March 7, 1932

LIB

James Layton Ralston

Liberal

Mr. RALSTON:

All the harder on the

mari times.

Western Freight Rates

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

Franklin White Turnbull

Conservative (1867-1942)

Mr. TURNBULL:

That may be all the

harder on the toaritimes. That was by reason of the legislation passed by my hon. friends in 1925. Some day we are coming back for that three cents per hundred as well.

The west is under particular difficulties in regard to freight rates, particularly my own part of the country. I have watched the freight rate structure for some years, and rightly or wrongly I have come to the conclusion that there is an underlying principle with regard to the fixing of freight rates. The principle I saw established in regard to freight rates was the principle first established by the railways themselves, and confirmed more or less by the Board of Railway Commissioners as applied to the rates in force when the board was appointed. As I see it, the idea of the railways was to move the farm products of western Canada into eastern markets at as low a rate as they reasonably could, and as a result the freight rates on farm products travelling eastward were lower than the freight rates on farm products travelling westward. I do not know how that affected the maritime provinces. On the other hand, the rates westward on manufactured goods and building materials were lower than the rates eastward, and to-day manufactured goods can still be shipped westward more cheaply than eastward, which is a great handicap to the development of the manufacturing industry in western Canada. On those principles the railway rates were established. Then when my hon. friend the present Minister of Trade and Commerce (Mr. Stevens) attempted to establish a port at Vancouver and have an elevator built at Vancouver harbour, which my hon. friends for many years called "Stevens' folly," the fight began to get a freight rate which would make it possible to move the grain westward to Vancouver. That is where the fight for an equalization of freight rates westward began. That fight has continued down to the present day with some success, but perhaps not with success as complete as it might have been. We have still the mountain- differential to fight with; there is the difference of 15 per cent. I think the Board of Railway Commissioners have found that freight can be moved west as cheaply as it can be moved east. There are still more than 120 miles to pay for which do not exist between Calgary and Vancouver owing to the longer haul between Edmonton and Vancouver. All these years, since there has been a harbour at Vancouver, the battle has been on to secure an equalization of freight rates westward. It has been conducted mostly in the interests of the elevator companies and 41761-56 i

the farmers who sold wheat to elevator companies for export. The result of the battle has been that export rates from time to time have been reduced by the railway commissioners, either under direction of parliament, or without direction of that body. However, the domestic movement was comparatively small, and while the export movement was reduced the domestic remained stationary at the old high level which was established before the Board of Railway Commissioners came into being. That to my mind is the reason-and I am speaking more in argument than from figures-why there is such a spread between export and domestic rates from Alberta to the Pacific coast. While that may be a matter for the Board of Railway Commissioners to decide, the fact is that that body has made a decision, and has decided against any reduction in domestic freight rates west. So that if the governor in council, when this matter comes before them, decide to refer it back to the Board of Railway Commissioners, they will be faced with the necessity of sending it back with some direction, because since the board has already decided against the western provinces there is very little use sending it back to them to make a further decision unless some direction is given that they decide more favourably than they did the last time.

There seems to be evidence to show that it is in the interests of the country that such action be taken. After all there have been occasions in days gone by when parliament exercised that right, when they found it in the interests of the people generally to lay down a policy for the Board of Railway Commissioners to follow; because after all parliament is supreme. It could direct by statute that the Board of Railway Commissioners follow certain principles. If parliament chose to say to the Board of Railway Commissioners that in the opinion of hon. members assembled, domestic freight rates are too high, and that in the interests of the Dominion of Canada and of the railways that rate could be reduced, although I am not an experienced parliamentarian, my own poor opinion would be that parliament would be justified in laying down such legislation. I am not saying such a right is one which should be exercised on all occasions; it should be exercised only with the greatest hesitation and the greatest care, because after all, the striking of freight rates is a very intricate problem. It is a matter to be settled not by a court of 245 persons, but rather, as the Minister of Railways has said, by a very much smaller court which could have the advantage of hearing both sides of the question.

