May 11, 1911

LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

The Canadian Pacific railway is under their control by consent, though I think the company does not admit liability as a matter of law. I have expressed my opinion in the House before, and though I am not a lawyer, I believe they are legally under the Board of Railway Commissioners.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

Frederick Laurence Schaffner

Conservative (1867-1942)

Mr. SCHAFFNER.

When the Manitoba government guaranteed the bonds of the Canadian Northern railway in that country there was a clause in the guarantee enabling the government to control the rates. It seems to me it is very desirable that there should be a clause in this contract, notwithstanding the Railway Commission, giving the government control of the rates.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

That might be a necessity in a province where they have nobody specially appointed for controlling the rates. But we have a board which, by statute, is given power to investigate the rates of all these companies.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

Frederick Laurence Schaffner

Conservative (1867-1942)

Mr. SCHAFFNER.

It would apply to that company just the same.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

The control of the Board of Railway Commissioners does not apply to a provincial road. A company which gets its charter from the government of Manitoba would be under the control of Manitoba, if of anybody.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

Frederick Laurence Schaffner

Conservative (1867-1942)

Mr. SCHAFFNER.

The control of the traffic.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

That question has been in the courts. The Manitoba government put in a clause like this which has been effective in regulating the rates.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

Frederick Laurence Schaffner

Conservative (1867-1942)

Mr. SCHAFFNER.

This is an exceedingly important matter to the west. We have two railways now running north of Lake Superior which, in all probability, will meet the necessities of traffic for some years to come. Now in view of the trouble we have in the west, the objection I would make to guaranteeing these bonds would be the fact that so far we have not been treated right in respect to freight rates. I do not care so much about passenger rates, I refer particularly to freight; and it is high time that this government, or the Railway Commission, took some steps to regulate freight rates in the western country. It does not make any difference if there are a dozen roads, unless you have competition; we want these roads to be competing lines. We have seen these roadk making an agreement by which they all charge the same freight rates, and so far we have not received much advantage from the new line. The freight rates are too high, and it is time that this government, through its commission or some other means, should take steps to regulate the freight rates in that country.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

Of course the government of the Dominion has given a good deal of consideration to the question of dealing with the tariff of rates on railways. However, to be sure that there should be no discrimination as against Canadian ports, vou will find a clause in this agreement that at no time must the rates via this line exceed the rates via lines to an American port. Now, coming to that ten-mile section, what is called the Hutton Branch, in the vicinity of Sudbury and Sellwood, I may point out that there is already on that ten-mile branch, it being a portion of the line from Toronto, certain securities for which a mortgage has been given. But in order to secure the government on that ten miles, the company is depositing with the government other securities on their Canadian Northern and Quebec line to the extent of $35,000 a mile for this 10-6 miles. Now from Hawkesbury we have a second mortgage. The security on that runs out in twenty years, and then ours becomes the first mortgage. In the meantime the first mortgage bonds on another portion of the line to the extent of $35,000 a mile, are deposited with the government. On the line from Hawkesbury to Rideau Junction, about 61 -4 miles, the same thing occurs. That is a portion of the line chartered from Niagara to Montreal. Certain securities have been issued on the line, including this piece from Rideau Junction to Hawkesbury, and

the company deposits with the Minister of Finance these securities that have already been issued but not sold, to the extent of $35,000 a mile. Although the mortgage is not a first mortgage on this portion of the road, under the guarantee, these bonds that the government will hold are first mortgage bonds, and the government's security, in addition to holding these, comes second on this line. The same thing applies to the 1.1 miles of the bridge. I may say that the security held by the government is, with this exception, a first mortgage from Montreal to Port Arthur, and that it ranks as a second mortgage on the entire system from Niagara to Montreal.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART (Lanark).

What are they allowed to issue on the line from Niagara to Montreal? We require this information to understand our security, which ranks after it.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

I think the amount is $30,000 a mile, if I remember rightly. I am speaking from memory, but I can give that information in a little while.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

Is any part of the line built?

