August 16, 1917

LIB

Rodolphe Lemieux

Liberal

Mr. LEMIEUX:

I did not rise to record my vote, Mr. Speaker, because I did not see my pair, the hon. Minister of the Interior (Mr. Roche) present in the House, but as I saw him afterwards voting, I asked the clerk to record my vote in favour of the amendment.

Topic:   WESTERN COAL SUPPLY.
Subtopic:   'COMMONS
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LIB

Edward Walter Nesbitt

Liberal

Mr. NESBITT:

I was paired with the hon. member for Halton (Mr. Henderson). Had I voted I would have voted for the amendment.

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Subtopic:   'COMMONS
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LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

I was paired with the hon. member for Grenville (Hon. J. D. Reid). Had I voted I would have voted for the amendment.

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Subtopic:   'COMMONS
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CON

Harry Fulton McLeod

Conservative (1867-1942)

Mr. McLEOD:

I was paired with the hon. member for Carleton (Mr. Carvell). Had I voted I would have voted against the amendment.

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Subtopic:   'COMMONS
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CON

Avard Longley Davidson

Conservative (1867-1942)

Mr. DAVIDSON:

I was paired with the hon. member for Cape Breton South (Mr. Carroll). Had I voted I would have voted against the amendment.

The motion of Sir Thomas White for the second reading of the Bill was declared carried on the same division reversed:

Bill No. 125 was thereupon read a second time, and the House went into committee thereon, Mr. Rainville in the Chair.

At six o clock the committee took recess1

After Recess.

The committee resumed at eight o'clock, Mr. Rainville in the Chair. v

On section 1-His Majesty may acquire

600,000 shares of common stock.

Mr, GRAHAM: Before His Majesty acquires these shares of capital stock, I think we ought to have some assurance from the Government that contractors who have just claims against Mackenzie and Mann, either as contractors or as owners of the capital stock of the Canadian Northern Railway should be paid. Mackenzie, Mann & Company as contractors construct the road for Mackenzie and Mann as owners. There are various subsidiary companies making up the Canadian Northern Railway system. In the different provinces the road, main line and branches, has been constructed under charters with different names. In Ontario it is called the Canadian Northern Ontario Railway, in Quebec the Canadian Northern Quebec Railway. In British Columbia the road was constructed under a provincial charter, called the Canadian Northern Pacific Railway. These several companies make up the Canadian Northern Railway system. Mackenzie, Mann & Company as contractors constructed most of these lines for Mackenzie and Mann as owners of the railway. My contention is that the Government, in taking over all this property, takes the place of Mackenzie, Mann & Company, contractors, or Mackenzie and Mann, owners of the road, and should become responsible for all their just liabilities. I pointed out on the second reading that, of necessity, the Government will have to assume these liabilities. Several contractors who have performed work in this connection claim that they have not received their pay and have not been able to make any progress during the last two or three years towards getting their money. I know the Government could say in taking over the Canadian Northern Railway system that technically it is not responsible for the liabilities of Mackenzie and Mann as contractors or of any of their sub-contractors. But this is the situation: If the Government is -taking over, under a statute, property which has not been paid for, it certainly should pay for that property; buying the capital stock from the holders of the capital stock does not at all relieve the Government but rather involves the Government in the payment of these accounts. I do not pretend to say that every hatched-up account or every account that can be hatched up should be paid by the Government, but

I do say that where a contractor proves a legitimate claim this Government cannot in equity refuse to pay that contractor for work done on the highway that the government is taking over under statute. If these same men had built a house, as mechanics, they would have taken liens on the house, and no matter who purchased the house the liens would be enforceable. So I say, that although as railway contractors they cannot take liens on this property; in equity the Government ought to pay to these contractors every just claim.

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Subtopic:   'COMMONS
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CON

Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

Would not such items

as the hon. gentleman refers to be deducted from the value of the stock in the ultimate analysis? In that case the money, if paid to the creditors, would really come out of what would be going to Mackenzie and Mann.

