February 23, 1926

LIB

Charles A. Stewart (Minister of Immigration and Colonization; Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Liberal

Mr. STEWART (West Edmonton):

In plain English-my right hon. friend knows it better than anyone else in this House-that provision is made for the construction cost.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

What ds the difference

in the provision?

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LIB

Charles A. Stewart (Minister of Immigration and Colonization; Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Liberal

Mr. STEWART (West Edmonton):

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Will the hon. gentleman permit me? I know there is provision for supervising the construction cost, but of what value is it unless you hold the directors down against the issue of bonds for more than that amount?

The Address-Mr. Nicholson

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LIB

Frank S. Cahill

Liberal

Mr. CAHILL:

I rise to a point of order.

Is the hon. member for East Algoma making a speech, or is it a debate across the floor? Let the hon. member continue his speech.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

An hon. member may

not be interrupted except with 'his consent.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Had the hon. member

(Mr. Cahill) not better sit down?

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. member who

has the floor has the right to refuse to answer questions if he so chooses.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

I am not finding any

fault whatever with the Minister of the Interior injecting himself into the discussion, because I submit that the further inquiry is made the more clearly it will be shown that the government, or at least some members of it, knew nothing whatever as to the character of the agreement into which they were entering, and that is the whole point.

The Minister of Finance, following my hon. friend from West York (Sir Henry Drayton) the other night said that he had never even read the lease. I say you can read the lease from beginning to end and you cannot find anything in it except this provision-that the Canadian National Railways will pay the rental, and will redeem $5,000,000 worth of bonds.

Now, I will give another aspect of that in a few moments. The Minister of Finance stated in reply to the hon. member for West York that the total amount of money that had been spent on this railway up to January 31, 1926 was $130,000. But if you look at the document you will find this:

Extract from minutes of meeting of the board of directors of the Canadian National Railway Company.

Held in the Company's offices in the city of Montreal, on Monday the 21st day of September, 1925.

The meeting was informed that the Rouyn Mines Railway Company-

Otherwise "The 1925 Campaign Funds Company,;-

-has been negotiating for a loan-

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LIB

Charles A. Stewart (Minister of Immigration and Colonization; Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Liberal

Mr. STEWART (West Edmonton):

Mr. Speaker, may I interrupt the hon. gentleman? I take exception to a statement of that kind. I do not think that any hon. member has a right to make such a statement and get away with it without some exception being taken. Will the (hon. gentleman inform the House where he Obtained the information that campaign funds came out of this company?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

If my hon. friend will bear with me for just a very few minutes I will state all the facts and then he can draw his own conclusion.

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LIB

Charles A. Stewart (Minister of Immigration and Colonization; Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Liberal

Mr. STEWART (West Edmonton):

Drawing a conclusion is quite a different thing from making an alleged statement of fact. I take very serious exception to a statement of that character coming from the hon. gentleman.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

I do not know what rule prevents the hon. gentleman from describing the dummy company in any language he likes, unless members of the House are members of the company.

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CON
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

They had the government guarantee.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Air. NICHOLSON:

Yes. I am coming

to that in a moment, and I will show the position the government took in relation to it. Now we come to a meeting held on September 26, 1925 in the office of the Privy Council in Ottawa:

The committee of the Privy Council have had before them a report, dated 25th September, 1925, from the Right Honourable the Prime Minister-

Now, Mr. Speaker, I want you to note this. The report is not from the Minister of Railways at all; it is from the Prime Minister acting for the Minister of Railways. And then is set out the whole of the terms of this lease, and a copy of what was presented to

The Address-Mr. Nicholson

this other meeting in the city of Montreal by this railway company, so-called, on 14th September, 1925. And what do we find in connection with that? The Mines Railway proposed to create an issue not exceeding $5,000,000 worth of bonds, and so on; and the position is recited again by which the government of Canada, not the Canadian National Railways, will pay the interest and sinking fund on these bonds. It goes on further to say:

That the guarantee by the Canadian National Railway Company of the loan to the Mines Railway has been agreed upon in the general form hereto attached marked "F".

