1905-05-16

NORTHWEST TERRITORIES REPRESENTATION.

[Stage Direction]
Hon. CHARLES FITZPATRICK (Minister of Justice) moved for leave to introduce a Bill (No. 156) to amend the Northwest Territories Representation Act. He said : I promised to introduce a Bill at the request of the hon. member for Calgary (Mr. M. S. McCarthy) to (amend the Representation Act. It is based practically upon the lines of the Bill introduced last year by Mr. Cas-grain, then member for Montmorency. In this Bill I have added a provision to cover a difficulty that the member for Calgary pointed out with respect to the question of the residence of a voter in the polling subdivision in which he is supposed to vote.
Motion agreed to, and Bill read the first time.

Mr. SPEAKER.: Crown in Chancery to make out a new writ of election for the said electoral district.



THE PORTFOLIO OF PUBLIC WORKS.

Hon. GEO. E. FOSTER.: Yesterday the question was asked as to when the vacancy in the Public Works Department would be filled, and I think the minister who was in charge asked that that question be repeated to-day.


Rt.   H@: I see by the statement just made by His Honour the Speaker, that the seat of North Oxford is uow vacant; and the portfolio of Public Woi'ks is also vacant. I am not in a position to make any statement to-day, but I shall have pleasure in doing so at an early day.



VETERANS OF 1S06 AND 1870.

Mr. F. D. MONK.: Before the Orders of the Day are proceeded with, I would like to ca'll the attention of my right hon. friend to a matter of some urgency, and that is the request that was made a few days ago by the veterans of 1866 and 1870 for a grant of land from the government in recognition of their services. As my right hon. friend is aware, and the matter has been brought to my notice, the provincial legislature of Quebec is going to prorogue very shortly, and many of those interested in the petition which was presented a few days ago to the government are anxious to ofotain some kind of answer from this government before that prorogation takes place, because upon that answer will largely depend the steps they intend to take with the government of Quebec. My right hon. friend will remember that when these gentlemen, who are deserving of the highest consideration, went before the Quebec government they were told by the provincial Prime Minister that their request would more properly be addressed to the federal government. Consequently, they are waiting with some anxiety for the answer of the government here in order that, before prorogation, they may, if necessary, bring the matter once more to the notice of the provincial government, and that the provincial government may, if necessary, obtain legislation for the purpose of satisfying the petitioners. 1 have received several letters in reference to this matter, and have been requested to call the attention of the government to the request of these claimants, and to ask for as prompt an answer as possible.


Rt.   H@: I think it is obvious to any one, and my hon. friend (Mr. Monk) will agree with me, that if the veterans of 1S66 and 1870 have a claim against anybody, it is the Dominion government, although I do not say that the veterans, from .their point of view, have not done well to address themselves to the provincial government. Mr. Mr. SPEAKER.
Gouin, the provincial premier, I do not think went further in his answer than to say that they should first of all address themselves to the Dominion government. This they have done, and the matter is now under consideration. But I must say, and my hon. friend will not be surprised, that up to this moment the government has had no time to take that matter in hand and give it the attention which it will require before we can come to a conclusion. The matter is under consideration, and without making any pledge, I will say that I will give an answer during the present session. When the answer will be given, I am sorry to say that I can give no indication to-day to my bon. friend, but certainly it will be given during the present session.


Mr. R. L. BORDEN.: I may add that this matter has been mentioned to me by some gentlemen* residing in the province of Ontario who were on military service in 1866 and, possibly, in 1870 ; and I would like to make on their behalf the same claim for federal aid that has been made by the hon. member for Jacques Cartier (Mr. Monk) for the veterans of the province of Quebec.



THE DEFAULTING LAND AGENT, NIXON.

George Eulas Foster: I brought a matter to the attention of the Minister of the Interior six or seven days ago, one in regard to which it should not have taken him a very long time to furnish the information. It is a matter which is a little urgent and pressing, and I would like to call the attention of the First Minister to it. The new Minister of the Interior is not as punctual in getting in here at three o'clock as some of the older ministers, for instance, my hon. friend the Minister of Customs, and that is the only period when we can well refer to the matter without delaying proceedings. If the First Minister will mention it to him, I will bring the matter up to-morrow.


Sir WILFRID LAURIER.: I have no objection. If the Minister of the Interior does not come in before the House rises to-day the hon. gentleman will have his answer, because it is ready.



PROVINCIAL GOVERNMENT IN THE NORTHWEST.

[Stage Direction]
House again in committee on Bill (No. 69) to establish and provide for the government of the province of Alberta.-(Sir Wilfrid Laurier.
On section 22,
Nothing in this Act shall in any way prejudice or affect the rights of properties of the Hudson Bay Company acquired, held or existing under and by virtue of the conditions of the deed under which that company surrendered Rupert's Land to the Crown.

Hon. CHARLES FITZPATRICK (Minister of Justice) moved that the following he substituted in lieu of section 22 :
Nothing in this Act shall in any way prejudice or affect the rights or properties of the Hudson Bay Company as contained in the conditions under which that company surrendered Rupert's Land to the Crown, and all rights, privileges and properties conferred on the Canadian government by the said conditions, shall, in so far as they relate to matters within the legislative authority of the province, belong to and be vested in the government of the said province.
Mr. W. F. MACLEAN.: I asked the hon. Minister of Justice last night why it was necessary to protect these rights. To my mind, if they have rights, they are protected by the original agreement and why should we go out of our way to protect these rights in this clause and especially in the clause succeeding ?


Mr. FITZPATRICK.: My hon. friend (Mr. Maclean) is aware that when the imperial government acquired this property from the Hudson Bay Company they acquired it subject to certain conditions which are mentioned in the title. The property was vested in the Queen in the right of the imperial parliament, and was handed over to the Dominion government subject to the same conditions as those under which the property passed from the company. The only condition of the original surrender which this section is intended to cover is the condition repeated in section 11 of the Order in Council under which the property was banded over to the Dominion and which reads as follows :
The company is to be at liberty to carry on its trade without hindrance in its corporate capacity, and no exceptional tax is to be placed on the company's land, trade or servants, nor any import duties on goods introduced by them previous to the surrender of 1870.
That last question of the import duties has ceased to be of any effect. It was merely applicable to goods imported into the country previous to the surrender of 1870.


William Findlay Maclean: Are not these rights protected by the original agreement without any restatement in this Act ?


Charles Fitzpatrick: That may be my hon. friend's view. I do not think it is the correct view and it was not the view taken at the time that Manitoba was admitted into the Dominion as a province. This provision is adopted from the Manitoba Act.
Section as amended, agreed to.
On section 23, .
The powers hereby granted to the said province shall be exercised subject to the provisions of section 16 of the contract set forth in the schedule to chapter 1 of the statutes
of 1881, being an Act respecting the Canadian Pacific Railway Company.


William Findlay Maclean: I urge the same objection in this case with even more force. Why should we go out of our way to protect the exemption the Canadian Pacific Railway has in its original contract V This may also have been in the Manitoba Act.


Charles Fitzpatrick: No, it is not there.


William Findlay Maclean: Whatever rights the Canadian Pacific Railway has under the contract made with the Dominion government are set out in an Act of parliament and there is no reason why we should reenact this legislation. It is almost emphasizing its claim. This claim, in a way, lias been in the courts and the matter has caused a great deal of dissatisfaction to the people in the west. This may be reinforcing the claim and we may be abandoning something that is of interest to the public by re-enacting this clause. Whatever rights the Canadian Pacific Railway has are set out in black and white in a solemn contract which has been made an Act of parliament and they ought to rest there and not be brought into this Act. On the contrary it ought to be the duty of the government to ascertain exactly what the rights of the Canadian Pacific Railway are in regard to these exemptions,, and If they are burdensome, as they appear to be burdensome to the people of the Northwest Territories, it should negotiate with the Canadian Pacific Railway for the surrender of any rights which it may have as to exemptions. We all know, because we have heard from the west year after year, about the grievance that exists there in regard to these exemptions. There is the Canadian Pacific Railway, the wealthiest corporation in this country. It.is paying large dividends on its stock. It is making handsome profits every year. It is the richest corporation we have in Canada. The company has great possessions in the shape of land's in the west on which it pays no taxes. The poor settler in the west is paying his taxes while the Canadian Pacific Railway pays no taxes. Grant that the Canadian Pacific Railway has a right ; if that right could be commuted and if these lauds could be immediately made subject to taxation an effort should be made to abolish this exemption. In the province of Ontario we know what tax exemptions are. They are an enormous burden on the people who have to pay taxes. In the city of Toronto there are millions and millions of dollars worth of property of the most valuable kind which is increasing in value every day and which is yet untaxed. It is relieved from taxation by reason of exemptions granted years and years ago. We have had some of these exemptions removed. We have given a great deal of attention to the question of exemption from taxation in the province of Ontario.

Gradually we are removing these exemptions. More and more we are asking the people who are exempt to pay their 'taxes. Take, for instance, the situation here in Ottawa ; the citizens of Ottawa find it a great grievance to have so much Dominion property exempted from taxation and the government, recognizing that condition of affairs, is making liberal concessions to the people of Ottawa in the way of the improvement of the city and in other ways. In this way the Dominion is contributing to municipal taxation. We were told in the House the other day that Wellington street in front of these grounds is to be paved at the expense of the Dominion authorities. I say much more ought the poor settler of the west to have this grievance removed whereby he is to-day paying the municipal taxation of the Canadian Pacific Railway, one of the richest corporations in the country, and whose land which was at one time valued at $1 an acre is to-day worth $5 an acre upwards. If that is the case some effort should be made in the interest of the settlers of the west to remove this exemption and above all things we should not by this Bill re-enact the rights of the Canadian Pacific Railway whatever they are. Leave their rights to look after themselves. The Canadian Pacific Railway can look after them in the courts. I do not think it is in the public interest that this clause should be introduced into the Bill and I would ask the government not only to withdraw this clause but to take into its serious consideration the necessity of negotiating with the Canadian Pacific Railway for the commutation of its rights in this respect, so that the lands of the Canadian Pacific Railway in the west shall pay their proper share of the municipal taxation.
(Sir WIDFRUD LAURIER. Mr. Chairman, the argument of my hon. friend (Mr. W. F. Maclean) is not at all directed against this clause. He has ended his argument as he commenced it, by stating that the government should enter into negotiations with the Canadian Pacific Railway in order to obtain from them a commutation of their rights, improvidently granted to them, I admit, but which were granted at the time that they were organized into a company for this national undertaking. I do not dispute there may be something in that. Some day or other I have no doubt this line of action may have to be taken into consideration and acted upon. I am conscious for my part that as the country advances this burden will become intolerable to the people of the new provinces, and even to the Dominion government itself, because it is not only the provinces which have been restrained, the Dominion government has been restrained also. But if that be so, if you are to negotiate with the Canadian Pacific Railway Company, that is an admission that they have acquired a right, that they have a vested right by legislation.


William Findlay Maclean: 


William Findlay Maclean: We do not admit anything in the law.


Wilfrid Laurier: Does my hon. friend pretend that when we have passed a law-and I agree with my hon. friend that It was not proper legislation-but there it is and under it the Canadian Pacific Railway have obtained certain rights to which they are entitled. What is the contention of my hon. friend? Does he pretend that we should withdraw this clause and give to the new provinces the power to legislate and to tax the Canadian Pacific Railway ? Let me call the attention of my hon. friend once more to the clause of the statute in that respect:
The Canadian Pacific Railway and all stations, and station grounds, workshops, buildings, yards and other property, rolling stock and appurtenances required and used tor the construction and working thereof, and the capital stock of the company, shall be for ever free from taxation by the Dominion, or by any province hereafter to be established, or by any municipal corporation therein.
Well, Sir, it is evident to me that the Dominion government not only undertook for themselves never to tax the stock and property of the Canadian Pacific Railway, but they undertook also to see and to make themselves answerable to the company that the same exclusion shall be imposed on any province which may hereafter be created, and we could not excise this clause not only without breaking faith with the Canadian Pacific Railway but without making ourselves liable for any loss they might incur by being subjected to taxation.


William Findlay Maclean: I want to bring the matter before the right hon. gentleman in another way. Here is a copy of a petition which has been presented to this House :
Whereas in the division of the Northwest Territories into two provinces, arrangements are made for a perpetual exemption from taxation of the property of the Canadian Pacific Railway.
And whereas, such legislation is contrary to public policy and sound legislation, and inasmuch as such legislation binds the freedom of people yet unborn and forever limits the scope of legislation in matters which are by right the sole business of the people who now live or will live in the said provinces.
And whereas such legislation cannot he morally passed by men who are elected for a maximum of hve years and are then trustees for the people.
And whereas, this unjust privilege has already been enjoyed by the company for nearly a whole generation, and inasmuch as one generation cannot morally dictate the terms upon which another generation may live, and use the earth, any such privilege granted them in the past must be continually renewed in order to keep it alive.
It therefore follows that this legislation is a fresh exemption and is practically an injustice.
We therefore pray that this exemption clause be struck out and the provinces he allowed to

tax the property of this and all other corporations just as are the other provinces.
And your petitioners will ever pray.
That may be a rather far-fetched resolution but it points to a grievance. Hon. gentlemen say the King's government must be carried on. So it must, but the King's government must also dea I with the grievances, to give better and improved laws te the people, and now that this grievance does exist 1 say it is the duty of the government to remedy it. They may be bound by the clause in the original charter just read, they may be bound to put this clause in the Bill but they are also bound in some way to secure commutation of this right that the Canadian Pacific Railway have acquired. The Canadian Pacific Railway had other rights in the original charter; they had the right to prevent the running of lines to the American boundary ; they had also certain rights 'which they surrendered in the negotiations in connection with the building of the Crow's Nest Pass Railway, but the grievances in connection with the law which prohibit the building of lines and the grievances which existed in regard to the freight rates which were commuted at the time of the building of the Crow's Nest Pass Railway were not equal to the grievances which exist now in regard to this exemption from municipal taxation. We are asking settlers to come to Canada, to take up lands, to go to the great wheat fields of the Northwest, to settle there, establish themselves on farms and bring up their families and in order to give the poor man a fair show-and every man is entitled to a fair show-I say that some steps should be taken by this parliament to commute these rights of the Canadian Pacific Railway' in regard to exemption, and while the hon. gentleman may say that lie is obeying the law he may state what is true, but he has a duty to discharge to the people of the west and I am surprised that the Minister of the Interior (Mr. Oliver) does not spefik for the people of the west in this matter, and that all the members from the west are not aiding in it. I hope he will join with me because in other days he did join with me on tile floor of this House in pointing out how widespread and serious this grievance was to the -poor settlers in the west. I am not proposing any confiscation here to-day, but I am asking the members from the west to join with me in pressing upon the government to secure in some way commutation of this right to exemption now enjoyed by the -Canadian Pacific Railway which we acknowledge to-day by this clause. I say it is not progressive legislation. We are actually committing, as I believe, a wrong. We may be respecting a right of the Canadian Pacific Railway, but we are permitting a wrong against the settlers of the west. The Canadian Pacific
Railway is well able to pay this taxation. It is a rich company, it is increasing its service every year, it is expanding anc}, as one of its directors said the other day, there is no other railway company in the world whose credit is so good and which can borrow money so cheaply as the Canadian Pacific Railway. If that is the case why should the richest corporation in Canada, the company in receipt' of the largest revenue -and which has the greatest prospects in the world, have this exemption which the poor man has not ? It may have been improvident legislation when it was made originally, but it is worse than improvident to allow it to continue if there is some way of securing its removal, and I believe there is a way for securing its removal ; that is by negotiation with the Canadian Pacific Railway just as Sir John Macdonald cancelled the right to prevent lines running to the American boundary and the right hon. gentleman (Sir Wilfrid Tanner) cancelled their rights in regard to certain freight rates, when he made his arrangement with them for the building of the Crow's Nest Pass Railway. Now let him come forward and let him negotiate and in some way remove this grievance, a most substantial grievance as it has proved to be to the settlers of the west. In the province of Manitoba the Canadian Pacific Railway pays municipal taxes on their lands, but they do not in the west, and yet for some of their lands in the west they are getting $10 and $20 an acre, and as soon as the lands are sold they are of course liable to municipal taxes. But as long as the Canadian Pacific Railway hold them they pay no taxes on them, and I say to the right hon. gentleman and to the members from the west that I hope they will join with me in urging upon the government to do something to remove this grievance and not to re-enact it as they propose to do by this clause in the Bill.


