1931-05-19

[Stage Direction]
On the orders of the day:
Hon. CHARLES MARCEL (Bonaventure):: Mr. Speaker, would it be possible for the different departments to arrange to table returns in duplicate, otherwise we will have to continue to go to the trouble of having these papers copied. A duplicate could easily be made at the time the original is being prepared.



BEAUHARNOIS POWER CORPORATION


Mr. ROBERT GARDINER (Acadia):: Mr. Speaker, I desire to ask leave of the house to move, seconded by the hon. member for Bow River (Mr. Garland), the adjournment to discuss a definite matter of urgent public importance respecting order in council P.C. 422, dated March 8, 1929, passed under circumstances that amount to an abuse and infringement of the privileges of this house and constituting a serious reflection upon the honour and integrity of the parliament of Canada, and also to discuss the unauthorized and illegal action of the Beauharnois Light, Heat and Power Company in proceeding to construct the Beauharnois canal in contravention of the terms of order in council P.C. 422, dated March 8, 1929, and the plans provided therein, and in further contravention of the terms of the British North America Act, the building of the said canal being brought about in such manner as unjustly to deprive the people of Canada of a vast part of the national domain, thus causing a great and irreparable loss unless immediate action is taken by the government in respect thereto.


Mr. SPEAKER:: Has the hon. member the leave of the house to move the adjournment.
The Clerk Assistant having stated that thirteen members had risen:


Pierre Édouard Blondin: As less than twenty, but not less than five members have risen in their places, I will now put the question as to whether the hon. member has leave to move the adjournment of the house.


Mr. GOTT:: I was paired with the hon. member for Kent, (Ont.) (Mr. Rutherford). Had I voted I would have voted for the motion.


Mr. HEPBURN:: In view of the importance of this matter, I wish to announce that I am paired with the hon. member for North Huron (Mr. Spotton); otherwise I would have voted for the motion.


Mr. HEENAN:: I have a standing agreement with the hon. member for Digby-Annapolis (Mr. Short), so that when either one of us is not in the chamber, the other will not vote on any question. But had I voted, I would have voted for the motion.


Mr. MURPHY:: I was paired with the hon. member for West Edmonton (Mr. Stewart). Had I voted I would have voted for the motion.


Mr. WEIR (Melfort):: I was paired with the hon. member for Melville (Mr. Motherwell). Had I voted I would have voted for the motion.


Mr. BELL (St. John):: I was paired with the hon. member for Nieolet (Mr. Dubois). Had I voted I would have voted for the motion.


Mr YOUNG:: I was paired with the hon. member for South Renfrew (Mr. Maloney). Had I voted I would have voted against the motion.


Mr. CANTLEY:: I was paired with the hon. member for Richelieu (Mr. Cardin). Had I voted I would have voted for the motion.


Mr. SMITH (Cumberland):: I was paired with the hon. member for Antigonish-Guys-borough (Mr. Duff). Had I voted I would have voted for the motion.


Mr. McDADE:: I was paired with the
hon. member for Laprairie-Napierville (Mr. Dupuis). Had I voted I would have voted for the motion.


Mr. PERRAS (Translation):: I was paired with the hon. member for Stanstead (Mr. Hackett). Had I voted I would have voted for the motion.


Charles Marcil: I was paired with the hon. member for Argenteuil (Sir George Perley).


Mr. ROWE:: I was paired with the hon. member for Beauce (Mr. Lacroix). Had I voted I would have voted for the motion.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Speaking on a question of privilege, there is, I believe, in the taking of votes in the house a custom whereby the Assistant Clerk is expected to look first to the Prime Minister on the government side in order amongst other things that the views and wishes of the administration in the matter of recording a vote may be made known. When I saw the Prime Minister (Mr. Bennett) did not rise when the yeas were called, I assumed that he was taking a view somewhat similar to my own with respect to this matter, namely, that if the matter were one of great importance some notice should have been given in advance of a motion of this kind, so that members *who were interested and who 'had a special knowledge of the matter, might be present. When the Prime Minister did not rise, I assumed that such was his point of view. I could not understand how a matter relating to a transaction of two or three years ago, could just at this moment become one of urgent public importance; I therefore felt that I would join with him in seeking to preserve what I believe to be t'he best procedure under the rules of the house in the matter of debate and governed my actions accordingly. That was the reason why at the outset some of us on this side of the house did not support the motion but conformed to the order in which votes are generally taken in giving our vote only after the other side of the house had recorded its vote.


Right Hon. R. B. BENNETT (Prime Minister):: Speaking to the question of privileges of the house I may say that the Assistant Clerk did not look to his right when the vote was called. He called first the hon. member for Acadia (Mr. Gardiner). It is my opinion that only questions of urgency should be the subject matter of a motion to adjourn the house. My personal opinion is that this is not a matter of such urgency.

Beauhamois-Mr. Gardiner


Mr. McINTOSH:: Why did the right hon. gentleman vote for it?


Richard Bedford Bennett: Just a moment. The chair having decided that it was a matter in which the hon. gentleman should have leave; the chair having called upon twenty members to rise, I not being one of that number and the house having indicated clearly its desire that the motion should be put, t'he will of the house should govern. But I still think this is not a matter of urgency within the rule. I merely desire to make that statement, because, after all, the will of the house governs with respect to the matter, and the house decided that leave should be given.


Mr. POWER:: I rise to a point of order. When such prominent members of the house as the leader of the apposition and the Prime Minister press the opinion that this is not a matter of public importance, I raise the point of order as to the possibility of Changing the recorded decision.


Pierre Édouard Blondin: The question cannot properly be raised at this time; it is not a point of order. Subsections 3 and 4 of standing order 31 cover the .matter completely, and I would refer the hon. member to the same.
And leave having been granted:


Robert Gardiner: Mr. Speaker, I appreciate very much the sentiment which the house has expressed in answering the question affirmatively and by such a large majority. It is unfortunate that on a question of this kind, unless you want to throw the whole matter into the purely political arena, you must adopt this method of obtaining a hearing before the house. It would have been quite possible to bring the matter up on a motion to go into supply, but unless you confine the discussion to an amendment to the motion to go into supply you will not have the question you desire to bring up discussed in the manner in which you wish it to be discussed. Furthermore, the government of the day always feels that an amendment on a motion to go into supply is a motion of want of confidence, and therefore I chose this method rather than a motion of want of confidence.
On the 22nd May of last year I asked leave of the house to move the adjournment to discuss a definite matter of urgent public importance in connection with the hydro electric development of the Soulanges section of St. Lawrence river. On that occasion I reviewed, more or less inadequately, the history of its development and I hope I succeeded in convincing hon. members that this development was brought about and was being proceeded with in a manner which called for action by the house. The then Prime Minister (Mr. Mackenzie King) listened throughout the debate and did not say anything in reply. The present Prime Minister (Mr. Bennett), then leader of the opposition, took advantage of that occasion to make some observations, and I shall refer to what the present Prime Minister is reported then to have said. As reported at page 2419 of Hansard of May 22, 1930, the present Prime Minister is reported as saying:
But what position are we in? Tile power that once belonged to Canada and to all the people-and I have a very strong conviction when I use those words-has now passed irrevocably out of our hands. The price at which that power is to be sold for Canadian development is to be passed upon by three managers for the next ten years. That is what it means.
Let us look at this thing fairly. There are the names of the persons concerned; some of them are friends of mine. Does that deter me from the discharge of my public duty here? It does not. My public duty here is to point out just what I am pointing out to this country, that the power development of the great natural resources of power and energy that infuse life into factories and make them efficient instruments for the purpose of making this country great, can come about only by a realization that this development must be under terms and conditions that enable such power to be available to the Canadian people on the cheapest possible terms. These resources are held by us from Providence in trust, not for tihe few but for all; they are held in trust for the Canadian people and not for the few'. I am the last man who would deny to the man wdth enterprise, initiative and courage just compensation for his efforts, but I ask any hon. gentleman sitting opposite, whether he be a capitalist or otherwise, to read the figures given this afternoon and say whether this country of ours has had a fair deal. We are the beneficiaries; the crown in the right of the Dominion has been the trustee; they and they only could grant the permission, and when they granted that permission did they impose a single restriction or condition that would secure to posterity and to this generation as well the use of that great natural power given to us by Providence, the extent and value of which is such that it should make Canada equal any nation in the world?
That is the question. When we talk as we have been talking about the necessity for protection and why it is necessary to put ourselves on terms of even and fair competition w-ith those who are carrying on mass production in other countries, wo must remember that one
Beauharnois-M r. Gardiner

of the most valuable factors, namely, the great hydro-electric possibilities of Canada, is now passing out of our hands and cheap production is then rendered less and less possible. I say, sir, that while I sat in my place and listened, as I did this afternoon for the first time, to those speakers and remembered what I have read as to the' prices at which securities upon the stock exchanges are being sold, I realized that in its possibilities this was one of the most gigantic enterprises this country has ever had to consider, and the question is well worthy of the consideration of parliament even if it were the day before dissolution. I am only sorry that it should not have been considered before this. I have been recreant to my duty in that it has not been so considered and after all I heard during this discussion this afternoon I realized that fact.
I do think, and I say it to the Prime Minister, that this matter should be the subject of judicial inquiry:	It should be inquired into;
there have been statements made which necessitate that procedure being adopted. Why should $3,500,000 be spent for little or nothing? What is the reason for this vast financial scheme? Why, there are now several thousand shares apparently available for sale on the market at $15 per share which, in itself as you will observe, involves a vast sum of money. What is the reason for these things being done without our having some knowledge of just what Mr. Sweezey meant when he pointed out what had to be done in order to secure the results which he has attained?
Go to the United States and watch what they are doing there. We talk about our institutions; the United States Senate lays bare everything. What are we doing in this country? We are pussyfooting about matters of this kind, because men think that your friend or my friend may be associated with this matter, and we have not the courage to stand up and talk about it. Well, sir, I value my position in public life, but I would rather be relegated to private life and be there forever than remain silent on an occasion of this kind.
That is what I have to say; let there be no misunderstanding about it. It may mean that I will be subjected to the threats of the great financial powers that are behind this venture. I snap my fingers: that is my answer.
I confess, Mr. Speaker, when I contemplate this matter and when I regard all that is involved in it, not to thousands but to millions of people who some day will fill this great valley around the St. Lawrence, which might become one of the greatest industrial centres in America-the Ruhr of Canada; when I contemplate what those figures meant this afternoon, my feeling of resentment gets the better of me. I ask hon. gentlemen if this thing is to be tolerated. It rests with us, with each of us, to say whether or not it shall be tolerated, and I believe that in the end the common sense of the Canadian people will prevail and that, great and powerful though the promoters have been, they are not sufficiently powerful to control the common sense of the people of Canada.

I just want to mention now in passing that the Prime Minister was undoubtedly mistaken in saying that "the power has now passed irrevocably out of our hands." I am sure on more mature reflection he will agree with me that that power still belongs to us and not to the Beauharnois Light, Heat and Power Company, and that he may still secure for the people of Canada their heritage which Sweezey and his friends are attempting to acquire by fraud and conspiracy.
Hon. members will recall that it was pointed out on May 22 last that the Beauharnois Light, Heat and Power Company first applied to the Dominion government for permission to divert the whole flow of the St. Lawrence river through the Beauharnois canal, beginning with an initial 40,000 cubic feet per second and the approval of its plans to effect such diversion.
This application was so preposterous that the then Liberal government was forced to refuse to entertain it, but only after the most vigorous protests had been made against it. Hon. gentlemen will note that the then Minister of Public Works (Mr. Elliott) in an apparent endeavour to help Mr. Sweezey and his senatorial friends, limited the protests to the question of navigation only, thus preventing any protests being made with respect to other and most important features of this transaction.
Having failed, however, to secure the approval of the original application by which they would get the whole flow of the river, these promoters, with their real object still in view, agreed to amend their application. The application was amended and finally assumed this form:
The application of the Beauharnois Light, Heat and Power Company now pending before the governor in council is purely and simply for the approval of plans for hydraulic development which will be subject to a condition that not more than 40,000 cubic feet per second shall be diverted from the river-from lake St. Francis to be returned to lake St. Louis and used for power purposes by the company between these two points: and any condition that the government may exact, in any wording satisfactory to the government, involving that limitation is accepted in advance by the applicant. If the engineers think that the plans should be altered to meet this declaration the company will submit to any such alteration.
It is beyond question that the amended application of the company was for the purpose of securing from the Dominion govern-

Beauharnois-Mr. Gardiner
ment authority to proceed with a hydraulic development which included the right to divert water through the canal the use of this water to produce power, and the approval of the remedial works; the company being specifically limited, however, to a maximum diversion and use of 40,000 cubic feet per second.
The government had no authority to receive or to approve of this application under the powers conferred on it by the Navigable Waters Act or any other act, and of this I am satisfied that some members of the then government should have been aware.
The government in receiving and granting this application conferred on their friends no rights whatsoever. The order in council is illegal because, let me repeat, the government had no authority under the Navigable Waters Act to grant the right to divert and use this water for power development, and the whole Beauharnois development is without real legal foundation and contrary to the laws and treaty obligations of Canada.
But there is another serious aspect to this situation and of immediate interest to the people of Canada as a whole. By one of the terms of the lease of imaginary and wholly non-existent rights which this company secured from the province of Quebec, the company acquired a lease of:
The rights of the province of Quebec to such ' part of the hydraulic powers of the St. Lawrence river that can be developed between lake St. Francis and lake St. Louis, through a derivation canal on the right (southern) shore, haying a maximum flowing capacity of 40,000 eubic feet per second, the province reserving the ownership and free disposition of the surplus.
Their lease, size of their canal, the order in council, their plans filed, all absolutely limit them to a diversion of 40,000 cubic feet per second.
Does this lease and the order in council represent the honest and real intentions of those concerned? Was it an honest transaction? What are the real facts? Scarcely had the ink dried on this order in council when these very same promoters proceeded to violate not only the letter but the very spirit of the provincial lease and of the order in council. They prepared plans that provided for the diversion of the whole flow of the river; they sold their bonds on the representation that they would eventually get the whole flow; and they are now building without authority a canal which will take the whole flow, of the river. Further, they have acquired 13,000 cubic feet from the Montreal
Cottons. To add insult to injury, they have secured this past winter 30,000 additional cubic feet from Quebec, and are awaiting a favourable opportunity to ask for another order in council from this government.
It is apparent the then government and these Beauharnois promoters entered into an agreement which they never intended should be carried out. I say the then government was not evidently sincere in limiting the diversion to 40,000 cubic feet, because it is plainly evident from subsequent events that they knew when they imposed this limitation on the company that neither they nor the company ever intended to abide by the terms of this order in council, a single condition of which, designed to protect the people, has not been observed or enforced. Later in the same year a second order in council was passed giving to this company the right to divert this
13,000	cubic feet which they had bought from Montreal Cottons.


Mr. EULER:: When?


Robert Gardiner: Late in 1929. I have the evidence under my hand. You see therefore, Mr. Speaker, that when the first order in council was passed it was quite evident that the promoters were not satisfied that they were going to be limited to 40,000 cubic feet. Therefore, when they had an opportunity of securing a further order in council which permitted them to acquire this 13,000 cubic feet, they proceeded to do so, and the government obliged them in that regard. I am afraid, Mr. Speaker, that the government of the right hon. the leader of the opposition was unfortunate, in a measure, in somewhat misleading the people of this country in the passing of this order in council, P.C. 422.
The Dominion government and these Beauharnois promoters were either guilty of conspiracy or the government was negligent in respect to the duty it owed to the people of Canada to maintain for the people their possessions and in preventing these from being stolen or illegally acquired by others.
But there are other matters to consider. I ask the Prime Minister, fully believing that he has given this subject serious consideration since May 22 last, if there is any doubt in his mind as to the illegality of the foundation of this whole Beauharnois development from its very inception? And more especially so, as a result of the Montreal Cottons deal and in view of the action of the Quebec government in attempting to grant the company a lease of the power resulting from an additional 30,000 cubic feet which
Beauharnois-Mr. Gardiner

means, coupled with other facts, that the company will continue to secure additional water until the whole St. Lawrence river between lake St. Francis and lake St. Louis is dewatered and flows through the Beauharnois canal, or, as the corporation's advertisements say, "forms a new river." I, for one, have no doubts about it.
In addition to this serious phase of the situation we have the amazing spectacle of a number of members of the Senate, all appointed by the former Prime Minister, no doubt in his efforts to reform that august body, identified with this transaction by which they and the other promoters of this enterprise were able to secure possession of the national domain to the nauseating extent of hundreds of millions of dollars, without having one dollar of their own money invested in the enterprise and without giving to the people of Canada one actual dollar's worth of value for the concession. They may say "we are giving the people of Canada a ship canal 600 feet wide, 28 feet deep and 15 miles long." Mr. Speaker, that is an outrageous lie. What deception! An investigation will show that they had to dig this power ditch that size in order to get the necessary quantity of water for their power production; even their literature says so. It was not dug at all, as they and the then government represented, for a navigation canal and given to the people.
If there is any doubt about this deception will the right hon. the Prime Minister and will the right hon. the leader of the opposition explain to the people of this country why it is necessary to have the Beauharnois canal 600 feet wide when the Welland canal which is to form part of the deep seaway is only 310 feet wide? I challenge contradiction and proof thereof, of this statement.
The association of these senators with this enterprise does not make for good government, nor dees it tend to create confidence in the minds of the people of Canada in governmental institutions, and no greater danger confronts us to-day than the loss of such confidence. The circumstances which resulted in these senators becoming identified with this enterprise must be inquired into. Senator McDougald was a member of the national advisory committee on the St. Lawrence waterway. The committee reported to the government on January 11th, 1928. This report was divided in two parts-a majority report and a minority report. Senator McDougald was found among those who subscribed to the majority report. This

is what Senator McDougald, with others, reported and advised the government to do on January 11th, 1928, page 19, paragraph 4:
We believe that the first concern of this committee should be, and of the government will be, the national aspects of the proposed undertaking, and we regard it as most desirable that the initial development take place in the purely domestic section of the river lying within the province of Quebee. We believe that if a reasonable time were permitted in which to enable the resultant power to be economically absorbed the development of this national section would be undertaken by private agencies able and willing to finance the entire work including the necessary canalization, in return for the right to develop the power.
Hon. gentlemen will note the date, January 11, 1928. On April 18, 1928, the Globe and the Mail and Empire published certain articles suggesting, among other things, that Senator McDougald was interested in the Beauharnois Power Company, the Mail and Empire adding a suspicion that Senator McDougald was one of the three men on the advisory committee who advised the government to develop the national section first by private agencies. Senator McDougald felt it necessary to rise in his seat in the Senate on the 19th of April, 1928, and, to use his own language, repel the above implication reflecting on his honour and integrity both as a member of the Senate and as a private citizen. His remarks in respect to the Globe are reported in Hansard as follows:
I want to say here, and to say it with emphasis, that I do not own a dollar's worth of stock in this enterprise, and have no interest in or association with that company in any way, shape or form.
And further:
Speaking for myself, I want to make a further positive and absolute denial of the implications and suspicions of the Mail and Empire. So far as I myself am concerned I cannot add too much emphasis to my denial of the suspicions and aspersions which these despatches have cast upon me as a member of the advisory committee, as a member of this honourable body and as a private citizen. Perhaps I may take some slight comfort from the fact that this sort of thing seems to be one of the ordinary penalties of public life.
The people of Canada to-day are asking if that statement made by Senator McDougald is true. If it is not true, then Senator McDougald deliberately deceived the Senate and the people of Canada. I am simply going to state the facts which are known to the public. Senator McDougald was interested in the promotion of the Beauharnois Light, Heat and Power Company in 1927 before the legislative assembly of the prov-

Beauharnoie-Mr. Gardiner
inee of Quebec. The company subsequently, in 1928, again applied for and succeeded in getting a revision of its charter. In 1929 the company came to the Dominion government and succeeded in securing the passage of order in council P.C. 422. In October, 1929, the Beauhamois Corporation Limited purchased from the Beauharnois syndicate the shares of the Beauharnois Light, Heat and Power Company. The members of the Beauharnois syndicate received for each unit they held forty shares of the corporation stock and $150 in cash. I have this information before me in a document entitled The Financial Post Survey of Corporation Securities. Senator McDougald received 208,000 Class A common shares and $780,000 in cash from the Beauharnois syndicate for his share in an enterprise which several months previously he had disclaimed any interest in or association with. I have also under my hand documentary evidence as to the allocation of these shares, because I have had the share registers searched, and I have an affidavit under my hand as to the result of the search. He received securities valued, according to their prospectus, at over S30,000,000. That is the statement they make in their prospectus, that the potential value of these 208,000 shares is over $30,000,000.


An hon. MEMBER:: Potential.


Robert Gardiner: That is what they state, and they have given the figures to show it, too.


Mr. GARLAND (Bow River):: They are
conservative in their estimates.


William Daum Euler: May I ask my hon. friend
a question?


Robert Gardiner: I do not want to be
interrupted, but the hon. member may proceed with his question.


William Daum Euler: All right.


Robert Gardiner: Senator McDougald is
the chairman of the enterprise. He is also one of the three members who have complete charge of it for the next ten years. What do hon. members think and what will the country think of the facts surrounding Senator McDougald's connection with this enterprise? If it was a reflection on his honour and integrity as a member of the Senate or as a private individual to be suspected of or referred to as being interested in the Beauharnois Company on April 19, 1928, the Canadian people are wondering just * what bearing his present position will have in this respect.
Furthermore, the press despatches carry the startling news that these same gentlemen have been accused of corrupting the administration of justice in the province of Quebec in relation to certain matters in dispute between themselves and another company, in whose affairs I have not the slightest personal interest. A dispute arose between the Beauharnois company and this other company, with the result that a lawsuit was started in the courts in the city of Montreal. As to the outcome of the lawsuit I am, of course, entirely disinterested. But in the course of the proceedings last winter Chief Justice Greenshields-one of whose relatives is identified with the Beauharnois corporation-interfered with the trial, as stated in the press, by withdrawing Mr. Justice Patterson, the trial judge who had started the hearing of the case, and substituting in his place Mr. Justice Boyer.


