1924-07-08

[Stage Direction]
Hon. CHARLES STEWART (Argenteuil) (Minister of the Interior) moved for leave to introduce Bill No. 241, to amend the Research Council Act.

Business of the House
Mr. MEIGHEN:: If the minister is acting
for this department I would like to have him explain the reason.


Mr. STEWART (Argenteuil):: I am merely-acting for this department in so far as this particular bill is concerned, because I happen to be associated with it a little more closely than any other minister. The Minister of Railways (Mr. Graham) is acting for this department. My hon. friend is aware that the present bill is merely amending the existing act giving council power to accept a bequest, and it gives the council power to increase its membership. Beyond some changes which were made in the manner in which the expenses of the council would be paid, the present bill is much the same as the old act.


[Stage Direction]
Motion agreed to, and bill read the first time.

Mr. H. C. HOCKEN (West Toronto):: I desire to present a petition from the depositors of the Home Bank asking fen- relief.



BUSINESS OF THE HOUSE


[Stage Direction]
On the Orders of the Day:
Mr. ROBERT GARDINER (Medicine Hat):: On June 26, the hon. member for
Brandon (Mr. Forke) asked the Prime Minister (Mr. Mackenzie King) what further legislation might be expected before the end of the session. It was intimated at that time that the whips were considering the whole question. Will the Prime Minister tell us whether the whips have reported, and what is the result of their report?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: All the legislation the
government intends to bring down is now before the House, with the possible exception of one or two bills that may arise out of the reports of committees, and there may possibly be something referring to the Toronto viaduct. With the exception of that I do not know of any other legislation likely to be brought down this session.


Arthur Meighen: When the Prime Minister says that there may be some legislation arising out of reports of committees, does he refer to reports of committees not yet presented?


William Lyon Mackenzie King: Yes.


Mr MEIGHEN:: But as far as committees have reported, the government has no further legislation?


William Lyon Mackenzie King: I cannot think of any.



CANTEEN FUNDS

Hon. H. S. BELAND (Minister of Soldiers' Civil Re-Establishment):: In this connection,
with the consent of the Prime Minister, I might state that it was my intention to introduce legislation at this session to provide for the disposition of the canteen fund. I have asked the royal commission to supply me with an advance report in this connection, and I am now having the resolution prepared.


Mr. MANION:: Can the minister give us
some information in regard to the disposal of the canteen fund, so that we can understand what the legislation is likely to be?


Henri Sévérin Béland: The resolution will probably appear on the order paper to-morrow, and I would not venture to outline the proposals at the present time. I have only been able to read the report, and I have handed it to the Law Clerk to prepare the necessary legislation. It provides for the disposition of the funds among the different provinces, the money to be placed in the hands of trustees to be appointed by the Lieutenant Governor in Council.



SINGLE TRANSFERABLE VOTE

Mr. SPENCER:: Is it the intention of the government to bring down, or have they decided not to bring down, legislation with regard to the single transferable vote this session.


William Lyon Mackenzie King: The legislation my hon. friend refers to is before the House at the present time. I am unable to say at the moment how far it may be proceeded with this session; but the legislation is before us.



CRIMINAL CODE AMENDMENTS

Mr. SHAW:: Does the Minister of Justice contemplate any amendments to the Criminal Code or to the Bankruptcy Act at this session of parliament?


Mr. LAPOINTE:: Many amendments have been suggested and are being considered with regard to the Criminal Code; but it would be a heavy bill to bring down this session. At this stage the government is considering whether it would not be better to postpone these amendments till next session. In making a decision in regard to postponement, the government may possibly be influenced by the heat.


Mr. SPEAKMAN:: In connection with consideration of possible amendments to the

Overseas Food Supplies
Criminal Code, is the Minister of Justice considering the suggestions I laid before him arising out of the Hanson case, with regard to appeal in criminal cases?


Ernest Lapointe: Yes, the remarks of my hon. friend are being considered. It is a very serious case, and the government is considering the question with regard to amendments permitting appeals in criminal procedure. It will be a very important amendment to repeal this part which was enacted last year. The government is considering the matter.



DATE OF PROROGATION

Mr. IRVINE:: Can the Prime Minister tell us whether whips have indicated to him when the session will close, and if so, what is the date?


William Lyon Mackenzie King: I am afraid I am unable to give my hon. friend an answer 'hat will cover the point in question.



STEAMBOAT ACCIDENTS-TORONTO HARBOUR

[Stage Direction]
On the Orders of the Day:
Mr. T. L. CHURCH (North Toronto):: I would like to call the attention of the Minister of Marine and Fisheries (Mr. Cardin) to two serious steamboat accidents off Toronto harbour. One of these was a collision between the steamer Toronto and the steamer Mod-jeska. Another serious accident to the Mod-jeska occurred off the western harbour. Will the minister instruct the commissioner to proceed to Toronto and hold an inquiry?


Hon. P. J. A. CARDIN (Minister of Marine and Fisheries):: I have already ordered an investigation into the first accident, and I am taking the necessary steps to have an investigation into the other.
OVERSEAS FOOD SUPPLIES On the Orders of the Day.


Arthur Meighen: .1 observe that a former Prime Minister of Great Britain, Mr. Baldwin, speaking in the British House very recently, suggested to the government that a means should be provided for using the enormous quantities of foodstuffs which Great Britain requires, by arrangement with the dominions, involving the transportation and distribution of them at cost; and that Mr. Snowdon, Chancellor of the Exchequer, answering Mr. Baldwin, spoke as follows, according to the Times' report:

He announced that the government had submitted to the dominion governments a proposal of a definite character of a kind suggested by Mr. Baldwin in regard to overseas food supplies.
Has such a proposal been submitted? If so, what is its nature and what statement or reply has the government made?


William Lyon Mackenzie King: The report of the words of the Chancellor of the Exchequer as given is quite correct. The government has received from the British government an intimation to the effect that the British government desired to appoint a committee to consider the one question of the marketing of overseas produce in Great Britain; the communication asked whether the dominions would be prepared to name members of a committee to deal with that one question. The government has replied that as respects Canada we would cordially accept the proposal, and would be prepared to name two members of the committee when it is about to be formed.
SWEDISH IMMIGRANTS On the Orders of the Day:


Mr. S. W. JACOBS (George Etienne-Car-tier):: The newspapers this morning announce the arrival in New York of a Swedish ship with a number of Swedish immigrants. Those people, I understand, are debarred from entering the United States under the new quota law, and it is stated in the report that they are going to endeavour to land in Canada. I should like to direct the attention of the Minister of Immigration and Colonization (Mr. Robb) to this fact in order to see whether permission cannot be granted to these people to land here. I understand they are desirable in every sense. They belong to the Nordic race and as such should be welcomed to this country.


Hon. J. A. ROBB (Minister of Immigration and Colonization):: I thank my hon. friend
for directing my attention to this newspaper item which I have not yet read. I shall have the department look into the matter at once.



REDISTRIBUTION COMMITTEE

William Lyon Mackenzie King: With the permission of the House, I beg to move that the name of the Hon. H. H. Stevens be substituted for that of Mr. McQuarrie on the special committee on Redistribution.


[Stage Direction]
Motion agreed to.

C.N.R.-Branch Lines

[Stage Direction]
Hon. J. A. ROBB (Minister of Immigration and Colonization) moved the third reading of Bill No. 195, to amend the Immigration Act.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved the third reading of Bill No. 227, to amend the Public Service Retirement Act.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals) moved the second reading of and concurrence in the amendments made by the Senate to Bill No. 26, respecting the construction of a Canadian National railway line between Kingsclear and the St. Croix river, in the province of New Brunswick.
Arthur Meighen: Explain.


Mr. GRAHAM:: The original bill provided for the construction of a shorter line in case running rights might be arranged over the Canadian Pacific between the vicinity of Kingsclear and the international boundary; or in case that could not be done, for an extension of the line itself to the boundary. The amendments made in the upper House provide for an attempt being made to get running rights from one or two different points on the Canadian Pacific. I am inclined to think that possibly not much will be accomplished under the amendments; but as the bill as amended accepts the principle that the Canadian National ought to run its own trains to the boundary line at that point, I am prepared, not having been able to secure the whole bill, to accept the bill as amended.
Motion agreed to; amendments read the second time and concurred in.



INLAND WATER FREIGHT RATES

[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals) (For the Minister of Trade and Commerce) moved the second reading of Bill No. 213, to amend the Inland Water Freight Rates Act, 1923.
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Gordon in the chair.
On section 1-Definitions-"shipper".
Mr. STEVENS:: I expressed my objections to this measure pretty fully when the resolution was being considered in committee, I think, about a week or more ago. I am going again to express my objections to the bill. The section immediately under consideration describes what the "shipper" means, and so forth. My attention was called a short time ago to the large number of reports and returns to be made out and formalities to be observed by various classes of business in Canada. Some of these things, no doubt, grew out of the war and, perhaps, under war conditions were warranted. But they have been perpetuated largely because clerks in departments want the information to compile statistics, and so forth. What measure of good can be conveyed to the public or to facilitating the transaction of business by this legislation is beyond me. I cannot see any effect in it at all except that of placing a further impediment in the path of the business public, a further burden, further restrictions, without any corresponding advantage either to the public or to the government. I would suggest to the government to abandon not only this bill but the abortion, which was called legislation, of last session; that so-called legislation failed and the government themselves abandoned it in the middle of the year. The only way in which shipping was able to function on the lakes last year was through the abandonment of that legislation. If the government had administered that legislation it would unquestionably have interfered in a serious manner with the transfer of freight from the head of the lakes to the markets of the world. And the substitution of this bill for last year's act, imposing as it does on the shipper certain duties, is not going to assist at all. I urge the minister to abandon even at this late date, this type of legislation which merely adds to the burdens and obstructions of business. My hon. friend from Marquette (Mr. Crerar), referring to last year's bill the other day, contended that there was something in it in the way of controlling insurance. Personally I do not believe that it does, but for the sake of the argument I am prepared to admit that the act may serve some purpose in that respect. Parliament however is entitled to have it proved how that abortive legislation-I must insist upon so describing it, for I can think of no more suitable term-contributed last year in any way to the reduction of insurance. As a matter of fact the difference was as between one third of a cent, I think, and a quarter of a cent, but, even so, it was not

Inland Water Freight Rates
shown that the reduction, slight as it muse have been, was due to the legislation. I know that the minister now in charge of the bill is not in sympathy with any legislation that harasses business; I am sure that is not his disposition. Unfortunately for himself however he has been forced into the control of the bill by the regrettable absence of his colleague. Now, let us face the facts and admit at once that the hasty and ill-conceived legislation of last year did not work out satisfactorily, and, that being the case, let us abandon that legislation altogether.
Mr.ROBB: For the "hasty and ill-conceived legislation" of last year I assume full responsibility ; I was the minister who brought it in. Hon. gentlemen will recall that the act was introduced as a result of a report made to us by the commissioners appointed to look into complaints regarding excessive freight rates on the upper lakes during the fall season of 1922. In view of that experience therefore the government could not consistently abandon this legislation. The sole object of this measure is to enable the department, through the Board of Grain Commissioners, to compile such records in regard to freight rates charged as will enable them to advise the government at any time whether or not there has been any discrimination. There are those who ask us: "Why do you not abandon the coastal laws altogether without consideration of Canadian shipping?" On the other hand, others point out that this might not work to the advantage of the Canadian shippers of grain.


Henry Herbert Stevens: This act does not refer to the coastal laws, and I have not referred to that aspect of the matter.


James Alexander Robb: I know, but I am leading up to that. I say, there are those who point out that if we abandoned the coastal laws and discouraged Canadian shipping altogether we might eventually find ourselves in the hands of a United States combine and that therefore, so long as our own shipping deals fairly with the Canadian people and carries grain to Canadian ports at relatively as low rates as it charges for transportation to American ports, it is better in the interest of trade generally and of our own shipping not to suspend the coastal laws. So that the government ought to be fully advised as to whether or not it is wise to abandon the coastal laws when they are asked to do so. And how can we determine that? We can do so only by having a record of the rates charged by shipping sailing from Fort William to Canadian and to United States ports. I am free to admit that the one great advantage will be that the Board of 
Grain Commissioners will have continually before them a record of the rates charged so that they may be in a position to advise the government if there is discrimination and whether or not the coastal laws should be repealed. On Friday last I had the advantage of a conference with the chairman of the Board of Grain Commissioners and on Saturday I met another member of the board, Mr. Snow. The chairman would be here to-day so that the committee might have the benefit of his experience, but through the serious illness of a relative he is unable to be with us. I repeat that this bill has been actually in practice since October last, and the chairman tells me that it has been working out satisfactorily to the shippers and to the Board of Grain Commissioners. Under these circumstances, and in the light of the experience of last session, I think the bill covers the requirements of the trade of this country.


Mr. FORKE:: I candidly confess I have not very much hope, from the remarks of the Acting Minister of Finance, that there will be any control of rates on the lakes. The minister speaks about monopoly. Well, I wonder what difference it would make whether we were in the hands of American monopolists rather than Canadians.


James Alexander Robb: It would be all the worse if
we had them both.


Robert Forke: There are things which one cannot repeat in the House but I am going to tell the committee what I heard last year when the bill was going .through this House; it was a threat that we should be left entirely dependent on the American boats if the legislation went through.


James Alexander Robb: That attempt was made, but
they were beaten.


Robert Forke: And I thought that when
such a threat could be made to the government of Canada it was time for us to look for some other source of supply than that particular company.


James Alexander Robb: What would the hon. gentleman recommend?


Robert Forke: I would recommend the suspension of the coastal laws on the slightest provocation. I was glad to hear the remarks of the Acting Minister of Finance to-day, because in a newspaper statement which I read this morning it was suggested that the minister was careful to refrain from mentioning anything like the suspension of the coastal laws. To-day, however, he has mentioned it.

Inland Water Freight Rates


James Alexander Robb: It was the present Acting Minister of Finance (Mr. Robb), who urged the suspension of the coastal laws.


Robert Forke: I do not see any hope for
the future. This talk about building up a Canadian merchant marine is all right, and no doubt we should all like to see that brought about. But under present conditions, with the few people owning boats on the lakes, a monopoly at any time is within their grasp; there is no question about that. We all know that so long as ore is being shipped they are not going to be in a hurry to carry grain if they can make good returns by carrying that ore. I am satisfied that last year if we 'had kept a stiff upper lip until the proper time we should have been able to get the American boats anyway. The minister I know was in a difficult position. He probably did the best thing he could. I have only one suggestion to make. From my experience with some of the gentlemen connected with the Canadian mercantile marine, I am convinced that they are quite capable of looking after themselves, and therefore I think the government need not waste any effort trying to protect them.


Mr. McMASTER:: Under the present law the government may suspend the coastal laws by order in council?


James Alexander Robb: Yes, under another law, not
under this.


Mr. MACLEAN (York) :: I should like to have a short statement as to what would be the benefits resulting from a suspension of the coastal laws, for it might throw much light on this matter.


James Alexander Robb: Under the coastal laws a
Canadian or an American boat can carry grain from a Canadian port to a United States port, and vice versa; but a United States boat cannot carry grain between Canadian ports, nor can a Canadian boat carry grain between United States ports.


William Findlay Maclean: Then when you suspend the coastal laws we will have free trade in inland navigation.


James Alexander Robb: Yes.


William Findlay Maclean: That might be a great advantage to the farmers of the western provinces and to many other people. Perhaps the day is coming when we will have real competition in lake transportation.


James Alexander Robb: Does my hon. friend recommend that?


William Findlay Maclean: I might. If the Canadian National railway system* is to be destroyed in a certain quarter-and there is a suspicion of such an attempt-that might be a way out. I hope that before this House prorogues we will get some light on the attack *which is being made on the National Railways. The key to the situation may be in the suspension of the colastal laws.


Mr. CALDWELL:: If conditions arose on
the Great Lakes similar to those which obtained last year, would it not be possible to suspend the coastal laws with regard to inland navigation only?


James Alexander Robb: We did suspend the coastal
laws on the Great Lakes last year, and the year before.


Thomas Wakem Caldwell: And the suspension did not extend to ocean traffic?


James Alexander Robb: No.


Thomas Wakem Caldwell: If that is the case, I
do not see any reason why the government cannot cope with the situation without doing injury to anyone.


Henry Herbert Stevens: But this bill has nothing to do with the suspension of the coastal laws.


Thomas Wakem Caldwell: I realize that.


Henry Herbert Stevens: We pointed out to the
minister the other day that this was simply imposing further restrictions on the bona fide shipper without protecting him against agents trafficking in space; that is, a broker or a speculator might charter space in a ship ahead of time and re-sell to the shipper. The shipper, under this bill, would be compelled to post his contract, but the broker who makes the profit would not be compelled to disclose his contract at all. The interpretation given to the word "shipper" in this bill limits the application of the proposed obligations to the man who actually owns and ships grain. That is the basis of my protest against this suggested legislation. I want it to be clear in the minds of the committee that under this bill we are not putting any impediment in the way of speculating in shipping space, but that as a matter of fact we are encouraging it. Suppose a shipper of grain charters space in May for shipment in October at a very low figure, and shipping rates increase as time goes on, all he has to do is to put his contract in the namle of a third party, and then at the time of shipment buy from this third party holding on his behalf and post the higher rate. This bill does not give the slightest opportunity to the producer or to the man selling

Inland Water Freight Rates

grain to keep a check on the cost of the transportation of his goods to see whether an unreasonable profit is being made between him and the ultimate market; on the contrary, it simply gives facilities, for covering up abnormal profits resulting from traffic-ing in shipping space.


James Alexander Robb: The Board of Grain Commissioners know the rate charged, and if it is discriminatory they advise the government, which is then in a position to suspend the coastal laws.


Henry Herbert Stevens: The rate would have to
rise to a point which constituted a public scandal.


James Alexander Robb: Not at all.


Henry Herbert Stevens: At least, the rate would
have to rise to a point which must focus public attention.


James Alexander Robb: There might be discrimination at very low rates.


Henry Herbert Stevens: I am not talking of discrimination. I am talking of the alleged intention of this bill. The rate on grain runs from 3 cents up to 7 cents.


James Alexander Robb: It starts as low as 1| cents.


Henry Herbert Stevens: Suppose a broker buys his space now at li cents, and the rate increases to 5 cents; he makes the difference by putting through a transaction with another broker who buys the space in his name,.


Thomas Langton Church: One of the most important factors in solving the transportation question on the Great Lakes is the regulation of shipping rates. Last session this parliament passed chapter 49, an Act to Regulate the Carriage of Grain on the Great Lakes. I cannot see why the rates on grain have been singled out for regulation; what about the rates on package freight, fruit, coal and a great many other commodities that to-day are under no rate control as to water-borne traffic? Why should the grain commission be charged with the control of the lake rates on grain, while rates on the other commodities I have referred to are left uncontrolled -or rather are left at the mercy of a monopoly? Since last session an inquiry by a royal commission has disclosed that the charges were proved in respect to there being a shipping combine on the Great Lakes. This combine exacted such exorbitant rates on the Great Lakes last season that there was an agitation in the summer and fall for the suspension of the coastal laws. I am sorry that the minister proposes by this bill to

charge the grain commission with the regulation of these shipping rates. I think he should follow the report of the royal commission on the subject and also the Drayton-Aoworth report, which recommended that the control of shipping rates on the lakes be placed under the Railway Commission. We do not hear much about the Railway Commission these days. Formerly it was very active in rate regulation, but latterly it seems to be lost, stolen or strayed, for we never hear anything of its activities in this direction. The royal commission which looked into the rates on the Great Lakes last year reported that the Canada Steamship Company froze out all competition on the river St. Lawrence and the Great Lakes, until they were in absolute control. This combine has charged whatever rates it thought the traffic could bear, and it is time that it was brought under control. The only way you will ever regulate transportation rates on the Great Lakes, and maintain proper control of this combine, is to place the rates on all waterborne traffic under the control of the Railway Commission, and1 so put a stop to unjust, unfair and undue discrimination. The report of the royal commission disclosed the existence of an ocean and lake combine, that sat in with the railway to keep up all rates, and hon. gentlemen to my left will find that it will continue in the future as it has in the past. Instead of a political football being made of this matter of the control of rates on land and *water let us have a commission that can wield the big stick and carry out the recommendations of the various experts who have investigated this problem from all angles. We have the Drayton-Acworth report, the report of the royal commission dealing with lake shipping, and the report of a committee of this parliament which last session and the session before investigated the control of rates. The working classes and the farmers are suffering from high freight rates and high cost of production, but there can be no effective remedy until we get a commission that will do in this country what the Interstate Commerce Commission are doing on the other side; they have control not only over rates on grain, but over coal, fruit and all classes of products carried by both rail and water. The grain Commission should fulfil the functions for which it was appointed-it was never intended that that commission should have any control over rates either by land or by water, this is solely the function of an up to date Railway Commission which is badly wanted in Canada to adjust and regulate rates by rail and water equally.

Inland Water Freight Rates


Mr. MILLAR:: A few days ago when we
discussed this matter I objected to the clause to which the hon. member (Mr. Stevens) has taken objection this afternoon. Since then I have discussed the matter with the Chairman of the Board of Grain Commissioners, and I do not think I am betraying any confidence when I say he assured me that the information that would seem to be necessary was available, that is, the rate at which the shippers leased their space. As I read the bill it does not indicate that the shippers must supply that information, and I can conceive of their refusing to give it. He assured me that at the present time they were supplying the information desired as to the rate at which they were letting their space, and if that were placed in the bill or if it were carried out in practice the objection of the hon. member (Mr. Stevens) would not stand. I am convinced, notwithstanding the remarks of the hon. gentleman (Mr. Church) that this power is placed in the proper hands. The grain commission have specialized in the grain trade. They are closer to the producer and I am sure the producer will feel much better protected if the matter is left in the hands of the Board of Grain Commissioners than he would if it should be placed in the hands of the Board of Railway Commissioners. What I said in regard to the saving in insurance a few days ago I am quite convinced is correct. After appointing a commission to investigate alleged abuses and establishing that a combine existed,-to withdraw this legislation and go back to where we started would in my opinion be most unfortunate. If any more effective remedy can be suggested, very well, but until that remedy is suggested I think we should adhere to this legislation and make it as complete and effective as possible.


Henry Herbert Stevens: The remedy that was found last year was in the suspension of the coastal laws, which is not incorporated in this bill and was not in the bill of last year.


Mr. SALES:: When discussing this matter
the other night I asked the minister if he would insert the words "and broker" after the word "shipper" so that we would know of the transaction as respects the man who steps in between. I do not think we get the full information unless that is done.


Henry Herbert Stevens: This legislation is very
incomplete, even if it has any effect along the lines the minister speaks of. We are repealing section 3, and a little later on we are dealing with section 5. Here is what section 5 says:
263i
Any company, owner or person who charges, contracts or stipulates or receives any toll, charge or rate in excess of the maximum rates so fixed by the board shall be guilty of an offence-
That is a penal clause, but there is nothing to penalize the broker or other person who may traffic- in this space. For instance, the owner of a vessel contracts to let space at a rate that is discriminatory, if you like. The buyer of that space must post his rates. The board take power under this new act to penalize not the shipper who posts the rate but the owner of the vessel, who may have sold that space three months before to a broker or middleman. The broker is invariably the man, if he wants to act in this way, who puts his shingle out and has nothing but an office. He has no assets, so that there is no use going after him for a fine. The chances are that if he has made a good killing out of the sale of his space he vanishes, and under this legislation there is no redress. That is the quarrel that I have with this legislation; it was ineffective last year and it is ineffective this year.


James Alexander Robb: My hon. friend is quite wrong. The best proof that it is effective, that it is satisfactory to the trade, is that there is no objection from the trade, though it has been working since October of last year.


Arthur Meighen: The minister means it
has been dead since then.


Sir HENRY DRAYTON:: The minister
should be a little more frank in dealing with this question. We got a lesson last year in respect to the foolishness of trying to rush through legislation in the dog days without very much consideration. When this bill was rushed through at the end of last session there was a protest against it from this corner of the House, but it was not persisted in. It was expensive legislation; it was mistaken legislation, so mistaken that the government had to say that the English language did not mean what the English language said. It was so wrong that we had to read for the words "vessel owner" the word "shipper." It was so wrong that black had to become white. That was the kind of legislation it was. It cost the western farmer, on the lowest possible basis, $3,100,000. The figures have been gone over here, and no answer whatever was made to them; no answer can be made to them. There was a difference in those rates until the time the government sanctioned the calling of black white, and it resulted in a loss, on the lowest possible calculation-

Inland Water Freight Rates


James Alexander Robb: And now my hon. friend is
objecting to our correcting it.


Henry Lumley Drayton: Well, we will
just see how much reason there is in that statement; we will see if there is any more reason in it than there was reason for the act which was passed last year. Of course, my hon. friend has not to pay for it, the government has not to pay for it; these mistakes do not cost the government anything, but they cost the western producer on the lowest possible basis $3,100,000.


James Alexander Robb: Will my hon. friend tell us
how much it cost the western farmer in 1922, prior to the legislation that was brought down?


Henry Lumley Drayton: Yes, I will go
further than my hon. friend goes in connection with 1922. I will freely admit that in 1922 excessive rates were charged; there is no question about that. I will go a little bit further and say that if the remedy had been applied in 1922 which the government could have applied, a sum of money which was probably in excess of $3,100,000-1 could not say exactly -could have been saved to the western farmer. There is room for a little further moral to be drawn from this.


Charles A. Stewart: My hon.
friend will agree that the government had no authority in 192? to act. It was the bill which gave them the first authority to interfere with the coasting laws.


Henry Lumley Drayton: My hon. friend
again takes an impossible position. It suits a government that lies inert to say:	We have
not any legal authority to do anything", when it pays them to say it; but we have heard only this afternoon from the Acing Minister of Finance (Mr. Robb) that in the year 1922 the coasting laws were suspended, and now we hear from the hon. Minister of the Interior (Mr. Stewart, Argenteuil) that the government could not suspend the coasting laws in 1922.


Charles A. Stewart: Is my hon.
friend quoting the Acting Minister of Finance correctly?


Henry Lumley Drayton: I am quoting
him perfectly correctly.


Charles A. Stewart: It has been
the practice of all governments to permit vessels to load in the winter season, and remain loaded, and discharge in the spring at Canadian ports, but I am not aware that there has been any suspension of the coasting laws during the shipping season.


Henry Lumley Drayton: My hon. friend
will find that the law is the law, and that it makes no difference-


Charles A. Stewart: Am I not
correct in that statement?


Henry Lumley Drayton: My hon. friend
is uneasy, and I will wait till he gets through.


