August 26, 1903 (9th Parliament, 3rd Session)

CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

When I say that the construction of the road would cost $30,000 per mile, such a road might not be up to

the standard and would require additional expenditure for betterment. If, on the other hand, you were to acquire one of the roads in existence, you would have to spend that same amount on betterment to make it a first-class road. The sum total which will bring the Intercolonial Railway from Montreal into the city of Winnipeg will be $60,470,000. You remember that we are dealing now entirely with the roadbed, with its terminals, and with the equipment which belongs to a railway outside of its rolling stock. The scheme proposed by the government from the town of Moncton to the city of Winnipeg is precisely that class of work, and I wish to make a comparison upon similar terms. I propose now to deal with the scheme proposed by the right lion, gentleman, alongside the one enunciated by the leader of the opposition. I wish to ask any hon. gentleman in this House if he is prepared to say that you can build a mile of the road from Moncton to Winnipeg any cheaper than you can a mile of the road from Montreal to Winnipeg. Gan any lion, gentleman state within ten million dollars what that road will cost 1 Will any hon. gentleman assume the responsibility, even upon better information that the government have, of saying that mile for mile the road from Moncton to the city of Winnipeg *can be built as cheaply as the road proposed by the leader of the opposition, namely, the extension of the Intercolonial from Montreal to Winnipeg ? They both pass through a country somewhat similar, and the estimates I have given are based on the experience of a country traversed by railways, where we have reliable information as to the cost of a first-class road. If we wanted to begin work to-morrow, we have all the information necessary to ascertain the approximate cost. But the question of policy, how it shall be done, the most economical and efficient way to do it, is a question to be determined on better information than you can get in this House.
I shall now make a comparison upon the same basis of cost, between the government scheme and the proposition of the leader of the opposition. The cost of the eastern section of the Grand Trunk Pacific Railway is as follows : From Moncton to Winnipeg
is 1,875 miles. I am taking the figures given by the Finance Minister, and I am going to take the mileage given all through by hon. gentlemen opposite, so that there will be absolutely no mistake in making a fair comparison. According to the Minister of Finance, the distance between Moncton and Winnipeg is 1,875 miles, and the average cost per mile, as set forth in the extension of the Intercolonial Railway is $41,500, including everything. I, therefore, apply the same rule and calculating 1,875 miles of road from Moncton to Winnipeg, at the same cost per mile as the extension of the Intercolonial, we have a cost of $77,812,000. Then there is the interest during the period of
construction, taking the figures given on the cheaper plan outlined by the Minister of Finance, this would come to $3,309,000, and the contribution to the Quebec bridge would be $2,000,000, as estimated by the Minister of Finance. The total capital expenditure in this case would be $83,122,000. I will ask you, Mr. Speaker, -to mark the words ' capital expenditure,' because it is an important feature in this scheme.
In the scheme laid down by the hon. the leader of the opposition there is absolutely no interest expenditure involved beyond the paltry some of something like $200,000, but the interest expenditure upon this road as proposed by the government, from Moncton to Winnipeg, a distance of 1,875 miles, would come to $29,238,000. Then there is another sum involved which the hon. the Minister of Trade and Commerce (Rt. Hon. Sir Richard Cartwright) and the Minister of Finance (Hon. Mr. Fielding) termed the cost to the country. The Prime Minister estimated this at $13,000,000 ; the Minister of Finance raised him half a million, and called it $13,500,000 ; the Minister of Trade and Commerce went still further and told us yesterday that it would be $14,000,000. Now, let me tell the whole truth as to what this is to be. There is an expenditure on capital as I have said of $83,122,000 ; and the interest on the cost of construction on this eastern section-and I am dealing now with the eastern section alone, leaving out the prairie and mountain sections for the purposes of this comparison-the interest on the cost of construction, in ten yearly payments, which the government In their contract have agreed to pay, and must pay, would be $2,493,665 a year for ten years. Some hon. gentlemen may say : Well,
we may have to pay that for only seven years. There is something in an argument of that kind, speaking generally, but the probability is overwhelmingly on the side of having to pay it for ten years ; and for this reason, that it is no small matter for the Grand Trunk Railway to have to finance each year so large a sum in interest as $2,493,000. There is another danger ; it has not been contended in this House that this will be a paying, competing road. No hon. gentleman has offered the statement so far, or even the suggestion that this will be a competing road through Canada. They have said time and again : Oh, there is a good deal of fine national sentiment in this. It is going to promote colonization. But no man has ventured to deny the one fact that is overwhelmingly more important than this, namely, that this is not to be a national competing road from one end of Canada to the other. There is the other danger that the Grand Trunk Pacific Railway will not have net earnings sufficient to pay that interest or any portion of it. The doubt is, and this doubt -was in the minds of the men who made the bargain-for the Grand Trunk Pacific Railway

