May 15, 1916

?

Mr REID:

Only in . so far as the maximum amount to be paid is concerned; and I think it is right, in the interests of the Government to do so, because we say that the actual cost is not to exceed a certain amount. The statement is made to the

Government that there has been a very much larger amount than this expended on the road, and for that reason we say: We will limit the amount to this maximum. If, when the statements are put before the judge of the Exchequer Court, he is of the opinion that there has not been this amount expended on these Toads, then he has power to fix a lower price: That is the reason we limit the maximum.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

Wilfrid Laurier (Leader of the Official Opposition)

Liberal

Sir WILFRID LAURIER:

Has my hon. friend taken any steps to verify the figures given to him of how much has been put into the road? He says it has been stated that more than this amount has been put into it. I presume that statement has been made by the company, that they have expended more than appears. Has any audit been made, and have these figures been verified?

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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CON

John Dowsley Reid (Minister of Customs)

Conservative (1867-1942)

Mr. REID:

No, we have not gone that far because we have the figures showing what has been paid. We feel perfectly satisfied that, as the whole matter has to come before the Exchequer Court, ',he court will take good care to see that that amount has actually been expended or has gone into the road; and for that reason it would hardly be necessary for us to go that far. We have confidence in the Exchequer Court carrying out the provisions of the Act.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

The Exchequer Court, tc put it shortly, was established to decide claims of contractors. A contractor does not go to the Exchequer Court and say: I spent so much. The Exchequer Court decides certain disputes under his contract. If the Government were expropriating a building, the Exchequer Court would decide what the building was worth, not what it cost for its construction, although that might be an element in the evidence. What I mean by tying up the Court is that the Government is compelling it to take what was put into the road as a basis, even if one-half of what was put into it has floated away. Suppose the road had been constructed, and a million dollars worth of it had been washed away.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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CON

John Dowsley Reid (Minister of Customs)

Conservative (1867-1942)

Mr. REID:

They have got to reproduce it.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

That is all right. My hon. friend ties up the Exchequer Court to give a decision based on the amount that was invested. Unless in their judgment value was received for that investment, the basis is no good at all. Suppose the road were extravagantly built, supposing, for reasons that occur sometimes in railway construction, it cost the company one

million dollars and they got value for only one-half a million dollars, there is no provision made for an allowance for that in the Exchequer Court. The judge must take into account what they expended. The basis ought to be the value of the work that is there, no matter what it cost. That, I think, would be the simple way. The Exchequer Court should not be tied up as is here proposed.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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CON

Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

Does the hon. member mean the value based upon the cost at the time of construction, or what, if it were constructed to-day, that same work would be worth?

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

The judge ought to have full liberty to take everything into consideration.

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CON

Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

Then you are opening it up to a dangerous point.

Topic:   SUPPLY.
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

If the Government is going to pay the value and no more or less, the judge ought to be the one to determine what the value is. If you take the road as a going concern-my hon. friend need not be alarmed-portions of it have a high value. I am pointing out that the minister is tying up the Exchequer Court on a certain basis on which the court will bring in its findings, and that is not a correct basis; it ought to be the value of the property at present, no matter what it cost.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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CON

Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

My idea is that the present value might be a great deal more than its cost when constructed; and if it is opened up in that way, the country may pay a great deal more than the money put in to build the road.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

I can assure my hon. friend that will not be the case.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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CON

Auguste-Charles-Philippe-Robert Landry (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

I wish to remind hon. members that the question before the House is the second reading of the Bill.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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CON

Arthur Meighen (Solicitor General of Canada)

Conservative (1867-1942)

Mr. MEIGHEN:

