Lord Sydenham's efforts to obtain the consent "of leading individuals among the principal religious communities" did not succeed in preventing a strong opposition to the measure after it had passed through the legislature. Dr. Ryerson, a power among the Methodists, denounced it, after he had at the outset shown an inclination to support it, and the Bishop of Toronto was also among its most determined opponents. Lord Sydenham's well-meaning attempt to settle the question was thwarted at the very outset by the reference of the bill to English judges, who reported adversely on the ground that the power "to vary or repeal" given in the Constitutional Act of 1791 was only prospective, and did not authorize the provincial legislature to divert the proceeds of the lands already sold from the purpose originally contemplated in the imperial statute. The judges also expressed the opinion on this occasion that the words "Protestant clergy" were large enough to include and did include "other clergy than those of the Church of Scotland." In their opinion these words appeared, "both in their natural force and meaning, and still more from the context of the clauses in which they are found, to be there used to designate and intend a clergy opposed in doctrine and discipline to the clergy of the Church of Rome, and rather to aim at the encouragement of the Protestant religion in opposition to the Romish Church, than to point exclusively to the clergy of the Church of England." But as they did not find on the statute book the acknowledgment by the legislature of any other clergy answering the description of the law, they could not specify any other except the Church of Scotland as falling within the imperial statute.

Under these circumstances the imperial government at once passed through parliament a bill (3 and 4 Vict., c. 78) which re-enacted the Canadian measure with the modifications rendered necessary by the judicial opinion just cited. This act put an end to future reservations, and at the same time recognized the claims of all the Protestant bodies to a share in the funds derived from the sales of the lands. It provided for the division of the reserves into two portions—those sold before the passing of the act and those sold at a later time. Of the previous sales, the Church of England was to receive two-thirds and the Church of Scotland one-third. Of future sales, the Church of England would receive one-third and the Church of Scotland one-sixth, while the residue could be applied by the governor-in-council "for purposes of public worship and religious instruction in Canada," in other words, that it should be divided among those other religious denominations that might make application at any time for a share in these particular funds.

This act, however, did not prove to be a settlement of this disturbing question. If Bishop Strachan had been content with the compromise made in this act, and had endeavoured to carry out its provisions as soon as it was passed, the Anglican Church would have obtained positive advantages which it failed to receive when the question was again brought into the arena of angry discussion. In 1844 when Henry Sherwood was solicitor-general in the Draper-Viger Conservative government he proposed an address to the Crown for the passing of a new imperial act, authorizing the division of the land itself instead of the income arising from its sales. His object was to place the lands, allotted to the Church of England, under the control of the church societies, which could lease them, or hold them for any length of time at such prices as they might deem expedient. In the course of the debate on this proposition, which failed to receive the assent of the House, Baldwin, Price, and other prominent men expressed regret that any attempt should be made to disturb the settlement made by the imperial statute of 1840, which, in their opinion, should be regarded as final.

