*ask for it by the Vancouver Board of Trade. It is not my purpose to continue this discussion. I repeat, I hope my hon. friend will have the good judgment to withdraw his resolution at this time rather than have it suffer defeat at the hands of the House.
Mr. JOS. T. SHAW (Calgary West): The question of freight rates is one of the most interesting and I think all members will agree with me, one of the most complicated questions which might well be brought before this House for its consideration. With the political arguments which have been advanced I have little concern, but with the desire to secure legitimate reduction in freight rates so far as the western provinces are concerned I have every sympathy, and I am prepared under the proper circumstances to lend my every support. We in western Canada, especially in the interior provinces do, I think it must
be admitted, suffer severely from excessive freight rates. But I recognize, that it is a very difficult and a very complicated problem. It is one which requires consideration, not for days, but for months by competent bodies to arrive at a proper conclusion.
The double.-barrelled resolution introduced by the hon. member for Burrard (Mr. Clark) this afternoon has two purposes: First of all he wants to eliminate the so-called mountain rate. Secondly in some mysterious way which I cannot comprehend, he desires to grant the benefits of the Crowsnest pass agreement to all the basic commodities produced in every part of Canada.
With regard to the first question, the mountain scale, or differential as it is sometimes called, hon. members will recollect that this differential has been in existence ever since the Canadian Pacific railway was constructed. I do not know where it came from. I suppose it was introduced by way of analogy from the American states to the south, but in any event in 1914, I think for the first time, it was placed upon a rational, logical basis. The then chairman of the Railway Commission, Sir Henry Drayton, in the judgment of the court, gave as his reason the high cost of construction of the railway and the high cost of operation, and. let it be said that the British Columbia counsel who were associated with that case concurred with that particular view, that is, that there was a higher cost of railway construction in British Columbia, and in addition a higher cost of railway operation. I am satisfied that any hon. member of this House who has ever travelled over the Canadian Pacific railway in the province of British Columbia in the winter time or in the spring or fall cannot but have come to the conclusion that both these contentions are absolutely sound and absolutely justified. In that judgment the then chief commissioner of the Railway Board held that the differential was not only just, but that it was necessary. To that decision I have not the slightest objection. Not only did the judgment do that but it recognized the existence and the economic necessity of distributing centres not only in British Columbia but also in the adjoining province of Alberta. As a result of that long existing differential confirmed in effect by that judgment of the Railway Commission, distributing and jobbing houses have been built up in several centres in the province of Alberta. We have a large number of such institutions in Edmonton, we have them in Calgary, in Macleod and Lethbridge. Hundreds of thousands of dollars have been invested on the strength of that decision, and
hundreds of men have been employed. Now is this House, on a casual consideration of this question, going to imperil that investment, because that is exactly what would be done if this mountain rate were ruthlessly removed at the present time, and at the same time without giving to the consumers in Alberta or elsewhere any adequate compensation for such a removal.
My hon. friend did not catch my remarks. I said the elimination of this mountain rate will imperil perchance-I am not suggesting that it will entirely-the existence of these institutions, and at the same time I suggest it will not give the benefit to the consumer which some people suggest.
I am anxious to see competition; I am anxious that primarily consumers shall get the benefit of it.
Owing to the various rate increases this mountain differential was exaggerated; I think-that British Columbia did so suffer as a result of these increases. In 1921 British Columbia took its case before the Railway Commission. That case, as hon. members will realize, extended over a period of some two or three months. During its progress much evidence was heard, much argument was given, and in every possible way the case received the fullest consideration. I think some twenty-six different witnesses were heard from the city of Vancouver alone. Representatives were also heard representing Kamloops, Calgary, Edmonton, and all the western centres. It was pointed out by the Vancouver representatives that the rates were so extremely burdensome, that the Vancouver industries and industrial enterprises could not do business under them. In the very next breath some of the witnesses told the commission that industries had increased in Vancouver five-fold since the year 1912; that there were 1,200 industrial enterprises in Vancouver at that time, and that new industries were being added evqry day. So that in one breath the witnesses told us about the tremendous rate burdens from which they were suffering, and in the next breath they declared they were making this very substantial progress-a progress, I suggest, which cannot be paralleled by perhaps any other 124}
comparable centre in Canada. The Railway Commission having heard that evidence came to the conclusion that the mountain scale should be cut in half. Subsequently, British Columbia appealed from that judgment and that appeal is the one that is now under consideration by the Privy Council.
