1948-04-05

[Stage Direction]
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): Mr. Speaker, I should like to answer a question put on March 22 by the hon. member for Peel (Mr. Graydon) as to the intention of the government with respect to objectives set out in the joint statement on Trieste issued on Saturday, March 20. by the governments of the United States, the United Kingdom and France. The first part of this declaration reads as follows:
The governments of the United States, United Kingdom and France have proposed to the governments of the Soviet Union and Italy that those governments join in agreement on an additional protocol to the treaty of peace with Italy which would place the free territory of Trieste once more under Italian sovereignty.
In his address before the plenary session of the Paris conference on August 2, 1946, the Prime Minister (Mr. Mackenzie King) said:
Our concern as a nation is to see that, as far as we can help to make them so, the peace treaties will be based upon broad and enduring principles of justice and equity. Canada seeks no territory, no reparations, no special concessions of any kind, but we do seek to build a lasting peace.
On October 8, 1946, the head of the Canadian delegation, the Hon. Brooke Claxton, speaking before the plenary conference, stated with reference to the statute of Trieste:
The compromise for which the large majority of the commission eventually voted followed the lines laid down by the council of foreign ministers. The Canadian delegation supported the creation of the free territory of Trieste in the hope that it will possess genuine independence under the authority of the united nations. This hope, however, is based upon the belief that in the last resort Yugoslavia, which was in the forefront in the Avar against the axis forces, will find it possible to play a leading role in supporting a pacific and progressive solution of this most difficult aspect of the Italian settlement.
This hope has not been realized. In reply to the question of the hon. member for Peel, therefore, I wish to state that it is the intention of the Canadian government to support the proposal of the governments of the United States, the United Kingdom, and France to return the free territory of Trieste to Italy by revision of the peace treaty with Italy.
Mr. GRAYDON:: Does that mean that the resolution standing on the order paper in the name of the Secretary of State for External Affairs as the second order under government notices of motion will have to be amended with respect to Italy?
Mr. ST. LAURENT: No. It is our intention to proceed with this resolution, and, if there is a protocol to the Italian peace treaty, to bring it forward in proper time for approval by the house.



VOCATIONAL TRAINING


[Stage Direction]
Mr. PAUL E. COTE (Parliamentary Assistant to the Minister of Labour): Mr. Speaker, I should like to table copy of order in council P.C. 1146, passed on March 25, 1948 under the provisions of the Vocational Training Co-ordination Act, 1942. This order in council provides for the consolidation into one agree

ment of several types of training being carried on under financial arrangements between the dominion and provincial governments. The types of training are: training of veterans, training of unemployed workers, youth training and student aid, training of foremen and supervisors. The new agreement will run for two years from April 1, 1948, whereby the dominion government will pay dollar for dollar the cost of training all except war veterans. The entire cost of the training of war veterans is to be borne by the dominion government.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, before we proceed with the business of the house I ask leave, seconded by the hon. member for Vancouver East (Mr. Maclnnis), to move the adjournment of the house under standing order 31 for the purpose of discussing a definite matter of urgent public importance, namely, the proposed increases in freight rates authorized by the board of transport commissioners, which rates it is understood' are to be posted by the railroads concerned on April 8, thus creating a situation demanding urgent consideration by this house with a view to making clear the need for immediate action by the government.
Freight Rates


Mr. SPEAKER:: Has the hon. member leave of the house?


Some hon. MEMBERS:: Yes.
And leave having been granted:


Major James William Coldwell: Mr. Speaker, on March 30, the board of transport commissioners brought down its decision on the application of the railways for permission to increase their rates by thirty per cent. It will be recalled that they also asked that on coal a flat rate or sliding scale of rates of increase be permitted. According to the judgment of the board, the railway companies are authorized to publish and file tariff schedules in accordance with the board's findings on not less than three days' notice. The minimum charge for single less than carload shipments between any two stations will be one hundred pounds at first class rate, but not less than seventy-five cents. Then they go on to say that the recognized differentials via rail, water and rail routes are to be preserved as far as may be practicable, even though certain rates via differential routes may be lower or higher than would otherwise prevail if such rates were subjected to the increase authorized. As hon. members no doubt know from reading the judgment issued by the board, the increase 'authorized is a flat increase across the board of 21 per cent, together with an increase of 25 cents a ton on coal.
There are of course certain exceptions to this increase which the board has listed, namely, rates affected by the Crowsnest Pass agreement, the rates on the movement of grain, feeds and so on east and west, and the rates which are affected by our relations with the United States and the transportation systems of the two countries.
The proposed increase in freight rates I take it is a matter of vital concern to every part of Canada. It is of particular concern to certain parts of Canada, namely, the maritime provinces, the Pacific coast province of British Columbia and the provinces that we call the prairie provinces. This is a flat increase in rates of 21 per cent across the board-in other words, .a horizontal increase, as it was sometimes termed in the discussions before the board of transport commissioners. I think it should be noted that all the interests in the regions to which I have referred, whether governmental, * commercial, agricultural, or otherwise are united .in opposition to this increase in freight rates.
I would draw the attention of the house to the fact that the implications of these increases are a matter of grave concern to this house and to the country at the present time, because they come in one of the most inflationary periods in modern Canadian economic history.

According to the dominion bureau of statistics the cost of living index is now 150-8 as compared with 100 as the pre-war level. That is indeed a most substantial increase, and one which has occurred largely within the last twelve or fifteen months. In our opinion this will further aggravate the difficulties that many of our people find in meeting the cost of living on the fixed income or salary or wage which they have been receiving for the past number of years. To those people in the more distant parts of Canada who live on such incomes the impact will be the greatest, just as will the impact be the greatest in every respect on those who live farthest away from this part of Canada which we usually describe as central Canada.
The provinces that are most concerned with the export of primary commodities will feel the effect the most. These are the provinces, like my own province of Saskatchewan, where there is very little manufacturing, where they export the bulk of what they produce and where they have to buy nearly all the things they need for the production of that which they export. The same thing applies in parts of British Columbia, in parts of Alberta and Manitoba and in the maritime provinces. These areas are likely to be the most hard hit by the decision of the board.
The freight rates in these regions have always been unusually high in relation to their total production. Into the cost of their production go the costs of the machines and supplies they must purchase, and in the main those costs, as I shall show in a few moments, have to be met by the producer himself. They cannot be passed on to the public.
I wish to point out to the house, and particularly to the government, that a horizontal or across-the-board increase is particularly discriminatory and prejudicial; it does not affect all parts of Canada in the same way and to the same extent. Where, because of competition by water or by road, railway rates are kept down, the 21 per cent increase is obviously less in dollars than it is in regions where the rates are higher because there is not that effective competition. The dollar increases will be larger in British Columbia and in the maritime provinces and on the prairies than they will be in central Canada where this competition does exist.
When we read the story of confederation we realize that this nation as we now know it was largely made possible by the undertaking given at that time by the government and the fathers of confederation that a transcontinental railway line would be built to the Pacific coast, and it was largely on the basis of those bands

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of steel that British Columbia joined confederation. We are linked, then, by those bands of steel, and while the board of transport commissioners could not consider what one may term the political implications in the sense in which I have just noted them, while they apparently felt they had to consider the question purely on the ground of economics, this house and this government are in my opinion obligated to take the wider and the broader view of the conditions under which confederation was established in Canada.
We are linked by those bands of steel. Let us not forget that British Columbians could sell much of their produce and purchase many of their commodities to far greater advantage in the Pacific coast states to the south of the line if those bands of steel ran north and south; that the maritime provinces would benefit enormously through being able to trade with the states on the Atlantic coast of the United States, and that the [DOT] prairie provinces, my own region, would be in a much more advantageous position if the railways ran north and south, thus enabling them to dispose of their goods south of the 49th parallel in Minneapolis and other great cities in the south, and in addition were able to buy their machinery from the United States. But our forefathers decided that we should not link Canada to the United States but build up in this country an independent nation, and we have built up that independent nation along certain lines. One of the bonds that link us together in this country is the bond of railways, those bands of steel to which I have referred. Our forefathers determined to build up an independent Canada, and because of that I submit to the government and to the house that considerations other than those of cold railroad economics must enter into a question of this kind and of this magnitude.
I have said that the substantial increases in ;he rates are bound to make increases necessary in certain price levels. We had a demonstration of that in 1920 when an increase of some 40 per cent was granted to the railways. As I recall the judgment of the board in 1920 I must say that there is one satisfactory feature about the judgment which the board of transport commissioners gave the other day, and that is that there is to be no interference with the Crowsnest rates. We have read the record of the debates of 1920 and recall the controversy that arose then with respect to what are called the Crowsnest rates, and I am glad that we are not faced with that situation again today. But those increases in railway rates were brought about and were followed by a recession, and together they made our whole position, particularly in the
parts of Canada to which I have specifically referred, much more difficult than it might otherwise have been.
I would point out to the house that this judgment of the board is particularly inopportune. Last Saturday the President of the United States signed the European recovery program measure, popularly known as the Marshall plan. We expect that Canada will be called upon to participate in the sending of greater supplies of food and other commodities to Europe under that plan, and of course it will be to our economic advantage to provide those goods. But without effective price controls or subsidies, which have been removed in our country, with an increased demand for our goods without comparable increases in production-and those are not possible to the extent that will be required, because as the Minister of Labour (Mr. Mitchell) loves to tell us from time to time, we have virtually a condition of full employment now and we cannot increase our productivity to a very large extent - with a greater demand for our goods from without the country and' the maintenance of purchasing power within the country, there is danger of still greater pressure on the price level, and the 21 per cent increase in freight rates authorized by the board of transport commissioners is bound to make that inflationary pressure greater than it otherwise would have been.
We have also to bear in mind that freight rates enter into the price level at many points. They enter into it when the primary commodity which is to be fabricated or processed leaves the farm or other point of origin and goes to the processing point. Secondly, when the fabricated goods leave the processing point and go to the wholesaler, the 21 per cent freight rate increase is again effective, and when the article goes from the wholesaler to the retailer the same thing applies.	Each one of these intermediaries figures his profit on his entire outlay, which includes freight; consequently the increase in freight rates when the commodity reaches the ultimate consumer has been pyramided many times over what it was at the primary point, and the increase in freight rates becomes far more than 21 per cent on that primary article when it ultimately reaches the consumer. And so I say that the freight rate increase will enter into almost every aspect of our price level.
I said a few moments ago that certain competitive carriers exist in certain parts of Canada.	They exist in the province of
Ontario, and when it was announced that
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railway freight rates were to be increased by 21 per cent the truckers met and decided to increase their rates by 15 or 20 per cent- I believe it was 20 per cent-still retaining a competitive position; but because of the increased railway freight rates they are able to increase their own rates very substantially. All this - increased cost of production, the increased cost of living, increased transportation rates-is bound to be reflected in an increased demand for wages. In many lines of work wages in this country are not high. Sometimes it is claimed that the men working on the railways are receiving relatively high wages. But today trains of a hundred cars are operated by the same crew of five as trains of forty cars forty years ago; and so the amount of wages spread over the longer and heavier train is not much more than the wages spread over the smaller train of forty cars.
In any event the demand for increased wages will follow the increased cost of living, and we shall ibe in that inevitable spiral; because wages never catch up with rising prices, and there is unrest when men cannot make both ends meet. Therefore I say that at a time when every effort should be made to reduce living costs and the cost of production, prices will increase and the granting of this increase of 21 per cent to the railroads is a bad example to other industries. We ask other industries to reduce their prices, and at the same time one of the very factors entering into production, the railroads, are permitted a substantial increase in their freight rates. That is why I say it is a bad example to set to other industries.
As usual, in a country like this, freight rates enter into almost every aspect of our commercial relationships. At a time when we need houses for our people, when there is a shortage of dwellings for Canadians, when we need' to ship lumber, cement, steel and other commodities that enter into the building of houses from' one end of the country to the other, we are permitting an increase of 21 per cent on this heavy freight. The result will be more and more difficult in financing the building of houses and in the purchase of homes by those who need them. Altogether the effect, of course, will ultimately be to increase prices and to restrict purchasing power, because when prices rise, individuals have less to spend on things other than their basic needs.
While I do not think there is any immediate prospect of a depression, particularly with the demands that are likely to be made on the Canadian economy in the next year or two, yet we do have a condition of high prices, and inflation inevitably is followed by deflation and depression.

In thinking of the farming community of this country we have to bear in mind that the prices of farm commodities are controlled. As a matter of fact, price ceilings are in effect on several farming commodities, on butter particularly at the present time, and under the new wheat agreement negotiated by the thirty-six countries a ceiling of $2 is set, with a sliding scale downward over the next few years, an agreement which I believe has been made in order to stabilize farm prices, and I think therefore worth while. Nevertheless it has placed a ceiling on the goods the farmer produces, while he will have to meet the increased cost of production that will [DOT] arise because of the increased costs of machines and of the commodities he must buy from outside the areas in which he lives. As a matter of fact that is usually the case with the farmer, because he is one of the producers who cannot pass his costs on to someone else. Usually his prices are pretty well fixed one way or the other, and1 he has to bear any increase in the cost of production, which is unjust.
I said a moment ago-and I want to emphasize it-that the new rates do not affect grain, and I do not want to leave the impression that they do. The price of wheat has been stabilized by an international agreement, and the increased cost of the farmers' machines will have to be borne by himself. May I also say, Mr. Speaker, that at a time when the demands for supplies from North America, and particularly from Canada, are more intense from Europe, naturally there will be an increasing demand for access to the American market, and under the circumstances that is a very legitimate demand. Altogether it seems to me that what this decision has done is to complicate very seriously the situation for Canada, in relation to both our domestic needs and our export demands.
I said the rates are lower in central Canada because of the competitive water and truck haulage. An increase of 21 per cent means less to the people of central Canada than to the people of the maritimes, of British Columbia and of the prairie provinces, but it is still a serious factor in this part of the country, and I do not want to minimize the seriousness of it by the comparison I have just made. The increase of 25 cents a ton in freight on coal, for example, is a serious factor in central Canada, because central Canada is an area which uses vast quantities of coal for industrial purposes and for domestic heating, and every increase in freight always costs much more than the amount of the increase in freight when the commodity reaches the ultimate consumer. Even if the increase is only 25 cents a ton,

Freight Rates
it is bound to be reflected in many ways in central Canada itself. Coal is vital to central Canadian industry; coal is vital in domestic heating in this province and in the neighbouring province where there are no coal deposits.
Apart from these economic considerations the government must consider the political effect of this increase on our regional relationships, to which I have already referred, and ultimately on our international relationships; because if the primary producing areas of Canada are hardest hit and the cost of production increases then their competitive position in world markets is made more difficult. Just at the moment one would not expect that to be a factor, but the day will come when the competitive position of various Canadian primary products will decide the abundance or otherwise of our exports overseas.
A short time ago I read some statistics compiled with regard to the improvements in European farm and productive conditions, and I was particularly struck by the enormous acreage that the Russians seeded last fall in addition to the 1946 fall seedings. I think some seven million additional acres were seeded. Reference was also made to the fact that they are breaking a lot of new land and are going to seed some twenty million acres of fallow land this spring. Bear this in mind: the Russian people accept a much lower standard of living than we do, and the result is that food, which may become a political factor, may also become a matter of economic concern to countries like Canada which experienced the effects of the dumping of cheap wheat on the market back in the early thirties. We should consider how it may affect us again.
Consequently, these freight rates, while grain and so on are excluded, will affect everything that enters into the cost of production of grain. Everything entering into that cost will be affected by the new freight rates which have been authorized by the board of transport commissioners. I say therefore that in view of present world conditions the government should give some consideration to the political implications of the board's judgment. We should endeavour to maintain our associations, both economic and political, with the countries of western Europe and with the United Kingdom, and these associations may depend in no small measure, in a few years' time, upon our ability to sell basic commodities at prices which can be paid by the people overseas and at the same time provide our own people with a reasonable and decent standard of living. But the increase in the freight rates will make it difficult to do either or both of these things.
As I have indicated, the board of transport commissioners could not consider many of the factors I have put before the house this afternoon, but this parliament should and must consider them, and the government should and must do so now. The board, though, admitted that the representations made by some of those who appeared before it were correct. Incidentally, last week the new balance sheet of the Canadian Pacific Railway Company confirmed the statements that were made before the board, that the Canadian Pacific had presented a really pessimistic estimate of its receipts for 1947. Again, that is a factor which the government should take into consideration.
The department of immigration at the present time, from the point of view both of developing our country and, what I think is at the moment even more important, of giving refuge to those who have suffered on account of the war, is bringing to the country many new settlers, some of whom will go into the more remote areas of Canada; and transportation costs will tend, as they have always done, to restrict settlement of those more distant parts.
For example, the district represented by my hon. friend the member for Peace River (Mr. Low) contains enormous quantities of good land yet to be settled. There are various parts of British Columbia, and some parts of Saskatchewan and indeed other sections of our country, which, at a time when we are bringing people into Canada for ultimate settlement, are looking for such settlers; but this freight rate increase will make it more difficult to settle these people economically because of the transportation costs to and from the more remote areas of the things they need or produce.
Then, too, we have to give some attention to the livestock industry. This action will certainly retard expansion in the livestock industry of Canada. It will make hog and dairy production less remunerative because the farmer cannot pass on his increased costs; and already, as has been noted in this house by various hon. members, and admitted by the Minister of Agriculture himself, there has been a serious decline in our hog population in the prairie provinces. At the moment we.are suffering severe shortages in some lines of dairy produce, particularly butter. You can see the consequences of this threatened increase if you consider one or two examples of the effect that will be produced.
I have here a bill for the shipment of thirty-nine head of cattle from a Saskatchewan point to the Toronto market. This Saskatchewan point is near Moose Jaw. It is a little place called Crane Valley. The present
Freight Rates

rate from Crane Valley is $1.09 per 100 pounds. The actual weight of the carload of steers was 21,430 pounds. In the amount I am going to put before the house there was no charge for stopovers and sometimes there are substantial charges for stopovers for various reasons. As I say, the freight charge was $1.09. That amounted to $233.59. Together with the care of the car, and feed en route, the total charge by the railway-and I am advised that it is on that total charge that they can make the increased freight rate- was $238.34. If we take 21 per cent of $238.34, which is the increase to be allowed, we find it amounts to $50.05, which the farmer will have to pay.
It may be said of course that the prices of cattle are relatively high, though they are certainly not as high as they are in the United States, and not as high perhaps as warranted by the present situation, but they are very much higher than I can remember them years ago. I can remember when animals were shipped, not to Toronto from a Saskatchewan point, but to Winnipeg from Saskatchewan points, and the farmers received bills for the freight because the cattle did not pay the freight. In fact, I believe I have such a bill in my files upstairs at the present time. Today of course the prices of cattle compared with those of the time of which I speak are relatively high; and if, as will inevitably happen some time, we have drastic reductions in the price level of these animals, then an increase of $50.05 on a carload of cattle, which is substantial at the present time, will be crippling in the future.
These are factors that should be considered by the government when they are coming to a decision in regard to this matter. Of course, I could give other examples equally striking but I do not propose to weary the house with them. The one I have mentioned will suffice. That one, however, could be multiplied many times in respect of other commodities from the maritime provinces, from British Columbia, and other types of goods from the prairie provinces.
Let me point out that the areas to which I have referred, and particularly perhaps the prairie provinces, have always been penalized by the operations of the tariff policies of various governments. Almost everything we have to buy in order to produce and to live in western Canada has been imported, if not from the United States, with a high tariff, then from eastern Canada, where the manufacturer has taken advantage of the tariff and added on the tariff toll to the cost of his commodity.


Mr. HOMUTH:: Oh, no.