Mr. JACOBS:: Mr. Speaker, the hon. member is making an attack upon the Chief Justice of the province of Quebec.


Robert Gardiner: No, I am not.
Mr. LaVERGNE: He is not the Chief Justice of the province of Quebec anyway.


Samuel William Jacobs: He is acting as such. The hon. gentleman must not be allowed to proceed with his attack.


Richard Bedford Bennett: Mr. Speaker, some years ago I drew attention to a similar case. I have followed the hon. member with great care and I notice he said "as stated in the press." If he quotes from the press he is not making an attack against the judge. The former Speaker ruled against me when I raised the question in the course of an attack made by the hon. member for Labelle (Mr Bourassa) on the late Lord Chancellor Cave.


Samuel William Jacobs: Does that make it correct?


Richard Bedford Bennett: No, but that was the ruling of the Speaker at that time.


Robert Gardiner: Mr. Speaker, I have the press reports before me from which I drew my information.


Richard Bedford Bennett: I think the hon. gentleman would be well advised to leave out any reference to the judges of this country, but I cannot control his speech. If he had made the statement on his own authority I certainly think it would be the duty of the Prime Minister of the day to challenge the statement and draw the attention of His Honour to it; but he said-I followed him with extreme care-"as stated in the press."
Beauharnois-Mr. Gardiner


Mr. LAPOINTE:: Does my hon. friend suggest that an hon. member can attack the judiciary merely by referring to attacks in the press?


Richard Bedford Bennett: Far from it. I am merely pointing out that on a former occasion, like the hon. member for Cartier (Mr. Jacobs) now, I felt it my business as a lawyer to interpose, but the Speaker ruled against me. The attack on that occasion was against Lord Chancellor Cave-a much worse attack than this.


Ernest Lapointe: But that is different from an attack on a present member of the judiciary in this country.


Robert Gardiner: I think if hon. members will wait until I have concluded what I desire to say on this point it will clear the matter up.


Samuel William Jacobs: No, we will have the ruling of the Speaker.


Richard Bedford Bennett: I suggest, Mr. Speaker, that the hon. gentleman would be well advised to leave out any reference to the judges of this country. It does not strengthen his case or add to the dignity of the discussion so to refer to the judiciary.


Pierre Édouard Blondin: The hon. member must not cast reflections upon the judiciary. It is not any more in order to read a newspaper attack than to make the attack first hand.


Robert Gardiner: In explanation, Mr. Speaker, may I say that I have never cast any reflection upon any judge in anything that I have stated to-day. I am merely calling attention to a situation that should be investigated and cleared up.


Richard Bedford Bennett: That is not the way to do it.


Robert Gardiner: Well, the circumstances surrounding the removal of Mr. Justice Patterson by Chief Justice Greenshields led the counsel who was acting for the plaintiff to protest in open court against what he characterized as an improper interference with the administration of justice.


Samuel William Jacobs: Are we going to listen to this after the ruling made by your Honour?


Robert Gardiner: I am speaking of the charges made by counsel in open court.


Samuel William Jacobs: There is a way of attacking the judiciary.


Pierre Édouard Blondin: In Beauchesne's Parliamentary Rules and Forms, quoting Bourinot, under standing order 41, will be found the following:
293. (j) Members are prohibited from casting reflections upon the conduct of judges of superior courts unless such conduct is based upon a substantive motion.
It is further dealt with in paragraph 305 under this standing order:
All references to judges and courts of justice and to personages of high official station, of the nature of personal attack and censure have always been considered unparliamentary, and the Speakers or the British and Canadian houses have always treated them as breaches of order. Members have even been interrupted in committees of the whole by the chairman when they have cast an imputation upon a judicial proceeding. The proper course for persons who feel called upon to attack the conduct of a judge is to proceed by way of a petition in which all the allegations are specifically stated so that the person accused may have full opportunity to answer the charges presented against him.
I hope the hon. member for Acadia (Mr. Gardiner) will keep these rules in view.


Robert Gardiner: Mr. Speaker, a certain accusation was made in open court by the counsel for one of the parties to the action. I am not saying whether his accusation is well-founded or not, but I do say that this is a situation which must be cleared up. Some action should be taken, first of all, to find out whether the counsel was correct in the statement he made in open court before Chief Justice Greenshields. If on investigation it is found that he was making an incorrect statement he should be punished. That is what I am coming to.


Richard Bedford Bennett: That is a provincial court; that is not this parliament. Further, was there not an appeal taken in that case and- was the appeal not disallowed? I am only speaking from memory, because I do not follow all the proceedings in the courts, but if that is the case, surely this house can only deal with an allegation against any judge in the manner and form provided by law that is by impeachment, and not in the manner which has been adopted by the hon. gentleman.


Robert Gardiner: I have made all the remarks I desire to make in that connection. It does appear to me, however, that this is a matter which should be investigated, to see whether or not it is correct. I stated that our judges should be protected from persons making statements which they cannot substantiate, and that is my attitude in the

whole matter. Hon. members are absolutely wrong when they make the statement that I am attacking a judge.
When a member of parliament profits by the exploitation of the public domain, Mr. Speaker, to the extent of approximately $30,000,000, and when this exploitation is only made possible-


Mr. MERCIER (St. Henri):: What does the hon. gentleman mean by a member of parliament.


Robert Gardiner: I said a member of parliament ; I did not say a member of this house. When this exploitation was only made possible by concessions granted by a government at the head of which was one of his intimate friends, the right hon. leader of the opposition, then Prime Minister, a situation is created which demands the most far-reaching and thorough judicial investigation. To neglect or refuse this investigation will forever destroy the confidence of the public in the integrity of the House of Commons and of the Senate. Furthermore, to neglect this demand for judicial investigation will forever identify the Prime Minister as a party to the machinations of this group. Perhaps I can do no better than put it' in the words used by the hon. member for South Toronto (Mr. Geary) last year, in speaking on this question. He said:
I would like to ask the government to consider whether it is not now in the position of lending itself to the schemes of these promoters.
Furthermore, in view of the fact that this same company of promoters saw fit to acquire from the province of Quebec the right-which I submit is ultra vires-to enlarge their canal from six arpents to twenty-one arpents, after this order in council was passed, it becomes doubly apparent to the people of Canada that the government of the right hon. Prime Minister in particular will have lent themselves to these schemes if it fails to conduct an investigation, to stop this work at once, take over this development and declare it to be a work for the general advantage of Canada.
I asked the Prime Minister if he would produce the report which he secured last fall ' as a result of the departmental investigation which he ordered. The right hon. gentleman refused to produce this report, taking advantage of the old doctrine that this report was privileged and that it was not in the best interests of the -people that it should be produced. I say to the right hon. Prime Minister with the greatest respect that he was wrong in taking that position. That report will dis-
Beauharnois-Mr. Gardiner
close the utter fraud of these promoters in inducing the then government to pass order in council P.C. 422, dated March 8, 1929, because in that order in council the company is limited then and for the future to a canal six arpents or 1,100 feet wide, and this report discloses amongst other evidences of fraud the fact that they are building a canal twenty-one arpents or approximately 4,000 feet wide. I ask the right hon. Prime Minister if this statement is not true. If it is true, what explanation has he to make of his action in withholding from the people of this eountry fbe knowledge that this company has deliberately disobeyed the order in council, and in withholding from the people the certain knowledge that this canal company is now building a canal wide enough to absorb the whole flow of the St. Lawrence river instead of
40,000	cubic feet? I am sure the people of this country will feel very much aggrieved.
I have under my hand indisputable evidence that this company acquired from the province of Quebec, the imaginary right to build this 4,000 foot canal on March 20, 3930, over one year after P.C. 422 was passed, and that they are building a canal the plans of which never have been approved, a canal totally and entirely different from the canal referred to in and approved by the order in council. The people of this country are asking and demanding to know all the facts in connection with this Beauharnois development. They are demanding the reason why it was possible for the government of the right hon. leader of the opposition to have granted certain concessions whereby the Beauharnois promoters were able to make such vast and staggering profits out of the public domain. They are demanding to know how it was possible for certain members of the Senate, who are intimate friends of the right hon. leader of the opposition, to acquire the public domain to the extent of tens of millions of dollars, without giving anything in return.


William Lyon Mackenzie King: Now. Mr. Speaker, my hon. friend is going a little too far. He is not only reflecting upon members of the other house who are not in a position to speak for themselves, but he is now attempting to reflect upon members of this house. I would draw your attention, Mr. Speaker, to standing order 41, which says:
No member shall speak disrespectfully of His Majesty, nor of any of the royal family; nor of the governor or person administering the
Beauharnois-Mr. Gardiner

government of Canada; nor use offensive words against either house, or against any member thereof. No member may reflect upon any vote of the house, except for the purpose of moving that such vote be rescinded.
My hon. friend's remarks this afternoon, for the most part, have been in the nature of reflections, not merely upon individuals but upon both Houses of Parliament as well. He has reflected upon the judiciary, and upon members of the Senate, and now he is reflecting upon members of the House of Commons. As a parliamentarian he knows as well as anybody else that if he has a charge to make against any person and wishes an investigation, all he has to do as an hon. member is to stand up in his place and say he is prepared to make a charge and is ready to put his seat in jeopardy in order to prove it. If he will make a statement of that kind with regard to any hon. member or if he will make a specific charge against any individual, I will join him in asking the government to see that there is the fullest investigation carried on, but unless he is prepared to put his own seat in jeopardy and deal with the matter in an open, manly and parliamentary way, he should not be permitted to violate the rules of the house in this way.


Pierre Édouard Blondin: The hon. member for
Acadia (Mr. Gardiner) will not be greatly handicapped in stating the facts and the circumstances which exist without making reflections upon those who were perhaps responsible for the state of affairs.


Some hon. MEMBERS:: Oh, oh.


Pierre Édouard Blondin: I intend to say just what
I did say, without any reflection on anyone or without insinuating that this house or any member of this house is in any way responsible for what the hon. member for Acadia is complaining of. I do suggest to him. however, that he can make his statements of fact without casting reflections upon anyone, or contravening the rules in this regard.


Robert Gardiner: I intend to make my
statement of fact as best I can. In my judgment I did not cast any reflections upon the right hon. leader of the opposition. I stated merely that the leader of the opposition (Mr. Mackenzie King) was a close personal friend of Senator McDougald, and I believe that statement is correct. I do not think that is any reflection.


William Lyon Mackenzie King: I am a close
personal friend of the hon. member for Acadia (Mr. Gardiner) but I would not stoop to make insinuations of the character which he is making at the present time.
(Mr. Mackenzie King.]


Robert Gardiner: Mr. Speaker, I am
afraid that my time has nearly elapsed.


Paul Mercier: The hon.
member should make his suggestion.


Some hon. MEMBERS:: Order.


Paul Mercier: No hon.
member is allowed to read his speech.


An hon. MEMBER:: You read all of yours.


Robert Gardiner: The hon. gentleman
does not know the difference between an hon. member reading his speech and following his notes closely. As I stated before, I do not know how much time I have left and I will close my remarks with an appeal to the Prime Minister.
I realize that this is a very important matter. A year ago the Prime Minister felt it was his duty as the then leader of the opposition to suggest a judicial investigation. I realize that I am placing a mess on the doorstep of the Prime Minister, but I think that mess should be investigated and cleared up at the earliest possible moment. I have considerable evidence under my hand to which time will not permit me to refer. A commission should be appointed and I would be very pleased to go before such a commission and give the evidence in my possession of this whole transaction. The matter is too important for this government to permit it to go any further. I ask the Prime Minister and his colleagues to order an investigation of this matter as soon as is humanly possible.


Richard Bedford Bennett: Mr. Speaker, the question raised by
the hon. member for Acadia (Mr. Gardiner) is one of great national importance. The St. Lawrence river is more than a river, it is the most important waterway in Canada and one of the most important waterways in the world. The Beauharnois canal enterprise was brought to the attention of this house last year and I made certain observations at that time as to my appreciation of the importance of the matter and of the desirability of the facts being known to the public because of the allegations then made. However, I pointed out that securities had been sold and were in the hands of innocent purchasers. Upon the advent of this government to power and before I went to England I arranged that certain information should be obtained and on my return that information was available. I stated the other day that I did not believe it was in the public interest to bring that information down because it was only what one might term an interim report.

Beauharnois-Mr. Bennett
The St. Lawrence river is undoubtedly being dewatered if the cubic feet per second provided for by the original lease granted to the company by the province of Quebec, plus the leave to take 30,000 second feet additional is given effect to. The river is being dewatered and the water turned into a canal which is not being built as a canal but as a communication between two lakes formerly provided by the river itself.


Mr. STEWART (Edmonton):: That would total 70,000 second feet?


Richard Bedford Bennett: Yes, that would be the
result of the two grants. I have steadily endeavoured, without in any sense being hurried, to secure additional information with respect to the matter. I have been furnished with the opinions of leading counsel that under the Navigable Waters' Protection Act there is power to do certain things and that the jurisdiction of the federal government in the premises is solely as defined by that statute. I have not had time to consider these opinions in detail but when the hon. gentleman says that the canal is larger than was provided for by the order in council issued by the late government he is stating the fact; the engineers' report clearly indicates that.
I deprecate very greatly the references made by my hon. friend to the judiciary. I do not think it serves any useful purpose at this time, although perhaps it may serve one purpose. The government is of the opinion that from the facts which have been stated in this house both last year and this year, an investigation into this matter should take place without delay. I propose to prepare a motion to submit this question either to the consideration of the standing committee on banking and commerce or to a select committee to be appointed by the house. The hon. member may indicate in what terms he would like the order of reference to be made and I promise him that the government will give to his suggestions its closest attention and consideration. The matter is too important even when considered from the standpoint that it only concerns differences between individuals or what profit individuals may or may not make, to be allowed to remain as it now stands. Without anticipating what may be said or making any aspersions upon the good faith or interest of those who have been engaged in the undertaking, we will prepare the necessary motion to submit the matter either to a standing or a select committee of this house.
Mr, E. J. GARLAND (Bow River): Mr. Speaker, it is with considerable pleasure and satisfaction that I have listened to the promise of the Prime Minister (Mr. Bennett). I had felt for some time that the departmental investigation which was undertaken and which he now refers to as an interim investigation was hardly in keeping with the promise made to the house last year of a full judicial inquiry. While we may be satisfied for the time being with an inquiry by a committee of parliament-I understood the right hon. member to suggest a committee of parliament?


Richard Bedford Bennett: Yes, I said either a
standing committee or a select committee. Parliament is in session and the observations made this afternoon with respect to the judiciary make it impossible to impose upon any judge of this country a burden which under the statutes he is not required to assume. *


Edward Joseph Garland: I am inclined to believe that an investigation by parliament might on the whole be even more satisfactory than a judicial inquiry, although it is quite possible that a judicial inquiry may arise out of the investigation by the committee.
The right hon. gentleman who has just taken his seat referred to the Navigable Waters Protection Act as being the authority under which the order in council was passed which permitted the diverting of these waters by the Beauharnois Light, Heat and Power Company. I submit that there is not a single line, sentence or section in that statute which gave the late government power to divert this water. I have examined the matter somewhat closely, and I find the different events appearing in a regular fashion. The order in council P.C. 422 at the bottom of page 1 refers to the lease granted. This was referred to by the hon. member for Acadia (Mr. Gardiner) and reads as follows:
The rights of the province of Quebec to such part of the hydraulic powers of the St. Lawrence river that can be developed between lake St. Francis and lake St. Louis through a derivation canal on the right (southern) shore, having a maximum flowing capacity of 40,000 cubic feet per second, the province reserving the ownership and the free disposition of the surplus.
To put it in simpler language, all that this part purported to do was to lease to the company 500,000 horse-power to be developed from the St. Lawrence river between the two lakes which I mentioned. Before that power could be developed, it was necessary for the

1742	COMMONS
Beauharnois-Mr. Garland (Bow River)
company to secure certain other things somewhere else, and so the company came not to parliament, but to the Dominion government and secured the passage of the order in councli to which reference has been made. Let us look at the order in council and find out what they asked for. They asked for the following:
First: approval of the proposed development.
Second: in connection therewith they applied for all such authority from the Dominion government as might be necessary to divert water.
Third: they applied for authority to use an "initial" flow of 40,000 cubic feet per second, pursuant to the provisions of section 5 of the Navigable Waters Protection Act.
Fourth: the company applied for approval of the plans and site of works to be constructed in the St. Lawrence river with respect to the diversion of the flow of water mentioned above.
Fifth:	After the happening of certain
events and the doing of certain things, the company was to have the right to enlarge its canal and divert through it and utilize for the development of power all the flow of the St. Lawrence river, if their original application had been granted.
All of the original application is embodied in the order in council, and the only alteration that has been made in it is in the amended application which is also in the order in council. The amended application limited the flow to an actual and final flow of 40,000 cubic feet per second. I wonder whether hon. gentlemen realize the implication of that. The company had asked for the right to launch a project for the development eventually of the entire power of the St. Lawrence river. They amended that application, and in the amendment they said in effect: Very well, since the objections have arisen, we shall content ourselves with applying for only 40,000 cubic feet. That is all they got; that is all the order in council purported to give them. As has already been said, they have gone ahead and prepared plans and done actual work for the production of more power than that, but that is aside from this particular point. This amended application was really brought about by the refusal of the late government to grant this company power to divert the whole flow. The company amended their application on representations made. The amended application reads at page 5:
The application of the Beauharnois Light, Heat and Power Company now pending before the governor in council is purely and simply 
for the approval of plans for hydraulic development which will be subject to a condition that not more than 40,000 cubic feet per second shall be diverted from the river-from lake St. Francis, to be returned to lake St. Louis, and used for power purposes by the company between these two ponts; and any condition that the government may exact, in any wording satisfactory to the government, involving that limitation, is accepted in advance by the applicant.
In the amended application there is not a word regarding navigation; it deals solely with power.
Therefore we now arrive at this point where we can ascertain and determine what the Dominion government undertook to accomplish by this order in council. We ascertain this:
First: they approved the hydraulic development.
Second: they approved the plans of the company for the proposed hydraulic development.
Third: they assumed the power to grant to the company the right to divert water from the St. Lawrence river through the proposed canal.
Fourth: they attempted to grant to the company the right to divert a total flow of
40,000	cubic feet of water per second from the St. Lawrence through this canal.
Fifth: they approved the plans and site of the company for remedial works that became necessary as a result of such hydraulic development, the remedial works being that part of the development which necessarily had to be constructed in the St. Lawrence river itself.
Sixth: in the amended application, the company applied for the use of a flow of 40,000 cubic feet. That means they asked the Dominion government to grant them the right to the use of 40,000 cubic feet of water for the production of water power.
I assert again that the Navigable Waters Protection Act does not give any government authority to authorize the diversion and use of 40,000 cubic feet or 50,000 cubic feet or any flow from the river.


William Daum Euler: It is quite useless without that power.


Edward Joseph Garland: The authority to grant this is vested somewhere, but that authority is certainly not vested in the executive council; it is not vested in the government. It is vested, as I shall show in parliament itself, and only by act of parliament could these alleged rights or privileges be extended, because there is no legislative sanction or authority for what has already been done. I

Beauhamois-Mr. Garland (Bow River)
submit that most respectfully. In order to make this clear, let us examine the Navigable Waters Protection Act. "Work" is clearly defined in section 2 whereby work is said to include:
any bridge, boom, dam, aboiteau, wharf, dock, pier, or other structure, tunnel or pipe, or telegraph or power cable or wire and the approaches or other works necessary or appurtenant thereto, or any work, structure or device, whether similar in character to the foregoing or not, which may interfere with navigation.
Section 4, which is really the purpose of the act, enacts:
No work shall be built or placed in, upon, over, under, through or across any navigable water unless the site thereof has been approved by the governor in council, nor unless such work is built, placed and maintained in accordance with plans and regulations approved or made by the governor in council.
It will be seen that first of all the works are clearly defined. They must be works of such a character that they involve one or both banks of the river. Secondly, they must be in the river or across the river or under the river, or, in short, 'between the two banks of the river. By what stretch of the imagination can it be argued that the act under which this authority is incorrectly claimed, gave the government power to authorize the diversion of water and to sanction the plans for the construction of a development which for its greater part is a long distance from the river? Of course I am not a lawyer and that may be my excuse in this connection, but I cannot understand where one can find in any section of the act any authority whatever for the passing of the order in council. There is no question that the proper authority, as I said a moment ago, is parliament. This whole matter should have come before us as an act of parliament. It should have been dealt with by the house and not by order in council.
In connection with this there are other points that might be taken up. It might be argued, for example, that the government had the right to give sanction to or approve plans for the works. The remedial works only could be involved, and remedial works in this case mean works in the river. Remedial works are not the canal, but this order in council purports to give sanction for plans for the creation of a canal, its curvature, depth, width, breadth and all the rest of it. In my opinion-and I am only a layman-my reading of the act would indicate that the government had no right whatever to approve plans for this canal. They could approve remedial plans in the river itself if such plans wer.e proper to the 22110-nil
undertaking and satisfactorily safeguarded navigation, but that is the limit to which the government could have gone under the Navigable Waters Protection Act. Let us examine that phase of the matter for a moment.
The plans for the remedial works have, in my opinion, and so far as the evidence to my hand goes, never yet been sanctioned. I doubt very much whether the Prime Minister or the Minister of Public Works can inform the house that satisfactory plans for remedial works have ever been placed before the department. They certainly were not sanctioned by the order in council, for the order in council itself points out that the plans already submitted-


Richard Bedford Bennett: No plans of any shape
or form in connection with Beauhamois have been approved by this administration.


