I do not want to interrupt the hon. member in his argument, but before he leaves that point, will he indicate whether or not the particular subject matter of his argument to date was under consideration by the Board of Railway Commissioners, I think in the year 1908, and if so would he be good enough to indicate to us the judgment of the board at that time?
I wanted ro ask, simply for information, if the argument he has thus far addressed to the House with regard to the constitutional question was not involved in the question before the railway commission in 1908, and I think, if my recollection is right, the railway commission of that date refused to entertain the question.
I cannot definitely answer that question, because according to the dates which I have, the applications were made in 1906, 1910, 1914, and the last two years. What I think, however, is that if the Board of Railway Commissioners had listened to that argument in 1908, they certainly would have listened to it last year, because it would have been considered a precedent. So I assume, because it appeared in the judgment of last year, that they did not consider it then, that they did not consider it even if advanced in 1908 or any later year.
The next point I wish to advance is regarding the guarantee given by the province of British Columbia upon bonds of the Canadian Northern through that province. In 1911, Sir Richard McBride, then premier of British Columbia, appealed to the electors of that province for endorsation of his railway policy. He asked that the government be authorized to guarantee the bonds of that railway company up to $35,000 per mile, and he was returned to power on that plea. Let me read this brief statement of Sir Richard McBride's, just one sentence, indicating the lines on which that election was fought:
We believe that through the introduction of the Canadian Northern railway into this province with the control of freight and passenger rates in the hands of the government, there will be such an adjustment of railway freight and passenger rates throughout the province generally that if will place travel within the reach of the financial ability of the whole Canadian people.
The agreement between British Columbia and the Canadian Northern railway, which agreement was consummated after that election, gave control to freight rates to the Lieutenant Governor in Council of that province. In other words the control of rates within that province on that particular line was not in the hands of the Board of Railway Commissioners, and for that privilege British Columbia guaranteed those bonds to the extent of $35,000 a mile. That was the consideration we got for that guarantee-the right of making rates and the right of counteracting this discrimination about which we have been complaining ever since the Canadian Pacific railway was built. We lost out even on that, because in 1914 this House passed an act which declared the Canadian Northern railway to be a work for the general advantage of Canada. That immediately cancelled the main consideration 4 p.m. which we got, and which we were relying upon for our guarantee, and it gave to the Board of Railway Commissioners the right to make rates upon that railway. It has often been stated that British Columbia has been relieved from the guarantee of those bonds. Not at all. We are liable to-day upon those bonds just as we were when we gave the guarantee. Further, let this be noted that if British Columbia under its guarantee had been bound to take over the Canadian Northern railway in British Columbia, that would not have perturbed us. It might have caused us some temporary embarrassment; but there we have the most wonderful piece of mountain railway construction in North America, and possibly through any mountainous country in the world. I have no hesitation in suggesting that if the Canadian Pacific at any time since 1914 had had opportunity of taking over that piece of the Canadian Northern railway, between Edmonton and Vancouver, they would have jumped at the opportunity, especially of taking it over at the full value of those bonds. It would have been for them the cheapest investment in the world, and furthermore it would have disrupted and destroyed absolutely our Canadian National railways, because this is the most vital and important part of that line to-day. In that connection, I should like to point out two or three facts of interest as regards the grades of that railway. This is a comparison between that portion of the Canadian National railway, that I have been speaking of, and six or seven other transcontinental railways. The Canadian National railway crossing British Columbia has a maximum grade of * 7 per cent, but that is only for about twenty-eight miles. Practically throughout
its length the maximum grade is * 4 per cent.
Tlie comparison is as follows:
Railway Per cent FeetCanadian Northern. 7 3.706Canadian Pacific..
2.2 5,321Northern Pacific..
1.6 5,500Union Pacific.. ..
1.8 8.200Great Northern.. ..
2 5,202Chicago, Milwaukee & St. Paul
2.5 6,322Sante Fe
2.6 7,421The situation is most remarkable. . We havethere a railway which, with one engine can
haul fifty loaded cars of grain from Edmonton to Vancouver throughout the length of that road, whereas these other roads have difficulty in hauling twenty-two loaded cars over their mountain grades, and in so doing the roads are obliged in many instances to use two engines, whereas on the Canadian National railway one will do for the whole route. So there is the road on which British Columbia has lost the right to fix rates by reason of the action of parliament. In view of what this House has done in the past, I think it is perfectly fair that immediate action should be taken to restore that agreement-if the Crowsnest pass agreement should be restored- or any part thereof. The latter agreement was made between the Dominion government and the railway company. Why should not an agreement such as I have described be restored, an agreement to which the Dominion government was not a party, but yet undertook to interfere with and thus take away from the province of British Columbia rights which existed thereunder and for which we paid in guaranties to the extent of $35,000 per mile?
Now, the stock arguments which are advanced against the removal of this discrimination are-cost of construction, cost of operation, density of traffic. I want to face every one of these arguments squarely. As to cost of construction, I would refer the House to Volume 12 of the report of the special committee on rates of last session, in which at page 475 the evidence of Mr. Lanigan will be found to the effect that the original cost of construction of the Canadian Pacific railway has long since been lost and is no longer a factor in rate-making. I would also refer to the fact that the Canadian Pacific railway was not built through British Columbia entirely at the expense of the Canadian Pacific Railway Company. There is a very considerable portion of this line, namely, that between Emery Junction and Boston Bar on the North Thompson which was built at the cost of the treasury of
Canada and handed over complete to the Canadian Pacific Railway Company. Why should we pay any extra rates because of the cost of construction? I would also refer hon. members to the evidence of the Hon. Mr. Oliver, the Premier of British Columbia, on the same point. At page 170 of Volume 6 he says:
I want to deal with another phase of this matter: British Columbia was the only province from which a huge land subsidy was exacted in aid of the construction of the Canadian Pacific railway. That land subsidy given by British Columbia in connection with the main line of the Canadian Pacific railway amounted to approximately 12,000,000 acres. I want to submit to this committee the view that if there is any merit at all in the plea of the cost of construction, that has been entirely offset so far as British Columbia is concerned by the huge land grant which was given in aid of the construction of that road. That land grant was a strip of land 40 miles wide through the entire width of British Columbia, and any deficiencies were made up out of the prairie lands of the Peace River district of British Columbia,-3,500,000 acres.