A strong feeling now developed in Upper Canada in favour of a repeal of the imperial act, and the secularization of the reserves. The Presbyterians—apart from the Church of Scotland—were now influenced by the Scottish Free Church movement of 1843 and opposed to public provision for the support of religious denominations. The spirit which animated them spread to other bodies, and was stimulated by the uncompromising attitude still assumed by the Anglican bishop, who was anxious, as Sherwood's effort proved, to obtain advantages for his church beyond those given it by the act of 1840. When the LaFontaine-Baldwin ministry was formed, the movement for the secularization of the reserves among the Upper Canadian Liberals, or Reformers as many preferred to call their party, became so pronounced as to demand the serious consideration of the government; but there was no inclination shown by the French Canadians in the cabinet to disturb the settlement of 1840, and the serious phases of the Rebellion Losses Bill kept the whole question for some time in the background. After the appearance of the Clear Grits in Upper Canadian politics, with the secularization of the reserves as the principal plank in their platform, the LaFontaine-Baldwin cabinet felt the necessity of making a concession to the strong feeling which prevailed among Upper Canadian Reformers. As they were divided in opinion on the question and could not make it a part of the ministerial policy, Price, commissioner of Crown lands, was induced in the session of 1850 to introduce on his sole responsibility an address to the Crown, praying for the repeal of the imperial act of 1840, and the passage of another which would authorize the Canadian legislature to dispose of the reserves as it should deem most expedient, but with the distinct understanding that, while no particular sect should be considered as having a vested right in the property, the emoluments derived by existing incumbents should be guaranteed during their lives. Mr. Price—the same gentleman who had objected some years previously to the reopening of the question—showed in the course of his speech the importance which the reserves had now attained. The number of acres reserved to this time was 2,395,687, and of sales, under two statutes, 1,072,453. These sales had realized £720,756, of which £373,899 4s. 4d. had been paid, and £346,856 15s. 8d. remained still due. Counting the interest on the sum paid, a million of pounds represented the value of the lands already sold, and when they were all disposed of there would be realized more than two millions of pounds. Price also pointed out the fact that only a small number of persons had derived advantages from these reserves. Out of the total population of 723,000 souls in Upper Canada, the Church of England claimed 171,000 and the Church of Scotland 68,000, or a total of 239,000 persons who received the lion's share, and left comparatively little to the remaining population of 484,000 souls. Among the latter the Roman Catholics counted 123,707 communicants and received only £700 a year; the Wesleyans, with 90,363 adherents, received even a still more wretched pittance. Furthermore 269,000 persons were entirely excluded from any share whatever in the reserves. In the debate on the resolutions for the address LaFontaine did not consider the imperial act a finality, and was in favour of having the reserves brought under the control of the Canadian legislature, but he expressed the opinion most emphatically that all private rights and endowments conferred under the authority of imperial legislation should be held inviolate, and so far as possible, carried into effect. Baldwin's observations were remarkable for their vagueness. He did not object to endowment for religious purposes, although he was opposed to any union between church and state. While he did not consider the act of 1840 as a final settlement, inasmuch as it did not express the opinion of the Canadian people, he was not then prepared to commit himself as to the mode in which the property should he disposed of. Hincks affirmed that there was no desire on the part of members of the government to evade their responsibilities on the question, but they were not ready to adopt the absurd and unconstitutional course that was pressed on them by the Clear Grits, of attempting to repeal an imperial act by a Canadian statute.

Malcolm Cameron and other radical Reformers advocated the complete secularization of the reserves, while Cayley, Macdonald, and other Conservatives, urged that the provisions of the imperial act of 1840 should be carried out to the fullest extent, and that the funds, then or at a future time at the disposal of the government "for the purposes of public worship and religious instruction" under the act, should be apportioned among the various denominations that had not previously had a share in the reserves. When it came to a division, it was clear that there was no unanimity on the question among the ministers and other supporters. Indeed, the summary given above of the remarks made by LaFontaine, Baldwin, and Hincks, affords conclusive evidence of the differences of opinion that existed between them and of their reluctance to express themselves definitely on the subject. The majority of the French members, Messrs. LaFontaine, Cauchon, Chabot, Chauveau, LaTerrière and others, voted against the resolution which affirmed that "no religious denomination can be held to have such vested interest in the revenue derived from the proceeds of the said clergy reserves as should prevent further legislation with reference to the disposal of them, but this House is nevertheless of opinion that the claims of existing incumbents should be treated in the most liberal manner." Baldwin and other Reformers supported this clause, which passed by a majority of two. The address was finally adopted on a division of forty-six Yeas and twenty-three Nays—"the minority containing the names of a few Reformers who would not consent to pledge themselves to grant, for the lives of the existing incumbents, the stipends on which they had accepted their charges—some perhaps having come from other countries to fill them and having possibly thrown up other preferments."[21] The address was duly forwarded to England by Lord Elgin, with a despatch in which he explained at some length the position of the whole question. In accordance with the principle which guided him throughout his administration of Canadian affairs—to give full scope to the right of the province to manage its own local concerns—he advised Lord Grey to repeal the imperial act of 1840 if he wished "to preserve the colony." Lord Grey admitted that the question was one exclusively affecting the people of Canada and should be decided by the provincial legislature. It was the intention of the government, he informed Lord Elgin, to introduce a bill into parliament for this purpose; but action had to be deferred until another year when, as it happened unfortunately for the province, Lord John Russell's ministry was forced to resign, and was succeeded by a Conservative administration led by the Earl of Derby.

