March 7, 1927

LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

Mr. Speaker, just before

recess I was dealing with a question that was raised by the hon. member for Argenteuil (Sir George Perley) who had visualized the utilization of electrical energy for heating purposes. I had dealt for a few moments with the fact that in the city of Winnipeg that vision had already become a reality, and that we were now using electrical energy for the development of heat. During the recess I was asked by one or two hon. members to deal for a few moments longer with that particular matter, and without taking up too much of the time of the House, I wish, in

Georgian Bay Canal Company

order to satisfy the request made by the hon. gentlemen, to give a few more details in regard to that particular aspect.

In the development of any hydro-electric enterprise there is bound to be a large off-peak load which is like a by-product and is bound to go to waste. I do not think in the Dominion of Canada the average consumption over a twenty-four-hour period exceeds fifty per cent of the total quantity of electrical energy generated, the result being that there is a fifty per cent off-peak load that goes almost entirely to waste. It has always been a problem with electrical engineers how to utilize that waste in hydro-electric development1, and in the city of Winnipeg we have come as close as any other city to the utilization of that off-peak load or the by-product of hydro-electric development.

That has been effected in this way. In Winnipeg we were bound by circumstances to erect a stand-by plant for our hydro-electric system. That stand-by plant became necessary, as I believe it will become necessary in all large centres where large quantities of electrical energy are used, owing to the fact that at certain periods of the year cyclonic storms would blow down the transmission lines or there would be a stoppage from other causes, with the result that there would be very little or no hydro-electric energy obtainable in the city to carry on essential public utilities and works in factories such as packing plants and so forth. Hospitals would probably be without electrical energy; elevators in hospitals would be unable to run and so on, and the commercial life of the city would be completely demoralized for the time being. With the creation of a stand-by or auxiliary plant, as some people call it, we are able to give to a large section of the users of hydro-electric energy in Winnipeg a guaranteed twenty-four-hour continuous service.

The erection of such a stand-by plant involves a very large capital outlay as well as a large annual outlay for upkeep. One of the methods used to keep down that expenditure was the creation of a joint utility by combining with the stand-by plant a central heating system whereby the boilers, which are kept in readiness to generate electricity in case of emergency, can be utilized for heating purposes. What we do now is to generate heat through these boilers in the winter time; but in addition to that we have certain electric boilers, which are made in Canada, which were made by Canadian engineers, and the off-peak power which is on tap for many months in the year and for many hours each day finds its way into these 32649-61

electrical boilers. These boilers, which have a capacity of 750 horse-power and are not much larger than one of the desks in this chamber, generate steam which is sold in exactly the same way as steam that is produced by the use of coal. That brings in a large revenue to the city by using hydroelectric eneigy which otherwise would go to waste.

We have partly solved another problem which I believe is seeking solution in many other parts of the Dominion. More than one hundred of the largest buildings in the centre of Winnipeg are now supplied with heat from a central heating plant, and in the milder winter weather such as we have at the present time and such as they had in Winnipeg during February, not one ounce of coal is used for the creation of heat. The result is that in months where in other cities they have vast volumes of smoke coming out of their chimneys, Winnipeg is almost a smokeless city so that the atmosphere there possesses advantages that are not possessed by other cities. Moreover users of electrical energy in Winnipeg who find it essential to have a twenty-four-hour continuous service receive that by the creation of the stand-by plant which was put into operation, I believe, in 1924. I have endeavoured to make these one or two points clear for the bnefit of hon. members who asked me the question during the recess; otherwise, I had no intention of dealing again with the matter.

Coming back to the direct question of the bill before the House, another objection I have to it is the fact that if the charter is granted to the people who are seeking it there will be established in Ontario something which I believe will not be to the advantage of that province. It would mean for the province a dual system of private ownership and public ownership. Whilst I know that many hon. members will say that competition is a good thing, I believe an monopolies in certain things. I think the control of electric energy should be a monopoly and already in Ontario, 'the hydro-electric commission have a monopoly practically of this service which they give to the people. I think it would therefore be unfair of parliament to establish another system to enter into competition to a certain extent with the already publicly-owned utility of the province of Ontario. I have no doubt in my own mind that such a corporation should not come into competition, although I have an idea that if the power were granted to them they might hold up this charter and try to bargain with someone who would give them a good price for it. What is

Georgian Bay Canal Company

likely to be the result if a charter is granted? I understand that they could tap a region already not tapped by the Ontario Hydro Electric Commission. If they put into operation a hydro-electric system in the province, and then started supplying the people of those areas with electric light and power, I am satisfied that they would have to charge a much larger price than is charged to the people who use the energy of the publicly-owned utility of Ontario.

