May 31, 1940

NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Yes; I am coming to that. I may as well deal with the two statutes at once; I want to be as coherent as possible and not take up too much time.

A moment ago I stated that there were two statutes, and I have given the house the substance of the first, together with what appear to be the reasons for that statute. At the same time parliament passed a second

statute, which is chapter 20 of the statutes of that year, the preamble of which deals with the question of jurisdiction. This has to do with inland navigation, and I think it was upon that basis that the act was passed. At all events that was one of the reasons. The preamble states:

Whereas the improvement of inland navigation by the development of a deep waterway, which is now in progress, from lake Superior to the sea-

I might interject that we were then either finishing or had just finished the great Welland ship canal.

-through the great lakes and connecting waters and in part in, over or along the St. Lawrence river, requires that the canal now being constructed or to be constructed by the Beauharnois Light, Heat and Power Company, Limited, should hereafter be under the legislative jurisdiction of the parliament of Canada and be made available for navigation for vessels of such size and draught as may use the new Welland canal upon its completion-

This company having been given the right to divert 53,000 cubic feet per second, the effect on the flow of water for purposes of navigation will be appreciated at once. My information is that the canal was designed, constructed and in fact conceived to take the whole flow of the river, about 250,000 cubic feet per second; and it was because of the idea that eventually this company might gain the whole flow of the river that it was deemed desirable that the canal should be vested in His Majesty the King, while built at the expense of the company, so as to take the place of that portion of the St. Lawrence river bed which would be denuded of water by the entire diversion of the river.

I understand that the canal cost 816,000,000. Anyone who has seen the canal must be impressed with the magnitude of the whole undertaking. This statute, chapter 20, was designed to vest the canal in His Majesty the King, and to declare that the work was for the general advantage of Canada, so as to give jurisdiction over the canal to the government of Canada, having regard to the appropriate provisions of the British North America Act. Section 3 contains a provision empowering the governor in council to acquire such lands and works as may be deemed necessary or useful for the improvement of navigation by means of said canal between the two lakes, and finally section 4 contains a provision safeguarding the rights of the province of Quebec, whatever they may be. I recall very well the discussion backward and forward at that time between Mr. Cahan, who was in charge of the matter, and my right hon. friend

Beauhamois Power-Mr. Hanson (Sunbury)

the Minister of Justice (Mr. Lapointe). Certainly the rights of the province of Quebec are adequately safeguarded, and no question arises out of that.

One point further in this brief history of the undertaking. I understand that subject to the passage of legislation in 1931-and I have not the exact date before me-the Beauhamois company secured from the Quebec government of the day the right to use an additional thirty thousand cubic feet per second of water, and I understand the company were made to pay pretty well for that right, too. I do not know just what right and proper rentals should be, but I thought that if a company were receiving a public franchise from a province it was only right and proper that that company should pay proper compensation.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

William Earl Rowe

National Government

Mr. ROWE:

They still have it cheap.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

It may

still be cheap hydro power; I think perhaps it is. So far I do not think it has been an especially cheap hydro-electric installation, based on horse-power cost. But if they get this additional diversion of thirty thousand cubic feet per second, and if they ultimately secure the diversion of the whole of the waters of the St. Lawrence river, it will be a gold mine for the Beauhamois company. The country should get something out of it, and so should the province of Quebec. That is the history of the situation, as I know it.

This application is one for the diversion of an additional thirty thousand cubic feet per second of water from the St. Lawrence river. Under the existing statute application must be made to parliament. But before parliament passes the bill there are some considerations to which the House of Commons, the government and the public ought to give attention. I am not raising these matters in any hostile attitude. I understand that to-day the company has two contracts, one with the Ontario hydro-electric for 250,000 horse-power and the other with the Montreal Light, Heat and Power Company for 150,000 horse-power. It should be noted by hon. members that at the present time, and I believe since 1931, the Beauhamois company has been a wholly-owned subsidiary of the Montreal Light, Heat and Power company.