Edward Joseph Garland: I am glad
to hear that. I could hardly understand how an administration that took cognizance of the legal facts in connection with this matter could approve of these plans for remedial works. On page 6 of the order in council I find the following:
With respect to the effect of works on river or rapids navigation-
That is the remedial works:
-the committee

That is, I imagine, the committee of the cabinet:

finds that the diversion of 40,000 cubic feet per second will adversely affect navigation in the Soulanges section and that the works proposed by the company for rectification purposes in this section are not satisfactory.
Could language be clearer? In the order in council itself reference is made to the plans submitted and referred to on page 3 at the bottom of the first paragraph of the present application of the Beauhamois company, these plans consisting of twelve sheets of description. These are the plans to which the order in council refers, and the order in council says that the plans now submitted, and upon which the order in council is presumed to be based, are not of a kind that are satisfactory and that they will not protect navigation. Then it goes further and says:
The committee finds, however, that with modifications therein there is a reasonable likelihood of the present condition being largely recovered. It is pointed out by the committee that these works are largely experimental, are relatively costly, and, in view of the possibility of the balance of power being developed in a short time, the expenditure involved is likely to be lost before many years.
1744	[DOT]	COMMONS
Beauhamois-Mr. Garland (Bow River)


William Daum Euler: Is the hon. member not
aware that the engineers passed upon the question whether the diversion of 40,000 cubic feet per second would interfere with the navigation of the stream?


Edward Joseph Garland: All I know is that under the authority of the Navigable Waters' Protection Act the plans approved should have been without question sufficient to protect the navigation rights of the St. Lawrence, but in the order in council itself it is admitted that at the very best, in the opinion of the engineers, it is "'reasonably likely" that the interference with navigation may be "largely recovered." That is the position with respect to the remedial works in the St. Lawrence. As a matter of fact, it may easily be contended that not even the Navigable Waters' Protection Act gives the government power to approve of plans of the character that would be necessary to an enterprise of this kind. Apparently there is no certainty in the minds of the engineers of the department that any remedial works will be satisfactory or that navigation will be fully and properly protected.
I say, then, that the whole basis upon which the Beauharnois development is now being proceeded with is illegal, that it has no foundation or authority in any statute whatever, and that the government had no jurisdiction for passing the order in council; certainly no jurisdiction can be found in my reading of the Navigable Waters' Protection Act, and, under this development, unfortunately, a gigantic alienation of the natural resources of this country to private interests for exploitation is taking place under the monstrous financial scheme that was fully disclosed to the house last year.


Charles A. Stewart: Is the argument of the hon. gentleman that the government had no authority by order in council to agree to this diversion because it is not specifically mentioned in the section of the Navigable Waters' Protection Act which my hon. friend read?


Edward Joseph Garland: All that the Navigable Waters' Protection Act gives the government power to do is to approve of certain works in navigable waters, "in, upon, over, under, through or across any navigable water." That is all.


Samuel William Jacobs: Does not the hon. gentleman know that the St. Lawrence river at that point does not belong to the Dominion of Canada at all, but belongs to the province of Quebec?
{Mr. E. J. Garland.]


Edward Joseph Garland: I cannot
for the life of me see what the point of my hon. friend's question is. It has no relation whatever to the subject matter of my discussion.


Samuel William Jacobs: I think it has.


Edward Joseph Garland: I am discussing the order in council passed by the late government giving certain interests power to divert water through the medium of works without authority for the diversion of such water and without having proper plans filed and approved.


Samuel William Jacobs: The Dominion government
has power merely to protect the navigability of the river, nothing more.


Richard Bedford Bennett: If the hon. gentleman
would add to his statement this, to divert water the property of the crown in the right of the province of Quebec for which they have received a licence, it would 'be complete.


Edward Joseph Garland: On that
point we might debate for days, because, as the right hon. gentleman himself pointed out in the debate last year, the order in council itself casts serious doubt upon the ownership of the power by the province of Quebec.


Richard Bedford Bennett: Oh yes, of the power.


Edward Joseph Garland: And therefore of the water. If the late government was justified in authorizing the diversion of water for the production of power, then it may be argued they owned the water.


Samuel William Jacobs: Merely the navigability
of the water, and nothing else.


Edward Joseph Garland: It is open
to argument whether it owned the water, and thereby the power also. The supreme court judgment left the whole matter entirely in the air. The court refused to make a decision one way or the other on the question referred to it, and to this day neither this house nor the province of Quebec nor anyone in this country knows to whom the power that may be developed on the St. Lawrence river belongs. Not a soul in this country can say:	Here we have legislative,
statutory or judicial authority stating that we alone own the power. Nobody knows. Why the order in council itself in one of its clauses on page 5 points out:
That in view of the combination of the two questions of power and navigation, it was deemed advisable to refer to the Supreme Court of Canada a series of questions to the end of determining the respective rights of the Dominion and provincial governments in the development of power.

Beauharnois-Mr. Garland (Bow River)
The order in council says:
The supreme court has recently submitted the result of its consideration of the various questions asked. The conclusions of the court do not furnish sufficient ground to establish a ivell-defined line of action with respect to power.
Of course they do not. The whole thing is still undecidied. If hon. gentlemen would turn to clause 21 of the conditions, found on page 10 of the order in council, they will see that it reads:
The approval hereby granted is given upon and subject to the condition that in case it should be judicially determined that His Majesty in the right of the Dominion is entitled to any of the power now or hereafter to be developed in connection with the works the subject of this approval or any works hereafter to be constructed by virtue hereof by the company or which His Majesty may construct then and in such event the company shall pay to His Majesty-
And so on. That clause can be read as meaning many things, but one thing certainly, that it was the intention, implied at least, of the government to make further examination into the ownership of the power. It says here that it is given upon and subject to the condition that in case it should be judicially determined- "in case."


Richard Bedford Bennett: There is a distinction
between power and water; I should like my hon. friend to keep that in mind.


Edward Joseph Garland: Yes; in
case it should be judicially determined. In other words, if it be argued that, in order to develop power, it is necessary to grant a diversion of the water, then you have the thing still further confused. The order in council implies that the matter has not been settled by any authority anywhere, and it implies that further examination will be made before the court in respect to ownership. And although the government had themselves, within a few days of that very time, through the Attorney General for the Dominion of Canada argued before the supreme court that the Dominion alone had the right to the power; in spite of the fact that they had prepared an extensive and expensive factum which was signed by many legal authorities, including the former Solicitor General:	in
spite of that fact the Solicitor General of the late administration himself rose in the house, a few days after having contended in the court that the Dominion had the power, and challenging hon. members on this side, argued that the province of Quebec owned the power and should be given authority- a most absurd and ridiculous position to be placed in.


Samuel William Jacobs: Perhaps he was merely
devil's advocate.


Edward Joseph Garland: It may be that lawyers lend themselves to that sort of thing; but I submit that in both cases he was speaking or should have been speaking, in the interests of the people of the Dominion. He should have been speaking, first, as their advocate as Attorney General before the Supreme Court of Canada; and, secondly, as a minister of the crown in this house In neither capacity was he representing the interests of Quebec or the point of vie? he held with respect to Quebec; he shoulf have been concerned to preserve, and con tend for, the rights of the people of the wholi Dominion. Does it appear that he was doing so in both cases? One day he argued in th< court to the effect that, "of course, the Dominion has the power; there is nothing to the argument opposing this contention. We own this power; here is the proof." And a few days afterwards he says, "The Dominion has no jurisdiction; it is a matter for the province of Quebec." Well, Mr. Speaker, that is an additional matter that might be investigated.
I do not wish unnecessarily to prolong the debate, Mr. Speaker, because I am more than satisfied with the agreement of the Prime Minister that this whole matter should be sent to a special committee of this house. I do submit however that it certainty is time this be done. If there is one thing that the country is demanding at this time it is that the fullest possible investigation, as full as has been made in the past before a committee of the United States Senate, should be made in regard to power matters in Canada. I say without fear of contradiction, that the gigantic control, on the part of small groups of powerful financiers, of these immensely valuable natural resources upon which, as the Prime Minister said last year, the life, the welfare, the happiness and wellbeing of millions of people in the future depend-the right hon. member used words to that effect, I believe-is a matter of the gravest concern to the people of this Dominion. And any alienation of these resources to private interests by order in council must be investigated; we must look into such questions as cost of production of power and the prices charged the consumer. In my opinion the time is coming when, if necessary, amendments to the British North America Act must be secured in order to give this government authority to preserve the rights of the consuming public in this country. I say therefore that the narrower
1746	COMMONS
Beauharnois-Mr. Garland (Bow River)
and narrower, the smaller and smaller these groups become-such financial groups as the Sweezey and the Holt concerns who are now more and more controlling this great resource -the more certain is it that we must by legislative interference' on the part of the Dominion of Canada protect the rights of the consuming public of the country.
It has been suggested that as third parties are now involved by the purchase of the bonds and shares certain vested rights have been created and therefore nothing can be done in connection with the matter. Let me however point out that under section 12 of the Navigable Waters Protection Act, under which the whole thing is purported to have been made possible, parliament may take action. Let me quote from the act:
Parliament may, at any time, annul or vary any order of the governor in council made under this part.
Therefore, if it be found that the inferences I have drawn from the facts as I have set them out are correct, that this government had no legal authority for the order in council, and that the plans have not been ratified nor sanctioned-because no plans suitable to enterprises of this character could yet have been before the Department of Public Works then I say that the whole basis upon which this development has taken place is illegal and the agreement should be cancelled forthwith.
Then comes the point-1 suggested a moment ago, namely, the question of third party interests. We did not worry about the third party interests in the form of the taxpayers of Canada when we abandoned development at Port Nelson upon the recommendation of Mr. Palmer. The former Minister of Railways advised, and the house agreed, that the development at Nelson should be abandoned, and Fort Churchill was decided upon instead -properly and wisely in my opinion. But that involved the loss of 16,242,000 of money expended at Port Nelson. It was profitable and wise to take this course, and I venture to say it would be found profitable and wise in this instance to forget the third party interests involved especially as this Dominion is not concerned in any way, by law or otherwise, in the matter. The stock and bonds of the corporation were disposed of to certain associates of Mr. Sweezey and others through their companies, the Dominion Securities Corporation and Newman Sweezey and Company. These companies in turn sold to the public. The issue is therefore as between the public and these bond companies, not as between the public and the Do'minion, nor between the public and the provinces, unless fMr. E. J. Gariand.]
it be found that fraud has been perpetrated on the public. In that event these associates of Mr. Sweezey, and Mr. Sweezey himself, should be assailed in the courts and made to pay over the necessary amount to make good their exploitations.
If I had time, Mr. Speaker, I would direct the attention of the house to other illustrations to bear out my contention in this regard. I have in my hand the examination which was made by the Commission of Conservation of Canada with regard to Long Sault rapids, and development in connection therewith, in the St. Lawrence. Hon. gentlemen will recollect that in that case the development involved a tremendous amount of public money, and the whole project was cancelled by law. It happened in the United States, in the state of New York-not in this country- but it is an illustration of the wise action taken to protect the whole public interest even though at the sacrifice of a few investors. I certainly hope therefore that investigation before a committee of this house of the question now before us will be as full as possible.


William Lyon Mackenzie King: The proceedings of this afternoon, Mr. Speaker, illustrate better than anything that has happened thus far this session the importance of adhering in spirit and in letter to the rules which have been framed with a view to t'he protection of members in the course of debate, and the rights of the public to the fullest discussion of matters of public interest. To bring up a particular matter as one of urgency is permissible under the rules. It is generally conceded, however, that there must be some special ground of urgency in order to have questions discussed under that special heading; if such is lacking some other course should be followed. The question of the Beauharnois canal and matters incidental thereto is a very large question. It involves matters affecting the rights of the provinces and of the Dominion. It involves the question of the jurisdiction respectively of the Dominion and of the provinces. It involves the question of power rights which in part, as yet, are undetermined judicially, I believe. The whole question, I imagine, is as large as any likely to be brought up for discussion in this house, and yet, with the exception of the two hon. gentlemen who have spoken this afternoon, no member, so far as I am aware, had any knowledge until the time of opening t)he proceedings this afternoon that this question was to be brought forward to-day. I do not

Beauharnois-Mr. Mackenzie King
assume that the hon. member for Acadia (Mr. Gardiner) advised the government in advance of what he had in mind. I know that, he did not advise me in advance, until three o'clock, when I received the following note:
Ottawa, May 19, 1931.
Dear Mr. King:
I propose this afternoon to move the adjournment of the house to discuss a matter of urgent public importance, namely, the Beauharnois project.
Yours very truly,
R. Gardiner.


Richard Bedford Bennett: I received a similar note.


William Lyon Mackenzie King: The Prime Minister says he received a similar communication. May I say, Mr. Speaker, that if the object of my hon. friend from Acadia had been solely that of the public interest, which he has put forward so professedly and so profusely this afternoon, I think he might have advised both the Prime Minister and myself, at least this morning, if not a day or two ago, that he intended to bring this subject up for discussion to-day. I have had no intimation from any source this year that this question was to be brought up in parliament at this session. I have known that there were present in the city two or three individuals-I do not know whether they are lawyers or not-who for motives best known to themselves have been preparing a brief on the Beauharnois case, which brief was read in this house this afternoon by the hon. member for Acadia.


Robert Gardiner: I rise to a point of order, Mr. Speaker. I ask the leader of the opposition (Mr. Mackenzie King) to take back his statement, for it is not correct.


William Lyon Mackenzie King: If it is not correct, Mr. Speaker, I will take it back, but it is so nearly correct that I think everyone must feel the force of it.


Robert Gardiner: Again I rise to a point of order, Mr. Speaker. The statement the right hon. leader of the opposition has made is not "nearly correct," and I ask him to withdraw it.


William Lyon Mackenzie King: I am quite prepared to withdraw the statement in that form, but I repeat, it is a matter of common knowledge that within the capital for t'he past few weeks two or three individuals have had their headquarters at the Chateau Laurier, where they have been preparing some briefs on the Beauharnois canal situation.


An hon. MEMBER:: Two months.


William Lyon Mackenzie King: For the past two months I am informed. I do not know that it is possible to state definitely just for whom the particular briefs were being prepared, but I would point out to you, Mr. Speaker, and to the house, that with respect to the speech delivered this afternoon by the hon. member for Acadia every word of it was read from a manuscript which he had upon his desk, and that manuscript has been in course of preparation for some time.


Robert Gardiner: I rise to a point of
order, Mr. Speaker. I did not read from a manuscript; I had very extended notes be-fpre me.


William Lyon Mackenzie King: My hon. friend says he had very extended notes before him. I think he might have given to the Prime Minister and myself at least an opportunity to have, I will not say extended notes, but some knowledge in advance that this question was coming up, so that we might have been in a position to discuss intelligently some of the points raised. As I have said, the matter is very involved, and with the number of subjects which it is necessary for hon. members to carry in their minds from day to day, unless there is given some opportunity of looking up the statutes and referring to the orders in council, I do not see how any member can be expected to reply intelligently when these particular documents are referred to in debate. The hon. member for Acadia might have advised this house at any time that he was going to bring up the subject. Even if he did not wish to do so on the floor of the house, we do not live so far apart in this building that he might not have given us an intimation at least a few hours in advance that he was going to bring the question up.
Now, the fact that the hon. member has come here prepared in the fashion in which he was, and supported by the hon. member for Bow River (Mr. Garland), who also has had considerable time for the preparation of what he said to-day, I assume-I notice he does not rise to a point of order-I say the fact that although they have had ample time to prepare their speeches and have pleaded the urgency of the situation as their reason for making them, causes me to feel that there is some object other solely than the public interest which they are seeking to serve by bringing up this matter in this way at this time.


Robert Gardiner: Mr. Speaker, I rise to
a point of order.

Beauharnois-Mr. Mackenzie King


An hon. MEMBER:: You don't like to take it, do you?


Robert Gardiner: I am ready to take
anything that is coining to me right. I rise to a point of order, Mr. Speaker. The leader of the opposition has just stated that we have some ulterior motives in bringing this subject before the house. All we want is to secure an investigation by this house; we have no other motive.


Mr. DEPUTY SPEAKER:: In view of the hon. member's objection I think the right hon. leader of the opposition (Mr. Mackenzie King) should withdraw his imputation.


William Lyon Mackenzie King: No, no, Mr.'
Speaker, I do not propose to withdraw what I have just said.


Armand Renaud La Vergne: The right hon. gentleman knows that he must not impute motives to any hon. member.


William Lyon Mackenzie King: I was not imputing motives, I was judging the situation in the light of what has taken place to-day, and I said if what the hon. member for Acadia had primarily in mind was a full and thorough discussion of this subject on the floor of the house to-day, we would not have been precipitated into this debate without acknowledge in advance of bis intention to bring this matter up. Let me say at once that I for one am more than delighted that the Prime Minister has undertaken to grant a committee of investigation into this matter, because some of these hon. gentlemen in the far corner will then get a chance to make good some of the general statements and reflections that they have been making on the floor of the house about judges, members of parliament, and everyone else who does not happen to be one of their number.
With respect to the so-oalled Beauharnois project, it is advisable that it should be made perfectly clear to the house and to the country just what the relation of the federal government to this matter has been and is. As I have already said, I must ask the indulgence of the house in speaking without having had an opportunity of looking at any of the past records. I do not wish to be held too closely to technical exactness in what I am about to say. Broadly speaking, the outstanding facts, as I understand them, are these. The St. Lawrence river is, having regard to the territory through which it flows, in part, an international waterway; in part, a national waterway exclusively in the province of Quebec or in a part of the adjoining province. Where the St. Lawrence river is exclusively in

the province of Quebec this parliament has not jurisdiction over the power rights or any other matters affecting the water, except in so far as there is imposed on it the obligation of safeguarding navigation under the Navigable Waters Protection Act.
May I go a step further? In order to incorporate a company such as the Beauharnois Light. Heat and Power Company, it is essential that a charter shall be obtained from the government of the province, not from the government of the Dominion. This government has given no charter to the Beauharnois company respecting power rights, nor has this parliament or any federal government given any right to the Beauharnois company with respect to power rights. Those rights have been obtained from the government of the province of Quebec. If they have been illegally obtained, or if there are matters that are not as they should be with respect to any phases of the transaction, the place in which those matters should be discussed is on the floor of the legislature of the province of Quebec and not on the floor of this parliament, though I have no objection to this parliament taking up its time with provincial mlatters if, even indirectly, they can be shown to have a bearing in so far as federal matters are concerned.
Mr. LaVERGNE: The St. Lawrence is not a provincial matter.


William Lyon Mackenzie King: No, the St, Lawrence is not a provincial matter, but the St. Lawrence in the province of Quebec is regarded by that province as being within its jurisdiction so far as the granting of power rights are concerned, and those rights have been granted by the province of Quebec to this company. If the government of the province of Quebec had no authority to grant those rights then surely, under the laws of the land, there are methods of restraining the government in that particular and of preventing the granting of those rights.


Mr. WOODSWORTH:: Would the Prime Minister tell us what those methods are?


William Lyon Mackenzie King: That is a legal matter; it is not.for me to explain it.


James Shaver Woodsworth: The Prime Minister has suggested that there are methods; would he indicate them?


William Lyon Mackenzie King: My hon. friend
means leader of the opposition at this moment. I thank him.


James Shaver Woodsworth: Yes, the leader of the opposition. I presume he had some-

Beauharnois-Mr. Mackenzie King
thing definite in mind when he said there are methods by which this work can be stayed. I would like him to indicate what are those methods.
Mr. MACKENZIE KING.* If I were an expert in the law and had been paying special attention to this phase of the question, I could answer my hon. friend offhand, but I must say to him at the moment that he will have to accept the statement, as I think he will be prepared to accept it, that if a province does a thing which it has no right to do, then under the laws of this country there are methods at law whereby the province can be restrained.


James Shaver Woodsworth: And if the Dominion government does something it has no right to do?


William Lyon Mackenzie King: That is equally so in regard to the Dominion government; it can be restrained under the law.


James Shaver Woodsworth: Is not this the place to introduce the matter?


William Lyon Mackenzie King: Yes, and I am glad my hon. friend has now brought the matter to a head. The function of the Dominion is to pass upon any power rights or diversions of water granted by provinces with respect to their not interfering with navigation. I will read the clause under which the Dominion has authority in these matters:
No work shall be built or placed in, upon, over, under, through or across any navigable water unless the site thereof has been approved by the governor in council, nor unless such work is built, placed and maintained in accordance with plans and regulations approved or made by the governor in council.
That is the extent of the functions and duties of the federal government and of this parliament with respect to such matters as power rights and diversions of water on the St. Lawrence in connection with a company such as the Beauharnois company. The plans are submitted to the government; they are then submitted by the government to its engineers and on the technical advice which is given to the administration it acts in granting approval of those plans. Bu't its function is confined to the approving of plans. That is what was done by order in council, and the statute says that the approval is to be given by order in council. It makes that quite clear. The government in proceeding by order in council is not usurping the functions of parliament. Parliament passed this act; parliament gave to the government or placed upon the government of the day the responsibility of approving of plans by that
method, by order in council. To listen to hon. gentlemen who have spoken one would think that because the government of the day passed some order in council instead of getting an act of parliament, they had been going behind parliament in order to confer some special powers or favours upon political friends


Some hon. MEMBERS:: Hear, hear.


Robert Gardiner: At this point I shoulc like to ask a question. Does the act give the government power to divert water?


