May 17, 1904

LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

They are different only because the conditions have changed. My views of last session were given in reference to the contract as it stood last session. If there had been no change, there would have been no need of any. discussion about it, but the change was made, and my views of that change were fully expressed to the House at an earlier stage of the discussion while this committee was sitting, and ' Hansard ' has them embalmed in its valuable pages. I do not know that my hon. friend will attach enough importance to them to induce him to look them up again, but if he really does regard them as of any value, I can only refer him to ' Hansard.' I can only assure him in all good faith that nothing has been said to-night that has not been said in previous discussions, and I do -not think that I should fill the pages of ' Hansard ' with a repetition of my own speeches.

Mr. R, L. BORDEN. Comparing the views which my hon. friend has expressed this session with the views which he expressed last session, there is a remarkable ineon-Mr. R. L. BORDEN.

sistency. However, they lie, as he says, embalmed in 'Hansard.' They He in beauty side by side, but they do not resemble each other very much. I do not know that the exact suggestion which is made to-night by my hon. friend who moved this amendment has ever been made before in this House, either during this session or the past session. The amendment is not designed to prevent the Grand Trunk Railway Company from transferring stock, but it is designed to prevent that company from so disposing of stock unless that stock has been subscribed for at par. It leaves it open to the Grand Trunk Railway Company to acquire a very considerable portion of this stock for the mere nominal consideration which has been suggested as the consideration by the president of that Company, but it imposes upon the qualification that the stock obtained for that nominal consideration shall not be put upon the market. If the Grand Trunk Railway Company desires to put on the market any portion of the stock of the Grand Trunk Pacific Railway Company, it must subscribe for that stock payable at par. It seems to me that this amendment accomplishes all the results which have been desired by the government, and safeguards in some measure-able extent at least the public interest. It permits the Grand Trunk Railway Company to acquire a large portion of this stock for a nominal consideration. That seems to be an object, not only desired by the Grand Trunk Railway Company itself, but also desired by the government, but it also safeguards the public interest by providing that stock so acquired, not subscribed for at par, but acquired for a nominal consideration, shall not be placed upon the market and shall not come into the hands of bona fide purchasers for value to be afterwards used in increasing the rates. I do not know that any member of the government has dealt with this amendment from that standpoint or in that light up to the present time. My hon. friend the Minister of Finance, when he refers us, as he is, of course, entitled to refer us, to what he has said in the past, is not giving a very forcible answer, or a very fair answer, to the amendment which has been moved, and to the very logical and forcible speech which has been made by my hon. friend who has just taken his seat.

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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

Inferentially, hon. gentlemen opposite, in moving that amendment, have confessed their faith in the ultimate success of this undertaking. How this stock is ever going to be worth a hundred cents on the dollar unless the Grand Trunk Pacific fulfils all its agreements with the government I cannot understand. I can understand that the Grand Trunk might want to realize on this stock, but I cannot conceive of any man with money to invest investing it in stock that is at the present time absolutely worthless, and will always be worthless unless these united companies carry out their obli-

gations. It is assumed that value is given to these pieces of paper that the railway companies have the right to issue. I do not think that any value attaches to them at all until it can be shown that this stock has an earning capacity, that it is capable of declaring dividends, and not until the public are satisfied that the Grand Trunk Pacific will carry out its obligations to the government, that the eastern as well as the western part of this* railway is an absolute success and that the interest upon the bonds is being paid will this stock begin to assume any value at all and not until then will any one with common sense and money invest one single dollar in it. I have no fear at all about the ultimate disposition of this $25,000,000. Besides the obligations that these railway companies have undertaken the Grand Trunk Railway Company or somebody must raise immense sums of money to carry out this undertaking. We have provided in so far as we can see for the building and equipment of the railway. That is only a portion of the expense that is involved in this immense undertaking. Millions of dollars must be raised in some form or other. The road is already mortgaged, three-quarters of the western section to the government and the other one-quarter to the purchasers of the bonds to be guaranteed by the Grand Trunk Railway Company. The eastern division we do not need to bother about. It is tied down by agreements. The Grand Trunk Pacific Railway Company must pay three per cent interest upon the entire road for fifty years, they must provide shipping facilities at both ends of the line, and incidently involved in it is the construction of branch lines from the main line and before we get to the end in the construction of this railway it may be that another hundred million of dollars must be raised and the only way in which it can be raised is by the guarantee of the Grand Trunk Railway Company. Therefore, all this fear that is manifested as to the ultimate disposal of this $25,000,000 is entirely premature, and the fact that our friends on the other side believe that ultimately this $25,000,000 of stock which at present is absolutely worthless, will be worth $25,000,000 in cash, is the best evidence of the faith they have got in the success of this undertaking.

