May 8, 1909

LIB

Alfred Henry Clarke

Liberal

Mr. A. H. CLARKE.

villains if they have done such a thing.

I have a list of the directors of 1879 and a list of the directors who, in 1880, declared profits without giving the policy-holders the interest on invested capital, but first taking the interest on capital and then computing the profits for the policy-holders. The first is Mr. F. Wolferstan Thomas, of Montreal. Then there is Canon Innes, of London, D. Mclnnes, Hamilton, George Hague, Montreal, F. W. Gates, Hamilton, Mr. Justice Burton - who was at the time a judge of the Court of Appeal, and afterwards became Chief Justice of the province of Ontario,-Col. Gzowski, Toronto; N. Merritt, Niagara; Thomas W. Ritchie, Montreal; John Stuart, Dennie Moore, and Wm. Hendrie, of Hamilton;- George A. Kirkpatrick, M.'P., of Kingston,-my hon. friend (Mr. Henderson) lauded him as a most exemplary character, one who would do nothing wrong; yet he is one of the men who perpetrated this great fraud upon the policy-holders according to my hon. friend himself-A. G. Ramsay-whom also my hon. friend lauded and who -also was one of those who took part in this transaction; James A. Harding, St. John, N. B.; J. Osborne, Hamilton, then another Lieutenant Governor, Sir Alexander Campbell-he was another of these villains,-Mr. A. Allan of Montreal, one of the most prominent business men of Canada, and Mr. Thomas Swin-yard, of Hamilton. These were the men who were responsible. This was not done by Mr. Cox, who is now being made the target of attack; he had nothing to do with the directorate of the company in those days; he did not institute the practice now complained of, but followed the practice as he found it and which every person believed to be correct practice. It seems to -me that when hon. gentlemen will rise here and say that these men, not believing they were doing right, did exactly the contrary of what they led parliament to believe they were going to do, they are putting a stamp upon the reputation of prominent men in this country which is not deserved. When we have a Chief Justice of the ability and standing of Chief Justice Burton, who was connected with the company up to the time of his death, this is a pretty good guarantee to the policy-holders that the directors acted in what they thought the best interest of the policy-holders and in accordance with the claims of justice. My hon. friend from Montmagny (Mr. Cyrias Roy) asked a very proper question, and that was, as to the attitude of the policy-holders' directors. For, in 1899, by Act of this parliament, the directorate was changed to some extent, so that six of the directors were appointed by the policy-holders along with nine to represent the shareholders. It is

true that, under the Act, the policy-holders' directors were not to vote on the question of distribution of profits. The company would cease to be a joint stock company if that were done. Parliament, at that time, thought that this was good representation of the policy-holders on the board, and did not see fit to say that the policy-holders' directors should have a right to vote on a matter which affects the distribution of profits. But these men have -other duties to perform. The policy-holders have had their representation on the board ever since 1900. Do we hear any complaint from them? They are the people the policy-holders sent there to represent their interests, and they have acquiesced in every respect, not only in the division of profits made ever since that time, but also, I am informed, in the application to this parliament to have this matter set right in order to prevent costly and, perhaps, never-ending litigation and to preserve the standing of the company. Are these competent men? Who ' are the men appointed to represent the policyholders? I believe the Act was passed in 1899, and I have here a list -of the policyholders' directors in 1900. The first was Mr. Alexander Bruce, who has been referred to in this debate. Besides there were Hon. Donald Maclnnes, Sir Georce W. Burton, William Gibson, M. P., Very Rev. G. M. Innes, of London, and J. W. Plavelle. These men, one would think, ought to be able to protect those whom they represented. They were men of large business experience, large professional experience, and among them was a member of ttie clergy, who, we might expect, if any fraud was intended, would be able to protect those who elected him to the board. This list is changed somewhat. Mr. Maclnnes died, and his place was filled by the election of Mr. Charles Chaput, of Montreal, who, I understand, is a very prominent and astute business man of that city. These men and their successors have been meeting year after year on the board of directors, they have known exactly what is going on, they are interested in the prosperity and success of this company, their interest and duty was to represent faithfully those who elected them. And I submit that the very strongest evidence of the good faith and beneficent character of the legislation being asked for is that these men, appointed for the purpose of representing the policyholders, have approved the manner of distributing the profits which has been followed, and, at a meeting in which Mr. Chaput took part, decided that it was in the interests of all parties that this matter should be set right and no further difficulty raised in connection with it.