people are not in any sense Infants-that for the first seven years they will not be able to pay anything. They contemplate that for the next three years it may be possible, nay, it is probable, that they cannot pay one cent and they therefore ask yon to capitalize that and to charge them the interest on it. The Grand Trunk Railway thus compels the government to finance for it something like two and a half millions of dollars. If the Grand Trunk pays that, it will go into the public treasury of Canada. If the Grand Trunk does not pay it, it is not a debt against the Grand Trunk Railway, it is a sum upon which interest is to be paid, and therefore constitutes a part of the cost of the road without one dollar going into the road in return.
For ten years wre must pay in interest out of the treasury of Canada, $2,493,000 a year, an enormous sum. Let it be remembered that each of these payments must be carried, one of them over nine years, one over eight years, one over seven years, one over six years, one over five years, one over four years, one over three years, one over two years. Therefore we must pay out of the treasury of Canada to carry each of these payments during the period of ten years a sum amounting to $3,306,000. There is absolutely no doubt that this will have to be carried. If you had made a payment nine years ago you would have borrowed the money to pay it, and therefore must pay the interest on the money for that nine years, and in this case the interest will constitute part of the cost of this scheme. Then the government have entered into a contract with the Grand Trunk that the rental, if any is paid, is to be paid annually. They have undertaken by their Bill and by the contract that the commissioners appointed to construct and manage this road shall issue the bonds of Canada, payable half yearly. Therefore a sum of money is borrowed that is paid to the government if it is paid at all, yearly, and the government has to pay the interest upon that half yearly. The difference thus arising during that period is nearly one million dollars that the country will lose directly by that transaction, $935,350 is thfe net sum. The whole sum involved, Mr. Speaker, is $29,238,000 not one cent of which will have gone into that road, every cent of it being a dead loss to the country. There will be nothing to show for it.
I have given you the capital expenditure at $S3,000,000 in round numbers. I have pointed out in detail-and I challenge hon. gentlemen to successfully controvert a single statement I have made-that you are paying out nearly $30,000,000 interest on this scheme after it is constructed. The Minister of Finance made an allowance for interest during the period of construction, but I am now dealing with that future interest which amounts in round numbers to $30,000,000 for which you have to carry a Mr. CLANCY.
dea l scheme for ten years. Now if that can be said then this road will have cost $83,000,000 with $29,000,000 added to it, altogether $112,000,000. I wish to say and to emphasize this particularly, that thirty-five per cent of the money will be paid out by Canada, $83,000,000 of it for construction and nearly $30,000,000 paid out for interest for which Canada will have not one copper to show. I know of no more alarming condition of affairs than tha,t Canada should have to enter upon a scheme of this kind.
I know of no more alarming condition of affairs than that Canada should have entered upon a scheme' that involves, not the cost alone, for if the cost went into the road you could use it as an asset, but that Canada should be 'asked to commit herself to a scheme that involves the payment of a subsidy to a railway without any return for ten years, a cost that will amount to two million and a half dollars, in round numbers, in order to get the company to take over the road and run it. Is it any wonder that the Grand Trunk Company refuse to enter into a scheme of that kind, or to finance it ? It was stated by way of apology, by the Minister of Trade and Commerce that the reason for doing that was that the Grand Trunk Pacific, although a great and rich corporation, backed by the Grand Trunk Railway Company, was unable to finance so great a scheme. The Minister of Trade and Commerce was'cautious, prudent, as he always is, and refrained from entering into details of that kind. The hon. gentleman did not tell us that we could have got over the difficulty without costing us one cent, by way of guarantees, if we considered the security good. But the hon. gentleman skated over the thin ice without falling in. I only regret that the hon. gentleman did not improve the opportunity to give scope to his intellect and experience upon a question of this kind. Had he done so, he would have denounced the scheme as the rottenest scheme that was ever proposed in Canada. He would have told the country that we had entered upon a scheme that would involve an expenditure of $30,000,000, in interest and that for all the good we would get out of it, we might as well throw the money into the Ottawa river.
Now, that is the essential difference between these two schemes ? The first one Is a scheme that loads Canada with interest for many years to come. The best evidence that it is a scheme that should not be entered upon is the fact that the shrewd railway men of Canada would not touch it. It has been said in this House over and over again that the Grand Trunk Pacific did not want this scheme. It has been said in this House that it was a miserable compromise of local conditions and party conditions, and that what might have made it a scheme of national utility has been sacrificed to the meanest motives. The Grand Trunk Pacific Company know that perfectly