Amendment (Mr. Pringle) negatived.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

I move :

That the Bill he amended by adding thereto the following section :-

1. In the event of any complaint being made that any of the terms and provisions of the 41st, 42nd, 43rd, 44th and 45th clauses of the agreement, a copy of which forms the schedule of the National Transcontinental Railway Act, are not being duly complied with and observed, such complaint and all the circumstances connected with such non-compliance and non-observance, shall be immediately investigated

and reported on by the Board of Railway Commissioners for Canada, and their report with the evidence shall be laid before parliament forthwith ; or, if parliament be not in session, within the first ten days of the following session, for such action thereon as parliament may deem expedient.

2. The Pacific and Grand Trunk Companies shall be duly notified of any such investigations, and shall have the right to appear and to be heard thereat.

A great deal of importance has been attached by the government to the provisions of the paragraphs in the original agreement which are mentioned in the amendment. It is no doubt of the highest possible importance that any comprehensive scheme of transportation in which this country may engage or which it shall encourage by public aid, shall safeguard the carriage of Canadian traffic by Canadian routes and from Canadian ports. That idea was especially dwelt upon by the Prime Minister last year when he introduced this measure. It is of especial importance to the people of eastern Canada, and of the greatest importance to the people of the maritime provinces, that public aid should not be given to the building up of a railway which shall eventually carry the traffic of the Canadian Northwest tc United States ports. The maritime ports of Canada have the greatest possible interest in ensuring that no such results shall ensue from any scheme of transportation which is encouraged or aided by the government. If this traffic goes, as a great deal of it has gone in the past, to the city of Portland, it means that our maritime ports like Halifax and St. John must remain at a standstill, instead of participating in the commercial development of the future. It has been argued by the government, that this agreement will secure the trade for Canadian routes. In answer to arguments from the other side of the House to that effect, we have repeatedly pointed out, that although these provisions are binding upon the Grand Trunk Pacific Company, there is no penalty for the breaking of them, and further, they are not binding in law upon the Grand Trunk Railway Company because the Grand Trunk Railway Company is not a party to the contract in which these covenants and provisions are contained. The Minister of Justice and the Minister of Finance have agreed that the Grand Trunk Railway Company would be in a very precarious position-I think that was the expression used-if it undertook to disregard the provisions of this agreement, although it is not a party to it ; and it was suggested if not plainly stated by these gentlemen, that if these provisions were not fairly carried out by the Grand Trunk Railway Company in controlling the policy of the Grand Trunk Pacific Company, the Grand Trunk Railway Company might expect that

parliament would take action of a somewhat stringent character. I have not taken that view of the contract, and last year I pressed the opinion, that if we see fit to enter into an agreement with the Grand Trunk Pacific Company; if we see fit to permit the policy of that company to be controlled by the Grand Trunk Railway Company, and if we do not insist upon any stipulations being imposed on the Grand Trunk Railway Company by way of contract, it would hardly be in the ordinary course of parliamentary procedure that we should afterwards attempt to punish by Act of parliament the Grand Trunk Railway Company, for not observing the terms of a contract to which it was not a party.

We think, however, that we may put something in this Act of parliament which will serve as a notice to the Grand Trunk Railway Company in that behalf. We know where the danger points lie, they have been pointed out to us last year by the Minister of Trade and Commerce, the Minister of Finance and other members of the government. One danger point lies at Chicago, with which the Grand Trunk Railway Company can very easily connect Winnipeg and thus connect its system in the United States with the Grand Trunk Pacific Railway system. Another danger point lies at North Bay, because the Prime Minister has said during this session that all traffic which comes over the Grand Trunk Pacific Railway to North Bay will inevitably go to Portland ; and yet he is authorizing the construction of a branch, to be controlled by the Grand Trunk Pacific Company, (which in turn is controlled by the Grand Trunk Railway Company), from some point on the eastern division to North Bay. There are other danger points, but I mention only these two. Now, if this view is taken by the government, and if the government has not seen fit to impose any stipulation upon the Grand Trunk Railway Company, but has seen fit to impose stipulations only upon the Grand Trunk Pacific Railway Company, which has not terminals in the United States, and from which danger is not specially to be feared, then I say it is a wise thing to insert a clause in this Bill by which the Grand Trunk Railway Company, as well as the Grand Trunk Pacific Company, shall receive notice that any infraction of the provisions of this agreement to which X have referred may be and shall be inquired into by the Board of Railway Commissioners for Canada, that their report with the evidence accompanying it shall be laid before parliament, and that parliament thereupon may take such action in the premises as shall seem most in the public interest. I regard this as a most important stipulation in the interest of the people of the maritime provinces. Suppose for in* stance, that the people of Halifax find that the Grand Trunk Railway Company, being abound by no stipulation in this contract, Mr. R. L. BORDEN.

