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INCOME TAX BID IS MADE BY HEPBURN Offers to Bear Ontario Relief Cost if Prior Right Conceded ASKS AID OF HOUSE Macaulay Upholds Him Partially--McQuesten Raps Ottawa Publicly promising that his Gov-- ernment wiil shoulder the entire costs of Ontario relief, if Ottawa concedes to the Province the prior right to tax personal income, Pre-- mier Hepburn yesterday opened the Legislature debate by means of which he expects to win the solid support of the House on this tax issue, and thereby strengthen his Administration's position in the sub-- missions it will presently make to the Rowell Commission on Domin-- ion--Provincial relations. He was speaking to a resolution asserting Ontario's prior right in the field of income taxation, which he asked the House to endorse. _ "We have no intention of raiding the Dominion Treasury." he sum-- med up his argument for Federal recognition of his long--stated de-- mands. "We are merely presenting claims that are reasonable and just." Legal Right Not Questioned. Ontario, he said, did not question the legal right of the Dominion to impose an income tax. It did con-- tend, however, that it held the prior right. That direct taxation should be left wholly to the Provinces was provided for, he further argued, in what might be described as an un-- written agreement between the Provinces and the Dominion that had extended from Confederation down to the outbreak of the Great War. With an ever--increasing bur-- den of mothers' allowances, relief, hospitalization, education and other social services costs devolving upon the Province and the municipalities --all of which meant need for more money--the time had come, he said, when every possible resource had to be husbanded and any further encroachment by Ottawa upon the Province's field of direct taxation had to be "zealously and jealously" guarded against. _ & & s Hon. Leopold Macaulay, Opposi-- tion Leader, supported Mr. Hep-- burn's resolution for prior right, in the hope that it might bring about some more equitable distribution of taxation than obtains at present, but he warned the House that the Premier was using the idea for bar-- gaining purposes before the Rowell Commission and that the Premier honestly realized that he couldn't possibly get from that Commission all his Government was asking for. Federal Problem Broader. Mr. Macaulay also warned the Prime Minister that the day of "hundred million dollar budgets" was over in Ontario, and that the sooner some system could be de-- veloped whereby municipalities raised their own taxation to meet certain vital services, and no longer "camped on Queen's Park doorstep" for "handouts," the better for the country and the public, generally. Although he scored Hon. James Gardiner as "the worst machine politician" the Dominion has ever seen, Mr. Macaulay recognized the position of the Western Provinces, and said that the House, in endors-- ing Mr. Hepburn's present demand, should not overlook the fact that the Federal authorities had a much broader and complex problem with which to deal, than the purely On-- tario one which Mr. Hepburn was discussing. Former Premier Henry approved of Mr. Hepburn's resolution, but with reservations. HMe opposed a Provincial income tax, claimed it was Mr. Hepburn's duty to direct Ontario away from "narrow Pro-- vincialism," and while he objected, like Mr. Hepburn, to having On-- tario made "a milch cow for the rest of Canada," he felt that On-- tario and Quebec should not stand together at Ottawa to defy any just claims of the other provinces, and thus tend toward a possible dis-- membering of a long--united Domin-- ion. Gives Ottawa Advice. It remained, however, for Hon. T. B. McQuesten, Minister of High-- ways, to startle the House with his views on the issue. Making a set speech that was openly dubbed "pretty radical" by one Opposition bencher, Mr. McQuesten advised Ottawa to look after its own busi-- ness, solves its railway problem, and balance its budget, before ac-- cepting any further responsibilities, unless, he said, it was anxious "to get control of all taxation through-- out Canada." es Mr. McQuesten expressed the per-- sonal opinion that unemployment insurance and other social services should be regulated and controlled by the Province. In the Provinces, he said, they knew their respective conditions better than any one else. "What right," he asked, "have the Eskimos in the north, the Ruthe-- nians in Saskatchewan, or the fish= ermen on the coast got to contribute to our Councils? What do they know about our problems--about the problems of capital and labor-- about the problems of industry we have to meet in Ontario, for in-- stance ?" "We might say to our friends down there," said he, "that a fool is always sticking his nose into other people's business." w':'l.fwt'hé)-'"x;fi;decl-- their own busi-- ness they might get them cheaper," Mr. McQuesten shot back. j .'