May 6, 1925

LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

You could sell the stock in them, of course. Just to show you how delicate some of these things are, recently in a certain legislature in one of the states it was charged against the Canadian National that it was spending all the money in Canada, and not spending in the United States the money to which the United States was entitled on account of the mileage there. Of course, there is not any foundation for that statement, but that question was raised, and I heard that without any criticism that legislature, in both houses, passed an act to take over without the consent of the Canadian National or of the Canadian government a certain mileage of the Canadian National railway, which it is stated that state intends to sell to another company. I do not know whether that is so or not, but I am citing that as a matter of public record just to show the delicate questions that sometimes arise in connection with the operation of the Can-

C.NJi.-Minister's Statement

adian National lines in the United States. I want to add this, that on the whole every state in the Union, and the federal government of the United States as well, has given the Canadian National system fair play, and given it just as good an opportunity as if it was one of their own lines.

Now may I be permitted to refer to the question of taxation? That is a live question in the Dominion of Canada with reference to the railways in the various provinces. The company lines, and these are the lines exclusive of the Canadian government lines, pay their taxes now as they did before. The Canadian government lines proper-these are the Intercolonial, the Prince Edward Island, the Hudson Bay and the Transcontinental-being government owned have not paid any taxes. To my mind, while that is constitutional, because you cannot tax the king or his property, I am rather of the opinion that where a government and the people deliberately go into a commercial enterprise they will eventually have to bear some of the responsibility attaching to that commercial enterprise.

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PRO

John Morrison

Progressive

Mr. MORRISON:

We did not deliberately go into this; we were forced into it.

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

But you are in now.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Is the hon. member for

Weyburn (Mr. Morrison) not wrong? We deliberately went into it so far as the Intercolonial and the Transcontinental are concerned.

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PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

Would the minister be

willing to extend that policy to the farms owned under the Soldier Settlement Board?

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

I will consult with my

colleague when he comes in as to that, but I have certainly troubles enough already with the railway. As I was pointing out, Mr. Speaker, when the people of Canada go into a great commercial enterprise, whether they are forced into it or go into it, or however it is, I cannot see how they can well escape a portion of the responsibility at least that pertains to that enterprise. Believing that to be the case, I asked the Canadian National management to appoint a committee to consult with the provinces through which these government railways run. Now, mark you, any taxation that is arrived at to be placed on the Canadian National is voluntary by the Canadian National or by the Canadian government, but notwithstanding that, I think there is a moral claim for some taxation. At the present time, government owned land leased to any individual is taxable to this extent, that the tenant of that property

can be taxed, although, technically speaking, the property itself is not taxed. That was decided, I think, in the case brought by the city of Montreal some three years ago, when the government of which my right hon. friend (Mr. Meighen) was the head referred the matter to the judicial committee of the Privy Council. It was then decided, if I remember correctly, that the property owned by the crown could not be taxed, but that the tenant of the property could be taxed. Consequently the tenants of various properties along the Lachine canal, for instance, leased by the Department of Railways could be taxed by the city of Montreal. That holds good, of course, all over the Dominion. But there is something further than that. The provincial governments tax company lands unless there be some agreement to the contrary. The municipalities in those provinces tax company lands unless there be an agreement to the contrary. Therefore this committee composed of Mr. Ruel, chief counsel, and Major Bell, one of the directors, has been appointed to confer with the Prime Minister of each province and see if some amicable arrangement can be arrived at by which taxation-I think it ought to be small under the circumstances, the principle being acknowledged-might be imposed by each province, or rather by which a certain amount might be paid to each province and to each municipality in that province. That will cost considerable money, but I believe the governments of the. various provinces and the municipalities, under the circumstances will be reasonable, and not expect to receive too large an amount.

Now, Sir, I come to the question of the proposed amalgamation. But before I deal with that question briefly I want to put on record, as I think it is really a splendid showing for the year, these figures-the operating expenses and the operating revenues. During the past year the operating revenues decreased by $17,500,000, and the operating expenses by $14,360,000. The net earnings of the Canadian National, under all the conditions which I have outlined, this year amount to $17,244,251. Now I come to a point where I am not sure that I will agree with anybody. What shall I say about the proposed amalgamation? The hon. member for North Waterloo (Mr. Euler) gave us a most interesting address, as he always does except on the budget.