and controlling virtually the policy of the Grand Trunk Pacific Company, continues in the future to divert the traffic to Portland, as it has done in the past. The Prime Minister says he does not expect that the traffic which has gone to Portland in the past will go to the maritime provinces in the future. He expects that it will go to Portland in the future as it has done in the-past. He does, however, entertain the hope and expectation that the new traffic which is gathered up by the Grand Trunk Pacific in the west will go to the ports of Halifax and St. John. I cannot understand it, but that is the position he takes. However, it is important to the ports of the maritime provinces that this traffic shall go to those ports and not to Portland, where traffic carried by the Grand Trunk Railway has very largely gone in the past; and I desire to propose this amendment as a substitute, perhaps not the best, for alternatives which we have suggested and which have been voted down. I desire by this amendment to afford the people of Halifax, the people of St. John, the people of Sydney and the people of other maritime ports, the opportunity to bring their complaints, if they shall have any in the future, before the Board of Railway Commissioners, and to demonstrate, by such evidence as they can bring forward, the fact that the Grand Trunk Railway Company is still diverting traffic from Canadian ports to Portland, as it has been doing before this Act was brought before parliament. For the reason that this amendment is in the public interest, that it is along the line of what has been suggested, if not openly proposed, by the Minister of Justice and the Minister of Finance, I commend it to the attention of the government; and I ask if it is not a fitting and proper thing, inasmuch as this country is to engage its credit to the extent of $150,000,000 in promoting this enterprise, that there should be some tribunal established and indicated to which complaints might be made, in case the true intent and meaning of this agreement, as contained in the clauses to which I have referred, should not be carried out by the Grand Trunk Railway Company in the future. I am aware that there are provisions in the Railway Act to which attention may be directed ; but there is no provision in that Act which quite fulfils the entire office which will be fulfilled by the amendment to which I have referred. The 23rd section of the Railway Act passed last session provides as follows

The board shall have full jurisdiction to inquire into, hear and determine any application by or on behalf of any party interested :

(a.) complaining that the company, or any person, has failed to do any act, matter or thing required to be done by this Act, or the special Act.

The provisions which I propose are not in any part of the Special Act, within the

3293

meaning of tlie Railway Act, so far as I can understand that Act. Furthermore, the amendment to which I have referred points distinctly, as 1 intended it to do, to some action which may be taken by parliament In case the Grand Trunk Railway Company sees tit to disregard and ignore and overlook and depart from t-he clauses of the agreement to which I have referred. The Special Act is defined by the Railway Act as follows :-

The expression ' Special Act ' means any Act under which the company has authority to construct or operate a railway, or which is enacted wjth special reference to such railway, and includes all such Acts.

If we look at the statute of last session, we find that it has an agreement annexed to it, which is ratified by clause 2 of that statute, is as follows :-

The agreement, a copy of which forms the schedule to this Act (hereinafter called ' the agreement '), is hereby ratified and confirmed and declared to be legally binding upon His Majesty and the Grand Trunk Pacific Railway Company (hereinafter called 'the company'), subject to the provisions of this Act ; and His Majesty and the company are hereby authorized and empowered to do whatever is necessary in order to give full effect to the agreement and to the provisions of this Act.

