May 18, 1904

CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

I understand the Minister of Finance to give as a reason why this amendment should not be adopted that it is the intention of the government tc consider whether they shall introduce into the General Railway Act a provision to the same effect, which shall apply to all companies. That may or may not be a thing that will come to pass within the next few years, but whatever may be the position of the government with regard to companies generally, there are special reasons why such a clause should be inserted in the Act relating to this particular company. There are reasons why this provision should apply to this company, which perhaps do not exist with regard to any other company. This is called a National Transcontinental Railway, and if there is any company in existence which should have its board composed as this amendment proposes, it is this one. I think, whatever faith we may have in the Minister of Finance, we may have some hesitation in believing that it is likely he will carry out his good intention. I do not doubt for a moment his good

faith, but would ask him to consider this. Suppose he comes next year with a Bill to introduce this amendment into the General Railway Act, making it apply to all railway companies, where is he going to be with regard to the Grand Trunk Railway ? He will find a great many difficulties about applying his proposed amendment do that company. Almost every shareholder and bondholder interested in the Grand Trunk Railway is a resident of England or of one of the British islands. Those people have acquired for the last half century their interest in that company, knowing they had a board in England, knowing that the board met there, and that they could attend the half-yearly meeting of that board and discuss there their interests and criticise the conduct of every president and director. I think there might be a very strong case made out against the proposition of the government to make this clause applicable to every company. Certainly there would be very strong ground shown. I think, in opposition to making such a clause apply to the Grand Trunk Railway. If that be so, if there be one company to whom such an amendment might possibly be an injustice, is it not clear that we should now lose the opportunity of making this amendment apply to the one company to which we know it ought to apply ? And what is the company to which it ought to apply ? That is the point of the amendment and we cannot understand why hon. gentlemen should refuse. What possible objection can they have to providing that the board of directors who are to control this Natioual Transcontinental Railway shall be British subjects ? Are they going to leave it open to foreigners, aliens, to manage the policy of the Transcontinental Railway, the national railway of Canada ? That is the effect of the opposition to this amendment. Though it might be prudent and wise to make that clause apply to half the railway companies of Canada for one reason or another, there cannot be one sensible reason given for objecting to it with regard to this particular railway. And it is now. when we have an opportunity of applying it to this company that the government hesitates, and says no. I would like to know their reason for it. The Minister of Finance (Mr. Fielding) says that there :s no objection to it but he intends to do something else. That is no answer-no answer whatever. This company when it is floated should be floated on a distinct understanding as to the character of the board that is to rule it. The company should not be allowed to go upon the market, create their holdings, elect their directors, and then, we afterwards come and say to them : You must change all that ; ' we

did not put it into the Bill when we had the opportunity to do so ; we left you free to take what course you pleased ; but nowr you must dismiss these alien directors.

I say this is the time when it ought to be clone. There may be in the future, many reasons why the Minister of Finance cannot carry out his proposition even though be would like to do so.

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LIB

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

Liberal

Mr. FITZPATRICK.

The hon. gentleman (Mr. Barker) says he cannot see any good reason why the majority of the board of the Grand Trunk Pacific should not be British subjects. In that statement we agree ; We know no reason why the majority should not be British subjects. But we see no reason why that should not apply to every state-aided railway in Canada.* And, if the hon. gentleman sees any objection to that, I would like to hear him state it. We can see no objection.

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CON
LIB

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

Liberal

Mr. FITZPATRICK.

Wre say we will do it. But we say we cannot see any reason why the hon. gentlemen opposite should single out this particular railway for such an amendment. We mean to have it made applicable to all state-aided railways in Canada.

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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

The reason is that this is the one railway incorporated in this country which, the Prime Minister and his followers tell us, is to be the National Transcontinental Railway. That railway has special obligations to this country ; it has enormous powers in the country ; it has powers on the very point that we have been discussing as to diverting our traffic from Canada; and for these reasons we do not want aliens controlling this company of all companies.

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?

Mr. BEEF@

It seems to me that the experience of the last year would indicate that it would be well to deal with this matter now. Last year a similar amendment was offered by the hon. member for East Toronto (Mr. Kemp), but, on the assurance of the Prime Minister that that provision would be incorporated in the Act, that amendment was withdrawn. That was a year ago; and still, although the Prime Minister asserted then, and asserts now, that he regards it as a matter of importance, in fact of necessity, that such a provision should be made, we find that a member of this House is again offering the same amendment, which proves satisfactorily enough. I should think, that the provision lias not been made. Now, it is quite possible that what has been neglected for a year may be neglected for two years ; and, unless some good reason can be shown why this provision should not be put in this Bill, it seems to me a case has been made out sufficiently strong to justify us in making this amendment to the Bill.

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LIB

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

Liberal

Sir WILFRID LAURIER.

The matter is simply this. A proposition was made last year by the hon. member for East Mr. BARKER.