I know there was a great deal of recrimination in connection with the acquisition by the Montreal Light, Heat and Power company of the Beauhamois company. The original company, namely that of 1928, which might properly be described as the promotion company-I am at a loss to know how to characterize it-was in financial difficulties; and if the government had not taken action

and guaranteed the banks over an interim period, this great enterprise might have gone into liquidation and been purchased for a song. There were some who thought control of the Beauhamois company ought not to go into the hands of the Montreal Light, Heat and Power company. But it was developed at the time and subsequently that no other group was capable of coming to the rescue of the Beauhamois company and of carrying its operations through to a successful conclusion. Whatever one may think about power monopoly, he must realize that there are practical considerations which have to be taken into account, particularly in a situation such as that which confronted the Beauhamois company.

I shall not go into that phase of the matter. Suffice it to say that the Beauhamois company is a wholly-owned subsidiary of the Montreal Light, Heat and Power company. I think I am correctly advised when I say-and if not I shall accept correction-that about

400,000 horse-power is being generated and sold, such horse-power being allocated as I indicated earlier in my observations. It is contended, and I have no doubt genuinely, that the Ontario hydro-electric authorities are approaching a time when more power will be needed from Beauhamois, notwithstanding what we have heard in recent years about selling Quebec power in Ontario. I shall not discuss that aspect of the matter at all, but I have no doubt power is needed in Ontario. I do not know what the situation is in the Montreal area.

I am wondering if the minister has any information as to what portion if any of the power is now being or in the future may be exported to the United States. My information is that the 150,000 horse-power to which I referred earlier goes into what is known as the Montreal power pool, and is used in various ways and through various channels. I have no information which would lead me to believe that any portion of that power is directly exported to the United States. I made some inquiries respecting the power exported to the Aluminum company located in the state of New York, and my information is that the power they import from Canada is developed at the Cedars. My understanding is that the development at that point is not a wholly-owned subsidiary of the Montreal Light, Heat and Power company, but is one in which they have a very substantial interest.

Will the minister indicate what portion if any of the present output of this power can be said to be exported to the United States, and what portion of any increased output will be so exported. It may be that none of it

402 COMMONS

Beauhctrnois Power-Mr. Hanson (Sunbury)

will go to the United States; I have not been informed on the point. In any case the public ought to know something about it. If Canada is giving the right to the Beauhamois company to divert 30,000 cubic feet per second from the wholly enclosed Canadian portion of the St. Lawrence river, and if a portion of that increase is to be exported to the United States, we ought to know about it. No matter how friendly we may be to the great republic to the south, after such observations as I have been able to make I am led to the belief that once an agreement is made to export power to the United States we shall never get back the rights to that power.

I realize that there are two schools of thought on the subject. Frequently I have heard it urged that (power is one commodity Canada can sell, and that we have an excess supply. It is stated that the sale of power would bring in money. The other point of view is that we should not (permit any further export of power to the United States because after a time they might claim a vested interest and we should never get back the rights.

I remember clearly a debate which took place in this chamber in 1925 on a resolution moved by an hon. member then sitting on this side of the house, and seconded by myself. The government of the day was led by the right hon. gentleman who now leads the government; I believe the late Sir Lomer Gouin was minister of justice and my right hon. friend the present Minister of Justice (Mr. Lapointe) was minister of marine. On that occasion the principle of the resolution was accepted, namely that there should be no further export of power without the consent of the province involved.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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LIB

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

Liberal

Mr. LAPOINTE (Quebec East):

Was that Mr. Stewart's motion?

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

I think it was the motion of Mr. LeSueur. That gentleman is now connected with the Imperial Oil company, but in the years I have mentioned he sat in the house. I believe that principle has prevailed ever since, and I agree that it is a sound one. The view that we ought to sell our power in order to obtain ready money is a short term view. We ought to take the long term view of this matter. However, that is one' point to which I should like the minister to give consideration. I am sure the information must be available to him and he should inform the house. I do not imagine for a minute that any of the

250,000 horse-power sold to the Ontario hydro is exported to the United States, but I should like to know definitely. Is any of the 150,000 horse-power sold to the Montreal company exported? Will any of the power to

be generated by this additional diversion of

30,000 cubic second feet be exported to the United States?