Western Freight Rates

For the life of me I cannot understand why the domestic freight rate cannot be lowered to the advantage of both the railway companies and the industries in the Fraser valley to which my hon. friend from New Westminster (Mr. Reid) is so partial. In addition the industries on Vancouver island, to which he has not made reference, would benefit, as would the farmers in the prairie provinces. I am told that every week about 300 empty railroad cars are carried from the mainland to Vancouver island, and that in those cars products of Vancouver island are brought back to the mainland. I cannot see why the railroads would be under any great expense if they were to put wheat in those cars; it could be taken to Vancouver Maud with very little added cost. If such traffic were encouraged it would become extensive enough so that the cars might be taken over full instead of empty. It seems to me that if the matter is properly put before the railway companies-as I hope it will be-in the course of time, with public opinion behind us, we may reach a solution satisfactory to all concerned.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

John Vallance

Liberal

Mr. JOHN VALLANCE (South Battleford):

Mr. Speaker, I had not intended to take part in this discussion, until I heard the remarks of the Minister of Railways and Canals (Mr. Manion) and the hon. member for Regina (Mr. Turnbull). First of all may I deal with the statements made by the hon. member for Regina to the effect that the resolution now under discussion proposed by the hon. member for Qu'Appelle (Mr. Perley) is entirely different from that proposed by my good friend from New Westminster (Mr. Reid). May I be permitted to read the resolution as presented by the hon. member for New Westminster:

That, in the opinion of this house, it is expedient that the freight rates on grain and grain products destined to points in British Columbia from the prairie provinces of Canada be carried by the railways at the same rate as grain and grain products for export to other countries.

May I say to the hon. member for Qu'Appelle, however, that I am really more pleased to support his motion. What does it say?

That, in the opinion of this house, the domestic freight rate on grain and grain products moving from any point in Manitoba, Saskatchewan, Alberta and British Columbia, to a point in any of the said provinces, or from one point to another point in any one of the said provinces, be substantially reduced.

I think those of us who are farming in any of the four western provinces will receive greater benefit from the resolution presented by the hon. member for Qu'Appelle than from the one presented by the hon. member for

New Westminster. Under that resolution it would be possible for a farmer in the northern part of Saskatchewan to ship low grade wheat, or any wheat for that matter, to the southern part of the province, and receive the export rate thereon. I am all for it.

The Minister of Railways made comparisons of the rates on other commodities moving in Canada, both for domestic and export purposes. I took down the figures, and although I did not manage to get his facts concerning all commodities, I did get the information concerning the transportation of apples both for domestic and export use. He said that apples for domestic purposes carried a freight rate of 58 cents, and for export 39 cents. I should like to point out to the minister that there is only about 19 cents difference between the export and domestic rates. However, in a distance of 1,015.3 miles from North Battleford to Vancouver the rate for export is 24 cents per 100 pounds, or 14.40 cents per bushel on wheat. For domestic purposes the rate is 50 cents per 100 pounds or over 100 per cent more for domestic than for export.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

What is the export rate?

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

John Vallance

Liberal

Mr. VALLANCE:

Twenty-four cents per 100 pounds, and the domestic is 50 cents, a difference of more than 100 per cent. Therefore the figures placed on Hansard to-night by the minister will make the farmers in the three prairie provinces, if I know them at all, just that much more anxious to put up a barrage to see if this wrong cannot be righted.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

Robert James Manion (Minister of Railways and Canals)

Conservative (1867-1942)

Mr. MANION:

I gave the figures only to show that there was a difference in the export rates on other goods as well as on wheat. I was not defending the situation.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

John Vallance

Liberal

Mr. VALLANCE:

Yes, I understand that. I am merely showing the difference between the export and the domestic rates. The other day we had a spectacle-and I use the word advisedly-of a cargo of wheat, 250 tons, coming from Australia to Vancouver which was not permitted to land because of disease. If it is possible for Australia to ship wheat to Vancouver and sell it to the poultrymen of that province cheaper than it can be secured from Alberta or Saskatchewan, I think it is time something was done. It was good feed wheat, outside of the disease which prevented it from entering.

Might we not look forward to a discussion of interimperial and preferential trade at the forthcoming Imperial economic conference? Would it not be possible for Australia, India or any other portion of the empire to ship

Western Freight Rates

wheat into Vancouver harbour cheaper than it can be secured from the prairie provinces, until these rates are rectified?

I have risen, Mr. Speaker, merely to point out these facts. I have before me a statement of the differences between the export and domestic rates on many commodities, but I think if you go through the schedules you will find that nowhere is there such a disparity as that which exists on the rate on feeds that we export to Vancouver.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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UFA

Alfred Speakman

United Farmers of Alberta

Mr. ALFRED SPEARMAN (Red Deer):

Mr. Speaker, the subject matter of this resolution has been presented in such detail and with such a wealth of argument by the mover and those who have spoken in his support as to render it unnecessary for me to deal with it other than briefly. It is, however, I think extremely desirable that someone from the province of Alberta should at least express an opinion, and a very decided opinion, as representing the sentiments of that province.

