April 17, 1923

LIB
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

As a legislative act no

provincial legislature can fix rates on Dom-ionion railways; but as a contractual right it can. In a word, it can only base its power upon contract. If it attempts to fix rates without any agreement with the railway company, the company does not need to bother its head; but if the company agrees to submit to the rates fixed, then, aside from any interference by this House, undoubtedly the company would have to -abide by those rates because it contracted to do so. This does not apply to us. We can fix rates by legislation. The company need not contract to abide by those rates for we have jurisdiction over Dominion railways. A legislature can fix rates only if the company agrees to abide by the rates so. fixed; and the company is bound by those rates if it contracts to accept them, unless it is relieved by this parliament.

Then, it may be asked, how did this parliament relieve the company? It is very easy for me to answer. Remember when the provincial statute was passed there was nothing that prevented its enforcement. This parliament ratified the agreement, but at the same time reserved the right afterwards to come along and fix rates itself. The statute reservjng this right is chapter 53 of the statutes of 1901. This parliament ratified the agreement. It did not need to ratify it in so far as the contract was concerned for the fixing of rates; there were other things, though, that had to have ratification to make the agreement binding. And in ratifying the agreement in toto parliament said " Nothing herein contained shall prevent the right of this parliament by commission or otherwise later on to fix rates itself." The clause I refer to is subsection 1 of section 3 of the statute.

Unless this parliament came along and itself got in between the railway company and the legislature of Manitoba and forbade the legislature to enforce its right, the legislature could do so. But parliament did come along and forbid the legislature to take action when it established the Railway Commission in 1903. Manitoba did not complain. Why? Because the Railway Commission did not establish rates higher than those that had been fixed by the province. The province had fixed rates in pursuance of this agreement in 1901 and right from the first day, the first of April of that year, the rates which the province fixed were fMr. Meifihen.]

in force, showing that the province had a perfect right to contract so to do. The province of Manitoba got the benefit of those rates, having given consideration for them.

This parliament came along in 1903 and put the Railway Commission in a position, if it chose, to override those rates. The Railway Commission did not do so, but now it comes along and does override those rates. It exercises its power and steps in between the legislature of Manitoba and the Canadian Northern Railway Company and denies the right to the Government of Manitoba to enforce the contract that it made with the Canadian Northern Railway Company. Very well, if an agreement with the Crowsnest Pass Railway is an agreement, here is an agreement too. If one agreement is not to be swept away, why sweep away the other?

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LIB
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

No, the company is in existence to-day in exactly the same corporate position that it was in in 1901.

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PRO

John Livingstone Brown

Progressive

Mr. BROWN:

It would follow then from all that has been said that the province itself has no power to enforce rates under the old agreement without the consent of this House?

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

That is right.

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PRO

John Livingstone Brown

Progressive

Mr. BROWN:

Very well. That is not the position taken by many in Manitoba, including some of the right hon. gentleman's friends.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

That is the position I understand to be the law. I do not know of any who take a different position. What is the position taken?

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PRO

John Livingstone Brown

Progressive

Mr. BROWN:

If I mistake not, a campaign has been carried on in some quarters promising that certain individuals would restore the rates in Manitoba, and contending that the legislature has power to do so irrespective of the authority of this House.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Oh, I think my hon.

friend is misinformed. I do not think anyone would argue seriously that this parliament, in respect of Dominion railways that are works for the general advantage of Canada, cannot fix rates or establish a tribunal to fix rates over and above and operating beyond the contract of the province of Manitoba. Now, the province of Manitoba did not complain so long as this parliament did not in any way fasten chains upon the tribunal that fixes rates. But when this parliament, on the advice of this government, fastens chains on the tribunal and prevents them from making rates that they believe to be equitable, then the

Railway Rates

province of Manitoba is denied justice and is on good ground in calling upon the government to restore its rights as well under the 1901 agreement. I would like to know what the fault is with that reasoning. Because, this parliament, on the advice of this government, establishes fixed rates for wheat flour and grain westward, no matter what the Railway Commission should think would be fair, the province of Manitoba to-day is paying beyond the rates that would have been fixed and were fixed under the contract of 1901.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

Were these

rates not fixed by the parliament of Canada long before this government had anything to do with it?

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

No; the Prime Minister has not followed me either. Not at all; the government of Manitoba fixed the rates. The hon. Prime Minister will remember it put wheat down to 10 cents, subsequently to 11 cents-that is, wheat out of Manitoba to Fort WTilliam. About three years afterwards the Railway Commission was established. That body was then given power to step in and fix rates irrespective of that contract. But the Railway Commission, exercising that power, did not disturb the rates fixed by the Manitoba government, not until in 1917. That was the only time that there would be any reason to do it. But in 1917, it was made free to fix all rates irrespective of all agreements, on an equitable basis, all round. In 1917 this parliament, wiping aside the Crowsnest and all agreements, effectively stepped in and prevented the province of Manitoba from executing its contract with the Canadian Northern Railway Company. The province of Manitoba submitted as long as the tribunal was a tribunal unrestrained by the arbitrary acts of this parliament, but when this parliament restores another agreement and thereby prevents the commission from getting back to the old Manitoba rates as soon as it otherwise would, Manitoba has just ground for complaint and has a right to come to this government and say, "Restore our agreement too."

