1948-04-13

Hon. LIONEL CHEVRIER (Minister of Transport) moved:: That the name of Mr. Bourget be substituted for that of Mr. Lalonde, and the name of Mr. Hamel be substituted for that of Mr. Raymond (Beauharnois-Laprairie) on the select standing committee on industrial relations.


[Stage Direction]
Motion agreed to.


Right Hon. C. D. HOWE (Minister of Trade and Commerce):: Mr. Speaker, I desire to announce that Mr. F. L. M. Arnold has resigned as a member of the wheat board, effective May 15; and I now table the correspondence in respect thereto.



CRIMINAL CODE

[Stage Direction]
ONE-THIRD OF JURORS TO BE FEMALE IN TRLtL OF FEMALE PERSONS
Mr. T. L. CHURCH (Broadview)1 moved for leave to introduce Bill No. 199, to amend the criminal code (juries).
Motion agreed to and bill read the first time.


[Stage Direction]
On the orders of the day:
Mr. JOHN BRACKEN (Leader of the Opposition):: I should like to direct a question to the Prime Minister having to do with a matter we will be discussing this afternoon; that is why I ask it now. Has the government made any other modifications in its announced policies with respect to freight rates?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Doubtless my hon. friend will hear the Minister of Transport (Mr. Chevrier) in a few minutes, and he will answer the question while he is speaking.
5849-184|



TABLING OF REPRESENTATIONS ON BEHALF OF PROVINCIAL GOVERNMENTS

[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: Has the Minister of Transport received permission from the seven interested provinces to lay on the table of the house, representations made on behalf of the provincial governments to stay the order of the transport commissioners recommending increased freight rates? If so, will he table the documents?


Lionel Chevrier: The answer is yes. The request was also made by the hon. member for Lake Centre (Mr. Diefenbaker). I now table the applications to stay effective date of the order of the board of transport commissioners. At the same time I should like to announce that there will be distributed to members' boxes, if indeed this has not already been done, the judgment of the board of transport commissioners in the case.



PALESTINE


[Stage Direction]
On the orders of the day:
Mr. NORMAN JAQUES (Wetaskiwin):: On Friday last I addressed a question to the Secretary of State for External Affairs, who said he would give an answer after he had time to read Hansard. I would ask when I may expect an answer to my question.
Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): The question is framed in language which makes assumptions of facts as to which I have not been able as yet to obtain confirmation. That is the reason no answer has yet been given.



VETERANS AFFAIRS


Mr. D. KING HAZEN (Saint John-Albert):: Mr. Speaker, I should like to ask a question of the Minister of Veterans Affairs, based upon a resolution passed by the Saint John trades and labour council on April 2 last. It states:
We consider that the request made unanimously by-
Freight Rates


Mr. SPEAKER:: Order. The hon. member must understand that he cannot refer to a resolution in that way.


Douglas King Hazen: I cannot very well ask my question without doing so.



FREIGHT RATES-INCREASES ORDERED BY TRANSPORT BOARD-AMENDMENT, MR. COLDW'ELL   SUBAMENDMENT, MR. BRACKEN

[Stage Direction]
The house resumed from Wednesday, April 7, consideration of the motion of Mr. Abbott for committee of supply, and the amendment thereto of Mr. Coldwell and the amendment to the amendment of Mr. Bracken.
Lionel Chevrier: Mr. Speaker, I rise to take part in this debate fully conscious of the serious political and economic implications that the question which the house has been debating may have upon the country.
As I indicated in a statement made earlier in debate, there have been some definite contributions. to the discussion, some constructive speeches made by hon. members; and on the other hand there have been some destructive speeches. Some speeches unfortunately have been aimed at heaping abuse not only upon the judgment of the board of transport commissioners but also against and upon the government.
In the remarks I shall make this afternoon I propose to be frank and honest about the discussion now before the house, and that for more than one reason. But before entering upon a discussion of the three points with which I should like to deal today-first, the responsibility of the governor in council; second, the: decision of the board, and, third, the decision of the government to require or direct a. thorough and complete investigation of the inequalities in freight rates-I should like to dispel some of the misconceptions which seepa to me to exist on this question.
First of all there seems to be a misconception with reference to the decision of the board. The decision of the board deals with an application for an. increase in freight rates by the railways-and that was the only matter that came before the board at that time. The board on that occasion did not deal with inequalities in the freight rate structure, the so-called discriminations which have been mentioned in this debate. But the board dealt with and was faced purely with a revenue case.

Next, it was clearly stated, and I shall refer to this later, that in the discussion by counsel for the provinces they had no intention of submitting at that time an application for the disappearance of inequalities. Their arguments and evidence were directed clearly as an objection to the application of the railways.
Dealing therefore with the first consideration I mentioned a minute ago, namely, the responsibility of the governor in council, I should like to say this. Many hon. members, and I think no one more forcibly than the hon. member for Lake Centre (Mr. Diefenbaker), have taken the position that the responsibility was not that of the board of transport commissioners, but that of the governor in council. To use the expressive words used at that time, it was said that this was not only the responsibility of the governor in council but also that of the minister, that the baby was on the doorstep of the government, and that it was up to the government to deal with it.
I have no intention even in the slightest measure of backing away from any responsibility the government may have, and in anything I shall say I will not be back-pedalling from that responsibility. But I think the house should know that there is a definition respecting the responsibility of the government and the governor in council. That is what I should like to place before hon. members at this time.
Prior to 1903 the responsibility for rate fixing and for the rate structure in this country lay squarely upon the shoulders of what was then known as the railway committee of the privy council. That committee was charged not only with that responsibility, but with all other responsibilities having to do with transportation in Canada at that time. It soon became evident, however, as hon. members will immediately realize, that that method of dealing with freight rates, freight structure and1 the like was not only desultory but ineffective. Parliament therefore decided to obtain the opinion of a recognized authority on the subject, Professor McLean, who passed away only a short time ago.	'
Professor McLean proceeded to make an investigation and to report to the government. This is what he had to say with reference to the inability and the ineffectiveness of the railway committee of the privy council to deal with this subject:
That committee has been unable, owing to its organization, to grapple effectively with the

Freight Rates
problem presented. It has been impossible, owing to its stationary character, to deal effectively with questions pertaining to rates and preferences. A more migratory body could deal more effectively with these matters.
The defects of the railway committee as a regulator of railway transportation I would place under the following heads:
1.	It has a dual function, political and administrative.
2.	The lack of migratory organization renders it impossible to deal effectively with complaints.
3.	The distances to be travelled by complainants render the expense too great.
4.	There is lack of technical training for the work.
5.	The existing organization is not sufficiently permanent.
And still quoting Doctor McLean:
In my opinion, the only way to put the matter of railway regulation on a more satisfactory footing in Canada is by entrusting it to a railway commission composed of men of technical training, who shall receive salaries adequate to attract the most efficient, and who shall have a long tenure of office.
It was following that report made by Doctor McLean to the then minister of railways and canals that parliament decided to pass the Railway Act. That act became law in 1903. It contained comprehensive provisions with respect to tariffs and tolls of the railways, and established the railway commission to administer the act.
Section 52 of the act sets out clearly the responsibility of the governor in council with reference to the matter. It states that the government shall have wide and varied powers to deal with applications of this kind. And while the discretion is vested in the governor in council in proceedings under this section, the position of the governor in council is defined as one of a judicial nature.
The intent of the legislation of 1903 was to invest the governor in council with these judicial powers by which he may, in his discretion, aid in securing and enforcing the provisions of the Railway Act, having due regard to the method of railway rate regulation by an independent commission, which was the outstanding innovation of the Railway Act of 1903, and has been preserved throughout the succeeding amendments which were made to the act down to the present time.
In other words, the powers of the governor in council are judicial in nature. These are not the only powers of the governor in council which are of a judicial nature. I do not think, and this is my own personal opinion, that it
was ever intended that the governor in council should interfere in the question of rate making or rate equality or rate discrimination. The very nature of the act indicates that that should be left to the technical and expert knowledge of the staff of the board.
Again, without in any way backing away from the responsibility of the governor in council, it w'ould not seem to be desirable, except under very extraordinary circumstances, that the governor in council should undertake to rehear or review the decisions of the board as to whether, upon the facts appearing in the evidence before it, in any particular case, the provisions of the statute with regard to rates have been complied with. That seems to me to be the proper interpretation to place upon section 52 of the act. In fact that is the history of the various cases. I believe that I am reliably informed when I say that from 1917 to date, in the cases wherein the increases were passed or ordered by the board following world war I, in no instance has the governor in council interfered to change the findings contained in the board's order.
In fact the contrary is true. In the 40 per cent case, to which I shall refer later, the decision of the board was dated September 9, 1920. It provided for an increase in rates of 40 per cent to be effective September 13, 1920; that is, four days later. An application was made to the governor in council to stay the order, but the governor in council declined to interfere with the effective date of the order. In other words, the point I am making now is that the governor in council should not substitute its judgment on a technical question demanding expert and technical knowledge and evidence for that of a board which parliament has created to do the job.


Mr. SMITH (Calgary West):: Will the minister permit a question? There was an appeal, was there not?


Lionel Chevrier: I shall be glad to answer any question at the close of my remarks. I am afraid I shall not be able to make in forty minutes the remarks I have to make.


Mr. KNOWLES:: You have unlimited time.


Lionel Chevrier: What I have said thus far is without prejudice to the right of the premiers of the various provinces of the dominion to make application by way of appeal for a review of the decision of the
Freight Rates

board. Nothing in what I have said affects that position. While the premiers have not thus far made that application, they have asked for a stay in the order. They have signified a notice of intention to appeal. When they do I can assure this house that their representations will be carefully considered. If it is thought necessary to hear them, they will be heard. In the light of what they may have to say then, as well as in the light of circumstances, a decision will be made having regard to the best interests of the country as a whole.
The next point with which I should like to deal is the decision of the board made pursuant to order 70425 of March 30, 1948, following application by the railways for a thirty per cent increase in rates. The railways applied as well for an increase of twenty, thirty and forty cents per ton on coke and coal. The application of the railways specifically excluded a long list of items which I shall not repeat but which may be summarized under three heads. The application of the railways did not include (a) rates on grain and grain products under the Crowsnest Pass agreement; Ob) rates on international traffic beyond the Canadian border; and (c) certain import and export rates on such traffic through Canadian ports.
What I should like to bring to the attention of the house is that the application for increases, instead of affecting an estimated freight revenue of $492 million for the two main railway lines in Canada affected a freight revenue of approximately $262,500,000, thus immediately eliminating nearly $230,-J00.000 of freight revenue. The application was predicated upon increased costs of operation. In other words, the board was faced with a revenue case. The railways claimed that because of higher wages, higher material costs, their revenues would be insufficient to meet their operating expenses, their fixed charges, their dividends and also the provision of adequate amounts for additions and betterments to their lines. After having listened carefully to the best expert evidence which could be brought forward, after having heard technical evidence by accountants and the like, the board of transport commissioners came to the conclusion that there was a substantial deficiency in the financial requirements of our two railways. They found that that deficiency amounted to $70,000,000 in 1947. For the

Canadian National Railways lines in Canada alone the deficiency was in the neighbourhood of $40,000,000.
Let me pursue that point just a bit further. In 1940 the operating revenues of the Canadian National Railways and the Canadian Pacific Railway put together amounted to $384,000,000 and these produced a net operating revenue of $80,500,000. In 1947, seven years later, the operating revenues of the same railroads was $693,000,000 which produced a net operating revenue of only $71,000,000. In other words, an increase in operating revenue of $300,000,000 produced a smaller net operating revenue. There in one word is the position of the railways in Canada today.
If one stops to compare the position of the Canadian National Railways alone in the year 1946 with that of the year 1939 one finds that wages have increased by 42-2 per cent; fuel by 51-4 per cent; ties by 47-3 per cent; rails by 27-4 per cent; other materials by 26-2 per cent, or an over-all increase in wages and materials of 40-1 per cent. Thus $60,000,000 more was paid for wages in 1946 than was paid in 1939 and this for the same level of employment. A total of $26,000,000 more was paid for the materials used in 1946. This comparison needs no adjustment for the man-hours performed nor for the amount of materials used.
How can anyone expect that under those circumstances the railways can meet such mounting costs without additional revenue? The comparison which I have just made is based on the year 1946, and everyone knows what increases have taken place since.
The board gave careful consideration to all the arguments that were put before it. They sat for almost fourteen months. The hearings themselves began in February of 1947 and terminated in December of the same year. Sittings were held in every province. The provinces were represented by able and outstanding counsel. Expert witnesses were called and technical evidence was put before the board. From one end of the country to the other the board listened carefully and attentively to groups, associations and individuals who desired to present their cases.
There are six commissioners on the board at the present time. The board through the chief commissioner has delivered a clear and outstanding judgment in this case. One of these commissioners is a former attorney

Freight Rates
general of the province of Saskatchewan. Does anyone in this house think that that man was not fully conscious of the position in which he found himself or that he did not understand the implications which this decision would have upon the province of Saskatchewan or upon the prairies or the rest of Canada?
Another commissioner is the former president of the Farmers Union of Canada. He subsequently became president of the United Farmers of Canada. He also served as a commissioner on the royal grain inquiry. Does anyone suggest for a moment that that commissioner, equally with the1 member from Saskatchewan, was not fully conscious of his duties as a commissioner and did not understand fully the impact which this judgment might have on the economy of Canada?
A third commissioner is a former member of the government of British Columbia. He delivered a separate judgment. He agreed fully with the conclusions arrived at by the chief commissioner, but he made some distinction with reference to the mountain differential. True, he referred to the inequality which existed in British Columbia so far as the mountain differential is concerned, but he agreed in substance with the conclusions and with the decisions arrived at by the rest of the board.
Still another commissioner came from the maritime provinces and represented the railway brotherhoods from that section. Four out of the six commissioners represented provinces other than the provinces of Ontario and Quebec. Surely these men were as much interested and as much concerned about the decision which they might render as any hon. member of this house could be.
The board had to assist it expert advice and expert assistants. It had two bodies from which it could seek advice. First it had the traffic department of the board of transport commissioners, composed of some twenty men, headed by a traffic officer and an assistant traffic officer, both of whom have done nothing during the whole of their lives but study freight rates and their effect in various parts of the country. Does anyone suggest for a moment that these men were not fully conscious of their position in the advice which they gave to the board?
The other body which the board had to assist it is known as the bureau of transportation economies, established in 1946 to assist the board of transport commissioners in the freight rate case now under discussion. It comprises some forty employees, seven of whom are technical men fully versed in the economics of transport, whether it be from the accounting, the financial or the statistical standpoint. So when the statement is made in this house that the board of transport commissioners are a group of incompetent men who have made a mess of their task and should be fired, I say that those who make such charges are not fully aware of the facts, nor are they doing justice to themselves. They are making statements which are entirely contrary to the facts.
May I deal briefly with the changes in the rate structure in this country following world war I. I think it will be of interest to the house, because there are some parallels which might well be drawn.
The first increase in freight rates in this country following world war I came in 1917. It was known as the 15 per cent case. It was made as a result of an application by the railways to the, board of transport commissioners following the granting of a general 15 per cent increase in the United States. The increase then granted in Canada was generally 15 per cent in the rates, with a large number of exceptions too numerous to mention.
The second increase came in 1918. It was the 25 per cent case. It followed the McAdoo award in the United States; and hon. members will please, note this, that it was made by the direction of the cabinet to the board. The increase was a general 25 per cent increase all across the board, with a number of exceptions too numerous to enumerate.
The third increase, known as the 40 per cent increase, came in 1920. It was made on application of the railway association to the board and was heard from August 10 to August 23, 1920. It provided for a general increase, of 40 per cent in eastern Canada, 35 per cent in western Canada, and 33i per cent in transcontinental rates, subject to certain exceptions.
In January 1921 there was a reduction in the rates by five per cent. In December of 1921 there was a reduction of ten per cent, and finally in 1922 the increase in the 40 per cent case was reduced to 174 per cent in
Freight Rates


Arthur Leroy Smith: Are these commodities moving both ways?


