June 3, 1936

CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

Does the minister think a board of seven directors will be more likely than three trustees to carry out the recommendations of the Duff commission? What particular advantage would such a board have over the three trustees? The minister says that some of the provisions of the act are unsatisfactory, but is not the answer to that, amend the act?

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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LIB

Clarence Decatur Howe (Minister of Marine; Minister of Railways and Canals)

Liberal

Mr. HOWE:

We are doing that.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

You are doing more than amending it; you are wiping it out altogether. It is not an amendment of the act; you are putting in a different set-up. The minister might just as well admit that now as at any other time. The minister states that there are certain defects in the present set-up, but I submit to him that he should amend the act rather than wipe it out altogether. When a house needs repairs it is not necessary to tear it all down. If a roof is leaking, repair the roof; if there is a defect in the plumbing, repair it. You do not need to build a new house in order to correct some defects in the old one.

C.N.R.-Board oj Directors

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

What happens when the house is suffering from dry rot?

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

A house two years old could hardly have any dry rot. Like my hon. friend, it would not be old enough.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

You have got rid of the old roof; that is my chief objection. The Prime Minister is in the chamber and I should like to have his attention for a moment. The government is now purporting by this bill to repeal some very important provisions of an act passed in 1933 known as the Canadian National-Canadian Pacific Act, 1933. Section 7 of that act, which is now being repealed, reads:

No trustee shall be removed from office, nor suffer any reduction in salary, during the term for which he is appointed, unless for assigned cause and on address of the Senate and House of Commons of Canada.

There may be differences of opinion with regard to a pledge contained in a statute passed by the House of Commons and Senate of Canada; there may be differences of opinion with regard to the terms of such pledge when it was under consideration when passing both houses of parliament; but I ask the Prime Minister, even although differences of opinion prevailed at the session of 1933 when the act was passed, is not some consideration to be given to the terms of a pledge which parliament made? Provisions were being made for the appointment of *three trustees to very high and important positions. Those appointments were similar to appointments to a court of appeal or a court of justice where the term was expressed in clear language, with the further provision that no one should be removed from office or suffer a reduction in salary, during the term for which he was appointed, unless for assigned cause and on address of the Senate and House of Commons of Canada. If that provision is to be wiped out by this bill, what confidence can hereafter be placed in the honour and integrity of a parliament that makes such a pledge and then two or three years later repudiates it by allowing the trustees to be removed without assigned cause and on address of the Senate and House of Commons of Canada after full consideration of the merits or demerits of the charges made against them? That was not a party pledge; it was a pledge contained in a statute passed by a majority of both houses. It declared that the men who were appointed and whose term of office was fixed should not be removed from office except for assigned cause and on address of the Senate and House of Commons of Canada. Such removal as is contemplated by this bill is not in accordance with the pledge.

12739-215J

While I dislike to use strong terms, I think opprobrium, if not dishonour, is placed upon the parliament that refuses to carry out a pledge so made.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Mr. Chairman, may I say to my hon. friend that if at the time that particular clause was inserted there had not been very strong exception taken to it by the then Liberal opposition, I would say he was entirely right in what he is now saying. But one has to consider not only the opposition which was made at the time, but the grounds for it and the nature of it. It was stated very clearly, by the then Liberal opposition, that the particular plan adopted, of having these gentlemen removable only by address of both houses was a Conservative or Tory device to tie the hands of a Liberal administration should we come into office at any future time. I think it was stated very plainly that if that clause did carry, every effort would be made to see that the House of Commons, which was the representative of the people as a whole, would not have its hands tied with respect to the control of any industrial activity for which it might be held responsible.

My hon. friend speaks about the courts of the land and the tenure of office of judges and the grounds on which they are appointed, but this presents no parallel. A judicial position is an entirely different position to that of a director of a company. When a government is held responsible for the success or failure of a great industrial enterprise, it surely should have the right to have as directors of that enterprise persons in whom it has confidence. Otherwise, we would not have responsible government in a true sense.

I wish to repeat that the linking up of the Senate with the House of Commons in the control of everything which relates fundamentally to the finances of the country is a wrong principle and has always been recognized as such. My hon. friend may argue that the Senate was made a party to any dismissal of these gentlemen in order that their tenure of office might be secured, but he overlooks the fact that the House of Commons is the one body responsible for the administration of the different departments of government, that the government of the day has to take responsibility, and that any government returned by the people should, with respect to matters which relate to the finances of the country, be free to deal with those finances as its members think best.

