April 17, 1923 (14th Parliament, 2nd Session)

CON

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

In my presentation of
this resolution I hope to be able to show to the House that so far as British Columbia is concerned we are not seeking any sectional advantage, but rather the removal of a sectional disadvantage from which the province of British Columbia has suffered since confederation. I also hope to be able to show that by the elimination of this sectional disadvantage the general trade of the country will be stimulated, and that immigration which we so much need will be thereby encouraged, and made posible by reason of the fact that settlers will be able to market their produce at reasonable rates, and be able also to purchase their necessities at reasonable rates.
I also desire to make it quite clear that my aim is to effect this correction by constitutional means, relying upon the fairness of the people and of rthis House, rather than upon threats that British Columbia will withdraw from confederation.
I also want to make it quite clear that I am not animated by any spirit of unfriendliness towards the Canadian Pacific Railway. I feel that we are fighting for a principle, and that we differ in principle from the Canadian Pacific Railway. I lay no blame upon them for fighting for their principles, but we propose in so far as it is in our power, to bring home to the people of this country that we have been suffering from a sectional disadvantage, the removal of which is in the interests of the whole of Canada, and which the interests of British Columbia absolutely demand if that province is to go forward and succeed.
It may be said that it is a strange thing for a member of this party to move a resolution dealing with freight rates after the stand that we have taken with regard to keeping our railways out of politics, and having regard to the fact that there is a judicial body seized with the power of dealing with the question of freight rates.
At the, last session of parliament the government dealt with freight rates. At the outset I want to say and I say it with all frankness that if the government is prepared to withdraw that legislation I am prepared to withdraw my motion. In other words, I am prepared to go before the Board of Railway Commissioners and argue this case if the board is left free and unhampered by this House. But my point is this: At the last session of parliament this House undertook to fix the freight rates on two specific commodities namely, grain and flour, for three specific

provinces. This House has gone into the ratemaking business. The result of that legislation was' to accentuate the discrimination which already existed against British Columbia. We were already suffering from discrimination by reason of the mountain scale, and the reduction of the rates on these two basic commodities merely served to accentuate that discrimination.
It may be of interest to know that British Columbia is supported in the stand it has taken by no less authority than Sir Henry Thornton who, speaking before the Board of Trade of Vancouver on January 18, of this year, said in regard to freight rates:
If I were in your position I would adopt the same attitude as you have adopted and advance the same arguments. It does seem to me that whatever rates are to be applied on the transportation of grain from the prairies to the West should be based upon sound economic and scientific principles.
And he went on to say that the agreement known as the Crowsnest pass agreement did not embody, in fact, any sound economic or scientific principle, but was merely a matter of expediency based upon the situation which existed in 1897. He characterized that agreement as "a horse-trading proposition between the Dominion government and the Canadian Pacific Railway Company."
For the purpose of rate making Canada is divided into three divisions-the East, the prairie, and the Pacific. The East embraces all of Canada as far west as Fort William; the prairie, the country from Fort William to the mountains; and the Pacific that portion of Canada west of the mountains. The eastern rates are the lowest; the prairie rates are the next lowest; the mountain rates are the highest. The eastern rates are the lowest because of the factor that enters into rate making in that portion of Canada, namely water competition. For the principles of rate making I refer to the judgment of the Board of Railway Commisioners of June 30, 1922, the last decision. In that judgment the board says it found "that in the main the rate structure of eastern Canada was justified on the basis of water and rail competition." These are the words of the Commissioners. Now then just what is the exact position of British Columbia in regard to rates? That also I will give you from the board's last judgment. These are the words of the Commissioners :
Under the western rate case-
Which was in 1914-
-a basis of one and a half for one was adopted on the Pacific standard tariff.