Lionel Chevrier: No, moving from their principal sources of supply.


Arthur Leroy Smith: Take tea.


Lionel Chevrier: Yes. It depends on where it originated. If it originated in Quebec and was moving to Montreal, there would be no increase; but I shall take other items which will, I think, make the point clear in a moment. Take milk. Because of the decision the increase per quart will be one-tenth of a cent moving from various sources of supply across Canada to all the points mentioned in this document. The same can be said of butter. There the increase will be one-tenth of a cent per pound, and the increase is almost the same on cheese.
I do not want to refer exclusively to items which bear out my point. Let me take one which may have a different bearing on it. Let me take a Chevrolet car, which the average man does not buy. A Chevrolet car moving east from Walkerville or Oshawa to Quebec will have to bear an increase of $7.33; to Montreal, $5.33; to Halifax, $7.86; to Toronto, $2.40; to Winnipeg, $17.48; to Regina, $23.39; to Calgary, $29.73; to Vancouver, $31.26.
I should like to place this table on record for the information of the house.


James Horace King: Has the minister the unanimous consent of the house?


Some hon. MEMBERS:: Agreed.


Lionel Chevrier: The table follows:
On the morning of March 30 the board of transport commissioners handed down its decision under order No. 70425 pertaining to the railways' application for an increase of 30 per cent in freight rates within Canada. The order referred to authorized an increase of 21 per cent in freight rates. On coal and coke an increase of 25 cents per ton was authorized. No increase was permitted in rates on grain and grain products moving between points in western Canada.
Here are shown the range of the increase in final freight costs per retail sales unit, for twenty-one different commodities transported from their principal sources of supply to eight representative centres of consumption in Canada. The commodities selected are, in the main, important items in the cost of living budget. Other items were selected in order to illustrate the situation more fully. The information shown does not necessarily represent increases in retail prices w'hich may occur as a result of the increase in freight, but is merely indicative of the limited extent to which laid down costs will be affected by the proposed increase.
RANGE OF FREIGHT INCREASE IN CENTS PER RETAIL SALES UNIT For Commodities Transported From Their Principal Sources of Supply To Important Consumption Centres tn Canada
Commodity
Tea	
Coffee (roasted)	
Milk	
Butter	
Cheese	
Eggs	
Apples	
Refined sugar	
Salt (refined)	
Beef	
Fish (salted or cured)...
Potatoes	
Canned goods	
Men's suits	
Men's shoes	
Shirts	
Bath tubs	
Coal stove	
Electric stove	
Chevrolet car	
Lumber	
Retail sales unit	Quebec	Montreal	Halifax	Toronto	Winnipeg	Regina	Calgary	Vancouver	Carload	L.C.L.	Carload	L.C.L.	Carload	L.C.L.	Carload	L.C.L.	Carload	L.C.L.	Carload	L.C.L.	Carload	L.C.L.	Carload	L.C.L.cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.	cts.00	0-0	0-0	0-0	0-0	00	0-0	0-0	0-0	0-0	0-0	0-0	0-0	0-0	0-0	0-00-7	1-1	0-7	1-1	0-7	1-1	0-7	1-1	0-5	0-7	0-5	0-7	0-6	0-9	0-7	0-8Low	0-1	0-1	0-0	0-0	0-1	0-1	0-1	0-1	0-0	0-0	0-1	0-1	0-2	0-2	0-0	0-00-5	0-7	0-3	0-7	0-5	0-7	0-3	0-7	0-3	0-5	0-3	0-5	0-4	0-6	0-3	0-70-1	0-1	0-1	0-1	0-1	0-1	0-1	0-10-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-10-1	0-1	0-3	0-5	0-5	0-7	0-1	0-1	0-3	0-3	0-2	0-2	0-2	0-3	0-3	0-40-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-3	0-3	0-4	0-5	0-5	0-6	0-1	0-10-1	0-1	0-1	0-1	0-1	0-1	0-1	0-1	0-3	0-3	0-4	0-5	0-5	0-6	0-5	0-70-1	0-3	0-1	0-1	0-1	0-2	0-1	0-1	0-1	0-2	0-1	0-1	0-1	0-2	0-1	0-1High	0-5	0-8	0-5	0-8	0-8	1-3	0-5	0-8	0-5	0-9	0-1	0-2	0-4	0-7	0-5	0-70-1	0-1	01	0-1	0-1	0-1	0-1	0-1	0-2	0-3	0-2	0-2	0-1	0-2	0-1	0-10-3	0-7	0-3	0-7	0-3	0-7	0-3	0-7	0-2	0-3	0-2	0-5	0-2	0-2	0-1	0-10-1	0-1	0-0	0-0	0-0	0-0	0-0	0-1	0-0	0-0	0-1	0-1	0-1	0-1	0-0	0-0High	0-1	0-2	0-1	0-1	0-1	0-1	0-1	0-1	0-2	0-3	0-3	0-3	0-2	0-2	0-0	0-00-1	0-1	0-1	0-1	0-0	0-1	0-0	0-1	0-0	0-1	0-1	0-1	0-1	0-2	0-0	0-0High	0-1	0-2	0-1	0-1	0-1	0-2	0-0	0-1	0-1	0-3	0-1	0-5	0-1	0-3	0-2	0-50-1	0-1	0-0	0-0	0-1	0-1	0-0	0-0	0-0	0-0	0-0	0-1	0-0	0-0	0-0	0-0High	0-3	0-5	0-3	0-5	0-3	0-6	0-3	0-5	0-2	0-4	0-1	0-3	0-1	0-2	0-3	0-50-1	0-1	0-1	0-1	0-0	0-0	0-1	0-1	0-3	0-4	0-3	0-4	0-2	0-3	0-0	0-0High	0-1	0-1	0-1	0-1	0-0	0-1	0-1	0-1	0-3	0-5	0-3	0-5	0-4	0-6	0-3	0-70-8	1-5	0-3	0-9	0-6	1-1	0-5	0-8	0-4	0-6	0-8	1-7	0-4	0-9	0-6	1-1High	0-8	1-5	0-9	1-7	0-8	1-5	1-1	2-0	2-4	4-4	2-0	3-8	1-3	2-3	0-7	1-40-1	0-1	0-0	0-0	0-1	0-1	0-0	0-0	0-2	0-3	0-1	0-2	0-1	0-1	0-0	0-0High	0-1	0-2	0-1	0-2	0-2	0-3	0-1	0-1	0-3	0-6	0-4	0-6	0-5	0-7	0-2	0-90-7	0-7	0-0	0-0	1-0	1-0	0-0	0-0	2-7	2-7	3-5	3-5	4-5	4-5	5-0	5-01-0	1-0	0-6	0-7	1-2	1-2	0-8	0-7	2-7	2-7	3-5	3-5	4-5	4-5	5-0	5-00-0	0-0	0-0	0-0	0-3	0-4	0-2	0-2	1-1	1-6	1-5	2-1	1-8	2-7	1-9	2-90-3	0-5	0-4	0-5	0-6	0-8	0-5	0-6	1-1	1-7	1-5	2-2	1-9	2-8	1-9	3-00-1	0-1	0-0	0-0	0-1	0-1	0-1	0-1	0-4	0-4	0-5	0-5	0-6	0-6	0-5	0-50-1	0-1	0-1	0-1	0-2	0-2	0-1	0-1	0-7	0-4	0-5	0-5	0-6	0-6	0-5	0-5350	51-3	28-0	42-0	39-7	59-5	16-3	25-7	79-3	123-7	109-7	168-0	137-7	212-3	123-7	249-514-1	22-7	28-3	36-7	22-7	28-3	15-6	25-5	96-1	150-0	133-1	204-0	167-3	258-0	167-3	254-7High	45-3	73-7	38-0	56-7	53-9	80-7	45-3	65-1	101-9	158-7	136-0	212-5	172-7	266-7	167-3	311-732-5	45-5	22-7	32-7	43-3	61-7	15-1	21-7	88-8	145-3	121-3	192-8	151-7	244-7	182-3	294-7High	43-3	62-8	34-7	50-0	48-7	69-3	30-3	43-3	88-8	145-3	121-3	192-8	151-7	244-7	182-3	294-7733-3	656-0	533-3	546-7	786-7	786-7	240-5	240-5	1,748-0	1,748-0	2,339-7	2,339-7	2,973-9	2,973-9	3,126-7	3,632-7High	733-3	656-0	533-3	546-7	786-7	786-7	240-5	240-5	1,748-0	1,748-0	2,339-7	2,339-7	2,973-9	2,973-9	3,126-7	3,632-7116-7	116-7	116-7	186-7	163-3	116-7	0-0	High	630-0	630-0	746-7	618-2	385-3	396-7	350-0	0-0	
* >
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Freight Rates
Freight Rates


Lionel Chevrier: 1927. In that judgment will be found the reasons for these discrepancies. The reasons are so extensive that there is not time in a debate such, as this to go into them fully. But let me say briefly, and speaking generally, that the general level of rates in eastern Canada on general merchandise and other commodities is somewhat lower than in the prairies and in the so-called Pacific area, namely, west of the Crowsnest, British Columbia, Oanmore and Ed.son, Alberta, the rates are somewhat higher than on the prairies. There are, however, numerous exceptions with respect to various special rates which have been published. Lower rates in eastern Canada are compelled by water competition, a combination of water and motor truck competition, as well as rates established by the United States lines. The different rates have been brought much closer together under various decisions of the board at different times since 1914.
In 1925, in the decision referred to a moment ago, the board undertook a complete investigation, the largest one of its kind, into the rate structure in this country. This lasted

for two years, and a decision was rendered in 1927. Some mention has been made in the house of the time it will take for the board to complete this investigation. In order that there will be no further misunderstanding on this question may I say that I conferred with the chief commissioner of the board and asked him how long in his opinion it would take to complete this investigation. He said that because of the circumstances which had changed in the economy of this country from the time that the judgment was handed down in 1927, it would require an absolute minimum of six months in which to complete the investigation, and that it would probably be completed within a year.
I have this further to say as to the time within which the board can dispose of the investigation into inequalities. Just as soon as the provinces have indicated their readiness to submit their case to the board, the board will move immediately to the region or the province which is ready to present its case. I am informed, I believe reliably, that already in the province of Alberta preparations have been made for a presentation to the board

 preparations extending over a period of several months and in fact almost a year.
The charge has been made that while the investigation is being carried on the. people of this country will have exceedingly high rates inflicted upon them. I believe it was the hon. member for Lethbridge (Mr. Blackmore) who said that the rates would be exceedingly high, and I believe the hon. member for Rosetown-Biggar (Mr. Coldwell) used the expression "unusually high", because, of the inequality.
Does the hon. member for Rosetown-Biggar know of any group, any individual, any association, any board in any province which, in the. last twenty years, or since the, decision of the board in 1927, has signified any intention to the board of making an application to it to do away with inequalities?


Major James William Coldwell: I know there has been constant criticism of the inequalities from boards and all other sources.


Lionel Chevrier: There may have been constant criticism-


Major James William Coldwell: And may I say it was in every brief presented by the various governments.


Lionel Chevrier: There may have been criticism, but the point is, has there been an application? And really, if there has been criticism without the application, the board could not be seized of the inequalities. Let

Freight Rates
me quote from page 44 of the judgment of the chief commissioner. He states:
_ What was presented to us was, to a considerable degree, o-f <a generalized character. Many of the rate features covered by the submissions made at the regional hearings were referred to as being of long-standing unfairness and unjustly discriminatory, but it is somewhat significant that since 1927, when the last general freight rates investigation was concluded, not one of these matters has been made the subject of a formal application or complaint to the board.
The board is of the opinion that if the interested parties desire to have these questions dealt with under proceedings upon complaint, they should be handled in accordance with the board's rules and regulations and more specifically in accordance with rules 2, 3 and 4 thereof.
It is, of course, obvious that these matters would require to be very fully explored in a separate investigation involving much study and most complete evidence from all interested parties.	There would require, among other
things, to be special surveys made of actual traffic movements in various regions as well as with respect to railway operating costs in such regions. While many of the subjects presented in tliis case have been considered and dealt with in the past, it may be that since that time, which was many years ago, there have been such changes with respect to some of these matters that upon further investigation it would be found that there should be some changes made in the rate structure along the lines suggested in what was put before the board.
I have already put on the record in. this house, but I think I should again record, the statements made by counsel for the various provinces, who made it quite clear that they did not desire this investigation to be made one for the removal of the so-called discrimination or inequalities.
Counsel for British Columbia stated, at page 57 of the chief commissioner's 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. 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.
5849-18oi
Coming back to the charge made by the hon. member for Lethbridge and the hon. member for Rosetown-Biggar, that the effect of this judgment will be to make freight rates exceedingly high in this country, the answer is to be found in the chart which I tabled a moment ago, and also in this statement. Does the hon. member know that the average revenue per ton mile in Canada has always been lower than that of any other country in the world? It now stands at less than one cent per ton mile, with no increase having been granted since 1920, although substantial increases have been granted in the United Kingdom and the United States.
One cannot lose track of the fact that the last general rate increase was granted to the railways back in 1920 and the last general freight rate investigation was completed in 1927. Considerable development has taken place in Canada since that time. During those twenty years the railways of this country have had to cope with exceedingly difficult conditions. They were faced in the twenties with highway competition, then they went through the depression, which lasted nearly ten years, and everyone will agree that the war effort of the railways was tremendous and contributed in no small measure to Canada's share in the final outcome of world war II.
It should, it seems to me, be a source of great satisfaction to the citizens of this country that the railways were able to stand these economic upheavals without any increase in freight rates. It is only since 1946, when the increase in costs became greater than the increase in revenue, that the railways were forced to apply for a revision in their freight rates.
The hon. member for Rosetown-Biggar suggests that this increase should not be allowed to go into effect. I wonder if the hon. gentleman has considered the implications of such a decision. I wonder if he has realized that the net result of such a decision would unquestionably lead to amalgamation of the railways. I wonder if he has given consideration to the fact that, with the deficit of the Canadian National Railways as it now stands at $15,000,000, and with what will be required if this increase is not allowed to go into effect, namely, $25,000,000 or $30,000,000, this house will be called upon to vote somewhere in the neighbourhood of $45,000,000 to $50,000,000 to meet the deficit of the Canadian National Railways. I have no brief for the other railway, but in fairness I think it should be stated that were it not for the other income mentioned in its annual
Freight Rates

report that railway would be short by no less than $30,345,000 in meeting its requirements.
If that is the situation in reference to the two railways and the house should be asked to vote such a tremendous sum for the National Railways, does it not follow that if the judgment is not allowed to go into effect the Canadian Pacific Railway will be placed in a deficit position and will eventually have to go into liquidation, and that in effect and in the end this will mean the amalgamation of the railways?


Major James William Coldwell: Not at all; not necessarily.


Lionel Chevrier: My hon. friend cannot argue himself out of that position, which I think follows logically from the request he makes.


Major James William Coldwell: It does not follow.