I also draw the attention of hon. members to the fact that the cost of construction of the Grand Trunk Pacific railway from Winnipeg to Moncton was approximately $100,000 per mile. The cost of construction of the Canadian National railway through British Columbia was approximately $65,000 per mile, or considerably less. Yet we do not find any discrimination against the people who live along the line of the Grand Trunk Pacific between Winnipeg and Moncton. Their rates are the same as the rates on the other roads in those provinces. I would also direct attention to the fact that there is no special discrimination against localities by reason of the expense of construction of the Quebec bridge or the $9,000,000 Montreal tunnel. These great expenditures are not considered, and I agree entirely with Mr. Lanigan that the cost of construction has nothing to do with the fixing of freight rates.
Now, with regard to the cost of operation, I would point this out to those who suggest that any definite figures can be given as to excessive cost of operation on the Canadian Pacific railway through the mountains, that since 1914 operating costs and operating revenues have been kept by divisions of lines east and lines west, and therefore it is impossible to analyze and determine the relative cost in any particular province. In other words, it is impossible for the railways to meet the onus which is placed upon them by the Railway Act to show that any special discrimination against a particular locality is not undue or unjust. In any case it is admitted by the same Mr. Lanigan, the general traffic manager of the Canadian Pacific Railway. that the cost of operation is no longer
a basic factor in the making of freight rates. As to this I refer the House to the report of the committee on Railway Transportation Costs of last year. At page 573 the following examination of Mr. Lanigan by Mr. Mc-Murray is found:
Q. Mr. McGeer during his evidence this morning said that rates had nothing to do with the operating costs on the prairie. I gathered that was a statement made by the Board of Railway Commissioners at some time or other. Do you agree with that statement?
A. I think there are three things that make rates, and those are what Mr. George Olds, a very old traffic manager of the Canadian Pacific railway, used to call the "Three C's": Conditions, circumstances and competition.
Nothing much to do with the cost of operation.
You cannot segregate the cost of carrying a certain class of traffic for one year as compared with the cost another year and build up any kind of a tariff under which these people are interested.
Q. I was not asking you for the argument, but whether you agreed with that statement?
A. I do not agree with that statement. That is, that the rates are built on the cost?
Q. No, that the rates are not built on the costs on the prairies?-A. They are not and cannot be built on the costs. The whole rate system has to furnish a certain amount of revenue to meet the cost of operation.
Q. Are they furnished on the costs in British Columbia?-A. No.
Thus we have the admission of the very man chiefly concerned with rates on the Canadian Pacific railway that rates are not built on the cost of operation.
Now, I think I can show this House that the basic factor in fixing freight rates in this country is the earnings of the Canadian Pacific Railway, and I am forced to that conclusion by the judgment delivered by the Board of Railway Commissioners on June 30, 1922, We have in that judgment a statement filed by Mr. Lanigan of the Canadian Pacific Railway Company with respect to basic commodities. It was stated in the judgment:
At a hearing of the special committee on the 20th day of June instant, Mr. Lanigan, freight traffic manager for the Canadian Pacific Railway Company, filed a statement showing what would be the reduction in the revenues of that company if the offer above referred to had been accepted.
It will be recalled that the Canadian Pacific Railway Company offered certain rate reductions and showed what they would mean in the way of loss of revenue. Then followed the statement filed by Mr. Lanigan showing what that loss of revenue would be'. I shall not give the details, but the total, including international and interstate traffic, is $10,558,469, Now, the board goes on to say:
This showed a total, not including reductions on international traffic, of $8,338,469, and, of this amount S5.354.139 was the estimated reduction on grain. Taking
this from the total reduction leaves a balance of $2,984,330 to be distributed among the other commodities. By the legislation hereinbefore referred to granting the Crowsnest pass rates on grain as therein provided, according to the evidence of Mr. Beatty as recorded on page 46 of the reports of the special committee, assuming the grain traffic of the Canadian Pacific railway to be the same as in 1921, the adoption of the Crowsnest rates would reduce their revenue by $7,159,537, which, taken from the sum of $8,338,469 would leave $1,178,932 is still available for reduction in rates on the above list of basic commodities, and the board, after very careful investigation, has concluded that this would be represented by a reduction of 7$ per cent on the rates now in existence on those basic commodities, less than the increases authorized by general order No. 308, not, however, including therein any reductions heretofore made upon any of the said commodities upon domestic rates in Canada.
Then they go on to say:
The Canadian Pacific railway figures are given above, as this company is taken as the standard in rate discussions.
What can be clearer than that the rates today prevailing are fixed on the basis of the revenue of the Canadian Pacific Railway, not on the basis of operating costs? I leave it to hon. members to draw their own inferences as to whether or not that is a sound method of fixing railway rates. I am drawing attention to it with a view to proving conclusively that the basic factor in rate making is not the cost of operation, but, as I have pointed out, the revenues of the Canadian Pacific Railway.
Now, we come back to the operating costs of the Canadian National Railways. It is admitted-in fact, prominent officials of the Canadian National Railways have boasted that operating costs on their line through British Columbia are no greater than those in any other part of Canada. In that connection also I wish to refer to one brief sentence of Sir Henry Thornton's evidence ber fore the Senate committee on the fuel supply of Canada, given on the 21st of March of this year. This appears to me to be very important as bearing upon a comparison of the cost of operation on the prairies and in British Columbia, or in British Columbia and in eastern Canada. He says:
I can move coal much cheaper in the month of May in the West than I can in the month of February, because on account of the cold weather, the snow, our train-load is cut in half. It costs, I should think, easily twice as much to move a ton of freight in the western country in winter time as it does in the spring or summer.
I would draw the attention of hon. members to the fact that the climate of British Columbia is much more temperate than that of any other part of Canada. No part of that country, or at least very small portions of it, are subject to the extreme climatic conditions that prevail in the prairies and in cen-
tral and eastern Canada. Therefore, according to Sir Henry Thornton's reasoning, the cost of operation in British Columbia should be about half the cost on the prairies over a great portion of the year.
