Mr. A. B. Weselak (Springfield):
Mr. Speaker, may I, like those hon. members who have preceded me in this debate, extend my heartiest congratulations to the mover of the address in reply to the speech from the throne, the hon. member for Edmonton-Strathcona (Mr. Hanna), and to the seconder, the hon. member for Gloucester (Mr. Robichaud) for the splendid and capable manner in which they discharged the respective duties assigned to them. May I also extend my heartiest congratulations to the hon. member for Prince Albert (Mr. Diefenbaker) on his elevation to the position of leader of the official opposition. We in western Canada take pride in that one of our number has been selected to fill this high post.
The speech from the throne reflects the conditions under which parliament met for this current session. Serious problems faced the world in the international sphere, and at home we were in the midst of a serious railway strike which had thrown 67,000 people out of work and had tied up thousands of miles of railway track.
The greater part of the constituency of Springfield, which I have the honour to represent, is served by the Canadian Pacific Railway; and while alternative service is generally available by trucks and buses, nevertheless the strike did result in the complete stoppage of grain deliveries to elevators which now are practically always filled. It probably would not have been so serious to us if the farmers in that particular area had had reasonably good crops over the last three years, and if they had received a reasonable amount of cash over that period. This, however, was not the case. The financial position of these farmers can be readily appreciated when it is noted that the average yield in my immediate area for the 1954-55 crop year was 91 bushels per acre as compared with a long-term average yield of 19.7 bushels.
In the crop year 1955-56, on a quota of 3 bushels to an acre, practically all the grain in the district was cleared out. This year a reasonably good crop was harvested, though considerable difficulty was experienced in gathering it in due to wet weather and frost,
which resulted in increased expense, loss of yield and also deterioration of grade due to moisture and frost; therefore the prospect of a lengthy tie-up of rail facilities did not appeal to the people in that area.
I think we all appreciate the struggle labour has had in the past century to achieve the right to organize and also to obtain the right to strike, which is its most effective weapon when all other mediums fail. If one has this appreciation it is difficult to state that this right which has been earned through suffering and privation should be arbitrarily taken away from any group in our labour force. On the other hand the right to strike, particularly when the strike is of the nature of the recent railway strike, must be exercised with responsibility by the leaders of union groups and by the rank and file and therefore, as I have said, it must be carefully exercised. Abuse of this right could very well result in public opinion becoming such that in certain spheres of activity within the country the right would be restricted or in fact taken away, as it has been in some jurisdictions, in the public interest. We certainly hope this will never be necessary in relation to the railroads, and it will not be necessary if organized labour continues to face up to its responsibility.
Management, too, has an overriding responsibility to the public to negotiate in good faith, particularly since where railways are involved there exists the responsibility to take into consideration the public interest and welfare. We in western Canada are particularly affected when events such as the recent strike occur. We are dependent solely upon rail transportation in many areas; and even in areas with alternative service we depend upon rail transportation for manufactured goods from the industrial areas of the east to meet our needs and we depend almost wholly upon rail transportation for the export of our production both of grain and of animals.
Our farmers and local businessmen are having a difficult enough time at present without being subjected to the further losses which naturally flow from such an event. It was therefore reasonable to expect that farm and political leaders of western Canada did not take kindly to the strike and expressed opinions which were critical of it. The people of western Canada, however, were not prepared to settle this matter and have trains operating at any price. Since 1945, according to the Gordon report, the railways have been granted permission to introduce horizontal increases in freight rates on eight separate occasions in order to offset increases in their operating costs. The adjustments which have
been allowed total an increase of somewhat more than 100 per cent over the rates prevailing in 1945.
It is common knowledge that these increases do not affect Ontario and Quebec, where alternative transportation facilities exist, to the extent that they affect the economies of the maritimes and the western provinces. Any increase in freight rates increases the cost of production and the cost of living on the prairies, since prairie consumers must pay the freight on incoming goods. Increases in freight rates also reduce the gross income of western producers, since the cost of freight on produce shipped to eastern markets or ports of export are also deducted from the prices paid to producers for their product. The net result is that costs are increased, revenues reduced and net incomes seriously affected.
Representatives of farm organizations and of provincial governments appearing before the board of transport commissioners in freight rate hearings have insisted on economies in railway operation, and have insisted upon proof from the railway in justification of increased costs. Therefore the attitude of many people in western Canada is that if economies can be effected without prejudice to the general public, the railways should be required and permitted to effect such economies.
As we all know, the issue over which the strike was called was the question of whether firemen should be retained in yard and freight diesels. The railways contended that on diesel engines firemen were not required for their operation, and therefore their services should be dispensed with in all except passenger locomotives. The union on the other hand contended that firemen in the cabs of these engines were essential to public safety. The matter of public safety is one in which the general public of Canada has a definite interest; therefore there appeared to be some merit in the firemen's case.
If firemen are not needed for these purposes it would be ridiculous for the railways to keep these men in the cab. On the other hand, if the safety of the public is endangered the price to be paid for this safety factor is inconsequential compared to the possible loss of life, equipment and freight. The issue had to be resolved, and resolved it was, through the mediation and untiring efforts of the right hon. Prime Minister, who was able to bring the parties together and bring them to common ground, where finally both parties agreed to submit the issue to an investigating body for analysis and determination. The findings of this board should determine the matter as between the parties, and should remove from
The Address-Mr. Weselak the public mind the doubt which exists there as to whether, from a safety point of view, firemen should be removed from the cabs of these locomotives or retained.