well. They refused it, and they said : If you want a scheme of that kind you must carry it out yourselves. The government said : If we build the road you will operate it ? The company said : No, you must give us two million and a half dollars a year, or we will not operate it for ten years. What does that mean ? It means that we have to build a road that will be no good as a competing transcontinental line ; it means that we have to build a road that cannot earn dividends above the cost of operation ; It means that if you want a railway of that kind, it will be so expensive and of such a character that Canada must bear the burden and folly of it, because the Grand Trunk Pacific is not in a position to bear it.
But we have that scheme financed by the Finance Minister. I am sorry he is not in his place, but I am delighted to see the Minister of Trade and Commerce is here. The Minister of Trade and Commerce has been an authority for many years upon questions of finance. I sympathized last night with the hon. gentleman's embarrassment. He is a gentleman of long experience, a gentleman of more caution than the Minister of Finance, and in his utterances he took very good care not to commit the country to the extravagant statements made by the Minister of Finance. Now, Sir, let us see how the Minister of Finance deals with this great question. Before I go further,
I want to call the attention, both of the Postmaster General and of the Minister of Trade and Commerce, to this fact, that what the Minister of Finance terms the cost of the road to the people, is only a portion of the loss to the people in addition to the cost. It is not the cost at all. The leader of the opposition has never shirked his responsibility. He has never given any uncertain sound on any question which he is discussing. He is prepared to say, as his followers are prepared to say, that every dollar that goes into this work costs the people that much money. If we borrow the money, the credit of Canada is pledged to that extent. The sums paid out in interest are absolutely lost to the people, in addition to the cost of this scheme. Now, I wish to read what the Minister of Finance says :
If at the close of the year, when we are making up the accounts, we lay aside the surplus which will have accrued as stated in the budget speech, and subject to the improvement which we hope will take place in the final adjustment of the accounts, and if, instead of using that surplus to build railways elsewhere, t.o reduce our debt, or in the many other ways in which we could use it. we place that $13,000,000 in the hands of financial managers, I hope to show the House that tha.t money would mef't every financial responsibility which the government of Canada have assumed under this contract. How is this brought about ? We have to consider not the mere multiplication of interest for seven years. What we have to consider is what use we could make of that $13,000,000.
Now, Mr. Speaker, I ask the Minister of Trade and Commerce if be is prepared to commit himself to this government banding I over $13,000,000 to be invested by finance managers ? Does he propose to hand it over to an insurance company, as has been suggested by the Minister of Finance ? Does he propose to take $13,000,000 and invest it in that way ? I ask the right hon. gentleman now if he is prepared to sanction any such plan ; and without being offensive I ask him to give me an answer now, because it is important. The right hon. gentleman, prudent as he always is, cautious and wise, will never commit himself to a folly of that kind. Yet the Finance Minister, who sits alongside of him, has made that statement in this House, he would commit such a folly. I call it folly, Mr. Speaker, but the word is a mere euphemism for a much stronger term that might be applied to a proposition of that kind. I know of no more palpable fraud upon the people of this country than to propose a matter of that kind. It is something that no government would think of doing. It is something (hat no government in Canada has any authority to do. 3ut he told us that apart from that he was going to use it. We have had surpluses in past years as follows, according to the statement of hon. gentlemen opposite :
1898 $1,722,712
1899 4,837,749
1900 8,054,714
1901 5,648,333
1902 7,291,398
Now, the hon. Minister of Finance proposes to invest, as he says, $13,000,000 of surpluses that he is going to have in cash. I desire now to ask the right hon. Minister of Tirade and Qommerce <Rt. Hon. Sir Richard Cartwright) what has become of these past surpluses ? Will that toon, gentleman tell us where that money has gone ? These surpluses aggregate $27,554,000 during these past years. Will that right hon. gentleman tell us where that money is ? Has there been one dollar invested in any way ? Has it been placed at the credit of the people of Canada in any of the chartered banks ? Has it been invested in securities ? Has there been such a thing in existence ? The right hon. gentleman will not answer such a question. Nobody knows better than that right hon. gentleman, himself that this is a perfect fraud upon the people. No such thing is possible. The money did not exist, it is a mere bookkeeping fiction, and there was no surplus. I shall not ask that right hon. gentleman to account for it, because it did not exist in any sense. I say that when you have to call to the aid of any scheme such frauds as that, such pretensions, It requires no better answer for the people of this country than the complete silence of the right hon. gentleman. If any man in Canada knows, he does. Where has that money