Lionel Chevrier: Does any hon. member of this house think that is a desirable thing, that we should have railway amalgamation in this country? I doubt if any hon. gentleman would take that position.
Now I want to say a word about the contribution to the debate by the hon. member for Calgary West (Mr. Smith). The hon. member has made many excellent contributions in this house, and he has made some that were not so good. In fairness to him I have to state that his was really a constructive contribution to the debate. He attempted to deal with the matter not from the political but from the economic angle; and he dealt with two of the very serious sore spots in his part of the country, the mountain differential and the transcontinental rate. As the house knows, the mountain differential is brought about by the fact that in calculating rates, one mile in the mountain region is equal to one and a quarter miles in the prairie region. Here let me pause for a moment to state what has been done in the past with respect to the mountain differential. It used to be that one mile in the mountain area equalled two miles in the prairies. Following various investigations conducted by the board from time to time, that was reduced until now a mile and a quarter on the prairies equals one mile in the mountains. By virtue of at least two decisions of the board that differential was reduced first from two to one and three-quarters and then from one and three-quarters to one and one-quarter miles. The judgment of the board in 1927 dealt with that very matter, and that judgment is specific as set out in 33 Canadian Railway Cases, at page 127. Since that time economic conditions in this country have changed materially, as no

one knows better than hon. members who come from the British Columbia and prairie regions. Since conditions have changed it may well be that when the board of transport commissioners ends its investigation it will come to the conclusion that having regard to all the circumstances, including the changes .in the economy of this country, the time has come when the mountain differential should be made to disappear altogether; and if that should be the decision I am sure no one will have any fault to find with it.
The hon. member for Calgary West also dealt with the matter of the transcontinental rate, which, as is well known, was established to compete with water transportation via the Panama canal. The hon. member suggested that perhaps a remedy could be found by virtue of the decision in the Spokane case. I have considered that decision with the officers of my department, and I am informed that it is no longer in effect; that it has been eaten away by various exceptions and provisions, and that because the general effect of the decision has been reduced by those provisions and exceptions in various judgments of the interstate commerce commission it could not be made to apply with equity to Canada, because if any attempt were made to apply it here it might well result in a benefit to one region but a great disadvantage to another.
One hon. member suggested the appointment of a royal commission, and I think it was the hon. member for Calgary West who said that in his opinion some other body should undertake this investigation. I say to the house that if we were to appoint a royal commission or other body to investigate the inequalities of the freight rates structure in Canada this is what would happen. The royal commission or other body would come to the government and say, "We are ready to proceed with the case. Give us the technical assistance; give us the experts." We would have to reply, "We know of only two groups of people in this country who are able to give you the technical evidence and assistance you require, and those two groups are to be found in the board of transport commissioners." Those groups are, first, the bureau of economics of the board of transport commissioners, and second, the traffic experts of that board, the one composed of a personnel of forty and the other of a personnel of twenty. That being the case what would be the use of asking four, five or six men, not nearly as conversant with this question as are the members of the board of transport commissioners, and who to my mind would not have the same knowledge of the circumstances as the board, to carry out such an investigation? I say to the house

Freight Rates
therefore that the members of the board, four of whom are from provinces other than Ontario and Quebec, are better qualified and equipped to deal with this question than would be the members of a specialized board or commission of some kind or other.
I return to the point made at the outset, that in 1903 parliament vested in the board the duty and responsibility of fixing rates for this country. To take that responsibility away from the board set up at that time I do not think would be a step in the right direction.
In his contribution to the debate the hon. member for Vancouver East (Mr. Maclnnis) said at page 2656 of Hansard:
As I understand the question in British Columbia, it is not that we object 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.
And a little later on:
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.
Is that not exactly what we are doing? Is that not exactly the decision of the government? It has declined to stay the order, for the reasons mentioned; and it has ordered a thorough and complete investigation into the rate structure by the only body competent and efficient to deal with it immediately and with dispatch.
It has been said that this board has not the powers to deal with the matter of the investigation ordered by the government. I say to the house it has. There are contained in the various sections of the Railway Act all the powers required by the board of transport commissioners to make a thorough and complete investigation of the freight rate structure. In fact, in conversation with the chairman recently, I was informed by him that he was of the opinion-and so did his brother commissioners-that there was nothing in the Railway Act which hampered them in any way in dealing with the inequalities or the so-called discrimination which may exist in this country. What use would there be in further defining the powers of the board, in further instructing or directing the board as to what they should do in the investigation, if they themselves are of the opinion that they possess all the power that is required to remove these inequalities?
The same position obtains so far as the maritime provinces are concerned. That is why I submit it is impossible to make a decision over night-in a week, a month, or two months
-in a case of such importance; because if the board were to move to British Columbia and dispose of one matter there without weighing the position in the maritimes, I submit with deference to the house that the board could not then render a decision which would seek to equalize the freight rates from one end of the country to the other.
One must keep in mind the fact that there are two statutory rights having to do with freight rates. The first is the Crowsnest Pass agreement, which this investigation will not touch, and those will remain as they are. The other is the 20 per cent subsidy under the Maritime Freight Rates Act, in the territory east of Levis, which also will remain as it is, by virtue of this investigation.


Arthur Leroy Smith: They are statutory rates.


Lionel Chevrier: As the hon. member says, they are statutory rates.


Arthur Leroy Smith: Parliament alone can deal with them.


Lionel Chevrier: And they cannot be interfered with without an amendment to these statutes. But what I wanted to make quite clear was that there would be no misunderstanding with reference to the investigation.
I believe I have almost completed what I had intended to say. It has been suggested to me that perhaps I have omitted one pertinent feature in the discussion, and that is the application made by the brotherhoods for a wage increase. That is where my friend, the leader of the C.C.F. party, has placed himself in a most anomalous position.


Major James William Coldwell: Not at all.


Lionel Chevrier: On the one hand he seeks to protect or to defend the farmers of the prairie provinces from an increase, by asking the government to refuse to allow the increase to go into effect. On the other hand, what is his position with respect to the members of the railway brotherhoods? What is the position of the railway employees? I deal now only with the increases granted in the year 1947.


Major James William Coldwell: Has the minister read the reference from the conciliation board? The railway brotherhoods recognize that this has nothing to do with it, and the C.P.R. says it requires all the revenue for purposes other than wages.


Lionel Chevrier: I say to the hon. member that because of his attitude he has placed himself in a disastrous position.


Major James William Coldwell: Oh, nonsense.
Freight Rates


Lionel Chevrier: I say that, fully conscious of the fact that you cannot say to one section of the country:	You are not to have an
increase, and to another section: You must get the benefit of the judgment.


Mr. COLD  WELL@: We want both to have justice.


Lionel Chevrier: I have realized that since this debate started, because no one has been flooded with more telegrams than I have from members of the province of Saskatchewan. And this indicates to me that there is some attempt to make a political issue out of this question.


Major James William Coldwell: Is that what the minister is attempting to do now?


Some hon. MEMBERS:: Sit down.


Major James William Coldwell: I am asking, is that what the minister is attempting to do now?


Lionel Chevrier: I told the hon. member when I rose in this debate that I wanted to be frank and honest about the position, and I did not intend to make a political speech.


Major James William Coldwell: Oh, oh.


Lionel Chevrier: So far I have not made a political speech.


Major James William Coldwell: You are making it now.


Lionel Chevrier: All right; my hon. friend has prompted me by his interruptions into stating that if that is not the case, why is it that all these telegrams come from one province and do not come from another?


Major James William Coldwell: I cannot tell you that.


Lionel Chevrier: Well, if my hon. friend cannot tell me, surely I am entitled to say to the house why I think they come from that province.


Major James William Coldwell: Our people are wide awake. Where is Tucker?


An hon. MEMBER:: What a broken
political arm!


Major James William Coldwell: That is Mr. Tucker.


James Horace King: Order.


Mr. ROSS (Souris):: Succour for Tucker.
Mr, COLDWELL: Tuckered out.


Lionel Chevrier: There have been said in this debate many things which might well have been left unsaid.


Some hon. MEMBERS:: Hear, hear.


Lionel Chevrier: I am referring in that statement to the talk of secession,


Major James William Coldwell: You have not heard us say that.


Lionel Chevrier: I have not said so.


Major James William Coldwell: Don't point at us, then.


Lionel Chevrier: There has been much said about secession.


Major James William Coldwell: Not by us.


Lionel Chevrier: I make this statement now: I grant immediately that there is no question which can divide the country any more easily than this one can. There was a time when we in this country were divided by racial and religious issues. Fortunately members of parliament have cast that to one side and have placed reason far above passion and emotion. If this particular question is not dealt with in that light, unquestionably it can divide our country. Any hon. member who attempts to make a political issue out of this question is to my mind doing a disservice, not only to himself but to his country.
This is a motion to go into supply, and my hon. friend has decided to move an amendment to the motion in order to expound a grievance, something which he has a perfect right to do. But I submit that before that grievance was expounded the government had made the grievance disappear by ordering a thorough and complete investigation into the railway freight structure by the only board competent and efficient to deal with the question. The government has moved to have the situation righted by this investigation.
The only consistent thing to do is to adopt the position that that board is the proper body to fix rates, that that board is the proper body to eliminate so-called discriminations and inequalities. The only logical course the government could adopt in the light of all the circumstances was to take the step which it did take. For these and other reasons which I have mentioned during the course of my remarks I submit with deference that the house should vote confidence in the government.


John Bracken: Mr. Speaker, a few days ago the board of transport commissioners made a report. It recommended a horizontal increase in the freight rates of this country of 21 per cent. The government then took steps to see that that recommendation was put into effect.
On Monday, April 5, a motion was moved in this house for leave to adjourn in order to discuss a -matter of urgent public importance, namely, this question of freight rates. The discussion continued until the hour of adjournment.

Freight Rates
On Wednesday, two days later, following criticisms which had been made, the government announced a change in policy and said that there would be a further investigation into the inequalities and discriminations in the freight rates of this country. On the same day on the motion to go into supply the matter was further discussed, until adjournment at six o'clock. In that discussion the hon. member for Rosetown-Biggar (Mr. Coldwell) moved the amendment which is now before the house. Today we are considering the matter again.
We have just now heard from the Minister of Transport (Mr. Chevrier) who dealt with three phases of this question, the responsibilities of the governor in council in respect to freight rates, the decision of the board recommending the increase, and the decision of the government to have the board further explore freight rates. I should like to make a brief comment with respect to each of these points.
First, as to the decision of the board. The minister said that application had been made by the railways for an increase in rates to cover increased costs and expenses, and that it was purely a matter of revenue that was referred to the board for consideration. He said that there was no application for the consideration of inequalities and discrimination. My criticism, our criticism and the country's criticism is that the government did not appreciate and deal with these inequalities and discriminations before this and did not take steps to see that they were removed.
In connection with the responsibilities of the governor in council with respect to freight rates, the minister went back for more than forty years, to the time prior to the appointment of an independent board dealing with these matters. He pointed out that now we have an independent board; that it is not now the responsibility of the governor in council to determine detailed matters of rate increases, that theirs is more a judicial capacity and that it is the responsibility of this so-called technical and certainly independent board to deal with details of freight increases.
The minister said that the government had never interfered with the board's responsibilities in that respect. I am speaking now from memory, but I have a recollection that more than twenty years ago

if I remember *correctly, in 1925-we did have a serious fight with the government of the day in connection with interference with the statutory rates known as the Crowsnest Pass rates. I heard the minister refer to this only a few moments ago, and I have not all the details in mind; but my impression is that there was interference by the government at that time with respect to statutory rates and that it was a long-drawn-out fight which resulted finally in the rates being retained for the interests of the people of western Canada.


Mr. GARDINER:: 1920, not 1925.


John Bracken: I am speaking of the action of this government in 1925. I was not premier of Manitoba in 1920, and I was premier of that province at the time we had this fight over the Crowsnest Pass rates. My recollection is that it was 1925.


James Garfield Gardiner: They put them back at that time to where they were before.


John Bracken: In connection with the responsibilities of the governor in council the minister said that they would now consider a petition of the provinces for a stay of the application of this rate if they asked it. I gathered that that was what he said.


Lionel Chevrier: May I say just a word? What I did say was-


Mr. DIEFENBAKER:: You would not allow anyone to interrupt you.


Lionel Chevrier: If the house does not want to know-


John George Diefenbaker: You did not allow it.


Mr. DEPUTY SPEAKER:: With the permission of the leader of the opposition.


Lionel Chevrier: I do not like to say "correct" the hon. gentleman, but I should like to say to him that that is not what I stated. What I stated was that we had considered the application to stay the order, and that we would consider an application for appeal when it would come to us. We have not received it, but we have received notice of intention.


John Bracken: I am glad the minister got up to speak. What he says now is that they did consider the application. What I want to point out is that they turned it down.


Stanley Howard Knowles: By order in council.


John Bracken: Yes, by order in council. The minister is now apologizing and saying: Well, we made a mistake; now that we know better we will consider an appeal if they make it.
I have here a copy of the order in council the government passed. It might as well be read now. I quote:



P.C. 1486

[Stage Direction]
Certified to be a true copy of a minute of a meeting of the committee of the privy council, approved by His Excellency the Governor General on the 7th April, 1948.
Freight Rates
[Stage Direction]
April 7-That was the very day the amendment was moved in this house. The order in council goes on:
The committee of the privy council have had before them the petition of the transportation commission of the maritime board of trade (representing, inter alia, the governments of the provinces of Nova Scotia, New Brunswick and Prince Edward Island), and representations on behalf of the governments of the provinces of Manitoba, Saskatchewan, Alberta and British Columbia to vary order No. 70425 of the board of transport commissioners for Canada of March 30, 1948, by providing that tariff schedules published and filed under the provisions of the said order be not effective until at least thirty days from the date of the said order.
The committee of the privy council, having given due consideration to the said petitions and representations, are unable to advise that the said order of the board of transport commissioners for Canada be varied in the sense requested.
(Signed) A. D. P. Heeney,
Clerk of the privy council.
My point is that application was made by seven provinces, that the government considered it and turned it down, and only now, after long discussions in the house, does the government come forward and say that if they receive a petition for a further appeal they will give consideration to it.
I want to deal with one other point in this connection. When the minister was speaking of the decision to have a full investigation made of the freight rate structure, he made the statement that if the amendment now before the house moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) were passed, it would result in denying to the railways any further revenue by way of increased freight rates, and he implied that if that were the fact there could be no other result than that the railways in Canada would have to amalgamate.
Major James William Coldwell: I did not imply that.