The 'hon. member for Nipissing (Mr. Lapierre), When speaking this afternoon, said the canal system would have to be carried by profits of the power operation. I noted that statement when he made it, and I think what he meant was that the promoters of the bill would charge the users of electric energy in the area they would serve, a much larger price than they would ordinarily charge, and would be able to put the canal system into operation by tfhe profits they would make out of the hydro-electric system. I think, Mr. Speaker, that is a very false position for any one in this House to fake. There is no canal system in this country which is now being paid for by a.ny auxiliary company. There are no canal tolls in effect at the present time, and it would be a mistake for us to give a company the right, as we would be doing under this charter, to charge more for electric liigjht and power in order that it might be able to subsidize a canal system which it has in contemplation.

Discussing the question of rates brings me again to the point raised by the hon. member for St. Antoine (Mr. Bell) the other night when he was speaking about rates. I think I asked a question in reference to the rates as between a privately-owned corporation and a publicly-owned utility, and he was good enough to reply by quoting from the annual statement of the company in which they said that t)he average retail rate in the city of Montreal was three and a half cents a kilowatt hour. I think that statement will be found in Hansard. If we take the rate charged in other cities where they (have hydro-electric enterprises under public ownership, we see quite a difference. The average retail rate charged in the city of Winnipeg, with which I am familiar, would not be more than two cents a kilowatt hour. Making all allowances,

I think the rates charged in Montreal are fully fifty per cent higher than those charged in Winnipeg. I believe, without having before me the actual facts, that the same ratio would apply to Toronto and other large cities. In that same connection, the hon. member was urging that the company known as the

Montreal Light, Heat and Power Company should be relieved of its annual income tax payment, amounting to slightly over three quarters of a million dollars; that it was an injustice to the company, and that they ought to be relieved of the payment, on the ground that a publicly-owned utility is not required to pay income tax to the national exchequer. The people of the province of Quebec have a simple way of equalizing matters; all they have to do is to own the utilities, as they do in Ontario; then they will have no tax to pay. That is one way of overcoming the difficulty, if they wish to do it. I do not think they should penalize a public utility because in Quebec they have private ownership. In this particular regard I want to quote a very brief synopsis of the statement made in the annual report of the company. I am quoting from the Financial Times of January 28th, and hon. members will see in what poor circumstances this particular company as. The report says:

Gross revenue from operations for the year 1926, is $18,907,382, compared with $18,346,806 for the year 1925, and $17,394,091 for the year 1924. A favorable feature is a reduction in operating expenses and taxes during the year.

My hon. friend from St. Antoine is not satisfied with the ordinary tax reduction, but he is willing to give them about three-quarters of a million in addition. *

The former being down at $7,109,918 from $7,349,243, and the latter down at $1,213,028 from $1,274,655, while appropriation for depreciation is up at $1,890,738 from $1,834,880.

But that is not all. I want to give the House a few more figures.

Net revenue shows a gain of over $800,000, at $8,693,688 as compared with $7,890,026. Respecting the issue during the year of $30,000,000 of bonds is an increase in fixed charges to $1,611,121 from $1,213,650.

And I think we know what these figures are. They are a melon cut for the shareholders.

Leaving net earnings available for dividends on the 2,041,837 shares of capital stock outstanding at $7,082,567, or the equivalent of $3.47 a share; this compares with net earnings of $6,676,376 for the year 1925, equal to 10.32 per cent, (or $3.44 per share figured on the basis of the recent 3 for 1 split).

I think we all have an idea what is meant by the three for one split, and this corporation split their shares three for one.

Dividends absorbed the sum of $5,135,041 as compared with $5,119,091 in 1925, and surplus for the year at $1,869,482, compares with $1,537,285.

Georgian Bay Canal Company

Now, Mr. Speaker, a public-owned utility does not publish balance sheets of this character, it does not split up shares three to one. Instead of paying cash dividends out of surpluses, the public-owned utility gives its customers reduced rates and better service. Therefore the people of Toronto and Winnipeg and other large centres where these publicly-owned utilities are operating get the benefit of rates which are about fifty per cent lower than those prevailing in, say, Montreal, and probably in other cities throughout the province of Quebec. But the communities where public-owned utilities are operating have a further advantage. Probably there is not a city on the North American continent where on the basis of population as much electricity is used as in Winnipeg. There we try to bring it into the homes of all the people. We try to make the lot of the housewife easier, and in the average household in Winnipeg you will find an electric stove and other equipment, all of which lightens the work of the housewife and improves the conditions of the home. I can say of my own knowledge that private ownership never displayed the initiative that is so conspicuous Tinder public ownership in the city of Winnipeg.