Now, what are the tactics against this legislation? A writ was issued. What

would be the effect of that writ if granted? It is brought against the Canada Life Assurance Company, not against the shareholders who have received the profits which some say have been unfairly diverted to them. The action is brought against the company alone. If judgment were given against the company, out of whom will the payment come? Not the men who are dead, the men whose stock has been disposed of, but out of the very fund which the policyholders want for the distribution of profits. Take away by this action the profits which the policy-holders are entitled to, and the policy-holders cannot get those profits. I submit that the policy-holders to-day are entitled to the very moneys which this action is brought to take away from them. Mr. Laidlaw has been discussing this matter for the last three or four years-it is no new matter for him.

My hon. friend from Halton read a paragraph from his affidavit from which he drew the inference that he had been for a long time ignorant of what the profits were. I have his own letter written before that time when he was discussing this question with the president of the company. Go back to the year 1902, and you will find on the files in the records of the government a discussion of this very matter by Mr. Bruce. My hon. friend gives him a good reputation as a man who would do no wrong, and who did not intend to do wrong; yet he endeavoured to say that, although he allowed Mr. McCarthy, the solicitor of the company, to appear before the Banking and Commerce Committee and show what was the meaning of those men, Mr. Bruce being the man who framed the Bill of 1879, who sat there in the Banking and Commerce Committee, ready to corroborate it, yet my hon. friend says although Mr. Bruce was there he would not venture to get up and corroborate it. Is that complimentary to Mr. Bruce, the man who was promoting this Bill? Yet he says he has allowed all this hypocrisy to go on, first of all knowing what the intention of the Act was, the next year taking part in an, act which was one of treachery to the policy-holders. Yet he says that man sat still in the committee because he knew he could not get up and say that any mistake had been made, or that the intention was other than it was claimed to be. Yet I find that Mr. Bruce wrote a letter in the year 1902, when this matter was being agitated, and he explained it in precisely the same way it is being explained here. In 1902 he wrote a letter to the actuary. It is very long, and if any hon. gentleman cares to read it I will send it over to him. What he says in substance is that the reason for the Act of 1879 was this, that up to that time the directors

were not authorized to pay the participating policy-holders any part of the profits except those arising from participating policies. Now, the directors, notwithstanding that, had been going on for years and paying them, not only profits from participating policies, but profits from nonparticipating policies. That was open to objection, because the Act did not authorize it. Therefore, the intention in coming here, as Mr. Bruce points out, and what is apparent from reading the Act of 1879 itself, is to authorize the directors to pay profits to the participating policy-holders from both branches of the business, that is to say from the participating business and also from the non-participating business, and so anxious was he to show that, that he uses the very words that are now held to mean something further than was intended. What he says is that the entire assurance business paid profits, meaning, as he points out in the paragraph, all the business, that is to say, profits from the participating and also profits from the non-participating business; he makes it clear, and points out what the recital in the Act of 1879 shows plainly, that the profits which were to be divided thereafter were the profits which had theretofore been divided. The proportion up to that time time did not include interest on the investment of the capital stock, and it was never pretended at that time that any profits were to be divided except those that had theretofore been divided. Mr. Robertson, of Hamilton, in introducing the Bill, merely said that it was intended to alter the proportion in which the profits were to be divided. The proportion up to that time had been 75 to 25, after that time they were to be 90 to 10, and these profits which were set apart for division previously, have been thus divided ever since that time. Now it is said that Mr. Ramsay never said that. We are agreed in one thing at any rate, that Mr. Ramsay is a gentleman on whose word we can rely. Here is what he says in his certificate:

1. I came to Hamilton, Canada, in the year 1859 in the capacity of manager of the Canada Life Assurance Co., and entered on that duty in that year and continued in that office until the year 1874, when I was elected a director of the company and was then appointed managing director and continued to fill that position until December, 1899. I was elected as president of the company in the year 1875, and filled that office continuously up to December, 1899, when I resigned my position as a director and thereupon ceased to be president.

I had thus been connected with the company continuously from August, 1859, to December, 1899, in these positions. [DOT]

2. When I entered on my duties as manager I found that the paid up capital stock of the company was about $100,000, which was by

Topic:   ' COMMONS
Permalink
LIB

Alfred Henry Clarke

Liberal

Mr. A. H. CLARKE.

