1925-05-19

REPORTS OF COMMITTEES

[Stage Direction]
Second and third reports of the Committee on Agriculture and Colonization.-Mr. Kay.
Hon. CHARLES MARCIL (Bonaventure) moved that the third report of the committee of both Houses on the Printing of Parliament be concurred in.
Motion agreed to.

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I beg to lay on the table copy of a letter I received from the Premier of Ontario on April 16, and of my reply thereto. The correspondence relates to the Carillon power development, and probably should have been brought down with the other papers, but I overlooked it at the time.



PRIVATE BILLS


[Stage Direction]
Bill No. 134, from the Senate, for the relief of Lillian Rebecca Mains.-Mr. Euler.
Bill No. 135, from the Senate, for the relief of Elizabeth Ruth Badgley Shaw.-Mr. Jacobs.
Bill No. 136, from the Senate, for the relief of Lilian Helena Caldwell.-Mr. Preston.
Bill No. 137, from the Senate, for the relief of Elizabeth Strachan Reid Harvey Strachan. -Mr. Garland (Carleton).
Bill No. 138, from the Senate, for the relief of Esther Charlotte Ancel.-Mr. Jacobs.


[Stage Direction]
On the Orders of the Day:
Mr. GEORGE BLACK (Yukon):: Mr. Speaker, I should like to ask the government when I may expect the return to an order, passed on the 9th of March, for a copy of all correspondence concerning exemption from income tax allowed to officials of Yukon Territory. When the resolution was passed, the Prime Minister remarked that there was no objection to bringing down any of the papers called for other than such as might properly be regarded as confidential. I notice that some of the material was ready some weeks ago, and there seems to be no reason why the return should not now be made.


Hon. J. A. ROBB (Acting Minister of Finance):: Mr. Speaker, I have no knowledge

of the papers having been prepared. I will communicate with the department this afternoon and ascertain.



CHICAGO DRAINAGE CANAL

[Stage Direction]
On the Orders of the Day:
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Mr. Speaker, I have
seen a report which has given me some concern; I do not know whether it has come to the government's attention or not. It relates to the Chicago drainage canal diversion and to the interpretation given the recent judgment of the Supreme Court of the United States by the Chicago authorities and, so far as I know, by others generally. It is well known that a limitation was placed on the diversion by the Supreme Court judgment, which limitation was believed here to be a real limitation of the very serious diversion from our waters which had up to then taken place, and the still more serious diversion in immediate prospect, it being a limitation to 8,500 cubic second feet. The interpretation which I have seen as intended to be acted upon is this: that the 8,500 cubic second feet, disastrously serious in itself, is to be applied to the drainage exit alone, that is to say, it is not to include the waters diverted by the alteration of the course of the Chicago river, which course has been changed from a flow into the lake-the natural flow-to a flow at a nearer point into the Chicago canal. It also involves an exclusion of the water taken for purposes of water supply. That is to say, the interpretation is said to be 8,500 cubic second feet for drainage alone, exclusive of 1.300 cubic second feet represented by the turning of the course of the Chicago river, and 1.200 cubic second feet more taken for the purposes of water supply. This total would be 11,000 cubic second feet, or worse than we ever understood as having been the actual practice. I would like to ask the government if they have had any information to this effect, and if so, what steps the government have in mind to bring to a head, or at least to some prospect of solution, this very dreaded and calamitous state of affairs.


William Lyon Mackenzie King: The matter to which my
right hon. friend has just referred came also to the attention of the government, and we immediately communicated with the United States government, placing before them the interpretation referred to and asking them whether that was the view they took of the decision and its effect. We also drew attention to other possible interpretations with a

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view to getting from the United States authorities an exact statement of what in their opinion was the authoritative interpretation. Up to the moment we have mot received any final answer, but in view of my right hon. friend's question to-day I will have a further despatch sent.



CANADA-FINLAND TREATY OF COMMERCE

[Stage Direction]
Hon. J. A. ROBB (Aoting Minister of Finance) moved the third reading of Bill No. 128, respecting trade between Canada and Finland.
Arthur Meighen: Before this motion is adopted I would like to direct the attention of the minister who makes the motion to the correspondence-or, rather, I will make it plainer to the corresponding phraseology-of the Finnish agreement and the Finnish legislation to that of the Netherlands agreement and legislation, and therefore to the equal danger of such interpretation of this treaty as will bind Canada to extend to Finland the schedules of our preference tariff.


James Alexander Robb: Since yesterday I have had an opportunity of looking into it, and I find that these are in exactly the same terms as the treaty with Italy. It was never thought for a moment that there would be placed upon it the construction which my right hon. friend fears,


Arthur Meighen: What' about the French treaty?


James Alexander Robb: I do not know about the
French treaty. As regards the Netherlands, the commissioner has gone to Montreal this afternoon to have a consultation with the representative of the Netherlands in this country, and I hope to be able to give my right hon. friend a reply to that to-morrow. I do not think there is any danger in connection with this legislation.
Motion agreed to and bill read the third time and passed.



TRADE AND COMMERCE

[Stage Direction]
The House in committee of Supply, Mr. Gordon in the chair.
Trade and Commerce-Gold and Silver Marking Act, administration of, $6,000.
Hon. T. A. LOW (Minister of Trade and Commerce):: This vote is to provide for the salary and travelling and contingent expenses
of Mr. W. J. Ryan of Toronto, the inspector employed by the department for the enforcement of the act. It is the same as last year.


Sir HENRY DRAYTON:: I understand
that under the arrangement made last week we are to discuss under this item the question of the export of power, and if I am correct in that I wish to make a few remarks in that connection. Since we last discussed this matter a return has been tabled by the government dealing with the question of the export of Carillon power. It is a long return, covering a good many years. Since the return was tabled the gentlemen of the press, in the first place, considered it, and immediately after that the hon. member for Laval-Two Mountains (Mr. Ethier) was fortunate enough to be ab'e to get his hand upon, it, and he conveyed it after that to the Minister of Trade and Commerce-


Thomas Andrew Low: Who had it for fifteen minutes.


Henry Lumley Drayton: -who tells us he had it for fifteen minutes. I do not know where it was in the meantime, but I do know that the people who asked for it and wanted it were able to get it at something like twenty minutes to one.


Mr. ETHIER:: I got it only last night at ten o'clock and I gave it back this morning to the Minister of Trade and Commerce.


Henry Lumley Drayton: I can only say that the earliest we could get it was about twenty minutes to one.


Thomas Andrew Low: I might say to my hon. friend
that before it reached my office I had a telephone call that the file was wanted for the right hon. leader of the opposition. I retained it fifteen minutes, and it was then returned to the secretary.


Henry Lumley Drayton: I do not know
anything about the peregrinations of the file or how many people found it necessary to check it, but that is the hour it got to the office of the leader of the opposition.


Mr. FORKE:: I would like to point out to the hon. gentleman that the most of us do not know what he is talking about at all.


Henry Lumley Drayton: We will see if we can correct what perhaps is a common condition; we will see if we can make it a little less common. 1 am talking, Mr. Chairman, about the question of the export of power. My hon. friend forgets there was an arrangement under which this question was to be discussed under this item, and I am pointing out right
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at the commencement that I cannot give the House as well as I ought to give it, what is set forth under this file, and what the situation
is,	for I simply have not had the opportunity, I have not had the time to go into it.
I think we can say we are on common ground at the commencement. A lease was made-so far as I can make out in the short time I have had the chance of looking at this file-in June, 1911, which enabled, not this company but a predecessor of this company, to develop power at Carillon. There have been extensions to that lease from time to time; and it runs on until, in 1921, the lease is enlarged by a new document giving, as I gathered during the short time I have had the chance of looking at the lease, somewhat extended powers. I do not attempt to define them; the matter has run along from 1921 with extensions, so that it is still kept alive.
My right hon. friend the Prime Minister and myself talked of this a little while on the last occasion when we were discussing this matter, and when I was attempting to find out whether any request had been made for the right to export power, whether anyone had been busy about it, whether anyone had seen him or any member of the government about
it.	Well, we might have saved a whole lot of time, for there is a very definite proposition before the government, as shown by the draft leases which are on this file. The proposition that is made to the government under these leases is that power shall be exported in the first instance to the United States, with the right to Canadian muncipalities to get of that power up to 100,000 horse-power. The main object of the undertaking is entirely the matter of the exportation of power to the United States, as I am going to show in a few minutes. I asked on the last occasion who was looking into this, who was pressing it, who was behind it, and my right hon. friend could not tell me anything; or if he could, he would not. I am going to give him now some information. There need be very little trouble now in finding out all about this matter.
The lease which is forwarded is forwarded under cover of a letter dated October 23, 1924. Two revised drafts are sent in. I point out that the file is incomplete at that point; I have seen nothing of former drafts; there is nothing of former correspondence. Whatever the peregrinations of the file were, it is quite clear that there is nothing to show on the file itself how this situation was led up to; but on the 23rd of October, 1924, we have a letter. I read a portion of it:

On behalf of the Carillon Industrial Corporation, Limited, I would like to submit for the consideration of the minister and the department, two revised drafts marked "A" and "B" respectively, and would be obliged if arrangements could be made to have these drafts reviewed with a view to a final agreement between the parties as to the precise form of the leases contemplated.
Yours sincerely,
Carillon Industrial Corporation Limited.
That communication is signed iby Miss Lyla Brennan, as secretary-treasurer. I cannot find in the telephone directory or anywhere else particulars as to the Carillon Industrial Corporation, Limited, but on inquiring as to Miss Brennan, I find from the directory that Miss Lyla Brennan is a stenographer in the office of McGiverin, Haydon & Ebbs, at 19 Elgin 'Street, Ottawa, and I might point out that this letter bears the address, 19 Elgin Street, Ottawa. So my right hon. friend has not far to go to get information as to who is behind this scheme and what is in it. All he has to do is to go to his senatorial friend, on the one hand, or to his member of the cabinet without portfolio, on the other hand, and he will have it.


William Lyon Mackenzie King: I do not know whether I fully grasped the purport of my hon. friend's remarks. Is he referring to my statement the other evening that the government had had no application before it? I think I made it quite clear that the government had not had before it for consideration any applications for the export of power. What my hon. friend is reading now as to some communications that have come to the minister and the department, I am hearing now for the first time. I had no knowledge of it at all until my hon. friend read the letter.


Henry Lumley Drayton: I am very, very sorry, Mr. Chairman, that in an important matter like this my right hon. friend the Prime Minister is being kept so much in the dark and does not know anything about it.


William Lyon Mackenzie King: I understand
there are applications made departmentally running back three and four years. They have not come before the government; and I was speaking, as I said the other evening, for the government, and I made it quite plain the government had not considered any applications of the kind. I repeat that now.


Henry Lumley Drayton: My hon. friend
is doing scant justice to himself.


William Lyon Mackenzie King: Not at all.


Henry Lumley Drayton: I went further
and said I was not concerned with any formal application, but that I wanted to know whether
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this matter had been brought to the attention of the members of the government, and I did not confine myself to the Prime Minister, but I went down the line of the ministers who were here. There is the Minister of Railways (Mr. Graham): this is in his department, and if you could have a more formidable application for a right to export than we have here, I would like to see it.


William Lyon Mackenzie King: My hon.
friend at the time was pressing for a statement from the government as to what they purposed doing in the export of power, and he spoke particularly of Carillon. I told him then that the government had not had that matter before them for consideration, and I repeat it.


Henry Lumley Drayton: My hon. friend
had better look at Hansard. What I was trying to find out was what was going on in connection with this matter, not what the government was going to do, but who was behind it.


Joseph Arthur Calixte Éthier: Is that draft signed or is
it blank?


Henry Lumley Drayton: I would like to ask the hon. gentleman, who happens to be a lawyer, whether he ever heard of a draft document signed? If they were signed, they would not be drafts; they would be executed documents. We were trying to find out whether there was any real movement on, whether the deputations were accidental deputations; and we could get no information. But we have it here. We have an application for the export of power on a grander scale than anything we have ever had; that is the plain straight fact. And we also get it from the firm of McGiverin, Hay don & Ebbs, so there ought to be no mystery about it. Surely the government can find out and give the House and the country information as to who is behind this scheme. Well, I turn to the draft contracts and 'there are two. I confess in commencing that I have not had sufficient time to go through these contracts for the purpose of dissecting them and seeing clearly whether they differ one from the other. However, I have gone through them sufficiently to enable me to arrive at this conclusion-that the plain intent and the plain object under both contracts is the exportation of power in large volume and in large quantities. I first deal with contract A-


Mr. GRAHAM:: It is not a contract.


Henry Lumley Drayton: Well, draft contract A, submitted by the company to my
hon. friend. The covenant reads-I skip the first part of it which is not directly material:
Doth lease-
That is, the government.
unto and vest in the company the following rights, privileges and hydraulic powers on the terms and conditions and for the times in this indenture specified.
I' may say, just at this point, Mr. Chairman, that the contract runs a long time. In the first instance, if this lease is signed, it is to run to the 1st January, 1964. There is then to be a 21-year renewal from 1st January, 1964. There is then to be another 21-year renewal from 1st January, 1985, and a 40-year renewal from 1st January, 2006.


William Lyon Mackenzie King: Does my hon. friend think the government will entertain any such absurd request?


Henry Lumley Drayton: I really do not know what absurdity this government would not do if they thought it would pay them to do it. Why, this is no more absurd than what we went through the other night. This is very very little worse than the Petersen contract; it is only a difference of degree. So, Mr. Chairman, while I admit it is ridiculous, I frankly hesitate to predict bounds to the government's powers of erring and of error. So I will have to leave that particular thing to my hon. friends right there.


Mr. McISAAC:: How does it compare with the contract of the Bridge River Power Company?


Henry Lumley Drayton: Perhaps we had better deal with one thing at a time; my hon. friend will hear all he wants to about that later on. Now let us see what rates they get.


George Perry Graham: No, what rates they ask
for.


Henry Lumley Drayton: Quite right.


Arthur Meighen: We were told they did
not ask for any.


Henry Lumley Drayton: We are always
learning something. My hon. friend's sleeve is getting narrow; we are getting nearer the heart of the matter. Now the clause as to this power is clause D. They are granted all the hydraulic powers created under this contract if it went through.


Mr. CANNON:: If my hon. friend wants
to be fair he should deal with this as a contract which is submitted, and not as a contract which has been acted upon.


Henry Lumley Drayton: I have said that often, have I not? I am just talking about

Supply-Trade and Commerce
what this lease would do if put into force, I am not saying it is put into force. What I am doing is explaining the nature of the obligation which we could not find anything about.


Lucien Cannon: My hon. friend's English
is very poor, then.


Henry Lumley Drayton: Perhaps so,
but it is at least truthful:
All hydraulic power created by the said navigation, works, as extended, enlarged and improved as herein provided together with the right to generate, sell, transmit, convey and deliver the electrical power available through utilizing all of the water flowing to the dam forming part of the navigation works herein provided, and not required for the operation and lighting of the said present Carillon and Grenville canals, or of any canal or canals that may be constructed in addition to or in substitution for the said present canals or any of them, subject, however, to the obligation on the part of the company in respect to export to make available from Carillon or elsewhere at the power house of the company at or near Carillon for the requirements of Canadian municipalities, cities and other consumers for use in Canada electric power of the frequency and voltage of the company's plant up to a total of 100,000 horse power which shall be available to such Canadian consumers at the same average load factor as the balance of the load on the company's plant.
I just stop to point out there that I do not know from this file the amount of power that is to be developed. Perhaps my hon. friend the minister knows what the proposition is?


George Perry Graham: I would rather reply to
my hon. friend when he gets through; I do not want to interrupt him.


Henry Lumley Drayton: But I am
looking for'the interruption.


Some hon. MEMBERS:: Oh, oh.


Henry Lumley Drayton: There goes the general chorus. There goes a chorus which is a real chorus, which can always be counted on to fill in. But just look where we are.


George Perry Graham: Does my hon. friend want me to answer him now?


Henry Lumley Drayton: I want the information because it might cut out a whole lot of what I have got to say.


George Perry Graham: As a matter of fact I have never read those proposed leases, and have never considered them for a minute. I never saw them until Friday last, and I was not considering them at all. Those leases have never been brought before me and I do not know what is in them.


Henry Lumley Drayton: That is not the question I asked my hon. friend.


George Perry Graham: What was it?


Henry Lumley Drayton: I asked my hon. friend how much power was proposed to be developed?


George Perry Graham: I do not know what is in the leases.


Henry Lumley Drayton: This does not
say.


George Perry Graham: In the case of the National Hydraulic I think there was a proposed development of 400,000 horse power; but I do not know what is in those leases because I never read them.


Henry Lumley Drayton: If this is an
extension of the former idea, under this contract the right would be given to raise the dam to a height not exceeding 133 feet, and if the old plant would produce 400,000 horse power I would assume this would produce a bit more.


George Perry Graham: The National Hydraulic
asked to raise the level of the water to 133 feet.


Henry Lumley Drayton: It is the same in this.


George Perry Graham: If these leases contain the same request that horse power would apply to this request.


Henry Lumley Drayton: That would be
the same thing. Well then, we have a proposition looking to the development of 400,000 horse power. Out of that amount 100,000 horse power would go to the Canadian user; but he is given that right in such a way that if the idea was to see that no Canadians used the power at all it is pretty well looked after, having regard1 to the district, having regard to the municipalities to be served, and the like, because there is a limitation as to the amount that can be held over, the clause reading:
The company shall supply such electrical energy to such Canadian consumers in blocks of not less than 10,000 horse power and at reasonable rates and on reasonable conditions such rates and conditions (other than those herein specified) in the event of disagreement between the parties to be determined by the Board of Railway Commissioners for Canada.
I point out that none of the municipalities of ordinary size is ever going to want anything like 10,000 horse power, if my hon. friend looks at the list of municipalities taking power from the Ontario Hydro-Electric, he will find very respectable sized places getting along with less than. 10,000 horse power, but the limit here is 10,000 horse power. Then they have got to put in their requisition for that power within two years from the 1st day of October, 1924.

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Mr. BRISTOL:: By whom and how
delivered?


Henry Lumley Drayton: That particular
is not given at all. I suppose the company will have to hand it over to the municipality, but that is not covered. Then it says:
In the event of the total of such requirements being less than 100,000 horse power the company shall be obliged to furnish the remainder of such 100,000 horse power or any portion thereof on notice from the minister that the same is required by Canadian consumers.
But if they do not go into it, in the first instance, the right to give that notice is only at the expiration of the five-year period, January 1, 1931 and January 1, 1936, and so on. It is perfectly obvious that the real intent of the whole of this draft is to look after export, and that the provision that is put in as to Canadian users is just another smoke screen. Then as to their right of export this document says:
Such surplus of electrical power at the said works of the company as may from time to time during the terms and renewals contemplated by this indenture be available for disposition after the company has fulfilled its obligations in respect to Canadian supplies as hereinbefore defined may be disposed of by the company to customers in the United States or elsewhere subject to compliance with the requirements of this contract, and the company in addition to all other rights and powers granted to, conferred upon or possessed by it is hereby vested with and may exercise all the rights of the lessor to export such surplus electric power but over the transmission facilities of the company and in so doing shall be the agent of the lessor acting for the use and service of the crown.
I just point out there, that if any action is ever taken on this request, there is no necessity to get any license at all. The contract is plainly drawn for the purpose of getting around the aot as to the export of electricity. That act does not apply to the crown; it does apply to ordinary companies exporting. But in this case the applicant, the mysterious clients of Messrs. McGiverin, Haydon & Ebbs, with a view of getting round the point, have struck upon the novel idea of putting themselves in the position of the crown, exporting as agents of the crown and in right of the crown. A more absurd proposition I think could hardly be conceived. The only trouble is that my hon. friend did not throw it out long ago. It would be better if he had read it and thrown it out, and we would have saved some time.
Another clause is put in for the purpose of saying that as to that export business the company is to be left to themselves, because that clause is put in on behalf of the company, and provides that these people who make the contract can export and the whole export is to be left to them.
The other contract was very very largely the same. I frankly do not think there is any good in either of them, or that anything can be said in favour of either of them. They both have these long terms to run, they both nave the absolute right to export; and if they did not get that, if the substitution was not enough, there is another clause put in under which, under the further assurances, the government has the power to give them all the licenses that are necessary.
There is another clause to which I wish to draw my hon. friend's serious attention. I do not know whether he will tell us frankly and fairly that this whole thing is gone, but I want to tell him. The proposition is just as he says, to develop 400,000 horse-power. From what little we have heard about it, it will not be possible to develop that horsepower there. And the company do not think they can, because they have another clause in the contract which gives them the right to supplement this power with power obtained wherever they can get it. The effect of this audacious proposition is this:	Suppose there
were only 200.000 horse-power at Carillon and the company could show there was a demand in the United States for the whole 400.000 horse-power, then, under this ridiculous proposition, they would have the right to go anywhere else, get that power and export it.
Now, Mr. Chairman, these are very long contracts, and it would take some time to go through them, but I do not think it should be necessary to do that. I think the House :s entitled to a frank statement to-day from the government. The last time we were discussing this matter the government knew nothing about it. The last time we were dealing with the question no applications had been made.


George Perry Graham: Not to the government.


Henry Lumley Drayton: I do not know
any way in which the applications can be made except through the minister who has the matter in charge. Now sometimes subterfuge can get almost too thin.


George Perry Graham: Allow me to straighten
out the matter, and let the hon. member keep cool. There was no suggestion made that there had never been any application to the Department of Railways and Canals. I think the answer given by my right hon. leader (Mr. Mackenzie King) was a correct answer.


Arthur Meighen: How would an application be made 'except to the government, through its official channel?


George Perry Graham: When I get through-



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Arthur Meighen: Will my hon. friend not answer the question?


George Perry Graham: When I get through.


Arthur Meighen: But before you get
through?