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?

Some hon. MEMBERS:

Oh, oh.

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

The budget proper, I

mean. He dealt with this question in a very

C.N.R.-Minister's Statement

masterly way, and his conclusion was that we ought to have an amalgamation. He also gave us the figure of $100,000,000 that might be saved by this amalgamation. I think my hon. friend from South York (Mr. Maclean) did not give us any figures, but he told us he was strongly in favour of amalgamation and that he believed it would be the salvation of the situation.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN (York):

He gave a very exact programme of action that might be taken in the matter. He showed what could be done in the way of cutting out duplication and other changes and the enormous economies that would be effected.

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mir. GRAHAM:

I guess he did.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN (York):

Yes.

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

I must approach this

subject in a careful way. To me monopoly is distasteful in any form. I am not sure that amalgamation at the present time is the proper thing. It may be that, in the future, in the maturing of conditions, amalgamation may [DOT] be necessary; but I am free to admit that I would like to try out to

5 p.m. its fullest extent every other method before I submitted to monopoly of any kind in this transportation question. It has been said that the Board of Railway Commissioners could control. True. I believe our Board of Railway Commissioners is an able body of men, and could control, so far as any such body could, the operation and the cost of our transportation companies, or of one company if there were one. But there are so many things that cannot be controlled by a Board of Railway Commissioners or anybody else outside of competition. Without casting any reflection -because that is far from my idea-I will leave it to any man in any part of Canada, or to any hon. member sitting in this House, to answer this question: Is not the Canadian Pacific Company's service to-day immeasurably better than before there were other lines in their territory? Naturally so. I remember visiting a gathering of farmers once in Regina and 'they were pointing out to me-this was some years ago-the improvement in the service since another line came in.

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LIB

William Daum Euler

Liberal

Mr. EULER:

Would that not also constitute a strong argument why there should be no Canadian Pacific monopoly?

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

I will come to that. I

think my hon. friend the member for Vancouver South (Mr. Ladner) wishes to ask a question.

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CON

Leon Johnson Ladner

Conservative (1867-1942)

Mr. LADNER:

I should like to ask if

the improvement of the service of the one line has not meant a great amount of increase in capital expenditure in carrying out improvements on the other line, the net result being an increased burden to the people of Canada in railway debt and in taxation?

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

I should not like to admit that. One of the supreme things is service, and we would not have any railways if it were not that we wanted service. Of course if my hon. friend is prepared to take any kind of service he could have a service operated by horses.

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CON

Leon Johnson Ladner

Conservative (1867-1942)

Mr. LADNER:

Where is the limit?

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

The limit of service is

in the hands of parliament so far as the Canadian National system is concerned. I admit that whether it be the Canadian National or the Canadian Pacific there is no place to get the money to pay expenses except out of the pockets of the people.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN (York):

That is the

whole case.

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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

But I was discussing the

question of competition and taking this little instance to illustrate my point. I was saying that I was visiting a large gathering of farmers-that was before they were Progressives; they were just farmers in the west then-and the representatives of all the railways were gathered together in caucus with these farmers. The farmers were not hanging on to the railway representatives to find out if they could get cars, but the railway representatives were button-holing the farmers to see what they wanted in the way of cars, on account of competition. * Competition is the only thing that will give a man a car when he wants it. You can have all the railway commissions you like and they cannot control that feature of the service. Competition is the only thing that will give you an improvement in the way of attention on the trains when you are travelling; because if there is no competing system, it is human nature to make as much out of you as possible. I am pointing this out to show that monopolies may become absolutely essential; but at the present time I would rather see our people maintain their courage, maintain their belief in the Canadian National system, and find out if we cannot work out some way by which we can have in Canada not amalgamation at the present time but a co-operation that will give the people the desired service and protect them from monopoly.

C.N.R.-Minister's Statement

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May 6, 1925