Wilfrid Laurier: My hon. friend has changed his front and very properly so. The ground he took at first was that we should have clause 23 of this Bill excised altogether ; now he says that it would not be possible to do so without being guilty of a breach of faith with the Canadian Pacific Railway. He quite understands that that would be altogether reprehensible ; we cannot do that. We have to abide by agreements whether they are good or bad. My hon. friend says we are committing a great wrong to the settlers of the Northwest Territories. We are committing no wrong towards the settlers but a great wrong was committed towards them twenty years ago when this Bill was passed against the protest of the party to which I belong. We pointed out then the very thing which is pointed out by my hon. friend, the great mistake, the very great mistake of passing such legislation.

Our protest was unheeded, the contract became law, and if it is law it must remain law until another law can be substituted for it, but not in the manner suggested by my hon. friend (Mr. W. F. Maclean). I must say to my hon. friend that there are two classes of exemptions in this Bill. There is exemption in respect to the property of the Canadian Pacific Railway and there is also' exemption of their lands. The exemption on their lands is in process of extinguishment ; that exemption is to last only twenty years, and it is in process of extinguishment now. We have had a judicial decision on that and in the course of twenty years that exemption will become extinct.
But the exemptions of the stations and the station grounds, the workshops, buildings, lolling stock, capital stock, road-bed, Ac., are there, and there for ever. My hon. friend says this is a grievance which ought to be remedied. There is only one of two ways in which it can be remedied that is, by the government negotiating and agreeing to pay a certain sum to the Canadian Pacific Railway Company, or by this parliament passing a law to expropriate the exemption. X do not say that we may not have to come to that. I dare say that it is possible and more than possible that we may have to come to that eventually. But that question has nothing at all to do with the present legislation ; it stands quite apart from this legislation. "We have been petitioned by the legislature of the Northwest Territories to grant them provincial autonomy ; we are in process of doing so ; but they must take it such as it is, with all the exemptions created by law. So long as we comply with their request, we can only give them what it is in our power to give them.


Mr. HAGGART.: I expressed my opinion on this question pretty fully the other day. My contention is that the Dominion government had no power to enter into an arrangement with the Canadian Pacific Railway Company, by which it bound itself, when a province was to be created out of the territory, to see that the company's property was exempt from taxation.


Wilfrid Laurier: Is that agreement null and void ?


John Graham Haggart: That agreement, so far as it refers to a province, is null and void. That is my contention. As to the moral obligation, that is another thing. Although tlie government may not be legally bound by the agreement with the Canadian Pacific Railway Company, they may be morally bound, which is quite another thing. This parliament has no power to limit the constitutional rights of a province in regard to legislation by inserting any such clause. It may be good as a notice that there is such an agreement ; but the province, when it cnooses to legislate on the subject, can legislate itself out of any imposition of that Sir WILFRID LAURIER.
kind. You have not full power to create a province under the Act of 1871. You are bound by the provisions of the British North America Act. By no Bill of ours can we limit the power of the province. The hon. Minister of Justice steers pretty clear of that question. He is in a quandary between the powers he has claimed under the Act of 1871, and the limitations and proscriptions of the Act of 1867. He brings them into force in the Autonomy Bill by a statement that all the powers granted to the province by the British North America Act shall be given to this particular province, except those which are expressly excluded by the Act. My contention is that the bargain that was made between the Dominion government and the Canadian Pacific Railway Company by which the government bound themselves when a province was being constituted out of the Territories to limit the powers of the province, was ultra vires of the Dominion parliament.


Wilfrid Laurier: I would like my hon. friend from South York (Mr. W. F. Maclean) to ponder over the argument we have just heard from the hon. member for South I.anark (Mr. Haggart). If I understood aright the argument of the hOD. member for South York, it was that we shall enter into negotiations with the Canadian Pacific Railway Company to compensate it for the exemption given to them in 1881.


William Findlay Maclean: If necessary.


Wilfrid Laurier: Well, if we negotiate with them, they will say it is necessary. My hon. friend has no great faith in corporations-I do not think he has much faith in the Canadian Pacific Railway Company-and he knows that they will ask for all they can get. So if we go to the Canadian Pacific Railway Company to negotiate for relief from the exemption which was given them in 1881 from taxation by this Dominion and by the provinces also, the Canadian Pacific Railway Company will answer us at once : We have a double exemption, the exemption from taxation by the Dominion and we value that at so much, say $1,000,000 or $2,000,000 ; we also have exemption from taxation by the province, and we value that at say $2,000,000 more. But my hon. friend from South Lanark says the company have no exemption from taxation so far as the province is concerned, and therefore if we negotiate with the company, we would pay them for what they have not. We had better wait, then, until it is decided judicially whether the contention of the hon. member for Lanark is right or not. Until such time as the courts decide, if they so decide, that the provisions so far as the province is concerned are null and void, we shall have so much less to pay to the Canadian Pacific Railway Company than we would to-day if we entered into negotiations with them. So my hon. friend

will agree that we have acted wisely in inserting this clause in the Bill. If the contention of my hon. friend from Lanark is right, I have no doubt what will he the action of the new legislature of Alberta. My hon. friend says that this clause by which we continue the exemption of the Canadian Pacific Railway property from taxation is absolutely7 null and void, that it is not worth the paper on which it is written. If that be so, the legislature of the province of Alberta will next session pass an Act to tax the property of the Canadian Pacific Railway Company7, and then the question will have to be determined by the courts. If the courts decide that the statute passed in 1881 was ultra vires of this parliament and that we could not impose any such exemption of taxation on the new province, then, when we come to negotiate with the Canadian Pacific Railway7 Company, we shall have to negotiate with regard to taxation only so far as the Dominion is concerned. and not at all so far as the province is concerned. Is that not full justification of our policy and is not my hon. friend satisfied that in this, as in many other' instances, he has been speaking before going into the subject and is altogether too quick in jumping at conclusions ?


William Findlay Maclean: Is it not evident now that I spoke most timely and that good has come out of the discussion, because the, First Minister has expressed himself as largely governed by the opinion of the hon. member for Lanark (Mr. Haggart), and that hon. gentleman is of the opinion that the claim of the Canadian Pacific Railway is not worth anything ? But the First Minister is putting into this 'Bill a clause that is ultra vires, if the contention of the hon. member for Lanark is well founded. In the old days the right hon. gentleman denounced the Canadian Pacific Railway contract as a most improvident bargain and he appealed to the people : Put me in power and 1 will remedy your grievance. He sang two songs then but he is only singing one now. He is only singing the song of the improvident bargain now, but I would ask him to sing the other one and remedy the grievance. According to the British North America, Act each province has the right to impose direct taxation within the province in order to the raising of a revenue for provincial purposes. The province of Ontario is to-day exercising that right with regard to the railways in that province, and the legislatures of these new provinces will be able to tax the Canadian Pacific Railway notwithstanding these exemptions. That is a right which this parliament cannot take away from the province. Within the exclusive powers of provincial legislature there is also by subsection 1 of clause 92 :
The amendment from time to time, notwithstanding anything in this Act, of the constitution of the province, except as regards the office of Lieutenant Governor.
That being the ease and the jurisdiction of municipalities being a matter within provincial control, no act of ours, no contract or statute, can affect that jurisdiction ; and if the right hon. gentleman persists with this legislation, the best the two provinces can do. as soon as they are organized, will be to pass such legislation as will compel the Canadian Pacific Railway to pay taxes. And if the new provinces cannot reach the Canadian Pacific Railway by means of municipal taxation, they can reach that company under the clause giving the provinces the right to impose direct taxation.


Wilfrid Laurier: Everything said by my hon. friend is a vindication of the government. The construction of the hon. member for Lanark may be right hut there are others who think he is wrong. It is a question on which I offer no opinion.
It is one of those mysterious questions of law which had best be left to the judges to decide. But in the meantime there are two sides to it. There are some who pretend that the Act of 1881 is good and valid, and there are others who, like my hon. friend from Lanark, take the opposite view. If it is right and valid, we have to comply with it; but if it is null and void, so much the better.


Mr. SCOTT.: As a taxpayer in the proposed province of Saskatchewan, I would be delighted if the hon. member for Lanark and the hon. member for South York were right in their contention that this legislation will he found to he ultra vires and that the provinces will have the power, regardless of this legislation and the Canadian Pacific Railway contract, to tax the Canadian Pacific Railway. But the facts, as we have them so far, are against that contention. We all know that our courts are governed to a considerable extent by precedent and unfortunately we have a precedent against us in this very matter. A portion of the Northwest Territories was added to the province of Manitoba in 1881 and a similar provision to this was put in the Bill adding that area to Manitoba. Litigation ensued and a few weeks ago a decision was handed down by the Supreme Court of Canada, which is entirely against the contention of my hon. friends. A municipality in the added portion of Manitoba levied taxes upon the Canadian Pacific Railway. The Canadian Pacific Railway protested and a suit was carried) through the courts in Manitoba. The judgment in Manitoba was in favour of the company and has been upheld by the Supreme Court of Canada. The hon. member for South Yrork Is perfectly right however in his contention that this is a very serious matter for the * new provinces. On the second reading of the Bill. I explained that it was the detail which gave the greatest amount of difficulty. As the matter stood in January last, the "situation has become changed in some degree by the Supreme Court judgment



-given in the meantime-it was my very pronounced opinion that it would have been advisable that this subject of autonomy should be left pending until the tax matter was in a more determined stage. Practically three months have been spent by this House in discussing what is called a limitation on the autonomy granted the new provinces ; and with all deference to my hou. friends opposite, the matter they have held this House talking about all this time does not compare in importance with the limitation of autonomy contained in this section 23 of the Bill. If we left the people of the Territories absolutely free with regard to education, they would retain the system they have there at present. Ninety-nine out of every hundred are entirely satisfied with the present system of separate schools. But this tax limitation does make a difference and a very material difference. This is a real and substantial limitation which is placed on their autonomy.


Mr. OLIVER.: By the late government.


Thomas Walter Scott: By the late government. It must be one of the hon. member for South York's handsprings which the Conservative government turned for this corporation.


William Findlay Maclean: When did I say that ?


Thomas Walter Scott: Not very long ago.


William Findlay Maclean: Of what government ?


Thomas Walter Scott: Of every legislature in this country. The hon. gentleman lectures members from the Northwest Territories about principles and compromises. I would suggest that he should abstain from compromising his common sense so frequently as he does in this House. He gave as a reason why independent legislatures should be created and endowed with resources, that all legislatures were corrupt and turning handsprings at the bidding of corporations. I am inclined to agree with him that section 23 is unnecessary. That section says :
The powers hereby granted to the said provinces shall be exercised subject to the provisions of section 16 of the contract set forth in the schedule to chapter 1 of the statute of 1881, being an Act respecting the Canadian Pacific Railway Company.
If that clause were not in the Bill at all, the relations between the provincial government and the Canadian Pacific Railway would still be fixed by the statute of this parliament embodying the Canadian Pacific Railway contract. I may say that I am * very pleased indeed to hear the words of the right hon. Prime Minister (Sir Wilfrid Laurier) indicating that it is the intention of this government, and that it will be the duty of this parliament, as soon as possible, to cancel the rights possessed by the Canadian Pacific Railway Company in this con- ' Mr. SCOTT.
nection by means of either the ordinary powers of expropriation or


William Findlay Maclean: Did the leader of the government (Sir Wilfrid Laurier) make that statement this afternoon ?


Thomas Walter Scott: I understood him to make that statement this afternoon. Certainly he made that statement on the 21st of February in introducing these measures, and I understood him to repeat this afternoon his intimation that it would be the duty of parliament to revoke in some way these rights which the corporation holds under the contract. If there is any necessity for putting section 23 in the Bills, there is an equal reason for putting something additional in the Bills to give some tangible intimation to the people of these provinces and the people of Canada that that is the intention of parliament. I wish to suggest to the government the addition of a few words. I would move that the section be amended by adding the following words :
Provided that the foregoing shall not prejudice the right of the parliament of Canada, by expropriation or otherwise to obtain the relinquishment by said company of the company's rights under section 16 of the contract aforesaid.
I am not a lawyer. I have myself drafted these words and if the government and the House assent to the principle of my suggestion it may be found necessary to recast what I have suggested.