Charles A. Stewart: Was it not
the practice of the previous government, as was done in 1922 by this government, to suspend the coasting laws and allow American bottoms to load and remain loaded during the winter, discharging in the spring at Canadian ports? So far as I am aware, no suspension of the coasting law's has taken place during the shipping season.


Henry Lumley Drayton: In the first
instance, what I will say to my hon. friend is this:	If it is illegal for the government to
suspend the coasting laws-


Charles A. Stewart: It is not
now.


James Alexander Robb: We amended it last year.


Henry Lumley Drayton: My hon. friends need not be uneasy; I am coming to that. If it was illegal to suspend the coasting laws, that illegality exists whether they be suspended in September, October, November, December or in January. If they cannot do it, they cannot do it; if they can 4 p.m. do it, they can do it; and, of course, it was always done every year. The coasting laws were always suspended. Why, we never heard any difficulty about the suspension of the coasting laws until the government, instead of dealing with the difficulties which arose in connection with the movement of the 1922 crop, found it convenient to stall the matter by asking this House to have a royal commission appointed, and appointed it. I need not complain about that. The government in that connection were perfectly consistent. It is a habit they have of appointing commissions and robbing themselves of responsibility. They at least were consistent in taking that course. But until that was done I never heard any question about the right of the government to enforce and carry out the coasting laws, and just handle that matter as they ought to handle it in connection with the protection of Canadian commerce. My hon. friend asks, was it ever done before? Yes, it was done in the year 1912, and the rates came down. We had the same position in 1912 as in 1922, and the companies were told straight:	Those rates
come down, or the coasting laws are sus-

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pended. I forget whether the order in council was actually put through, but the rates came down.


Charles A. Stewart: My hon.
friend knows the government did not have authority prior to the passing of this act to suspend coasting laws.


Henry Lumley Drayton: I know nothing of the kind.


James Alexander Robb: The way it was done was that the Department of Customs gave a permit.


George Perry Graham: The Customs department shut its eyes, in other words.


Henry Lumley Drayton: We got it done
when it was necessary.


Charles A. Stewart: You did it when the shipping season was over, and so did this government.


Henry Lumley Drayton: My hon. friend is entirely wrong.


Charles A. Stewart: With the
single exception of 1912. We went very thoroughly into this matter with the Justice department, and had the record of what my hon. friends did during the whole period.


Henry Lumley Drayton: Well, the rates came down, but the rates in 1922 did not come down. Mr. Chairman, my hon. friends are creating a valuable precedent for civilization in this bill. I do not know whether it would be called progressive or not, but I am sure of this, that Canada is the only country in the world where rates are tried to be regulated, not by disciplining the carrier, but by harassing the shipper. I think I am well within the mark in saying that this will be found to be absolutely unique legislation. My hon. friends should get rid of the idea that new legislation is of any use just because it is new; there has to be some sense in it. We tried some new legislation last year, and it was so nonsensical that we have to pass this bill. No benefit whatever came from it. I will be perfectly frank with my hon. friends and say that there was pressure from the West to pass that legislation. The West thought it would regulate the rates, and my hon. friends from the West supported the bill in perfect good faith. I do not know whether they did it on the supposition that an act of parliament is almighty and will reverse economic conditions by its mere passage, or whether they thought its mere passage would make a foreigner submit himself to our jurisdiction,
or whether their ideas were that any change was a good thing. But the change cost the western farmer, on the lowest possible calculation, $3,100,000. That, one would think, should be a fair indication that it is dangerous to pass legislation unless one knows something about it, and no one who knew anything about the question could have been guilty of bringing in such an act unless he wanted to penalize the traffic. Anybody who knows anything about it would know that the whole of this question was threshed out from top to bottom by the Alexander committee of the United States, and that regulation of rates was proposed by that committee to be given to the Interstate Commerce Commission, but in the working out of it the Interstate Commerce Commission found that all that could be done was to regulate the boats owned by railway companies, and nothing else; and the net result of that legislation, which was going to help the wheat grower in the United States, was to lessen competition and bring about the sale of the American railway boats to their competitive carriers.. Anyone who knew anything about the matter would never think for one minute that a trade, which, under the existing conditions could not be reached by American legislation, could ever be reached by Canadian legislation; anyone who took the trouble to think for two minutes would realize that. But because there is a little agitation, because there is to be a little temporary parliamentary support, because it can be said that the government is doing something, that legislation without any thought whatever, and without any consideration as to what its cost to the shippers of this country will be, is to be put through. What we are doing is to nullify the previous legislation.


James Alexander Robb: No, to improve it.


Henry Lumley Drayton: No, to nullify
it. If my hon. friend wants an argument upon it, it is simple to demonstrate that the effect is to nullify. Does any hon. gentleman think seriously that he is regulating rates when he is getting after the passenger or the freight shipper? Is any one so foolish and so crass in his political beliefs and adherence to believe anything like that? No. We are simply nullifying the legislation. And why are we nullifying it? Last year we said that black was white in connection with the administration of the act, and that the act did not apply to the American shipowners as the act said it did. Now we are saying that the pretence of last year is all right, and that the American boats can come in and compete.

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That is all we are doing. Therefore, we are nullifying the legislation of last year. I think it is a good thing to do. Of course a better thing would be to take the whole farce off the statute book. That would be the best thing to do, and that I believe would be the honest and courageous thing to do.


Mr. McTAGGART:: Does my hon. friend
know of any method by which the government might effectively control freight rates on the Great Lakes? If so, would he explain?


Henry Lumley Drayton: The only way
I know of is by judicious handling of the coastal laws.


James Alexander Robb: Would my hon. friend keep
in mind that he once wrote a report on that subject?


Henry Lumley Drayton: I do not know what report the minister is referring to. I have written many reports a long time ago, and I do not know whether my opinion has changed or not. If it has changed, I am quite sure it is for the better, and my hon. friends have every right to adopt it if they so desire. I hope I am always growing a little wiser as I am getting a little older. I do not recollect the report my hon. friend is speaking of. I wrote a report once in connection with ocean rates.


Andrew Ross McMaster: A very interesting report.


Henry Lumley Drayton: I do not know that anything I have said in the House is in conflict with my report on ocean rates. In fact I have not seen the report, or heard of it, or had anything to do with the matter :for years; but I know that it is not in conflict with my statement now-not in the slightest. What could be done, apart from the coastal laws-but I despair of anything like this being done-would be to have some international understanding in connection with all these matters of international freight movement. I did recommend that, if I recollect rightly, in my report dealing with freight rates. That is the only thing which can be done that I know of, apart from coastal laws. If my hon. friend can find anything different in the report, he is welcome to it; but I do not think he will have any success in that line. The United States government at one time did turn their attention to handling this problem on the lakes. They put in a great deal of time on it.


James Alexander Robb: Would the hon. member be
in favour of a measure of reciprocity along that line?


Henry Lumley Drayton: That is hardly a measure of reciprocity, but is merely a friendly co-operation in policing a public service. I would not call it a measure of reciprocity. We have to-day, in connection with the international movement of freight rates, a comity between the Board of Railway Commissioner's and the railway board, a comity which does not rest on statute, a comity which I think as a matter of fact I very largely commenced and laid the foundation for in connection with the switching case down at Windsor; but it worked out. I am not against anything sensible in this world. I believe in common sense.


James Alexander Robb: Then why does the hon. gentleman not support this proposition?


Henry Lumley Drayton: Because this is nonsense; and after all, anything that will guarantee that this large public service shall not take too much from the people is largely a matter of policing. It is a good thing to have co-operation in policing, no matter what particular activity is concerned. I am not going to ask my hon. friend to do what he ought to do. He ought simply to repeal both bills, except the section as to insurance. The reason I except that is, because, frankly, I do not know anything about that insurance rate, and therefore I will not offer any advice on it. It may have worked well, I hope it has; but if it has, it is by accident, because we never heard anything about it in this House. There is nothing else in the measure. It is a question of publicity, which my hon. friend referred to in opening. It will not be effective because these contracts are not to be posted. We are now to pass an act the sole aim and object of which is to undo our mistakes of last year, but we are not to be honest about it, we are to pretend that we are really going to regulate rates by harassing the shipper. The only excuse that remains to be given is the excuse given by the minister, and it really speaks very very well for his self-control when he gives that excuse without laughing. He says we have got to have this information, so that we will know when to take off the coastal laws,-as if there ever was any difficulty in getting information on that point. My hon. friend has been there. I would like to assure hon. gentlemen who have not been there, and have not had the complaints, that there is never any difficulty in learning from the shippers how much they are being stuck

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in their rates. As a usual thing the administrator is not looking for complaints; the fact is that he cannot dodge them. My hon. friend will get all the information he wants as to the rates.


Charles A. Stewart: Is the hon. member sure of that?


Henry Lumley Drayton: Very sure.


Charles A. Stewart: Does the
hon. gentleman infer that there are not some contracts entered into by the big exporters and the shippers that you never hear of?


Henry Herbert Stevens: All of which is carefully concealed and buried and protected on behalf of the offending person in this bill.


Charles A. Stewart: I do not
think so, if the shipper has to file his rate. My hon. friend is making a good deal out of the fact that we get this information, but he forgets that in the case of the largest shippers, unless you have some compulsion in regard to it, you never know what they pay; neither this government nor any other government will know what they pay. My hon. friend realizes that.
Mr. STEVENS We will not know it under this legislation.


Charles A. Stewart: I do not
know why.


Henry Lumley Drayton: My hon. friend
is wrong again. He should not get the habit. It is a bad thing to persist in. I have had complaints, and insistent complaints too, from the biggest shippers, the biggest exporters of grain in Montreal, people who buy the largest quantity of space. My hon. friend need not think that trade is not affected as a whole. It is.


James Alexander Robb: I have had similar complaints
and I have discovered afterwards that the men making the complaints had a secret agreement, had booked millions of space at a low rate.


Henry Lumley Drayton: There is one
way in which my hon. friend can get away from that. If he really wants to deal with this matter, he can make it illegal to have any of this sub-contracting and transfer of space.


James Alexander Robb: I am willing to consider any
recommendation that will deal with the problem.


Henry Lumley Drayton: H my hon.
friend is really serious in this matter he should make it illegal to sub-contract and transfer space.


Charles A. Stewart: Would that be wise?


Henry Lumley Drayton: I am seeking to meet the case submitted by the minister. I am not saying that it would be wise. I am pointing out that the last excuse is this: There are big people who get space at a very low rate; they may not use it and it is passed on; they get control of this space and the competitors have to pay a very high rate.


Charles A. Stewart: The transfer js not the serious part. The serious part is the booking of space for the use of the individual himself.


Henry Lumley Drayton: Where does my {ion. friend think this legislation helps in that connection?


Charles A. Stewart: Simply that the shipper will have to file his space.


Henry Lumley Drayton: If my hon.
friends want to get cheap movement, they want to be consistent about this. They must go into the question of rate discrimination. As regards rate discrimination in connection with contracts for water carriage, the opinion of every expert that I have known in the world has been to the effect that you can provide only a maximum rate in connection with ocean traffic, and that is all that this provides. In order to treat logically the suggestion of the Minister of the Interior-and of course his case is a desperate one, but I am not blaming him for making these suggestions1-


Charles A. Stewart: Do not worry about me.


Henry Lumley Drayton: If we take that suggestion seriously, he is going much further than merely looking after maximum rates. He wants to find out when a big dealer is getting a low rate. The only use of that is to avoid discrimination and to have a parity in minimum and maximum rates. If he could do that, it would be an excellent thing, but so far no one in the world has ever said that it can be done. Nevertheless, we are here on the 8th day of July just wondering how on earth this bill could ever have been passed.


Andrew Ross McMaster: It is always interesting to see what consequences the restrictionist mind gets its adherents into. There are those who say that goods should be sent out of this country, and then complain of high prices, and then talk of price-fixing, and who now presage that all sorts of consequences are going to come from this legislation. What we have to do in this country is to apply an economic remedy to an economic ill. The

Inland Water Freight Rates
economic ill is the power among certain of our steamboat proprietors to create a combine, and! the economic remedy is to break that combine by opening up competition. That is the real method of curing this ill. Does this bill do that? If this bill stood by itself, it would not do it; but this bill, as has been indicated by one, if not both of its foster fathers, is merely to give a barometer or a speedometer or some other measuring instrument whereby one may judge whether rates are going up or going down or are being kept constant on a reasonable basis, in order that they may apply the real remedy. The real remedy is to take off the absurd coastal laws which we have, which endeavour to give our shipowners an advantage over other shipowners. Of course, also, when we are dealing on the Great Lakes, with other people, with laws of the same nature, our remedy would be to get some sort of reciprocal arrangement. There are those who say: Well you are just increasing the possibility of a larger combine. There may be something in that, but I do not think it is serious. The larger the market, the more difficult it is for sellers in that market to combine to the disadvantage of the consumer. The larger the supply of tonnage, of transportation facilities, offering, the less possibility there is for those supplying transportation facilities to get together and gouge the consumer. I would support this bill on this understanding, that it was merely a method of acquiring information. The minister tells us that the method is in force now; that it is doing good work, and, therefore, I think it is at least worthy of enactment. But what I should like to impress upon the government is this, first that they should be very responsive to information received by them of undue enhancement of rates, and that they should enforce the suspension of the coastal laws without waiting too long. I would go further and ask them to consider the advisability of making reciprocal arrangements with the United States, and also, if we are going to build up a great mercantile marine, if we are to be a great maritime power, whether we had not better take example from the greatest maritime power in the world which has no coastal laws at all, but which throws its coastal trade open to the whole world.


William Findlay Maclean: I agree with
what the hon. member (Mr. McMaster) has just said, that the time may have arrived when we should suspend the coastal laws and in that way improve competition in connection with transportation. I also agree with the hon. member for West York (Sir Henry 
Drayton), who did not quite say that, but who mentioned the point. We have heard a great deal about bringing Nova Scotia coal and also Alberta coal to Ontario by means of improved waterway and railway rates. The way to get all these things is actually to use the suspension of the coastal laws for the benefit of transportation. The real question in the country to-day is transportation rates by rail. We have in Canada a great national railway, the greatest system of railway transportation that was ever on this continent and a transportation system of the roost promising kind. I believe the day is not five years away when the Canadian National Railways will have a surplus of $70,000,000 a year. Somebody else does not like to see that. There is a competing road that would like to destroy the Canadian National Railways and it is trying to do so now. If the Canadian National Railways cannot stand the competition of waterways, I doubt whether the other railway that is so anxious to destroy the Canadian National, can stand it. If we want to reduce transportation charges, the way to bring about competition is to suspend the coastal laws. It will be found that the people are getting so tired of monopolies entrenched by statutes passed by this parliament that there will be a great demand for relief. There was an article in the Globe yesterday stating that the government must do something in connection with the attacks that have been made on the National Railways; but in this article they carefully avoided mentioning the fact that the real attack made on the Canadian National Railways in a certain quarter in this country quite recently was made by the Canadian Pacific Railway. That is the attitude of the Canadian Pacific Railway; it is down on the Canadian National Railways and wants to put them out of business. We can discipline the Canadian Pacific by putting it up against a suspension of the coastal laws so that there might be real competition in connection with water transportation. The Canadian National Railways could stand it, but I doubt whether the Canadian Pacific could, and certainly something of the kind would have a tendency to put a stop to these attacks on the Canadian National.


Thomas Sales: The point of importance to
my mind is the suspension of the coastal laws. The government admit that they have power to suspend these laws and the other night I raised the question as to the point at which they would consider there was a sufficient discrimination to warrant that suspension. The government had the power of suspension on

Inland Water Freight Rates
May 16, but no action was taken; and from the Manitoba Free Press of May 16, of this year I learn that the Canadian shipping companies are charging 2 cents a bushel to Buffalo and 2h cents to bay ports although the distance is only half as great. This 2 cent rate to Buffalo was fixed early in the season by the Canadian shipping lines. Does the minister not think that that was the time to suspend the coastal laws? Does he not think that with such a discrimination as that they should be suspended? Let me quote again from the Free Press of June 14 of this year:
There is a Canadian mill at Port Colborne, just 18 miles from Buffalo. This mill has to get its supplies of western Canadian grain by Canadian boats, because of the shipping regulations; and these boats patriotically charge at least a cent a bushel more than they charge for carrying the same wheat to its American competitor in Buffalo.
And again no action was taken. Is not that a sufficient reason for suspending the coastal laws?


James Alexander Robb: A government cannot be guided by newspaper articles, and that is the reason we are passing this bill; we want to enable the Board of Grain Commissioners to get all the information that is necessary so that they may be in a position to advise the government.


Thomas Sales: Then I take it that the information to hand has not been sufficient to establish discrimination as between Canadian and American ports. Is that the minister's answer?


Arthur Meighen: Does not the hon. member understand that the men who are so hard pressed and have to pay such high rates decline to say anything about it for fear they may get relief? That is the government's opinion.


Thomas Sales: I understood from the minister that this legislation had been in effect since October last and that it was instrumental in getting the necessary information. I must conclude from the minister's remarks that there has been no discrimination this year or the government would have suspended the coastal laws.


James Alexander Robb: The minister of Trade and
Commerce (Mr. Low) is ill; if he were here he might have all the information on the subject. I can say offhand however that there have been no complaints filed with the department' from shippers.


Thomas Sales: Have we to wait for a complaint on the part of shippers before the coastal law's are suspended? Or will the government through the Board of Grain Commissioners, at any time when it is considered that a discrimination exists, take the matter into their own hands and suspend the laws?


James Alexander Robb: When there is a complaint
from the shippers we will look into the matter. And had we looked into it in 1922 we should have discovered that an associate of my hon. friend who was complaining had himself a low charter rate.


Thomas Sales: I am not in favour of any
friend or associate of mine especially having a low rate. I have been imploring the minister to include the word "broker" in order more fully to meet the case.


James Alexander Robb: I do not object to that.


Thomas Sales: That I think would cover the point. But what must be .the extent of the discrimination against the Canadian grain grower by these boats before the government decides to step in and suspend the coastal laws? I recommended the other night 1 cent a bushel as being the limit that should be allowed to exist between the Canadian vessels and American boats.


James Alexander Robb: It is generally recognized I
think, from past experience, that cent was a fair difference between the rates. My hon. friend will understand that the vessel gets a return load a little quicker and handier when unloading at Buffalo, and that is one reason why they carry a somewhat lower rate to American ports. And the movement of ore, limestone and coal has very much to do with the return rate on wheat.


Thomas Sales: I quite understand that, and
that is why I want a declaration from the government as to the point at which they would say that the discrimination was sufficient to -warrant the suspension of the coastal laws. I suggested J cent a bushel.


James Alexander Robb: It would depend on the movement of the return cargo.


Thomas Sales: Will the minister not fix a
limit to the extent of the discrimination that should be allowed to exist?


James Alexander Robb: Why should I do so? The discrimination would vary from time to time.


Thomas Sales: [DOT] If a definite limit were fixed it would be a great assurance to the grower of grain; I would suggest \ cent per bushel, which is double what the minister himself has mentioned. If this w'ere done the shipping people would 'know that the moment they overstepped the line and indulged their greed
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too far the government would immediately cope with them.


George Perry Graham: A ship is not like a railway train, which has to go between two fixed points; a ship does not need to run between any two points which the government might designate. Let us suppose that we fixed an imperative limit, as is suggested. My hon. friend might want to move a cargo of grain and under peculiar circumstances he might find it advisable to offer a particular boat a slight margin over the limit set. But he would find himself in a difficulty inasmuch as he could not exceed the law.


Andrew Ross McMaster: It would be inadvisable to mention any fixed rate. But surely the government could say that whenever there was substantial discrimination the coastal laws would be suspended. "Substantial discrimination" would of course be a variable term, but I should think such a provision would be a wise one.


George Perry Graham: That is really what the
bill has in view.


Arthur Meighen: I have listened with a
great deal of interst to the hon. member for Brome (Mr. McMaster) who I noticed was watching the discussion, trying to find out what could be said for the legislation. He finally described it as a barometer and speedometer, and ended up by expressing the belief that at least it. was innocuous. I will give him my idea of the whole thing, last year's and this year's put together:	If ever
there was a mass of parliamentary rubbish which we should get out of the way as fast as possible it is this. How any hon. member who wants to maintain the dignity of parliament, who does not want ourselves to be made an exhibition of before the country and the world, can desire to keep this stuff on the statute books I do not understand. All afternoon we have been discussing another bill altogether to get something that means something. This means nothing; this talk about suspending the coastal laws has nothing whatever to do with this legislation. This legislation serves no purpose on earth in relation to the suspension of the coastal laws; it is only a joke.


James Alexander Robb: The right hon. member will
admit that it serves the purpose of gathering information as to rates.


Arthur Meighen: No. It is absurd to
suggest that it is for lack of information that we have refrained in the past from suspending the coastal laws. We did not know what high rates were being charged! The people who

were being charged high rates were so modest that they would not let us know for fear we would help them! Why, we know from day to day what the rates are, for you never have any difficulty in getting information from people who are oppressed.
Mr. MjoMASTER:	Oh yes, very often
the oppressed are afraid of the oppressor.


Arthur Meighen: I have never experienced that in this free country.


Andrew Ross McMaster: It is true nevertheless.


Arthur Meighen: Oh, that is a joke and
the hon. member knows it. "It is to laugh," to talk about the government having any difficulty in finding out what the rates are.


James Alexander Robb: Let me cite an instance.
During the months of June and July, 1922 a very large shipper in Toronto kept telephoning complaints to Ottawa of discrimination as between Canadian ports and Buffalo, but he refused absolutely to confirm his complaints by letter until some time in Augurt, and the reason he gave was the very reason given by the member for Brome.


Arthur Meighen: Who would ask any government to act on a telephone message? The government has no difficulty at all in getting at the facts as to the rates charged. In 1922 the rates from Winnipeg were quoted to the government over and over again, rates that could not be disputed, and the newspapers called upon the government to act. The government did not act. It may have felt that it had sufficient reason for remaining quiescent, but the last reason on earth ever suggested was that it did not know the facts. Did anybody ever say last year that the purpose of this legislation was to find out what the rates were? The purpose of the legislation was to regulate rates. The government never complained that it had any trouble in ascertaining what the rates were, especially when they were high. Now, once this legislation is passed we have a statute which is as arrant a specimen of parliamentary humbug as ever was placed on the records of any legislature. Look at section 3:
Provided that the shipping company-
Which always is the offender. The idea of calling the man who is imposed on the offender, and providing regulations which if he violates will render him liable to be fined! A more utter monstrosity could not be imagined The shipping company alone can be the offender, but this legislation does not get after the shipping company at all. Section 3 did, in the legislation of last session-at

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least it did in the way the legislation was intended, it provided that any shipping company must file, before any transaction shall be complete and binding, a record of that transaction virh a schedule of the rates which it proposes to charge. Anyone reading the section will see it was intended that the shipping company shall file a tariff that is to be effective for some specified time. It also provided that if the shipping company failed in that or, having a maximum fixed, failed to abide by it, it should be subject to a heavy penalty. This is repealed by the proposed legislation, and instead what do you think is substituted? A clause which says that the shipper-the man whom we are trjdng to protect-shall file with the grain commission a copy of his charter after he gets to be the owner of it. It may be three months after the shipping company issues the charter; it may be three months after the broker sold it; it may have been transferred half a dozen times before it reaches the shipper. Anyone knows that the filing of such a charter could not possibly be the foundation for action by a judicial body nor by this government. In so far as this government might act under its control of the coastal laws, it could not possibly act on the basis of any charter so filed, because such a charter may have gone through other hands and it might be three months before it would be filed with the grain commission. Then the substitute clause makes no offence at all, it simply says the shipper must do this.


Andrew Ross McMaster: Would not the right
hon. gentleman take it that on each transfer of a charter party, such as he contemplates, a copy would have to be filed?


Arthur Meighen: No, not until it gets to
the shipper. It is the shipper as defined in the first section of this legislation.


Andrew Ross McMaster: But the shipper is any
man who contracts.


Arthur Meighen: Very good. Section 4
remains as it is. Just let the member for Brome notice this. I want to read first of all section 3, which is the substituted section to which I have been referring. Section 3 did read that the rates and tariff should be filed as I stated, evidently contemplating rates and tariffs that would subsist for some specified time. Then section 4 reads:
It shall be the duty of the board to receive and tabulate all such tariffs and rates as may be filed-
After this law goes through, section 3 will read as follows:
3. Every shipper shall immediately after entering into any charter party, bill of lading or contract for
the carriage of grain from Fort William or Port Arthur to any other port or place in Canada or the United States by lake or river navigation, and before the grain shall have been laden in pursuance thereof, file with the Board of Grain Commissioners of Canada a true copy of the said charter party, bill of lading or contract for carriage.
Thereupon section 4 comes along and says that it shall be the duty of the board to receive and tabulate all such tariffs and rates. Tariffs and rates are not mentioned in the section, they are wiped out; all that is filed now is the charter party for this one trip-a charter party that may have been made two or three months before. Now then, how does section 5 ever apply after this legislation goes into effect? That section provides:
When in the opinion of the board, the toll, charge or rate which any company, owner or person charges or intends or proposes to charge for the carriage of grain as aforesaid is unreasonable or excessive, or amounts to an unjust discrimination against any person, company or class of persons as compared with the tolls or rates for similar traffic between Canadian and United States ports or between one port and another in either of said countries, the board may prescribe such maximum rates as it may consider reasonable; such maximum rates so prescribed may vary or be limited in their application according to the time or season of shipping, and the board shall indicate in its order fixing such maximum rates whether the same are to prevail until further order or the period or periods during which they are respectively to prevail; and so forth.
How could the board ever presume to act on the basis of the information which the new section 3 alone provides that the board shall act on? Why, the Minister of Trade and Commerce, when this bill was before us on a previous occasion, frankly told us that it was not contemplated the board would ever act against the shipper at all. Here is "Sl law which we are asked to place on the statute book to provide that in case an unjust charge is levied against a man, no doubt against his will, he be punished for paying the imposition! He is so liable under this new section 5 which effects a substitution for the old section 8. There is no way in the world-and the Minister of Trade and Commerce did not pretend it was ever contemplated-whereby the shipowner would be mulct under any of these provisions, and he could not be, for the simple reason that the board could not possibly fix a tariff based on information which does not provide at all what the rates are going to be. And if they attempted to make such a provision, how in the world is it to be enforced? It cannot be enforced; there is no provision for the purpose. So he comes to-day and says, ''All I want is the information." Well, if that is so, wipe all this other rubbish away. Why leave it here to becloud the statute; or rather, worse, to simply make an exhibition of this parliament before every person in the country
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or out of the country who reads the legislation. It would have been much better if the government had come down-and they would not have required to be any more frank than the minister this afternoon-and said, "We confess that it was hasty and ill-digested legislation, and we want to repeal it."