The hon. member for Vancouver Centre (Mr. Stevens) has spoken of the very grave discrimination from which British Columbia suffers. I have no complaint to make with regard to the presentation of British Columbia's case. I have every sympathy with that province in its demand for lower freight rates; but I do ask the people and the representatives of British Columbia not to put Alberta in; exactly the position they are asking to be relieved from. Let me illustrate. Under the conditions existing at the present time, owing to the fact that Vancouver has a special transcontinental rate compelled by water competition and although it is 640 miles farther west than Calgary we find that on all commodities shipped from Montreal, and similar places east, Vancouver has a much lower rate than Calgary enjoys. There is a very grave discrimination against Calgary so far as west bound products are concerned. I am not going to trouble the House with a whole list of these discriminations, but I do want to give just one or two illustrations which may be of some interest. Take the matter of bars, iron and steel bars, shipped from Montreal to' Calgary, a distance of 2,240 miles. We have a rate on carload lots of 192 cents per hundred pounds. The rate from Montreal to Vancouver for the same material, a distance of 2,882 miles, is only 65 cents per hundred pounds by carload lots. Shipping the same goods in less than car-load lots to the city of Red Deer which, mark you, is some 95 miles north of Calgary we find that these goods can be shipped from Montreal, through Calgary, to Red Deer, a distance of 2.335 miles, for 222 cents per hun-died pounds, whereas similar goods shipped from Montreal to Vancouver and back again, through Calgary, to Red Deer cost 185 cents per hundred pounds. The same situation exists with regard to wire rods, and I could go on and give several instances of such unjust discrimination in so far as the distributing centres of Alberta are concerned. If you take off this mountain differential, then you discriminate to just that extent further against the distributing centres in Alberta which have been largely built up on the faith of the judgment of a former Chief Commissioner of the Railway Board.
Not at all. What I say is this: If you are going to remove the mountain differential it is only proper, when these discriminations do exist, to consider the question as a whole and not only one phase of it. My suggestion is that in doing justice to British Columbia see to it that you likewise do justice to Alberta.
I am not so sure that that is exactly the terms of the resolution. The resolution does not say anything about giving the distributing centres of Alberta a rate from the east, so far as mileage is concerned, in comparison with the special rate which Vancouver enjoys.
I simply want to point out one or two other tilings. British Columbia has not done too badly so far as railway freight rates are concerned in comparison with the province of Alberta. I suggest to this House that no province has been discriminated against to the extent that Alberta has. In the first place, as I have mentioned before, Vancouver has the benefit of a special transcontinental rate, water compelled, by reason of her location on the Pacific coast. In the second place she has special commodity rates east bound which are much lower than any possible class rates, or any special consideration, received by the province of Alberta or any part of it. I need only instance the special rate which British Columbia enjbys with regard to the shipment of lumber, the special' rate which that province has with regard to the shipment of rice, and several other commodities. In fact I gather-and I think I got the information from the 1914 judgment I have referred to- that 80 to 85 per cent of British Columbia's east bound products enjoy special commodity rates lower than any rates which Alberta enjoys. Not only does British Columbia have these special privileges but, in addition to that, she has her class rates on special constructive mileage. That is, British Columbia is given the right in fixing the class rates of considering 424 miles equivalent to, I think, 290 miles. These are some of the special considerations enjoyed by British Columbia which *are not vouchsafed-certainly not to the same [DOT]degree-to the province of Alberta. Therefore, I say that while I do not dispute the [DOT]claim of British Columbia for the elimination
I Mr. Shaw.]
of this mountain scale, I do say that it cannot be considered as a thing apart; the other provinces must have their special conditions taken into consideration if justice is to be done to the country as a whole.