t)699

-gone ? There is a difference, as the hon. Postmaster General (Hon. Sir William Mu-lock) will see, between the cost of the two schemes, including interest and capital expenditure in both cases. The one leaving Moncton and going to the city of Winnipeg, and the other leaving the city of Montreal and reaching Winnipeg, of $51,000,000. Where is that difference thrown away ? I have calculated the cost per mile in each case as being precisely the same, because it is the only way of making the comparison. There has been thrown away at the commencement of the line, in paralleling the Intercolonial Railway, $15,000,000 or $16,000,000. We have evidence beyond doubt of that fact. We have the evidence of the hon. Minister of the Interior and we have the evidence of the hon. ex-Minister of Railways and Canals that the Intercolonial Railway can compete, and compete successfully, even with a shorter line. In order that there may be no mistake, I will give to the House what was stated in this House as evidence. I will give to the House the views of the hon. ex-Minister of Railways and Canals, a gentleman of experience greater than any other man in this House, who declared from his place here that the Intercolonial Railway could compete successfully and compete with the shorter line, because it had a better road, and that by attempting to shorten that road GO or 70 miles, you do not improve it in any way, because you cannot get as good a road, and the difference is so small that it is not recognizable. He says :
It must not be forgotten-and I wish to emphasize this fact-that the Intercolonial Railway has such exceptionally favourable grades, is so well laid, and is such an exceptionally favourable road for traffic, running along the coast line, that it can haul heavier traffic 2-59 miles further- .
In this case it would only be 60 or 70 miles further.
-than the Canadian Pacific Railway in shorter time. You can therefore see how small a figure 77 miles would cut under such circumstances.
But that 'is not all. I am going to give the evidence of an hon. gentleman in this House who, it has been said, made tin; speech of the season in regard to this question. I have now reference to the hon. Minister of the Interior (Hon. Mr. Sifton). He had made a reference to the earnings of the Intercolonial Railway, as hon. gentlemen will see by reference to 'Hansard,' and then he proceeded to say :
The figures that I have given prove that the Intercolonial Railway was able to do a substantial amount of business, and that the Intercolonial was able to do it in competition with the Grand Trunk Railway and the Canadian Pacific Railway ; both lines much shorter than the Intercolonial Railway ; both lines