John Bracken: I did not say the hon. member did; I said that was the minister's implication. I wish to say here that, so far as this party is concerned, we are opposted to amalgamation and opposed to any conditions which would bring about amalgamation. We feel that this country is better served by having one privately owned railway and one publicly owned railway. We think one will check the other. We think that the privately owned railway will check any tendency toward extravagance on the part of the publicly owned1 railway, and we think that the publicly owned railway will tend to check arbitrary decisions and any danger of exploitation by way of rates or otherwise by the privately

owned railway. We think we are better served the way we are-by two railways rather than by a railway monopoly.
In what I shall have to say now, I wish to look at this question from as broad a point of view as possible. Here are two great railway institutions serving this country. They are very important to our economy and emphasize the necessity of dealing with measures such as this as wisely as it is possible for human beings to deal with them. Canada is a land of vast distances, with diversified resources which are widely scattered, and with a sparse population in relation to its wide extent of territory. The combination of these circumstances has created a dependence upon communications, especially railway communications, unequalled in any other country in the world. With our small population scattered over a vast territory the railways are a basic element in the economic life and development of a nation.
Each of the economic regions of Canada is rich in its own particular type of resources, but is largely dependent on the other regions for the rest of the needs of life, and for markets. Practically everything that we eat and use and produce must be transported, generally over a vast distance. Matters affecting transportation have therefore a direct and enormous impact on the daily life of every Canadian. It is not surprising therefore that people of so many parts of Canada are gravely concerned in any measure affecting freight rates. Freight rates are an important factor in our standards of living and in determining our competitive power in domestic and world markets. The very existence of our whole industry and the lives of millions of Canadians are profound!}' affected by any sharp increase in freight rates.
The railways themselves are similarly affected by these vast distances, and they have their cost of living problem the same as the rest of us. There are three great areas which are relatively deserts to the railways so far as revenue-producing traffic is concerned, producing only a relatively small amount of business. One of those areas is the long circuitous route from the maritime seaboard in the east to the cities in the St. Lawrence valley. Another is the long stretch over the Canadian shield north of the great lakes, and the third is the great height and great expanse of the Rocky mountains. These areas must be traversed, and it costs as much-or more-to operate the railways through them as it does in populous regions where substantial revenues are derived.
There is also the question of the numbers to be served by the railways. In Canada there

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are barely 200 persons to every mile of railway tract, as against more than 400 persons per mile in the United States and 2,000 persons per mile in the United Kingdom.
Further, the cost of railway operation has been steadily rising. The deadly work of inflation has not spared our railways. When we promote or cause to be developed a state of affairs in which the cost of living rises by fifty' per cent, it is not conceivable that these great industrial organizations can carry on their operations without increasing their revenues at least to some extent.
In 1940 the combined gross revenues of the two principal railway companies, as the minister stated, was some $384 million, from which a net revenue of $80-5 million was obtained. But in 1947, seven years later, a gross revenue of $693 million, produced only $71 million in net revenue before fixed charges, income tax and dividends. In other words an 81 per cent increase in gross revenues resulted in 1947 in a 12 per cent decline in net income. Ultimately the Canadian National Railways showed a loss of $15-8 million, and the Canadian Pacific Railway had an income of some $318 million and an expenditure of $295 million. But it is reported that even this road would have had a loss of $4-1 million had it not been for "other income" not accruing from railway operation.
I am not quite certain of all the details but I think what I shall have to say as to railway wages is substantially correct. There was a cost of living bonus granted to employees early in the war. In any event, early in 1944 this was absorbed into a wage increase. This added charge amounted to an increase of $36,000,000 a year to the railway companies. In 1944 also there was a wage increase of six cents an hour to substantially all employees, and it was dated back to September, 1943. That increase resulted in a $24,000,000 a year wage bill to the railways. On June 1, 1946, a little less than two years ago, another increase of ten cents an hour was granted. This created a further charge of $37,000,000 a year on the expenditures of the two railroads. At the present rate of employment, therefore, the two railways are paying about $97,000,000 a year more than the same number of workers would have received before the war. Roughly it would appear that they have received on an average about twenty-five cents an hour increase. But the cost of living, as compared with pre-war days, has gone up 50 per cent, while the average wages of railway employees it would appear have gone up only some 33 per cent. That last figure is just an approximation; some say it is 40 per cent. Under
such conditions of increased cost it is beyond question that the railways require an adjustment of their financial position if they are to stay in business and to provide Canada with the efficient service whioh is essential on economic, political and strategic grounds.
What has been done in the circumstances, and what will be the consequences of present actions? The board of transport commissioners have ordered a 21 per cent general increase in freight rates. It is estimated that this will give the Canadian Pacific Railway an increase of $30,000,000 in revenue and the Canadian National about $40,000,000. One of the consequences is, as the evidence strongly suggests, that even this will not give them sufficient revenues to meet their needs. The railways have stated that nothing less than a 30 per cent increase will meet their needs. That is their position. We do not need to accept that statement without examination. Anyway, that is their statement. Within the board itself there was a doubt, reflected in Commissioner Wardrope's recommendation of a 24 per cent increase. Finally, Mr. A. R. Mosher, president of the Canadian Brotherhood of Railway Employees, has stated that the 21 per cent rate increase is not adequate to provide for necessary wage increases.
We may say that the views of the railways on the one hand and the views of Mr. Mosher on the other are one-sided or possibly prejudiced views; but I mention them for what they are worth. In any event it must be remembered that also concerned in this issue are 180,000 railway employees. These working men and women have had no adjustment of wage rates since June of 1946. Yet since that date the cost of living index has risen 27-2 points over the 1938-39 average, and the food index has gone up 43-8 points during the period when they have had no increase. Clearly this aspect of the matter deserves immediate and most careful consideration.
Finally it is entirely possible that the increase in rates will result in a falling off of traffic. Even the railway officials themselves do not like having to do this, and yet under these conditions, in order to pay for the goods they buy and pay the wages they have to meet, an increase has had to be asked for. But in asking for it they recognize that the higher the rates are the more it tends to discourage traffic.
Finally, it is entirely possible that the increase in rates, as I have said, will result in falling off of traffic, thus reducing actual revenue below the 21 per cent increase which is assumed. If, then, the financial needs of the
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railways and their employees are not met, what is the effect on the rest of the country? If it does not fully meet that need, we might look at what is the effect elsewhere. ,
First, a general flat increase on all rates serves to intensify the discriminations that now exist and to increase the inequalities which exist in our freight rate structure. It is as simple as this, Mr. Speaker. If over there in one area there is a high rate and over here in another area there is a lower rate, and J'ou put 21 per cent on that high rate and 21 per cent on the low rate, you get a bigger increase over there than over here, and you intensify and increase the discrimination rather than lessen it.
What are some of the discriminations? One might mention a few that have been brought prominently, before us. There is the mountain differential, which bears so heavily upon industry and the consumers of British Columbia, a western province, separated from the rest of Canada by the Rocky mountains. One of our railroads has to go up over a hill a mile high to carry all its freight from one section of the nation to the other. The other railroad has to go up two-thirds of that distance. It is 'because of that condition that high rates result.
It is said by some that the Canadian Pacific Railway was forced to take the southern route for political reasons. I do not mean "political" in the narrow sense; I mean it in the large national sense. It is said that they planned to go through the low passes of the north, the Yellowhead region, where the Canadian National Railway now goes through, but that it was government policy to see that the railway came down further south and went through the Kicking Horse pass west of Calgary. It is said that that was done in order to keep United States railway interests from getting into southern Canada and eventually having larger sections of what is now Canada tacked on to the United States. If that was so, and to the extent that it was a political decision, then the nation should bear that cost and it should not be left as a burden upon one or two of the nine provinces of Canada.
Among these inequalities, as I have said the mountain differential bears heavily upon the industry and the consumers of British Columbia. Then there is the heavy burden in the Alberta rates-Alberta, a long way from eastern Canada and separated from the west by the Rocky mountains. Someone has said that Alberta is at the apex of the rate structure in Canada. These rates bear more heavily upon that province than perhaps any other province of the dominion. The Crowsnest agreement

sought in part to overcome that handicap. This was an agreement entered into many years ago, an agreement by which the railway accepted some $3,000,000 from the government of Canada in connection with the construction of a railway into the Crowsnest pass. In return it undertook, wisely or unwisely, certainly unwisely from the point of view of the railroad, but wisely from the point of view of the people of western Canada, to give low through freight rates on the grain produced in that area. That is the agreement I referred to a little while -ago. In 1925 we had to fight for its preservation.
Another of the inequalities was in connection with the maritime freight rate concessions. Ever since confederation the maritimes 'have been fighting because of the increased burden of freight rates on their economic life. The maritimes were once the most prosperous parts of Canada, but when the nation became centralized after confederation, industries started leaving the extremes of Canada to come to the centre. Then the burden of freight rates became unduly heavy on the maritimes, and as long as I can remember they have been fighting to get a better deal and they have been given it to a degree. Now in the maritimes they have a 20 per cent concession in freight rates. That is one of the inequalities, and in the effort to correct other inequalities we must take steps to see that this concession is not lost to the maritimes.
Secondly, in addition to the specific hardships I have just mentioned, the substantial increase in freight rates will have several important effects on the nation as a whole. I have stated quite frankly that under conditions where the cost of living goes up 50 per cent, and the cost of goods goes up 50 per cent, no industrial concern can get along without increased revenues. If the plans proposed do not succeed in meeting the needs, what then is the general effect on the nation? How much better off would we be if we could avoid it?
First, these increased rates will increase the cost of living. It is estimated that even butter, which we heard so much about, will be a cent a pound more, meat two cents more, eggs one or two cents a dozen more, sugar one cent per pound more, coal twenty-five cents a ton more. The last is specifically provided in the recommendations approved by the government, and prices in the maritimes, the prairies and British Columbia will be higher.
Second, it will increase the cost of production. The figures I have here are taken from one of the financial papers and I do not vouch for them. Steel will go up from $1.47 to $1.75,

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fuel by twenty-five cents a ton, and building and other materials in varying amounts.
Third, it will decrease our competitive power in world markets, because the higher our costs rise as a result of railway freight rates the less will be our competitive power in world markets. For example, aluminum will possibly be a cent a pound more and newsprint $1.40 a ton more.
Fourth, it will increase the exchange problem by diverting purchases of the maritimes and British Columbia from Canadian suppliers, who must ship by rail, to foreign producers, who can deliver by sea. Canadian-produced machinery and equipment will be a little further out of reach for the men of the prairies.
Fifth, it will cause the further emigration of industries from the maritimes, thus de-industrializing the region which it is most important should be industrialized further in Canada.
Sixth, it will cause the further departure of farmers from the prairies, thus tending further to depopulate the region which most needs a heavy increase in population.
One of the distressing features of the development of our Canadian economy, particularly in recent years, has been the tendency of the west not to grow in population, the tendency of the central parts of the prairies to become less in population. Some of the figures I have show that it is less in some parts than it was ten years ago; and that condition is being perpetuated by the policies of the government- policies affecting livestock, which are driving people out of livestock production in the west, and policies of the government with respect to the price of wheat in preventing its being sold to advantage.
The policy of the government with respect to freight rates results in these being increased where they are already too high. As evidence of all this, the average farm in western Canada is reported now to be more than 400 acres, nearly twice as much as it was when I first went there nearly forty years ago. With the way things are going, it will not be long until the average farm in the prairies is twice 400 acres. I say that because it is almost impossible to get farm labour; often those who can be got are not too well trained for the work, and the farmer has to compete with the cost of labour in urban industry. With these conditions facing the farmers, they find that it is more economical, and that they can make more money, by using large and heavy machinery, thus needing fewer people to farm the land, while at the same time farming more land. That has been the tendency over the last forty years, and under present conditions it will continue.
These ill consequences are not the fault of the board of transport commissioners. By their terms of reference they are required to consider only the position of the carrier petitioning for an increase in rates. These great economic, social and political issues were not their responsibilities. The responsibility for the issues affecting the welfare of the nation falls upon the government, and upon the government alone.
I am referring now to the responsibility of the government in dealing with these major issues, and not with the detailed issue of determining whether a rate should go up five cents here or down three cents there. It is proper that that responsibility should be left with the technical board, and that a political institution such as this should not be charged with the responsibility of fixing these rates. If we ever get back to that state of affairs it will be a serious day for Canada. But when I say that, I say equally that the government cannot avoid its responsibility for meeting these major questions that are before us.
I repeat, the responsibility for the issues affecting the welfare of the nation falls upon the government and the government alone. The action which has been taken is not an adequate solution of the problem. It tends to accomplish one thing at huge economic costs and creates still further inequalities in the process.
The government has denied without a hearing the pleas of seven provinces. I read its own order in council denying those pleas. The government has allowed no stay of these increased rates to give time for a removal of discriminations. The government has allowed a situation to develop in which it is made to appear that the railways are pitted against the people. The only suggestion the government has to offer is a long investigation. A few days ago it was suggested that it would be a year or two; today the minister suggested that it might be less. He has not been very specific about it, but it is a matter of a long delay during which time anything can happen to the railways, their employees and the public.
In this connection I wish to take a moment or two to deal with various discriminations, and I shall do so briefly. The discriminations and inequities that are claimed are many and varied. For example, the maritimes claim that reductions elsewhere, made by the railways to meet competition, have impaired-in fact, some of them say they have nullified-their 20 per cent differential granted by the Maritime Freight
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Rates Act. Ontario claims, at least some people in Ontario claim, that their rates are unduly high in comparison, for example, with western grain rates. I am referring to those low through-rates achieved many long years ago by a bonus to one of the railways.
Alberta claims that, being at the apex of the transcontinental freight structure, the people there are victimized more than others in consequence of long-distance hauls. Alberta claims that through rates across Canada to Vancouver, put into operation to meet water competition via the Panama canal, enable goods in certain cases to be shipped by rail to Vancouver and back into Alberta more cheaply than they can be shipped direct to Alberta. That, of course, is a simple statement of fact. That is what the construction of the Panama canal did to the economy of Canada. It gave to both coasts economic advantages and a disadvantage to inland points..
British Columbia complains of the mountain differential. This higher rate simply means that the people of British Columbia bear an extra charge for the mountain haul. British Columbia also claims that freight rates on goods brought from eastern Canada, under compulsion of the tariff, are higher than freight rates on bought goods shipped from British Columbia to markets in eastern Canada, although there is no corresponding difference in haulage costs.
The Crowsnest agreement and the Maritime Freight Rates Act should be protected in any reference to the commission for further consideration of freight rates. The whole matter, however, is most complicated and deserves an impartial approach, one having regard both to local needs and to the national welfare. So I say the responsibility rests upon the government to deal with these major principles in connection with freight rates, but the detailed decisions with respect to smaller matters affecting rates should be left to the impartial and technical body we call the board of transport commissioners and its advisers.
The government's policies-its livestock policjq its labour policy, its marketing policy with respect to wheat, the decision to place oats and barley under a board which, by government decision, is not to get the best price it can for the farmers but rather to depress prices-all these tend still further to depopulate the prairies. I say in all sincerity that this vast agricultural empire, eight or nine hundred miles wide, is likely under present policies to see either a very slow increase or an actual decrease in population

in large sections. Such policies as these will tend still further to strangle industrial development in the -maritimes and will hold back development in Alberta and British Columbia.
The 20 per cent freight rate concession to the maritimes should be preserved. The Crowsnest Pass rate should be preserved. In my judgment the mountain differential should be removed. The apex of freight rates is reached in Alberta. In this and related regions the rates should be examined with a view to possible adjustments. The board of transport commissioners is the proper body to deal with these matters; but the general principles should be settled by the government with the approval of parliament. Political bodies should not be asked to determine such details. That is why a while ago we objected to the appointment of a political body, in the form of the wheat board, to determine the prices farmers will receive in this country. We do not want political prices, and we do not want political rates. As I have said, the government should tell the commission to protect the rate concessions already won by the maritimes; to protect the concessions bought and paid for under the Crowsnest Pass agreement; to reconsider the situation where the apex of freight rates bears heavily upon certain communities in Canada, and to remove the mountain differential which so hampers the development of British Columbia and Alberta.
In the meantime the government should do one other thing. It should get off the backs of the people. Here we are with two great railway systems in Canada, one asking for $30,000,000 and the other for $40,000,000 in order to meet costs which are ever-increasing, due largely to government policies. They are asking for $70,000,000, while this year this government is collecting as much revenue as it collected in the highest year of taxation in the middle of the war. We do not know what amount was collected last year; the Minister of Finance (Mr. Abbott) knows and he will tell us when the budget comes down. It will probably show that our revenue was in the neighbourhood of $3,000 million, and that our surplus is seven or eight or nine hundred million dollars, or perhaps more. Here we have this government taking seven or eight or nine hundred million dollars from the people more than it is spending in services; then the railways come along and the government says, If you want more money go and put higher rates on the people and get your $70,000,000.
My proposal is that the government should get off the backs of the people and to a large

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extent lessen the costs of running the railways. In this way the government could make it possible for the railways to meet their obligations without imposing such high freight rates. I say the government should reduce taxation, and in this way lessen to a great extent the impact of the freight rate burden upon the people of this country. This could have been done if the government had made, or if it will immediately make, a major reduction, particularly in the indirect taxation, which multiplies and pyramids upon itself, taking from the people of this country quite unnecessarily from fifteen per cent to thirty per cent or more in increased prices for the things they buy.
A hasty examination of such evidence as is available suggests that some $250 million to $300 million of the annual expenditure of the railways contains a substantial element of indirect taxation; and it also appears that the average rate of the indirect tax is not less than fifteen per cent and probably is much more. The lowest sum which might be saved to the railways by the removal or substantial reduction of these taxes would be not less than $30,000,000, and probably it would be much more. By removing some of these indirect taxes, if not all, or by at least lessening them, it would be possible by government action to reduce the need for a freight rate increase by probably one-half. Such a measure would be fully justified. It would not be a special privilege for a particular industry but the lifting of an intolerable burden from the whole nation, a burden which falls with the greatest severity upon those sections of the people least able to bear it. Canada is a nation which has been created out of a group of isolated communities linked together by steel rails. But it is not enough to "create" a nation; that nation also must be preserved and maintained, and we must ensure that the chief physical factor in our unity continues to serve us well.
Having regard to the views we hold in this matter, Mr. Speaker, I am going to move an amendment to the amendment. With much of what is said in the amendment I am in agreement, but it leaves open the question as to whether the requirements of the railways, in respect even of wages, will be met. I am not now criticizing the amendment, except on that point, which is not clear. This is the amendment I move, seconded by the hon. member for Vancouver South (Mr. Green):
That all the words after "this house" in the fourth line of the amendment be deleted, and that the following be substituted instead thereof:
"regrets the government's failure to secure the removal of inequalities and discriminations in the Canadian railway freight rates structure
before the imposition of a horizontal increase of twenty-one per cent-an increase which is bound to intensify the aforesaid inequalities and discriminations; and
"Further regrets that the government has refused the reasonable request of seven provinces that the imposition of increased freight rates recently authorized by the board of transport commissioners be delayed for thirty days until they could be heard."


