During the recess I took occasion to look into this section and to consider it in the light of the objection made by my hon. friend the leader of the opposition. If I remember rightly, the objection he raised was that in the event of the government undertaking to operate the eastern division on the expiration of the lease for fifty years, the Grand Trunk Pacific Company would, as the owners of the western division, have running rights over the eastern division to such extent as might be necessary to carry on their business arising on the western division, and that there were no reciprocal arrangements with respect to the user of the western division by the government as owners of the eastern division. Now, I would like to draw my hon. friend's attention to section 24 of the original agreement : and in constructing that section, I would ask him to bear in mind that three separate properties are being dealt with. In sections * a ' and ' b ' it is the property called ' the eastern division ; in section ' c ' it is the western division; in section * e ' it is the Intercolonial Railway. So that what is in contemplation here is that the company, as owners of the western division and as lessees of the eastern division, shall have the right to operate these two divisions in their entirety ; but, in addition to that, they will, under section * e,' obtain the right to use the Intercolonial Railway. On the other hand, the government, as the owner of the Intercolonial Railway and of any other lines of railway in the present or the future, acquire the right of user of the eastern division and also of the western division. Now, how are these rights dealt with ? The government, as the proprietor of the eastern division, reserves to itself-that is to say, takes from the lease- the right with respect to its ownership of the Intercolonial Railway and of any other lines of railway, present and future, to have running powers over the eastern division. That is a reservation ; and my hon. friend will observe that that is the word used in sections ' a ' and ' b.' Rut when you come to deal with the western division, which is not to be leased, but is an independent property belonging to the lessees of the eastern division the word used is not ' reserves,' but that the government ' secures ' to itself certain rights Mr. OSLER.
over the western division ; and with respect to the Intercolonial Railway, it will be observed that in section 1 e ' the company ' secures ' to itself certain rights over the Intercolonial. Now, what is the effect of that ? In order to construe section ' c.' you must paraphrase it in this way : the lease shall contain the proper and usual provisions securing to the government, in respect of its ownership, present and future, of the Intercolonial Railway and any other lines of railway, running powers and haulage rights over the western division. It secures those rights in respect of its ownership of the Intercolonial and any other lines of railway, present and future. There is no limitation ; it secures them for all time. The government is not dealing with the company as lessees, but as owners of the western division. Bear in mind that the amendment is only applicable to the eastern division. It is not applicable to the Intercolonial Railway ; because, with respect to the Intercolonial Railway, the company has secured in perpetuity rights over the Intercolonial under section ' e,' ih the same way as the government has secured rights over the western division in perpetuity under section ' c '-or rather will secure rights when the covenants are made.
The position is this. The company are the owners of the western section and the government own the Intercolonial Railway. Between the two there is a section that will be in the possession of the company for fifty years under lease, but which may l'evert eventually, at the expiration of that period, to the government, and the rights of the government with respect to the western division as well as the rights of the company with respect to the Intercolonial Railway are fixed. But with respect to the intervening part, they are not fixed so far as the company is concerned, and it is in order to supplement that omission that the company ask for this amendment. The company own absolutely the western division and the government own the eastern division and the Intercolonial. With respect to the western division, the government secures rights in perpetuity over it. With respect to the Intercolonial, the company acquire rights in perpetuity over that line, and with respect to the intervening portion, the government reserve rights to the Intercolonial pending the lease, but at the expiration of the lease, if the property reverts to the Grown, the company will have over that eastern extension the same rights it would have over the Intercolonial