Toronto (Mr. Kemp) and I acceded to it, and told him that I would make it a part ot the Transcontinental Railway Act. l am sorry to say it escaped my memory. Apparently, it escaped the memory of hon. gentlemen opposite also, for we were not reminded of it. We are reminded of it now, and we say we intend to apply this principle not only to this particular railway, but to every state-aided railway corporation.

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?

John William Bell

Mr. BELL.

When ?

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LIB

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

Liberal

Sir WILFRID LAURIER.

This session. If we fail to do it, my hon. friend (Mr. Bell) will remind me of it.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

It does not seem to me exactly proper that this should be applied to every railway corporation, because there are some of them that, although built on Canadian soil, have been built largely with American capital, their principal owners reside in the United States and their earnings must go mainly to (hat country. It is only reasonable that the parties who raised the bulk of the capital should have some control (over the enterprise. Hut, if we make provision in the Railway Act compelling every railway company operating any portion of its line in Canada to have a majority of British subjects in its directorate, it would be unjust to many of these concerns. Take, for instance, the railway passing through the south-western part of Ontario, the old Canadian Southern, now the Michigan Central, it would be hardship to provide that a majority of the directors of that road should be British subjects. The old Grand Trunk itself, has nearly as much of its line in the United States as in Canada. But for the fact that the bulk of the capital put into it, outside of the assistance given by this government and the provincial governments, was raised in England it would be a hardship, perhaps, to insist upon such a provision in that case. There are cases where the bulk of the capital for the construction of a railway was raised in the United States, and the earnings should go to the people in that country. In such cases it would hardly be fair to compel them to have a majority of British subjects upon their directorate. But this Grand Trunk Pacific road is different from the others. From the very inception of it, the great claim made by the Prime Minister was that this was going to be a road not only Canadian, but every foot of it on Canadian soil, carrying traffic to build up Canadian ports and absolutely free from foreigh control. It was to be owned and controlled by Canadians or British subjects, and was to be the great defence of Canada should the United States do away with the bonding arrangement. In every wTay it was to be Canadian. For that reason, the Prime Minister says, we are justified in giving it very large assist-

since ami great consideration. But, as we have been assured that the object of giving that assistance was to make a road eminently and entirely Canadian, we ask that the necessary proviso be inserted in the Bill that the majority of the directors shall be British subjects so that we may be guaranteed against the danger of foreign control of what we are told is to be the great National Transcontinental Railway. And yet the Minister of Justice says that is not a proper thing to do.

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LIB

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

Liberal

Mr. FITZPATRICK.

Oh. no.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

No. The contention of the government is that it is not a proper tiling to put such a provision in this Act. We claim that it is, and the objection to the contention of the Minister of Justice that this should be in the General Railway Act and should apply to all railways is that it could not be properly done, and it would be an injustice in many cases to foreigners who own and control roads in Canada to-day. If it were inserted in this clause it would be distinct and applicable to one road at least whereas it could not be applicable to all roads. I am told there is such a provision in the Canadian Pacific Railway Act, then why should there not be one placed in this Act ? It was not left to the Ceneral Railway Act in the case of the Canadian Pacific Railway, but was placed in a special provision in the private Act. The Canadian Pacific Railway, although it was a company in the interest of Canada, has some of its line in the United States, through the state of Maine and in the west. This road the First Minister claims, is wholly Canadian, and why should he object to adding a clause in the Bill by which the majority of the directors who control this road and Who would be responsible for its operation should be British ?

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L-C

Andrew B. Ingram

Liberal-Conservative

Mr. INGRAM.

There is a great deal in the contention of the hon. member for East Grey (Mr. Sproule). Reference has been made to other lines in Canada, built to a large extent by American capital. The Canada Southern has been mentioned. Every one who knows the facts in connection with that railway knows that the local traffic from the section of southern Ontario through which it runs wTould not support that railway at all. and that the railway would not have been built, if it had not been able to depend for its existence on the through traffic from the western states to the eastern states. It would not be fair to place that road on a par with the National Transcontinental Railway. I cannot see why. if the government say it should apply to all railways, they should refuse to put it in this Bill now7. That is beyond my comprehension. because it certainly ought to apply to this road. Little or no American freight is to pass over this road which is purely a Canadian national road, and if it

does not apply to this road, why should it apply to any in the country ? It is built by the money of Canada and I presume this is the proper Bill in which to place an amendment of that character.

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LIB

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

Liberal

Mr. FITZPATRICK.

Hon. gentlemen are surely borrow'ing trouble. When we come to introduce amendments to the General Railway Act we shall take care that all interests will be properly safeguarded. In the meantime it must be borne in mind that our desire is that this railway should be constructed, owned, operated and controlled absolutely by British subjects.

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L-C

Andrew B. Ingram

Liberal-Conservative

Mr. INGRAM.

Has the Grand Trunk Pacific any particular objection to a clause of that kind being placed in the Bill ?

