That is a different matter entirely. Suppose we take the liability here, as stated by my hon. friend the Chairman, that that 80 foot dam had been erected and these transactions could not be carried on-supposing that is right, and I am going to accept it-what liability can there be on the department or the government? Mj' hon. friend knows perfectly well that the liability, if any there be, is on the power company in not maintaining a proper by-pass, or some other arrangement, in order that those logs can be carried through; so far it has never been looked upon as a liability of the country.
But my hon. friend forgets that the logging operations were stopped on account of the pollution of the water that was going to be used by New Westminster. It was not particularly the building of the dam, but the restrictions placed upon the logging of the berth, which could very readily be logged into the Coquitlam river.
friend must see that if the dam was there, and the logging could not be done anyway, the falling back on the other matter is an excuse, not a reason. Down to 1917 the department was taking the position: We have put in reasonable regulations under which the water will not be polluted; go ahead and cut. And why should they not go ahead? Because we have this dam which is spoken about, and the opinion then given makes it perfectly clear:
If Mr. Grunsky's view is the correct one, it does not appear to me that the department is interested in the case, it being one between the berth holders and the power company.
There we are. I do not know whether the department has had an opinion from the Deputy Minister of Justice since, saying that Mr. Grunsky's law is wrong. But if he is
right, in law there is no justification for what we are doing.
friend is building up an argument against * treating with these men at all. All the ministers who preceded me appeared to be quite willing to make an exchange. I never attempted to do anything else. I quite believed that these berth holders were entitled to consideration. We have had the timber valued half a dozen times, and I think my hon. friend will recollect that Mr. Craig made the most recent valuation. We were trying to made an exchange, as we frequently do for various reasons, for instance, that the berth cannot be logged. But what I would point out to my hon. friend is that that was the established policy of the department, and that is what I recognized it to be-to give to these parties an exchange for their property. We still have the timber, which my hon. friend will agree is increasing in value all the time, because it is becoming more difficult every year to secure timber-even the timber over the height of land in berth 507 is becoming more valuable-and we will get our money back. That is what I want to point out to my hon. friend in connection with the whole transaction.
I am simply doing the best I can with the file I have before me in the very limited time at my disposal. I wonder if my hon. friend has read the memorandum of the branch of June 0, 1919, when the whole matter is gone into and particularly the policy of making provision for a log chute is discussed. For example, this, as bearing out the difficulty of doing anything with timber on that property:
An explanation on file shows that the consulting engineer took the position that the river was entirely unadapted for logging, and that the omission of the log chute could not affect the position of the timber licensees, and that a railway would have to be built in any case to get the logs out properly.
Of course, if that is true, the building of a dam did not make any difference; the property could not be worked anyway. There is the reason why we have the tremendous delay, and if that memorandum is true the property simply could not be worked.
Engineers of the Waterpower branch state unofficially that Mr. Freeman's view about the unadaptability of the river for logging is correct. They also point out that mechanisms have been incorporated in the dam for the release of large quantities of water into the stream if required below the dam for logging purposes,-
And so it goes on. But I have not been able to find anything which says we are liable.
Paragraph eight at page five of the memorandum reads as follows:
On the question being referred to the Department of Justice, the above position was substantiated,-
That is, I presume, as to the absence of liability.
-and upon a second reference to the same department a few months later, the opinion was given that the city would have no claim against the crown for damages for the flotation of logs down Coquitlam lake.
I cannot find anything here as to liability. On the very question of this claim, at page 7, the memorandum proceeds:
The timber berth owners ask for $125,000 damages this amount being based on the value of the timber in the entire area of the berth. They do not seem to recognize, or perhaps have not the facts at their command, to show that the timber from a large part of timber berth No. 507 can be marketed as easily as before the dam was constructed.
And it goes on in connection with the watershed of the Gold creek, pointing out that so far as at any rate the major part cf this property is concerned all this trouble about the Coquitlam watershed has nothing to do with it at all; that it could all be looked after.
Yes, and according to Mr. Grunsky, the larger part is. The report I am referring to is the one of June, 1916. Now, the matter goes to the Justice department, and I would like my hon. friend to tell me-I think I asked it before, but we did not get a categorical answer- what the position of the Department of Justice is as to this claim.
one of the difficulties of dealing with this case. The minister does not know the legal right of these gentlemen to get $120,000 of the taxpayer's money. I had better read what that opinion says:
In the case then under consideration the minister advised that allowance of the entry desired would not seem to be unreasonable, but that the expediency of it was a matter for the consideration of the Minister of the Interior and His Excellency in Council. I think these powers may be invoked to justify approval of a recommendation in the present case,-
That is, as to exchanges, as I understand it.
