March 17, 1922 (14th Parliament, 1st Session)


Edward Mortimer Macdonald


Mr. MACDONALD (Pictou):

Well, perhaps my right hon. friend has not recalled that one of those ministers whom he brought into being for a few short weeks was perfectly willing to deal with the situation down there which he condemned by the use of this phrase, and was perfectly willing to adopt as a candidate a gentleman who declared that the chief plank of his platform would be never to support England in any war in which she might be engaged. Let me remind him that when first he came into this House, in 1911, the government he supported owed its existence to the fact that there had been elected in the province of Quebec twenty-six or twenty-seven men called Nationalists, men who were returned on the principle that Canada should not embark in any of England's wars or participate in her affairs. He enjoyed his position as a member of that government, from 1911 to 1917, as a result of support from that quarter. Let me tell him. if he chooses to characterize in the same way the men and women of any province, in regard to the expression of their opinion upon him or his government in the last contest, that speaking for the province of Nova Scotia, I declare that we shall share the epithet he has applied to Quebec in this case. We will take these words as describing our own unanimity. My right hon. friend paid a visit to our province, and, in association with his Minister of Public Works, he made a tour, the progress of which might be compared to the famous march of Don Quixote and Sancho Panza. Our province has had a distinctive position in regard to the Conservative party. It has given to Canada three Prime Ministers who led that party: I refer to Sir Charles Tupper, Sir Robert Borden and Sir John Thompson. Now, the people of Nova Scotia heard my right hon.
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friend; they listened to his weary wail on the tariff and his persistent declaration that there was no other issue before the Canadian electorate. He did not want to discuss railway problems, or unemployment, or anything except this theory that a tariff should be maintained-he ran away from everything else. The good people of Nova Scotia, including those who had supported these three Conservative Prime Ministers, having heard the right hon. gentlemen and his colleagues, decided that they did not wish him to be entrusted further with the control of affairs in Canada, and the majorities of the hon. gentlemen who sit in this House to-day representing Nova Scotia were materially increased as a result of the visit of the leader of the Opposition. I say, therefore, that if my right hon. friend regards the position of the province of Quebec as being the acme of infamy, we in Nova Scotia are not at all concerned about that term; we share with Quebec the blame it implies.
My right hon. friend does not seem to appreciate his position as fully as he should. Beneath the surface there is an indication of a desire on his part to resuscitate the old sectional feeling, as evidenced by his attack on the Minister of Justice (Sir Lomer Gouin) and the member for St. Antoine (Mr. Mitchell) because they pointed out that the condition of affairs in this country was so serious. They said nothing more than what has been said all over the country in "hundreds of constituencies. My right hon. friend, however, singled these gentlemen out as special objects of attack, suggesting that they were allied with some special interest. The leader of the Opposition received his answer very well from the Minister of Justice yesterday, but it does seem to me that in the opening of a new Parliament, with the great problems that face us, he might well have applied himself in his address to a consideration of the difficult task that lies before us and have dealt with some of the questions which have been raised in so many quarters of the House by hon. gentlemen.
Now, as I said before, the task before the Government is a very heavy one, but already there has come from all parts of Canada evidence of an optimism and a belief that responsible government has once more been restored, and that the days of War-time Elections Acts and the putting through of Canadian Northern Railway deals under closure have passed. The

people look with optimism and confidence to the administration which has been formed by the hon. gentleman who leads the Government (Mr. Mackenzie King) and the galaxy of able men surrounding him who represent all parts of the Dominion. The choice of the Liberal party in 1919, when the present leader of the House was selected to lead that party, has been more than justified by the people of the country. The splendid political tour which he made during the course of the election contest, the high standard on which he appealed to the people on all the questions that were before them, won the confidence not only of the members of the Liberal party but of a very large number of electors throughout the country who in the past had not given allegiance to that party.
Associated with him is the man who guided Canada from 1896 to 1911 through many financial difficulties, and to hon. Mr. Fielding-if I may use his name, Mr. Speaker-I think that this House and the country look with confidence to deal with the pressing financial questions which now confront us in the same successful manner in which he handled our national finances during his former term of office.
We also feel very proud, on this side of the House, of the hon. gentleman who for fifteen years so wisely guided the destinies of the province of Quebec with the result that her position to-day is admired and envied by all her sister provinces. We are very glad indeed that the hon. member representing the historic constituency of Laurier-Outremont (Sir Lomer Gouin) has become a member of the Government.
I do not propose, Mr. Speaker, to deal with all the subject matters of the Speech from the Throne. Rather I desire to confine myself to what I conceive to be for the moment the most important question therein referred to-our national railways. We have heard a good many speeches from hon. gentlemen upon this subject and many arguments in favour of public ownership. To my mind public ownership need not be argued at all. The country owns these railways, and I propose to show that, having regard to their financial position to-day, there could not be found anywhere in the world a corporation or body of men who would undertake to buy and operate the railways. The country owns the Canadian Northern railway, as it was formerly called; it owns the Grand Trunk railway; owns the Transcontinental railway; and it owns the Grand Trunk Pacific and the In-