1805 increased to $125,000, and I also found that the board of directors, in preparing their statements for the shareholders and policy-holders and dealing with the question of profits (so-called), had in the past, uniformly computed the interest on the paid up capital stock at the average rate of interest earned by the company on its investments during the preceding year and credited the same to the shareholders' account, and after deducting and so crediting such sum, had estimated the profits realized from policies both on the participation and on the nonparticipation scale in one amount and credited the shareholders' account with twenty-five per cent of such amount, and the policy-holders on the participation scale with the remaining seventy-five per cent, thus giving the policyholders on the participation scale a share in the profits of the entire business of the company, and thus crediting them with the profits in a class of profits to which they were not entitled.

3. The same course of first crediting the shareholders' account with interest on capital at the average rate earned on the company's investments, was pursued during my whole tenure of office, and the amount of divisible profits was arrived at after crediting and setting apart such interest and included profits from policies on both the participation and non-participation scale. The shareholders' account from 1875 onwards was charged with a proportionate amount of the expenses of the company's investments.

Then there is a paragraph which my hon. friend from Halton read this morning, where he says that it was decided to apply to have it made clear in future that the directors might make an allotment of the profits from the entire business of the company, that is both from the participating and the non-participating policies, to make it absolutely clear what the meaning of the words 'entire business' was. Up to 1879 they were not authorized to give it from nonparticipating policies, he says, the intention was to give it from the entire business, that is both the participating and non-participating. He says that was the object and intention of the recital in the Act passed, 42 Vic., chap. 72, in the last paragraph of the certificate. He says:

After the passing of that Act, and during the whole of my connection with the company, the shareholders' account was, from time to time, regularly credited annually with the amount of average interest earned on the paid up capital stock, and it was after such amount was so credited and set apart, that a quinquennial allotment and division of profits was made within the limits of the proportions mentioned in that Act, and no question was ever raised or suggested as to such allotment and division being improper or unwarranted.

That is the statement of a man who is now pretty near the grave, and who has

been associated with this company for many years, and against whose character, business or otherwise, I have never heard a word of criticism. Surely it is rather farfetched for the hon. member for Halton to come out and attack Mr. McCarthy who was before the committee, and charge him with deceiving the committee when he said that the men of those days never intended that the words then used had the effect which it is now claimed they had. Mr. Bruce was there. We have the statement here of Mr. Ramsay. I have also the sworn statement of the actuary to the same effect, and there cannot be the slightest question that the meaning which was attributed in those days to the Act is the very meaning which we now claim it had. It has been said by an eminent judge that the best way to interpret a document or a will is by reference to what has beer done under it. He says in a certain case that came before him, ' Show me what the parties have done under the contract and I will tell you what the meaning of the contract is; in invoking that rule, surely we here have the strongest evidence of what the meaning is, because the directors, among the most reputable men in Canada, who have been associated with this company, came and asked for a certain Act, they explained what they believed they wanted, they acted upon it, and in this way, unless they are the most arrant scoundrels on the face of the earth, I submit that their interpretation is the only one that ought to be adopted at the present day. Surely after thirty years of experience the men who are insured in the Canada Life Assurance Company, many of whom are in this House, men occupying the highest positions in Canada in all walks of life, would have known something about it if a fraud were being perpetrated upon them such as is sipoken of at the present time. It has been said that they did not know what was being done. If they did not know what was being done it is very good evidence that they were not misled. If they were looking for profits from the investment of the capital stock when they entered into their insurance contracts then some one of the 35,000, or 40,000 policyholders and many more who have got their profits would certainly have discovered that they were not getting that which they had contracted to get.

There is one more thing that I want to discuss. It has been said that the company, by the paying up of the capital stock, have taken away profits to which the policyholders are entitled, and in support of that proposition they have invoked a paragraph in the report of the Royal Commission on Insurance relating to this company, which 'will be found on page 13:

But it is equally manifest that if the inherent earning power of the additional capital is only 4 -67 per cent, its engagement in the concerns of the Canada Life without any real need is a simple method of raising that earning power to 8 per cent, the difterence, under whatever name, being unnecessarily taken away from the policy-holders whose accumulations have earned it.