Railway Rates
That meant that one and a half miles on the prairie would equal one mile in British Columbia. In other words, for the same money you could haul the same commodity on the prairies three hundred miles and in British Columbia only two hundred miles. That was the situation. The judgment of the board last June corrected that to some extent in these words:
The rates on the new "Pacific" standard mileage tariff are to be constructed by applying to the "Prairie" standard tariff, li miles for one mile.
In other words we can to-day haul a commodity in British Columbia one hundred and fifty miles as against two hundred miles on the prairie for the same rate. That is the situation to-day, and that is the discrimination of which we complain-a discrimination that we say is unfair and unjust and should be eliminated.
I do not propose to quote figures giving the details of rates for the very good reason that I would be wasting the time of the House by so doing. I could quote rates which would show this discrimination, but nothing can be clearer than the general principle laid down in that judgment. I do not think it needs elaboration but I will say this: I could give you illustrations-and I have no doubt that members of this House in reply to me "will use illustrations to the effect-that British Columbia has rates from Vancouver, and other coastal points, to the far East-and when I say "the far East" I mean Montreal and Toronto-a distance of 2,800 miles which are very favourable, which are more favourable than rates on similar products from the Maritime provinces for an equal distance. For instance, I can quote you rates on canned goods and fish from Vancouver to Toronto which are less than the rates from the Maritime provinces upon the same products for an equal distance which appear favourable to us. The fact remains, however, that it costs us more money to ship those very commodities on which the rates would appear so favourable from Vancouver to Winnipeg than from Vancouver to Toronto or Montreal-it also costs us as much, or more, to ship those commodities from Vancouver to Calgary as it costs us to ship them from Vancouver to Montreal. That is what we say is not scientific. That is what we say is preventing us from getting into those provinces which arc our markets, namely Alberta and Saskatchewan. We have in Vancouver to-day six or seven hundred manufacturers who are clamouring for a market. Their only market is an export market; we are unable to get into the prairie market of Alberta and Saskatchewan by reason of that mountain scale, of that discrimination which exists against us. And yet the Canadian Pacific Railway Company tells us that we are being treated fairly; not only that but that other parts of Canada are being discriminated against by reason of the favourable rates given to us.
Another instance of that might be given in the case of rice. We can Ship rice to Toronto cheaper than we can ship it to Winnipeg or prairie points. The reason for that is to enable the rice mills to meet the competition from New Orleans. All these things, I maintain, have no application to the general principle defined in the judgment referred to. That one and a quarter miles on the prairie is the same as one mile in British Columbia is the thing we complain of.
Mr. Carvell, Chairman of the Board of Railway Commissioners, in a recent letter to the Associated Boards of British Columbia points out-and he also points it out in this judgment-that from 80 to 85 per cent of British Columbia traffic was carried at commodity rates, and that in the movement of the staples of British Columbia at commodity rates, the effect of the mountain scale is not apparent in many cases. I have given the House some illustrations of where, on some of our basic commodities, this discrimination is not apparent, but in every instance that discrimination is not apparent where the shipment extends over a long distance, it becomes apparent the very moment you examine shipments of our commodities into the prairie provinces where we want a market, and where we insist that we are entitled to a market, if trade is to flow in its proper and natural channel. I wish to quote from that letter which I referred to and I may say that it is difficult for me really to bring up such a letter in the House, because I am absolutely opposed to the principle of criticizing the members of any judicial body, but I think it is only fair to our province that I should quote from this letter, because it has been published broadcast throughout the country. In this letter Mr. Carvell says:
Mr. Oliver fails to realize that in the class rate schedule for all points from the coast, east of the boundary, 134 miles are eliminated from the actual mileage across the mountain, and if these are counted it would then bring the class rates practically down to the prairie level.
I point out that is true so far as it goes, but he does not mention that the same condition exists between Fort William and Winnipeg, and has existed for many years, and that it has nothing to do with this question whatsoever. It is based on an entirely differ-
Railway Rates

ent principle, and does not deal with and has no relation to this question of discrimination. The letter continues:
As I view it, the whole question is one of whether the coast wholesaler who can bring his good3 in by water will be able to send them further east and thus . displace the business which has heretofore been done via Winnipeg.
I do not know what he means by that, unless he stands on the principle that he is not going to see anything done which will interfere with the flow of trade to Winnipeg and the business now handled by the wholesaler of Winnipeg. That is an extraordinary principle on which to make rates, if that is the principle. Then he says:
So far as the present programme of the province of British Columbia is concerned in freight rates, it is much more political than real.
That statement I object to most emphatically, because, irrespective of party in British Columbia, the whole public-100 per cent-stands for the removal of this discrimination, and we have fought as hard as we know how, ever since the board was constituted to remove that discrimination. We fought before that board in 1906, again in 1910, again in 1914, we have been fighting since 1920 till to-day, and we are still fighting before the Privy Council and this House for the removal of the discrimination.
The first contention of the province of British Columbia is that by the terms of union Canada undertook to build a railway, the Canadian Pacific railway, and there was nothing in that agreement upon which British Columbia came into confederation which would indicate that there was going to be any discrimination in rates over that road. I would refer members of this House to the original negotiations between Earl Granville and Governor Musgrave, in which it was stated:
That the establishment of a British line of communication between the Atlantic and Pacific oceans is far more feasible by the operation of a single government responsible for the progress of both shores of the continent than by a bargain negotiated between separate, perhaps in some respects, rival governments and legislatures.
And the extracts from the terms of the union itself reads as follows:
Whereas the construction of a line of railway through British territory across the continent of North America, which, in conjunction with existing railways would afford uninterrupted railway communication between the Atlantic and Pacific seaports of the Dominion of Canada is a work of vast importance, not only to the political and commercial interests of Canada, as tending to the closer union of its several provinces, but also to the British Empire at large, as affording rapid and direct communication through British territory, Australian and Asiatic possessions and opening up for colonization an almost unlimited extent of fertile country.
,
Hon. members should note that this was for the closer union of the provinces. I ask you, do you expect closer union with British Columbia if you discriminate against that province? I also draw your attention to the fact that it is an Imperial project. Are we in British Columbia to pay additional rates by reason of the fact that this project was Imperial in its nature and for the closer union of the provinces of confederation? I merely draw attention to these terms. I think, perhaps, others will elaborate the point, but I draw attention to it for this specific reason: the Board of Railway Commissioners in their judgment of June 30, 1922, refused to consider that argument. They said that-
In the present application, various additional contentions were advanced. Emphasis was laid upon the implications alleged to arise from the steps culminating in confederation.
They say that this case is analogous to a case of Attorney General for British Columbia vs. C.P.R. in which it was held that under the terms of the contract with the Dominion government for the construction of the Canadian Pacific railway dated October 21, 1880, the only party who could make any complaint as to the non-observance of the terms of union was the government of Canada. I present that argument because the Board of Railway Commissioners have refused to consider it, and here I have an opportunity of presenting it to the government of Canada for it? consideration.

Topic:   EQUALIZATION OF RAILWAY RATES
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