George Perry Graham: I cannot answer until I get through. As a matter of fact, none of the applications was ever taken to the government by the Minister of Railways, and the government, never considered one of them.


Henry Lumley Drayton: It is like the
difference between Tweedle-dum and Tweedle-dee.


George Perry Graham: Tweedle-dum in this case is willing to take all the responsibility for what he did not do.


Henry Lumley Drayton: My experience
is that all applications considered by the government, treating the government collectively when sitting in council, came through the report of the minister, and I do not know how they could come to them in any other way.


George Perry Graham: They never made a report.


Henry Lumley Drayton: I do not know
how anyone could make an application except in the first instance by sending it to the department, and the application here is made to the department.


William Lyon Mackenzie King: My hon. friend expressed it accurately that time. He said the only way a matter came to the government was on the report of the minister. Now, the government has never had it before them, because there was no report by the minister.


Henry Lumley Drayton: I agree with my hon. friend in that statement but my hon. friend is wrong-


William Lyon Mackenzie King: No. Now I
think it would shorten matters if I would apologize humbly to my hon. friend, I never intended to be wrong; I never intended to convey any other meaning than what I am expressing now, namely, that the government had received no report through any minister on this matter and had not considered it at all. As to what applications there may be in the departments, I cannot speak for the government. I was speaking for the government as a whole, and I think I made that point clear. There may be in different departments a thousand applications of which I have no knowledge. But I have and should have a knowledge of matters that come before the government on the report of a minister.


Henry Lumley Drayton: We shall take it in that way; but what I was trying to find out was whether this was being pressed and who was pressing. It can be pressed only through a department. My right hon. friend (Mr. Mackenzie King) thought I was referring to the council. I was not. There is, however, an end of that. The minister may tell us whether something is going on about this, whether the thing is absolutely dead. It should never have lived at all. What is the situation?


George Perry Graham: It has not been bom yet.


Henry Lumley Drayton: We are delighted to hear that; but I should like to know whether Messrs. McGiverin, Haydon & Ebb3 have any object in putting life into these dead bones or not, and who is behind the thing.


Robert Forke: I confess that I am considerably puzzled to get the meaning of all this sort of thing. The ex-Minister of Finance (Sir Henry Drayton) has got hold of a draft contract of some kind which the government denies knowing anything about. Am I correct?


William Lyon Mackenzie King: Hear, hear.


George Perry Graham: It has never been considered.


Mr. BOYS:: The Prime Minister says,
" hear, hear." The hon. member had better get a straight answer.
Mr. FORKE. The ex-Minister of Finance should tell us where he got this contract, how it came into his hands.


Henry Lumley Drayton: We asked that these papers, which are ordinary governmental, departmental papers, should be tabled in the usual way, just as in any other case, and they were laid on the table yesterday afternoon. They perambulated around a bit; I managed to get hold of them at twenty minutes to one, and I was apologizing for not knowing the whole details of the case. The reason for that was simply because I had not had time to study them. There is no mystery about these papers at all; the mystery is as to who is behind them, what is going to be done with them, whether a thing that ought to be thrown out at once will be thrown out.


Robert Forke: Apparently this application
may have been sent into the government and it may never have been considered. That is as far as I can understand the matter. I do not know whether the proper thing was to

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put these papers on the table unless they had had some notice or consideration by the government. Perhaps I am floundering a little, but again I confess my ignorance. I should like to get at the bottom of this matter.


George Perry Graham: May I be permitted, as far as I can in my humble capacity, to throw a little light on it? In the first place, these papers were in the Department of Railways and Canals, the hon. gentleman 4 p.m. is quite right in that. It is questionable whether papers that had never been considered were covered by the request of the leader of the opposition (Mr. Meighen) and I read his remarks carefully- but so that there could be no question as to the Department of Railways and Canals bringing down everything it could find high and low, I brought down correspondence even from Sir Robert Perks on the Georgian bay canal, because it referred to this particular stretch of water. Allow me to give a little history. My hon. friend was somewhat astray, but not materially. The first lease was given in 1908 at the Carillon dam where the canal is-and that is why the matter comes under the Department of Railways and Canals-to the late Crawford Ross to develop 250 horsepower,

just a small development is given along nearly all the canals in the system. In 1911, that lease was transferred to a company which, I think, is called the National Hydro-Electric. The lease was enlarged a little, some new clauses being put in, but I think the total development under that would be only 500 horse-power. As a matter of fact, that lease has been honoured by that company, and at Carillon at the present time and for some years there has been a development of 250 horse-power. These two leases for this small development were, I am glad to say, signed by myself as Minister of Railways and Canals. The 250 horse-power lease was operated and is still in operation. In 1913, when the late Mr. Cochrane was Minister of Railways and Canals, a new application was made to him by the same company, if I remember correctly, to allow development which would mean an increase in the height of water to 115 feet. The development under that would have been a great deal larger; I think it would have been 100,000 horsepower. The arrangement was made, but while the then Minister of Railways and Canals, the late Mr. Cochrane, had the lease prepared, it was never executed. Some time later, I think it was in October-the date is immaterial-
214i


Mr. MANION:: With whom was the lease in 1913?


George Perry Graham: The lease that was not
executed?


Robert James Manion: Yes.


George Perry Graham: I think it was the same
National Hydro-Electric. I do not wish to be held too closely to the names of these companies; the name has changed several times, but to my mind it is always the same people with a new company.
In 1920, or approximately, a communication was had, I think with the Department of Railways and Canals, asking for some new construction, referring to the 1913 proposed lease. On November 25, 1921, an application was made for a lease of this power with the right to increase still further the height of water to 120 feet. This, as the engineers tell me, would enable a development of from
100.000	to 150,000 horse-power, and with certain other works the development would reach
300.000	horse-power. I may be wrong in some of the details, but this is the history of the power at Carillon. In none of these leases, so far as I have ever known, was there any export. That is quite evident because the place to get the right to export is in the Department of Trade and Commerce. I have very grave doubt if any clause put in a lease would override the statute of the Department of Trade and Commerce which provides for regulations as to the term of export. It is a mistake to say that the restricted term of one year is in the statute. The statute which has been in force for some eighteen years is quite broad. It allows the government by* order in council to regulate the period for which export can be permitted. In fact it gives the Governor in Council quite broad powers, extending even beyond this one particular point. But as a matter of fact the export of power is, under these regulations, confined to the term of one year, and I am very doubtful if any contract such as my hon. friend has read would be legal; certainly no person could borrow money on it unless it were in conformity with the statute. In these negotiations time and again the Department of Railways has been approached for the issuing of a new lease, but no new lease has ever been issued. While on this file there appears a copy of an order in council made a few months ago authorizing the Minister of Railways to again renew the lease to the National Hydro-Electric Company, I may say that that power has not been exercised, and today there is no lease to anybody beyond that for 250 horse-power.

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Henry Lumley Drayton: As I read it
that company takes the place of the other company.


George Perry Graham: Let me correct my hon.
friend. This lease which we found in existence in 1921 has, I think, been renewed once. Verbal application was made for renewal for another term, and an order in council was passed giving the Minister of Railways the right to renew it. An officer of the department, without instructions, signed a renewal and sent it out; the Minister of Railways himself recalled that renewal; so to-day there is no lease in existence for this power at all outside of the 250 horse-power. My hon. friend has been- led astray by tire order in council authorizing the minister to grant a renewal, which authority he did not exercise.


William Alves Boys: Is that lease renewed from
year to year pursuant to the statute which the minister referred to?


George Perry Graham: No, this was not for export at all. In the lease a certain time was given for the doing of certain work, and when that work was not done the time was extended once. My hon. friend has dealt with these proposed leases, submitted by -the Carillon Industrial Company, but I am free to say that I have not read them myself.
Mr. MEIG.HEN:	Will the minister say
that the fact of the application of the Carillon Power Company was not brought to his attention by his officer?


George Perry Graham: The fact was brought
to my attention that there was an application, but I was not considering the application at the time it was made, and i-t was never brought before me for action. I never read it, and never considered it, and I have heard more from my hon. friend of what is in the lease than I ever knew before. Until Friday last I had not read the letter, because while there has been a good deal of discussion with the Department of Railways and Canals for the last two or three years for the proposed new lease, it never came to the Minister of Railways for final consideration. I do not want to be misunderstood, because it is all quite plain and open. I discussed it once or twice with the solicitor and the engineer, and with Mr. Robert himself, but no action was ever taken on these suggestions, not the slightest. Now, I ask my hon. friend, if when he was Minister of Finance he had received an application from a bank to do a lot of things for that bank, and did not do them, would he be held responsible for the bank writing to him?


Henry Lumley Drayton: My hon. friend is perfectly right. But I would be held responsible if I denied having received the letter.


George Perry Graham: I never denied having
received the letter, I never made any such suggestion.


Henry Lumley Drayton: Well, the application.


George Perry Graham: I never denied receiving
the application.


Edmund James Bristol: We are discussing a very
interesting subject, and I should like to know if the minister has received any opinions from the Department of Justice as to the right of the Dominion to grant a lease of power such as has been discussed, as against the rights of the provinces of Ontario and Quebec?


George Perry Graham: That matter is under consideration. But- -my hon. friend should have had that question raised when this lease wa3 being made in 1921 by his own friends.


Edmund James Bristol: It has never gone through, so there is plenty of time.


George Perry Graham: It is a very big question
and is being considered now. This -power has been under lease for a good many years. But it is a perfectly legitimate question to ask.


Edmund James Bristol: It would be rather dangerous for the Dominion authorities, for they might have to face an action for damages if it turned out afterwards that the Privy Council declared the provinces had the sole right of granting -the lease of power we are discussing.


George Perry Graham: But this government has not made any lease; its predecessors did. Now, my right hon. friend (Mr. Meighen) referred to -the Board of Railway Commissioners. Well, that is not new. As a matter of fact I had the honour when I was in the House before, and the Trent Valley development was being discussed -in fact it resulted in litigation between the Ontario government and the federal government-I had the honour at that time of introducing a measure giving the Board of Railway Commissioners power to settle power rates as between producer and consumer in case there was any difference of opinion. My hon. friend has not given me very much to work on. As a matter of fact, we have been discussing two documents which have been in the Department of Railways and Canals, -and which have had no consideration whatever on the part of the minister. The government

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cannot be held responsible as a whole for what was in my department; and I submit to the House that I am not responsible for documents in my department if I do not act on them. If I come to my colleagues in council with a recommendation to lease this power, then I would be responsible for what I was recommending; but any person in the known world may file any document he likes in the department, and I am not responsible for it unless I commit the government or the country to something which is contained in that document. I think that is fairly well cleared up, unless some hon. member wants me to discuss further these mythical propositions which have no significance whatever. As to the people behind the proposal, as a matter of fact if the Minister .of Railways or the government ever proposed to act on the request contained in this proposal for a lease, they would have the right to demand and the right to tell parliament and the country who really was behind the proposal and was getting the lease; but so long as the request is not acted on, to my mind it is immaterial who is making the request.
Now, as to the export of power itself. My hon. friend has asked me a question as to what the government proposes to do. This question is one of great import. No government in this country, either federal or provincial, has ever declared itself against the export of power in practice-they have in theory, but never in practice. At the present time I am not expressing an opinion on the export of power.
I want to face it squarely. It is such a big question that conceivably conditions might arise at times when the export of power would be essential. It has arisen with the Hydro-Electric of Ontario when they admit it to be highly essential to export power. I am not criticizing that action.


Henry Lumley Drayton: My hon. friend is not putting that quite clearly. The HydroElectric of Ontario do not for one minute deem it necessary to export power. Unfortunately they are in a position where they cannot help themselves, they have got to export power.


George Perry Graham: Why have they got to do so?


Henry Lumley Drayton: They are bound by a contract which was made by the com-' pany which they took over, a contract which was validated and which has yet twenty-five years to run.


George Perry Graham: Apparently my hon. friend has not studied that contract any more than he has this file. Within the last few months
the Ontario Hydro-Electric has asked for the right to export 45,000 horse power per year off peak load. That is because they can make some money out of it, of course.


Henry Lumley Drayton: I do not think my hon. friend should say that that is the policy of the Ontario Hydro-Electric Commission. The position in Ontario is simply this. For the moment-I hope it is only very temporary-industrial Ontario is in such shape that they have now got this surplus power, and the commission are given the right to export it temporarily. And it is the same thing with the other producers.


William Lyon Mackenzie King: Does my hon. friend think they should not have that right?


Henry Lumley Drayton: I will deal with that in a moment. The Canadian Niagara Company are in exactly the same position. Their Canadian consumers, owing to lack of business, cannot use to-day the 20,000 horsepower which they ordinarily use, and what has been done is this. An arrangement is made under which that 20,000 horse-power is not to be used for the purposes of new contracts, is not to be used in connection with any new industry in the United States, or any new municipality; all that can be done with it is to have it take the place of just that much coal. So that there is no string on it which would put us in the unfortunate position we have been in in connection with other contracts. The power exported is simply taking the place of coal, and that is absolutely right and proper.	[DOT]


George Perry Graham: That is just what I was
coming at. If parliament were to instruct this government to say that the export of power should not be allowed under any conditions, then the Ontario Hydro-Electric Commission could not export a kilowatt of power, no matter what the reasons were.


Mr. MACLEAN (York):: If the minister
will pardon me:	If after careful study of
the whole question it was found to be in the interests of Canada to keep the power here, then it should not be exported. That study has not yet been made, and it is the duty of the government now to make it.


George Perry Graham: Mr. Chairman, I hope
Hansard will remember that this is my speech. I am doing my best to struggle along with it; I will get to all these points if there are not too many interruptions.


An hon. MEMBER:: They are all helping you out.
3348	COMMONS
Supply-Trade and Commerce


George Perry Graham: They are all making it
clear that it would not be businesslike to say that under no circumstances should the export of power be allowed; because if that were done the Ontario Hydro-Electric Commission would be prevented from exporting under its licenses, which give it the right to export
152,000	horse-power. Now, it does not export that amount, but it has the right to do it. I submit that the Hydro-Electric are proceeding properly when they seek to get some income from a peak toad with the view of keeping rates down to those who use power here. Should we say that under no circumstances might power be exported, all the companies in Canada who export would have to increase their prices to the Canadian consumers. That is the attitude the government takes. It is the attitude that has been taken by every government of Canada during the last eighteen years. It is the attitude followed right through by the Ontario government, and it is the attitude taken by the Quebec government in allowing power under its leases to be exported.


Arthur Meighen: Does the minister say
the government takes the attitude that more power than is now under license for export should be licensed for the purpose of serving new industries or new municipal uses in the United States?


George Perry Graham: That is just what is being done now, except the creation of new power.


Arthur Meighen: I am asking, is the government in favour of that policy?


George Perry Graham: I am stating the government's policy. I am pointing out that my hon. friend's supposed policy the other night is not practicable; is not followed by his own friends in any province; is not followed by any government. In the production of power business demands that under certain circumstances, such as those existing in connection wiith the Hydro-Electric projects, an export of power should be allowed.


Robert James Manion: Temporarily.


George Perry Graham: I will come to that. I
want to nail it down fast and tight that the policy of any government looking to the welfare of the Dominion of Canada and to the development of power in Canada should not be a prohibition of the export of power under all circumstances to the United States; for the result would be at one fell swoop to bring about increased rates on the part of the hydro-electric power projects in Ontario as well as on the part of other companies.

Let me go a little further. My hon. friend (Mr. Manion) suggests that the export should be temporary; I am coming to that. The legislation of the parliament of Canada has been sane along these lines. The regulations adopted in 1907-08 by the Laurier administration were sane. They restricted by regulation under the statute the period of time for which licenses might be granted, limiting it at twelve months. That was wise. The hon. gentleman may say that that might permit the establishing of vested rights. What vested right could' be established in twelve months? None, and none has been so established. This regulation restricting the export of power to a period of twelve months is notice to the United States users that this supply of power to them is not permanent; that it can be taken away from them at the end of any twelve-months period. It is notice to every person concerned that this is only temporary. I want to put it again, as strongly as I can, that the policy of this government in, power is the policy that has been adopted in Canada and successfully followed during the last eighteen years. It is the policy that has been practised by the HydroElectric Commission of Ontario and1 by the companies, and it is a policy under which every interest is safeguarded so far as the Canadian user is concerned.


Arthur Meighen: There are two or three
matters under review, if we may take the speech of the Minister of Railways as a sample. The question of the export of power and the proper policy to pursue is one Subject; the question of the leases to develop power and the history of those leases is another; the question of the conduct of the government in relation to this particular Carillon application is wholly another. It was the latter that the hon. member for West York brought up. As to the first, I do not propose to discuss it at any length now. Suffice it to say that if the government's policy is now matured and ready for presentation to the Canadian public on the whole subject matter of the export of power, it is strange that we have had such a long silence. It is strange that we should have such vague terms as those to which the Minister of Railways has just given expression. It is strange that he should postpone indefinitely an answer to my direct question; it is strange that when the delegation was here, the answer given, according to the Prime Minister on Thursday last, was merely that the government was as mindful of Canadian interests as any member of the House of Commons and would look after Canadian interests in the matter of power

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policy. One would have thought that the government's policy would have been stated direct when this delegation was before the administration asking for a fixed-term license for the export of large quantities of power. One would have thought that the minister would have said to me Yes or No when I asked him wheather the government was prepared, or was not prepared, to grant licenses for export of power for the purposes of new industrial enterprise or new municipal uses in the United States. This and this alone is involved in the question of the export of power. No member of this House can say Yes or No, judging from the minister's speech, by way of answer to that question.
As to the history of power leases, I do not think there is anything in dispute. I do not know why it is necessary to. confuse the issue with that question. Leases have been granted dating back for many years for power development in this country. The last granted in respect to this site was in 1921. So far as I have ever heard there is no criticism of the granting of the right to develop. If there was criticism, it will suffice to answer it by saying that the government renewed the lease so granted. So this may be [DOT] brushed aside for the moment, and the question is, what has been the conduct of this government in relation to this Carillon power development? It is not a mere incidental or whispered subject. It is not a mere minor incident of government policy. Everybody knows it has 'been before the government of Canada for months in a most prominent form. It has been the subject of importunities of delegations. It has been the subject of newspaper discussion. It has been the subject of acute controversy. It has been the subject of propaganda of a most skilful and pronounced type. In this state of affairs the government was asked on Thursday last where it stood on the matter, and specifically was asked whether an application had not been made to the government for the export of a large quantity of power from a proposed Carillon development. Now it is with the answer of the government to that question that I am chiefly concerned. The answer amazed me at the moment. I could not understand the government being in the position it claimed to be in-that the delegation should come, that all the controversy over the alleged application had gone on, and in the face of all these things that there had really been no application at all. The hon. member for West York (Sir Henry Drayton) was most explicit in his questioning. I read what he said, at the bottom of page 3225 of Hansard:
Does the government seriously want the country to understand, after what I think everybody knows has been going on not only for weeks, but for months, that it does not know how much power is sought to be exported?. What does the government say? That it does not know how much power the promoters of this new exploitation think they should have the right to export? If the government wants to say that it does not know, I shall have to take that answer, but it will surprise many people.
Mr. Mackenzie King: If I may speak for the government, I will say that the government does not know.


William Lyon Mackenzie King: Hear, hear.


Arthur Meighen: And he now says, "hear, hear." He continued:
There has been before the government no application that I am aware of, and the government has nothing before it to consider.


William Lyon Mackenzie King: Hear, hear.


Arthur Meighen: The hon. member is simply wasting the time of the committee in asking these questions.


William Lyon Mackenzie King: Hear, hear. Mr. MEIGHEN:
Even if there had been an application, is there anything in that to which the hon. member could take exception ?


William Lyon Mackenzie King: Hear, hear.


Arthur Meighen: I always wait for the
" hear, hear ":
Sir Henry Drayton: I would want to look at it before I woujd know. The right hon. member forgets all his pre-election discussion-
Mr. Mackenzie King: What does my hon. friend want to discuss? An imaginary application?
An imaginary application! I waited for the "hear, hear" in vain that time.


Some hon. MEMBERS:: Hear, hear.


Arthur Meighen: I can draw out any confirmation however absurd:
Mr. Mackenzie King: What does my hon. friend want to discuss? An imaginary application?
Sir Henry Drayton:-of the whole of this question as to the export of power, and I am going to tell my right hon. friend that I think I would be unkind to him to take altogether seriously the idea that nothing has been said to him about the export of this power.
Mr. Mackenzie King: I simply say to my hon. friend that I will not permit any insinuation of the character he is making at the present time. No application whatever, that I am aware of, has been made to the government with respect to the export of power.
That is the second assertion.
Sir Henry Drayton: I was not talking about that technical word "application" at the moment. I wanted to know whether the Prime Minister had not been approached in connection with this very question of the export of Carillon powers.
Mr. Mackenzie King: My hon. friend knows that I presided at the gathering at which a deputation stressed from their point of view the advantage it would be to many municipalities to permit a certain amount of power being exported. And this is all public knowledge. Surely municipalities have a right to present their own

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point of view to the government. But I repeat that the government has received no application and has had nothing before it to consider.


William Lyon Mackenzie King: Hear, hear.


Arthur Meighen: It is amazing that " hear, hear " should come to this-" the government has received no application and has had nothing before it to consider." He does not even put in the proviso that is in the other two statements; he makes an absolute assertion.


William Lyon Mackenzie King: My hon. friend will do me the justice of assuming that I was making that statement in the light of the other ones which were made before everyone present.


Arthur Meighen: I am ready, so far as the Prime Minister is concerned, to insert the proviso there:
But I repeat that the government has received no application and has had nothing before it to consider-
I will consider the proviso inserted there.
The reply given to the deputation was that the government was just as conscious as any member of this House-
I think there was a slip there.