As has been stated by other speakers, this matter in its present or a somewhat similar form has been before the house for some eight or ten years. During all that time this grievance, as we term it, has existed, not always in the same proportions as now, but still it has existed, and I believe that almost every session during that period although it has been very fully discussed nothing has been done. In a word, the situation has remained unchanged.

As I have intimated, it is not my purpose to go into the subject fully, but it does appear to'me that we are in a very anomalous position at the present time. Under our national policies as a parliament and as a government we are doing what we can to encourage not international and foreign trade only, but to develop domestic and interprovincial trade to the greatest possible degree. I am fully in favour of developing to the maximum trade between the component parts of Canada. There are no two parts of the Dominion that offer greater opportunities for an interchange that will be mutually beneficial than do the province of British Columbia on the one hand and the prairie provinces on the other. I have always felt that my own province in particular, Alberta, and the province of British Columbia are complementary and supplementary one to the other to a very marked degree, and that they should to a far greater extent than has been the case during the past years go forward side by side working together in their mutual interest. In this case it is a very great pleasure to me, as it has been to many others in the house, to find a subject upon which we may agree so fully and an end towards which we can work in such complete harmony.

The situation has been laid before the house, a situation under which thousands of fanners within the British Columbia valleys, where the climate and soil are admirably adapted to the most intensive forms of poultry raising, dairy farming and other kindred forms of agriculture,, find themselves completely handicapped through the fact that although grown only a few hundred miles away the products of the great grain fields of the prairie provinces are almost inaccessible to them, that they are shut out from the use of those products by a wall greater far as barrier than distance, by a wall more exclusive than oceans and continents, by a wall erected in a wholly arbitrary fashion-a wall of excessive freight rates. On the other hand, the farmers of the prairie provinces, looking westward as their shortest and cheapest route to the markets of Europe and to the great and developing trade in the orient which they visualize as their most hopeful market in the future, are also looking closer home across those mountain barriers beyond which they see thousands of potential and would-be customers-customers anxious to

purchase their grain products and to exchange their own in return.

This is a situation which I think should not be beyond the intelligence and ability of this house and this government to rectify. It has been stated by the Minister of Railways (Mr. Manion)-and in a general way I am in agreement with him-that by reason of the characteristics of their make-up neither the house nor the government is the best possible court for deciding a question so technical in its nature as that of freight rates. But on the other hand I conceive that this parliament must be responsible at least for one thing-for the laying down of national policies, and that within the lines of those policies all commissions of a technical character must function. I submit that parliament itself cannot delegate to any other body, especially a body that is not responsible directly to the people, the right to determine what policies shall be followed-policies for which parliament itself must be responsible. As I see it, we confer upon the railway commission power, not to lay down policies for this country, but within the limits set by parliament to look after the details of which the minister spoke. And when we deal with matters of internal trade, matters which must affect intimately the wellbeing and livelihood of the people of two or more provinces, then we enter a field which is too large to be left wholly to the railway commission or to any other body which we may constitute.

Western Freight Rates

Possibly it is true that the right of appeal to the privy council from decisions of the railway commission should not continue, that such appeals should be heard by the supreme court, the exchequer court or some other tribunal. But so long as the present law continues in force that responsibility rests on the government, and until the law is abrogated that responsibility cannot be evaded by the government. I am not going into the question now as to whether undue delay has taken place on the part of this government or its predecessors. I do suggest, however, that sufficient time has elapsed and that now we may well look to the government for action of one kind or another. Whether it be in the form of a reference back to the railway commission with instructions as to the lines within which they should work and the goal towards which they should strive, or in the direction of designating some other and perhaps more suitable body to do this work, in any case let us put an end to this period of suspense and indicate to the farmers and the other citizens of the provinces interested that within a reasonable time this disability shall as far as possible be removed, and those necessary goods shall go on backward and forward at the least possible cost.

