March 10, 1938

LIB

Clarence Decatur Howe (Minister of Transport)

Liberal

Hon. C. D. HOWE (Minister of Transport):

Both these questions involve matters of government policy. The policy of the government in regard to both matters will be made known in due course.

Electric Power Export

Topic:   RADIO BROADCASTING
Subtopic:   LICENCE FEE FOB RADIO SETS-QUESTION AS TO INCREASE, APPLICATION AND ABOLITION
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VALIDITY OF QUEBEC STATUTE

QUESTION OF REFERENCE TO SUPREME COURT OF CANADA OF "ACT RESPECTING COMMUNISTIC PROPAGANDA"


On the orders of the day:


LIB

Ralph Maybank

Liberal

Mr. RALPH MAYBANK (Winnipeg South Centre):

I should like to address to the Minister of Justice (Mr. Lapointe), a question of which I have already given him notice. It is as follows:

In the light of the recent judgment of the Supreme Court of Canada stating that the Alberta act called Bill No. 9, which restricted publication of news, is ultra vires a provincial legislature, and particularly in view of the reasons for judgment of the various judges, as, for example, the words of the Chief Justice and Mr. Justice Davis, that the "right of free

public discussion of public affairs..is the

breath of life for parliamentary institutions," can the Minister of Justice give assurance that the Quebec "padlock law" will shortly be either disallowed or referred to the Supreme Court of Canada for a decision as to its validity as a provincial enactment?

Topic:   VALIDITY OF QUEBEC STATUTE
Subtopic:   QUESTION OF REFERENCE TO SUPREME COURT OF CANADA OF "ACT RESPECTING COMMUNISTIC PROPAGANDA"
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Right Hon. ERNEST LAPOINTE (Minister of Justice):

I can only make to my hon. friend the same answer as I made to the hon. member for Peace River (Mr. Pelletier), and I may say that it is a standard answer which will be given to all possible similar questions. Any recommendations which it will be the duty of the Minister of Justice to make with regard to this or any other provincial legislation and with regard to any petition concerning this legislation, will be made to the governor in council. My hon. friend will understand that I could not give to him or to any other member of the house any information or intimation as to what that recommendation will be.

Topic:   VALIDITY OF QUEBEC STATUTE
Subtopic:   QUESTION OF REFERENCE TO SUPREME COURT OF CANADA OF "ACT RESPECTING COMMUNISTIC PROPAGANDA"
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ELECTRIC POWER

TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved the second reading of Bill No. 21, to amend the Electricity and Fluid Exportation Act. He said: Mr. Speaker, the bill which is now before the house for second reading implements the undertaking which was given in the speech from the throne on January 27 to the effect that legislation would be introduced with a view to furthering the principle of parliamentary control of the export of electric power. On the first reading of the bill, on February 11, I outlined its scope and purposes, but it might be well at this time to repeat what was then said. While the bill in form constitutes a general amendment and recasting of the Electricity and Fluid Exportation Act, which has not heretofore been amended since it was passed in 1907, in substance its object is to transfer to parliament itself the power at present legally vested in the governor in council to control all export of electric power from this country. The bill does not affect the licences to export power which have already been granted, nor does it take from the governor in council the right to renew or cancel the existing licences. It does provide that no further exports of power may be made unless they are specifically authorized by a private act of parliament. An exception to this rule is made only in the event of a temporary international emergency, and only for the duration of such an emergency. The house will recall that in 1928 the hon. member for Leeds (Mr. Stewart) introduced a bill in this house to amend the Electricity and Fluid Exportation Act. The bill was given first and second reading at that session but did not get beyond the committee stage. In the following year, 1929, the hon. member for Leeds reintroduced the bill, which was given all three readings in this house with practically no discussion. * The bill went to the senate, where it was given first and second readings. After the second reading, while the bill was in committee in the senate, some information was requested with respect to the number of licences that had been already issued, together with other data which hon. members of the senate desired to obtain. It was not possible to secure that information in time for consideration before the session prorogued. As a result the bill introduced by my hon. friend did not become law. What I should like particularly to bring to the attention of the house is that in 1929 all members of this house, regardless of party, accepted the principle of parliamentary control of the export of electrical energy. That was the underlying, essential principle in my hon. friend's bill. The original act with respect to the exportation of power from Canada was enacted in 1907. From 1907 up to the present time that act has not been amended. The amendment which the hon. member for Leeds proposed in 1928 and 1929 would have taken away the power which at present resides in the governor in council to issue licences, and would have transferred that power to parliament. It was the approval of parliament that my hon. friend desired should be Electric Power Export