That does not say that the policy-holders have suffered any loss on account of the capital stock being paid up. What they do say is that the difference between the 4-67 per cent and 8 per cent is unnecessarily taken away from the policy-holders. Well, if the Canada Life Assurance Company, or any other company, is doing business for charitable purposes without any attempt to make any profits out of it, then probably it would not be fair to take any of the profits from the insurance business, but I say most emphatically that the payment up of the capital stock has not affected in any way the profits received or which may be received by the policy-holders. Let us look at the facts. Under the Act and under the contract the shareholders are entitled to 10 per ent of the profits from the insurance business, and the policy-holders are entitled to 90 per cent. It does not make a particle of difference what the capital stock is. Whatever the insurance business realizes for distribution, 90 per cent of it has to go to the policy-holders and 10 per cent to the stockholders. Whether or not the stockholders put $10,000 or $1,000,000 or $10,000,000 into the company they are not taking in interest upon the capital stock anything but the 10 per cent of profits which are earned. If they did not pay up the additional $875,000 of the capital stock there would be no earnings upon it. If they had paid in $875,000 they would have paid in not the shareholders' money, but their own money instead of putting it into a loan company or of loaning it at a certain late of interest. They pay up their capital; they invest it in an insurance company, and it is only the money which is realized from the investment of their own money which they pay to themselves as dividends. What difference would it make if they paid $100,000,nnn? That $100,000,000 earns $100,000; it makes no difference at all to the policy-holders. They are only taking the legitimate earnings of their own money. If they were taking from the policy-holders more than ten per cent of the money earned in the insurance business, they would be doing wrong, but it has not been suggested that anything of that kind is being done. So I submit that the evidence is overwhelming that the intention of parliament in 1879 and the intention of the company was to give that section the meaning which has been acted upon by the comnany and acquiesced in by the policy-holders for thirty years. We have never had a man

who has dared to get up and say that ho was misled. If any contract of insurance was obtained by the representation that they were paying interest on the capital stock as well as the profits, the man who entered into such a contract is not harmed, because he has his redress. If any one told him that which was false, which was a misrepresentation, he has the simplest kind of an action to have the contract set aside and get his money back if he wants to. But he does not want to get his money back. Many men went into this insurance company twenty, thirty or forty years ago. They are men who have become too old to get insurance in any other company. If you are going to paralyze this company, if you are going to say: 'You have to give

up an investement which to-day yields you 8 per cent and you can only have an investment which will yield you about 4 per cent,' the result will be that you will ruin this company. If you ruin the company who are the people who will suffer by it? Who are the people who are going to have no profit? They are the policy-holders who went into this company years ago, and who cannot get into any other company now. If the company are going to make any profits at all the policy-holders are going to get profits. It is to their interest as policy-holders to make this company as profitable as possible because, according to the prosperity of the company, will the profits be distributed.

It is quite true that during the last few years profits have been less than they had been hitherto, and it is sought to blame-that upon the payment up of the capital stock. Let me give the committee an illustration of a policy of my own for $2,000. The profits were applied in reduction of premium. In the division of 1895 I had a reduction of $16,60 a year in my premium. It must inevitably happen in this as well as every other company that as the company gets older, as the men who went into it when they were young begin to die, the profits cannot be so large. The rates of interest are going down and for these two reasons it cannot be expected that profits in the later years of the company's existence are going to be as great as they are in the earlier years.

Topic:   ' COMMONS
Permalink
CON

Edward Arthur Lancaster

Conservative (1867-1942)

Mr. LANCASTER.

They ought to be if the actuaries are any good or know their business.

Topic:   ' COMMONS
Permalink
LIB
CON

Edward Arthur Lancaster

Conservative (1867-1942)

Mr. LANCASTER.

What I mean is that if the actuaries properly fix the rates there should not be any difference, because they should know that people will die.

Topic:   ' COMMONS
Permalink
LIB

Alfred Henry Clarke

Liberal

Mr. A. H. CLARKE.