For this reason I believe there is every justification for this particular clause being removed from the act. There is no ground

C.N.R.-Board of Directors

for contending that this implies any breach of faith or trust on the part of the present administration. As I said, it was made perfectly plain, when we were in opposition, that if we could possibly avoid it we did not propose to have our own and future parliaments bound in a manner which would hold them responsible for the administration, of public affairs and yet deny them the right of having in charge of those affairs persons in whom they had confidence.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Just one word. The right hon. gentleman has laid down this principle, that minority in the House of Commons who oppose any public bill are to be at liberty thereafter, should that minority become the majority, to repudiate any promise or pledge which parliament as a whole has given to particular individuals in their official capacity. He further introduces this suggestion. It has not been stated that the trustees are not prepared to cooperate fully with the government of the day; that suggestion has not been made. But the Prime Minister goes further and says; We are now making the Canadian National Railways the football of politics.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I said nothing of the kind.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

That is the only inference, that each successive government will be free to do what it pleases with regard to the provision for the organization and administration of that board, and a new government coming in, which does not like the colour of hair of these directors, or the colour of their eyes, or the particular smile which they bear upon their faces, is at liberty to put them out of office forthwith. Therefore no future tenure of office of directors or trustees of the Canadian National Railways can be regarded as secure. When that principle is once admitted and when parliament, in repudiation of its previous pledges, is prepared to carry out such a policy as that, does it not clearly mean and indicate that the administration of these great railways is to become purely a matter of party politics; that the door is wide open to the return of the system of corruption which we have had in times past in dealing with government railways? That is the precedent which, it seems to me, the right hon. gentleman is establishing. I am discussing this matter apart from his personality; I am not casting reflections upon him. But I do say this, that I do not know of a man in his government -and he has in i/t many members far whom I have high personal respect-there is not one of them, not even himself, who if placed in the position of Minister of Railways in charge of this can be expected to stand between his political party, demanding office

rM**. Mackenzie King.]

and demanding consideration, demanding this contract and that contract, between that horde, who are looking for patronage, and the public service, the public interest, which alone should command the care and attention of the government of which the right hon. gentleman is Prime Minister.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

My hon. friend has just said that I am seeking to lay down the principle that a minority must control the majority-

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

No; I said a minority in a previous parliament.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

The principle

I am laying down is that there is no minority which is superior to the majority when that majority is the people of the country as a whole; and the people of the country as a -whole have sent this present House of Commons to legislate with respect to the Canadian National Railways as it thinks right and proper. The whole question of a new enactment with respect to the Canadian National Railways was presented to the people in the last general election. It was one of the policies on which the Liberal opposition took a very strong and positive stand, and it was returned to power in virtue of it and the other policies it outlined. The authority of the present administration in this matter is an authority which has been derived from the people of Canada as a whole, and in no unmistaken voice or way; and we intend to exercise that authority in the light of the responsibility so placed upon us. I wish to take very strong exception to the assumption that just because a director is to be appointed by a Liberal administration he will be thoroughly corrupt in the carrying out of his obligations, whereas a trustee appointed by a Tory administration is always to be above criticism. That is a new doctrine, a principle that does not apply. The only principle that can govern in these matters of the administration of public affairs is the principle of ministerial responsibility. The ministry will be responsible for those whom they appoint as directors. If a mistake is made in the appointment, or if mistakes are made by their appointees, the members of the ministry will be answerable to their masters. But their masters will not be the Tory party but the people of Canada as a whole. That is the essence of the situation. No one knows better than my hon. friend, unless it is his leader, that in most of the legislation which was introduced having to do with financial matters, an effort was made by the previous administration to tie the hands

Questions

of an incoming administration, to tie future parliaments in such a way that they would be bound, not to policies to which they were committed, but to Tory policies which they believed to be inimical to the country's interests. This is one case in point, and it is not by any means the only one. Certainly, however, so far as the present administration is concerned, it is prepared, in so far as it is able, to secure the necessary power and authority to take full responsibility for the legislation it proposes. It is not going to be tied, with respect to what it deems to be necessary and in the public interest, by any clause in any act or agreement which says that with respect to great transactions involving the finances of this country-and that is what is always put up in connection with the Canadian National Railways, that it is a big financial problem

this House of Commons is to be controlled by the other house of parliament. It will in so far as that is possible be controlled solely by its own members, in the exercise of full ministerial responsibility.

Progress reported.

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   PROVISION FOR ADMINISTRATION BY BOARD OF DIRECTORS APPOINTED BY GOVERNOR IN COUNCIL
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At six o'clock the house adjourned, without question put, pursuant to standing order. Thursday, June 4, 1936


June 3, 1936