Mr. W. ROSS THATCHER (Moose Jaw):: Mr. Speaker, first of all I should like to say that I was pleased this afternoon to note that the Minister of Transport (Mr. Chevrier) was much more conciliatory and much more humble than he was last Wednesday. Perhaps the Liberal caucus this morning had something to do with that.
On the other hand I wish to say-and I believe I speak for many westerners-that the minister's remarks this afternoon were particularly unsatisfactory, so far as we are concerned. I think he tried to befog the issues as best he could.
A little more than a week ago, as hon. members will recollect, the board of transport commissioners allowed this increase which was, with a few exceptions, a flat increase of 21 per cent across the board. Since that time, as the minister pointed out this afternoon, protests have been pouring in to the government. Some of them have been pretty violent protests, I think, particularly, from the outlying sections of this country. Those protests have come from producer organizations. They have come from farm organizations; they have come from city councils, and they have come from private citizens. I believe almost without exception, those protests pointed out-
Mr. MITCHELL; Did any come from labour organizations?


Wilbert Ross Thatcher: Possibly so. I shall come to that in a minute. Those protests pointed out that this decision, if it were approved, would increase a discrimination which was already unfair, and would perpetuate injustices which were already severe.
The announcement of the board of transport commissioners a few days ago aroused such resentment in the west, and in the maritime provinces, that those provinces protested to the federal government. They sent in an appeal to the federal cabinet, which was the only place where they could take such an appeal. All the provincial governments asked was that the increase be held up thirty days, until the seven premiers could come to Ottawa and discuss the matter themselves, with the government.
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Surely that was a reasonable request. What was the minister's reply last Wednesday? I quote what he said, as reported at page 2717 of Hansard:
Without prejudice to any appeal, the government has decided that it should not interfere with the effective date of the board's order.
Was there ever a more abrupt; was there ever a more arbitrary; was there ever a more unreasonable reply, given to a legitimate plea? I think that, regardless of the merits or demerits of the case about which we are arguing today, the government has been guilty of shocking rudeness to the premiers of seven provinces. Knowing their wishes, and without even giving them the courtesy of a hearing, the government allowed these rate increases to be put into effect.
The minister uses the expression, "without prejudice to any appeal". I wonder if be is trying bo kid someone. It is quite true that the premiers can still come to Ottawa; it is quite true they can still have their conference ; it is quite true they can talk over the matter if they wish to. But the fact of the matter is that their appeal has been prejudged. The minister has already rendered his decision. He has allowed the rates to go up.
I believe every member in the house will concede that the conference, even if held, has been rendered futile in advance.
I say the minister's action was similar to that of a judge of an appeal court who renders a decision before he has heard the evidence. We hear a good deal today about the need for better dominion-qrrovinoial relations. I think the need for better relations in that field certainly exists. But surely the action of the Minister of Transport last Wednesday, when he rode rough-shod over the express wishes of those seven premiers, marked a new low in dominion-provincial relations. The people of those seven provinces are looking to this parliament today to rectify that blunder; and the failure of the House to Commons to do so could in my opinion have far-reaching consequences.
Why are these freight rates causing so much resentment in the maritimes; why are they causing so much resentment in the west? Is it because westerners feel that the railroads should not obtain additional revenue? Perhaps that is the answer in part.
It does seem to us that it is somewhat strange for the Canadian Pacific to ask such a large rate increase just after it has shown in its annual report a surplus of $47,000,000, the second largest in its history. Most of us are a little dubious about the contention of the two railroads that they need an additional $70,000,000 in order to balance their books.

Yet most of us I think agree basically with the railroads when they say that the cost of railroading has gone up. We know that wages have gone up. We know that materials have gone up. We know that other costs have gone up. We know that at the same time the rates have stayed pretty well stationary.
In railroading, as in other business, if costs increase, then sooner or later prices have to go up. I believe it is in the national interest to have a railroad system which is efficient, and a railroad system which is financially healthy. And for that reason, while I query the amount, I do not argue basically with the contention of the railroads that they must have some extra revenue.
On the other hand I believe fundamentally that the method they are suggesting to obtain this additional revenue is discriminatory. I believe that it is unfair, and that it is contrary to the interest of certain sections of this country.
It is conceded by the railroads-I believe it is conceded by all hon. members-that over the past few decades, rates in the maritime provinces and in the west have been higher than those in central Canada. Originally the prairie scale of rates was 40 per cent higher than the eastern scale, and the British Columbia rates, in turn, were 100 per cent higher than those of the prairies. However, as a result of unceasing protests for forty years the prairie scale stands today about fifteen per cent higher than the east, and the British Columbia rate is about sixteen per cent above that of the prairies.
The judgment brought down last week ignores the fact that this heavy and unjust discrimination is already there. The recent decision of the cabinet means that for the first time in forty years, the west and the maritimes have lost ground in trying to obtain equalization of freight rates. So far as the prairies are concerned, the fifteen per cent discrimination now becomes eighteen per cent. That is our basic grievance. We can see no reason why we in the prairies, or in British Columbia, or in the maritimes, should pay rates which are higher than comparable rates in Ontario or Quebec.
A moment ago the Minister of Labour (Mr. Mitchell) asked about the attitude of labour unions in that connection. I say there is no great difference of opinion on this issue among C.C.F. members, whether they are farmers, or members of labour unions. I should like to read a statement issued only a few moments ago by Mr. A. R. Mosher, president of the

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Canadian Congress of Labour and the Canadian Brotherhood of Railway Employees and other Transport Workers. The release states:
Asked to comment on the alleged difference of opinion between the C.C.F. members of parliament and himself, as representing a large group of railway workers, regarding the twenty-one per cent increase in freight rates, Mr. Mosher said he felt that there had been a good deal of exaggeration in that respect. "It is true that I have supported the increase," he continued, "as being fully justified, in the light of present-day costs of operation, and, so far as I am aware, there has been no attempt by the C.C.F. to deny the need of the railways for increased revenue.
Mr. Coldwell, on behalf of the C.C.F. asked for delay in the application of the increased rate for the purpose of dealing with alleged discrimination, which it is claimed will seriously affect the western and the maritime provinces. I am opposed to delay in this respect, but I am in full support of an examination of the whole rate-structure, with a view to removing any discriminatory features that may exist, and I share Mr. Coldwell's view that every section of Canada and the Canadian people should be fairly and justly treated.
The fact, however, that there may be differences of opinion on specific issues does not affect the mutual confidence and respect which exists between the C.B.R.E. and the C.C.F., and I have no doubt that in each case such differences will be resolved in a satisfactory manner."


Mr. MITCHELL:: I should like to ask a question.


Some hon. MEMBERS:: Sit down.


Humphrey Mitchell: This is still a free country, I hope.


Major James William Coldwell: There are still rules of order.


Mr. HANSELL:: That is why he should be free to finish.


Humphrey Mitchell: My hon. friend stated clearly that Mr. Mosher was opposed to any delay in the increase in freight rates.


Major James William Coldwell: Quite right; that is an honest difference of opinion.


Wilbert Ross Thatcher: That is just what I read.
As I said a few moments ago, it seems to me that the chief issue in this debate is very clear cut. Is confederation to be an association of provinces equal in every respect, or is confederation to be an association of provinces where seven provinces will receive treatment less favourable economically than the other two? Is the transport board, where freight rates are concerned, to treat some provinces as first-class provinces and others as second-class? That is the question before us today.
As a Canadian who comes from a western province, I ask for precisely the same treatment on freight rates as is given to the Canadian who comes from Ontario or Quebec. My constituents ask for no more than equality, but they will willingly accept no less.
Some hon. members may feel that there are certain reasons why the west should pay freight rates which are higher than those paid in central Canada, but I can assure them that there are many reasons for the opposite being true.
The prairie provinces have almost everything which should make for low rates. We have flat country with very few rivers. We have almost no natural obstacles. I think these features should make for low operating costs. Certainly the capital investment of the railroads has been kept much lower than it is in central Canada. The hauls on the prairie are long, and the density of traffic is there. The prairies have bulk products which should make for lower operating costs. Despite the advantages which we have, we are at an overwhelming disadvantage through not having competition similar to that which is present in the east. In the east there is competition from the United States railroads, from the great lakes, and from trucks. All these factors have forced the railroads to keep their rates at a reasonable level. Speaking in Saint John, New Brunswick, on November 25, 1946, Mr. D. C. Coleman, then president of the Canadian Pacific, had this to say about the proposed increase:
Railway rates should be based on what the traffic can afford to bear.
Obviously that is the way in which the railroads have fixed their rates during past years. The west has had to pay higher rates simply because it was felt that it could afford to pay them. The railroads have taken advantage of the situation to make the west "pay through the nose" in many cases. If hon. members think I am exaggerating I would refer them to exhibit 131 filed by the Canadian Pacific during the recent hearing.
In the past ten years 1936-45 inclusive, 65-8 per cent of the operating profits of the Canadian Pacific were made in western Canada. In the twenty years ended in 1945, the Canadian Pacific earned $245 million in the east as compared with $525 million in the west. In my opinion the recent 21 per cent increase will not be fully enforced in central Canada because of the competition to which I referred a moment ago.
In the past, high freight rates have had a definitely harmful effect upon the economy of the west. In the first place, our standard
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of living has been adversely affected in direct proportion to the unfair differential. In the second place, higher freight rates have made it difficult for industry to develop in the west since industry must start out under a disadvantage as far as eastern competition is concerned because of those higher rates. It seems to me that if this is allowed to go through the discrimination will be increased. In other words, it is the firm belief of this group that, before this increase goes through, equalization across Canada should take place.


An hon. MEMBER:: Two years.


Wilbert Ross Thatcher: That is too long. The Minister of Transport on Wednesday last and again tnio afternoon made a feeble attempt to placate public opinion. He stated that the board of transport commissioners would be instructed to investigate these rate differentials in the near future. Let me tell the minister that I do not think he is-


Lionel Chevrier: The hon. member should state what the minister said before commenting on it. He is all wrong.


Wilbert Ross Thatcher: All right. The idea of charging the Canadian people an additional $70,000,000 and then ducking behind a new investigation, will be recognized by the people of Canada and by hon. members of this house for what it is. If after sitting for nearly two years, the transport commissioners do not know that there is discrimination in the railway rate structure of Canada, then I doubt if they ever will know it. What is the point in having them spend another two years on an investigation, as the hon. member for Lethbridge (Mr. Blaekmore) said the other day, simply to discover abuses which they know already exist?
I believe the last time we had a similar investigation was in 1925. At that time it took the board seven months to commence after they had been ordered to start, and then it took them eighteen months to finish their inquiry. I think the government is simply shelving the whole matter for a couple of years, during which time Canadians will be forced to pay higher rates.
Where were all the Liberals when this decision was made? When the Minister of Transport spoke in the house the other day backbenchers got up-I give them credit for this-and protested. I hope they will vote according to the way in which they spoke in the house the other day.


An hon. MEMBER:: They have had a caucus since.


Wilbert Ross Thatcher: I think the minister should have known when he made his announcement that the maritimes, the prairies and British Columbia could not take an increase like this one lying down.
Where were the cabinet ministers? Where was the Prime Minister (Mr. Mackenzie King)? I may be wrong, but it did not seem to me that the announcement made by the Minister of Transport had the Mackenzie King touch, the usual finesse. It seems to me that possibly the Prime Minister was in seclusion somewhere trying to get caught up with his work, during which time the cabinet made its decision without him. I do not know, but it seems to me that that is what happened.
British Columbia is one of the provinces most vitally affected by this decision. Where was the cabinet minister from British Columbia? British Columbia has not had a cabinet minister for about four months. I will wager that, had Senator Mackenzie been still in the cabinet, a lot more would have been said against the proposed increase. I think this decision has demonstrated more than any other single thing that the Liberal government should appoint a cabinet minister to represent British Columbia without further delay. If they are waiting for the Vancouver by-election they may have a long time to wait, because I do not think they will get one in that riding.
Where was the cabinet minister from Prince Edward Island, another province vitally affected. It is some years since that province has had a minister. Prince Edward Island had nothing to say about this decision which affects them to such an extent. I understand that the cabinet minister for Manitoba was unfortunately too ill to be present and Manitoba did not have cabinet representation when the decision was made.
What about the province of Saskatchewan? Where was the Minister of Agriculture (Mr. Gardiner)? If he was out in Saskatchewan I suppose we cannot blame him too much because, after all, there is an election coming up. However I think that when such a vital issue was being debated it would have been better for the people of Saskatchewan if the minister had been present. Where was our other representative from Saskatchewan, the parliamentary assistant to the Minister of Veterans Affairs (Mr. Tucker)? Well, he was out electioneering too, trying to ride a dead horse.


An hon. MEMBER:: What dead horse?


