July 18, 1917

LIB

Edward Walter Nesbitt

Liberal

Air. NESBITT:

We have no proof of

that. We just had a statement to that effect. The solicitors for the Hydro-Electric and for the city of Toronto made that statement but they furnished no proof to the committee that it was true. They only surmised that might be true. But, in the meantime, they ask us to enact clause 5 to take away the rights of the people who put their money into these bonds. I see no reason why Toronto should not buy

it these corporations if they want to take them over.

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

They will buy them

Out, but they do not want to buy out the Electric Development Company.

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LIB
CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

That is not part of the agreement. They (are buying out the Toronto Electric Light Company and this is an .attempt to get in there in perpetuity and to secure an eternal franchise by improper means.

Mr. -NESBITT: That is purely a surmise. They have furnished no proof that that statement is correct. In the meantime they ask us to enact ia clause to do away with a statute passed by this Parliament. They said that Parliament did not know what it was doing. I believe that the Parliaments that have gone before knew what they were doing just as much as we do now. I have no doubt that the .people of Toronto were very glad to get that, power transmitted to them at that time. Now they have other power and they want to cut off the rights of this company which were acquired 10 years ago.

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

The Toronto Electric Light Company got their franchise in To-

ronto long before the Niagara power was developed. They developed their power by coal. Then the Toronto Niagara Power Company had a franchise for Niagara. Trie franchise which they got was only for a certain number of years. The Power Company conceived the idea that if they got control of the Toronto Electric Light Company they could have a perpetual franchise and develop electricity at Niagara. That is a different thing altogether. If this Parliament gave them that right they gave them something which was unfair. The municipality has the right to control its own streets and if we did wrong once there is no reason why we should perpetuate it.

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LIB

Edward Walter Nesbitt

Liberal

Mr. NESBITT:

The other part of the clause makes it impossible for anybody to interfere with the streets of a municipality in the future. I believe that the municipality has the right to control its own streets

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Air. COCHRANE:

Ever since I have had anything to do with the Railway Committee there has been a clause in every Bill protecting ' the rights of the municipality. For the last six years this Parliament has not given a charter to any company carrying with it the right to interfere with the streets of a municipality. We have put in a special clause to protect the municipality. In this we are doing nothing but what is fair and just to the people.

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LIB

John Howard Sinclair

Liberal

Air. SINCLAIR:

I sympathize with the views of the hon, member for Carleton, N.B. (Air. Carvell) and the hon. member for North Oxford (Mr. Nesbitt) and I voted against this clause in committee. I am still of the same opinion. I am especially opposed to that part of the section which . has a retroactive effect. I agree with the minister that a city ought to have control of its own streets. But when we go back for ten years for the purpose of. taking away from a company right, which they acquired in a proper and legal way from this Parliament, and which they have exercised ever since, I think we do something for which there is no justification. Their title to the rights which they claim was sustained by the highest court in the Empire, the Privy Council. We are undertaking in the latter part of this section to take away and nullify the rights that were given the Toronto and Niagara Power Company under a decision of the Privy Council. That is confiscation. While I agree with the minister that in the future the city ought to have the right to control its own streets, and while I would vote for that, I

do not agree with him that we ought to put this retroactive clause in because it would mean taking away a right that was given to this company by an Act of Parliament, and a right which has been sustained by the decision of the highest court in the realm. There is no doubt that it is confiscation. A letter explaining the position was written to the chairman of this committee which I do not think has yet been placed on Hansard. It is as follows:

National Trust Company, Limited,

Toronto, May 26, 1917i Joseph E. Armstrong, Esq., M.P.,

Chairman of Committee sitting on Revision of Railway Act,

Parliament Buildings,

Ottawa, Ont.

Dear Sir,-

We are trustees under a bond mortgage dated March 1, 1903, securing an issue of bonds of The Electrical Development Company of Ontario, Limited, maturing in 1933. The total amount of this issue now outstanding is $9,669,500, and of this amount approximately $2,500,000 were issued directly to the British public, and an additional $5,014,000 is held by the British. Empire Trust Company, Limited, of London, England, as security for the debenture stock of the Toronto Power Company, Limited, which debenture stock was issued to the British public. The practical situation, therefore, is that the loss which would be occasioned by any impairment of the security for the bonds of The Electrical Development Company of Ontario, Limited, would primarily fall upon British investors.