William Lyon Mackenzie King: I think I have made clear what the powers of the federal government are and what is the method of procedure. In all this matter the action of the government has been entirely regular Now let me read this further section, and I will ask my hon. friends who have spoken to pay particular attention:
Parliament may, at any time, annul or vary any order of the governor in council made under this part.
In other words, this order in council was passed, so far as the federal government functions in the matter, over two years ago; it was passed in March, 1929. For two years hon. members who have spoken to-day have had the right to introduce in this house a motion which would annul that order in council, and this parliament had full authority to annul it. All they had to do was to make out a case before parliament why the order in council should be annulled. They have not done that, but they have come here and have made insinuations against pretty nearly every person other than those who belong to their own particular group, as if no one in this world possessed aught in the way of integrity except themselves. I wish to say to one or two of my hon. friends in the far corner that the public will believe that hon. members of the old political parties in this country have just as .fine a sense of honour and just as high a sense of integrity as members of any group in this house who may not happen to belong to one or other of those two parties. It ill behooves them, when there is a statute which was passed by parliament expressly to provide a means of dealing in a parliamentary way with a matter such as this, and when they have not availed themselves of that means, to come and make insinuations of the general character which we have had this afternoon.
I think, Mr. Speaker, that is perhaps about all it is necessary to say at this time. I hope I have made clear first of all that so far as the Beauharnois company is concerned,.
1750	COMMONS
Bcauharnois-Mr. Mackenzie King
it is a company which obtained its charter from the government of the province of Quebec. It obtained whatever rights it has with respect to power from the government of Quebec and obtained whatever rights it has with respect to diversion from the same government. As far as the government of Canada, whether under the old administration or the present administration, is concerned, it had nothing to do with this matter except to approve of those plans from the. point of view of the protection of navigation. If there has not been the protection of navigation on the St. Lawrence in the approval granted that there should be, then certainly the administration which granted the approval without sufficiently safeguarding navigation should be criticized and taken to task in the matter. My hon. friend said this afternoon, "Why is it that you have made the canal twice as wide in Quebec as you have made the Welland canal?"	My
answer is that we wished to be doubly sure that the rights of navigation would be fully protected in that part of the St. Lawrence river. That is the answer to that question. There were no ulterior motives of the character which have been insinuated here this afternoon. That is the position, and may I say that I believe the public of this country, as well as hon. members of this house, will be more' than gratified when this matter of the Beauharnois development and anything that can be brought up incidental to it is finally referred to a committee. There everyone will be given a chance to prove any charge he may bring, but he will be obliged to prove it not by insinuation under the privilege which he has as a member of parliament, but by evidence of a character which would be accepted in a court of law.


James Shaver Woodsworth: Mr. Speaker, in view of the
very satisfactory statement of the Prime Minister (Mr. Bennett) I had hesitated to continue this discussion, but now that the leader of the opposition (Mr. Mackenzie King) has spoken, all my hesitation has vanished. He worked himself up into a righteous indignation with regard to the methods adopted by the hon. member for Acadia (Mr. Gardiner), which may or may not have been quite correct; but that is not what we are concerned with to-day. We are concerned with certain facts which we wish to lay before the house. It was only by a very narrow margin, that we were able this afternoon to bring this question before the house, and so it seems to me that we should not let slip this opportunity of informing the

general public with regard to the whole situation.
I do not think the public of Canada are informed either as to the facts or as to the great issues at stake. It might well be said that the committee which has been promised will discuss the details of this matter, but on the other hand I would like to call attention to the fact that the corporation has been carrying on a very extensive and persistent publicity campaign across Canada ever since this matter was taken up a year ago. The leader of the opposition seemed to be rather surprised that the matter should come up before the house this year. In view of the charges which were made last year, and of the definite statement of the hon. member for Acadia (Mr. Gardiner) that he would bring the matter up again, I cannot quite understand why the right hon. member did not understand that it would be taken up again. Hon. members have received resolutions and letters in regard to it, and it would seem to me to be a matter of course that this question should be brought up for further discussion. The one thing I did not like in the statement of the Prime Minister was the suggestion that because securities had been sold there might be some difficulty in regard to cancellation. I think that was the idea in his mind.


Richard Bedford Bennett: That is correct; I stated that there were vested interests on the part of people in all parts of the American continent who had purchased securities.


James Shaver Woodsworth: I protest against
that attitude. It seems to me that if this undertaking has been illegally acquired the public who have invested in its bonds cannot be said to have a legal interest or to be entitled to legal protection. My lawyer friends tell me that if a man receives stolen property he is not given protection. I know the Prime Minister will say there is no analogy, but lawyers generally see no analogy between big steals and little steals.


Richard Bedford Bennett: My hon. friend's aversion to lawyers should not prompt him to make his statement so general. The courts have held that where a company is found to be ultra vires, those who expended their money in good faith believing it not to be ultra vires have a right to be protected.


James Shaver Woodsworth: If that is the law
then there should be some decided amendments, because the rights of the people should be protected. If a corporation is required only to issue a few bonds and manages in some illegal way to get its pro-

Beauharnois-Mr. Wooilsworth
position before the public in order to be secured, it is time the country knew about it and had the necessary amendments passed. With the hon. member for Bow River (Mr. Garland) I see no reason why an annulment should not take place.
In view of what the leader of the opposition has said I should like to state my interest in this matter. I believe first of all in public ownership; that is one of my prime interests in this question. The recent administration alienated the Seven Sisters falls in spite of the protests made. I have never been convinced-


An hon. MEMBER:: That was Taschereau power.


James Shaver Woodsworth: I do not want to
get into Quebec, I am in Manitoba at the present moment. The Seven Sisters falls should have remained the property of the people for the use of the people. I would direct the attention of this house to the fact that already the Insull interests have acquired a large part of the stock of the Winnipeg Electric interests. I think it is an outrage thus to alienate the patrimony which we have inherited, and turn it over to American interests.
Further, I am firmly convinced that the Beauharnois corporation is not legally entitled to the power in the St. Lawrence. That being the case it seems to me that as a public man I have to do everything in my power to call attention to the situation.
It has been suggested by the leader of the opposition that there was something sinister in the fact that certain hon. members have been working on this power proposition. I will say very frankly, that I have been furnished with information by interested parties on both sides, as have, I presume, nearly all hon. members. In relation to almost every important question which comes before the house it is a common thing for us to obtain memoranda from the various parties interested. I have no hesitation in saying that I have received information in this case. I did not use any of these memoranda or documents without carefully considering them and making them my own.
It has been said that those who are opposing the actions of the corporation now in control are playing the game of a rival corporation. There is always a danger of that, but I want to state that I will be the first to protest against any irregular procedure on the part of any other corporation. I have no particular antagonism to the Beauharnois Company as such, but I protest against the irregularities connected with their obtaining this power.
Whether or not power in Quebec is Taschereau power, private power or public power,
I need not argue. I maintain that the water powers in the St. Lawrence river should be under public control and if possible under public ownership. Let me direct attention to some of the legal aspects of this case. The other evening we were discussing the British North America Act and at that time, as in the past, we heard a great deal about provincial rights. I should like to take a few minutes to talk about Dominion rights, a matter about which we hear very little, although I acknowledge that we did hear something of this the other day from the Minister of Justice (Mr. Guthrie).
The claims of the Beauharnois Power Corporation are based on the original rights of the Roberts. The present undertaking is simply an extension of earlier works. If any hon. member has any doubt in regard to this matter I would refer him to the Exchequer Court Reports, volume IX The judgment appearing there gives an outline of the history of the Beauharnois power proposition. I think I will take about five minutes of my time to summarize that history.
The history of the Beauharnois begins with the Marquis of Beauharnois, owner of the seigneurv of the county of Beauharnois which he acquired from King Louis of France. The marquis or his descendants erected a feeder running from lake St. Francis to the river St. Louis and drew water from lake St. Francis through the feeder for the purpose of developing power at Beauharnois to operate a mill which belonged to them. This feeder or canal was constructed early in the last century by the then seigneur of Beauharnois, through his own lands for the purpose above indicated, and from that time to the present, he and his grantees have continued to use the water supplied by the feeder for the purposes mentioned. Later in the century when the Beauharnois canal was constructed by the government of Canada it was found that it had the effect of raising the water along the south shore of lake St. Francis. To overcome this difficulty a dyke was constructed, the contract being dated March 1, 1855. This dyke crossed the feeder. The gates at the head of the feeder which the seigneur had built were removed when the dyke was constructed and replaced by gates constructed as part of the public works and which formed part of the dyke. Title was acquired in some way by the crown to the land upon which the dyke and the gates were built. This dyke and the gates were the property of the late
Beauharnois-Mr. Woodsworth

province of Canada, the title of which passed to the Dominion in 1867 by the British North America Act. After the construction of this dyke and head gates the seigneur remained in possession of the feeder and in disposing from time to time of mill properties on the St. Louis river, of which he was the owner, he granted to the purchasers a right to the use of the waters supplied by the feeder. This condition of affairs continued until 1882 or 1883 when the Dominion government took possession of the head gates and feeder as well as the St. Lawrence river, and made improvements on the river, deepened and improved the feeder, constructed a bridge over it and took out and rebuilt the head gates.
The Dominion government remained in possession until 1888. In that year some arrangement was arrived at between the late J. B. Robert and the government whereby he was given the keys to the head gates and allowed the use of the feeder until 1892. In the meantime he had acquired practically all the rights of mill owners in the vicinity of the feeder of the river St. Louis. In February, 1892, the government resumed possession of the feeder and control of the head gates against the will and consent of Robert who gave up the keys of the gates to avoid difficulty but without waiving any of his rights. This condition of affairs continued until 1904 when an action was brought by the Roberts against the government for possession of the head gates and feeder. This action was tried in the exchequer court and decided against the Roberts. Negotiations continued until 1909 when an agreement was reached whereby the government passed an order in council authorizing the minister of public works to lease to the Roberts the head gates, feeder and the use of the water to be diverted to the feeder for the production of power at and for the sum of one dollar per year.
In 1902 the Roberts incorporated the Beauharnois Light, Heat & Power Company, to which they transferred certain of their rights. In 1910 the agreement with the government referred to was assigned to this company, which has continued to lease the head gates, the feeder and the water, paying to the government the agreed rental. This condition of affairs has continued up to the present time.
I have summarized that statement from the judgment in order that the house may have something of a background, and also to reinforce my statement that to-day all the extensions that have been made and the powers claimed go back to the original rights of the Roberts. That is dearly recognized from
TMt. Woodsworth.!
the fact that the present corporation is paying a rental to the Dominion government. I think this letter might be of interest:
Newman, Sweezey and Company Limited, Investment Brokers,
136 St. James Street,
Montreal,
29th October, 1927.
Your file No. 804-1 B
The Deputy Minister,
Department of Public Works,
Ottawa, Out.
Dear Sir:
We enclose herewith our cheque for one dollar ($1) in payment of the annual rental due by Beauharnois Light, Heat and Power Company, as assignees of the interests of the lessees, in an agreement dated December 29, 1909, between His Majesty the King and Dame Sarah Roberts et al.
This agreement was assigned to Beauharnois Light, Heat and Power Company by deed of transfer dated March 26, 1910-authentic copy of which was filed with your department on June 27, 1927, and acknowledged by the secretary of vour department under date of June 29. 1927-file No. 804-1-B.
Will you please acknowledge receipt of this rental in due course.
Yours faithfully,
Hugh G. Griffith.
There was a similar letter dated October 20,
1928,	another similar one dated October 17,
1929,	and then I have here a copy of a receipt from S. E. O'Brien. These documents indicate that the ownership and control of the St. Louis river feeder by the Dominion government were clearly recognized; otherwise why was this annual rental paid?
Not only is this the case with regard to this particular work and feeder on the St. Lawrence, but there are certain other public works that are distinctly the property of the Dominion. The hon. member for Bow River referred incidentally to the factum on behalf of the Attorney General of Canada in the Supreme Court of Canada. This factum is the case of the Dominion government as argued before the Supreme Court of Canada:
In the matter of a reference as to the relative rights of the Dominion and the provinces, respectively, in relation to the proprietary interest in, and legislative control over, waters with respect to navigation and water-powers created or made available by or in connection with works for the improvement of navigation.
The factum is dated 1928. On page 67 of this factum we observe that "all those portions of the St. Lawrence navigation, from Kingston to the port of Montreal, improved at the expense of the province," were vested in the crown and eventually became the property of the Dominion by virtue of the British North America Act of 1867.

Beauhamois-Mr. Woodsworth
The leader of the opposition is trying to evade the issue by making the Beauhamois development a purely provincial matter. It is not in any sense a provincial matter. Under the British North America Act of 1867 t/his was one of the properties that distinctly became the property of the Dominion of Canada. Since the leader of the opposition wants to throw discredit on those of us who are taking up this matter-although I do not know why he should-I think I had better read from the factum itself. On page 67 I find:
94. By section 108 of the British North America Act, 1867 (App. p. 83, lines 32-33) the public works and property of each province enumerated in the third schedule (App. p. 85, lines 21-22) to this act were declared to be the property of Canada. The third schedule enumerates, under the caption "provincial public works and property to be the property of Canada," the following amongst others.
This can be found in the British North America Act, a copy of which I hold in my hand.
X. Canals, with lands and water-powers connected therewith.
This is the statement of the Dominion government itself that the powers in the St. Lawrence enumerated here belong to the Dominion government?
Mr. LaVERGNE:	Who represented the
Dominion government?


James Shaver Woodsworth: I think the hon.
member for Bow River (Mr. Garland) mentioned one of the representatives: the former Solicitor General. This, however, is the statement, and while I am not always quite sure with regard to my legal grounds, I fancy this presentation as put forward by the Dominion government stands until in some way it has been overturned by legal decision, and that has never taken place. This then is the position of the Dominion government itself. Under and by virtue of section 108 of the British North America Act and the third schedule, this canal and the water powers connected therewith, passed to the Dominion government in 1867, and having so passed, they still belong to the Dominion government. Thus as a matter of fact, Quebec has no jurisdiction whatever.
Let me go a step further. In the lease of this corporation,' the province claims the right to all the water powers. I would refer the house to order in council P.C. 422, in which these words are used:
The province reserving the ownership and free disposition of the surplus.
I would point out that in addition to the Beauhamois Light, Heat and Power Company which is still paying a rental to the Dominion government, we have the Dominion government leasing part of the hydraulic power in the St. Lawrence river between lake St. Francis and lake St. Louis to the Montreal Cotton Company.


Richard Bedford Bennett: Acquired by Beauharnois.


James Shaver Woodsworth: Yes, but my point is this: that the lease is given by the Dominion government; it is not a provincial matter, although in some curious way, I am informed that the province is receiving a sort of second rental for this. I do not know how they have the right to do this, but the province itself is charging a rental.
Another corporation, the Canadian Light and Power Company, has leased power from the Dominion government, and there is also a possibility that the Cedar Rapids Power and Manufacturing Company, one of the other companies in this district, has also leased power from the Dominion. I would refer to the factum at page 105.


Richard Bedford Bennett: There is a condition in the lease that the Beauhamois would have to pay any damages that would accrue with respect to Cedar Rapids.


James Shaver Woodsworth: Yes, and there have been some cases of compensation with regard to this matter. My submission is that if the Dominion owns part of the hydraulic powers of the St. Lawrence river, the exclusive claims of the province are untenable. Indeed, the presumption is that the Dominion government is the agency which has legal authority and right to lease this power.
At this stage in some way or another, Quebec comes on the scene-I say advisedly, "in some way or another," because I do not know how it was managed.
Mr. LaVERGNE :	Behind the scenes.


James Shaver Woodsworth: Perhaps behind the scenes, as my hon. friend suggests. But in any case, in the act of incorporation of 1902 of the Beauhamois Company, they were given the right to build a canal 120 feet wide between this feeder and the river St Louis, and in 1910 the act of incorporation was amended to allow the company to build a canal of six arpents or 1,100 feet wide. In 1928 the act of incorporation was further amended allowing them to change the location of the intake on lake St. Francis and the position of the outlet from river St. Louis to lake St. Louis. In 1930, when the

Beauharnois-Mr. Woodsworth
securities were already in the hands of the public, further amendments were secured, allowing the company to widen the canal to 4,000 feet.
Let me point out again that the enlargements and extensions are based on the original rights of the Roberts. There is no other basis. That was the position taken by Mr. Geoffrion in seeking the amendments in 1928. I have his statement here, but have not time to read it; as I understand it, however, the whole claim was based essentially on the original rights of the Roberts.
Let me pass to another phase of this question, in which I think we shall see that the province has also exceeded its jurisdiction. By subsection 11 of section 92 of the British North America Act the province is permitted to incorporate companies with provincial objects only. That is as far as the power of the province goes. If a company's works and undertakings are of such a character as to extend actually or potentially beyond the limits of a province, they are manifestly not provincial objects for the establishment, control and operation of which a provincial company can be incorporated. Again, Mr. Speaker, I am drawing my statement from the factum itself.
The Beauharnois Light, Heat and Power Company was incorporated by the legislature of the province of Quebec, chapter 72 of 2 Edward VII, 1902. Section 12 of the act incorporating the company gives the company the right to supply, sell and distribute light, heat and power in any direction within a radius of thirty miles of the town of Beauharnois. By a later amendment, that radius was extened to within forty miles from the town of Beauharnois, within which the company may supply, sell and distribute light, heat and power. As a matter of fact, while these I suppose are more or less standard clauses, before you come to the limit of thirty or forty miles from Beauharnois you come to the boundary of the province of Ontario and to the international boundary. It was the evident purpose of the company to distribute power in Ontario, or possibly in the United States; that is, the company was permitted to transmit electricity within this radius, which contemplates the erection by the company of transmission wires entering the United States or the province of Ontario or connecting with transmission wires at the boundary. That was the object of the company. Let me read again from the factum:
Where the objects of a company fall within section 92 No. 10 (a) it is clear that the [Mr Woodsworth.]
Dominion has exclusive legislative power to incorporate such company and grant it all powers required for the construction and operation of the proposed work, including, inter alia, the power of expropriation.
I am not going into the rather technical details which are contained in the factum. But I would urge that the act of incorporation is ultra vires, since the company's objects were not local or provincial but rather interprovincial.
I mighlt go on to show that not only had we the original company, but this company formed a sort of subsidiary known as the Beauharnois Transmission Company, evidently for the purpose of taking electricity from the point of production and distributing it throughout the territory served by the company.
The company was formed by a Quebec charter, and inasmuch as these wires go outside the province and are evidently designed to carry on works outside the province, I urge thait this company also becomes a company having interprovincial objects. It is clear that the Dominion government alone has the exclusive authority and jurisdiction to incorporate a company to undertake a development such as is now being undertaken by the Beauharnois Light, Heat & Power Company.
But I come to an even more important consideration than that, and one which some of us emphasized last year, namely that the whole St. Lawrence scheme is essentially a Dominion project. It ought never to be considered a merely local matter; in fact, that situation is more or less recognized by the Beauharnois company itself,' because in its prospectus issued on December 8, 1930, it says:
In providing deep water navigation in its power canal, the Beauharnois Power Corporation is providing one of the major links in the deep waterways by canalizing all the wholly-Canadian section of the river, save for the stretch around the Laehine rapids at Montreal.
We all know that the St. Lawrence system extends all the way from the head of the great lakes right through to the sea; and here is one of the major links, acknowledged as such by the corporation itself, and yet we are going to allow it to go into the hands of a private corporation. I think it is absolutely absurd. We have spent I do not know how many tens or it may be hundreds of millions of dollars in the Welland canal, and yet the whole of that important project may be rendered useless if we allow the control of Beauharnois to pass to a private corporation.
Mr. LaVERGNE: They could stop navigation in a day if they wanted to.

Beauhamois

Mr. Woodsworth


James Shaver Woodsworth: Yes, that is true, and a friend of mine, Mr. R. K. Finlayson, a good Conservative in politics, wrote a letter not long ago to the Manitoba Free Press, urging that we can do that and should do that. We can plug the canal, but I fancy that there are vested interests at stake which, if they can prevent us from annulling the lease, would protest vociferously if the government undertook to plug the canal.
Mr. LaVERGNE: I say that the company could stop navigation.


James Shaver Woodsworth: I misunderstood my hon. friend. I suppose they could, although navigation is supposed to be protected by the order in council. May I here read a statement from the factum that I could not find a moment ago when I was dealing with the limitations of provincial companies. At page 108:
It 13 now well established that it is the potential scope of the authorized objects and not the area of their actual exercise or operation which determines the character of the work or undertaking as being federal, and where the authority conferred covers works or undertakings which may extend beyond the limits of a province, such works or undertakings are therefore non-local and fall to the exclusive jurisdiction of the Dominion by virtue of section 92, 10 (a) of the British North America Act.
But, Mr. Speaker, this is not simply a question as between the provincial authorities and the federal authorities. It is not simply an interprovincial question, but an international matter as well. I submit that the works contemplated by the Beauharnois development are of such a class as to bring them within the jurisdiction of the Treaty of Washington of 1871, or the Boundary Waters Treaty of 1909, or within a treaty to be entered into between Canada and the United States with respect to the St. Lawrence deep seaway. Being works of such a nature, they would be subject to the exclusive legislative control of the Dominion. That, too, is clearly substantiated by the argument as contained in the factum at page 95:
Article 3 (App. p. 50), further provides that, except as provided elsewhere by the treaty or by special agreement, no further or other uses or obstructions or diversions, whether temporary or permanent, of boundary waters . . . should be made.
At page 97 of the factum certain fundamental principles are laid down. I quote:
The Attorney General submits that the Dominion has the exclusive legislative control over water-powers created or made available by the works referred to in this question, for the
following reasons:	The parliament and government of Canada alone are empowered under the British North America Act to carry out and perform the obligations of Canada under such a treaty.
In order that Canada should obey the spirit as well as the letter of the various treaties which have hitherto been entered into between Great Britain and Canada, on the one hand and the United States, on the other, and in order that we may 'be free with regard to the proposed treaty between the United States and ourselves, parliament should at once annul the lease which has been granted to the Beauharnois corporation by order in council.
There is another matter which I must touch upon, however briefly, and which I regard as of very great importance, and that is the fact that the order in council goes directly in face of the advice of the joint board of engineers, whose recommendation is against such a scheme as is proposed by the Beauharnois people.
Mr. LaVERGNE:	Why?