I say that the provisions contained in the agreement do not seem to me to come within the definition of the Special Act contained in the clause of the Railway Act to which I have referred. But even if my hon. friends on the other side of the House, especially the Minister of Justice, should disagree with my view of the construction of the statute in that regard, I would still press the amendment, because it contains something more than is contained in the Railway Act, and it points to the possibility that in the future, if the Grand Trunk Railway Company shall disregard the provisions of this Act, which are of great importance to the people of this country, and which are regarded as of special importance by the government. it may look for an investigation from those interested, and for action by parliament. For that reason I trust that this amendment will commend itself to the government, and we will thus have some safeguard that Canadian traffic shall not in the future be diverted from our maritime ports to ports in the United States.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

My hon. friend was good enough to give us notice of the other proposed amendments which it was his intention to move, so that we were in a position to deal with them freely on their being presented. This amendment, however. was not included in the list. I am not taking exception to this because it is his right to move without giving notice, but he will see that this gives us very little time to consider it

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

I quite agree with what my hon. friend says, and the amendment need not be discussed now. I have been rather busy during the last day or two or I would have sent a copy to my hon. friend, the Minister of Justice. It was my intention to hare done so, but not having done so I agree at once that my hon. friend is perfectly right in desiring a postponement of the discussion.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I shall only detain the committee a moment with an observation or two. I am afraid that I do not attach as much importance to the amendment as does my hon. friend. I am not, speaking of the object he has in view, to which I attach as much importance as he does, but I question whether what he desires is not already sufficiently accomplished. Section 23 of the Railway Act, which my hon. friend quoted in part, says :

The board shall have full jurisdiction to inquire into, hear and determine any application by or on behalf of any party interested ;

(a.) complaining that the company, or any person, has failed to do any act, matter or thing required to be done by this Act or the special Act or by any regulation, order or direction made thereunder by the Governor in Council, the board, the minister or any inspecting engineer, or has done or is doing any act, matter or thing contrary to or in violation of this Act or the special Act, or any such regulation, order or direction.

It would be difficult to devise words broader aiid more comprehensive. A special Act is defined in another part of the Railway Act to mean * any act under which the company has authority to construct or operate a railway or which is enacted with special reference to such railway.' I think my hon. friend will see that the National Transcontinental Railway Act comes under this definition. It would seem to me, therefore that the legislation now existing is broad enough to cover what my hon. friend has in view. However, we quite realize that the object is one in line with the policy of the government, as fully set forth in the clauses of the contract to which my hon. friend has referred. He is simply giving what he may regard as a legitimate supplement to these clauses ; and if any such amendment as he proposes is necessary and will give better effect to the defined policy of the government, as expressed in the contract of last year, and as adhered to and confirmed in the contract of this year, we should be disposed to give effect to the view expressed by my hon. friend. I would suggest that the amendment should stand, with the understanding that at a later stage an opportunity will be afforded to bring it for-word again.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

I would like to move it before we leave committee, and I thought

it was understood wre would get out of com rnittee to-night.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

That would not prevent our going back into committee at any time if necessary.

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LIB

Wilfrid Laurier (Prime Minister; President of the Privy Council)

Liberal

Sir WILFRID LAURIER.

We expected to get out of committee to-night, but that need not interfere with our reaching the ultimate result we have agreed upon.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

I am as anxious as my hon. friend to get out of committee.

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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

We do not want to get in again.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

The Minister of Finance suggests we might get in again.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Once out, I do not desire to get in.

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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

I beg to move :

That the Bill be amended by adding thereto the following section.

Notwithstanding anything in this Act or in the supplementary agreement contained, the government shall have and may exercise all rights, powers and remedies in respect to possession, foreclosure and sale upon default by the Pacific Company in the payment of interest on the bonds guaranteed by the government as fully and effectually to all intents and purposes as if the sixth, seventh and eighth paragraphs of the said supplementary agreement were not therein contained, and as if the said three paragraphs formed ho part of the scheduled agreements, or of any agreement between the parties thereto.

This amendment virtually covers all the changes made in the agreements between the Grand Trunk Pacific, the Grand Trunk Railway and the government-both the agreements passed last year and the one now submitted to us. It applies particularly to the security which the government have on the western section of the line, which section is 'divided into two-the mountain and the prairie sections. The government guarantee bonds to the extent of $30,000 per mile on the mountain section and $13,000 on the prairie section. On the mountain section they agree to collect no interest for the first seven years, and should there be default in the payment of interest in the succeeding three years, the Grand Trunk Pacific have the option of capitalizing the amount and paying interest on it to the government after the three years are up, or redeeming it in the form of payments divided over forty years. But on the prairie section, the Grand Trunk Pacific are obliged, after the completion of the road, to pay interest upon the bonds guaranteed by the government. This is what is provided by the original agreement, but under the supplemental agreement, these terms are considerably altered. The government guarantee must be given, not merely to the extent of $30,000 per mile on the mountain division, but to the extent of whatever amount may have to be floated in Mr. R. L. BORDEN.