Charles A. Stewart: I am inclined to agree with my right hon. friend, but he does not suggest that we wipe out the penalty for non-fulfilment of filing?


Arthur Meighen: I consider it perfectly
worthless. It cannot be any use for the shipper to file those charters.


Charles A. Stewart: Why not?


Arthur Meighen: I have tried to make it clear. Simply because those charters may be one, two, three weeks or a month old. And even if they are only a week old they are no good. What good would they be for determining what the rate should be the next week?


Charles A. Stewart: The only
remedy is suspension of the coastal laws.


Arthur Meighen: Then there is nothing
known. The shipper may pay twice what the charter says and the government knows nothing about it. He has bought that charter from a broker and he has had to pay the broker a premium. But all he files is the charter, and that is worthless; it will only stack up the grain commission's office. That is all it has ever done.


Mr. MARTELL:: Is any procedure provided for other than the ordinary system of bringing action for breach of contract?


Arthur Meighen: The old act provided
that no shipping company could collect if they charged beyond the maximum that was fixed. But in the first place there cannot be a maximum fixed because there is no basis to fix it on. Next, the new act provides that the shipping company cannot collect an excess above the maximum that never is fixed. But I do not argue on these special provisions because they do not come into the picture at all; you never get them. There cannot be a maximum fixed on the basis of the information here. The minister knows he never intends that a maximum shall be fixed. He has learned from last year that the very fixing of that maximum drives American vessels off the lakes.


Charles A. Stewart: That was
not the point.


Arthur Meighen: The minister knows that is not intended. Why leave all this legislative wreckage-


Charles A. Stewart: It was not
a question of maximum; it was a question of filing.


Arthur Meighen: But is not the maximum exactly the same as the filing? Does he imagine that American vessel owners who object to filing their tariffs are going to submit to a maximum dictated by the parliament of Canada? The minister knows they will not.


James Alexander Robb: I made it very clear last
year in presenting this legislation that I thought it would be dangerous to fix a maximum, because the result would only be to drive business over to Duluth.


Arthur Meighen: Certainly. Therefore let
us get this legislative wreckage out of the way; it is humbug to leave it in. Some one says there is one clause that is a jewel in the ash heap and that we should therefore keep it-it is this clause about insurance. Now, I regard the clause about insurance as just as worthless as the rest,- and nothing worse could be said. I will read the clause; it is the first time I have given special attention to it.


James Alexander Robb: It has workp-'


Arthur Meighen: Worked? Pshaw! I heard something about its working last fall, and now I understand fully why it worked just as it did. This is clause 7:
It shall 'be unlawful for any person who is a vessel broker or person engaged or acting as agent or otherwise in the chartering of any vessel or in contracting for the hire or letting of cargo space fof the carriage of grain from Fort William or Port Arthur to any port or place in Canada or in the United States by lake or river navigation to solicit any risk, or to issue or deliver any receipt or policy of insurance, or to collect or to receive any premium in whole or in part, or to inspect any risk, or to adjust any loss, upon, for or in connection with any consignment of grain so to be carried.
I presume it was thought that the broker who was selling the space would probably have some leverage by which he could exact a larger rate, consequently he was put out of the insurance business.


James Alexander Robb: What happened was this. Brokers who were selling insurance would say to a grain shipper: You cannot have space on this vessel unless you take insurance from me.


Arthur Meighen: Yes, and does the minister say he cannot do it yet? Suppose he is acting now as John Smith or more likely as Georgian Bay Ports Limited, or something

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like that; well, he can take out a charter next day as Lake Bay Ports Limited, and he is outside the act. That is what I understand was done. I had not read the provisions of the clause before, but now that I have read them I can see that no man need be delayed more than twenty-four hours, at least not longer than enough to get out a charter.


James Alexander Robb: But the broker is in the position now that he must sell the space and the shipper has the right to get the insurance where he pleases and where he can get it cheapest.


Arthur Meighen: All he has to do is to
do it in another capacity, and he can do it right off. There is no hindrance, there is not the slightest handicap. Whatever may have resulted in the matter of insurance rates resulted from the law of supply and demand, and not from this legislation.


George Perry Graham: Will my hon. friend say
that under the present act any of these brokers can compel a shipper to pay more than the proper rate for insurance? Under the old act he could.


Arthur Meighen: He can do it just the
same as under the old act, because if he is running this brokerage business as John Smith, Limited, all he has to do is to run his insurance business as Georgian Bay Ports, Limited.


George Perry Graham: But if John Smith says
the shipper must insure with Georgian Bay Ports Limited, this provision will apply.


Arthur Meighen: He is in absolute compliance wdth section 7.


George Perry Graham: He is not trying to comply with section 7; he is trying to get his insurance at a low rate. He does not have to go to Georgian Bay Ports Limited; he can go to any other company that he believes will give him a proper rate.


Arthur Meighen: He could do the same
before as he can do to-day; precisely the same. The whole act is defeated by a simple change in the name, a change in the corporate entity of the party acting.


George Perry Graham: That is, if there is collusion.


Arthur Meighen: No, there is no need of
collusion at all. I do not think the minister follows. Suppose I am a broker and I am holding up a shipper in an effort to get a larger insurance rate than I am entitled to. I say to him: You will not get the space
unless you take this insurance. I am not allowed to do that, but who am I when I am doing it? I am John Smith, Limited. Well,
I take out a charter and I call myself Georgian Bay Ports Limited, and my boy sitting over there can do just precisely the same as I was doing before; there is no breaking of the act at all. So I say that whatever ressulted in the matter of insurance rates resulted from the law of supply and demand and not from anything in section 7. But if the minister still clings to section 7, I believe I would agree with the member for Brome that it is innocuous without being a howling farce. The rest of the legislation is nothing but a screaming joke; and let us as a parliament wipe it away and be frank enough to say that we were wrong.


Mr. BOYS:: Is it the minister's intention to relieve the shipping company, or shipowner, or person who offers or advertises or proposes to carry grain for hire, and to impose the penalties of this act upon the shipper of the grain? If that is the purpose then I admit it is being accomplished, but I can hardly believe it is.


James Alexander Robb: I am not very insistent upon
the penalty clauses; if we are able to get the information that will enable the grain commission to advise the government from time to time as to the rates. In doing this we are now almost two years away from the report of the grain commission which inquired into those rates. In introducing the legislation last year we only followed the recommendation of this commission. That is why hon. gentlemen opposite did not oppose it except to the extent that they suggested we should put the rates under the Railway commission. The government decided that the grain commissioners, being on the ground, were in a better position to examine these rates. They also indicated that we should establish maximum rates, fix rates on the lakes, but we did not consider that practicable.


Henry Herbert Stevens: So far as I am concerned
I never supported in any shape or form last year's legislation. I prophesied then that the legislation would be abortive, and I opposed it unreservedly, as I am doing this year.


James Alexander Robb: I think my hon. friend did,
and I believe he was sincere. But I recall that there was a very big lobby carried on around this building and that there was opposition from government supporters as well as from the Senate. But we knew where the opposition came from and we knew where the opposition came from to allowing American
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vessels to go in there last fall, because agents of the Canadian companies were at Buffalo and at Cleveland and all along there trying to keep them out.


Henry Herbert Stevens: In regard to that insinuation-because that is what it is-I may say that not a soul ever spoke to me in regard to this matter. I opposed the legislation on principle. When I sat on the other side year after year I opposed legislation of this character, though not dealing with exactly the same matters. If the minister suggests that I was influenced by any unholy lobby in this matter, he is absolutely wrong.


James Alexander Robb: I did not say that. I said
there was a lobby carried on around these buildings, and that opposition came from government supporters. I recall that my hon. friend didi oppose the measure.


Andrew Ross McMaster: I would gather from what the leader of the opposition has said that he is not altogether in hearty accord with this legislation. I would like, however, as far as my feeble powers might enable me to do so, to meet some of what I think are his reasonable objections to clause 3 as redrafted in section 2 of this bill. I would ask him to do me the honour of listening attentively while I read to the committee a suggested change in the clause which I think would meet some of the objections he has so forcibly and eloquently urged upon the committee. I suggest that section 2 read:
Section three of the said act is repealed and the following substituted therefor:-
Every person who makes or acquires the right of carriage under any charter party, bill of lading, or contract for the carriage of grain from Fort William or Port Arthur to any other port or place in Canada or the United States by lake or river navigation, and before the said grain shall have been laden in pursuance thereof, shall file with the Board of Grain Commissioners of Canada a true copy of the said charter party, bill of lading or contract of carriage, with a statement of the consideration price paid by him therefor where said consideration differs from that stipulated by the said charter party, bill of lading or contract of carriage.
I think there is something in what the leader of the opposition says, that as a means of obtaining information the clause leaves something to be desired, inasmuch as the charter party might be transferred from hand to hand on several occasions with a price differing in subsequent transactions from the price first stipulated when the charter party was originally made.


William Alves Boys: How would you know the
original price?


Andrew Ross McMaster: I presume it would appear in the charter party.


William Alves Boys: Has that to be filed?


Andrew Ross McMaster: Under this section as originally drafted the charter party would have to be filed.


William Alves Boys: No, that is the very point I am after. That is all being eliminated by repealing the original clause 3. That is the very point I was trying to develop with the minister.


Andrew Ross McMaster: I had the feeling that under the clause as presently drafted the charter party would contain the rate. I think most charter parties do.


William Alves Boys: I quite agree, but my point is, under what provision of the act as it is proposed to amend it, would the original charter party have to be filed? I admit you had to do that under the act last year.


Andrew Ross McMaster: The original charter
party, under my suggestion, would always be filed.


William Alves Boys: I think not. Why?


Andrew Ross McMaster: Because that would show the initial price paid for the carriage, and if there was any price different from that originally stipulated, when the charter party passed from hand to hand, that price should be filed with the commission as well.


William Alves Boys: If my hon. friend's amendment provides that it meets my objection, but if he reads it again, he will see that it does not. He would need to provide two things to be filed, namely, the contract made with the person who has to do the filing and
5 p.m. who received that right by transfer, as well as the original charter party, which I do not think he provides for.


Andrew Ross McMaster: I thought I did. May I read the clause I suggest again: Every person who makes or acquires rights of carriage under any charter party, bill of lading, or contract for the carriage of grain-


William Alves Boys: I at once say that language could be made applicable, and solely applicable, to the last transfer.


Andrew Ross McMaster: I do not think so. I have made the language very broad. I say that "Every person who makes or acquires the right of carriage under any charter party", whether he uses that right of carriage himself or transfers that right by transfer of charter party or bill of lading would have to file with the Board of Grain Commissioners the consideration price which he paid for the charter party or the contract of carriage. The words "contract of carriage" cover both bill of lading

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and charter party, both those methods of entering into a contract of carriage. My idea is that the original contract of carriage should be filed, and that every acquisition of that contract of carriage by any person subsequently should be filed with the price paid, if that price differs from the price stipulated in the original contract of carriage.


Henry Herbert Stevens: What would my hon.
friend do with clause one under his suggestion?


Andrew Ross McMaster: I think perhaps clause one would require some amendment, but if my hon. friend would notice, I have rather enlarged the scope of section three. It reads at present "every shipper." I say "every person."


Lewis Herbert Martell: Is it not a fact that a charter party may be made for the whole contents of the ship? Then there might be subsequent bills of lading which the person who secured the charter party could enter into with other parties. So the bill of lading or the charter party could not, under any circumstances, be the same thing.


William Alves Boys: The minister answered my
inquiry merely regarding penalties, but that was not my only point. Is it the intention by legislation to relieve the ship owner of filing the rate he gets? That is certainly being done here in this legislation, which transfers that duty absolutely from the shipowner to the person who does the shipping. You are repealing clause 3 entirely, and relieving the ship owner both of penalties and the duty of filing the rates. You are casting the whole thing upon the shipper. I think there is absolutely no escape from that.


James Alexander Robb: My hon. friend does not need to argue that; I admit it at once, and that das been the practice since last October. With such an evident division of opinion between eminent lawyers on both sides of the House, I am disposed to accept the opinion of the chairman of the grain commission, who was recognized as a pretty good lawyer when he was in Montreal. My hon. friend the leader of the opposition also thought he was a pretty good lawyer, because he was a member of the government that appointed him. Now the chairman of the grain commission says that this act is right, that it has worked since October last, and that it is satisfactory to the trade. Having that in mind, I am disposed to stand by the act as it is.


Arthur Meighen: Has the minister ever seen him laugh at it? He would not say anything to me, but really he could not keep
from laughing. That is the only comment he ever made to me on the act, and really I think it was most appropriate. Talk about lawyers! It is not a lawyer's work at all; it is a matter of common sense.


James Alexander Robb: Answering my hon. friend, I had no reason to doubt the chairman's loyalty to the ministry he is now under when he made that statement to me last Friday.


Arthur Meighen: He is absolutely loyal to the minister, but the minister himself would laugh at it just the same as he did, and the Minister of Trade and Commerce even more. The act is a farce. There is a measure of control that can be exercised by control of navigation laws, but it is only a measure, and I would not like to go the length of some hon. members, nor do I think they would go to that length if they had the responsibility. When you talk of capriciously cancelling navigation laws-


Andrew Ross McMaster: Nobody said capriciously.


Arthur Meighen: Well then, fixing a rate within a quarter or half a cent-it cannot be done, and we will only injure ourselves in the long run by doing it. Only under special circumstances, circumstances which I think arose in 1922, but the ministry did not act upon them, and again early this year, should the navigation laws be suspended. If we act hastily in these matters, we will only end up without any mercantile marine of our own in the hands of an American monopoly. England built up her mercantile marine by navigation laws. I do not know whether she has them now or not


Andrew Ross McMaster: None for years.


Arthur Meighen: But England is not
situated beside a country tremendously stronger than herself. It is the old, old story. Without navigation laws, does anybody imagine our vessels would not go over and put themselves under American registry? Why in the world would they not? We would not have a company. We would not have a tax on them and would not collect a cent. They would all be American companies. Why would they not? So that we must have some reason in the matter. At the same time the ministry were excessively timid in 1922. In 1912 we got it done. The navigation laws actually ceased to operate, and we did it through the customs regulations.
Inland Water Freight Rates


James Alexander Robb: You did it in 1912 the same as we did it in 1922, after there was a big row and discrimination.


Arthur Meighen: But we did it in time
to get the rates down, and we saved a lot of money to the western farmer; but in 1922 you suspended the navigation laws after the ice had suspended them.


Charles A. Stewart: When the
row occurred about excessive rates in 1922 there was not a particle of space in Colborne, in Midland or in any of the lake ports. I happened to be making investigations at that time, and I say that any action taken then would have been fruitless. Ships were tied up at these ports for several days then, awaiting unloading. I agree with my hon. friend that we should be careful about the suspension of the coastal laws. In regard to the criticism about our action in 1922, I know whereof I speak, because a thorough investigation was made at that time.


Arthur Meighen: There may have been
circumstances which have not been brought to my knowledge, which afford some justification, but I think an investigation would show that it should have been done sooner.


Charles A. Stewart: At the time the requisition came to Ottawa, I had a man visit every one of those ports, and the fact is that for five days the ships were lying at the docks unable to load. What would have been the sense of suspending the coastal laws?


Henry Herbert Stevens: Was Buffalo congested?


Charles A. Stewart: Buffalo is
always open.


Henry Herbert Stevens: An American company
cannot go to Fort William, take a cargo of grain to Buffalo, and then take it from there to Montreal. The same company cannot take the same cargo right through.


An hon. MEMBER:: They do.


Henry Herbert Stevens: Not the same cargo. They can take a different cargo. But if my hon. friends had suspended the coastal laws they could have transferred the cargo at Buffalo into smaller ships, and taken it to Montreal in smaller bottoms.


Lewis Herbert Martell: When was the law
changed, so that an American vessel could trade between one port in Canada and another port in Canada?


Henry Herbert Stevens: It would require a suspension of the navigation laws, and my hon.

friend says it would have been, fruitless to suspend those laws in 1922. Why? Because the lake ports were congested; but had he suspended the coastal laws Canadian grain could have been carried from Fort William to Buffalo by American vessels and transferred into smaller vessels and taken to Montreal.


Charles A. Stewart: That was
being done. The transfer was going on at Colborne at that time. There were 1,300 cars at the elevators in Montreal, which they were unable to unload. The harbour was full of ships with grain at the time this demand arose for the suspension of the coastal laws. I am .thoroughly in accord with the leader of the opposition that one should exercise some care about these things and only do it when it is imperative in the interests of the trade. If it had been of any value at that particular time it could have been done; but that was the situation. I want to take the responsibility of having made that recommendation at that time. I am convinced that the only remedy on earth that we have, in fairness to our own ships, and for the preservation of our own interests, is to take the responsibility of suspending the coasting laws, if need be, to cut down rates. Otherwise I do not see that we have any remedy.


Arthur Meighen: A measure of control
can be exercised in that way. I do not wish to go further into the 1922 case, because it has no immediate relation to this bill, but any other effective control necessarily from the very geography of the situation must be a joint control.


Charles A. Stewart: You cannot get that because their own shipping controls it-


Arthur Meighen: Their own shipping I
hope does not control their government.


Charles A. Stewart: That may
be, but they refuse to register.


Arthur Meighen: We have solved international difficulties before by joint control- for example our International Joint Commission-and I do not see anything in the way of a real permanent solution of this question, until the United States look upon this matter as we do and are ready to enteT into some joint arrangement and have a board for the purpose. In the meantime, let us not perpetuate again the awful farce of a year ago; and having done it, do not let us try to cover up our tracks by a paltry bill such as has been introduced this afternoon. Let us frankly breast the whole situation, wipe it

away, and leave ourselves to do the best we can, in our wisdom, to control the situation by the exercise of our coasting laws, and let us make an effort to join with our neighbours to the south in effecting a control that will be a real control.


Mr. CAMPBELL:: I think that this legislation will be useful because it will enable the government to secure information necessary for them and on which they can act in suspending the coastal laws. But I would impress upon the minister the necessity for acting before he receives complaints from the shipper. If I understood him rightly he said he would not act until he had received complaints from the shippers. The shippers are not particularly interested in what the rates are. The shipper is the purchaser of grain, and he simply passes on to the farmer whatever rate is being paid at that particular time. The farmer is the man who pays the rate. In 1922 complaints were received, not only from sihippers but from farmers' organizations, from provincial governments in the West and very many boards of trade and. other public bodies. There was plenty of information before the government at that time on which they could have acted. In regard to the coastal laws, the minister stated that the suspension of those laws would not be in the interests of the shipping companies. I am quite aware of that. But the suspension of those laws very often would be in the interests of our own ports and of our own producers of grain. For instance in 1918, in 1921, in 1923, and again this spring in 1924, we found that the shipping companies were charging higher rates to bay ports than to Buffalo, notwithstanding the fact that the distance is 50 per cent greater.


Andrew Ross McMaster: Fifty per cent greater
to Buffalo?
Mr. CAMPBELL. Yes, I think it is 500 to 800 miles. There is surely in any case a reason for the suspension of the coastal laws when the rates are higher to bay ports than to Buffalo, and I think the government should certainly not wait for any particular information or any particular specified complaint. They should act immediately when they find high rates are being charged to bay ports.


James Alexander Robb: Regarding my hon. friend's
statement of the difference in rates, I have aere a telegram from the chairman of the grain commission, dated June 11, addressed to the Minister of Trade and Commerce. Apparently there were newspaper complaints that there was discrimination in rates, and 264
Inland Water Freight Rates
this telegram gives the rates. It is addressed to Hon. Thomas A. Low, Minister of Trade and Commerce, and reads as follows:
Your wire lake rates: inquiring from varied interests Winnipeg unable ascertain further reasons than already advised for differential Port Colborne Buffalo rates: rate to-day Fort William to Montreal eight and a half cents, Fort William Buffalo New York ten and a half cents, being two cents preference Canadian route.
Rates were not higher; they were lower.


Milton Neil Campbell: I was referring to the
rates to the bay ports as compared with the rates to Buffalo. I think if the minister will look into this he will find that a quarter to half a cent higher rate was being charged to bay ports than to Buffalo.


James Alexander Robb: Will the hon. member tell me what the rates to bay ports were at that time?


Milton Neil Campbell: They were varying
almost from day to day. They were published in the Free Press, but they showed various rates which were higher. I have a statement from the Bureau of Statistics covering the rate's from 1912 to 1923 inclusive. These are correct, I presume. They are issued by the Bureau of Statistics and they show that the bay rates in 1918 ran higher than the rates to Buffalo.


Henry Herbert Stevens: Is that for a specific period or an average over a season or what are the rates the hon. member is quoting?


Milton Neil Campbell: I have here a chart-


James Alexander Robb: I think in 1918 the whole trade of both the United States and Canada was controlled under the War Measures Act.


Milton Neil Campbell: It was only for a short period during 1918 that the rates went higher. These are simply lines on a chart showing the two rates, one to Buffalo and one to the bay. From 1912 to 1917 the rates run very closely together, the bay rates being slightly less than the Buffalo rates. But in 1918 the bay line crosses the Buffalo line and runs higher. Later on, in 1919, it drops down again. In 1921 we find the bay rate very much higher. Then the lines meet again and in 1923 the bay rate runs considerably higher. I know that the shipping interests claim that the return cargoes they get from Buffalo have a good deal to do with these rates; but I do not think that is correct; in fact I am assured by the Bureau of Statistics that it has no effect on the rates. The average price they were charging for handling coal last year from Buffalo to the head of the Canadian lakes was 45 cents a ton as compared with about $1.45 a ton for grain and 80 cents



Inland Water Freight Rates
a ton for ore from the American head of the lakes. That would indicate that coal is being handled very cheaply, and I think when a vessel coming back secures coal, it is just that much to the good. I do not think it has any effect whatever on the rate going down. In my opinion the suspension of the coastal laws is the only thing that can affect the rates. If we are going to retain the coastal laws for the benefit of the shipping interests and operate against our own ports and our own farmers, that is very serious discrimination. The minister spoke abou; being in the hands of an American combine. If he will refer to the report of the royal commission appointed to examine into lakes rates, last year, he will notice that they stated that there is not nearly so much indication of a combine on the American side as on the Canadian side. In fact, the rate always shows that there is keener competition on the American side and not so much of a combine as on the Canadian side. If anything were necessary to prove either the lack of ability or of desire on the part of the government to deal with these combines, it is this very amendment that we are passing to-day. The very fact that the government was unable to handle the shipping companies and is now putting the restrictions on the shipper of grain instead of the shipping companies shows that the government either has not the power to handle the situation outside of the coastal laws, or else has not the desire. I do not know which is the case. It cannot be emphasized too strongly that the coastal laws are the only means we have of dealing with this rate situation. I know that the quantity of ore that is handled has a great effect on the rates. When a large quantity of ore is being handled the rates go up; when the quantity of ore drops off, a large quantity of space is available for grain and the rates go down.
As regards insurance, I do not wish to rob the previous legislation of any of the credit for reducing the rate of insurance, because I believe it had a great deal to do with that reduction. Nevertheless, competition had also a great deal to do with it. I notice in 1922 an insurance rate of 60 cents per $100 was charged from the head of the lakes to Montreal. In 1923, it had dropped to 30 cents, but it dropped from 30 cents to almost ten cents per $100 after the American boats came in. Therefore, competition is, after all, the principal factor in setting the rate of insurance as well as of grain.


Mr. COOTE:: I am prompted to make
these remarks by the statement of the Minister of the Interior that in 1922 he did not
lMr. Campbell.j
want to suspend the coastal laws because the elevators were full of grain and boats had to wait five or six days to be unloaded. At that time Canadian elevators on Georgian bay ports and at Goderich were in some cases filled up with American grain and American boats were still discharging grain cargoes at those elevators. Would it not have been just as well to let the American boats carry down a little Canadian wheat and congest the Canadian elevators with Canadian wheat as well as American wheat? Chickens will come home to roost. This government in 1922 in not suspending the coastal shipping laws did not, I think, do their duty. They were appealed to, I think, as early as July of that year when there was no new Canadian wheat crop coming down. Mr. James Stewart appealed to this government because he was discriminated against and made to pay a higher rate.


Mr. MOTHERWELL:: Under what
authority would we have repealed the coastal laws at thai time?


George Gibson Coote: Under the same authority as the government repealed them in November of that year when it was too late to afford any relief.


William Richard Motherwell: We repealed them
when the last boats were being loaded. That was all. That had been done a dozen times before.


George Gibson Coote: The government had just as much power to suspend Those laws in the month of July as they had in the month of November.


Charles A. Stewart: Was there a request for a repeal in July?


George Gibson Coote: Yes.


Charles A. Stewart: I never
heard of it.


William Richard Motherwell: There was no congestion then.


George Gibson Coote: The correspondence of last
season was brought down. I do not have it at hand, but Mr. Stewart's appeal started in July and it kept up for some time. The government must have considered the advisability of suspending the coastal shipping laws because anyone who will look at the file will see that there were a large number of protests from shippers who feared that they would be discriminated against. We are often told in Canada that if we had more farmers and increased production, we would have cheaper rates. It was because we had so much pro-

Inland Water Freight Rates
duction in 1922 we got the elevators blocked up and the western farmer was charged excessive freight rates to the extent of aboul 87,000,000.
I have just this suggestion to make to the minister. I have been rather impressed, during the discussion which has been carried on this afternoon, 'by the statements made by the hon, member for Brome (Mr. McMaster), and also by the leader of the opposition (Mr. Meighen) in regard to the possibility of trouble resulting from this legislation such as we had last year in the months of September and October, particularly before the Board of Grain Commissioners put their own interpretation on the act which we passed. I would . suggest to the minister that as this is a very difficult situation to deal with, he might incorporate in this bill a provision which will give the Board of Grain Commissioners power either to enforce the law requiring the publication of rates or not to enforce it, because they may find they are only getting into difficulties the same as they did last fall.


James Alexander Robb: It is on the recommendation of the Board of Grain Commissioners that we are introducing these amendments. This is what they have been working under since October of last year.


George Gibson Coote: They have not been working under it very long and they may run up against trouble with American shippers this year if they enforce this legislation. That is my idea. I want to see the Board of Grain Commissioners given as free a hand as possible to deal with this situation. I advocate the abrogation of the coastal shipping laws, but the government will not agree to that and the responsibility is upon them to see that fair rates are charged to the Canadian shippers. If they are satisfied with this legislat'on, are wilbng to accept the responsibility and will see that we get fair rates this fall-


James Alexander Robb: AVhat does my hon. friend call fair rates?


George Gibson Coote: Similar rates to those which
the American farmer has to pay.


James Alexander Robb: I pointed out a few minutes
ago that in June the rate was two cents lower to the Canadian seaboard than to the United States seaboard.