given in respect to all future licences for the exportation of power. The principle contained in the present bill is the same as that which appeared in the bill of the hon. member for Leeds in 1928 and 1929. It is the principle not of completely prohibiting, under all circumstances, the exportation of power from Canada, but rather of making a general prohibition, subject to exemptions by approval of parliament. The present bill, however, is a little different from that introduced by my hon. friend. It is not different in principle: the principle is the same,, as I have indicated, the direct control of parliament over further export of power from Canada. But inasmuch as the legislation has not been amended since it was originally introduced in 1907, the present measure seeks to recast the legislation by separating those provisions which have to do with the export of electrical energy from those which have to do with the export of fluids, such as gases, oil and water. The provisions with respect to fluids are in no way changed but are placed by themselves in the bill. The provisions with respect to the export of electrical energy are likewise placed by themselves. A change is made in the provisions with respect to the export of electrical energy, in the manner that I have indicated. My hon. friend's bill merely provided for the approval of parliament. It did not indicate in what particular form that approval should be given. Approval might have been given, under my hon. friend's bill, by resolution of this house or by a private act. The government has thought it preferable at this time to make provision for the approval of parliament being given specifically in a private act. One reason for preferring a private act to a resolution is that a resolution is not law. It would leave the legal position just as it is to-day; the governor in council would still have the power to grant licences. On each occasion the governor in council would simply have to wait until a resolution of both houses had been passed. But a private act has this advantage over a resolution; it enables the parties desiring to secure a licence for the export of power to make formal application, to present their views to a committee of the house and -to have the house view the matter in a judicial as well as a legislative manner.


CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Might I ask the right hon. gentleman a question? Does he realize that a resolution, if it is to mean approval by parliament, cannot be effective unless it is in the form of a bill-because then it is a resolution not of both houses of parliament but of parliament itself, which is all three estates.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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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 right hon. friend is giving an interpretation which I had not thought had been placed on my hon. friend's bill in the first instance. This house passes many resolutions without enacting legislation as a result. On the other hand, very frequently the house enacts legislation as the result of a resolution, and certainly I had assumed that my hon. friend's bill would have made it possible for the approval of parliament to be given by a resolution- I mean a resolution approved by both houses of parliament. As the right hon. leader of the opposition (Mr. Bennett) has just indicated, an act would require the assent of the crown as well as action on the part of both houses. However, a resolution on the part of both houses might have been a course for which the present administration could have provided in this measure, had they desired to do so. We preferred, as I have said, in order to ensure that parliament would exercise its judicial as well as its legislative functions and powers, to proceed with the granting of licences by means of private acts rather than in any other way.

There is a third reason why it is preferable that the approval of both houses should be given in the form of a private act rather than in the form of a resolution; it is very difficult to draft into a resolution the specific terms which it might be advisable to have inserted with respect to any licences that might be granted.

My right hon. friend the leader of the opposition raised a point at the time of the first reading of the bill to which perhaps I ought to direct attention at once; that is, that the government should proceed by means of a public bill rather than a private bill. May I say to my right hon. friend that I am unable to follow him in his suggestion in that regard. At the time he spoke, I thought he was correcting me on a matter of terminology, but I see that he had something more in mind. As he knows, a public bill sets forth a general policy and makes the general provision with respect to the subject with which it deals. A private bill is in the nature of an exemption from a general law, and that is what the government desires to effect with respect to future authorization for the exportation of power. The measure before the house is a public bill providing that, except by private act, no further export of power can take place from Canada, other than under the exceptions in the bill itself, which are restricted to licences which have already been granted from year to year.

In support of what I have just said I would direct the attention of my right hon. friend

Electric Power Export

and members of the house to the citations in reference to private bills as indicated in Beauehesne's Parliamentary Rules and Forms. I quote first paragraph 840:

The object of a private bill is to alter the law relating to some particular locality or to confer rights on, or relieve from liability, some particular person or body of persons.

And paragraph 847:

The object of a private bill is, in fact, to obtain a privilegium-that is to say, an exception from the general law, or a provision for something which cannot be obtained by means of the general law, whether that general law is contained in a statute or is common law.

The present bill, if it passes both houses and is assented to by the crown, will be the general law. In order that hereafter any person or corporation or other body may obtain authorization to export electrical energy, he or it will have to come to parliament for a private bill granting that authority.

May I supplement what appears in Beau-chesne by the following, which is taken from Ilbert's Legislative Methods and Forms, 1901, at page 28. Ilbert is a recognized authority in matters affecting legislative methods and forms.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

He was clerk of the House of Commons in Great Britain.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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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:

Yes. I quote:

A public bill is introduced as a measure of public policy in which the whole community is interested, and originates on the motion of some member of the house in which the bill is introduced.

The object of a private bill is, in fact, to obtain a privilegium-that is to say, an exception from the general law, or a provision for something which cannot be obtained by means of the general law, whether that general law is contained in a statute or is common law.

Private and public bills differ not merely in the mode of origination, but in the mode of procedure for passing them. In the case of a private bill the rules of the standing orders of the two houses as to the giving of certain notices and the deposit of bills before a certain date must be complied with, in order that all persons may have notice if their private interests are affected. Each bill is considered by a select committee of each house, who hear the promoters and opponents by counsel, consider their private interests, and determine, in a quasi-judicial capacity, whether the promoters of the bill have justified their request for a privilegium, and whether private interests are properly protected.

The officers of the house and the different government departments watch private bills from the point of view of the public interest, and call the attention of the select committee to matters affecting that interest. The House of Commons also appoint annually a special committee on police and sanitary regulation 51952-76

bills, for the purpose of guarding against the insertion of enactments inconsistent with the general law.