Another factor which might be taken into consideration is the question of the earnings of these roads-western earnings and eastern earnings. I would refer the House on this question to volume 14 of the report of that special committee, page 554, where certain statements are filed in the evidence of Mr. McGeer, who was counsel for British Columbia in connection with this matter. In those statements he showed that the earnings of the Canadian Pacific Railway in British Columbia up to 1913-14 were very much greater than its earnings in eastern Canada. I will not trouble the House with the details, but the evidence is there and can be seen. I would point out also that at present this situation as between the East and the West, we can only compare the earnings of the railway companies on lines west of Fort William with those on lines east of Fort William. The accounts of the railways show that the net earnings per mile of line and per train mile are higher on these western lines than they are in the east. For instance, in 1920 the net earnings of lines east were $10,723,868 as compared with $28,311,645 on lines west. In other words, the net earnings per mile of line on lines east were 82,221 and on lines west $3,466, the earnings per train mile being 46 cents on lines east and $1.19 on lines west. So that the question of earnings does not operate against us in the fixing of rates.
Then we come to the question of the density of traffic, the other argument advanced against us. I ask hon. members to compare the density of traffic on lines through British Columbia with the density of traffic on lines from Winnipeg to Moncton. There is not a shadow of a doubt that the density of traffic on lines in British Columbia is infinitely greater than that on lines between Winnipeg and Moncton yet there is no discrimination against the people in this latter section. Now is there any discrimination against the people living between Fort William and Sudbury on the Canadian Pacific Railway, where the same condition exists. Furthermore, I would point out that the traffic in British Columbia is growing day by day; it is infinitely greater now than it was a few years ago. There are 700 manufacturers in Vancouver awaiting an opportunity to ship their goods into the prairies, and they will take advantage of that opportunity the very moment that equitable freight rates are given to British Columbia.
I come now to what I think concerns more particularly our friends in the East. I think beyond all question of doubt that the removal of this discrimination will react to the general advantage of Canada and more particularly the East, and more particularly still the cities of Montreal and Toronto. Our railways in this country have been clinging to the long haul instead of assisting in colonization and relying upon the increase in population to increase their general traffic and consequently, increase the prosperity of the country. The Panama canal since 1919 has become a great factor in the situation, and we see the railway companies to-day as a result of that Panama canal competition doing the most extraordinary things with regard to rates. For instance, on bar iron they have given a rate from Montreal to Vancouver of $13 sc ton-not to help British Columbia, but to enable the eastern manufacturer to compete with the manufacturers in the United States and Great Br ain, who enjoy rates infinitely lower than S13 per ton. They ship by steamship through the Panama canal and get their products' into Vancouver for about $6 per ton.
I might give another instance. The rates on chemicals going to Vancouver have been reduced for the same purpose of enabling the eastern manufacturer to meet the competition of the American and the British manufacturer. There, is a freight rate of approximately $20 per ton on chemicals going to Vancouver, whereas the freight rate on the very same commodity to Calgary is $30 per ton. Remember, that is not designed to benefit British Columbia. It is designed for the purpose of enabling our eastern manufacturer to compete with the American and the Britisher. I do not object to that. We in British Columbia want to do business with eastern Canada. We want to buy your manufactured articles, but we cannot buy them if you will insist on denying us the right of bringing them through the natural trade channels, and we are being denied that right to-day.
The other day the Minister of Customs was asked in the House whether he proposed to put a customs officer at the port of New York. He did not because it would take business away from the transportation companies. Now the fact is that that business is not travelling over the railways to-day, and that fact is evidenced by the figures of trade passing through the Panama canal. Just let me illustrate the effect of having a customs officer at the port of New York on the British Columbia purchaser of manufactured articles, particularly heavy machinery and such like. For instance I have heard our pulp manufacturers say: We are forced to buy in the markets of the United
States because though we could buy as cheaply in eastern Canada markets, we cannot buy there because we cannot pay the freight rates; and they are denied the right of bring-nig those goods through the Panama canal- denied that by the government of this country. But if we had a customs officer at New York we could buy those goods, ship them to New York, tranship them there into American or British bottoms, and bring them around to Vancouver via the Panama canal at rates which would compete with the rates we pay for the American and the British article. But the situation at present is that if we ship these goods to New York and then tranship them having no customs officer at New York we have to pay duty on our own Canadian manufactured goods, just as if they were manufactured in the United States. What I want to impress upon the House is this, that our transportation companies are not getting that business now. You are losing it here in the East, and losing it fast, and the following figures are the best proof of that.
In 1913 we had 132 deep-sea going vessels coming into Vancouver; in 1920, 333; in 1921, 496; and in 1922, 717-increasing at a tremendous rate.
Now what about the imports through the Panama canal? In the short period of one year these imports increased by 700 per cent. The imports in 1921 through the Panama canal amounted to 20,416 tons; in 1922 the imports amounted to 149,553 tons; our total imports through the Panama canal being greater than through the port of Montreal. That is what the eastern manufacturers have got to waken up to if they are going to retain the western market. They have to waken up to the fact that they have to allow freight to flow through the natural trade channels. The Americans have wakened up to that fact. They have their regular established steamship lines going through the Panama canal. Their railway companies are spending millions of dollars to-day on developing the short haul as opposed to the transcontinental haul, because they realize that they cannot haul a commodity across the continent in competition with a steamship travelling through the Panama canal. That is obvious and the sooner we waken up to it the better.
There is also the 'greatest opportunity here for the colonization and settlement of that huge western country. That western countiy cannot be settled unless you make it possible for the immigrant whom we propose to bring in to go there and prosper. In the first place the western farmer to-day-and you can sneer if you like; I have heard many jeers and sneers, and I take issue with them-the
western farmer is suffering under a disadvantage, and that disadvanatge is this. It costs him too much to lay his grain down to the consumer. He is losing from six to ten cents a bushel on his grain by reason of the fact that we have not wakened up and are not taking advantage of the natural trade routes. If we take advantage of these natural trade routes he can then market his grain and obtain a reasonable return for his product. Furthermore, he would then be able to buy his necessities, his machinery and other things that he has to use in his business, at the lowest possible cost. Do not make it necessary for him to haul these things he needs right across the continent. Enable him to take them in by the shortest route, and then you will cheapen the cost of living and make the prairie an attractive place for farmers to come and settle and prosper. Biit if we insist upon these artificial trade channels we cannot hope to make the West a popular place for the immigrant to come and settle.