I have another objection to the bill. As a layman, I take it that the bill gives to the company a perpetual franchise. I believe there is a clause somewhere, perhaps in the old bill, which gives to the government the right of expropriation. I have some idea of what expropriation proceedings are, and I can understand how7 much a private corporation would demand for surrendering a perpetual franchise; the amount required would be staggering. So I cannot for the life of me see why we should give to a private corporation these valuable privileges and at a subsequent period buy them back for millions and millions of dollars. Undoubtedly the safest course will be to see that the promoters do not get a renewal of this franchise, and thus save ourselves the expense of expropriating their franchise at a later period. But I am asked by those who are sponsoring this bill, "Why not send it to the committee and discuss it there?" I do not see the reasonableness of myself and others who are opposed to the bill being required to go before the committee with our objections. I believe it is the safer policy to express my opinion now on the floor of the house and show where I stand, rather than wTait until the bill comes back from the committee after having received its second reading.

In dealing with this question I think we ought to take into consideration, Sir, the fact 32649-61J ,

that the legislature of Ontario is to-day discussing this identical question and, according to newspapers, a resolution is to be framed in such a way as to meet the wishes of all parties there-the conservative party, the liberal party, the progressive party and the labour party. They will all unite on a resolution asking this parliament to preserve the rights which belong to the province. In view of this we ought to pause a long time before we do anything which would in any way infringe on the rights of Ontario and give to a private corporation something which really belongs to the people of that province.

It has been argued by those who are promoting -this bill that the province of Quebec may give the water-powers on the Ottawa river over to private ownership for development. Well, if the government of Quebec favours private ownership development, that is the business of the people of that province. On the other hand, if the people of Ontario want to develop their share of these water-powers under public ownership, then they ought to be given the opportunity of doing so as part of their hydro-electric system. I believe that within the Liberal party there are quite a number of members who are in favour of the principle of public ownership, particularly those from western Canada. It is only quite recently that at a convention the Liberal party in Manitoba went on record as being in favour of the public ownership and operation of water-powers. I hope the Liberal members representing Manitoba in this house will fbllow the lead of the provincial party convention and help to uphold the principle of public ownership of utilities not only in Manitoba but in Ontario, for after all what is good in the one province is good in the other. I oppose this bill mainly on the ground that it is a complete violation of the principles of public ownership; further, I oppose it because I believe that the people of Ontario are anxious to retain these water-powers in order to develop them in the interests of the whole province. I believe, Sir, that when the interests of a small group of capitalists-of men who are attempting to exploit the people of Ontario and their rights-are opposing the interests of the people of that province, I as a member of this house must decide in favour of the people of Ontario.

I believe, Mr. Speaker, that this House ought aa far as possible to conserve the rights of the people in the development of their natural resources, and when we find that Ontario, through its premier, through the members of its legislature, and through other authorities in a position to speak, has expressed in most

Georgian Bay Canal Company

emphatic terms that it would be a great injustice to the people of Ontario if we renewed this franchise, it seems to me that the only course open to us is to see that this bill is not allowed to pass. It has been before the house on fourteen different occasions, and for thirty-three years its promoters have enjoyed the privileges and rights which they now seek to have renewed, but during all that time they have done nothing to carry out the project for which in the first instance the charter was ostensibly granted them. Therefore, Sir, I think we shall be acting in the best interests of the people of Ontario by rejecting this bill1 and thus allowing the provincial authorities to develop their own natural resources.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

Joseph Thorarinn Thorson

Liberal

Mr. J. T. THORSON (Winnipeg South Centre):

Mr. Speaker, I agree with the hon.

member for Argenteuil (Sir George Perley) and the hon. member for Fort William (Mr. Manion) that it is highly desirable to have a full discussion of this measure before referring it to the committee. There are two questions involved in the renewal: first, the construction of what is called the Georgian bay canal, and second, the development of the water-power along the route, including the development of the power on the Ottawa river. I do not propose to discuss the various legal questions involved, nor to discuss the respective powers of the Dominion of Canada, on the one hand, and the provinces of Ontario and Quebec on the other. We have courts properly constituted and competent to decide questions of this sort. If Canada has no jurisdiction in the matter of granting this charter, then, I submit, Canada can do itself no harm in granting it. Let us assume that Canada has the power to grant it and let us endeavour to discuss the question from the point of view of the principles involved.

The hon. member for Nipissing (Mr. La-pierre) made it quite clear, in my opinion, that the canal in question cannot be economically constructed or operated except in conjunction with the development of the water-power along the canal route. The two, in my opinion, ought not to be separated. But we should be careful to draw this distinction. The canal cannot be operated as a commercial undertaking without at the same time developing the water-power; but, on the other hand, it is possible to develop the water-power without building the canal. I think that distinction ought to be clearly kept in mind.