I submit to my hon. friend thalt he should review these circumstances. Here is a railway proposition which has been before the people of this country, and particularly before the government of the province of Quebec, since 1922, for (the construction of a railway from a point on the Canadian National railway or the Transcontinental railway into the township of Rouyn; a railway that the government of the province of Quebec had a perfect right to construct at any time they desired. The whole matter before the government of Quebec was one of negotiation, as every hon. member who has been following the public affaire of this country knows, between the government of the province of Quebec and the officers of the Canadian National from 1922 onwards. The House of Commons was in session until some time in June last year. These matters were still under consideration, but on the 14th of September a condition of urgency apparently was reached. What was it that happened in the township of Rouyn or in any other part of that north country in September last to make iit So urgent that this railway had to be built at once? Does anybody who knows anything about that north country know of anything special that took place? There was nothing more than has been happening from day Ito day since the mineral discovery was made in northern Quebec; nothing whatever. There was nothing exceptional in connection with the controversy over the question whether the Nipis-sing Central Railway should (build! in there, or whether the Canadian Pacific Railway Should build. But all at once it became so urgent that a company had to be formed. What was the company going to do? Let me repeat: they were going to build a railway which they themselves said was to cost about $3,500,000. They had bonds guaranteed by this government for $5,000,000, under a lease passed by the order in council on September 26. So urgent was the case that on September 26 they had to do something.

Again let me say (they could not wait until they put their bonds on the New York market, could not wait for the trust deed to be completed, bht had to go to the Canadian National Railway and get a short term guarantee for a loan of $2,000,000. What were they going to do with it? Wotk that the Minister of Railways stated in the House the other evening required! the expenditure of $130,000 up to the end of January last. Will any reasonable man who knows anything about the borrowing or lending of money believe that the five directors, with a guarantee of $5,000,000 of bonds in their pockets, could not get $130,000 from any bank in Canadia, without the necessity of a guarantee from the Canadian National to enable them to borrow $2,000,000 in New York? I will name the five directors mentioned by the hon. Minister of Finance in bis speech. They were:

Robert Adair of Montreal; Charles M. Hart of Montreal ; Mr. Donat Raymond of Montreal, proprietor of the tV mdsor Hotel: Mr. Harold Fowler and Mr. C.ifton M. Miller, of New York City.

There is no explanation of why this circuitous method was adopted. If the board of directors of the Canadian National Railway felt that it was a good thing thait that branch line railway should be constructed and had come to parliament and! submitted the matter to us, I for one would have been prepared to examine into the facts and to endorse the proposal if it appealed to my judgment; because I am not one of those who think that the Canadian National Railway should not be permitted to build branch lines. They must build them wherever they are necessary to serve the country and to act as feeders to the National railway. Blut if they had done that, and if parliament had given them the sanction that i)t will give in every case where it is necessary, and they had undertaken the construction, what course would they have followed? Is it not a fact that they would have called for tender for the construction of the railway. But what happens under this arrangement? Are any tendlers called for by the company?

The next step is that this company is incorporated. It matters not who constitutes the company; it is a dummy from first to last. The whole scheme from begining to end is just a plan to flout this parliament in the first instance. But what happens? The company goes ahead1 and builds the railway. No one knows anything about it. Then they proceed to the the approving of the trustees and bondholders, and all the vouchers for the work that is to be done are made out here. In other words, this means the turning over

The Address-Mr. Nicholson

of the construction of the forty-five miles to whoever the dummy company might choose as their contractor without competition. It is provided in this agreement-

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LIB

Frank S. Cahill

Liberal

Mr. CAHILL:

Does my hon. friend know who the contractors are?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

No, I have no knowledge of the contractors. I am not in the secrets of the dummy company. Neither am I in the secrets of the government, if they know who the contractors are. But let me say that under the provisions of this agreement all these people have to do is to go ahead and build the railway themselves, and to do as has been done from one end of Canada to the other-fleece this country by building the railway and constructing works which cost two or three times what they should. Some day we may have an opportunity of going into that phase of it.

Then I deal with another point. It is being paraded as a protection for the National railways that the government of the province of Quebec is going to provide $50,000 a year; and certain guarantors, who I believe are the officers and directors of the Noranda mine, are going to guarantee $20,000 a year to provide for any possible deficit there might be in the operation of the Rouyn railway. That I think is a fair statement. It is thought that perhaps under normal conditions, and operated as a railway usually should be operated, there might be a deficit, and to provide against that the government of Quebec agrees to contribute $50,000 a year and the Noranda mine agrees to contribute $20,000 a year. But what precaution was taken to make it certain that the guarantors would never be called upon to put up a cent? There is a provision in regard to revenue from freight or traffic. It matters not where it originates, whether in British Columbia, in the Maritime provinces, or any other place, that one-third of the total revenue for transporting freight or traffic from any point on the Canadian National to any point on the Rouyn railway shall be credited to the cost of the Rouyn railway; and vice versa, on traffic originating on the Rouyn railway and destined for points on the Canadian National, one-third of the revenue will be credited to the Rouyn railway. How does it work out? It is impossible to take the whole of the Canadian National railway system station by station and determine what that means. But let us take the city of Montreal as a common distributing centre, and I will refer to three single items to show you just exactly what is meant. Take a carload of sugar shipped