James Shaver Woodsworth: I too should like
to ask, why it is that the late government went directly in face of the advice of their own engineers. That question has never been answered. And again let me say to the leader of the opposition, if he is in the house, that we are not taking our cue merely from some people who happen to have personal interests. This action in disregard of the engineers' report is dealt with in the articles to which I have referred and which may be elaborated later in the discussion- I hope they will-as published in the Manitoba Free Press, one of the leading organs of public opinion and one that has generally supported the late government.
We had several years ago considerable trouble with regard to the Chicago drainage canal, and we protested very vigorously against the waters there being diverted for United States purposes, even though they were for sanitary purposes; and if you will look at the factum you will find a certain order under which the waters may be diverted'. But we must admit that the United States government during the last, ten years has consistently refused to grant any rights on the international section of the river. Canada should do at least as much. We have hopes of some day having a deep waterway scheme realized, and it does seem to me that by this action the late government has impaired the success of that scheme. And,

Beauharnois-Mr. Woodsworth
incidentally, it has not lived up to the treaties or the understandings which existed between Canada and the United States.
Let me now summarize, in closing, the paints I have tried to make. The claims of this corporation are based essentially on the old claims of the Roberts. The Dominion government owns the Roberts' works, as is shown by the fact that the present corporation is paying a nominal rental charge to the Dominion government. Under the British North America Act, public works on the list. Lawrence were definitely put under Dominion jurisdiction. There is no doubt about that-If any hon. member questions it, I would advise him to read the British North America Act. Further than that, provincial claims to water-power have apparently no foundation; I have never seen any ground on which these claims are based. Moreover, the province can incorporate only such companies as contemplate distinctively provincial objects-and the objects of the Beauharnois corporation are decidedly not provincial but, in fact, interprovincial in character. The St. Lawrence system is essentially a great Dominion project, and if we are ever to carry it through successfully we cannot allow anything to stand in the way. Finally, this whole question involves our international obligations.
For these reasons, Mr. Speaker, I submit that the whole matter should be given the most careful consideration, and I should like to think that some of us at least may be free from any imputation that we are personally interested. There are some people who have stock in Beauharnois. There are some people who have bought the corporation's bonds. There are some people who hope to get something out of it. And there are some who perhaps hope to get something out of those who are opposed to Beauharnois. But some of us are in the happy position of being able to declare that we do not hope to get a red cent out of the business. We feel that it is in the interests of the public as a whole that this question be brought into the full light of publicity and that, if it is at all possible, this great waterway, with the enormous potential water-powers which it carries, shall be saved for coming generations in Canada.
Mr. LaVERGNE:	Was there any excuse
for the order in council?


James Shaver Woodsworth: I think it was very clearly shown by the hon. member for Bow River that the late government quite exceeded its powers as granted under the Navigable Waters Protection Act. Perhaps it
(Mr. Woodsworth.]
might be well for me to put on record one pertinent section. Section 4 reads:
No work shall be built or placed in, upon, over, under, through or across any navigable water unless the site thereof has been approved by the governor in council, nor unless such work is built, placed and maintained in accordance with plans and regulations approved or made by the governor in council.
This appears in chapter 140 of the revised statutes of Canada, 1027, section 4. There have been no such plans made and approved, and certainly the operations that are now being carried on by the Beauharnois people have not received any sanction, even by order in council from the late government. Nor, as we have been informed to-day, have they received any sanction from the present government. So that undoubtedly the recent government went entirely outside the terms of this act when it granted the lease.
Mr. LaVERGNE: Why?


James Shaver Woodsworth: The question is
asked, why? I am not so much concerned why they did it; that might bring the discussion into the realm of imputation, and to-day I have made no imputation. I have confined myself to what I consider to be the facts, and for the most part I have read from the official documents concerned.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



BORDER CITIES COMMUTERS


Richard Bedford Bennett: Mr. Speaker, I desire, with the consent of the house, to lay on the table certain correspondence that has taken place between the State Department of the United States of America and the Department of External Affairs of the Dominion of Canada. It deals with commuters, and consists of a note from the Canadian Legation to the State Department on December 20th, an acknowledgment from the State Department of December 30th, and the full reply dated May 11th.
The main provision in the reply of the Secretary of State is that commuters who have been properly admitted as immigrants under general order No. 86 will be accorded the same consideration as if they had actually taken up their residence in the United States. It is further implied that loss of employment

Caughnawaga Bridge
in the United States by aliens of the immigrant commuter class of less than six months will not involve abandonment of status. It is provided that commuters who visit European countries without securing reentry permit or a new immigration vise on their return will be assumed to have abandoned their status, inasmuch as one of these documents is required of an alien resident in the United State to secure reentry. The information as to procedure in the latter part of the Secretary of State's note indicates certain concessions from the usual practice to facilitate reconsideration of the cases of persons already rejected. The final paragraph of the note permits persons rejected as commuters to apply for temporary entry to the United States as visitors, and constitutes a general exception to the regulation that persons who have been rejected may not be admitted to the United States within one year except by special permission of the Secretary of Labour.
I lay two copies of the correspondence on the table.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. 22 respecting the construction and maintenance of a bridge over the river St. Lawrence at Caughnawaga

Mr. Dupuis-Mr. LaVergne in the chair.
Section 1 agreed to.
On section 2-Submission of plans for approval.
William Lyon Mackenzie King: This bill, I believe, is similar to the bill introduced near the close of the last session of the last parliament. At the time my right hon. friend the present Prime Minister (Mr. Bennett), who was then leading the opposition, took exception to ithe bill on the score that it necessitated payment of tolls. I had rather imagined that any bill that might be introduced at this time would not with the government's consent have included that particular feature, but apparently this bill is altogether similar to the previous one in that regard, and as the plans will have to be approved by the governor in council, I think this is an aippropriate moment at which to ask the government whether it is the intention to insiist on the bridge being free of tolls.
My right hon. friend, speaking during the recent campaign at Onmstown on June 29th, 1930 made this statement, which I quote from the Ottawa Citizen of the day following: 22110-112
Mr. Bennett added that he favoured Dominion assistance towards a bridge across the St. Lawrence at Lachine, but not a toll bridge which will prevent farmers getting their products to the market cheaply.
Then at Ormstown on June 30,-


Richard Bedford Bennett: I was not at Ormstown twice.


William Lyon Mackenzie King: No. I should
say at Ormstown on June 29, but the Montreal Star of June 30 reports my right hon. friend as follows:
"Now, everyone is in favour of this bridge. Most of all I am. But I believe in free bridges and free highways. After all the king's highway has been always free, ever since mediaeval times and the dark ages. It belongs to the people, and so should a bridge, for it is simply an integral part of the highway. When the Conservative party takes office," Hon. Mr. Bennett concluded, "we will help you build a bridge-but it won't be a toll bridge."
Now that the Conservative party is in office and I presume by the approval to be given by the governor in council is helping to build a bridge, I ask the Prime Minister if he is going to carry out the pledge made to the electors at that time that the bridge would not be a toll bridge.


Richard Bedford Bennett: The question put by the right hon. gentleman is easily answered. This bill is a private bill in charge of one of his supporters from the province of Quebec. The government has been neither asked for nor has it sought to give assistance.


William Lyon Mackenzie King: The government is giving assistance to the hon. member in getting his bill through.


Richard Bedford Bennett: This is a bill reported by the private bills committee.


William Lyon Mackenzie King: He could not get it through without the assistance of the government.


Richard Bedford Bennett: Mr. Chairman, it is almost impossible to think that anyone with the parliamentary experience and education of the right hon. gentleman could make such a statement and expect no one to reflect on him for having made it. To say that a private member cannot get a bill through the house without the aid of the government is rather indicating that the government he is accustomed to is not the kind of government that this is. The hon. member has introduced a private bill under the rules of this house. The bill has been reported upon by the private bills committee and the fees necessary to enable it to be considered have, I assume, been paid. The bill as reported on

Caughnawaga Bridge

is now before this committee, and had not the hon. gentleman given me further particulars of it I would only have known of it because of something brought to my attention yesterday as to a clause inserted in the bill. I most strongly resent the thought that private members' bills must have the aid of the government in order to pass this house. Parliament is free to anyone who desires to present a bill, and the rules and regulations are framed for that purpose. This bill is properly before the house, and no assistance has been sought or suggested to be given by the government for the purpose of enabling it to pass.


William Lyon Mackenzie King: I wish to remind my right hon. friend that I prefaced my remarks by drawing attention to the fact that the section read requires approval of the governor in council of the plans before there can be any construction of the bridge. Either my right, hon. friend is misleading the house and particularly the hon. member who is introducing this bill, in causing him to believe that this requirement is of some value and the approval of some assistance-


Mr. CHAPLIN:: Is that the lieutenant
governor in council?


William Lyon Mackenzie King: No, by the
governor in council, and unless my right hon. friend is in a position to implement the promise which he made, that this bridge will be free of tolls, he is simply not carrying out a pledge given to the electorate by himself in specific terms during the last general election.


Richard Bedford Bennett: As far as the approval
of the governor general in council is concerned, this bridge crosses the St. Lawrence river, and the law provides that a bridge shall not cross the St. Lawrence at that point unless this parliament, not the governor in council, has given its approval. The manner in which parliament gives its approval is to provide that the detail plans are to be submitted to the governor in council. In other words, this parliament has been asked, under the terms of the Navigable Waters Protection Act, to do what has been suggested by my hon. friends opposite and to my right this afternoon, which is to obtain the approval of parliament and not the governor in council for the crossing of the St. Lawrence river. This parliament has stipulated that such approval is contingent upon the plans being approved by the governor in council, and that is all there is to it. That is the whole story, and the question of tolls or anything of that kind is not a matter over which parliament has control.


Charles A. Stewart: -Surely my right hon. friend will agree, however, that this is not the reason the bill is before parliament. The bill is here to get authority to construct the bridge.


Richard Bedford Bennett: No, it is not; that authority comes from Quebec.


Charles A. Stewart: But you
cannot have a bridge across the St. Lawrence river without the governor in council approving the plans. I see no difference between this and the bill of last year.


Richard Bedford Bennett: As usual the hon. member for West Edmonton has not taken the trouble to inform himself as to the facts. This is entirely a Quebec arrangement.


Charles A. Stewart: Is there
any difference between this bill and the bill of last year?


Richard Bedford Bennett: I cannot say with regard to the bill of last year. This bill provides for the crossing of the St. Lawrence river, which has to be approved by parliament, but the company which is to build the bridge will do so with the aid of the provincial authorities, who will guarantee the bonds. That is purely a provincial matter, over which we have no control.


[Stage Direction]
Section agreed to.
Section 3 agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Mr. JOHN T. HACKETT (Stanstead) moved the third reading of Bill No. 28, to amend the Bankruptcy Act (priority of claims).
Motion agreed to, and bill read the third time and passed.

[Stage Direction]
Mr. JOHN T. HACKETT (Stanstead) moved the second reading of Bill No. 33, to amend the Companies Act (auditors).
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. LaVergne in the chair.
On section 1-Auditors not to be directors or officers.
Mr. GEARY:: It seems to me the proviso is a little cumbersome and probably does not quite effect the object the promoter of the bill has in mind. I would suggest, and move

Companies Act-Auditors
accordingly, that the proviso be struck out and the following substituted therefor:
Provided however, that the subsection shall not apply to any private company, nor to any company whose shares, bonds, debentures or debenture stock are not offered for public subscription.
The present proviso excludes a company which prohibits any invitation to the public to subscribe for shares, but I do not believe that would afford the protection which is desired. A company may be a private company or a company not offering its bonds or shares for public subscriptions, although still not prohibiting such action. It might be, also, that the proposed provision is too broad, that any company could take advantage of the proviso by simply passing a resolution to the effect that public subscription is not to be invited. It seems to me if we confine the proviso to private companies or to other companies which, while not nominally private companies, do not in fact offer their stocks, shares or debentures to the public, that would be what this parliament would wish, and I move accordingly, seconded by the non. member for Yale (Mr. Stirling).


Mr. STEVENS:: Mr. Chairman, I have
no particular desire to offer very harsh criticism of the proposal, but I do question the loosening up or the slackening of the present restrictions in connection with auditors participating in the management of * companies of which they are the auditors. I believe the principle is bad. If we are to do anything under the Companies Act or similar acts to affect auditing, we should make the position of the auditor clearer, more definite and more responsible than it is to-day. The value or merit of an auditor's report rests in the thoroughness with which his work is done. I have not the amendment in my hand, but from my memory of it I would draw attention to this possibility: a company might organize, publicly offer for sale its debentures and carry on business for a certain time with its auditors being permitted to act as directors. It might be the intention of the company to list its stock at some later date, which it could do by obtaining an amendment to its original charter. I desire only to draw attention to the danger of loosening the restrictions which already exist, which are meagre enough, as to auditors taking part in the management of companies of which they are auditors.


Mr. RINFRET:: I have no desire to prolong the discussion on this bill, but I rise to say that I share fully the views expressed by the Minister of Trade and Commerce (Mr. Stevens). The Companies Act was amended at some length last year, and this is one of the matters which came before the committee. I believe there was unanimity in having our present act include a clause concerning this very matter. I think it appeals to everyone's common sense that a man who is an auditor of a company should not be a partner, associate or director of that company, otherwise he would be auditing his own accounts, and that is not a good principle. Subsection 3 of section 123 of the act reads as follows:
Neither the auditor of any company nor any partner associate in any accounting or auditing company or business with the said auditor shall be capable of being appointed a director or officer of the company.
That provision is as complete and extensive as it could be. It makes it very clear that the books of a company must be audited by someone who is not associated with or interested in the company. That is a good principle for all companies, and it should not be departed from even when dealing with private or small companies. They might as well not be audited as to be audited by one of their own personnel because, as I said before, if a man is a director of a company and is the auditor of that company, he is practically auditing his own work. I associate myself with the Minister of Trade and Commerce-and it is a great pleasure to associate with him-in opposing the amendment embodied in this section.


Mr. NICHOLSON:: Mr. Chairman, it
seems to me that something very important is being lost sight of in the objections offered to this bill. Many companies which are practically family corporations are carrying on business throughout the country, and the purpose of any auditing they do is to audit the books of a servant of the company, such as the secretary treasurer. Instead of employing a firm of auditors or chartered accountants, these companies save money by auditing the books of their own officers. As the bill now stands, this practice would be made illegal. It seems to me that the present bill was meant to take care of situations such as this.


Mr. HACKETT:: Mr. Chairman, there can be no doubt as to the wisdom of the enaet-ent of the last session. It is undesirable that the affairs of the company should be audited by those who are managing it, but it is not desired that legislation should react unfavourably against those whom it is intended to protect. When this subsection 3 was passed it was found that it wrought a great hardship on innumerable small com-
Companies Act-Auditors

panies. There is a large number of companies represented in Canada by auditors from the old land. They have offices here from which they transact business, but their affairs are controlled and supervised by auditors who are at the same time directors and managers of the companies. I am sure many hon. members can recall at least half a dozen such concerns in the larger cities of the Dominion. I venture to say that half of the hon. members in this house hold shares in small private companies, and this amendment is offered to enable those companies to carry on their business as they have in the past, without prejudicing the public, their neighbour or anyone else. It might be called a poor man's amendment; it offers that measure of elasticity which is desirable in all legislation if it is to be effective, and it need not reduce the quantum of supervision and careful scrutiny incidental to good business management. Large companies, companies in which public funds are invested and the shareholders of which must look to the auditors for protection, are in no way affected by this amendment. It applies only to private companies, and private companies are very insignificant entities as compared with those which the measure of last year aimed at protecting. If one were to take a census of the number of companies that are placed under a hardship by the legislation of last year, I think one would reach the conclusion that there is behind this amendment an element of wisdom and forbearance which makes it altogether desirable. It in no way attacks the principle to which the hon. member for St. James (Mr. Rinfret) has referred.


Mr. NEILL:: The hon. gentleman referred
to a hardship. Is it the expense of outside auditors?


John Thomas Hackett: It is not only the expense of an outside audit. The people who own the company have to choose between being the auditors of the company, as stated, for instance, by the hon. member for East Algoma, for the purpose of auditing the accounts of their own business, and being ' directors of their own business. They are faced with that alternative.


Mr. GUTHRIE:: No doubt there is a great deal of merit in the proposal embodied in this bill, but I think the course in the house heretofore has been, perhaps not invariably, but almost so, to refer bills of this kind to the banking and commerce committee. The bill of last session was referred to that committee. I do not know whether the promoter would have any objection to that course being pursued now.


John Thomas Hackett: I have no objection.


Hugh Guthrie: Perhaps that course
should have been pursued before the bill was read the second time, and before it came into committee; but if the committee has no objection, my suggestion is that a motion be made to refer the bill to the banking and commerce committee in order that they may thoroughly understand it and report to the house.


Some hon. MEMBERS:: Carried.


Hugh Guthrie: I move that the committee rise and report progress. With the consent of the house I shall then move that, the bill be referred.
Progress reported.


Hugh Guthrie: With the consent of the
house I beg to move:
That Bill No. 33, to amend the Companies
Act [Auditors), be referred to the select standing committee on banking and commerce.


Alan Webster Neill: If I am in order-and I would like to be in order for once-I have no objection to the motion


Pierre Édouard Blondin: The motion as put is not debatable.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed from Friday, May 1, the adjourned debate on the motion of Mr. Boulanger for the second, reading of Bill No. 18, to amend the Civil Service Act (returned soldiers' preference).
Mr. W. W. KENNEDY (Winnipeg South Centre):: I desire to make a few observations in connection with this bill which is sponsored by the hon. member for Bellechasse (Mr. Boulanger). It proposes to amend the Civil Service Act of Canada in two respects: first, by adding to section 29 of the said act a further subsection (5) reading as follows:
Notwithstanding anything to the contrary in this section, or in any regulations made by the Civil Service Commission, the preference mentioned in subsection 4 of this section shall be granted only in the case of Canadian nationals as defined in section 2 of chapter 21 of the revised statutes of Canada, 1927, or as defined in any amendment or reenactment thereof.
The explanatory note set out opposite this subsection in the bill reads:
The object of this subsection, which is new is to provide that the preference, commonly referred to as 'The returned soldiers' preference" shall be granted Canadian soldiers only.

Civil Service Act-Returned Soldiers
The second amendment proposed by the bill relates to section 33 of the act and has to do with the residence in Canada required as a condition precedent to the admission to examination of British subjects desirous of entering our civil service.
It is in respect to the first part of the bill that I wish to direct the immediate attention of the house. What is the purpose of the proposed amendment? I think I can do no better than give to the house the answer of the hon. member for Belle-chasse who is sponsoring the bill. As reported in Hansard at page 1196, the hon. member for York-Sunbury (Mr. Hanson) asked this question:
Is it the declared object of this bill to cut off the preference to veterans of the British army?
This is the reply of the hon. member for Bellechasse:
Yes. The intention is to restrict the preference to veterans of the Canadian army.
I ask the house to examine briefly that purpose, with some of its implications, in relation to the British Empire of which Canada is still, thank God, a part. This bill seeks .to draw a line of demarcation between Canadian nationals and all other soldiers of the empire who fought the battles of the empire in our hour of need. I know it is a far cry back to 1914, but I should like, if I could, to'take hon. members back for a few moments to those days so that they might realize in this year 1931 what was the situation in 1914 and by what means the empire met that crisis.
You will recall, Mr. Speaker, that it was not a prdblem for Canada alone, for the motherland alone, for Australia or New Zealand or South Africa alone, but it was an empire problem, and the keynote of the force with which that crisis was met was unity of force and purpose and not lines of demarcation. You will remember the call Chat went out in this country and how it was answered. From the little cabins of the miners along those creeks in the Yukon, from that great province of British Columbia, from the foothills of Alberta, from the plains of Manitoba and Saskatchewan, down through old Ontario to Quebec and the maritimes, who answered? Were they Canadian nationals alone? I ask hon. members to mark the calls that went out and to observe whether or not in those days the call was to Canadian nationals as distinct from imperials, and I shall give just a few of those slogans. What are they?
Hear the dead calling you, strong men and able
For Canada's honour respond to your name.
Here's your chance. It's men we want.
Each recruit brings peace nearer.
In her hour of need your country calls you.
Join the brave throng
That goes marching along.
Brothers, will you come?
The Prussians want to make this the dark continent. Will you let them do it?
"Fall in."
Answer now in your country's hour of need.
If ye break faith
We shall not sleep.
Boys, come over here. You are wanted.
You come across or Germany will.
Here is another one:
Young men!
The privilege of service is yours, that your country may live and that freedom may not disappear from the earth.
This one for the hon. member for Bellechasse :
Unis pour la paix avec la victoire.
Another:
It is always fair weather when good fellows get together. You will find a lot of good fellows in the Kilties. Why not join the 73rd Cameron Highlanders of Canada?
I want to place beside those slogans the words with which our troops were sped to the front. I want to give one extract from the speech of the late Sir Sam Hughes, then Minister of Militia, and a great minister he. was, to the troops at Gaspe, on October 2, 1914, as they were about to go:
That you will render a splendid account of yourselves for king and country is certain. You come of the right breed,-English, Scotch, Irish, French and Welsh.
No line of demarcation there. Again I should like to quote from the message of Sir Arthur Currie to the Canadian corps after the enemy had advertised its last great onslaught and had struck. You, Mr. Speaker, and many other hon. members of this house will keenly recall that message, which was dated March 27, 1918:
In an endeavour to reach an immediate decision the enemy has gathered all his forces and struck a mighty blow at the British army. Overwhelmed by sheer weight of numbers the British divisions in the line between the Scarpe and the Oise have fallen back fighting hard, steady and undismayed.
Measures have been taken successfully to meet this German onslaught. The French have gathered a powerful army, commanded by a most able and trusted leader and this army is now moving swiftly to our help. Fresh British divisions are being thrown in. The Canadians are soon to be engaged. Our motor machine gun brigade has already played a most gallant part and once again covered itself with glory.
Looking back with pride on the unbroken record of your glorious achievements, asking you to realize that to-day the fate of the British Empire hangs in the balance, I place my trust
1762	COMMONS
Civil Service Act-Returned Soldiers
in the Canadian corps, knowing that where Canadians are engaged there can be no giving way.
Under the orders of your devoted officers in the coming battle you will advance or fall where you stand facing the enemy.
Canadians, in this fateful hour, I command you and I trust you to fight as you have ever fought with all your strength, with all your determination, with all your tranquil courage. On many a hard fought field of battle you have overcome this enemy. With God's help you shall achieve victory once more.
A few days later all ranks were addressed by Field Marshal Sir Douglas Haig, and I should like to put beside these extracts I have given his message to all ranks of the British army in France and Flanders. It is dated April 11, 1918:
Three weeks ago to-day the enemy began his terrific attacks against us on a fifty-mile front. His objects are to separate us from the French, to take the channel ports and destroy the British army.	. . .
In spite of throwing already 106 divisions into the battle and enduring the most reckless sacrifice of human life, he has as yet made little progress towards his goals.
We owe this to the determined fighting and self-sacrifice of our troops. Words fail me to express the admiration which I feel for the splendid resistance offered by all ranks of our army under the most trying circumstances.
Many amongst us now are tired. To those I would say that victory will belong to the side which holds out the longest. The French army is moving rapidly and in great force to our support.
There is no other course open to us but to fight it out. Every position must be held to the last man: there must be no retirement. With our backs to the wall and believing in the justice of our cause each one of us must fight on to the end. The safety of our homes and the freedom of mankind alike depend upon the conduct of each one of us at this critical moment.
In addition to those, Mr. Speaker, we have at the beginning of the story in the memorial tower in this building these words:
Read how free men throughout this land kept faith in the hour of trial and in the day of battle, remembering the traditions they had been taught, counting life nothing without liberty.
There answered the call' from this country 619,636 men. An analysis of those figures will prove of interest. Of those born in Canada there were 318,728; of those born in England, Ireland, Scotland, Wales and other British countries, 237,586; from other than British countries 59,505; not stated, 3,817. The call in those days was not to Canadian nationals alone, but to all citizens of the empire wherever dwelling. It is a matter of record that among the first to go from this country were many of those here from the motherland as well as many Canadians. From the farthest reaches of this country the British-born answer-