There are three other considerations of a national character to which I desire to direct the attention of the minister. First, I should like to know what effect if any this additional diversion will have upon the water levels of Montreal harbour. I know that many people will say right off that it will have no effect, because this water is simply to be diverted at one point in the river, passed through the canal, and then expelled in the lower lake to go down the St. Lawrence river. However, it must be remembered that in order to make the best use of a water diversion, the water must be controlled. I think this is something about which the government should consult an independent hydro engineer. I have the highest respect for Mr. Henry's ability, but I think we should have some other opinion. To put it frankly, he is rather interested in the project. This diversion may result in a periodic lowering or raising of the water level at Montreal. I hope I have made it quite clear that I am not objecting; I simply offer this for the consideration of the government.

The next matter to which I would direct attention is the possible effect of this diversion upon the Soulanges canal, which is on the north side of the river opposite the Beaubar-nois development. I should like to know at what stage of this diversion or of future diversions will there be an effect upon the government-owned canal.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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LIB

Thomas Reid

Liberal

Mr. REID:

Can the hon. member say whether or not the diversion which has taken place up to the present time has bad any effect upon navigation?

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

As I

understand it, for quite a number of years there has not been m-uoh navigation. The only steamboat plying these waters was the Rapids Queen. I made that trip several times. I understand that this boat does not go down the rapids at the present time, but I am not prepared to say that that is because of any diversion that has taken place. Any navigation on the river is taken care of by the canal on the north side. If the hon. gentleman has ever travelled up and down the river he will know that that canal provides the only feasible way of getting up the river. I should like to know what effect this diversion will have upon the Soulanges canal. I can visualize the time when, if this company succeeds and additional diversions are permitted by future governments, the whole flow of the river will go through the power company's canal, thus rendering the canal on the other side useless

Beauhamois Power-Mr. Hanson (Sunbury)

for navigation or any other purpose. This is a consideration which we ought to keep before us.

The next matter which I offer for the consideration of the minister and the government is this: If the present diversion or future diversions seriously interfere with navigation through the Soulanges canal, what arrangement is there in existence or what arrangement will be put into effect to permit navigation through the company canal? That is the canal which was built by the company and which has been vested in the federal government by legislation. At what stage of the diversion will the Beauhamois development be considered a navigation project as well as a power development? To-day it is only a power development, but if future diversions should change the course of the river it will become a navigation proposition. The government is in duty bound to see that provision is made to protect the rights of navigation. I hope there will always be navigation in the St. Lawrence river.

If my reading of the public press is correct, at this very moment the government is negotiating with the government at Washington for a new treaty to establish what is known as the St. Lawrence waterway development. My view is that in war time all such demands might very well wait. I am not going to say anything more about that at this time. This scheme has no friends in the maritime provinces, no matter what government promotes it, and I doubt if it has many friends in Quebec. I would not venture to speak for the hon. members from that province, who are well qualified to speak for themselves; but I do venture to speak for my own and neighbouring provinces. The Minister of Finance (Mr. Ralston) is a maritimer, and I am just throwing this out as a hint to him. This scheme has not many friends down there.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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LIB

James Joseph McCann

Liberal

Mr. McCANN:

There are lots of them in Ontario.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

That may be true. It just shows what a sectional country Canada is, which is a pity. I am not so sure that all of Ontario is in favour of it, neither am I so sure that all of the United States is in agreement. I have read many press reports and I have received many communications, but why labour that point now? I mention the matter merely in passing.

Let me ask this further question. What would be the feasibility and desirability of diverting the main flow of the St. Lawrence through Beauhamois, making it fully navigable and abandoning the Soulanges canal? What works would be required for that purpose, and is the government looking ahead to that

situation? I think that parliament in granting this very important and very valuable franchise ought to take as long a view as possible of its every effect on the economy of this country, and I have endeavoured to present these considerations as best I could and bring them to the attention of the government. Having done that, I feel I have done my full duty. I am trying to do that, and I think hon. members will give me credit for presenting the matter in as judicious a way as possible without opening up any old sores. I could talk of "valleys of humiliation" and $500,000 election gifts, but I am not going to do SO' because that is past and done with. Perhaps I am sorry that I did not get part of that money to help elect myself. But that is all over.

There is a further consideration to which I would direct the minister's attention. What is the potential gross power development at Beauhamois? What is it capable of doing? Is it not sufficient, if fully utilized, to render completely unnecessary any further plans for the St. Lawrence waterway considered as a power project?