I listened with -a great deal of interest to the remarks of the hon. member for North Winnipeg (Mr. Heaps). It might be prefer-

able that this whole scheme should be undertaken by the Dominion. I should be inclined personally to favour such a proposal, but I do not believe that such a scheme would be undertaken. Water-power, we are frequently told, is one of our greatest assets and it should be jealously guarded by the people of Canada. But it is not an asset until it is developed. If we have to choose, in the development of our water-power, between Dominion control and private enterprise, then I think the remarks of the hon. member for North Winnipeg are well founded. [DOT] But if it is not probable-and it does not seem to be probable-that the Dominion will undertake this project as a public ownership scheme, then I think we shall have to choose between two methods of water-power development: on the one hand, a scheme of water-power development that will bring with it cheap transportation and, on the other, a scheme that brings no transportation facilities at all. That point, I think, is worthy of the consideration of the House, and, personally, I should much prefer a scheme of water-power development that carries with it the possibilities of cheap transportation to a scheme that offers no transportation facilities at all.

I quite agree with the various speakers who have pointed out that great care must be taken by the House in transferring waterpower sites to private individuals or even to provinces. As I understand it, under the statutes that have been passed, relating to the Georgian bay canal, since the year 1894 when this company was incorporated, the rights of the public are very fully protected. I understand that the Dominion will have complete control over the construction and operation of the canal, over the levying of tolls, and over the sale of water-power. Furthermore, I understand that it is competent for the Dominion to take over the whole scheme at any time. I fully agree with other speakers that our great assets should be adequately safeguarded, and if there are not adequate safeguards provided in the present statutes relating to this corporation, then those safeguards should now be set up as a condition precedent to the renewal of the charter.

Those who are in favour of the Georgian bay canal project point out its many advantages not only to western Canada but to eastern and central Canada as well. The Georgian bay canal will establish a deep waterway from Montreal to Fort William and Port Arthur and it will be an all-Canadian deep waterway. Those who speak in its support say that it will industrialize the whole Ottawa valley. They say that it will increase the development of the port of Montreal and of

Groryian Bay Canal Company

all the cities on the lower St. Lawrence. The hon. member for Tort William (Mr. Manion) in his speech this afternoon emphasized the value of the St. Lawrence waterway. So far as I can see, all advantages which he pointed out as accruing from the St. Lawrence waterway scheme will flow from the Georgian bay canal undertaking. In addition the friends of the Georgian bay canal point out that it will provide cheap transportation from the maritime provinces as far west as Fort William. They argue that it will provide cheap transportation for Nova Scotia coal to Ontario, that it will open up the mining area of the latter province, and that it will enable ore to be carried cheaply to Cape Breton where the coal supply is situated.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

What guarantee

is there that the canal will be completed for navigation purposes?

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

Joseph Thorarinn Thorson

Liberal

Mr. THORSON:

I am unable to answer

that question. Possibly those who sponsor the bill in this House will give some information in that regard. I am simply at this stage pointing out the advantages which those who favour the scheme suggest.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
PRO

Milton Neil Campbell

Progressive

Mr. CAMPBELL:

Is there not lacking in

the bill itself that very guarantee that we should require, namely, that the canal will be completed?

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

Joseph Thorarinn Thorson

Liberal

Mr. THORSON:

On that point I cannot

speak with authority. If the scheme has the advantages indicated, then it deserves the careful consideration of the House. Western Canada is particularly interested in the Georgian bay cana'l project and in this connection I may refer again to the remarks of the member for North Winnipeg. He spoke of the rights of Ontario and of Quebec. As I mentioned at the outset, I do not propose to discuss the legal rights of these two provinces as opposed to the rights of the Dominion at large. If this work is constructed as a canal scheme it will be a national water highway and western Canada will have as much Tight to it as will the provinces ol Ontario and Quebec. It will be a transportation scheme then as well as a power development scheme; to that extent western Canada will be as interested and as vitally concerned as will the provinces of Ontario and Quebec.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

But would the hon.

gentleman say by whom the cost of the navigation scheme would be paid?