Subject to these provisions for the protection of public interests, the proceedings on a private bill resemble more closely private litigation between the parties interested than a discussion on questions of public policy, though, as each bill has to go through the same stages in the whole house as a public bill, there is an opportunity for members to raise at those stages questions of public policy in respect of the bill.

When my right hon. friend raised the point on February 11, with respect to the term "private bill," I thought it well to ask the Deputy Minister of Justice if he would give me a written opinion on the matter. As the right hon. gentleman had raised the point, I thought it would be of some importance. May I now supplement the authorities I have read by the opinion of the Deputy Minister of Justice. The communication is dated at Ottawa, February 12, 1938, and reads:

Dear Mr. King,

With reference to the observation of the right honourable the leader of the opposition that a bill to authorize the export of power could hardly be designated a private bill but would be a public bill of a private nature, I beg to advise you as follows:

The question whether a bill should be classified as private or public, of course, depends upon the object thereof. The object of a private bill is to alter the law relating to some particular locality or to confer rights on or relieve from liability some particular person or body of persons. The object of a private bill is to obtain an exception from the general law.

If it is contemplated that the export of power in future is to be permitted in the same manner and circumstances as in the case of licenses under the present law, I would think that any such privilege under or exception from the general law prohibiting export would be an object which would properly be dealt with by means of a private bill resulting in a private act. The boundary line between public and private bills is a narrow one and since no conclusive definition or test exists for determining doubtful cases, individual opinions may differ.

My understanding wTas that the private bills procedure was considered to be peculiarly appropriate for dealing with applications to export power. Being initiated by petition to parliament, the proceedings partake of both judicial and legislative character. The promoters appear as suiters while those who apprehend injury are admitted as adverse parties. Petitions in favour of or in opposition to such a bill may be received at any time while the bill is under consideration.

My view is that the granting of an exception to the general law prohibiting export is comparable for example to the case of a loan company being excepted from the operation of the Money Lenders' Act; such exceptions are created by a private act.

Yours truly,

W. Stuart Edwards, Deputy Minister of Justice.

Electric Power Export

I would say, therefore, in connection with what is contemplated under the present measure, that, hereafter, parties proposing or desiring to obtain authorization for the export of power will have to proceed, for example, in exactly the same manner as persons interested in securing from parliament a charter to establish a bank or build a railway. They will have to follow the procedure for private bills, and thereby enable all parties interested to be heard, before any final decision is reached with respect to the measure in question.

There is a further consideration I should like to mention at this time. It is a reason why it would seem desirable to have the matter of the future export of electrical power removed from the control of the governor in council and placed under some other authority. The reason is not new; it was advanced in 1907, at the time the original bill was enacted, by Sir Robert Borden, who at the time, was leader of the opposition. The then Minister of Justice, Sir Allen Aylesworth, who had the legislation in hand, was not unfavourably impressed by the suggestion.

It was pointed out by Sir Robert Borden that the governor in council is necessarily concerned with matters largely of a political nature. He felt that the governer in council was not equipped to handle matters of administration as effectively as some other bodies, and necessarily the governor in council would have to be guided by the advice of individual officers in the public service. Apart from that, attention was drawn to the fact that, under our constitutional practice, council is composed of members of one political party, and, in dealing with a matter of this kind it might be assumed, although not necessarily so, that the action of the governor in council was being influenced by political reasons. That possibility would be removed altogether if the power were taken away hereafter from the governor in council. I may say, however, that there has been nothing in the thirty years since the act was passed to give reason to believe that there had been the slightest political motive or consideration behind the granting of any licences. Nevertheless, I think the point is one which deserves consideration and I must say that personally I rather favour the suggestion which was made at the time, that these matters of the export of electrical power and energy should be made the subject of review by a body such as the railway commission, or the transport commission as it is now known, which would deal with them as it does with other matters already under its jurisdiction.

When that proposal was made in 1907, it was urged that the railway commission had about all that it could attend to and that

without reorganization it would not be advisable to add to its duties. No government from that time up to the present has thought it necessary to make the suggested change. However, something in the nature of a public utilities commission will, I believe, sooner or later become necessary. It might well be that we should have in mind the possible transfer to such a body of jurisdiction in the granting of future authorizations for the export of power. It may be of interest to the house to have before it the words used by Sir Robert Borden at the time with respect to this matter. They will be found at pages 4635 and 4636 of Hansard of March 13, 1907. Sir Robert said:

The other objection is that the governor in council is about the worst body that could be found for the purpose of dealing with such a matter. I say that for two reasons; in the first place, because the governor in council is not composed of persons having any special knowledge of the conditions which should control the export. It is composed of men who are very much taken up and occupied with their political as distinguished from their administrative duties. For that reason one would not anticipate that any administration-I am not speaking especially of the present administration-would be a very competent or capable body to deal with a question of this kind. The answer may be that they would be governed by the report of some officer, but when we are confronted by that answer, then, there is another consideration.