Charles Fitzpatrick: I have not had an opportunity to consider this amendment, and therefore am not able to advise about it. But, at first sight, I would suggest that it is unnecessary. Just now, we are giving effect to a contract entered into with the Canadian Pacific Railway; and it seems to me that if we did not enact the clause we should toe guilty of a violation of every canon of decency and good faith. The right of this company to exemption of taxation in the Northwest and in that part of Manitoba which formed part of the Northwest Territories in 18S1 is 'based on section 10 of the contract between the syndicate, now represented by the company, and the Crown, represented by the government of that day. The contract is dated 21st October, 1880, and forms part of the statute 44 Victoria, Chapter 1. This section 10 to which we are practically giving effect to-day is as follows :
The Canadian Pacific Railway and all stations and station grounds, work shops, buildings, yards and other property, rolling stock and appurtenances required and used for the construction and working thereof, and the capital stock of the company, shall be for ever free from taxation by the Dominion, or by any province hereafter to be established, or by any municipal corporation therein ; and lands of the company, in the Northwest Territories, until they are either sold or occupied, shall also

be free from sueh taxation for 20 years after i tile grant thereof from the Crown.	i
This provision, of course, was ratified j aed approved of by parliament by means , of the statute to which I have just referred. No property of the company within [DOT], the limits I have described has been subject to taxation from the time the railway was constructed up to the present. That -contract, in my opinion, created a solemn obligation on the part of the Crown, ratified by parliament ; and I submit that nothing can be done, justly, by this parliament to impair that solemn obligation.


Robert Laird Borden: I thought there was another statute which expressly provided-


Charles Fitzpatrick: I am just coming to that. I would like the committee to take note of the fact that the section I have quoted provides expressly for the case we are now dealing with, that is to say, the formation of the Northwest Territories into a province. Now, this exemption is to extend to any province thereafter-that is after the section has been passed-to be established. The Act to which the leader of the opposition has referred. I presume, is 44 Victoria, Chapter 14, which provides for the extension of the boundaries of the province of Manitoba. Subsection (b) of section 2 of that Act provides as follows :
(b) The said increased limit and the territory thereby added to the province of Manitoba shall be subject to all sueh provisions as may have been or shall hereafter be enacted, respecting the Canadian Pacific Railway and the lands to be granted in aid thereof.
So that this parliament has given legislative sanction to the obligation we assumed under the original contract. My hon. friend from West Assiniboia (Mr. Scott) suggested that this matter was up for consideration incidentally in the Supreme Court in connection with a number of cases of municipalities, two in the Northwest Territories and one in Manitoba. These cases were to test the validity of by-laws taxing for school purposes the Canadian Pacific Railway Company's lands. In that case the argument was put forward that if Manitoba chose to commit a breach of this agreement by taxing these lands, there was no power to prevent this. Thus there was a direct test of the validity of this enactment. The point was dealt with by Mr. Justice Nesbitt who said in delivering judgment :
la the case of the tax levied in the Northwest Territories, to give effect to the contention of the appellants would, in reality, be to hold that the contract did not exempt the land while in the Northwest Territories, but to make it subject to taxation and to be exempt only when the contingency of provincial autonomy occurred, if It ever did occur within twenty years from the issue of the patents. Such a construction is so opposed to good sense and good faith and so foreign to the object of the contract that 1934
apparently it never occurred to any one until after the opening of the argument of the case before the court in Manitoba. In my view the company's lands to be earned by building the railway were exempted for twenty years from the issue of the patent, from any Dominion taxation, or from provincial or muncipal taxation, by any bodies subsequently obtaining provincial or municipal authorities in respect of such lands.
There is the opinion of a distinguished judge of the Supreme Court on this very point. And, in the face of the statute and of this construction put upon the statute, I conceive that it would be an absolute impossibility for us to do otherwise than to give effect to the provision of the contract I have referred to. As to the question whether we shall negotiate with the company to obtain a release from them of the rights under the agreement, that is a matter of policy and one that I have nothing to do with now. What I have to do with is to give effect to a solemn parliamentary contract.


Robert Laird Borden: Of course, in the case to which my hon. friend the Minister of Justice (Mr. Fitzpatrick) has made an allusion, Mr. Justice Nesbitt in the portion of the judgment dealing with the exemption in the province of Manitoba based his judgment to some extent at least on the ground that Manitoba had not attempted to repeal the provision.


Charles Fitzpatrick: That is not the point I referred to at all, I referred to the Northwest Territories.


Robert Laird Borden: 
Thomas Walter Scott: Do I understand the hon. gentleman to say that his opinion is that the province would have rights of expropriation ?


Robert Laird Borden: They would have the right of expropriation, that would necessarily follow of course if the assumption which I made in dealing with the question were a correct assumption. I said that I was not quite sure whether this would operate as a constitutional limitation, in which case the provincial legislature would have no power to deal with the matter at ab that is, if we have the power to restrict the legislature in that regard-or whe-tuer it was intended as simplv a notice to the legislature that the Crown had entered into a contract which ought to be observed by the new legislature. If I did not make myself clear, let me repeat for a moment what I said in order that I may do so. This ' parliament has the power to deal with the subject matter of section 16 of the O.P.R. contract so far as it relates to Dominion : taxation, and we would not be willing to 1 deal with it otherwise then upon terms -absolutely fair to the Canadian Pacific 1 Mr. R. L. BORDEN.
Railway, that is. we ought not to expropriate without compensation. If the legislative power were confided to the new province it would stand exactly in the same position. The Crown is represented in the province and the Crown is represented in the Dominion. The Crown made a contract, the Dominion parliament can deal with it so far as the Dominion is concerned, and the legislature of the province can deal with it so far as the province is concerned, if such power is j conferred by this parliament in establish-j ing the new province. Well, what is the position we are in to-day in that regard? I am as strongly in favour as any man can he of absolutely observing contracts. If we handed over the subject matter of clause 16, so far as provincial and municipal taxation is concerned, to the new province, I would regard it as absolutely essential that the province, in attempting to-dea-1 with that matter, should deal with it upon the just and fair terms which would be incumbent upon this parliament if we were dealing with it. For example, if the Prime Minister should adopt the suggestion of my hon. friend from West Assiniboia and should attempt to relieve the people of the Northwest, and indeed relieve the Dominion as a whole from this exemption, parliament could only do it upon perfectly fair terms.
In that connection let me say that possibly some of us in this country are not fully alive to what may be done in the way of taxation by the new provinces. In considering that question a little as it presents itself to-day in Manitoba, I find that the province of Manitoba has passed a statute, which is to be found in the consolidated statutes of Manitoba, 1902, volume 2, chapter 166, and which in effect provides that every railway company shall pay to the province such part of its gross earnings, not exceeding three per cent, as the lieutenant governor in Council shall determine. Under-that statute the province of Manitoba has levied taxation upon the gross earnings of the Canadian Pacific Railway, and during the year 1904 they collected from the Canadian Pacific Railway, under the terms of that statute, no less a sum than $56,450. So that although the lands and buildings and other properties of the railway are exempt from taxation, it would appear-
I do not know that the question has been tested in the courts-but it would appear that notwithstanding this provision in the contract of 1881, the new provinces may, in the exercise of the same rights as those exercised by Manitoba, tax the gross earnings of the company, although they cannot tax its lands and property. Therefore the grievance in the Northwest Territories might not be found so great as has been suggested. I myself, two years ago, in the session of 1903. when the members from the Northwest were pressing strongly upon the attention of parliament the discontent

and dissatisfaction which had been created in the Northwest by this tax Exemption, suggested to the Prime Minister that if that discontent and dissatisfaction prevailed to so great an extent as had been represented, and if it were likely to obstruct the flow of immigration into those Territories, it would be a reasonable thing lor the government to consider forthwith the project of entering into negotiations with the Canadian Pacific Railway Company for the purpose of doing away with this exemption, and I was prepared to support a reasonable measure for the purpose of removing this exemption at the expense of the people* of Canada as a whole, because I thought it would be in the Interest of the people as a whole to do so rather than to have immigration obstructed and the development of the Northwest arrested. So -far as this provision is concerned, I would like to have the view of my hon. friend the Minister of Justice-either to-day or at some convenient time, if lie does not feel disposed to answer to-day, because, being of the same profession as the Minister of Justice, I realize that it is much easier sometimes to ask a question than to answer it offhand-whether he would regard this as a constitutional limitation upon the powers of the new province, or whether it might not be its true effect that the Crown, having made a contract, is bound to carry it out- in good faith in so far as the Dominion as a whole is concerned; and thus while we retain the legislative power in the Dominion, so far as exemption from Dominion taxation is concerned, we are really handing over the legislative power to the new province to be exercised by it in so far as section 16 of the contract concerns provincial taxation by municipalities within the province.
To sum up once more : the Crown has made a contract and parliament o.ught to observe that contract. The advisers of the Crown must insist always that parlia

ment shall observe that contract. They would be perfectly justified in resigning if parliament did not see fit to do so and any subsequent advisers of the Crown ought to pursue the same course. But. after all, under the terms of section 23, will not that remain, as far as the Dominion is concerned, a matter for consideration by the Dominion parliament in connection with anv action of the Dominion executive and will it not, in so far as the province or the municipalities are concerned, remain a matter for legislative action within the province by the legislature of the province acting in connection with the provincial executive ? It is a questiou which I have not as fully considered as I would like to have done, but it struck me in listening to the arguments which have been made upon the question and in listening to the explanation of the hon. Minister of Justice that possibly after all that might be the true
result, and 1 do not think the result is one which may be regarded as very prejudicial to the interests of the Canadian Pacific Railway. I do not think that any statute which should be passed by the legislature of the province, except on fair terms in respect to the contract entered into by the Crown manv years ago, is one which should be approved by the Dominion executive in whom, of course, rests the final decision by wav of disallowance.


Charles Fitzpatrick: As I said on a previous occasion in connection with this debate, this is one of the two clauses-of this Bill for which I am personally responsible. I would like to say that this particular clause was drafted for the purpose of imposing a constitutional limitation on the legislature of the new province. The view 1 took of the matter was that by virtue of section 16 of the contract we had constitutionally-I will not say hound ourselves for all time, because parliament has the power to do what is wrong-but constitutionally we bound ourselves to observe this provision in_the contract with the Canadian Pacific Railway. and we bound ourselves not only to observe it ourselves, but to see that when a province was created, which province would have jurisdiction over these Territories, it would effectually carry out that contract, and therefore, I think that we should enact a provision which would prevent the legislature-and I do not for a moment suggest that it would do such a thing * front in any way legislating in any such way as to interfere with the provisions or that contract.


Robert Laird Borden: I quite appreciate what the hon. Minister of Justice lias said. Of course, I am presenting it from the standpoint that we would not necessarily suppose any greater danger of violation of the terms of the contract by the legislature of the province than tliat which we might apprehend from any future parliament of Cana'da. Therefore, I think that possibly in that view the section might have beeu intended to distribute the exercise of legislative power in future between the parliament of Canada on the one hand and the legislature ot the province on the other hand. That, as I said before, might not be regarded as prejudicial to the interests of the company.


Mr. GALLIHER.: If it is necessary to carry out the legislation passed in 1881, in so far as the Dominion parliament had power to legislate in regard to this exemption from taxation of the Canadian Pacific Railway, to insert a clause in this Act, or in I tiTe Acts creating these provinces, such as clause 23. then, I perfectly agree with the position that the government are taking in the matter, but if it is not necessary then

I want some more light on the subject. I think it will be admitted that the Dominion parliament in 1881 had power to legislate as to this exemption up to the time that these unorganized Territories, should be created into provinces. While these were unorganized Territories, and while they were not formed into provinces the only way by which that legislation could be interfered with would be by a repeal of the statute. That, of course has not taken place up to the present flme nor should it have taken place, because, in so far as the Dominion parliament in 18S1 had power to legislate on the subject, I agree with the contention that it is the duty of this parliament to observe and maintain that compact. As my bon. friend beside me says it is a contract. I have not been able to give as much attention to this matter as I should have, and I may be wrong, but this question strikes me :	Had the parliament of
Canada, in 1881, power to legislate for these unorganized Territories beyond the time that they remained unorganized Territories and to extend the operation of that legislation to the time after they became provinces ? If they had the power to do so we are right still in continuing the exemption that is proposed here, but if they had not the power to do so, if when these unorganized Territories are created into provinces they should have the right under the British North America Act to deal exclusively with the subject of taxation then this question suggests itself to me :	Are we
justified in making good, as I believe we would be by this provision, what might have been an excessive power exercised by the Dominion parliament at the time that this legislation was enacted in 18S1 ? If that could be made clear to me I could quite easily see the position of the government and of those who are supporting it on the other side of the House. But, I would like to see the necessity for enacting this section 23. If we were to put something into this Bill which would destroy the rights of the Canadian Pacific Railway under the enactment of 1881 we would be doing wrong just as much as we would be ciotng wrong by repealing the Act, but if we leave that absolutely alone, if we are absolutely silent in these Bills creating these provinces as to the exemption clause, what is the position ' If the Act passed by the parliament of Canada in 1881 was good or sufficient and they had the power to extend the exemption as they have specified that they have extended it to the time when these Territories should become provinces, then, that cannot affect it, because, even if there is a provision in the British North America Act which gives the Territories exclusive jurisdiction as to taxation after they became provinces they can onlv assume provincial powers subjet to the exemption created by the Act of 1881, granting that the Dominion Parliament had Mr. GALLIHER.
full pow^r to go as far as they did go. Now I may be wrong in the conclusion to which I have come, but if 1 am right in that conclusion I think that they should be left to whatever exemption they actually receive and actually are entitled by law to receive under the Act of 1881.


Charles Fitzpatrick: The Act of 1881 does not give any exemption beyond tholier iod during which they shall have a territorial government.
Mr. GALLIHER, The reading, as I understood it, would extend to the time also-when they became provinces.


Charles Fitzpatrick: 'Hake provision for becoming provinces ' ; you will have to have something new then.


William Alfred Galliher: I did not understand it, and I do not understand it in that way.


William Findlay Maclean: The statement of the Minister of Justice is in substance that this is a limitation of tjie provinces.


Charles Fitzpatrick: Not of the provinces, of the constitution.