William Lyon Mackenzie King: I think my
hon. friend is right there. I think I used the expression " conscious as any member of parliament."


Arthur Meighen: It does not make much difference:
The government was just as conscious as any member of this House of the importance of considering the future needs of Canada and protecting the requirements of the Dominion against any possible encroachment from any direction.


William Lyon Mackenzie King: Hear, hear.
. Mr. MEIGHEN: If that was the answer and the government knew what its policy was, it was a very, very strange and unsatisfactory answer to give the delegation. He continued:
The government is just as sensible and as watchful of the interests of the provinces and of all classes as any deputation that can come before it, and it has so stated.
This, of course, is the statement of the Prime Minister to the House, not what he said to the delegation:
What other position does my hon. friend wish the government to take in the matter?
Then the Prime Minister kept on repeatedly asserting it was all right for delegations to come, which, of course, nobody had ever disputed.
Now when these assertions were made by the Prime Minister, there were seated on the

government benches the Minister of Trade and Commerce (Mr. Low), who has to do with questions of export of power, and who must give the licenses; the Minister of Railways and Canals (Mr. Graham); and several other members of the government. While the Prime Minister was repeatedly asserting that no application even had reached the government, the Minister of Railways was aware that in his department there was an application and that the fact of that application had been brought to his own personal attention. Now, have I overstated the truth?


George Perry Graham: I would not think so
except that the application is wrong.


Arthur Meighen: I have not applied it
yet, but I think every other hon. member of this House has applied it. While the Prime Minister was declaring in all these assertions that there was no application that had reached the government, that it was purely imaginary, the Minister of Railways, who knew of the application, who had personal knowledge of it, sat silent in his seat and did not correct the Prime Minister; and this whole country got the idea, and this whole country could not avoid getting the impression-and not only the impression, but it was asserted to the country positively- that this matter had not even got to the stage of an application. But for the fact that, before that vote was allowed to pass, so far as we could we insisted upon the papers being brought down departmentally, the country would not know yet there had even been an application for the export of power from Carillon falls. It comes to light through the press yesterday, and even as yet only one of us has had time to read the return, and he has only partially got through it.
Now the fact is that an application as astounding in its audacity as any ever presented has been before the government for months, lying in the government files, and lying there without repudiation, without one negative word going to those who are behind the application. Not only so, but the application comes from a firm of which a member of the government is a partner himself. I do not think that member of the government was in this House when this rather amazing interlude took place on Thursday last.


George Perry Graham: I think it would be fair
to say, Mr. Chairman, that the hon. gentleman if I remember the date correctly, was not a member of the government at the time the application was made.

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Arthur Meighen: That may be so. I think from memory the hon. member for Ottawa (Mr. McGiverin) came into the government of the day on the 5th of November last. Perhaps his activity in connection with this application accounts for his ascension in public life. At all events it was coincident therewith. But the fact is that one member of the firm which promoted the whole scheme is a member of parliament who a few days afterwards became a member of the government itself, and whose stenographer is secretary of the company which proposes these things to the people of Canada. The other member of the firm is a senator appointed by this administration and now sitting in the upper house. Now, does the government really think this is treating the people of Canada as they deserve to be treated? Does not the Minister of Railways to-day think it was his duty to have corrected the Prime Minister when those statements were made on Thursday last?


George Perry Graham: My right hon. friend and
the House have heard the Prime Minister's statement. I say that this government is composed of ministers in whom the Prime Minister has confidence, and they do their own jobs. When they want the advice of the government on something they take it to council; but in other affairs that are properly departmental they act on their own initiative.


Arthur Meighen: Perhaps other hon. members can get the connection between the answer and the question-I cannot.


George Perry Graham: I am not responsible for
the question, I am only responsible for the answer.


Arthur Meighen: I asked the Minister of
Railways why

seeing that he was sitting in his seat when the Prime Minister was assuring the House there was no application-he did not correct the Prime Minister and. assert there was an application which he had never considered.


Lucien Cannon: The Prime Minister said
there was no application to the government.


Arthur Meighen: Not to the government?


Lucien Cannon: Certainly not.


Arthur Meighen: An application made to
a minister, as a member of the government, is not made to the government?


Lucien Cannon: Certainly not.


Arthur Meighen: Why, every return brought down in response to a motion for correspondence between any person and the department, or between a minister and any other party, is
brought down as a return from the government.


William Lyon Mackenzie King: My right hon. friend will probably allow me to remind him of the remark made just a moment ago by his colleague when he said that when a matter came before the government for consideration it was brought before them by a minister, and he was discussing something that was not before the government for consideration. That was the whole point I had in mind when I spoke for the government in that regard.
Mr. T1EIGHEN:	By that is meant the
Governor in Council. But there is not a member of this House who did not understand that those men who want this right to export power had never made application for it at all-not a member of this House who did not so understand it. Now I am not going to question the veracity of ministers, inferentially or otherwise, but I do question their frankness; and I say it is a very stange inattention to duty on their part that a matter of this paramount consequence should be allowed to hang between heaven and earih for months, with a great newspaper controversy raging about it, with great public interest centred upon it, and never the applicants advised what the government's policy was, and never the public advised what the attitude of the government was toward the application. This is certainly a remarkable way for the government to attend to its work.


William Lyon Mackenzie King: I ask my right hon. friend, does he not think the government is entitled to see how public opinion views particular questions?-that in matters of great importance of this kind it is wholly in the public interest to allow plenty of opportunity for controversy before the government makes a decision?


William Alves Boys: "Wait and see."


Arthur Meighen: The explanation of the
Prime Minister is that they were treating the whole matter as a feeler, and their concern about the rights of Canada would depend upon the volume of complaint raised against the proposal. It would appear to me that the merits of the application should have been dealt with and disposed of in a day. The record should have been cleared and all concerned with such an application should have been advised right on the spot that no such thing would be considered or entertained on the part of this country or by any government of this country. Now, this is the question that is before this House. This follows upon what was disclosed here just a few

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days ago in regard to a return which was manifestly, obviously, and shockingly false- although we are past that now-a return for the character of which there was no excuse in the world: I refer to the return produced by the Minister of the Interior in relation to Dr. Hume's report as to the oil question in the counties of Lambton and Kent. This government should take warning, I think, by these two incidents and see to it that the returns brought to the House and the answers given here are in full and frank accordance with the facts, and that great questions of public policy are not left to be dallied between opposing parties and the House led to believe-as to where the administration stands -led to believe by newspaper utterances and reports of many papers, that the government stands just where it now declares it does not stand. All this information as to the government's attitude was to be found in the newspapers, and I hold in my hand one newspaper in which the answer alleged to 'be given by the Prime Minister is reported, although the Prime Minister on Thursday last declared he did not give an answer to such an effect at all. Yet the fact that this answer had gone into circulation was an additional reason for an early statement of policy on the part of the administration. Now, on Thursday last when the report was read to the minister to the effect that in answer to the delegation he stated that he thought surplus power in Canada should be exported, his answer to that question was a direct negative. In order to show that I had ground for stating what I did I quote from L'Autorite, although I have seen the same statement in a great many other papers. The authority from which I quote has a long front page article extending over many columns, denouncing those who oppose the export of power and commending the Prime Minister's favourable attitude thereto, and his favourable attitude towards the application which was supported by the delegation in respect of which this news item appears.


William Lyon Mackenzie King: Would my
right hon. friend let me clear that matter up for him?


Arthur Meighen: Perhaps I had better
read this and then the Prime Minister can do so. I will have to translate it or try to do so.


An hon. MEMBER:: Read it in French.


Arthur Meighen: My French pronunciation is not very good. However, I will read the statement in French first and then try to translate it afterwards:

Puisse l'honorable Mackenzie King persister dans son attitude, lorsqu'il d6clarait h une deputation de 300 notables de la vallee de 1'Outaouais que son gouvernement 6tait favorable a l'exportation d'une partie du surplus de notre energie electrique. A l'heure ou le pays a besoin du revenu qu'il tirera de la taxe imposee sur cette exportation, ou les ouvriers se plaignent du chomage, est-ce bien le temps de tarir de gaiety de coeur les sources du tresor et de priver des milliers de travail-leurs du gagne-pain dans les travaux de Carillon?


Some hon. MEMBERS:: Hear, hear.


Arthur Meighen: That is very charitable
on the part of hon. members indeed.


Some hon. MEMBERS:: Go on.


Arthur Meighen: This is how I translate
the statement into English:
May the Hon. Mackenzie King persist in his attitude when he declared to the deputation of 300 notables of the Ottawa valley that his government was favourable to the exportation of a part of the surplus of our electric energy. At a time when the country is in need of revenue which it will draw from the tax imposed from this exportation, when the workers are complaining of unemployment-
This is important to a government supporter.
-is it indeed the time to withhold the gain to be got from our resources and to deprive millions of workers of their daily opportunity in the work of the Carillon?
This is merely by way of intimation of the source from which I, for one, received an intimation that the government gave a rather favourable reply to the delegation which waited on it, and this is only one of the newspaper reports to the same effect. Consequently I was quite justified in what I said with respect to this application. Furthermore, if a statement was made of the government's attitude towards the export of power, even in the very vague form stated by the Minister of Railways, it might at least have been conveyed in that form to the deputation.
Now I come to the question itself.


William Lyon Mackenzie King: Perhaps my hon. friend will let me clear it up, as it would help to illustrate just how fair my right hon. friend is.


Arthur Meighen: I think I have been remarkably fair in this matter.


William Lyon Mackenzie King: My right hon. friend, in order to make his point, has been driven to discover a paper published in the French language some distance from Ottawa, and to read to us an extract therefrom. I think if my hon. friend had even desired to get the truth he would have taken a look at the Ottawa papers which are right at hand, in order to see how they reported that inter-

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view at that time. If he had looked at the Ottawa Journal, which is his own organ in the city I think he would have got better information in regard to that meeting. I have in my hand the Ottawa Journal of May 5, which contains a report of the proceedings before the deputation. The report is headed:
Export by Carillon has consideration.
Premier King says proposal has wide bearing.
And this is the particular reference to my own remarks:
The Prime Minister reminded the delegation that the request they had come to make was not wholly of local or Ottawa Valley interest. It was an interprovincial and international problem and there was keen opposition to the export of power.
There is not another word in the report which appeared in the Ottawa Journal, and the reporter of the Journal was present when that delegation made the application to the government. Then I have the report published in the Ottawa Citizen, which is headed:
Places interest of Canada first on power issue.
Premier King says this chief consideration in reaching decision on export question.
Deputation urges Carillon scheme.
Prime Minister says it is national problem. Cabinet to discuss it.
Then further on in the article I find the following:
Mr. Brown, mayor of Point Fortune, as a merchant, thought the development and export of power would help the country.
Return When Needed
The Prime Minister: "Do you think the Americans would object if we made strong reservations providing for the return of the power when Canada needs it?"
Mr. Brown did not think so. The Americans were willing to invest their money in return for the power.
The Prime Minister agreed Canada should sell anything she had a surplus of provided the future was not embarrassed thereby.
Those are my words. My hon. friend asked me a direct question, and I answered it in an honourable way. I told him I had not made a positive statement that Canada should export the surplus. I was perfectly aware of the words I had used, and if my right hon. friend had been the gentleman I always believed him to be he would have accepted my statement.


Arthur Meighen: I distinctly accepted it, but gave this report as my reason for the question. This item appeared in many papers and should have been denied.


Mr. CHURCH:: The industrial provinces
of central Canada have long been impressed with the necessity for power conservation, but it has taken a long time for the towns and cities of the Ottawa valley and St. Lawrence river in Ontario to become convinced of the advantage of falling in line and getting behind
hydro development. What the country wants is a national policy in regard to hydro power.
I advocated a national policy for coal and I would also advocate a national policy for power and oil development as well.
I say that down in the municipalities in the Ottawa valley and along the shores of the Ottawa and St. Lawrence rivers, the people are largely responsible because they have not endeavoured until recently to carry out anything in the shape of a proper policy of assisting hydro progress and development.
The Ottawa valley has been practically isolated against the rest of the province in regard to hydro power. When this Carillon dam was started away back in 1911, the Hydro Electric was producing 1,000 horse power. To-day Ontario is using 700,000 horse-power, and there is an acute shortage not only in Toronto but all over the hydro systems except the Fort William development. The Ottawa district and the towns on the St. Lawrence river are suffering also from the scarcity of power, and the fact that they are undeveloped and stationary to-day is practically due to themselves and not the fault of the Hydro or provincial government of Ontario.
I may say the Hydro Electric in Ontario are very anxious to develop this Carillon power. I was on a deputation as president of the Hydro here ten years ago, with the hydro municipalities who came accompanied by Sir Adam Beck, J. W. Lyon of Guelph and others asking for the right to develop power in the Ottawa and St. Lawrence rivers. We wanted to find out what the intention of the government was with regard to development on the St. Lawrence and Ottawa rivers, but we got nowhere. Application has been made to this government for the right to develop power on these two rivers, but nothing has been done along that line. The Hydro Electric application to construct the Morrisburg dam, has been before the government, for some years . now, and we have not had any reply from the government, with the result that the cities and towns on the St. Lawrence and the Ottawa are suffering from a scarcity of power.
Since this question has arisen there has been expended on power development in the other parts of the province of Ontario, $178,000,000. There has been more trouble getting something done on the Ottawa river than there has been in all the rest of the province. In the Niagara district $141,000,000 has been spent, although the water is taken from an international river. The Ottawa river runs wholly between two provinces of Canada, and no particular difficulties would arise in the development of this project. But the Hydro can

Supply-Trade and Commerce
policy of the people of this country in exporting power across the border to build up every Jittile distance fine industries all the way from Lewiston, N.Y., to Niagara Fails, N.Y., Lockport and Buffalo. Last winter the mayor of Buffalo had the temerity to count the number of cars of coal that were being sent across the border into Canada. Sooner or later we will have to have a national policy for coal and for power, because to-day Canada is being pictured in the United States as another Lazarus-not picking up crumbs that fall from the rich man's table, but going along the American railways picking up coal. I do not advocate dumping the coal off the cars into the lake as the Americans dumped tea into Boston harbour on a certain historic occasion, but Canada wants a government that will work out a national policy for coal that will make the people of this country independent of the United States. I also advocate a national policy for oil and a national policy for water-power that will help the development of industrial Canada as well as the farming community.
For some time I have had on the order paper a series of questions dealing with the export of power, but as the government have not yet answered any of them perhaps I had better attempt to do so myself.
My first question is:
Will the government afford the House an opportunity to discuss the tax on the export of power? If so, when?
We desire to be afforded this opportunity. It came to-day. Then I ask:
Has any decision been given on the Carillon power project by the government, and has any application been received to date in this connection, and from
whom?
Evidently from what we have been told to-day there is some application before the government or perhaps some "negotiations" would be the more appropriate word.
Has any protest been received from the government of Ontario protesting against the export of this power?
I can answer that with an emphatic, "Yes"; numerous protests have been made to this government by the provincial government and the Hydro Electric Commission of Ontario. The government of the province of Quebec has also objected to the export of power and is co-operating with the government of Ontario-in advocating the development of the Carillon power for Canadian industries, but so far the federal government has stood in the way. As a matter of fact the provincial governments own the surplus waters, subject to the rights of navigation, from which electric
[Mr. Church.J
power is to be developed on the Ottawa river at Carillon, subject only to the rights of the Dominion government I say* in regard to navigation. This question has not yet been decided by the Privy Council but these are some cases on it.
For instance, at Port Colbome the government of Canada takes only enough water for the canal between lake Erie and lake Ontario, leaving the balance of the waters of the Niagara river for the use of the government of the United States and the government of Ontario for power purposes. Similarly, the Ottawa river belongs to the provinces of Ontario and Quebec, subject always to the rights of navigation vested in the Dominion, and the bed of the Ottawa river and the banks and rapids belong to the provinces. My next question was:
Will the government secure the opinion of the Supreme Court of Canada as to the powers of this parliament and the government of the provinces on the whole question of the export of power, and also as to whether the export tax is ultra vires or not?
It has been held by eminent legal authorities that this export tax is ultra vires of the Dominion government, and in my speech on the budget debate on April 17th last I gave a dozen good and valid reasons why that is the case.
Now, a deputation from the hydro municipalities of Ontario protesting against the export tax was received with great courtesy by the government and they told the Minister of Railways that They did not object to the export of power if the licensee, the Americans, paid the tax. But, as the member for Park-dale (Mr. Spence) showed the other night, the hydro municipalities of Ontario and the provincial government are opposed to the export of power and the two who spoke gave only their own views and not those of the government of Ontario.
It seems to me it might be well for the government to get the opinion of the Justice department on this question. The Minister of Justice (Mr. Lapointe) is not in his seat, but I understand that his department has already expressed very grave doubts as to the jurisdiction of the federal government on the export matter and also the question of taxation and the whole constitutional question. The case should go to the Privy Council for a decision.
Will the Justice department be asked for such an opinion, or has one been given by the said department in the matter, and what is it?
As I say, I understand the Justice department has expressed very grave doubts regarding the position of the federal government in

Supply-Trade and Commerce
the matter and where the jurisdiction of the province begins and ends to generate, develop and distribute power from interprovincial and international streams and the export of power and taxes based thereon.
Did the government recently promise a hydro deputation to secure such on opinion?
I am told they did.
Have any protests been received regarding the export tax? If so, from whom and on what grounds?
Yes, a deputation was here and protested against this tax and so have the government of Ontario and the Hydro Commission. Undoubtedly the export of power is an international question, for once a lease or license is granted, and power is exported under it, certain industries are developed on the strength of the continuation of that export, and various municipal activities, such as waterworks, street lighting, domestic lighting, rely on such power, and consequently it becomes impossible to discontinue its export, and if we refused to deliver any more power, at once friction would arise between this country and the United States, and we would have to resume the export of power that probably we needed ourselves. In my opinion this is a question of policy not only for the government of Canada but for the governments of the provinces as well and all should unite to work out a national policy. I am glad to see there is no politics in this question. The absence of politics in the hydro-electric movement is one reason why it has been such a big success. Both the governments of Quebec and Ontario are very strongly opposed to the export of hydro-electric power and-


Joseph Arthur Calixte Éthier: My hon. friend states that
the governments of Ontario and Quebec are opposed to ihe export of power. Is he not rather referring to the personal views which have been expressed by the premiers of the two provinces?


Thomas Langton Church: That may be. Of course,
I do not pretend to have the same local knowledge of Quebec policy as no doubt my learned and respected friend has. I may say that I sympathize with the municipalities in his riding along both sides of the Ottawa river, because that river has been isolated from the rest of the province so far as power development goes and the development and distribution of cheap light and power is concerned, and I do not blame him for trying to get an early solution of this question. If public ownership will not do it then private ownership should have a chance under government regulation.
What about electricity for the farmers of Ontario? It was always intended that cheap light and power should be available not only to the artisan and the mechanic in the cities and towns, but to the farmers as well. I do not see many Progressives from Ontario in the House to-day, but this matter of cheap light and power is one of the most important questions before the agricultural industry of Ontario and Canada. The Ontario Commission have been repeatedly asked by the farming community for assistance in this respect and to supply the farms with power and where is the power to come from if not from the St. Lawrence and Ottawa rivers? When the Hydro-Electric movement was started the Ontario Power Commission entered into a contract with the Ontario Power Company for 60,000 horse-power. The Ontario Power Company on the Canadian side were the generating and developing company and the Niagara and Lockport Company were the distributing company for export purposes on the American side, for the benefit of American municipalities. The present contract for 60,000 horse-power at $12.35 has twenty-four and a half years to run with two twenty-year renewals since cancelled. That power can be very readily utilized in Ontario. It is now worth $24 to $28 per horse-power and is exported at a loss of $12.35 per horsepower. Now, the government asked the Hydro-Electric Commission for certain information when they made application in respect to the Ottawa and St. Lawrence power rights, and the same should be done in this case. Some of the questions to which I think the committee should have an answer are the following:	Who are conducting these
negotiations on both sides? Who are the applicants? What is to be done with the developed power? How is it to be distributed-how much for Canada, how much for Ontario and for Quebec? How much will be exported, under what terms, and to whom? How is the project to be financed? Where will the money be spent? What municipalities on both sides of the river will benefit by it? Will the company be a Canadian or an American company? Will there be an interlocking directorate? What will the contracts be? What will be the nature of the licenses? Will the leases be restricted or unrestricted? What public control will there be over these companies? Will there be control over rates as well? Are these leases being sought through an agent company for a gigantic American power trust or for an American super power scheme?
The magnificent success of the HydroElectric system under government ownership is


Mr.   ETIIIER@: I did not intend to take
part in this debate, but being a representative of the Ottawa va'lley district, which is especially interested in this matter, and in view of the importance of this question of the export of electric power to the United States, I think it is my duty to express nay views on this question and to bring before the House some of the representations which have already been made in regard to this -matter.
Two hours of this debate this afternoon have been taken up by the ex-Minister of Finance (Sir Henry Drayton) and the right hon. the ex-Prime Minister (Mr. Meighen) in finding fault with the government by insinuation and innuendo because the firm of McGiverin, Haydon and Ebbs had transmitted for their clients the Carillon Industrial Corporation, Limited, the draft of a 'lease in regard to this matter. That is the only objection which has been made in the two hours of discussion that has taken place this afternoon. We know now after listening to hon. gentlemen opposite and to the government

Supply-Trade and Commerce
that the Carillon Power Company is in the same position it was in in 1911 according to the lease, and in the same position they were put in by the late government on the 1st of December, 1921, when on the eve of the election a lease was granted to the same company by the Minister of Railways of that day, Mr. Stewart. That is all we know now.
I do not think any valid reasons have been given by hon. gentlemen opposite against the export of power at Carillon. The question before the House is this: Shall the government permit the export of our electric power to the United States, and shall licenses of long term be issued under special circumstances for that purpose? That is the question before the House. It is not a question of whether there was a draft in the Department of Railways and Canals asking for such and such a thing. It is not a question of whether there is or is not a draft contract before the Department of Railways and Canals asking for certain concessions. It is a question of whether the government intends to grant a license to the National Hydro Electric Company of Carillon permitting them to export power.
Before considering the matter in some detail I should like to refer to the deputation that waited on the government and to which allusion was made this afternoon. The deputation consisted of delegates from the Ottawa valley, and I had the honour of presenting them to the government. They urged the administration to grant permission to export power from the proposed development at Carillon. A long discussion took place, and the answer given was as stated last week by the Prime Minister and repeated by him to-day. The Prime Minister has correctly repeated the answer which he gave and his statement is absolutely correct. The right hon. gentleman informed the deputation that the future of Canada would be the first con-consideration in connection with the question of permitting the exportation of electric energy to the United States. That is the answer we received from the Prime Minister as representing the government. The reports given of the Prime Minister's statement as given in the Ottawa Citizen and Journal were also correct.
Now, let us come to a consideration of the Carillon power question. Yesterday a voluminous report was tabled by the Minister of Railways. I had occasion to examine it very briefly although my hon. friend the exMinister of Finance (Sir Henry Drayton) may think I retained it too long. I only got it at ten o'clock last night and it was given 215i
back to the Minister of Trade and Commerce (Mr. Low) this morning. It is not a very important matter however, but I deemed it necessary to make this explanation. In 1908 a lease of the Carillon power was granted to Mr. Crawford Ross of Ottawa covering certain lands and the surplus of water of the Ottawa river not required for navigation, the object being to develop electric power for lighting and industrial purposes under conditions that have been explained this afternoon. The lease was for a term of twenty-one years, renewable at the expiration of that term for a further period of twenty-one years. Mr. Ross was required to develop 250 horse-power and in the case of the first term was to pay 8100 a year on the lands and 82 per horsepower a year for the power. For some reason unknown to us Mr. Ross transferred his rights and privileges to the National Hydro Electric Company incorporated in 1910. The exMinister of Finance has asked who is behind this company. I may say to him it is not the firm of MeGiverin and Haydon.