Major James William Coldwell: The hon. member for Waterloo South (Mr. Homuth) objects to that statement, but all you have to do is to price an automobile in ordinary times in this country and in the United States and you will find that the tariff is in the price of the automobile that one buys in Canada whether the car is made in Canada or not. Take radios for example. I gave a good example here before Christmas of a little radio which I knew cost $96 in the United States and which I found in one of the large jewelry stores in this city priced at $197 plus tax.


Mr. KNOWLES:: What tax?


Major James William Coldwell: The excise tax.


Stanley Howard Knowles: It was not on then.


Major James William Coldwell: The tax was being collected illegally, but unfortunately, in spite of the majority vote against it on this side of the house, the house subsequently validated the illegal collection of that tax. That will be for ever held against the Minister of Finance (Mr. Abbott) and the government.


Mr. ABBOTT:: A previous debate.


Major James William Coldwell: We have been penalized by the tariff, and now we are to be penalized by a further increase in freight rates. I should like to suggest that we should not leave the matter there but rather that the government consider an alternative policy. If we are, as we contend, living in a country which has been built up largely upon railway facilities, then the people who live in distant parts of it should not be penalized because they live there. Consideration should be given to the equalization of freight rates across this country, thus recognizing that the railways are indeed a vital factor in the preservation of confederation. If the railways, as is contended, are unable to provide adequate services and to pay proper wages to their staffs with their present revenues, it seems to me that there arises the question of a national transportation policy for this country, that that national transportation policy should be presented to the house by the government, which should take responsibility for recommending it, and that the house should consider it and either modify it or adopt it as the case may be. There should be no regional injustices in order to finance the railways or to keep in operation any part of the Canadian economy. In our opinion an extension of government regulation of competing transportation agencies is overdue. I know that one of the factors in the demand for increased freight rates is that much of the profitable

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freight and passenger traffic is now being carried by buses and trucks. It seems to me that whether the buses or trucks are owned and operated by private companies-and I am not going into that aspect of it this afternoon; let us leave that out-or whether they are operated by governments, we should consider how they can best be integrated into the whole transportation system so that they may feed rather than destroy the great lines of railway upon which this country depends for its existence.
I note that the board of transport commissioners admit that railway freight rates -and I shall be just one minute longer, if I may conclude, Mr. Speaker-should be just and reasonable. I say that they have always been unjust, unreasonable and discriminatory as far as certain parts of this country are concerned, namely, the maritimes, British Columbia, and the prairie provinces. This freight increase makes them more unjustified, more unreasonable and more discriminatory. Therefore, Mr. Speaker, I want to urge upon the government that they take immediate action-not	consideration but	action-to
prevent the increase in rates until a thorough investigation has been made, having regard not only to the economic factors upon which the board delivered judgment but also to the broader political considerations to which I have referred this afternoon, and to present an alternative policy to this house for its consideration.


Mr. THOMAS REID (New Westminster):: It was only to be expected, Mr. Speaker, that the freight rate question would arise in the house after the decision of the board of transport commissioners became known. I listened with a great deal of attention to the remarks made by the hon. member for Rosetown-Biggar (Mr. Coldwell), and while I agree with everything he said, I would point out that, as a result of this decision, no province has been harder hit than British Columbia. I can say this also because I am one of the few members in the house who had the responsibility some years ago of appearing before the board of transport commissioners in an appeal with regard to freight rates on grain, and who also had the privilege of appearing before the privy council-which, by the way, is the government -in an appeal against an adverse decision made by the then board of railway commissioners on the same question.
It is not generally recognized-and I am not saying this in a derogatory sense, but rather as a result of experience-that the board of transport commissioners are not doing the job which they were set up to do in the first place. They were set up to protect the public
from the railways; they are now protecting the railways from the public. I say that in all sincerity. This decision which they have made cannot be taken lightly by the government, and I shall make one or two proposals before I sit down. But there are other matters that I want to deal with before making the proposals which I have in mind.
First of all, may I say that I am sorry I came down to the house without my file on freight rates, which I have been keeping since 1934. For sixty years British Columbia has been fighting what is known as the mountain differential in freight rates. They have spent considerable sums of money in appearing before the board of transport commissioners. Here is one thing I found when I appeared before them. It did not matter what argument you placed before the board of transport commissioners, they always came back with this answer: this matter of the differential in freight rates was decided many years ago and we cannot change that decision. The board of transport commissioners are not interested in trade. They are not interested in the development of trade. That is not their job; at least they say it is not their job. But when it comes to an application for an increase of freight rates and passenger fares, this fact should stand out. No real expert from the railways has yet been able to tell the board of transport commissioners just what it costs to haul passengers or to haul a ton of freight. The evidence of the C.P.R. is on record when they had their experts before the board, and not one of them could give the information. It was I believe impossible to tell. Therefore the railways went about their job of putting the charges on the public to the extent, in the words of the old statement, of what the traffic would bear. The differential into British Columbia has been paid for many times over by the people of that province. As was pointed out by the leader of the C.C.F. (Mr. Coldwell), when we entered confederation it was understood that we would have a railway on equal terms with the other provinces of Canada. When the C.P.R. went into our province, acting contrary to better judgment and deciding against the route chosen by the government of that day, they picked the highest grade for a railway into the province. We have been victimized right from the beginning, from the time the railway came into the province until the present time. I know that there may be members from Ontario who will get up and say it is wrong for us to contend that we in British Columbia are paying more for freight than they are. But may I point this out to the house. It is strange and significant that in the appeals by the various

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provinces before the board of transport commissioners, Ontario and Quebec were not represented. I ask the people of this country and I ask the government to make inquiries why those two provinces did not appear before the board and make representations.


Stanley Howard Knowles: They never come to anything.


Thomas Reid: I am not going to say anything about stories that have been told us as to the reasons they want to acquiesce, namely that they have a compact with the freight lines or something else. But in a great national question, when we hear members from the province of Ontario denying that they do not discriminate against other provinces, then certainly it is very strange that on this national question there was no representation, from either Ontario or Quebec.


Karl Kenneth Homuth: What is your government doing?


Thomas Reid: Our provincial government at least has done more than Mr. Drew, because they have already protested. I will wait to hear the protest from Ontario. That at least is something.


Karl Kenneth Homuth: I am asking about the government at Ottawa. What are they doing?


Thomas Reid: We will ask them, too.


Karl Kenneth Homuth: You ought to.


Thomas Reid: I am on my feet now to ask that very question.


Karl Kenneth Homuth: But you will not get an answer.


Thomas Reid: Well I have done more than you; at least I am protesting, while all you are doing is to interrupt. Just let me proceed with my argument. If this is going to be a debate between you and me, then I will accept it. I thought, however, this was above that kind of thing; if it is not, I will abide by any rules you like to put into effect. I believe that before I have finished I shall prove what I say about the benefits received by the two central provinces-especially Ontario-as against British Columbia.
When the, Canadian Pacific railway built into British Columbia they were paid well over $100 million and given, twenty miles of land on each side of the tracks through the province. The people and the government of that day reckoned that we had paid the C.P.R. for coming through the mountains. There still are people who think that when you go to British Columbia you go over the mountains and then drop down. As a matter 
of fact the Canadian National railways has through British Columbia the lowest grade for the whole of Canada. It has a grade of not more than -7 per cent on its low level water route. What does the board of transport commissioners do about the low grade of the C.N.R. as compared with the high grade of the C.P.R.?	The C.N.R. could haul
passengers from Ottawa to British Columbia- Vancouver or New Westminster-twelve hours ahead of the C.P.R.


An hon. MEMBER:: More than that.


Thomas Reid: Well, twelve hours, anyway; I am conservative when I say that.


Major James William Coldwell: That is good enough.


Thomas Reid: But are they permitted to do it?


Some hon. MEMBERS:: No.


Thomas Reid: Are they permitted to meet the developments of trucking and transport by air? No, they are not. The board of transport commissioners says: We will not allow the C.N.R. to do it because if you did, it would hurt the C.P.R. Hence I say to the house that the board of transport commissioners is not doing its duty because it is protecting the railways against the best interests of the people of Canada.


Stanley Howard Knowles: They are protecting
private enterprise.


Thomas Reid: British Columbia thought it was going to get justice when the Canadian National Railways came into that province. For sixty years we have fought the battle. Before any national increase was allowed in freight rates, the differential to the Pacific coast should have been removed. There should have been equalization before any increase was put into effect.
True, we are getting a kind of sop when g'-ain is left out of the picture-and, although I am not sure of it, I believe coal is also out.


Major James William Coldwell: Twenty-five cents a ton.


Thomas Reid: I know grain is out of it, and I am pleased. But what about all the other commodities? What about the hauling of apples, for instance? What about the rates on the produce we buy in other provinces? As I said, I have not my file with me at the present time, and as a result I have not the latest figures. On other occasions, however,
I have quoted from those records and figures to show that back in 1938, before the war, British Columbia, whilst selling on an export market, bought something like $78,000,000 worth of goods from the two central prov-

Freight Rates
inces, while those two provinces bought goods to the value of $12,500,000 from British Columbia.
In the light of those figures one would think that we would have an equalization of freight rates into British Columbia. But our manufacturers and our other people, when they attempt to ship the same kind of goods back east, have to pay up to 200 per cent more over the same mileage than do the people in the east when they are shipping those products into British Columbia.
I have here one or two newspaper clippings, and while I shall not weary the house by placing all the details on the record ito show the discriminatory rates, I shall mention one or two of them. Let us consider, for instance, items such as bleaching powder and liquid wax, the latter of which comes from Brantford, Ontario. Liquid wax in cans shipped from Brantford to Winnipeg carries a commodity rate of $1.38i per hundred pounds on the all-rail route and $1.28| by the great lakes. On the same goods shipped from Vancouver the rate is not $1.28| but SI .71. Is there any reason why a commodity going east should pay that much more than the same commodity coming west? It is as if a passenger who steps on a train at the Pacific coast were required to pay a higher fare to come to Ottawa than if he were going from Ottawa to the Pacific coast.


Mr. GIBSON (Comox-Alberni):: He should pay more to get out there.


Thomas Reid: And if any hon. member from Ontario disputes these figures, let him try to correct them if he can. I note in this list mention is made of the town of Chilliwack. From Chilliwack to Winnipeg the rate is S1.26|, whereas if a shipment is made from Sherbrooke to Winnipeg, the same distance, the rate is $1.14. Coffee shipped from Vancouver to Winnipeg would carry a rate of $1.54. whereas if shipped from Montreal to Winnipeg the rate would1 be 96| cents.
One could go on down the list item after item to show this discrimination. It matters little what we have to purchase in British Columbia; the fact is that we have to pay from thirty to two hundred per cent more on the goods we buy from Ontario and Quebec than we should be called upon to pay.
There is something else entering into the picture of freight rates which is not generally understood, and that is that sometimes rates are made in the United States. There is in existence an organization known as the Canadian Freight Association, with headquarters in Chicago. In 1941 one of the local manufacturers in Vancouver wanted to manufacture an article in that city and ship it to eastern Canada. But strange as it may seem, when an appeal was placed before the Canadian Freight Association, which, I understand, is an association of railway interests of Canada and the United States, an adverse decision was given. This association meets and decides rates. The rate was decided by the Canadian Freight Association in the city of Chicago. Representatives of the two countries meet and I suppose they see to it that the .Canadian rate does not go too low in case it might draw traffic away from the United States. It is a serious matter for the people' of this country, especially at a time like this when they are called upon to pay an increase of 21 per cent over what they have been paying.
I know the railways are having difficult times these days, but I think this is partly due to the antiquated system under which they are operating. I may be wrong, but I know that if one travels on the Great Northern Railway he may leave the city of Vancouver and be in Toronto almost one day sooner than he would if he travelled by either of the Canadian lines. That railway is operating so efficiently that it is meeting the competition of air travel, and the cost is no greater. This is a condition to which we should give serious thought.
I want to repeat-because I think it should be said again-that the Canadian National Railways have been held down by the Canadian Pacific both in the matter of freights and in the matter of passengers. I do not know particularly about the prairie provinces, but I do know that in and out of British Columbia the Canadian National Railways can haul two to three times the passenger or freight cars hauled by the Canadian Pacific, owing to the fact that on the C.P.R. there is at some points a grade of 2-5 per cent whereas on the C.N.R. they have a low level water route stretching right from the coast to the prairies of not over -7 per cent.
On a number of occasions I have informed the British Columbia government that it is useless to appeal to the board of transport commissioners for a reversal of their judgments. Therefore we must come to the real appeal board, to the foot of the throne, to the crown, in order to present our case. I am pleading as hard as I can and as sincerely as I can that the government do not allow this increase to be put into effect until the whole matter of freight rates is reviewed by some body other than the board of transport commissioners. The board of transport commissioners are so hedged in with past decisions they have made that you might just as well
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stay home. Unless you want to see the capital city of Ottawa you will be just wasting time and money to come down here.
I think I mentioned a little while ago that the Canadian Pacific had obtained an additional concession in British Columbia through being granted an injunction against the operation of trucks in the national parks. Truck transportation in the national parks has therefore been eliminated, and the people in the interior are still called upon to pay high freight rates with the mountain differential, whereas if this injunction had not been granted freight by trucks could be operated to the prairie provinces.
I could mention many cases, but I shall refer to only one or two to show how their decisions and their attitude have restricted trade. A few years ago a certain manufacturer wanted the right to operate his trucks in bond from Vancouver to Calgary. As hon. members know, there is no national highway through to the prairie. He had a contract to deliver five tons of fresh fish which he was going to freight from Vancouver to Calgary. He told me that he could land that fish in Calgary three hours ahead of the railway express and then bring back to the province grain which he could carry at rates cheaper than those charged by the railways. But they would not allow him to send his trucks through in bond.
I say without fear of successful contradiction that our whole attitude to railway freight rates and to the railways is wrong. Many hon. members have advocated the construction of a highway from one end of the country to the other, and in my opinion the reason we do not have such a highway is that the railways fear it and have blocked progress. Something has to be done.
I know that losses by the railways have to be taken care of, but it is also a fact that there is much duplication of railway lines. I think it was the late Sir Edward Beatty who said that at least $60,000,000 to $75,000,000 could be saved if the railroads could get together to eliminate the duplication of lines in certain districts. It might well be under a new set-up they could haul all the freight into British Columbia over the Canadian National and all passengers over the Canadian Pacific. I am not sure, but I feel quite certain that if we had only the Canadian National running into British Columbia we would not be paying the high rates we are called upon to pay today.
I am going to conclude my remarks by strongly appealing to the government, and in all sincerity, to step in on behalf of the people of Canada and not permit this decision to be

put into effect. I submit that the whole freight rate structure of Canada, particularly that of British Columbia, is antiquated and out of date under modern conditions. It is just something which has been set up to make the public pay.


An hon. MEMBER:: What the traffic will bear.


Thomas Reid: All the traffic will bear, as one hon. member s^ys. I think that expresses it very well. I appeal to the government to consider this decision seriously in the light of what we consider to be the needs of the present situation.


Karl Kenneth Homuth: Mr. Speaker, I had no intention of taking part in this debate until I listened to hon. members attacking the provinces of Ontario and Quebec with regard to the decision on freight rates. The provinces of Ontario and Quebec have nothing to do with freight rates; those rates are set by the Board of Transport Commissioners for Canada. If those two provinces saw fit not to appear before the transport board with regard to freight rates, that was their own business. The other seven provinces did appear and tens of thousands of dollars were spent by governments on experts and legal counsel in order that the case might be placed before the transport board. This having been done, the board finally rendered a decision.
I listened attentively this afternoon to the leader of the C.C.F. (Mr. Coldwell). I was not sure as he went along whether he was or was not opposed to the increase.


Major James William Coldwell: That was obvious.


Karl Kenneth Homuth: Just wait until I am through. I was not sure whether he was opposed to the increase, but as he concluded his speech I realized that he was opposed to it. What is the actual situation? Like any other business or industry in this country, no matter how small or how large, the railways were faced with increased costs during the war and it was impossible for them to renovate their roadbeds and cars and other equipment. They have to do that now. Anyone who travels on the railways knows very well how much they are in need of new equipment. I think every Canadian will say that no transportation system in the world did a.better job during the war than our railways. They carried on with only one major disaster during those years.
The board has made its decision. Differentials in freight rates are a matter of government policy; they are something for the government itself to decide. If the government is prepared to pay subsidies, or whatever you may call it, on freight moving east or west

Freight Rates
from the central provinces, that is a matter of government policy. Surely we should not condemn the railroads or the board of transport commissioners because of the decision that has been made.
I thought that after the motion had been made this afternoon the Minister of Transport (Mr. Chevrier) or some other responsible minister of the crown would have made a statement as to the government policy with respect to this decision. So far we have not heard that.
The hon. member who has just sat down made a speech taking to task the province of Ontario and the province of Quebec and telling us of the sorry plight of British Columbia in the matter of freight rates. We heard cheers from the members from the maritimes and the western provinces when the leader of the C.C.F. was speaking. I wonder why they did not bring to bear upon the government itself some of the arguments which they use in this house and ask the government to see to it that a policy is adopted which will bring freight rates more into line with national conditions.


Thomas Reid: Because we are outnumbered.


Karl Kenneth Homuth: My hon. friend says
"because we are outnumbered". It seems peculiar that a group of men representing the west and the maritimes in this house have not sufficient influence within their own party to get it to adopt a policy that is good for the whole nation. Nevertheless that is the situation.
Under the Railway Act there is an appeal against the rates where discrimination can be shown.


An hon. MEMBER:: Then what happens?


Karl Kenneth Homuth: I have found some very favourable decisions given even where rail and water transport competed'. In the summer months, when we had water transportation on the inland lakes, I have found the board favourably inclined to seeing that moderate rates were set, even when there was no competition from the railways. My hon. friend said that if only the Canadian National ran to British Columbia the situation would be different altogether. Surely he realizes that where you have competition you have lower rates. In all my experience, and I have had considerable experience with railways and steamship companies, I have found that where only one line runs into a town or village the rate is higher because there is no competition. My hon. friend must mean by his argument that if the National line ran into British Columbia it would see to it that it got-


Thomas Reid: We would have had that, but the board of transport commissioners would not grant it.


Karl Kenneth Homuth: Let me say that the board of transport commissioners is a creature of the government which my hon. friend supports, and if there is dissatisfaction with the board there is only one thing for the government to do.


Mr. CHEVRIER:: On a point of order, Mr. Speaker, the board of transport commissioners is not a creature of the government, as my hon. friend knows, but a creature of parliament, which is an entirely different thing. While I am on my feet perhaps he will allow me to say, as I did not want to interrupt him when he referred to government policy concerning equalization, that under the Railway Act equalization of tolls and facilities is a matter for the board of transport commissioners to decide. I am not denying the responsibility of the government upon appeal, but I say to my hon. friend that that is the situation under the act.


Karl Kenneth Homuth: I appreciate what my hon. friend says, but he might as well say that the budget itself is a creature of parliament; nevertheless it embodies the policy of the government. If I were sitting on the government benches and had any authority, and if the board of transport commissioners in my opinion were not acting in the general welfare of this country, I would fire them and appoint a board that would so act, and my hon. friend knows that only too well.


Lionel Chevrier: I know no such thing.


Karl Kenneth Homuth: It is all very well to say that the board is a creature of parliament, but if this government wanted to change the board tomorrow and brought in a bill for the purpose, every member of the house knows that it would go through and there would be a new board.


Lionel Chevrier: And who would object to that more than my hon. friend?