William Findlay Maclean: Of the powers of the provinces, and in that way it is asserting the actual jurisdiction of this parliament to do almost whatever it likes. I say this^ further, that apparently the Canadian Pacific Railway have no confidence in their position as regards this province when it is created, and that they are the petitioners for this clause, and I think hon. gentlemen opposite ought to tell the House whether the Canadian Pacific Railway have come to them and said : You must protect us now from this province, as we imagine our rights will cease to exist after the province is created, and if you do not we will come upon you. The hon. gentleman has been saving a great deal, and so have all the legal gentlemen in the House about the sanctity of contracts and of vested rights. Let me tell the hon. gentlemen, and especially the Minister of Justice, that tne government is compelling these little provinces to assume the obligations of the Dominion. The Dominion, which entered into this contract and granted something to the Canadian Pacific Railway, whose honour is at stake, has no hesitation in imposing upon these two little provinces the discharge of the obligation they entered upon. If the minister wants to unload the obligation on the smaller party-on the provinces-he ought to make provision for the provinces assuming the obligation of the greater parliament. But he has not done so, and I do not think there are any morals in that. When hon. gentlemen are talking about morals in law and the sanctity of contracts, I asked them what is their opinion of unloading on these two new governments in the west, these new settlers, the obligations that the Dominion assumed-

a great mauy years ago ? Have not these settlers some rights ? Have they no vested right to fair play in this country ? Are the people of the Dominion to come along to them and say : We entered into a solemn obligation with the Canadian Pacific Railway twenty-five years ago that they were to be exempted from taxation in your country, and now the time has come to erect you as provinces, and we are going to dump the load on you, Let us look into the matter from that point of view, and I say that the government cannot justify the discharge of the obligation they owe to the Canadian Pacific Railway by imposing it on these provinces, and I also bring out this view now that here is a confession in this House by the Minister of Justice of the supremacy of parliament to do anything it likes in regard to the creation of new provinces ; that we are not bound by the British North America Act. They are asserting the right to impose limitations on the provinces in regard to their municipal taxation, and they are imposing other limitations on the provinces in a way they should not. I was glad to hear the leader of the opposition (Mr. R. L. Borden) endorse what Manitoba is doing. It is within the competence of these new provinces to tax these railways on their income, and they have further power even-they can tax' one company more than another. The cure may -come in this way, that the two new provinces-and I advise them to do it at the first session-may put a tax on the earnings of the Canadian Pacific Railway unless the Canadian Pacific Railway agree to surrender this advantage that they have. And let us just see what it is. Here is the original clause, which 1 shall read again in order to emphasize it:
The Canadian Pacific Railway and all stations and station grounds, workshops, buildings yards, and other property, rolling stock and appurtenances required and used for the construction and working thereof and the capital stock of the company, shall be for ever free from taxation, &c.
Is that fair ? Is it fair for the Dominion parliament to put this imposition on the young provinces, that this great corporation, the Canadian Pacific Railway, all its stock, all its stations, its roadbed, shall be for ever free from municipal taxation ? Is it fair, is it honourable? The provinces have some vested rights under the British North America Act, and there is a solemn contract with the provinces in that Act. Does the Minister of Justice admit that this is a solemn contract, and are there solemn rights defined in this solemn contract ? Surely this contract, the British North America Act, is as sacred as any contract ever made in this country, and if these provinces have rights, and if other people have obligations, and they seek to discharge these obligations by imposing them upon a lesser power and a lesser community, a struggling community, who are our settlers, and who are also to be
the best customers and clients of the Canadian Pacific Railway, to supply them with freight and to build up their road ; is it fair to respect the contract contained in the constitution ? I put it to the Minister of Justice that there is as good a contract in this British North America Act, as between the Dominion and the provinces, as there is between the Dominion and the Canadian Pacific Railway, and when you come to choose as to which contract has the most sanctity, I say that the original contract between the Dominion and the provinces is the one that has the senior position in that regard, and I say that parliament ought to leave this clause out. There is nothing mandatory even in the contract that we shall reimpose this, or if there is anything mandatory it is that we must respect provincial rights in this case ; and if the cure is not effected in one way, it shall be in another.
It is all very well to give us _ lawyers opinions, as has been done in this House. Let me recall to the people and to this House an instance bearing on this. In Ontario not long ago the attention of the Attorney Den-era! was called to the existence of a certain pool-room nuisance in inyr own constituency. The Attorney General went into the law and said : The law is this, and I am powerless ; I can do nothing, blit I am obeying the law. He said : That is the law ; just as we are told here to-day : This is the law. Bat a change of government took place, another Attorney General comes in, and he says : This is the law. He enforces the law, and the result is altogether different. What is the difference between these two legal opinions ? Lawyers do not always agree, in fact they differ all the time. As I said before, you can get as many opinions as you care to pay out fees ; and if that is the case, the people of the province, as their rights are defined in this solemn contract, the British North America Act, ought to be defended to-day from the imposition that is being put upon them ; and again I call the attention of the Minister of Justice, when he talks about vested rights, to the fact that the government is to-day putting on the statute-book a statute which enables the Dominion government to evade its obligation and to impose it upon these two small provinces in the west. If that is the case, I say it is not good law ; it is not the constitution ; it is not respecting sacred rights, and 1 trust the Prime Minister will give me some credit for, perhaps-although, not being a lawyer, because I do not profess to be one, and i thank God I am not one but I hope be will give me credit for saying something in the interest of the settlers, and bringing to the notice of parliament a grievance that can be cured in spite of the opinions of lawyers. There is a way to cure these grievances, and they can be cured without doing injustice to anybody.
It is all very7 fine to cure these grievances by sending them to the courts ; but that is


Mr. SPROUEE.: If the minister will excuse me, I think there was a discussion in the Railway Committee as to whether we had or had not the power, and my rernem-berance is that the contention of Sir John Abbott was that we had the power in the event of erecting a province.
Mr. 11 IZPA'J RICK. The hon. gentleman a moment ago admitted that he was not a lawyer.- The evidence of that was so obvious in the suggestion he made that lie need hardly have taken the trouble to give us the information. My hon. friend wished to know if this clause had been imposed on the government by the Canadian Pacific Railway Company. I may tell him that I drew the clause myself, and that I consulted the Canadian Pacific Railway with reference to it and as to the form in which it should be put. because I felt that it was necessary to consider the position of the Canadian Pacific Railway Co nip any and to take its interests into account. If I were dealing with the interests of a beggar on the street, I would consult him before I would endeavour to dispose of them.


William Findlay Maclean: Did the hon. gentleman, then, consult the settlers of the west ?
be


An hon. MEMBER.: Tliev are the beggars.


William Findlay Maclean: They are the ggars on the street.
Mr. 11.1 /PATRICK. That is another suggestion on a par with the one the hon gentleman made a moment ago, only in this in-


Charles Fitzpatrick: And parliament confirmed that opinion, and all we are doing now is to give effect to what parliament had in contemplation at that time. We are doing nothing more than that, and, so far as this load on the Northwest Territories which my hon. friend refers to is concerned, if parliament wants to rid the Territories of that incubus, if 1 may use the word, parliament is free to do it. Parliament has the means in its own hands, if the people of this country want to assume additional burdens to those which they already .assumed in connection with that railway. But let us do one thing at a time. Bet us give effect to what we contracted to do in 1881. When we have clone that, the door is still wide open to us if we want to go further.


Mr.   BAKE@: This exemption from taxation is certainly a very serious burden on the people of the Northwest. The matter was 'aid before the present government some >
ears ago, when the people of the Territories were asking for provincial autonomy, and I propose to put upon 4 Hansard ' the argument with reference to this particular subject which was used by the representative of the Northwest Territories at that time. He said ;


William Findlay Maclean: In addition to the matters dealt with in the foregoing draft Bill, I have also to direct your attention to, and to press for the removal by ancillary legislation of the exemption from taxation granted to the Canadian Pacific Railway Company under clause 16 of the schedule to "chapter 1 of the Dominion statutes of 1881. The exemption as is well known is two-fold. First that in the words : ' The Canadian Pacific Railway, and all stations and station grounds, workshops, buildings, yards and other property, rolling stock and appurtenances required and used for the construction and working thereof, and the capital stock of the company, shall be for ever free from taxation by the Dominion, or by any province to be hereafter established, or by any municipal corporation therein," and, second, in that part of the clause which reads ' and the lands of the company in the Northwest Territories, until they are either sold or occupied, shall also be free from such taxation for twenty years after the grant thereof from the Crown.' The effect of these exemptions is to prohibit any province which may be established-or any municioal corporation therein- from requiring the Canadian Pacific Railway Company to assist in. the administration of the country or the maintenance of ' peace, order and good government ' within its bounds with respect to a part of its property for ever and with respect to another part for a limited period of time. This exemption falls hardly upon the people of the Northwest Territories in a number of ways. The nature of the land grant to the company, in that it is spread over the whole country in small blocks of one mile square alternating with those open for homesteads, causes every dollar spent by the settler in the improvement of his homestead, where it lies within the districts reserved for the selection of the land granted on account of the construction of the 'Canadian Pacific Railway, to enhance the value of the lands held for the company in its neighbourhood. All public expenditures made in such districts for roads, bridges and other works of a similar description improve the value of the lands still held by the company under its main line grant, the company contributing nothing* on account of such lands towards the cost of the works by reason of which they are benefited.
An examination of the terms of the grant to the Canadian Pacific Railway Company shows that the exemption will bear with particular stress upon any province established within the' area referred to in the draft Bill. The paragraph lettered ' A ' of clause 9 in the schedule to the 1881 Canadian Pacific Railway Act-chapter 1 of the statutes of that year-reads (a) the said subsidy in money is hereby divided and appropriated as follows, namely :
Central Section.
Assumed at 1,350 miles-
1st-900 miles at $10,000 per
mile	$9,000,000
2nd-450 miles at $13,333 per
mile	 6,000,000

Eastern Section.
Assumed at 650 miles, subsidy equal
to $15,384.61 per mile	 10,000,000
25,000,000
And the said subsidy in land is hereby divided and appropriated as follows, subject to the reserve hereinafter provided for :
Central Section.
1st-900 miles at 12,500 acres
per mile	$11,250,000
2nd-4(50 miles at 16,666-66 acres per mile	 7,500,000

Eastern Section.
Assumed at 650 miles, subsidy equal
to 9,615 acres per mile	 6,250,000
25,000,000
The original land grant of 25,000,000 acres has been reduced by 6,793,041 acres at a cost to Canada of $10,189,521, thus leaving the company to receive 18,206,986 acres. In other words, the amount of that apportionment of the land grant on account of the construction of the eastern section-or that part of the railway between Callender and a point east of Red River to which the road had been constructed from Selkirk by the government, .all of which lies in the province of Ontario-has been exchanged for cash at the cost of the people of the Territories equally with those of every other part of Canada. Of the balance of the land grant, the company has selected some 2,500,000 acres within the province of Manitoba, leaving the balance to be selected from the lands within the Northwest Territories out of the extensive areas reserved for that purpose. This particular 'grant is that made on account of the construction of the central section of the railway, namely, that from Selkirk to Kamloops, which has been definitely ascertained to be a distance of 1,250 miles. This distance is divisable as follows : Manitoba, 220 miles ; Northwest Territories, 760 miles ; British. Columbia, 270 miles. It is therefore apparent that a proportionate area, based upon the mileage through the province at the rate granted per mile through the prairie portion of the central section (220 miles at 12,500 acres per mile, being 2,750,000 acres) has not been taken from Manitoba lands, and that in addition to this shortage of 25,000 acres the whole of the grant earned by construction through British Columbia (at the mountain rate of 16,666-66 acres per mile) is being made, out of the lands of the Territories. Even if, under any process of reasoning, the exemption clause can be justified as regards the constx-uction of the railway through the Territoirles, it is not thought that the Territories can in equity be required to bear this extra burden on account of the construction of the railway through the provinces of Manitoba and British Columbia. If they are so required, the people of the Territories, who are individually contributing equally to the cost to Canada of the interest upon the debt created by the payment of the original bonus of $25,000,000, the payment of $10,189,321 for the repurchase of the land grant on'account of the eastern, or Ontario, section of the railway, together with the annual payment of $100,000 to British Columbia for the lands ^ conveyed to Canada under the terms of the imperial Order in Council of May 16, 1871, to aid m the construction of the railway, will be also liable to bear whatever the exemption from taxation under the Canadian Pacific Railway Act of 1881 may mean. By the terms of that Act the province to be established-or any municipal corporation therein-will be prohibited from taxing the company or its property in any manner or for any reason. Unless invidious comparisons are made between the Canadian Pacific and other railway companies this will mean the

involuntary relinquishment of resources to that avenue of revenue as no competing company will be liable to expend the necessarily vast sums of money required unless it has prospects of obtaining similar exemption from taxation at the hands of the province.
The necessity for the extraordinary burden upon the people of the west is not obvious. Ample evidence exists to show that the railway was not in any sense built for the benefit of the Northwest. In 1865 the Honourable George Brown voiced the opinion of the government of the day when he stated in his place in the parliament of Canada during the confederation debates ' the confederation is, therefore, clearly committed to the carrying out of both these enterprises,' his reference being to the construction of the Intercolonial Railway and the opening up of communications with the Northwest Territories. ' I doubt,' he proceeded to say, ' if there was a member of the conference who did not consider that the opening up of the Northwest and the improvement of our canal system were not as clearly for the advantage of the lower provinces as for the interests of Upper Canada. Indeed, one gentleman held that the lower provinces were more interested-they wished to get their products into the west-they wanted a back country as much as we did-they wanted to be the carriers for that great country-and they were, therefore to say the least, as much interested in the questions as we were.' But there is no need to go back beyond the solemn compact entered into between Canada and the colony of British Columbia in 1871.
The imperial Order in Council of May 16, 1871, respecting the province of British Columbia, sets forth as one of the terms and conditions upon which that colony consented to enter the confederation, the undertaking of the government of Canada ' to secure the commencement simultaneously within two years from the date of the union, of the construction of a railway, from the Pacific toward the Rocky Mountains, and from such point as may be selected east of the Rocky Mountains toward the Pacific, to connect the sea-board of British iColumbia with the railway system of Canada ; and further to secure the completion of such railway within ten years from the date of the union. The preamble to chapters 71 and 72 of the Dominion statutes of 1872 and chapter 1 of the statutes of 1881 all set forth the fact in various ways that-to quote from the last mentioned Act-*' by the terms and conditions of the admission of British Columbia into the union with the Dominion of Canada, the government of the Dominion has assumed the obligation of causing a railway to be constructed connecting the seaboard of British Columbia with the railway system of Canada.
All this being so, it is difficult for the people of the Northwest Territories to understand why they should be called upon to assume any other burden than that of contributing proportionately-and no more-with the people of other parts of Canada towards the cost of carrying out the obligation assumed by Canada under the compact with British Columbia. The exemption from taxation granted by the Canadian Pacific Railway Act is undoubtedly such an added burden, and an imposition upon the people of the Northwest Territories that cannot be justified. For no reason that is conceivable, this exemption bears with greater stress upon the Territories than it does even upon Manitoba. Except those lands selected by the company under Mr. LAKE.
its land grant which lie in that part of Manitoba added to the original province after the contract of 1881, none of the property of the company is exempt from taxation in Manitoba. That province to-day is taxing the company under chapter 57 of the Provincial Acts of 1890.
In view of the foregoing it is submitted that parliament should be asked to take such steps as may appear advisable in order to countervail the operation of the exemption clause of the Canadian Pacific Railway contract within the limits of the province to be created.