Henry Lumley Drayton: Is my hon.
friend really serious in his statement. Then who is behind the Carillon project?


Joseph Arthur Calixte Éthier: The company behind the
Carillon scheme is the National Hydro Electric Company, with a capital of $52,000,000 subscribed for the purpose of developing
400,000	horse-power of electric energy.


Arthur Meighen: Who are the leading men in the company?


Joseph Arthur Calixte Éthier: The president is Mr. Robert of Montreal and Hon. Mr. Miles Legislative Councillor of Quebec, is one of the directors. Canadians and Americans are furnishing the capital.


Arthur Meighen: My hon. friend has
missed my point. The Carillon Power Company, the applicants, are a corporation and therefore must have directors. I am asking who the directors are of the Carillon Power Company?


Joseph Arthur Calixte Éthier: I saw in the papers on the file that an application was sent in to the department by the firm of MeGiverin and Haydon, as representing the Carillon Industrial Company. I was surprised to see that because it is the National Hydro Electric Company to whom the lease was transferred by Mr. Ross. The same lease was renewed by the late government on the recommendation of Hon. Mr. Stewart, former Minister of Railways and Canals, in December 1921.

Supply-Trade and Commerce


William Findlay Maclean: I know my hon. friend is not to blame but why should the word "national" be used for a power development of this kind when it is not a national development? The National railway is a public proposition, and is very properly so called; but more and more the word "national" is being applied to private corporations engaged in developments of this kind. I notice another thing. In the Wall Street Journal, and other sections of the press, private corporations of this nature are called "public utilities". To merit such a term an enterprise ought to partake of the character of the National railway or the Hydro Electric in Ontario.


Joseph Arthur Calixte Éthier: I cannot give my hon.
friend any reason for the adoption of this name. All I know is that the lease in question was granted to the National Hydro-Electric Company and that is the name of the organization identified with this enterprise.


Henry Lumley Drayton: Can my hon.
friend give me the the names of the directors of the Carillon Power Company?


Joseph Arthur Calixte Éthier: No. I have not got that information. To resume with the history of the National Hydro-Electric Company. This lease was renewed in December, 1921, by the late government. It was renewable to January 1, 1942, and then a further renewal to December 31, 2005. These renewals were made in the ordinary way by the then Minister of Railways in the previous government.


Henry Lumley Drayton: Will my hon.
friend be kind enough to produce that lease if it is on the file?


Joseph Arthur Calixte Éthier: It is the second lease on the file. I found it when I went over the file last night.


George Perry Graham: The lease of 1921 is on the file.


Henry Lumley Drayton: I cannot speak definitely as to that.


Joseph Arthur Calixte Éthier: According to the endorsement on the lease it was renewed in December 1921 until 1942, and there was a further renewal until December, 2005. That lease is on the file. I saw it last night.


George Perry Graham: I have been accused of not airing this matter and henceforward I - propose to put everybody right.


Henry Lumley Drayton: You will never do it unless you make a new start.


George Perry Graham: Under certain conditions the lease was renewable. When the conditions are not performed a renewal can be refused. At the present time the Department of Railways has not g;iven the lease renewal although the minister has power by order in council to grant such renewal.


Joseph Arthur Calixte Éthier: The question of the export which is the real issue, and which has been a subject of controversy in the press of Canada, has been strongly to the fore during the last few weeks. Since the question of Carillon power has been brought before the House all kinds of statements have been made with reference to this matter. Those who have made some of these statements are actuated by an honest desire to state the truth, but the majority are actuated by a desire to befog the issue and to prevent the financing of a possible competitor, namely the National Hydro-Electric Company. Evidently the purpose of the opposition is to defeat the efforts of what promises to be a serious competitor, whose introduction into the field would prevent a monopoly such as we now have in Ontario and Quebec. We have the HydroElectric in Ontario, the Montreal Light, Heat and Power Company in Quebec and the companies allied with those two concerns.


Henry Lumley Drayton: Does the hon.
member seriously say there is a monopoly in Ontario?


Joseph Arthur Calixte Éthier: Yes, absolutely. It has been exposed to-day. It is obvious to hon. members that this is not a sound proposition in regard to the export of power. The question of the export of power should be considered on its merits, and preference should not be given to water-power developments which it would be impossible to develop without the help of power contracts from the United States. Reasoning along these lines it seems that the Quebec government, when it granted a sixty-year lease to the Canada Paper Company on the 30th April, 1924, for a 5,000 horse-power development, was not justified in writing into this contract a clause which practically authorized the company to export power upon the payment of an additional royalty of 50 cents per horse-power. In the same way the federal regulations under which nine Canadian power companies are at present authorized to export, under one-year licenses, about 1,400,000,000 kilowatts of electricity per year to the United States are not in the best interests of the country, If we follow on the lines of that proposal, then we must blame the policy of

Supply-Trade and Commerce
the government for all that has been going on for the past eighteen years.
Let us examine the case of the National Hydro-Electric Company, which proposes to develop 400,000 horse-power at the Carillon dam, on the Ottawa river. My hon. friend the ex-Prime Minister (Mr. Meighen) and the hon. member for North Toronto (Mr. Church) express doubt about 400,000 horsepower being developed at Carillon. They went so far as to say that no such amount could be developed there. I have here in my hand the report of the engineers' conference held at London in July, 1924, and I refer to the statement of a gentleman who is well known in all these matters, Mr. J. B. Challies, now of the Shawinigan Water and Power Company, who was then a director of the Dominion Water Powers branch. He presented a paper entitled "Water power from Canada" from which it is possible to derive a good deal of information concerning the future power requirements of Canada. The total amount of power development in Canada is given as 3,227,414 horsepower and the total possible commercial installation as 42,000,000 horsepower. That is not doubted.	.
I have here a summary of the present installation of power development in each province. These figures are quite interesting, because the information which is given in this debate will be very important for the country.
The figures are as	follows:	Per-Possible	Present	cent-installation installation	agein horse-	in horse-	devel-power	power	opedBritish Columbia.. ..	.. 6.680,000	355,517	5.32Alberta	.. 1,490,000	33,067	2.22.. 1,425,000	.. 7,560,000	162,025	21.45.. 8,910,000	1,445,480	12.85Quebec	.. 15,240,000	1,116,398	7.33New Brunswick	.. 160,000	44,539	27.85Nova Scotia	.. 168,000	54,950	32.70Prince Edward Island	... 7,000	2,^9	32.00Yukon and Northwest.. 360,000	13,199	3.67Total for Canada..	.. 42,000,000	3,227,414	7.68


Henry Lumley Drayton: What is the date
of those figures?


Joseph Arthur Calixte Éthier: : They were given by Mr. Challies at the conference in July, 1924. It was estimated in 1924 that the total development in Canada at the beginning of 1926 would be about 4,000,000 horsepower. The average growth from 1910 to 1926 is shown as having been at the rate of 101.000 horsepower per year, and that from 1920 to 1925 at the rate of 303,000 horse-power per year. On the basis of these increases Mr. Challies
estimates that by the end of 1940 our developments should be between 7,000,000 horse-power and 8,500,000 horse-power. Applying the same rates of growth during the next ten years, it would give us about 11,000,000 horsepower in 1950 or about 26 per cent out of a possible total of about 42,000,000 horse power.


Henry Lumley Drayton: Will you give us the report of the engineer showing the
400,000	horsepower? You were going, to let us have it, but you did not do so.


Joseph Arthur Calixte Éthier: I have also another report made by Messrs. J.' A. Jamieson and G. R. Heckle, engineers of Montreal, and some of these quotations are taken from the St. Lawrence waterways report and some from the Electrical World of June 12, 1924. That is the suggestion that has been made to the government in connection with the requirements of that part of the country. Since that time new developments have come up, and I wish now to prove to the committee that there is a power monopoly behind the opposition to the National Hydro-Electric Company Recent developments have conclusively proven the fact that what is known as the "power monopoly", who apparently are sitting on the hydro-electric throne, are leaving no stone unturned that will take away from them one atom of the grip they now appear to have on the power situation in Quebec. Not content to develop certain power rights which they control, they are using every possible influence to frustrate any opposition, no matter how slight, that might prevent them from completing their policy of absolute control of the electric situation. What have we read lately in the Financial Review of Montreal? Immediately after the first delegation came to Ottawa in order to obtain a licence for twenty-five years, I read this.
At six o'clock the Speaker resumed the chair and the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 62 for the relief of Harry Hamble-ton.-Mr. Sheard.
Bill No. 76 for ithe relief of Laura Grace Davis.-Mr. Jacobs.
Bill No. 77 for the relief of Alice Brouse.- Mr. Duff.
Bill No. 79 for the relief of Robert Lawrence Anderson.-Mr. Duff.
Private Bills
[Stage Direction]
Bill No. 80 for tihe relief of Pearl Hibbard. -Mr. Stewart (Leeds).
Bill No. 81 for the relief of William Jcfhn Taylor.-'Mr. Hanna.
Bill No. 82 for the relief of Albert Edward Cottrell.-Sir Henry Drayton.
Bill No. 83 for the relief of Florence May Mott.-Mr. Clifford.
Bill No. 84 for the relief of Ellen Mary Harvey.-Mr. Hanna.
Bill No. 85 for the relief of Stella Florence Brickenden.-Mr. Euler.
Bill No. 86 for the relief of Frank Alexander Michel (otherwise known as Frank Alexander Mitchell).-Mr. Euler.
Bill No. 87 for the relief of Thelma Adeline Rose Hands.-Mr. Jacobs.
Bill No. 88 for the relief of Jean Veronica Margaret Wright.-Mr. Garland CCarfleton).
Bill No. 89 for the relief of Ruth Darcy Blinn MoCrimmon.-Mr. Shaw.
Bill No. 90 for the relief of Thomas George McElligott.-M. Hocken.
Bill No. 91 for the relief of Alvin Wesley Richards.-Mr. Stewart (Leeds).
Bill No. 92 for the relief of Cecil Tanner- Mr. Rankin.
Bill No. 93 for the relief of Ruth Ellen McGowan.-Mr. Shaw.
Bill No. 94 for the relief of Edith Kcarsley Smith.-Mr. Boys.
Bill No. 95 for the relief or James Raymond Armstrong.-Mr. Garland (Carleton).
Bill No. 96 for the relief of Josephine Royant. -Mr. Sheard.
Bill No. 97 for the relief of Gertrude Margaret Burkart.-Mr. Ryckman.
Bill No. 78, for the relief of Vera Thelma Gooderham.-Mr. MacLaren.
Bill No. 99, for the relief of William John Fuller.-Mr. Duff.
Bill No. 100, for the relief of Alfred Augustus Jacques.-Mr. Duff.
Bill No. 101, for the relief of Paul Zizis.- Mr. Hocken.
Bill No. 102, for the relief of Annie May Blunt.-Mr. Hocken.
Bill No. 103, for the relief of Grace Harrington Bloom-Mr. Hocken.
Bill No. 104, for the relief of Ian Somerled Macdonald-Mr. Garland (Carleton).
Bill No. 105, for the relief of Arthur Beldon Morrison.-Mr. Church.
Bill No. 106, for the relief of George Edward Sharp.-Mr. Arthurs.
Bill No. 107, for the relief of Marjorie Morton.-Mr. Arthurs.
Bill No. 108, for the relief of William Ernest Hampson.-Mr. Arthurs.

[Stage Direction]
Bill No. 123, for the relief of Ruth Dorothy Rutenberg.-Mr. Baxter.
Bill No. 126, for the relief of Mollie Weiner. -Mr. Jacobs.
Bill No. 130, for the relief of Lillian Yaffe. -Mr. Hanson.
Bill No. 131, for the relief of Charles William Dickinson.-Mr. Hanson.
Bill No. 132, for the relief of Charles Murray Cramsie.-Mr. Baldwin.	[DOT]
Bill No. 133, for the relief of Frederick William Mallyon.-Mr. Speakman.
[Stage Direction]
The House in committee of Supply, Mr. Gordon in the chair.
Joseph Arthur Calixte Éthier: I was going to bring proof after the recess of the allegations I made that behind the opposition to the proposed Carillon power development there was a "power monopoly." In this connection I would like to refer to an article published under a New York date in the Financial Review of Montreal, in which it is plainly pointed out that Mr. A. Robert, of Montreal, who is the president of the National Hydro Electric Company has been ousted as president of the Montreal Tramways Company and as president of the Quebec-New England Hydro Electric Corporation and is a big factor in the Quebec power industry because he insisted upon going ahead with his plans to develop water-power on the Ottawa river, and give to the people cheap and abundant electricity. The article reads as follows:
The report that Sir Herbert Holt has bought control of the Duke-Price Power Company has attracted some attention in local financial houses interested in the larger aspects of the international power situation. If this is the case, the change thus indicated in the alignment of the financial powers behind the big power development companies in the province of Quebec, indicates victory for the Canadian interests in the big battle now under way for control of the water-powers oP the province. According to local informants the first victory in the battle was won when Mr. Robert was ousted as a big factor in the Quebec power industry, and the second was the success of the big power companies in getting back of them the governments of the two provinces in their fight against the exportation of power to the United States. The third was the refusal within the past two weeks of a syndicate, headed by one of the best known bond underwriting houses in the United States and Canada, to take a $10,000,000 issue to finance the Carillon development. The fourth is apparently this move on the part of the big Montreal power interests to gain control of the $50,000,000 power development on the Saguenay,
Mr. Chairman, I would call special attention to this paragraph:
"The success of the big power companies in getting back of 'them the governments of the two provinces

Supply-Trade and Commerce
in their fight against the exportation of power to the United States."	,
That statement is certainly startling.


Mr. PARENT:: Does the hon. member assume that the article in question represents the truth, and does he take responsibility for it?


Joseph Arthur Calixte Éthier: I know the standing of the Financial Review in Montreal. It is a reliable and very important business paper, and I presume that its information is accurate.


Georges Parent: That is only supposition.


Arthur Meighen: Is the hon. member right, that it is the Financial Review, and not the Financial Times?


Joseph Arthur Calixte Éthier: The Financial Review.


Arthur Meighen: I know of the Financial
Post and the Financial Times, but I did not know of the Financial Review.


Joseph Arthur Calixte Éthier: It is from the Financial
Review, and I am sure its report is accurate that Sir Herbert Holt has bought control of the Duke-Price Power Company, which is erecting plants on the Saguenay river.


Georges Parent: That is another assumption which is entirely against the facts.


Joseph Arthur Calixte Éthier: I take it to be the truth,
more, especially when I read in 'the annual report of the Financial Times that Sir Herbert Holt, if not president, is a director of every power company in the province of Quebec, the Montreal Light, Heat and Power Company, the Quebec Power Company, the Southern Power Company, the Shawinigan Power Company and all the allied power companies in the province of Quebec. That is the monopoly, the merger, the trust- which is fighting against the Carillon power development plan; it is this monopoly which is behind the organized opposition to that development. This same publication called the attention of the interested parties in the Ottawa valley district to the matter, and a big meeting was called in the town of Lachute, in the county of Argenteuil, where a resolution was passed protesting against the opposition, and endeavouring to show the government the benefit it would be not only to that particular district, but to the province and the Dominion as a whole, if the Carillon power development was approved. The question was viewed not only from the point of view of their own interest, but from the national point of view. The resolution read as follows:
Resolved that after consideration of the proposed hydro-electric development at Carillon, on the Ottawa river, the council and citizens of the town of Lachute express their approval of the project and request that the federal and provincial governments do give their immediate endorsement to the work so that the work of construction may proceed without delay.
In endorsing the project, this meeting wishes to point out .that the construction of this large hydroelectric plant would ensure an abundant supply of electrical energy, now so urgently needed throughout the Ottawa valley; that it would mean the expenditure of many millions of new capital in this province; that it would give employment to thousands of workmen, thus relieving the serious situation now facing civic and other authorities; and that it would create activity in many industries manufacturing materials needed for such an undertaking.
A further consideration which this meeting considers is highly important to Lachute is that the development at Carillon would be accompanied by the construction of a 14-foot canal from St. Anne's to Ottawa, thus creating a new navigable waterway which would assist in industrial development, without the cost of a single dollar to the public.
Resolved further that as it is reported that this huge power development is not financially possible unless there is an immediate market for the surplus power, this meeting can see no reason why the export of power should not be permitted so long as the home demands are amply met-a provision which can be fully provided for by the federal government.
That resolution, Mr. Chairman, covers all the points in favour of the granting of the electric water-power plant at Carillon. Firs of all, it would mean the expenditure of mans millions. The plant, as shown by the en gineer's estimate, would cost about $52,000,000, with a capacity of 400,000 horse-power. The erection of that plant would mean employment for over 2,000 people during three years, and the employment of that number of people for that length of time would certainly bring relief to the general labour situation in Canada.
Not only do t'he municipal councils in the districts north and south of the Ottawa river support the proposition, but the Trades and Labour Council of the city of Montreal adopted a resolution in its favour similar to the one passed at Lachute. It is therefore apparent that labour men to the number of
100,000	are behind the people of the Ottawa valley in the support of the enterprise. The Trades and Labour Council of Montreal, adopted also a resolution approving the project.
In addition to the great good to labour that will result from the carrying out of the enterprise, there is the further fact that navigation will be facilitated by the raising of the level of the Ottawa river. From the engineering reports that are available it is evident that the carrying out of the project would give a fourteen foot waterway in the Ottawa river, thus placing the city of Ottawa, on a footing
3366	COMMONS
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of equality in the matter of navigation with various cities on the St. Lawrence. As a further evidence of the popularity of this project in the particular district affected, may I state that, at the time the delegation met the government, AJderman Low stated that the Ottawa city council had adopted a resolution in favour of the power development scheme, similar in form to the Lachute resolution. Surely the support of such large bodies of public opinion indicates the necessity and urgency of this work.
It was stated this afternoon that the National Hydro-Electric Company had only developed 250 horse-power but let me point out that the company has already spent $500,000 on engineering work. I must not forget to mention that in addition to satisfying Canadian demands before exporting power to the United States there is a clause in both leases which declares that the plans for the construction of works must fulfil all the requirements of the Georgian Bay project. In the leases all possible contingencies are provided for, even to the extent of protecting the requirements of the Georgian Bay canal and Canadian demands for power.


Robert James Manion: Will the hon. gentleman state how much power has been developed by the expenditure of the $500,000 to which he referred?
Mr. ETHIEIt: Only 250 horse-power has been developed.


Henry Lumley Drayton: 
Henry Lumley Drayton: The hon. gentleman was going to give us a provision from the lease as to the sale of power in Canada.


Joseph Arthur Calixte Éthier: The provision in that respect is the same as the one in the lease of 1908, subsequently renewed in 1913 and 1921. The project in its original form did not con template the exportation of power. That is a new idea which is involved in the present plans of the National Hydro Electric Company. Under the old lease it was only proposed to issue a license for one year. Where will you find capital willing to invest such an enormous sum as $52,000,000 with a prospect of having the lease terminated at the expiration of one year? For the past eighteen years the license has only been good for one year. True it has been renewed from time to time, but it is a very uncertain basis upon which to found an expenditure of $52,000,000. No capitalist will invest money in an enterprise unless there is a guarantee of at least twenty-five years' tenure, and that is what the National Hydro Electric is asking for. Then too, unless a market is found for the surplus power outside of Canada the process of developing electric energy will be slow and tedious, and Canada itself will lose money which would1 otherwise come to it as a result of the development and sale of power.
As regards the development of our power resources, not only in this province, but throughout Canada, I maintain that without finding a market for our surplus power outside the Dominion our development of electrical energy will be slow and tedious and we will still go on losing millions of dollars a year which would come to Canada as a result of the sale of power. I am convinced that the opposition which is apparently emanating from interested sources, if allowed to succeed, will mean the absolute killing of the Carillon power development which is so vital to the people of the Ottawa valley, and unless those opposing the export can give us more concrete arguments that the sale of electrical energy should not be permitted, I am certain that the federal authorities will understand the workings of the "power ring," which is slowly but surely getting a strangle hold on the power situation throughout our province.
What is the objection which is urged to this project? It is that "we may need in the future the surplus power proposed to be exported." Surely this is not a reason for deferring action in connection with this very important matter.