I do not quarrel with that. If the actuaries do their duty Mr. A. H. CLARKE.

they will institute rates and keep up the reserve, so that- those in later years will pay the same as those in earlier years. That is precisely the condition which the directors were confronted with in 1889. It was not only a question which confronted this_ company, but one with which all companies had to deal. Parliament said to the companies: ' The rates of interest are

going down and you must maintain a greater reserve out of profits for your policy-holders than you have been keeping up.' In pursuance of that the Canada Life increased its reserve. If it were not for increasing this reserve the profits would have been greater because a very large sum which was carried to the reserve account had to be taken from the fund which otherwise would have been divided up in the shape of profits. If you keep that as a reserve you cannot pay it in profits. If it had not been for increasing the reserve of this company a large amount of profits would have been divided up and there would not have been the diminution in profits that there was. But, to say that the paying up of the capital stock had anything to do with the amount of profits is absolutely fallacious and I will illustrate that by my own policy. In 1895 the premium on my policy was reduced by $16.60. There was another distribution of profits in 1900. Up to 1900 the capital stock had not been paid up. At the quinquennial division in 1900 there was the largest reduction made in the history of the company. Why was that? . Not because their capital stock was paid up, because it was not paid up until after that time, and yet in the distribution of profits in 1900, instead of having a reduction for the five years of $16.50' there was a reduction of $8.40. It was after that that the capital stock was paid up; but notwithstanding the paying up of the capital stock my profits were increased, because in the distribution of 1904, instead of having profits of $8.40 the profits were increased to $10.30. The reserve now has been made up and that has been my argument and I appeal to those who have any consideration at all for the policy-holders of this company, and now that the company has its reserve made up it is in a position such as it has not been in since 1899. They do not now have to carry anything to make up the reserve to the requirement of the Act of parliament and hereafter all these profits will be carried to policy-holders' account or to the account for the distribution of profits. This is the last year in which the policyholders receive any share of the profits of the five years last past. If we are to get any profits from the last five years we will get them from an allotment made by the directors. The directors are not bound to

make any allotment of profits. If they do not I will have to pay on my small policy $10.30 a year more than I have been paying for the past five years, and when my hon. friends talk about the widows and orphans I wish they would remember that it is the widows and orphans who are to participate in these profits. If these profits are held up, if the directors are not in a position to divide them, it is the widows and orphans who will suffer. It seems to me that the whole matter is so eminently in the interests of the oolicy-holders that this Bill ought to go through without opposition. It would be an outrage upon the company to cut the profits down from 8 per cent to 4 per cent and to put a construction on the Act which neither the directors nor any one else ever contemplated. It is a strange sense of iustice that would impel people to take that view of this matter.

Topic:   ' COMMONS
Permalink
LIB
LIB

Alfred Henry Clarke

Liberal

Mr. A. H. CLARKE.

Yes. My information is that the policy-holders' representative on the board, Mr. Chaput, of Mont real, amongst others, have requested this legislation at a meeting between themselves and the shareholders of the company.

Topic:   ' COMMONS
Permalink
CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

The hon. gentleman read a list of policy-holders' directors. How many of these are shareholders, or arc they all shareholders?

Topic:   ' COMMONS
Permalink
LIB
CON
LIB

Alfred Henry Clarke

Liberal

Mr. A. H. CLARKE.

I do not know about that. I know they are the gentlemen whom the policy-holders have chosen to represent them.

Topic:   ' COMMONS
Permalink
CON

Haughton Lennox

Conservative (1867-1942)

Mr. LENNOX.

That would take away all the force of the hon. gentleman's argument in regard to them. As shareholders they would be interested in the affirmative of this legislation and could not be said to fairly represent the shareholders.

Topic:   ' COMMONS
Permalink
LIB

Alfred Henry Clarke

Liberal

Mr. A. H. CLARKE.

Men of the character of these men appointed to represent the policy-holders would be betraying their trust if they did not do everything which they thought in the interests of the policyholders.

Topic:   ' COMMONS
Permalink
CON

Edward Arthur Lancaster

Conservative (1867-1942)

Mr. LANCASTER.

I do not agree in that, because we all know that individual policy-holders cannot watch everything that is done by the directors. The shareholder directors become associated with the other directors and officials and become deferential to them in regard to what they have

been doing; they get into the way of continuing from year to year certain things which they -might not do if they had to account to their policy-holders. These directors do not account to the policy-holders as such, they only have to go to those meetings and take a part in the allotment of profits. The moment they become shareholders their interest is against the policyholders, in so far as the subject of this Bill is concerned.