William Findlay Maclean: Would the hon. gentleman say whose statement that is?


Mr. LAKE.: That is a portion of a letter sent by Mr. Haultain inclosing the draft Bill on behalf of the legislative assembly of the Northwest Territories. I have heard it suggested in this House. I think, that there had been an omission on the part of the legislative assembly to ask that this exemption from taxation should be done away with, and so I consider it advisable to place on the records the statement I have just read. I think the statement shows quite clearly that a very considerable burden is imposed upon the people of the Northwest Territories by this exemption. As I understand, it was admitted just now on the other side of the House that the reason for the clause it was proposed to insert in the present Bill was to protect parliament. Now, it seems to me that this is not just. This burden was imposed upon the people of the new provinces without their consent-there can be no question about that. There was no province at the time, there was no representative body in the Territories, and there was no representation of the Territories in this parliament. Therefore, it appears to me that, as it was the Dominion itself which made the contract, it is the Dominion which is responsible to the Canadian Pacific Railway Company for the benefits which that company were to receive on the comxdetlon of their share of the contract. I think, therefore, that it is only fair that the Dominion, at the present time, should assume that burden itself and relieve the people of the Northwest from it. As has been pointed out in the statement which I have just read, the Northwest Territories are paying their share, along with the other people of Canada, of the money grant required to aid the Canadian Pacific Railway. They are also finding the land grants, not only for the line constructed in the Northwest Territories, but also for a portion of that constructed in Manitoba and for the whole of the line constructed in British Columbia. I fail to see why, in addition to all this, this burden caused by the exemption from taxation should be placed upon the people of the Northwest. And it is a burden. With reference to the exemption of taxation on the land grant, I think we have a very strong claim to relief upon the Dominion

00 7 S
government. I believe it to be generally admitted that the intention of the contract was that there should be a twenty years' exemption. Whether the period was to run from the date of the contract or from [DOT]the date on which the lands were earned does not matter nowr, for the period has expired in either case. If it had been intended to extend the exemption any longer the contract would have so stated. It was to be an exemption for twenty years from a certain date, now more than twenty years ago. And if the exemption is now in force on a very large portion of these lands in the Northwest Territories that is not due to any fault or any laxity on the part of the Territories themselves ; it is really due to the neglect of the Dominion administration. I think that is quite clear. If the patents had been issued to the company immediately, the exemption period would have expired by this time, and the people of the Northwest would have been able to tax this land. It becomes the duty of the Dominion government, whose fault it is that the exemption still runs, to see to it that that exemption is taken away. When I went into that country upwards of twenty years ago, one of the first things I heard was that the odd-numbered sections were exempt from taxation for twenty years. I firmly believed that at the end of the twenty years we would be able to call upon the owners of the alternate sections to pay their share of the necessary expense for carrying on the local government of the country. I speak from experience as to this exemption being a burden upon the people. I live at this time in a section of the country where a considerable number of the Canadian Pacific Railway lands have been undisposed of and where there are still areas undisposed of, and all the time my taxes have been higher on that account than they would otherwise have been. For instance, I had to pay for school taxes at one time nearly twice what I should have had to pay if all these lands had been occupied by settlers, and the lands would have been occupied by settlers, I have little doubt, had not it been for the fact that they were being held at a price by the Canadian Pacific Railway Company. At present I have to pay considerably more than I would have to pay if these lands had been settled on. And the same is true o>f the local improvement tax. Every farmer throughout that country who settles in a district which the Canadian Pacific Railway lands have not been disposed of is exposed to this great increase of taxation on account of the exemption. It has been stated that, in the course of time, owing to the sale of lands by the company, and also owing to the fact that, in any case, within fifteen or twenty years the exemption will cease, therefore this is a vanishing question. Still, I cannot see the reason why even for the next fifteen or twenty years the farmers of that
country must continue to bear this additional burden. The Canadian Pacific Railway Company have been disposing of considerable portions of their land grants lately. But this is frequently done in such a way that we are unable to tax the lands they thus dispose of. 1 know of one large company which is selling Canadian Pacific Railway lands, but which claims that it is merely acting as agent for the Canadian Pacific Railway Company in this service, although I think there can be little doubt that it has really taken over the lands from the Canadian Pacific Railway. They are claiming this exemption and the people in the portion of the country to which I am referring, which has only recently been settled have to bear this additional burden, although those who purchased and those who did not buy their lands from the Canadian Pacific Railway but from this large land corporation. I consider that it is in the interest of the settling up of that country that this exemption of the land grant from taxation should be swept away. If there were not an exemption the Canadian Pacific Railway Company would certainly try to dispose of these lands as quickly as they could. But so long as there is no taxation to be paid on the lands, just so long will they continuue raising the price to obtain the highest figure possible. When the Canadian Pacific Railway had a monopoly of the carrying trade in the Northwest it was to their interest, as it is still in many parts of the country, to dispose of these lands as quickly as they could. Every new settler they put upon the lands brought them an added profit in the carrying business which they did for them. Some time ago they used to sell the lauds at a very low figure in order to promote settlement. But in certain parts this condition is now changing. The Canadian Pacific Railway owns lands which are tributary to some of the new railway corporations which are coming in, and it is not to the interest of the Canadian Pacific Railway to sacrifice those lands When the people who buy them will do their carrying business through other railways, and naturally the Canadian Pacific Railway will retain these lands which are exempt from taxes in their possession in hope of a rise. I do not wish to suggest that the contract of the Canadian Pacific Railway should be interfered with in any way. I consider that contract as sacred ; but I do hold that it is the duty of the Dominion government to accept the obligations incurred by themselves under this contract, and not place all those obligations upon the shoulders of the people in the new provinces.


William Findlay Maclean: Let me point out to the right bon. gentleman and to the government how they can immediately secure the commutation of this exemption. There is always a way out of every diffi-cutty, and I will show the right hon. gentle-



man a legal way out of this difficulty. Let me read clause 20 of the Canadian Pacific Railway Act:
The limit to the reduction of tolls by the parliament of Canada provided for by the eleventh subsection of the 17th section of ' The Consolidated Railway Act, 1879 respecting tolls, is hereby extended, so that such reduction may be to such an extent that such tolls when reduced shall not produce less than ten per cent per annum profit on the capital actually expended In the construction of the railway, instead of not less than fifteen per cent per annum profit, as provided by the said subsection; and so also that such reduction shall not be made unless the net income of the company, ascertained as decribed in said subsection, should have exceeded ten per cent per annum instead of fifteen per cent per annum as provided by the said subsection.
Now here is a provision whereby the parliament of Canada can compel the Canadian Pacific Railway to come before it and show what it has cost to build that railway, and they are entitled only to earn ten per cent on the actual cost of that railway. Parliament lias had that power over the Canadian Pacific Railway ever since the contract was entered into, and the time has uow arrived, indeed it arrived long ago. when the government of this country should demand a statement of the cost of the construction of that road and should tell the railway ; The day has c-ome when your rates must he reduced as provided for in tue statute, and we intend to reduce them. If the Canadian Pacific Railway had been brought before parliament, supposing an Act were passed in which we said to them : You must go before the Board of Railway Commissioners and show the original cost of your railway, and be prepared to submit to this reduction-I say the Canadian Pacific would have given up this exemption clause the day they got that notice. But instead of that, instead of dealing with the whole question now as the government should deal with it, they only deal with a part of it. they strengthen the Canadian Pacific Railway in their exemption, and they refrain from taking any action in regard to the regulation of their tolls, notwithstanding that the hon. gentleman says It is a had exemption, an improvident exemption. He agrees with me in saying that it was the worst exemption on the statute-book of Canada. He still has under this Act power to go after the Canadian Pacific Railway and bring them before him, to compel them to produce papers in connection with the cost of the railway, and to say the time has arrived for a reduction of the old rates by the parliament of Canada. Now we have that power, and if we exercised it we would get a commutation of this exemption. The hon. gentleman thinks not. Well, let him try it. He has taken jurisdiction over other companies : combines like the tobacco trust are under the jurisdiction of the Minister of Inland Revenue, and we can compel


William Findlay Maclean: them to do certain things. We have the Canadian Pacific Railway Company within our jurisdiction as regards -their rates, and you can always make a trade in a matter of this kind, and in that way the provinces can get relief. I say this clause should not be passed to-day as it is proposed without some provision being made by which the government can get a settlement of both these questions, in one of which the Canadian Pacific Railway has the advantage and in the other the people have the advantage. Let the government settle both questions together, and if that is done the Territories will be afforded relief. Show- them we have more strings to our bow than they imagine. Here is a solemn contract signed by the Canadian Pacific Railway Company providing for a reduction of their rates at a certain stage of their earnings, and this government to-day can, by enforcing that condition, obtain one of two things : They can probably make it clear that there ought to be a reduction in the tolls ; or they may say :	We will not enforce that reduction
of tolls for five years hence provided you commute this exemption. The hon. member for Assiniboia stated just now the character of this exemption. Let me point out, on similar lines, that this exemption is what is called an unearned increment, that is to say. the people of the west are constantly increasing the value of the Canadian Pacific Railway by every dollar that they tax themselves. They tax themselves for local improvements, they build roads, the Canadian Pacific Railway contributes nothing, but the Canadian Pacific Railway takes up all this unearned increment, and the settler taxes himself for his own roads ; he not only provides for himself but for the Canadian Pacific Railway, and he doubles and trebles the value of the Canadian Pacific Railway. Now that is the greatest injustice that exists in the world, the injustice that inures to the benefit of the few against the many, the Injustice that is called the unearned increment. It is happening all the world over, it is happening in this case, it is happening in cities. We may not be able to reach it in the case of cities, but in some way we can reach it. The Minister of Justice has confessed to-day in this debate that he consulted the Canadian Pacific Railway. He says he did not consult the Territories,
I do not know whether he even consulted the representatives of the territorial government, although from the statement that has been read to-day the territorial government has presented an unanswerable case. That statement as read by the hon. gentleman just now and put on record in the ' Hansard,' is unanswerable, because it is the statement of a great injustice being done to the people of the west, an injustice which calls for a remedy. Therefore I say a remedy ought to be given. The Minister of the Interior, who is not in the House just now, if ever he did make an outcry in this House it was about the unfair customs

taxes tlie people of the west had to pay to this Dominion government. He estimated last year at from $40 to $100 per family the amount that the people of the west paid in customs taxes to this government. This government says : you shall not only pay $100 per family in customs taxes but you shall pay the exemption of the Canadian Pacific Railway in your own country. The member for West Assiniboia says this is a great grievance. Well, if it is a great grievance it is entitled to a remedy, it can be remedied in some way. Now 1 will make this suggestion; that before this Act is passed the government ought to make an intimation that under this clause 20 of the contract that I have read, they will pass an Act referring this whole question to the Board of Railway Commissioners for ascertainment of the actual cost of that railway, and that under that clause they will see whether the time has not come for a reduction or regulation of the tolls of the Canadian Pacific Railway.


Charles Fitzpatrick: The interests that my hon. friend represents in this House are so wide and so varied and so much of his time is taken up making speeches that he appears to be in entire ignorance of the things that have been going on during recent sessions. He is probably in ignorance of the fact that a session or two ago it was decided to refer this very clause to the Supreme Court so that we might ascertain in what our rights are in regard to the regulation of rates on the Canadian Pacific Railway. He is probably also in ignorance of the fact that some months ago the Canadian Pacific Railway agreed to submit their rates to the supervision and control of the Board of Railway Commissioners and they are now in the same position as any other company in respect to their rates.


William Findlay Maclean: Under that clause a commutation of these rights to exemption might have been obtained. As it is nothing has been done. Their rates are not being regulated.


Charles Fitzpatrick: They are being regulated.


William Findlay Maclean: The jurisdiction may be in the Railway Commission, but nothing has been done. The Canadian Pacific Railway are not having their rates regulated, but they are having their exemption protected in a way in which they should not be protected in this Act. It is all very fine to say that something has been done, but it is the old story of neglecting the settler and protecting the capitalists and vested rights. It is not sound public policy that these things should be continued. I hear the hon. Postmaster General (Sir William Muloek) say ' hear, hear.'


Sir WILLIAM MULOCK.: I made no such observation.


William Findlay Maclean: Then the hon. gentleman agrees with me and he will join
with me in weeping for the farmer of the west. He used to weep for the farmer in Ontario, for the widow and the orphan.


William Mulock: No, I do'not agree with such rubbish.


William Findlay Maclean: The hon. Minister of Justice does not give up his time, and he does not


Charles Fitzpatrick: 1 think you might weep a little for those who have to listen to this.


William Findlay Maclean: The hon. Minister of Justice should weep for the people of the west and for this legislation, because, if there is anything that the Liberal party ought to be ashamed of, it is In the passing of this legislation binding these new provinces. The right hon. leader' of the government (Sir Wilfrid Laurier) introduced his Bill by saying that he was laying the corner stone of complete autonomy in these new provinces. Where is that autonomy He is restricting them in the matter of schools, restricting them in tne matter of municipal and provincial rights, restricting them in the matter of their boundaries, laying down a schedule! of constituencies, limiting them in every way and robbing them of their lands although all the other provinces have been given their lands.


William Mulock: Was Manitoba given its lands ?


William Findlay Maclean: No, it asked for them, but it could not get them. The Conservative government refused them. The hon. gentleman cannot justify himself in wrong doing by pointing to the Acts of the Conservative party. The Conservative party was not an immaculate party, it was guilty of many mistakes and because it diet make mistakes my hon. friend says that he may commit every mistake in the calender, that he may violate every commandment of the decalogue because Sir John Macdonald or some one else did this.