It has been argued, and perhaps with some truth, that the Canadian Pacific Railway faces certain definite geographical handicaps, that it has a heavy mountain grade and that it cannot be reasonably expected to haul tonnage over the mountains at anything like a prairie rate. It might also be said, and has been said, it would be totally unfair to use the comparatively low and easy grade of the Canadian National railways as a weapon with which to coerce the other system. But, Mr. Speaker, let us go back a few years, comparatively speaking, and what do we find? We find that the Canadian Pacific Railway, being first in the field, had ample opportunity and a perfect right to have chosen that low grade had it so desired, but at that time those directing the Canadian Pacific Railway did not see, nor could very many men foretell, the tremendous movement of freight westward which might develop. So, not foreseeing that great movement, their actions would indicate that they naturally expected the factor to which they must look for their greatest profit to be the passenger traffic and, by providing a scenic route over and through our beautiful mountains, they exepected to attract a great tourist traffic and provide themselves with ample profit. Possibly they were quite justified in figuring it in that way, but is it right that the citizens of these

(Mr. Speakman.]

provinces should be compelled forever to pay scenic freight rates because, forsooth, thirty or forty years ago the Canadian Pacific built a scenic railway in order to attract tourist traffic? Is it right that we should be forever debarred from the advantages which would naturally accrue from the easy grades which the Canadian National railway now follows? It has been proved and demonstrated, so amply and so frequently as to require no repetition, that following the line of the Canadian National railway westward we find grades that compare favourably with those found in the movement eastward, so the mountain differential is a fantasy, a mere dream, a figment of the imagination, with no actuality in fact. There is no such thing as a mountain grade or a mountain range when going through the Yellowhead pass. Most of us have travelled over that road and we have seen for ourselves. We have seen the number of freight cars a locomotive will haul both east and west, and perhaps it is not necessary to assure you, Mr. Speaker, or to indicate to any hon. member of the house, that the power used to haul a train of cars from the prairies to Fort William is sufficient to haul at least an equal tonnage through the mountain passes.

Under those circumstances, and in view of the fact that our present policies encourage the development of domestic and interprovincial rather than international trade, to a greater degree than ever before it is imperative that we should take action in this matter and make it possible for that interprovincial trade to proceed. It does seem to me that a curious paradox exists. By means of subsidies and tariffs and every possible policy within the grasp of the government of this country we have done our best to encourage this trade as between provinces, and the paradox is that we should longer tolerate a freight rate structure which is indefensible under any circumstances-indeed which no one has endeavoured to defend, except to say that it is necessary to find from some source profits which are not obtained elsewhere. So it is that we compel those who wish to ship their grain within the country to pay for a loss which has been sustained on another part of the system. That is the only argument I have heard, and that argument cannot be sustained morally or logically.

In view of these facts I repeat that this house should indicate its desire to have something done. I was glad to hear the sympathetic expressions which emanated from the Minister of Railways, and I think we should indicate to the railway commission that, leav-

Western Freight Rates

ing to them the settlement of those matters of detail which are within their province, public policy and public necessity alike demand that this matter should be reconsidered in the light of the greatest good to the greatest number, in the light of justice and common sense, and that this curious, archaic anomaly of freight rates should not longer exist. The Minister of Railways said he could discover no specific basis upon which our freight rate structure was built; to a layman like myself, and I may be pardoned for saying in some degree like himself, it is a confused patchwork of rates apparently based on some factor with which we are not acquainted; thrown together, complicated and so complex in its nature that we cannot properly comprehend it. That may be true, Mr. Speaker, but we can comprehend this particular item; we can see here something which should not exist, and therefore I repeat that parliament and the government should indicate very clearly to those charged with the immediate responsibility that this state of affairs must not continue, that they must so arrange our rates that they shall no longer act as an effective barrier against natural interprovincial trade and the proper future development of the western provinces.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. J. L. BROWN (Lisgar):

I had not intended to take part in this debate, Mr. Speaker; I felt that my colleague from Macdonald (Mr. Weir) had well presented the case for Manitoba. I felt also that the discussion had been carried on at a very high level, with no indication of any party bias, and it was not until the hon. member for Regina (Mr. Turnbull) made his speech and showed that he could not forego the opportunity, as he thought, to make a little cheap political capital, that I thought I should have a word to say.

The hon. member for Regina sought to make a point by urging that those on this side of the house should have remembered that certain things were omitted from the Crowsnest pass agreement when it was restored, instead of giving our attention to reductions in tariff. Perhaps I might briefly review the facts in that regard, and I think I will state those facts in such a way that no person will dispute them.

