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§ 375. “Until the Imposition of Uniform Duties of Customs.”

THE SURPLUS REVENUE.—This section forms one of a series of three (see secs. 93, 94) which provide for the distribution of the federal surplus among the States during three periods: (1) Before the uniform tariff; (2) During the transition period immediately following the imposition of the uniform tariff; (3) After that period.

These three sections are widely different from any provision to be found in other Federal Constitutions. In the United States, revenue raised by Congress from customs and excise, or from any other source, is entirely at the disposal of the Federal Government, and the States are obliged to rely entirely on direct taxation to meet their own expenditure. In Canada, the Dominion must pay to each Province a certain fixed subsidy for the support of its Government and Legislature, and also an annual grant of 80 cents per head of its population as ascertained by the census of 1861—or, in the case of Nova Scotia and New Brunswick, by each subsequent census till the population of each amounts to 400,000 (B.N.A. Act, 1867, sec. 118). In 1869 Nova Scotia obtained “better terms” from the Dominion Parliament. The new Provinces of Manitoba and New Brunswick were afterwards admitted on a similar basis, and in 1873 the “better terms” were extended to all the Provinces. (See Garran, Coming Commonwealth, pp. 91–2.)




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FIRST PERIOD.—This section provides for the distribution of surplus revenue during the first of the three periods marked out by the Constitution. The characteristic of this period is that free-trade and a uniform tariff have not yet been introduced; customs duties are still collected on intercolonial imports, as well as on imports from abroad, according to the tariffs of the several States; and secs. 90 and 92 are not yet in operation.

The one difference between this section and sec. 93, which provides for distribution during the first five years after the uniform tariff, arises out of these circumstances. The ascertainment of the revenue contributed by each State does not involve the book-keeping adjustment which is afterwards necessary: because, so long as each colony is surrounded by a circle of Custom-houses, it may be considered for all practical purposes that the dutiable goods imported into each State, or produced in each State, are intended for consumption in that State, and, therefore, that the revenue actually collected in any State by the Commonwealth is practically the revenue contributed by the people of that State. During this period, therefore, the crediting of revenue on the basis of contributions is a very simple matter.

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