William Mulock: The hon. gentleman supported them in their wrong doing. The hon. gentleman belonged to the Liberal party until that act was done, but as soon as the Conservative party was guilty of a wicked act he joined that party.


Mr. LEMIEUX.: Explain.


William Findlay Maclean: I can explain. I regret the sins of my adolescence and I am trying to redeem myself and to lead a better life, but here is the hon. Postmaster General getting up in years and to-day he is glorying in the fact that he is imitating the~ sins of those who preceded him. I am willing to be judged by the people of the country as between my record and conduct and that of the hon. gentleman in the past, and I say that the government to-day in passing this Act of complete autonomy for these two newi provinces, in putting the

coping stone on the edifice, are doing nothing but restricting and imposing conditions on these great new provinces of the west, and again I tell them that there is that free, fresh air of liberty that glows from the west across the prairies that will not submit to this kind of legislation, that will not submit to this kind of restriction and the day is coming rapidly w hen all of them will have to weep for the principles which they have enunciated here to-day.
Amendment (Mr. Scott) negatived, and section agreed to.
On section 15,


Charles Fitzpatrick: Since this question was up for consideration before, I have considered the observations that were made by the hon. member for North Toronto (Mr. Foster), and by the hon. leader of the opposition (Mr. R. L. Borden) in respect to the question of joint stock companies, and I have concluded to substitute for the last paragraph of the amended section 1 proposed a day or two ago a new provision. The last paragraph, as I propose to amend it, will read as follows :
Every Joint Stock Company lawfully incorporated by or under the authority of any ordinance of the Northwest Territories shall he subject to the legislative authority of the province of Alberta if,-
(a) The head office or the registered office of such company is at the date upon which this Act takes effect situate in the province of Alberta; and,
<b) The powers and object of such company are such as might he conferred by the legislature of the said province and not expressly authorized to be executed in any part of the Northwest Territories beyond the limits of the said province.
The effect of this will be to declare that every joint stock company that is incorporated now by the Territories, which has for its purpose and object works which are clearly of a local character, which is merely a local undertaking, will be a joint stock company within the power of the provincial legislature to deal with. Those having powers qnd objects on the face of their charters extending over the whole Territories, will of course, continue to have a local existeuce, but they will be what they evidently would be under the law if nothing was contained in these Bills, Dominion companies and they must be dealt with by the Dominion. A joint stock company that is now incorporated in the Territories, if no provision were contained in this section, would, by the fact that the Territories are divided into two provinces, if that company had power to carry on business in both provinces, become, ipso facto, a Dominion company. The intention is to continue that company if the company desires to be treated as a local company, if its object and its powers are matters of mere local concern within the limits of one of the provinces and the province within which the head
Mr. \V. F. MACLEAN.
office or registered office of the company is "'ill have jurisdiction. I use the words ' registered ' office to meet the difficulty suggested by my hon. friend the leader of the opposition in respect to those companies that are incorporated to do business and the head office of which is beyond the limits of the province, for instance in England.


John Graham Haggart: Can they make the choice ?


Charles Fitzpatrick: No, the Act says that where the head or registered office is that will be the locus of the company.


John Graham Haggart: I mean as between a Dominion and a local company ?


Charles Fitzpatrick: They may be registered wherever they choose. They have to take out a license under the ordinance. But, I use the word ' registered ' to meet the difficulty suggested by my hon. friend the leader of the opposition in respect to those companies, the head office of which is abroad beyond the limits of the province. The local ordinances provide for a foreign corporation and the word ' foreign ' applies to al! corporations incorporated beyond the limits of the Territories. They must have a registered office in the province so that where the registered or head office is will be the place which will determine the jurisdiction of the province.


Mr.  R. L.@: BORDE'N. In other words, the registered office will be the guide where the head office is out of the Territory ?


Charles Fitzpatrick: That is it.



ROYAL ASSENT.

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows :
Mr. Speaker,-I beg to inform you that His Honour the Deputy Governor desires and awaits the immediate attendance of your Honourable House in the chamber of the Honourable the Senate.
Accordingly, 'Mr. 'Speaker, with the House, went up to the 'Senate Chamber.
And having returned.
Mr. Speaker informed the House that His Honour the Deputy of the Governor General had been pleased to give, in His Majesty's name, the Royal Assent to the following Bills:
An Act to amend the Mounted Police Act, 1904.
An Act to amend the Quebec Harbour Commissioners' Act, 1899.
An Act to incorporate the London and Saint Clair Railway Company.
An Act to incorporate the Georgian Bay and Sea-board Railway Company.
An Act respecting the Calgary and Edmonton Railway Company.

An Act respecting the Walkerton and Lucknow Railway 'Company.
An Act respecting the Atlantic, Quebec and Western Railway Company.
An Act respecting Contracts for Government Works.
An Act to amend the Act respecting the Department of Railways and Canals.
An Act to amend the Public Works Act.
An Act to amend the Railway Act, 1903.
An Act respecting the Census and Statistics.
An Act respecting ihe Canada and Michigan Bridge and Tunnel Company.
An Act respecting the Canada Southern Railway Companv.
An Act respecting the Canada Southern Bridge Company.
An Act respecting the Columbia and Western Railway Company.
An Act respecting the Ottawa, Northern and Western Railway Company.
An Act respecting the Vancouver, Westminster and Yukon Railway Company.
An Act respecting the Toronto and Hamilton Railway Company.
An Act respecting the Niagara-Welland Power Company.
An Act respecting the Regina and Hudson Bay Railway Company.
An Act respecting the Lake Champlain and St. Lawrence Ship Canal.
An Act respecting the Canadian Pacific Railway Company.
An Act respecting the Kootenay, Cariboo and Pacific Railway Company.
An Act respecting the Red Deer Valley Railway and Coal Company.
An Act respecting the Molsons Bank.
An Act to incorporate the St. Mary's and Western Ontario Railway Company.
An Act respecting the Nicola, Kamloops and Similkameen Coal and Railway Company.
An Act to incorporate the Sovereign Fire Assurance Company of .Canada.
An Act to incorporate the Calgary, Red Deer and Battleford Railway Company.
An Act respecting certain Patents of the Facer Solid Steel Car Wheel Company, of Perth, Limited.
An Act respecting a Patent of the Paper Goods Company, Limited.
An Act respecting certain Patents of Jean Effront.
An Act to incorporate the Lebonk and Thunder Bay Railway Company.
An Act respecting the Maeleod, Cardston and Montana Railway Company.
An Act respecting the Bay of Quinte Railway Company.
An Act respecting the Monterney Electric Gas Company, and to change its name to ' The Monterney Railway, Light and Power Company.
An Act respecting the Brockville, Westport and Northwestern Railway Company.
An Act to incorporate the Calgary and Battle-ford Railway Company.
An Act to amend the Act respecting the Packing and Sale of Certain Staple Commodities.
An Act respecting the Century Life Insurance Company.
An Act to incorporate the Imperial Guarantee and Accident Insurance Company.
An Act respecting the Grand Council of the Catholic Mutual Benefit Association of Canada.
An Act to incorporate the Ontario Fire Insurance Company.
An Act to incorporate the Annuity Company of Canada.
An Act respecting the Medicine Hat and Northern Alberta Railway Company.
An Act to incorporate the Athabaska Northern Railway Company.
An Act respecting the Hudson Bay and Pacific Railway Company.
An Act respecting the Alberta Central Railway Company.
An Act respecting the Timagami Railway Company, and to change its name to the Ontario Northern Timagami Railway Company.
An Act respecting the Montreal and Southern Counties Railway Company.
An Act respecting the Guelph and Georgian Bay Railway Company.
An Act to incorporate the Uhabaska Railway Company.
An Act for the relief of James Arthur Prior. An Act to incorporate the Moose Jaw and Edmonton Railway Company.
An Act respecting a patent of the Gold Medal Furniture Manufacturing Company, Limited.
An Act for the relief of Edward Albert Murphy.
An Act respecting the Grand Trunk Railway Company of Canada.
An Act respecting the Canada Atlantic Railway.
An Act to incorporate the Brantford and Woodstock Railway Company.
An Act to incorporate the Algoma Copper Range Railway Company.
An Act respecting the Central Counties Railway Company.
An Act respecting the Northern Bank.
An Act respecting the Board of the Presbyterian College, Halifax.
An Act to incorporate the Crown Casualty Company of Canada.
An Act respecting the Richmond and Drummond Fire Insurance Company.
An Act respecting a certain patent of Celeste Joly.
An Act respecting the Torono, Hamilton and Buffalo Railway Company.
An Act to incorporate the Saskatchewan Bridge Company.
An Act respecting the Esquimau and Nanaimo Railway Company.
An Act to incorporate the Canadian West Life Insurance Company.
An Act respecting the Battleford and Lake Lenore Railway Company.
An Act to incorporate the Montreal, Quebec and Southern Railway Company.
* An Act respecting the Citizens' Bank of Canada. An Act respecting the administration of an Act respecting the Packing and Sale of certain Staple Commodities.

[Stage Direction]
House in committee on Bill (No. 69) to establish and provide for the government of the province of Alberta.-Sir Wilfrid T.aurier.
At six o'clock, committee took recess.
After Recess.
Committee resumed at eight o'clock.
On section 17-subsidy to province,
Thomas Simpson Sproule: Who is to take the census in this case ? Is it the province ?


Charles Fitzpatrick: The decennial census is provided for by the Census Act, but the census in the intervening period will have to be taken, I suppose, by arrangement between the provincial and the Dominion governments.


George Eulas Foster: So far as I am concerned, in discussing the land question last night I discussed the financial question, because the two seem to be intimately combined ; and having said all that I would have said if I had divided my remarks into two parts, the one on lands and the other'on financial terms, I do not know that it is worth yrhile to repeat them again to-night, unless the Minister of Justice is very anxious to hear a good speech a second time. There is another reason which would induce me to repeat it, if I had a little more faith in the stiff-necked and rebellious ministry which sits opposite me. I might think it worth while to repeat it if I thought they yould take good suggestions and put them into practice ; but I can quite see that having arranged their method and plan, which is to my mind an entirely fictitious one, and placed on a fictitious basis, they propose to carry it out. I get no assistance from the Northwest members, who seem rather to be indisposed to make a good and enduring provision financially for their country. They shiver on the brink of a little responsibility, and do not seem to feel that the people or the legislature will care to take up the matter in a business way and arrange for their present necessities, and at the same time conserve the resources which would suffice for future and better use. Having exhausted my store of wise and prudent couusel, I do not know that it is of any use to cast any more pearls before the government opposite. I have said my say, and I hold to my contentions.


Thomas Simpson Sproule: On what basis do you make the maximum 800,000 of a population?


Charles Fitzpatrick: I think that was fixed by taking into account the conditions existing in the provinces of Nova Scotia and New Brunswick, the population of which was fixed at 400,000. I went through the debate which took place at confederation to see why 400.000 was selected, but I could not find any reason for it.


Thomas Simpson Sproule: What is the maximum of Ontario and Quebec ?


Charles Fitzpatrick: The population according to the census of 1861.


Thomas Simpson Sproule: Each of these Northwest provinces will in the course of time be as populous as Ontario or Quebec, and we fix their maximum population on which they are to receive 80 cents a head at 800,000, while the maximum of Ontario and Quebec is over 1,000,000. It may be that we are making up for this difference in other ways, but the question is, will the people of these provinces be satisfied with that ?


Thomas Simpson Sproule: 


Frank Oliver: I may say that in the draft Bill prepared by the Northwest assembly and presented by the Northwest gove-ernment, if my memory is not mistaken, the limit of population upon which 80 cents per head should be drawn was placed at
400,000	for the single province which it was proposed to organize out of the territory. The demand of the territorial government was for 80 cents per head on 400,000, The concession, on the terms of the existing Bill, is eighty cents on 160,000.


Mr. HENDERSON.: Was the 400,000 not the minimum population ?


Charles Fitzpatrick: No, 250,000, and the maximum was 1,396,091. My hon. friend will observe that 1,396,091 was for the two provinces.


Mr. LENNOX.: I presume that our dealing with these financial figures is without prejudice to what may be determined hereafter as regards allowing the Territories to have their land. Am I right in assuming that they will be entitled to these moneys in any ease ?


Charles Fitzpatrick: This has no reference at ail to the payment in lieu of land. This is what we call the legislative grant and the 80 cents per head on the population. There is another provision for a grant in lieu of debt and an allowance in lieu of land.


Mr. HERRON.: I think it will be found on looking back over the last five or six years and seeing the increase in the expenditure of that country, that the new provinces are not going to get, even with the-whole Bill, the same money they are getting now. The amount looks large to hon. members on both sides of the House,
but	I do not think	it is	going	tobe	nearly sufficient for	the	needs	ofthe	country. A few	years	ago	wewere getting about 8300,000 from the Do-mion for	the	purpose	of	carrying onlocal government in the Territories. It was found that that was not nearly sufficient. The population has been increasing so rapidly that the expenditure has gone up until to-day we are spending over a million dollars a year, and even that is not found	sufficient for	our	needs. Themoney we	will	have to	spend under thisBill will not be half sufficient for our needs. True as the country becomes more settled, our annual grant will increase, but the needs of the country will increase far more rapidly, and the result will be that in the very near future, if not at the outset, the new provinces will have to resort to direct taxation, and every hon. member for the Northwest	will	acknowledge	that direct
taxation would be one of the worst things that could happen us in the way of retarding immigration. Settlers coming to our country have left other countries because of the high taxation, particularly in

tlie L nitecl States. It is the high taxation in	that country	which is
bringing the bulk of American settlers to our Northwest, and consequently it would be very injurious to us to have to resort to direct taxation. But that will be the result, I believe, under this Bill.


Mr. P. TALBOT.: I would like to draw attention to a source of revenue which has attracted little notice, and that is our school lauds. According to estimate, we have at least eleven million or twelve million acres of school lands which in time will be sold and the money held in trust by the Dominion government and on that money we will be paid three per cent yearly, every half year. The policy "has been to hold these lands until they are worth $7 to $10 an acre. We will have, therefore, ten million acres which will be eventually sold at $10 an acre, or $100,000,000, on which we will receive an annual income of three per cent, or three million dollars per year. That amount, along wTith what is arranged in this Bill would be sufficient for the new provinces.