The Conservative amendment accuses the government of indifference, inertia and lack of leadership. The settlement of this strike by the right hon. Prime Minister in my view, and I think in the view of most Canadians, refutes this charge and shows that the leader of this government is not indifferent to the welfare of the people of Canada; shows not inertia but aggressiveness; not lack of leadership but outstanding leadership in times of considerable difficulty.
Before leaving the question of railways and freight rates I should like to make one more point. The preliminary report of the royal commission on Canada's economic prospects, commonly known as the Gordon report, suggests among other things that additional revenues to meet rising costs of railway operation might be obtained in the future by increasing the statutory rates on grain.
Obviously the reference is to the Crows-nest pass agreement of 1897, in which the C.P.R. agreed, in return for a cash subsidy of $3,404,702 and a grant by the British Columbia government of 3,602,000 acres of land, to reduce the rate on grain and flour by 3 cents per hundredweight from the prairies to the head of the lakes. Subsequently, in 1927, this rate was extended to Pacific coast ports. As an alternative the Gordon report suggests that the railways be paid a subsidy in lieu of increased rates on grain being transported to the lakehead or Pacific coast ports.
There is no suggestion by the government that it has any intention of repealing the legislation which incorporates the Crowsnest pass agreement rates; nevertheless there seems to be some public support for this as the result of certain statements made in the past by railway officials and others that these rates are responsible for some of the financial difficulties experienced by the railways. The mere fact that these rates were set approximately 60 years ago does not necessarily imply that they are not still profitable, and there is plenty of reliable evidence to show that these rates are profitable to the railways.
We have only to go to the report of the Turgeon royal commission of 1950-51, where a detailed study was made of these rates, to find authoritative evidence in support of the statement that they are profitable. The report of the commission reads in part:
Much time has been taken to consider whether it has been established that the Crowsnest pass rates hitherto exempt from the burden of general freight rate increases, should now be made subject to them. As above stated the removal of this exemption is asked for principally on the ground
The Address-Mr. Weselak that it casts an unfair burden on shippers of other commodities. This argument seems plausible in theory but an examination of all the facts involved shows that it is not well founded. There is really not much to be said against these rates in respect of their effect upon the railways.
We must remember that when the agreement was entered into, production of grain on the prairie provinces was about 35 million bushels per year. Today it is about one billion bushels, and naturally the unit cost of transportation falls with increased volume. In addition, technical advances in railroading since 1897 have resulted in an increase in the capacity of box cars from 60,000 to 120,000 pounds; handling of cars is automatic; trains are longer and motive power much more efficient, all resulting in lower cost of operation per unit bushel transported.
Apart from the Turgeon report we have only to go to the C.P.R. itself for further evidence, for early in 1956 in sworn testimony given before the board of transport commissioners Mr. Kenneth H. Brink, research officer of the C.P.R. stated "normally we depend on a good grain year for good net earnings". If a good grain year contributes to good net earnings, obviously such grains are not hauled at a loss but at a good profit under the Crowsnest rates; therefore no change in rates or subsidy in lieu thereof is justified.
If one examines the accounts of the C.P.R. as contained in their annual report he finds under the heading of land surplus account a cumulative surplus of $101,685,263, and finds that in the year 1954 net revenues from this account amounted to $9,406,406. In its recent campaign for higher freight rates and the abrogation of the Crowsnest pass agreement the C.P.R. has constantly sought to withhold from the railway end of its business the other income and land surplus accounts, and contrary to the statutes creating and endowing the C.P.R. it has arbitrarily divided its accounts in this manner since 1946.
When the railway was built through western Canada, by an agreement in December of 1880 the C.P.R. was given a cash grant of $25 million and 25 million acres of land fairly fit for settlement. The money in the land surplus account of the C.P.R., in violation of the statute, is kept apart by the railway from its operating accounts. This money is income derived in one form or another from land given to the C.P.R. by this parliament and the province of British Columbia. The purpose for which the land was given, as stated in the law, is to complete, equip, maintain and operate the railway in perpetuity.
To summarize, all available evidence indicates that the Crowsnest rates are profitable; that increasing, substantial revenues are received by the railway from lands granted in
western Canada, and therefore charges that these rates undermine the operations of the railway are unfounded and unfair and should be ignored. The railways feel that if they could abrogate this agreement and raise the rates on grain and flour by 100 per cent as they have been raised on many other commodities they would gain from $70 million to $80 million a year at the expense of the western farmer.
Members from other parts of Canada may wonder at the strong and determined resistance of the west towards any change in these rates. This resistance is fully justified, and I hope my remarks here today will contribute toward a better understanding of this problem. The Canadian Pacific Railway through its propaganda has confused the thinking of many Canadians in this respect, and one has only to read the editorials of many leading eastern papers to see the extent to which it has succeeded. The Canadian National Railways to my knowledge have never complained of any losses accruing to them as a result of the Crowsnest pass rates.
The hon. member for Brandon-Souris (Mr. Dinsdale) almost wholly embraces and speaks with general approval of the Gordon commission's recommendations.
Subtopic: CONTINUATION OF DEBATE ON ADDRESS IN REPLY