Topic:   ' COMMONS
Permalink
LIB
CON

Edward Arthur Lancaster

Conservative (1867-1942)

Mr. LANCASTER.

By some of the policyholders, not by all, because very few get a chance to ballot. I have been a policyholder for a great many years and have never been asked to vote, have only once received a paper or anything else giving me a right to vote as a policy-holder. I do not say this was done purposely, but I contend there is nothing in the fact that certain people on that board, who are themselves shareholders, are supposed to represent policy-holders more than any one else. If my hon. friend asked a court for a construction of this statute, his arguments would not hold good. All he has said is the best reason why parliament should not interfere. He has argued why a certain construction should be put on the statute of 1879 but he is not content to rely on the virtue of that statute because he asks parliament to prevent a court from construing that Act.

How are we to get away from the precedent we establish if we pass this Bill? This precedent will be used to interfere with established rights in this country and with wrongsi which may occur by reason of the condition of the law. We are asked to say that parliament in 1879 did not mean what it said by its legislation. If we are not asked to do that, we are not asked to do anything. A certain construction would be put upon these words in the Bill of 1879. That is the construction the courts would place upon it, and the moment we interfere with that and pass an Act to say what was intended to be meant we change the rights of the people under that statute. If a very strong and meritorious case were made out it would be bad enough but I believe that even then it would be wrong technically for us to pass such an Act as this. If both parties were before us and they agreed that there had been a mistake, there might be some justification for this legislation, but we are asked here to assume that the Senate and House of Commons of Canada in 1879 passed an Act which was not intended to mean what it says and apparently it does mean. I ask in all fairness of the Prime Minister and every other hon. member whether

there is a particle of evidence in support of such an assumption. There will be endless difficulty if we introduce the principle of not accepting legislation as meaning what it says. We must not seek to place the responsibility for legislation on the draughtsman who prepared it, on the typewriter who wrote it, or on the printer who printed it, the responsibility must rest on the legislative bodies which passed it. It does not make any difference what any body outside the walls of this chamber thinks in regard to an Act passed by this parliament. It does make all the difference in the world what the members of this House or the members of the Senate who passed that Act undertook to say when they passed it. If you say the Bill is to rectify a mistake, you have to say it was the mistake of the legislators themselves not the people asking for the legislation, which would be absurd. A motion might be passed in this House that was right to be passed because the right hon. the Prime Minister might see no harm in it, and let it pass. Does that entitle any one to say that any motion that he presented should be accepted because he asks for it? If that were so there would be no functions for parliament, nothing for parliament to act on, no need of us asembling. So we must say that the legislation passed in 1879 was what was intended to be passed, unless we have evidence that the legislature of that day made a mistake. If any hon. gentleman said that he was present and was one of those who took part in the discussion of that Bill, and showed that something was intended which was not expressed in the Act, we would have some-thng to go upon. But we have here only the statements of those who asked for the legislation and who supported it in their own interest, asking that their action be contra dieted, so there is no reason why we should vote that parliament made a mistake in 1879. The Bill does not allege that as a reason for passing it, which makes it all the more vicious. It simply says boldly that certain language in the Act of 1879 was intended to mean so and so, without any reason being given why it is to be so declared. If we pass this Bill to-day, on the understanding that those who sought for the legislation made a mistake in asking for what they got, we do not save parliament from the consequences of a most dangerous precedent. We do not give any reasons for changing the legislation. We simply say that certain words in a certain Act of parliament passed in 1879, are not only intended to denote so and so, but do denote so and so, and have been denoting it for thirty years. If we were going to say that hereafter the arrangements the Canada Life makes in regard to its profits shall Mr. LANCASTER.