That is the consideration that the governor general in council under our system is and necessarily must be a partisan body. It represents presumably a majority of the people of this country and it certainly must always represent a majority of the members of parliament. It is a partisan body, it acts as a partisan body and you will have entrusted to the governor general in council under the provisions of section 5, very delicate questions indeed, questions which concern the material advantage of their political friends, questions which concern the material advantage of their political opponents; and it does not seem to me that it is wise to entrust so delicate a power as this must necessarily be to a body of that kind.

As I have already intimated, the then Minister of Justice Sir Allen Aylesworth rather agreed with Sir Robert Borden in the point of view he expressed, but no action was taken to change the method by which licences would be granted. I bring this suggestion before the house at the .moment because I feel that in the existing situation it is important that hon. members should realize that the only desire of the government is to further the public interest and to ensure that there shall not be in reality or to appearances, directly or indirectly, the determination of the export of electrical energy from any partisan political motive.

It .might help the house better to appreciate the stand which the government has taken

Electric Power Export

with regard to some recent applications which have been made to the governor in council for the export of electrical energy if I were briefly to review the discussions which have taken place in this house on this all-important question. I shall try not to detain the house at too great length in this review, but to indicate in brief outline the essential features of the more important discussions, and in particular statements of policy as they have been put forth by different administrations in dealing with the question of the export of power. As already mentioned, the first debate of any importance on the subject was that which took place in 1907 when the existing legislation was enacted. I shall not go into the arguments which were put forward at that time, although I shall refer to one or two of them when I come to sum up the reasons which may be urged for and against the granting of licences for the export of power when there is a surplus of power available.

From 1907 on, for many years, there appears to have been very little in the way of discussion in parliament on this subject. In 1914 an important order in council was passed as a result of certain statements which had been made by the Public Service Commission of the state of New York to the effect that the termination of existing exports of power from Canada would paralyse the business and industry in the United States which had become dependent upon Canadian sources of power. I shall refer to that order in council later on as it sets forth reasons which are very important in considering the advisability of exporting power. The 1914 order in council will be found set forth at page 104 of the white paper recently tabled. It was not until 1925 that any extended discussion took place in this house on the question.

In 1925, the matter came before the house in connection with the placing of a duty on the export of power. In that year an effort was being made to develop the Carillon power site. Considerable discussion took place on the question of the export of the power which might be generated as a result of that project. Delegations made representations to the government with respect to the matter. In that year also a resolution was introduced into this house by Mr. LeSueur, the member for Lambton West. This resolution had an important bearing on the policies adopted at that time and thereafter, and I shall refer to it more particularly in a moment.

In the next year, 1926, a significant act was passed by the legislature of Quebec prohibiting the export of power from that province. That act was amended in 1933 to permit exports in 51952-761

certain cases. I shall have occasion to refer to both these measures .when I come to set forth the reasons for and against the export of power. There was, however, no discussion in this house in 1926 on the export of power problem.

In 1927 the Beauharnois development was projected. There was some discussion on matters relating to waterways, but there was no discussion of importance on the subject of the export of power. In 1928, however, the Beauharnois company made an application to the government for the approval of plans in connection with the Beauharnois project. This served to bring to the fore the question of the possible export of power from Beauharnois once that development had been completed. As I have mentioned, it was in that year that the hon. member for Leeds (Mr. Stewart), who was then, as he is now, a member of the opposition, introduced the bill to which I have referred. At that session the measure received only two readings. In the following session the bill' was re-introduced early in the year and passed by this house without debate. There was, however, in the year, considerable discussion on the St. Lawrence waterway development, and with respect to the approval of the plans of the Beauharnois company. From that time until 1933 there will not, I believe, be found in Hansard references to this question, other than some of a cursory character made by members during the debates on the address or the debates on the budget, expressing their views as to the general policy that should be followed with respect to the export of power. The present leader of the opposition (Mr. Bennett) did make one or two references as to the views of his government. I shall bring those references to the attention of the house.

From sketching it thus in outline, it will be seen that the main discussions on the question on the export of power took place between 1925 and 1929. There had been little discussion in the years between 1907 and 1925 and very little discussion from 1929 until the present year. A Liberal administration, as hon. members will recall, was in office from 1921 until 1930, except for a short intervening period when the Right Hon. Arthur Meighen was in office. Such discussions as took place in that period occasioned declarations on the part of the government of the day as to its policy with respect to the export of power. I intend to give to the house these declarations and the circumstances which occasioned them.

Electric Power Export

While my right hon. friend was in office from 1930 to 1935, he did not introduce any legislation on this subject. He accepted, I think, the view which was generally held at the time the bill of the hon. member for Leeds passed this house, namely that all parties were agreed upon the policy that there should not be further export of power from Canada without some form of parliamentary approval.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

No new licences were

issued.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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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:

As my right

hon. friend says, no new licences were issued. The same was true of what has taken place since the present administration came again into office in 1935. From that year to the present time we have issued no new licences of any importance but have confined the action of the governor in council to renewing year by year the licences which had been previously granted.