and this is the point I wish to emphasize-both lines shorter than the new Grand Trunk Pacific Railway line will be. Then, Mr. Speaker, if the Mr. CLANCY.
Intercolonial Railway under its traffic agreement can compete with the short line to Portland and with the short line to St. John, why in the name of common sense cannot, it compete with the new line by way of the Chaudiere Junction ?
We have the evidence now of the hon. Minister of the Interior that such an expenditure is wholly unwarranted. The only reason given for building a shorter line was to enable the transcontinental line to be a competing line. We are told by tile lion. ex-Minister of Bailways and Canals that the Intercolonial Railway is a competing line, and that it will be a better competing line than the proposed short line, as hon. gentlemen may term it, and we have the further evidence of the hon. Minister of the Interior that the Intercolonial Railway is competing, and can compete, with the existing short line. Then, I say you have thrown away $15,000,000 or $16,000,000 of their $51,000,000 in constructing that alleged shorter line through the province of New Brunswick. But you have done more. You have paralleled the Intercolonial Railway. You put a road alongside the Intercolonial Railway when it is stated by one of tbe hon. ministers that the Intercolonial Railway will he a better competing line than the proposed short line, and I say it is the rankest folly to build a road alongside the Intercolonial Railway and thus render tlie Intercolonial Railway less efficient. You will destroy the efficiency of the service for the people living along that line, you build a line to no purpose, and you will enter upon a scheme which is an absolutely unjustifiable one, as a supporter of the government declared from his place in the House last night, and one that he was prepared to "vote against.
Where does the balance of the $51,000,000 go ? The other part of it disappears in the payment of interest. The sum payable in interest will be about $30,000,000.
Now, I want to come to another feature upon which much stress has been laid, and that is the colonization feature of this road. I shall not say anything in regard to the province of Quebec, because I confess to a very limited knowledge of tbe character of the country in that province. I am, therefore, leaving out the question of colonization in New Brunswick and Quebec. I believe that to be a question of general policy, which must be dealt with by itself. But I will take the province of Ontario, and I shall not have one ill word to say of that country.
The hon. member for St. Mary's (Hon. Mr. Tarte) delivered an admirable speech last night, in which he said that both parties 'had faith in the country and I venture to say that for the first time in his whole parliamentary experience, he had seen both sides of the House professing abiding faith in the possibilities of Canada when discussing a controver-

sial policy. It was a feature that he had never witnessed in the course of his whole public life. I believe that the hon. gentleman (Hon. Mr. Tarte) came to parliament a very young man, and he has grown up in wisdom, and experience brought to him by those two greatest schools in Canada. namely : Membership in the House
of Commons and membership in the profession of journalism. The hon. gentleman (Hon. Mr. Tarte) was pleased to notice that no matter what the scheme before this House may be, the present opposition, the Conservative party of Canada, refuse to decry the country when they are discussing it. The opposition in this House, Sir, will use no unworthy weapons in meeting any scheme promulgated by the opposing political party. In that respect they differ from another parliamentary opposition in Canada in days past. The opposition in this House have chosen to examine the scheme itself and to base their criticisms upon its merits or demerits, and I will not go so far even as to tell what I believe to be the whole truth about the country through which this government railway will run. Let me say in general terms, that I believe that part of Canada is worth something. But, if you put colonization roads there to-morrow, the northern part of the older provinces cannot possibly compete with the great west for many years to come. As an evidence of that let me refer to the reports of the Ontario government surveyors, upon which hon. gentlemen opposite have been compelled to rely entirely for their information. There are about 100,000,000 acres of land in that territory, and if you take what is called the clay belt and every patch of agricultural land that can be collected in it. you have something like 15,000,000 or 10,000,000 acres of agricultural land in northern Ontario, nr about one-seventh of the whole. I shall not decry the country ; I need not say more than that. I believe that some day, even perhaps in this generation, young men may go into that territory when the lands in more favourably situated parts of the country are exhausted for agriculture. Sir, I shall not follow the member for Bona-venture (Mr. Marcil) in his manner of justifying the government scheme. He told us that this country would be settled up immediately, when as a matter of fact every one knows that it cannot compete in agricultural possibilities with the fertile lands of the west, for many years to come. The hon. gentleman (Mr. Marcil) proposed to subject French Canadians to be hewers of wood and drawers of water. He told us that there were people in Quebec who would go into that country and grub up stumps. I shall not allow the remarks of the hon. gentleman to dispel from my mind my long-cherished belief, that the French Canadian people are as intelligent and progressive ns any other people in Canada. My experience of them is that they are as much alive to 304i
public questions, that they are as keen in business questions as any other class of our people ; and to say that French Canadians would go into such a country as that and be too dull to see the advantages of the west, is a statement which I for one do not believe. Are our French Canadians or any other Canadians for that matter, less intelligent than the Europeans who are flocking into our west to reap the many advantages which that country possesses ? The hon. gentleman (Mr. Marcil) driven into a corner for an argument in favour of the government scheme, was forced to say that his fellow French Canadians were duller than other people and could not see the advantages of fertile lauds as compared with these regions in the north. It is a slander on the French Canadians, and I do not think, Mr. Speaker, that your own experience has been, that French Canadians will dig up stumps when they can get clear and fertile lands on which to settle.
I have said, Sir, that the question of colonization must be dealt with separately, and I have also said that it would be folly amounting to insanity to subordinate a single feature of a strong national transcontinental competing railway to the idea of colonization. What is going on in the province of Ontario just now ? Commencing at Quebec until we reach the line between Manitoba and Ontario going west, what do we find in the matter of railway construction ? We have the Lake Temiscamingue and Pettawawa River Railway, under the Canadian Pacific Railway, built some distance into that country. We have the Ontario government constructing a line from North Bay and penetrating that country into the fertile lands of Lake Temiscamingue. We have the .Tames' Bay Railway, now under construction, I understand. that will run from Sudbury to Lake Abitibi also in what is called the fertile belt. This has been given by the Ontario government a cash subsidy of $2,000 a mile and a land grant of 5.000 acres a mile for 175 miles running north. AA'e then have the Ontario. Hudson's Bay and Western Railway, that runs from Missanabie Station further west, through the valley of the Missanabie and within forty miles of the clay belt. In order that hon. gentlemen may not be sceptical let me read what this report says :
The southern boundary of this great tract of fertile land is less than 40 miles from the Missanabie Station on the Canadian Pacific Railway, and the country north of the height of land being an immense level belt sloping off towards James Bay, the construction of a railway and wagon roads through every part of it would he comparatively an easy matter.
But that is not ail the railways that are projected or under construction. There is as I have said, the Ontario, Hudson's Bay and Western Railway running from Missanabie station to Moose river or .Tames bay, going through the whole length of that conn-