-:"Itw};)\'.\--lv(;'eb"on talking as you're doing they'll never buy any more," gibed Mr. Macaulay. _ """.'i"h'e'y buy our goods," L, M. Frost (Cons., Victoria) declared. _ _ _ The debate adjourned until Mon-- day, with former Labor and Welfare Minister David A. Croll scheduled to resume. Denies Any Politics. In opening his plea for undivided support of his resolution, Mr. Hep-- burn told the House that the tax levied by the Dominion on personal incomes brought in 52 per cent of the entire revenue of the Dominion. Of the Dominion--collected tax on corporation income, 58 per cent, he said, came out of Ontario. His Gov-- ernment, he added, was not asking Ottawa to relinquish the latter tax, or to give up its tax on personal income. All Ontario wanted was the March 12 first crack at the personal income. There were no politics, he said, in the attitude he was taking, or in the House backing he was soliciting. More revenue would be required at an early date--not for the Province, he said, but for the municipalities. The Premier quoted statements of Hom. A. T. Galt, the Minister of Finance, and of Hon. George Brown, during the debates on Confedera-- tion, to support his claim that the Frovinces had the power of impos-- ing direct taxation. Im 1917 Sir Thomas White, then Minister of Finance, had declared that except in case of manifest public necessity (such as the war was held to be) it was not expedient that the Do-- minion should invade the field to which the Provinces were solely confined for the raising of their revenues. Premier Pattullo of Brit-- ish Columbia, he said, was support-- ing Ontario's stand, and the late Provincial Treasurer Monteith of Ontario had often claimed, while in office, that the Federal income tax should be abolished. Raps Ottawa on Relief. Mr. Hepburn reminded the House of the immense sums the Province had spent in Northern Ontario on roads and the T.N.O. Railway to open up and develop that section. And yet, said he, all the Province had collected in taxation from the mines since 1933 had been $6,257,000, as compared to the mearly $20,000,-- 000 collected by the Federal Gov-- ernment. He also condemned the "unfair policy'" of Ottawa with re-- spect to unemployment relief, say-- ing that the dollar--for--dollar--with-- the--Province basis once proposed had now fallen away to the point where this month (March) Ontario | will contribute 45 per cent and the Dominion a scant 21 per cent. The Province, he said, was now sand-- wiched in between distressed muni-- cipalities and "a reluctant Federal Administration," and with real es-- tate unable to stand any more taxa-- tion, the situation was becoming in-- creasingly difficult. Ontario, he. submitted, had contributed the lion's share all along, in thes diffi-- cult times, and yet Ottawa was persistently trying to whittle down on the Province, not only in the field of relief but in many other respects. Mr. Macaulay, at the outset, em-- phasized that anything he had to say was dissociated from party po-- litics, but anything that the Opposi-- tion could do to strengthen the Government's hand to secure just taxing powers from the Dominion would be done. He saw in the resolution a move on the part of the Premier to strengthen his hand--to put four-- teen or fifteen cards in a hand in which only thirteen cards could be played in the Province's game--in other words to "put himself in a strong position before going before the Royal Commission so he can ask for more than he expects to re-- ceive." One of Hepburn's Cards. Other Provinces, in some in-- stances, claimed Mr. Macaulay, "had made ridiculous suggestions. '"This income tax resolution, I pre-- sume, is one of the cards Mr. Hep-- burn is going to play in a game with nine players, with the Dominion being the banker," he remarked. "There are a great many other Federal problems but when you are making a Gemand for a greater share of the tax pot, remember there is only one taxpayer--only one group Argument that the Provinces' de-- mands were steadily increasing in proportion to revenue, he forecast, would be met with similar argu-- ment from the Dominion. He point-- ed out the Dominion's heavy de-- fense appropriations. The Do-- minion, he said, could not go on for ever with its head in the sand in respect to the problem of defense. The railway debt continued to pile up at the rate of $1,000,000 a week.