George Gibson Coote: But the minister was quoting rates to the seaboard; he was not quoting rates from Fort William to Georgian bay ports as compared with Buffalo. There is no question that last year and the year before we were paying higher rates from Fort William 2641
to Georgian bay ports than we were paying to Buffalo although the distance is not more than one half.


James Alexander Robb: Yes, and that is why we introduced the legislation; it was because of that discrimination.


George Gibson Coote: The minister will admit
that the legislation was faulty and that it took two months to get it operating at all.


James Alexander Robb: I admit that as a result of
that legislaion we have had no complaints of discrimination this year such as we had last year.


[Stage Direction]
Section agreed to.
On section 3-Penalty for excessive rates.
Henry Herbert Stevens: I want to point out one of the absurdities of this bill. Personally I am absolutely opposed to this legislation through and through as I was last year, and I predict again that it will be simply a source of trouble and of misinformation and misdirection to those who it is hoped will get some benefit from it. I want to indicate a situation which in my opinion no sane individual could wish to bring about. This section relates to section 5 of the old act, which carries with it a penalty clause. Let me read that clause and then show the minister how it may apply.


James Alexander Robb: It applies only for neglect to
file rates.


Henry Herbert Stevens: That point will come up:
Any company, owner or person who charges, contracts, or stipulates or receives any toll, charge or rate in excess of the maximum rates so fixed by the board shall be guilty of, an offence and liable therefor to a penalty not exceeding two thousand dollars, and so forth.
Under the new act which we are passing,
A,	the owner of a vessel may sell a charter to
B,	an agent or broker, six months, say, before the charter is to. be used. B sells t*
C,	the shipper, who pays perhaps double what B paid to A originally. C, under the new aet must file information as to what he has paid. He files it, and the rate is considered excessive. Now, the penalty falls-where? Under this clause it falls on the owner of the vessel who is quite innocent and who made a perfectly fair sale in the first place to B. There is nothing in the act to hold B responsible at all; he may be just a transitory individual who has taken his profit out of the sale and vanished. The only penalty, if any penalty is invoked, is executed on A, the original owner. That is one of the absurdities of the bill, and I want the minister to appreciate the ludicrous part of it.
Inland Water Freight Rates


James Alexander Robb: Will the hon. member not give the Board of Grain Commissioners credit for some common sense? Surely they will not arbitrarily haul everybody into the police court; they are not going to go out and look for legal trouble.


Henry Herbert Stevens: But I find that it is not the Board of Grain Commissioners who will apply the penalty. Let me continue the quotation from section 5 of the old act:
-a penalty not exceeding two thousand dollars and not less than five hundred dollars, or to imprisonment for a term not exceeding six months, enforceable and recoverable upon indictment or upon summary conviction before any stipendiary or police magistrate having the jurisdiction of two justices of the peace, and moreover shall be disentitled to recover or to assert any remedy for the recovery of any freight for which he shall have stipulated or charged at a rate in excess of the maximum rates so fixed as aforesaid.
The prosecution shall be before a stipendiary magistrate or a magistrate having the power of two justices of the peace; it is not the Board of Grain Commissioners who will apply that section.


Charles A. Stewart: They are
the only parties who can originate the prosecution.


Henry Herbert Stevens: I do not think so. And
in any case I have not that supreme confidence in the board which my hon. friend seems to have. Merely to say that the Board of Grain Commissioners appears to be satisfied with this legislation is not sufficient. I believe that the grain commissioners themselves feel that this bill is of such a character that it will not offend the shipping interests, nor the brokers, nor the insurance men, nor the big shipper of grain. I do not *think it will offend any of these.


James Alexander Robb: Then why delay it?


William Richard Motherwell: The only ones it
appears to offend are hon. gentlemen opposite.


Henry Herbert Stevens: There is one whom it will offend and whom the Minister of Agriculture overlooks.


William Richard Motherwell: Who is that?


Henry Herbert Stevens: I mean the small shipper
and producer of grain: he will suffer injury.


William Richard Motherwell: If the producer of
grain were hurt does not my hon. friend think he would know it?


Henry Herbert Stevens: He knows it afterwards.
Now, there is an example of the way in which the Minister of Agriculture (Mr. Motherwell) looks after the interests of his constituents.
[Mr. Stevens.!
Regarding the producers of grain, he says, "Let us wait until they are injured and we shall then hear from them." I want to point out to the Acting Minister of Finance (Mr. Robb)-because I know it is hopeless to point out anything to the Minister of Agriculture-


William Richard Motherwell: It certainly is.


Henry Herbert Stevens: I do not expect either to
influence his desire or to penetrate his intelligence in this regard; I am speaking to the minister (Mr. Robb) who is acting for the Minister of Trade and Commerce.


Some hon. MEMBERS:: Order.


Henry Herbert Stevens: What is out of order about that?


William Richard Motherwell: Oh, let it go.


Henry Herbert Stevens: My hon. friend will have to let it go; he bows to the inevitable.


William Richard Motherwell: Of course, seeing
where it comes from.


Henry Herbert Stevens: I am addressing my remarks to the Acting Minister of Finance, whom at least I give credit for reasonable intelligence and honesty of purpose. It is difficult for us to extricate ourselves from the old legislation, and it would be far better for the minister to repeal the old act altogether and bring in an entirely new bill. But do not let him mix up any new intentions, however excellent they may be, with a piece of legislation such as last year's which has been proven hopeless and inapplicable. The only way in which the legislation of last year could be of any use was, paradoxically, by its being ignored. And how did the minister ignore it? He said to the grain commissioners, "You interpret the act in any way you like, but be sure to interpret it in such a way as to break the deadlock." And that was wise under the circumstances.


James Alexander Robb: And it is their interpretation that we are now putting into the statutes.


Henry Herbert Stevens: Well, it is so absurd, that upon my honour, I cannot see why the minister should stand by it at all. The only excuse for this bill is to save the minister's face; it may save him from being ridiculed on account of the legislation of last year.


James Alexander Robb: For that matter, hon. gentlemen have atempted to ridicule me already this afternoon.


Henry Herbert Stevens: That is unfortunate, but
the legislation is so fatuous that I would ask the minister to let it stand until he can obtain

Inland Water Freight Rates
competent legal advice which will enable him to eliminate these absurdities that face us step by step in this legislation.
Mr. ROBB. I should like to accept the advice of my hon. friend but I am now acting on the advice of the chairman of the Board of Grain Commissioners who, I may point out, was recognized as a competent lawyer.


Henry Herbert Stevens: I wish we had him in the committee before us.


James Alexander Robb: He would have been here if
it were not for the serious illness of a relative. But he is not alone in expressing satisfaction with this legislation. I have been going through the files and I find a number of telegrams from different shippers indicating that they are satisfied with it.


Henry Herbert Stevens: Will the minister read
them?


James Alexander Robb: Yes. The first I have is from Winnipeg, Manitoba, under date August 13, 1923:
Hon. J. A. Robb,
Minister of Trade and Commerce,
Ottawa.
The filing of charters as constituting a tariff we consider advisable in connection with the Inland Water Freight Rates Act.
Gooderham, Melady & Sellers.
There are four similar telegrams from shippers. The next one is P & H-that would be Parrish & Hinebecker; the next one is James Carruthers & Co.; then Hallett Carey Swart Ltd.-


Henry Herbert Stevens: Are these shipping concerns?


James Alexander Robb: There is no bigger grain exporter in Canada than James Carruthers, and
he does not own any vessels.
Mr. STEVE'NS:	I am asking about the
others.	*


James Alexander Robb: My hon. friend knows that
Gooderham, Melady and Sellers have houses in Winnipeg, Fort William, Montreal, New York and, I think, Liverpool; Parrish and Hinebecker have a string of elevators throughout Western Canada. These are all shippers and they are satisfied with the proposed legislation, but notwithstanding that the change proposed has been working satisfactorily since October, we have discussed it all this hot July afternoon. I would suggest that we let the bill go through, and if it is wrong my hon. friend will be able to chastise us next year.


Henry Herbert Stevens: What is the date of those telegrams?


James Alexander Robb: August 11, 11, 11 and 13.


Henry Herbert Stevens: I would call the minister's attention to the fact that the approval expressed in those telegrams applies to the old act before it was suspended.


James Alexander Robb: Certainly, that is what I am
stating.


Henry Herbert Stevens: My hon. friend is repealing the very clause of which they approved.


James Alexander Robb: The grain commissioners have applied the clause in its amended form since October last.
Bill reported, read the third time and passed.



POST OFFICE ACT AMENDMENT

[Stage Direction]
Hon. CHARLES STEWART (Acting Postmaster General) moved the second reading of Bill No. 189 to amend the Post Office Act.
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Gordon in the chair.
On section 1-Regulations by Postmaster General as to registration of letters, and compensation for loss.
Henry Lumley Drayton: What rates are proposed to be charged?


Charles A. Stewart: These rates are given to me merely as an indication; they are: For $25, 10 cents as at present; $50, 20 cents; $75, 30 cents; $100, 40 cents.


Henry Lumley Drayton: That is a very considerable increase. What is the present revenue?


Charles A. Stewart: I have not
the figures.


Henry Lumley Drayton: Has the revenue been sufficient to cover the cost of service?


Charles A. Stewart: This is an
increase of indemnity.


Henry Lumley Drayton: Also of rate;
it runs from 10 cents to 40 cents.


Mr. ROSS (Kingston):: Does payment of those rates insure the public for the amounts stated? Or is it simply the old regulation under which you paid 13 cents, 3 cents postage and 10 cents registration, and got nothing? Has anybody ever been paid $25?


Charles A. Stewart: Yes, the
maximum has been paid. The reason for increasing the indemnity to $100 is that so much jewellery is being sent by registered mail.

Inland Water Freight Rates
_ Mr. ROSS (Kingston): I register my objection to any further increase. The old rate of registration was pretty high, and this increase is a steep tax on the people.


Charles A. Stewart: Of course,
we are giving the post office authorities power under the amendement to make rates, but these are not definitely fixed. What I have mentioned is simply the scale that has been handed to me.


Henry Lumley Drayton: Does the minister think the duty of legislation should be passed on to the Post Office Department.


Charles A. Stewart: It is not a matter of legislation, but of regulation. If the rates are excessive, there is no reason why they should not be reduced, but I have not any information in that respect.


Arthur Edward Ross: What are the insurance rates?


Henry Lumley Drayton: Practically the same.


Charles A. Stewart: The insurance rates are: $5, 3 cents; $25, 6 cents; $50, 12 cents; $100, 30 cents.
Mr. ROS& (Kingston); That is in addition to registration?


Charles A. Stewart: Yes.


Henry Lumley Drayton: The rates were fixed by legislation. The department could make a lower charge if they desired, but there was a maximum beyond which they could not go. My hon. friend's suggestion is to allow the department to charge just what they like, which is a novel departure. Why should he not give us his maxima?
Mr. STEWART (Argenteuil); The maxima were not fixed by legislation as far as I can discover, but if it is thought wise that they should be so fixed I see no objection. This is simply a copy of the regulation that is in effect with respect to insurance.
Sir HEXRk DRAYTON: I do not think my hon. friend has read his own notes to this bill. Paragraph (k) as it now stands in the statutes reads as follows:
(k) prescribe and enforce such regulations as to letters directed to be registered, as to him seem necessary , in respect to the registration of letters and other matter passing by mail, as well between places in Canada as between Canada and the United Kingdom, or any British possession, or any foreign country, and to the charge to be made for the same, not exceeding ten cents per each letter or article: and to compensate for loss not exceeding twenty-five dollars for each registered domestic article.

That is just what I said: that there was a maximum provided, and that maximum is now struck out, so that the department will have the right to make regulations, in the matter without limitation. It may be that the maximum charge is too low, though the general idea is that most of these charges are at present too high. However, leaving that aside for the moment, the effect of my hon. friend's amendment is that the department may fix the charges without being limited by any maximum, and may make any charge they see fit. I would ask him seriously if he really supports legislation of that character, giving the postal authorities a blank cheque to charge what they please.


Thomas Langton Church: I have had some protests from people who object to this increase in the rates. The minister was not so anxious to increase the rates of the rank and file in the postal service, but he is now willing to put up the rates on certain classes of registered mail, when Great Britain, for instance, is reducing its rates on similar matter. I have read the report of the Postmaster General of Great Britain and I find that he is not only making use of many new methods of giving the public service, but is also reducing rates. I submit that we should come back to one cent drop letters in the city of Toronto.


The CHAIRMAN:: I would direct attention to the fact that this clause deals purely with registered mail and regulations relating thereto, and insurance.


Thomas Langton Church: I accept your ruling, Mr. Chairman; I have no doubt it is correct. But we wish to find out something about this legislation. There is reference here to the making of regulations with respect to registered letters and to compensation for loss. I fail to see where there is any loss, and I fail to see where the minister can show any justification for such a bill as this. The people are clamouring for increased postal facilities and for decreased rates. This matter was discussed last session when the Post Office estimates were up, and you can find on Hansard a statement of what was being done in other places. I submit that this bill should be held over until a survey is made of what is being done elsewhere.


Charles A. Stewart: There is no change in existing rates. There is no increase in the rate up to a maximum of $25, but we do want to increase the maximum to $100. As to What the hon. member (Sir Henry Drayton) has said, I am unable to give him the

La Banque d'Hochelaga
information with respect to maximum rates, Sir ^ HENRY DRAYTON:	Better call it
and that being the case I would move that six o'clock.
the committee rise and report progress. I will ^t sjx 0>cioct the Speaker resumed the get the information and it will save a good	chair and the House took recess,
deal of discussion later.
Progress reported.



AGREEMENT WITH THE CORPORATION OF OTTAWA

[Stage Direction]
Hon. J. H. KING (Minister of Public Works) moved that the House go into committee to consider the following proposed resolution :
Resolved, that it is expedient to provide that the Minister of Public Works may, on behalf of His Majesty, enter into an agreement with the corporation of the city of Ottawa, extending for a period of one year from the first day of July, 1924, the provisions of the agreement between His Majesty and the said corporation dated 30th March, 1920, and set out in the schedule to chapter 15 of the statutes of 1920.
Motion agreed to and the House went into committee. Mr. Gordon in the chair.
Henry Lumley Drayton: Is there any
change in the agreement, or is it simply an extension for one year?


Mr. KING (Kootenay):: It is extended for one year, without any change.
Resolution reported, read the second time and concurred in. Mr. King (Kootenay) thereupon moved for leave to introduce Bill No. 242 to authorize an agreement between His Majesty the King and the corporation of the city of Ottawa.
Motion agreed to and bill read the first and second times, considered in committee, resorted, read the third time and passed.



INDIAN RESERVE LANDS

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved the second reading of Bill No. 191 for the settlement of certain questions between the governments of Canada and Ontario respecting Indian Reserve Lands.
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Gordon in the chair.
On section 1-Agreement binding, and Governor in Council authorized to carry out its provisions.
Henry Lumley Drayton: Would the
minister explain the effect of the agreement?


Charles A. Stewart: The agreement is rather lengthy.
After Recess
The House resumed at eight o'clock. PRIVATE BILLS
LA BANQUE d'HOCHELAGA
Mr. PAUL MERCIER (Westmount-St. Henri) moved the second reading of Bill No. 218, to change the name of La Banque d'Hochelaga to Banque Canadienne Nationale.


William Findlay Maclean: Will the Prime Minister inform us whether the government approves of that name? I have no objection to it, but by this bill the bank is given the name National Bank. It might lead people to think that it was the Bank of Canada, if we had one.


Ernest Lapointe: How about the Royal Bank?


William Findlay Maclean: That is the
Royal Bank of Canada.


George Perry Graham: And the United church.


William Lyon Mackenzie King: This bill simply changes the name from La Banque d'Hochelaga to Banque Canadienne Nationale.


William Findlay Maclean: I am not raising any objection from a local point of view.


Mr. J. S. WOODSWORTH (Centre Winnipeg) :: A few days ago a number of
members took exception to the bill regarding the United Church of Canada. They objected to using the word "Canada" or "of Canada," the thought being that we must not do anything that would in the slightest way suggest that any denomination had any particular status approaching a national church. I think an even greater objection applies to the incorporation of this institution under the proposed name. Here is a bank that seeks to have the name "Banque Canadienne Nationale." No bank short of a government bank ought to have that name. Some of us desire to have government banks established in this country. There will be no end of objection when that day comes, as it will before long, when we have government banks established, to having the name pre-empted by a small bank like this. It may lead to false ideas on the part of many who come to this country. We have
Indian Reserve Lands

no Canadian national bank to-day, and here is a bank that will be presumed to have some status as a national institution. It seems to me it would be a bad precedent to set, and even aside from the name I wonder whether it is a good thing to change the name at a time when there is so much suspicion with regard to the standing of a good many of our Canadian banks.


Ernest Lapointe: May I suggest that this condition exists already. We had the Banque Nationale, which means the National Bank. It was merged into the Banque d'Hoehelaga. They have the right to use the name of the one or the other. We have that name already. I would suggest, however, that the matter be dealt with by the committee on Banking and Commerce. The bill could be referred to that committee and all the objections could be raised before the committee. We would discuss the matter when the committee reported on it.
Motion agreed to and bill read the second time.



SECOND READINGS

[Stage Direction]
Bill No. 229, to incorporate L'lnstitut des Freres de Saint-Gabriel au Canada.-Mr. Cas-grain.
Bill No. 230, for the relief of Eva Laura Bell.-Mr. Rankin.
Bill No. 231, for the relief of Alexander Fawcett.

Mr. Duff.
Bill No. 232, for the relief of James Henry Cooke.-Mr. Duff.
Bill No. 233, for the relief of Beatrice Ella Mastron.-Mr. Martell.
Bill No. 234, for the Telief of Herman Kleinsteuber.-Mr. Guthrie.
Bill No. 235, for the relief of Mary Ann Hastings.-Mr. Hocken.

[Stage Direction]
The House resumed consideration in committee of Bill No. 191, for the settlement of certain questions between the governments of Canada and Ontario respecting Indian Reserve Lands, Mr. Gordon in the chair.
On section 1-Agreement binding, and Governor in Council authorized to carry out its provisions.
Joseph Tweed Shaw: Has this bill any significance in connection with the present dispute between the government and the Indians from the province of British Columbia?


Charles A. Stewart: No. This is an agreement between the Ontario and federal governments and affecting only Indians in Ontario.


Joseph Tweed Shaw: It can in no sense be considered as a precedent, I take it, as regards that situation?


Charles A. Stewart: Not any
further than that precedents are so frequently quoted, but I fail to see where it would have any significance in connection with the British Columbia affair, because this purports to deal purely and simply with Ontario Indian affairs.


William Findlay Maclean: Does it affect the Indians' title to land?


Charles A. Stewart: No.


William Irvine: Have the Indians themselves been consulted regarding the agreement entered into between the two governments?


Charles A. Stewart: In many cases, yes, but that would not be true of all the bands in Ontario. To consult them all would be an impossibility as my hon. friend will readily understand. There is in this agreement nothing new except the very oft disputed question of the ownership of the land itself, an everlasting dispute, and then the question of the allocation of moneys received from the sale of minerals found in Indian reserves. That is all that the agreement purports to do. It will be beneficial to the Indians. My hon. friend will remember that my remarks on a former occasion in connection with this bill included the reading of a memorandum of the dispute that has existed between the province and the Dominion with respect to the actual ownership of lands in Indian reserves. This is somewhat complicated because of treaties that were in existence prior to 1873. Those are not included in the bill because in that case the tribes made treaty arrangements whereby they have complete ownership of all minerals that are on their lands. In the event of the extinction of a tribe, the same process would be applied to the disposition of funds as is provided for in this agreement, but the bill does not affect those tribes who have had special treaties entered into prior to 1873 involving the minerals as well as the land.


Mr. LEWIS:: Have those lands already
been surrendered by the Indians?


Charles A. Stewart: There is no surrender on the part of the Indians. When

Indian Reserve Lands
a band surrenders its land, it always does so by vote of the band subject to the approval of the superintendent general. That is true in the case of sales or leases. This bill does not involve the hereditary title to reserves already in existence, but the bill provides a method, if a band becomes extinct, for dealing with the land and minerals in question and how .the disposition Of the funds is to be made. The federal government through the superintendent general has complete control of the funds in the interest of the Indians so long as an Indian remains in existence.


Mr. GARLAND (Bow River):: Are the
Indians represented by counsel when agreements of this kind are arranged?


Charles A. Stewart: No.


Edward Joseph Garland: The department undertakes all that for the Indians without any separate counsel for them.


Charles A. Stewart: Yes. I
wish my hon. friends not to be mistaken, in the attitude of the department. My hon. friends will remember the argument made by the leader of the opposition (Mr. Meighen) a few days ago with respect to the Eskimo. The responsibility of the government of Canada is to take care of the Indians, who are known as wards, and certain lands are allocated for the use of the Indians. To all intents and purposes the Department of Indian Affairs stands to protect the Indians in every way it can, to work in the interest of the Indians. The Indians, I am free to say, do not always think so. They are human, like the rest of us, and sometimes they feel that, perhaps, what we consider is in their best interest, is really not the thing that should be done for them, but in the main we get along fairly amicably with the Indians in that respect.


William Irvine: The minister said that
certain lands were allocated to the Indians. Who allocated those lands originally and what rights were involved in the allocation? Does not the present bill set aside those rights and involve a constitutional difficulty?


Charles A. Stewart: No. In
nearly every case the settlement of reserves and the treatment of Indians was arrived at by treaty with the various bands through their chiefs; the Indians were settled on reserves and for the surrender of their title they accepted by agreement an adjustment by which it was undertaken that they should be given certain benefits. The bands in the West were
to get stated quantities of food at stated intervals, besides clothing, and they were to be educated, and so on. In other words they became wards of the government, settled upon an area of land known as a reserve which is administered by the Department of Indian Affairs. This duty devolved upon that department of the federal government at the time of confederation. We are experiencing considerable difficulty in British Columbia as it is not clear what the arrangement was between the federal government and the government of British Columbia under the provisions of the Act of Union. But in this case that difficulty does not arise. It is true that in Ontario within recent years there has been some question regarding the settlement of a reserve, the band contending that they had not surrendered their title and claiming certain areas in that province. The reserve has of course been in existence for a number of years but there was some doubt as to the question of the treaty. We are endeavouring to settle amicably with the Indians these differences that arise from time to time, and while I do not know personally of any other case in Ontario at the present time I am informed that there are some small tribes in the north of that province with whom treaty arrangements have not been made.


William Irvine: Are the Indians in British
Columbia in an entirely different position from those in Ontario, or is the same principle involved in both cases?


Charles A. Stewart: The tribes
in British Columbia claim they never surrendered their right or title, but they have reserves.


William Irvine: It has been alleged by some of the Indians through their representatives in British Columbia that an attempt has been made by the federal government-I am not referring to any particular government-to prevent them from taking their case to the Privy Council. Is that allegation true, and if so is the government taking steps to see that justice is done in the matter?


Charles A. Stewart: The government have been attempting to adjust the matter in dispute between the provincial government and the Indians, but there has been no attempt at all on the part of any one to prevent the Indians if need be from going to the Privy Council, although that might be a questionable thing to do after all. That however is beside the point, and I want to make it clear that no such attempt has been made.
Indian Reserve Lands


Robert Forke: Certain documents have been handed to me with a request that they be read to the committee. I shall read them and perhaps the Minister of the Interior will be able to make some explanation as to their intent. I wish to read first of all a letter from Mr. A. E. O'Meara who claims to be counsel for the Indians. The letter refers to an alleged "fallacious document", which the minister can explain, and it reads in part:
On behalf of the allied tribes I now submit that the memorandum, presumably prepared by the Indian department, which the Minister of Interior placed before the House of Commons is a fallacious document presenting a view regarding Indian reserves in Canada entirely erroneous and unfounded. I confidently state that the alleged constitutional position embodied in the memorandum and placed before the House of Commons as the main ground of the agreement of March last does not exist. Any one who will take the trouble of examining the judgments delivered by their Lordships of the Judicial Committee in cases decided in the years 1902 and 1920 and mentioned in the memorandum will find that my statement is well founded. These two cases do not deal with lands which as result of treaty between a British Sovereign and an Indian tribe or under other constitutional instrument competent for the purpose are held by the Dominion of Canada in trust for the use and benefit of an Indian tribe.
Also on behalf of the allied tribes I submit that, in so far as parliament has power for settling the main questions dealt with by the agreement of 24th March last, the passing of Bill 191 would injuriously affect all the rights of the Indian tribes of British Columbia, both aboriginal rights and those relating to reserves.
I beg to request that upon motion for second reading of Bill 191 you will be good enough to put before the House of Commons the petition of the Nishga tribe presented on 19 th instant together with this letter.
I will not read the whole of the petition but only the following:
9.	It is submitted on behalf of the Nishga tribe that the agreement made between the government of the Dominion of Canada and the government of the province of Ontario on 24th March last is in conflict with the rights claimed as above stated before His Majesty's Privy Council and the parliament of Canada.
10.	It is submitted on behalf of the Nishga tribe that the agreement above mentioned, which it is proposed by Bill 59 to confirm and enact as the law of Canada, adversely affects the rights of all the Indian tribes of Canada and in .particular the rights of the Indian tribes of British Columbia in the following respects:-
(1)	The definition of Indian title embodied in the preamble of said agreement is erroneous and unfounded.
(2)	The agreement is founded upon denial of the iboriginal land and other rights of the Indian tribes >f Canada which are claimed by the Indian tribes of British Columbia.
(3)	The agreement, erroneously as is submitted, concedes to the province of Ontario reversionary title to all Indian reserves.
11.	With regard to the claim of reversionary title it is submitted on behalf of the Nishga tribe that all lands which have been reserved for the use and benefit of the Indian tribes of Canada, either by treaty made between the British Sovereign and the tribe or in case of British Columbia under article 13 of the

Terms of Union, have become the permanent beneficial property of the tribe, as has been completely recognized by all laws of the Dominion of Canada relating to Indian reserves. It is submitted that lands which at time of confederation had been so reserved for the use and benefit of Indian tribes were not public lands but Indian lands and were not acquired by any province under section 109 of the British North America Act.
12.	For the reasons above stated it is submitted on behalf of the Nishga tribe that the said agreement of 24th March last is beyond the powers of the two governments and that the provisions of Bill 59 are beyond the powers of the parliament of Canada.
Therefore the petitioners humbly pray:
That said Bill 59 be not passed by your honourable House until the issues which have been placed before His Majesty's Privy Council as above stated shall have been fully and finally determined.
The minister smiles, but I do not know that this can be dismissed as lightly as he would suggest. If I understand the situation rightly there has been no treaty with the Indians of British Columbia. I think the governments have denied that the aborigines had any right to the land, contending that they were simply the inhabitants of it.