Karl Kenneth Homuth: Certainly I would. But if I were on the government side I would not. Let us be frank about these things. If I were sitting with the government I would certainly see that the policies I believed in were carried out, and if the board of transport commissioners were not carrying out the policy of the government, I would change the board. Let the government bring in a policy that will satisfy every member from the east and from the west.
I listened very carefully to the leader of the C.C.F. this afternoon and I heard his
Freight Rates

reference to buses and trucks. I was in the Ontario legislature for a number of years at a time when motor vehicle traffic was starting to build up in this province from 173,000 licences until today there are some 1,200,000 licences in the province. At that time the railways were dead to the issue. They were not paying much attention to the bus and truck competition, but finally they realized it was a factor. The leader of the C.C.F. said that we should work out a transportation policy in this country that would integrate the bus and truck traffic with the railways. In other words it was a mild way of saying that we should nationalize or socialize the whole bus, truck and railway business in this country. That of course would be their policy if they came into power.
I believe that the question of the differential and the question of the equalization of freight rates must be the responsibility of the government, and the government must accept that responsibility. I do not see how the government can go against the board of transport commissioners which has said that there must be a 21 per cent increase in freight rates. I do not see how the government can say to the railways: You are not going to have that increase. The question has been under investigation for over a year. The greatest legal minds in the country appeared before the board for the railways, and against them were arrayed the best legal minds the government could get to refute their arguments. Having heard the evidence and the argument the board decided that there must be a 21 per cent increase in freight rates. In view of that fact I do not see how the government can say to the railways: You are not going to have that increase. But, on the other hand, if the government as a result of this increase decides that there must be a new policy of equalization if there is discrimination as between the east and west and the central provinces, that is a matter of government policy.
This afternoon the leader of the C.C.F. put his party on record as being opposed to increased freight rates. He said that the railways were the bond that bound together the provinces of this dominion. That might have been the case at one time, Mr. Speaker.


Mr. ISNOR:: Why not now?


Karl Kenneth Homuth: Certain promises were
made at confederation to provide railway communication between the provinces, and that was done. But we have grown up since then, and today there are much stronger bonds than those bands of steel of which the leader of the C.C.F. spoke. They are the bonds of Canadian nationhood, which have

been welded time and time again in the last thirty years, when men and women from every province banded together and went out to fight for the safety of this country. Those are much stronger than bands of steel to bind this country together. I would hate to think that it was only because of economic conditions that we as provinces were banded together into one nation.


Mr. MUTCH:: Not on this issue.


Karl Kenneth Homuth: I come from the province of Ontario and I believe that to build up a nation we must be prepared to give and take. There cannot be any east and there cannot be any west; there cannot be any Quebec and there cannot be any Ontario. We have to be willing to give and take, to give more and take less. If we all adopt that attitude we will get along much better.


An hon. MEMBER:: Why do you not practise it?


Karl Kenneth Homuth: I say to my hon. friend that I have practised it all my political life, which is more than my political friend can say.
This afternoon the leader of the C.C.F. party rose in his place and condemned the increase in freight rates. I remember an occasion some three or four years ago when a few of us, members of all parties in the house, were gathered together. A by-election had been held that day. It looked as though the C.C.F. candidate might be elected, -but he was defeated. On the same day a labour organization met in the city of Montreal and passed a resolution stating that they would endorse the C.C.F. as the political arm of labour. A certain C.C.F. member who was sitting with the group said, "Well, we lost the by-election, but look at the tremendous victory we have won. We now have the C.C.L. and the C.I.O. unions of this country adopting the C.C.F. as the political arm of labour." All down through the last few years we have found1 that the heads of the C.I.O. and the C.C.L. unions have come out and tried to turn the members of their unions into a political field that is foreign to most of them. They have tried to make them vote for C.C.F. candidates. They are forgetting all their trade union principles and are paying more attention to the political arm of labour than to the injustices under which the trade union members may be suffering. Today the political arm of the C.I.O. and the C.C.L. is more important to the leaders of these organizations than fighting for the rights of the men who belong to the unions. Today in this house we have the leader of the C.C.F. party condemning the increase in freight rates, and' his great political pal, who he hopes will be able to send

Freight Rates
many more C.C.F. members to the House of Commons and' to the various legislatures of Canada, Mr. Mosher, says that the increase in rates is not enough; that it should be a great deal more. I realize that politics makes strange bedfellows, but" this combination is about the strangest that I have ever seen. It was surprising to me today to bear the leader of the C.C.F. party condemn the decision of the board1 of transport commissioners at a time when the men who form a great part of the labour unions, and whom the leaders are trying to have pledge their support to the C.C.F., are demanding higher wages and are saying that the only way they can get them is to have the railways increase their earnings.
Therefore, Mr. Speaker, we are in this position. The board of transport commissioners have made a decision. The decision has been made as the result of careful consideration on their part and, I would say, as the result of the argument of the best legal minds in this country and the advice of the best chartered accountants. The case was ably presented to the board of transport commissioners. If the decision of the board means discrimination, if it means unfairness in rates, then it comes back on the lap of the government, and the government must accept the responsibility of bringing down such a policy as will rectify any discriminations there may be. Let us deal with this thing not from a political angle but in a realistic way. Let us realize that our two great railways are two of the most important parts of our whole economy. They have done a wonderful job down through the years, and will do a greater job in the future. Surely we should not stand in this house and condemn them today. Rather we should condemn the lack of policy of the government, if there is such a thing as discrimination, as some of my hon. friends opposite from the east and the west have said.


Stanley Howard Knowles: Will the hon. member permit a question?


Karl Kenneth Homuth: Yes.


Stanley Howard Knowles: My hon. friend was
correct when he said that the leader of this group opposed this increase. Will the hon. member state whether he is in favour of or opposed to the 21 per cent increase?


Karl Kenneth Homuth: I will say this to my hon. friend, and I have always maintained the same policy. No industry, no business in this country, can adequately pay its employees what they should get unless it has the earnings with which to do it.


Stanley Howard Knowles: Is the answer yes or no?


Karl Kenneth Homuth: Have you stopped beating your wife?


Stanley Howard Knowles: Apparently you have not.


Karl Kenneth Homuth: In closing I say this-


Stanley Howard Knowles: Without an answer.


Karl Kenneth Homuth: I appeal to the government to handle this matter in such a way that we can face the future with a reasonable assurance that there will be no discrimination as between various parts of the country. I appeal to the government to give us a railway policy which will help build up this country as we hope to see it built up.


Mr. ANTHONY HLYNKA (Vegreville):: Mr. Speaker, speaking for this group in the house on March 10, 1947, as recorded at page 1229 of Hansard, I said that in the matter of freight rates the Social Creditors stated their position clearly in the Alberta brief on dominion-provincial relations entitled "The case for Alberta," published in 1938. I pointed out at that time that in view of the existing discrimination in the freight rate structure against the western provinces, and particularly against the province of Alberta, we advocated a downward revision of freight rate structure for western Canada rather than any increase. I also said that we realized the fact that it was in the best interests of Canada to have an efficient and smooth running railway service; and if it could be shown that the railways need additional revenue to operate efficiently we would not oppose any justifiable adjustment, but definitely not at the expense of the prairie provinces or of any other one section of Canada. I can only emphasize the point that the load should be borne equally by the entire nation; but to determine the financial position of the railways the house should be supplied with accurate figures as to the earnings and operating costs of the railways in order that the members may be in a position to consider this question intelligently. Failing this, Social Crediters have no other choice than to oppose any upward revision of freight rates and to continue pressing for a downward revision of freight rates for the prairie provinces, and for a fair equalization of freight rates for the entire country.
I do not intend to argue at this time the effect which the increase in freight-cost will have on the cost of living in Canada. Suffice it to say that $70,000,000 additional freight-cost will be imposed on the Canadian people in addition to the already high cost of living in this country.
Freight Rates

I notice that the spokesmen for the railway companies have stated that they will perhaps need and ask for further increases as time goes by, and several of them have asked what would happen if the railways were to go bankrupt. I do not think any reasonable, responsible Canadian would want to see our railways bankrupt. We believe that, should the railways require additional revenue, they should have it. But as I have pointed out. we cannot support discrimination such as has been practised in the past.
In the Montreal Gazette of April 1, 1948. there appeared an editorial which placed before, the Canadian people views which in my opinion should be corrected. The editorial stated:
One of the most important features of this week's judgment of the transport board on railway freight rates was that it upheld the railways' insistence on an inclusive, uniform percentage increase applying equally to all areas of the country and all rates embraced by the decision. Both by inference and by stated conclusions, the judgment unequivocally rejected the vehement, often stormy demands for special favours that would lift or reduce the burden of any increase for the prairie province and the maritimes. The board is to be commended for thus firmly resisting the considerable pressures, political and otherwise, brought to bear upon it to discriminate between different geographic regions and economic categories of the country as a whole. The award upholds the sound principle that the rate increases finally found necessary shall be spread evenly across the general rate structure and borne pro rata by all classes and areas of the national community.
That statement is an interesting one but it is totally misleading. Let me quote two sentences from an article written by the Hon. Stuart Garson, Premier of Manitoba, which appeared in the Edmonton Journal on November 22, 1947:
In the current freight rates hearings before the transport board of Canada, exhibit 131 filed by the Canadian Pacific Railway, shows that in the ten years from 1936 to 1945 inclusive, 65-8 per cent of the operating profits of the Canadian Pacific Railway were made in western Canada. Unfortunately, no comparable figures are available from the Canadian National Railways.
In the light of that statement, I ask you, Mr. Speaker, is there no discrimination, as the Montreal Gazette states? Not only that, but let me point out something else. The population of Canada in 1941 was 11,506,655. The western provinces of British Columbia, Alberta, Saskatchewan and Manitoba had a population of 3,239,766, and the rest of Canada, the larger part of Canada, or what we in the western provinces usually call eastern Canada, had a population of 8,266,889.
Now 3,239,766 people in the four western provinces contributed to the profit of the

Canadian Pacific Railway Company, in the ten years mentioned by Mr. Garson, 65-8 per cent, while 8,266,889 people contributed, in the same ten year period, only 34-2 per cent of the operating profit of the Canadian Pacific Railway Company. That is the point; that is the pivot on which our argument is based. I want to repeat it because it is the strongest argument and one which cannot be refuted, an argument which totally disproves any contention that western Canada is not being discriminated against-and, of course, the maritime provinces. The fact that 3,239,766 people contribute 65-8 per cent to the operating profit of the Canadian Pacific Railway Company, while 8,266,889 people contribute only 34-2 per cent is an argument that cannot be brushed aside. Let someone answer it.
Let me point out further that the standard rate for first-class freight east of Fort William and Port Arthur is fifty-eight cents for 100 pounds for 100 miles. West of Fort William the first-class rate is sixty-five cents for the same weight and distance. Moreover, discrimination is also practised in applying the process known as "tapering", by which standard rates per mile are reduced on long hauls. On a 500 mile haul in the eastern division this reduction amounts to 25 per cent on the mileage rate for short hauls, while in the west the reduction is only 11-4 per cent; yet long hauls are more common in western Canada than in eastern Canada.
Here are some other important and striking examples of discrimination. Take lumber. A carload of lumber shipped from a. Quebec lumber centre, Mont Laurier to Glencoe, Ontario, a distance of 643 miles, pays twenty-three cents per 100 pounds. On the other hand, a carload shipped from Vancouver to Calgary, also a distance of 643 miles, pays fifty cents per hundredweight. Again, let us take freight charges from Okanagan Landing to Calgary, a distance of 358 miles. The cost is $1.04 per hundredweight, while for practically the same distance, from Hamilton to Vaudreuil, 355 miles, the cost is sixty-five cents per hundredweight. Then from Okanagan Landing to Red Deer, 453 miles, the rate is $1.41 per hundredweight, and from Hamilton to Isbister, a distance of 453 miles, the rate is 91^ cents per hundredweight.
On a carload of domestic grain the rate per 100 miles is 7i cents per hundredweight in the east, fifteen cents on the prairies and seventeen cents in British Columbia. Then again it costs forty-nine cents per hundredweight to ship grain from Streamstown, Alberta, to Vancouver, a distance of 995 miles; while it

Freight Rates
costs only twenty cents to ship it from Fort William to Montreal exactly the same distance.
Let me give one or two other examples. A carload of flannelette blankets intended for Vancouver may be sent under a special "cotton goods" rate of $1.75 per hundredweight. A similar carload sent to Edmonton is put in an entirely different classification at $4,531 per hundredweight.


An hon. MEMBER:: From where?


Anthony Hlynka: From the east; from
Montreal.
The town of Holden, Alberta, is only sixty miles from Edmonton, but it is cheaper to ship eastern goods there via Vancouver than it is to bill them through Edmonton.
Some of these examples I have cited are absolute proof that our freight rate structure as it has existed for many years is out of date and, as the hon. member for New Westminster (Mr. Reid) has stated, should be overhauled. I want to point out that the board of transport commissioners sat on this case for 174 sitting days. If the decision which they handed down is the best they could do in 174 sitting days, I do not know what they would hatch if they continued sitting much longer. We must realize that the time has arrived for Canada to organize her freight rate structure on a sound, scientific basis. This discrimination which has been practised for so long, by placing as much burden on the western provinces as they can possibly bear, has run its limit. I might say, Mr. Speaker, that members and the people in western Canada are not against the central provinces. We are not blaming the central provinces, but we certainly place the responsibility for the freight structure on the doorstep of the government.
The Minister of Transport (Mr. Chevrier) mentioned that the board of transport commissioners was named or set up by this parliament. That is true. But it is also true that the government has the power to overrule any decision of the board; the minister knows that. Surely the time has come for us to realize that the people in western Canada should not be asked to continue bearing the burden they bore during the thirties and of course, since then, with regard to freight rates. Why should three million people pay into the treasury of the railway company by way of freight rates twice as much as eight million pay? There is no justifiable reason for it.
It is pointed out in the press that because the C.P.R. had a deficit of $33,737 for the
month of February, the position of the C.P.R. was shaky and therefore western Canada and the maritimes must stand the burden. Let me say this. If I know the people of western Canada at all, this time it will not be sufficient for hon. members to rise in their places and speak for fifteen or twenty minutes or forty minutes and then mail out a number of copies of Hansard to their key men and say, "You see, we tried our best, but the government did not do anything about it; they let the board of transport commissioners put it through." That will not be enough this time. My view is that any member from the three western provinces, regardless of the party he represents, or from the maritimes-


Stanley Howard Knowles: The four western provinces.


Anthony Hlynka: Yes, from the four western provinces or the maritimes-if he allows this thing to go through, has no business to go back to those people and ask for support, because he is not representing their interests as well as he should.


Mr. BLACKMORE:: He has no business to stay in parliament, even.


Anthony Hlynka: The hon. member for
Waterloo South (Mr. Homuth) stated that the railways needed money to replace their equipment. He also pointed out that the railways rendered a great service to Canada during the war years. That is all true. I do not think anyone in a reasonable frame of mind would deny that. But that does not mean that we in western Canada should have to fork out some more cash to contribute an even greater proportion than before in order to help out the railways. I feel that, as I have already pointed out, the time has come for this government to find ways and means of arriving at some scientific solution to this problem. Surely it is not fair for us to carry this burden any longer.
I notice some headings in papers published in western Canada, and I just want to make a brief reference to this. One of them goes on to say, "West provinces get concession." How do you like that? Then they go on to say, "The prairie provinces received a substantial concession in Tuesday's freight rate judgment." A substantial concession!
Another newspaper goes on to state:
Western farmers naturally will be pleased with the concession on western grain movements made by the board of transport commissioners . . .
It is almost tragic. Why make or print statements of that sort when -we know that the primary producer-that is, the farmer-is the
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only one who pays freight on the things he buys and on the things he sells? He pays double, and he is the only one who does that. If hon. members try to find examples of this in the secondary industries, they will not be able to do so. Those industries do not pay freight both ways; not at all. But the farmer must pay it. Then the headlines are put in the paper-to mislead the farmer, to leave that sweet taste with him after he has been given a pill of the rise of 21 per cent in freight rates -that the farmer "has been granted a concession." I say, let us be fair and let us be grown up. I would appeal to hon. members on all sides of the house to take this matter under consideration and solve the problem properly.
I do not object to the leader of the C.C.F. (Mr. Coldwell) bringing this matter to the attention of the house this afternoon. I feel, however, that a question of this kind requires more study on the part of members wishing to take part in debate. Judging from the debate thus far, I would conclude that other members and the leader of the C.C.F. have spoken more effectively on other subjects. Hon. members on all sides of the house would have gained much had they known this matter was to be discussed today, and had they had an opportunity to prepare the material they wished to place before parliament and to place it on Hansard, so that the people might read what was said and learn something more about this question.


Stanley Howard Knowles: Is the hon. member aware of the fact that the leader of this group did notify each of the other parties in the house this morning that it was his intention to raise the matter of freight rates this afternoon?


Anthony Hlynka: To give notification this morning that a motion would be made this afternoon does not give anyone much time to study the subject matter.


Mr. BRYCE:: You are doing all right.


Anthony Hlynka: I thank the hon. member for saying that I am doing well. At the same time I feel that this matter requires more study and that we should have access to at least a synopsis of the material placed before the board of transport commissioners. We have not had an opportunity to study any of that material. All we have is a number of clippings from newspapers and briefs sent to us from various provinces. I have one here from Alberta.


Mr. PROBE:: Meantime the freight rates go up.


Anthony Hlynka: I am not blaming any
particular group. I am sure hon. members

will agree, however, that this matter should have been introduced m a different way so that hon. members might have had an opportunity to prepare themselves to discuss it properly.


Mr. CLARENCE GILLIS (Cape Breton South):: Mr. Speaker, I agree with the hon. member who has just taken his seat when he states things are moving so rapidly today that it is difficult for hon. members or the public generally to follow what is taking place. We have got away from the horse-and-buggy stage and are trying to develop a streamlined society. Therefore we have to keep on our toes all the time; that is all there is to it.
However, the subject matter before us this afternoon is not new. The fact of the matter is that freight rates have been discussed in the press for the last two or three years, and we have been told repeatedly that the railways were seeking an increase of 30 per cent in freight rates. I think no apology is necessary for having introduced the subject this afternoon. My recollection is that before the Easter adjournment the Prime Minister (Mr. Mackenzie King) stated that the first order of business would be the discussion of a bill to subsidize gold production. I believe the discussion this afternoon is much more to the point than would be a discussion having for its purpose the subsidizing of a metal dug in Canada and buried in the United States. Surely this discussion is more timely.
I should like to say only a few words for the benefit of the hon. member for Waterloo South (Mr. Homuth). I know what I shall say is out of order, but no more so than what he said. The hon. member was allowed to place his observations on record and to accuse the leader of the C.C.F. of being more interested in the Canadian Congress of Labour and the C.I.O. than in matters affecting the people generally.
Just for a start, let me point out to the hon. member that there is in Canada no such organization as the C.I.O. It is an American organization which has in the Canadian Congress of Labour its counterpart in Canada. It is not a union; rather it is a body having for its purpose the co-ordinating of industrial unionists in Canada and the United States, and the handling of their legislative problems. After many years of experience of going cap in hand to governments, unions very wisely decided that it was about time to send some of their own men into the lawmaking bodies so that they might help to make laws which might be in keeping with their own ideas. And so, just as the manufacturers' association, the chambers of commerce, the National Steel Company of Canada, DOSCO and others have

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selected Liberal and Tory parties as their political agents-and contribute to their campaign funds-so the labouring men of Canada, through that industrial organization, in convention and after discussion, decided that they, too, would select a political party.
The hon. member for Waterloo South does not like that; but let me tell him that the selection was made without any solicitation on our part. He tried to show conflict between the statement by Mr. Mosher, head of the Canadian Congress of Labour, to the effect that the increase in freight rates was not great enough, and the statement by the hon. member for Rosetown-Biggar (Mr. Coldwell) in the house that an increase in freight rates at this time was unwarranted.
Surely that should not surprise the hon. member for Waterloo South. I understand that at one time he sat as a labour member in the Ontario legislature. He should know that Mr. Mosher, as head of the railway unions, is the sales agent of the labourers and employees of Canadian railways. As such it is his job to sell that labour power at the highest possible figure. And in this House of Commons the leader of the C.C.F., as leader of a socialist party in Canada the objective of which is a new order of society in this country, is doing his job to fight for the changes in the mechanics of society which would make it unnecessary to do those things such as we are now doing under this present scheme of increasing freight rates.