In the early part of last year, the present Minister of Trade and Commerce (Mr. Euler), speaking in a discussion in this house on the export of power, set forth the view of the government as understood by him at the time, namely that further licences should not be granted without the consideration of each case on its merit; that there should be not a blanket prohibition, but a policy of prohibition admitting of exceptions where the circumstances of the case justified. That was the position when the present administration received, in the summer and autumn of last year, three applications for export of power, two from the province of Quebec and one from the province of Ontario.

Before I discuss the three applications, I should like to supplement what I have said by reference to declarations of policy and opinion as they were made in this house in regard to the various matters to which I have referred. First of all, in the debate which took place on the imposition of an export duty in 1925, a statement was made by the Hon. Charles Stewart, who was at that time Minister of the Interior, and as such had particularly to do with water power questions. Mr. Stewart, speaking in this house on March 30, 1925, stated the position of the government as follows:

There is a law upon the statute book at the moment authorizing us to issue licences for only one year, and so far as I can ascertain that is all that the government intend to do in that direction. Whatever their intention may be, as a member of the government I have not heard of any change of policy. What I do say is that notwithstanding the fact that we have only developed to the extent of three million odd horsepower out of a possible development of forty-one million horsepower, I think it is good business to keep the cheap power in

Canada for the development of Canadian industry, and I see no objection, and my hon. friend opposite sees no objection, to the imposition of an export duty.

That, as I have indicated, was the one important pronouncement made in that debate.

A little later in the year a delegation from the Ottawa valley on behalf of the National Hydro Electric Company waited on the government to advocate the export of

300,000 horse power from the development at Carillon. That delegation was received by the Right Hon. George P. Graham, the Hon. Charles Murphy and myself. We gave to the delegation the promise of consideration of their request, but no assurance was given that any additional licences would be granted. It may be of interest to the house to know the government's view as expressed to the delegation. I have to give it as it appeared in the local press, as the delegation was received at my office and the record of its proceedings does not, of course, appear on Hansard. The Ottawa Citizen of May 5, 1925, under the heading, "Places Interest of Canada First on Power Issue," reads as follows:-

Premier King Says This Chief Consideration in Reaching Decision on Export Question.

Deputation Urges Carillon Scheme.

Prime Minister Says It's National Problem. Cabinet to Discuss It.

That the future of Canada would be the first consideration in the question of permitting the export of electrical energy to United States was stated by the Prime Minister yesterday afternoon in replying to a large and representative delegation from the municipalities bordering on the Ottawa river. The delegates came to urge the administration to grant permission to export power from the proposed development at Carillon.

*

The Prime Minister replied that the problem which the government had to consider was not local to the Ottawa valley, but had its national, international, and interprovincial viewpoints. The government had only one desire, namely, to further the public interest. When private interest could be helped without injuring the public interest, it was desirable to help it also.

The main question for the government was to decide for the public interest, and in the export of power it was necessary to see that the future of the country was not prejudiced in any way. Immediate consideration was promised.

Speaking in this house that year, the Right Hon. George P. Graham made some significant statements with regard to the export of electrical power. In Hansard of May 14, 1925, at page 3222, he stated:

I am strongly of the opinion-if it were my personal business, I might perhaps think otherwise, being after the profits-that any government in Canada ought to go very slow

Electric Power Export

in approving of the export of power in any great quantity. There is no question about that in my mind; I agree heartily. There is an argument on the other side which has been presented to us very strongly time and again by people living along certain powers, who feel they are losing day by day in seeing the power flow by their doors without development. They take the ground that development cannot take place unless outside capital is got for that development, and that would imply the export of a part of the power. That is the situation. It is not changed at the present time from what it has been for months and years.

Again, speaking on May 19, at page 3348, Mr. Graham said:

I am stating the government's policy. I am pointing out that my hon. friend's supposed policy the other night is not practicable; is not followed by his own friends in any province; is not followed by any government. In the production of power business demands that under certain circumstances, such as those existing in connection with the hydro-electric projects, an export of power should be allowed.

Mr. Manion: Temporarily.

Mr. Graham: I will come to that. I want

to nail it down fast and tight that the policy of any government looking to the welfare of the Dominion of Canada and to the development of power in Canada should not be a prohibition of the export of power under all circumstances to 'the United States; for the result would be at one fell swoop to bring about increased rates on the part of the hydro-electric power projects in Ontario as well as on the part of other companies.

Let me go a little further. My hon. friend (Mr. Manion) suggests that the export should be temporary; I am coming to that. The legislation of the parliament of Canada has been sane along these lines. The regulations adopted in 1907-08 by the Laurier administration were sane. They restricted by regulation under the statute the period of time for which licences might be granted, limiting it at twelve months. That was wise. The hon. gentleman may say that that might permit the establishing of vested rights. What vested right could be established in twelve months? None, and none has been so established. This regulation restricting the export of power to a period of twelve months is notice to the United States users that this supply of power to them is not permanent; that it can be taken away from them at the end of any twelve-months period. It is notice to every person concerned that this is only temporary. I want to put it again, as strongly as I can, that the policy of this government in power is the policy that has been adopted in Canada and successfully followed during the last eighteen years. It is the policy that has been practised by the Hydro-Electric Commission of Ontario and by the companies, and it is a policy under which every interest is safeguarded so far as the Canadian user is concerned.