ed that call, and so anxious were they to rally to the mother country that many thousands of them at their own expense, paying their own transportation, left Canada to join their regiments in the old land.
This bill, if it passes this house, would now draw a line of demarcation between those who served in the Canadian army and the imperial veterans who served in the imperial army. I ask hon. gentlemen whether it is the desire of the people of Canada that this distinction should be drawn. I ask this house to remember that the preference given to all those who served in the allied armies, so far as the Civil Service Act as it now stands is concerned, was not prompted by charity but as a measure of re-establishment of those who served, and as such I submit that it should remain.
Last Sunday there took place in cemeteries in various cities and hamlets up and down this country the ceremony of burying exservice men who had died in various hospitals and elsewhere during the winter. The Last Post was sounded, the press was eulogistic of the services of these men, editorials were written.
I urge the hon. member for Bellechasse to reconsider this amendment. I would point out to him that already, with the lapse of time, even the youngest of those who served now border upon or have passed middle age. A few years more and with the flight of time all those who were united in those days of stress will again be united in death. Can Canada not wait a little longer?
The hon. member for Bellechasse appeals to this house in his closing words and purports to invoke the Canada first policy as enunciated by this government. Here is what he says:
I believe the spirit of the bill is in accordance with the Canada first policy of this government.
Let me remind him that the "devil can quote scripture for his purpose." The Canada First policy as enunciated by the Prime Minister of this country, and as I apprehend it. has to do with the welfare, happiness and prosperity of all Canada and of all who dwell therein, irrespective of origin, race, creed or party.
This amendment to the Civil Service Act proposes to draw a line between those who stood together and served our empire well in her great hour of need. I submit that the spirit of the bill is wrong. The bill is wrong and I protest against it: I trust that at the hands of this house it will receive "no quarter."


Charles Gavan Power: All
of us, I think, appreciate the lofty and patriotic sentiments expressed by my hon. fr.end from Winnipeg South Centre (Mr. Kennedy). But
MA'/ 19, 1931
Civil Service Act

Returned Soldiers
the bill as submitted should at least be allowed to go to the committee in order to be carefully studied. If hon. members will turn to the provisions of the Civil Service Act, section 29, subsection 4, they will find that it deals with the preference given to returned soldiers, and I think they will agree with me that that section as it stands calls for some sort of amendment. I am not prepared to say that the amendment suggested by my hon. friend from Bellechasse (Mr. Boulanger) is the one which will meet the views of every member of this house, but I do think that if the bill is allowed to go to the committee, where proposals can be given careful consideration, amendments can be suggested which will meet with the approval of the majority of hon. members.
I will read the section of the Civil Service Act to which this bill refers. Section 29, subsection 4, reads:
In all examinations for entrance into the civil service the persons named on such special list who are found to possess the necessary-qualifications shall be named, in the order of merit, on the list of successful candidates above all other candidates; and all other persons who have been on active service overseas-
This is the list of persons preferred.
-on the military forces or who have served on the high seas in a seagoing ship of war in the naval forces of His Majesty, or of any of the allies of His Majesty, during the war, who have left such service with an honourable record or who have been honourably discharged, or when any persons who have served as aforesaid have died owing to such service, the widows of such persons, and who, in either case, obtain sufficient marks to pass such examinations, shall, irrespective of the marks they have obtained, be named in the order of merit, on the list of successful candidates next after any candidates who are on the special list mentioned in subsection two of this section and above all other candidates.
The act as very badly drafted. I do not know who drafted it, but with all respect I must say a terrible mess has been made of its English. In any case it means that on the preferred list, apparently indiscriminately, there shall be placed all those who served in the forces of His Majesty, naval or military, as well as all those who served in the forces of armies allied to His Majesty's.
I believe a number of the members of this house will agree with me that, whatever patriotic motives we may have had at that time in inserting such a provision, it is no longer necessary that we should give a preference to those who served in the allied forces. Let me give an example which, while it may be personal, I believe will apply to other members of this house who served overseas. I have a son of seventeen. In
another year or two he will be eligible to enter the Civil Service of Canada. I hope and pray he will never desire to do so, but the fact is that he will in due course become eligible. Should he desire to enter the civil service he will be obliged to submit to a preference in favour of a Portuguese or a French Senegalese or some other soldier who at some time or other served in the allied forces. This seems to me absolutely ridiculous. There is no reason why the children of Canadian returned soldiers should be obliged to give precedence to some one who served in any one of the allied forces.


An hon. MEMBER:: In the Foreign Legion.


Charles Gavan Power: Yes, in the Foreign Legion. But I am giving examples of armies from which it would be veiy difficult for us to obtain the real military record-armies of Montenegrins, of Serbians and of every nation on earth.


An hon. MEMBER:: Russians.


Charles Gavan Power: Such men may come to Canada and, provided they have the residential qualifications, having become British subjects perhaps only two or three years ago, just long enough to make them Canadian nationals, may have the preference over children of returned Canadian soldiers. I submit that the act as originally drawn, in section 29, subsection 4, should be changed; and if this bill is allowed to go into committee I propose to submit an amendment which will eliminate the preference given to members of the allied forces. So far as members of the imperial forces are concerned, I would propose this amendment:
In all examinations for entrance into the civil service, the persons named on such special list, who are found to possess the necessary qualifications, shall be named in the order of merit on the list of successful candidates above all other candidates, and all other persons who have been on active service overseas, in the military or naval forces of His Majesty during the late war, and were at the time of their enlistment-
This covers the 30,000 mentioned by my hon. friend from Winnipeg South Centre.
-oi at the date of passing of this act-
That is, the present time.
-domiciled in Canada, who have left such service with an honourable record, or who have been honourably discharged, or when any persons who have served overseas as aforesaid, have died owing to such service, the widows of such persons, and who, in either case, obtained sufficient marks to pass such examinations, shall, irrespective of the marks they

Beauharnois-Miss Macphail
have obtained, be named in the list of successful candidates next after any candidates who are in the special list mentioned in subsection 2 of this section, and above all other candidates.
The proposal is first of all to eliminate the preference given to members of the allied forces and, secondly, to give a preference to members of the imperial forces who were domiciled in Canada at the time, of enlistment or who are at the present time-at the date of the passing of this act-domiciled in the Dominion. That is to say, it is not intended to give a preference to those who may come here after the passing of the act.
That is the proposal which I hope to make if the bill goes to committee. It is a proposal which I believe will commend itself to many members of this house who may be under the impression that the bill now under consideration is designed to do away with the returned soldier preference. I believe an amendment such as I have suggested would fully safeguard all those returned soldiers whom it is the interest of this house to protect.


Pierre Édouard Blondin: The hour for public bills having expired, the house will revert to the discussion of the special motion to adjourn.



BEAUHARNOIS POWER CORPORATION


[Stage Direction]
The house resumed consideration of the motion of Mr. Gardiner.
Miss AGNES C. MACPHAIL (Southeast Grey): I shall address the house very briefly, and I wish to do so because, in my opinion, it has been too often true that the natural resources of Canada have been given away to promoters. This policy, which we have followed fairly consistently in the past, has created millionaires on the one hand and struggling Canadian citizens on the other; and it is because I believe that the Beauharnois project comes within this classification that I wish to discuss it. There seems to be something in the nature of giving away the natural resources of Canada.
In the first place, as has been made clear in this house many times, both in this debate and in former discussions, the prospectus made claims that could not be substantiated by the racts. It does seem clear that the Beauharnois corporation could not have sold their bonds as successfully as they did, or possibly could not have sold them at all, had it not been that the Hydro-Electric Power Commission of Ontario entered into a long-term contract with

them to take 250,000 horse-power. It is curious to find that the hydro-electric enterprise, the pride of all those who stand for public ownership in Canada, should have put itself in this position. We recall that Sir Adam Beck when he founded the enterprise wanted, through it, to develop the water powers of the province for the use of the people at cost. Those of us who were in the house when Mr. Church was a member knew what an avowed friend of public ownership he always was. In an interview as reported in the Toronto Globe of Tuesday, April 14, 1931, I find he said in relation to the hydro-electric commission:
It could not have been put over-
That is, the Beauharnois project.
[Stage Direction]
without Mr. Ferguson's guarantee to take
250.000	horse-power, which guarantee financed the whole deal.
In following other utterances on this subject, one can hardly miss the interview that Mr. Sinclair, the Liberal leader in Ontario, or the former Liberal leader-I am not quite clear on this point-gave to the Toronto Globe, as reported in its issue of April 22, 1931. He said :
Hydro agreed to purchase 250,000 horsepower from Beauharnois, another block of
150.000	horse-power was contracted for by another concern. These contracts enabled Beauharnois bonds to be sold. Their prospectus showed these contracts would pay more than all operating expenses and the interest and sinking fund on all the bond issues. There remains 100,000 horse-power still to be marketed at a clear profit. Such being the case, hydro is buying power at more than its cost of production, and the excess over cost goes to the promoters of Beauharnois.
And may I add for Mr. Sinclair-at the expense of the people of Ontario. Then, too, Mr. McQuibban, speaking in the Ontario legislature, used this very significant sentence as reported in the Toronto Globe of March 30 last:
Hydro has hoisted the white flag of surrender.
It really does look like that. A public ownership scheme started, as I said a moment ago, to develop power at cost, has become a distributing corporation for private concerns -concerns that have no particular interest in developing power at cost, but rather in developing power at profit. So I believe I can say without fear of contradiction that the Hydro-Electric Power Commission of Ontario has aided and abetted the schemes of its adversaries. If more power is needed in Ontario why is it not possible to develop the power resources of the international section of the St. Lawrence river? That would seem

to me to be a policy in keeping with the practice of the hydro-electric commission in years gone by.
There is one other aspect of the question with respect to which I wish to say a word or two. The development of the Beauharnois project, in the opinion of those who have given most study to it, prevents the development of the St. Lawrence waterway. It naturally occurs to one that if a depth , of 35 feet is needed for ocean boats below Montreal, the same depth would be needed above Montreal. May I again refer to Mr. Church? And one must say this for him. that as we look back over his record in the house we cannot help but feel that . many times he championed causes here when they were very unpopular, and that he did it because he believed it to be in the best interests of his own city and province that he loves so much and of the whole Dominion. In this connection he said, as reported in the Toronto Globe of April 14, 1931:
There will be no St. Lawrence waterway. The whole public canal policy of Canada has been upset by this deal and the company given power to build an artificial navigation canal 27 feet deep on the St. Lawrence in exchange for the power, whereas from Montreal to Quebec the navigation channel is 35 feet. The canal feature is a myth.
Then Mr. Sinclair in the same interview to which I have already referred stated:
In the Beauharnois development, the depth oi the ship canal is limited to 27 feet. Below Montreal the river is now being dredged to a depth of 35 feet to allow large ocean boats to reach .Montreal, which will thus become the head of navigation for all such vessels. If it is good for Montreal, would it not be good for all ports in Ontario, including the 840,000,000 harbour of Toronto? The construction of the ship canal also provides for fixed spans in bridges crossing^ it, indicating there is no thought of navigation using the canal, because all other canals will remain as at present, and can be used as at present for all traffic west of Montreal. Montreal seems to control the situation, and promoters of Beauharnois have seen to it that navigation in a big way stops at Montreal.
And Mr. McQuibban speaking in the legislature of Ontario, as reported in the Toronto Globe of March 20, 1931, said:
If this gigantic scheme-
Speaking of the Beauharnois scheme.
-is consummated it has postponed the seaway for one, or maybe more, generations.
It seems clear that the fact of the Ontario Hydro-Electric Power commission buying power from Quebec for a period of fifteen years will in itself retard the development, of the deep waterway. For that period of time at least Ontario will not be in a position
Beauharnois-Mr. Campbell
to buy power from the international section of the St. Lawrence should it be developed-Then, too, Quebec can claim that since she is exporting this great block of power to the province of Ontario she is short of power for her own use, and so can bring pressure to bear upon the Dominion government to allow her the full flow of the river.
I would not have said a word as the Prime Minister has agreed to a parliamentary committee to investigate the whole Beauharnois scheme, except that I do feel tha-t since the inception of the hydro-electric enterprise in Ontario the danger to its continuance as a public-owned enterprise has never been as grave as it is at the moment, and I believe that all lovers of public ownership in Ontario should bring to bear whatever influence they have as a whole to ensure that if possible the contract is cancelled, and certainly that the present policy of the hydro-electric commission shall not be followed in the future.
Mr. M. N. CAMPBELL (Mackenzie):: Mr. Speaker, I do not propose to discuss at any great length the history of the Beauharnois project. That has been very well covered by hon. members in this corner of house who have preceded me. Suffice it to say that the development of power on the St. Lawrence river has been conceded to the province of Quebec with regard to that part of the river lying in that province. Under the constitution, however, the federal government controls navigable rivers. I know there are some legal arguments in connection with these, points, but in substance that is the attitude which has been taken by the federal government in regard to this question. Therefore the power rights that were granted to the Beauharnois company by the province of Quebec were of no use to that company until they secured the authority of the federal government to use the water of the river. The federal government granted the right to the company to divert 40,000 cubic feet per second from the St. Lawrence river -to their fifteen-mile power canal. This will enable the company to develop 500,000 horse-power of electrical energy, with an annual commercial value of about S15 per horse-Dower.
The government secured nothing in return for the granting of this natural resource, and the late King government has been very severely criticised for its failure to secure some compensation. However, the company are obligated to permit navigation through that canal if required. That navigation, however, will be made possible only by the construction of locks, which it is estimated will cost about $25,000,000. Perhaps the most severe criticism

Beauharnoi<?*-Mr. Campbell
of the action of the late government is that they did not stipulate for the construction of these locks by the company. This criticism is accentuated by the fear that this diversion may interfere with the development of the St. Lawrence deep waterways scheme. Since the United States has treaty rights in the St. Lawrence river, also, it is even asserted in some quarters that there may be international complications.
Now, Mr. Speaker, in connection with the deep waterways development there, would seem to be three courses open to us in regard to the navigation of this river. First there is the present Soulanges canal, about fifteen miles long, on the north shore of the river, which will accommodate vessels drawing fourteen feet of water. All the navigation of that portion of the river going around the rapids must use that canal at present. The Beau-harnois power canal when completed, will accommodate vessels drawing twenty-seven feet of water, and this canal also is about fifteen miles in length. This may or may not conform to the requirements of the engineers of the deep waterways scheme. If it does, then I presume the canal can be used, but I am not quite clear on that point. I have heard it asserted that it does conform to the requirements of the scheme, and on the other hand I have heard it said that it does not. There is also a shorter canal suggested by the joint board of engineers, which would be about five miles in length, and at the head of which there could be developed about 2,000,000 horsenpower.
It seems to me that in dealing with this question parliament first must see that nothing is done which may interfere with navigation on the river. I think that is the first thing that must be decided, and that should be consistent with the development of the maximum amount of electrical energy. Electrical energy is one of Canada's most valuable assets; it is one of the things which we expect to give Canada her place in the industrial world in the years to come, and I believe I am safe in saying that no other country in the world is possessed of the great potential water power which we have in Canada. Therefore II say that in any scheme of this kind we must first protect navigation and in the second place we must consider the development of the maximum amount of electrical power.
The obvious duty of parliament, therefore, is to secure something for the people for the valuable rights which have been granted to the company. So far in the debate only one suggestion has been put forward, namely that the whole undertaking be cancelled, on the assumption that the government itself would

operate the development. That could be done, if the government has a legal right, as has been asserted, by the cancellation of the present rights granted to the company; or it could be done by the government declaring the whole work to be for the general good of Canada. In either case I assume the. government would be called upon to reimburse some of those who have put their money into this project, at least those to whom the Prime Minister referred as the innocent third parties.
It seems to me, however, that there is an alternative. The history of governmental action in Canada in the past would give us very little hope that any such cancellation will be. made. The alternative, it would seem to me, would be to grant the extra diversion requested on condition of a consideration therefor, possibly the construction of some public work which would adequately and properly protect the public interest and give the people of Canada something in exchange for the valuable concession made.
With regard to the question of cancelling the project, as the Prime Minister has indicated there would be difficulties. There is the question of financing; there are the innocent third parties, the persons to whom bonds have been sold and by whom common stock has been purchased. Then again there is the question of operation. If the government took it over it would have to build up an organization to operate it. Whether or not we have enough confidence in ourselves and in the government to undertake a great work of this kind is a matter open to question. Then there is another point in regard to the lease of power. I understand the company has already contracted for all the power it proposes to develop. Industries are being built up and developed on the strength of these contracts, so the ramifications of the enterprise are very great and the whole thing is very complicated.
Now lei us consider the second proposition, that we should secure something from the company in return for what has been granted to them. In that connection it seems to me the difficulties are not so great. The question is simply what we can secure for the people as adequate compensation for the right that has been granted the company. Let me. say again that any [DOT] arrangement entered into must make absolutely certain that navigation is not prejudicially affected. The Soulanges canal, I think it is admitted, is not suitable for the deep waterways scheme; that canal would have to be reconstructed or entirely rebuilt in order to fit in with that proposition. Probably the Beauharnois canal comes much closer to the specifications any such canal

Beauharnois-Mr. Campbell
would be required to meet. In this connection I would like, to draw the attention of hon. members of the house to two very excellent articles appearing in the Manitoba Free Press, and written by a man named It. K. Finlyason. These articles show a very thorough and thoughtful study of the whole question, both from the standpoint of navigation and with regard to the development of power, and I would commend them to hon. members. The first article appeared in the Manitoba Free Press under date of December 19, 1930, and deals more particularly with the question of navigation. Referring to power, however, Mr. Finlayson says:
Harnessing power presents the same economic difficulty that would follow if an equal number of horses *walked out of the stream. They must be used, or destroyed, or sold abroad. It will require some 30 to 40 years in Canada to absorb the St. Lawrence Canadian power into use.
There is another problem also. The company securing the right to develop power must secure a market for that power, because there is no use developing power unless it can be sold.


Mr. FACTOR :: The Prime Minister having promised an investigation into this matter, what is the object of all this discussion which is taking place now?


Milton Neil Campbell: If my hon. friend will just listen until I am through I will tell him the object. I think we have a right to discuss the question here, and to perhaps give some lead to the committee.
Dealing with freight rates, Mr. Finlayson says:
The picture of all the great vessels of the world coming to Port Arthur has vanished, and with it those fanciful claims for savings which were to equal the present cost of shipment from Port Arthur to Montreal.
His argument is that from a navigation standpoint the project is not feasible; it is feasible only by the development of power supplementary to navigation. Dealing with transportation, he says:
But while transportation is arguing, power considerations are acting.
He then goes on to give the details of the grants to the Beauharnois company. Referring to the rights to divert water granted to the company, he says:
If the main river development for navigation is feasible in spite of this diversion and is eventually followed, the Dominion of Canada without any consideration whatsoever has surrendered such right to revenue as it had from P00.000 hydro electric power with a preemption of the power market in the St. Lawrence basin for five years.
Editorials appeared in the Manitoba Free Press apparently inspired by and based upon the articles from which I have just quoted. An editorial in the Free Press of December 20, 1930, in part reads as follows:
The present condition of the waterways question is well described in the articles contributed to the Free Press by Mr. R. K. Finlayson. The surrender by the King government of the Dominion position-outlined by Mr. Lapointe in his statement of 1927-in the face of political pressure from Ontario and Quebec, the absence of any political support from other parts of Canada, and the failure of the supreme court to give a clear judgment upon the questions submitted to it, as indicated by its action in the matter of the Beauharnois lease, has placed the whole enterprise in jeopardy, as is clearly shown by Mr. Finlayson. The advantages of the canal are not sufficient to justify the people of Canada in building it out of the public funds, without assistance from water-power rentals. Whether the Dominion's right to share in the power which it creates can be regained is doubtful.
Another editorial which appeared in the issue of April 29, 1931, in part reads as follows :
The whole Beauharnois situation is to be reviewed in Ottawa this session, and there is still time to snatch safety for the seaway from the elutches of the hitherto invincible power interests.
There has been too much politics in the Beauharnois situation up to the present. The primary aim is too often lost sight of. The St. Lawrence deep waterway project must be carried to completion. This is the aspect of the situation which is national in character. The disposition of St. Lawrence power, save as it affects the seaway, is not a national nroblem. It happens, however, to be the only lever with which the seaway can be built.
That is the particular point to the whole argument. The editorial continues:
The power on the Canadian section of the St. Lawrence is in the right of the Quebec government, which can dispose of it as it sees fit.
And again:
The Dominion has the right to step into the situation and say that not another horsepower shall be installed at Beauharnois until plans are adequately laid, and under way, for the development of the whole St. Lawrence scheme. If Mr. Bennett does not do this, lie will betray his election pledges.
And further on the editorial continues:
He has the chance to block further grants to Beauharnois until such time as the whole seaway is assured.
If he does not care to take so drastic a step, another course lies open to Mr. Bennett. He can drive a bargain with the Beauharnois interests such as should have been driven by the King government. He can say to them that they can take more water, but only if they hand over not only a fully equipped canal on the Beauharnois section, but also the necessary
1768	COMMONS
Beauharnois-Mr. Bell (St. Antoine)
canals ancl locks on the Lachine section further down the river. He can force the Beauharnois interests to do this, or refuse to make them any further grants.
It seems to me that that is the real crux of the whole situation. I agree with the suggestion made by the Prime Minister (Mr. Bennett) that this matter should be sent to a committee of the house for further investigation. Hon. members should be allowed to interview these men in order to ask questions. They should come here, place their cards on the table and give us all the information we need to discuss this matter intelligently. We would not have been in possession of all the information we now have in connection with the Beauharnois project had it not been for a rival financial group who had been worsted in the fight for this power. Both these financial groups should be called before the committee and asked to give us all the information they possess. It should be discovered whether or not the present Beauharnois canal will adequately serve the needs of navigation for the purposes of the St. Larvrence deep waterway. Technical advice should be available as to what should be secured to the people of Canada in exchange for the company being allowed to go ahead.