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LIB

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

Liberal

Sir. FITZPATRICK.

I do not know whether they have or not, nor do I care.

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L-C

Andrew B. Ingram

Liberal-Conservative

Mr. INGRAM.

As this is a government owned by the Grand Trunk Railway, I thought it might be worth while consulting them.

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LIB

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

Liberal

Mr. FITZPATRICK.

Not at all ; this is a question of public interest.

Amendment (Mr. Casgrain) negatived.

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CON

John Reeve Lavell

Conservative (1867-1942)

Mr. LAYELL.

built and I think it is not too much to say that some of these branch lines will probably carry a larger proportion of the western traffic than will the extreme eastern section of this line. As a result, in all probability, the main line trade may be taken from the western section to our eastern ports and the various eastern points not by a continuous run along the eastern section, but by running along part of the eastern section to some one or more of the many branch lines that will be built. It also goes almost without saying that some of the branch lines that in all probability will be built will not be successful lines, and will be lines over which there will not be any of this main traffic. Under para-giaph 11 of the agreement, those lines oo which there has been no such traffic or along which no special business has been created will have to be taken over by the government at a price as agreed on. I am not discussing that or any questions of liability under that paragraph ; but I want to deal with the other lines for which no provision is made under this contract. As the Grand Trunk Pacific has, under -this agreement, haulage rights and very clear haulage rights after the fifty years have expired, and as they will have had their organization and their western connection, all of which is arranged for by this Act, this contract and the one passed last year, I think we can take it for granted that after fifty years have expired the Grand Trunk or the Grand Trunk Pacific, or whatever it may be at the end of that time, will have certain branch lines the operation of which is absolutely necessary to the successful running of the eastern section by the government. I submit this amendment largely on that account. It will be very essential for the government to have other connections than those which have proved a failure under Grand Trunk Pacific operation. The only branch lines for which provision is made for their taking possession of under the contract are those which have proved a failure to those who have operated the line during that fifty years or which are a failure at the end of fifty years. If this contract is left as it is and if it is clearly understood that the government have no right to take over the successful branch lines, the branch lines which are absolutely necessary to the successful operation of the eastern section, it will mean that the government will be so handicapped at' the end of the fifty years or that they can be so handicapped by the Grand Trunk Railway 'Company if they perfect their organization as they undoubtedly will that the government will almost be compelled to make a renewal of the lease under section 24, I think it is. of the original Act. Unless the government contemplate building parallel branch lines and making connections to points to which these successful branch lines of the Grand Trunk Pacific have carried Mr. IA VEIL.

trade. I therefore would submit that this amendment is a reasonable one and that it is not inconsistent with this contract ; nor can it in any sense of the word be said that its adoption would prevent the whole contract being carried out. I do not, for myself, admit the argument but it apparently has been used as an argument by the lion. Minister of Justice and other hon. gentlemen on the other side of the House, that any amendment which materially interferes with the contract cannot be accepted. I submit that this is an amendment which does not materially interfere with the contract. It simply gives the right to the government to take possession of the lines which are absolutely necessary to the successful operation of the eastern section, and I would ask the government to take it into their serious consideration and to see if such a section could not be incorporated in the Act.

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LIB

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

Liberal

Mr. FITZPATRICK.

The object the government had (in view in connection with the project was ' to secure an outlet for the trade of the Northwest by the shortest, most commodious and most direct route to the summer ports on the St. Lawrence and to the winter ports in the maritime provinces. Then, the Grand Trunk Pacific Railway Company chose to ask for permission to build branch lines from this main line from Winnipeg to Moncton, one of which would extend to Port Arthur, or to some other port on Lake Superior, another to North Bay and the third to Montreal. If at the expiration of the fifty year period the company chose to continue in control of their branch lines then to operate them successfully it will be necessary for them to use the main line of the government road and to that extent the government will benefit by the successful operation of the branch lines. Can it be imagined that these branch lines cannot be successfully operated ? The one to Port Arthur will enable them to communicate with water navigation at the head of Lake Superior, the second will enable them to communicate with their Ontario system and the other to Montreal places them in touch with an ocean port at the head of navigation. These branch lines must necessarily be operated by the company and operated successfully and in proportion as they operate these branch lines successfully the government, if the main line reverts to the government, will get the benefit of that operation. As far as the other branch lines are concerned my hon. friend (Mr. Lavell) has to remember that there is no present power in the company to build any branch lines beyond the three which I have mentioned. Their power to build branch lines is limited to the three which I have referred to. If in future it is their desire to build other branch lines which may not be operated successfully it will be for parlia-

inent when it gives permission to build branch lines to attach such conditions to the permission as will enable parliament to deal with the question before the lease ends. At the present time the lease is applicable only to three lines which I have mentioned.

Mr. LAVE LI,. Could they not get authority to build branch lines from Quebec or Ontario ?

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May 18, 1904