As the 'hon. member pointed out, that agreement was suspended in 1919, and the suspension lapsed on July 8, 1922. For the three years following that, the whole matter was in a somewhat unsettled condition, being discussed by the Board of Railway Commissioners and the courts. I need not go into that. But in the session of 1925 the government of the day brought in a resolution restoring in part

the Crowsnest pass agreement. If that were the whole story, we might even claim that half a loaf was better than no bread. If the Conservatives of that day had had their way, we would not have had even half a loaf, for during all the discussion from 1921 onward the whole force of the Conservative party in this parliament was arrayed against the restoration of the Crowsnest pass rates. No person will dispute that statement, for Hansard will show it. But I say, when we make that statement we have not told the whole story. The agreement was only partly restored. The contention had been raised that the agreement applied only to that part of the Canadian Pacific railway which was in existence when the original agreement was made. So, when this bill was brought down in 1925 by the government of the day, it is true it abrogated the rates on goods moving west, but it made it clear that the rates on grain and grain products applied not only to that portion of the Canadian Pacific railway which was in existence when the agreement was originally made, but to the whole Canadian Pacific system and to the Canadian National system as well. I can understand now the kind of argument that the hon. member for Regina gives to his electors when he goes through his constituency.

Mr. W. A. BEYNON (Moose Jaw); Mr. Speaker, I had not intended to take part in this debate, but I cannot allow to go unchallenged the statement made by the hon. member for Lisgar (Mr. Brown).

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

I can prove every word of it.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

William Addison Beynon

Conservative (1867-1942)

Mr. BEYNON:

Well, the Votes and Proceedings will bear out something very different. If the hon. member will take the trouble to refer to the Votes and Proceedings of that date, he will find there a different story entirely. He says that the government of that day brought in a measure restoring in part the Crowsnest pass agreement. It was not necessary for the then government to bring in a bill to restore that agreement; all the government had to do was to sit still and let the agreement go back into force. The hon. member for Lisgar knows that. He ought to know, if he does not, that a committee was appointed, at the instance of the government, to consider the matter. That committee consisted of Conservatives, Liberals and Progressives, the Liberals having more on it than either of the other parties in the house, and the Progressives being the next largest group. In that committee a resolution was proposed to allow the Crowsnest pass agreement to go back into force in its entirety. The committee was equally divided on the resolution

Western Freight Rates

and the Liberal chairman gave his casting vote that the agreement should not go back into effect in its entirety. That is borne out by the Votes and Proceedings and everyone in the house is aware of the fact. Yet the Liberals will go throughout the country telling the people: We restored the Crowsnest pass agreement. It did not need any restoration at all; all the then government had to do was to sit still and let it go back into force.

The matter of freight rates is very intricate, and when a layman who has no knowledge of railroading attempts to deal with it, he is naturally going to be met with the statement that "Fools rush in where angels fear to tread." There is a good deal of justification for that statement as regards the question of dealing with freight rates. Therefore I do not propose to deal with the scientific side of freight rates or to question the arguments put forward by the railway companies, as I do not feel I am in a position to do so. But in connection with freight rates I wish to point out some things that I think might be considered.

We are told in this world to accept things as facts when in reality they are only theories. To illustrate what I mean, when the steam engine was first proposed as a motive power for transportation, the people of England appointed a commission to inquire into the feasibility of using steam on railways for transportation purposes. That commission consisted of very able men, and hon. members might be astonished to know that its report read something like this: that steam as a motive power in transportation might be of some value particularly in the matter of transporting freight, but for anyone to suggest that the travelling public would trust themselves in a railway carriage drawn by a steam locomotive at the ridiculous rate of fifteen miles an hour, was absurd; such a thing would never take place. How far astray that theory was, time has amply proven.

There is another illustration that is perhaps even a little more in point. There was a time when it was believed that penny postage was the most absurd thing in the world. Why, the idea of carrying a letter for two cents was unthinkable! But when penny postage was introduced the volume of mail handled increased at such a rate that after all the post office returns were better at the two cent rate than they had been at the ridiculously high rates formerly charged. When you start to apply that principle to the question of freight rates, in order to be fair to the railways and to everybody else you must acknowledge that another factor enters into the question: that is, that we are living

in a country some four thousand miles in extent and a great deal of it very sparsely populated. The question naturally arises: Even if those rates were reduced very materially, is it possible to develop sufficient business? Is sufficient business there, or can it be brought there to make those rates pay? The railways tell us that they have investigated this matter and that their experts tell them it is impossible to make those rates pay; that the business is not there, nor can it be developed. But again I say to the railways: that is, after all, a matter of theory, because it has never been tried. The only way to demonstrate whether, on a reduction of freight rates, sufficient business will develop to make the railways pay on those reduced rates, is to make the experiment. Until that is done we are acting entirely on a basis of theory. I am not prepared even to say that my opinion is that the railways could be made to pay better on that very much reduced rate, but it would be a very useful experiment, and if it should work out, it would be like the penny postage, a great blessing to humanity. We must not presume simply because this theory has stood for so many years that it is a fact. After all it is only a theory.