Wilbert Ross Thatcher: May I finish? What did the parliamentary assistant have to say? He

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made a statement in Saskatoon, as reported in an article which is headed, "Tucker thinks west will get fair deal on freight rates". The article goes on to report him as saying:
I think the west will get a fair deal out of the freight rate situation under proper representations.
Apparently we did not have proper representation in the cabinet. I doubt very much if the parliamentary assistant is happy about the way in which the freight rate situation has developed. I picked up the Ottawa Journal just before I rose to speak and I notice this headline:
Liberals united on freight rate crisis.
Are we to take from, this statement that the Minister of Agriculture and the parliamentary assistant believe that this decision is the best that Saskatchewan can get on freight rates?
In other words, four out of seven of the provinces affected by this discriminatory action were not represented in the cabinet when this matter came up.
We hear a great deal today about the need for national unity and that is all to the good, but I think we must realize in this house that national unity must be brought about on a basis of equality. The action of the government in permitting the freight rate increase cannot but cause discontent in the dominion, because it will impose on the citizens in the remote areas of Canada a charge which is greater than the charge imposed on people in Ontario and Quebec. Once again I do not argue basically with the railways when they say they need increased revenue, but I disagree strongly with the way in which they are proposing to obtain it; that is, by a flat increase instead of by equalization. As equal partners in this confederation we are asking for the same rates as Ontario and Quebec. Let all sections of Canada pay freight rates which are on a fair and equitable basis, and if the government must be defeated to make it see the wisdom of such a policy, then let it be defeated.
Mr. ROBERT H. WINTERS (Queens-Lunenburg): Mr. Speaker, as a member from Nova Scotia I wish to present certain aspects of this problem of freight rates. But first I should like to say how much the house was enlightened by the statement made so capably this afternoon by the Minister of Transport (Mr. Chevrier).
This is undoubtedly an issue of the gravest importance, and at the outset may I briefly summarize the history of the case. On October 9. 1946, the railways applied for an increase of 30 per cent in their freight rates. They emphasized that there had been no general
increases since 1920 and no general investigation since 1925 and pleaded that costs of labour, materials, and other factors had risen enough to justify increased rates.
The board of transport commissioners undertook a comprehensive study of the situation and gave all concerned an opportunity of presenting their cases both for and against. Seven of the nine provinces opposed the increase; Quebec and Ontario refrained from presenting their views.
It is important to note that it was the railways-not the government-that requested the increase.
After hearings and study lasting almost eighteen months, the board announced on March 20 that it had authorized an increase of 21 per cent-instead of the 30 per cent requested-with the effective date to be April 8.
When the board announced its decision, the seven provinces indicated their intention to appeal to the cabinet and asked that the provisions of the order be not effective until at least .thirty days after the date initially announced, April 8, pending the results of the appeal. This the government did not see fit to do, but the minister stated on Wednesday, April 7, as reported at page 2717 of Hansard, that such action would not be prejudicial to any appeal.
It is my understanding, Mr. Speaker, that when the seven provinces presented their briefs in opposition to the increase requested by the railways they made it clear that they were not at that time dealing with so-called equalization or differentials. Any action they had in mind in this regard they clearly indicated to be for future consideration. Nevertheless the government, according to the minister's statement of April 7, directed the board to conduct an investigation into this matter of inequality and the general problem of a fair rate structure for all parts of Canada. The minister's statement was as follows:
In the circumstances, the government has decided it would be in the public interest to have the board of transport commissioners make a thorough investigation of the rate structure of railways and railway companies which are under the jurisdiction of parliament, with a view to the establishment of a fair and reasonable rate structure which vcill, under substantially similar circumstances and conditions, be equal in its application to all persons and localities so as to permit the freest possible exchange of commodities between the various provinces and territories of Canada and the extension of Canadian trade, both foreign and domestic.
According to the minister's statement and press reports, the board has already met for this purpose.
Freight Rates

There is no question that the increase in freight rates will be a severe and adverse blow to the maritime provinces as well as to the west. Even at the old rates it was almost impossible for our industries to put their products on central Canadian markets at competitive prices. To be in a competing position, it was necessary not only to aim at wages more moderate than those prevailing elsewhere but to keep our other manufacturing costs down. What small measure of success we have had indicates that we have achieved both these aims to some extent. Now, however, the higher freight rates place another obstacle in our path. They will tend to make us live within ourselves in an industrial sense more than ever before.
The establishment of a railway with its attendant facilities and services was one of the conditions upon which the maritimes accepted the terms of confederation, as is clear from the British North America Act, section 145, which reads in part:
Inasmuch as the provinces of Canada, Nova Scotia, and New Brunswick have joined in a declaration that the construction of the Intercolonial Railway is essential to the consolidation of the union of British North America, and to the assent thereto of Nova Scotia and New Brunswick, and have consequently agreed that provision should be made for its immediate construction by the government of Canada.
That was one of the important terms upon which the maritime provinces entered confederation. Such a railway was regarded in the eyes of the dominion as being necessary to give maritime merchants a market in Canada, particularly since the maritime provinces stood to sacrifice reciprocal and profitable trade agreements with the United States. It was clearly understood at the time that construction and operation costs would not be related directly to the traffic that might pass over the line, but would be borne in great measure by the dominion in the interests of national, imperial and strategic considerations.
It is clear that the intention of those concerned with confederation was to give the maritimes freer access to central Canadian markets, whereas this increase in freight rates as such may well have a further effect in the opposite direction.
The Maritime Freight Rates Act recognizes that certain statutory advantages in rates should be given to the maritimes as a matter of right. It states clearly that no rates will be approved which may destroy or prejudicially affect such advantages. Section 8 of the Maritime Freight Rates Act reads as follows:
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.
We in the maritimes attach great weight to this statutory advantage.
On the other hand, there is no denying that costs have gone up and there is clear indication that the railways needed some relief if they were to continue in operation. This applied more particularly to those privately owned railways which were incurring operating deficits and were not able to offset them by government funds made available through subsidies or some other means of financing.
In its last annual report the Canadian National Railways showed that since 1939 the average compensation paid to each employee had increased by $816.26. Over the same period many materials which are used by the railways in their operation had increased in large proportion. For example, softwood ties increased from 59 cents each to $1.35 each, or a percentage increase of 128-8. Coal increased from $4.09 to $7.50 a ton, or an increase of 83-4 per cent. There are many other such increases shown. Assuming therefore, Mr. Speaker, that some help was needed if revenues were to balance expenditures, it would appear that three courses were open. The first course was to reduce wages, or at best to hold them from going higher, not only to the railway employees but to all employees engaged in allied undertakings; second, to pay increased subsidies on a very broad scale; and third, to increase revenue by charging higher rates for goods carried.
It is not necessary to dwell on the disadvantages of reducing wages at this time or the reaction that would have resulted' across the country if any such course had been followed. The reason for not dealing with the problem by this method will be well understood.
As to the second alternative; that is, subsidies, we in Nova Scotia do not look unfavourably on subsidies that tend to minimize the disadvantage under which we operate as a result of our geographical situation. The maritimes have subsidized Ontario and Quebec industry for many years-out of all proportion to the returns we derive from these two wealthy provinces-by buying their manufactured goods. The industrialization of Ontario and Quebec has been accomplished, and is being protected, by tariffs which continually operate to the disadvantage of the maritimes. We regard, and Canada regards, reasonable subsidies to the maritimes as being a matter of

Freight Rates
right, but we do not want subsidies on a scale that would make us fully dependent upon or pensioners of central Canada. We want every opportunity to stand on our own feet.
Solving the problem completely by subsidies means that all taxpayers would be required to share the burden, whereas we feel that the brunt of it should be borne by those who use the freight hauling facilities of the railways.
Sir Stafford Cripps, in bringing down his British budget last week, said that high prices and inflationary pressure cannot be removed entirely by government action unless England is to envisage a degree of economic control too rigid to be operated in a democracy. Coming from a socialist government, this is clearly indicative. We in the .maritimes also are satisfied that subsidies cannot be regarded as the full answer to the entire problem'.
This leaves as the third alternative the necessity for increasing rates. We see the necessity of this move; but, situated as we are in the maritimes, and with due regard to our attitude toward subsidies, we feel that if the problem must be solved by applying increased rates, the solution should carry with it a measure of subsidies. In other words, the impact of the freight rate increase must be cushioned by subsidies wherever they are indicated.
Let us look for a moment at the government's performance in the field of freight assistance to the maritimes. There is not much doubt that the administration fully realizes this problem and our position as a result of it. The Maritime Freight Rates Act, to which I have already referred, provides that -westbound freight from the maritimes shall be at a rate 20 per cent lower than that prevailing for eastbound freight to the maritimes. This alone will cost the dominion over five and a quarter million dollars for the present fiscal year, but will assist the maritimes in putting their goods on Canadian markets. Freight subsidies which enable our farmers to purchase feed grains at prices comparable with those prevailing at the head of the great lakes are another form of financial assistance which helps to offset the disadvantageous position in which our farmers would otherwise find themselves. It was good news for the maritimes farmers to learn from the Minister of Agriculture (Mr. Gardiner) that the period for this subsidy assistance will be extended to July 31, 1949. Then, too, there are the well known subventions on coal which are intended to enable our miners to place their coal on Canadian markets in competition with United States coal.
According to statute, the advantage extended to us by the Maritime Freight Rates Act must be protected, and there is no indication that the government will not live up to its obligations. Where it develops that the increased freight rates react to our disadvantage when compared with other sections of the dominion, we will seek offsetting assistance, as we believe we have the right to do.
On this basis, and in the light of the government's assistance in the past, as well as the undertakings extended to Nova Scotia when entering confederation and our present statutory protection, I can see no good reason for supporting this amendment opposing the government's action. Moreover, both the amendment and the subamendment resolve themselves into motions of lack of confidence in the government.


Mr. MacINNIS:: That is the determining factor, is it not?


Mr. SINCLAIR:: Looking across at the hon. member, I say it is.


Mr. WINTERS:: Without denying the
gravity of the possible effect of this increase in freight rates, I believe it would be an outstanding lack of wisdom to use this one predicament as a lever in an attempt to unseat an administration which has done such a commendable job on a broad front. Therefore, Mr. Speaker, since the amendment and the subamendment have resolved themselves into motions of lack of confidence, there is no alternative but to oppose them.
(Translation):
Mr. GEORGES H. HEON (Argenteuil):
Mr. Speaker, I wish to begin this brief speech in French, in order to assert once more my absolute right to speak French in this house. However, as the majority of the members have not the advantage of speaking that beautiful tongue, I shall now proceed in English, that I may be readily understood.
( Text) :
On March 30 last, the board of transport commissioners rendered judgment on an application of the railway association of Canada on behalf of its member railway companies for authority to make a general increase of 30 per cent in freight tolls and rates and of a specified amount per ton on coal and coke. The judgment rendered authorizes a general advance of 21 per cent and an increase of 25 cents per ton throughout on coal and coke. The government has refused to interfere with the judgment rendered, whilst the amendment proposed by the bon. member
Freight Rates

for Rosetown^Biggar (Mr. Coldwell) is being offered , to prevent or rather to defer the increase which the judgment of the board has allowed after a prolonged and exhaustive inquiry in the presence of counsel, and the representatives of the applicants and seven highly interested provinces.
The press of Canada has given much space and attention to the government's decision to respect the board's ruling, and to the amendment which it is alleged may put some hon. members on the hot spot if they dared vote against it, because of the political dynamite therein contained. The whole problem, as I *see it, is not one which should be approached with the view of winning impending byelections, provincial general elections or a threatened general federal election; but rather it should be considered on its merits, on the evidence and on the arguments advanced before the board by the interested parties and their counsel.
To start with, it is evident that the board of transport commissioners was not asked to equalize freight rates, nor did any eminent counsel for the provinces suggest, prior to or during the hearings of the board, that the issue of equalization of rates be joined to the demand for a general increase in tolls and freight rates. The board, therefore, could not in my very humble opinion, without exposing itself to ridicule and violating all rules of law and evidence, rule on an issue which was not contained in the application.
This house, then, is called upon to decide only whether the increase of 21 per cent decreed by the board is justified, at least in principle.
It is generally agreed, I believe, that our railways, much the same as every other public or private corporation and individual, have felt the pinch of increased costs of maintenance, construction, operation and extension of services. Then again, the travelling public is constantly asking for more speed and comfort, with air-conditioned cars, de luxe parlour and sleeper cars and coaches, exclusive cuisine, expert personnel, while it continually complains of bumpy roadbeds, outmoded and dilapidated passenger cars and day coaches, lack of snow-removal and repair equipment, trains running behind schedule, delays in freight and express deliveries.
To do all these things the railways have offered before the board conclusive evidence that they need more money to operate. This money cannot be obtained without an increase in rates, and an increase in rates, cannot be established or put into force without being examined and sanctioned by the board.

Further, the Canadian National Railways, owned, operated and financed by the Canadian people, is one of the applicants and has lately announced a deficit of $23,000,000. We cannot hope to erase this deficit, even partly and thereby lessen our financial burden arising therefrom, unless relief is provided through increases in rates.
As to the Canadian Pacific Railway Company, which is privately owned and therefore taxed to help balance the deficit of its chief competitor, it also has construction and operation problems which can be solved only by increased rates. As a matter of fact, the Canadian Pacific could not successfully compete or even attempt to compete with the Canadian National Railways unless it enjoyed the same increases, because it cannot delve into the dominion treasury to recoup its operating losses.
For these reasons alone, Mr. Speaker, I would vote against the amendment of the hon. member for Rosetown-Biggar. But there are two other more important reasons which will motivate my vote, and which I wish to put on Hansard.
First, today's newspapers carry the announcement that conciliation in railway wage negotiations has collapsed. My sympathy is with the railway workers, who are entitled to a fair and reasonable increase in wages; and I do not want, by voting in favour of the amendment, to give a further excuse to the railway companies, if the increase in rates they seek were denied, for not meeting the motivated wage increases of their employees.
Second, I went on record in this house last year as stating that I was unwilling to vote for any issue which would precipitate a general election in the midst of the constitutional term of this parliament; and I am not changing my mind, particularly at this time, when the dangers of the international situation are too great to afford the risks of a general election.
I would, Mr. Speaker, vote for a measure or a resolution tending to a fair equalization of freight rates for every province, but not at the cost of an immediate general election.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



CRIMINAL CODE


[Stage Direction]
Mr. WILFRID LaCROIX (Quebec-Mont-morency) moved the second reading of Bill No. 2, to amend the criminal code.

Criminal Code Amendment
He said: Mr. Speaker, this bill is aimed at suppressing the communist party as a political party and preventing the formation of a permanent fifth column in the event that we should be forced into war against Russia. The difference between my bill and the padlock law of Mr. Duplessis lies in the fact that, instead of the minister or the government itself deciding whether or not a certain political group is communist under the present law, a procedure which might lead to abuse in the case of political opponents, under my bill as opposed to the attitude taken by Mr. Duplessis a superior criminal court would, decide definitively whether a certain political group is communist according to the present law. Mr. Tim Buck, leader of the Labour Progressive party, has written to hon. members of this house telling them that his party would never conspire to use force in order to take over power. That is exactly what has been done in all countries where the communist party, with the help of democratic institutions, succeeded in obtaining key positions which subsequently permitted it to suppress its opponents by force. The Minister of Justice (Mr. Ilsley) recently declared publicly that the Labour Progressive party was following directions dictated by Moscow. How can we tolerate in our country a political party whose allegiance is given first and foremost to a foreign government? This has been amply proved, and I challenge any hon. member to demonstrate the contrary.
I have been in this house for the past twelve years, and I know from experience that when a bill is referred to a committee before its principle is accepted by the house on second reading that bill generally dies quietly in committee and is forgotten forever. Such was my experience last year, and I do not want the same thing to take place this year. Therefore I insist on my bill being put to the house for second reading before being referred to a committee, where its details may be examined, since a bill the principle of which has not been accepted by the house seldom comes up for third reading. However, since only one hour is allowed for the consideration of bills moved by private members of the house, I would ask my colleagues who support this bill to remain silent. If they spoke time would1 be wasted and the bill would go to the end of the list when the time limit was reached. Every hon. member is aware that when it is desired to kill a bill some hon. members are asked to speak, ostensibly in support thereof but really in order to exhaust the time allowed for its consideration. Thus some hon. members may seem to be in favour of a bill while actually against it. I will set an example by resuming my seat and
asking five of my colleagues to support my stand, in order that the house may vote on the principle of the bill.
Before I take my seat may I add that here in Canada we are first and above all a country whose people believe there is a God. We must not forget that here, as in the United States and the United Kingdom, Christianity is part and parcel of the law of the land; and I consider it necessary to prevent the growth and development in Canada of a political party whose main tenet is atheism, because we must bear in mind that communism is a philosophical system based upon materialism. Allow me also to point out that I am thoroughly convinced that the mere fact of not believing in God is likely to suppress any sense of responsibility in the individual. Therefore we must bear in mind that we are a nation who believe in God. Each day before resuming deliberations in the House of Commons we say this prayer:
Our Father which art in Heaven, Hallowed be Thy name.
Thy kingdom come. Thy will be done in earth, as it is in heaven.
This clearly shows that we are believers, and that we intend to remain so.
Angus MacInnis: Mr. Speaker, I wish to say a few words in opposition to the principle of this bill, but before stating the reasons why I oppose it I want to make it quite clear that I am as much opposed to the aims, the policies and the methods of the communist party and the Labour Progressive party, which is merely the communist party under another name, as anyone in this house or anywhere else. Further I should like to say that my opposition to the communist party is not a matter of recent date or recent development. It has been my attitude since 1918, when for the first time the principles and tactics of the communist party began to show themselves on this continent. I have been associated with the labour and socialist movement in Canada since the first war; consequently I think I am about as familiar with the policies and tactics of the communist party as anyone in this country can be.
I was elected first to the House of Commons in 1930; consequently I have contested four elections from 1930 to 1945. On every occasion I have been opposed by a communist party candidate. Not only that; but on every occasion the communists who were opposing me were definite in stating that they were more opposed to me than to the candidates of the old parties, and, on my part,
Criminal Code Amendment

