1940: Ontario

Under the leadership of Premier Mitchell Hepburn, the Province of Ontario continued to be the political storm center of the Dominion throughout 1940. Early in January the Ontario legislature, at Premier Hepburn's behest, adopted a vote of 'no confidence' in the war effort of the Dominion Government under Prime Minister Mackenzie King. Although under no compulsion to do so, Mr. King almost immediately dissolved Parliament and called a national election which was held on March 26. The fact that Hepburn and King were both Liberals in no sense diminished the bitterness between them. Premier Hepburn threw his full weight in the campaign to obtain the defeat of the King government. The election was enlivened by the resignation of Provincial Secretary Harry Nixon in protest against Hepburn's attitude toward the King government. He was later brought back into the Ontario Cabinet.

The election fight centered largely in Ontario where the Conservative Party is much stronger than elsewhere in the country. Prior to the election most of Prime Minister King's supporters conceded that the Conservatives would gain at least 20 seats in the province and would probably control the province's delegation in Parliament. Dr. Robert Manion, leader of the Conservatives, stood for election in Fort William.

To the general surprise of observers, King carried Ontario by exactly the same margin he had achieved in 1935 — which was unprecedented at the time. Out of the province's 82 seats in the House, the Conservatives won only 25. Although this was a much larger proportion than they gained in any other province, their failure in Ontario was especially significant because it was so unexpected. Dr. Manion himself, together with many of his principal supporters, went down to defeat.

The victory of the Dominion Liberals under Mackenzie King over the dissident Ontario Liberals under Mitchell Hepburn was of tremendous importance as it affected the long controversy between the provincial and Dominion governments regarding fundamental policies with respect to the extension of federal authority. For years Premier Hepburn, supported by Premier Duplessis of Quebec, had struggled successfully against any extension of Dominion authority. Opposition had been centered particularly against a federal unemployment insurance law, although the controversy was concerned with power issues, tax policy, and many other questions of basic importance.

The year 1940 saw the crumbling of this opposition. The defeat of Duplessis had robbed Hepburn of his most dependable ally. The formula suggested by the Sirois Commission for establishing a federal system of unemployment insurance legally through action by the British Parliament proved wholly successful. Finding defeat inevitable, the Ontario Government withdrew its objection to the unemployment insurance plan and it was adopted by the Dominion Parliament without dissent.

To the major proposals of the Sirois Commission on Dominion-Provincial relations, Premier Hepburn continued, however, to maintain his opposition. In this he was aided by the fact that the Commission did not recommend grants from the Dominion Government to Ontario for the support of the province's social services, such as those recommended for the less wealthy provinces. Thus the Premier could argue that Ontario would have to carry more than its share of the increased costs of social services under the new plan by increased taxation — and surrender the right to utilize certain kinds of taxation — without receiving any compensating advantages. Although the Ontario Government agreed, in November, to participate in the conference called for January 1941, to discuss adoption of the recommendations of the Sirois Commission, it is believed that the province will oppose action at this time.

Proponents of the Sirois Commission's plan point out, however, that Ontario would definitely gain by its adoption. The plan calls for the Dominion Government to take over debt services aggregating $18,539,000 from the province, together with $8,347,000 spent for relief of employables, $1,099,000 in tax collection costs, and some $9,000,000 further would be saved by the elimination of provincial subsidies to the municipalities for the relief of employables. The total savings is estimated at $37,199,000 as against a loss of $31,873,000 through a surrender of taxes and subsidies.

Premier Hepburn finally withdrew his determined opposition to the power phases of the St. Lawrence Waterway Project in October and acceded to an arrangement between the American and Canadian governments under which the Ontario hydro-electric system will obtain more water from the Niagara River and would divert other water to the Great Lakes system.

In Toronto, Mayor Ralph C. Day was re-elected Mayor on Jan. 1 after one of the closest races in the history of the city. His margin over Lewis C. Duncan was approximately 3,500 votes. The Board of Control and most of the City Council were likewise re-elected.