That statement, I think, sets forth clearly the policy of the administration at that time. The question of export of power was also brought before the house that year in a debate on a resolution introduced by Mr. LeSueur, the then member for West Lambton.

The resolution proposed that export be permitted only on a yearly licence, no licence to be issued "beyond those at present outstanding except for off-peak power."

The resolution as introduced practically meant the prohibition of export except with respect to off-peak power. When the resolution was presented to the house by Mr. LeSueur, who was then in opposition, I suggested on behalf of the government that it should be amended so as to permit the export of power only upon the consent of the government or governments of the province or provinces concerned, and the amendment was accepted by the opposition. The Right Hon. Arthur Meighen, who at the time was the leader of the opposition, said that he accepted the amendment because he believed that so far as the provinces were concerned they would not wish to give their consent to the export of power. He thought that prohibition of export would be obtained in that way. In addition to that reason, however, he thought it desirable to have, if possible, unanimous agreement in the house on so important a question, and accordingly was prepared to accept the amendment which the government proposed. The amendment struck out the words "except for off-peak power" and substituted the words "except with the concurrence of the province or provinces in which it is proposed to develop such power." I shall read in a moment the text of Mr. Meighen's remarks at the time. The resolution as introduced read:

That in the opinion of this house the export of hydro-electric power from Canada should be permitted only on yearly licence and no licences should be issued beyond those at present outstanding except for off-peak power.

My observations on the resolution appear in Hansard of June 15, 1925, at page 4276, as follows:

I am sure every hon. member would wish, witli respect to the export of power, to see that under no condition was power exported which we would likely need in the immediate future, or which we would be unable to recover before the time at which the actual need might arise. With any policy that has that end in view, the government is wholeheartedly in accord.

And at page 4278:

I would suggest that the hon. member amend his resolution by deleting the words "and no licences should be issued, and so on, and substituting therefor the words:

-and that hereafter no licence for the export of power beyond that already granted should be issued except with the concurrence of the province or provinces in which it is proposed to develop such power.

I believe that if that provision were substituted it would give all the security that is needed. ... [DOT]

Electric Power Export

In a word, if this parliament declares that there should be no export of power except by yearly licence, it thereby serves notice on its neighbour-because it is only to the United States that any export can take place-that at any time, as the needs of this country demand, that power export may be terminated, without occasioning a grievance or without having established any vested rights of the other side meanwhile. If beyond this it couples with that declaration the provision that all future licences shall be granted only by concurrence of the province from which the power is to be exported, there should be every reason to feel that we have gone as far as we should in seeking to safeguard our resources. To go further would be possibly to work an injury in the opposite direction.

The motion as amended was agreed to, on June 15, 1925, and appears at page 4288 of Hansard:

That in the opinion of this house the export of hydro-electric power from Canada should be permitted only on yearly licence, and that hereafter no licence for export of power beyond that already granted should be issued except with the concurrence of the province or provinces in which it is proposed to develop such power and of any other provinces adjacent to such development and interested therein.

In the course of that debate, in addition to Mr. Meighen and myself, the Right Hon. George P. Graham also spoke, and his utterances in reference to the policy at the time I think should be quoted. Mr. Graham said, as reported at page 4258:

It is different in the case of a yearly licence. If a licence is given for twelve months, as has been the practice since 1907, the party who receives the power-unless something unforeseen happens or he gets notice to the contrary in advance-has a certain right to believe that year by year that licence will be renewed. That is really what has been done. That is what has to be done if the contract is for one hundred years. That has been done for years in the case of the Hydro-Electric, and that is being done also in the case of the Cedar Rapids power development. Giving a licence year by year leads to the conclusion that, unless something unforeseen happens, such yearly licence will be granted annually

I just want to point out to my hon. friend and to the house that we must be careful how far we go with a resolution aimed at the export of power. The general principle may be all right but if we are going so far to say that it never shall be possible, that it cannot be possible under any circumstances, that any new power developed in this country should be exported, then we may- tie up some very laudable enterprises, including the development under way in the province of New Brunswick, which is not in the hands of a private concern at all but is a provincial enterprise respecting which the province has been trying for a long time to get a proper status so that it could proceed with the necessary construction and development. I think we ought to be very careful as to how we proceed in tying up beyond peradventure the right of some province to export power. . . .

Of course I can imagine the time might come when it might be the duty of any government then in power, no matter of what party, to consider the situation and to see that the power in Canada is retained to the people of the dominion to whom it belongs; but to tie ourselves up absolutely and to say that under no circumstances whatever shall power be exported would be an altogether different thing. I think my hon. friend will see himself that it might be a mistake to make this resolution so far-reaching. Personally I have no objection at all to the first part of the resolution, but I think it would be a great mistake to insist that we should never export one single horsepower hereafter except off-peak load.