The question arises as to why the government is not dealing with this. The hon. member for Red Deer (Mr. Speakman), who is always very clear and moderate in his statements, has suggested that it is time the government did something. This appeal, however, was brought by the provinces and I do not think they are at the present time very anxious to have it heard. That perhaps is the reason why the government has been unable to get them together. They may not have stated frankly the reason, but I think they do not consider this an opportune time to have the appeal heard. How the government is going to bring the appeal on unless the provinces come forward with their case is something I do not know. The Prime Minister (Mr Bennett) stated that a date was set, but that the provinces stated they were not ready to go on; consequently the appeal was not heard. As the hon. member for Regina has said, unless the government is prepared to give some direction or offer some suggestion there is little advantage to be gained simply by hearing the appeal and sending it back to the railway commission to be retried. That body decided on the evidence placed before it and without a specific direction no doubt would decide again in the same manner.

I think everyone agrees that the railways are in a very difficult position, and it is well

Western Freight Rates

known that the people of this country are carrying a great burden in that connection. Any government which attempts to deal with this situation as far as the western provinces are concerned is faced with a very serious problem. I doubt very much if there are many people who, after having this question explained, would be prepared to suggest to the government that it adopt a definite course one way or another. It will be said, of course, that the people are looking to the government for a lead, but I think they can rest assured that the government will take definite steps in this respect. That the rates are entirely out of line would seem evident from the fact that goods can be shipped from Calgary to the orient at a lower rate than they can be shipped to Vancouver.

If I had any objection to the resolution it would be that it does not go far enough. The people in British Columbia grow some splendid fruit which is needed badly in the western provinces. There are occasions when we in the western provinces are hungry for fruit which is rotting in the orchards of British Columbia. Perhaps the railroads will take it into their heads to try the experiment which they have made in the passenger rates between Montreal and Ottawa. However, there is this difficulty: you cannot develop freight over night; it would take some little time and the railroads might get weary of well doing before the results of the reduction in rates would be felt. That the railroads are facing a serious problem I think is apparent to every hon. member in this house. The one encouraging feature of this debate is the fact that hon. members on both sides have recognized the necessity of protecting the railroads to the extent of allowing them to charge a fair rate in order that they may keep going and serve the people of this great country.

I am heartily in favour of the resolution, but I would like to see it go a little further so that we could get the products of British Columbia into the prairie provinces. I am not an expert in freight rates and I am not prepared to say what should be done, but I certainly would like to see an experiment made to test the old theory that a reduction in rates will not produce a sufficient increase in business to justify its being put into effect.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

Charles A. Stewart

Liberal

Hon. CHARLES STEWART (West Edmonton) :

Mr. Speaker, I have listened with

considerable interest to the suggestions offered by various hon. members .this afternoon and evening with respect to the differential which should apply in the freight rates through the mountains. May I express some regret that

the hon. member for Qu'Appelle (Mr. Perley) has extended his resolution to take in the movement of freight within the prairie provinces themselves. One of the difficulties which we experienced as a government was in having an inquiry which had been submitted to the railway commission enlarged in scope when it appeared before us for consideration or on appeal. I think to take one step at a time would be to make progress in the right direction Let us first get settled the question of the differential between the export and domestic rates on grain to British Columbia.

I sympathize somewhat with the hon. member for Pictou (Mr. Cantley). His is an old grievance one which is comparable with the trouble we are having in Alberta with respect to the rates to British Columbia. I do not see the necessity-nor has this ever been asked, except by resolution-for making the domestic and the export rates comparable, but there should be some paring down of the domestic rates on grain to bring them more in line with the export rates.

I do not intend to traverse the whole field, but may I say that in my opinion parliament is totally unfitted to deal with a matter of this kind. We may express an opinion, but we have not the time or the opportunity to obtain full information with respect to all aspects of the question. May I carry that point a little further and say that despite the fact that it has had an opportunity of hearing both sides of the question discussed, despite the fact that new matter has been interjected into the discussion, the government must find itself in a very difficult position in coming 'to a decision upon a question as involved as this. I have had the privilege of listening to two or three appeals from the Board of Railway Commissioners, and I am firmly convinced that the government should not be a court of appeal. A question of this kind should be submitted either to the supreme court or to the exchequer court. Coming to a conclusion in connection with freight rates is most difficult; both sides of the question are advanced so strongly, precedents have to be considered, and then there is a possibility of that happening which has happened to-day-a continued extension and widening out of the circle of the application until you finally reach the stage where you do not feel like taking the responsibility of a decision. There must be considered the possibility of jeopardizing the interests of the railroads, one of which is a national undertaking, and of necessity entitled to some protection from the government.

