August 2, 1904

LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

benefit that accrues not only to the people of the maritime provinces but to the people of Ontario especially ; they are especially to be benefited by the acquisition of that road down in that section of the country. If that was the end of it, we would not have so much to complain of. Here are $800,000 taken at the beginning, but what will come afterwards ? You will find in the acquisition of that road what you found after the acquisition of the road connecting the Intercolonial with Montreal, that instead of its being a benefit to the Intercolonial it is a drag upon it. A large sum will have to be expended to bring it up to the standard that the road should be in, and the expenditure must be greatly in excess of receipts. It is then not only an expenditure of $800,000, but you have to keep up the bridges, you have to keep the road in a good state of repair, and keep it running afterwards. I say it would be better that this $800,000 were pitched into the sea, or made a present of to the provinces down there and let them keep the road, than that we should enter into any such bargain as this. ' Oh, but we don't begrudge the people of the western portion of this Dominion the expenditure that has been made upon the canals ! ' The expenditure at the present day amounts to about $90,000,000. That is solely for the benefit of this section of the country and particularly for the Northwest provinces. Let me draw the distinction between that expenditure about which the hon. gentleman talks. The Dominion has made an expenditure on the Intercolonial Railway or $70,000,000. We pay the interest upon that : that is part of the national debt. Besides that this year we made an expenditure owing to loss in working the road, an actual expenditure, between it and the Prince Edward Island Railway, of $2,750,000. Where is there any such loss on the canals ? You only pay your proportion of the interest. We pay the same on $70,000,000 on the Intercolonial Railway. We have a larger portion in this section of the country and the expenditure of $90,000,000 on the canals is not at all to be compared with the expenditure of $70,000,000 on the Intercolonial Railway. Taking it even from that point of view the comparison is absurd.

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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

Is not the expenditure on the Intercolonial Railway for Ontario as well ?

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CON

John Graham Haggart

Conservative (1867-1942)

Mr. IIAGGART.

Partially and only partially for Ontario. The great benefit of the building of the Intercolonial Railway is not the carrying of through traffic from Ontario to points in the maritime provinces but the handling of local traffic within the maritime provinces themselves. To a certain extent every part of the Dominion benefits from the operation of every railway. It is a mutual benefit. Has the minister persuaded any member in this

House that the expenditure of $800,000 for the acquisition of this road will be a benefit to the Intercolonial Railway in any respect whatever ? Does not the Intercolonial

Railway now benefit by the interchange of traffic with the Canada Eastern ? The express business on the Intercolonial Railway amounts to a net profit of $100,000 a year and he fears he would lose the express traffic on this section of the road. How would you lose it ? You would have the right to send express parcels over-the Canada Eastern or if it was acquired by the Canadian Pacific Railway you would have the right to send on that road as on any other road in Canada and no matter who had possession of that road they would be compelled to carry express parcels on fair terms from Halifax to Fredericton. Could you not establish an office to collect the express at Fredericton ? There is no use debating the question. You are paying $800,000 for an undertaking which is managed in the most economical manner by the parties now in possession and which realizes $2,400 a year. If this becomes part of the Intercolonial Railway the result of its operations will be the same as on the rest of the Intercolonial Raliway as it is managed to-day and we will have a far larger deficit than we have at present. What possible advantage is a branch of that kind to the Intercolonial Railway ? What possibilities or potentialities are there in it ? I should be glad to see the country between Fredericton and Chatham ten times as fertile and productive as it is. The minister talks of possible development in pulp wood and manufactures along the road. If there was a factory every ten miles of the road would the probabilities be any greater for the future than under the present conditions ? My protest against this on behalf of the people of my section of the country is that while we are willing to make any expenditure that is for a public utility which would be a benefit to the people of the maritime provinces we object to expenditures which are utterly useless and which will be a load upon the people of the country not only now but to the end of time, especially if the road is managed as it is at the present moment.

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CON

Ernest D'Israeli Smith

Conservative (1867-1942)

Mr. E. D. SMITH.

I also wish to protest against the purchase of this road. If the government are going to extend the system of government owned railways and to increase the area served by the Intercolonial Railway, they will do well to do it in a section of the country where there might be some traffic, but instead of that in this case we see they have selected on,' of the most unprofitable roads in the country. Its gross earnings on a length of 130 miles were only $116,000. There is not enough return to justify the expenditure of a single dollar upon capital account upon the road. I judge by the minister's remarks that the

road must be in an extremely dilapidated condition. He acknowledges that passengers have been obliged to go by St. John and around in that way to get to Chatham rather than travel over the road. What sort of service, what sort of ears, and rails must there be. He acknowledges that there are only fifty-six pound rails. We all know that no road that claims to be in any respect a first-class road, has rails of that weight. If the government purchase this road, we will immediately find the Minister of Railways coming to parliament to ask a large grant to rerail the road, and we will have to pay $300,000 to substitute eighty pound rails for the sixty pound rails. In all probability too the ties will have to be renewed and the present wooden bridges will have to be replaced with iron bridges. We will have an expenditure not only of the $774,000 of bonuses we have paid and the $800,000 we are paying for the road we will have to spend a large amount for the purpose I have mentioned. The minister says that the Canadian Pacific Railway had an option on the road for $800,000 but they did not regard it as worth that much. The minister steps in and proposes to pay that price for the road although the Canadian Pacific Railway were not willing to pay it. It was stated that some years ago the traffic was $20,000 or $30,000 a year more than it is now. That shows simply that the country was a timber country, that the timber has been stripped off and the road has become less profitable so this is a good time to unload it upon the government.