Lionel Chevrier: I am glad the hon. member smiled when he referred to a new order with reference to the C.C.F.


Clarence Gillis: And I want to pass this into the ears of my Tory friends, that so long as the mechanics of society are as they are today this is the procedure which will have to be taken. It cannot be done in any other way than it is being done today, so long as you stick to this capitalist system of so-called free enterprise. And what you are ranting and raving against today in the light of this increased schedule of freight rates, and the hardship it will create among people throughout Canada, is the very thing for which the people of this country voted when they voted to retain a system of free enterprise, represented by either Liberal or Tory candidates. They are getting what they asked for.
Let me say a further word about communism-because the hon. member also injected that into the debate. I do not care whether it is the Minister of Justice (Mr. Ilsley) or the hon. member for Waterloo South who rises in his place in the house
anil tries to create the impression that the democratic socialist party of Canada is exactly the same as the communist party of Russia; if either does it, then he is doing this country a great disservice.


Lionel Chevrier: The Minister of Justice did not say that.


Clarence Gillis: And he is doing exactly what was done in Europe. He sowed seeds of suspicion and confusion, until such time as that Mr. Bolsheviki he is so afraid of came in and took things over, because they arose out of the confusion created by men who should have had better sense.
Let me say further to the hon. member for Waterloo South that the only countries in Europe which stood up to Hitler and which have not capitulated to this totalitarian machine of Russia are the countries where there were well developed social democratic parties based upon trade unions and cooperatives.


An hon. MEMBER:: Nonsense.


Clarence Gillis: The people there were welded together politically and economically, and there was no vacuum into which that machine could creep so as to destroy the structure of society. Those Scandinavian countries stood up, as did Great Britain, New Zealand and Australia. And if that development does not take place in this country, despite all this talk about democracy-at least the way it has been talked about from those sources to whom I am directing this little bit of advice- you are apt to wind up behind the eight ball and get the very sort of thing you are afraid of.
Let us get back to this business of freight rates and the Canadian National Railways. My contention is that there are two pertinent points in connection with this whole matter that should be made clear. In so far as the maritimes are concerned I believe that this increase of 21 per cent across the board has destroyed the effect of the Maritime Freight Rates Act.


Lionel Chevrier: It has not.


Clarence Gillis: I am glad to hear the minister say that, but I have in my hand the judgment rendered by the board of transport commissioners in the application of the railway association of Canada on behalf of its member railway companies for authority to make a general increase in tolls and freight rates. I have read this over, and I am going to call the attention of the minister to a part that strikes me particularly, to be found on page
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69. This deals with the Maritime Freight Rates Act and it quotes section 8 of the act which reads:
The purpose of this act is to give certain statutory advantages in rates to persons and industries in the three provinces of New Brunswick, Nova Scotia and Prince Edward island, and in addition upon the lines in the province of Quebec mentioned in section two, together hereinafter called "select territory," accordingly the board shall not approve nor allow any tariffs which may destroy or prejudicially affect such advantages in favour of persons or industries located elsewhere than in such select territory.
When I read that over I came to the conclusion that that practically wipes out any advantage the maritiines may have because of the Maritime Freight Rates Act. The hon. member for Rosetown-Biggar and others have stated that neither the province of Quebec nor the province of Ontario was represented at this hearing because they were not interested. My impression is that the 21 per cent increase in freight rates which will be applied both east and west will not be applied in central Canada, because the competition from trucking companies is so great and the hauls so short in those provinces that if the increase is applied it will simply mean driving business to the trucking companies. I hear a rumour to the effect that the trucking companies are going to jack up their rates by 20 per cent but I do not know how true it is.
In view of the fact that our principal exports are coal and steel, this increase imposes an additional burden in marketing our products in central Canada. I shall go into this further later on. In addition, a large percentage of what we eat and wear in eastern Canada comes from the central provinces. We did have some advantages under the Maritime Freight Rates Act, but in my reading of that small section of the report those advantages are wiped out. I think that is also the opinion of the maritime transportation commission as set out in their representations to the government.


Lionel Chevrier: I hope my hon. friend is not arguing that the 20 per cent subsidy paid by the federal government has been wiped out?


Clarence Gillis: Certainly it has.


Lionel Chevrier: I must say definitely that it has not.


Clarence Gillis: When you speak afterwards you can try to prove that to me, but I am reading now from your report.


Lionel Chevrier: You are not reading my report; you are reading the report of the chairman of the board of transport commissioners.


Clarence Gillis: That is right. I do not blame the minister for wanting to get away from it. The other fellow does not have to run an election.
Secondly, I do not believe that this board had any authority or right to proceed with this hearing or to make that report, and I shall read from the report in order to justify my contention. The board of transport commissioners merely acted in this matter as the agents of the railroads. I quote from page 70 as follows:
Mr. Burehell, one of the counsel for the maritime provinces, contended that the applicant railways had failed to adduce any evidence to show that there has been an increase in the cost of railway operation in Canada between the first day of July, 1927, and the present time and that the board was, therefore, without jurisdiction or authority to permit any increase in freight rates which would include the "select territory" until satisfactory evidence has been furnished of such increased cost. And that this omission on the part of the applicants could only be remedied by a further substantive application on their part for the purpose, and upon due notice to the respondents.
Mr. Cross, a member of the board said:
I must agree with the argument of counsel for the maritimes that the applicants, it may be through inadvertence, did not furnish us with specific evidence, or in any event sufficient evidence, of increased cost of railway operation in Canada over the cost prevailing on July the first, 1927.
According to this report, the board of transport commissioners went ahead and appointed Mr. John C. Lessard-


Lionel Chevrier: Would the hon. gentleman read the other three paragraphs?


Clarence Gillis: Yes. They read:
To require the applicant railways to proceed by way of substantive application, as suggested by counsel for the maritimes. would involve much delay in disposing of the most important question before us. This further delay should, 1 think, be avoided if it can be fairly done.
The board has, I think, power to investigate and ascertain the facts itself and to make a finding based upon the results of such investigation, and we have proceeded accordingly.
The board instructed Mr. John C. Lessard, its then director of the bureau of transportation economics, to investigate and ascertain the facts, as to whether the cost of railway operation in Canada has increased since July 1, 1927, and if so, to what extent, and to report thereon to the board. These instructions were carried out and Mr. Lessard reported to the board.
My contention is that, in view of the fact that the Canadian National Railways had been contending for at least two or three years that they required an increase in rates, it was reasonable to expect that they would have had their case prepared and in the hands of the board of transport commissioners rather

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than the board setting themselves up as a body to investigate the costs of the Canadian National Railways. The board sent in one man and upon that one man's evidence they permit an increase of 21 per cent in the freight rates across this country.
I think it was an absolutely stupid thing to do. I do not think the board of transport commissioners had any right to set themselves up as the agents of the Canadian National Railways in order to gather evidence which should have been placed in their hands by an organization which in my opinion has sufficient economic divisions, research facilities and all that kind of thing to have prepared a report to be placed in the hands of the board.


Lionel Chevrier: They have that authority under section 3 of the act.


Clarence Gillis: This thing was done absolutely wrongly, and it is a serious matter for the people of this country.
Where does the question of provincial rights come in? I understand that seven provinces are opposed to this increase in freight rates. I know that three maritime provinces, working through the maritime transportation commission, have made or are making representations to the government asking for a stay of execution, and I mean execution literally, because this increase is execution so far as the maritime provinces are concerned. It is the final kick in the face for these displaced provinces which will put them on their back. Seven provinces I understand, apart from Ontario and Quebec, have made or are making representations to the government asking that the application of th;s judgment be withheld for at least thirty days to give them a chance to appeal. I understand that the rates become operative on April 8. Let us take a look at this question of appeal. In order to appeal you must first get permission from the board of transport commissioners-


Lionel Chevrier: Better read the act.


Clarence Gillis: -or you must get the permission of the supreme court itself. Far be it from me to suggest that the board could influence the judiciary of this country. I will not suggest that at all, nor would I suggest that the judiciary might in some cases be political appointees. I think the cards are stacked against the people of this country getting redress along the lines of an appeal. I would ask the minister when he replies to tell the house if he or the cabinet intend to consider the matter of withholding the application of these new rates for at least thirty days in order to give the seven provinces who are dissatisfied with the judgment the opportunity of making an appeal.
What does this increase in freight rates mean to the cost of living? In the maritime provinces it means a lot more than the average member here realizes. For instance, to start with, there is a flat increase of twenty-five cents a ton on coal, whether on long or short hauls. In reality that amounts to a flat increase of fifty cents a ton on most of the coal of the maritime provinces. Take the coal shipped over the Sydney and Louisburg railway. That is a company-owned road, and it comes under the Maritime Freight Rates Act. The company will haul coal from Sydney to Louisburg or from Glace Bay to Sydney and there is a twenty-five cent increase per ton on coal going that distance. Then the coal is transferred to the Canadian National Railways, where an additional twenty-five cents a ton has to be paid. So on practically 85 per cent of the production of coal in the maritime province? there is a flat increase, not of twenty-five cents, but of fifty cents a ton. In Cumberland county, on the Cumberland railway, and on the Sydney and Louisburg railway-and most of the coal is produced in this area-the two rates will apply. I notice that Mr. Ralston, one of the counsel for the maritimes, made a very strong argument on this point; but all the satisfaction he got, according to the report, was: Oh, there are incidentals like that which will have to be taken care of as we go along. But in the meantime the rates are applied, and once they are applied they have the habit of sticking. The time to cure the thing is before the rates are applied. But even assuming that the increased rate was only twenty-five cents a ton on coal, if the minister acquiesces, if he agrees with the board's judgment-


Lionel Chevrier: I did not quite follow what my hon. friend said. Did I understand him to say that I was acquiescing?


Clarence Gillis: You can read it in Hansard. If my hon. friend acquiesces-


Lionel Chevrier: My hon. friend should not place in the mouth of an hon. member words that he has not used. If I have anything to state on this question I will state it in due course. The hon. gentleman has no right, if he wants to be fair, to place those words in my mouth.


Clarence Gillis: I was not placing any words in the minister's mouth. He was not listening. I do not blame him for being sensitive. There were a lot of ifs and ands and buts in what I said. I said if the minister acquiesces, if he agrees with this increase of twenty-five cents a ton on coal, even if it were only twenty-five cents but on most of Nova Scotia coal it will be fifty cents, he is acquiescing in an increase
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in the fuel bill of the Canadian people of over $200,000,000 a year in freight charges alone.


Lionel Chevrier: I am afraid my hon. friend misconstrues this whole picture. The minister neither acquiesces nor refuses. An application is made to the board and it deals with it. My hon. friend is dealing with the judgment of the board now. I wish he would not continually say "if the minister consents, such and such a thing will happen".


Clarence Gillis: What I am trying to do is to have the minister prepare some pretty good notes so that he will be in a position to make a clear and definite statement to the house when he speaks. I am trying to draw information out of him. I want to know what the cabinet thinks about this thing, because the cabinet is now the only body with power to prevent this rate from becoming operative pending a hearing before the courts of the country. That is why I am addressing the minister. He presides over the department that has jurisdiction over the board; he is a member of the cabinet, and if we can make him see how serious this thing is the chances are that he will appeal to his colleagues from Ontario and Quebec and say: The maritimes have got a bad kicking around already and this increase is a bad kick in the nose to them, so perhaps we had better let up and stagger this thing, transfer some portion of the burden to the central part of the country.
The minister will agree that the maritime transportation commission is headed by capable people. I do not think anyone would consider that body as being political in any way, shape or form. It represents some seventy boards of trade. I have met some of them. I do not know what their politics are and I do not care. I have always believed that they were interested in the part of the country in which they live and that they were continually trying to improve conditions there. They feel very strongly about this increase. Here is a long press statement giving the views of the commission. I presume the minister has read it. I shall not take time to read it, but it points out that this freight increase will add to the cost of living tremendously because there are sections of Nova Scotia where 80 per cent of what the people eat is imported, dragged all the way from the central part of Canada, and this additional freight rate will not only add to the cost of living but hamper the marketing of Nova Scotia's basic materials. The only things we send out of the province are steel to be fabricated, and our coal, which we are trying to get back into the Quebec market which we lost during the war.

As I said, the maritime transportation commission feel very strongly about this increase and they have written much stronger stuff in the press than what I am saying here this afternoon. They say also that the increase in the freight rates, rather than encouraging subsidiary industry which is so badly needed in the maritimes, will back it further and further away. It means a continuation of unemployment; perhaps it means creating more unemployment. The last government figures showed that today 27,000 people are unemployed in the maritimes, and there is not a chance in the world for them to get a job. There was some work for them under the displaced persons program which the federal government operated. Under that program they assisted the people from the maritimes to go to central Canada. Today they have been displaced by the displaced persons whom the government is bringing in from Europe. Our people have to stay at home today and there is no relief and no work. The displaced persons are coming in. I have had complaints about that. They are taking the work that our people ordinarily would be exported to take. I know that is not a nice way to put it, but it is an actual fact. The freight rate increase further aggravates that situation so far as the maritimes are concerned.
I do not think the 21 per cent increase is the answer. I noticed in a press report that in the month of February alone the deficit on the Canadian National Railways amounted to $730,000. If that is true; if that is the monthly deficit on the Canadian National Railways the 21 per cent increase is not the answer. It will bring in only $70,000,000 a year on the basis of the present traffic. If the Canadian National Railways are accumulating a deficit of $730,000 monthly they will still be in the hole. The increase granted is not the answer. One needs to ask, is the railway inefficient? Is it obsolete? Surely, something is wrong with it and it needs to be overhauled. We cannot continue to pile on the backs of the consumers of this country a load of taxation in the form of an increased cost of living-and it is taxation, no matter how you look at it

for the maintenance of obsolete equipment. If there was an answer in this increase I would say, yes, perhaps it is all right; but there is no answer there. The institution is still uneconomic.
As the hon. member for Rosetown-Biggar said, the bonds that hold us together from coast to coast are these bands of steel. They are pretty shaky so far as the maritimes are concerned. I wonder whether the minister has ever taken a ride from Moncton to Sydney.

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Take a ride down there some time, but take a belt and a life preserver with you, because you will need the belt when you go around the curves and you may need the life preserver on the strait of Canso. That is a pretty shaky stretch of road. I have never seen the service worse in the last thirty years than it has been in the last year or two. From Truro east, at least, it is terrible. The equipment is obsolete. They have no engines. I came up one night and the train was only five hours late. Why was she late? Well, she was late because she had to stop at Antigonish and leave the passengers on the train while she went away about fifteen miles looking for a car of salt.


Lionel Chevrier: The hon. member is certainly roaming around the country, from Social Credit to the C.C.F., from equipment on the eastern division to-


Clarence Gillis: What are we talking about? Are we not talking about the Canadian National Railways? Are we not talking about an increase of 21 per cent? I am trying to tell the house that it is not an increase in freight rates that we want. What we want is an examination to find out whether or not the operation is an economic one. I am not prepared to say in the house that I will vote an increase of 21 per cent in the freight rates, which I know means an increase in everything that is dragged dowm to the maritimes, for the purpose of maintaining that kind of machine. There is something the matter with an organization that is going in the hole S730.000 a month, and it needs to be overhauled to see what is WTong with it. Pumping money into that kind of thing is not the answer.
There are two things I want the minister to answer when he rises to speak. First, is it the intention of the government to increase the subventions on maritime coal to offset the proposed increase in the award of the board of transport commissioners?


Lionel Chevrier: My hon. friend will have to ask the Minister of Trade and Commerce that question.


Clarence Gillis: Yes, I have already sent him notice.


Lionel Chevrier: He is in charge of the responsibility for subventions on coal.


Clarence Gillis: Thank you. Since you are in the cabinet I thought you might know something about it. I intend to ask that question when we get to the orders of the day, but it has now been answered.
My second question is, has the cabinet considered, or will it consider the appeal made by the seven provinces of Canada which are opposed to this increase that there be a stay of execution for thirty days to give each of these provinces an opportunity of appealing to the courts of the country against this proposed increase? I shall be obliged if the minister gives us that information.
Mr. GORDON B. ISNOR (Halifax): Mr. Speaker, I do not propose to deal with the evidence as prepared and presented by the legal representatives of the various provinces, nor do I feel what I shall say will have any effect on the decision of the board of transport commissioners. However, since the west, through the hon. member for New Westminster (Mr. Reid), has spoken on behalf of British Columbia, I thought I should add my voice from the east with regard to the reaction of the people of that section of the country.
Like other hon. members, I have just returned from my constituency. When this decision was made known I was in Halifax. I hope that the motion which was introduced today by the hon. member for Rosetown-Biggar (Mr. Coldwell) and the remarks of the various hon. members, who have presented their views from various angles, will have some effect on the board of transport commissioners. If not, I hope and I believe that it will have some effect on the government in making them realize that this action is not one which is well received in other than the two central provinces of Ontario and Quebec.
I think the point has been well taken by other hon. members that there was really no reason for Ontario and Quebec to present an argument against this increase. We all know that the industrial activity of our country is centred in these two provinces, and largely in Ontario. The same is true of our population. Quebec has a population of 3,331,882, while Ontario has a population of 3,787,655, or a total of 7,119,537 in these two provinces out of 11,500,000 people. The figures I have quoted are taken from the 1941 census. Very largely the same proportion exists today. Therefore I say I am not approaching this problem from the point of view of a legal argument, or as to whether the railways were justified in asking for an increase of 30 per cent.
As a businessman I recognize what has been said by the hon. member for Waterloo South (Mr. Homuth), that unless you have sufficient revenues you cannot operate successfully. That is recognized, but I do say that is a problem which the government must face if they are to carry out the very foundation of
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confederation. Using the same words that have already been used twice before, I believe that we should have something stronger than steel rails connecting east and west, and I agree with those who say that the whole economy of our nation is founded upon the individual economy of every province. You cannot have a prosperous central Canada, Ontario and Quebec, at the expense of other sections of the country. I do not say that in any unkind spirit with reference to the progressive and aggressive manner in which Ontario has gone about its industrial activities. I say it rather to point out that there are, in the extreme east and in the extreme west, disabilities that must be overcome.
I do not propose to deal with the political issue introduced by the hon. member for Waterloo South, nor shall I discuss the reply made by the hon. member for Cape Breton South (Mr. Gillis). All hon. members know my position with respect to free enterprise and competition. In this regard I differ from some hon. members, because I believe that competition will bring about greater efficiency and, in consequence of that increased efficiency, greater economy.
The Canadian National Railways are a publicly owned railway system and, because of the large returns secured in 1947, the people of the maritime provinces find it a little difficult to understand why this large increase was found necessary. A Canadian Press dispatch from Ottawa on April 4 stated:
Canadian rails move largest peace freight.
Canadian railways last year carried the highest volume of freight ever moved in peacetime, the bureau of statistics reported. The railways moved 452,706,006 tons of goods in 1947. The total was exceeded only in two wartime years, 1943 and 1944, when 152,942,000 tons and 154,845,006 tons were transported. A gain of 14,000,060' tons was reported over 1946.
Then they refer to the freight which was carried. The largest increase was in grains, ores, petroleum, lumber, iron, steel, building materials, automobiles and newsprint. If you consider the freight carried you will find that the great proportion of it originates in central Canada. As regards automobiles, we are all aware, of course, of the large amount of freight which is carried by the railways from the automobile districts. Declines were shown in the movement of hay, straw, apples, cattle, sheep, wool, coal, coke and fresh fish, and these are products which come from the maritime provinces.
You will see why we in the maritimes are concerned about this increase. I do not propose to discuss the various royal commissions which have looked into the economy of the country, particularly as related to the mari-

times; but we do know that from time to time, without exception, before every royal commission that has investigated this subject the question of transportation from east to west has been a very live issue. Later on I shall read from one or two of the recommendations and findings, but it is generally accepted that there has been and is a disability, so far as transportation is concerned, from the point of view of the maritime provinces.
My approach to the consideration of this question is from the point of view of the promise that was made to us at the time of confederation. There is no question that we were given to understand, at the time of confederation in 1867, that we would have a line of communication whereby we would be able to trade with other parts of the country, and the reason advanced then was that it would improve the economic position of the east, and also promote settlement in the west. It did precisely that, so far as the west is concerned, because it resulted in carrying people to the west and to central Canada, and it was only natural that, with the large increase of population they had, they should gradually become an industrial centre.
With that background I feel justified in making this statement, and I do not as a rule use harsh terms. I say that there was a grave violation, if not of the terms of the confederation, at least of its spirit.