I am quite aware it might be said that the Americans to the south of us have higher freight rates than we have in the West on grain and some other commodities. That is true, but let it be remembered that these American farmers are in this position: They have at their door a huge local market-something we have not got. They can sell the bulk of their grain locally, but we are dependent on the price we can get in distant markets for our living. Furthermore, let it be remembered that they have a protective tariff. I know my friends to my left will not agree that that is any advantage to them, but the fanners of the United States see the special advantage that tariff is to them. They are the people who have promoted a tariff on behalf of the farmer, and they are the people who have got it.
Let us also take advantage of their disadvantage if such exists. If they are suffering under a disadvantage let us make our country more attractive to them and then we can bring into this country from the United States the most desirable type of immigrant. They will move across the line if we make our country more attractive and make it possible for the farmer in this country to prosper.
There is just one other point that I wish to draw to the attention of the House and it is this: The principle of equalization of freight rates, in so far as British Columbia is concerned, has already been recognized by the past government, and in the opening paragraph of the judgment of the Board of Railway Commissioners handed down in June, 1922, the commissioners recite the direction
which was given by the Privy Council on the 6th October, 1920, after they had heard an appeal from the judgment of the commissioners. The Privy Council then said:
The committee of the Privy Council therefore further recommend that as conditions have probably changed materially in recent years, tending more and more to make equalization practicable an inquiry by the board be directed to be held at the earliest date with a view to the establishment of rates meeting to the utmost extent possible the above requirement as to equalization. [DOT]
Namely, the removal of the mountain scale. Now, I have various other arguments which I could advance but I feel that I cannot, in justice, take up any more of the time of the House. That it is a matter of the most vital importance to British Columbia is true, but I want to urge that I am not advocating this from the sectional point of view of that province. I believe that it is in the interest of this country, that if we are going to encourage people to come to Canada we must make the country attractive to them, we must make it possible for them to prosper. There is no question but that the high freight rates in Canada will make it impossible for a small population such as we have to prosper unless we largely increase that population. Furthermore, by increasing that population, by bringing in desirable immigrants and bringing them in as fast as we can, we will make it possible for these railways to prosper by hauling much greater quantities of freight, by moving much larger numbers of passengers; and that such equalization, and a broad-minded attitude on this question, will react not only to the advantage of British Columbia, to the advantage of eastern Canada and of the whole Dominion, but to the advantage of the railway companies themselves.
I have a great deal of pleasure in seconding the motion so very ably presented by the hon. member for Burrard (Mr. Clark). This matter .of freight rates is one of the most important that we have in British Columbia, situated as we are at th? extreme western end of Canada. I feel that I will be quite safe in supporting the statements of the mover of the resolution to the effect that the statement of the Chairman of the Railway Commission, as it appeared in a western paper a short time ago, namely that the feeling in British Columbia was much more political than real, is not correct. The fact that we have fought this question of high freight rates for so many years should be ample proof for everyone that we are in earnest in our contention.
It is rather interesting, in looking back to the time when British Columbia was a colony and to the time when it was proposed that
she should be taken into confederation, to observe that in the undertakings that were then being considered it was decided to construct a railway from the Atlantic to the Pacific with the object of bringing the provinces of Canada closer together, and increasing trade from east to west rather than from north to south, and that at that time Great Britain also encouraged this work with the idea that it would enable her to reach her possessions on the Asiatic side and in the Pacific, with much greater ease and safety than was previously possible. British Columbia cordially entered into this bargain and made very liberal grants of land, giving to the Canadian Pacific Railway Company a grant of twenty miles wide on each side of that line from the Alberta boundary west, and also about three-and-a-half million acres of rich land in the Peace River district. I might also point out that in making the bargain the federal government took over the right to collect a tariff, at that time enjoyed by the colony of British Columbia, and in exchange the federal authorities gave to the province a grant, of $100,000 a year in perpetuity. It is interesting to note here that while other sections of Canada east of the mountains made land grants towards the construction of the Canadian Pacific railway, the colony of British Columbia gave her own land for this purpose; the lands granted in other provinces belonged to the Dominion. At that time nothing was said concerning the extra cost of construction through the mountains; nothing was said about it being necessary to give the railway any undue advantage or any privileges or monopoly; the whole spirit of the bargain was that of equal treatment for all the provinces. No references, as I say, were made with regard to an extra tariff being levied in the mountain section; I am quite sure that it is very doubtful indeed if British Columbia would have entered into this bargain had any such proposition been initiated by the federal authorities. In the selection of the route the Canadian Pacific Railway Company had the whole country to itself. It could have selected a pass from the Arctic circle clear down to the American, boundary line. As a matter of fact the company selected the route through the Yellowhead pass west of Edmonton That route was chosen, in the first place, by the company's engineers on account of its better grade. After some little time the company changed its mind and decided to go west through the Kicking Horse pass, but it was necessary to obtain the sanction of the federal government to that change. In the Kicking Horse pass, as has been so well
pointed out by the mover of the resolution, the grades were very much greater than the grades in the Yellowhead pass, the mountain at its highest point being some 1,650 feet higher in the former than in the latter. In addition there is also the handicap of heavy grades in both directions. Any of you who have been through that country will know that there is a huge depression lying immediately to the west of the Rocky mountains and to the east of the Selkirks-what is known as "The Great Dip." It was only at that point, where the Yellowhead pass crosses the mountains, that a first-class grade could be obtained.
Now, British Columbia urges this: That these routes having been clearly open to the selection of the Canadian Pacific Railway Company, the company having first made the selection of the better grade across the mountains and then having changed to the Kicking Horse pass, and this having been endorsed by the parliament of Canada, the province should certainly not be penalized for any mistakes made by the railway company, or by parliament on that occasion.
With regard to the mountain scale at present existing, which is one of our first objections, and which is one of the subjects behind the resolution of the mover, we find, as has been pointed out, that under present conditions it is possible to haul for 125 miles on the prairie, at the rate applicable to a 100 mile haul through the mountains. I am quite sure that this is not in keeping with the spirit of confederation where, as I pointed out a moment ago, equality in all the provinces was the prevailing question that was prominently kept before us. In British Columbia we want this corrected. We believe in the Railway Commission . We believe it is a very valuable body and one that is rendering a great service to this country under a very heavy handicap but during the last session the government according to its right thought it proper at that time to step in and over-rule the heads of that commission and make certain changes in what is known as the Crowsnest pass agreement, giving certain concessions to the prairie provinces. This, we claim, is an added discrimination against the province of British Columbia, and we ask now in this resolution that that privilege be not confined to the prairie provinces favoured last year, but that it be extended to all the other parts of the Dominion, including the province of British Columbia.