Now, as to the point I was speaking about a few minutes ago with regard to the question of benefit to the consumer. In the judgment which is now under appeal the Railway Commission decided that the mountain scale should be reduced 50 per cent. I think that the percentage of mountain scale prior to that judgment was some thirty-three per cent. This judgment would reduce it to sixteen or seventeen per cent. One would expect that, with that substantial reduction, there would be a great benefit to the consumer. I have taken the trouble to look up the Labour Gazette containing the prices of many commodities, the prices prevailing so far as Calgary and Vancouver are concerned, and I find not the slightest difference between the months, say, of June and December, last. The consumer has not apparently benefited, despite the partial removal of the differential. I simply point that out. It may be that the removal of this differential, even the total removal, is not going to give the great benefit to the consumer which some hon. members of the House might suggest. Therefore, I say to this hon. House that to pass this resolution would simply mean that, in increasing the preferential treatment to British Columbia, just treatment may not be given to neighbouring provinces. We in Alberta are asking, and I think properly, for a special rate on coal eastward, in order that the product of Alberta may be placed in the markets of eastern Canada where it is so urgently required. How can we expect, under those circumstances, to receive any favourable consideration for that view, if at the same time we place an additional burden on the Transcontinental railway, and increase the deficit which they already labour under? The whole problem, I suggest, Mr. Speaker, is a most complicated and difficult one, requiring months of study and of effort, and it cannot be determined adequately or properly by this House in one session, or for that matter, in many sessions. It occurs to me that the whole matter of fixing rates should be gone into scientifically by the Railway Commissioners. An effort should be made to iron out many of these difficulties and discriminations which undoubtedly exist, and unless this work is undertaken by the Railway Commission, I am fearful that we will never be relieved of the burden of considering rate difficulties in this House.
I have one or two further remarks to make with regard to the Crowsnest pass agreement. Much has been said about that agreement. I want to say frankly, as I have stated before, both in public and elsewhere, that the Crowsnest pass agreement must be preserved. I took the position in the Transportation Cost Committee last year that we should preserve every part of it, that if it is sacred in one part it is sacred in every other part, and it must be preserved in toto for the benefit of western Canada. If one considers the circumstances under which that agreement was entered into, one can readily appreciate how it can be easily differentiated from any other question of freight rates. In western Canada at that time- that is in 1897-the freight rates were excessive. The people of eastern Canada realized, even in those days, that the hope of Canada lay in the West, and it lay largely in the development of the agricultural resources of that territory, not only that, but they realized that, while eastern Canada had special rate controlling, geographic factors and as well American rail competition, western Canada was entirely deprived by nature of such rate controlling factors. We had no water competition in western Canada to save us from excessive freight rates. We had no American rail competition such as eastern Canada enjoyed, and so parliament said in 1897 "We will give these people a statutory rate-controlling maximum, beyond which the railway companies of Canada can never go." That agreement did operate for several years as a rate-controlling factor until 1903. Then subsequently, by reason of the competition induced by the Manitoba agreement referred to earlier in this debate, the railway companies had to meet competitive reduced rates, and as a result, until 1917 the Crowsnest pass agreement did not become effective, although remaining on the statute books, as a safeguard against increased freight rates. In 1917, however, by reason of the 15 per cent increase of freight rates, the Crowsnest pass agreement again became an effective barrier against increased freight rates. It did not long remain, however. The railway companies apparently saw to that, because under the jprovisions of the War Measures Act the statute was ignored, not by an act of parliament, but under the provisions of the War Measures Act, and then under that act the various increases took place. However, with the. conclusion of the war the War Measures Act fell. Prior to its falling parliament suspended the Crowsnest agreement for a period of three years, and that explains why on the
7th July last it became necessary for parliament to determine whether or not the agreement should be further suspended. As I say, this is the only safeguard which western Canada has at the present time with regard to its basic production. That is something which we are not prepared to abandon, and is something which must be preserved in the absence of those natural geographic and competition-compelling factors we do not possess.