John Horne Blackmore: Hear, hear.


Gordon Benjamin Isnor: I repeat that there was a violation of the spirit of confederation, and that conviction is shared by people in the maritime provinces. I cannot speak for all the maritimes but I can speak, I believe, for many sections of Nova Scotia. During the Easter recess I came in contact with people in many parts of the province and without exception they were bemoaning the fact that this was one more burden added to our part of the country.


Mr. HAZEN:: And New Brunswick too.


Gordon Benjamin Isnor: I said I could not speak for all the maritimes but I am sure the hon. member can speak for his section. I think, therefore, I can say that the people in the maritime provinces generally feel that this is one more burden added to the cost of living, as the hon. member for Cape Breton South has pointed out; and the same is true for British Columbia, the hon. member for Fraser Valley (Mr. Cruickshank) says.
I doubt very much whether I can offer a solution. Those with greater knowledge than I have have studied the question and the board

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of transport commissioners decided that a 21 per cent increase was necessary. They based their finding, I believe, purely on revenue and expenditures. I feel quite sure that the board of transport commissioners in carrying out their duties viewed the whole picture as it was put before them, studied all the evidence, and based their findings upon revenue and operating expenses. I do not believe the factors brought out by the hon. member for Cape Breton South or even by my friend Mr. Burch ell of Halifax were so important except from the legal angle. We cannot help realizing that there has been a large increase in cost. All one has to do is to look at one of the older reports and at one of the recent reports and he will see at once that there have been increased expenditures across the board in supplies, salaries and everything else. That is not so important from my point of view. From my point of view, what is important is the question of trade connections which must be maintained throughout all parts of Canada, and that is a matter which, I suggest to the minister, and through him to the cabinet, should be given serious consideration.
In the construction of trans-Canada railway lines east and west, I believe the fathers of confederation had that in mind. It was not merely a question of carrying passengers but the effect which the construction of railways would have on every part of the country. I think we should bear that in mind. I do not know just what solution can be offered. As a rule I do not believe in subsidies.


John Horne Blackmore: Why not? Tell us why you do not believe in subsidies.


Gordon Benjamin Isnor: If the hon. member will be good enough


John Horne Blackmore: I do not insist, but really, after all, it is a matter that ought to be dealt with with some intelligence and I expect the hon. member to have that intelligence.


Gordon Benjamin Isnor: If the hon. member had followed my words he would know I said that as a rule I do not believe in subsidies because I do not believe in artificially 'building up any industry. I might say for his benefit that we have that to a certain extent in central Canada. We have that through the tariffs. That is the artificial building up of an industry. I believe somewhat the same principle applies with regard to subsidies.


John Horne Blackmore: Would the hon. member permit a question?


Mr. CRUICKSHANK:: Oh, no.
5849-168i


John Horne Blackmore: I should just like to ask this simple question. It is a simple one, but we must face it. What device has the hon. member to suggest as a means of offsetting, in respect of the maritimes and the western provinces, the effect of these tariffs?


George Alexander Cruickshank: I will answer that later.


Gordon Benjamin Isnor: I thank the hon. member for his question, Mr. Speaker. No doubt he, with his usual wisdom, will be able to throw some light on his own question at some future time.


John Horne Blackmore: I am quite ready to do that.


Gordon Benjamin Isnor: If I may proceed, I should like to do so. I say that if something is not done in the form of subsidies, then our whole railway structure must have a thorough overhauling. Perhaps this is far-fetched, but we are able to deal with postal matters from a central point. We are able to give a rate whereby no particular section is penalized except in the case of the east and west with regard to air-mail service. Therefore I say it might be possible for the board of transport commissioners or the government itself to consider whether the whole railway structure should not be revamped so as to bring it more in line with a service to the country such .as that given by the postal department. I know that thought is a little bit new to the hon. member who asked the question, but it. is worthy of consideration. As he usually gives these matters study, I would suggest that he spend this evening and perhaps some time tomorrow in thinking it over. Perhaps he may be able to enlarge on my thought, and maybe the government will accept our joint suggestion that they revamp the railway structure with that thought in mind.
As you can see, Mr. Speaker, I have Her prepared speech. I have always wanted the1 C.P.R. to go into Halifax because I felt that with competition there would be great efficiency and better service, and perhaps it would stir up the C.N.R. so that they would not have those bumpy roadways referred to by the hon. member for Cape Breton South. He is either right or wrong. He must either agree with me that competition is a good thing, or he must put up with public ownership and take the bumps over the bad roads which we have in our end of the country.


Stanley Howard Knowles: Ask the hon. member for New Westminster for his views.


Gordon Benjamin Isnor: What I say applies to each and every member who wishes to develop the subject. I feel that the hon. member for
Freight Rates

Cape Breton South was just a little bit off the track when he said what would happen. If we had only one railway and they decided to put a 30 per cent increase into effect, they would simply put it into effect, and that is all there would be to it. That would be the type of public ownership which he would advocate. Instead of that, we heard not only one or two railways but representatives from all the railways in Canada who wished to appear before the board, representatives from the provinces and individual citizens. As a result of that there was an award not of 30 per cent but of 21 per cent. This does not go into effect until April 8. I am going to offer some further evidence and perhaps some kindly advice in such a way that I am hopeful that it will not go into effect on that date.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Gordon Benjamin Isnor: Mr. Speaker, when the house rose at six o'clock I had already placed before lion, members my views with respect to the Increased freight rates announced by the board of transport commissioners. I had almost concluded my remarks, with the exception of summing up. It will be recalled that I had covered briefly the background of our transportation system from confederation in 1867 to today. I do not propose to go over that ground again, or to do more than briefly refer to one or two of the recommendations which may have been made. I had also given the reasons for the linking up of the provinces as outlined on more than one occasion by those who appeared and presented briefs before the various commissions which have been held to consider this question.
I had referred to royal commissions held from time to time which dealt with the disabilities of different sections of Canada and which had emphasized particularly those of Nova Scotia. I emphasized that not only should questions of revenues and expenditures be considered, but that trade and equality in all sections of the country-not in any . particular one alone-should be taken into .consideration.


John Horne Blackmore: Would the hon. member speak more loudly? He has friends down here.


Gordon Benjamin Isnor: You are a long way off.


John Horne Blackmore: 
Gordon Benjamin Isnor: I am pleased to know that; the hon. member has always been most kind when I have taken part in debates.
I referred to the fact that not only was settlement in the west promoted by the building of the railways, but that also activities in the east had been stimulated. Railway connections with the prairies gave a tremendous degree of assistance to the industrialization of Ontario and Quebec, and to the coal and steel industries of Nova Scotia as well as to lumbering in British Columbia. The railways in effect reduced the vast size of our country to one of reasonable proportions.
I had drawn attention to recommendations made in 1926 to the royal commission which dealt particularly with disabilities affecting Nova Scotia. May I quote briefly from the economic inquiry of 1934, which closes with this passage:
It -was partly for this reason that, in 1926, the royal commission on maritime claims was appointed. In its report the commission makes the following statement:
"We have come very definitely to the conclusion that the rate structure as it has been altered since 1912 has placed upon the trade and commerce of the maritime provinces (a) a burden which, as we have read the pronouncements and obligations undertaken at confederation, it was never intended it should bear; and (b) a burden which is, in effect, responsible in very considerable measure for depressing abnormally in the maritdmes today, business enterprise which had originated and developed before 1912- on the basis and faith of the rate structure as it then stood."
Thus we see that the claim of the maritime provinces, and in this instance more particularly that of Nova Scotia, was recognized. And it is because of that recognition we are fearful today of the effect this increased freight rate will have upon the economy of our section of the country.
Another brief prepared by the late Norman McL. Rogers and presented to the royal commission on the disabilities of Nova Scotia within the Canadian confederation stated as follows, in reference to the handicap under which the province of Nova Scotia was operating:
This handicap, arising in part from the interrelation of tariff policy and freight rates, appears to have been recognized by the royal commission on maritime claims in 1926, although the phraseology used by the commissioners would seem to suggest that it w-as recognized more particularly in relation to producers of the maritime provinces who wished to market their goods in central Canada. In section 2 of the report of the royal commission, the following references may be quoted as bearing upon this question:
"In addition, the ease which the maritime provinces have already submitted to the railway commission also raises the question of handicaps

Freight Rales
arising from the geographical position of their natural products and their distance, generally, from the central markets."
I have every reason to believe that the reference to "central markets" is a reference to the markets of Ontario and Quebec, to which I referred on more than one occasion this afternoon. Then, to continue with the quotation:
"We are far from suggesting that there should be interference on the part of the railway commission with the business judgment of the railway companies, or that there should be any confusion between trade development that can reasonably be expected from the railway rate structure, and trade development that must be a matter for public or government responsibility quite apart from rate structure."
I pause there to repeat to the Minister of Transport (Mr. Chevrier) the two words "government responsibility" as they appear in this report.
I felt I was justified in bringing this matter before the government today in the hope that not only would it consider the revenues and expenditures of the railway systems as placed before the board of transport commissioners at board hearings, but rather that it would deal with the matter from the point of view of the effect it would have upon all sections of Canada, and particularly, of course, upon Nova Scotia and Halifax, which I have the honour to represent.
In closing, may I place greater emphasis upon what I said this afternoon. Our transportation system is the means of linking the economic activities, developments and progress of our country. It must not be considered from the point of view of revenues and expenditures only; but matters of trade, and the effect which certain procedures may have on our trade expansion in every section of Canada, and not only the central section, must be considered.
I made reference this afternoon to the effect the change in rate is having on the extreme western section of our country, and in this I have supported the thought expressed by the hon. member for New Westminster (Mr. Reid). I say again that the same effect is being felt in the maritimes. Apart from the financial and legal aspects of the case as presented by seven out of the nine provinces, I submit that the spirit in which we entered confederation should ever be kept before us if we are to have a united, contented and satisfied nation.
I opened my remarks this afternoon by saying that I did not know what effect any remarks of mine would have in delaying the bringing into effect of the increases on April 8, but I felt that at least I was doing my duty
in placing the views which I held, and which I believed were held not alone in my native province of Nova Scotia tut from the information given me by hon. members from other provinces, throughout the whole eastern maritimes. I ask the Minister of Transport and, through him, the government to give serious thought to the suggestions I offered this afternoon with a view to either holding up this increase or formulating some plan to offset the ill effects which I believe will be felt in the extreme sections of our country.


Mr. McIVOR:: Does the hon. member
believe that any increase in freight rates will affect the high cost of living? If so, does he not believe that that argument alone should cause the government to consider these freight rates?


Gordon Benjamin Isnor: The hon. member has asked me, not one question but two. I think I would be quite satisfied with the answer he has supplied. I know the hon. member's intentions are good. There is no question in my mind that overhead, operating expenses and carrying charges are bound to be reflected in the cost of goods. If the cost of goods is increased, naturally the consumer will have to pay more.


Mr. P. C. BLACK (Cumberland):: Mr. Speaker, this is a subject which is important to all Canada and particularly important to the maritime provinces. I arrived back from Nova Scotia only an hour before the house convened this afternoon. I did not know this subject was coming up and I did not have an opportunity to make any preparation. However, I feel that I should express my views. I am particularly pleased to be associated with the hon. member for Cape Breton South (Mr. Gillis) and the senior hon. member for Halifax (Mr. Isnor) speaking after each other and joining forces in giving the viewpoint of our part of Canada.
I do not think this important matter should be discussed under these conditions. We should have had some notice. As far as I am concerned, I have not had an opportunity to get a copy of the finding of the board of transport commissioners. I think every hon. member is entitled to have had a printed copy so that he can examine it and not have to rely upon casual references in the press. Before we were called upon to discuss this matter we should have had a pronouncement of policy by the government. The minister may say what he likes but the government cannot divorce themselves from responsibility in the subject we are now discussing, as the board of transport commissioners is appointed by and responsible to them.
Freight Rates

There is a second point in connection with the short view which I would emphasize, and it is this. As far as the prairie provinces are concerned, this 21 per cent increase is a direct charge on the farmers of the prairies at a time when they are hampered in their attempts to offset and to meet it by being under a series of prohibitions and controls which make the levy most onerous at the present time. I do not care whether you call these controls agreements or export embargoes, or what the device is by which you limit the amount the producer can get for that which he has to sell, or when his markets are restricted in which he is able to sell that which he produces. That, by whatever name you call it, is in effect a control. Therefore, if it should be that this cause is finally lost; if the protests of the seven provinces are not to be heeded and there is to be this added burden, this aggravation of what some of us in the western part of Canada are coming to regard as a second-class citizenship; if that is to be the case, then I urge, with all the earnestness I can command, that this increase be not imposed until such time as those in western agriculture are freely able to sell those things which they produce for what they can get for them in whatever markets they may seek.
There is a long view. I said at the beginning that in my view a clear case was made out against the need of relieving the financial situation of the railroads by the imposition of higher freight rates now. I do not suppose there is in the business world anywhere today anything quite so haphazard, unscientific and un-understandable as are the current schedules of freight rates. I have had the experience in committees of this house of having highly placed officers of the railways admit that freight tariffs have simply grown like Topsy and that they are complicated, unscientific and unwieldy.
I venture to say that there are not more than half a dozen lawyers in the Dominion of Canada who are qualified to interpret with authority the rate structure of either railroad. I doubt very much whether there are half a dozen. I have some knowledge of the business world, and people in our part of the country who are in business are frequent and, continuous users of freight transportation. Any firm that is doing business to any considerable extent and is shipping is simply crazy if it does not retain, as in fact it does retain at substantial salaries, men whose job it is to keep in touch with the freight rate structures and to find out how they can do business and what it will cost them to do business. There are classifications and cross-classifications. I have looked at them. The last volume I saw was a thick one, the
fMr. Mutch.]
so-called revised edition by one railroad. No one person on earth knew what was in it. The railroads themselves maintain, at every major shipping point in this country, men whose job it is to pass on these rates and classifications. All credit to the railways for that. The instructions which these men have are that they shall see to it that the shipper gets the best deal under the freight rates which are available to him and to make helpful suggestions. Because of the fact that they are as complicated as they are, that is the situation.
I have not dealt for the moment with the regional discriminations, with the horse-trading and the dealing which has taken place over the years with respect to local areas. Rates are purchased by concessions made at the time but which it seems we are to continue to pay forever. I think what we would be better advised to do is to suspend the operation of these increases until such a time as we have something more nearly approaching a free economy in western Canada for our farmers and importers generally; and the government, through its own agencies or through the board of transport commissioners, could begin now, at this late date, to see what is equitable in the matter of freight rates in this country. If we do not do so, what will happen?
Someone has spoken today about the steel rails that bind the country together. Someone else said that there is a much more important element than steel rails that holds us together. Railways made possible our first communications, and the presumption was that because we have been able to travel up and down on the railways, we now all love each other and have a common bond in our citizenship. Actually the type of thing which has been going on since the early development of the west, the discrimination against our areas by the railways -even by the railway which is the creature, the servant and the property of the people themselves-as a result of the rulings of the board, has done very little to consolidate the people of Canada. The railways have done more in the opposite direction by this type of discrimination, this type of charging all that the traffic will bear, where you can get it; not because the people are easy-going, have more money than those elsewhere, are stupid or anything like that, but because of dire necessity, because they must have certain things and because there is no other way of getting them: and for that which you must have, you pay what you must pay in order to get it. This has been the situation.
We know perfectly well where the burden of the 21 per cent increase in freight rates will fall. It will fall not on those who are best able to pay it but on those who are least able.

Freight Rates
My complaint is not that once more we of the west and indeed those in the maritimes- we of the seven provinces, shall I say, who have expressed a willingness to get together and to make some contribution to the building up of nationhood and the consolidation of good feeling in this country-are to be left without those benefits which we desire because two of the stronger provinces refuse to co-operate. That is understandable on the basis perhaps of thoughtful though misguided selfishness. However, I am a little bit at a loss to understand why in a situation like this, these same two provinces have adopted in this matter the role of the Levite. Not being themselves affected, they have passed by on the other side instead of taking advantage of the opportunity to help the weaker provinces to win some consideration for themselves.
I have a shrewd suspicion, Mr. Speaker, that for the moment, in appealing to these provinces, I am pleading a lost cause. Sir, I would not want to go back to my home city, to my home province or to western Canada generally, and have it said of me that I had been unable or unwilling to rise in my place in this house and give voice to the resentment which I feel with regard to the timing, the method and the result of the investigation generally. I think it is tremendously important, even though we lose out, that as an evidence of good faith the government should exercise that authority which it undoubtedly has to delay the implementing of these new rates until the least of the provinces shall have had a full opportunity to present the views of their people in the one place where they can go in these matters, namely to the federal government. If necessary', and if they desire it, failing satisfaction there, there should be delay until they have had an opportunity of seeking satisfaction in the courts themselves. I think this delay, in all fairness and in all justice, should be made.
I come back once again to that other thought to which I gave voice.
Failing successful appeal, if it is decided that this impost must go on, then so far as this government is concerned, I urge that they meet the situation which they cannot escape seeing, by freeing western agriculture from the shackles which are on it and give the west every opportunity to pay the extra tariff imposed upon them.


Mr. J. G. DIEFENBAKER (Lake Centre):: I listened, Mr. Speaker, with interest to what my friend the hon. member for Winnipeg South (Mr. Mutch) had to say regarding this matter; but I thought he weakened his case 5849-1691
when, in pursuance of his argument for certain changes to be made, he stated that he believed he was pleading a lost cause.


Leslie Alexander Mutch: The difference between
"feared" and "believed".


John George Diefenbaker: I do not mind whether the word used was "feared" that he was pleading a lost cause or whether it was the one I used. There is nothing that damages one's plea more or detracts more from it than to believe that the arguments one is advancing will fall on deaf ears. That is not the view, though, of all western Liberal members. The hon. member for Rosthern (Mr. Tucker) made a speech the other day.


An hon. MEMBER:: Oh, no.