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Then as to the licenses granted, I refer to the returns made under the Electricity and Fluid Exportation Act. Central stations exported 1,344,199,267 kilowatt hours during 1923, which was 16.6 per cent of the total output of all stations. Three stations on the Niagara river exported 878,335,200 kilowatt hours, or 65 per cent of the total quantity exported, and one station on the St. Lawrence exported 30 per cent of the total. A complete list of all companies exporting electric energy to the United States is shown below. Practically the only electricity imported is at Sarnia, Ontario, where the St. Clair Tunnel Company imports some for operation of their locomotives and shops and a small quantity for sale. And they exported 40 per cent. The following memorandum shows the kilowatt hours exported to the United' States in the calendar year 1923:
Kilowatt
hours
Maine and New Brunswick Electric Power
Company	 10,209,784
Sherbrooke Railway and Power Company.	42,495
Cedar Rapids Manufacturing and Power
Company	 405,524,000
Ontario Power Company	 332,866,100
Toronto Power Company	 193,009,750
Canadian Niagara Power Company..	..	352,459,350
Ontario and Minnesota Power Company..	10,365,200
Western Canada Power Company	 38,450,560
West Kootenay Power and Light Company	 554,900
British Columbia Electric Railway Company	 717,128
Total	 1,344,199,267
Hon. gentlemen will observe that of the 1,344,199,267 kilowatt hours exported in 1923,
405,524,000	kilowatt hours were exported by the Cedar Rapids plant of the Montreal Power Company and 878,335,100 kilowatt hours from the Ontario plants of the Hydro Commission. Practically 95 per cent of the present export is done by the private power monopoly in Quebec and the Hydro in Ontario. Those are the people who are endeavouring to prevent private enterprise requesting the government to give them a license to export electrical energy from the Carillon Power Company. It would be interesting, Mr. Chairman, to show to the House how these people have discarded their proposed plan and changed their minds when they see it is not in their own interests. It is quite surprising to observe the attitude of the Montreal Gazette, the official paper of the opposition in this House, who are now every day fighting in decided opposition to the Carillon works dam. What has happened in the last two years? Who is behind the Gazette? I put the same question as the exMinister of Finance put, who is behind the
Gazette? I will show the House the attitude of that paper and I quote the following from the Montreal Gazette:
When in 1923 a suggestion was made in parliament that a restriction should be threatened on the export of power as a means of obtaining an undertaking from the United States that American coal exports would not be restricted, the following is the editorial published by the Montreal Gazette on February 28, 1923:
This was not at a time when the National Hydro Electric Company were asking for the powers they are now seeking. The article continues:
At the suggestion of Hon. Mr. Robb, Minister of Trade and Commerce, Dr. Deslauriers in the House of Commons, withdrew a resolution favouring the restriction of the export of electric power from Canada unless the United States undertook that the export of coal to Canada sihould not be interfered with. The subject of control over exported electric power has been up in parliament before on several occasions. The only result was an act passed some dozen years ago requiring that producers desirous of exporting current to the United States which is the only country concerned, should take out a license before making any delivery. If occasion arose it is presumed the refusal of a license would be followed by a stoppage of the export. That, however, is not within probability. The situation is simple. It is as legitimate-
I wish my hon. friends opposing the plan would meditate on this sentence:
It is as legitimate for a Canadian producer of electric current to supply a demand from the United States as it is for the producer of wheat or lumber or asbestos, or anything else, to sell his goods in the same market.
That was the Gazette's opinion at that time.
To act on any other theory and put restrictions in the way would be to interfere with a proper development of commerce and restrict business without justification. There are sections of Canada wherein the local demand for electric power exceeds the capacity of the development plants, as there are sections where, unless an export demand existed, the plants could not be operated at their capacity and their water-power would be running to waste.
This is the case at Carillon.
The lack in one case is not the result of the export of power in the other, but is usually attributable to the geographical situation. To stop the export at Niagara or Fort Frances would not help those in central Ontario who would use more if they had it. If it were advisable to interfere by law with such a situation, no general prohibition would be advisable. Each region would have to be dealt with according to its peculiar circumstances. Embargoes as restrictions on freedom of commerce are almost essentially mischievous. The war time produced many of these. They were generally submitted to as having some good object in view, though evil in themselves and the product of greater evil conditions. No wise merchant or manufacturer would desire their establishment. Merchants and producers generally know that the wider the markets they have for their goods the better for them; and embargoes restrict markets. The general argument must be against them. The special argument advanced by Dr. Deslauriers was not sufficient. The United States had been suffering during

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the war from a restricted coal supply. The government at Washington-
Listen, to this-
The government at Washington knew what the facta were and took measures to distribute available fuel, so as to reduce the general inconvenience and prevent one section from suffering while another had abundance or more. Canadian dealers were treated by the Washington authorities on the same footing as those of the United States. There was a continuous movement over the border of anthracite, and the people of this province did not suffer more than those of northern New York. Such a national neighbour is not one to threaten. There may rise occasion for government interference with the distribution of electric power generated in Canada. It will be in the nature of an emergency, however, and should cease with the emergency. Though the House of Commons did not divide on the issue raised by the resolution, the effect of what was said was to put the idea into the background, where it should stay.
Who is behind the Gazette now? The Gazette inspired by people behind it publish articles every day similar to the one I have read. I do not say that they are inspired by Sir Herbert Holt, but it is strange altogether.
This question is of such importance that I thought proper to place the case as it really is before the committee. If a lease is granted to a private company which is ready to carry on the work, Canada as a whole will benefit. This will be a great advantage also to the labouring people and to the municipalities on the two borders of Ontario and Quebec from Ste. Anne to Ottawa. It will bring to Canada a capital of over 152,000,000, without costing a cent to the national treasury or to any municipality. On the contrary, according to the proposed lease, in 1928 the company will have to pay $50,000 as rental, in 1930, $75,000, in 1931, $100,000, and up to 1964. After the renewal of the lease twenty-one years by twenty-one years, the rent will be $175,000. That is a clear revenue to the country. Moreover, with the export tax on hydraulic power according to the new budget of this year, which budget I approve entirely, the company will pay $1.96 per horse-power for export and we shall pay $175,000 for rent to the government making a total revenue of nearly $SOO.OOO per year. We keep 100,000 horse-power to serve Canadian needs. We ask permission to sell or export 300,000 horsepower to the United States, without infringing on the power required for Canadian industry.


William Findlay Maclean: For what period?


Joseph Arthur Calixte Éthier: The company is asking for a period of twenty-five years up to 1950, as I stated this afternoon. There will be only 11,000,000 horse-power utilized in the whole of Canada. If we export 300,000 horse-power,

that will give a revenue of $600,000. Thau, with $175,000 for the lease, makes nearly $800,000 revenue going into the treasury of this country every year. This wil help the labouring people and the farmers along the borders of the two provinces and there will be all the benefits accruing from the general utilities growing up from such a development in this country.
I leave the House with these considerations, renewing publicly the application which has been made by the delegation to the government. That this matter will be considered from a national point of view, I have no doubt; but I hope the opposition which has been brought against it will be severely inquired into and, if inquiry is made, it will be found that behind the opposition to the proposed plan of the National Hydro Electric Company, there is a merger, a trust, a monopoly in Quebec as well as in Ontario, and that this company will be in a position to sell electricity more cheaply than it is now being sold in Montreal or anywhere else.


William Findlay Maclean: I have been very much interested by the speech of the hon. member (Mr. Ethier), but he does not quite prove his case. He rather proves the argument that I am going to make in favour of delay in this matter. My suggestion in a word is this, and I have written it down rather carefully. The thing for the government and parliament to do in regard to the export of power is to delay further action until federal investigation is made, first, as to our possible water-power development, and second, as to its further conservation by the use of long-distance transmission by high tension current, as scientists now promise us. Such an investigation might result in a national policy of keeping this power as a national asset which, in time, would take care of our public debt and our national budget for many, many years. Such a policy would have to be strengthened by a programme of sustained rainfall, by forest preservation, and permits to export power should be, not for long periods, but for short periods with frequent renewals. What the power people are trying to get-and I direct the attention of the Acting Minister of Finance (Mr. Robb) to this-is to sew up the country in long terms for the export of power. Even with the frequent renewals as I propose, the result may be that this, which I consider is the greatest asset that Canada has to-day, namely, the possibility of the development of our waterpower, will pass from the people into the hands of entrenched monopoly. Therefore,

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there is every reason why we should conserve this power. We should see whether it is not possible, as scientists say, to transport it for long distances by high tension currents. Besides that, they say now that electrical energy can be transmitted by a beam. Just what a beam is I will not undertake to say at the . moment, but they have that in their mind. They say something else about water-power. A water-power is the most marvellous thing in the world. Neither a gold deposit nor a silver deposit is to be compared with it, nor even are the great wheat fields. This hydroelectric power, once you generate it, has this peculiar characteristic. Once you store the water and put in your generator, you get the power and what does the power do? It delivers itself a hundred miles, and I hope, in a little time, a thousand miles away through a wire; it requires no upkeep and it becomes more and more valuable. The scientists are promising a still further development and that is this. All hon. members know what these little storage batteries are. They see them in the hardware stores. The scientists promise even to store water-power in the same way and they say that it can be kept for years; that it can be transported and then released at any distance away where it can be distributed by other wires. Parliament, therefore, ought to take care of this asset. It should not part with it; especially it should not part with it under long-term 9 p.m. leases, but it should keep it as the greatest asset the country has. To prove that it is the biggest asset the country has, one needs only to listen to the testimony that my hon. friend has just given to the committee about the efforts of capitalists in this country and throughout the whole of the United States to get this great source of electrical power sewed up to their companies, because if they get that, they have an almost unlimited field of profitable distribution of it. Canada has this wonderful store. Notwithstanding the statement that has been made, I contend that we ought not to lease any of this power for export until we know whether there will be enough of it for ourselves; and, above all, we ought to keep the development in our hands until there has been a thorough investigation as to its amount.


Mr. HUGHES:: Is there any danger of a
monopoly at home?


William Findlay Maclean: There might be. I am not in favour of a monopoly at home, and whatever it is, I do not want to see it grow. That is the object of this movement. I do not want to assist a monopoly now, I want to prevent other monopolists from getting control of this power. That, Mr. Chairman, is my whole object, and as the Prime Minister (Mr. Mackenzie King) is not here, I would impress upon the Acting Minister of Finance (Mr. Robb) and the Minister of Trade and Commerce (Mr. Low) the importance of taking up this question with their fellow members of the cabinet and urging that there be a thorough investigation as to the amount of power available and as to what the prospects are in connection with its development, and until that investigation is completed they should emphasize the desirability of not granting any lease for power export.


Mr. FORTIER (Translation):: Mr. Chairman, I share entirely the views expressed a few moments ago, by the hon. member for Laval-Two Mountains (Mr. Ethier) in favour of the development of the Carillon water-power scheme. It seems to me that the proposal which is made to the government is of great importance to that district and to the country as a whole. I fail to understand why one should really oppose the development of this water-power. The only people who, in my opinion, might object to such a scheme would be those who fear to see the beauty of our landscape spoiled. Some years ago, I heard it said by litterateurs that we should not allow industries to monopolize part of the waterpowers of the magnificent Niagara falls or the majestic St. Lawrence river. "It is depriving-it was said-beautiful nature of its poetry." Perhaps, a future generation will reproach us of having disfigured Long Sault by establishing industries. "A dam now exists on the spot where Dollard des Ormeaux immortalized himself, at the foot of these rapids" will posterity exclaim!
It has been stated, with truth, that the water powers developed along the St. Maurice river had largely contributed in making that region one of the most beautiful of the province of Quebec, and that we should follow such an example, so as to develop and utilize all the water powers of this country. I think, Sir, that there existed special reasons which favoured the development of the water-powers of the St. Maurice region, however, these reasons do not exist when it is a question of the Carillon water-powers, on {he Ottawa river. The province of Quebec possesses, in the St. Maurice district, unequalled forest reserves. It has wonderfully developed these water powers. Moreover, this forest reserve, scientifically exploited will foe a perpetual
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source of wealth to the province. It is necessary to preserve for that part of the province of Quebec, the water-powers which have built up the industrial towns of Shawinigan, Grand Mere, and so forth, and which contribute to the expansion of Three Rivers; but such is not the case in regard to the Carillon water-power. We cannot, in fact, contend that a forest reserve necessitates the development of the Carillon water-power to establish pulp mills, as they exist on the St. Maurice.
Mr. Chairman, I agree entirely with the views expressed by the Gazette of Montreal, in 1923, in connection with a discussion which took place in the House of Commons at that time. This newspaper which, to-day, so strongly opposes the scheme of the promoters of the Carillon water-power development, at the time expressed the views which are at present shared by the majority of the citizens of this country.
The following is an extract from the editorial which the Gazette published on February 28, 1923, commenting on the debate brought on in the House by the resolution of the hon. member for St. Mary's (Mr. Deslauriers) in connection with the export of electric power:
There are sections of Canada wherein the local demand for electric power exceeds the capacity of the development plants, as there are sections where, unless an export demand existed, the plants could not be operated at their capacity and, their waterpower would be running to waste. The lack in one case is not the result of the export of power in the other, but usually a geographical situation. If it were advisable to interfere by law with such a situation, no general prohibition would be advisable. Each region would have to be dealt with according to its peculiar circumstances.
To-day, when the people of the Ottawa valley request the government to allow the export of electric power from Carillon, can the government be told: "Do not allow it, as we might later need these water-powers!" Proof has been given to this committee by the hon. member for Laval and Two Mountains, that the fact of exporting 300,000 horsepower of the 400.000 which would be generated by the Carillon water-power, would in no way jeopardize the reserve of electric power we possess in the province of Quebec. It has oeen clearly shown by experts that Canada has it its disposal 42,000,000 horse-power and that there are, at present, but 3,500,000 horsepower developed. Canada would have to be .nhabited by a population of 70,000,000 people so as to develop and utilize all its water-powers. It is estimated that in 25 years Canada will have 13,000,000 of a population and that 8,000,000 horse-power will be all it will require. It is, therefore, only 22 per cent of what we have at our disposal.

Engineers have stated that, in the province of Quebec, there exists 15,000,000 horse-power and that we but utilize, at present, about 1,000,000 horse-power. It is estimated that the yearly increase of electric power is 60,000 horse-power, and taking these figures as a basis for our calculations, the province of Quebec will utilize in 1950 about 3,000,000 horsepower supplying about 3,500,000 of a population, and that will only amount to 20 per cent of the province's water-powers.


Georges Parent: Would the
hon. member tell us where are located these 20 per cent? Is it in Labrador or in the vicinity of Montreal or Quebec?


Hyacinthe-Adélard Fortier: Within a
radius of 200 to 250 miles from the Carillon water-power. That is according to the report of a most competent engineer, a statement which up to now has not been gainsaid.
I think, Sir, that the Carillon water-power development scheme is one of the best of its kind. It will draw to this country considerable capital; it will establish mills the building of which will amount to millions of dollars and it will give the labouring class remunerative work for many years to come. Finally, it will be a source of revenue to the government, for the leasing of these water-powers, according to the figures themselves which are mentioned in the contract of said scheme, will add to the public treasury many millions of dollars. Moreover, thanks to the government's policy of levying a tax on the exportation of electric power, we are assured that, for a period of 25 years, this export alone of these 300,000 horsepower will add to the country a revenue of many million dollars.
Neither should we lose sight of the fact that, as a result of these improvements, a navigable channel having a depth of 14 feet will unite Montreal to the capital of Canada. It would be practically the first link in the scheme cherished not only by the Ottawa valley people, but by all Canadians-the first link, I might say, in that great waterway, the Georgian Bay canal.
For these reasons which are of an economic order and bear on the future prosperity of the country, I am strongly in favour of allowing, on reasonable and equitable conditions, this company or any other sound company which may so desire, to undertake the scheme of developing the Carillon water-power.


Henry Lumley Drayton: I want to thank the hon. member who has just taken his seat for the manner in which he has dealt with this subject and for his kindness in speaking as deliberately and clearly as he did. I wish I

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could answer him in his own language. But with regard to his argument as to the development on the St. Maurice river, at Shawinigan and at Three Rivers, he gets all these things by a policy completely different from that which he is now endeavouring to support. The hon. member for Laval-Two Mountains talked about employment. He wants to give employment to our people by shipping out of the country the chief thing through which employment can be brought to Canada-that natural, rich and permanent gift of nature, to use the words of the hon. member who has just spoken, and in whose language I should like to be able to express it with equal felicity. But there is no beehive of industry about a power .plant. It is the loneliest place in the world. Nature does the work, and one or two men can look after an enormous plant. There is no pay-roll worth talking about in a plant of that kind; the pay-roll is where the electricity is used commercially.


Joseph Arthur Calixte Éthier: What does by hon. friend think of the resolution of the Trades and Labour Council of Montreal approving the
scheme?


Henry Lumley Drayton: Perhaps my hon. friend was there and talked about (the great amount of labour there would be. But there is very little labour about a power plant; the pay-rolls are where the power is being used.


Joseph Arthur Calixte Éthier: How about the construction of the plant?


Henry Lumley Drayton: Now, let us see how far my hon. friend is pushed in his argument. Just for the sake of the temporary labour in the construction of the plant he would remove from this country an enormous pay-roll for a long period of years. Talk about selling one's birthright for a mess of pottage; my hon. friend would not even get the pottage out of it. The hon. member is pushed for an argument and he makes an attack on existing power activities in this country. He calls them monopolies, and the like. Well, let us say for the moment that they are monopolies; why should they object to a proposal which would remove from the country that which can be made the basis in the future of an attack upon their local strength? What the hon. member really says is that these co-cailled monopolies are objecting to something which, if it goes through along the lines of the drafts available, will for all time-and I say it advisedly- remove any chance of opposition to those monopolies in Canada.


Joseph Arthur Calixte Éthier: The proposal is only for a license for twenty-five years, up to 1950 and
no further; and it is understood that there must be a clause in the license to provide that if the needs of Canada call for over 100,000 horse-power -the lease Shall be null and void. The hon. member knows enough about law to appreciate the fact that any such provision in the lease will have to be respected by both parties.


Henry Lumley Drayton: Perhaps my hon. friend will produce the lease he is speaking of; I have not seen it. The document I have seen does not provide what 'the hon. member says. It provides for a lease which dhalil run until January 1, 1964. It then provides for a twienty-one year renewal from that date, that is, to January 1, 1985; then it provides for another renewal of twenty-one years and at the expiration of that second renewal it provides for a fourteen-year renewal from January 1, 2006. I see nothing in it which says that the Canadian product shall be looked after.


James Alexander Robb: What document is my hon.
friend quoting from?


Henry Lumley Drayton: I said I was
referring to the draft lease. It is the only thing we have been able to get. If we can get anything a little more up to date, a little more definite out of this mystic matter that we are trying to get to the bottom of, we shall be delighted to have it; but this is all I have been able to get.


James Alexander Robb: Does my hon. friend contend that a lease has been granted for this power? If so, I want to say that there has been no lease granted.
, Sir HENRY DRAYTON: My hon. friend I am afraid was not here this afternoon when this matter was gone into. The only paper I have been able to find dealing with this question of export on the whole of this long file-I admit I have not had time to go through it-are two draft leases, which evidently are the outcome of long negotiation.


James Alexander Robb: That is accompanying an
application, but there is no lease.


Henry Lumley Drayton: I am not saying there is. I am speaking of this draft lease. If there is anything that would show us what is behind the smoke screen, anything that will make the matter clearer, let us have it.


James Alexander Robb: So long as my hon. friend
admits that there is no lease, I have nothing to say.


Joseph Arthur Calixte Éthier: With the permission of
my hon. friend may I repeat what I said this afternoon, that the delegation which came
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here asked for the issuing of a license for a term of twenty-five years, up to 1950. That was the sense of the deputation that came here, representing the National Hydro Electric Company. I do not know anything about the Carillon Industrial Company. I understood that the question over this draft lease which was put in the record without the cognizance of the Minister of Railways, and which was discussed this afternoon for two hours, was settled, and that argument on that would not begin again. There is no question about the proposed draft. The only question is, shall the license be renewed for a long term of years? The question is, will the government take the responsibility of adopting the policy of issuing in special circumstances a license for a long term, fifty years, if you like? But in this specific case we are asking for a license from to-day up to 1950, for a twenty-five year period; that is all.
Sir HENRY DRAYTON. Perhaps my hon. friend would tell me whether that application was in writing and whom it came from?


Joseph Arthur Calixte Éthier: No.


Henry Lumley Drayton: I want my hon. friend to be fair. I have not brought up again the question of this document. It was my hon. friend the Acting Minister of Finance, who was not here this afternoon, who asked the question. Of course, if I can get anything definite I shall be only too glad to get it. My hon. friend has not yet told us who the directors of this Carillon Industrial Corporation are. I shall be delighted to get that information.


Joseph Arthur Calixte Éthier: I gave you the names.


Henry Lumley Drayton: No.


James Alexander Robb: My only reason for intervening in the argument of my hon. friend was that I understood, and I believe every member of the House understood, him to be arguing from the point of view that the lease had been granted and I say on behalf of the government that no lease has been granted. The government is not responsible for people who come here from day to day and make applications. My hon. friend has been a member of a government and knows that every day of the week applications come before the government of one sort and another, but that does not mean they are granted.