It has been clearly shown that there has been very little difference, if any, in the cost of transportation over the line of the Canadian
National railway in the mountains and over similar distanpes on the prairie sections. In fact I am informed, taking the distance from Edmonton to Vancouver, and Edmonton to Fort William, that you pass over higher land on the way to Fort William than on the trip to Vancouver. It was also shown last year in the findings of the Railway Committee of this House, which sat during last session, that the cost of construction is no longer a serious feature in fixing freight rates over the Canadian Pacific railway.
The position in British Columbia is this:
Here is a vast province of great resources, with plenty of goods for sale, timber, minerals, fish and agriculture, anxious to do business with the eastern section of Canada, particularly that section lying immediately east of the Rocky mountains, but severely handicapped by freight rates which have prevailed for a great number of years. We feel that if we are to have the proper development which we have a right to expect, we should have equal treatment, and that we should be placed on an equal footing with that country lying to the east of us and with other parts of Canada. The result of the high freight rate has been that we find a certain amount of business uncertainty and unrest. There is a lack of confidence among business men, capital is shy about investment, particularly since the increase of freight rates some time ago, and many of those inland towns built along the line of the Canadian Pacific railway at the time of its construction have practically not developed at all, handicapped, as they are very greatly, by the excessive freight rates which they have to pay. We find that our mills, particularly those lying inland, are not doing the amount of business that they would under more favourable conditions. I am quite sure that if these concessions asked for in the resolution were granted we would have immediately very much improved business conditions, which would not only be enjoyed by the great northwestern country, but by the people throughout the whole of Canada.
Take the matter particularly of the concession made last year under the Crowsnest pass agreement in the matter of grain and flour. t which includes, as I understand, feed grain and mill offal, such as bran and shorts, a tremendous advantage would be enjoyed by our British Columbia friends if this material were permitted to go to British Columbia at a lower freight rate. You will understand in those western valleys we not only have an excellent growth of grass in summer, but we are able to grow a great deal of forage for winter use, ensilage and hay. If we could
buy those cheap concentrates east of the mountains and have them delivered to us at a reasonable figure, we could extend our dairy operations much more. We have in that country as regards dairying, the finest possible conditions existing anywhere on the continent of America, and this has been proved on more than one occasion by our being able to produce cattle that have broken the world's record in dairy production. Looking at conditions generally in Canada, particularly agricultural conditions, while we all recognize the necessity of having a first class market, the first thing we need to encourage the farmer to produce is to guarantee him a first class market which will yield him some profit for his work. What do we find? Whe 1 we consider these markets, we find we are very much handicapped by the heavy cost of distribution, and one of the principal causes is the heavy freight rates. I am quite sure that if the concessions asked for were extended to British Columbia, much more of the wheat would roll to the West than is moving at the present time. But why not? The development of our agriculture is far too important to have that wheat guided with a view to helping out any particular point. If we are going to make a great country of this Canada of ours, huge in extent as it is, populated with a virile people, and to develop it in keeping with its present place in the world and as part of the great British Empire, we must put aside any little feelings we may have about any particular section which we wish to boost, and let the grain and any other produce we have run along natural lines. We have two channels through which trade flows. One is the natural channel and the other is the boosted channel. If we want to stand on a sound foundation, we must always rely on the natural channels of trade. I will read to the House this statement from the Toronto Globe, a paper that I have not quoted very frequently since I have com; into this House:
The Western Grain Route If British Columbia in asking for a reduction of rates on westbound grain, were seeking simply to build up its own ports as against those of eastern Canada, its demand might be described as sectional. But what it contends is that the westbound movement is not artificial, but natural, and is economically the more profitable, at least for the grain of Alberta and western Saskatchewan. The vital question is not what is best for Vancouver or Montreal, but what is best for the grain grower in the West.
The western route to the Pacific has the advantage, for at least a large portion of the West, of a much shorter rail haul. Against this is the grade through the Rocky mountains. But here it is to be borne in mind that the National railway has a far easier grade [Mr. Tolmie.l
than the Canada Pacific, and this advantage ought to be used to the fullest possible extent. This is not
a sectional, but a national question.
I was just going to say that we are only in our infancy as regards agriculture. During the time that I had the honour to be Minister of Agriculture, I had a very careful estimate made by the experts of the Department of Agriculture, and I may say that while they were all recognized as experts, some were also agriculturists, and some even farmers. It was estimated at that time that by a slightly improved form of agriculture, the more strict selection of our seeds, better cultivation, the keeping of a better quality of dairy cattle, beef cattle, hogs and poultry, with very moderate estimates in all those particular lines, there would be an increase to the agricultural wealth of this country of not less than 3503,000,000 a year, or enough to wipe out our national debt in five or six years without turning over a single fresh acre. This will show the possibilities. No single port is going to be able to take care of the produce of this country, when the western country gets into mixed farming as it will undoubtedly, because the history of some ot the states to the south will be repeated. Their wheat production went down to only six bushels an acre, whereas now by the introduction of the dairy and creamery system on an extensive scale, they are producing more wheat to-day than before, and producing at a greater profit. Therefore, our agriculture being only in its infancy; all the good ports we have will be necessary to get rid of our produce as the quantity increases.
Perhaps the most important question today before the government and people of this country is that of making the business of the producer profitable. If we can do that., nothing else practically will matter because it will take care of itself. We are talking about immigration. We want more immigrants into this country; but I think simultaneously with any movement to increase immigration, we should certainly move along those lines that will better conditions for those people who are in the country already, and in that way improve conditions for any immigrants that might settle here.
One of the most important of those 'things is to keep down the cost of living and freight rates to within a reasonable figure, so as to enable us to place our goods on the market at a reasonable profit. While we recognize that one of the greatest handicaps in our development is cost of distribution, perhaps one of the greatest factors in that cost of
distribution is the matter of high freight rates.
Those freight rates affect everybody
5 p.m. and everything. They increase the cost of living, and while we blame the railways, the railways blame their employees for the high wages they have to pay and also the high cost of materials. This matter should be sifted to the bottom, and whatever remedies can be adopted should be adopted for the purpose of relieving the situation. One thing that the public are dead sure of is that we are not going to enjoy the proper prosperity to which this country is entitled so long as those high rates prevail.