John George Diefenbaker: Yes, as reported in the Saskatoon Star-Phoenix of April 3. I will read it in part, because he believes that there is hope. The heading of the article is, "Tucker thinks west will get fair deal on freight rates". Then he goes on to say this:
"I think the west will get a fair deal out of the freight rate situation under proper representation," Walter Tucker, provincial Liberal leader told ... a meeting here Friday evening.
I commend those words to the hon. member for Winnipeg South. The hon. member went on, as reported in this article:
He described the ruling by the board of transport commissioners as "just an advisory ruling."
He said he had argued in caucus for a "bridge" in rates between the head of the lakes and Winnipeg as an aid to the west. "We certainly shouldn't pay all the cost of this stretch," he added.
Then he used these significant words, which I bring to the attention of the Minister of Transport (Mr. Chevrier):
We are best represented by our members at Ottawa. But there are only four of us from the west; two from Alberta and two from Saskatchewan. How I could have used the support cf fifteen or twenty Liberal members in my talks before the caucus.
That indicates, sir, that this matter was up for discussion; and the difficulty under which the hon. member for Rosthern operated was that he did not have sufficient support from western Canada to bring before the government the representations of the west.


Major James William Coldwell: What did maritime and British Columbia Liberals do?


John George Diefenbaker: And then he said this; and it is significant in explanation of why he is not getting the support of eastern members in his representations in caucus in this connection. He used these words:
Eastern members were objecting to these tactics-*
Freight Rates

That is, to C.C.F. tactics.
-and were becoming increasingly opposed to extending benefits to western Canada as a result.
I do not know how the hon. member for Winnipeg South will be able to reconcile his arguments of this evening with the representations by the hon. member for Rosthem when speaking in Saskatoon the other night.


Leslie Alexander Mutch: He is younger than I am.


John George Diefenbaker: But, one thing, if the Minister of Transport in caucus did not have representations made to him, except by these four-and no more-he today has representations not only from representatives from Saskatchewan and Manitoba, but also from British Columbia and the maritime provinces as well.


John Horne Blackmore: And do not forget Alberta.


John George Diefenbaker: Yes, and from
Alberta; and well made by the hon. member for Vegreville (Mr. Hlynka). The minister now has representations from all the provinces affected by this discriminatory rate structure. And, after all, I should have thought that by this time the minister would have removed the veil and allowed us in the House of Commons to have some idea as to what the government's stand in this matter is. The responsibility is not that of the board of transport commissioners. That responsibility rests on the government, and on no other. I am going to refer to the act, for no amount of casuistry can get away from this fact, that the government must assume the responsibility. If it had appointed a committee of parliament, it might wait until the committee reported before doing anything. If it had appointed a royal commission it could have said, "After all, this is merely a recommendation." But it appointed the board of transport commissioners, under law, and the matter was submitted to that board.
I shall now refer to the relative sections. First, the board is composed of six members, holding office during good behaviour for the period of ten years from the date of appointment, but may be removed at any time by the governor in council upon address of the Senate and the House of Commons.


Stanley Howard Knowles: Is what they have done "good behaviour"?


John George Diefenbaker: Then we come on to decisions of the board, where it is stated that decisions of the board are final, unless they are reviewed, rescinded, altered or varied by the board itself, which may rehear any
f Mr. Diefenbaker.]
application before coming to a final decision. However, where there is no rehearing, we find that section 52 of the Railway Act states:
The governor in council may at any time, in his discretion either upon petition of any party, person or company interested, or of his own motion, and without any petition or application vary or rescind any order, decision, rule or regulation of the board, whether such order or decision is made inter partes or otherwise, and whether such regulation is general or limited in its scope and application; and any order which the governor in council may make with respect thereto shall be binding upon, the board and upon all parties.
Not only have there been representations made by various provinces, but I understand that representations have been made by various parties affected. So that the responsibility rests-and I repeat this-upon the governor in council or, in other words, upon the cabinet.
There is provision for appeal; but the facts in this case, if I understand them correctly, permit of no appeal to the Supreme Court of Canada. The act states:
An appeal shall lie from the board to the Supreme Court of Canada upon a question of jurisdiction, upon leave therefor being obtained from a judge of the said court-
And again:
An appeal shall also lie from the board to such court upon any question which in the opinion of the board is a question of law, or a question of jurisdiction, or both . . .
There is no question here either of law or of jurisdiction. My recollection is-and I speak subject to correction by the minister-that the question of jurisdiction was raised at one time during the proceedings before the board, and that an application for leave to appeal to the Supreme Court of Canada on the ground of jurisdiction was in fact dismissed.
So that however much the minister may endeavour to evade responsibility, the responsibility for what will take place under this recommendation, or advisory recommendation if you will, will rest upon the government which, alone, will be responsible for permitting this recommendation to be carried into effect.
The baby is on the government's doorstep. It cannot in any way divest itself of its responsibility. Surely by this time, after the arguments advanced here today, the minister is or should be in a position to let the house and the country know the course the government intends to follow.
I am not going to enter into any argument as to the advantage of private enterprise over socialism, although that was brought into debate today. One of these times it will have to be answered. I want to get down to the

Freight Rates
meat of this situation, as I see it. Members from the maritimes-at least those who are interested-have set forth their view that there is diserimination. By reason of the mountain differential there is discrimination in British Columbia. There is discrimination on the prairies where the effective rates in the three prairie provinces are above the average level of Ontario and Quebec to the extent of some 14 per cent. That discrimination, under the 21 per cent across-the-board increase in freight rates will be increased until it will amount, over all, to 16-94 per cent. In other words, by this over-all increase the prairie provinces are being penalized by an additional 2-94 per cent over what they are paying today.
The hon. member for Nanaimo (Mr. Pearkes), who has just arrived this evening, has certain representations to make with respect to British Columbia. However, by reason of the fact that the list of speakers is complete, he finds himself unable to make those representations on this occasion and has authorized me to place some facts before the house on his behalf. I do so, accepting these representations as being proper in every respect and as being the representations he would have made respecting the situation in British Columbia.
The Vancouver Daily Province of April 1 points out that, according to an estimate made by A. K. Lloyd, president and general manager of B.C. Tree Fruits Limited, the 21 per cent rail freight boost may cost British Columbia's fruit industry $1,000,000 a year. By this 21 per cent increase across the board the mountain differential is made even worse than it is today. The situation today is that one and a quarter miles in the mountains equals one mile elsewhere, and a 21 per cent increase on the one-quarter mile will mean an increase in the discrimination against British Columbia, a discrimination that will affect practically all the products produced in that province. The hon. member also handed me, and I now place it before the house, a telegram which he received from the Okanagan and main line associated boards of trade. The telegram is dated April 3 from Enderby, B.C., and reads:
General Pearkes, M.P.,
Ottawa, Ont.
Strongly urge dominion government notify board transport commissioners that any attempt to increase rates on British Columbia traffic before existing discriminatory mountain differential removed will be appealed to highest authority.
I point out again that the only authority to whom an appeal can be made is to the governor in council the government of Canada. There is no appeal to the supreme
court or any other judicial body except on a question of law or on a question of jurisdiction, and the latter matter has already been determined.
I now return to the prairie provinces and their views. We in the prairie provinces, without regard to party considerations, view any increase across the board as an intensification of the freight rates discrimination that has existed over the years and against which successive governments in the various provinces have objected. I feel that the effect of the board's decision will be to perpetuate the blight of discrimination against the prairies, against British Columbia and against the maritimes.
We in the prairie provinces and those who live in the maritime provinces have much in common in this regard. Discriminatory freight rates have had the result of relegating some provinces to the position of second-class provinces in the economic set-up of this dominion. Discriminatory freight rates have devitalized the potentialities of industrial expansion in (he prairie provinces and in the maritimes.
During the war we on the prairies were penalized. During that period we were denied any real participation in the billions of dollars that were advanced by the government for the development of war industries, not because of a lack of natural resources but because of the discriminatory nature of our freight rates and because we could not interest the government in decentralizing industry. This is a matter of great moment at this time when we find ourselves in the midst of world turmoil.
I believe the time has come, not to have an across-the-board increase in freight rates which will merely continue if not perpetuate-the unfairness under which these various provinces suffer today, but to have a scientific revamping of the freight rate structure. Instead of doing that, the board has recommended the easy way, it has simply added all annex to an already dilapidated structure. During the course of his remarks the hon. member for Winnipeg South pointed out that he did not think there were more than six men in the dominion who understood the structure of freight rate differentials.


An hon. MEMBER:: He said six lawyers.


John George Diefenbaker: He said six lawyers; after all, he was taking the best men in Canada when he referred to the legal profession. That is true. We have a board of transport commissioners, and I suggest to the minister that, having regard to what this
Freight Rates

increase in freight rates will do at this time to interfere with the economy of the country, he should apply the veto on the part of this government to the immediate operation of these recommendations and place the board of transport commissioners in a position where, with the necessary scientific ability they have available, they can revamp our freight rates structure, to the end that one of the most serious disadvantages under which some of the provinces in confederation are operating will be removed once and for all.
When the discrimination is removed there can be no objections to such increases as are necessary to assure a fair and proper return to the railroad companies. No one wants a condition of affairs where deficits will continue. Having regard to the situation in which our country is today, I am sure that no one desires to see continued this discrimination which has done more to put east against the west and to separate our country than any other single thing.
I suggest to the minister that the responsibility rests with him. He will never have a united federation; he will never build the type of Canada that we want to see -built, where every part of the country is developed according to the resources it possesses, until this unfairness is removed. He will never build the kind of Canada that will assure the destiny that Canada should achieve by having some of the provinces placed in the position where, through the years, they will continue to be "have not" provinces industrially. The minister has the opportunity to do that which over the years many successive ministers of railways have realized should be done but have never had an opportunity of doing or have never had the vision to do. They never had the opportunity to do what the hon. gentleman who now holds the portfolio can do for Canada as a whole.
This is not a party matter. If this matter were allowed to come to a vote removed from all the trammels of party consideration; if each and every member voted not on the basis of voting non-confidence in the government but on the basis of the views he held, you would be surprised, Mr. Speaker, by the result. This afternoon when the hon. member for Rosetown-Biggar (Mr. Coldwell) spoke a most unusual thing occurred; there was applause from the government side of the house for many of the arguments which he advanced. That applause, could not have been missed by the Minister of Transport. That applause represented an expression of the inward ideas of hon. members across this dominion who, without regard to any consideration, unselfishly

want to see Canada developed as a unit rather than to be Balkanized industrially by reason of a differential that denies equality as between British Columbia and Ontario, that denies equality as between Saskatchewan, Alberta, Manitoba and Quebec, that denies equality as between the maritimes and central Canada. Those inequalities are inequities and those inequities are doing more to separate this country and, in the event of war, to make it defenceless by reason of the centralization of industry in central Canada. These inequalities and inequities would be removed if the minister would either place the matter in the hands of the transport commissioners, with all the thousands and thousands of pages of evidence that they have before them and knowing the facts as they do, or set up a commission to take additional evidence with a view to removing this discrimination, for, as long as it continues, this country can never hope to achieve that development she should have, having regard to the resources she possesses.


George Alexander Cruickshank: Mr. Speaker, I shall be very brief because I am optimistic enough, after hearing the hon. member for Lake Centre (Mr. Diefenbaker), to believe that the hon. member for Muskoka-Ontario (Mr. Macdonnell) will fall into line, though I cannot conceive of a member from Toronto falling in line with the west in this matter.


Mr. MACDONNELL (Muskoka-Ontario):: I am not from Toronto.


George Alexander Cruickshank: That is all right. I should like to hear the hon. member for Muskoka-Ontario say that he agrees with us in the west on the. mountain differential, and I will gladly forgo my time if he will give that assurance.


Mr. CASSELMAN:: Get your own minister up.


George Alexander Cruickshank: He will get up in good time, and fortunately the minister in charge will for many years belong to this side of the house.
I wish to compliment the hon. member for Rosetown-Biggar (Mr. Coldwell) on his speech this afternoon. I believe that he spoke on behalf of all of us, and in my opinion in all the years I have been in this house I never heard him make a better speech. I am glad to say that he kept partisan politics entirely out of it. I am sure that he spoke for every member from the maritimes and certainly for every member from British Columbia, irrespective of party.

Freight Rates
I am sorry that on this side of the house we have not had the support we should like to have had from the members from the man-times. which are affected almost as much as British Columbia.
In my opinion the most effective part of the speech of the hon. member for Lake Centre was when he spoke of unity. At the present time we are trying to attain unity in international affairs, but we shall never have unity in international affairs if we cannot secure unity within Canada; and as long as the maritimes and the west are treated as we are now being treated, we shall never have unity within Canada. I believe, with the hon. member for Winnipeg South (Mr. Mutch), that this question should not have had to originate with the hon. member for Rosetown-Biggar, but that the government itself should have found ways and means of bringing the matter before parliament because it is one of the most important matters that could come before us. If a motion were introduced I believe that we could find sufficient members on this side of the house to carry it if we had the support of the official opposition, which I doubt very much except for a few members. I am frank to admit that I do not think we would have the support of the members from Ontario and Quebec on this side of the house.


An hon. MEMBER:: Sure.


George Alexander Cruickshank: An hon. member says "sure", but no member from Ontario or Quebec has yet risen in this debate to say one word on behalf of either the maritimes or the west.
Every farmer in my riding is being penalized by this increased freight rate. Every poultryman is being penalized two cents a dozen on eggs. The. berry growers are penalized on some 15,000,000 pounds of fruit which they will ship this year. The. previous speaker mentioned wires that he had received. I received more than that; as well as the same wire, I had two long distance telephone calls from people knowing perhaps that we could present their case more effectively on this side of the house as we are about to elect a new member from the fruit-growing district.


Mr. MacINNIS:: You cannot do so unless you change, your policy.


George Alexander Cruickshank: We believe that we are going to change, the policy. I have always been a sort of modest member who has refrained from saying what he. thinks, but I can assure the government that if some of my legal friends, the hon. member for Lake Centre or some other member of his profession can show me how a motion can be
introduced that will present this issue straight to the house, at least three British Columbia members will, vote in favour of the motion, even if it should be a want of confidence motion, because we believe that the very future of our province is at stake in this matter. We believe, not in appeals such as the hon. member for Lake Centre suggested, but that parliament should be supreme in this matter. I do not know much about the. rules. I never break them myself; I know that my hon. friend the member for Vancouver East (Mr. Maelnnis) is an expert on the rules and that he sometimes calls me to order, but I believe that on this question we are in agreement. I want to impress on the government, and it will continue to be impressed on the government by the private members from British Columbia both in public and in private, that no longer are we going to stand to be. sacrificed for the benefit of Ontario and Quebec, nor do I believe that the people in the maritimes will continue to. be sacrificed in this way. We want unity within Canada; but unity means one thing, unity in all parts of Canada, and the only way you can have unity is by equality of treatment.
I want to impress on the minister, who I believe is both capable and fair-minded, the necessity of a change of apparent government policy on this question, for without a change you cannot maintain unity within Canada or deal out justice to all parts of this country. I am for once disappointed that we have not heard on this question from the hon. member for Eglinton (Mr. Fleming) who usually speaks every three minutes on every third question, but I notice a great silence today from Ontario and Quebec on this subject. I can assure you, Mr. Speaker, that all parties in British Columbia are unanimous on this question and that we shall fight to the last ditch to see that we get a square deal.


Mr. A. J. BROOKS (Royal):: Mr. Speaker, I feel somewhat diffident in following the able speech of the modest member for Fraser Valley (Mr. Cruickshank), with most though not all of whose remarks I agree. He stated, however, that the British Columbia members have not received much support from the maritime provinces.


George Alexander Cruickshank: I said on this side of the house.


Alfred Johnson Brooks: I beg the hon. member's pardon, because I was going to point out that the hon. member for Cape Breton South (Mr. Gillis), the senior member for Halifax (Mr. Isnor) and my seatmate the hon. member for Cumberland (Mr. Black) have already spoken
Freight Rates

in support of his stand. They presented very strong arguments, indeed most of the arguments which I was going to use myself. But as no one from New Brunswick has spoken I should like to indicate to the house that in my province we feel keenly about this freight rate increase. One has only to read the newspapers of the last week or to talk with men from different parts of the province to realize how strong the feeling is.
Freight rates have always been an acute problem in the maritime provinces. It has been said in fact that the freight rate means life or death to maritime industry. This has been so in the past and we feel that it applies also to the future. Over a long period of years we have lost industries in the maritimes because of high freight rates, and as the hon. member for Cumberland pointed out this evening, we have also lost many thousands of our people. Our people have to go where they can find work, where there is industry, and if industry leaves any part of the country the people have to leave too. That has been the result in our province ever since confederation.
It is not necessary for me to go into the history of freight rates in the maritime provinces because they were dealt with this afternoon. Our people have always been conscious of our difficulties before and ever since we joined confederation. One of the reasons our province came into confederation was the promise that freight rates would be one of the main considerations. We were not in confederation very long until we began to realize that the freight rate structure of this country was against these little provinces down by the sea, and we began at once to lose our industry and also our people to the central parts of Canada.
In 1925 there was formed in New Brunswick, Nova Scotia and Prince Edward Island what was known as the maritime transportation commission. This commission received the support of the governments of the three maritime provinces. It also received the support of all the businessmen in the three provinces. The idea of this maritime transportation commission, was, among other things, to keep careful watch on the freight rate situation in these provinces. Out of the idea of this maritime transportation commission eventually developed the Duncan commission which made certain recommendations for our provinces with relation to freight rates, which recommendations were not carried out to their full extent, with the result that we continued to lose industry and our people, even though under the Maritime

Freight Rates Act we had a 20 per cent benefit over the other parts of Canada with the exception of the west.
What does this increase of 21 per cent mean now? Mr. Rand Matheson, who was the manager of the maritime transportation commission, has estimated that it will mean between $7,000,000 and $8,000,000 to the people of these three provinces; that is, that it will cost our fishermen, our farmers, our people in industry and our lumbermen an extra amount of between $7,000,000 and $8,000,000. It will cost the whole of Canada something like $70,000,000. We have not one-tenth of the population in the maritime provinces. It is estimated that there are about thirteen million people in Canada today. In the maritime provinces we have less than one million people, and if we were to pay on the basis of our population we would contribute only one-thirteenth of this amount of $70,000,000; but, according to the estimate of Mr. Matheson, and he is a keen authority on railway matters, we are contributing one-seventh of the amount, which, in itself, is inequitable. This will increase the cost to the farmers. Someone pointed out this afternoon that it will mean a great increase in the cost of the machinery we have to buy from central Canada. It will mean an increase in the cost of the fertilizer which the farmer uses. In New Brunswick we use something like 60,000 tons of fertilizer a year. It will mean an increase in the cost of practically everything that goes into the farming industry. It will mean an increase in the cost of feed grains which we have to use in our dairy and hog industry.
Take an industry like the Atlantic Sugar Refinery in the city of Saint John. A few days ago the senior hon. member for Halifax was bewailing the fact, and rightly so, that during the last few years the sugar refinery in the city of Halifax had moved to the city of Montreal. What will happen to an industry like the Atlantic Sugar Refinery in Saint John with these increased freight rates? We know what has happened in the past. It will mean only a few years until this industry is closed up and moves to some other part of Canada. That is what we in New Brunswick and in the maritime provinces generally have had to put up with for years, and it seems to be the logical result of the increase in freight rates.
I could go on and mention other industries. The hon. member for Cumberland mentioned the stove and furnace industry, which is in my own province in the town of Sackville. It employs quite a number of people. These