Henry Lumley Drayton: No, it does not mean that at all, but I am quite confident that this carefully prepared document has meant a great deal of negotiation. But be that as

it may, my hon. friend from Laval-Two Mountains (Mr. Ethier) is wrong when he says he has given me the names of the directors of the Carillon Development Corporation. If he has those names, I would like to get them. No, they were not given.
My hon. friend wants to know who is behind the Gazette. I tell him frankly I do not know. He may as well ask who is behind the Globe. He will find the Globe is taking precisely the same attitude as the Gazette. He will find that some people look upon this question as a large national question entirely removed from any matter of party politics, but as a matter that is really vital to Canada. My hon. friend talks about monopolies, and says this project is only fought by monopolies. I wonder if my hon. friend is really serious in saying that? I do not think he can be. I do not think he can be serious in saying there is a power monopoly in Ontario. The people are not being bled in Ontario for power; they are just paying what it costs and nothing else, and if my hon. friend objects to a monopoly, as he calls it, which is run for the benefit of the public, without cost to the country except the actual cost of the service-well, my hon. friend may call it a monopoly, but he will not have many supporters. I wonder if my hon. friend really thinks his case is so weak that he has got to come down to the point of charging those who are against him with being monopolists? It seems to me that he does.
I would again point out that if anything is to be done with what I hope will never be heard of again-and I did not have this before me at the time I pointed it out previously -do not let us have the delusion that anything is being done for Canadian municipalities. If anything is being done, it is along the lines proposed. There is no municipality that I know of in that neighbourhood that is as big as Brockville, for example. No municipality can get into this until they ask for at least 10,000 horse-power. Brockville takes only a comparatively small amount; I will give the figure later, I cannot find it at the moment, but it is only a small amount.
Mr. hon. friend the Minister of Railways (Mr. Graham) made an argument which is entirely to the point, that is, if his argument is correct. He points out that the policy of the government is consistent, that no harm can be done by issuing merely a yearly license. Of course, he sees at once that if you get away from a yearly license and you invite a large investment on the other side of the line, it is going to be very hard to take away the power and scrap that investment.

Supply-Trade and Commerce
He realizes that, and so he says that the yearly license has done no harm. But I just want to point out to the House that even under those circumstances we are no longer in control of our power, to the extent that we have let it go.


Thomas Andrew Low: Did my hon. friend realize
that in 1912-13 when his government granted a license to the Cedar Rapids Power Company to export 100,000 horse-power?


Henry Lumley Drayton: What I was
going to point out to my hon. friend is this: The first time I had anything to do with this matter was in the year 1917 and, as a matter of fact, my hon. friend knows it.


Thomas Andrew Low: Very well, but my hon. friend
was a member of the government when the license was granted to the Bridge River Power Company.


Henry Lumley Drayton: My hon. friend has been looking into this question, and must know about the situation as set out in the report.


Robert Forke: There was the largest export of any year in 1917.


Henry Lumley Drayton: Yes, it was a
large export.


Georges Parent: On a one-year license.


Henry Lumley Drayton: I am not denying that for one minute. I do not know what is wrong with the Minister of Trade and Commerce.


Thomas Andrew Low: Nothing at all.


Henry Lumley Drayton: Then perhaps
we can get on. I am not saying that to-day the licenses are for a longer or shorter period than at any other time; I am simply saying that even under a yearly license, the granting of which the Minister of Railways referred to as t'he government's invariable practice and a sound practice, we lose control of our power.


Thomas Andrew Low: Did my hon. friend hold the
same opinion in 1921 when he granted a license to the Bridge River Power Company?


Henry Lumley Drayton: Perhaps my hon. friend will let me get on. I do not know whether anything turns on the point of granting a year's license; if my hon. friend wants to interrupt he can, I do not mind it. If the minister thinks there is any difference in the practice now I wish he would point it out so that I would know. If he wishes to say that in 1921 we gave licenses for more than a year let him say it. But if he does
not wish to make a statement of that kind his interruption is not germane to the argument.


Thomas Andrew Low: My hon. friend is charging the government with issuing a license for a longer period than one year, and at the present time we have not issued one.


Henry Lumley Drayton: I know there
is a movement on foot looking towards that end, and I know we have not had very much luck in getting information as to that movement, or as to what the government would do. All the government need say, in order to clear matters up, is what its policy is going to be in connection with this export. If the government will say now: We have no idea of enlarging the term, we will do nothing to tie up the country, the license will be a yearly one as in the past, all this discussion will stop. But we have at least got the right to insist upon learning, so that the country will know, what the government's policy is on a most important question. My hon. friend can do me a, great kindness and save me the necessity of talking at greater length if he will answer the question.


Thomas Andrew Low: My hon. .friend is simply
building up a straw .man for the purpose of knocking him down.


Henry Lumley Drayton: Will my hon.
friend say that this application is a "man of straw?"


An hon. MEMBER:: Absolutely.


Henry Lumley Drayton: Did anyone say "absolutely?" Does any member of the government say " it is a man of straw "? If not, the Minister of Trade and Commerce is not getting very far with his interruption. Now I will go back to where I was when I was interrupted. The act regulating the export of electricity came into effect in 1907. I was just going to take one contract, in connection with which we have had a lot of unfortunate trouble, and that is the contract with the Ontario Power Company. In the year 1908, and the amount was even less the year before, the Ontario Power Company generated for export 4,610 horse-power under merely the yearly license. Now take the situation in 1917, and it shows what happens when there are large distribution plants on the other side of the line. I read from the report of the Power Controller, published in 1919:
Between August, 1904, and April, 1917, it acquired a private right of way leading from Niagara river to the city of Syracuse, with lateral lines to the city of Lackawanna, adjacent to Buffalo, and to the city of Auburn, and constructed upon these rights of way, in the main, two high tension steel tower transmission lines, with carrying capacity for the distri-

Supply-Trade and Commerce
bution of the 60,000 horse-power it had purchased rom the Ontario Power Company; and secured customers whose aggregate firm demands were as stated on the schedule of contracts between the Niagara, Lockport and Ontario Power Company and its customers, hereto annexed _ Furthermore, in this period of time it had constructed large and extensive sub-stations and switching stations at Lockport, at Gardenville (near Buffalo), at Mortimer (south of Rochester), and at Solvay, adjacent to the westerly corporation limits of the city of Syracuse. For the creation of this property during the period of time mentioned, there was expended approximately $10,000,000. Aside from this, customers secured by the company had been busy during the same period purchasing and installing equipment for taking the power purchased from the Niagara, Lockport and Ontario Power Company, in connection with which millions more had been expended.
I am quite sure if the Minister of Railways were here he would see the fallacy of the position. You cannot utilize this electricity without these tremendous investments being made. And there are some things that do not turn upon the form of a contract, particularly when you get down to a question which assumes on international complexion over night. How idle it is for any of us here to say that simply because the power goes out on the strength of a year's license this government would feel itself justified in cancelling that license and saying that to-morrow morning American municipalities shall go without water and without light. And yet that is what the government has been doing. There are certain things you cannot do, and a cancellation of that character cannot very well be made.
Now the hon. member for Laval-Two Mountains (Mr. Ethier) spoke about monopolies and about the prices here. In reply to a question he gave me one bit of information, and that was that Hon. Mr. Miles was connected with this movement. Well, I might perhaps have known that after reading the article which appeared in that gentleman's journal.
But he is the same gentleman who, in his attack on the Cedar Rapids-and he can- be just as successful in that as he likes-pointed out to us that power was exported to the United States for only $12 per horse-power per year. Why, there is a pulp mill just across the river which is churning up Canadian pulp into paper because it can do that with expbrted Canadian power at $12 a horse-power and if that plant were in Montreal it would cost them a great deal more. The argument presented by my hon. friend from Laval-Two Mountains is no argument at all. He states that the local purchaser is going to be looked after if this goes through. Is it not absurd to think that anyone would seriously argue that the more electricity you sell out of the country to the United States the cheaper will be the cost of electricity in Canada? But that is 
where this ridiculous argument goes. We are not the only people who have found out exactly what happens when you sell electricity. I am going to read, Mr. Chairman, from an article written by Paul Lewinson in the International Relations Section. It is produced in The Nation of Wednesday, June 25, 1924, at pages 746 and 747, and this has to do with the International Relations Section, and there is some realization of what the sale of electricity internationally might produce in international relations. I am not going to read it all, but simply a small portion of it. He says:
Approximately one-sixth of the total power produced per annum, then, goes into the export trade; in amount of power available for export at any given moment, however, the proportion is much greater- about one-half. The difference is due to the fact that the production of electric power goes on much more continuously for domestic than for foreign consumption.
Again, on the surface-
And this is the argument we get:
-This would seem to be wholly advantageous to Switzerland. Switzerland has water-power to spare; France, Italy and Germany need it and are willing to pay for it. Why not sell it, like Swiss cheese, Swiss watches, or Swiss milk chocolate?
The hon. member for Brome (Mr. McMas-ter) had a similar argument the other day, but he did not take cheese as an illustration. I forget what he took, but his argument was the same. This article continues:
Unfortunately a little consideration must make it obvious that electricity as a commodity for export is not in a class with cheese and chocolate. Electric power is primarily a service. Ordinary goods can be stored against a shortage. Electricity can not. Ordinary goods can be bought in the open market when the usual source of supply is cut off. Electricity, supplied over expensive and fixed transmission lines, can not. Ordinary goods have common substitutes quickly available. But it would take from eighteen months to two years to "build sufficient steam generating plants in the French provinces on the Swiss border to cover the withdrawal of electric power supply on the part of Switzerland.
The city of Milan already depends on Swiss electricity for a large measure of its street lighting and tramway service.
Just as in the case of American municipalities.
So do many towns in northern France. In Italy and France and Germany as well great industrial undertakings depend on the uninterrupted transmission of power from the great Brusic, Waggital and Olten-Gosgen plants. Were the export of power suddenly to cease, whole provinces in these countries would be plunged into darkness, their transit facilities cut off, their chief industries ruined.
If we go into this export business on fixed terms and go into it any more extensively than we have got into it now-and I think it is a pity we have gone as far as we have- we are going to make a mistake that we will

Supply-Trade and Commerce
only regret once, and that once will be all the time we realize it. The minister presented a further argument this afternoon based upon his statement that the Hydro was in favour of export. Of course in some circumstances, under existing conditions it is perfectly right, to the extent that we have gone into it now. What I mean is this: If we have, as unfortunately we now have, a shrivelling population and decreasing activities, and the power we produce now is more than sufficient, and if we have somebody going ahead and wanting power, and can arrange with them so that they will take it, and not make any new commitments, not go into any new contracts, but simply utilize that power instead of using a steam plant, temporarily we are doing no harm. But apart from that, the Hydro certainly does not want any electrical institution that is not run in the interests of the public. Just think of the suggestion which is made. To-day they are exporting power at the rate of 812.35, when they are charging their own municipalities $24, and they have to do it.


Mr. CAHILL:: Is it my hon. friend's opinion that power would be cheaper in Canada to-day, say in Toronto, if that power were not exported?


Henry Lumley Drayton: Yes.


Frank S. Cahill: What makes the hon.
gentleman think so?


Henry Lumley Drayton: We are getting, Mr. Chairman, $12.35 per horse-power. It is to some extent below cost. It is certainly below the market value, and to the extent that that is below the market value, everybody else has to pay just that much more; and that is just what they are doing.


Frank S. Cahill: What is the basis of market value?


Henry Lumley Drayton: That is a difficult thing to get at. Suppose we go back to the basis of production cost of labour; the basis of production cost is interest charges in the first place, and when you get by your interest charges, the next question of cost you have is the cost of supplies and labour which you know have gone up very much. I admit veTy frankly that the percentage of the increase of labour is very small in one of these plants, and further that the interest cost of the first installation cannot go up. It is still there. The bonds are still there; but where the interest cost does come in is that in the operation of a lot of these plants -and I happened to be in charge at the 216
time as controller during the war period- there is any amount of damage done by running the plants under stress, getting the very last kilowatt hour, running them over the mark without any let-up at all. My hon. friend knows about the fatigue that sets in and about the danger you have from overcharge, surcharge or a back charge. We had a lot of this, and it entailed great expense and much work after' the war putting the plants really in proper shape. A lot of reconstruction had to be done, with the result that the Hydro had to advance the price in Toronto from $17 to $24, if my memory is correct. I think they charged $17 to the municipalities and the charge is now $24. But'in connection with the export they cannot do that. They are still held down to the $12.35. If this government to-morrow were to say, "We will have no more export," and took the chances of doing what I do not think they could do-


Frank S. Cahill: I wish to ask for information if my hon. friend does not mind giving it to me-	,


Henry Lumley Drayton: Not at all.


Frank S. Cahill: Is the contract that the Hydro have for $12.35 a term contract?


Henry Lumley Drayton: Yes.


Frank S. Cahill: It is for a period of years?


Henry Lumley Drayton: Yes.


Frank S. Cahill: If that were made to a
Canadian firm, would it not hold just as good?


Henry Lumley Drayton: Yes, but I cannot understand any power company making a power contract to a customer under an arrangement like that. They certainly could not do it under the Hydro-Electric regulations.


Frank S. Cahill: How was this made?


Henry Lumley Drayton: In this way.
In the first instance the Ontario Power plant was an American company entirely. That was the producing end of it on the Canadian side. On the other side there was the distributing end. The two companies made the deal between themselves. There was friction between the Hydro and the Ontario Power, and finally the Hydro bought the latter out. The original contract had a right for three renewals, and in the deal the Hydro got the three renewals taken off. They could not get away from the first contract which has yet twenty-five years to run.


Frank S. Cahill: What difference would there have been had that power been contracted to

33 ?5
Supply-Trade and Commerce

a Canadian firm? In what way would the question of export be affected if, before the Hydro originated in Ontario at all, the power had been contracted to a private company, say to the city of Ottawa? Would the contract not hold just as good as to export?


Henry Lumley Drayton: The only thing
is that it would never be done.


Frank S. Cahill: It would have been done
if there had not been the Hydro.


Henry Lumley Drayton: It unfortunately has been done here. Just on the general issue, I want to make another suggestion to my hon. friend. With the increased cost of coal, these water powers are becoming of great value. If we had all our water powers run by municipalities, or if the prices for electrical energy were all controlled by a proper board which would see that they were not excessive, the government rent would not make much difference. The people would get the whole benefit of it. But just as soon as you export the power, the people derive no benefit from it at all, except from whatever charge is being made. If the government are going to take any action with this thing-and of course I can only go on in the dark because they will not tell us what they are going to do-they should leave the present lease in the position in which it is left by the Minister of Railways and Canals (Mr. Graham) today. He has authority to renew it, but he will not renew it. No construction has gone on and he has not renewed it. Instead of its being renewed, what ought to be done is this, and I think it is done in the province of Quebec. My hon. friend (Mr. 10 p.m. Cahill) will know this much better than I do. I think they advertise all these powers for sale before they are leased. If this power is to go out of the country, if every plea we make is of no avail, at least let us get for it something worth while. The power can be developed to sell at a profit on a 10 per cent basis unless conditions have changed very much. I admit conditions have changed and I may be a little out one way or the other. I am not, however, very far off, and I think I am conservative in saying that the power can be sold at a profit at from $12 to $15 a year per horse-power. Mv hon. friend shakes his head. There is to be a head there of 133 feet.


Frank S. Cahill: How much would that be per horse-power installed?


Henry Lumley Drayton: $120 installed Mr. CAHILL: My hon. friend, of course, knows it could not be developed for that.
'Mr. Cahill.]


Henry Lumley Drayton: I know of powers that have been put in cheaper than that. I have had to do with them. I admit that was some time ago, but I do not think I am very much out to-day when I say that I think they can be put in for $120 to $150 per horsepower installation. A multiplication has been going on in the cost of steam electricity, which our friends to the south have to rely on, as a result of the increase in the price of coal. I certainly think we ought to see that the country gets what should be coming to it out of the export of our power, if export there must be. I really think the government should give us their policy now.


Mr. BALDWIN:: After at least ten or
twelve years of observation and experience in connection with hydro-electric power, weighing all the pros and cons and viewing the question from every angle with an open mind, as a Canadian citizen I can say unqualifiedly that I am against the export of electrical power which is our greatest asset. From any standpoint Canada has everything to lose and nothing to gain in permitting the export of this, her richest asset. Electrical development is still in its infancy, as is acknowledged by all scientific people. A multitude of uses are making their appearances from year to year, and not one electrical plant has yet been developed practically all the power of which was not sold before the plant was ready to deliver the energy. For example, in the Eastern Townships in which I live, a district of 6,000 square miles including the cities and towns of Drummondville, Granby and other towns, Sherbrooke, St. John, St. Hyacinthe, $25,000,000,000 have been laid out in plants to say nothing of the houses and other adjuncts that run with the property. We are paying out in that district over $5,000,000 annually for labour. That district has made such a distinctive showing that it is known as the New England of Canada. Just last year we developed a $3,000,000 plant. We had*no idea of increasing the plant right away, but in a very short time we contracted for a million dollar addition. If we had made a larger plant in the first place, instead of waiting as we expect to wait until 1928, we would have been a year or two ahead. When we think of exporting power to a foreign country to build up towns and cities there, where labour will receive wages, dividends will be paid and communities will be built up, while we in Canada have a lone generating plant covering the needs of a dozen or so individuals and making us no better off for the development of that energy, it seems that every Canadian

Supply-Trade and Commerce
who understands this matter would say: No, we shall not develop power here to send over to a foreign country to build up that country at the cost of Canada. Take, for instance, the cost of coal and oil during the last few years. We look with pride on our white coal. Someone said this afternoon that the coal supply of the United States will be exhausted in less than forty years. The power generated by our great hydro-electric stations grinds our pulpwood, turns the great papermaking machines, and hoists and crushes the ores of our mines. But at the present time there is not enough energy in Ontaro and Quebec to look after the mining prospects in the Rouyn district. This power runs our electric railways, lights our streets and homes and operates innumerable domestic appliances.
There can be no question about the mistake of allowing this power to be exported, for vested rights are created and to discontinue the export would inevitably lead to international complications. It is a well known fact that the demand for electric power doubles every six years, some say every seven years, but whichever figure is correct there can be no doubt that all our available water-powers will be needed within t'he next twenty-five or thirty years. There may be great potential hydro electric power in the Hudson bay region, the Mackenzie district and the Yukon, but it would require railway facilities to develop these powers, and therefore they need not be considered in discussing this subject.


Arthur Meighen: What was the period?


Willis Keith Baldwin: All our available waterpowers will be needed within Canada in the next twenty-five or thirty years.


Arthur Meighen: I think the hon. gentlemen is a little long in that.


Willis Keith Baldwin: Well, I am very generous. I said the power demand at this stage doubled every six years.


Arthur Meighen: On that estimation which I do not counter at all, how much would be within the available transmission range area in Canada?


Willis Keith Baldwin: A very much higher
estimate was given here to-day by, I think the member for South York (Mr. Maclean); he said 40,000.000 horse power.


Arthur Meighen: That is where the hon.
member was led astray. The 40,000,000 is the estimate for the whole Dominion in all its reaches.


Willis Keith Baldwin: Inaccessible-
216J


Arthur Meighen: Inaccessible and accessible. That would include the water powers of Labrador, which it would be quite impossible to reach.


Frank S. Cahill: When will we get Labrador?


Arthur Meighen: We never will unless
this government moves faster.


Willis Keith Baldwin: Twenty-five or thirty
years is quite a space in the life time of an individual, but not of a nation. Something has been said to-night about a monopoly. I have a list of companies that certainly are not joined with any monopoly. They are: Chicoutimi Pulp Company, Price Brothers Company, Duke-Price Company, Southern Canada Power Company, Ottawa Hull Power Company, Montreal Ottawa Power Company, Laurentian Power Company, Ottawa Electric Company, and the Canadian International Paper Company. The Southern Canada Power Company I know perfectly well is. owned by the people it serves, but the member for Laval-Two Mountains (Mr. Ethier) stated that this was in the merger. No outsiders have any control over that company.
I am free to say that these nine companies are not comprised in any merger, nor are they controlled by any of the great power interests that have been mentioned to-night.
New demands are always arising for electric power and, as I have said, not one big power pliant has yet been completed before its entire output was sold. This afternoon some conflicting arguments were put forward in regard to that, some members contending that there was a surplus while others were just as emphatic in asserting that there was a shortage of horse-power in Ontario. I do know that boards of trade and other institutions that have any interest in public affairs in 1920, 1921 and 1922 sent resolution after resolution to all the hydroelectric power companies of Ontario asking for the withdrawal of the export of power from the Niagara district to Buffalo, Tonawanda and other places across the line, but this was found to be impossible. I do not think that we could attempt any such withdrawal of export without international trouble arising immediately, and this would be unthinkable, for it would destroy international good will. If we are to guard against such a' contingency in the future, we must look after our business now and not commit ourselves to any further contracts for the export of power to our American neighbours. That seems to me quite reasonable.
I have taken pains to secure the best authority on the subject in this country. I was in favour at first of an export tax on power and I asked the member for Vancouver Centre
3378	COMMONS
Supply-Trade and Commerce
(Mr. Stevens) if .there was anything to prevent our imposing an export tax of $20 per horsepower in case any .contract was not being lived up to by the United States. He answered no. That seemed to me to be as good as an embargo. But how couild we collect such a tax if under a contract with the United States they took umbrage and said "We will not pay it"? As I have said, to at once cut off their supply of power would bring about a state of war. Now, if for no other reason, I object to the exportation of power to the United States because I do not believe that once vested rights are created we could for a moment entertain the idea of cutting off the supply. For instance, when the city of Chicago, through their drainage canal, commenced to divert water from the Great Lakes they asked for about 4,000 cubic feet per second. It went on and on until they had diverted over 10,000 cubic feet per second; and we have had all the cities in the United States that border on the Great Lakes working to assist us in preventing that diversion, because it operated to the detriment of those cities as well as to the detriment of Canada. But the whole combination of interested people are unable to stop this diversion. Recently the Supreme Court of the United States handed down a decision that the city of Chicago has no legal right to divert this amount of water. The court ordered the city to stop using this amount of water within sixty days and to cut the quantity down to less than half of that amount. All parties who are against this diversion which is seriously affecting navigation by lowering the level of the Great Lakes, hail the decision of the United States Supreme Court as a victory, but does anyone think the city of Chicago will forthwith stop this illegal use of the waters which Canada owns? Experts, lawyers and engineers who know the situation, think that perhaps some time within twenty years they may stop using the waters, but not within sixty days. If they ignore a contract as between two individuals or corporations; if they ignore an international contract in that way, who can have confidence in their adherence to this decision? We know that our water-powers are a great asset to our country, as we have tried to illustrate in a few ways down in the Eastern Townships. We know that all over this country, particularly in the Ottawa valley, industry is languishing. In view of the fact that these international agreements have been ignored, that an illegal diversion has taken place and that there is no willingness to allow even one horse-power to revert back to Canada, I am emphatically

against the export of power to the United States unless it be under contract limited to a period of twelve months.