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

The part from Hawkes-bury to Ottawa, 56 miles, is constructed. The bridge is constructed across from Hawkesbury, but it will not answer the purpose without improvement or reconstruction. In addition to this, it is provided that the government may, after two years of operation, pay the interest on these bonds, and if they do this interest is added to the principal and becomes part of the guarantee for which the government has security and must be repaid by the company to the government.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART (Lanark).

Is it ' may ' or ' must '?

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

No, it is ' may.'

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART (Lanark).

We ' may ' only pay?

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

Yes. My own opinion is that we will pay it if you ask me for my interpretation of it. It generally turns out that way.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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CON

Frederick Laurence Schaffner

Conservative (1867-1942)

Mr. SCHAFFNER.

We will pay for some time to come.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM.

Not for long, but for two years. Suppose that what my hon. friend says' actually came to pass, what would be the result? In the first place, it has been said that holding the securities of the line from Niagara to Montreal in part, in order to secure ourselves, we would have to step in and buy the line or satisfy the holders of the first mortgage on that line. Supposing that were the case, we would then have what many people in Ontario think we ought to have-a line1 directly connecting with the Intercolonial railway, running

through the province of Ontario to the city of Toronto, and we would have it cheaper-than any line was ever built for. Suppose that there was a default in the interest on the main line from Montreal to Port Arthur, what would occur? The government would have the road then, too. We would have Halifax, St. John and Sydney hooked up with the Intercolonial railway, and this line clear through to Port Arthur, we would have a through line belonging to the Dominion of Canada, and that is what a lot of people in this country would like. Looking at it in every way, I come back to the point again that Canada cannot lose a farthing, because under this proposition the worst that might happen would be that the company would default, and if they defaulted it would in the opinion of some people be the best thing that could happen to the Dominion of Canada.

Then, we get to the city of Montreal, where the company engage to provide terminals. The city of Montreal is the great commercial metropolis of Canada. It must remain the gateway to a very great extent of the commerce both inward and outward for our country. It is a striking fact, Mr. Speaker, and one for congratulation as well, that the increase in the value of property in the city of Montreal has been as rapid during the last ten years as the increase in almost any city in the whole of Canada, including the western cities. It is due largely to the fact that Montreal is the commercial metropolis, and that the prosperity of Canada as a whole is reflected in the growth of that city. The Canadian Northern engages to provide terminal facilities in Montreal.

Then we come to this other proposition, and it is of some import, I think, Mr. Speaker. At the present moment the Intercolonial railway runs from Sydney, Halifax and St. John, and through intermediate points to the city of Montreal. For forty miles east of Montreal, to what is known as Ste. Rosalie, it runs over the Grand Trunk Tailway. We have a running arrangement with them and also an arrangement for the interchange of traffic. We pay the Grand Trunk Railway Company $140,000 a year in connection with this arrangement.. Last year the Intercolonial railway made, as its share of the traffic received from and, given to the Grand Trunk railway, $1,600,-. 000. The arrangement is a good thing for the Intercolonial railway, for, without being fed with some traffic gathered up somewhere the receipts of the state-owned railway would be materially lessened. In a few years the Grand Trunk railway will undoubtedly be urging that that arrangement be abrogated. They will have the Grand Trunk Pacific, with a branch into Montreal, built by somebody, and they will have the Grand Trunk Pacific crossing at Quebec to Levis and running eastward. They will

urge strongly with some degree of reason that they ought to be allowed, as the Grand Trunk Kailway Company have a deep interest in the Grand Trunk Pacific, to make connections for traffic with the Grand Trunk Pacific. That traffic arrangement is so drawn that this government, or whatever government is in power, can cancel it, but the company cannot.

An hon. MEMBEK. Hear, hear.

Topic:   QUESTIONS.
Subtopic:   CANADIAN NORTHERN RAILWAY-GUARANTEE OF BONDS.
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May 11, 1911