As trustees under the said bond mortgage, we hold here as part of the mortgaged premises the whole of the $1,500,000 of bonds and practically all of the capital stock of the Toronto and Niagara Power Company. By reason of these holdings, the bondholders of the Electrical Development Company are entitled, as one of the most important parts of their security, not only to the benefit of the physical assets of the Toronto and Niagara Power Company represented by its present and future transmission and distribution lines and other properties but also to the benefit of all its franchises, rights and corporate powers.

The Toronto and Niagara Power Company is a Dominion company incorporated by Chapter 107 of the Statutes of Canada, 2 Edward VII (1902). We are advised that under its Act of Incorporation'the Toronto and Niagara Power Company has, amongst other rights:

(a) The right to supply hydraulic, electric or other power by means of cables, machinery or other appliances;

(b) The right to acquire, construct, maintain and operate works for the production, sale and distribution of electricity and power for any purpose for which such electricity or power can be used ;

(c) The right to construct, maintain and operate lines of wires, poles, tunnels, conduits and other works In the manner and to the extent required for the corporate purposes of the company, and to conduct, store, sell and supply electricity and other power and with such lines of wire, poles, conduits, motors or other conductors or devices to conduct, convey, furnish or receive such electricity to or

from any person at any place, through, over, along or across any publie highway, bridges, viaducts, railways, water courses, or over or under any waters, etc., and

(d) To erect poles, construct trenches or conduits or do other things necessary for the transmission of heat or light as fully as the circumstances of the case may require, provided the same are so constructed as not to incommode the public use of streets, highways or public places, or to impede the access to any house or other building erected in the vicinity thereof, or to interrupt the navigation of any waters, the company, however, being responsible for all damages which it causes in carrying out or maintaining any of its works.

The powers of the Toronto and Niagara Power Company including those above mentioned, may be exercised without the consent of any municipal corporation, the right of the company to so exercise them having been, as we are advised, affirmed by the Judicial Committee of the Privy Council In the case of the Toronto and Niagara Power Company v. Corporation of the Town of North Toronto, 1912, A.C. page 834.

"We have been apprised that your Committee is now considering Bill No. 13, an Act to consolidate and amend the Railway Act, certain provisions of which, if enacted in the form in which they appear in the copy of the Bill which we have seen, would seriously limit and impair the rights, powers and privileges of the Toronto and Niagara Power Company, and would correspondingly affect the security for the bonds of The Electrical Development Company of Ontario, Limited. *

It is, of course, obvious that the value of the undertaking of the Toronto and Niagara Power Company depends wholly on its ability to market the power which it transmits from Niagara over its transmission lines, and an impairment of its ability to effect such distribution would, therefore, result in serious loss to the holders of the bonds of the Electrical Development Company.

As trustees for the bondholders of the Electrical Development Company of Ontario, Limited, under the circumstances above set out, we beg respectfully to submit that the provisions of the draft Act to consolidate and amend the Railway Act, above referred to, should be so amended as not to impair or limit the charter rights of the Toronto and Niagara Power Company, or that the Toronto and Niagara Power Company, should be excepted from their operation, so long as any of the bonds of the Electrical Development Company of Ontario, Limited, remain outstanding.

Tours faithfully,

Trust Officer^

I have no brief to act for any of these parties. I never had any consultation with any of them. I never heard anything in connection with this question except what I heard publicly before the committee. My objection is that we are confiscating a right to which this company is legally entitled. I am surprised that the minister is making such a proposal to the House. I have great faith in his fairness, and I was able to agree with him on nearly everything in connection with this Railway

Act white we were considering it, excepting this one thing. I cannot make up my mind to agree to the course pursued by the minister in regard to this matter, and I want to put myself on record as opposed to it, and to vote against it.

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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

I am not sure that there is any reason why I should take up the cudgels for Toronto, but I want to state the other side of the case. The minister has briefly outlined the situation, but it must not be forgotten that in Ontario, under a Provincial Act, there has been undertaken a work that has not been undertaken elsewhere. The Hydro-Electric Commission, acting by virtue of a statute of Ontario, has undertaken and put in force what is without doubt the greatest public work of this kind anywhere in the world, controlled by the province and by the municipalities. It can be understood that in connection with such a scheme as that difficulties will be met with in the way of vested rights held by companies, and it must not be forgotten that privileges granted to companies by this Parliament and by the Legislature of Ontario previously, never contemplated the situation that has arisen; and, in justification of this amendment and of some very drastic legislation, perhaps in some instances too drastic, passed 'by the Ontario Legislature, it must be remembered that the object of all this was to remove obstacles from the way of the full development of the Hydro-Electric system, in a large measure that accounts for this amendment, although the explanation may be a little intricate and might not be of interest to this House. In view of the object contemplated and of what has been accomplished and what is to be accomplished in the future in the way of bringing electric power not alone to the cities and towns but to the doors of the farmers throughout the country, I am prepared to go a long way in voting for legislation that will remove impediments from the path of that great enterprise.

