July 16, 1931

PRIVILEGES AND ELECTIONS


Mr. R. B. HANSON (York-Sunbury) presented the second and final report of the select standing committee on privileges and elections, as follows: Your committee have had before them an order of reference of the house under date of June 4, 1931, namely: "That all correspondence and other communications in the possession of the government relating to the preparation of the voters' list for the municipality of Port McNicoll, in the riding of East Simeoe, and a copy of the original list prepared by the enumerator, and of the revised list as prepared by him for use on election day, together with a copy of any communications exchanged between the chief electoral officer and the returning officer or any other person as to the conduct of the poll on election day, laid on the table of the house 22110-2431 on Wednesday, the 27th of May, 1931, be referred to the select standing committee on privileges and elections with instructions to inquire fully into the registration and polling of the votes or other related matter in connection with the election in the electoral division of East Simeoe, on July 28, 1930." Your committee have inquired into the matters referred to them under the terms of the above reference and have held five meetings in the course of which they have heard twelve witnesses. After having perused the evidence adduced before them, your committee beg leave to report as follows: That in the opinion of the committee, having regard to the fact that it is the intention of the Dominion Elections Act to enfranchise as many voters as possible under the residence provisions if they have the other qualifications, those in situations similar to that of Messrs. Chidwick and Campbell, should have been entitled to vote. Your committee therefore recommend that the necessary amendments be made to the Dominion Elections Act to enable persons similarly situated to vote at future Dominion elections. Your committee also recommend that the proceedings and evidence, a copy of which is submitted herewith for the information of parliament, be printed as an appendix to the journals of the house for the present session.


RAILWAYS AND SHIPPING


Hon. J. D. CHAPLIN (Lincoln) presented the third and final report of the select standing committee on railways and shipping, as follows: Your committee, to whom was referred for consideration and for report to the house the estimates on the Canadian National Steamships and Maritime Freight Rates Act, the Canadian Government Merchant Marine, the Canadian National (West Indies) Services, and the Maritime Freight Rates Act requirements, held thirteen meetings in the course of which they examined sundry witnesses, including: Sir Henry Thornton, K.B.E., chairman of the Imard and president, Canadian National Railways; V. I. Smart. Deputy Minister of Railways and Canals: J. E. Labelle, director, Canadian National Railways; S. J. Hungerford. vice-president, operation and construction departments, Canadian National Railways; D. C. Grant, vice-president, finance department.. Canadian National Railways; R. C. Vaughan, vice-president, purchases and stores department, Canadian National Railways ; R. L. Burnap, vice-president, traffic department, Canadian National Railways; D. E. Galloway, assistant vice-president, Canadian National Railways; S. W. Kairweather, director, bureau of economics, Canadian National Railways; J. B. McLaren, comptroller, Canadian National Railways; T. H. Cooper, assistant comptroller, Canadian National Railways; C. B. Brown, chief engineer of operation, Canadian National Railways;