Charles A. Stewart: The federal
government never takes that stand; it is taken by the provincial government.


Robert Forke: I do not see that it makes
very much difference, for in British Columbia the reserves were handed over to the Indians as a sort of peace offering, they having no aosolute title and being regarded as wards of the government. I have had some experience of the feeling of the Indians in this respect. There is an Indian reserve close to my home, and the main reason for any unrest among them is that they have no vested interest in their land, and they realize that the government can transfer them to another area whenever it may see fit to do so. That is not a satisfactory state of affairs. The British Columbia Indians have no treaty rights under which their reserves have been set apart for their use, and if I am correct, the Dominion government to-morrow could move the Indians to other places and dispose of the lands as it pleases. Perhaps the Minister of the Interior will put me right if I am misinformed on this point.
I take a friendly interest in the Indian. At one time it was confidently believed that the aborigine would assimilate with the white population. He is not inferior to the white man in intellect, but our civilization, unhappily for the Indian, is detrimental to his moral and physical well-being and judging by present indications he will gradually disappear. I sincerely hope that the government will not take advantage of the Indians simply because they are not in a position to defend their

Indian Reserve Lands .
417-j
rights as white people would under similar circumstances. As I understand it, the British Columbia Indians have been allotted certain areas for their own use, but the legal title remains in the provincial or the Dominion government, and naturally the Indians are dissatisfied with this insecurity of tenure. I think they ought to have some treaty rights.


Charles A. Stewart: My hon.
friend is speaking of the Indians of British Columbia?
Mr. FORIvE: Yes. I think they ought to have some documentary title to their land so that neither the Dominion nor the provincial government could dispossess them. If I am misinformed, I shall be glad to be advised of the actual position.


Charles A. Stewart: What my
hon. friend has said respecting the British Columbia Indians is largely true, as in their case there has been no final settlement. After being in controversy for many years, a commission was appointed by agreement between the Dominion government and the government of British Columbia to carefully survey the whole situation and to allocate certain lands for the use of the Indians.


Joseph Tweed Shaw: Before the minister proceeds
further, perhaps he will tell us exactly what is the nature of the Indian's aboriginal title.


Charles A. Stewart: I would
refer my hon. friend to the various cases cited by the hon. member for Brandon (Mr. Forke). He will find that the Privy Council have already decided that the reversionary interest in Indian lands in Ontario belongs to the province. But that reversionary interest only arises after the Indians become extinct; until they finally disappear the government cannot take possession.


Robert Forke: Does the minister say that
the Dominion government cannot move a band of Indians off a reserve?


Charles A. Stewart: Only by
agreement. The Indian Act gives the superintendent general very wide powers in this respect, but they are never exercised. We never lease land on an Indian reserve unless the band has voted in favour of it, which vote is registered in our office. Take the Gleichen Indian lands sold by the preceding government, a reference to the records of the department will show that the band agreed to the sale.


James Shaver Woodsworth: Is it not the practice in British Columbia to cut timber off the Indian reserves?


Charles A. Stewart: Never
without the consent of the Indians so far as I am aware. The Indians get a great deal of very bad advice from misguided friends, and this makes it very difficult for the department to reach any settlement with the Indians. For example, Levi General, who is better known as Chief Deskaheh, is at present over in London, and we are continually in receipt of letters from British people to whom he appeals stating that we are not treating his fellow-citizens on the Six Nations reserve as they should be treated. This misinformation keeps certain misguided people very busy working, as they think, in the interests of the much-abused Indians. As I have already stated, the Privy Council has decided that the reversionary interest in Indian lands in Ontario belongs to the province, but this reversionary interest cannot be exercised as long as the land is required for the Indians. But certain Indian tribes have become extinct. While there is an increase in the Indian population living under civilized conditions, this is not the case in those areas where the white trapper is competing with the Indian and taking away his livelihood. I agree most heartily with my hon. friend that you cannot change the mode of life of the aborigines in a year or two; it takes years of education and training to get them to adopt the white man's mode of living. But this agreement which we are dealing with applies to Ontario alone, *where there are no disputes as to the reserves, and the agreement deals solely with leasing. So far as the government of Ontario is concerned, they say:	"These
reserves belong to the Indians; you are administering Indian affairs; therefore administer them in the interest of the Indians- become responsible for them. If at any time the tribe becomes extinct, and there is any capital money remaining unexpended or any rentals in hand, then the land and the money will revert to the province." In respect to mineral rights, there is mineral on many of these reserves in Ontario, and this has been a very serious problem to deal with inasmuch as the Indians own the surface rights. The province could not apply their mining regulations; no one could go in and prospect on them without the consent of the Crown. Then there was a disprfte as to the ownership. The province claim, and have been sustained in their claim, that they own the precious metals, the Indians owning the baser metals. In Ontario both the precious and the baser metals are found in the same localities and are separated by chemical processes. So that under this arrangement we say that we will
Indian Reserve Lands

make an equal division of the two. No man will be allowed to go on these reserves without the consent of the band and of the Superintendent General of Indian Affairs, but when he has that consent and does go on, then we have an agreement under which the results of the find of minerals will be divided in the interests of the band and of the government of Ontario.


Edward Joseph Garland: The minister has stated that the band was given power to say whether prospecting should take place or not. Under section 3 it is simply provided that the agent shall give permission.


Charles A. Stewart: Yes, but
that implies that the band are consulted. That is the procedure we follow in every case.


Edward Joseph Garland: Suppose on a reserve in Ontario there is a gold or a silver strike. Some miners have already gone in, and there is an immediate rush and an application for staking. What will prevent the Indians from being driven off in that case under pressure of stakers from the outside?


Charles A. Stewart: They cannot do it; it would be illegal staking. There would be no right to prospect and stake without consent.


Mr. ARTHURS:: The minister has stated that no lands in Ontario are leased without the consent of the Indian band, am I correct?


Charles A. Stewart: Yes, through their agent.


James Arthurs: I am instructed that within the last month or two a lease has been made on a certain reserve in Ontario without the consent of the band, and that the band are unanimously against the lease. Very strong representations have been made against the character or the actions of the lessee. He is accused, and the accusation is supported by the evidence of many persons, of selling liquor to the Indians and others, using the reserve as a rendezvous for that purpose. These facts are at present before the Indian department; they were in the possession of the Indian department before the lease was made. I wonder if the matter has come to the attention of the minister?


Charles A. Stewart: Was it a case of an Indian leasing his supposed rights, or was it done by the department itself?


James Arthurs: It was done by the
department. It was done under cover of the 
assumption that a certain member of the band had certain personal rights. There is no justification in law for such personal rights. The reputation of the man is well known in that vicinity, but in spite of that the lease went through.


Charles A. Stewart: I do not
know anything about the case, but under the Indian Act there is a provision whereby an Indian if he has such rights may lease them, but not-


James Arthurs: He must first acquire
those rights by legal process.


Charles A. Stewart: This Indian business is a very difficult subject to handle. There are cases where Indians are allocated certain pieces of land on a reserve. Take the Six Nations Indians, for example; there are men on farms there and they claim ownership because they and their predecessors have been hundreds of years there. I am told that this is a case where an Indian claims that he had that right on the reserve and that he leased the property for mining purposes. Is that correct?


James Arthurs: No, I do not think that is correct. I am instructed that the applicant came personally to the minister. I do not know whether he did or not; at any rate, he came to the department and asked for the lease.


Charles A. Stewart: Who is he?


James Arthurs: A man named Grenon. I am instructed that this matter came under the personal observation of the minister.


Charles A. Stewart: I am sure I never granted him any lease.


James Arthurs: After the application was made he was informed, perhaps indirectly, that if he could get some Indian who could make a claim on a certain piece of land he could get it through by that means. The fact remains that the Indians are averse to this lease and the public are averse to it. The white people in the immediate vicinity, who are in the vast majority, are absolutely against this lease, yet no satisfaction can be gained from the department as to what action they will take.
Mr. STEWAR.T (Argenteuil): This man may have seen me, I do not know. But if the facts are as my hon. friend states, I will say at once that no lease will be granted.


James Arthurs: It has been granted.

Indian Reserve Lands


Charles A. Stewart: Well, it will be cancelled.


James Arthurs: What I am asking for is cancellation, and I ask it in the interests of the Indians themselves and of general morality and good behaviour. Will the minister look into the case?


Charles A. Stewart: Yes. I shall be glad if my hon. friend will give me the particulars. If the band are opposed to the lease, then the lease shall not stand.


William Irvine: The minister just quoted
a decision of the Privy Council to the effect that the Indian lands could not revert to the province unless the Indians had become extinct.


Charles A. Stewart: Except by
their consent.


William Irvine: I understand, then, that you have their consent; therefore the proposed legislation is in keeping with the ruling of the Privy Council.


Charles A. Stewart: The ruling
of the Privy Council does not apply to the Indians. Formerly it was provided that when the lands were surrendered by the band or if the band had became extinct the moneys went to the provinces. This provides that as long as there is an Indian to be taken care of the capital moneys shall be retained and expended in the interests of the Indians. It settles that question as between the province and the Dominion.


Joseph Tweed Shaw: I understand from the Minister's statement that the Privy Council cases decide the rights as between the Dominion government and the Ontario government. In this agreement which is submitted for ratification there are certain rights in which the Indians are interested, the matter of their share of the baser metals. I do not know how that amount was arrived at-one-half, for instance. With regard to the question of title

and I am not referring to title secured by treaty rights; we know that in the case of a treaty the treaty itself specifies the nature of the Indian title in a particular reserve-but what is the nature of the aboriginal title of the Indians? I would like to know also why the consent of the Indians is not secured to the agreement that the minister now asks parliament to ratify and put in the form of a statute?


Charles A. Stewart: It would be very difficult to get every tribe in Ontario to agree to it. Many of the tribes in the agricultural areas are not interested in the matter.
This only applies to the tribes who are in the mineralized area. My hon. friend will readily understand that it is very difficult to get uneducated Indians to understand a complicated matter of this sort, and surely if we are to administer the affairs of the Indians, parliament will give us the necessary power to treat in their interest and settle vexed questions of this kind, especially when we are convinced that the agreement is in the interest of the Indians and preserves their rights as well. The precious metals belong to the province. They have laid claim to them and have been sustained in that claim. Of course, my hon. friend knows that a very vexed question arises here. It is no difficult matter to stampede the Indians and prevent them doing these things. That sort of thing is happening every day, and our predecessors in office as well as ourselves have felt the absolute necessity of having arbitrary legislation to deal with matters of this kind in the interest of the Indians themselves. I can assure my hon. friend that I have no thought in mind other than the interest of the Indians. This dispute has been going on for years, and we believe it is in the interests of the Indians to have it settled in this way; otherwise, we would not be coming to parliament with this legislation. The British Columbia matter is entirely foreign to this, and must be dealt with on its merits.


Joseph Tweed Shaw: I accept the minister's statement, of course, that the British Columbia matter has no reference whatever to the situation we are dealing with here, but the thing that appears to me to be wrong about this situation is this: Two governments come together and decide in an agreement what they think is best for the Indians. Now I should have thought, in view of the fact that there are very few Indian tribes who own lands in the mineralized area, that it would have been highly desirable to have some understanding, if at all possible, with these Indians, and get their consent, because if I apprehend the situation correctly it certainly is a British principle that any person whose interests are proposed to be affected shall be consulted, and especially so when that person happens to be an Indian who is very probably quite unfamiliar with this complicated problem.


Charles A. Stewart: That is just the point. My hon. friend will agree that it is most difficult to get the tribes of Indians in the north country to thoroughly grasp the situation, and in many cases they are given bad advice.


Joseph Tweed Shaw: I would trust the minister to give them good advice.
Indian Reserve Lands


Charles A. Stewart: I think I do. I look upon the one who is administering the Department of Indian Affairs as having a very grave responsibility in respect to these wards of the nation. These men after all, for the major part, are not capable of understanding what is in their best interests, and very frequently our great difficulty is not to preserve what they ought to have, but to keep them from dissipating what is given to them. In this particular case I am satisfied, after a very careful study of the matter, that we have reached a good agreement. We have settled a dispute of long standing and the settlement is undoubtedly in the interest of the Indians and will bring them a good deal of money, if there are the minerals in this area which we think do exist from the slight exploration that has been carried on. We have a division of what was clearly claimed and admitted to be provincial government property, namely, the precious metals, and the mining of gold is carried on to a very considerable 9 p.m. extent in that north countiy. There is not any coal, but there is considerable copper. There is not much of the baser metals which we are claiming in the interest of the Indian, but there is an equal division of gold and silver. We think we have made a very good arrangement in the interest of the Indians, and one that we think will protect them from exploitation, which is the main thing.


Mr. SUTHERLAND:: There has been a
long standing dispute between the Six Nations Indians in the counties of Brant and Haldi-mand and the Dominion government, as to its jurisdiction over them and their property. I believe that a commissioner was appointed about a year ago to investigate this dispute, but I understand that he has not yet reported.


Charles A. Stewart: He has reported, but the report has not yet been brought down.


Donald Sutherland: Then the report is
lot yet available to the Six Nations Indians?


Charles A. Stewart: I explained ,o some of my hon. friends on the other side of the House the reason why it has not been brought down, but that reason has now disappeared.	.


Donald Sutherland: This reserve is in the county adjoining the one I have the honour to represent, and I know something of the dissatisfaction which prevails there. The Indians on this reserve are: the descendants of

those who rendered such splendid service to Great Britain in the early history of this country. Many of them also rendered splendid service during the Great War; they volunteered very readily. I think the report of this commissioner should be made available before a question of this kind is decided. I have not looked into the bill as thoroughly as I might have done, but I do know that there is still a good deal of dissatisfaction among the Indians with regard to the matter. I think the report should be placed before the House.


Charles A. Stewart: I have no
objection to bringing down the report. The reason I did not do so before was that the Six Nations had, through their chief, been representing themselves as British subjects not amenable to Canadian law, and they carried their case to the League of Nations. Some fairly drastic changes are suggested in the report, and advantage has been taken of the lenient attitude I have assumed towards the Six Nations to make greater and greater demands, unthinkable demands, I might say. I did not think it wise to publish the report in view of the circumstances, but the reason has now disappeared, and I am perfectly willing to bring it down.


Donald Sutherland: I appreciate the
difficulties and that it is not easy to find a solution. The claims of the Indians may seem somewhat preposterous, but they may have a substantial basis, in their opinions, and for that reason I think the report should be brought down.


Charles A. Stewart: I know the situation very well, and on two occasions I have personally visited the Indians on their reserve and discussed this matter with them. The difficulty is with their hereditary council and the election which is a very antiquated affair, but with which the government has never interfered. The control of affairs in the tribe is in the hands of the hereditary council. However, I do not wish to go into a discussion of that at the moment, but I shall be glad to discuss it with my hon. friend when the estimates are up.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The House resumed consideration in committee of Bill No. 189, to amend the Post Office Act.-Mr. Gordon in the chair.

Post Office Act
Hon. CHARLES STEWART (Argenteuil, Acting Postmaster General):: We were discussing this bill before six o'clock, with reference to the fees for registration. . My hon. friend the ex-Minister of Finance (Sir Henry Drayton) was objecting-and his objection was a proper one-that we had not fixed a maximum, and I was not aware of this until I had looked up the amendment of 1920. That amendment reads:
(k) Prescribe and enforce such regulations as to letters directed to be registered, as to him seem necessary, in respect to the registration of letters and other matter passing by mail, as well between places in Canada as between Canada and the United Kingdom or any British possession or any foreign country, and to the charge to be made for the same.
Now come the words we omitted from the clause which has been objected to:
Not exceeding ten cents per each letter or article; and to compensate for loss not exceeding twenty-five dollars for each registered domestic article.
I am informed by an officer of the department that the reason they did not want to make the forty cents statutory is that they are now assuming a greater responsibility, and that they now propose to indemnify for lost or mutilated articles. It will be largely jewellery that will be shipped or registered. I am now asking that the same provision be embodied in this bill. I move that after the word "same" in the second last line there be inserted the following:
Not exceeding forty cents for each letter or article.
Then it will read as fallows:
Or any British possession or any foreign country, and to the charge to be made for the same not exceeding forty cents for each letter or article and to compensate for loss not exceeding one hundred dollars in any case.


William Alves Boys: It is a sliding scale up to
forty cents.


Charles A. Stewart: Yes, that
is the maximum amount. I do not know why that word "per" is inserted.


Andrew Ross McMaster: Do not put in the
word "per". That sounds like a communication by a third-class commercial house. We had the Speaker of the House talking about the necessity of maintaining the purity of the English language. As he is not in the chair, I feel I am doing right in drawing attention to this matter. I would be sorry to see the word " per " left in there.


[Stage Direction]
Amendment agreed to.
Section as amended agreed1 to.
Bill reported, read: the thirds time and passed.

[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Railways) moved that the House go into
committee of Supply.
['No increase.']
George Gibson Coote: I move:
That all the words after "that" be struck out and the following be substituted therefor:
In the opinion of this House the disallowance of the statute enacted by the legislature of the province of Alberta being chapter 32 of the statutes enacted in the year 1923, and entitled an Act to Impose a Tax Upon Minerals was an abuse of the powers of disallowance vested in the Dominion government, said statute being entirely intra vires of the province and not interfering with any matter the subject of the Dominion policy or administration.
He said: In order that the members of the House may fully understand the question at issue, possibly I should take just a few minutes to explain the nature of the act and why it was passed. In 1887, while Alberta was still a part of the Northwest Territories, an order in council was passed by the government at Ottawa reserving to the Crown the mineral rights in the lands west of the third meridian. I will quote a part of that order m council:
On a memorandum, dated 12th May, 1887, from the Minister of the Interior, recommending that a clause be inserted in all patents from the Crown for lands in the Northwest Territories situate west of the third meridian, reserving to Her Majesty, her successors and assigns for ever, all mines and minerals which may be found to exist within, upon or under such lands, together with full power to work the same, and for this purpose to enter upon, and use and occupy the said lands or so much thereof and to such an extent as may be necessary for the effectual working of the said minerals, or the mines, pits, seams and veins containing the same.
The Minister of Justice, to whom the foregoing memorandum was referred, concurs in the recommendation, except in the case of patents for lands which have already been sold or disposed of for valuable consideration.
The mineral rights in lands sold or patented prior to that time were transferred to the purchasers of the lands, but the mineral rights in lands sold or patented since that time were retained by the Dominion government and in some cases they have been sold or leased separately from the surface rights. Mineral rights in many million acres of lands in Alberta are owned by large corporations and others who have made very little effort to develop those minerals, although in many cases they are very valuable. At the same time it should be remembered that in Alberta there is a direct tax on land values, this having been found necessary in order to raise sufficient revenue to carry on the affairs of the province. I should like to quote very
Supply-Alberta Mineral Tax

briefly from an article in the U.F.A. published at Calgary, Alberta, by Mr. George H. Ross, K.C., a prominent barrister of that city. He said in part:
All natural resources are the heritage of the state and for that reason the state is entitled to its just proportion of that wealth. A reasonable assessment should be put on all mineral rights; we need the revenue; furthermore, such a tax will have a tendency to prevent corporations and others letting their mineral properties lie idle thereby retarding development and production.
As I have already said, the provincial government has found it very difficult to raise sufficient revenue to cover their expenditures. The expenditure is necessarily heavy on account of the large influx of immigrants into that country necessitating the building of roads, schools, telephone systems and other essential conveniences. I think it was to meet this very pressing need of revenue that this tax was imposed upon minerals. It is also quite proper to say that in many cases the mineral rights in those lands are of greater value than the surface rights. Therefore, why should they not be taxed? The act in question which placed a tax upon those mineral rights was passed by the Alberta legislature and assented to on April 21, 1923. Shortly after the act was passed, petitions for disallowance were made to the Governor General in Council by the Canadian Pacific Railway Company as owner of mineral rights in 9,433,000 acres of land in Alberta, by the Hudson's Bay Company as owner of mineral rights in 1,084,441 acres, by the Western Canada Land Company and by the Calgary and Edmonton Land Company. These petitions were all forwarded to this government in July, 1923, and copies of the petitions, excepting that of the Hudson's Bay Company, were forwarded by the government of Canada to the government of Alberta. These petitions are very lengthy, and I think the House would rather that I would not take up the time to read them. They are summed up by the Minister of Justice (Mr. Lapointe) on page 13 of his report, and the answer which the Attorney General of Alberta made to these petitions will be found on pages 40 to 43 of this return. Hon. members may read the report of the Minister of Justice and the report of the Attorney General of Alberta by securing the return. The grounds that were stated in these petitions for disallowance, as I would sum them up are: First, grounds of hardship, second, injustice and, third, discrimination. In my opinion, the Dominion government should not interfere with legislation simply on those grounds. The Canadian Pacific Railway Company, the Hudson's 
Bay Company and these other land companies which have petitioned for disallowance have recourse to the courts to protect them if they think the legislation is unjust, discriminatory or ultra vires of the powers of the province.


Robert James Manion: Was this a tax upon all
lands, or just upon mineral lands?


George Gibson Coote: It is on mineral rights in
the land.


Robert James Manion: Would it be upon farming lands for example?


George Gibson Coote: On all mineral rights in Alberta if they are owned by a taxable person. I will deal with that point later on.


Mr. McMURRAY:: Does that apply to
lands which have been obtained by homesteading or pre-emption? Are they not excepted?


George Gibson Coote: The exception is for a very
small part. I might mention that homesteads that were granted prior to 1887, the date of the order in council which I read, are exempted, and also parcels less than ten acres in extent. If I am correctly informed all other mineral lands in Alberta are taxed unless they are owned by the Dominion Government.
The Deputy Minister of Justice appeared to think that sufficient grounds for disallowance were not shown in the petitions of the four petitioning companies. I will quote the letter of the Deputy Minister of Justice on that matter to Mr. Cory, Deputy Minister of the Interior, under date of the 2nd November:
Dear Mr. Cory,-I would direct your attention to chapter 32 of the statutes of Alberta for 1923, intituled an " Act to impose a tax upon minerals." The Canadian Pacific Railway Company, The Hudson's Bay Company and several other land companies, have petitioned for disallowance of this act, and this matter is under consideration, and I should like in the meantime to know whether the act be objectionable from the point of view of your department, and if so, for what reasons. You will realize of course that the act does not and cannot charge any interest of the Dominion Crown. Therefore, so far as I can see, it is not prejudicial to the Dominion, although not unnaturally the land companies find this sort of legislation very embarrassing.
We cannot help it if the land companies find this legislation embarrassing. They apparently consider these mineral rights valuable or they would not have retained them. I might say, for the information of the House, that as regards the majority of the lands which the Canadian Pacific Railway Company have received and have sold again to settlers, they have reserved to themselves these mineral rights. Although tihey have reserved the mineral rights on the lands which they have sold,

Supply-Alberta Mineral Tax
they have petitioned this government to disallow an act which aims to tax what they have retained. If the surface rights should be taxed, why not the mineral rights? They must be of value or the Canadian Pacific Railway would not have retained them; and when I say the Canadian Pacific Railway, I intend the statement to apply to all the companies which have retained the mineral rights in the land which they have sold. But the strange feature about this whole case is that the reasons advanced by the minister for disallowance, if I correctly interpret his report, were not mentioned in the petitions of the parties who were appealing for disallowance. After reviewing in his report the grounds set out by the petitioners in the case, and having dealt with the reply of the Attorney General of the province of Alberta, the minister says:
It is not necessary however further to review the legislation upon its merits with relation to the position or interests of mineral owners in the province who are subject to the provincial taxing powers, or whose property and civil rights in the province are affected, by the operation of the provincial laws. These are reasons which have influenced the undersigned to submit his recommendation upon this report which are not influenced by the mere grounds of injustice or hardship which are urged by the petitioners.
There are paramount considerations affecting the government of Canada and the general public interest which demand attention, and, whatever may have been said as to the propriety of recommendations for the disallowance of legislation which is thought to be unfair, unreasonable or unjust, it has, whenever the occasion presented itself, been maintained by the Ministers of Justice, and has never been successfully controverted by any province, that disallowance is the appropriate remedy for the maintenance of that harmony which it is essential should exist between provincial legislation and the administration of Dominion affairs within their proper domains.
I pause in the reading of the report to remark that the action of the government in this case is not in my opinion conducive to harmony between the different sections of the country or between the province of Alberta and the Dominion. I think possibly that point has been overlooked by the government. To continue:
This precise effect is the report to the Governor in Council of 8th November, 1898, of the late Honourable David Mills, Minister of Justice upon a statute of Prince Edward Island, where he said: "The .power of disallowance has however been vested in Your Excellency in Council not only for maintaining the constitutional lines of legislative authority, but also for preventing the provincial legislatures from interfering with Dominion policy in matters in which it is competent under the constitution to the Dominion government to have a policy. There may be provincial legisfla/tion which can have effect until superseded by parliament, and as to such the undersigned apprehends the power of disallowance may be properly exercised if the legislation foe in the opinion of Your Excellency's government prejudicial to Dominion interests". Effect was
given to this principle whenever it became requisite, notably when the Vancouver Island Settlers' Rights Act, 1904, Amendment Act, 1917, was disallowed by order in council of 30th May, 1918.
In the constitution of the western provinces the public lands were reserved for administration by the federal government, and therefore for the general advantage of all the provinces, and the administration of those lands is intimately connected with immigration and the settlement and development and revenues of the country. It has been a part of the policy of the administration in disposing of Dominion lands to reserve the minerals, and for many years the grants of homesteads and pre-emptions have uniformly been subject to these reservations. All lands contain mineralls, whether valuable or not, and in the disposition of the minerals it has been usual to grant leases for the working and winning of those which may be specified in the demise. Thus it happens that, as to granted lands, while the surface is in the grantee, the minerals remain in the Crown, and not infrequently some of these underlying minerals have been leased, whole others remain reserved. In other cases certain minerals have been leased by the Crown in ungranted lands, and in those cases the surface and the minerals other than those granted or leased remain in the Crown. Usually when minerals are leased the leasehold does not include all minerails within the demised area.
When a mineral owner is taxable and the minerals are registered in his name all minerals in the area pass if the taxable owner fail to pay his tax as required. The Dominion is not taxable, but the grantee or the lessee of the minerals from the Dominion is a mineral owner and taxable within the meaning of the act; he may be the lessee of all the minerals or of one or more oif these; in any case if he does not pay the tax pursuant to the Minister's notice, and if the minerals "in, on or beneath the parcel of land affected are registered in the name of a taxable person", the statutory provision is that by the Minister's direction to the registrar "all mines and minerals in, on or beneath the surface of the said parcel of land are the property of the province".
In the province of Alberta for many years -the rural municipalities and local improvement districts have exercised this very power of which the minister seems to complain; and in the case of a homestead where the patent still remains in the name of the Crown the rural municipalities and local improvement districts have distrained upon the property of the homesteader on this land. The same is true in the case of school lands leased for grazing purposes; in the event of the lessee not paying his taxes the municipality can distrain upon his cattle or other live stock on that leased land. The same thing applies to pre-emptions. I do not see why the government of the province should not be in as good a position in this respect as the municipality or local improvement district. The minister then goes on to say:
A large portion of the property which is declared to be taxable consists of leasehold estates which the mineral owners have in lands vested in the Crown, and which are created by grant of the leaseholds by the Dominion directly to the tenant.
It will be seen that the minister is advancing reasons for disallowance which are not