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LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

My hon. friend talks of the great work the Hydro-Electric has done, and with that I have no quarrel. He talks about the objects of the Hydro-Electric, and no doubt they are the very best in the world. But the Hydro-Electric Commission are not the only people in Canada who are taking electric power to the people in the cities and towns, and to the farmers as well-and others are delivering it a great deal cheaper than the Hydro-Electric Commission. They are not the only philanthropists in Canada. Because Ontario as a province is trying to work out a great scheme which they say

will be for the benefit of the people of Ontario, does that give them a legal right to step in and confiscate property which men have honestly acquired and for which they have paid good money? A public corporation like the province of Ontario should be the last class of people to do a thing like this. I could understand a private corporation attempting to do it to get the better of a competitor. But here is the great province of Ontario, according to the statement of the hon. member for Renfrew (Mr. Graham), wanting to confiscate private property and to create class legislation. If they want these properties why do they not buy them and treat the owners as any white man would?

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

Why do not your people carry out their agreement?

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LIB
CON
LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

I have never spoken to a man about this. I was not even here when Mr. McCarthy presented his case. I have never had a conversation with any one with respect to the Toronto Electric Company or the Toronto-Niagara, or anything in connection with this case. I am protesting against this as a matter of principle, and trying to point out to the minister the terrible consequences that may follow legislation like this, and, worse than that, surreptitiously smuggling it in in a general Act.

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CON
LIB

Frank Broadstreet Carvell

Liberal

Mr. CARVELL:

Putting it in at the end of

a general clause. By section 374, subsection 1, "company" is defined. Then subsection 2 provides as follows:

(2) Notwithstanding anything contained in any Special or other Act or authority of the Parliament of Canada or of the legislature of any province, the company shall not, except as in this section provided, acquire, construct, maintain or operate any works, machinery, plant, line, pole, tunnel, conduit or other device upon, along, across, or under any highway, square or other public place within the limits of any city, town, village or township, without the consent of the municipality.

Subsection 3 provides:

(3) If the company cannot obtain the consent of the municipality or cannot obtain such consent otherwise than subject to conditions not acceptable to the company, the company may apply to the Board for leave to exercise its powers upon such highway, square or public place.

The board holds an investigation and makes an order which is binding on the company and on the municipality. That is

the general law of Canada. That is the law that hereafter will apply to every corporation in Canada incorporated by this Parliament. And then what? They stick on two clauses after that, I say, surreptitiously- and I use the word advisedly-two clauses which no man in the world would understand unless the special circumstances were brought to his attention. Toronto is not mentioned; the Toronto Electric Light is not mentioned, the Toronto-Niagara is not mentioned, the Hydro-Electric is not mentioned-one of the finest pieces of underground grafting I ever heard in my life. And the Minister of Railways wants this Parliament to enact that and make it the iaw of the land. It is an outrage, nothing short of it.

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CON

George Henry Barnard

Conservative (1867-1942)

Mr. BARNARD:

I consider this legislation objectionable on two grounds. I do not pretend to speak from an intimate knowledge of the facts, but from a hasty perusal of the proceedings which took place before the Special Committee on this Bill, it appears to me that this particular company whose rights are in question obtained certain charter rights in connection with the city of Toronto from Parliament. Those rights were the subject of litigation, which was carried to the Privy Council, and in the result the rights of the company were upheld. On the faith of that decision I presume the company has made certain expenditures. It is important, if those rights are going to be taken away, that before they are so taken away the company should receive compensation. I object to subsection 5 upon another ground. If this Parliament sees fit to take certain rights away from a particular company, the Toronto company, let them say so.

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LIB
CON

George Henry Barnard

Conservative (1867-1942)

Mr. BARNARD:

But to frame a general clause and say that every company which had charter rights since 1906-

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CON

Francis Cochrane (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. COCHRANE:

Thi is not for Toronto alone. It is for Ontario.

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July 18, 1917