be so and so, and qualify the words of the Act of 1879 for future use, that would be bad enough; but it will be certainly vicious, besides most unfortunate for the credit of parliament, if we enact retroactive legislation which declares that not only shall these words for the future be held to mean so and so, but they will be held to mean the same ever since the Act was passed. If investors in Canadian enterprises once get it into their heads that legislation under which they have acquired rights may be set aside, and retroactively treated, by the influence of somebody upon the government of some future day, it will be a sorry day for this country. Just contemplate it for a moment. Some people may come to parliament and get an Act passed, induce people to invest money on the faith of that Act, and afterwards, if they have influence enough with the government in power, get it changed. People who are invited to invest their money under the authority of our Acts of Parliament will be afraid to do so. If this sort of thing is going to be begun now, it will be expected to be continued hereafter; and we shall have that deplorable condition, that the man who does not want to use political influence, but wants to stand on his merits as an ordinary citizen, will not have any faith in parliament's acting to give him an Act which will protect his rights. But the man who is willing, and who with his associates may be able, to use influence enough with the government that may control parliament for the time being, will be able to get legislation which is deceptive to the country. It will be a most serious blow to good faith in Canada's legislation. It will be more than that. To say that certain words used in a former Act of parliament were and are intended to denote something different from what they do denote in the ordinary meaning of the words, and to say that an Act shall be passed so declaring them, because those who sought that legislation are unanimous in saying that they wanted to get something else, is practically an insult to the intelligence of parliament, especially to the intelligence of the parliament that sat in 1879, because it is equivalent to saying that those who sought that legislation could get anything they asked for. We must suppose that parliament knew the words it was using and used the right language. If the language is so certain to be construed as it is interpreted by the hon. gentleman who promotes this Bill, then he does not need this legislation, and the moment he comes and asks for it, proclaiming that he is certain that the language will be construed in that way in the courts, it makes any body who applies his knowledge of human nature to this Bill believe that those who are interested in this legisla-

tion and who are asking for it, do not believe that the courts would so construe the language. If there is so much certainty that the language will be there held to mean what it is so strongly contended it does mean, that is the best reason for not passing this legislation. If they are wrong in that they still should not have the legislation, because it is establishing a precedent that will strike at the very root of respect for parliament and government in this country. I want as strongly as I can to put on record my views, and what I believe are the views of my constituents, on this matter. I must resent the statement made by the hon. gentleman who is promoting this Bill, that Mr. Cox, I suppose he means Senator Cox, is made the target of the opposition to the Bill.

That is very unfair. It should not have been said and was not justified. It is not the Hon. Senator Cox who is the target,

[DOT] but the people of this country, and Senator Cox is the man who is attacking them. The people have not come here for any legislation; the policy-holders are content to be governed by the statute of 1879, and I resent the insinuation of the hon. gentleman as utterly unfounded. Why do not the promoters of this Bill go before the courts and have the courts decide what this statute really means instead of coming before this parliament? I appreciate the force of the hon. gentleman's remarks that a judge will often take the practice which has been followed under a contract, and construe the contract according to that practice when there is doubt. But I would not go so far as to say that such practice is the primary ground on which a document is construed. That is a course taken only m the last resort. But what I submit is that the matter before us involves property and civil rights and consequently is one in which we have no right to interfere. I want to impress upon the Prime Minister as strongly as I can that this Bill is a serious attack on a fundamental principle, and is calculated to shake the confidence of the people in the parliament of this country. If men come to parliament for legislation which affects other people as well as themselves, and if, in the legislation which they ask parliament to pass, they are unfortunate enough to use language which does not accurately convey the meaning they intended, and if that legislation be adopted, then they must pay the penalty. But if you are going to alter a statute afterwards in the interests of one of the parties concerned, and against the interests of others, you will be committing a great injustice and shake the confidence of our people in parliamen-ary government. My hon. friend speaks of the rights of those people who have invested their paltry $200,000 or whatever it is in this company. And when I use the

word paltry I do so because the amount is of no importance whatever compared with the rights of the mass of the people. The hon. gentleman talks of the $200,000 invested by certain capitalists in the stock of this company. But what is that compared with the amount invested by the policy-holders or with the millions which we expect to be invested in this country, and which are now being invested, in other enterprises? How can we expect people to have any confidence in their investments in this country if at any moment an Act of parliament is liable to be amended which will completely change the conditions under which these investments were made, and especially when such changes are made at the instances of men who have sufficient influence with the government to have the government force through the legislation they desire? iSuppose some ordinary citizen, some poor farmer or merchant or labouring man, or even professional man, had a contract with the Canada Life governed by a certain statute, which is interpreted differently by the company from his understanding of it, does any one believe that he would dare come here and ask for an Act of parliament to change that statute so as to make it beyond doubt suit his interpretation of it? If he did, he would not be listened to. The position is a serious one. It will cause the people to come to the conclusion that the more money a man has, the more influence he can wield and the more rights he has in parliament, and that is the worst belief with which you can innoculate the people of any country. If you want the people to be contented, you should impress them with the conviction that every contract, whether made by rich or poor, shall be held sacred and that this parliament will not interfere with the courts in construing that contract and enforcing it.