Our transportation system was largely built up many years ago with the great centres in the East kept plainly in view at all times, such as Montreal, Toronto and other centres. Conditions have changed tremendously since that time. I think a point has been reached where it is almost time to review the situation and to bring to bear such reorganization as is possible, taking into consideration the tremendous growth of the prairies, the development of British Columbia, the development and great increase of our agricultural production of the plains, particularly wheat,
and also the great possibilities of Pacific trade which cannot be overlooked now. This is increasing in importance every year, and we must always keep in view the competition which the Panama canal is going to give the railways crossing this continent. I am quite sure the development of British Columbia would be a great boon to our prairie friends. I have always felt that that great province, with its rich resources, will, once it is developed, provide at the door of the prairies, particularly Alberta and Saskatchewan a market that will be a very valuable one. There is nothing that will help out the development of that country so much as favourable freight rates. I am sure, once rates are reduced, we shall find a great deal of the grain in the prairies flowing over the mountains, not only for consumption in British Columbia, but for shipment abroad through our elevators which are built now, and increased elevator facilities which will be provided in the near future. The Pacific offers to the prairies an excellent way of getting rid of its grain all the year round with a very short haul and all down hill.
I do not propose to take up any more of the time of the House. The mover of the resolution has gone into this matter very completely and in full detail. I have great pleasure in seconding the resolution.
Hon. G. P. GRAHAM (Acting Minister of Railways and Canals):
Mr. Speaker, had my
hon. friend had this motion presented to him two years ago, I am afraid he could not have seconded it in this House. He would then have been in the position of being a minister of the Crown with this case before him on appeal. He is fortunate, perhaps, in that respect to-day. The question of transportation, as hon. gentlemen have said, is one that directly and intimately affects the people. The method of moving from the point of production to the point of consumption the products of the people either on the farm or in the shop, to a large extent controls the returns which the people get for their labour or their investment. Neither the government nor parliament can minimize the effect of freight rates on the public business of the country, or on the private happiness, contentment and prosperity of the people.
But the question, so far as I can view it, is not one of freight rates, although that side. of the question has been presented ably to the House. This country, years ago, rightly or wrongly, passed an act creating a body with machinery to which is referred the control of freight and passenger rates and movement of trains, together with the kind of equipment and standard of its repair. That was right or it was wrong. But to-day that is the law of the land. I know the hon. member for Victoria City (Mr. Tolmie) stated that last year parliament interfered with the work of the Board of Railway Commissioners. I want to point out the inaccuracy of that contention. In 1897 the Crowsnest pass agreement became a part of the law of the Dominion of Canada. That implied a contract between the Canadian Pacific Railway Company, the people of Canada, and the government of Canada. From 1897 until 1918, I think I am safe in saying, the Board of Railway Commissioners never had any jurisdiction over the rates affected by that agreement, at least not legally. Those rates were according to a contract embodied in the agreement called the Crowsnest pass agreement. In 1918, by another statute, with the consent of parliament and with the approval of the people of Canada, that agreement was suspended for a term, and during that suspension those rates came under the Board of Railway Commissioners. That term expired last year, and it was in the hands of this parliament to say whether or not it would be extended for another term. Parliament was not interfering with the work of the Board of Railway Commissioners as originally intended by this agreement, because that board was constituted many years after this agreement was made and the agreement was never brought under the board's jurisdiction until 1918. If this House had not enacted legislation for the purpose last session the Crows-
nest pass agreement would again have come into full force and effect, and accordingly parliament passed certain legislation allowing the main features of that agreement to again become operative. In other words, parliament refused to extend in its entirety the suspension of that agreement.
Now, the position to-day is altogether different. These rates have been under the control of the Board of Railway Commissioners since its inception, and this House is now asked to say that it is opposed to the existing machinery for the control of rates. How far has that machinery functioned concerning this very question now before the House? The Railway Act provides that the making of rates shall be placed in the hands of the Board of Railway Commissioners. If I remember correctly, the procedure is this: The railway
companies file their rates with the board, and if any objection is taken to those rates by any person or any organization the case is tried on its merits by the board. Under that statute the very case we are now discussing was heard before the Railway Board and a finding given. But the Railway Act further provides that in case any dissatisfaction exists as to a judgment of the board, appeal can be had on questions of fact to the Privy Council-the cabinet- and on questions of law to the Supreme Court.
This case was heard before the Board of Railway Commissioners, and the judgment of the board was not satisfactory to the province of British Columbia, which thereupon lodged an appeal with the Privy Council. That appeal has already been partially argued, and the constitutional aspect, referred to by the hon. member for Burrard (Mr. Clark) has been presented to the Privy Council by Premier Oliver and counsel for British Columbia, Mr. McGeer. The Speaker has ruled that if the Privy Council were a court this case could not be discussed here to-day, but in his opinion it is not a court. Of course I must accept the ruling, but I would submit that the Railway Act to all intents and purposes constituted the Board of Railway Commissioners a court of first instance and the Privy Council a court of appeal.
Now, the government is in this situation. We cannot discuss the merits of this case no matter how we may regard them. We are precluded in all decency from discussing whether British Columbia is fairly treated or not, for, as I have already stated, the case is now before the Privy Council and has already been half argued, and the attorney-general and the premier of British Columbia agreed that the completion of the argument should
take place immediately after the close of this session. The government having within a few weeks to give a decision on this case, and not yet having heard all the argument, is it in the interests of the people of British Columbia, is it in the interests of those who wish to have freight rates reduced that this motion should be pressed upon the House? I submit that any vote on this question could not be absolutely on the merits of the case, because members of the cabinet are precluded from suying a word one way or the other. Therefore in my opinion this question ought to be left in abeyance until at least the Privy Council, as the appellate court to the Board of Railway Commissioners, has had an opportunity to hear full argument and give its finding. If parliament then comes to the conclusion that that finding is not in accordance with the facts or with public policy, it can always so declare.