Freight Rates
people have to bring a lot of their products for the manufacture of their stoves from central Canada. This cannot go on forever. If the freight rates are to be increased they will have to move nearer to the great centres of population in this dominion. And so it goes on, first one industry and then another. The main reason why we lose these industries in our province is the freight rates.
I read an article the other day in which the Premier of Prince Edward Island said that the potato industry in Prince Edward Island would be very hard hit. As a matter of fact, I think it was the deputy minister of agriculture of Prince Edward Island who made this statement:
The "very existence" of Prince Edward Island farmers was threatened by the 21 per cent increase in freight rates granted the railways by the board of transport commissioners' ruling this week, a resolution adopted at the annual meeting of the P.E.I. Potato' Growers' Association declared. The resolution urged that the case for the maritimes be reviewed.
What is true of Prince Edward1 Island; with reference to potatoes would be also true in the province of Nova Scotia with reference to apples, I believe, and in the province' of New Brunswick as well. Under the British empire trade agreements, Nova Scotia sold its apples to England1. That province had a splendid market there. That market is being lost to the apple growers of Nova Scotia, with the result that they will have to seek a market in central Canada and in other parts of Canada, and this increase in freight rates will be a severe blow to the apple growers of Nova Scotia and New Brunswick.
I could go on and quote case after case, but I do not think it is necessary because of what has been said1 this afternoon and evening. I would point out that if all sections of Canada were equally prosperous, if we were as prosperous in the maritimes as are the people in Ontario and Quebec, we would have no objection to bearing our share of this freight rate increase, and there would be no argument against it. We in the maritime provinces have not been as prosperous as the people in other parts of Canada; we have not been as prosperous for the very reasons that I have been pointing out, and one of the main ones has been the increase in freight rates. For instance, our farmers in the maritime provinces and in New Brunswick particularly received an average salary last year of about $800. The average salary for the whole of Canada was about $1,700. Thus our people received one-half of what the farmers throughout Canada received. The same thing applies to other industries as well. That is the point
I am trying to make. If our people were as prosperous as are the people in parts of central Canada, then we would have no objection to bearing our just portion of the burden.
I think it was very well put this afternoon that this is not a matter for a commission to decide. This is a very broad question. It is a question which affects the very life of this dominion of ours; it affects the unity of our people, and it is something which the government of this country must decide. The decision must not be left with any commission,
I should like to call attention to what the Premier of New Brunswick said in this connection a short time ago. It is as follows:
McNair urges joint action
Suggests Ottawa delay operation of freight boost.
In the course of his remarks he had this to say:
It was clearly intended under the Maritime Freight Rates Act that the maritime provinces should be placed in a position to do business with the other provinces of Canada. Any movement or action which has the effect of disrupting this position is most disturbing.
Then further:
I am strongly of the opinion that the federal government should intervene to ensure that at least thirty days' notice be given by the railways before putting into effect the rates permitted under the recent decision.
He thinks there should not be any hurry in this matter but that there should be time for careful consideration. The Premier of Nova Scotia, the Hon. Angus Macdonald, said:
The new rates recommended by the board run contrary to the spirit of the Maritime Freight Rates Act, and, in my judgment, the board has failed to deal adequately with the arguments made by maritime counsel on this point.
In closing, Mr. Speaker, I would point out to the government that these men whom I have quoted this evening, the Premier of New Brunswick, the Premier of Nova Scotia and the Premier of Prince Edward Island, are all very strong supporters of the present administration at Ottawa. If it were some years ago when the Prime Minister (Mr. Mackenzie King) said, "Not a five cent piece to a Tory province", we might understand the attitude the government has taken. But here we have three premiers who are very strong supporters of this present administration, and each of them has stated definitely that this is a problem which the federal government should solve and which, in justice to the people of their provinces, must receive immediate attention.
Freight Rates


Angus MacInnis: Mr. Speaker, this is a difficult debate in which to take part, largely because all the debating is on one side. Although I presume there is a different point of view on the question, there appears to be no one to give expression to that point of view. I merely rise-and it is almost inevitable at this stage of the debate-[DOT] to emphasize some of the points that have already been made. It is difficult at this stage to make any new points. Before I go on with what I have to say, I wish to refer to a point raised by the hon. member for Vegreville (Mr. Hlynka) and also by the hon. member for Cumberland (Mr. Black); that is, that it is too bad that the debate came up in the way it did, namely, on a motion to adjourn the house on a matter of urgent public importance.
I too regret that the debate had to come up in that way. Unfortunately in this house we have not reached the stage where a member can rise in his place and ask the government to set aside a certain time for debating an important question. That is the procedure at Westminster. There they have a standing order similar to our standing order 31; but as regards any question of importance arising, the leader of the opposition or a private member, either on the government side or on the opposition side of the house, can rise and ask that a day be set aside for discussing the question, and invariably that is done.
The leader of this party could not in the natural order of things have given more notice than he did. As a matter of fact we did a very unusual thing. We not only notified the Speaker, which we are not obliged to do under the rule, but we notified the government's chief whip and the leaders of the other parties as well, because we appreciated that this was a matter of which they should have some notice and that it was not in any sense a political matter. That is the reason the question has come up in this way.
As I understand the freight rates question as it affects British Columbia, it is a matter of the fairness of the rates; and may I say by the way that in this matter I can speak both as a maritimer and as a member from British Columbia. Like so many others, I had to leave the maritimes in order to make my livelihood somewhere else, and I therefore know their difficulties there. As I understand the question in British Columbia, it is not that we are opposed to an increase in freight rates if that increase is necessary, but we object to the fact that the decision made at this time perpetuates freight rates which we have considered for years to be inequitable. That is the point.

I have lived for forty years in British Columbia; in every year during that time that province has been fighting at Ottawa for a better break in the matter of freight rates and wTe have not got it yet. Not only that; but this order, if it stands as it is now, will make the situation worse than it was before. Not that the present discrimination will be increased by 21 per cent, but it will be more than it was before. That is the position as we see it in British Columbia.
It has been mentioned that the railways were represented b}'. I was going to say some of the best lawyers in Canada, but I will say some of the cleverest lawyers. One of them made the statement in argument that the inquiry into freight rates was concerned with revenue for the railways. He said that the board of transport commissioners was limited to the fixing of just and reasonable rates, and he said further that:
. . . just and reasonable rates referred to in the statute are rates that must be just and reasonable to the railways to whom they are to be paid, and that unremunerative rates are unjust and unreasonable.
I maintain there is more involved here than simply revenue for the railways. That, of course, is important because, without the necessary revenue, they cannot carry on and serve the country, but there is more than that involved. The railways in Canada were built in order to develop the various parts of this far-flung country and to knit the provinces together and that is where in my opinion the government comes in. Even if the board of transport commissioners is restricted to dealing solely with the question of revenue for the railways, without regard to whether the collection of that revenue is equitable or not, the government is bound to take notice of that, and that is what I suggest to the minister and to the government that they must do.
Let me say again that, as I understand the position of the people of British Columbia, they are not opposed to an increase in freight rates as such. They are opposed to the maintenance of an inequitable freight structure. I have in my hand, and I was going to read it to the house, a copy of the wire that was read by the hon. member for Lake Centre (Mr. Diefenbaker) when he spoke on behalf of the hon. member for Nanaimo (Mr. Pearkes). That wire makes it quite clear that until the discriminatory mountain differential is removed, British Columbia will not be satisfied. We believe that since freight rates in our province are much higher than average, we should not be asked to pay higher rates until the rates have been increased in those areas which have for many years enjoyed the

Freight Rates
relatively lower rates. I submit that is not an unreasonable position to take. I imagine it is pretty much the position that the people of the nmritimes take as well. But if we continue the present discrimination, we are helping to create an imbalance in the economy of Canada, and we are certainly not helping to create that unity which must exist in this country if we are to be prosperous, happy and free. I was indeed glad to hear so many of those who spoke in this debate refer to the fact that in order to have unity we must have equality. We cannot have unity when certain sections of the country feel they are being discriminated against for the benefit of other sections. That being the case, if we want unity let us see to it that all sections of this country have the same consideration and the same opportunities.
I am glad tonight to be able to associate myself with those other members from British Columbia who have opposed the decision made by the board of transport commissioners.
I hope the government will not allow the decision to go into effect without having an opportunity for a review.
Mr. W. CHESTER S. McLURE (Queens): Having listened in this debate, Mr. Speaker, to all those who have spoken, representing most of the provinces of Canada, I thought, since I was the only Tory member from Prince Edward Island, I might be allowed an opportunity of saying a few words.
This question of transportation is one in which I have always been interested from the point of view of our own province. I have endeavoured to show the discrimination with reference to freight rates by all governments against our province as a province. But that is not quite the question with which we are dealing tonight.
To begin with, I might say that I did not approve the manner in which this debate was introduced into the house, but I approved the manner suggested by the hon. member for Winnipeg South (Mr. Mutch). However, that is past and the last speaker has given the reason why the debate was so introduced. It does not give the members of this house the fullest opportunity to discuss the greatest question that has arisen in parliament for many years, namely, the freight rate increase which was announced a short time ago.
When this freight rate increase of 21 per cent was announced, with other entanglements, it rocked the maritime provinces and nearly shook them clear of the Dominion of Canada. It also rocked the western provinces to the same extent. The central provinces, owing to their great wealth and their centralization of great factories, have nothing much to say
with regard to it, because both the maritimes and the western provinces are paying the shot and the central provinces are enjoying the benefits.
There is one thing I want to mention-and it may not be quite in order-along the lines of what has been said by those who have spoken, and it is this. The board of transport commissioners had no authority that I can see, although I am not a lawyer, to make this increase without due consideration having been given and information having been received in this way. I believe this matter should have been discussed on the floor of the house before it ever went to the board of transport commissioners. They are not all-powerful. For instance, over a year ago I took objection to the board of transport commissioners and protested their going into our province and setting freight rates over which they have no jurisdiction whatever. I am glad to say that, after they went there, they themselves found out that they did not have the jurisdiction to submit to us freight rates that we should have to pay. I feel assured that the government should not have given this board of transport commissioners the authority to go over this country and set freight rates; I feel they are not getting the true picture of what we should have with reference to freight rates.
Of course there are two sides to this question. Two great railways are connected with it; in fact, two of the greatest railway systems in the world, the Canadian National and the Canadian Pacific. However, these two companies are somewhat different. One is practically a government-owned railway and the other one is what we might call a private enterprise. Notwithstanding that, we have these two companies now to share and share alike in the decision of the board of transport commissioners; that is, each of them is entitled to put on this new rate for its own benefit. The Canadian National is a railway that Canadians are proud of. It was built, like the Canadian Pacific, for one purpose, namely, the development of Canada. The Canadian National is giving us excellent service, generally speaking, across Canada. If we are demanding still greater service from this railway, and also service in other directions throughout the country, if it cannot make revenue and operating expenses balance, there is only one solution. If we demand that the railway maintain the service at the highest possible level without the raising of rates, then the government must pay the deficit.
However, in the matter of freight rates, as in ordinary passenger transportation, there i3 the matter of differences of equipment. I was
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about to say with regard to the maritime provinces-and I would speak particularly about Prince Edward Island-that we lack the transportation system enjoyed by the other provinces. However we are gaining somewhat, and had hoped we would be linked up with the rest of Canada, and have de luxe trains such as have been provided by the Canadian National across the country.
How does the increase in freight rates affect Prince Edward Island? As an agricultural province, it will cast a heavier burden on Prince Edward Island than on any province. Freight rates will be increased on our exports as well as on our imports. We are exporters and importers. We have no great factories or industries. Our people must live by the soil and the fisheries. We have only two industries of any great importance. As some hon. members have said tonight, it can be well imagined that an increase in freight rates on our exports will almost cripple the farmers of Prince Edward Island.
Someone has placed on record figures showing estimates concerning these increases. Estimates have been made as to what it will cost Prince Edward Island farmers and fishermen-particularly the farmers-in the export of their goods. The amount has been set down at $1,500,000 to $2,000,000 as the amount the new increase will cost, if it goes into effect. However, while we are all talking against the increase in freight rates, and endeavouring to persuade the Minister of Transport (Mr. Chevrier)1 and the government that the increases ought not to be put into effect, I am positive that neither the minister nor the government would dare to put them into effect at the present time. They must be given consideration. From one end of Canada to the other, with the possible exception of the central provinces, a cry has been raised against them.
In face of that, and in face of the arguments submitted from time to time not only in the house, but when the investigation was taking place before the commission at different points across Canada, I feel that these increases will not be put into effect. All these things must have a bearing on the action the government will take. I certainly hope I am right when I say that it will not dare to impose these increases on the maritimes and the western provinces.
A few days ago I mentioned discriminations against those situated in geographically extreme locations. I mentioned, for instance, the freight rates we in the maritimes and those in the west have to pay on automobiles, trucks and farm machinery, none of which are manufactured in

the maritime provinces. If this increase were added, for an ordinary car brought from Oshawa, instead of paying $86 we would have to pay at least $100, and up as high as $165 to bring to Prince Edward Island a car that a farmer may wish to buy. I endeavoured the other day to show the discrimination in this instance; and the same could be said about all farm implements. The situation is that a farmer living near Oshawa will receive support from that factory, when he produces food for the men employed there, and their families. When that farmer buys a car he pays the factory price. We in Prince Edward Island also support the factories, but we get no direct results from the sale of produce, because those commodities are supplied by the local farmers. Yet, when we attempt to support that factory by buying an automobile or a truck we are discriminated against and penalized to the extent of from $100 to $165. This should be placed on the stamp rate, and there should be some equalization whereby a man living next door to a factory would not be in a position to buy his car one nickel cheaper than a man living in Prince Edward Island or in the west.
Some of the largest merchants have taken up this matter, and have equalized freight rates throughout Canada on the articles they manufacture. The matter of freight rates brings us to many other matters which, in the interests of our own provinces, we could discuss. I know, however, that the hour is late and that before the Minister of Transport speaks there are other hon. members who wish to make their contribution to the debate. I trust the minister will give the matter such consideration that those of us in the east will not have our hopes so terribly blasted, as they were when the 21 per cent increase was announced.
The hon. member for Royal (Mr. Brooks) referred to Prince Edward Island's voicing its opinion against these increases. It is not necessary for me to repeat what has been said by representatives from other provinces. The resolution passed by Prince Edward Island is already in the hands of the minister, and it is not necessary for me to repeat it at this time.
Let me say I am sure the government will give this matter its honest consideration, because it is entirely in the government's hands. We should not have to be ruled by the board; the government must take the responsibility for this increase in freight rates.


Mr. F. D. SHAW (Red Deer):: Mr. Speaker, there are a few things I should like to say at this time. I believe it was fortunate that I happened to be in Alberta, in my own constituency, at the time the freight rate increase was announced. Thus I was able to secure a

Freight Rates
-clear and concise picture of the reaction of many people in that part of Canada.
It will be noted, if one examines the press releases of March 30, that the board of transport commissioners authorized the railway companies to make a general advance in freight rates to the extent of 21 per cent, with certain exceptions. Those exceptions relate to grain and flour. Then we read that there was to be a flat increase of twenty-five cents a ton on coal and coke. We also find reference made to minimum charges for certain less than carload shipments between any two stations. We find further reference to recognized differentials by way of rail, water and so forth and the indication that those differentials are to be preserved.
While I do not desire to tie my remarks specifically to Alberta, I feel I am justified in taking that province as a typical example, possibly the most outstanding example of the discrimination which exists under the prevailing freight rate structure. As anyone who examines the facts will realize, Alberta suffers the highest freight rate charges on goods exported from that province and pays the highest rates -on goods coming in from any other part of Canada. Alberta stands at the apex of the freight rate structure, and I sometimes think that from that lofty position we are able, not only to have a better appreciation of our problem but to look down and note the problems confronting the maritime provinces, the other prairie provinces and British Columbia.
I think it is well to bear in mind that the prevailing freight rate structure in Canada, particularly in western Canada, was designed at a time when traffic was considerably less than it is at the present time and when the population of the west was quite sparse. I had always believed that freight rates or freight costs depended, at least in part, upon the volume of business available. However, we discover in western Canada that as the volume of business increased, as it multiplied many times over, there was no freight rate reduction commensurate with the greatly increased volume of business.
One could briefly list the disadvantages suffered by my own province under four or five different heads. We know that in Alberta as between two points, let us say 100 miles apart, we pay a much higher rate than is paid between two points in Ontario an equal number of miles apart. This afternoon the hon. member for Waterloo South (Mr. Homuth) seemed to take exception to the suggestion that the provinces in central Canada must, in some measure at least, bear the responsibility for this situation. I should like to say to the hon. member that feeling definitely exists in
western Canada. I am saying that when one examines all the evidence he cannot avoid being convinced that the condition is approved by the provinces of central Canada.
I realize that from a political point of view the government must have its eyes on the provinces of central Canada. In fact I would go so far as to say that if a condition arose where the government had to make a choice as between the wishes of western Canada and the wishes of central Canada, its vote would be in favour of central Canada. It is an established fact that more than half the members in the Canadian House of Commons come from those two provinces.
We find that goods manufactured or produced1 at one point within the province of Alberta and transported' to another point bear a substantially higher rate than goods produced, let us say, at one point in Ontario and transported to another point within that same province where they are consumed. We find also that we suffer unfavourably from the point of view of distribution of goods within our province which are produced outside the province and brought into the province for consumption.
The particular situation which arises has already been referred to this evening. Goods which are manufactured in Ontario and shipped to Calgary or Edmonton bear a considerably higher freight charge than the same goods shipped to Vancouver. As an illustration, goods produced1 at Hamilton are shipped to Vancouver and then back to Calgary and sold more cheaply than they could be sold in the city of Vancouver.


Mr. LOW:: Shipped back by local freight.