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Subtopic:   'COMMONS
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

I care not particularly

where it comes from so long as it goes to the man who did the work and cannot get his pay.

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Subtopic:   'COMMONS
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CON

Hugh Boulton Morphy

Conservative (1867-1942)

Mr. MORPHY:

Does the hon. gentleman not think it would be so actually?

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Subtopic:   'COMMONS
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

Technically and legally

I suppose that would be the way to do it. In other words, the account might be treated as if it were garnisheed by the contractor, and the amount payable for the capital stock be reduced to that extent and the money paid to the contractors.

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Subtopic:   'COMMONS
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CON

John Webster

Conservative (1867-1942)

Mr. WEBSTER:

How about the contractors from Brockville to Westport?

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Subtopic:   'COMMONS
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LIB
CON
LIB

George Perry Graham

Liberal

Mr. GRAHAM:

That road was sold under mortgage and would hardly come under this proposition. I may say, in response to the hon. member for North Perth (Mr. Morphy), that if the arbitration would say that the capital stock had no value, then, unless, the Government were prepared to assume this liability for property that they are taking possession of, that *had not been paid for, the contractors would not get their money.

There is more than one account of this kind. For several years contractors have been placing their claims before me and asking me if I could get a settlement from Mackenzie and Mann. I have no power to get a settlement of their claims, but I have presented some of them to the com-

pany. I have in mind one claim of a firm that built some 23 miles of railwav between March and Arnprior. The Government has all the particulars of this claim. An effort has been made for the last four years to get payment of this claim. There was some $18,000 of a hold-back kept until recently when $5,000 was paid. The contractor has been unable to get a settlement although the work .has been completed and he has been asking for payment of his whole account.

He has not been paid for his work at all. Much of this work has never been placed in any estimate over which there could be a dispute by the Canadian Northern or Mackenzie and Mann. There has been no estimate made for it; they just declined to make the estimaite. The firm of contrac-ors claim $37,000 of a balance due them. I shall read one statement of this claim to the House, and I think it is a strong claim -at least it ought to be settled. Procrastination of a claim of this kind, without refusal to settle, but holding out hopes that it would be settled in some way, is the most exasperating thing in the world. The statement reads as follows:

In reference to statement of claims herewith we would point out that since the fall of 1913, when the work in question was completed, we have made many appeals to the Canadian Northern Ontario Railway Company, both direct and through J. P. Mullarkey, for a settlement of our account and an adjustment of our claims. Not only have they shown no disposition at any time to investigate and consider our claims for shortages in the estimates returned for the work done, hut for three years they have withheld payment of over $18,000 of a ten per cent hold-back, which was due and payable thirty days after the completion of this work. About a year ago, however, we received an advance of $5,000 on account of this hold-hack, leaving a balance still of $13,679.87 as per statement herewith.

As to amount of $20,289.73 additionally claimed for work done and for payment of which no provision has been made, we have from time to time particularly urged that they send an engineer over the work for the purpose of conscientiously checking up our claims at the various points. The only advance that was made towards this end, however, was a flying trip made over the road by Division Engineer L. E. Rowley, on a motor car, and we have absolute proof that no more serious attempt than that was made to verify the legitimacy of our claim.

Early this spring, then, we decided to em; ploy an engineer ourselves, to re-measure the work and having advised both J. P. Mullarkey and the C. N. O. Railway Company of our action, invited them to send one of their own engineers along with ours and at the same time requested that they supply us with their engineer's cross-sections of the work, but no notice was taken of either invitation or request ; so that it was necessary for us to go

ahead with our re-measurement without their co-operation or assistance. This we did, and the enclosed statement of account and claims is compiled from our own engineer's notes and cross-sections conscientiously and conservatively made.

This inspection work, re-inspection, and re-measurement, was made by the contractors themselves, the Canadian Northern declining, though requested, to send an engineer along to check it up, and see if the statements were correct. I have another statement, which says:

We would like to call your particular attention to the fact that there are a number of items that constitute work done for which there is absolutely nothing in the estimates to cover.