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

Joseph Thorarinn Thorson

Liberal

Mr. THORSON:

I think that has already

been indicated; it would be paid for by private enterprise and by tolls and by the sale of water-power. I think that is clear.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

Edmond Antoine Lapierre

Liberal

Mr. LAPIERRE:

It would not cost the

nation one dollar.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB
LIB

Joseph Thorarinn Thorson

Liberal

Mr. THORSON:

Western Canada is vitally interested in transportation costs. I am told that the Georgian Bay canal route will be shorter than the present all-water route via lake Erie and the St. Lawrence river by almost 300 miles; I am told that it will be shorter in time by 37 hours, and that it will result in a reduction in freight rates of from three to five cents per bushel. Whether or not that is true, and whether or not the construction of the canal will bring those results I cannot say, but if those results are to be obtained western Canada is vitally interested in seeing that the project gets a fair chance. There is also another consideration. At present a great deal of our grain is diverted at Buffalo, and goes down the Erie canal to American ports. If the Georgian Bay canal scheme is a success all of that wheat will go direct through Canada, through the port of Montreal. I think that consideration should be kept in mind.

Those are the advantages which the friends of the proposal bring forward for the consideration of the House. Whether or not the canal will bring about the various results suggested is a different question, and I think the committee will be entitled to receive full particulars on that point. WTstern Canada, so far as her farmers are concerned, is very sure of her economic position. The farmer of western Canada knows very we'll that the price of what he has to sell, his exportable grain surplus and the like, is fixed by world conditions.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
PRO

Milton Neil Campbell

Progressive

Mr. CAMPBELL:

I would like to ask the

hon. gentleman if he can quote a single expression of opinion by anyone representing the farmers of western Canada in favour of this project?

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

Joseph Thorarinn Thorson

Liberal

Mr. THORSON:

Just allow me to finish

my argument, and then repeat your question if you think it in point at that time. The farmer of western Canada realizes that the sale price of what he has to sell cannot be changed by any act of this Dominion; no tariff legislation and no fiscal policy which may be adopted by Canada can increase by one farthing the price of what the farmer has to sell. Therefore the farmer appreciates that if he is to increase his very narrow margin of profit he must do so in one of two ways; he must either have the cost of what he has to buy reduced or he must have his transportation costs reduced; upon these two issues western Canada presents a united front. This Georgian bay canal project does suggest the possibility of a decrease in transportation costs.

Georgian Bay Canal Company

We in western Canada fought for a long time for the restoration of our Crowsnest pass railway rates and were finally able to have those rates guaranteed by statute. We have strenuously opposed, and will continue to oppose, any effort to remove that statutory protection which we now possess. So I repeat that western Canada is vitally interested in any project giving promise of a reduction in transportation costs. Those who favour this proposal do suggest that there will be a material advantage to western Canada in the. construction of this canal, and, if that is so, I think western Canada would be in favour of a thorough investigation of this proposed measure. I think I speak for a large portion of western Canada in urging that this measure be sent to committee in order that the most full and favourable consideration be given to it.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

I would like to ask the

hou. gentleman a question. Why is it that he now proposes to support the Georgian bay canal, which will become a competitor of the Hudson Bay railway?

Mr. THOIteON: I do not think that, question deserves an answer.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

John Gordon Ross

Liberal

Mr. J. G. ROSS (Moose Jaw):

In regard

to the question asked by the last speaker, I would suggest that if there are other wavs than (he Georgian bay canal and the Hudson Bay railway by which we can reduce our transportation rates from central Canada to the ocean w* want to know about them and to look into them. I agree with the last speaker that this bill should go to committee to be thoroughly discussed; it is of great interest to all of Canada, and- particularly to western Canada. One of my hon. friends opposite asked what guarantee we have. I say we should send the bill to committee and put cur guarantees in it there.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LAB

James Shaver Woodsworth

Labour

Mr. WOODSWORTH:

I was just asking,

m view of the clauses of the bill itself, whether there was any guarantee that this work would be completed.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

I do not know

what guarantees there are in this bill, but when it goes to committee it can there be amended and have proper safeguards placed in it. If the provinces of Ontario and Quebec have certain rights in t he water-powers of navigable streams in Canada, those rights should be safeguarded, but I believe that the advantage of any canalization of navigable streams in Canada ehou'd be kept for the Dominion as a whole. My hon. friend has said that if the canal is built it will do certain things, and hon. gentlemen opposite ask,

"Will they build the canal?" Well, when the bill goes into committee, insert your guarantees and safeguards and provide that if the canal is not built the charter becomes absolutely null and void. My friend has said that this charter has been before the House on fourteen different occasions. They have said that the canal could have been- proceeded with. I say that the government of the Dominion never allowed the company to go ahead with the construction of the Georgian bay canal?

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
CON
LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

Because they

never approved of the plans put in by the company, and those plans were put in years ago.

Topic:   MONTREAL, OTTAWA AND GEORGIAN BAY CANAL COMPANY
Permalink
CON

March 7, 1927