Frederick Davis Shaw: Shipped back by local freight. I recall accompanying a merchant from my own town to Calgary. He was desirous of procuring a special type of grate for a furnace. We were told in Calgary that the only place the grate could be procured was in Vancouver. We pointed out that that seemed1 rather queer when the grate was manufactured in Hamilton. We were then told that it was found more profitable to establish a warehouse in Vancouver, ship the goods there to be stored, and then ship them by local freight to be sold in Alberta as they were required. Naturally such a situation creates a great deal of consternation among the consuming public of my province. It has already been pointed out that the kind of differential which creates that situation has caused Albertans to condemn the freight rate structure as it applies there.
We know what has happened in the past with regard to Alberta grain which went either to Winnipeg or to Vancouver. We know there is an eastern section of the province of Alberta
26G0
Freight Rates

where we reach the extreme apex of the freight rate structure. We realize less for the grain we produce there than is realized in any other part of Canada. This is due once again to the excessive freight charges which are imposed. Reference was also made to the situation west of Fort William where we find the breaking point at the head of the lakes and the constructive mileage principle which was introduced between Fort William and Winnipeg. This must be altered.
I have jotted down hastily a number of articles and I have indicated the increased freight dollars which we must pay as compared with the dollars paid by the consumer in Ontario. The previous speaker referred to automobiles. We find that for a Chrysler product produced in Windsor we have to pay $169 more than the consumer in Ontario. That is for a lower priced automobile, if there is such a thing left. In the medium priced field we find the difference running as high as $200. For a light delivery truck we pay $150 more per unit, and for a two-ton truck we pay as high as $227 more than the Ontario consumer.
On electric ranges we pay approximately $7 more, while refrigerators run from $6.25 to $12.75 more. Someone may suggest that that is not a very large sum, but when you multiply it by the number of such commodities consumed within our province you discover that the result is a large sum. In the case of the lowly washing machine we pay approximately $5 more.
As we have constantly emphasized, Mr. Farmer is penalized because he pays approximately $18 more for his binder than does the farmer in Ontario. His mower runs approximately $13 more, his ten-foot drill $10 or $15 more, his cream separator $23.50 more, his wagon $15 to $20 more. His 16 to 26-horsepower tractor $112 more; his power churn, which is used in the dairy industry in my province, $165 more than is paid by the Ontario farmer. I mention one other item, the bottle washing machine, which is also used in the dairy industry. It runs $130 more per unit than is paid in the province of Ontario. All these increases represent freight charges.
Let us take a few comparable figures of freight charges over comparable distances between central and western Canada. I find on making a comparison of the rates on first-class traffic, on standard mileage, for fifty miles we pay approximately three per cent more in Alberta; on the average 100-mile haul, 4-6 per cent more; on the 200-mile haul, 11-2 per cent more; on the 300-mile haul, 11*7 per cent more; on the 400-mile haul, 12 per cent more; on the 500-mile haul, 13-6

per cent more. If you apply those percentages to the actual freight moved in the course of a twelve-month period over those areas you will find that we are penalized extensively.
I have also a comparison of eastern and western ton-mile rates which are extremely illuminating. On grain we pay 13 per cent more per ton-mile than in central Canada; on flour and milk products the rate is equal; on lumber and squared timber, 31-1 per cent more per ton mile; on wood for fuel, 12-5 per cent more; on anthracite coal, 51-6 per cent more; on bituminous coal, 36-6 per cent more; on ores of various types, 30 per cent more; on livestock it is equal, also on dressed meats; on raw cotton, 5-3 per cent more; on other revenue billing, 15 per cent more.
The lumber situation has been referred to. Once again I have taken some comparable mileages in central Canada, and I find that on a carload of lumber hauled approximately 642 miles in Alberta we pay 85-1 per cent more. Lumber hauled in Alberta over a distance of 720 miles costs us 75 per cent more per car in freight; on 765 miles, 83 per cent more, and on 818 miles, 71-4 per cent more.
Here are a few more interesting figures. I do not care particularly to quote figures, but if they are given some consideration it will open the eyes of some of those who believe and say that we are crying with probably no justification.
A carload of lumber leaving the city of Edmonton and going to prairie points-I emphasize that, to prairie points-as compared with carloads of lumber moved within the two central provinces of Canada makes an interesting comparison. If we haul a car of lumber 244 miles on the prairies out of Edmonton we will pay 28-5 per cent more than they pay in the central provinces; on 294 miles, 23 per cent more; on 370 miles, 33-3 per cent more; on 425 miles, 20 per cent more; on 501 miles, 38-3 per cent more, and so on. I have other figures but I shall not give them.
The hon. member for Fraser Valley (Mr. Cruickshank) referred to fresh fruits and indicated that the growers of his province stand to lose hundreds of thousands if not a million dollars a year. Here are a few interesting figures. Let us take fresh fruit produced in his own area in British Columbia and shipped to our own province, as contrasted with fruits produced in the Hamilton area of this province and shipped to points in western Ontario or to any part of Ontario. On a haul of 301 miles we pay 38 per cent more than they pay in the province of Ontario; on a haul of 355 miles

Freight Rates
we pay as high as 60 per cent more; on a haul of 453 miles we pay 54 per cent more, and on a haul of 556 miles we pay 15-5 per cent more. You can imagine what the addition of 21 per cent to any of these figures which I have quoted will do to us and to business generally in western Canada. I repeat what I said before.
I think the hon. member for Fraser Valley was quite right in voicing the alarm he did voice a few moments ago.
Let us now look at a few general commodities which are used on the farm or in the home from day to day. Take shipments of commodities from eastern Canada to Vancouver and shipments of commodities from eastern Canada to Calgary or Edmonton in the province of Alberta. On soap alone we pay in freight in Calgary and Edmonton 98 per cent more than the consumer in the city of Vancouver; on twine, 79-6 per cent more; on wire, 164 per cent more than if that wire were shipped right through to the city of Vancouver; on calcium phosphate, 212-6 per cent more; on drugs and medicines, 102-3 per cent more; on lead, 164 per cent more; on boots and shoes, 51-8 per cent more; on linoleum and oil cloth, 58-4 per cent more; on wire rods, 138-6 per cent more; on window shades, 51-1 per cent more; on glass, 46-6 per cent more; on drygoods, 66-6 per cent more. I would emphasize that that is the increased rate per ton mile; it is important that I mention that.
There is a peculiar case which I have often mentioned. We have a condensery in my city of Red Deer. It produces the best canned or condensed milk produced anywhere in Canada. If we desire to ship that milk to Vancouver it has to compete with milk from Tillsonburg, Ontario, which is laid down in Vancouver much cheaper than we can lay down our Red Deer milk in Vancouver, purely because of the freight rate structure that prevails. If that is not a most discriminatory position I should like to have it explained. Is it any wonder, Mr. Speaker, when we examine some of these figures that we hear more and more talk about the secession of the western provinces? In fact the talk is becoming in some instances extremely outspoken. I mentioned a moment ago that when these people look toward eastern Canada and attach a certain part of the responsibility to these two central provinces they may do so because of certain newspaper propaganda which circulated about the year 1907.
I think I quoted this once before but it might be well to put it on the record again. ' As I emphasized at that time, some people think this is the attitude which still prevails here, and until it is proven that this is not
the attitude, possibly we shall continue to believe that it is. This is from a newspaper of 1907:
The marvel of our west is its productiveness, the inrush of population, most of all the consuming capacity, the consuming possibility of that population for manufactured goods of all kinds. The farmers of the west do not haggle overprices, they have the money to buy all kinds of things, and with their rapidly increasing numbers they can support an immense population in some other portion of -the dominion better suited for industrial and manufacturing purposes.
Then the editorial goes on to indicate that the central provinces are the parts of Canada particularly adapted to profit from this large increase in population on the prairies. The people of western Canada-I presume the same is true of the maritime provinces also- are becoming a bit sick of the support which they are being constantly called upon to render to industry in central Canada. What central Canada will discover before too long is, I am quite sure, that the west will become highly industrialized, and then I presume it will not take them very long to tell central Canada just where they can go. The trend is in that direction, and unless some of these inequalities, inequities and disturbing conditions which prevail are removed that situation will develop just as surely as I stand here.
I for one am not questioning at the moment the necessity of the railroads for increased revenue. I prefer to leave that situation to the experts who are in possession of all the facts. However, I would be very much surprised if the government of Canada did not give careful consideration to one or two things which happened at the time of the application for an increase in freight rates. The first was that the Canadian Pacific made some extremely pessimistic estimates with respect to their operations, extremely pessimistic guesses, should I say. These estimates were not in any sense borne out by their own figures which later came to light. Let me say, secondly, if we are to adopt as a policy within this country that when demand starts falling off industry is to be permitted to jack its prices up, then I say you are guaranteeing to us one of the most disastrous depressions ever inflicted upon the Canadian people.
We hear government officials talking about production or competition lowering rates. I would like to see them give some encouragement to the carrying into effect of that bit of philosophy. No doubt the board of transport commissioners did what they were called upon to do. They examined the dollar position of the railroads; they examined the assertion that the railroads required additional revenues
Freight Rates

in order to carry on, and they recommended accordingly. I am not going to criticize the board of transport commissioners, but I say this: certainly, before they were ever called upon to authorize any increase in freight rates the government should have taken action to correct and remove the anomalies that existed within our present freight rate set-up.
I do not know why the government wait before doing a thing of that kind. They are now faced with a situation of this kind and they find themselves right up to their necks in hot water, squirming in every direction. I agree thoroughly with what has been said here today by speakers from every side of the house, that we should first establish an equalization of rates within this country in order that one part shall not be called upon to bear an unfair burden.
The government may wonder why this announcement caused such consternation. I hope they are conscious of some facts. I imagine the Minister of Agriculture (Mr. Gardiner) knows what it did out west, because I understand that he has been out there recently. This'increase of $70,000,000 in the cost of living at a time when our cost of living index shows that the cost of living is higher than it ever was in the history of Canada since the index was first established, coming on top [DOT]of such things as the coarse grain policy of last fall, the farmers' income tax forms, the excise taxes and so forth and so on, just seemed to bring everything to a head. I do not know, but it seems to me that this government have the uncanny faculty of doing things that bring condemnation down upon their heads; because if one looks back over the past four or five months he must conclude that, had they deliberately set about to do things to annoy the Canadian public they could not have been more successful than they have been. I am not going to say it was deliberate, because an election cannot be too far away; therefore I can hardly believe it would be deliberate. I would rather say they did the best they could, and it is simply that they were not equal to the task. That is about the only conclusion I can possibly come to.
I have been asked how long I am going to speak. I should speak until I have said what I started out to say, regardless of how long it takes. However, I am practically through. I speak for all of us over here, when I say that we join with those who demand that the government set aside, at least for the time being, the application of the 21 per cent increase, and that during the interim they set about to do what I am convinced they believe in their own hearts should be done, namely, a revision of

the whole Canadian freight rate structure. Only thus can you have a Canada that is prepared to talk in terms of Canada, and not a Canada parts of which are looking elsewhere for, I should not say relief, but at least for encouragement. I beseech the government to give consideration to what has been said here today and to take appropriate action forthwith.


Lionel Chevrier: Mr. Speaker, my remarks this
evening must of necessity be extremely brief, for reasons which I shall give in a moment. In the first place, I think I should thank the hon. members who have taken part in this debate, because I have no doubt that the house has benefited from the remarks which have been made from this side and from the other side of the house.
I would have welcomed very much the opportunity to participate in this debate at greater length than I am about to do. I would also have welcomed the opportunity to discuss some of the suggestions which have been made by hon. members this evening. In the first place, I think perhaps there may be some doubt as to whether or not this whole debate was in order. The matter of the freight rate question is, to my mind, still in the pending stage. However, if I had risen and taken that view there would have been a great deal of objection from the other side of the house and perhaps from this side as well. In any event I do not think it would have been well regarded in the country as a whole; therefore, for that reason, I withheld taking any technical objection to the motion made by the hon. member for Rosetown-Biggar.
There has been a tendency in this debate today to confuse two issues, the one which was the increase recommended by the board of transport commissioners and the other which was the equalization of the rates; or, to use the expression mentioned at various times in the debate, a discrimination in the rates across Canada.
I have listened carefully to the debate and have come to the conclusion that there has been a tendency to confuse those two issues. Those two issues are, I think, quite separate one from the other. The board in this case was dealing with one specific matter, namely an application, not by the government of Canada but by the railways, through the railway association of Canada representing some twenty railways, to the board of transport commissioners for an increase in freight rates.


Major James William Coldwell: Does the hon. gentleman not think a 21 per cent increase across the board is discriminatory?

Freight Rates


Lionel Chevrier: I will deal with that as I go along. The point I am making is that these two matters must of necessity be separate. They are not joined in this issue. They may have been joined in this debate. That has been the tendency today, but they were not the subject of consideration in the application of the railway association. I do not think there is any doubt about that. If anyone reads the judgment carefully he can come to no other conclusion than that the board had not before it an application to consider or investigate or make a survey of the equalization of rates from one part of the country to the other.


An hon. MEMBER:: Do they have to be
asked?


Lionel Chevrier: An application must be made, and if my hon. friend looks at the judgment, particularly on page 81 and page 82, he will see where the chief commissioner deals *with that- point.


George Alexander Cruickshank: Will the minister permit a question?


Lionel Chevrier: I have just a few
moments left.


George Alexander Cruickshank: None of the provinces asked that it be considered?


Lionel Chevrier: No, just the very opposite happened. Counsel for British Columbia, counsel for Manitoba, and counsel for Alberta stated that the application which was being considered was not one having to do with the equalization of rates or having to do with discrimination, if I may use an expression that has been used this evening, but that they intended at a later date to make application for that purpose.


George Alexander Cruickshank: I do not think that is correct.


Douglas King Hazen: Counsel for the maritimes said it was not to be horizontal.


Lionel Chevrier: Counsel for British Columbia stated, at page 106 of the judgment:
This is not an application for the removal of the mountain differential by British Columbia. Our role is quite clear: we say there should be no increase in rates while the present inequality under which our people have been suffering remains.


Major James William Coldwell: There is a charge of discrimination right there.


Lionel Chevrier: Removal of the mountain differential is something which must be brought up by a substantive application which, when our preparations are complete, I propose to launch.
Counsel for Alberta stated:
We are not here now petitioning for the removal of the mountain differential nor to be relieved from discrimination which results from transcontinental rates.
Counsel for Manitoba stated:
We have heard considerable evidence on this question of mountain differential; and aside from the argument, I do not think that this board has before it at the present time evidence upon which any finding could be made. That I submit would have to be a matter of investigation.
I bring that to the attention of the house not because I do not regard with a great deal of sympathy what has been said by various members in connection with that very matter, but I did want to say simply this, that the two are distinct and separate matters, one not necessarily relying upon the other, although one may affect the other, as has been clearly stated this evening.
My hon. friend the member for Vancouver East (Mr. Maclnnis) stated that he did not object-I think I am paraphrasing his words- to an increase in freight rates as such, but that he objected to the inequalities which exist across the country. I do not wish to enter into a discussion of this and I said so at the outset; nor do I wish to be drawn into a discussion, for this reason, that there has been launched an intention to appeal by the maritime provinces, and I think, if it has not already been done, by the other provinces, save Ontario and Quebec. They have petitioned the governor in council that they intend to appeal the decision of the board, and I am afraid that anything I would say would be prejudging the case. I think, therefore, the house will understand that under the circumstances the best thing for me, or for that matter anyone speaking on behalf of the government, to do is simply to state that that petition, or that intention to appeal, has been launched. That being so, the petition will be dealt with when it is formally brought to the attention of the government. It will be carefully considered in the light of what has been said with reference to the increase as well as with reference to equalization.


Major James William Coldwell: Will there be a stay in the increase of rates until the petition is received?


Lionel Chevrier: AH I can tell my hon. friend in answer to that question is this-and I am sure he will agree with me that I could not say any more-that the application has not come formally before the government. Until it does come formally, I cannot make any statement as to whether that will be done or
Freight Rates

not. All I can tell him is that when it does come formally before the government it will be examined carefully in the light of the application itself and the petition, as well as in the light of the discussion which has taken place this evening.


Solon Earl Low: Is it within the power of the government to stay the application of the new rates?


Lionel Chevrier: If my hon. friend looks at section 52 of the Railway Act he will find the procedure with respect to appeal clearly set out therein. A decision will in due course be reached and I am sure it will be announced later.


Frederick Davis Shaw: May I ask one question? Will the one lodging the appeal be notified when the appeal is being heard by the government; and will that province, or whoever the applicant may be, be granted an opportunity of appearing before the government or a committee of the cabinet? I know of one case where that rvas not done and the decision was rendered without the applicant knowing anything about it.


Lionel Chevrier: I know the case to which the hon. gentleman refers. If I am not mistaken, he refers to a case where a railway line had been abandoned in a certain part of Canada.


Frederick Davis Shaw: I lodged the appeal.


Lionel Chevrier: Well, the procedure there is not the same as in the present case. If the hon. member will look at section 52 of the Railway Act referred to this evening by several hon. members he will find the procedure set out therein.


Mr. F. S. ZAPLITNY (Dauphin):: Mr. Speaker, I am sure the members of this house and those who read the debates will feel disappointed in the kind of reply we have received from the Minister of Transport (Mr. Chevrier). Surely, in a matter admittedly as important as this, in fact so important that a fairly substantial number of the members who normally support the government have risen in their places and taken an opposite stand, the minister should have given the house more than he did in his brief and cursory statement. The chief point he raised was his contention that the question of discrimination was not part and parcel of the whole question of a general increase. He made out that because the application itself did not mention that, or did not make direct reference to the differentials or the discrimination, therefore the

board could not take that into consideration. I do not know on what legal grounds he makes that sort of plea.


Lionel Chevrier: No. My hon. friend is misquoting me. I did not make that statement. What I did say was that counsel for the various provinces made the statement, and I quoted their words.


Frederick Samuel Zaplitny: I would assume that the reason the minister quoted the words of counsel which suited him-and incidentally he did not quote the words of all the counsel who were there-rvas that he wished to make that sort of argument. I do not know of any other reason he would have.


Lionel Chevrier: I am sure the hon. gentleman does not want to be unfair to me.


Frederick Samuel Zaplitny: No.


Lionel Chevrier: I was replying to a question that had been asked me.


Frederick Samuel Zaplitny: I believe the question *was put directly to the minister while he was speaking, as to whether he did not think there was a connection between the two matters. If I understood him correctly, his opinion was that the question of discrimination or differentials would have to go by itself in a separate application before the board, before it could be properly considered. That, of course, is only an incidental. I am sure the minister must have a copy of the submissions of the Manitoba government in this matter. If he will turn to page 59 he will find that there is a summary of the previous decisions of the board. It goes back as far as 1914, and goes on to 1916, 1918, 1920, 1922 and 1927. In practically every case the decision by the board involved the question of differentials as to different parts of the country. For example, in 1917 there was an increase in the passenger and freight tolls, in what was called the 15 per cent case.
. . . there was a further recognition of the disparity between the east and the west-
I am quoting now from the submission.
-and in that case the western rates were raised 10 per cent only, whereas the general bulk of eastern rates were raised 15 per cent.
That in itself is an admission that the board was quite competent to take into consideration all the factors that go into the making of freight rates. Surely in the evidence that was given before the board of transport commissioners there were plenty of arguments to show that there was discrimination and that there was need for an overhaul of the system of freight rates in itself. I believe the board

Freight Rates
was quite competent to make that recommendation or that change. But the question that is still left hanging in the air is this: What is the government going to do in this matter on its own responsibility?
Many of us were anxious all during the session last year, and in the session so far this year, to say something in the house about this question, but we were prevented from doing so by the rules of the house inasmuch as the matter was then before the board, and it was ruled that it was of the same nature as being before the courts. We felt that at the first opportunity which presented itself we would get from the Minister of Transport, who, after all, is most closely connected with this matter, a full explanation of all the factors which went into the making of this decision. I believe the house is entitled to that sort of statement, and the country is certainly anxious to have it. All one has to do is to look through the headlines of the newspapers across Canada, since the -decision was rendered, and he will see that the people of Canada are anxious to know the basis on which that decision was arrived at; if the government-which, after all, has the final responsibility-is in favour of the decision made; and if not, what is it going to do about the matter? Yet all we get from the minister today is a brief and sketchy statement saying that in his opinion there are two matters involved, and that we must not confuse them.


Lionel Chevrier: I gave the hon. gentleman the reasons why I could not at this stage make any comment other than that which I made.


Frederick Samuel Zaplitny: If the minister gave any valid reason as to why no comment could be made, it certainly missed me; because this debate has been going on all afternoon and statements of various kinds have been made from all parts of the house. If it is within the rules and within the rights of the members on this side of the house and of all private
members on the other side of the house to make arguments and submissions either to justify .the increase or to take the opposite stand-as we in this group have taken-then surely it is also within the competence of the minister. Surely he has just as many privileges in this house as has any other member and he should not feel backward or bashful. He is generally not bashful in this house, but on this .occasion he appears to shy away from the question and try to leave it hanging in the air.
Time will not permit me, Mr. Speaker, to say all the things I wanted to say in the first place, because it is now almost eleven o'clock. I only wish to say that I concur most heartily with what the leader of this group said; and I believe he has performed a public service to this country in raising the question today. I am disappointed, and I am sure the house generally is too, that the minister did not rise to the occasion to justify the action taken by the board.



BUSINESS OF THE HOUSE

[Stage Direction]
Mr. ST. LAURENT: Tomorrow we shall deal with the matters we intended to deal with today, the first being the second reading of Bill No. 7, to provide for assistance to the gold mines; then, after that, the resolution for the introduction of a bill to amend the Industrial Relations Act, in order to try to get that bill to the industrial relations committee for consideration. After that we shall take the resolution for the introduction of a bill to modify the War Veterans Allowance Act be^ cause that also is required to go to a committee for consideration, namely the committee on veterans affairs. When those two matters have been disposed of, we shall take up the resolution standing in the name of the Prime Minister, to appoint a joint committee of both houses of parliament on human rights.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, April 6, 1948