The Canadian government soon ascertained from Sir John Pakington, the new colonial secretary, that the new advisers of Her Majesty were not "inclined to give their consent and support to any arrangement the result of which would too probably be the diversion to other purposes of the only public fund … which now exists for the support of divine worship and religious instruction in the colony." It was also intimated by the secretary of state that the new government was quite ready to entertain a proposal for reconsidering the mode of distributing the proceeds of the sales of the reserves, while not ready to agree to any proposal that might "divert forever from its sacred object the fund arising from that portion of the public lands of Canada which, almost from the period of the British conquest of that province, has been set apart for the religious instruction of the people." Hincks, who was at that time in England, at once wrote to Sir John Pakington, in very emphatic terms, that he viewed "with grave apprehension the prospect of collision between Her Majesty's government and the parliament of Canada, on a question regarding which such strong feelings prevailed among the great mass of the population." The people of Canada were convinced that they were "better judges than any parties in England of what measures would best conduce to the peace and welfare of the province." As respects the proposal "for reconsidering the mode of distributing the income of the clergy reserves," Hincks had no hesitation in saying that "it would be received as one for the violation of the most sacred constitutional rights of the people."

As soon as the Canadian legislature met in 1852, Hincks carried an address to the Crown, in which it was urged that the question of the reserves was "one so exclusively affecting the people of Canada that its decision ought not to be withdrawn from the provincial legislature, to which it properly belongs to regulate all matters concerning the domestic interests of the province." The hope was expressed that Her Majesty's government would lose no time in giving effect to the promise made by the previous administration and introduce the legislation necessary "to satisfy the wishes of the Canadian people." In the debate on this address, Moria, the leader of the French section of the cabinet, clearly expressed himself in favour of the secularization of the reserves in accordance with the views entertained by his Upper Canadian colleagues. It was consequently clear that the successors of the LaFontaine-Baldwin ministry were fully pledged to a vigorous policy for the disposal of this vexatious dispute.

A few months after Lord Elgin had forwarded this address to the Crown, the Earl of Derby's administration was defeated in the House of Commons, and the Aberdeen government was formed towards the close of 1852, with the Duke of Newcastle as secretary of state for the colonies. One of Sir John Pakington's last official acts was to prepare a despatch unfavourable to the prayer of the assembly's last address, but it was never sent to Canada, though brought down to parliament. At the same time the Canadian people heard of this despatch they were gratified by the announcement that the new ministers had decided to reverse the policy of their predecessors and to meet the wishes of the Canadian legislature. Accordingly, in the session of 1853, a measure was passed by the imperial parliament to give full power to the provincial legislature to vary or repeal all or any part of the act of 1840, and to make all necessary provisions respecting the clergy reserves or the proceeds derived from the same, on the express condition that there should be no interference with the annual stipends or allowances of existing incumbents as long as they lived. The Hincks-Morin ministry was then urged to bring in at once a measure disposing finally of the question, in accordance with the latest imperial act; but, as we have read in a previous chapter, it came to the opinion after anxious deliberation that the existing parliament was not competent to deal with so important a question. It also held that it was a duty to obtain an immediate expression of opinion from the people, and the election of a House in which the country would be fully represented in accordance with the legislation increasing the number of representatives in the assembly.

The various political influences arrayed against Hincks in Upper Canada led to his defeat, and the formation of the MacNab-Morin Liberal-Conservative government, which at once took steps to settle the question forever. John A. Macdonald commenced this new epoch in his political career by taking charge of the bill for the secularization of the reserves. It provided for the payment of all moneys arising from the sales of the reserves into the hands of the receiver-general, who would apportion them amongst the several municipalities of the province according to population. All annual stipends or allowances, charged upon the reserves before the passage of the imperial act of 1853, were continued during the lives of existing incumbents, though the latter could commute their stipends or allowances for their value in money, and in this way create a small permanent endowment for the advantage of the church to which they belonged.

After nearly forty years of continuous agitation, during which the province of Upper Canada had been convulsed from the Ottawa to Lake Huron, and political parties had been seriously embarrassed, the question was at last removed from the sphere of party and religious controversy. The very politicians who had contended for the rights of the Anglican clergy were now forced by public opinion and their political interests to take the final steps for its settlement. Bishop Strachan's fight during the best years of his life had ended in thorough discomfiture. As the historian recalls the story of that fight, he cannot fail to come to the conclusion that the settlement of 1854 relieved the Anglican Church itself of a controversy which, as long as it existed, created a feeling of deep hostility that seriously affected its usefulness and progress. Even Lord Elgin was compelled to write in 1851 "that the tone adopted by the Church of England here has almost always had the effect of driving from her even those who would be most disposed to co-operate with her if she would allow them." At last freed from the political and the religious bitterness which was so long evoked by the absence of a conciliatory policy on the part of her leaders, this great church is able peacefully to teach the noble lessons of her faith and win that respect among all classes which was not possible under the conditions that brought her into direct conflict with the great mass of the Canadian people.