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tercolonial railways. Those railways could not be sold to-morrow for the debts that are against them. Therefore, public ownership is here for the time being and must be given a fair trial, as the Government has decided. For the moment public ownership is not in issue.
In this connection I would submit that the Government should let the country know exactly t"he present financial position of all the roads composing the National system, because it is not at present very well known either to the country or to this House. We should understand exactly what their present financial position is, because if the Government's policy of giving these railways a fair trial under public ownership is to be carried into effect, as I am sure it will be, in order to determine whether or not Government direction and control is to bring to these railways the advantages and benefits which we would like to see accrue to them, we must know beforehand the exact position in which these railways stand financially. Operating accounts for the last three years in the fullest detail should be laid before Parliament. I am aware the position was taken last year that these operating accounts should not be made public, and I gather that the House was told at that time that such accounts should not be laid on the table for fear the Canadian Pacific Railway Company should find something in connection with those accounts which would enable its management to take advantage of our National system. That seemed to me to be a very flimsy reason. The time has not arrived in this or any other country enjoying British parliamentary institutions when you can lay down the doctrine that hundreds of millions of dollars of public funds are to be spent without the people or their representatives having the right to know the disposition of every single dollar. If we are going to give a fair trial to public ownership, then a most essential element is to have these financial statements laid down upon the table of the House. Only in this way can you know where you are going to begin under public ownership.
Let me say, I do not regard the operation of the Canadian Northern Railway, or the so-called Canadian National Railway, since 1918 as being operation under public ownership. What is the use of talking about public ownership of these railways when you have Mackenzie and Mann's officials operating them? What is the good of talking about the failure of private ownership rendering public ownership necessary if you take the gentlemen who could not operate these railways successfully under private ownership and put them in charge under government ownership? You have got to start square with this thing. We upon this side of the House do not want to be responsible for the peculiar policies that characterized our railway administration under the direction of the right hon. leader of the Opposition and his friends. We want to start fair.
Allow me to digress for a moment, Mr. Speaker. My right hon. friend and his associates have been very fond of asserting that they were not responsible for this railway problem at all. That has been reiterated time and again in that form of propaganda which my right hon. friend and his colleagues so well know how to use, and which he is so afraid somebody else might use, though nobody has any intention of following his lead in that direction. By his propaganda he has declared continually during the last two years that the Liberal party was responsible for the railway situation. Let us examine the facts. As I have already said, I had the pleasure of sitting in this House in three Parliaments, and I was here in 1911 when the right hon. gentleman and his friends took charge. What was the railway situation then? The government owned the Intercolonial, as it had owned it for forty-five years. It owned the Transcontinental, stretching from Moncton to Winnipeg. The Grand Trunk Pacific Railway Company had title to the Grand Trunk Pacific railway from Winnipeg westward. That was the position. Those were all the railways that the government of Canada had anything to do with when my right hon. friend and his associates took charge in 1911. The Transcontinental was under lease to the Grand Trunk Railway Company with respect to operation on terms which would have freed this country from any responsibility financially. But what did my right hon. friend and his associates do immediately after 1911? They appointed a commission with a view to discrediting the construction of that railway and of playing into the hands of the Grand Trunk Railway Company, who wanted to get rid of the contract. Eventually, after a couple of years, having laid the ground-work, they proceeded to let the Grand Trunk Railway Company escape responsibility, and the government took the Transcontinental over. Were we responsible for their action? Then, in 1913,
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Mackenzie and Mann came to this House and asked the government of the day to loan them $15,000,000. My right hon. friend supported that request and the money was handed over. At that time Mackenzie and Mann, or the Canadian Northern Railway Company, assured the House that with this money all their obligations would be attended to and they would not come back for any further loans. But they came back next year for $45,000,000, and my right hon. friend was the gentleman who piloted the Bill for that loan through Parliament. On our side of the House at that time we moved the six months' hoist to that proposal and took direct issue with him and his associates. We have no responsibility whatever for the giving of that money. Let me remind the House, Mr. Speaker, that it was upon that occasion that the gentleman whom my right hon. friend took into his Cabinet as Minister of Justice just before the election-I refer to Hon. R. B. Bennett-told the House of Commons that the right hon. gentleman was nothing but the "megaphone of Mackenzie and Man." That was in 1914. Mark you, assurance was given to the House at that time that security for the loan had been given; that a mortgage would be taken; and that upon default, foreclosure would not be necessary, as it would in any other case-the whole property would revert to the people of Canada.
But that is not the whole of the story. My right hon. friend came to the House of Commons in 1917 and introduced legislation to take over the Canadian Northern Railway, which he put through under closure. A certain hon. gentleman who went to the Senate this session and who came here from the West to join the Union Government, save the country and win the war, might give us some of the reasons which contributed to that legislation. I know this: certain provinces of this Dominion were relieved of $110,000,000 of obligations which they had incurred for local railways, including the province of British Columbia, and that amount was made part of the debt of the country and charged against the Canadian Northern Railway. My right hon. friend went further and provided that there should be a reference to arbitration for the purpose of ascertaining how much Mackenzie and Mann were entitled to for the equity of redemption. The award was $10,000,000, and I will show you, as having a bearing on the present financial position of the