So much for the Manitoba agreement. Manitoba is not alone in this matter; other provinces have rights as well. But before I come to them, does anyone seriously argue that the act of last session was based upon any other consideration than that this government-to put it on the very highest plane-this government and this parliament thought that the old Crowsnest pass rates were as high as the western provinces could stand? Now, that is the highest plane you can put it on. I am not saying they were not; that is not the point.

When this parliament seeks to justify its conduct on the basis of the old Crowsnest pass agreement, that is the time this parliament takes a stand there is no defence for whatever. The old Crowsnest pass agreement, if it was an agreement, stood, and its integrity should never have been invaded. That is to say, if the fact of the agreement was to be a rock upon which we stood, then let the agreement remain a fact; do not tear it to pieces and then pretend there is a certain sanctity about what remains. Could any humbug be more manifest? That is what parliament did. But more: If this parliament felt that, no matter what the Railway Commission might think to be fair in the light of the circumstances in the Maritime provinces, in Quebec and in every part of this Dominion-if this parliament felt in the face of the serious conditions in the West that no higher rates could be paid-and that is the best footing upon which we could possibly put our conduct-then the duty of this parliament was to leave the Commission free, but to give power to the government of Canada to pay a part of these rates out of the public treasury. Would that not have been the straightforward conduct? It is what should have been done. If this government felt and this parliament felt-let me repeat-that the rates of the old Crowsnest pass agreement were the highest that could be paid if the West was to be saved from paralysis, they should not on that account have tied the hands of the commission; they should have let the commission do what they felt was fair having regard to all parts of this country. They should have left the Railway Commission a real tribunal with power to exercise its functions and then paid -as it could easily have done with the authority of this parliament-the extra freight out of the treasury of the Dominion. Very well, they took the other stand. They said definitely: "We are going to fix rates on wheat flour and grain going eastward, and we are going to do it even though it should be the opinion of the Railway Commission that such rates are inequitable having regard to the rights of other parts of this country in respect of freights." What was the result? One result which has been depicted in the strong speech this afternoon of the hon. member for Burrard (Mr. Clark)-the discrimination that all along had existed, justifiably or not justifiably, against the western passage out of the prairie provinces, was accentuated and duplicated by the conduct of this government and. this parliament.

Ever since the Canadian Pacific railway was built, British Columbia has laboured

sajojf flv:nfiB}j

under a discriminatory rate, always justified by the argument that British Columbia was a mountain province and that because of the grade of the railway and the cost of construction-chiefly because of the heavy grade over the mountains-it was only reasonable that a higher rate should be paid. The discrimination has existed all along. There were those who felt it should never have existed. There were those who ever since the Canadian Pacific was built have taken the stand propounded by the hon. member for Burrard this afternoon, who have argued with very much force that when this country undertook to build a railway through those mountains it undertook that the whole of that burden should be the burden of the Dominion of Canada, that no special part of it would be levied on British Columbia alone, and that when you fix extra rates over the mountain section you do impose a certain special part of the burden on the mountain province. There is great force in that argument, but it was resisted-resisted by the Special Committee of the Privy Council, and resisted afterwards by the Railway Commission, both of whom held that a certain amount of differential was justified. Rightly or wrongly, that view prevailed. But the condition against which British Columbia complained has been aggravated because this parliament came in and fixed special rates eastward and said nothing about rates westward. The differential against the westward rate is much greater than it was before. I want to know how the government justifies that. What answer have they to the hon. member for Burrard? What right has this parliament to come in and to magnify the differential under which British Columbia has laboured all these years? Now, let this debate proceed and let us listen carefully for the answer of the government to this contention. British Columbia has a grievance against this administration. British Columbia has been done a grave injustice; other parts of the Dominion have too, and the government cannot expect to be regarded as anything except a tribunal before which they all can come and demand redress at its hands If they had kept out of the jurisdiction that we stepped from in 1903, then they could maintain their position; but they did not keep out. They thought they would get in and get credit for reducing the rates on certain wheat and flour; they thought they would like to be called the party of low freight rates. All right; I say to them now: Be the party of low freights.

I say to this government: Come to British Columbia. Come to British Columbia and at

least remove the extra differential you put against that province. Come to Manitoba and restore the rates you prevented Manitoba enforcing for the last fifteen years. Why don't you do it? Come to the Maritime provinces and listen to their complaint against the freight rates under which they labour. You cannot say you have nothing to do with it. You have already done with it. You went into two provinces and for one reason and one reason only, because you wanted votes in this House, for that reason and that alone, you went into two provinces and fixed rates below what the Railway Commission would do, and in that fact you imposed upon other parts of this country served by the railways, burdens that their people had no right to bear at all; you destroyed wholly the position upon which the government of Canada has stood for the last twenty years, that the matter of railway rates and railway control was for the Railway Commission alone.