John Herron: The hon. gentleman has given one of the best reasons to prove why this government is not treating the Northwest properly in the matter of lands. If ten million acres of school lands are going to give the amount of revenue the hon. member mentions, viz. : three million dollars per year, and that almost immediately, what about the hundreds of millions of acres of land which this government is keeping from us, and in return for which it is giving but a million dollars a year ?
Section 22,
On an estimated population of 250,000 at eighty cents per head, $200,000, subject to be increased as hereinafter mentioned, that is to say : A census of the province shall be taken in every fifth year reckoning from the general decennial census of 1901 and an approximate estimate of the population shall be made at equal intervals of time between such quinquennial census and such decennial census; and whenever, the population by any such census or estimate exceeds 250,000, which shall be the minimum on which the said allowance shall be calculated, the amount of the said allowance shall be increased in accordance therewith until the populaion reaches 1,396,091, after which there shall be no further increase.
In the explanation that follows, It Is stated that taking into consideration the extraordinary rate of increase in the population, it would be manifestly unfair to limit this grant to a population of 400,-
000.


Frank Oliver: The hon. member (Mr. Lake) has corrected me in the statement I made as to the figures contained in the draft Bill. I find, on reference to a copy of the Bill which is before me that there is some ground for the correction, and that still there is some ground for the statement I made. The Bill in the form in which it was received at Ottawa specifically states the limit of population at 400.000 ou which the payment of SO cents per head is made. But I find in one of the later pages of the return, page 30, is a copy of a telegram dated December 16, 1900, which is as follows :
Right Hon. Sir Wilfrid Laurier,
Ottawa.


Thomas Simpson Sproule: I doubt whether these school lands will realize very much more than we got from the old school land grant of Ontario. In Ontario, when we add to the revenues from school lands what is required to meet the expenditure on education, education becomes a pretty expensive burden ou the people. In Manitoba they have been trying from time to time to get the use of the capital of the school lands fund and have frequently expressed great dissatisfaction because the Dominion government would not give more than the interest I think the Dominion government are right because they hold these lands in trust. But I am merely pointing out that the interest on the sales of these lands is very much too small for the needs of that province for educational purposes. It is quite possible that there will be a similar experience in the new provinces.


Richard Stuart Lake: My hon. friend the Minister of the Interior (Mr. Oliver) said that the draft Bill presented by the Territories fixed the limit of population upon which the capitation allowance would be given, at 400,000 souls. I think he is mistaken. The clause of the draft Bill is as follows :
Have just noticed that seven words at end of paragraph- 22, draft Bill, were inserted through clerical error. Kindly strike them out and substitute one million, three hundred and ninety-six thousand and ninety-one, after which there shall be no further Increase.
That is to say, the statement I made as to the terms of the Bill, which, I presume, was absolutely assented to by the Northwest Assembly, was a limit of 400,000. But we will admit that was a clerical error which was amended afterwards, as stated by the telegram sent to Ottawa. Therefore, we are bound to consider that that was the intention in the first place. I would merely point out again that, even accepting the cor' rection suggested as being what was in the ! mind of the assembly at the time the Bill was passed, there is still a difference to the Northwest Territories in favour of the present arrangement as between 1,390,091 and 1 600,000. We are getting an advantage of $160,000 a year under the arrangement by the Autonomy Bills, as compared with even the amended provision of the Northwest government's draft Bill.


Thomas Simpson Sproule: That will not be a very wonderful difference if you have to keep up two governments instead of one.


Richard Stuart Lake: I think the Minister of the Interior forgets that the autonomy draft Bill was not passed by the assembly before being submitted to this government. This was drawn up on the responsibility of the Prime Minister of the Northwest Territories and his colleagues. And his telegram, I think, followed immediately after his letter forwarding the Bill. His letter forwarding the Bill was dated 7th December, and his telegram followed immediately. So it is evident that this was a clerical error. I appreciate the statement of the Minister of the Interior that the population upon which the Territories as a whole will get the capitation allowance will, in view of the fact that there will be two provinces under this Bill, be larger than it would otherwise have been. But, after all, it must be taken into consideration that it will mean that two separate local governments will have to be carried on with a great deal of expensive machinery ; and this, in my opinion, does not compensate for the increased expenditure which will be necessary.


Frank Oliver: It is not required to compensate for the increased expenditure which will be necessary, because provision is made to the amount of $50,000 a year for each province, as compared with $50,000 a year for one province provided for in Mr. Haul-tain's draft Bill.
On section 18,
Inasmuch as the said province is not in debt it shall be entitled to be paid and to receive from the government of Canada, by half-yearly payments in advance, an annual sum of $405,375 being the equivalent of interest at the rate of five per cent per annum on the sum of $8 107 -500.


David Henderson: On a former occasion I made a reference to this clause 18, which clause I will read :
18. Inasmuch as he said province is not in debt, it shall be entitled to be paid and to receive from the government of Canada, by halfyearly payments in advance, interest at the rate of five per cent per annum on the sum of eight million one hundred and seven thousand five hundred dollars.
What I fear is that in after years


Mr. FIELDING.: The lion. gentleman has not the clause iu its preseut form. Having regard to my hon. friend's suggestion, we changed that so that we pay an annual sum ' being the equivalent of ' the interest, which, lawyers tell me, means the same amount of money, but on a different condition.


David Henderson: I understand the Minister of Finance to say that he made the change iu this clause with a view to meeting tlie opinion of his legal adviser, who, I presume, is the Minister of Justice in this case. Now, we in the province of Ontario have had a good deal of experience in the interpretation of a clause of this kind ; and it is owing to the very great difference of Mr. SPROULE.
opinion that exists there among legal men as to the meaning of such a clause that I draw attention to the matter now. I am very much Inclined to think, notwithstanding what the Minister of Finance has said, that with his own interpretation given in a similar matter in the province of Ontario, the difficulty which I apprehended would arise, and which I think the Minister of Finance did not intend should arise, may still come up. If I understand the minister, he has no intention to go further than to pay over to the province of Alberta each year the sum of $405,375 as an allowance on account of the province having had no debt. I assume that it is not his intention at any time to pay any part of the principle sum on which this interest is calculated. I believe that is the hon. minister's intention ; at any rate, I think that is the intention of parliament.


William Stevens Fielding: Yes.


David Henderson: Now, are we sure in tile light of the experience we have had in the past that that will be the interpretation in after years put upon this clause ? A favourite argument in the province of Ontario, under a very similar condition, in fact a case not nearly so strong, was that where there was interest there must be principal behind it ; and if the Dominion was entitled to pay to the province of Ontario a fixed amount of interest yearly, certainly there was a capital which the province was entitled to call for. That was the case in reference to the subsidy granted to the province of Ontario in the year 1884 of $142,414, being the equivalent of 5 per cent interest on $2,848,000. Now, to put the matter plainly, I will read a letter written by the Minister of Finance, and we will ascertain whether his opinion is the same to-day as it was in the year 1900 ; if it is, then I think we should make some further change in this clause. The letter is somewhat lengthy, but I can read it in a very few minutes. I think it is well that hon. members should hear this letter, because it reviews the whole matter. The letter is written to the provincial treasurer of the province of Ontario, dated, Ottawa, January 12, 1900, in answer to a communication sent by the Hon. Mr. Ross to the Minister of Finance. The Minister of Finance, the Hon. Mr. Fielding, writes as follows :
Ottawa. January 12, 1900.
My Dear Mr. Ross,-I have the honour to acknowledge receipt of your letter of the 29th ultimo on the subject of certain moneys placed to the credit of the province and the accounts of the Dominion.
The advantage to the province in permitting these moneys to remain to the credit of the province in the Dominion, where they yield to the province five per cent interest, are so obvious that I do not suppose you are contemplating their withdrawal. As a pure matter of

finance between the Dominion and the province, it would of course be profitable to the Dominion to pay you the money, as we could easily raise it at much lower rates.
I do not think your government have any unconditional right to demand this money from the Dominion. There are certain limitations provided by the statutes ; but no doubt if you desired to obtain the money, you could easily comply with these conditions.
In the earlier history of confederation it appears to have been contemplated that the moneys placed to the credit of the provinces in what was called the debt account should remain in that account, and the annual interest be paid to supplement the allowances for the support of the provincial governments. I find, however, that in 1874 there was a change of policy in this respect. Section 2 of chapter 17 of the statute of that year provides as follows: The Governor in Council may in his discretion advance from time to time to any province of Canada such sums as may be required for local improvements in the province, and not exceeding in the whole the amount by which the debt of the province for which Canada is responsible then falls short of the debt with which the province was allowed to enter the union, such advances io be deemed additions to the debt of the province, with permission to the province to repay them to Canada, on such notice, in such sums and on such other conditions as the Dominion government and that of the province may agree upon, any amount so paid being deducted from the debt of the province and calculating the subsidy payable to it.
Under this statute it appears to have been intended that the moneys at the credit of the provinces could be withdrawn for the purpose of assisting in the construction of provincial public works. Considerable sums were so drawn by the provinces of Nova Scotia, New Brunswick, British Columbia and Manitoba.
By chapter 4 of the Acts of 1885 the section above quoted was re-enacted with a further limitation placed upon the action of the provincial governments by requiring the passing of the provincial statute as a basis for an application to the Dominion government for payment of these moneys.
I think that practically the Act of 1884 operates as an extension of the Acts relating to the debt account, and that, therefore, the moneys credited to Ontario by the Act stand in the same position as a balance of debt account favourable to a province under the British North America Act. This was the view apparently taken by this department in 1884, and since continued, as appears by the public accounts.
Looking at these several Acts, I am of opinion that you would not have the. right to withdraw these moneys for the ordinary purposes of government, but what parliament intended that they might be withdrawn by a provincial government, with the previous sanction of the legislature, for local improvements. I have no reason to doubt that if, instead of raising the moneys for your public works by the issue of securities, you had seen fit to make application under the Acts above cited, for a portion of these moneys from the Dominion, the government of the day would have recognized this as a proper use of the moneys, and would have authorized the payment of the sum required.
If you desire now to withdraw, subject to the above conditions, any moneys standing to the 194|
credit of the province, there would not be any objection to your so doing.
Yours faithfully,



W. S. FIELDING,

[Stage Direction]
Minister of Finance.
To the Hon. G. W. Ross,
, Premier of Ontario,
Toronto.
Now, to my mind the two clauses are practically similar, with this difference, possibly, that the case before us is a stronger case in favour of the province withdrawing the money than was the case of Ontario. It is doubtful whether this sum of $2,848,000 was a debt or not; but in any case it was practically a sum made up as the basis of a subsidy, but in the Act of parliament creating that subsidy it was called capital, and then 5 per cent of that sum was to be paid as additional subsidy. Here we declare this sum of $8,107,500 to be a principal sum, and we name the amount of interest that is to be paid on account of that principal sum, namely, $405,375. Now to my mind, as the resolution is now worded, this sum of $405,375 being specifically designated as interest under the Act of 1885, the Minister of Finance would be obliged, if the proper application was made by the province of Alberta by Act of the legislature, to pay over any portion of this sum of over $8,000,000 so long as it was required by that province for the purposes of public works.
I do not think that is the intention of the Minister of Finance, but I do not think that he has yet secured a wording of the resolution that would actually prohibit the province from demanding it. Now we may say : Let us pay it to the province if they demand it, because the Dominion can borrow money at a much lower rate of interest, it would be a saving to the Dominion, and we would thenceforth require to pay a much smaller subsidy. But we know the danger of provinces exhausting their revenues in this way. It will simply result in after years in a further demand being made for an additional subsidy on account of their having lost or spent what was originally provided for them. If the minister can assure me that the wording of this will make it absolutely clear that the province of Alberta will have no right to call upon any part of the principal sum, then I have nothing further to say, because I am making no complaint with regard to the provision that is made for the province.
I am not saying it is too small or too great. I have not gone into the calculation as to whether this is the correct equivalent to the debt of the other provinces or not. I take it for granted the officials of the Finance Department have thoroughly investigated that, and that it approximately, at any rate, approaches the exact figure. But legislating, as we are here now, on a matter that is to last practically for all time to come, we
[Stage Direction]
want to make sure that we are making provision for a permanent revenue for that province, and one that cannot be used for an improper purpose-I would not say for an improper purpose-but used in a way differently from that in which this parliament contemplates it should be used, so as to open the door for the legislature coming back here at a future time and asking for an increased subsidy. I fear very much that having designated this as interest, the argument will be set up that where there is interest there is principal, and that under the Act of 1885, which is in force today, the province would have the same right to demand the capital sum in this case as it was interpreted they had in the case of the province of Ontario.
William Stevens Fielding: I think the intention in the mind of my hon. friend from Halton (Mr. Henderson) and the intention in my own mind are precisely the same, but whether we are able to get a form of words which will correctly carry out that intention is, of course, a matter for his legal advisers and my legal advisers.


David Henderson: I have none.


William Stevens Fielding: Well, then, I am more fortunate than my hon. friend. I have some. It is certainly intended, by the common consent of the House, that this sum shall be an annual payment to the province. A change has been made in the wording which makes it materially different, as we think, and as we are advised, from the Act respecting the province of Ontario. The difference of a few words in the statute will be such as to make the first statute entirely inapplicable to the second, and we are advised that the difference in the wording is entirely sufficient to account for one interpretation being given in the case of Ontario and another in this instance. After the discussion which took place in the House, the intention of both sides, I may say; has been that this shall be an annual payment to the province. The words employed seem to me to be sufficient for the purpose. On the day that I made this amendment at the table my hon. friend the Minister of Justice was not present, and, as I stated then, I had not the benefit of his advice. Since that time he has looked into the matter, and he concurs in the view I then expressed, that the words used are ample to carry out the intention in the mind of my hon. friend from Halton and the intention in my own mind. If there is any good reason to believe that that intention has not been carried out, I will willingly have any other words suggested that will serve the object better, but I think my hon. friend will agree that the words now used do carry out the intention which is in the mind of the committee generally.