Railways and Shipping Report C. S. Gzowski, chief engineer of construction, Canadian National Railways; Dr. W. J. Black, director of colonization, Canadian National Railways; B. J. Roberts, comptroller of government guarantee branch. Department of Finance; R. B. Teakle, vice-president, Canadian National Steamships; A. H. Allan, general manager, Canadian National Steamships. Canadian National Railways Bill 79 Your committee have had under consideration Bill 79. "An act respecting the Canadian National Railways and to authorize the expenditures made and indebtedness incurred during the calendar year 1931" amounting to $68,500,000 and have agreed to report the same without amendment. Bill 83 Your committee have also had under consideration Bill 83, "An act respecting the Canadian National Railways and to authorize the guarantee by His Majesty of securities to be issued under the Canadian National Railways Financing Act, 1931" and beg leave to report the same without amendment. The committee have considered the general report of last year's operations of the railway made by Sir Henry Thornton as president of the company and chairman of the board of directors and were partioidarly interested in his expressed intention to reduce the expenditures on capital account and wherever possible «n operation and maintenance. Yout committee heartily approve of such proposed action and recommend that for the present projects entailing capital expenditure be curtailed as far as possible. Your committee desire to call the attention of the bouse to the proposal made by Sir Henry Thornton at one of the sessions of the committee. He referred to the serious position of the transportation business generally and recommended that a commission be appointed for the purpose of considering the whole question of Canadian transportation. Your committee regard such a recommendation coming from such a source at this time as worthy of the serious consideration of the government. Canadian Government Merchant Marine Your committee have had under consideration item 379 of the estimate's-loan to the Canadian Government Merchant Marine, Limited, to be applied in payment of deficits in operation of the company and of the vessels under the company's control during the year ending December 31, 1931, amounting in all to $588,500. Your committee also reviewed the balance sheet of the company and are of the opinion that the amount of $588,500 included under item 379 of the estimates, is required for the purposes of the company and should be granted by this house. Your committee believe that the time has come when the government should very carefully consider the abandonment of the Canadian Government Merchant Marine, and the making of arrangements with other shipping companies so that the external trade of Canada will not be jeopardized. In this respect we wish to point out that the total original cost of this (Mr. Chaplin.] enterprise which was undertaken solely as a result of the exigencies of the war was approximately $80,000,000. After almost ten years of operation there has not been a single year in which an operating profit has been shown by the merchant marine. Throughout the whole period, a deficit of over $57,000,000 has accumulated, including depreciation on ships sold and interest due the government, but does not include accrued depreciation on vessels remaining in the fleet, which depreciation amounts to more than $17,000,000 in addition. Your committee has been informed that the ships are for the most part obsolete and only part of the fleet is now in operation. Canadian National (West Indies) Services Your committee have had under consideration item 380, loan to the Canadian National (West Indies) Steamships, Limited, whose steamships provide the services called for by the West Indies Trade Agreement. Your committee note that the operations for the year ending December 31, 1930, resulted in an operating loss of $523,136.98, which is partly offset by the fact that previously a subsidy equial to $380,000 per annum was paid to a private company by the Dominion government for a similar service. Your committee further believe that the steamship service established on the Pacific coast and known as the Triangular Service between Vancouver, Seattle, and Victoria should not have been established as it does not earn its operating expenses. We, therefore, recommend that serious consideration be given to immediate action looking toward the elimination of this loss. Maritime Freight Rates Act Your committee have also had under consideration item 382 of the estimates, to provide for the payment to the Canadian National Railway Company as required by the Maritime Freight Rates Act, of the deficit incurred during 1931 on eastern lines, the amount of the estimated deficit being $6,631,856, and in addition the sum of $2,450,632, representing the estimated amount by which the revenues of the eastern lines will be lessened during the coming year by the reduced rates granted under the Maritime Freight Rates Act in accordance with the recommendations of the Duncan commission. By reason of the special consideration involved in the maritime railway situation, with which the house is familiar, your committee are of the opinion that these amounts are necessary to give effect to the Maritime Freight Rates Act in the operation of the eastern lines. Your committee have -also had under consideration item 381, to provide the sum of $900,000 from which privately owned railways operating in territory eoveTed by the Maritime Freight Rates Act shall be reimbursed the difference between normal tolls and special tolls provided by that act. Your committee are of the opinion that this amount is necessary to implement the provisions of the act in that regard and should be granted by this house. Certain questions relating to the salaries and emoluments paid to executive officers of the company were asked by members of the committee. and were by resolution of the committee submitted to a sub-committee for consideration. The report of the sub-committee has been re- 3S25 Railways and Shipping Report ceived accompanied by a statement from the president of all salaries of $15,000 per annum and over, together with the names of the officials receiving them. The president, Sir Henry Thornton, has expressed the opinion that it is not in the best interests of the railway that the list of such salaries and the names of the recipients be published. Your committee, while of opinion that many of the salaries are much too generous, and in some instances excessive, accede to the expressed wish of the president that the list be not published for the reasons given by him. Your committee, however, are of opinion that the salary of the president stands on a different footing as he 'has a term contract calling for the payment of $75,000 per annum from the National Railways and all its subsidiaries, besides legitimate out of pocket expenses, which wras negotiated by the previous government and approved by order in council. Therefore, to all intents and purposes the salary of the president is a matter of contract with the Dominion of Canada and is a public document. Your committee also are informed that in addition to the contractual salary of the president above referred to, he is, with the approval of the former board of directors, in receipt of other substantial amounts in the form of salary and emoluments, which he receives in addition to his contractual salary. It has also come to the knowledge of your committee that the late board of directors in the year 1929 passed a resolution recommending the payment of an annuity of $30,000 per annum for life to Sir Henry Thornton, if his services to the railway Should at any time be terminated. Your committee are of opinion that such resolution was unnecessary and should be rescinded forthwith. If later on the services of Sir Henry Thornton are discontinued and his contract terminated, the matter of a retiring allowance may then be discussed on its merits, by the directors and the government. In view of the decreased revenues of the company, and the economies being made in other branches of the service, your committee are of the opinion that the executive committee of the board of directors should immediately consider the whole question of salaries, allowances, disbursements, pensions and retirement previsions for executive officers and officials of the company, receiving salaries of $5,000 and over in order that every reasonable and proper economy should be effected. # Your committee recommend thiat immediate action be taken in these matters and a report be made to the select standing committee on railways and shipping, owned, operated and controlled by the government, at the next session of parliament. Your committee strongly condemn the practice which has grown up under which the National railways are chargeable with large amounts for payment for the social entertainment and other activities of officials on other than official business. Your committee recommend that this practice should be discontinued forthwith. Expenditures for such purposes are in the opinion of your committee, wrong in principle and practice, and should never have been permitted. When it is necessary in the interest of the business of the railway that moneys should be expended chargeable to the railway for entertainment, then it should be approved by the executive committee. In reporting the result of the conferences of the committee with the president and officials of the railway, your committee would draw the attention of parliament to the magnitude of the task wdiieh was referred to them by the house. In the opinion of your committee, it is a practical impossibility to conduct an exhaustive inquiry into the affairs and management of the Canadian National Railways and Mercantile Marine within the time at the disposal of the committee. The result of the partial investigation conducted by the committee is by no means adequate, complete or satisfactory. Full justice cannot he done in respect, of an undertaking of so great magnitude without much greater time than the committee had at their disposal. The committee desire to emphasize this phase of the matter to the house, and recommend that in order that the operations of the company be fully scrutinized, a thorough audit by an independent auditor, appointed by the government, should be made from time to time of all such matters and accounts as may be designated by the minister.' and reported to him. - Your committee are glad to record that all the members present as hereinafter stated are unanimous in the foregoing report, namely: Hon. R. J. Manion, Minister of Railways and Canals, Hon. J. D. Chaplin, chairman. I [on. Robert Rogers, Hon. W. D. Euler; and Messrs; Beaubien, Bell (St. Antoine), Botliwell, Cantley, Duff. Edset (Sir Eugene), Fraser (Cariboo), Gobeil, Gray, Hanbury, Hanson (York-Sun-bury), Heaps, Kennedy (Peace River), Mc-Gibbon, MacMillan (Saskatoon), Power, and Stewart (Lethbridge). Your committee append hereto a copy of the proceedings and evidence adduced before your committee, for the information of the house and recommend that the same, together with this report be printed as an appendix to the journals of the house.


LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):

I was surprised to read in this morning's press the report of the special committee on railways and shipping. Perhaps the Prime Minister can give some explanation of the matter.

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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Prime Minister) :

Like the right hon. gentleman

opposite, I was greatly surprised to see the report published in the newspapers. I know nothing about the matter but I have asked that inquiries be made as to who is responsible for the publication of the document before it was laid before parliament. I am greatly annoyed that it should have happened. It is a reflection upon parliament, is an improper thing to have done, and whoever is responsible for the information having been given to the press is guilty of a gross error so far as the house is concerned.

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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

If any error has been

committed I must say to the house that I must take the responsibility myself. Unfortunately I gave to one of the press men a copy on the understanding that the report had not been presented to the house and that

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Australian Trade Agreement

no use was to be made of it until it had been presented. I regret if any error had been committed, and 1 only and solely am to blame, and no other member of the committee.

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LIB

SERVICE LOAN AND FINANCE CORPORATION

CON

James Earl Lawson

Conservative (1867-1942)

Mr. J. E. LAWSON (West York):

I move, seconded by Mr. MacNicol, that Bill No. 118, Letter LI of the Senate, to incorporate Service Loan and Finance Corporation, the preamble of which has been returned as not proven, be placed on the order paper for consideration at the next sitting of the house.

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?

Some hon. MEMBERS:

Carried.

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UFA

William Irvine

United Farmers of Alberta

Mr. WILLIAM IRVINE (Wetaskiwin):

The hon. member ought to give some reason for his motion.

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CON

James Earl Lawson

Conservative (1867-1942)

Mr. LAWSON:

This is a private bill

which I undertook to sponsor, and having been engaged on another committee I was unable to be present when the bill came before the banking and commerce committee yesterday. I felt that it had not been presented to that *committee in the light in which I should like to have had it presented, and I make this motion merely in order that I may have an [DOT]opportunity to present the bill properly to the committee. If, when the bill is presented to the committee, the committee sees fit to withhold its support or still to regard the preamble as not proven, that will be the end of the matter.

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UFA

William Irvine

United Farmers of Alberta

Mr. IRVINE:

May I point out that although the hon. member was not present in the committee, the company concerned was represented by learned counsel. The object of the bill was fully explained and the members of the committee present did not feel like supporting it. I do not believe that any explanation which the hon. member could give regarding the meaning of the provisions of this bill would differently impress the committee if composed of the same members who were then present. I do not think it is good parliamentary procedure to upset the actions of that committee, nor do I think the committee should be asked to go all over the matter again, especially when we are so near the end of the session.

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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

Under standing order 111, the hon. member for West York (Mr. Lawson) is within his rights in offering the resolution. Is the house ready for the question? All those in favour of the resolution will say aye.

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Some hon. MEMBERS:

Aye.

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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

Opposed, nay.

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?

Some hon. MEMBERS:

Nay.

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UFA

July 16, 1931