That is, work performed by this contractor for which no account has even been paid, but the work stands there, being taken over by the Government now. There is no question as to the amount. They have never received a cent for this part of the work, and nothing has ever been put in the estimates. In this statement, from which I have just quoted, I find the following :

These include about six different sections of side barrow excavation, among which a section of 1,300 feet, station 955-968, might be particularly referred to; 71 cubic yards concrete pedestals for trestle at station 799; 20 cubic yards dry masonry for culvert at station 1189 ; 13 cubic yards dry paving in culvert at station 926, not to speak of the many sections of clearing and grubbing noted.

I have a further statement here which shows amount due on ten per cent holdback, $13,679.87. As a matter of fact, this company had this much cash in their hands belonging to this firm of contractors, and although the work has been completed, the contractors assert they have not been able to get the company to say whether it has been completed or not, but they still keep the hold-back, and there the matter rests.

Topic:   WESTERN COAL SUPPLY.
Subtopic:   'COMMONS
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LIB

Edward Walter Nesbitt

Liberal

Mr. NESBITT:

Were these gentlemen

sub-contractors of Mackenzie and Mann or of the railway?

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Subtopic:   'COMMONS
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

The contract was through Mr. Mullarkey, who is the chief engineer of Mackenzie and Mann, the main contractors.

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Subtopic:   'COMMONS
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LIB
LIB

George Perry Graham

Liberal

Mr. GRAHAM :

The way Mackenzie and Mann operated was this: They took the contract as contractors; J. P. Mullarkey is the chief contractor of Mackenzie and Mann, and, to all intents and purposes, is Mac-

kenzie and Mann. I think he took the contract foT the line between Ottawa and Toronto.

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Subtopic:   'COMMONS
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LIB

Frank Oliver

Liberal

Mr. OLIVER:

Was Mr. Mullarkey subcontractor under Mackenzie and Mann?

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Subtopic:   'COMMONS
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LIB

George Perry Graham

Liberal

Mr. GRAHAM:

I do not know whether

he would be a 6ub-contractor. He does the work for Mackenzie and Mann, under their contract. In the statement of moneys claimed by these contractors I find the.following:

Claims for under allowances in prices,

etc $3,155.60

Claims for shortages in quantities returned in estimates 20,289.73

The total claim amounts to $37,125.20. I am not going to read the details of each of these items, or put them on Hansard. They include clearing of lands and other items. To my mind, this claim seems to be absolutely right, but, if it is not right, the Government, having taken possession of the road, should at once ascertain whether this is a correct statement of claim or not, and the matter should be settled. It is an outrage, when a man has to put up a certain amount of money for carrying out a contract, and when he claims it is all completed, and wants the engineers of the company for whom he has done the work to go over it with him, see if it is completed, and have a settlement, to be told that he must stand to one side, and get no satisfaction. To my mind, the Government cannot escape the responsibility of paying any just claim that may be made for the construction of the road, either against Mackenzie and Mann as contractors, or against them as owners of the capital stock, because, to all intents and purposes, so far as the public is concerned they are one and the same thing. I do not know that I can say anything more, but I think that, in order that there may be satisfaction among the men to whom Mackenzie and Mann owe money, or who have claims against them, the Government should announce that it will be their policy to pay any just claims that are found to exist against Mackenzie and Mann as contractors or against them as owners of the capital stock.

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Subtopic:   'COMMONS
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LIB

Charles Murphy

Liberal

Mr. MURPHY:

Up to the time my hon. friend from Calgary (Mr. R. B. Bennett) spoke this afternoon, the Government, as I recall their attitude since this discussion opened, did not manifest any disposition to accept suggestions by way of improvement of the method or the details of carrying out the transaction to which the Bill now before the committee relates. However, after the hon. gentleman from Calgary had spoken, and had delivered what I think, in the opinion of this House, was one of the most incisive, complete and masterly analyses of any measure ever submitted to Parliament, the Solicitor General (Mr. Meighen), who followed him, realized the position in which the Government and its Bill had been placed by that speech. The Solicitor General proceeded to indicate that in regard to certain matters of principle, and in re-gard-to other matters of detail, the suggestions made by the member for Calgary would probably receive consideration. The Minister of Finance will recall that a complaint, voiced, perhaps, with more effectiveness by the member for Calgary than by any other speaker in this discussion-although he was not by any means the only one who voiced it-was made as to the incompleteness of the information laid before the House with regard to the Canadian Northern Railway Company. The member for South Renfrew (Mr. Graham) has dealt with one branch of that aspect of the discussion. He has pointed out that there are a number of unsettled contractors' claims. He has argued that these contractors, having built the road which is to be taken over by the Government, having put up some of their own money in connection with that work, should be paid for their services and that the Government should assume responsibility for the debts so owed these contractors. I have knowledge of some of those claims. I recall some claims that were submitted to me by contractors who did work on the Sudbury-Port Arthur line, a branch of the Canadian Northern system which was constructed by the Mackenzie and Mann company. So far as I know, these claims have not yet been settled. One claim at least in connection with the construction of the telegraph line along that system has not yet been settled; there may be others. I could give the details and verify these before the Bill goes out of committee. But if the minister will admit the principle that the Government should pay these men, who have given value to the company, then we could postpone the discussion of the details.

Another very important matter was touched upon by the member for Calgary, to which allusion had not previously been made, and which the hon. Solicitor General found it convenient to overlook in what he described as his reply. I refer to the member for Calgary's enumeration of the existing liabilities in connection with unfinished

contracts for which the Government will become liable under the terms of their proposed legislation. Let me direct the attention of the minister and of the" committee to the situation in that regard as it exists in British Columbia in connection with the Canadian Northern Pacific Railway. A news item in the Vancouver Sun of August 11, 1917, is as follows:

Viotoria, Aug:. 10.-The following telegram sent by Hon. John Oliver, minister of rhjil -ways, to Sir R. L. Borden to-day:

"British Columbia has guaranteed the principal and interest on forty-seven million nine hundred and seventy-five thousand dollars of Canadian Northern Pacific railway company bonds and has contracts obligating the railway company to expend twenty-two to twenty-five millions to complete. Are the province's interests being protected? Please reply quickly.

The under-mentioned reply from Sir R. L. Borden has been received :

"The Government proposes to acquire all the capital stock of the Canadian Northern railway company which owns all the stock of the Canadian Northern Pacific railway company. Copy of the bill now before Parliament is forwarded to-day for your consideration. The company's obligations will remain as they were before such acquirement."

The newspaper item proceeds:

By Sir Robert Borden's telegram it will be seen that the Dominion Government assumes all the Canadian Northern railway's obligations in respect to the Canadian Northern Pacific railway, both financial and as to the completion by the latter railway of its existing contracts.

If the statement of the Premier of British Columbia be correct, there is an obligation of between $22,000,000 and $25,000,000. I submit that this committee is entitled to full information, not only in regard to this particular outstanding obligation, but also in regard to all other obligations coming within that category. That is information which, I think, should have been regarded as included in the general request for information made by hon. gentlemen on this side of the House. That is the second point upon which I should like the hon. minister to furnish the committee with details before we proceed to a consideration of the Bill.

I wish to refer to another matter in connection with which the committee is entitled to the fullest information. We have had discussion as to the pledgees of the stock, the holders of bonds and other individuals or interests who will be affected by or who are bound to become beneficiaries under this legislation. Information was asked from the minister as to the identity of these individuals and interests, but so far as I am aware that information has not yet been given to the committee. I

wish to recall the incident through which the Minister of Finance was brought into public life. I refer to the letter that was signed by the eighteen gentlemen in Toronto in the spring of 1911 against reciprocity. The minister Was one of those eighteen gentlemen. The complete list of the eighteen is given in the Canadian Annual Review for 1911. _

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Subtopic:   'COMMONS
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August 16, 1917