t am glad to say that there was complete reciprocity: I was more opposed to them than I was to the candidates of the old political parties. And I am not a bit ashamed to say that I had much more in common with the candidates of the other parties, Liberal and Conservative, than I had with the communist party; because the candidates of the old parties, and I, stood for something in common; we stood for government by consent of the people whose support we sought.
Furthermore my opposition to the communist party has not lessened over the years. I have not been taken in by any of the palaver that has taken in so many people during the past few years. Indeed my opposition to the communist party has grown, because the danger of the philosophy they advocate has become much more clear in the past few years. And as I said, I am more opposed now than ever before, because communists everywhere have consistently shown that they reject and despise those attributes of civilized human behaviour in which I believe, and which govern my relations with other people in the community.
I believe in such things as honest dealings, integrity as between man and man, group and group, tolerance of other points of view, and the bringing about of social and economic change by consent. May I add this note, that I find it impossible to have personal dealings with any individual whom I cannot implicitly trust and in whose integrity I do not believe.
I have just mentioned what I am opposed to in the communist party philosophy. I also reject what the communist party makes the guiding principle of its policies and methods; that is, the overthrow of existing governments by force, government by dictatorship, liquidation of political opponents-and that is just a polite term for murder of one's opponents.
There may be occasions when force may be necessary in effecting social change. I know of very few countries where the people are ashamed of the revolutions by which they brought about social, political and economic changes. We heard much talk in the house during yesterday's debate about Magna Carta. Let us be clear on this:	Magna Carta was
not something given to the British people by the willing consent of the British King. I remember quite well, though it is a long time ago, reading in my school history that when King John signed Magna Carta in the meadow at Runnymede he signed it with a smile on his face but with rage in his heart. In other words, the barons of England of that time-

and let us be clear about it; it was not the common people of England, but the ruling class-told King John, "You sign here"; and King John signed, because there was no alternative to signing.
In the United States they had their revolution of 1776, of which all Americans are very proud indeed. Sometimes I am amused when I read statements made by the Daughters of the American Revolution, worthy ladies who have organized to perpetuate the achievements of one revolution, and who insist that no more revolutions must ever take place, no matter how great the need may be.
I mention these facts merely to show that there may be occasions in the lives of people when force is necessary to put down tyrants.


Mr. CASE:: Are you in favour of communism, or against it?


Angus MacInnis: I will tell my hon. friend this, that it would be useless to tell him whether I am in favour of it or against it, because he would not know after I had told him.


Wilfrid Garfield Case: Yes, he would.


Angus MacInnis: I do not believe there are any Englishmen who consider that the civil war of 1648 and 1649, when King Charles lost his head, is something to be ashamed of.


Wilfrid Garfield Case: King Charles lost his head.


Mr. IRVINE:: You never had one to lose.


Angus MacInnis: I mention these things merely to show that there may be occasions in the lives of men when violent action may be necessary. But I am glad to say that I am living in a country where change by the consent of the people has become a tradition. And I should like to say here that in all the years I have been advocating political action through parliamentary institutions, the argument my communist opponents used against me was this: Yes, but when you have elected your socialist parliament the ruling classes will not allow you to put your program into effect.
If there is anything that has been completely falsified by events, it is that assertion. I do not know of any socialist government in any democratic country that has been prevented from carrying out its program by any counterrevolutionary action on the part of the former ruling classes. I want to make that clear.


Wilfrid Garfield Case: May I ask the hon. gentleman a question? Do you subscribe to the theory introduced in the book "Make This Your Canada" by David Lewis, alias Louz?


Mr. ARCHIBALD:: Take out the drunken bum.

Criminal Code Amendment


Angus MacInnis: I suggest that that question is quite unworthy of an answer. David Lewis did not write "Make This Your Canada." He collaborated in writing the book. May I say that before the book was published I went over every line of it.


Mr. CARDIFF:: I ask that the hon. member of the C.C.F. here at the back withdraw at once the statement he made about the hon. gentleman.


An hon. MEMBER:: Who are you talking about?


Lewis Elston Cardiff: I ask that the hon. member withdraw that statement.


James Horace King: Is the hon. member rising on a point of order?


Lewis Elston Cardiff: Yes.


James Horace King: Would the hon. member be kind enough to state his point of order?


Lewis Elston Cardiff: The hon. member for Skeena made a slanderous remark about the hon. member for Grey North and I ask him to withdraw the statement.


Harry Grenfell Archibald: The hon. member for Grey North made a slanderous statement about a member of our movement and implied race hatred.


Some hon. MEMBERS:: Order.


Lewis Elston Cardiff: Take back your statement.


James Horace King: I would ask the hon. gentleman to state the words he would like to have withdrawn.


Lewis Elston Cardiff: He said he was a drunken bum.


James Horace King: I ask the hon. member to withdraw that statement.


Some hon. MEMBERS:: Withdraw.


Harry Grenfell Archibald: Under your instructions, Mr. Speaker, I withdraw.


Mr. FRASER:: Not under instructions; that is not good enough.


James Horace King: I would ask hon. members to keep silent in order that the Speaker may hear what is going on. I ask the hon. member for Skeena to withdraw his remark.


Harry Grenfell Archibald: I withdraw.


Angus MacInnis: I suggest to the hon. member for Grey North that it would have been far better for him to reject the support of the communist party when he was elected to this house rather than to come here now and attack hon. members who have taken a stand against that party and who have
refused at all times to accept the support of communists. He is casting slurs on the character of such hon. members, but he had an opportunity to reject the support of the communist party and he did not do so. He came here first with their support.


Wilfrid Garfield Case: No, I was never supported by a communist in my life. I understood that "Make This Your Canada" was one of your textbooks.


Mr. HARTT:: Who else was supporting you?


Angus MacInnis: I oppose the principle of the communist party that the end justifies the means. This is not a new principle historically. I maintain that the means used to achieve any purpose-


Mr. FERGUSON:: May I ask the hon. member a question? Do you support the views of David Lewis and the co-author of that book "Make This Your Canada"? Declare yourself yes or no now in this House of Commons.


An hon. MEMBER:: Who are you?


Angus MacInnis: Of course I support the views expressed in the book "Make This Your Canada." If you do not like them you do not have to support them.


Julian Harcourt Ferguson: We know you for what you are.


An hon. MEMBER:: You do not know anything; you never did.


Maurice Hartt: In the name of human rights.


James Horace King: Order. Hon. members will realize that it is one of the duties of the Speaker to protect freedom of speech in this house. Hon. members realize also that it is not necessary to pass a bill to have freedom of speech in this house and they will permit the hon. member who has the floor to carry on with his speech.


Angus MacInnis: Thank you, Mr. Speaker, I will do the best I can. I was stating that I was opposed to the principle of the communist party that the end justifies the means, and I said that was not a new philosophy in history. I maintain that the means used to achieve any purpose will have an effect on those using them. We cannot use bad means to achieve even a good end without ourselves being debased in the process. I should like hon. members to pay particular attention to that, because in our political activities in this country bad means are used to achieve what some people may at the time consider to be good ends. But as I say, we cannot use bad means without ourselves becoming debased in the process.
Criminal Code Amendment

I wish to make one thing quite clear so that even my hon. friends over here will be able to understand it. I believe that today the'communist party is the greatest menace in the world to human peace and freedom. It is filling the world with fear and foreboding and distrust. If there is anything worse than that, I do not know what it is.
Having said that as clearly as I possibly can, I want to go on to say that I am opposed to this bill. In my opinion it is the embodiment of the principle and philosophy of the communist party. It adopts the principle of the communist party that what you do not like you suppress. We are not going to overcome the evils of communism by adopting the methods of communism into the laws of our country.
Remember that this bill proposes to outlaw the communist party, not because they have committed illegal acts but because they have ideas which we do not like. That is implicit in the bill. They are being outlawed as political opponents. It is true that all political opponents are not to be outlawed at once under this bill; but I should like to point out, as was mentioned many times in this house yesterday, that if we adopt the principle of this bill it may be but a beginning. It should be observed that the communist party itself does not abolish or liquidate all its opponents at once. It takes them one at a time, but ultimately the point is reached where every party but the communist party is liquidated. Once we embark on a policy of suppressing or outlawing organizations or associations of people because we do not like their ideas, where shall we end? Where will be the limit to our suppressions?
The bill mentions the Communist Party of Canada and the Labour Progressive Party of Canada by name, but it also includes others. I quote from the bill which I have before me:
. . . and any association, society, group or organization having similar aims or purposes are declared to be, and shall he deemed to be illegal organizations . . .
Mr. LaCROIX: Provided that a superior court of criminal jurisdiction has expressed the opinion that the association is an illegal one.


Angus MacInnis: I know that the bill provides that if, upon a reference submitted by the governor in council, a superior court of criminal jurisdiction expresses the opinion that the association is illegal it may be outlawed, but I submit that no party in this country, unless it is guilty of overt acts, should be outlawed just because a court has expressed an opinion as to its aims.

I was going to draw attention to the proviso which the sponsor has just mentioned, and which modifies the sweeping provisions of the bill except in so far as it applies to the communist party and the Labour Progressive party, but the section being bad in principle it cannot be made acceptable to a democratic people by a modifying proviso. I know of no democratic country which is not plagued today with its quota of communists, but I know of no democratic country at the moment which has legislation such as we are now being asked to put into our laws, legislation which is contrary to democratic practice and democratic traditions. What is needed in this country is not a law to make illegal parties and ideas that we do not like, but that we should as quickly as possible improve the quality-I emphasize that, improve the quality-of our democracy by abolishing social inequities and making our economic democracy as pervasive as our political democracy. That is what this parliament has to do, and when we do that I have sufficient confidence in the common sense and good judgment of the Canadian pbople to be satisfied that we shall not need any repressive laws such as this bill would put into effect.
May I point out that no country ever saved itself from revolution or from overthrow by oppressive laws. If oppressive laws have any merit, if they would prevent subversive methods from growing, the communist party would never have come into existence, but the fact of the matter is that the communist party grew and prospered where oppression flourished. There is only one way in which freedom can be extended. That is by extending it. We cannot extend freedom by limiting it. We have laws now on our statute books for dealing with sedition and overt acts. Let us apply these laws where and when there is need, but do not let us begin to make laws to ban ideas, because such laws just won't work.
It is interesting to note that the section which this bill proposes to add to the criminal code is numbered 98. There was a section 98 in the criminal code from 1919 until 1936, the purpose of which was to outlaw certain associations, organizations, societies or corporations. It was later repealed. I should like to read subsection 1 of the old section 98 of the criminal code, which later was repealed. The marginal note to the section is "Unlawful associations," and subsection 1 reads:
Any association, organization, society or corporation, whose professed purpose or one of whose purposes is to bring about any governmental, industrial or economic change within Canada by use of force, violence or physical injury to person or property, or by threats of

Criminal Code Amendment
such injury, or which teaches, advocates, advises or defends the use of force, violence, terrorism, or physical injury to person or property, or threats of such injury, in order to accomplish such change, or for any other purpose, or which shall by any means prosecute or pursue such purpose or professed purpose, or shall so teach, advocate, advise or defend, shall be an unlawful association.
That was the old subsection 1 of section 98. The section which this bill proposes to introduce is of a similar nature except that it mentions the communist party and the Labour Progressive party by name. There were ten other subsections in the old section 98, but the one I have read was the operative subsection. It was passed in panic after the Winnipeg general strike of 1919 and it remained on the statute book until 1936. There was considerable agitation before it was repealed. I was a member of the house at the time and I can well remember the debate.
The late Mr. Lapointe, then Minister of Justice, introduced the bill to repeal the section. I should like to quote briefly from Hansard some of the points made by Mr. Lapointe at that time. I do so because I know that Mr. Lapointe was highly regarded in this house not only on the government side where he sat but on this side as well. As a matter of fact I came to know Mr. Lapointe well before I ever met him, through hearing the late Mr. Woodsworth speak of him with appreciation. I quote from page 3901 of volume IV of Hansard of the session of 1936. Mr. Lapointe said:
I come now to another phase of the matter. Those who hold the views I hold on this question have been and are being charged with friendship towards the communistic element.
Unfortunately that continues to this day. You cannot speak for what you think is decency and democracy and liberty and freedom in a situation of this kind without being accused of being a communist. An amazing statement was made in the house yesterday by an hon. member to the effect that everyone who gave support to a certain organization was a communist or a member of the communist party. Mr. Lapointe was not a communist and I am not a communist. As I have said before, I detest and abhor everything they stand for.
Mr. Lapointe went on:
I am not a friend of the communists, and those who say that know I am not. I abhor, I hate the teachings and ideals of communism. But I want to fight them in a successful way, and I believe the way to fight them successfully is by argument, by attempting to have social justice everywhere and sound policies of administration.
He then quoted from a statement made by himself on some previous occasion, and he said:
To ensure our political stability as well as our economic stability, to victoriously repel the attacks of the trouble makers we must rely not so much on the criminal code, the officers of justice and the gaols as upon the personal dignity, the individual effort and the social co-operation which are the substance and soul of a free nation.
Could anyone put the situation clearer than it is put here by Mr. Lapointe? May I say that I agree with him; I agree with him with my mind and soul. He continued:
The adepts of the strong manner to the contrary notwithstanding ideas, whether they are good or had, cannot be billed with guns or machine guns. There must be an enlightened acceptation of the changes to make and the reforms to accomplish to take away the weapons which certain abuses and certain mistakes have placed in the hands of the enemies of order.
There again you have it. We are not going to destroy these people by sections in the criminal code. We are not going to destroy them by jails and prosecutions; we are going to destroy them only when we build a social order in which they cannot exist. It must be remembered that roses do not bloom in gutters. It is as sensible to try to destroy ideas of this kind by repressive measures as it would be for a man who wanted to clear his garden of weeds, and who, on seeing a weed growing, took a rock and put it over the weed. In a few days, instead of killing the weed he would see that the weeds had sprouted all around the rock. By suppressive measures we may think we are destroying communism, but we just hide it as the weeds were hidden by the rock; it will sprout out in every direction and we will not have the same opportunities for dealing with it as we have when it is in the open.
I should like to give one other quotation from the speech of the late Mr. Lapointe.


Mr. MANROSS:: Read the whole book.


Angus MacInnis: No. It would do you good if you read it. Now that you know the page in Hansard in which to find it, I hope you will go to your room and read it. Mr. Lapointe continued:
May I add that perhaps we are at fault in that regard, too, and that conditions which permit a small group of men to get together with a little sum of money, which with the help of privileges and our protective laws and insufficient social legislation became $ 15,CWX>,000 after a few years, are productive of communism.