The resolution proposed by the hon. member for Burrard (Mr. Clark) suggests that the benefits of the Crowsnest pass agreement shall be made to apply to the basic productions of all of Canada. I do not know how he is going to do it, but if you look at the agreement itself you will find that in connection with certain west bound articles certain stipulated percentage reductions on the then existing freight charges were provided for. With regard to grain and grain products, it was provided in that agreement that a reduction be made of three cents per 100 pounds. How does the hon. member for Burrard propose to apply that agreement to the basic commodities of all Canada? Personally, I cannot understand how he is going to do it. Does he mean that if there is a water-compelled rate from, say, some place in Nova Scotia to Montreal that he is going to reduce that rate, regardless of water competition? Is he not going to take into consideration at all the natural factors which fix rates, and simply impose an arbitrary rate of some kind or other, in some peculiar way or other, which I must confess I do not understand?
I want to make it perfectly clear in conclusion that, so far as the application for reduction in freight rates is concerned, I have every sympathy, and I will on the proper occasion lend every support. I think it is high time the whole question of freight rates be examined into scientifically and carefully and be placed upon a logical and rational basis. But I do not see how we can take a jump in the dark by accepting this particular resolution and hope to iron out the difficulties and the intriicadies in connection with our freight rate problems in western Canada.
Mr. Speaker, we are, perhaps, getting a little away from the resolution as a whole and what it is really aimed at. I am going to invite hon. gentlemen just to go back again to what was done and said last year and to what has happened since. Last year the government started out with the idea that they did not know anything about freight rates. They were right. They did not. Starting out with that idea, they had a com-
mittee sitting for weeks on the question of freight rates. The hon. member for Pictou (Mr. Macdonald) was one of the members of that committee and he took a very strong stand in connection with the deliberations of that committee just upon the lines that the government did not know anything about freight rates and that the Railway Commission was the proper body to consider rates. In fact, the committee as a whole came to the same conclusion, and brought their report in to the committee;-it was never allowed to get to the House-to the effect that as regards basic commodities, reductions ought to be made on all of them, and that those reductions could not be got if the Crowsnest pass agreement was again made operative. That is the committee's report. Then we had a change, and the hon. gentleman representing Pictou suggests politics in connection with this motion. We had that considered report changed against all the evidence, simply because certain interviews had taken place with the government and with hon. gentlemen to my left, as a result of which interviews the government thought it would pay to disregard the evidence, disregard the claims of producers of basic commodities everywhere except in two provinces. So it was that last year we had rates, political railway rates, enforced as regards the very important commodities of wheat, other grain and flour on their eastern movement. There is also no doubt that, probably, of the different commodities that had claims for reductions, there were none that had greater claims-I want to be absolutely fair about this-than had wheat and flour, but after all no greater claims than had the basic commodities on which other provinces were depending, no greater claims, for example, than the claims regarding basic commodities of the Maritime provinces, no greater claims than those of the agriculturists of Quebec who showed that they could not sell their hay.