-and that it would not be unreasonable to authorize the licensees to cut timber of corresponding value upon Dominion lands in an other location in consideration of surrender of their existing rights, but while I am disposed to think upon the authority aforesaid that the power exists to authorize these arrangements, the question of propriety or expediency is to be determined by the Governor in Council.
Not one single word as to their being any liability on the part of the country.
Well, where licensees had allowed their berth to go uncut for a number of years and the government stepped in and prevented the cutting advantageously of perhaps the most accessible portions of the berth, surely the licensees were entitled to some consideration. I never questioned the right of exchange; the difficulty was we never could reach an agreement as to value. I recommended that rather than give more valuable timber we pay back to the licensees the expenditure made and keep our timber, because my own opinion is that we will eventually be very much better off with the timber than we would be by making the exchange. Of course, the $120,000 is in coin of the realm; the licensees get it and we keep our timber. The hon. member has gone into a long argument as to legality. From the strictly legal point cf view I suppose we could say to the licensee: "You have got your berth; do what you like with it; we will not recognize any liability on our part for interfering with your rights and privileges." But in dealing with matters of this kind, if by inadvertence or some other circumstance the government by its action destroys the investment of the licensee, surely the licensee is entitled tc some consideration on that account. I think my hon. friend would agree with other ministers who have dealt with this matter that an exchange should be arranged if possible.
statement overlooks the real facts of the case. It overlooks the erection of the eighty foot dam, for which this government certainly is responsible. It overlooks the state of the river, which cannot be fed in the ordinary way by these logs, and which his own department says cannot be used for that purpose. It overlooks the fact that the conditions out there were such that from 1906 up to 1916 no one thought of doing anything with it-not until it is known, as pointed out in the report of the previous November, that there are difficulties in the way and there as some chance of their getting paid either by the city of New Westminster or by the government. But the point I am really emphasizing is this: that it is absurd to expect any proper consideration of a matter of this kind on a supplemental .estimate brought down at this hour of the session. I am just going to finish with the legal question now. The matter was again sent to the Justice department on September 20, 1921, and Mr. Newcombe gives another opinion. He first acknowledges the letter and says:
In reply I beg to state that I have nothing to add to the opinions in regard to the above matter given by me in my letters to Mr. Cory of the 25th of October, 1919, and the 9th of May last. If by "valid claim", you mean "legal claim" my reply must be in the negative, but as stated in the opinions just referred to it is open to the Governor in Council if he thinks. it expedient to make an exchange of timber berths,
That is as far as the Justice department could go, and I submit that they were right in their opinion that there is absolutely no legal liability. The situation is an unfortunate one. It is very unfortunate that these gentlemen should have been held up by all these different matters in connection with their investigation. But why should the Dominion have to take on the whole burden in the absence of all legal liability? Here we have nature itself making that berth, which is valueless until a railway is built, and if the records of the department are to be relied upon-my hon. friend will not say they are not-they show that the river cannot be used, irrespective entirely of the dam; that the river was such that it was not at all suitable for logging operations. In short, the investment was a mistaken one. Here is a lot of timber that the licensees could not have removed irrespective of anything whatever *about New Westminster, except at a greater cost than the timber would be worth even dn the war period, and now we are called upon in the dying days of the session without the slightest proper opportunity of considering
this matter, to say that these two gentlemen shall have $120,000. I am not in a position to say whether the whole of this is wrong or not, but I do point out that it does seem absurd that against the reports of the officers of the department, against the reports that the timber cannot be removed, against the fact that an eighty-foot dam is built over which we have no control, and for which we are not liable, giving absolutely no chance of logging operations going on, against the fact that the reports of the department show that unless the railway be built this timber is valueless-
friend is confusing his explanation/ because the railway, referred to is the railway built into the southern block, and which when built allows logging to be done quite acceptably, but my hon. friend is referring to a railway being built into the area which the Coquitlam river formerly served before the dam was erected. There is no provision made there for logging, but even if there was provision made for logging, the reservation placed upon the reserve was where the difficulty started in the first place.