order to produce a net result of $30,000 per mile, and they extend their guarantee in a similar manner as regards the $13,000 per mile upon the prairie section. Then under the old agreement, should there be default in the payment of interest, the government have the right to foreclose. That right they abandon under the supplemental agreement, and substitute for it the right to appoint an agent or manager to operate the western division, and should possession be taken in this manner, the right of the government to such possession shall terminate ' if and when the application of the proportions herein provided of the said surplus tolls and revenue shall have paid off all arrears of such interest.' In other words, the second-class mortgage bonds to be issued by the Grand Trunk Pacific, and guaranteed by the Grand Trunk Railway, shall rank pari passu, as far as value is concerned, with the government bonds.

And, instead of exercising the right ot foreclosure the government exercise only the right of appointing a manager or agent, with the concurrence of the company, or if they do not concur, such officer to be appointed by the majority of the Supreme Court. This agent will manage the road and apportion the receipts between the government and the holders of the securities guaranteed by the company. Under this arrangement the holders of these bonds guaranteed by the Grand Trunk are given at least equality with the government. In one respect they have a decided advantage over the government. The government cannot even appoint a manager of the mountain section until seven years after the construction of the road, then three years after that, and, under the new agreement, until there has been a default of at least four and a half or five years after that. In other words, the government cannot collect a dollar of the interest on any sum which they advance for the purpose of building the mountain section for twenty-two and a half years from the present day. On the other hand, the holders of the bonds guaranteed by the company can compel the payment of interest, and need not wait until the agent is appointed to administer the affairs of the company. They can exercise foreclosure at any time after there has been default. Why this was extended I do not see. It seems to me that even the parties who drew the agreement really do not intend it. Let me read the clause.

Notwithstanding anything in the said contract contained, the government shall not exercise any rights in respect of possession, foreclosure or sale, by reason of non-payment of interest by the company under the thirty-first, thirty-second or thirty-third paragraphs of the said contract, or under all or any of them, unless and until there shall he such default to the extent in the whole of a sum equal to five years of such interest, as the company is not relieved from payment of or permitted

to defer or capitalize by the provisions of the said paragraphs.

In other words, added to the ten years they had before upon the mountain section they have four and a half years further. And there is no provision in this clause when that four and a half years' interest is to be paid. I think they need not pay it until the end of the fifty years. The president of the Grand Trunk told his board and his stockholders that the prairie section will be a paying portion of the road from the commencement. But, under this contract the government allow interest for a further period of four and a half years and make no provision as to when it is to be paid. That was bad enough. But, there is the other point which I argued with the Minister of Justice a little while ago. His only answer was to pooh-pooh my argument and to tell me to ask my leader. I pointed out that the holders of the bonds guaranteed by the Grand Trunk can exercise the right of foreclosure at any time when there is default. But, is it a condition of the bonds that if the holders of them exercise the right of foreclosure, they shall be bound by all the conditions contained in the contract ? Among the conditions are these : The routing of freight,

the preference of Canadian ports, the company to develop trade through Canadian channels, division of tolls for traffic over the company's lines and the Intercolonial, shipping facilities on the Atlantic and the Pacific. Is it incidental to the foreclosure under the bonds that a.re guaranteed by the Grand Trunk that those who take possession of the road shall perform these conditions ? If I understood the Minister of Justice he said there was no doubt about it. But I doubt it very much, notwithstanding the hon. gentleman's opinion. Or, rather, I can hardly say he ventured an opinion but merely pooh-poohed the idea. As far as common sense is concerned-but the hon. gentleman may say that he is not here to interpret things with the good morals of common sense, but to tell us the legal construction. But my opinion is that, even under the legal construction, this possibility may arise. And whenever it is'to the interest of the Grand Trunk Railway they can easily make arrangement with the holders of the bonds to exercise the right of foreclosure. On the other hand, what rights have the government ? They can exercise the right of foreclosure, in case of default twenty-two years from now, so far as the mountain section is concerned. So, what hon. gentlemen on this side have been asking, what my hon. friend the leader of the opposition (Mr. R. L. Borden) has been asking is that there should be some provision in this contract that the undertakings to be performed by the Grand Trunk Pacific Railway Company should be, in case of their default, performed by the Grand

Trunk Railway Company.. But I do not see any condition of that kind ; if my argument is correct there is no such condition.. The Grand Trunk Railway Company merely enter into a contract with the government, to hold a majority of the stock of the Grand Trunk Pacific by such a tenure as will enable them to control the policy of that company. But, suppose the holders of the bonds guaranteed by the Grand Trunk pay no attention, as they may, in case of default, to these conditions, there is nothing I believe, to compel them to observe them. For these reasons, the remedies under the old agreement, which were little enough, have been considerably lessened by this agreement.