from the city of Montreal to the end of the Rouyn railway; the total freight at present rates for a full car loaded to capacity would be $576. The haul of the Canadian National is approximately 700 miles. The portion the Canadian National proper would secure would be $387 and the Rouyn railway $189. The car mileage rate on the Canadian National railway would be 55 cents and the car mileage rate on the Rouyn railway would be $4.20. It is reasonable to suppose a lot of machinery will be shipped into that country if the country develops as we all hope it will. On a carload of machinery shipped from the same shipping centre, Montreal, a distance of 700 miles, the gross charges will be $544. The Canadian National Railways will receive as their share, $362.67, and the Rouyn Mines railway will receive for its forty-five miles, if we assume that the carload is shipped to the end of the line, $181.33. In that case the Canadian National Railways gets fifty-one cents per car mile and the Rouyn railway, $4.03 per car mile. On a carload of groceries shipped from the same centre or an equal distance, the gross charges will be $720. The Canadian. National Railways will receive as their share, $480, and the Rouyn railway, $240; or sixty-eight cents per car mile for the Canadian National Railways and $5.44 per car mile for the Rouyn railway.

Let me say in conclusion in regard to that: When you operate a branch line railway connected with any trunk line system, you take into account, first, what the branch line provides and, second, what the trunk line system provides. The trunk line system provides the terminals as the Canadian National Railways have already done at O'Brien. They provide the shops, the supervision, the management, the superintendence, trainmasters, train despatchers and everything else of that kind. The branch line, as I said a moment ago, provides simply the road, passing tracks, and possibly a turning point in the township of Rouyn. In face of that, if you go over the whole list of goods and take for example goods shipped from Toronto, Hamilton, Galt or any of the other manufacturing centres of Ontario; or if you take a carload of coal shipped from Alberta where the -haul will probably be two thousand miles; or if you take coal shipped from Nova Scotia-and there will certainly be large shipments of coal into the Rouyn district if it is to be developed, because you cannot carry on a smelting business without coal and coke-what do you find? In every single case the Rouyn railway gets more than eight times

1262 COMMONS

The Address-Mr. Ross (Moose Jaw)

per ear mile what the Canadian National railway gets, making quite certain from the start that in the construction of this railway neither of the guarantors will ever be called upon to put up a single nickel of the guarantee; they have seen to it that no such thing as a deficit can ever occur, even though only one or two cars of freight move each way each day of the year. Just stop and consider what that means. It will cost $181.33 for moving a carload of machinery; $189 for moving a carload of sugar, and $240 for moving a carload of groceries forty-five miles. Examine the whole document from A to Z; do what you will with it, and you will find it is nothing more or less than a crudely constructed or drawn together camouflage in an effort to delude the people of this country and to secure what the government had in mind, simply the incorporation of .what I said a moment ago, not a dummy railway company, but a campaign fund company for the campaign in the city of Montreal in September last.

At six o'clock the House took recess.

After Recess

The House resumed at eight o'clock.

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?

Mr. J. G. BOSS@Moose Jaw

Allow me, Mr. Speaker, to add a word of congratulation to you on your re-election to the position which you so graciously and impartially fill and to congratulate also the mover and the seconder of the Address on their splendid effort in putting before us the government's policy, which has been acclaimed with so much satisfaction throughout this whole Dominion and in western Canada particularly.

I would also congratulate the Conservative party on its choice of leader (Mr. Meighen). It had never been my privilege to listen to the right hon. gentleman before coming to this House. I must say that as a debater he has, I believe, few peers; his sallies are delightfully refreshing. And as for advocating the policy of his party in the country, I do not believe that anyone could do it better than he. But that policy was so unpopular in the province which I have the great honour to represent-I am the first person born within its borders to be elected to this House -that not one of the right hon. gentleman's followers was returned. The leader of the opposition scolds the members from Saskatchewan because of their attitude towards the tariff. Let me say that we from that province are here to put before parliament the views of the people of Saskatchewan, and if hon.

gentlemen will take the trouble to look into the record of the election of members to parliament from Saskatchewan since it became a province of the Dominion they will find that the people there have elected only two Conservatives to the House of Commons, one in 1908, defeated in the next election, and another in 1911, also defeated in the ensuing election. The next election after 1911 was held in 1917 and neither Conservatives nor Liberals were returned to parliament from the province of Saskatchewan, all the members being Unionists. In 1921 not a Conservative was returned, and again in 1925 not a Conservative. With 21 seats in the last election 16 Liberals were elected, the number being now 17, soon to be increased to 18.