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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

I am sure my hon. friend does not wish to make a misstatement. There has been no statement that the earnings were $20,000 or $30,000 more a few years ago than they are to-day. They have not been reduced but the net earnings have beeu.

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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

The total earnings have been reduced. The statement of the minister was that that total earnings a few years ago were in the neighbourhood of $130,000 and now they are $116,000.

(Mr. E. D. SMITH. This railway is now-owned by a private individual who runs it to try to make money out of it, and no doubt he charges as high rates as it will bear, but immediately the government gets possession down, will come the rates, and the revenue will probably be thirty per cent less than at the present time. The truth is that this line will be an everlasting burden upon the people of this country. If its purchase would be beneficial to the people along the road, or to the people of any part of this Dominion, I would not hesitate to approve of its purchase by the government, even though it should be a loss ; but its purchase benefits no one except the private individual wrho has it to sell. I do not think it is the mission of this parliament to tax the people to benefit a private individual.

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CON

Ernest D'Israeli Smith

Conservative (1867-1942)

Mr. E. D. SMITH.

The express service on this railway amounts to the magnificent gross sum of $2,400 a year and the minister is greatly afraid that if the Canadian Pacific Railway took hold of the road, the Intercolonial Railway would lose its share in this huge annual earning of $2,400. The fact is that the Intercolonial Railway will get the greater portion of that no matter -who owns the road, because that express matter must be mainly destined to points on the Intercolonial Railway or from points on the Intercolonial. It is the same way in regard to the freight. The minister stated that the interchange of traffic amounted to $125,000 a year, but three-fourths of that is destined to points on the Intercolonial Railway or from points on the Intercolonial, and cannot be taken by any other railway. The payment of $800,000 for the purchase of this railway is only the beginning of it, because wTe will have an annua! deficit on this road for all time to come, and the people of Canada will assume that burden to benefit a private individual. The Minister of Railways stated that in wishing to have the Dominion Express Company on the whole line of the Intercolonial Railway, I was in favour of a loss on the Intercolonial Railway. The minister has no justification for making that statement. I believe that if the Dominion Express is on the Intercolonial Railway system there will be a very large gain on account of the competition that will arise, and in addition to that the people living on that line will have an enormously better express service than they have now. It will benefit the fishermen of the lower provinces who can send their fish to tlie west; it will benefit the fruit growers of the west who can send their fruit to the east, and the consumers will be benefited by the lower prices of fruit brought about by competition. I believe that the Dominion Express Company have guaranteed that there shall be no loss of revenue whatever.

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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

Have they done so ?

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CON

Ernest D'Israeli Smith

Conservative (1867-1942)

Mr. E. D. SMITH.

I believe so; I am sure of it.

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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

It has not been done to my knowledge and I think I should know about it.

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CON

Ernest D'Israeli Smith

Conservative (1867-1942)

Mr. E. D. SMITH.

If the minister will look into the matter he will find it has escaped his attention. I do not believe we are justified in buying this railway at any price. Even if it were cheap, we don't want it. It is just like certain ladies who buy goods at the bargain counters which they have no need for ; the minister thinks the road cheap therefore he buys it, no matter what the consequence to the taxpayer. The road will serve no good purpose and I enter my earnest protest against its purchase.

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CON

Albert Edward Kemp

Conservative (1867-1942)

Mr. KEMP.

We are asked to pay $SOO,OO0 for this railway, and the question is whether it is worth it or not. To my mind it is not worth it. I am not disposed to dispute

that this railway would act as a feeder to the Intercolonial Railway, hut I do believe it is not worth the money the government propose to pay for it, and I believe the government is making a very bad bargain for the country. Transactions of this kind are usually based on the earning power of the property purchased ; but the minister could show no basis of that kind, and he seemed to think that the hope for the success of this railway was in the future. That is not a businesslike way of approaching the matter at all. I repeat that this is an unfortunate bargain for the country. We may assume that the road has been run with the utmost economy, and that it will be impossible for the government to operate it as economically as it has been operated by the private owners. Last year this railway only earned $2,074, the year before there was a deficit of $9,uo0, and the year before that, the net earning's were only $12,400. There is no doubt it will be a losing concern under the management of the government. This railway is a white elephant on the hands of its present owners and the government has no valid excuse for paying this exorbitant sum of money for it. I enter my protest against the whole transaction.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Is it not a fact that this railway was offered for $400,000 by the banks that held the securities ?

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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

I don't know anything about that.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I heard no such figure as that mentioned, but I did hear it stated that offers had been made at a lesser sum than it is now proposed to pay. I made personal inquiry into that, and 1 am in a position to state that it is not correct.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

I heard the_statement made that it was offered for a little less or a little more than $400,000.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I may say to my hon. friend that I have communicated -with the bank referred to, and I have the distinct statement of the bank that it is not correct.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Is this road taken over in pursuance of any general policy pointing to the acquisition of similar roads in the maritime provinces, or is it a special case resting upon the special merits of this particular project ?

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LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

This matter is dealt with solely on its merits, without regard to other railways.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

It is not in pursuance of any policy of acquiring branch lines in the maritime provinces ?

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August 2, 1904