try. It has from the Ontario government a cash subsidy of $2,000 a mile and a laud grant of 5,000 acres a mile for 240 miles. Then we have from Peninsular Harbour, a station still further west, the Lake Superior Long Lake and Albany River Railway, running from Peninsular Harbour to Hudson's bay. It has a cash subsidy or ten miles of $3,000 a mile from the Ontario government. Then we have the Nepigon Railway, running from Lake Nepigon to Long lake and James bay, also penetrating that country. It has a cash subsidy of $3,000 a mile for the first fourteen miles, which, I believe, are being constructed. Then, we have the Thunder Bay, Nepigon and St. Joe Railway, which runs from Port Arthur to St. Joseph's lake, on the Albany river, which, as you know, forms the boundary line between Keewatin and the province of Ontario. The length of this railway is 225 miles. It has received from the Ontario government a cash subsidy of $2,000 a mile for the first ten miles, which, I understand, are in operation, and a land grant of 5,000 acres a mile for the whole length. It is abundantly clear that an effort is being made in the direction of colonizing that country. I have pointed out seven lines of railway which will be feeders to what in the near future I contemplate will be the Intercolonial Railway of Canada. Much has been said as to the value of developing that northern country. That country has both mining and agricultural features; and, although the latter may be and will be delayed in their development for many years, for the reason I have given, some day the country will be developed and colonization roads will be built through it; but they will be built from other parts of Ontario than from the city of Quebec or the city of Winnipeg into Ontario. The natural flow of capital into that country will not come from either of these quarters. The men who put their money into these schemes are men who live in the great cities of the province of Ontario. No man can be considered sectional because he says that the capital for these purposes is more likely to come from the great cities of the province than from either end of it. Some day it may be found necessary to build a colonization road through that country, or the necessity may never arise. It must depend entirely on the information which may be obtained, and the circumstances which it will disclose.
Now, Mr. Speaker, I have just one matter more which I desire to deal with, and that is with regard to the relative cost of the two schemes before us. I am assuming, as I have a right to assume, that this House will not of necessity consent to the scheme placed before the House by the government.
1 I have a right to assume that hon. members on both sides of this House will exercise their prudence and their independence-will recognize their responsibility, not

Topic:   QUESTIONS.
Subtopic:   THE NATIONAL TRANSCONTINENTAL RAILWAY.
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