Western Freight Rates

It is very difficult, therefore, for a government to come to a decision upon a question so involved as that of freight rates. I think I am safe in stating that during the time the Liberal party was in office we followed the practice of returning these questions to the railway commission for consideration. Something of that kind could be done with this matter. The commissioners could be instructed to give consideration to the question of the differential between the export and domestic rates on grain going to British Columbia, and I am not unmindful of the fact that perhaps something might be done to solve the problem facing the maritime provinces.

These two questions are similar in every particular. Products are going to the ports of export and in no way do they interfere with the internal rates either in the maritimes, in Quebec and Ontario or the iprairie provinces. I.f these two questions were out of the way and some readjustment made, I think it would go a long way towards the settling of this vexed question which has been agitating the mind of parliament and particularly of the people of Alberta and British Columbia. May I say here and now that I think the government would be wise, if appeals are to be allowed to have the act amended, to have at the earliest possible date those appeals go to the supreme court or the exchequer court.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. G. B. NICHOLSON (East Algoma):

Mr. Speaker, I rise to support the suggestions made by the hon. member for Regina (Mr. Turnbull) and the hon. member for Red Deer (Mr. Speakman) with regard to the responsibility or jurisdiction of parliament in a matter of this character. For parliament as a body to attempt to adjust freight rates or to go into all the details in connection with freight rates is entirely out of the question. My opinion is that for the government itself to act as a court of appeal to hear cases coming from the railway commission and to go into the details of freight rates is also out of the question. But freight rates being what they are, applying as they do to all commodities in Canada that must be transported, often considerable distances, and being so intimately linked up with our export trade, being in a word one of the most important factors affecting the Canadian people, I believe it would be well for parliament to lay down a principle that should apply in determining the differential between the export and domestic rates in all parts of Canada. I might stand here and cite case after case, not so exaggerated perhaps as those that have been cited as between the prairie provinces and Vancouver,

but nevertheless showing a very wide spread between the domestic and export rates which it is difficult to understand. It is indeed difficult to understand sometimes why domestic business is penalized as it is, but the problem that must be dealt with is this: the railways must have revenue, and we must treat all classes of industry fairly. We cannot select a particular commodity or a particular locality and apply a principle with respect to it that should not be applied to every other commodity and in every other part of Canada. Having given the matter such consideration as it can give in a debate of this character, and having ascertained the general view of the country in regard to the subject, parliament might well appoint a committee to study the question and hear interested parties in all parts of Canada, with a view to laying down the principle that should be followed in determining the extent of the differential between the export and domestic rates and between the short-haul and long-haul rates. In that way something might be accomplished; but simply to throw the question back to the railway commission without instructions is to invite a decision similar to the one already given.

I do not agree with my hon. friend the exMinister of the Interior (Mr. Stewart), who has just spoken, that these questions should be settled one at a time, because when you deal with one particular commodity or one particular locality, you cannot help but discriminate against some other commodity or some other locality. If the railways are to get sufficient revenue to make it possible for them to continue to operate, when the freight rate is reduced on one commodity moving from one particular point to another, it must perhaps be raised on some other commodity, and you are simply taking the burden from one industry and placing it on another. The problem is so vast, the details are so innumerable, the range of country is so wide, the number of commodities that have to be transported is so large, that the question can be adequately dealt with only after an intensive study of all industries and after hearing all interested parties. But the subject might be referred to a committee of this house to report back the principle it thinks should be followed in determining what the differential, if any, should be.

