of the party's brief, and the conclusion around which it was built, was stated in its Introduction. Rejecting the misleading interpretations of constitutional history that were then rampant, the brief declared: "The constitutional history of Canada is really the history of the struggle between the democratic masses of workers and farmers and the vested interests and monopolists.... The constitution, insofar as we have a constitution, records some of the formal rights of citizens; but no regard is given to the conditions for exercising those rights. . . . The material basis of real political equality and democracy is lacking because the exploiting class dominates the economic life of the nation. The masses have attained democratic rights through their struggles for economic improvement and security against the vested interests. Constitutional principles must therefore be understood in reference to this struggle of the people."(2)

Governmental admission of the necessity for the royal commission had been compelled by the extreme poverty of the many in contrast to the fabulous riches of the few. By government statistics the Communist Party's brief proved that the concentration of wealth and economic power had brought about a situation in Canada in which a numerically small group of monopolists bad been able to maintain their corporate and personal incomes at the expense of the masses of the people, even in the year 1934 when the national income as a whole was down to only 60 percent of the 1929 level. The brief showed that in 1934, the last year for which official statistics were then available, the national income produced by Canadian workers was divided as follows:

Dollar worth of the national income produced $3,600,000,000
Income from foreign investments 100,000,000
Wages and salaries (including salaries of directors, bank and railroad managers, etc.) 1,840,000,000 (50%)
Farmers' income 440,000,000 (12%)
Employers and workers on their own account 300,000,000 (8%)
Income on investment (rents, interest, profits) 1,130,000,000 (30%)

As those figures show, the investment interests who owned Canada's banks and industries and exploited Canada's natural resources (exclusive of the farms) made $1,130,000,000 just through the fact of ownership. By simply owning and controlling the decisive sectors of Canadian economy, they received 30 per cent of all the values produced that year.

The brief showed further that only 23,600 Canadians, only one fifth of one per cent of the population, had incomes of more than $5,000 during that year. But that one fifth of one per cent of the population received $940,000,000, half as much as was received by all the millions of workers whose labor had produced the national income. Concerning this fact, the brief showed how the income tax laws are framed so as to tax only a small part of the income that the rich make. Describing the technique by which the income tax laws tax the rich only for what the government calls their "taxable net income," it showed that:

"It is possible for a Canadian millionaire to increase his fortune from 1 to 100 millions without paying a penny of personal income tax on the 99 millions he has made. Profits made but re-invested without ever taking the form of dividends are not profits in the eyes of the law. Under such laws the 'taxable income' of the rich is really only their living expenses, and this, coupled with evasion, means that only one dollar in every three that the rich make in a year is declared and taxed. Our capitalist class makes in a bad year $500 to $600 millions beyond, what it pays income tax on. Yet when pittances are asked of governments to keep hundreds of thousands from starving to death, the capitalists coolly ask 'Where is the money going to come from?' "

Then, as now, the opponents of a thoroughgoing democratic re-shaping of the constitution to bring it into line with modern conditions were concerned only to maintain the British North America Act as a barrier against needed reforms. The Communist brief challenged that attitude and put forward a comprehensive program of reforms indicated in the following summary.

"National Measures Required to Meet the Needs of the Canadian People and the Reallocation of Responsibilities

"The Communist Party of Canada proposes that responsibility for all social legislation shall be assumed by the Dominion government. Specifically, we ask that the Dominion government become fully responsible for:
1) Unemployment Insurance and Relief.
2) Health Insurance.
3) Crop Insurance.
4) Minimum National Standards of Education.
5) Housing.
6) Mothers' Allowances.
7) Old Age Pensions.
8) Aid to Youth.

"In addition, we propose that the Dominion government shall assume control of all legislation relating to labor and take steps to institute:
1) Maximum Hours for Labor.
2) National Minimum Wages for Women and Young Workers.
3) National Standards of Minimum Working Conditions.
4) Enforcement of the Right of Workers to Organize in Trade Unions.

"Lastly, there are two other matters which should be transferred entirely to the Dominion, so that much needed action can be taken. The first is control of all companies to the end that the Dominion shall be able to control the monopolies which at present act as complete dictators of the economic life of the country. The second is that the Dominion government shall be given the necessary powers to establish minimum prices for agricultural products."(3)

As noted above, the report of the commission, submitted by Mr. Justice Sirois(4) included modified versions of several of the proposals put forward in the Communist Party's brief. The report was rejected by Premiers Hepburn of Ontario and Duplessis of Quebec, with the active support of Pattullo, premier of British Columbia. They broke up the Dominion-Provincial Conference convened to consider implementation of the report.

With a sigh of relief that was almost audible, the King government shelved the report. In agreement with the provincial premiers, Mackenzie King introduced substitute makeshift measures which enabled the federal government to raise revenues to cover expenditures that were approved of by the finance-capitalist interests, without committing it to the social reforms recommended by the Rowell-Sirois royal commission.

The fact that the federal government has been compelled to introduce other substitute measures to deal in some measure with the problems of unemployment insurance, contributory old age pensions, and to amend the constitution in conformity with its immediate needs in each case, does not in any way justify the criminal manner in which the elaborate findings of the Rowell-Sirois commission were shelved - without even a pretence at serious study. That was an act for which Canadians will some day condemn the Liberal Party. The changes that the Liberal government has made in the B.N.A. Act, while refusing to consider the establishment of a democratic method by which the Canadian people can amend their constitution, all confirm the fact that the program put forward by the Communist Party to solve the constitutional crisis expressed the urgent democratic needs of the Canadian people.

(1) "The West and the Federal Elections," radio broadcast by Tim Buck, Winnipeg, 1938. Sentences excluded from the broadcast by CBC censorship were retained in the published text.

(2) Submission of the Dominion Committee of the Communist Party of Canada to the Royal Commission on Dominion-Provincial Relations, 1938. pp. 6-7.

(3) Submission of the Communist Party of Canada, p. 41.

(4) The Hon. N. Wesley Rowell, K.C., and Mr. John Dafoe of Winnipeg died before the report was published.