As regards the tariff in Saskatchewan, our people are predominantly against any increase in customs duties. They sell all they produce in the open markets of the world in open competition and the tariff can do them no good whatever. That is the provincial view. But the people of Saskatchewan are first of all Canadians of the highest type, which they proved beyond the shadow of a doubt in. the great national and international tragedy of the last decade. They are Canadians and therefore they will make some sacrifice and concede a tariff to the Dominion so long as that tariff is just and in the interests of the country as a whole. We must use a little common sense in relation to the tariff. When anyone comes to the government and asks to have a duty put on a certain article because he cannot produce that article on such a basis as to be able to sell it in competition with similar goods imported into the country, he thereby admits that he cannot produce it in Canada to sell in any other country. So that when a tariff is given to protect that article in order that it may be sold in Canada to any great extent we must look after the home consumer, who is the only one that can buy that article. Several members of the opposition have said that a lower tariff is driving our young people from the farms to the United States. My view is that on account of too high protection they are leaving the farms because they cannot make a decent living; they are driven to our cities, and when they cannot find employment there they go to the United States. The reason is not too low a tariff; it is too high a tariff.

The right hon. leader of the opposition and his followers have said a great deal about a tariff on butter. If we look at that from a common sense standpoint what do we find? Montreal contains one-eighth of the population of the Dominion, not one of whom makes

The Address-Mr. Ross (Moose Jaw)

any butter, but all of whom eat it. Now, as a farmer and rancher, 1 claim that I have no right to be given a special privilege to charge the people of that city or of any other urban centre in the Dominion more money for what they have to eat.

The right hon. leader of the opposition stated that the press of Saskatchewan is all Liberal. The reason is not that the press of that province has been bought up by big interests; it is that the policy of the right hon. gentleman is not looked on with favour there, and t,he papers that supported his policy lost their subscribers in such numbers that naturally they died for lack of circulation. In this conneotion I should like to read a clipping from the Kingston Whig of February 17, 1926:

Politicians and Newspapers

Mr. C. R. McIntosh of North Battleford performed a service for every newspaper when he stood up in his place in the House of Commons on Monday and interrupted Hon. S. F. Tolmie, of Victoria, who stated -that Mr. Dunning controlled the newspapers in Saskatchewan, Mr. McIntosh, who owns two newspapers in Saskatchewan, promptly told Dr. Tolmie that no government controlled his papers. It's a habit politicians have-both Conservatives and Liberals-this talking about "controlled" newspapers. We heard a lot about it during Union government days. It's all a mytn. The day of the politically controlled organ is gone, never to return. Most newspaper men value their independence as much as a member of parliament does his.

Already this session we have heard a great deal about Maritime rights. The only thing I have been able to gather since I have been in the House respecting Maritime rights is that certain people from the Maritime provinces want a special rate on coal; I have not heard that they want anything else; I think that is their trouble. Just a little common sense there, too, at the present time will help us to fully appreciate the situation. The other day I ascertained that anthracite coal in the city of Montreal was worth to the consumer $26 per ton, while coke was worth $17 per ton. The all rail freight rate, I believe, is $4.50 from the Maritime provinces to Montreal. If the mine operators of the Maritimes cannot pay the freight rate with the prices for coal and coke now prevailing in Montreal, a lowering of that rate will never do them any good.

We have also heard a good deal regarding coal from our Alberta friends. Alberta coal is good coal; no doubt about that. But as a man born and brought up in Saskatchewan, and having lived there most of my life, I can say that in order to keep warm during the winter we have to burn quite a lot of coal. What has been our experience? We buy what is known as Pennsylvania hard coalwhen we can get it-at double the price of Alberta coal. I do not think that the people of Saskatchewan have been foolish for thirty years in using Pennsylvania coal by preference. I think Pennsylvania anthracite is usually worth double the Alberta product; and if the coal operators of Alberta are given a special freight rate on coal to Ontario I cannot see that they will ever be able to sell their coal there at an even price with Pennsylvania coal, which they would have to do if they got such a rate.

We have no right, as I see it, to force the railways to grant a special rate on coal.

I do not see why the people of the Dominion should pay part of Ontario's coal bill. The suggestion has been made by the government of Ontario, I believe, that a third of the cost over and above the $7 rate be paid by Ontario, a third by Alberta, and the remaining third by the Dominion government. If we start to put a special rate on Alberta coal or on Maritime coal transported to the centre of Canada, then, it seems to me, everybody in the Dominion has the same right to have the coal rates lowered. Not only so, but I have as much right to ask that apples be shipped from Ontario, or lumber from British Columbia or fish from Nova Scotia to Saskatchewan at a special rate as the coal man has to seek a special rate on coal.

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CON

Peter McGibbon

Conservative (1867-1942)

Mr. McGIBBON:

What about Wheat?

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February 23, 1926