The politics of finance: A comparative analysis of public finance in the provinces of Quebec and Ontario from 1867 to 1896

This dissertation contrasts the financial evolution of the provinces of Quebec and Ontario from Confederation to the year 1896. Traditionally, studies which have examined the role of government in the two provinces have confined their attention to expenditure patterns in order to arrive at conclusions about relative levels of state activity. The dissertation employs budget speeches and assorted fiscal records in order to examine the short and long term fiscal strategies adopted by the provincial administrations as a consequence of the changing circumstances in which the governments found themselves. The thesis also assesses the way in which priorities were identified by the governments as their respective financial situations evolved.;The financial evolution of the provinces, it is contended, had an important impact on the manner in which the Confederation arrangements came to be understood. The forecasts originally presented by the architects of Confederation regarding the future favourable condition of provincial finances proved erroneous particularly in the case of Quebec. This resulted in heightening the degree of federal-provincial conflict specifically with regard to the jurisdiction over certain revenues that were sources of dispute between the two levels of government. In the case of Quebec's growing financial difficulties, from 1875 to 1895, the federal government offered no permanent fiscal remedies. This was a major factor in federal-provincial tension during the period.;Within the first decade following Confederation, Ontario attained a relatively comfortable fiscal standing and proved able to develop a significant financial advantage over its eastern neighbour. This was in part the result of the assets carried forward by the province of Ontario under the Confederation arrangements. There were, however, other important factors which contributed to the fiscal gap between Quebec and Ontario notably the far greater revenues collected by the latter province prior to the recession which emerged in the mid-1870's. When the economic downturn occurred, Ontario found itself significantly better prepared to maintain its financial security whereas Quebec's already fragile financial situation continue to deteriorate in the remaining years of the century. Quebec was obliged to resort to direct taxation over a decade prior to Ontario. Despite this, Ontario was able to spend considerably greater sums than Quebec on its social mission while the latter province focused to a greater extent on railway expenditures and the cost of basic government services.;The Ontario administrators of the post-Confederation period had little sympathy for the fiscal dilemma of Quebec. Moreover, under Liberal Premier Oliver Mowat, the government was concerned that Quebec would propose adjustments to the Federation that would occur at the expense of the Ontario population. Nonetheless, the two provinces found common ground on the need for some form of autonomy insofar as federal encroachments on their authority were concerned.