The statements of the Right Hon. Arthur Meighen will be found in Hansard of June 15, 1925, at page 4281:

Power is the rawest of all resources. Power is much more rudimentary, much more an instrument of further development and production than is any other raw resource whatsoever. Power bears the same relation to the ordinary raw resources of a country that those raw resources bear to the finished products of the country. It is the instrument by which the mineral is delved from the ground; it is the instrument by which the coal is heaved to the surface. It is the most fundamental and rudimentary of all things looking to the expansion of a nation; so that the arguments which apply in favour of directing trade currents and trade policy so as to keep raw resources for development by the people of a country apply with double force to the case of power. . . .

At page 4282:

Power is not something that is in the world market, that another country can substitute for if a first country withdraws. Power is something which once exported becomes the foundation of a great vested right and the withdrawal of it-however closely, however narrowly and carefully it may have been provided for-becomes a practical impossibility. We found ourselves in the position that when we needed the power badly we could not withdraw it, and we found, as well, that although we applied the system of yearly licences the company undertook to give contracts extending over a period of time and we were bound not only by the rights secured by the industry erected but were also bound, in a measure, by the contract although that contract had no warrant to be entered into.

At page 4287:

I accept the amendment in order that we may be united and that the whole world may know how we are travelling in relation to this great question. But I would prefer that governmental responsibility should not be shirked, and I would have preferred that it be declared once and for all that we are against further exportation; but I accept it inasmuch as I believe this amendment in its practical result will reach the same end as the amendment that was moved before, because I do not believe that our provinces will agree to the export at all. That being my opinion, I accept the amendment as now agreed to by the Prime Minister himself.

Electric Power Export

The references I have given make it clear that in the year 1925 all parties in this house were united on a policy of permitting the export of electrical energy by yearly licence only, subject to the approval of the province or provinces concerned. They were united as well in agreeing that, with these precautions, individual applications might be considered upon their merits.

In 1926 there was, as I have already indicated, nothing further in the way of discussion in this house. But in that year- and I refer to this particularly because it bears on the position of the provinces-the province of Quebec passed an act prohibiting the exportation of hydro-electric power from that province to places outside Canada. The first clause of the act is as follows:

Every sale, lease or grant whatsoever of water powers belonging to the province or in which it has rights of ownership or other rights, made on or after March 24, 1926, shall contain a clause prohibiting the exportation outside of Canada of the electric power which may be developed in this province.

The following year, 1927, there was no discussion in this house, although the then hon. member for Vancouver Centre, the present member for Kootenay East (Mr. Stevens), in the course of the debate on the budget gave his views at some length with respect to the export of power.

I come now to the year 1928, the year in which my hon. friend the member for Leeds introduced his bill for the first time. On January 7, 1928 the Beauharnois company made application for the approval of its plans under the Navigable Waters Protection Act. I should like to make perfectly clear what was the duty of the administration of the day with respect to that application. Some hon. members who were not in the house at the time may not be familiar with the law with respect to the development of water power on navigable rivers. The law requires that, where any power development is contemplated on a navigable river, the plans must be submitted in the first instance to the Department of Public Works of the federal administration, and be approved with respect to their non-interference with navigation. In other words, under the Navigable Waters Protection Act, no development is permitted on a navigable stream, which is calculated or likely to impede navigation. The application of the Beauharnois company for the approval of its plans, was made pursuant to the provisions of this act. The Beauharnois company had obtained its charter, not from the federal government but from the government

of Quebec. All the federal government had to consider was whether or not the plans as proposed interfered with navigation.

May I direct attention to this fact, that the province of Ontario had for many years been developing power at Niagara. The province of Quebec was equally anxious to develop power within its boundaries. Had the government of Canada at that time refused to approve the plans of the Beauharnois company, when as finally submitted they in no way interfered with navigation but as a matter of fact took into full account possible future developments with regard to navigation, this government would have been denying the province of Quebec a right which the province of Ontario had exercised for many years. I think that ought to be clearly understood, because many efforts have been made to misrepresent the action of the then federal government with respect to the Beauharnois development. All that was done was to approve the company's plans under the Navigable Waters Protection Act. I do not think it has ever been claimed that the approval was not properly given. It was. given in the light of the reports of technical experts, who were agreed that the plans in reference to the development of power did not prejudice the federal interest in the matter of navigation.

At the same time there was before the country and before parliament the question of the development of the St. Lawrence waterway, involving a navigation project as distinguished from a power project. The St. Lawrence waterway occasioned a great deal in the way of discussion and consideration in parliament. Being discussed pretty much at the same time as the Beauharnois power development, the two questions came to be interlocked, as it were, and each was referred to in discussions on the other. When discussions took place with regard to the development of the St. Lawrence, the question of what attitude should be taken, with regard to the power that might be developed on the St. Lawrence, as a result of the navigation development, naturally came up for consideration, and the government felt it imperative to express its views in reference thereto. What was said with respect to what related to navigation must be viewed in the light of the particular proposals to which it had reference..