Surely the government never intended: that a default on the prairie section or a default in the payment of the interest on the mountain section for 4J years need not be paid until the end of 50 years, the interest need not be paid or capitalized or an arrangement made for payment in annual instalments for 40 years. The provision In the Act is that the only default is after five years and there is no remedy provided for collecting that amount. I move this amendment believing that the bargain as confirmed by this parliament in 1903 was far more favourable than the present bargain.

Amendment (Mr. Haggart) negatived.

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CON

Charles Eusèbe Casgrain

Conservative (1867-1942)

Mr. CASGRAIN.

Might I ask the Minister of Justice whether there is any provision in this Bill or in the contract by which it is enacted that a majority of the directors of this company snail be British subjects ? I do not find any such provision, and it seems to me that a provision should be made that at least a majority of the directors should be British subjects. I would like to have my hon. and learned: friend (Mr. Fitzpatrick) point out anything at all in this contract or the contract discussed last session by which this is provided. I must admit that I could not find any such provision myself.

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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

I have a fairly good knowledge of the Act of incorporation of the Grand Trunk Pacific and also of the Railway Act, but I must confess that I cannot be cross-examined at first sight on every question that comes up.

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CON

Charles Eusèbe Casgrain

Conservative (1867-1942)

Mr. CASGRAIN.

Of course, I do not wish to cross-examine the minister. I quite understand that in a matter of this kind he cannot carry everything in his memory. I can almost assure him that there is nothing in the contract or in the Bill which provides that the majority of the directors shall be British subjects.

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LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

The general law, of course, would be applicable to this as to other companies.

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CON

Charles Eusèbe Casgrain

Conservative (1867-1942)

Mr. CASGRAIN.

There is nothing in the general law either which would oblige the

company to have a majority of its directors British subjects. I find in the statute concerning the Canadian Pacific Railway, in the schedule to the Act 44 Vic., chap. 1, which is entitled, ' An Act respecting the Canadian Pacific Railway, ' the following proviso : Section 5, after enumerating the

gentlemen who are to form a part of the first board of directors of the company, reads as follows :-

And a majority of the directors, of whom the president shall he one, shall be British subjects. *

The evident reason for this provision being inserted in the statute, is that as the Canadian Pacific Railway was a transcontinental railway line, running from one ocean to another, and was being built for the purpose of binding together the different provinces of the Dominion and also for carrying out a general policy which was a Canadian or a British policy, it was thought best at that time that a majority of the directors of the Canadian Pacific Railway should be British subjects. The project which is now before the House is not only a transcontinental line, but it is called in the Bill a national transcontinental line, and as I had occasion to remark before, the two objects which the government seem to have in view were, first, the carrying of the immense traffic which we expect will originate in the west down through Canadian channels to the eastern termini in our seaport towns, and, secondly, the colonization of the country. It seems to me, and I submit to the House, that if it were found necessary to enact that the majority of the directors of the Canadian Pacific Railway should be British subjects, the obligation on the government and on this House is greater in connection with the project which is now being discussed by the committee. We have had within the past few days an example of what a board composed of or controlled by parties who are not Canadians or British subjects can do. We have had evidence before us that in the preliminary surveys that have been made British subjects and Canadians have not been employed in such numbers as they should have been employed, in fact that a preference has been given to American engineers. When it comes to carrying out the policy of the government in connection with this road the general policy which has been outlined a great many times by gentlemen on this side of the House and which this company is supposed to carry out in the future, we must be assured by the composition of the board of directors, that British interests and especially Canadian interests will be safe-guarded. If a majority of the board of directors are not Canadians or British subjects, we cannot hope that this policy will be carried out.

For these reasons, I beg to move the following amendment to the Bill :

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CON

Charles Eusèbe Casgrain

Conservative (1867-1942)

Mr. CASGRAIN.

That the Bill be amended by adding thereto the following section as section :-

The majority of the directors of the Pacific Company, of whom the president shall be one, shall be British subjects.

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May 17, 1904