Hon. gentlemen say that the action of the government had nothing to do with the result as regards all these other claims. Let us see if that is true. Do we not all know that it is not true? In December of the previous year, a 10 per cent cut had been made in those wheat and flour rates without any cut being given at all on basic commodities in the other provinces. According to the evidence, that accounted for 83,000,000. The resumption of the Crowsnest pass statutory rates meant another $14,000,000. This meant a difference of $17,000,000 in revenue which was available for purposes of a reduction, and at
that time it was said
I remember very well saying it myself-if this goes through, the suggestion that there will be other reductions made in the railway rates on other basic commodities, is nothing more than a pious wish; it will never and it cannot be carried out. What parliament said is this, that while during the inflation period, all railway costs were advanced as nearly as possible equitably, in the deflation period, the rate reduction shall be confined to the two chief activities of the prairie provinces. That prophecy, which anybody could foresee, has been absolutely borne out. The judgment of the Board of Railway Commis-11 p.m. sioners themselves refers to it. The House has heard that judgment read this afternoon, and I am not going to take up any more time on it. The fact is that there was the sum available for reductions, and that sum was appropriated by this House for a specific purpose. There is no question that there were heavy advances in grain rates and I am going to give the House a few illustrations of increases in order to show exactly the result of their interference with the freight situation last year, just what the result of the political rate is. The grain rate from Saskatoon, which is pretty well in the centre of the territory, was 24 cents. It was increased to 33| cents, or an increase of 39 per cent. The rate from Calgary was 24 cents. It was increased to 36 cents, an increase of 50 per cent. The rate from Maple Creek was 21 cents. It was increased to 331 cents, an increase of 54 per cent. In each case we have the re-enactment, not, of course, of the lowest rate, which was two cents lower in each case, but reducing all those increases to an increase of only two cents. I want to compare that with another basic commodity. We will go back to this again a little later on. We have been told-and there is no doubt that this is true-that down in New Brunswick, where they depend just as much upon potatoes as the Northwest does upon wheat and flour, rates were such that they were digging the potatoes into the ground again; that they could not use them. Let us see how they were increased and whether the West was unfairly treated. The potato rate from New Brunswick shipping points-they take a common rate for long distances-to Montreal in 1917 was 19 cents. That was raised to 341 cents, an increase of 81 per cent, as against a total increase at Saskatoon of 39 per cent, at Calgary of 50 per cent and at Maple Creek of 54 per cent. The only reduction that was made by the board at all, and apparently the only reduction that they
could make, was one or two cents, making that rate as left by the Railway Board, an increase of 71 per cent as against a Saskatoon rate, which was reduced by the action of parliament, and which had been increased by only 39 per cent. Where is the fairness in this? What possible justification is there for it, if we are to bear honestly in mind the general provision of the Railway Act that rates are to be fair, just and equitable?
Just another illustration as to whether, the western rate was so tremendously out of line. Let us take the Maple Creek rate. Maple Creek has a mileage to the head of the lakes of 1,013. Sweetgrass, Montana, is just south of Maple Creek and has a mileage to its distributing point, Duluth, of 1,004 miles. The Maple Creek rate before it was reduced was 32 per cent less than the Sweetgrass rate; after the action of the House the American rate is 87 per cent greater than the Canadian rate.
Is it not a fact that there is comparatively little grain moving from Sweetgrass in Montana to Duluth whereas there is a tremendous volume moving from Maple Creek?
Sir HENRY. DRAYTON: All these rates are on a mileage basis. I do not care what points you take, the result is the same. I am only dealing with these two points because they have a similar mileage, that is all. Take any points he likes, the grain rates, as the hon. member knows very well, do not depend upon volume but upon mileage, both in Canada and in the United States. There is no doubt of course that the major portion of American wheat is grown nearer Duluth than is the major portion of Canadian wheat. Now then, I was dealing with potatoes and pointing out that, so far as the potato producer is concerned,, he is still trying to do business at an increase of 71 per cent. That rate is not out of line with the others. Montreal was not the significant point, or a point that is treated differently from others. The rate to Toronto was 25 cents, it was increased to 45J cents, or an increase of 82 per cent; to-day the increase stands at 69 per cent.
There is another feature to consider. We had any amount of evidence as to the great necessity of cutting down the costs of building and making building materials cheaper. The rates on building materials were increased from 61 to 133 per cent in eastern territory, with similar increases in western territory.
There is no reduction whatever except some half a cent on building bricks.
