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$8 million of the 8th and 9th Vic- tory Loan bonds. He also reported that the Government' was con- tinuing to liquidate loans granted under the Agricultural Develop. ment Board and that maturing loans were being paid promptly. to the Province and municipalities at parity of exchange, exchange needed to meet external obligations. (This was one of the proposals sub- mitted to the Dominion-Provincial Conference in January by Premier George Drew.; Mr. Frost reported increased deposits in 22 Province of Ontario Savings Ottices--843,820,919 as com- pared with S38,741,362 the previous year and purchase by depositors of Mr. Frost said that. while the Province did not question the wis- dom of the Dominion foreign ex- change policy, it placed a heavy annual burden on the Province and recalled that it had been submitted that the Dominion make available tal hospitals and more aid in treat- ment of tuberculosis, and $5,630,000 in the Highways Department tor urgently needed repairs to roads after years of heavy traffic of war equipment. .. "This is a burden," Mr. Frost! said, "which has been put upon _tl.hli) Province and the Hydro Commis-g sion as a result of the financial policy of the Dominion Govern-' ment. No complaint has been mate; by this Government during the period of the war. However, with. the termination of the war we have submitted that this annual burden of upward of $2 million should not be borne." TWith the ending of the war," Mr. frost said, "to have postponed making repairs would have been disastrous." External Debt Lower As an indication of the favorable. progress during the year in debt financing. he said that the Provin- rial debt payable in New York funds had been reduced by $6,369,- 000 and the debt payable in London by 52.020319. With the Dominion continuing foreign exchange meas- ures. Mr. Frost said that it was with satisfaction that he was able to announce reduction of more than 88 million in the external debt of the Province. Further, refunding of serial loans at lower rates would result in annual savings of ap- proximately $600,000 in interest and foreign exchange. The Treasurer declared that the burden of foreign exchange borne by the Province and the Hydro un. der Dominion Wartime Foreign Ex. change Control Regulations should now be lightened. As a direct result of these regulations, Ontario and the Hydro had paid more than $12 million during the war period in premiums for New York exchange! to cover interest and maturing} debentures. "This" he told the House, "is a very gratifying saving in one year, resulting as it has from prudent management. This improvement in our financial position. impressive as it is, was made possible by calling at the earliest possible date deben- tures which normally would have remained outstanding at much higher rates." that Ontairirii strong financial position was reflected in its high' credit standing. Rates were well. below those paid by otherl Provinces. l Significance ot the figures was "One has only to glance at the course of events," the Provincial Treasurer remarked, "to see how sound this decision was. At the time it was stated by one of the Fathers of Confederation that the subsidy would be sufficient for all time for the local or Provincial Governments. _, take. i He cited the speech of the Hon. (George Brown at Toronto in 1864-- a vigorous defense of the prelimi- nary agreement and the compro- mises in which he had concurred to bring it about. Brown had been a strong believer in direct taxation though some of the Provinces had never employed it except in minor instances. Their revenues had been derived almost entirely from indi- rect taxation. Some Provinces had preferred to give this taxation power to the Central Government in return for subsidy payments based on population, relieving them of levying direct taxation. The subsidy had been agreed on finally with the Provinces retain- ing the right of direct taxation, the Central Government levying in.. direct taxation. The Ontario Government, he said, had not been dogmatic, but had submitted a carefully prepared and considered plan, stating that cer- tain modifications might emerge, Confederation itself having been brought by an attitude of give and "A vital factor in the success of our Federal system," Mr. Frost pointed out "is the strength, inde- pendence and self-reliance with which each Provincial Governnvant is able to undertake its own allot- ted tasks." He expressed hope for the suc- cess of the Dominion-Provincial Conference which would vitally af- fect Provincial taxing powers. He advised House members to study the brief which the Provin- cial Government had presented at the conference, as well as briefs submitted by the Dominion and tho other Provinces. _,' "This," said Mr. Frost, "marks a Fnew achievement in Government "inancinm Without imposing any new taxes, the Government has steadfastly adhered to a sound policy of a balanced Budget, a re- duction in debt and, with it, a con- servation of our credit, which will be of vital importance in the post- war days of expansion and progress which are immediately ahead." Submitting an outline of the Province's financial position and discussing the problems to be faced, Mr. Frost stated that during the, past four years the Province had! balanced its Budget and reduced debt even though large additional! (commitments had been met. The! (favorahle balance had been the re; 'sult of deferring many" important) (works, expedient since all efforts! were directed toward winning the) war, and because revenues were in-: adequate. I Hopes for Conference Success ! He gave current farm loans as 11,619 with a total indebtedness of $23,436,000. Reductions granted un- der the Farmers' Creditors Arrange. ment from its inception were $1,183,757, The Provincial Treasurer an- 'nounced a decrease of $5,693,110 in fthc Province':; gross debt and an (estimated $587,648 decrease in the net debt. It was with satisfaction. he said, that in each of the three {Budgets he had presented he had {been able to announce a surplus {or ordinary account and reductions [in arosx and net dobts. Wank an Value of wild life was twofold, the Minister said. commercial fish- ing and taking of pelts being a considerable industry. and the value to the tourist industry being in.. estimable. Conservationists for To carry forward a plan to in- crease conservation and propaga- tion services, the Game and Fish. cries Department estimates are be- ing increased from 5751.400 to tl,.. "The Government has therefore appropriated $4,150,000 for rural Hydro extensions to bring the blessings and benefits of Hydro to our rural communities." More 'for Fish. Game Mr. Frost also forecast extension of Hydro services in rural districts resumed in 1944, when 400 miles of primary lines had been con- structed and 10.000 power custom- ers added. In 1945 1.073 additional miles of lines had been constructed. adding 11,420 more consumers. This year, he said, 2,058 miles of new extensions serving 7.250 new cus- tomers were planned. In addition it was expected that 15.500 more customers would be added of exist- ing lines for a 1946 total of 22.750. This would require an expenditure of more than $8 million, the Prov- ince ptkrng half. "We plan to progressively ex- pand and improve our services for this great and valuable natural re- source." l Forest resources. he added. also, (Vere the basis for a great indus-.I try. wood and paper products, in-,' cluding pulp and paper mills, saw! and planing mills and factories! making paper boxes and bags, fur- niture, etc. Nearly 34 million was: invested in the industry in 1943: and its products totalled $372,248.-' 223. Heralding a program of expand- ed development of forest resources, including more adequate forest protection, conservation and re-. ,lorestation. the Provincial Trear; 'urer said the departmental appro-i [priation would he increased ti.} 1200.000 to $5 million. For somef years, he said, only about $2 mill!'?nl had been spent annually on the} forests. This had been increased to JB million in 1944 and $3,800,000 last, gyear. He pointed out that 85 perl Went of all accessible forests andi ilands in Ontario still were ownedl .'by the Province. about 110 million' acres which in 1943 had produced. $195,379,500 in pulpwood. wood pulp! and sawlogs. ! satisfactory. But Ontario was press- ing for a settlement that would be equally acceptable in every part of Canada and without thought of giv- ing special advantage to those in Ontario." "Time, demonstrated that Con. federation could not have function. ed if the Provinces had not had ample financial scope. tt should Itherefore not be said that those who seek to assure fiscal adequacy for their Provinces are selfish . any more than that the wise counsellors who obtained direct taxation for the Provinces in 1867 were selfish. Their advice made the union successful." Calling for a spirit of co-opera- tion, Mr. Frost said: "We in On. tario might take a selfish view. We might say that even it there were no agreement we could get along. Our position is very strong. It On- tario's taxing powers now held by the Dominion were returned. this Province's position would be quite Denies Selfish Attitude