In order to be fully advised with respect to the development of the St. Lawrence waterway, the dominion government appointed an advisory committee composed of a number of gentlemen who had

Electric Power Export

special knowledge of the questions involved. This body, which was known as the Canadian national advisory committee on the St. Lawrence waterway, made its report to the government on January 11, 1928. The report will be found in the white paper which was tabled the other day. I shall make reference to one or two passages from the report. They bear on the question of the export of power and the policy that should be adopted in reference thereto.

Parliament met early in January, 1928, and on January 30 of that year the hon. member for Leeds introduced his amendment to the Electricity and Fluid Exportation Act, which provided that no person should export power without the approval of parliament. In introducing his bill my hon. friend said, as will be found in Hansard for that year, on page 12:

The effect of this bill is to provide that a licence shall only issue by the authority oi parliament, and on such terms as may be determined by parliament. The necessary amendments to the existing act are included in this bill, and there is an express provision that nothing contained in this bill shall be deemed in any way to affect the rights of the provinces in connection with electric power.

The right hon. leader of the opposition (Mr. Bennett) spoke on the second reading of the bill and made the following statement, which will be found on page 361 of Hansard for February 10, 1928:

There is, however, a general tendency towards believing that, with respect to the exportation of electric energy, parliament should be consulted because of unfortunate incidents that sometimes arise by reason of such licences being granted, and then when the power may be required for domestic purposes at home, it is found that there have been created abroad vested interests of such a character that the cancellation of the licence is regarded as an unfriendly act. Parliament, therefore, should consider these matters in every detail before a licence is granted.

Hon. Charles Stewart, taking part in. the debate and speaking on behalf of the Liberal administration of the day, on February 14, as will be found at page 453 of Hansard for that year, declared:

The government is taking no exception to this bill. It does not make any drastic change, but I think the sponsor has in mind that in eases where new developments spring up, and there is a possibility of a certain portion of the power being exported, the company or individual promoting the measure shall come to parliament and obtain a private bill for that purpose. With that suggestion the government has no quarrel; indeed I think I may say on behalf of the government that we will go even a step further. It is in our opinion desirable that the exportation of electricity be absolutely prohibited; it is too valuable an asset for us to permit it to leave our country.

Speaking on behalf of the government during the budget debate of that year I gave to this house a very explicit statement of the views which the government held at that time. In doing so, I had in mind the existing controversy with respect to the development of the St. Lawrence, and the desirability of making the position clear in order that undue expectations might not be aroused in other countries with respect to the power which might be developed as a result of the project. The quotation is:

Then take our -water powers; a few years ago we did not even regard them as an asset; to-day they are one of our greatest assets. This government has laid down the policy that the export of hydro-electric power shall be prohibited so that these great reserves of energy may be utilized in building up the dominion. We have available forty-one million horsepower, of which at present only four and three-quarter million has been developed.

That was the position in 1928. In 1929 my hon. friend re-introduced his bill and, as I have said, it was passed without discussion. It was given its three readings in this house with the unaminous approval of all members. The present Premier of Ontario, the Hon. M. F. Hepburn, was at the time a member of the house and, from the record of a division on that day, it will be seen that Mr. Hepburn was present in the house the day the bill received its three readings. As a matter of fact, so united were hon. members on the measure as proposed, which had as its essential principle the approval by parliament of the granting of all subsequent licences for the export of power, that it went through the house in one day.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

Did Mr. Hepburn vote

for or against it?

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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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:

In effect everyone voted for it. There was no division.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

It was just called

"Carried".

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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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 bill was carried unanimously in this house. That was on February 21. On February 25, a debate took place on the St. Lawrence waterways development, and on that occasion I brought out clearly the government's view, with respect to the exportation of power developed through that project from Canada to the United States.

I wish at this point to make clear to the house exactly what was in the mind of hon. members at the time that measure was 'discussed. One of the arguments strongly urged in favour of the St. Lawrence waterway project was that, under certain circumstances, it might be possible to have the whole cost

Electric Power Export

of canalization of the St. Lawrence borne by the United States. Canada had already made expensive developments in connection with the Great Lakes-Niagara-St. Lawrence waterway system. We had constructed the Welland canal, and there are other important developments of which hon. members are aware. Our outlay had already been very considerable, so that if the project were to be proceeded with it remained then for our American friends to meet the major portion of the expense, and we would have the advantage of the development, without much by way of further cost to Canada.

The situation was that the eastern states were in need of power and Canada requested only a limited amount; she did not require anything like the amount of power which could be developed on the St. Lawrence. The proposal was made from different quarters that Canada might be prepared to allow export of power to the United States for a number of years, until the demand had increased sufficiently to enable the Canadian market to absorb all the surplus power. That point was raised concretely in connection with the Beauharnois project. It was stated that if it could be agreed between the two countries that a large part of the surplus power developed at Beauharnois should be exported to the United States for a period of years, the amount paid for the power would be sufficient to meet whatever expenditures might have to be made by Canada for the canalization of the St. Lawrence.

Topic:   ELECTRIC POWER
Subtopic:   TRANSFER TO PARLIAMENT OF CONTROL OF EXPORT EXCEPT IN INTERNATIONAL EMERGENCY
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March 10, 1938