Now take the. British Columbia lumber rates. We were told they could not do business on account of the high rates. Those rates still stand. But let us get away for a moment from both New Brunswick and British Columbia. The situation is the same all over Canada. Supposing we take coal, which is something everyone is interested in here. The rates on anthracite coal were increased 71, 81 and 83 per cent, and still stand without a single cent's reduction. For example, from the gateway, Prescott, where you get your coal, to Ottawa, the original rate of 83 cents was increased to $1.39, an increase of 70 per cent. Let us take Renfrew, another point in this neighbourhood. The original rate was $1.12, it was increased to $1.80, or an increase of 60 per cent. But the increase applies not only there, but everywhere. Take the rate from the Niagara frontier. To Hamilton it was 55 cents, this was increased to $1.05, or an increase of 90 per cent-not one single cent taken off.
Now, basic reductions. What is basic m Ontario? Why, this action last year was taken presumably in the interests of agriculture. It covered just exactly one-fifth of our agricultural products, that is that part of it that was aided by the rate and prevented any possible relief being given to the four-fifths. Supposing you take butter in carload lots to Toronto from a point near here, for example, Smiths Falls, the rate was 30 cents, it was increased to 54 cents, an increase of 81 per cent. Let us go to another part of the province, Woodstock, the centre of the dairy industry. The rate to the same destination was 23 cents, it was raised to 41J cents, an increase of 80 per cent-not one single sou taken off. Not only Toronto as a buttercollecting centre gets these rates; look at Montreal. Suppose we go back to Renfrew again which ships butter to Montreal. The Renfrew rate was 29 cents, it was increased to 52 V cents, an increase of 81 per cent. From Peterborough the rate was 33 cents, it was increased to 591 cents, an increase of 80 per cent-not one cent's reduction. Take this commodity in less than carload lots, and you have the same story-the same increases and absolutely no reduction. Cheese is a commodity which we are all very much interested in. On this basic production the rate from Peterborough to Montreal for export was 251 cents, increased to 461 cents, an increase of 82 per cent-no reduction made whatever. From Finch to Montreal the rate of 15 cents was increased to 271 cents, an increase of 83
per cent-again no reduction whatever. To Brockville, a large cheese centre, the rate from Finch was 17 cents, it was increased to 30i cents, an increase of 80 per cent. Similarly the Peterborough rate of 22 cents was increased to 40 cents, an increase of 81 per cent. Eggs tell the same story. Everything the farmer handles in Ontario is left in the same position, everything the farmer raises in Quebec is left in the same position, everything the farmer raises in New Brunswick and Nova Scotia is left in the same position -absolutely no reduction whatever made by the Railway Commissioners, just as was pointed out clearly and emphatically from this side of the House. Eggs in carload lots from St Mary's to Toronto enjoyed a rate of 19 cents which was increased to 341 cents, an increase of 81 per cent. From Smiths Falls the rate of 25 cents was increased to 45 i cents, an increase of 82 per cent. If you are collecting at Montreal, your increased rate is practically the same: from Lindsay to Montreal, 29 cents, increased to 524 cents, an increase of 81 per cent. From Renfrew, 24 cents, increased to 43 cents, an increase of 79 per cent. In less than carload lots the condition is the same; there are slight differences, of course, in amounts, but the percentage still increases; the additional burden placed upon the farmer stands about the same. St. Mary's to Toronto, eggs, in less than carload lots, 26 cents, increased to 47 cents, 80 per cent increase. Thamesville, 32 cents, increased to 58 cents, 81 per cent increase; Brockville to Montreal, increased from 30 to 54 cents, or 80 per cent; Renfrew, increased from 33 to 594 cents, or 80 per cent.
The inference is perfectly plain. It is just what I said lasr. year: if you put through that legislation, if you tell the board that the whole of the difference, that $17,000,000, goes in one direction, do not expect anyone else to get any relief.
I think none of them should be remedied that way, but if you start to remedy them you had better do it right through. If we are to have political railway rates for the voter here, the voter there has a right to ask for them.