Arthur Meighen: The very large file which was brought down and for which this debate was postponed is not really yet known to or read by the members of the committee. I have not had an opportunity to read it; indeed, I could not do so without absenting myself from here. I am sure nobody else has; consequently I think the minister would be well advised not to delay further with this estimate, or, if he does, to permit the discussion to be resumed when there has been some reasonable opportunity, copies of the file being circulated, for hon. members who are most interested to read it. But if the minister will give a definite statement of policy now, to which the committee undoubtedly is entitled, this may be avoided, and I for one will not insist on any further delay for the purpose of reviewing this file. I will put what I conceive to be the pivotal questions to determine what the policy of the government is. First, is this government prepared to undertake to the House that there will not be issued by this government licenses covering a longer period than a year? Can I get an answer in the affimative to that? I do not see many signs of one, nor have I seen any signs of one in any of the speeches of the members of this government.


Mr. JACOBS:: Is it not a case of silence
giving consent?


Arthur Meighen: Giving consent to what? To the export?


Samuel William Jacobs: For twelve months.


Arthur Meighen: Silence gives consent for twelve months?


Samuel William Jacobs: No, to the issuing of no
licenses for a longer period than twelve months. Of course I' am not talking for the government.


Arthur Meighen: Will the Minister of
Trade and Commerce permit that answer to stand for the government?


Georges Parent: He has no application be-foie him. He cannot answer.


Arthur Meighen: I am applying now,
though I do not know what satisfaction it will be to the House to know after it is done.
I am without an answer. This is the second question:	Is this government prepared to
undertake that yearly licenses hereafter shall not be issued for new industrial purposes in the United States, or new municipal uses?

Supply-Trade and Commerce
Now both these questions are clear as day to every member of the government and this House. I will sit down and give the Minister of Trade and Commerce or the Acting Minister of Finance every opportunity to answer, and if I receive an affirmative answer in both cases, personally I shall be content.


Robert Forke: Would the right hon. gentleman state that second question again?


Arthur Meighen: The second question is
this:	Will the government undertake that
yearly licenses in addition to those already issued will not be issued for power to be used for new industrial purposes in the United States, or for new municipal uses; that is to say, for purposes that will entail the investment of large capital over there which would be seriously impaired if the license was ever withdrawn?


James Alexander Robb: My right hon. friend who asks this question was himself a member of the government that in 1912 or 1913 gave a license to the Cedar Rapids Company for export.


Arthur Meighen: I admit that, and I am going to say what I think ought to be done. Will the minister answer yes or no to these questions?


Thomas Andrew Low: Is the right hon. gentleman
through with his speech?


Arthur Meighen: I am through with the
questions, yes.


Thomas Andrew Low: The Prime Minister this afternoon, and also the Minister of Railways and Canals, endeavoured to make the position of the government as clear as possible. I do not think either myself or the Acting Minister of Finance could add anything to what the Prime Minister has already stated.


Mr. CRERAR:: Through an inadvertence
on my part I was unaware that this discussion was to come up to-day. I was not in the House this afternoon, and I should be glad if the Minister of Trade and Commerce could give me in a word what the position of the government is in the matter.


Arthur Meighen: I was in, and I do not
know.


Thomas Andrew Low: If my hon. friend will read
Hansard to-morrow he will find that out.


James Alexander Robb: The hon. member for Marquette may ibe surprised to know that we have a letter from the Minister of Public Works for Manitoba, Mr. Clubb, protesting against the recent tax on the export of power
because, he said, it would prevent the Water Power Commission of Manitoba from exporting power to Minnesota and Dakota.


Thomas Alexander Crerar: I am not surprised at all, because I was aware through the public prints that the Minister of Public Works for Manitoba had made representations to the government here of that character. But that does not solve the question. I want to say in all seriousness, speaking purely from the angle of my responsibility as a member of parliament, that the government of Canada- or the people of Canada, if you like, who can only speak through their government in the matter-should have a definite policy on this question of export of power. I think the time has come for that question to be considered and a conclusion reached upon it, and I should like, if I may, very briefly to give my reasons. In respect to this Carillon development, I know very little of it; in fact, I must plead guilty to knowing almost nothing about it outside of what I have learned in the discussion this evening. I was not particularly impressed by the argument advanced by the hon. member for Laval-Two Mountains (Mr. Ethier). The argument in favour of this development that it will bring in some forty or fifty million dollars worth of capital for investment in Canada does not, I am bound to say, appeal very strongly to me. I may hold rather peculiar views upon this question, Mr. Chairman, but one of the things that gives me some concern in my waking moments is that this Dominion of Canada of ours is being rapidly mortgaged to our great neighbour to the south, and I have never overlooked the fact that the person who holds the mortgage ultimately calls the tune. That is the first objection.
The second argument advanced by my hon. friend from Laval-Two Mountains was that this development was necessary to combat a monopoly in Canada. Now where is the monopoly in Canada, and how are you going to combat a monopoly in Canada by exporting power from Canada to the United States? I cannot for the life of me see the force of that argument. There may be a monopoly in Canada-I am not saying there is not-in the region that would be served by this power, but if there is, how on earth can you advance the argument that you are going to break that monopoly by exporting the power to the United States?


Samuel William Jacobs: Have we Dot enough for ourselves and for export too?


Thomas Alexander Crerar: I am going to deal with that in a moment. I am happy to anticipate

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what is in the mind of my hon. friend. I say that it is essential that the government should have a policy in the matter. The use and value of electrical energy in satisfying human needs, and in turning the wheels of industry, is only commencing to be recognized Thirty years ago it was practically unknown. All this vast development has taken place in that short period of time. Not only that, but as the hon. member for South York (Mr. Maclean) has suggested, improvements are constantly being made in engineering science and in the transmission of electrical energy, so that we may reasonably expect within a comparatively few yeare at any rate, that electrical power will .be distributed over far greater distances than are possible at the present time, and with much less loss.
I hold to this policy, and I dare say it is one that may not find support in some quarters of the House. I hold that the great water-powers of Canada are among the most valuable resources that this country retains. Now from the very nature of it, electrical energy on the rivers of Canada can only be developed by a large investment of capital, and I hold absolutely to this principle, that that development should be under public aegis, and should not be done by private capital. I do so for this reason: I recall, if I may give an experience of which I have knowledge, that in the province of Manitoba we had a private power development, the first that was undertaken and carried through in that province. In 1906 the citizens of the city of Winnipeg were paying 16 cents per kilowatt hour for power to light their homes, and were paying about the same rate for power to drive their machinery. The city of Winnipeg thought that rate was too high and it approached the private power company with a view to securing an arrangement for a lower rate. It was unable to make an arrangement with the power company, although it offered them a very advantageous bargain. I think as a matter of fact the power company held out for some ten or twelve cents per kilowatt hour, while the city wanted to negotiate on a basis of eight or nine cents. Failing to reach an agreement, the city of Winnipeg at that time undertook its own power development on the Winnipeg river, and brought that power into the city over a distance of eighty miles, and the day the transformer started to work the rate was three and one-third cents per kilowatt hour, with a ten per cent discount for cash, and it has remained at that point ever since. Not only have the citizens of Winnipeg had in consequence the great advantage of cheaper light and power, but the city by careful

management has built up very handsome reserves, and within the last year the revenue from the power made a contribution of $100,000 towards relieving the city taxation. That is an outstanding example, but one that can be duplicated anywhere in this country, and I say that this vast resource, the value of which is only beginning to be realized, should not be turned into private hands for private exploitation. I would have the water-powers in the valley of the St. Lawrence from the headwaters of the Great Lakes to the Atlantic ocean developed by public money. I would not have them distributed and sold by public money, but I would have them made available to every manufacturer and to every city in Canada that wanted to use that power, and I would give it to those manufacturers and to those cities at cost. In that way you would place our manufacturers and cur artisans in a much more favourable position to compete with the whole world.
There is one other aspect of this question of the export of power that should receive the most serious consideration of the government. I agree altogether with the argument of my hon. friend from Stanstead (Mr. Baldwin), who stated that within a comparatively few years-I think he put it at some twenty-five or thirty years, and that is a comparatively short period in the history of a country-all this power would be required in Canada. I agree with him. I look forward to the time when this country will have not the eight or nine or ten millions that it has now, but fifty or sixty or seventy-five or even one hundred millions of people, and that will come within the present century, or almost so, I believe. When that time comes, shall we not require all this power, and more, in Canada? And what position are these central provinces of Ontario and Quebec in with respect to the development of power? What other agency is there for the development of power in these provinces outside of the water in your lakes and streams? You can bring in coal from a foreign country, it is true, but you may have that shut off some day, and while you have coal down in the extreme east of Canada the cost of bringing that coal to develop electrical' energy, for instance, in the heart of Ontario is very considerable, and I have never had any very great hope that the needs of Ontario and Quebec in the matter of fuel, and particularly Ontario, can be met by the coal mines of Alberta or the mines at Sydney, for the distance is too great. And looking to the future, not to-morrow or the day after to-morrow,

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but twenty-five or fifty years from now, that question should give all forward looking Canadians food for thought. Twenty-five or fifty years from now you may be absolutely dependent upon the power generated from your lakes and streams to turn the wheels of industry in this province, which will then have five or six and perhaps ten times the population it has to-day.
Now what do you propose to do under the Carillon project? You propose to give a license to this company to export at least three-quarters of the power that is developed to the United States.


Thomas Andrew Low: Who proposes to do that?


Thomas Alexander Crerar: The promoters of the
scheme. I will hasten to set the mind of the Minister of Trade and Commerce at rest at once. I am not suggesting for one moment that the government have fallen before the tempter in this matter-not for a second do I suggest that. I hope they will not. But it is estimated, I understand that 400,000 horse-power will be developed under this project, and that 100,000 of that horse-power will be retained for Canadian manufacturers and Canadian users under certain conditions. The inference is that the balance of 300,000 horse-power will be exported to the United States. That will mean of course the building up of industries in the United States, and if I were a good protectionist in fiscal policy, which I must confess I am not, I think I would be utterly opposed to the export of power to the United States that will permit, for instance, the development of industries that will compete with industries in Canada. I can understand my hon. friends to the right. I have given up almost hope entirely that they will ever see the light in fiscal matters; but I did have some hope with respect to members of the government, and I trust they will give that aspect very serious consideration when they come to consider this application for the export of this power to the United States if it is ever presented to them.
But there is one other point: If you export power to the United States under a contract, or under the proposals that are connected with this Carillon development, will it not be extremely difficult in twenty-five years, or thirty years, or forty years fron now, when the franchise expires, to refuse permission to export the power to the United States? You have not only created, unless you are careful, unless the greatest care is taken in the terms under which these export contracts are made, conditions with respect to the people to whom the power is sold but going even furtherand I will refer to that in a moment-this country will find itself in the position, twenty-five or thirty or forty years from now, where it may be very difficult to refuse to allow the exportation of that power to the United States. What then should be the policy of the government in the matter?


Thomas Andrew Low: Will my hon. friend let me
ask him a question?


Thomas Alexander Crerar: Surely.


Thomas Andrew Low: Did my hon. friend ever see
a copy of the license granting the right to export power? It contains a clause that sets forth very clearly that the license is only for one year, and that the licensees must not enter into any contract which they will be unable to carry out if this contract is not renewed.


Arthur Meighen: Will the minister say he will always use that form?


Thomas Andrew Low: That is the form we are using to-day. *


Arthur Meighen: Will the minister say he will always use it?


Samuel William Jacobs: Does my right hon. friend
expect the minister to be there always?


Arthur Meighen: He is not earning a much longer time to-night.


Thomas Alexander Crerar: That gives a certain protection I am quite free to admit. But this development is in its infancy in Canada. I venture to predict that within the next fifteen or twenty years there will be opportunities presented for the development of all the water-power that may be running loose in Ontario and Quebec for export to the United States, and that is why it is necessary to settle on some definite policy. If power is exported to the United States in large volume I venture to offer this suggestion to the government: That they should make it clear, as a government, not only to the purchasers of that power in the United States in the person of private parties, but to the government of the United States, that this country reserves the right to withdraw that power when it sees fit to do so. Then you put the question beyond the possibility of any international complications later on. You must bear this in mind-that the United States is a country of 110,000,000 people alongside of us; it has over ten, yes almost twelve times the population we have got. American capital comes in here; it develops this power; it takes it across, and very often takes it across for use in industries allied to the capital that is

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invested here; and that continues for twenty-five, thirty or forty years. Thus you may have something in the nature of a vested interest grow up that would be very difficult to break; and I would like to see, for the benefit of those who may be guiding the destinies of Canada twenty, thirty or forty years from now, after we are all gone, something on record with the government of the United; States putting that aspect of the question beyond any manner of doubt whatever when the time comes that Canadh requires the power for her people.


Thomas Andrew Low: What stronger notice can be given than the words embodied in the act itself? The license is only for one year.


Thomas Alexander Crerar: That is true, but I believe that in the case of this project the minister hesitates to give that assurance. However, aside from that I offer my suggestion to the government, in all good faith, and not in any captious way because it does seem to me the matter is one of the very greatest importance that could probably be considered in this House.
I do not know that I have any further remarks to make on the question we are discussing. What I have said is fragmentary because it has been said almost wholly on the spur of the moment. I do not wish to place myself on record as being opposed to the export of power but I do wish to emphasize this point: It should be made clear beyond any question of doubt, to the people who are buying the power and I think it should be made a matter of record with the government at Washington, that this country reserves the right to withdraw this power whenever the government of the day in the future thinks it is necessary for the Canadian people.


James Alexander Robb: I do not think there is any difference of opinion on that point.


Arthur Meighen: I am afraid the hon. member for Marquette (Mr. Crenar) was scarcely careful enough in the last sentence. That is why his statement was seized on by the Acting Minister of Finance to say there was no difference of opinion. I have no doubt at all that in anything the government purpose doing there will be some Clause about the power to withdraw, but I know .this, that if they dio what is only too plainly in their minds the withdrawal will never be within the practical power of this country; and I am very suspicious from the conduct of ministers to-night that they do contemplate a further exportation of power from the Carillon falls, and exportation under circumstances that they cannot possibly

ever recall. Hon. members of this House could not but have witnessed the hesitating, vacillating way in which ministers arose and refused one after the other-four of -them altogether- the House any assurance at all that meant anything on this important matter. The questions I put and put repeatedly are plain and clear and only two. I asked the government if they will assure the House that they will not grant the export of further power from Canada other than on a yearly license. I cannot get an affirmative answer. Second, I asked them if they will agree that even on a yearly license they will not grant licenses for further export of power to be used for new industrial or municipal purposes over there.


James Alexander Robb: And I directed the attention of the House and the country to the fact that the gentleman who asked that question was himself a member of a government that gave the right to export power.


Arthur Meighen: I know I was, but is that an answer? Gould a minister possibly evade the question in any more suspicious form? Certainly I know the government of which I was a member-the government before that again, and this government-have granted1 up to now yearly licenses for the export of power. I am not prepared to say that the granting of these licenses has not run to too large a total-I am not prepared at all to say that-but I realize that in 1925 we know a great deal (more about the use of power and the rate of expansion than we knew in 1921, than we knew even in 1922 and 1923 when this government acted. But I am not speaking in any spirit of criticism of the past either as to this government or any government. We have to learn as years advance, but I do want an assurance as to the future that this government does not purpose to issue licenses other than by the yearly permit. In the past none has been issued other than by the yearly permit and we want an assurance that they will not change that. What is the inference the House must draw? Is this House going to infer from the conduct of the ministers that they take the attitude that they have not considered this matter?


James Alexander Robb: My right hon. friend will
agree with me in this that under the act as it is now we have only the right to export for one year. If we decide to export for any further period, which is not contemplated at the moment-that has been made clear two or three times-we must come to parliament for that purpose.


Arthur Meighen: No, the very contrary
has been made clear, and the very contrary

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is the fact. The act does not prohibit the government from doing it. It is the regulations, which they can change at any time, which prohibit them. That was made clear by the Minister of Railways. He may be wrong, but I think he is right. He said as far as this statute was concerned, which was passed years and years ago, this government could grant a license for a longer period than a year, but that under the regulations pursuant to the statute, they could not. I am putting it to the minister that that was his statement. The regulations are made by order in council and can be changed at any time. Now, if I have misstated the remark of the Minister of Railways, he will correct me. I hope the Acting Minister of Finance accepts the rebuke implied by the minister's silence.


Samuel William Jacobs: I do not think that is quite right. The minister has just taken his seat.


Arthur Meighen: I explained'it as soon
as he sat down.


Samuel William Jacobs: No.


Arthur Meighen: I will do it again. Would he assure the committee-


Georges Parent: It is a case where silence gives the answer.


Arthur Meighen: My hon. friend knows it is right.


Georges Parent: Yes.


Arthur Meighen: What I have stated is
correct.


Georges Parent: Yes.


Arthur Meighen: He stated that the statute gives the government power to export, and does not limit the government to the yearly licenses plan, but that the regulations made thereunder do limit the government, in that respect. This I apprehend is the law and I am confirmed in this by the member for Quebec.


Georges Parent: Not Quebec.


Arthur Meighen: I mean the member who has just spoken. I have no doubt the minister states the law correctly. The regulations are made by order in council, and this government can change those regulations at any moment, and unless parliament has an assurance that the government does not purpose doing so, and purposes abiding by the regulations that now exist, then the whole matter is just in the hands of the government and all our debate is wasted. Are we not entitled to an assurance? The minister cannot escape responsibility for giving an assurance by the assertion he has just made that they have to come to parliament, because they do not. Now in the failure even to get the assurance that they will abide by the yearly license system, and the failure still further to get the assurance that they will not issue licenses for export of power to be used for new purposes, industrial or municipal, the whole question is before parliament, and I propose to address myself to the discussion. The only policy the government appear to have is to get away with whatever they can, so long as the outcry in the country is not too loud, and, I shall start the outcry to-night and state where I stand. I do not believe that anything but the yearly license system should be followed by any government and consequently I think the time has come when we should cease to increase the export of power for any new purpose of any kind. I hope the government will follow the example I have given and make a clear, definite commitment on this point. I hope the debate will not end until they do. The hon. member for Marquette (Mr. Crerar) has advanced three reasons for his opinion. I do not think his last sentence expressed his real opinion. It was not in accord with his own opinion, and the same with regard to the remarks of my hon. friend from Stanstead (Mr. Baldwin). I will give my reasons for the assertion. First of all, I shall speak in criticism of the course we have pursued. I do not think under the circumstances any government, however wise and gifted with foresight, would have done otherwise. We now license the export of some 290,000 horse-power, but as respects quite a share of that no vested rights have grown up and no difficulty presents itself in reducing the total. For example, as respects the Bridge River Power Company of British Columbia, the cancellation of that license could not be followed, so far as I am aware, by the slightest objection on the part of any industry, and some of the other licenses are not being lived up to.


James Alexander Robb: What year was that license
issued?


Arthur Meighen: The Bridge River license was given in 1921 and renewed since that time. If it was not given then, it was given too long ago. The purpose of the interruption is hard to find.


Samuel William Jacobs: Was it under the present
administration or under the administration of my right hon. friend?


Arthur Meighen: Under both. If it was
not under both it is too long ago. The only license given under our administration ex-

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pired on the 31st March, 1922. So I say again I do not see what the purpose of the interruption was. It takes an awful small shadow for members of the government to get behind. So that I say we have reached a stage where, although licenses have been outstanding and may be to-day, totalling about that sum, the total of our export responsibilities can be reduced and I do not make complaint of any administration, either the Laurier administration or any other, for inaugurating the policy and pursuing it up to this time.


Thomas Andrew Low: When the government of which my right hon. friend was a member granted a license to the Cedar Rapids Power Company in 1915 for 100,000 horse-power-


Arthur Meighen: It was in 1912, I was
told.


Thomas Andrew Low: It was increased in 1915. When his government issued the license for 100,000 horse-power was my hon. friend aware of the length of the contract that the Canadian company had made with the American company? I am told there is a 99-year contract in existence. Was the government of my right hon. friend aware of that at the time?