We have this session a general Bill before parliament respecting the whole insurance business. That is a Bill in which all classes are interested. When you pass such legislation, are you going in a year or five years later, at the instance of interested parties, to say that certain sections of it do not mean what these parties say it does not, or what the courts might hold it to mean, and have that law amended so as to suit people who have sufficient influence with the government to have their views prevail? How are you going to give any stability to your legislation unless you hold everybody by it once it is adopted, saving those very exceptional instances in which a mistake apparent to everybody is made? In this instance, wc have not a particle of evidence that a mistake was made. We cannot say that the Act which was passed in 1879 would have been passed differently had the contention been raised then which is submitted now. For these reasons I am decidely opposed to this Bill.

Topic:   ' COMMONS
Permalink
LIB

John Gillanders Turriff

Liberal

Mr. TURRIFF.

It is not my intention to speak at any length, and I have not the slightest idea of obstructing the Bill. The House has decided to force the Bill through this session without giving the policy-holders an opportunity of appearing before the committee, and the House must assume the responsibility. But in view of the fact that the policy-holders are not to be allowed to come before the committee to present their views, it had been my intention to take up the best part of an hour in placing some of my views before the House. However, as the hour is so late, I shall forego saying the greater part of what I had intended to. I find myself in the very unpleasant position of working and debating against all my friends with whom I have worked for years. But I feel keenly on this subject. I feel that this Bill is a rank injustice to the policy-holders, that it is corporation legislation as against the people; and I want to say that when it comes to a question of a corporation against the people, I want to be found- at all events when I know it-standing up for the rights of the people. I have been told by a number of hon. members on this side that this is not the place in which to deal with matters of this kind, and that the proper place is the annual meeting of the Canada Life Company. But you know, Sir, as well as I, that that would be simply an idle farce. There are nine shareholders who are directors in this company, and they are all controlled by one man who owns over 50 per cent of the stock. If he owned the full amount he could not control the company, in selecting the personnel of the directors, any more than he does at present. It has been said by my hon. friend the promoter of the Bill that there are six policy-holders' directors. But how are they elected? Any of us who have had anything to do with the company work know that a lot of directors who own one-fifth of the stock of a company, if that stock is at all widelv scattered, can at any time control the company by getting proxies. So, these shareholders' directors get the proxies at the same time from policyholders all over the country and by casting their votes unanimously they can elect whomsoever they please. So, I say, it would be absurd for any policy-holder to get up at an annual meeting and expect any consideration for the proposal not along the line of what was desired by those in control of the company.

There is one phase of this question that I wish to nut before you and before the legal gentlemen of this House. If this Act is passed, you are taking away the legal rights of some 30,000 or 40,000 Canadian shareholders. But there are many other policy-holders outside of Canada.

Topic:   ' COMMONS
Permalink
CON

Edward Arthur Lancaster

Conservative (1867-1942)

Mr. LANCASTER.

There are British policy-holders and American policy-holders, and this parliament cannot interfere or do away with the rights of these. What position will the Canadian policy-holders be in? They will be charged a high rate for their insurance and the American and British policy-holders will be charged lower rates. This is a very serious matter. The Caandian policy-holders who will build up the company, they put up the $33,000,000 invested at the present time; it is not the shareholders or the directors who did all this, but it was you and I and everybody else who took out a policy, and for years we have been paying premiums not only to carry our insurance but to give us a profit and our accumulations make up all these millions that are invested. Is it fair that the Canadian policy-holders, who built up the company and own nine-tenths of it, should be taxed at one rate and the American or British policy-holders be given their insurance at a lower rate? There has not been very much said about the merits of this Bill. The whole trouble is that there is an uneasy feeling throughout the whole country that the policy-holders are not being fairly treated by the present management.

Topic:   ' COMMONS
Permalink
LIB

Edward Walter Nesbitt

Liberal

Mr. NESBITT.

May I ask, is the company charging the American or British policy-holders less than it is charging the Canadian policy-holders?

Topic:   ' COMMONS
Permalink

May 8, 1909