Mr. Speaker, in rising to take part in this debate I do not want to give the impression that 1 am asking for freight rates to be reduced. When I look over the freight rates that are charged in the United States and compare them with the freight rates that are charged in Canada, I find that on this side of the line they are about 25 per cent less. If we expect our railways to pay how can we consistently ask the government to cut freight rates? I believe in running our railways as a cold-blooded business proposition. In other words, I think our railways ought to carry at least their own overhead expenses and not expect the taxpayers to shoulder the burden. Why should we in the West pay taxes to make up an operating deficiency to get coal to the people of Ottawa? And why should the peoole of Ottawa be expected to pay taxes to make up an operating deficiency on the hauling of grain from the prairies to the seaboard? I do not think it is fair that those who are getting no consideration whatever from the railways should be taxed to make up these deficiencies. In my opinion freight rates should be fixed on a basis to cover overhead expenses, and indeed I hope to see the time when our National Railways will not only earn their overhead expenses but a surplus that will go a long way towards paying the debt of this country.
Now, when British Columbia entered confederation the government of Canada agreed to build a road to the Pacific coast. When that agreement was made nothing was said of discrimination in the way of freight rates. And here let me say that anything I am about to state in regard to the Canadian Pacific
Railway need not be taken as in any way condemning that railway. The Canadian Pacific Railway is (in organization that I think every true Canadian has just reason to be proud of, and the same might be said of the Canadian National Railways. The officials and employees of the Canadian Pacific Railway Company and the Canadian National Railway are giving transportation service to this country that is not surpassed in any other part of the world. The steamboats of the Canadian Pacific Railway and also of the Canadian National Railways on the Pacific coast are the flower of the Pacific ocean and should be the pride of all Canadians. Therefore I repeat any remarks I may make in connection with the Canadian Pacific Railway are not to be taken as in any way condemnatory of that railway but are intended simply to show the discrimination against the West in the way of freight rates as compared with the other sections of the Dominion.
Now, I see no reason why the people in the W est should not get the same scale of freight rates as apply in the East. When British Columbia entered the union her people took into consideration the inducements that were then offered to them to take that course. As I have already stated, one of those inducements was a railroad to the Pacific coast that was to be started within two years and completed within ten. That railroad was not started, I may say, until eight years after British Columbia had entered the confederation. However, that is past history. There is not a vestige of the agreement under which British Columbia entered confederation that has not been fully carried out by the people of that province. Why, then, should this government not see to it that the railway companies carry out their part of the agreement and exercise no discrimination in the matter of freight rates? Why should it be that a manufacturer of roofing paper, for instance, in Victoria, can ship his product down the Pacific coast, through the Panama canal, up the Atlantic and back to Winnipeg at 89-20 a ton less than he can ship it direct across Canada by rail? Yet he can do it. It simply means that the people producing these articles on the Pacific coast cannot compete, owing to the freight charges, with those engaged in similar businesses in the East. Why should it cost 100 per cent more to ship a car of apples from Okanagan to Vancouver than it does to ship the same distance in Ontario? And yet it does. It must be borne in mind that the British Columbia government gave 14,000,000 acres of land toward the building of the Canadian Pacific railway; and not only
that, the Dominion government built the greater portion of the line and handed it over to the Canadian Pacific Railway Company free of cost. Taking these things into consideration I do not think any person can justly say that the cost of construction of the Canadian Pacific railway in the West to the company has been much in excess of the cost of construction in the East. It is argued that the Canadian Pacific was an expensive road to build. I will admit that, but are .the people of the West to be penalized for - the mistakes of the C.P.R. engineers? That is the question that is before this House. The C.P.R. had the, same right to go through the Yellowhead pass that the Canadian Northern had. But in 1882 the C.P.R. came to this House and asked permission to change the route from the Yellowhead pass to the present route through the Rogers pass, on the ground that the distance would thereby be made some 79 miles shorter. It was a more expensive road to construct and no doubt is a more expensive road to operate, but that is no reason why the freight rates should be held up on the Canadian National on the basis of what the C.P.R. charges. I do not suppose there is a member of this House who would say that the East should be charged a higher freight rate on account of the Quebec bridge or the Montreal tunnel. No person will say that the cost of building that bridge or that tunnel should be charged up to the people in Quebec; much less should we in the West be charged with the mistakes of the C.P.R. We in the West are paying taxes on the money that the government advanced to build these roads, just as well as the people in the East; why, then, should we have to pay an additional tax in the way of high freight rates?
Some people will say that it has cost a great deal more to operate the roads in the West than it has in the East. I think I can show by figures that the cost of operation is from 65 to 80 per cent more in the East than it is in the West, I am sure that anyone who is accustomed to railway operations will admit that it costs more to operate in the East than the V est. Let us look at a few figures. The cost of operation of the C.P.R. per mile in Alberta and British Columbia in 1917 was $5,682, whereas in Quebec and New Brunswick the cost in that year was $10,000 per mile, or 76 per cent more. In 1920 the cost, of operation per mile in Alberta and British Columbia was $10,830 and in Quebec and New Brunswick S17,913, or 65 per cent greater in the East. In 1921, Alberta and British Columbia $8,631 per mile; Quebec and New Brunswick,
$15,560 per mile, or 80 per cent greater in the East than in the West. Why, then, are the freight rates in the West so much higher than they are in the East? Is there any just reason for it? . Some people will say, "But look at the amount of freight that is handled in the East compared with the West." Well, let us look at the figures with respect to the density of freight as represented by gross ton miles in Quebec and New Brunswick taken together, and in British Columbia and Alberta, taken together. The figures are as folows:
Quebec & New Brunswick 54,572
British Columbia & Alberta 56,431
Quebec & New Brunswick 46,021
British Columbia & Alberta 57,229
Quebec & New Brunswick 38,411
British Columbia & Alberta 42,891
This shows that in the West the volume of business for the railroad is much greater every time.
Some people think that the prairies are flat and that freight can therefore be handled much more cheaply there. But the prairies are not flat; at both Regina and Medicine Hat there are pusher grades on the C.P.R. Nearly a 2 per cent grade is encountered between Montreal and West St. John.
We hear a great deal about the mountain scale out West. The C.P.R. does pay its men a mountain scale of wages for 200 miles but it charges the people in the West the mountain scale on 4,500 miles. That is what is called the mountain scale. Is there anything to justify it? Not that I can see. As for the Canadian Northern, there is no such thing as a mountain scale.