Supply-Alberta Mineral Tax
mentioned in the petitions of the petitioning companies. From a perusal of all these documents it will be noticed that none of the reasons which were given for disallowance were advanced by the petitioners. It will be seen also that the petitions of the Canadian Pacific Railway and the Hudson's Ray Company make no reference whatever to these reasons. In the report of the minister the reasons for disallowance do not include the reasons submitted in the petition as ground for disallowance. The report of the Minister of Justice, is dated February 2, 1924. The Alberta legislature convened about January 21, and prorogued about April 15, over two months after the report was completed, so there was ample time to notify the provincial government of the objections raised by the Dominion, with a suggestion for amendment, if such were deemed necessary. Apart, therefore, from the merits of the bill, the procedure of the Dominion government constitutes a complete departure from the policy invariably followed by the Dominion government in respect of provincial legislation where such legislation was thought to conflict with Dominion interests and policy.
It is interesting to note that as far back as June, 1868, Sir John Macdonald, in a report approved by the governor general, laid down the following ruling:
Where, a measure is considered only partially defective, or whore objectionable as being prejudicial to the general interests of the Dominion, or as clashing with its legislation, communication should be had with the provincial government with respect to such measure, and in such case the act should not be disallowed if the general interests permit such a course until the local government has an opportunity of considering and discussing the objections taken, and the local legislatures have also the opportunity of remedying the defects found to exist.
This policy, as enunciated by Sir John Macdonald, has been consistently followed since that date, as the following examples will show. In the case of the Chartered Accountants' Act of 1909 the Minister of Justice, while the provincial legislature was still sitting, suggested the repeal of one section so as to exclude Dominion Chartered Accountants. I will quote from Provincial Legislation, Volume II, 1896-1920, page 91, where Sir Allen Aylesworth says:
The undersigned did, however, on the 31st ultimo, while the legislature of Ontario was still sitting, communicate to the attorney general the grounds of complaint as herein stated, and suggested the immediate repeal of the said section 13, or such amendment as would exclude from its operation the Dominion chartered accountants. It was stated to the attorney general that the invalidity of the said section 13 as affecting the Dominion Association seemed plain to the undersigned ; that if left to the courts the matter could only arise in summary proceedings; that magistrates would be very likely to consider themselves bound by

the strict letter of the statute; that this might give rise to considerable litigation and embarrassment, and hence the desirability of amendment by the legislature. The session closed, however, without any further action taken.
In that case Sir Allen. Aylesworth followed, I think, what Sir John Macdonald laid down as the proper course, but this government has not seen fit to do so. I might quote from Bourinot in regard to this matter at page 29. He says:
It has, however, been the practice in the case of measures only partially defective not to disallow the act in the first instance, but to give the local administration an opportunity of considering objections and of remedying any defects.
I would also quote from Parliamentary Government in the British Colonies by Todd where, at page 530, quoting the number of acts which have been disallowed by the Dominion over a period of years, he says:
This is a very small percentage, and shows how reluctantly the power is exercised. It by no means follows, however, that only seventy acts have been thought objectionable by the Dominion authorities. The practice has been, before taking the extreme course of disallowing an act to call the attention of the provincial government to its objectionable features, and give them an opportunity of promoting its repeal or amendment. Occasionally, however, from the very nature of the act itself, or from the shortness of the time for disallowance, it has been thought necessary to disallow it without waiting for its repeal.
I submit, Mr. Speaker that in this case there was plenty of time for the government to have notified the province of Alberta it they thought there was anything objectionable in the act, but this was not done. The Hon. David Mills, in his report on the Manitoba Act dealing with corporations, made the following observations:
The minister submits that the present act should be disallowed unless the government of Manitoba undertakes to make satisfactory amendments, and recommends that a copy of this report be transmitted to the Lieutenant Governor of Manitoba.
In the debate in this House last session on the Nova Scotia case respecting certain lands vested in John MacNeil, Sir Lomer Gouin, then Minister of Justice, is reported at page 2359 of the Debates of the House of Commons as follows:
When we had to consider the merits of that statute we wrote to the Attorney General of Nova Scotia, and the reply was to ithe effect that the government of that province was satisfied that the statute should be disallowed.
It further appeared that the preceding Minister of Justice had communciated with the government of Nova Scotia. This action was in keeping with the policy of first communicating with the provincial government before taking the extreme action of disallowance. This courtesy was not extended to the pro-

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vince of Alberta, but the act was disallowed just a few days before the time limited under the British North America Act for such action. The report of the Minister of Justice showed that the Alberta Act was received by the Secretary of State on May 2, 1923, and that action must be taken within one year of that date. The reasons for disallowance were never intimated to the provincial government, nor an opportunity given for reply, so as to correct what we believed to be an entirely erroneous interpretation of the act. Even if the objection were valid, this could easily have been remedied by a proper amendment, but notwithstanding that to the knowledge of the Dominion government the session of the provincial legislature was in progress, no opportunity for such amendment was given and the taxation measure on which the government was depending for revenue was disallowed a few days after the Alberta house prorogued.
In this connection on January 2, 1924, Premier Greenfield was in Ottawa, and Mr. Brownlee, the Attorney General of Alberta, telegraphed the Deputy Minister of Justice as follows:
Have requested Premier Greenfield, at present in Ottawa, to inquire decision federal government on application Canadian Pacific Railway for disallowance provincial act respecting mineral tax. Wil appreciate decision in view approaching session provincial legislature. In considering application presume you are aware similar act has ex'isted in British Columbia for some time iba^is flat rate per acre.
I believe Premier Greenfield saw the Dominion government on receipt of this wire and was assured the matter would be dealt with at an early date. On January 23 the attorney general, in a letter to the Deputy Minister of Justice, closed with this sentence:
As ithe next session of the provincial legislature of this province commences on the 28th instant, it is highly desirable that the various petitions for disallowance be dealt with as soon a? possible in order (that the government of this province may have the benefit of the decision of the Dominion government in deciding what further consideration, if any, should be given this form of taxation.
On April 10, 1924, Premier Greenfield wired the Dominion government as follows:
We understand Mineral Tax Act being considered your government to-day. Press reports state opinion law officers favour disallowance. Trust such reports not well founded and particularly believe act must be admitted to be within jurisdiction provincial government. Having regard views repeatedly expressed by various Ministers of Justice, notably Sir Allen Aylesworth, on exercise Dominion powers disallowance, cannot see how your government can grant application. Should your government seriously entertain such decision (this government feels opportunity should first be given to state our views before your cabinet. This government feels very strongly your decision on this application vital to all provincial gov-
2652:
ernments inasmuch as it involves question whether taxation measures within jurisdiction provincial gov* ernment are to be reviewed by federal governmeir under disallowance power.
To this wire a reply was received from the Prime Minister as follows:
Replying your wire Mineral Tax Act to-day date just received, have transferred same to Minister of Justice with request that same be placed before cabinet at time matter mentioned under consideration. This we hope may be possible this week. There was no opportunity to have matter considered to-day.
A subsequent wire was received from the Minister of Justice as follows:
Your telegram to Prime Minister re Mineral Taxation Act has been referred to me. Attorney General of Alberta has already sent the representations and the reply of your government concerning petitions of disallowance in letters dated September twentieth and January twenty-third. If your government has further representations to make shall be pleased to receive them without delay.
I wonder how the Minister of Justice expected them to make any further representations in regard to this matter when they had never been advised of the ground on which they proposed to disallow. It will be noted that in this last wire the Minister of Justice states:
Attorney General of Alberta has already sent the representations and the reply of your government concerning petitions of disallowance.
But he does not intimate in any way that objections have been raised by the Department of Justice itself which were not in the petitions sent to the provincial government. To this last wire Mr. Greenfield replied as follows:
Edmonton, April 17th, 1924. Reference your wire twelfth re Mineral Taxation Act. Without knowledge of objections if any raised by law officers of the Crown to the act we have nothing to add to representations and reply concerning petition already filed with you.
I feel that the action of the government in connection with this disallowance is, to say the least, most unusual. As I have pointed out, the attorney general of the province was never made aware of the objections raised by the law officers of the Crown, altogether outside of the petitions which were sent to him and which had been lodged with this government by the Hudson's Bay Company, the Canadian Pacific Railway Company, and others. And as the attorney general never had that opportunity of replying to these objections raised by the Department of Justice itself, I think I cannot do better than give to this House the answer of the attorney general to the reasons given by the minister in his report to the Governor in Council. This is part of a memorandum which I received from the attorney general of the province in regard to this matter. He says:

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The ground for disallowance may be summarized as follows:
That the public lands of the western provinces are
reserved for administration by the federal government for the general advantage of all the provinces, including the mines and minerals under such lands. That the legislature may operate to divest the Dominion right.
Then he quotes from the report of the minister :
Moreover if the surface remains in the Dominion and the underlying minerals be leased, section 10 operates in terms to authorize the provincial minister to proceed to enforce the payment of the tax by suit or distraint levied in the same way and to the same extent as if the minister were a landlord who had demised the surface of the parcel of land, thus giving the minister the right of entry' and distress upon Dominion lands.
Also the act assumes that authority rests in the provincial legislature to interfere with these contracts (leases of mineral rights) to the extent of substituting the government of the province for the tenant, and further "not only does the statute profess to bring about a condition of title which is contrary to the express provision of the Dominion grant, but it is also designed to operate so as to substitute public provincial ownership sanctioned by the Dominion."
The province submits that a fair reading of the act does not lead to this interpretation.
The interpretation section, section 2 of the act, distinguishes between a non-taxable and taxable person and defines non-taxable person to include the Crown. This surely is a clear indication that the act did not presume to tax or interfere with Crown authority or Crown property and it is of course a matter of law well understood that the province has no rifht to interfere with Crown property or to legislate in any way so as to interfere with the operation of Dominion contracts or Dominion lands.
The interpretation taken by the minister can only refer to sections 9 and 10 of the act which set out the remedies of the provincial government in the event of non-payment of taxes, and at the outset it should be noted that these two paragraphs clearly distinguished between mineral rights for which certificate of title has been granted to a taxable person and mineral rights that are held under lease from the Crown. There would be no object in thus distinguishing between different methods of holding mineral rights other than the knowledge that the jurisdiction of the provinces was different in the two cases.
With respect to section 9, our contention is that it only operates in case "the minerals in, on or beneath the parcel of land affected are registered in the name of a taxable person either by a separate certificate or together with the surface rights." A certificate of title under the Land Titles Act is never issued to a Dominion lessee, nor can a certificate of title be issued to any person unless a grant from the Crown has been registered. If a grant from the Crown has issued and a certificate of title issued under our Land Titles Act to a taxable person, then clearly the Dominion has divested itself of all interest in the minerals, to the same extent os it divests itself of surface rights when a Crown grant has been issued.
This section 9 is the only section which deals with forfeiture of the mineral rights to the Crown and in as much as it only applies, according to our contention, to cases where a certificate of title has issued to a taxable person, we submit it cannot clash with Dominion interest or Dominion policy because such certificate of title cannot possibly issue until the Dominion had divested itself of its interest. Moreover in the operation of our system of land holding any memorandum filed in the Land Titles Officet would only operate to give the province whatever rights

were defined in the existing certificate of title in the Land Titles Office. To this extent we feel the Department of Justice has not clearly understood the operation of the act and of our Land Titles Act, and this could have been made clear had the province been given an opportunity to answer this objection.
Section 10 deals with mineral rights held under lease from the Crown and clearly the right of the province in such cases is limited to suit or distress, the right of distraint being described as that of a landlord.
In the Vermilion Hills case the Privy Council held that a municipality could tax the interest of a lessee of the Crown lands, and this procedure is widely adopted in western Canada. The right of taxation carries with it the right of collection and no question has been raised of the right of the municipality to enter upon lands for the purpose of distraint upon any property of the lessee. Surely the province has as w'ide jurisdiction in this respect as a municipality, and I cannot see any possible objection to the province entering upon lands, even where the surface rights are held by the Dominion as mentioned on page 6 of the memorandum for the purpose of distraining on property of the lessee, providing no attempt is made to distrain upon Crown property. In any event it is well settled that a landlord cannot under any circumstances distrain upon the property of the Crown.
I am therefore unable to find anything in either of these sections which bears the construction that the act operates to the extent of substituting the government for the tenant under Dominion lease, or to substitute public provincial ownership over Dominion leaseholders for private or individual ownership.
In brief, I submit that section 9 operates to give the province the right of forfeiture which is a common remedy on taxation measures only where the Crown has divested itself of all interest, and certificate of title under our Land Titles Act has issued to a taxable person with the further power tinder section 10 to sue the lessee or distrain upon the property of the lessee, where the mineral rights are held under lease from the Crown.
If this clear intention is not adequately set out by the wording of these sections, only a very slight amendment would be necessary to put the intent of the act beyond all dispute had an opportunity been given.
That is the strongest ground of complaint we have to make, namely that the provinces were never notified of the grounds upon which it was proposed to disallow this act.
Let me now briefly review the manner in which this disallowance was carried out. The petitions for disallowance which were forwarded to the government from the Canadian Pacific Railway Company and others were received by the government in July. A letter from the Deputy Minister of Justice to the attorney general at Edmonton enclosing these petitions, and dated September 13th, states that consideration of the matter is somewhat pressing, and requests a prompt answer from the province in answer to the petitions for disallowance. The reply of the Attorney General of Alberta to the Deputy Minister of Justice is dated September 20th, so the attorney general was certainly prompt. Then on November 2nd, the Deputy Minister of Justice wrote to the Deputy Minister of the

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Interior to ascertain if the act was objectionable to them. That was the letter to Mr. Cory which I quoted some time ago. On November 14th the Deputy Minister of the Interior replied, and his letter raises certain possible objections. This letter from the Deputy Minister of the Interior, and the memorandum attached to it, were never submitted to the Attorney General of Alberta so that he might be able to reply to the objections raised, the same as he did to the objections on behalf of disallowance which were sent in by these land companies. On January 12th the Deputy Minister of Justice forwarded a copy of the Hudson's Bay Company's application for disallowance which had not been sent in August or September; but still there was no mention of any other grounds for disallowance. At that time the objections raised by the Deputy Minister of the Interior were in the hands of the Department of Justice, and if this petition of the Hudson's Bay Company was at this late date to be sent to the Attorney General of Alberta, why was there not also sent to him a copy of the objections which were raised by the Deputy Minister of the Interior, so that the attorney general might have an opportunity to answer those objections?
The report of the Minister of Justice to the Governor in Council recommending disallowance is dated February 2nd. A copy of this was never sent to the attorney general of the province. The legislature of the province was at that time in session, and if the attorney general had been given a copy of the proposed grounds for disallowance, he might have been able to so amend the act that this government would not have felt that it had grounds for disallowance. This would simply have been following the action of Sir Allen Aylesworth, to which I have already alluded, when he wrote to the government of the province of Ontario and suggested amendments in their act. Even if this government had, after this report of the Minister of Justice, which was dated February 2nd, promptly disallowed the act, it would not have been so bad, because the legislature could then have passed a new act if they had so desired, and have worded it in such a way that it might have met the objections raised in the minister's report. But that was not done, although according to
10 p.m. the telegrams which I have quoted this evening the government at Edmonton were wiring this government asking what was going to be done about it. But this government did nothing until the legislature of the province of Alberta had
been prorogued, and then they disallowed the act just within a few days of the twelve months which are allowed them under the British North America Act.
I can see no excuse for the action of the government in this matter. The province of Alberta cannot be expected to tamely accept this disallowance, and particularly the manner in which it had been carried out. The government must surely be inviting conflict over provincial rights when they disallow this act apparently for the benefit of some large land corporations in this country, and I am sure the electors of the province may be depended upon to support the action of their legislature.
I do not think there is anything further I need say in support of this amendment. The government has, of course, the power to disallow any provincial act; I do not for a moment deny that, but I do feel that in this case, and particularly in view of the manner in which the disallowance has been carried out, there has certainly been an abuse of the power of disallowance.
. Hon. ERNEST LAPOINTE (Minister of Justice):	The question raised by my hon.
friend (Mr. Coote) by his motion is certainly an important one, only it is unfortunate that the discussion should come at this stage of the session, when discussion must necessarily be limited.
I desire briefly to mention the principle which has led the government to reach the conclusion which it did. and then the facts which justify the application of that principle.
That the power of disallowance exists, there can be no doubt. Sections 56 and 90 of the British North America Act are still in the act, despite the various assaults which have been directed against them. The existence of that power implies the duty to use it when the circumstances necessitate its use. There has been an evolution, since confederation, as to the extent to which this power should be exercised. Sir George Etienne Cartier, during the debate on confederation, suggested that any act- which would be unfair and would destroy contracts should be disallowed. This idea prevailed for many years after confederation, but later on the various Ministers of Justice succeeding, the Hon. Mr. Blake, Sir John Thompson, to a large extent, the Hon. David Mills, Sir Oliver Mowat, Sir Charles Fitzpatrick, and finally Sir A. B. Aylesworth, took the position that mere injustice or unfairness wras not sufficient to justify the disallowance of provincial legislation. But a principle has been recognized by all those

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whom I have mentioned, and has been sanctioned by parliament following their recommendation, and1 it is that when the provincial legislation conflicts with federal policies, injures federal rights, or clashes with federal administration in some way, then the power of disallowance should be exercised.
I may perhaps quote a few instances when this has been done, in order to place on- the record these special circumstances:
On the 11th of April, 1896 the statute of Manitoba regarding companies incorporated out of Manitoba was disallowed on the ground that it was prejudicial to the general interests of Canada.
On the 4th October, 1879, an act of British Columbia to amend the Caribou Wagon Tolls Act, 1878 was disallowed by Hon. James McDonald on the ground of possible imposition of unfair charges upon the Dominion exchequer and interference with the regulation of trade and commerce.
Two similar acts were also disallowed about the same time.
On the 2nd April, 1898, a Manitoba statute regarding companies incorporated1 out of Manitoba was disallowed on the ground that it might defeat the settled policy of the federal government and of parliament; that it might interfere with proprietary interests of the Dominion in Manitoba and contracts which it might have made with railway companies. The Hon. David Mills was then Minister of Justice.
On the 6th April, 1911, a Manitoba statute incorporating an insurance company was disallowed on the ground that it purported to confer extra territorial powers which could not in the public interests be allowed to stand. That was under Sir Allen Aylesworth and on his recommendation.
On the 18th July, 1901, a statute of Manitoba regarding real property was disallowed on the ground that certain of its provisions were embarrassing and objectionable, in so far as they applied to Dominion lands. The recommendation was signed by the Hon. R. W. Scott.
On the 10th May, 1902, a statute of British Columbia incorporating the Lake Bennett Railway Company was disallowed on the ground that it was inconsistent with the policy of the Dominion government. That was signed by Sir Charles Fitzpatrick.
On the 31st May, 1911, a Quebec statute with regard to the charter of the General Trust was disallowed on the ground that it entrenched upon the Dominion's exclusive power to legislate with regard to banking and the creation of companies with extra provin-

cial objects. That was recommended and signed by Sir Allen Aylesworth.
On the 23rd' April, 1909, an Ontario statute regarding chartered accountants was disallowed on the ground of interference with Dominion legislation. That was signed and recommended by Sir Allen Aylesworth. So that it is not quite accurate to say that Sir Allen Aylesworth always pronounced himself against any disallowance of provincial statutes. He always recommended the disallowance of statutes which interfered with Dominion policies or Dominion rights.
In 1918 a statute of the province of British Columbia, the Vancouver Island Settlers Rights Act, 1904 Amendment Act 1917, was disallowed also on similar grounds.
Now then, Mr. Speaker, the power of disallowance is not only in the interests of the Dominion of Canada, but is in th6 interests of the provinces themselves. I have seen a very recent instance of a province asking the Dominion government to disallow the act of another province. As recently as last year the province of Saskatchewan petitioned the Dominion government for the disallowance of an act of the province of Manitoba which was intituled the Grain Futures Act, and the concluding sentence of the petition, signed by the Attorney General of Saskatchewan, Mr. Cross, reads:
Manitoba seeks to lay the main industry of Saskatchewan under tribute, taxing our people for the benefit of Manitoba's revenues. If this attempt succeeds it may be imitated elsewhere and the relations of the provinces to one another reduced to a partial state of economic war. Whether or not this evil example soreads, the taxation of grain futures imposes upon the farmers of Saskatchewan an unjustifiable burden, and I submit that the act should for the reasons given be disallowed.
In another letter addressed to the Dominion government the Attorney General of Saskatchewan used the following language:
The undersigned is aware, that it has been of recent years the practice not to disallow provincial statutes on the ground that they exceed the powers of the province, but to leave them to their operation and allow the question of their validity to be decided by the courts. But the various Ministers of Justice have always reserved to themselves the right to disallow measures even when intra vires if opposed . to Dominion policy. Thus Sir Charles Fitzpatrick in reporting upon an Ontario statute, December 31, 1901, says. "It will be observed that the,grounds urged on behalf of the petitioner do not affect the constitutional validity of the act, nor do they point to any conflict between the statute and any matter of Dominion policy."
Again in reporting on a British Columbia statute on the same date, Sir Charles says: "The undersigned bases his refusal to recommend disallowance upon the fact that the application proceeds upon grounds affecting the substance of the act in regard to matters undoubtedly within the legislative authority of the province and not affecting any matter of Dominion policy."

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In the opinion of the undersigned it may well be
deemed a matter of Dominion policy that one province shall not employ its taxing powers to levy taxes which fall most heavily upon the main industry of another province. lit is submitted that such is the clear effect of the statute under consideration, and for that reason alone, if for no other, it should not be left to its operation but should be disallowed.


Joseph Tweed Shaw: Is it not a fact that in that
particular case the government referred the matter to the Supreme Court of Canada?


Ernest Lapointe: I am going to give my
hon. friend all the information in regard to that matter. It was a mere question of law. The contention of the Attorney General of Manitoba was that the Manitoba legislation was infra vires. It was a pure question of law, and the government decided, before exercising the power of disallowance, to submit that question of law to the Supreme Court of Canada for the purpose, as the order in council says, of being advised as to the legality of the Manitoba act, and, strangely enough, the Attorney General of Alberta then joined with the Attorney General of Saskatchewan in asking the Supreme court to declare the Manitoba statute ultra vires, but for what purpose? For the purpose of having it disallowed by the Dominion government, because the reference was for that purpose, and for that purpose only, and Alberta joined with Saskatchewan to obtain that advice from the Supreme Court of Canada, in regard to the exercise of the power of disallowance by the Dominion government of the Manitoba statute.


William Irvine: I do not think we are
doubting the power of the Dominion government to interfere. What we want to know is, on what grounds they interfered, and if they were justified in interfering in this particular case.


Ernest Lapointe: I will give my hon.
friend another ground that Alberta is quite prepared to accept as a reason for disallowance. I am not sure whether I will go as far as Alberta is going on the question to which I am now going to refer. Under an Imperial statute of 1900 called the Colonial Stock Act, 1900, the securities of the dominions and colonies cannot be admitted to the British trustee list if there is not a declaration by the government of the dominion that they are willing that the power of disallowance be used if any legislation in the future is passed by their legislatures decreasing the value of their securities, ensuring the contract which gave birth to those securities. For instance, the securities of Australian states are quoted better on the British market than provincial
securities of the Dominion, because the securities of the Australian states are on the British trustee list, but the Canadian provincial securities cannot and have not yet been placed on the British trustee list because the Imperial government of course has no right to disallow legislation of the provinces, this right and power being in the Dominion government. There have been suggestions and requests that the provinces and the Dominion should co-operate to declare that the power of disallowance shall be exercised in those cases, so that in England provincial securities should be as high as those of Australia, for instance, and should be put on the British trustee list. Nothing has been done so far by the Dominion government, but the Dominion government has communicated with the various provinces for the purpose of finding out their views in that regard. The Lieutenant Governor of Alberta has sent to this government a letter of the premier speaking for the government in that regard, which letter I am going to read:
Edmonton, October 23, 1923.
Your Honour,-Referring to the communication from the Under-Secretary of State, dated May J6 last, on the subject of the suggested disallowance of local legislation bearing upon original contracts with regard to provincial securities.
Your government has had umdeT study for some time the conditions which exist by reason of the provisions of the Colonial Stock Act of 1900, and has noted the anomalous position of the various provinces of Canada as compared to the states of Australia, the colonies of South Africa and the Crown colonies, with respect to the rate of interest secured on their borrowings on the English market.
It would appear that whatever action may be necessary to bring the Canadian provinces under the regulations governing the approval of trustee investments should be instituted without delay.
To this end, the government of the province of Alberta would support any arrangement that may be made between the Imperial government and the Dominion government to the effect that provincial legislation, which, in the opinion of the Imperial government may be objectionable within the meaning of the conditions prescribed by the British treasury, shall be disallowed by the Dominion government on the request of the Imperial government, and is prepared to pass the necessary order in council embodying the substance of the condition in question.
I have the honour to be, Sir,
Your obedient servant,
^	H. Greenfield,
Provincial Secretary.
To His Honour,
The Lieutenant Governor,
Government House, Edmonton.


Andrew Ross McMaster: Would the Minister of
Justice seriously consider the advisability of having this government disallow legislation on the sayso of some other power?


Ernest Lapointe: I would not. I took the trouble to say that I would not go so far as

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the province of Alberta is going in the exercise of the power of disallowance and is asking us to go.


William Irvine: It is the distance that this government would1 go that we are most interested in.


Ernest Lapointe: My hon. friend might
reserve his argument. I might mention that this was not the subject of the question at all.


Andrew Ross McMaster: There are other members of the House who are interested in this matter perhaps on somewhat broader grounds.


Ernest Lapointe: Certainly.


William Irvine: I question that.