Arthur Meighen: I do not know whether
there was such a contract or not. I do not know anything about the issue of the license, and I do hot think I was a member of the government which issued it, but I would like to know where that comes in. If I were making an attack upon any administration for the issue of licenses, the matter might be in point, but really I do not think it would be in point. All the government is responsible for is what it did, and if the Cedar Rapids Company made a contract for a period, extending beyond the period the government took responsibility for, that responsibility is theirs.
Now perhaps we can get to the point. Recent years have been illuminating as respects the value of power; still more illuminating as respects the multiplication of its uses. The asset that Canada has in its water-power could not be appreciated by any man however gifted, even four years ago, to say nothing of sixteen or twenty years ago, as it can be appreciated to-day. The hon. member for Stanstead stated that the experience of those years has shown that the use of power doubles every six years. I had thought the figure was seven, but at all events it is in the neighbourhood of seven. Now in Canada there is no 40,000,000 horse-power that can be taken into account as available for use in this Dominion. I suppose in one sense there are 
millions of acres of land available in Canada, if we count what is in Melville island. That is in the Arctic circle, and much of the water-power is of a character comparable with that, that is when the figure 40,000,000 horsepower is used. The best authority on that subject in this Dominion, he who has far the most to do with it, has, in a paper which he has written, estimated that the available horsepower in Canada is not 40,000,000 but 18,000,000, that is what is within transmission range of our population, and that as respects Ontario and Quebec the available waterpower within transmission range is only 12,000,000 horse-power. This power that we are speaking of, referring to Carillon, is, of course, for use in Ontario and Quebec, that is for Canadian use. To-day there is developed in Ontario and Quebec something like 2,500,000 horse-power. I ask the hon. members now to consider how long it will be, with a doubling every six years, before the whole available power of Ontario and Quebec is absorbed in this country. If we take the whole Dominion, the whole 18,000,000 horse-power available with 3,500,000 horse-power developed now, and if we take the rate of increase of the last four years and come to the conclusion that the hon. member for Stanstead (Mr. Baldwin) comes to or even to the conclusion that it is doubled every seven or eight years, we find the whole horse-power of this country absorbed within a space of twenty to twenty-five years. Does anybody imagine that any American concern is going to invest in the United States the capital required for the installation of industries to use that horsepower if it knows that horse-power is going to be withdrawn as it is required for use in Canada and all withdrawn within twenty-five years? There is not' an American capitalist outside of bedlam who would consider that for a moment. There may be American capitalists who will sign agreements that the power is withdrawable; but if they do, they know it is withdrawable on paper, but that never in actual fact can it be withdrawn. If the government sign any contract or pursue a policy which encourages the utilization of this power within the United States, they do so knowing that we shall require the power year by year and need to extract or withdraw it year by year from them,-the whole of it within a quarter of a century, and, as regards the Carillon power, the whole of it within fifteen or even twelve years. They know they will not be able to do so, no matter what may be the letter of the contract they enter into. Does the minister dispute my argu-

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ment? Though so far as any writing or law goes, we can withdraw the whole 250,000 horsepower that is going over there now, does he think we could do it practically if we set to work?


Thomas Andrew Low: No, because some of these contracts that 'have been entered into are for ninety-nine years.


Arthur Meighen: Does he think we could as regards those that have no ninety-nine or nine or two year terms?


Thomas Andrew Low: So far as the government are concerned, they can do so at the renewal of the leases.


Arthur Meighen: The minister knows as
well as he is sitting in his seat that he could not withdraw a bit of the power. Let him test it out by way of example and see where he is going to land. We have some experience in this matter. We remember the days towards the end of the war, the corner we were in then and the pressure upon us. We were face to face with facts. Anyone who was through that experience knows where he is going to land when he attempts to withdraw power on the basis of which industries have developed and get their life.


Frank S. Cahill: What are the facts that
the leader of the opposition is speaking about?


Arthur Meighen: They have been related
by the hon. member for West York (Sir Henry Drayton). We were face to face with the fact that we could not withdraw power when industries in Ontario and Quebec were starving for power.


Frank S. Cahill: Because a contract had been signed.


Arthur Meighen: No, because there were
yearly licenses issued. The government had made no contract. The government was perfectly free to withdraw the license.


Thomas Andrew Low: Why did my right hon. friend
continue to issue licenses if that was the case? In 1921, he issued one to the Bridge River Power Company.


Arthur Meighen: We were past that time. The minister says that we should not have issued licenses in 1921. Perhaps we should not. Certainly if we knew then what we know now, we would not have. As a matter of fact, this talk of the power of 1921 is all moonshine for it does not exist to-day or the license can be withdrawn on the merest notice, 'because the power itself has never been developed. All this talk about 1921 is all nonsense. It is only an attempt to draw
a herring over the trail. The question is: What should be the policy of Canada as to the future? That, however, is the only question on which we can get no word from the government. Every dollar that goes into a power development, of course, is spent in Canada, no matter whether it is borrowed from another country or not. But for every dollar that is spent in a power development, six dollars in any case and usually more are spent in the building of industries that are to use that power. While 13 per cent goes in capital investment for the power development, 86 odd per cent goes in capital investment for the industrial structures that use the power. As regards employees, after the plants are down, it takes just 2.2 per
11 p.m. cent to run the power plant and 97.8 per cent to run the plant that is built on the power. Does the minister think he is standing true to Canada if he fails to assure the committee that we are not going now to launch further into a policy, enter a new course altogether that we did not even pursue in years gone by, a course which will have the effect of draining the very life blood of this country? With the export of power this country has tried, a further export in the light of the facta to-day is simply to mortgage our future and to commit a crime against ourselves and posterity. Will the government answer tonight that they do not purpose to depart from the form that has been used even in years when we did not know what we know to-day as respects the value of this asset? Will they give us that assurance? Will they give us as well the assurance that they are not going to export power under conditions which will result in the building of new industries over there or the utilization for new .municipal purposes over there of the power .that they license? If they do not, certainly there should be some definite expression of opinion on the part of parliament as to the course the government pursues.


Frank S. Cahill: When did the right hon. gentleman become a convert to the new policy which he proposes to-night, that no power should be exported?


Arthur Meighen: Conversion with honestminded people is a matter of growth. Suffice it to say that I am there, and I hope the hon. member for Pontiac gets there very soon.


Frank S. Cahill: That is about the answer
I expected. But my right hon. friend is trying to badger the government into an immediate answer. He says: Why not give us an answer now?

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Arthur Meighen: I stated my position.


Frank S. Cahill: My right hon. friend gave
us an answer offhand. Did he consult with his colleagues about this answer?


Arthur Meighen: Not at all.


Frank S. Cahill: They have al'l independent
action?


Arthur Meighen: I think they are just
as independent as my hon. friends opposite.


Frank S. Cahill: My right hon. friend would
like to leave the impression that he is trying to speak for the whole Conservative party.


Arthur Meighen: He can take that assurance.


Frank S. Cahill: He wants the government
also to give him an answer and he is badgering them to do so to-night. Have they not got the same right to consider this as my hon. friend and allow it to develop in their minds?


Arthur Meighen: I would be sorry to
arrest any development in their minds.


Frank S. Cahill: My hon. friend is jumping at the conclusion that the government of Canada has the right to do everything in regard to this power. The water-powers of Canada are vested largely in the provincial governments.


Arthur Meighen: If so, the government
should have no difficulty in answering the questions.


Frank S. Cahill: My hon. friend jumps at
conclusions-something which it is not good even for governments to do. He did so in 1915 or 1916, when he gave this lease for 190,000 horse-power, and he did it on several other occasions when he rushed this country into various commitments.


Arthur Meighen: I did not give the lease.


Frank S. Cahill: My right hon. friend takes
the ground that this matter is for parliament to decide, and he thinks we should give a decision to-night regardless of provincial rights. But that is no reason why the government should pay any attention to him whatever; indeed I think they will be displaying good judgment in ignoring his demand.


Arthur Meighen: How will the provincial
governments be affected by an affirmative answer by the government to both questions?


Frank S. Cahill: Are not the water-powers
of the country largely vested in the provinces? If the provinces want to export hydro-
electric power, is my right hon. friend ready to say that this parliament should interfere and prohibit such export? Of course, he might do that.


Arthur Meighen: The question does not
arise, because the provinces have spoken and say they do not want the power exported.


Frank S. Cahill: They are willing to export it.


Arthur Meighen: They do not want this
export.


Frank S. Cahill: My hon. friend said they
had a request from the province asking to export power.


Arthur Meighen: No, protesting against
the export tax.


Frank S. Cahill: Is Ontario protesting against it?


Arthur Meighen: Certainly.


Frank S. Cahill: On what grounds, that it
is provincial property?


Arthur Meighen: Not at all.
Mr. CAHILL It is on that ground that they question the right of the Dominion government to interfere. I am not saying that my right hon. friend's argument, so far as the future use of power in Canada is concerned, is not right. It is just possible that we should not allow the export of power. But I am saying he is making the wildest kind of guess in asserting that all the power of the Ottawa river and its tributaries will be developed in the next ten or twelve years, because today power can be had right here at less than $20 per horse-power.


Arthur Meighen: I did not say that.


Frank S. Cahill: He said within ten or
twelve years.


Arthur Meighen: I said within transmission line area inside fifteen years.


Frank S. Cahill: Let us make it fifteen years.


Arthur Meighen: That is right.


Frank S. Cahill: I will allow him to change
his mind. There is lots of power to be developed along the Ottawa river wito'.n a distance of a hundred miles both ways from Ottawa. My right hon. friend thinks this is all going to be used within a few years. But to-day power is offered for less than $20 oer horse-power right here in Ottawa, and he can come to my constituency and get it at $12 per horse-power.

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Samuel William Jacobs: Not political power I hope.


Frank S. Cahill: That is the great trouble
with the Carillon development; it is political in his mind.


Arthur Meighen: My hon. friend from
George Etienne Cartier (Mr. Jacobs) refers to the Carillon power.


Frank S. Cahill: The province of Quebec
maintains that they have the right to levy an export charge on power generated in their province, so they can control the situation without my right hon. friend's worrying about it. But he seems to have run into a mare's nest. He has found something, or imagines he has.


Arthur Meighen: I think so.


Frank S. Cahill: And his friends in Montreal, who have practically complete control of all the other power that is now developed, are very much opposed to anything which might lead to opposition. My hon. friends from Marquette (Mr. Crerar) and from West York (Sir Henry Drayton) made much of the impossibility of correcting the present price by exporting power. It would 'be possible by having a clause inserted in the agreement that this 100,000 horse-power will have to be sold in Canada at a reasonable price. Would it not be more to the benefit of the surrounding country to have that power sold at a reasonable price than to have those now in control of the water-power of Quebec charge practically what they like in order to exclude competition?


Thomas Alexander Crerar: Mr. Chairman, I would say to my hon. friend1 that if this power is to be developed and used in Canada, his argument applies. But the argument of my hon. friend from Laval-Two Mountains (Mr. Ethier) tonight was the very reverse; it was all in favour of exporting this power, and he suggested that only 100,000 horse-power would be retained in Canada. That is the argument I was dealing with.


Frank S. Cahill: It might regulate competition to a large extent if the surplus power not required now were exported. But my right hon. friend also seemed to make a point of the fact that this is a yearly lease. Now, I cannot see why a yearly lease would be as good as a ten, twenty or thirty year lease. It is taken for granted naturally that if the lease is from year to year it is practically a perpetual lease, and it is so regarded apparently by the 'people who are using it. That applies in my own province to timber
limits, where a yearly lease is regarded as a perpetual lease. On the other hand, a lease for twenty, thirty or forty years would be terminable and the people themselves would have a chance to make other arrangements. I think a terminable lease for a period of years would be much safer than a yearly lease, because at the end of the term you would expect to get the power back.
The other night my hon. friend from Wesl York (Sir Henry Drayton) made much of the steam plant in Toronto. He will fina that there is a steam plant right here in Ottawa, and there is a surplus of power being developed and used here at the present time That steam plant is operated to take care of the peak load, which can be done much cheaper than by increasing the capacity of the hydro-electric plant. So a steam plant is not so harmful as my hon. friend tries to make it out to be. If the overhead is less than that for the development of the peak load by other means, why steam power is used, and those cities in the United States which are taking our power would probably find themselves in a few years in a position where they could use steam power in lieu of the power taken under' these contracts. But, as I say, I am not favouring export nor am I opposing it; I have an open mind; but J did wonder how the leader of the opposition came to this conclusion that made him so insistent on a yes or no answer to-night, an , immediate answer on what he himself says is an " all-important question." Unless they do that he is going to start something. And he did, and he finished it.


Arthur Meighen: Will the member give us an estimate of how long it will be before he can come to a conclusion?


Frank S. Cahill: I have already concluded.


Mr. STEVENS:: Mr. Chairman, I brought this question to the attention of the minister last Friday. Unfortunately I was out of the House to-day attending the aimless Ocean Rates committee and therefore have missed most of the discussion. But since last Friday I have carefully looked up the act under which the government is authorized to export this power, and also the regulations. I want to present to the government a viewpoint prompted by the remarks of the hon. member for Pontiac (Mr. Cahill). The legislation which empowers the government to act in regard to the export of power was passed in 1907. I think every hon. member will admit that the development of electrical energy in 1907 and

Supply-Trade and Commerce
its general commercial use was in such a condition of partial experiment-I was going to say, infancy-that it is not a safe guide for our actions to-day. In other words, the problem of to-day is the outgrowth of a number of years; it is one of those things that develops gradually, perhaps unnoticed, until we get to a point where there is some sudden and large development in view, and then we come to a realization of the direction in which we are heading. That condition is before us now. Here ds a huge proposition facing Canada-I am going to refer to it in a little more detail in a moment-and Canada, not only the government, is now determining what its course and its policy will be in a few years. I therefore suggest to the government that this whole busines with respect to further licenses for the export of power should be held in abeyance until the act under which we are at present working can be carefully surveyed and studied by parliament. I do not think it can be done this year, but the government should make a survey of the matter during the recess and next session we might revamp the whole act and bring it up to date. Let me review the act' very briefly. It is very brief and general in its terms. It is 6 and 7 Edward VII, chapter 16, assented to on April 27, 1907. It has some very simple provisions. .First, no person shall export power without a license. No person shall construct a power line for export without a license. The Governor in Council-this is an important provision-may grant licenses upon such conditions as he thinks fit, and such licenses shall be revocable upon such notice as the Governor in Council may deem reasonable. In other words, the whole thing is placed in the hands of the government and the Governor in Council. Then it provides that such licenses may be limited as to quantity; it does not say "shall" be limited. The government is empowered to-day under this act to grant a 120 year lease-issue a 120 year license-or a 99 year, or a 40 or a 20 year license. I cite 120 for a certain reason which probably is better understood by the government than by most members. Then, the Governor in Council may make regulations not inconsistent with 'the act, and so on. Now, there are certain regulations that are also not up to date; they were adopted the same year that the act was passed, as the date upon those I have in my hand indicates. I want to refer briefly to the regulations. One clause refers to the quantity proposed to be exported; it must be shown in the license. There is another clause, an important one, which provides that the license shall be revocable at the will 
of the Governor in Council if the licensee refuses or neglects to comply with any of the conditions from time to time imposed by the Governor in Council. At once you see that the revocability, to use the term of the license, depends on whether or not the licensee violates the conditions that are imposed upon him. In other words, if he observes the conditions his license is not a revocable license, so far as that particular provision is concerned. Then it says that if the electrical energy, gas or fluid is required for the use of Canadian producers in Canada, any such license shall be revocable upon such notice to the licensee by the Governor in Council as the Governor in Council deems reasonable in such cases. What does that mean? If there seems to be a need of power in Canada, then it is the wish or the will or the whim of the Governor in Council which must determine whether or not the license shall be cancelled. Under this regulation the matter is entirely in the hands of the government.


George Perry Graham: Of course governments have to carry on between sessions of parliament, and there is no other power to cancel but the Governor in Council. It is possible that action could not await the meeting of parliament.


Henry Herbert Stevens: Quite true. I am not saying this is wholly wrong; I am simply pointing out the facts. Both the regulations and the act are of a character that require careful revision. The other clause I desire to refer to is this:
Where a supply of electrical energy is provided in any part of Canada by the contractor for export and home consumption, then the price charged to any person or company in Canada by the contractor shall not exceed the price at which the electrical energy is sold by the contractor for export in like quantities under similar circumstances.
Now, I understand a contract was entered into by one of the power companies many years ago under which power is being exported to the United States at $12 per horsepower-I am subject to correction, but I think I am stating it correctly-whereas the same company is selling power in Canada at double or treble that amount. They could not sell in Canada at the figure to-day; it is an old contract. The Governor in Council is empowered to say to that company: You must sell your power in Canada at the same rate as you do for export. The government will not suggest for a minute that they could or would make any such suggestion to the Hydro-for I think it is a subsidiary of the Hydro which is affected in the case to which I refer. That clause in the regulations, there-

Supply-Trade and Commerce
fore is of no value where the contract price is below what is a reasonable figure for the sale of the power.


George Perry Graham: There is a distinction to be made between companies who entered into contracts before this law was passed and those who did so subsequently. The former were not supposed to presume that such a law would be passed, although of course theoretically they are subject to it if the government wished to make it applicable to them. But is it reasonable to suppose that any company that entered into a contract after the law was passed in 1907 would know that they would be subject to the terms of that statute at any time that the Governor in Council thought it necessary to enforce the regulation providing for a limit of one year.


Henry Herbert Stevens: That is quite true. I am mentioning this not by way of complaint or criticism of the government, but rather to lay before the committee the difficulties which undoubtedly have developed and to offer a warning against a continuance or increase of those difficulties. I want to say a very few words in regard to the present situation. I admit frankly that necessarily my information is not very definite, but I think it comes from a sufficiently high source to justify my offering it to the committee. There is in existence to-day, I am told, a very large and powerful syndicate of American and Canadian capitalists who are desirous of developing a considerable amount of electrical energy and a large number of hydro-electric powers in eastern Canada for the purpose of supplying power to the United States and eastern Canada. The idea is to develop it on lines that will ensure to certain sections of the United States an ample supply of power. Involved in this is the American interest in the international waterway so I am told. Now then we ought to be very careful how we proceed. I am also informed that the first unit they desire to develop is the Carillon power; that is to be the first in a number of units of power development. They are asking -this is in their programme, so my information goes-for 400,000 horse-power from the Carillon development, whereas it is well known, so I am also informed by competent engineers, that the maximum to be developed from the Carillon power will be 200,000 horsepower. If that is the case, they are seeking to tie the country to an export of 400,000 horse-power, the balance of which will have to come out of some other power plant in some other section. This, I believe, is fairly near to the mark. If it is near to the mark,
then I say it behooves the government of Canada to pause before they become a party to it. The issuing of a permit or the entering into of an agreement which will obligate this country to the export of power for any given period of years to my mind is a very, very serious menace to the industrial future of this country, a most serious menace, and I really do not believe that the government or parliament or the people of Canada appreciate how serious it is. I do not think we can understand it until we have given it a great deal more study than we have at the present time. It is beginning to filter into our minds through the reports that are made by engineers. I admit that many of these reports are conflicting, but some of them are alarming, and some of them are exceeding significant in the evidence and the data they produce. Therefore I again put it to the government that I think it would be a fair statement for them to make to parliament that nothing will be done for one year, or until parliament meets again, until the whole question of power development and power exportation can be fully studied and the legislation which is now on the statute books be revised and brought up to a point where it will properly and adequately safeguard Canada's interests. I do ask the government to-night to stay its hand in regard to any agreement, and in regard to the issuing of any license or the entering into of any understanding with any company that will commit this country ,to participation in this great scheme which I have not the slightest doubt from the information I have [DOT] is already well under way and in a stage of fairly advanced development.


William Lyon Mackenzie King: I may say the government have already taken that position.


Henry Herbert Stevens: I am very glad to hear the Prime Minister say that. Do I understand that the government's position is that they will do nothing for a period of one year until parliament has had an opportunity of studying this problem, which I think is the proper course to pursue?


William Lyon Mackenzie King: The government has stayed its hand for many months in this matter, and it does not intend to proceed with any haste whatever.


Henry Herbert Stevens: I want to say to the
Prime Minister-and I am not captious at all, I welcome his observation-but I would welcome much more the assurance that nothing will be done along the line I have indicated, that is in committing this country to anything more than the bare annual license.

Supply-Trade and Commerce
I add to that, Mr. Chairman, and I put this to the Prime Minister, it is what I stated the other evening, and what I have already repeated to-night, that within the period of the last twenty-five years, and the last twenty years in particular, there has grown up a condition which was not foreseen when this act was passed in 1907, under which the government permits licenses to be issued for the export of power. Therefore I say to the Prime Minister further than what I have already stated, I believe the time has come, and we are warned by present events, when we should refrain from issuing even any further licenses for export, and in saying that I am not condemning the government for the licenses that have been issued or criticizing the government of Sir Wilfrid Laurier or the Conservative government that followed in any sense; I am not criticizing any government, but I say that conditions are such that we are warranted as a parliament, and the government is the executive of parliament, in staying our hand absolutely from issuing any further export licenses.


William Lyon Mackenzie King: I might say
that since the government has been in office, at no time has a license been issued beyond a period of one year. That is the policy upon which the goverment has been proceeding, and that is the policy upon which it intends to proceed.


[Stage Direction]
Item agreed to.
Henry Herbert Stevens: I would respectfully suggest that this has been a very full day both here, where we have been discussing a very important question, and in the Ocean Rates committee, where we had .two sittings, and I think we could very well now rise and report progress.


William Lyon Mackenzie King: I had an understanding with the right hon. leader of the opposition (Mr. Meighen) that he would allow us to call an item in the estimates of my hon. friend the Acting Minister of Finance.


Henry Herbert Stevens: Whatever understanding
there was will certainly be carried out.
Finance-salaries, $341,840; contingencies, $40,000; Inspector General of Banks, salaries and contingencies, $50,000.


James Alexander Robb: There is a reduction of thirty-six employees, and a reduction in amount of $27,500.


Henry Herbert Stevens: I might say to the minister that we desire to discuss the Auditor General.


James Alexander Robb: I will allow that later, if we
can pass this item.


[Stage Direction]
Item agreed to.
Progress reported.
On motion of Mr. Mackenzie King the House adjourned at 11.30 p.m.
Wednesday, May 20, 1925