Leslie Gordon Bell: Mr. Speaker, coming as I do from the city of Montreal only twenty-five miles from the Beauharnois canal, and in view of the fact that a great many distinguished citizens of that city are directly or indirectly concerned with the Beauharnois project and are working for its completion, I rise not to protest against the motion of the hon. member for Acadia (Mr. Gardiner) that an investigation be made of this project, but to say that I believe such an investigation will be welcomed as much by those connected with the Beauharnois Company as by those making the charges.
Hon. members should realize that this is one of the biggest projects ever undertaken by Canadians. Next to the Panama canal, it is possibly the biggest canal in the world. It will cost in the neighbourhood of some $75,000,000 when completed. I do not protest against the charges made this afternoon by the hon. member for Acadia, but in making those charges he must realize that the responsibility rests upon him and other hon. members in his corner of the house.
Several questions will be involved in any investigation regarding Beauharnois. In dealing with this subject the hon. member for Acadia referred to a citizen of Montreal, an outstanding engineer, a man with a genius for engineering possessed by very few Canadians, and who has worked eighteen years on this

project. That man is attacked in the. House of Commons by the hon. member for Acadia in these words: Sweezey and his associates are trying to acquire certain rights by fraud and conspiracjr. The hon. member must realize the full purport of those words. When the investigation, suggested by the Prime Minister (Mr. Bennett) is being conducted, I hope the hon. member will then make his charges as they should be made, directly to the people charged. They should be given an opportunity to defend themselves against the charges, the evidence of which the hon. member claims to possess. Unless the charges are made in such manner, the purpose of asking hon. members to acquiesce in his demands is useless, the fact being that he along with other members in that comer of the house had ample time during the last two years to make those charges. I have no doubt that the action of hon. members in that comer of the house is in their view to all intents and purposes fully justified. I have full faith in their integrity, but I might say that the house is entitled to be given in no uncertain terms the facts upon which those charges have been based. First of all, the charges against those associated with the Beauharnois proposition should be clearly set forth, because charges have been made against them. Charges have been made against members of the upper house, the Senate, and those charges should be set forth in no uncertain terms. Charges have been made against hon. members on the opposition side, and possibly against hon. members on this side of the house, and those charges should be fully explained. Charges have also been made against the judiciary. Occasion was taken to refer to some lawsuits that are pending in the courts of Quebec, and I trust the hon. member for Acadia will be just as frank in making those charges against the judiciary of that province.


Robert Gardiner: I did not make any
charge against the judiciary of Quebec. I merely made a statement with regard to press reports.


Leslie Gordon Bell: The hon. member for Acadia, if my memory serves me aright, mentioned the name of Acting Chief Justice Greenshields of the province of Quebec, and he must have had some reason for mentioning that gentleman's name. Will he, in making his charges, explain if he made any charges against the acting chief justice or will he make it quite clear why the acting chief justice's name was mentioned?
I do not intend to dwell upon the vastness of the Beauharnois project. As I stated, it

Beauharnois-Mr. Bell (St. Antoine)
is the greatest undertaking ever contemplated by Canadians. I was thoroughly amazed by what the undertaking really meant. There is in operation at the Beauharnois plant one piece of machinery costing more than half a million dollars, and there has been expended on machinery alone more than $5,500,000 so far. For excavation purposes material has been removed amounting to more than 4,000,000 cubic yards. During the past year-and this is a very important matter for the city of Montreal-2,200 men have been on the payrolls every month, and at present 3,000 men are employed with an estimate of 3,000 other men making materials for the Beauharnois project. I am bringing these facts to the hon. member's attention, so that he may realize that, in submitting this question to the house he is making a very serious charge and one which affects Canadians everywhere. It affects not only the rights of Quebec but also the rights of the Dominion, and it is a question which, if it is possible for an investigation to settle it, should be settled by such a method. If the people connected with the project are not given a fair chance to proceed with their work, the work will be stopped and some action should then be taken whereby their interests and those of the people who have invested money in the Beauharnois project will be protected. I think hon. members in that corner of the house are assuming a little too much in advance that this canal will be taken over by the government. We in the province of Quebec, rightly or wrongly, have so far believed in private ownership. We may, be wrong. The people of Ontario may believe in public ownership, but strange as it may seem, the Beauharnois promoters, out of the 500,000 horse-power which they propose to develop, have already sold to Ontario by contract 250,000 horse-power.
Mr. LaVERGNE :	Does my hon. friend
contend that we in Quebec believe the navigation of the St. Lawrence should be in the hands of a private company?


Leslie Gordon Bell: I do not intend to enter into any argument with my hon. friend regarding the navigation question, but my hon. friend surely realizes that the canal, which, when completed, will be twenty-seven feet deep, should take care of any navigation to the sea.
Mr. LaVERGNE: Undoubtedly.


Leslie Gordon Bell: The channel from Montreal to Quebec, as my hon. friend knows, is not as deep as that.
Mr. LaVERGNE: Undoubtedly; but will it be the property of a private company and not of the Dominion.


Mr BELL (St. Antoine):: Surely my hon. friend realizes that neither the Beauharnois company nor any other private company will control navigation so far as Canada is concerned. No government would be so foolish as to permit navigation of the St. Lawrence to be left in the hands of any private corporation. There would be something wrong with any government that would handle that particular problem in such a way.
I come to a more serious part of this question, and I hesitate to make the statement. I am not interested in the Beauharnois; I am not retained iby the Beauharnois, nor have I any connection with the Beauharnois. I am interested in Montreal, and I am interested in the development of Beauharnois if it is going to bring industries into the vicinity of Montreal. When that company has expended more than $5,000,000 in industrial lands, proposing to bring industries to Montreal and to give them power cheaper than it can be had in any other country on the face of the earth, naturally I should like to see such a project proceed to completion. That is the primary abject which those of us have who look to the future of the Beauharnois development I know nothing about the financing of it.
I am going to enlighten my hon. friend in regard to the other side of the picture. He has put forward certain views; undoubtedly he believes that they have been presented to him by people who have given him the facts. The facts of Beauharnois as I understand them are these: The original rights, as mentioned by the hon. member for Winnipeg North Centre (Mr. Woodsworth), were in the hands of one Robert. Robert had a charter from the Quebec government as far back as 1910. That was the Beauharnois Light, Heat <?: Power Company. Robert gave an option to the Transportation and Power Company for $10,000. Now comes the controversial question: Did he give an option or did he sell the rights to the land? On one side you have certain clients claiming he gave an option, and on the other the Transportation and Power Company claiming they bought the land. Naturally the hon. member for Acadia and those on the left will agree that the only way that question could be settled was in the courts. They went to the courts and after a decision had been given in Robert's favour, Mr. Sweezey and those associated with him, I understand, proceeded to deal with Robert Was that the end of the matter? Not at all. From then on the people who were dealing with Robert in the first instance immediately began their attacks on Sweezey and Beauharnois. Mr. Sweezey and those associated
1770	COMMONS
Beauharnois-Mr. Bell (St. Antoine)
with him went to the Quebec government for an extension of their charter rights. That involves another question that will have to be decided as between the provincial and federal governments. He got the powers under his charter extended for the widening of the canal and for the diversion of more water from lake St. Francis to lake St. Louis, as well as the right to build a power house on lake St. Louis instead of on the river St. Louis He proceeded with that work.
The financing of this company was not done in a day. Four months after the actual construction work was started the first public financing was done. Several months later my hon. friend from Acadia brought this matter up in the house. I do not want to reflect in any way upon the intergrity of hon. members in that corner of the house. I wish to make that quite plain, but it does seem strange to me that all the time that Sweezey and those connected with the Beauharnois project were engaged in this gigantic engineering scheme, the greatest ever launched in Canada, involving the diversion of the railway line of the New York Central, the building of a bridge-


Paul Mercier: Two bridges.
Mr. BEiLL (St. Antoine): -the making of arrangements with four different townships so that the public roadway could pass, they should at the same time be faced with attacks from these other men who claimed that they had no rights to the canal proposition at all. An action was taken in the courts against those associated with the Beauharnois company to the amount of $7,000,000. What happened to that action? It was tried by Mr. Justice Duclos, and as my hon. friend from Acadia knows, on the second day of the trial the plantiffs desisted from the action. The principals of the Beauharnois company must have then felt that they were through with these constant attacks which were being made upon them. But a few months later an action was brought against the company or its associates in the amount of $10,000,000. It is not fair for the members sitting in that corner of the house to get up and accuse all those interested in Beauharnois. I am not at all concerned in the political faith of any member so far as this particular project is concerned. But there is another side to this picture. These men who have been bringing these actions at law have access to the courts. I refer particularly to Cantin, Regan, the Transportation and Power Company, and to Ecremont, none of whom is known to me, but these men claim, and my information comes

from as reliable a source as I believe is open to hon. gentlemen in that corner of the house, that amounts running from one million down were demanded for settlement; otherwise they would bring the matter u>p on the floor of the House of Commons.
The hon. member for Acadia has made his charges on the floor of the House of Commons, and has been promised a committee for the investigation of the charges against the Beauharnois company. I want him to be fair towards those associated with that project and to put everything before the committee in the most straightforward manner. I feel sure that he will do so. There is no reason so far as I can see why this investigation should not settle once and for all the question of provincial and federal rights so far as Beauharnois is concerned, and why the people who have invested their money in Beauharnois should not be given a fair opportunity to see the project develop. As I say it is a project owned by Canadians, financed by Canadians, in Canadian territory, and built for the purpose of attracting industries and providing them with the cheapest power in the world. I do not see why thousands of men should be thrown out of employment, and their families made to suffer for a day longer than is absolutely necessary, and I appeal to the right hon. the Prime Minister, as soon as the charges have been properly brought forward, to expedite this investigation and let us have an end of it, and the settling once for all of this Beauharnois argument about which we have heard so much


Hon. J. C. ELLIOTT (West Middlesex):: It is not my intention to dwell at great length on the arguments which have been adduced by the hon. member for Acadia (Mr. Gardiner), the hon. member for Bow River (Mr. Garland) and' other hon. members who have spoken in this debate, but there are one or two phases of the argument to which I should like for a short time to direct the attention of the house.
First of all may I invite attention to the argument made by the hon. member for Bow River, an argument following somewhat the line of his remarks on the subject a year ago except that his main argument to-day is that there was no right in the federal government to approve of plans for the diversion of water. The hon. member made a speech in his usual excellent manner on this very subject during the session of 1930, but then he never raised the main argument which he has used to-day as one of his objections to the scheme. Today it is his main objection, that the government had no jurisdiction to approve of the

Beauharnois-Mr. Elliott
plans, that the Minister of Public Works and the government in granting approval were going beyond their jurisdiction. He cited section 4 of the Navigable Waters Protection Act in proof of his statement. May I read section 4 of that act, which has been read already a couple of times:
No work shall be built or placed in, upon, over, under, through or across any navigable water unless the site thereof has been approved by the governor in council, nor unless such work is built, placed and maintained in accordance with plans and regulations approved or made by the governor in council.
That is what he based his whole argument upon. Apparently he has not read paragraph (b) of section 2 of the act, which defines "work" as follows:
.... "work" includes any bridge, boom, dam, aboiteau, wharf, dock, pier or other structure, tunnel or pipe, or telegraph or power cable or wive and the approaches or other works necessary or appurtenant thereto, or any work, structure or device, whether similar in character to the foregoing or not, which may interfere with navigation.
If my recollection serves me aright, that last part was inserted after the act had been in force a couple of years so as to make it cover practically everything. That act has been administered ever since by a department of this government; diversions of water have been granted under its term's and have been dealt with by the various governments which have been in power in this country since that time. That I want to make perfectly clear. There is, I submit, no work that might interfere with navigation which is not covered under this act; and I think it will appeal to hon. members of this house that the spirit of the act could not be carried out if any . work which might possibly interfere with navigation were omitted from the purview of that legislation.
What was the position of the government when this application was made? My hon. friend from Southeast Grey (Miss Macphail) spoke about the policy of public ownership. That matter, I may say, had been settled when the application was made. This was water belonging to the province of Quebec Unless it belongs to the province of Quebec, then there is no approval granted for diversion of it. The terms of the order in council make that perfectly clear. I do not wish to deal in detail with the terms of the order in council, but all reasonable safeguards which could have been taken will be found upon investigation to have been taken. The lease which was brought to the government by the applicant was a lease from the province of Quebec of such flow of the river St. Lawrence
at that particular point, not exceeding 40,000 cubic feet per second, as belonged to the province. It was not water that belonged to the Dominion of Canada; it was not water over which the Dominion had jurisdiction, except in so far as navigation was concerned.
That application was brought in, and the whole question for the department to decide was as to whether or not that 40,000 cubic feet of water per second could be diverted without interfering with navigation. That was an engineering problem which it took months to settle definitely; and the duty of the department, and of the government of which that department was a part, was to refuse to approve of the plans if it was going to interfere with navigation. And the duty was just as obvious to approve of the plans if it did not interfere with navigation.
The matter was reported upon by the most competent engineers in the land-and I believe my hon. friend the present Minister of Public Works will agree with me that they are very competent engineers in that department. They were very busy and they called in the assistance of other engineers, most capable men; and after very careful consideration they decided that if certain safeguards were observed they would approve of these plans, provided the water were diverted by a channel. And the channel is defined, I think, as 600 feet in width. It will be one of the best canals in the world, a canal which will not only not interfere with navigation but which will make for better navigation than there is at the present time along any other section of the St. Lawrence anywhere in that district.
So that so far as navigation is concerned, those interested are. amply protected by the conditions which were imposed at the time the plans were approved. So far as the province of Quebec is concerned, they have rights to whatever water belongs to them and over which they have control. And they have a right to have the government say whether or not the plan that they propose shall be followed. What would be the position of this government if a lessee should come to them and say, "I have a lease from the province of Quebec of certain water rights. If the rights do not belong to the province they are not covered by this lease, but we want approval by you of plans to divert such waters as are owned by the province of Quebec". Suppose they put forth plans which our engineers inform us are sufficient to provide for these waters and to give good navigation -and I do not think anyone will contend that it will not be the very best navigation possible; the government, I sumbit, has no alter*
Beauhamois-~Mr. Elliott


John Campbell Elliott: My hon. friend has great
faith. I think he is right. But there is a certain bank of land left at the point from which the water is to be diverted, and that, I understand, will not be taken away until the plans are all thoroughly approved by the minister. I do not understand that any of the water has been diverted up to the present time.
I had not intended to speak at any length, and I' am very glad that the Prime Minister has intimated that he will have the matter referred to a committee. I hope that, in looking into the question, the committee will go thoroughly into every aspect of it which has been brought up from time to time by various critics of this scheme.
I wish to say just one word more. When the debate took place a year ago on the motion of the hon. member for Acadia to adjourn the house to discuss a matter of urgency, the motion was withdrawn. The matter was one of urgent importance at that time and

apparently, a year later, it is still urgent, only, the urgency is of a little different nature from what it was at that particular time. Several of the reasons for the urgency were not given at that time.
I think it is well in business matters-and this is one of the most important that ever came before any department of government- that they should be thoroughly considered, and I am confident that when the committee go carefully into the matter they will be satisfied that the most complete safeguards were placed around the approval of the plans and the manner in which the water was to be diverted.
There is some question, of course, as to the ownership of the whole flow of the St. Lawrence, which, if I recollect correctly, is about 200,000 cubic feet per second. Part of this flow had been leased to various . other concerns, and' with the 40,000 cubic feet per second leased to the Beauharnois company there still remains a balance perhaps double what this diversion amounts to. But the government could not justify waiting to have the question of ownership settled, for the reason that when the matter was before the supreme court hon. members will recall that their lordships stated in effect: "We cannot find specifically upon the points submitted to us. We must have a concrete case. We are not going to give judgment upon theories. When a concrete case arises it will be decided, and until then it cannot be decided." So that the absolute ownership of all the flow of water cannot be settled until a concrete case arises and is decided by the courts. But this portion of the river being situated entirely in the province of Quebec, I think there can be no question that at least the 40,000 cubic feet proposed to be diverted by this particular work will prove to be the property of that province. If mot, we are protected by the order in council, and the right to divert ceases upon any judgment being given by the supreme court that the whole or any portion of the water does not belong to the province of Quebec.
I do not propose to discuss the matter further at the present time. I have no doubt it will be thrashed out before the committee. But I did want to place before the house in as fair a way as I could just what question was submitted to the department and just what position the department took in dealing with it. The action taken was in accordance with what has been the practice of the depart-

Beauharnou-Mr. Euler
ment for years, and I think the committee will find that the department acted with as much care at least as has been exercised in any similar case which has ever come before it.
Mr. LaVERGNE : Will my hon. friend allow me a question on the ownership of the water? Suppose the department had come to the conclusion that the water to be diverted belonged to the Dominion, would the late government have granted the permit to the Beauhamois company?


John Campbell Elliott: Of course my hon. friend is asking me the same kind of question that the supreme court refused to answer, and I think I should follow the precedent then established.
Mr. LaVERGNE : Their case was not yours.


William Daum Euler: Mr. Speaker, I am not sure that I can add anything of value to the discussion which has taken place, but apart entirely from the interest which a member should take in a question of some importance, I have perhaps a peculiar interest from various points of view. In the first place, I happen to come from the province of Ontario, which perhaps more than any other, with the exception of the province of Quebec, is interested in the development and use of this power from the St. Lawrence river. In the second place, I am and have always been a strong advocate of public ownership-public ownership of water powers, natural resources and other services which are in a sense monopolistic, or may become monopolistic, and upon which the prosperity and welfare of the people generally depend. I have always felt that in such cases I would even go further than we have gone in this country in some respects. I have always felt that water powers and other services of like nature should remain, if not in the ownership and operation of the people themselves, at least very definitely under the control of the people. Then, finally, I have a peculiar interest in the question because I happened to be a member of the government which passed the order in council that we are now considering.
As I have said, I have always been predisposed to public ownership, and when the matter of the Beauharnois lease came up I, for one, as did most of my colleagues in the government of that day, hesitated to pass the order in council, not feeling quite sure whether we had the right to do so, and it was only when I felt satisfied that we had not only the power but were under a moral 22110-113
obligation to issue the order in council, that as a member of the government I consented to the passing of the order.
The matter then to my mind had to be considered from three points of view: first of all, that the water power does belong to the provinces; second, that the 42,000 cubic feet per second allotted did not interfere with the navigation of the river; third, that the government had legal authoritiy to pass the order in council. I am not a lawyer, I am not an engineer, and so far as I was concerned I felt, as also I think did most of my colleagues in the government of the day. that we had to take the advice and the opinion of those who were best qualified to judge in these technical matters.
Mention has been made of the 'reference to the supreme court of questions in regard to the ownership of these water powers as between the provinces and the Dominion. While no definite opinion was given by the supreme court, I think it was pretty well understood from the judicial deliverance later handed down that water powers situated entirely within a province do belong to the province itself. I do submit that with respect to a stream which is not navigable and is entirely within the borders of a province the water power does undoubtedly belong to the province; therefore it is logical to conclude that where a navigable stream is entirely within the confines of a province, the water power should also belong to the province so long as navigation is conserved.
I might say further-and perhaps in this my right hon. leader will correct me-that I think we, as a government, also came to the conclusion that as a matter of policy and as a matter of moral right it was advisable and proper that the water-powers of any stream, whether navigable or not, always having regard to the protection of navigation where appropriate, should and do belong to the provinces themselves. That was proven, I think, by the fact that when the former premier of Ontario, Mr. Ferguson, made application to develop hydro-electric power on the international section of the St. Lawrence no objection was raised, and permission was given, although the project was never gone on with by the Ontario government. I might say further

and it was referred to by the hon. member for Southeast Grey (Miss Mac-phail) this evening-that I believe it is true that had it not been for the contract made by the Hydro-Electric Power Commission of Ontario to take some 250,090 horse-power for a period of 40 years at $15 per horse-power,

Beauharnois-Mr. Gardiner

it would have 'been practically impossible for the Beauharnois corporation to float their bonds and continue their financing. I do regret that the power to be developed on the St. Lawrence river does not remain under public control, perhaps developed toy 'the provinces. However, as has been stated here by the hon. member for St. Antoine (Mr. Bell), while the people in the province of Ontario very largely believe in public ownership, the people in the province of Quebec are not of that opinion. They have a perfect right to believe in the benefits and the merits of private ownership as compared with those of public ownership.
I have stated that we were convinced that the water-power in this section of the river, being entirely within the province of Quebec, belonged to that province and that all the Dominion government had to do was make certain that in the development of the power derived from the 40,000 cubic foot diversion, navigation was safeguarded and not interfered with. Some reference was made this afternoon by one of the speakers to the fact that the abstraction of 40,000 cubic feet from the river did interfere with navigation, or at least that there was some doubt about it. I am not very clear on all the details of this transaction. I have not had time to look them up, to write them out or have somebody else write them out for me, but I am very firmly of the impression-and the former Minister of Public Works (Mr. Elliott) bears me out in this- that the most capable engineers we could possibly secure said very definitely that the abstraction of the 40.000 cubic feet per second did not interfere with navigation on the St. Lawrence river. Therefore, assuming that the power did belong to the province; if it was also a matter of policy as far as the government was concerned that the water-power should go to the province-and I for one am in favour of that-further, if we were quite sure that navigation rights were protected, I was of the opinion and the government of the day was of the opinion that we had no moral right to refuse to sanction those plans. I never had any doubt as to whether the government had legal power to pass the order in council; as far as I am concerned I did not know the question had been raised. However, that is a legal question, and I do not see how even a committee can decide as to that. I should think it would be up to the courts to decide finally, though possibly in view of the reflections which have been made upon certain judges my hon. friend to my left will not even consent to have the courts decide it.
iMr. Euler.]
I am glad a committee is being appointed, although I believe the committee may have its difficulties. For instance, the Beauharnois corporation is a provincial company, and I have some doubt as to the jurisdiction of any committee of this house to investigate anything that is of provincial origin. However, it will be well to have the committee. I do not know how far it can go, but I trust that in making the reference to that committee my right hon. friend the Prime Minister will make it sufficiently broad and specific so that the Pharisaical accusations which have been made this afternoon will be cleared up, together with other points of law and of policy.