I would also ask the minister about the Chicago diversion. It may seem a little far afield to speak of that here, but I followed this matter in days gone by when I was here, and I was astonished at the absolute disregard by the Chicago municipal authorities of the agreement made between the two nations. I ask the minister now: Is the Chicago drainage commission complying with the terms of the judgment of the supreme court of the United States?

There is one further consideration. With this additional diversion, with this increase in the flow of water and the increase in the company's power production, will there be any effect on the capital structure of the company? Hon. gentlemen may say that that is none of our business. Possibly not; it is a matter of property and civil rights, the company being incorporated under a Quebec act. But I would remind the house that large sums of money were subscribed by the public and put into this enterprise in days gone by and were absolutely lost to the enterprise- not by the present owners, because I do not think any money has been lost by any action of theirs. But in days gone by there is no doubt that huge profits were made by the promoters of this Beauhamois scheme. Some of it did not stick very long with some of the recipients but it all came out of the public, every dollar of it, and it is loaded into the capital structure and into the rates which this company may charge. Will this new diversion of 30,000 cubic feet per second have

404 COMMONS

Beauhamois Power-Mr. Hanson (Sunbury)

any effect on the capital structure? Will it have any effect on the rates? It should have, because this new diversion will make the cost of the installation very much lower per horsepower than it is to-day. I understand that the capital cost to-day is about $200 per horsepower. The figure may not be accurate; it is an estimate, and it is estimated that this additional diversion will reduce the capital cost per horse-power to $150, which as hon. gentlemen will observe is a very marked improvement in the capital cost of the installation.

I have already alluded to Mr. Henry. Mr. Henry's position with respect to this matter ten years ago occasioned a good deal of censure and recrimination. Mr. Henry was deputy minister of railways; Mr. Henry was head of the Beauhamois corporation. I cannot recall whether he occupied both positions at the same time. My colleague from Yale (Mr. Stirling) says he did not. But I know there was a great deal of criticism with respect to Mr. Henry's relationship to this project and the application that was granted in March of 1929. Mr. Henry is now the head of the Beauhamois corporation, and I understand that he is the minister's right hand man.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

He is a liaison officer.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

He is

liaison officer with the minister. I am not going to pursue that-

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply; Minister of Transport)

Liberal

Mr. HOWE:

To get the record straight I may say that Mr. Henry is a member of the executive, first of the war supply board, now with the Department of Munitions and Supply, serving without salary.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Very good.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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LIB

Clarence Decatur Howe (Minister of Munitions and Supply; Minister of Transport)

Liberal

Mr. HOWE:

And I suggest that a man doing that should not have unnecessary disapprobation piled on his head.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

I agree with the minister. You will not find me slinging any mud at Mr. Henry. I am simply calling attention to the present situation which is somewhat similar at least to the situation which existed in 1929.

I am not going to vote against this bill. I believe that the company is up to the limit of the power which can be developed from the present diversion. Is that correct?

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
Permalink
LIB

Clarence Decatur Howe (Minister of Munitions and Supply; Minister of Transport)

Liberal

Mr. HOWE:

Yes.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
Permalink
NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Just about up to that. I understand from the minister to-day, and this is a very important point to which we should give consideration, that in the area served by this development there is

need for more power. I am quite prepared to accept the minister's statement on that. I believe it is correct, and that is one fairly good reason-it may not be the best reason in the world-for putting this bill through. The only reason I have occupied the attention of the house for so long was to call its attention to the relationship of this development to the national interests. The government in the final analysis must take full responsibility for putting this bill through; by making it a government measure they have taken that responsibility.

In closing I commend to the minister's attention the different aspects of the matter to which I have referred. There are questions of a serious public character to which consideration should be given and in respect of which there should be a statement from the government before the bill is finally passed.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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LIB

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

Liberal

Mr. LAPOINTE (Quebec East):

May I ask my hon. friend and the house if the bill could be allowed to go to committee, so that the minister might be able to give the information which has been asked for?

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

I think that would be the proper procedure.

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

The minister intends to put the bill into committee right away?

Topic:   MUNITIONS AND SUPPLY
Subtopic:   BEAUHARNOIS POWER COMPANY
Sub-subtopic:   PROPOSED APPROVAL FOR DIVERSION OF ADDITIONAL 30,000 CUBIC SECOND FEET
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May 31, 1940