I think I appreciate the point raised by the hon. member for South Renfrew (Mr. Graham). His contention is that no special limit should be placed upon the Exchequer Court in determining the value; that the Exchequer Court should be governed by the same conditions as it is governed by in other matters when values come before it for determination. It is well known that, under the law governing expropriations, the Exchequer Court considers the various elements, all in varying degree, depending on the case that happens to be before it; sums those elements up and

reaches a valuation. What these elements are and what the law is, there is no need to dilate upon; it is well known to hon. gentlemen opposite. If in this case no basis were provided for the Exchequer Court, it would be difficult, if not indeed impossible, to arrive at a determination. As the hon. minister has stated, the intimation that a basis of value would be desirable came from the Exchequer Court itself. I can quite understand why such an intimation should come in this case. Ordinarily the basis of allowance by an Exchequer Court, or indeed by any court, on an expropriation; is the damage .done to the parties from whom the property is expropriated, and the damage would be the value of the property to that party; the loss he suffers by its severance from him and by its being taken to become the property of the expropriator. It naturally would appear to the judge of the Exchequer Court that in this case it would be very difficult to have any means of arriving at a basis where all these elements would come in. Here is a road for example, the Quebec and Saguenay, 62:8 miles, which runs through a country yet unprovided with railways, which has been built at a very great expense on account of the character of the country through which it runs. That railway if it were completed, would serve a certain population that exists there to-day. I do not know how the value of that railway could be estimated. It is a matter of potentiality. It is a matter of estimating the future, of estimating, not only the conditions that prevail now, while the railway is in embryo, but of estimating what may be the prospects of the road as conditions develop by the operation of the railway itself. It may be that the railway handled by the company in whose hands it is, would be a losing proposition for a time. One man might say that it would be a losing proposition always; another might say differently. There would be nothing of a tangible nature to go upon, because it is a matter, not of existing conditions, but of potentialities that are buried in the nature of the conditions themselves.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

Daniel Duncan McKenzie

Liberal

Mr. McKENZIE:

I understand that we

are not expropriating this railway, but taking over the road for what it may be worth?

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CON

Arthur Meighen (Solicitor General of Canada)

Conservative (1867-1942)

Mr. MEIGHEN:

Yes.

Topic:   SUPPLY.
Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

Daniel Duncan McKenzie

Liberal

Mr. McKENZIE:

It is not in the nature of an expropriation but of a purchase?

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CON

Arthur Meighen (Solicitor General of Canada)

Conservative (1867-1942)

Mr. MEIGHEN:

That is true in one

sense. While I am on the point, I may answer the hon. gentleman in full. The Act of 1915, under which we are empowered to act, gives the minister the power to take over a road, and under a clause in that Act, he may exercise all the powers of expropriation. That power is given in a clause on the second page of the Act, if my hon. friend will turn it up. The minister is not required to exercise the powers of expropriation, but he has the powers of expropriation vested in him by that statute.

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Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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LIB

Daniel Duncan McKenzie

Liberal

Mr. McKENZIE:

You are not going

to exercise them here?

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CON

Arthur Meighen (Solicitor General of Canada)

Conservative (1867-1942)

Mr. MEIGHEN:

Oh, yes; we will have the power to exercise them as soon as this Bill passes, because we take the roads under the provisions " of an Act to amend the Government Railways Act and to authorize the purchase of certain railways." Taking the road under that, we get the powers of that Act, and we would be able to exercise the power of expropriation. But whether we choose to exercise it or not, or whether we choose to make an agreement by way of purchase with the necessary provisions for the protection of the Government, and then refer that agreement, either under the Act of this session, or simply under this Act, the [DOT]course before the Exchequer Court would be to determine the value of the road, the valye of what we get, and under the very peculiar circumstances that prevail here, expropriating a railway, part of which is only a railway in embryo, the ordinary rules would he very difficult, indeed, of application. Consequently, it appeared to the judge of that court that a basis of valuation was essential.

Before I deal with the method of arriving at a basis, I may say that the words I have used so far apply pretty accurately, also, to the first thirty miles of the Montmorency and Charlevoix road. That road also has a certain value now. But it may have a much greater value when the addition is completed, the Quebec and Saguenay railway, which connects it up with Naim Falls. It may have an added value by virtue of the possibility of the extension of that line to St. Catherines Bay, which is claimed to be a winter port.

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Subtopic:   QUEBEC AND SAGUENAY AND LOTBINIERE AND MEGANTIC RAILWAYS ACQUISITION OF BRANCH LINES.
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May 15, 1916