David Henderson: I have not read for some years the debate that occurred in 1884, but I remember reading it years ago. My


David Henderson: recollection is that a question very similar to this came up, when Sir Richard Cartwright asked the question of Sir Leonard Tilley whether it was the intention of the Act of 18S4 to pay over simply the 5 per cent yearly on the $2,848,000, or to pay over any part of the principal, and the answer of Sir Leonard Tilley was distinctly that the intention of parliament and the intention of the government at that time was to pay only the annual sum. Sir Leonard Tilley seemed to be just as firm in his opinion as my hon. friend the Minister of Finance is in his opinion now, but, notwithstanding that fact, lawyers and others, including the hon. Minister of Finance himself, afterwards interpreted the meaning of parliament at that time as different, and the hon. gentleman assented in fact to the payment over of a portion of the priucial sum, or all of it, if it was called for. My objection of the wording of this clause is to the use of the word ' interest.' If the hon. minister could pay over the sum of $405,375 as an additional allowance, and make no reference whatever to interest, it would be better. As long as you leave the - reference to interest you will have some person coming up ten or fifteen years afterwards and stating, as the late government in the province of Ontario did, that where there is interest there must be principal, and they would simply capitalize this sum of $405,375 and say : As you owe us that much interest you owe us the capital sum. I said before that if the hon. minister assured me that he had the matter absolutely clear I would withdraw my objection, and he seems to think that he has it absolutely clear. Whilst I withdraw my objection, I confess that I cannot agree with him in the wording of the clause. However, the hon. minister is responsible for the government and not myself, and I discharge my duty when I point out the difficulty that has arisen in a similar case.


William Stevens Fielding: I think we have really benefited by my hon. friend's earlier suggestion. I think he will find that the words as now used express his own idea.


Mr. BLAIN.: I rather agree with my hon. friend from Halton (Mr. Henderson) that the word ' interest ' should be removed from these resolutions. I accept, of course, the statement of the hon. Minister of Finance (Mr. Fielding), endorsed by the hon. Minister of Justice (Mr. Fitzpatrick), that the change in the wording of the clause will remove any doubt hi the minds of the people as to whether there is an amount of money deposited with the Dominion government to the credit of these two new provinces. My hon. friend from Halton has read a letter addressed by the hon. Minister of Finance to the Hon. George W. Ross. I remember very well when Mr. Ross, then premier of Ontario, contended before the electors of Ontario that the provincial government had deposited with the Dominion $2,848,000, that

they could draw it at any time to be expended in the interest of the people of the province with certain limitations. 1 will venture to read the letter written to the lion. Minister of Finance by Mr. Ross :
Toronto, December 29, 1899.
My Dear Sir,-The government of Ontario have appointed a royal commission for the purpose of inquiring into and reporting on the financial affairs of the province. For the purpose of assisting the commission in the prosecution of their inquiry, I am desirous of ascertaining how your department regard the sum of money ($2,848,000) which has been placed to the credit of the province by chapter 4 of the statutes of 1884.
Although we have not called on the Dominion for payment of this money, we have assumed in our accounts that it belongs to the pro vince, and that if we had desired to use it for provincial purposes we would have been free to do so.
Kindly let me know the view which your department takes of this question.
Yours truly,



G. W. ROSS.

Hon.  W. S.@: Fielding, M.P.,
Minister of Finance,
Ottawa.
This is a statement over the signature of the premier of Ontario that the government of Ontario had deposited with the government at Ottawa $2,848,000, and they so stated in their financial statement to the people of Ontario at that time. Thus they were enabled, by the placing of that amount to the credit of Ontario, held by the Dominion government in trust, to put before the electors of Ontario the statement that they had a surplus of money when the fact is they had no surplus. And then it was the great question of debate in the legislature of Ontario for many years, and was a great question before the electors in that province. I believe that the Minister of Finance, and particularly the Minister of Justice, should be very careful now when they are legislating for the new provinces to remove altogether the word ' interest,' and make it so plain that the people of western Canada will not be confronted with that question as the people of Ontario have been confronted with it for so many years.
Mr. HENDERSON, dn the event of the language being so construed at any time by the courts or by any government, that the province of Alberta was entitled to call upon this capital sum the province would not only be entitled possibly to call upon that capital sum but would be entitled to capitalize the annual payment at the current rate of interest. I have made a calculation. Suppose Alberta established the fact that being in receipt of an annual income of interest of $405,375. from the Dominion of Canada-and wherever there is interest there must of necessity be principal-they would certainly have just as much right to capitalize that at o per cent as at 5 per cent if money was not worth more than 3 per cent.
and instead of taking a capital sum of $8, 000,000 or rather of $8,107,500 they would practically have a capital sum of $13,512,500 rendering this Dominion liable for a much larger sum than we contemplate at the present time. It is no simple problem, and if the English language can possibly make it clear beyond a doubt I would say decidedly, make it clear. I do not want to rob those provinces of anything to which they are enitled but when we agree to give a substantial sum let us leave no doubt whatever as to the exact sum they are entitled to get. The illustration I have given of what might be the demand of the province of Alberta is simply a repetition of a calculation made by the Hon. Mr. Ross, in the province of Ontario. He contended that lie had a right to capitalize his interest at 3J per cent when money was worth 34 per cent and showed a very much larger amount of capital in the hands of the Dominion than he was actually entitled to in the first instance, when In fact there was practically no capital. But in this instance we admit there is capital because there is interest and where there is smoke there is generally fire, according to the old saying ; where there is interest we consider there must be capital, there must be something behind it, what I fear is the dangerous word 'interest.' I apprehend that even if we satisfy ourselves now, possibly ten or fifteen years hence there may be men who will take a different view of that interest.


William Stevens Fielding: My hon. friend and I will have to leave this matter to the lawyers and if they say the words used fail to express the intention of the committee I will consent to consider an amendment. I do not think anything which Sir Leonard Tilley said years ago or anything I may say now will be of any value in interpreting this statute in the future. It must be interpreted like other statutes, according to its own words, and it is not likely that any one will refer to the debates in this House to ascertain its meaning. We must make it clear and if we have not done so let us do so. But since the hon. member from Peel (Mr. Blain) has also read the letter which I addressed to the Hon. Mr. Ross, whether that letter was wise or unwise, right or wrong, it was based on the language of the statute as it then existed. That is not the same language as we have here, and therefore we do not get any assistance by importing into the discussion that lettei giving an opinion, possibly an ex-roneous one, based on the statute as it then existed. The statute here is in different terms and is designed for a different purpose. If my hon. friend (Mr. Henderson) finds, after he consults his legal friends, that this language fails to express the intention of the committee I have no desire to adhere to the words used.


George Eulas Foster: Was the letter written by the advice of the Department of Justice.


William Stevens Fielding: Yes. Since I heard the letter read ini the fine round voice of the hon. member for Halton (Mr. Henderson) I am rather proud of it. I think it is rather a good state document and I think it stands the fire to-day. It was written as a business document, but after I had obtained advice as I should in important matters from the Department of Justice. The only reasons for inserting a capital sum and the interest thereon is this that in all past negotiations or arrangements between the Dominion and the provinces, you make a certain allowance in connection with what is known as the debit account and in order that you may deal fairly with a province it is necessary to know the basis on which such arrangements are made. It is a convenience in comparisons hereafter, to have the matter thus stated, but the amount allowed is not interest ; it is a sum equivalent to the interest and I believe that legal gentlemen say the difference is very great.


David Henderson: In the Act of 1884- and I am sorry I have not the statute before me-it is stated distinctly that the 5 per cent on $2,848,000 should be paid over each and every year, half-yearly, to the province as an additional subsidy.


Charles Fitzpatrick: No.


David Henderson: I think that is a stronger term than anything used here.


William Stevens Fielding: Am I not right in saying that in that case the sum was to be treated as capital ?


David Henderson: I believe the hon. minister is right.


William Stevens Fielding: We do not so treat it in this ease.


David Henderson: By inference we certainly do, by he fact that we are paving a sum that is declared to be interest. '


William Stevens Fielding: Not interest, but the equivalent of interest.


David Henderson: The equivalent of interest.


William Stevens Fielding: That is all the difference in the world.


David Henderson: I think the difference is not sufficient as long as the word is used there.


Thomas Walter Scott: I trust the hon. member for Halton (Mr. Henderson) is not arguing that this province in this respect should be placed on a different basis from the other provinces of Canada. I am not very clear on this matter myself.


David Henderson: Will the hon. gentleman pardon me. I thought I had made myself so clear that he who runs might lead. I stated distinctly that I was not attacking the allowance made to those provinces, and I was very careful in all Mr. FOSTER.
the discussion to find no fault with the allowance. I only desired that the province should clearly and distinctly understand what it is getting and that this parliament should clearly and distinctly understand what it is giving. Now beyond that I am quite sure I have not gone, and it does not remain for the hon. member for West Asisiniboia (Mr. Scott) to charge me with trying to keep anything back from the new province which the government is disposed to give it.


Thomas Walter Scott: I am still somewhat in the dark myself about this matter, but I recollect that we had a discussion concerning capital accounts a couple of years ago when it was proposed to advance a quarter million dollars to the Northwest Territories ns a capital advance, and I think I recollect the statement made in the House at that time that it was possible for the other provincial governments to draw from their capital if they wished to do so. For instance there was a certain number of million dollars standing as capital account to the credit of New Brunswick or Nova Scotia, and it was open to those provincial governments to draw that capital although of course afterwards they would draw less interest and certainly, speaking on behalf of a portion of the people who are to compose one of these new provinces, I wish to stand out for equal treatment. If I am mistaken about this matter well and good, but we certainly should be placed on exactly the same basis as the other provinces have been in regard to capital or debt account.


George Eulas Foster: If my hon. friend were wise and were looking after the interests of the Northwest provinces, I think he would rather have the matter arranged so that they could not withdraw and dissipate their capital. If they had the sum of $8,000,000 which they felt they could withdraw by the million or half million each year, it would be an additional temptation to them to dissipate for present needs what should be kept for the future. I would have it understood that while they could draw the percentage of that from year to year, it should be 'kept as a never-failing source of income. I think it is a question whether the maritime provinces have done the best for themselves by dissipating their capital and drawing upon it for present necessities and coming to the point of finding a diminishing revenue because they have eaten up their capital. If I were from the Northwest, I should want to have it fixed that the capital from which the yearly payments arose should never be diminished, or liable to be taken for present and pressing necessities. I think it would be better for the province.


[Stage Direction]
Section agreed to.
Section 19 agreed to.
6i0i MAY 16, 1905 6102	
:							- On section 15, Mr. FITZPATRICK. This section is a highly technical one, and is intended to deal with a somewhat embarrassing situation which will exist in the Northwest after this Act comes into force. I have consulted the Deputy Minister of Justice, who drew this Bill, and he in turn has consulted those who represented ^the Northwest Territories. The section as it is now proposed to amend it. meets with the approval, I understand, of the representatives of the Northwest Territories and those who represent the Northwest government. Under these circumstances I would suggest that the clause be allowed to pass with the understanding that at any time it may be reconsidered at the suggestion of any member of the House. Mr. R. L. BORDEiN. That, I think, should be quite satisfactory. Myi hon. friend the Minister of Justice (Mr. Fitzpatrick) was good enough to give me at six o'clock a memo, prepared by Mr. Newcombe, Deputy Minister of Justice, dealing with some points which had been raised on this side as to the possible construction of section 15 as proposed to be amended. I expected to have had an opportunity of looking over the memo, of the deputy minister between six and eight o'clock but was prevented by other engagements. Under the circumstances, I shall not ask the committee to wait until I have examined it. If I think any difficulty arises under the words of the amendment, I will ask the government to permit us to return to clause 15 for the purpose of moving any amendment which may be thought necessary on this side. The only important question raised on this side was whether or not section 11 of the Act of 1875 might not be continued as part of the constitution of the Territories by the very words of this section. Mr. Newcombe thinks that is not possible. I am not prepared, without considering his opinion, to say I do not concur, and therefore I shall be very glad to accept the suggestion of the Minister of Justice. Mr. SPROULE. How will the societies at present existing be affected ? Mr. FITZPATRICK. They are continued in their provincial existence. They can only be dissolved by the Governor in Council after the province has made provision for substitutes. These societies, being in operation, will immediately', when this Bill passes, come under the jurisdiction of the Governor in Council, and we must deal with them, in so far as their present corporate existence is concerned ; but we wil deal with them in such a way as to dissolve them after the province has arranged by legislation for their continued existence within the province. The province must	irst arrange for other societies being substituted for the present ones. Section agreed to. Mr. FITZPATRICK. There is nothing left but the land clause, the distribution of seats and the school clause, which includes number 2. In view of the fact that we have a number of amendments, I .would move that the committee rise so as to give us time to consider the present condition of the Bill and come to some conclusion about dealing with the other clauses. Mr. W. F. MACLEAN. Will the Bill be reprinted ? Mr. FITZPATRICK. I am afraid that will take too much time. Mr. W. F. MACLEAN. It is not very ' long, and I think you could have it set up in two hours. Mr. FITZPATRICK. I was going to suggest that possibly to-morrow we might take up some other measures, and in that event we might get the Bill reprinted. Mr. R. L. BORDEN. I think that will be desirable. We have had a pretty steady grind at the Bill for some time, and there will be amendments moved to all the clauses still undisposed of. It will be advisable to put the amendments in such a shape as will, with as little prolixity as possible, express the views we entertain on this side ; and a day or two devoted to a little consideration for that purpose will not be time wasted. I would suggest that some other business could in the meantime be taken up. I did intend to have made this afternoon some observations with regard to the difference between the original and the amended clause 16. However, I did not wish to make any suggestion to the government as to the course they should take, but I would think that when we take up the Bill again, we should dispose of the land clause first and then take up clause 16 unless the government specially desires to' take up the school matter first and deal with the other afterwards. I am not particular except that I would like to know a little in advance what the course of the government will be in that regard. Mr. FITZPATRICK. As regards the order in which we will take up the clauses, we are quite willing to leave that to hon. gentlemen opposite to decide. I would like to keep the redistribution of seats to the last, but it is a matter of indifference to us whether we deal with the educational clause or the land clause first. Mr W. F- MACLEAN. Is the understanding that the Bill lie over till next Monday'. Mr. FIELDING. We might agree that the Bill may not be taken up to-morrow and that will leave us free to take it up Thursday. [DOT] [DOT]
[Stage Direction]
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Robert Laird Borden: Will the House sit Thursday evening ?


William Stevens Fielding: It is probable we may not and we can always come to some understanding as to when the Bill will be proceeded with.
Progress reported.
On motion of Mr. Fielding, House adjourned at 9.30 p.m.

Wednesday, May 17, 1905.