country, that that was simply $10,000,000 thrown away.
Now, what is the situation to-day? A reference to the railway blue book which has been laid on the Table of the House shows that the mortgage and bonded indebtedness of the Canadian Northern Railway is $626,000,000, in round figures, and that the estimated value of the. road-bed, tracks and terminals is only $632,000,000, a margin simply of $6,000,000. That is a pure question of bookkeeping. In order to get at the real position in regard to the matter, an actual valuation would be necessary, made by proper valuators, and that valuation would disclose whether or not the Canadian Northern is mortgaged for moi'e than it is actually worth.
This, then, is what my right hon. friend did. And he has the audacity to come to this House and say that these conditions were created by hie opponents, although all along he was the chief actor in the drama. Now, what did he do further? He was not content with taking over the railways mentioned, but in 1919 he asked the House to authorize bis Government to make an agreement for the acquisition of the Grand Trunk. That agreement was made and the road was taken over. Then there were arbitrations as to values, all the dealings with complicated stock, and so on. He it was who took over the Grand Trunk. These are the railways which belong to the Canadian people and which this Government has to deal with. Would it, then, not be a most desirable thing, before we embark upon any enterprise of Government operation involving the expenditure of large sums of money, to inquire fully into the matter as suggested in the Speech from the Throne? The member for South York (Mr. Maclean) has been talking public ownership in this House for a great many years, but able as he is I would not say that he is an expert on railway transportation. Nor would I say that the former mayor of Toronto, who represents North Toronto (Mr. Church) and who spoke yesterday very lengtaily and very glibly about "co-operation" and "co-ordination," is an expert on transportation, even though he did say that he could effect this co-ordination in twenty-four hours. The transportation question involves the most important considerations in the life of a country; men are trained from boyhood in its technicalities, in its details, in matters connected with administration. Would it not therefore, be prudent to seek the advice of those

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who give their lives to the perfecting of their knowledge in regard to railway matters? Surely, ordinary common prudence should prompt us to say that the Government would have been right in suggesting that there should be an inquiry. Do you not think that instead of dealing in generalities we ought to have a statement before the House-and the Government, no doubt, will have it before them-as to just what the financial position of the Grand Trunk is? I am told that the deficit on the Grand Trunk last year was $15,000,000, Last year the deficit on the Canadian Northern was $70,000,000, of which amount $33,000,000 went to pay interest upon mortgage and bonds. It has been said that this deficit is due to the increased wages of employes, but the blue book shows that the increase in wages amounted to only $12,000,000, so that the deficit cannot be due to that alone; there must be other important reasons for it. I submit, therefore, that this House should know the exact financial position of all these railways before we embark upon any new policy or lay down any new lines.
We have to deal with most serious prob-elms in regard to this matter. As I have mentioned, the hon. member for North Toronto would co-ordinate this system in twenty-four hours, but I would direct the hon. gentleman's attention to the fact that the Grand Trunk railway, which is proposed to be the subject of co-ordination, does not operate only in Canada; sixteen hundred miles of it are in United States territory. Forty-one per cent of the total tonnage carried by the Grand Trunk comes from the United States; seventy per cent of its freight traffic receipts is obtained in that country. The proposal is that this Government become a competitor in the United States, a foreign country, with American railways operating there. Grave international difficulties surround, this question. There is no precedent in the world's history for one government operating a public utility within the territory of another without first making with that country a proper agreement or arriving at an understanding in regard to the matter. Take the case of the Suez canal; when the contract for that work was arranged, France and England had to obtain from the Khedive of Egypt his permission to proceed, although at the time the Khedive had very little authority. Take the case of the Panama Canal; when the United States undertook to construct that work they obtained from the newly-created Republic of Panama the
concession which was necessary before actual operations were commenced. We are in this position with regard to the United States, that this Government, owning the Grand Trunk railway in that territory, would be dependent on the federal United States Government for all the laws they might pass with regard to the road, including liability for any taxation they might impose, and liable also to taxation and legislative interference by the six or seven states through which the railway runs. What would we think in this country of such a proposition as the American Government purchasing the stock of the Canadian Pacific railway? It is not inconceivable that that might not occur. All that they would need to do would be to purchase the stock as it was offered on the exchanges. What would we in Canada say if the American Government owned all the stock of the Canadian Pacific Railway and wanted to operate that road in this country?

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