It must also be borne in mind that one of our tremendous problems is to get our export products, particularly of the west, into the world markets on a basis that will enable them to compete. There are many commodities-lumber, for instance, newsprint, pulp, coal in the east and the west-vital to different

Western Freight Rates

parts of this country, and in my opinion the only way in which the sense of parliament and of the people can be ascertained is by having the whole subject carefully inquired into by some body which will hear evidence from all parts of Canada and from all classes of people interested. It can then be determined whether it is the general desire to have the differential narrowed, and a principle can be laid down which will guide the commission in working out the details and reaching its decisions.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

Pierre-François Casgrain (Whip of the Liberal Party)

Liberal

Mr. P. F. CASGRAIN (Charlevoix-Sague-nay):

Mr. Speaker, I cannot very well let this resolution pass without saying a few words on behalf of those whom I have the honour to represent in this house. It is all very well for the people of the west to talk about the disparity in freight rates and ask for substantial reductions on grain and grain products, but I wonder if some of our friends have ever thought of the conditions that now prevail in the province of Quebec, the people of which are suffering at the present time to a greater extent perhaps than those of some of the western provinces. Inequalitj^ of freight rates is not justifiable in relation to goods of the same class shipped a similar distance, but this condition does exist in the province of Quebec and is creating a most undesirable situation in various parts of our province. Perhaps it is not known to all the members of this house, but it can be shown that there is charged the sum of 812 to S13 for shipping a cord of fuel wood from the colonization districts to the central markets in our province. That is out of all proportion. It is also out of proportion to charge a rate of SI .08 per one hundred pounds for goods of the first class shipped from Montreal to Montmagny, a distance of 307 miles, when the same class of goods is transported at a rate of 83 cents per one hundred pounds from Galt to Sudbury in the province of Ontario, also a distance of 307 miles. As a result of this disparity in freight rates the traders and shippers of the province of Quebec are called upon to pay in a year over 8100,000 more than are the people of the province of Ontario for the movement of goods of the same class over the same distance.

The maritime provinces have special freight rates for their coal. The prairies have special freight rates for their grain, their cattle, and coal from the province of Alberta. Last year parliament voted a bonus to help the distressed farmers of the west in the shipment of their grain to the export market. Ontario has the advantages of its lakes and a rail tariff lower than prevails in the province of

Quebec. It is true that the province of Quebec is served by the great and mighty St. Lawrence, but this river does not serve the outlying and remoter parts of the province. It can be affirmed with safety that the province of Quebec has not the same advantages from the point of view of railway rates that are enjoyed by the other provinces in this dominion. The difference in the cost of transportation is particularly high as regards goods shipped from remote districts, such as the Abitibi district and from part of the county which I have the honour to represent in this house. Transportation costs as they affect these two districts, and no doubt other districts in the province of Quebec, are of such a nature as to impose a real hardship on the traders and shippers in those districts, placing them in a very inferior position from the point of view of agriculture, trade and industry, as compared with the other provinces. This is also a serious obstacle to colonization, working against the policy which every government nowadays has in mind, that of keeping our people on the land.

I should not like to see the present proposal adopted unless the same opportunities were given to the province of Quebec as would appear to lbe offered to other parts of the country by the resolution now before us. Therefore I move, seconded by Mr. Brasset, that the following words be added to the motion:

and the domestic freight rates in general, now prevailing in the province of Quebec are prohibitive and of a nature to injure agriculture, colonization and industry in general, and should also he substantially reduced..

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

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

Conservative (1867-1942)

Mr. BENNETT:

Are those words to be added at the end?

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

Pierre-François Casgrain (Whip of the Liberal Party)

Liberal

Mr. CASGRAIN:

Yes, I have moved that these words be added to the resolution.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

Isaac Duncan MacDougall

Conservative (1867-1942)

Mr. I. D. MACDOUGALL (Inverness):

Mr. Speaker, before the question is submitted I should like to say a few words, because I believe I have given somewhat more study to the matter than has the hon. member (Mr, Casgrain) who has just resumed his seat. I should like to ask him in what way the maritime provinces secured a special freight rate from the Dominion government or from the Canadian National Railways?

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

Pierre-François Casgrain (Whip of the Liberal Party)

Liberal

Mr. CASGRAIN:

A few years ago there was a readjustment of freight rates, at which time special rates were given and the Canadian National Railways assumed a certain part of the cost of transportation. That additional sum was added to the cost of operation of the railways.

Western Freight Rates

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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CON

Isaac Duncan MacDougall

Conservative (1867-1942)

Mr. MACDOUGALL:

But for what reason? It would be well for any hon. member standing in his place in the House of Commons to know what he is talking about. What was the reason?

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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LIB

Pierre-François Casgrain (Whip of the Liberal Party)

Liberal

Mr. CASGRAIN:

I know the maritime provinces got more than the province of Quebec ever got.

Topic:   WESTERN FREIGHT RATES
Subtopic:   REDUCTION OF DOMESTIC RATES ON GRAIN AND GRAIN PRODUCTS
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March 7, 1932