Now the government is in the position of sheltering itself behind an agreement the integrity of which they claim is important. The shallowness of such position really hardly admits of serious argument. The idea of one party arguing that an agreement into which it entered is sacred and cannot be broken when the other party is at its door asking to be relieved! How foolish that is! The government cannot stand on such paltry talk at all. It cannot stand on it first of all because by the very Railway Act it broke down every other previous agreement. It cannot stand on it, secondly, because that very agreement they themselves took in their hands and tore to ribbons at the moment they were applauding its integrity. So I say, answer to the demand of British Columbia. Answer to the demand of Manitoba. Answer to the demand of the Maritime provinces. What you are ready to do for one part, be ready to do for all. That is the demand of this resolution. Pass this resolution, and the government must answer these demands, and there is no one who voted for the invasion of the jurisdiction of the Railway Commission who has any excuse at all for his vote against this resolution. And this government won't be through merely by voting it down.

Oh, we are told, the government is in the position of a judicial body, and they will be prejudicing the case if they vote on this resolution. They say: Inasmuch as we as a government must decide the appeal of the province of British Columbia against the judgment of the Railway Commission, inasmuch as we have to decide that, you should not bring the matter up in parliament at all until we are through. I would like to ask, what is

Railway Rates

the use of bringing it up after they are through? After they are through, it is hopeless. I know the government has an appeal to decide. I presume all the evidence has not been heard, but the tinje for parliament to speak is now. There is no use speaking at any other time. Why, this government has other things to decide besides this. It has to decide what it is going to do about the extension of the rest of the Crowsnest pass agreement, and I presume if we bring that question up hon. gentlemen of the government will say: Oh, please don't bother us with that because we have to decide it later on. There is no use in parliament waiting until the government has decided. The. only time parliament can express its opinion is now. Therefore we are expressing it now.

The government members may vote against this resolution because they must decide the appeal. There may be some force in that contention, but there is no force at all to the argument that we should not discuss the subject and press our views on the attention of the government. That is what we are doing to-day and we will continue to press our views, we will continue to press for the government to do for every province what it did for two and we shall do so until the government leaves the proper tribunal intact to exercise its functions as a judicial body should.

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LIB

Edward Mortimer Macdonald (Minister Without Portfolio)

Liberal

Hon. E. M. MACDONALD (Pictou):

I

have heard my right hon. friend on more than one occasion adopt the casuistical tone which he has adopted to-night, and I notice that he resorts to it particularly when railway matters are under discussion. I call to mind with what simulated indignation in 1917, when he was dealing with the railway problem of that time, he undertook to deny that in 1914 when he steered through the House of Commons of that day the legislation that forever fastened on the Canadian people the ownership of the Canadian Northern railway, he had told parliament and the country that the legislation which he was then introducing for the purpose of taking over the stock of that company, involving the security of the Canadian people by way of mortgage, would have this effect, that in case of default the Canadian people could at once take possession of the property. Yet three years afterwards he came to parliament and introduced a bill for the purpose of enabling the Canadian people to take over that property at a valuation to be paid which three years before he had said would be absolutely forfeited in case of default.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Will the hon. gentleman permit me? I want to make one correction,

not because the hon. gentleman particularly has made that statement, but others have. The legislation of 1914 provided that in case of defaidt under the mortgage the government could take over the property upon such terms as parliament provided. Those were the exact words of the statute. When there was default, the government came to parliament to provide the terms upon which we took it over.

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LIB

Edward Mortimer Macdonald (Minister Without Portfolio)

Liberal

Mr. MACDONALD:

I have not before me the statute, but I do not need to turn aside from this debate for the purpose of verifying what I say. I well remember, however, my hon. friend's attitude on those two occasions and of myself pointing out in 1917 how the arguments which he had used against the former Solicitor General, the Hon. Mr. Bennett, in 1914, had come home to roost.

You would think, Mr. Speaker, to hear my right hon. friend that we were discussing the question as to whether we should have passed the Crowsnest pass legislation last year. That has been the burden of his song. He has made his speech just one year too late. Why did he not when the report of the committee came before parliament last year stand up and say then in the same vehement tones the words he has used tonight? Why question to-night the action of the government in submitting that proposition to parliament a year ago?

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CON
LIB

Edward Mortimer Macdonald (Minister Without Portfolio)

Liberal

Mr. MACDONALD:

But the right hon.

gentleman did not do so. On the contrary. Let me call attention to the resolution which my right hon. friend's first lieutenant has moved, and to the resolution which my right hon. friend supported last year. What was that resolution?

That while the Board of Railway Commissioners remains as it is now a tribunal constituted by parliament to fix railway rates without discrimination and in accordance with changing conditions and to meet the needs of the country as a whole, it should be. left free-

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Hear, hear.

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LIB

Edward Mortimer Macdonald (Minister Without Portfolio)

Liberal

Mr. MACDONALD (Reading):

-it should be left free to perform such duty-

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?

Some hon. MEMBERS:

Hear, hear.

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April 17, 1923