Ernest Lapointe: I repeat that this power of disallowance is in the interest not only of the people of Canada at large, but I believe, as shown in the two instances that I have named, of the provinces themselves. Of course, if the power exists, it must be used in certain circumstances when it is justified.
Let me now come to the act of the province of Alberta which is to impose a tax upon mineral rights. As the House will see, the definition sections are very important. Under the act:
[DOT]'Mineral owner" shall mean a person with the right to search for. work for, win or get. any mineral, wfho derives such right by lease, grant, license or otherwise from the Dominion o*f Canada or the province, and also every person who 'possesses the same by virtue of a reservation or exception thereof, or as an incident or pant of his ownership of Hand.
The definition is very wide!
"Non-taxab'e person" shall mean the Crown and any person who is not liable to taxation by the province.
So, every time in the act the words "nontaxable person" are used, that means the Crown and of course the Crown in the right of the Dominion, because every time it means the Crown in the right of the province, it is said to be the right of the province. The act provides that:
Every mineral owner-
In the sense which I have mentioned. *
-who is a taxable person in respect of any parcel of land in, on or beneath the surface of which he is entitled to search for, work, win or get any mineral, shall pay in every year to the minister a tax of three cents per acre of the surface of such parcel of land; that the tax shall fall due 1st August in each year; that the mineral owner shall before 1st September in each year forward to the minister a statement of the parcels of land in respect of which he is taxable, and therewith shall send to the minister all taxes due by him, and that if he fail to pay the tax within the time so prescribed ten per cent shall be added thereto as a penalty.
[.Mr. Lapointe.]
If the tax, and penalty for non-payment, be not paid before 1st October next following the day upon which it falls due the minister shall notify the mineral owner of the fact of non-payment by sending a registered letter to his address as shown by his certificate of title, or if no such address be shown, " to any address at which it appears to the minister that he may be likely to be found "; if payment be not made within three months from despatch of the notice the minister shall, in case the minerals in, on or beneath the parcel of land affected be registered in the name of a taxable person, direct the registrar of the land registration district within which the parcel lies to make a memorandum upon the proper certificate of title that all mines and minerals in, on or beneath the surface of the said parcel of land are the property of the province and thereupon the property in all minerals, in, on or beneath the surface of such land shall pass to the Crown in the right of the province, together with full liberty to the province, and to the persons authorized by it, to enter upon the said parcel of land and sink pits, erect buildings and fix machinery and works of any kind for winning, working, getting or converting any such minerals, and to carry away the same at pleasure, upon paying such compensation as may be fixed by agreement, or in default, by arbitration in accordance with the provisions of the Arbitration Act.
This provision for compensation is evidently for the surface owner, because the act plainly shows that the words in question have no reference to the mineral owners.
Then it is provided that if the mineral owner pay to the minister all taxes and penalties in respect of the parcel of land, together with a further penalty of ten per cent of the amount so due, before the first day of January next following the making of the memorandum, the minister shall direct (the registrar to remove the memorandum from the certificate of 'title; but, if the amount be not paid prior to the expiry of the said year, the registrar shall issue to the Crown in the right of the province a certificate of title to the said minerals	
It is further provided that any mineral owner who so desires may surrender his minerals to the province, and upon such surrender the minister shall direct the registrar to make a memorandum upon the proper certificate of title, and that thereupon the minerail owner shall be exempt from all taxation in respect of such minerals during the year in which he so surrenders the same, and in all subsequent years.
If he makes the surrender next year, for instance, and has not paid the tax for this year he will still be liable for the tax due by him this year, although the property is taken by the Crown.
It i3 further provided that, in the event of payment of the tax and of the penalty not being made within one month from despatch of the registered letter the minister shall, if the parcel in, on or beneath the surface of which the minerals lie in respect of Which the tax has noit been paid, belongs to a no-n-taxable person (meaning 'the Crown or any person who is not liable to taxation by the province) proceed to enforce the payment of the tax by suit or by distraint levied in the same way and to the same extent as if the minister were a landlord who had demised the surface of the parcel of land and the minerals in, on or beneath the same to the mineral owner.
I will comment on this later; I am merely giving what the act says.

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Finally it is provided that the act shall not apply to
any parcel of land less than ten acres in extent, if the ownership of the surface and the right to the minerals be not separated; or to any parcel of land owned as to both surface and minerals by a person to whom letters patent therefor were originally issued as a homestead and pre-emption, and who has not leased the said minerals or any of them, or otherwise granted the right to search for, work, win or get the same, also by subsection 3 of section 13, that the Lieutenant Governor in Council may confer exemptions upon any class of persons "which by reference to quantity of land granted, and the absence or smallness of the pecuniary consideration therefor can fairly be placed in the same category as homesteaders", etcetera.


Henry Lumley Drayton: When was the
act passed and how much has been collected under it?


Ernest Lapointe: I do not think much has
been collected under the act. The government of Alberta was notified that petitions for disallowance had been received almost immediately after the act was passed and I understand they discontinued operations.


Henry Lumley Drayton: What is the
date of the act?


Ernest Lapointe: I understand, May 23.


Joseph Tweed Shaw: I think it is April 21.


Ernest Lapointe: Now, applications for
disallowance were made by the Canadian Pacific Railway Company, the Hudson's Bay Company, tho Western Land Company, Limited, the Calgary and Edmonton Land Company, Limited, and others. The Canadian Pacific Railway Company claimed that they were, within the meaning of the act, mineral owners of large tracts of land in Alberta. My hon. friend gave certain figures on this point.


William Findlay Maclean: As a matter of
fact, is not the Pacific Railway Company constantly complaining in respect of matters of this kind?


Ernest Lapointe: May be, but I am merely stating the history of the case; I am not mentioning the Canadian Pacific Railway particularly, apart from the record of the facts. In the province of Alberta approximately 7,258,000 acres of land have been granted the Canadian Pacific Railway under statute and this has all been sold subject to certain reservations in regard to mines and minerals. In some cases the mines and minerals generally were reserved and in other cases only certain minerals were reserved. The Canadian Pacific Railway Company claim that no survey has been made and that the expense of such survey would of course be very great; and in consequence, except as to a relatively small area, the
existence of valuable minerals while not improbable is a matter of conjecture. They refer to the clause of non-taxation in the statute, granting them their lands for a period of twenty years and point out that the Alberta Act reserved to the Canadian Pacific Railway all the rights which they had under that statute. They claim about 2,175,000 acres of land in Alberta in respect of which the said period of 20 years has not lapsed. When that period has expired this land will of course be taxable along with the rest and then the mineral ownership of the company will extend' to 9,433,000 acres all of which certainly contain minerals, some of them valuable but much not having been prospected or explored. They submit:
In these circumstances the company submits that the act should be disallowed as confiscatory, oppressive and unjust, because of its indiscriminate application to all iands without regard to the value of the minerals therein; because, in so far as it purports to apply to the company's lands which were exempted from taxation under the said act 44 Victoria, it is ultra vires of the province-
I am merely stating the allegations of the company; I do not say for instance that I agree with that allegation.
-and because it interferes with the rights of mortgagees, bondholders and others who have in good faith invested capital in the province, and whose security is jeopardized by the powers conferred upon the minister, which may be exercised without notice to mortgagees or bondholders, and even without actual notice in fact to the registered owner.
The Hudson's Bay Company represented that under its deed of surrender on November, 1869, it retained valuable areas of land in the Northwest Territories, and that the surrender was made upon the condition that the company should be at liberty to carry on its trade in its corporate capacity without hindrance, and that no exceptional taxes should be placed on the company's land, also that a considerable portion of the fertile belt so retained is situated in the province of Alberta. They claim that the area of land belonging to the company in Alberta is approximately two million acres in extent and that the mineral rights are included. Some of these lands have been sold without a reservation of the minerals, other lands have been sold with a reservation of the minerals, and since 1910 the general practice has been to reserve the minerals. It is stated that 614,473 acres remain unsold and of the land sold the minerals were reserved on 469,968 acres. The company is therefore, according to the statement submitted, the mineral owner of 1,084,441 acres in the province of Alberta.

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Their reasons in support of their petition for disallowance are the same as those of the Canadian Pacific Railway, but they submit further that the taxation discriminates in favour of owners of small areas, homesteaders and preemptors and their descendants and assigns; that it hinders and interferes with the trade and business of the company; that the purchasers of land, including minerals therein, from the Hudson's Bay Company are subjected to a mineral tax, while the purchasers of land from persons who acquire title by homesteading or preempting or from the heirs and assigns of such homesteads and preemptors are tax free. From the latter objection it follows that the Hudson's Bay Company, the railway company and the land companies possessing lands which were granted as subsidies or by direct grant would find themselves at a disadvantage in competition with the owners of lands acquired by way of homesteading or preempting, as they would have to pay $4.80 annually on each quarter section.
The land companies-some of them also apply for disallowance-allege the injustice of the legislation and its prejudicial effect upon the project of settlement and the introduction of capital into the country. They claim that mortgagees are unprotected in their security in so far as it consists of minerals, as these maj' be taken over by the province without notice and without compensation.
As my hon. friend said, these petitions were sent over to the Attorney General of Alberta-


Henry Lumley Drayton: Before my hon. friend proceeds further

will he kindly state whether the tax applies merely in the case of the owner of a mineral reserve, or in the case of the owner of land which may have minerals under it although he knows nothing about their presence?


Ernest Lapointe: It applies in all cases.


Henry Lumley Drayton: Does it apply in the absence of all minerals?


Ernest Lapointe: It is supposed that all lands contain minerals. It applies when no exploration or survey has been made, merely because the land is there and is supposed to contain minerals. It applies against all who have mineral rights, whether they are the surface owners or the lessees of mineral rights.


William Findlay Maclean: In other words, the company has precedence over the settlers.


Ernest Lapointe: I presume my hon.
friend is referring to the Canadian Pacific?


William Findlay Maclean: No, I am referring now to the position taken by the Hon. David Mills, when Minister of Justice. He and his party were great defenders of provincial rights, and I hope my hon. friend, who also claims to be a Liberal, will take the same attitude.


Ernest Lapointe: I claim to be a Liberal and to act as one. My hon. friend is very often advocating principles which appear to be Liberal, but when it comes to supporting them by vote he always votes against them.


William Findlay Maclean: Oh, no.


Ernest Lapointe: Now I have given all the reasons which have been alleged by the various petitioners for the disallowance of the act. My hon. friend has said that the order in council disallowing the act was passed upon a recommendation in which it is stated that the reasons for disallowance are that the act interferes with Dominion policy, clashes with Dominion rights and infringes upon Dominion jurisdiction. I am now reaching this part of my argument. In the constitution of Alberta, as also of Saskatchewan and Manitoba, public lands were reserved to the federal government. Whatever may have been the reason for this policy, and whatever be its merits or demerits, it is still the policy of the Dominion, and those lands must be administered by the federal government in the interests of all the provinces with a view to encouraging immigration and developing the country. Negotiations have been opened in the past, and even now are proceeding, for a transfer of those lands in the province of Alberta to the government of that province. These negotiations may reach a successful conclusion, but until that happens the legislation of the Dominion as well as the legislation of Alberta must be framed in the light of and upon the basis of the administration of such lands by the federal government. In the policy which has been followed by the federal government in the past it has been the custom for many years when making grants of homestead and preemption lands to reserve the minerals. As I said a few minutes ago, all lands are supposed to contain minerals, some of them valuable and others of no value whatever. Frequently some of these reserved minerals have been leased while other minerals have been reserved in the same piece of land. In other cases the Dominion is still the owner of the lands but has leased the minerals, some of the leases covering all minerals and other leases being restricted to only one mineral.
I will take first a case where the surface has been granted and the minerals have been

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leased. The lessee under clause 3 of the Act, according to the interpretation given in the first clause, is taxable. He may be a lessee of all the minerals, of only one of them, or of some of them. If he does not pay and the minerals are registered in the name of a taxable person, the province under the act confiscates or takes from him or from others all minerals which are in that parcel of land and not only those for which the tax has not been paid. If the minerals have been leased in ungranted lands, the Dominion being still the owner of the surface of the land, then section 10 operates. Section 10 authorizes the province to enter for distress on the Dominion lands as a landlord would do, but whatever my hon. friend may say I think the province has no right to do that. By the British North America Act the province has no right to legislate with regard to Dominion land which is still owned by the Dominion, in the possession of the Dominion and under lease to other people, as in the case my hon. friend has mentioned. Moreover, as the Department of the Interior has pointed out to the Department of Justice, the machinery, the mining equipment and the buildings which the lessee may have constructed constitute very often the only security the Dominion government has for the payment of rent or royalties; therefore, the distress which the act authorizes the province to execute comes directly in competition with the right which belongs to the Dominion, as the real and lawful landlord. There will be a conflict there which will be the source of trouble and difficulty, according to the officers of the Department of the Interior who are in charge of the administration of the Dominion lands and the Dominion minerals in the province of Alberta.


Joseph Tweed Shaw: I presume the minister will
admit that no lien attaches on behalf of the Dominion government in the case he has mentioned unless the right of lien and distress is given in the terms of the lease itself, in which case the province under this act could not in any way affect the rights of the Dominion in that regard, but their rights would have to accrue subsequently to those of the Dominion.


Ernest Lapointe: Even if there is no lien
attaching to it, it is natural that the Dominion government should consider this machinery, equipment and buildings as security for the payment of rent or royalties. That would be the case even if no lien were specified in the grant or in the lease.


Joseph Tweed Shaw: Surely the minister will admit that there can be no lien until such time as the seizure is made. In that case if the seizure is made prior to the provincial government's seizure, then of course, the right accrues.


Ernest Lapointe: Well, m>
hon. friend
himself indicates the troubles and the difficulties and the discussions which will arise between those who represent the province and those who represent the Dominion in this instance.


William Findlay Maclean: Unless the Dominion government is prepared to quash or arrange otherwise for the surrender of all these rights and settle the matter in the interest of the settler, of the public and of the province.


Ernest Lapointe: That may come, but I am not discussing the question in the light of what may be the case when the transfer is made. I am discussing it in the light of conditions as they are to-day, on the basis of legislation as it is to-day and of Dominion rights as they exist to-day.


George Gibson Coote: Would not any creditor of
this party, in the event of judgment having been secured against him, have the right to seize those works on the surface?


Ernest Lapointe: Not where the surface
is owned by the Dominion and is in the possession of the Dominion.
The leases of minerals by the Crown are subject to various 'covenants, terms and conditions, and valuable rights depend upon those covenants. The act assumes the authority to interfere with these contracts to the extent of substituting the government of the province for the tenant in the case where the minister exercises his power. In many cases the lessee cannot transfer without the consent of the Dominion. The act as it is will take away this disposition which is to the advantage of the Dominion government and will substitute a sort of provincial ownership of the land instead of the ownership which has been the policy of the government until the present day. All these provisions, in the opinion of the law officers of the Crown as well as in the opinion of the officers of the Department of the Interior, would be a source of friction between the two governments and would result in an interference with the carrying on of Dominion policies as they have been carried on in the past.
These were the reasons for the disallowance. The power exists; even my hon. friend has admitted that. Its exercise is justified and
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even necessary in certain eases. If the power of disallowance exists when provincial legislation comes in conflict with or interferes with Dominion rights and Dominion policies-and that has been recognized by everybody in this country up to the present; by all governments and by all Ministers of Justice-then the only question is this:	Do the provisions of the
act in question come within the meaning of the principle I have stated; do the}' conflict with Dominion rights or Dominion jurisdiction? With all deference to my hon. friend I submit that the opinion of the law officers of the Crown in that regard should be accepted by parliament. It is an opinion which corroborates my own, and it is the opinion also of the officers of the Department of the Interior. That opinion must not be superseded by the opinion of my hon. friend or that of the Attorney General of Alberta who, of course, is an interested party. I believe that I can fairly ask the members of the House to recognize, to accept, and to confirm the views of the law' officers in that regard, and their interpretation of the sections of the law of the province of Alberta which have been disallowed.


Henry Lumley Drayton: In the matter of taxation, here it takes the form, if I follow my hon. friend, of a specific tax apart entirely from value?


Ernest Lapointe: Yes.


Henry Lumley Drayton: Let us go a
step further and take the case of a lease of Dominion lands. The fee simple would not be taxable, being Dominion property, but we will assume a lease at a nominal figure, a lease which could be sold for a large bonus, which would represent property which I think could be taxable. Would my hon. friend say that was not taxable?


Ernest Lapointe: That is taxed.


Henry Lumley Drayton: Then leasehold interests can be taxed?


Ernest Lapointe: Yes.


Henry Lumley Drayton: If the leasehold interests can be taxed, is not the objection one of the method rather than of principle?


Ernest Lapointe: The objection is as to
method. There was interference with Dominion rights, and the province, if the act applies as it is framed, takes upon itself to take over minerals other than those subject to the taxation.
May I repeat the words of Sir Wilfrid Laurier, acting for the Minister of Justice, in

a recommendation which he made for disallowance of an act on the 9th of January, 1911. He said:
Ministers may, of course, err in the interpretation of constitutional powers, but they should not on that ground decline to give effect to what they deem to be a just conclusion.
These words I desire to adopt as my own in this instance. It is not a pleasant duty to perform, but so long as it is a duty it must be performed. I regret that my hon. friend (Mr. Coote) should have suggested that this power of disallowance was exercised in the interests of large land corporations. My hon. friend is quite wrong about that. The statement may make good campaign literature for himself or his friends, but he knows that no great corporation has a hold on me. My hon. friend will pay me that compliment. I know he knows it, and I know he knows he was wrong when he made that statement. I did not act in the interest of any large corporation. No large corporation has a sway over me, either here or anywhere else. I acted as I did because I thought it was my duty to do so, and not to serve any interests other than those of the Dominion of Canada.
Mr. JOS. T. SHAW (West Calgary): Mr. Speaker, the power of disallowance, as the Minister of Justice (Mr. Lapointe) has said, is a power which cannot be lightly used by the Dominion of Canada, and should be used only in the light of the fullest information, and with the assurance that the attitude taken by the government is absolutely sound. One year ago we had before this House the disallowance of a Nova Scotia statute. I do not know what the minister's attitude to-day is with regard to that disallowance, but I recommend to his perusal a very severe criticism by Professor Kennedy, in the Journal of Comparative Legislation, a considered opinion written after consideration of all the facts and all the law in connection with that matter.
In connection with this particular matter before us, it is of course, highly desirable that the minister should give us some light on the history of the power of disallowance, but I think it is rather unfortunate that he has not sought to elaborate his argument to justify the use of that power in this particular case. I would hesitate, Mr. Speaker, in an involved and complicated question of this character, to offer my humble observations were it not that I am convinced that the disallowance power in this particular case has, to use the legal term, been abused.
Before considering the particular statute, there are one or two principles that I think

Supply-Alberta Mineral Tax
we should have clearly in mind. There is first the principle that the province has no right to interfere by way of taxation or otherwise with Crown property or to legislate in any way that will interfere with Dominion lands. That proposition I think everybody will accept.
The second proposition I want to suggest is that the Crown cannot be reached except by express words or by necessary implication. Now having these sound legal principles in mind, I want to direct the attention of the House for a moment to the statute itself. First of all it was a revenue measure for provincial purposes. The government, therefore, when it interfered in its exercise of the power of disallowance, should have been the more careful, because it must have known that the province of Alberta was relying on this as a source of revenue, and that to disallow the statute would necessarily inconvenience the province in its financing. The act is cit.ed as The Mineral Taxation Act, and was assented to on the 21st of April, 1923. It was received by the Governor in Council on the 2nd of May, 1923, so that the power of disallowance must necessarily be exercised, if at all, before the corresponding date in May, 1924.
Now the first matter to which I direct the attention of the House is the definition of "mineral owner," and the hon. ex-Minister of Finance (Sir Henry Drayton) has asked some pertinent questions in regard to that matter.	,
The definition reads:
" Mineral owner " shall mean a person with the right to search for, work, win or get any mineral, who derives such right by lease, grant, license or otherwise from the Dominion of Canada or the province, and also every person who possesses the same by virtue of a reservation or exception thereof, or as an incident or part of his ownership of land;
The word "minerals" is defined, and I direct particular attention to this:
" Minerals " shall, but not so as to restrict in any way the ordinary meaning of the word, include natural gas, petroleum, gasoline and all oils of a mineral nature.
Now any one familiar with the situation in Alberta knows that a very large portion of the entire province is underlaid with valuable minerals, particularly coal, and what I have said in that regard is also true with regard to natural gas. It is hoped it is also true with regard to petroleum and gasoline. Then the act goes on to define two classes of persons, and only two classes of persons are defined for the purposes of the act:	First
of all, "non-taxable person," and secondly, "taxable person."
"Non-taxable person " shall mean the Crown and any person who is not liable to taxation by the province.
" Taxable person " shall mean any person who is liable to taxation by the province.
Surely in the definition itself, in the very terms used in the provincial statute, the provincial government has been careful to see that so far as taxation is concerned there shall be no interference with Dominion lands. Then clause 3 says:
Every mineral owner, who is a taxable person in respect of any parcel of land in, on or beneath the surface of which he is entitled to search for, work, win or get any mineral, shall pay in every year to the minister a tax of three cents per acre of the surface of such parcel of land.
Nobody is assessed save only a taxable person. Surely that is perfectly clear. Surely in the very beginning of this act it is made abundantly clear that the Crown, in the right of the Dominion, is not taxable at all. It seems to me, Mr. Speaker, that the intention is perfectly clear at the very outset of the act, that there is no desire to interfere in any way with the Dominion so far as taxation is concerned. I mentioned a moment ago that the Crown could not be reached except by express words or by necessary implication. Not only are there words to the contrary effect, but it is abundantly clear from the Statute that the Crown is not intended to be reached at all. I come now to the remedies. The procedure in this act is as the minister suggested. First of all as to the mineral owner, the one who is liable to taxation. The taxable person is to forward to the minister-that means the minister of municipal affairs.


Henry Lumley Drayton: Would the expression "taxable person" cover every interest, whether company, person or anything else in land in the province, other than land owned by the Dominion.


Joseph Tweed Shaw: Not necessarily, because nontaxable person means the Crown and any person not liable to taxation by the province. For instance, churches are exempted from taxation, and consequently non-taxable persons would include the churches as well.


Henry Lumley Drayton: But apart from that.


Joseph Tweed Shaw: Apart from that I think it
is quite clear, because the word "person" is also defined to include corporation.
Every mineral owner shall before the 1st of September in each year forward to the minister a statement of the parcels of land in respect of which he is taxable under the provisions of this act. The minister may prescribe the form.

Supply-Alberta Mineral Tax
If he does not pay the tax within the time prescribed, the minister has the power to add ten per cent as a penalty. That is a common provision in our taxation statutes. In case he does not forward the tax to the minister by the 1st October together with the penalty which has accrued the minister shall notify him of the fact of non-payment by sending a registered letter to his address as shown on the certificate of title, or if no address is shown, then to any address at which it appears to the minister that he will likely be found. A record is kept pursuant to the statute of the dates upon which these letters are forwarded. Every taxation statute I may say has several branches. It has a section which deals with the assessment of the taxation. Then secondly, it has provisions which deal with the procedure in the event of non-payment, usually forfeiture, distress and so on, and this statute follows the usual procedure in that regard. Section 9 reads:
In the event of payment of the tax imposed in respect of any parcel of land and of the penalty not being made within three months from the despatch of such notice-
That will be on or before the 1st of January following, and I direct the attention of the House particularly to these words:
The minister shall in case the minerals in, on or beneath the parcel of land affected are registered in the name of the taxable person, either by separate certificate or together with the surface, or together with other surfaces or minerals, direct the Registrar of the Land Registration District within which such parcel lies to make a memorandum upon the proper certificate of title that all mines and minerals, in, on or beneath the surface of the said parcel of land are the property of the province.
What the law officers of the Crown have apparently forgotten is that no one can get a certificate of title except under the provisions of our Land Titles Act, and may I refer to section 33 of that act, which reads as follows:
The owner of any estate leased or demised to him or to the person from whom he claims a title, for a life, or for lives, or for a term of more than three years, in any land for which the grant from the Crown has been registered-
That is, the grant from the Crown must first be registered.
-may apply to have his title registered and to have i certificate of title issued to him therefor under the provisions of this act.
This section first of all applies only to a taxable person. Therefore the Crown is eliminated. Again it applies only to a taxable person who has a certificate of title. Consequently the Crown is also eliminated under this section, because a certificate of title can

only issue when the Crown has, by a grant, divested itself of all interest in that parcel of land.


William Alves Boys: Does it apply to the lessee of mineral rights for more than three years?


Joseph Tweed Shaw: Yes, a lessee for a period of more than three years may get a certificate of title, but under the law the grant from the Crown for that particular parcel must first have been registered, and consequently the Crown must have divested itself of its interest.


William Alves Boys: Then the Crown would not
be the owner of that land subject to lease?


Joseph Tweed Shaw: Not at all. I should say a
lessee from the Crown cannot have a registered certificate of title within the provisions of the Land Titles Act.


William Alves Boys: Supposing there was a lease from the Crown for a period of five years, and the lessee failed to pay the taxes under that act, as I understand it the province would become the owner of those minerals which, it seems to me in that event, should1 remain in the Crown.


Joseph Tweed Shaw: No. There are two sections
relating to this question. Section 9 deals with the person who has a registered title to the minerals. Section 10 deals with the person who is the lessee. The act very clearly distinguishes between these two. Now the minister has objected to the wording where the minister directs the Registrar of the Land Registration District to make a memorandum upon the proper certificate of title that all lands in, on or beneath the said parcel of land are the property of the province. The Minister of Justice says one may have a title to a certain part of the minerals but the minister can call upon the registrar to make a memorandum as to all minerals. But surely the memorandum directed to be made by the minister can be effective only as to the actual minerals which the registered owner has and to no other. I think that is clearly the intention of the statute. Perhaps the wording was somewhat unfortunate, but if it was unfortunate there was the more duty cast upon the Minister of Justice to see that the provincial government was notified of the defect in ample time in order that there might be rectification.


Edward James McMurray: Turning to section 9,
I find it reads:
The minister shall in ease the minerals in, on or beneath the parcel of land affected are registered in the name of a taxable person, either by separate certificate, or together with the surface.

Supply-Alberta Mineral Tax
What interpretation, does the hon. member put upon the distinction between separate certificate in contradistinction to the certificate together with the surface?


Joseph Tweed Shaw: The taxable person may have the title only for the minerals. He may have the title for the surface rights with the mineral rights exempted, or on the other hand he may have a title for all the property, and in the event of there being no exemption of the mineral rights, he gets the surface and the mineral rights.


Edward James McMurray: That is the mineral
owner in land from the Crown.


Joseph Tweed Shaw: Quite right.


Edward James McMurray: In that case a separate certificate might refer to the minerals in the land.