I would now like to say a few words about the Canadian Northern. On that line out West for a distance of twenty-eight miles, up the North Thompson, the Canadian Northern has a grade of seven-tenths of one per cent, and that is the heaviest grade on the line. The rest of the grade is four-tenths of one per cent. In fact, the grade is such that you could start a train at Jasper or Lucerne and it would almost run itself without an engine to Vancouver. Indeed there is not one grade on the Canadian National railway that is not fully compensated. It is not so on the Canadian Pacific railway.
Some people may say: Look at the cost of construction on the Canadian Northern railway through British Columbia. Suppose we compare the cost of construction of the Canadian Northern railway through British Columbia and in the East. From Kamloops to Hope was the most expensive portion of the Canadian Northern road to construct, and that
section of the road cost $133,563 per mile, whereas the road from Ottawa to Montreal cost $178,000 per mile; in other words that section from Montreal to Ottawa cost $44,430 a mile more to build than the most expensive portion of the line in British Columbia. Or again, take that section of the road between Montreal and Winnipeg. That section cost an average of $59,313 per mile, whereas the section from Winnipeg to Vancouver cost $55,572 per mile, or in other words, $3,741 per mile less: Why then, when we take these things
into consideration, should the people out West have to pay the freight rates they are paying to-day? I might say that all these figures were taken from the official railway accounts and have never been challenged.
There is no reason that I can see why the freight rates in the West should be such as they are; it is a discrimination against western Canada, and one that is hard to explain. There is no reason that I can see why any railroad company should be entitled to hold up the freight rates to debar the people in the West from doing business with the prairies, and that is what they are doing at the present time. All we ask out West is a square deal. We have carried out, as I have already said, every vestige of an agreement with the Dominion government, and we ask the Dominion government to carry out their part of the agreement and give us the same freight rates gs other sections of Canada enjoy. If the freight rates have to be raised in order to put the roads on a paying basis, we are prepared to pay our share of the cost, but let the rest of Canada do the same thing. That is all we are asking.
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):
I wish to review this subject briefly, Mr. Speaker, and to state where I stand upon the resolution of the hon. member for Burrard (Mr. Clark). To come to an intelligent grasp of the whole question embodied and involved in this resolution, one has to go back some distance in the history of our railway legislation. That history has been reviewed, but I do not think reviewed fully, and I am quite certain not reviewed fairly by the hon. the Acting Minister of Railways (Mr. Graham).
This parliament has had from its inception the power to control railway rates in this Dominion. In so far as the railways of Canada were Dominion railways within the meaning of the British North America Act, the control of rates upon them rested with the parliament of Canada, or with such body or committee or commission as the parliament of Canada chose from time to time to depute
that jurisdiction to. Up till 1903 parliament had left with the Privy Council under the Railway Act the exercise of that control. The Privy Council had what was known as a Railway Committee, within which was placed the exercise of such review of the rates on our railways as was deemed in the public interest. While such was the law of the land an agreement was made by the Dominion government with the Canadian Pacific Railway Company, in 1897, whereby in consideration of a grant of money for construction of a branch line the Canadian Pacific Railway Company agreed to give certain rates on grain and flour eastward and on other important commodities westward into and from the prairie provinces as a consideration for the aid so extended. Those rates were lower than had previously obtained on the goods affected.
In 1903 parliament decided on another body for the exercise of the control that had previously been in the hands of the Railway Committee of the Privy Council. Parliament constituted the Railway Commission, and by specific legislation in amendment to and added to the Railway Act of the time provided that this commission should have control of all rates whatsoever, as well as the supervision of improvements, the maintenance of equipment and other matters that theretofore had been otherwise controlled. To that general reposition of power there was in the clauses establishing the Commission no exception at all, and it is unnecessary to add that any exception would be wholly inconsistent with the spirit and purpose of the legislation itself. As a matter of practical effect for many years no exception arose for the reason that in the case of the only exception which afterwards was found to exist namely this Crowsnest pass agreement, the rates thereunder were such as really not to be affected by the practical operation of the Railway Board.
What I would like to call attention to now is this, that in the granting of power to the board there was no exception, and intended to be no exception, but afterwards it appeared that in the general Railway Act, aside entirely from the provisions constituting and empowering the board, there was a clause that nothing in this general Railway Act should affect the provisions of any special act, the intention being, should affect any special act incorporating a company and the granting of certain powers thereunder. However, the effect of that general clause in the Railway Act was such undoubtedly as to maintain intact the original Crowsnest pass legislation. Now that Crowsnest pass legislation was not the only thing that was in my judgment intended to be cast aside by the general provisions adopted in 1903 establishing the Railway Commission. Previous to that there had been many agreements entered into, not only by companies and by individuals, but by provincial governments, with railways whereby for a consideration the railways undertook to give certain lower rates; but because of the establishment of a general tribunal and the submission of all companies to that tribunal these agreements inevitably were swept aside. If they were to still obtain in their old force then the whole purpose of the railway legislation of 1903 would be to that extent defeated. In a word, grievances of any kind-
I will come to that very fully. I undertake that the hon. member will be fully satisfied with my treatment of his question a little later on.
All previous agreements were swept aside for that reason. Once the railway companies submitted to the tribunal constituted by the parliament of Canada and said "We will let this tribunal fix rates herafter" what more could we ask of the companies? Very well. Upon the establishment of the Railway Commission in 1903-there having been up to that time a gradual general reduction of rates in Canada
the rates then obtaining under the Crowsnest pass agreement were only such rates, and no lower, as the Railway Commission anyway would fix. So it turned out. Indeed, as time passed the Railway Commission found it possible to assess rates even lower than the Crowsnest pass rates, and those were in effect for some years. This point the Acting Minister of Railways overlooked in his review this afternoon. He stated that the rates effected by the Crowsnest pass agreement had never been under the jurisdiction of the Railway Commission. They were; the Railway Commission actually dealt with them and reduced them below the Crowsnest pass level. Now, all the while legally, because of that exception in the general Railway Act, the Crowsnest pass legislation was in existence; but not until 1917 did the time arrive when the effect of that agreement actually and practically interfered with the operations of the Railway Commission.
I was smiling at this: I do not quite agree with my right hon. friend's position on the submission to the Railway Commission of the Crowsnest pass agreement. However, it is immaterial; the results were the same; the rates were lower than the rates under the Crowsnest pass- agreement.