Robert Gardiner: If no other hon. member wishes to speak I should like to say just a few words to conclude the debate.


Pierre Édouard Blondin: If the hon. member for
Acadia speaks now he will close the debate.


Robert Gardiner: It is not necessary for
me to say very much in closing the debate, Mr. Speaker, since the Prime Minister has consented to the appointment of a committee of this house to investigate this whole matter With the hon. member who has just taken his seat (Mr. Euler) I also suggest to the Prime Minister that the reference to this committee be wide enough to include all matters which might come within the scope of such an inquiry.
The former Minister of Public Works (Mr. Elliott) made a few statements during his address to which I think attention should be directed. In the first place, he was thoroughly convinced in his own mind that this water belonged to the province of Quebec. Then later on in his address he said he was not quite sure whether it belonged to Quebec or to the Dominion of Canada, because that matter was not definitely settled, so the latter part of his address was rather a contradiction of the first part. I am of the opinion that this matter should not be proceeded with until the rights of the provinces and of the Dominion are determined. I am also of the opinion that all this trouble would have been largely avoided if the Dominion government had resorted to the final court of appeal for a decision as to who owns the water in this river.
I will go further, Mr. Speaker; I will say that we in western Canada believe we have some rights in this river. We maintain, and I think we are right in maintaining, that this is not only an international river but a national river as well, in which all the people of Canada are interested, those of the maritime provinces as well as those of the west and

Grain Rates-Mr. Reid
central Canada. I maintain that before any such authority as this should have been given, the rights of the provinces and the Dominion should have been determined. This should have been done before the order in council was passed and work permitted to proceed; because after all is said and done the claims of the whole people of Canada are more important than the claims of the people of any province. The court of last resort should have been appealed to in order to determine this point.
The former Minister of Public Works quoted the Navigable Waters Protection Act, reading subsection (b) of section 2 and section 4. After he had read those sections he said, "Why, here is our authority to pass this order in council to divert water from the St. Lawrence." I will challenge any member of this house to show me any section in this act giving the government power to pass an order in council to divert water from a navigable stream. There is no such section in the act and there is no reference to that power being given any government. If the bill had come before parliament, this house would have had the right to permit the diversion of water from a navigable stream, but there is no question in my mind that the act gives no power to any government to permit that diversion by order in council.
This is one of the important points at issue, and it is a matter which should be inquired into. My hon. friend from St. Antoine (Mr. Bell) made reference to certain companies which were contending with each other in the courts with regard to certain alleged wrongs done by one to another. I do not know very much about those matters; I have 'heard rumours, but I have not inquired into the merits of the claims of these companies. I am not interested in any company, whether it is the Beauhamois company or a company claiming damages from that company. I do not know anything about these companies beyond the odd references which 'have appeared in the press from time to time. I am not connected with any of them and am not interested in the success or failure of any of them. We have not raised the issue on that point, and we are not bringing up the matter on behalf of either of those companies. My hon. friend may rest assured that that is not the case as far as I am concerned.
I stated a few moments ago that I hoped the Prime Minister would make this reference wide enough to include all matters of importance in regard to this particular question. In order to obviate any possible recurrence of 22110-113i
what, has taken place in regard to the development of this particular section of the St Lawrence river, it should be the duty of the present government or any government which may be in power to have this matter referred to the court of last resort so that the people of Canada will know where they stand.
With the permission of the house I will withdraw my motion.
Motion (Mr. Gardiner) withdrawn. SUPPLY-GRAIN RATES



AMENDMENT TO MOTION OF MINISTER OF FINANCE

[Stage Direction]
Right Hon. R. B. BENNETT (Minister of Finance) moved that the house go into committee of supply.
Mr. THOMAS REID (New Westminster):: Mr. Speaker, before you leave the chair, I desire to discuss a question which I believe to be of urgent importance, namely the matter of domestic freight rates which are ai present affecting adversely the farmers of British Columbia, and before I sit down I intend to move an amendment to the motion to go into supply.
I realize that this question has been before the house many times, but I doubt very much whether the question of domestic freight rates was ever of more importance or presented graver possibilities to the poultrymea and those who keep dairy stock in the province of British Columbia than it is at the present time. It is not my intention to labour the question with a mass of statistical data, or unduly to delay the business of the house, but speaking on behalf of those in British Columbia who are dependent on the poultry and dairying industries for their livelihood, I must say that the time has long passed for the reduction of the present discriminatory domestic freight rate on grain and its products moving west to British Columbia. The matter. I say, is urgent; I believe it is important and serious enough to warrant the immediate attention of the government.
It is quite true that the question of railway rates has been discussed previously in this parliament and has been argued before the Board of Railway Commissioners in years past, but the fact remains that the poultry-men in British Columbia have never been in such dire straits as they have been during the past few months, and the same may be said of the farmers on the prairies who have their grain to sell. I intend to plead as best I can the case for these people in the sincere
Grain Rates-Mr. Reid

hope that the government will take speedy action to remedy what has been a long-standing grievance.
Since coming to Ottawa I have been surprised at the seeming lack of information on the part of many hon. members with regard to the position of British Columbia in her fight for a revision of the domestic freight rates. I intend to review the situation as briefly as possible and to show that the domestic freight rates to British Columbia from eastern points are discriminatory and unfair, not only in relation to export rates but as compared with the rates applicable to other sections of the Dominion. I believe I will be upheld in my argument by every fairminded member, because I do not think &ny hon. member will deny that the province of British Columbia is just as much entitled to equitable treatment in the matter of railway rates as is any other province in Canada. To my mind British Columbia since confederation has been treated more as an orphan than as a rightful and important member of the confederation. To obtain an intelligent view of our case it will be necessary to cite authorities dating from before confederation down to the time of our becoming a part of the Dominion in 1871.
One of the inducements offered to British Columbia, then a colony, to join the Dominion was a promise to construct a railway to establish speedy communication with other parts of the Dominion of Canada and at the same time to link up the Atlantic with the Pacific. To present the full facts it is necessary to go back to crown colony days. The preamble of the British North America Act of 1867 sets out that the provinces of Canada, Nova Scotia and New Brunswick desired to be united with a constitution similar in principle to that of the United Kingdom, and that such a union would conduce to the welfare of the provinces and of the British Empire. The dominating influence was that confederation was necessary to the empire as a whole, and provision was made for the admission of other parts of British North America into the union. It is the violation of this spirit of unity which has brought about the unjust conditions which we are now requesting should be removed. The inducement offered by the imperial govern-nent to British Columbia to join confedera-;ion is contained in the following quotation from the despatch of Earl Granville:
Most especially is this true in the case of internal transit. It is evident that the establishment of a British line of communication between the Atlantic and the Pacific oceans is far more feasible by the operation of a single government, responsible for the progress of both
[Mr. Reid.}
shores of the continent, than by a bargain negotiated between separate, perhaps in some respects rival, governments and legislatures.
The San Francisco of British North America would, under these circumstances, hold a greater commercial and political position than would be attainable by the capital of the isolated colony of British Columbia.
The proposed terms of the union which were drawn up read as follows:
Inasmuch as no real union can subsist between this colony and Canada without the speedy establishment of communication across the Rocky mountains by coach road and railway, the Dominion shall, within three years from date of union, construct and open for traffic such coach road from some point on the line of the main trunk road, and shall further engage to use all means in her power to complete such railway communication at the earliest practicable date, and that surveys to determine the proper line of such railway shall be at once commenced, and that a sum not less than one million dollars shall be expended in every year, from and after three years from date of union, in actually constructing the initial section of such railway from the seaboard of British Columbia to connect with the railway system of Canada.
Negotiations varied the proposed terms to some extent, but the dominant thought throughout was railway connection between the Atlantic and the Pacific. Section 11 of the terms of union agreed upon as a result of Earl Granville's despatch reads as follows:
The government of the Dominion undertake to secure the commencement simultaneously within two years from the date of union, of the construction of a railway from the Pacific towards the Rocky mountains, and from such point as may be selected, east of the Rocky mountains towards the Pacific, to connect the seaboard of British Columbia with the railway system of Canada; and. further to secure the completion of such railway within ten years from the date of union.
And the government of British Columbia agrees to convey to the Dominion government, in trust, to be appropriated in such manner as the Dominion government may deem advisable in furtherance of the construction of the said railway, a similar extent of public lands along the line of railway throughout its entire length in British Columbia, not to exceed, however, twenty (20) miles on each side of the said line.
It will be noticed that British Columbia was called upon to contribute a large grant of land in addition to her share of the other burdens put upon the nation by the construction of the transcontinental railway. In addition to this huge land grant British Columbia gave up many years before the railway was completed her customs tariff, which under the agreement she had the right to retain until the completion of the railway. An important fact which is not generally known is that the Dominion Railway Act, in

Grain Rates-Mr. Reid
force in 1871, made illegal any discrimination of toll. Subsection 6 of section 12, chapter
68, reads:
All or any of the tolls may by any by-law be reduced and again raised as often as necessary for the interests of the undertaking, but the same tolls shall be payable at the same time and under the same circumstances upon all goods by all persons or class of persons by any by-laws relating to tolls.
Some hon. members have said that they are not lawyers. I have made it clear that I am not a lawyer and I have no desire to be one, but I would say that no discrimination would have been possible under that section. In the Railway Act of 1879 the same proviso was included, providing against discrimination of tolls. However, we may differ as to that, the construction of the transcontinental railway was the dominant factor in inducing British Columbia to enter confederation, and I think I am stating a well founded belief when I say that had the people of British Columbia at that time known or been told that higher railway tolls would be exacted from her people than from the people of other parts of the Dominion, it is doubtful whether at that time she would have entered confederation and so become part of the Dominion of Canada.
The Dominion, as many hon. members know, entered into an agreement with the Canadian Pacific Railway Company to construct a line. It may be argued that the terms of union were not binding upon the Canadian Pacific Railway Company. When were any terms binding on the Canadian Pacific? The Canadian Pacific Railway Company certainly knew at that time that the Railway Act of 1868 did not allow them to discriminate as to freight tolls.
Regarding the construction of the first railway to the coast, it is not as well known as it should be that a route had been surveyed and laid out by the Dominion government over which the Canadian Pacific had contracted to build a railway to the Pacific coast. The Canadian Pacific did not adhere to that contract, and, instead, built the railway some 200 miles south of the proposed route and over the Rockies. Had the Canadian Pacific adhered to the route contracted for, there would not have been any mountain grades or mountain construction in British Columbia. As many hon. members know, the land in the Dominion of Canada slopes to the north, and the route which the Canadian Pacific abandoned as being no good is now the excellent route that was chosen by the Canadian National Railways and is now used by
their line from Vancouver to Edmonton, and which by the way is some 1,600 feet lower than the route chosen by the Canadian Pacific. If the Canadian Pacific had taken the Yellow-head pass route, the mountain differential in all probability would never have been put into effect. If, however, the Canadian Pacific blundered, and the parliament of Canada erred in permitting the change, that is no justifiable reason why British Columbia should be called upon to pay the whole cost of the error of the whole of Canada. The grades over the Canadian National railway route are nothing like those over the route used by the Canadian Pacific. It has sometimes been remarked: Look at what the Canadian Pacific has done for Canada. But having regard to the large subsidies paid by this country to the Canadian Pacific and the enormous grants made to them of the best of our lands, I think hon. members will agree with me when I say: Look at what this country has done for the Canadian Pacific. I am going to mention some of these subsidies. In cash the Canadian Pacific received $25,000,000; in constructed railways and services, another $38,000,000; in cash in exchange for subsidy lands, over $10,000,000, and a total of 18,000,000 acres of some of our best lands. In this way the Canadian Pacific easily received well over $110,000,000 from the Dominion of Canada.
The rate discrimination of the Canadian Pacific has always been resented by British Columbia. In 1906 and 1910 it was contested before the Board of Railway Commissioners, without result. Failure to obtain a removal of the discriminatory rates was one reason for the agreement of the Canadian National Railways to construct its line over the route originally contemplated by the Canadian Pacific, and this agreement was justified largely on the ground that such a road would reduce rates in that province and permit British Columbia to get into the consuming markets of the prairies on rates that were reasonable and just, and that the rates known as mountain scale rates would be eliminated.
In order to be certain that there would be no misunderstanding of what these new rates would be, the government of the day entered into another agreement intended to guarantee absolutely the promised reduction in railway rates. The agreement is contained in chapter 3 of the statutes of British Columbia, but at the moment I have not time to read the section dealing with it. The province at that time was very much alarmed regarding the rates, and was taking every precaution to see that there would be no further discrimination. The object of the then
Grain Rates-Mr. Reid

premier, Sir Richard McBride, in entering into the agreement, was not only to secure lower rates on the Canadian Pacific but also to force the general rates down to a reasonable point on any other transcontinental railway. British Columbia at that time was willing to guarantee $40,000,000 to another railway, so resentful did she feel over the Canadian Pacific. This, however, was going to place a competitor in the railway field, a factor which was not at all relished at the time by other private interests, and especially with the province of British Columbia backing those new railways to the limit. But, Mr. Speaker, I ask you to note what happened. The Dominion of Canada was, I believe, importuned to some extent, and passed an act in 1914 simply declaring the Canadian National Railways, to be a work for the general advantage of Canada, thus at one stroke taking the power of fixing rates out, of the hands of the province of British Columbia. I believe I am right when I say that the Canadian Pacific were the first to suggest such a line of action to the Dominion government. That is a brief history of the railways and railway companies of British Columbia since the day the province entered confederation, and I believe it should be more fully known that it is at present; for it is well, in my opinion, that these facts be had in mind before one proceeds with arguments as to the merits of our claim which are even more convincing.
I do not intend to make any extended argument in regard to freight rates generally, because, first, I do not wish to take up the time of the house in any general discussion, and, second, I want to keep to the main purpose of my address, which aims at this time only to bring about the necessary relief to the many purchasers and users of grain in British Columbia. The arguments from the point of view of the prairie farmers as sellers of grain can very well be left to hon. members from those districts. I intend, therefore, to confine my remarks to the discriminatory domestic	freight rate	which is	operativeagainst the province of British Columbia and which we in British Columbia are called upon to pay on all grain and its products purchased in Alberta, Saskatchewan or Manitoba for domestic use.	The freight rate	ongrain for	export from	Calgary is	some	20cents per	100 pounds,	while the	rate	for
domestic use is 41i cents per 100 pounds. We claim not only that the rates on grain for domestic purposes are excessive, but that the rates on grain for export are much higher

through the port of Vancouver than they are to eastern points.
I contend that a domestic rate of 41i cents per 100 pounds as against 20 cents for export is both excessive and discriminatory and is acting as a real barrier to our progress and development. While I am aware that the principle advanced by the railway companies is that export and domestic rates on any particular commodity, being based on different conditions as to marketing, may properly differ in amount for the like per mile service, I affirm, however, that from all the arguments advanced or presented on behalf of the railway companies before the Board of Railway Commissioners, no statistical evidence has yet been given, so far as I am aware, to substantiate the rates charged on grain westbound to Vancouver by either the Canadian Pacific or the Canadian National.
British Columbia, as we all know, produces less wheat than any other province in proportion to her population, and so the question of rates on grain and flour for local consumption is of far greater importance to every section of her people than to those of any other province of Canada. We in British Columbia at least should have rates the same as the lowest accorded to any of the other provinces. From prairie points eastward to Fort William, there is no difference between the rates on grain and flour for export and those on grain and flour for domestic use. Why should there be such a difference to British Columbia? The population at the head of the lakes get the full benefit of an export rail rate on their domestic supplies, which are, by the way, not large enough to be considered as a factor in the case. In fact they are hauling grain for domestic purposes from points in Saskatchewan to Fort William or Port Arthur for as low as 19 cents as against 4JA cents per 100 pounds to British Columbia, although the distance is only half as great. In this way the greater part of the two larger provinces of the Dominion may receive the bulk of their domestic supplies of wheiat and flour at export rates.
Let us bear in mind also that the domestic rate which we pay is for inferior grades of wheat, not for No. 1 or No. 2 northern. Let us see just what some of these rates are. The all rail export rate from Fort William to Montreal is 34J cents per one hundred pounds. The domestic rate is 37 J cents, which is just three cents higher than the export rate. Mark this; the rail distance from Fort William to Montreal is 992 miles, which is greater by more than one-half than the distance from

Grain Rates-Mr. Reid
Calgary to Vancouver, which is only 642 miles on the Canadian Pacific railway. In the face of those figures, surely British Columbia is entitled to some fairer treatment than she now receives at the hands of the railway companies. A domestic rate of three cents over the export rate from prairie points to Vancouver would represent the same difference between domestic and export rates as now prevails on the all rail grain movement from Fort William to Montreal. But it would not put us in the same favoured position as Montreal, because central Canada generally, including Montreal, gets the bulk of its domestic supplies at export rates.
The argument is generally put forward that the reason the rates on grain and flour are much higher westbound than eastbound is found in the so-called physical difficulties in getting into British Columbia. I would point out, Mr. Speaker-and I believe it is important information which should be more fully and generally known-that according to evidence submitted before the Board of Railway Commissioners in 1926, not only were the construction costs greater in some of the other provinces than in British Columbia, but the cost of maintenance is less in British Columbia than in many of the other provinces. The wrong impression in this respect which has prevailed for a considerable time should be corrected, and in my opinion now is the time to make the correction.
I am going to give a few instances as to the cost of construction at other points in Canada as compared to the cost through the Rockies. From Kamloops to Hope, 168 miles, cost 8133,563 per mile; eastern Canada, Montreal to Ottawa, 111 miles, cost 8178,614 per mile; British Columbia, Hope to Fraser River junction, 77 miles, cost $51,544 per mile; eastern Canada, Joliette to Gameau Junction, 61-49 miles, cost $62,394 per mile; British Columbia, Fraser River Junction to Grandview, Manitoba, 1,381 miles, cost $55,572 per mile; Montreal to Winnipeg, 1,451 miles, cost $59,313 per mile.
With regard to the cost of operation, the Canadian Pacific Railway have submitted a statement, which can be found at page 142 of the report of the Board of Railway Commissioners for the year 1925, setting out the operating cost per gross ton mile throughout its system by districts.
The Canadian National Railway shows that the operating costs in 1925 per mile of road in British Columbia were $3,825.50, and in the prairie districts, $4,707.34 per mile. In British Columbia the operating expenses were
shown to be about the same as in Ontario, and less than in Quebec and New Brunswick.
It is perfectly clear to me, Mr. Speaker, that unless the rates are adjusted to allow all traffic to move more freely, and with the proper degree of freedom between the prairies and the Pacific coast, the purpose of the construction of the Canadian National railway to Vancouver will not have been achieved and the money paid by the Dominion treasury to secure its construction will in a large measure have been thrown away.
I have endeavoured to place before the house important and general statistical facts, such as:
1.	The conditions under which British Columbia entered confederation.
2.	The conditions under which British Columbia was asked to enter the Dominion of Canada, and the inducements offered to her, which were rail connections with the Atlantic.
3.	The large grants of land which British Columbia gave for the building of the railway.
4.	The fact that the Railway Act of that day prohibited the imposition of discriminatory tolls.
5.	The varying' of the act of 1868 so as to permit an inequality of treatment, being a direct violation of the spirit of the terms of union.
6.	The fact that the Canadian Pacific Railway Company changed the excellent route laid down for them by the Dominion and chose for themselves a more difficult route, because it was shorter by some 130 miles.
7.	The fact that the Dominion government took away from the province of British Columbia the right British Columbia had, up, to that time to fix and control the rates and tolls of the Canadian Northern Pacific by simply declaring the work to be for the general benefit of Canada.
8.	I have also given figures which have been sworn to before the Board of Railway Commissioners, proving that the cost of construction was greater in some of the eastern provinces than from Alberta to British Columbia, and
9.	Figures submitted by both the Canadian Pacific Railway and Canadian National Railways showing that operating costs were less in British Columbia than in many other provinces in the east, and
10.	The pusher mileage is also less in British Columbia.

Orleans Island-Beaupre Bridge
Canada and have it hauled over our Canadian lines cheaper right past our very doors, and at prices less than one-half of the freight toll we in British Columbia have to pay.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, May 20, 1931