Joseph Tweed Shaw: No, because no one can get
a certificate of title covering a leasehold interest from the Crown. Before a certificate of title will issue there must first of all be a grant from the Crown. The Crown must have divested itself of its property. Section 9, as I have pointed out, deals only with a taxable person who is a holder of a certificate of title. Surely the section itself shows very clearly that there is no intention to interfere with the rights of the Crown at all. Now section 10 purports to deal with the other class of cases. It deals with the case of a lessee and I direct the attention of the hon. member for Simcoe to the wording of the section:
In the event of payment of the tax and of the penalty not being made within one month from the despatch of such notice, the minister shall, in case the parcel in, on or beneath the surface of which the minerals lie in respect of which the tax has not been paid belongs to a non-taxable person, proceed to enforce the payment of the tax by suit or by distraint levied in the same way and to the same extent as if the minister were a landlord who had demised the surface of the parcel of land and the minerals in, on or beneath the same to the mineral owner.
That section clearly covers the case where the Dominion government for a longer or shorter period has leased the mineral rights to a taxable person. It provides that in such a case if the taxes are not paid, the minister may proceed to enforce the payment of the tax by suit, or distraint levied in the same way and to the same extent as if the minister were a landlord. In other words the minister gets all the rights that a landlord would get in making a distraint upon property.


Henry Lumley Drayton: As regards the
right of distraint, would the hon. member, or would he not, say that there is a substitution.
of the province for the Dominion at that point? I was thinking for the moment of cases where we had royalties on leases. We have a general order-I forgot now what the royalties are-on petroleum and other things. In the late government we spent a great deal of time in regard to the matter and some people thought we were charging so much for oil they would never get anything out of the leases. The Dominion has rights as landlord. Under this act the province gets rights as landlord. What is the position?


Joseph Tweed Shaw: I will deal with the matter
in this way. A number of years ago a case went to the Privy Council, a case which is practically on all fours with the case that would arise under section 10, the section to which I have been referring. The council of the rural municipality of Vermilion Hills sought to impose a tax upon a grazing lease held by a gentleman called Smith from the Dominion government. The case arose in the province of Saskatchewan. Surely, that case would be one exactly parallel to the case where the Dominion government had leased its mineral rights to an individual. This particular case was decided in the year 1916. Might I just refer to some of the remarks of Lord Haldane:
This appeal arises out of an action in which the appellant-
The appellant being Mr. Smith.
-was held liable in the courts below to pay a sum of $3,118.78, being the amount assessed as tax upon certain lands in the province of Saskatchewan. The appellant's interest in these lands was conferred by leases from the Crown, granted to him by the Dominion government, for grazing purposes. The lands were situated within a local improvement district-
So, the question arose as to the right to impose this tax. The Attorneys General for the Dominion and for Saskatchewan intervened and were heard before the Privy Council. Lord Haldane says:
It is thus clear that the authorities of the province have no power to tax Crown lands, and the real question is whether this restriction prevents them from imposing the tax in controversy upon a tenant of Crown lands. The appellant was tenant of the parcels of land to which the taxation was directed under two leases from the Dominion government, for terms of years determinable upon notice, and with restrictions on assignment.
The Minister of Justice referred to the fact that there were restrictions on assignment in connection with these mineral leases.
The leases were granted for grazing purposes.
After a considerable argument, Lord Haldane, speaking on behalf of the Privy Council, affirms the judgment of all the lower

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courts, and holds that the appellant was duly assessed in respect of the lands comprised in the two leases, and that the assessment was entirely valid. That simply follows out a series of cases including the Calgary and Edmonton Land Company vs. the Attorney General of Alberta. In this case it is abundantly clear that the rural municipality had a perfect legal right to assess these grazing leases and to collect its taxes.


Henry Lumley Drayton: What was the basis of the assessment and how was it arrived at?


Joseph Tweed Shaw: This report unfortunately does not disclose that, but my impression is that under the statute in question there was either a rate per acre or a sum for the total acreage, I have forgotten which. The hon. member for Medicine Hat (Mr. Gardiner) informs me that it was a certain rate per acre similar to the mineral taxation act now in controversy. There can be no question in any event under the general law as it stands, that a landlord cannot under any circumstances distrain upon the property of the Crown. In this particular case, the province takes the right to distrain upon the property of the tenant in the lease. That is all that is proposed or intended to be done, and the province has a right to enforce that assessment by distress or otherwise as they may see fit, because of course, if there is the power to assess, there must necessarily be the power to collect by distress.
These are the simple propositions in connection with this statute. Section 9 gives simply the ordinary forfeiture right in the event of non-payment of taxes by a taxable person. Section 10 gives the right of distress and seizure in the event of a lessee who holds from a non-taxable person, the Crown. I think it must be clear that in this case the law officers of the Crown have apparently acted without realizing to the full the land titles system, the Torrens title system which we have in force in Alberta. Upon no other ground can I understand their going astray in this particular matter. May I suggest that it is highly desirable in, perhaps, cases of this character that the Dominion government, instead of exercising the power of disallowance merely on its own motion, should refer the matter to the Supreme Court of Canada and get a decision whether the particular statute in question interferes in any way with Dominion rights and whether or not it is intra vires of the provincial government.
I cannot close without referring, but briefly, to what I think is a rather cavalier treatment that the government has administered to the
IMr. Shaw.]
provincial government of Alberta. It may be of course that it was quite unintentional, but the facts were that the Canadian Pacific Railway Company, the Hudson's Bay Company, the Calgary and Edmonton Land Company, and some western land company, all I believe affiliated companies, prepared their petitions to the government on July 17-perhaps one was made on July 23-a year ago. The government immediately forwarded copies of these petitions and complaints to the provincial government, and the provincial government replied promptly, I think early in September, to the allegations of the various companies. But these complaints are not the ones upon which the minister has disallowed the statute at all; he has ignored the complaints of the Canadian Pacific Railway Company and the Hudson's Bay Company and the other petitioners and without notice to the provincial government has disallowed the legislation on entirely different grounds. In view of the representations made to the government as well as of the effort made by the provincial government to secure the grounds upon which the government proposed to disallow the statute; indeed, in view of the representations made by some members on this side of the House to the government itself, it seems to me that the government might well have communicated to the province the precise reason for its disagreement with this particular statute and given the provincial government ample time while the legislature was still in session to amend the act and make it effective even admitting it was defective. That I think is the least courtesy which the Dominion government might have shown under the circumstances. The action of the government is regrettable in view of the nature of the legislation in question and of the embarrassment which must necessarily be occasioned the province in its financing; it is unfortunate I say that steps were not taken in ample time by this government to communicate with the provincial government. In my judgment there was no excuse for the failure in advising the provincial government of the reasons upon which the disallowance was proposed to be made. The report signed by the Minister of Justice (Mr. Lapointe), many portions of which he read to-night, was apparently drafted on February 2, 1924. The reasons he gave for disallowance are contained in that memorandum. At that time, if he had communicated with the provincial government, the legislature being then in session, ample changes could have been made to meet even the fastidious requirements of the Minister of Justice. I think this is unfortunate and will make for controversy over provincial rights.

Supply-Alberta Mineral Tax


Ernest Lapointe: If the memorandum
which my hon. friend is quoting from bears date February 2 it certainly is wrong; the memorandum in its present form was prepared only a few days before it was submitted to council.


Joseph Tweed Shaw: I have a copy of the memorandum taken from t'he return brought down to the House and it is certainly dated Ottawa, February 2. Whether or not that is the right date I do not know. However, I think it is unfortunate that the reasons were not communicated to the provincial government while the legislature was still in session. Some hon. members of this House got in touch with the Prime Minister (Mr. Mackenzie King) and urged that whatever action was taken should be taken as soon as possible so that the provincial government might be enabled, while the legislature was still in session, to re-enact the' legislation if necessary. I cannot help thinking therefore that the provincial government in this matter has been treated cavalierly.


Henry Lumley Drayton: What is the estimate of the revenue from that tax?


Joseph Tweed Shaw: My impression is that it was
something over $300,000 per annum, although it must be more than that. The acreage owned by the Canadian Pacific Railway and the Hudson's Bay Company alone totals over 10,000,000 acres, and no one is exempted except those who hold an acreage not exceeding 10 acres.


Edward James McMurray: Section 10, I understand, deals with those cases where the surface is owned by non-taxable persons. Section 9 refers to cases in which the surface is owned by taxable persons; the minerals under section 9 may be owned by a man who owns the surface of the land or they may be owned by the Crown who has leased the minerals to someone.


Joseph Tweed Shaw: I do not get that.


Edward James McMurray: I am referring to
section 9, which relates to the surface of the land when owned by taxable persons.


Joseph Tweed Shaw: That is to say, taxable persons who have certificates of title.


Edward James McMurray: Yes. The minerals,
under that section, may be owned by the man who owns the surface or they may be owned by the Crown who has leased the minerals to a leaseholder. Under section 9, as I read it, the province of Alberta has the power to take over these minerals on three months' notice. If that 266
is the case, if they have the power to take over the minerals belonging to the Dominion government, is not the province expropriating the leasehold and the minerals under it as obtained by the individual from the Dominion government?


Joseph Tweed Shaw: I think not. I did suggest that perhaps the wording was unfortunate, but under the act the minister requires the registrar to make a memorandum on the certificate of title, that is all; and then it says with respect to the particular certificate that all minerals included therein-that is the effect of it-shall belong to the province.


Henry Elvins Spencer: I had intended to take part in this debate at some length, but the subject has been so well covered by the hon. member for Macleod (Mr. Coote) and the hon. member for West Calgary (Mr. Shaw) that I simply wish to say that I concur in their statements. I desire however to add a few words to what has already been said. If the minister really thought the act ultra vires he should have referred it to the courts to have the question of its validity determined as in the case of the Manitoba Act which attempted to impose a tax on grain futures. Attention has been drawn to the amount of taxation that might have been levied under the Mineral Tax Act. The House, I think, hardly realizes how much the province of Alberta has had to pay for two of the large corporations which are attempting to get out of the three cent per acre mineral tax. I want to quote these figures, which have been carefully checked and which I believe are correct:
A summary of the values of the claims of Alberta under the various items considered is as follows:-
C.P.R. Lands	$19,680,021
C.P.R. Tax Exemptions	 9,802,502
Hudson's Bay	Lands	
3,142,200Hudson's Bay	Grants	
177,846

Realizing this, one can understand why the people of Alberta do not feel at all kindly to the action of the federal government in disallowing an act which is going to penalise these corporations to the extent of three cents per acre for a mineral tax. At the present time the province is groaning under a very heavy load of taxation; the action of the federal government will only add to that burden. Further, it will probably have the effect of stimulating the present emigration from that province, for as long as the people realize that taxation is not going to be



Supply-Alberta Mineral Tax
lightened but made more burdensome, those who are hesitating about moving will probably make up their minds and leave.
The wild land tax of the province of Alberta taxes land without regard to value, just exactly the same as the mineral tax was intended to. The former tax was allowed; the latter was disallowed. The former is collected largely from small land owners; the latter from large and wealthy corporations. I consider that in disallowing this legislation the federal government has acted not only inadvisedly but very unfairly towards the province of Alberta


Alfred Speakman: Mr. Speaker, I have no intention of challenging the right of disallowance of provincial legislation by the Dominion government, it being absolutely indisputable; neither have I any intention of challenging their wisdom in exercising that right on certain occasions; nor do I intend to deal with the legal aspect of the question, for I am not competent to do so, and moreover it has already been dealt with fully and ably. But I do wish to stress one point which to my mind has not been sufficiently stressed in this debate-the unfair way in which the right of disallowance has been exercised against the government of Alberta. The undisputed facts are that in the session of 1923 the provincial legislature passed a revenue act upon which it relied for a portion of its finances; during the summer following representations were made, particularly by two large corporations which would be severely affected by this act, to the effect that it should be disallowed; these representations were taken up with the Alberta government, and apparently their answer must have been satisfactory, because the objections were never again referred to.
Whether the final decision to disallow the legislation was arrived at by the Department of Justice on February 2 or not, I do not know, and I do not think it is material. During the twelve months which elapsed the Department of Justice and the Dominion government had an opportunity of fully ascertaining whether or not the act was intra vires of the province. I believe it has been laid down as a dictum, and accepted as a fact, that mere injustice or even immorality in a provincial act affords no ground for its disallowance by the federal government. The act in question was disallowed solely on the ground of being ultra vires of the powers of the province.
I do not pretend to say whether the legislation was intra vires or ultra vires; authori-
ties differ on the point; but I do say that the Dominion government should be very careful
indeed in the exercise of its undoubted prerogative-careful because of the effect which it would undoubtedly have upon the finances of a province, careful because of the effect which it would undoubtedly have-and undoubtedly has had in this case-upon public opinion in the province. Public opinion, which is perhaps not always fully informed, has come to the conclusion in many instances of disallowance that whatever the grounds given may have been, the real ground was the disinclination on the part of the Dominion government to see any large and influential corporations taxed. I am not saying that that was the ground in this case, I do not believe it was, but I do know that in my province that opinion is held by many people.
During the whole of last winter and early spring the legislature of Alberta was in session, and at any time during that period had they known the grounds upon which disallowance was to take place they would have had an opportunity to do one of two things,-either to change those parts of the act which were ultra vires of the province in the opinion of the Dominion government, or to take other measures to secure the needed revenue. But the action of the Dominion government was delayed to such an extent, in spite of repeated representations being made by the provincial government and others, that the provincial government was not informed as to the disallowance, and when the announcement came it was too late for any action to be taken by the provincial authorities. The result is that Alberta is suffering under the disability of being behind in its anticipated revenue, and will continue to suffer until the next session of the legislature. I cannot but feel, and I express myself quite frankly and emphatically, that the government of Alberta has not been dealt with fairly to that extent.
But it is of importance to the other provinces as well, because if the impression gets abroad that this is a precedent, and that similar action can be taken on a future occasion without proper notice or proper information being furnished to the provincial authorities, what province will feel safe in respect to any of its legislation, and particularly in respect to legislation providing for very necessary revenue? They will always be in doubt. So I say, Mr. Speaker, that the action taken by the Dominion authorities was not only unfair to the province of Alberta, but was unwise in regard to the other provinces, and will tend to engender disputes in the future respecting provincial and

Supply-Alberta Mineral Tax
Dominion rights which may lead1 to very strong disaffection on the part of the provinces. Therefore I can only express the hope that this remonstrance having been directed to the government, they will at least for the future walk carefully, that they will at least think closely, that they will at least consider long and earnestly hefore such action in such a way is again taken.


William Findlay Maclean: Mr. Speaker, the Minister of Justice has entrenched himself behind the opinions of previous Ministers of Justice, and one after the other they have established the claim of the Canadian Pacific Railway and the Hudson's Bay Company to certain interests in these lands. But there has also come out of this discussion, as it no doubt will come out again, that while certain rights may have been established, certain duties are imposed upon the government of this country in relation to those rights, among them the duty of trying, not to quench those claims, but rather to undertake with the companies for their cancellation on certain terms. I am not talking about the Hudson's Bay Company now, because they are entrenched; but the Canadian Pacific Railway Company is here almost every year, almost every day, asking some favour from the government, and that gives us an opportunity to negotiate. These claims were established years ago when the lands were acquired, the idea being that they would be sold for settlement. But take the Canadian Pacific: they have acquired certain mining rights and they have a claim on the oil deposits, the gas deposits, and the valuable mineral deposits. If I understand the situation rightly they contend that it is the duty of the government to make the necessary geological surveys, find out how rich these lands are in minerals and' produce a statement on which they can sell the property and make a great income for themselves.
The minister speaks of past ministers of justice and their opinions. For myself I question it when he speaks of Edward Blake and David Mills; I thought they were the greatest exponents of provincial rights, as was Sir Wilfrid Laurier in the old days. But they are mentioned here to-night as being not quite so much in favour of provincial rights as of the rights of the companies that got these enormous land grants in the past. These monopolies are entrenched in the country to-day and in some way these claims must be wiped out, must be negotiated. For instance, Ontario recently gave to the returned men land in the township of Whitney in the Por-266J
cupine country that is worth millions, and gave it with an absolute title. I contend that it is the duty of the government to find some way of giving the public the title to these lands, even if they have to pay some reasonable consideration to the companies that now hold the grants. The government must also settle in some way the claims of the provinces, in the interests of the whole country. A great deal has been said to-night about the opinions of various ministers of justice with regard to the statps of the companies, but there was not a word about the rights of the settlers in the Canadian West. It has been suggested that even when the companies sold the land to the settler the mineral rights still remained with the companies. That is not quite just, and it is not what we would expect from a Liberal party. I advise the minister to try to rectify this condition. Why not try to establish the public rights in regard to this thing?


Samuel William Jacobs: May I ask my hon. friend
a question?


William Findlay Maclean: Yes, two.


Samuel William Jacobs: Just one. Does he think
the act should be disallowed, or not?


William Findlay Maclean: I have not said that. I suggested a computation of the subject, whatever it may be, and I do not think a Liberal like my hon. friend would disagree with that. Perhaps as the next Minister of Justice he would also give an opinion in favour of the entrenching of these companies. That is not the question before the House to-day so much as the inauguration of a policy that would bring about the settlement of all these claims, get them entirely out of the way, because if that is done certainly some prosperity will come to the West.


Henry Lumley Drayton: My right hon. leader (Mr. Meighen) was greatly interested in this subject, but unfortunately he had to leave to catch a train and so was unable to take part in the debate. I have been a great deal interested in what has been said, from more than one angle. I do not know that I am particularly enamoured of this kind of legislation. I do not know which is worse, this kind of legislation on the one hand or interference with Dominion or provincial rights on the other. So far as I can see, this legislation is not based on value, not based on the fact of the minerals, not based ppon anything except that everybody who has land in Alberta has to pay a specific tax, if his holdings are over ten acres.

Supply-Alberta Mineral Tax


Edward Joseph Garland: Is it not true that that power of taxation is vested only in the event of the lessee or owner of the land having mineral rights in the land? It does not apply to every piece of land.


Henry Lumley Drayton: I asked that question and I am told that the application is to every piece of land, whether minerals are there or not; the whole thing is wide open. If it was really a direct attempt to get payment where the value was, that would be different, but it 'is not. I am not disposed to think that this is much worse than a whole lot of the half-considered schemes of taxation that are suggested from time to time. I am not quite sure that the disallowance of this bill is such a bad thing for the province. Some of the western papers have pointed out that some $75,000,000 worth of lands in Alberta will become the property either of the municipalities or of the province as a result of some of the taxes that have been referred to in this House by the very hon. gentlemen who have been inviting the government to take up land taxation.


An hon. MEMBER:: Hear, hear.


Henry Lumley Drayton: An hon. member says, "hear, hear," but if the municipalities are to own the farms and that system is to prevail generally we shall not have much of a province. I am inclined to think that this is not a revenue measure. If it were a revenue measure we would be looking for value. Look at the way the act works. It does not matter a bit whether you have minerals or not. The 1st of August, the province gets busy; the 1st of September your return is due; the 1st of October, 10 per cent put upon it; the 1st of January, your title is gone, with the right of redemption within a year.


Ernest Lapointe: And a further penalty.


Henry Lumley Drayton: With a further penalty. That does not look to me quite as much like a measure for taxation as it does like a measure for confiscation. But I do not know that that is at all the business of the government.


Joseph Tweed Shaw: May I point out that there
is a provision for surrender, so an individual who feels that he has no mineral rights that are taxable can readily surrender them to the Crown.
Sir .HENRY DRAYTON: But look what it means. My hon. friend has a farm; he does not think there are any minerals there, and the chances are there are not. Somebody
[Sir Henry Drayton.l
goes to the treasurer and says: I want to get this hon. gentleman's farm, because I know there are minerals there. They are put up and sold for a trifling figure, as they would be, and then he has the right to go on this farm and exploit it. That is how it works out. There may be no minerals there at all, but nevertheless under this act somebody has the right to go in there.


George Gibson Coote: Is the hon. gentleman not
aware that that is the case now in regard to mineral rights in our homesteads, which are owned by this government? Some person may come on our homesteads and work these minerals, and ve have nothing to say about it.


Henry Lumley Drayton: That may very
well be where land is sold without the mineral rights, but I do not think that is a good way to sell it. I think it is wrong. But that is no argument for making it absolute everywhere. That is an argument against this act. But after all, that has not much to do with the Dominion's right of disallowing this legislation. I do not know whether it is going as far as the House went last year, when the House interfered in the case of. the Nova Scotia bill, simply on the ground that it was a matter of injustice, and nothing else. There is one thing, Mr. Speaker, I think we should often congratulate ourselves upon, and that is that we have not got some other legislature that is always sitting in judgment upon us. I wonder how many of our bills would stand if there was just as much anxiety in connection with our legislation and its disallowance? It would be well in some ways if we had it, when we have bills like the bill of last year set aside, not as a matter of justice, but as a slight evidence of parliamentary insanity.


James Alexander Robb: We have the Senate.


Henry Lumley Drayton: Yes, but what
does my hon. friend say when the Senate ever does anything?


Joseph Tweed Shaw: My hon. friend must be aware that the Lake Freights bill may yet be disallowed.


Henry Lumley Drayton: I do not think
so. There would be an awful roar put up by gentlemen who do not mind disallowing local legislation, if any legislation of this House was disallowed by the mother of parliaments.
Yes, in that Nova Scotia case 'the only claim was injustice, and that claim was never put forward before as a sufficient ground for disallowance. Now we have another claim here. Mr. Speaker, it is a claim that I think ought to be very, very slowly exercised, and

bupply-Alberta Mineral Tax
ii is a claim that I am perfectly frank in saying I have not been able to get hold of tonight. We have some troubles in connection with taxation, I can see that; but I do not know that they are very much worse than the troubles we would have had if the taxation were to be carried on in the ordinary way-assessments of the value of the lease and proceedings as in the case quoted by the hon. member for West Calgary. On the other hand', I am in this difficulty. We have officers stating that this is interfering with the Dominion parliament, and I can well see how it might be. If the Dominion ever does get a proper aggressive policy in connection with lands and minerals, and really wants to get a large programme going on and big discoveries made, I do not think they will be able to do very much in that direction if, by the statute of a province, that province is being put in the position of the Dominion. It may well be the province ought to get put in the position of the Dominion, but it ought not to get put in that position through machinery of that kind. I think, in other words, that that settlement which was going to be made, and which we heard so much about during the first session of this parliament, under which Alberta was to be given her natural resources, is the proper way of dealing with that question. The use of this power is a very dangerous thing, and I hope the government is not going to give us many more examples of it.
The House divided on the amendment (Mr. Coote) which was negatived on the following division.
++YEAS
Messrs.
Bancroft,	Kellner,
Bird,	Kennedy (Edmonton),
Campbell,	Lucas,
Coote,	Maclean (York),
Davies,	Macphail,
Doucet,	Milne,
Elliott (Dundas),	Shaw,
Evans,	Speak man,
Gardiner,	Spencer,
Garland (Bow River),	Thompson,
Good,	Ward,
Hoey,	Warner,
Irvine,	Woodsworth.-27.
Jelliff,	NAYS
	Messrs.
Archambault,	Bowen,
Baldwin,	Boys,
Beland,	Brown,
Benoit,	Bureau,
Binette,	Cahill,
Boivin,	Cannon,
Bouchard,	Cardin,
Boucher,	Carruthers,
Bourassa,	Casgrain,
Chaplin,	MacLean (Prince, P.E.I.),
Chevrier,	McBride,
Chew,	McConica,
Chisholm,	McGiverin,
Clifford,	Mclsaac,
Copp,	McKay,
Dechene,	McMaster,
Delisle,	McMurray,
Denis (Joliette),	Manion,
Denis (St. Denis),	Marcile (Bagot),
Desaulniers,	Marler,
Descoteaux,	Martell,
Deslauriers,	Mercier,
Desrochers,	Morin,
Drayton (Sir Henry),	Motherwell,
Ethier,	Murdock,
Finn,	Ouimet,
Fontaine,	Pelletier,
Forrester,	Power,
Fortier,	Prevost,
Gendron,	Putnam,
Gervais,	Rankin,
Gordon,	Raymond,
Gould,	Reed,
Graham,	RhSaume,
Hammell,	Rinfret,
Harris,	Robb,
Hatfield,	Roberge,
Healy,	Robinson,
Hunt,	Robitaille,
Jacobs,	Ross (Kingston),
Johnston,	St. Pere,
Kelly,	Savard,
King (Kootenay),	Seguin,
King, Mackenzie (York),	Senn,
Laflamme,	Sinclair (Oxford),
La pierre,	Sinclair (Queens, P.E.I.),
Lapointe,	Stewart (Argenteuil),
Lavigueur,	Stewart (Leeds),
Logan,	Stork,
Lovett,	Sutherland,
Macdonald (Pictou),	Tolmie,
Mackinnon,	Vien.-104.


Mr. KAY:: I was paired with the hon.
member for Wentworth (Mr. Wilson). Had I voted, I would have voted against the amendment.
Motion agreed to and the House went into committee, Mr. Gordon in the chair.
DEPARTMENT OF FINANCE Finance, salaries-contingencies, $413,445.


Henry Lumley Drayton: I see there is
a change made in that vote, as to the Commissioner of Taxation.


Mr. BUREAU:: No, no, it is all right.
The Commissioner of Taxation is to remain in office.


Henry Lumley Drayton: There is no vote for him.


Jacques Bureau: There is a vote in the
Department of Finance.


Henry Lumley Drayton: I am looking at the Department of Finance, page 82.
Supply-Finance


Jacques Bureau: The $10,000 is in the estimates. There are two items. I think there is an item Business Profits War Tax, Act 1916, and the Income War Tax Act 1917. $2,200,000, and then the difference is somewhere else.
Hon. .J. A. ROBB (Acting Minister of Finance) : It is provided for in item 318, page 59. There is an item at the bottom: Salary of $10,000 for the Commissioner of Taxation.


Jacques Bureau: To provide for the administration of the Business Profits Tax and Income War Tax, 1919.


Henry Lumley Drayton: Oh yes, it is
inserted there Then there is another one dropped, "Librarian, second grade." Do we get rid of the service there, or is there a change?


James Alexander Robb: We are likely dispensing with that service.


Mr. EVANS:: Those in the Civil Service
who are placed above the cost of living line have had their salaries increased, while those who, I might say, are well below the cost of living line have had theirs decreased. There is an inconsistency on the part of the government, and I wish to protest against these $10,000 salaries at the top of this page of the estimates.


James Alexander Robb: There is no increase.


Mr. HOEY:: Is the salary of the Commissioner of Taxation increased from $6,000 to *10,000?


James Alexander Robb: No increase.


[Stage Direction]
Item agreed to.
Progress reported.
On motion of Mr. Mackenzie King the House adjourned at 12.25 a.m. Wednesday.
Wednesday, July 9, 1924.