James Horace King: Order. I must call the hon. member's attention to the fact that he has exhausted his time.
Criminal Code Amendment


Mr. J. A. BRADETTE (Cochrane):: Mr. Speaker, to some extent I am sorry indeed that I cannot comply with the perhaps legitimate request made by the hon. member for Quebec-Montmorency (Mr. LaCroix). However, no one can blame me, and least of all my constituents, if I take a little of the time of the house to speak on such an important private bill as the one we are discussing at the present time. I believe I would be remiss in my duty if I did not find it possible to express the opinions that I believe would be re-echoing the opinions of my own constituents. I want to preface my remarks by citing one of the telegrams that I have received during the last ten days from the Labour Progressive party of my own constituency. I shall read one of them and I shall read the answer that I gave to that telegram. It is as follows:
Timmins, Ont.
Mr. J. A. Bradette,
Parliament Buildings,
Member of Parliament for Cochrane, Ottawa.
It is an insult to the intelligence of the Canadian people that at a time when the cost of living is the highest in our history,-
That is typical of their propaganda.
-when the nation faces the gravest threat, economic chaos and depression -
Old cliches again that we have heard ad nausecon.	'
-that the government of which you are a part, should indulge in a debate on the LaCroix bill which is designed as a weapon of political discrimination against a minority Canadian political party.
Poor little party!
Implementation of the LaCroix bill will not solve one of the real problems facing the people today. It will only give comfort and aid to the real enemies of Canadian democracy, the profit hogs that are gouging the livelihood of the Canadian people.
The fact that the bill was introduced by a man with well-known fascist connections should relegate it to the waste basket without delay. We demand that you register yourself in opposition to this bill and that the government get on with the real business of the nation.
For the Labour Progressive party in Cochrane.
On the twelfth day of this month I sent the following reply:
In reply to your telegram of 8th inst., I beg to state that parliament as a whole is doing right in allowing the discussion of the private bills and resolutions, like the LaCroix bill. We must realize that we have in Ottawa a democratic government in which each individual member of parliament has an implicit right to maintain his prerogatives.
Personally, although I do not agree with some of the private bills or resolutions, I shall how-

ever do all that I possibly can that such prerogatives will be maintained in a free parliamentary system.
I hold no brief for Mr. LaCroix, although I highly respect him, and I have often strongly disagreed w'ith him, but neither do I agree with your mentioning the old cliche, which is often used without reason whatever, of calling Mr. LaCroix a fascist. He is not a fascist but he is a good Canadian who expresses views, with which the majority of people may not agree at times, but no one can doubt his sincerity of purpose and his great love for his province and his country.
This is the kind of propaganda to which we have been subjected in the last few days.
By way of preface to my remarks, I should like to quote a great theologian of the Roman Catholic Church, Father Gustave Sauve, O.M.I., of the University of Ottawa, dealing with the present bill, in an article that appeared in Le Droit, an Ottawa journal on December 16, 1947. In order to be sure of my ground, instead of relying on my own translation, I will read four paragraphs of that article in the language in which it appeared:
(Translation):
A bill will be introduced in the House of Commons to ask that the Labour-Progressive party, which is nothing else but the Canadian Communist party alive and authentic, be outlawed.
Here are the three closing paragraphs of this article:
Again Let us not deceive ourselves. Here in Canada the Labour-Progressive party, imbued with the genuine Marxist doctrine, is ever striving to bring closer and closer the revolutionary ideal of Marx, Lenin and Stalin. Canadian communists are the bitterest enemies of our spiritual, social and economic traditions. Relentlessly and with an amazing energy, they worm their way everywhere under the cloak of democracy; they speak soothingly and admiringly of our w-onderful country while, on the other hand they are polishing up weapons to destroy our dearest possessions.
Communism is a constant threat, an ever-increasing menace to our country. Therefore I do not hesitate to declare that it would be expedient to outlaw any communist party, provided that such outlawry be followed by strong measures with a view to putting an end to the misfortunes of the working classes; to preventing capitalism from becoming an exploiter; to giving access to private ownership to the majority of workers; to promoting all activities aimed at the betterment of the labouring class.
I am for doing away with communism by a legal decree, but do not forget that communism has its source in poverty and misery, so that if you sincerely desire to definitely annihilate it, make sure, first of all, that the people enjoy the necessary degree of economic prosperity.
May I be permitted to give a free translation of the last paragraph of this article.

Freight Rates
(Text):
I should like now to translate the last paragraph of that excellent article of Father Sauve from which I have just quoted:
Do away with communism by a legal decree, I am with you, but do not forget it has its source in poverty and misery, and consequently if you sincerely desire to definitely annihilate it, first of all, make sure of the economic prosperity of the people.
My first reaction to this bill would be to support it 100 per cent, if I followed my own personal inclinations, because I have suffered from communists in my own section of the country. In 1934, in my own town of Cochrane, I barely escaped with my life, and if three provincial policemen had not sheltered me with their own bodies I might have been killed-by whom? By people who were not even Canadian citizens although they had lived in Canada many years. But they were the pupils, the slaves of Moscow and of Russia. That is why I speak freely on this important subject tonight.
I repeat, if I followed my own passions, my own personal inclinations, I would say, by all means let us pass this legislation at once. But I must remember also that I am a Christian; I must think also as a Canadian; and I must ask myself to be logical both with myself and with my own people.
Would it be a solution of the communist problem in Canada? To my mind, it would not. It would be simply laying on a thick coat of paint over rotten timber. It would be camouflaging to some extent the real issue. If we passed such a law it might for a time lull the Canadian people into a false sense of security which would not exist after the passing of the legislation.
I have no time tonight, Mr. Speaker, to elaborate this point; but I hope that hon. members, when the bill comes up again, will allow me to continue the debate. I move the adjournment of the debate.
Motion agreed to and debate adjourned.


James Horace King: The hour reserved for public bills having been exhausted, the house will revert to the business prior to six o'clock.



FREIGHT RATES-INCREASES ORDERED BY TRANSPORT BOARD-AMENDMENT, MR. COLD WELL -SUBAMENDMENT, MR. BRACKEN

[Stage Direction]
The house resumed consideration of the motion of Mr. Abbott for committee of supply,
and the amendment thereto of Mr. Coldwell, and the amendment to the amendment of Mr. Bracken.
5849-186J
James Sinclair: My colleagues, the hon. member for New Westminster (Mr. Reid) and the hon. member for Fraser Valley (Mr. Cruickshank), have already spoken in this freight rates debate, giving their views, as British Columbia members on the government side, so far as the present dispute is concerned, and I feel I should join them.
The matter of railways is, of course, of special significance to British Columbia, because we would not be in confederation today except for the promise of a railway for that province. British Columbia, after all, was tempted into confederation by the promise of the Dominion of Canada that a railway would be built to connect that province with the eastern provinces. With that promise we came into confederation, and immediately in, we began to develop our first grievance, the fact that the promise of rapid construction had not been fulfilled.
Long after the promised date for the completion of the railway, the railway had still not reached British Columbia. There followed, of course, further great land grants to the Canadian Pacific Railway Company. Out of the construction of the railway in British Columbia the Canadian Pacific Railway Company got a twenty-mile belt, on either side of the line, of the choicest lands in the province and the greatest forests on Vancouver island, the greatest softwood forest in the world.
Once the railway was completed in 1886, there began our second and greatest grievance, the fact that, once completed, this railway, which was intended to unify this new confederation, was not uniform so far as rates were concerned. We were being charged double the rates of the prairies, while the prairies were charged 40 per cent more than the rates of eastern Canada.
That grievance has been an historic one in the short history of British Columbia. I first heard of it in my school days twenty-five or thirty years ago. It was impressed upon us at that time that it was because of this economic injustice that British Columbia was a province engaged mainly in primary production. We were the hewers of wood and drawers of water, and the east, because of tariff protection and freight rates, was the part of Canada engaged in secondary production.
Today, however, I feel quite sure that informed businessmen in British Columbia are agreed that the railways of Canada do need more revenue. They have only to look at their own businesses to find proof of that
Freight Rates

Mine is perhaps one of the largest heavy industrial ridings in British Columbia, with the shipyards, the oil refineries, sawmills, pulp and paper plants and mines; and in each of those industries which are directly affected by this freight rate increase the management know there have been substantial increases in their own labour and material costs which have added to the final cost of production of their product. In turning to the figures supplied this week by the Canadian National Railways in their annual report, anyone can see justification for the request of the railways for an increase, if not in rates as given, then certainly in revenue. On page 6 we find that in 1939 the average wage to employees was $1,566. By 1947 that had risen $816, or by 52 per cent. In other words, there was a 52 per cent increase in wage costs to the railways during the war years. The other principal operating cost of a railway, coal, climbed from $4.07 in 1939 to $7.50 in 1947, or an increase of 83 per cent.
The railways asked the board to examine their need, and they endeavoured to prove to the board that they had need of an increase in revenue. To my mind, as the minister explained this afternoon, the railway board are the only group in Canada competent to judge such matters; and after fourteen months of close study, after every province concerned had presented its case in the very best light and through the best legal and technical talent they could hire, the railway board did come to the conclusion that the railways had established need and that more revenue would be required. I contend that the individual members of this House of Commons are not in the position of the board of transport commissioners with respect to coming to a conclusion on whether there is or is not need as far as the railways are concerned. I think most of us realize that we have not the training, the time, the talent or the opportunity to give to this case the study which was given to it by the board appointed under the law of parliament to do this task; and it is significant that, aside from a slight mention by one hon. gentleman, no hon. member of this house has attacked the ability of the board to judge such a case.
However, hon. members have two or three indications which they can use as criteria. The first is the fact that there have been no increases in railway rates since 1922. What other industry or what other labour group can say they have had no increase in either the cost of their labour or the cost of production during that time? Then every year, when we have the Canadian National estimates before

parliament, this house has to vote very large sums of money to make up the Canadian National deficit. That, too, should be some indication to us that the Canadian National at least has need of additional revenue.
The third point to which I think we should pay attention comes from a rather extraordinary source. Mr. Mosher, head of the Canadian railway brotherhood, has said publicly that the railways must have this increase if they are to pay the wage increases the railway employees are now demanding. How different that is from the argument we so often hear, especially on the west coast, by labour leaders that companies can meet their demands for more pay without any increase in their price structure. Therefore I say that when Mr. Mosher, a respected officer of the railway brotherhood, makes that statement, to my mind that is significant. It has been said here that the C.C.F. are the political arm of that body, a rather broken arm one hon. member said today. If the C.C.F. are so determined that this increase should be suspended or dropped, then I think that, as the political arm of that brotherhood, they should have said to the brotherhood, "Since Mr. Mosher has said the increase is essential before we can get increases, we will also advocate that we stop the wage negotiations now in progress until some adjustment is made." So far I have not heard such a declaration. I represent two railway towns in my own riding. At Port Coquitlam we have the main yards of the Canadian Pacific in the Vancouver district, and at the town of Squamish we have the terminus of the Pacific Great Eastern. So I know some of the problems of the railway employees in trying to meet the cost of living in British Columbia; and I know I would not go before the railway employees in either of these towns and tell them they should now drop their applications for wage increases because the C.C.F. have moved a motion to drop or suspend this freight rate increase.
The British Columbia opposition is not to the fact that the railways asked for an increase and proved1 their need for more revenue. Our opposition as a province stems from the fact that this is to be a percentage increase on top of our existing inequality, the mountain differential. That, of course, is the real reason for the opposition of British Columbia. There are rftembers on this side of the house from my own province who have criticized Ontario and Quebec members for not pitching into this fray on our behalf. I do not join in that criticism. After all, this parliament consists of members from every province so that we may

Freight Rates
be able to intelligently bring before this parliament those particular problems pertaining not so much to the nation itself but to our own provinces; and if the British Columbia and western members are not able to present intelligently to parliament their special problems, they should not expect the Ontario and Quebec members to do so.


Mr. FULTON:: Must have been a powerful caucus you had this morning.


James Sinclair: My hon. friend has had very interesting meetings in the west himself, to judge by what I hear from Moose Jaw. In this connection, for example, as a British Columbian, badly off though our province may be, I believe there is one province in Canada in a worse position than British Columbia. That is Alberta, which is at the very apex of the freight rates. At least we in British Columbia get a little advantage from the water competition that exists between Montreal and Vancouver. Alberta gets none of that; but I do not feel I should stand in my place in this house and explain the Alberta plight, when Alberta is represented by the able members from that province. I say also one other body has a very great responsibility for the present plight of British Columbia and for doing something about it. That is the provincial government, whose responsibility it is to take every possible step to safeguard our provincial economy. Yet-and this was the thing that struck me as most astounding and which actually, I can tell the hon. member for Kamloops (Mr. Fulton), did dampen my fires a bit-I learned from the minister that not since 1927 has our province taken any specific, official action. Oh, certainly they have talked. The members of the legislative assembly have talked; the members of parliament like ourselves have talked, but there has never been the one thing which would have brought about some correction of that mountain differential. There has not been an official demand by the government of British Columbia upon the board of transport commissioners for a review of the mountain differential since 1927.
The reason for that is probably that we have become accustomed to our burdens. When you are burdened down with afflictions, after a while you get used to them and bear them. You do not like it, but it is only when extra afflictions are heaped upon you that you suddenly object to the original ones; and that is the situation today. It was only when the 21 per cent was laid on top of our already heavy burden of the mountain differential that we suddenly rose as a province to protest against it. But I say the
real responsibility rests with the government of British Columbia, which should have made concurrent application about the mountain differential when the railways filed their application, so that today the board of transport commissioners and the federal government could not point the finger and say the only matter considered was the application of the railways for increased revenue and that the province of British Columbia made no application for a review of the mountain differential.
That is why, instead of condemning the federal government, I stand here today praising them, for at least they have taken the one specific action which will remove the mountain differential. The announcement of the minister that not British Columbia, the province most directly affected, but the federal government had asked the board of transport commissioners to start an investigation into the inequalities, not only in British Columbia but across Canada, was a positive step which my province and the other western provinces should have taken long ago. I would say this, to the credit of one provincial premier- Premier Manning-that at least a year ago he started preparing his case on the mountain differential. It has now been a year in preparation and should be very well presented before the board of transport commissioners.
There are some in the house who will say: What is the value of the applications now made by the federal government? The actual record shows that in the case of British Columbia the applications to the board of transport commissioners for the removal of the mountain differential have borne continuing fruit. At one time we had a double rate. An application was made against it by the province and the rate was reduced to one and three-quarters. Then came the famous freight rates case of 1924 when our province, at great expense, hired distinguished legal talent, who later adorned this chamber, and who succeeded in having that rate reduced to one and a quarter.
It is also true that a later application, a third one, failed. The vote by the board of transport commissioners was four to two, a very close vote indeed. Since that time great changes have occurred in the economy of our province which have changed our case. Certainly the imposition of this 21 per cent increase will have aggravated the case for the province; but I feel confident that the application made by the federal government on behalf of British Columbia, which British Columbia should have made for itself at the time the railways were making their applica-
Freight Rates

tion, will bring the mountain differential down to parity with the rest of Canada.
For these reasons I will vote against both the Conservative amendment and the C.C.F. amendment, and will support the government in the action they have taken.
(Translation):


Mr. MAXIME RAYMOND (Beauharnois-Laprairie):: Mr. Speaker, may I briefly define my stand on the amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) and the amendment to the amendment moved by the hon. leader of the opposition (Mr. Bracken). I cannot support either for the simple reason that both embody a principle which I wholeheartedly condemn. What, after all, is the point at issue? It is not a matter of deciding whether the board of transport commissioners' decision suits us or not, nor of deciding whether it is fair, reasonable and acceptable to all sections of this country. On the contrary the amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) would have us blame the government on the plea that it failed to intervene as a court of appeal in order to repeal a legal decision taken by the board of transport commissioners. Such a proposition implies a dangerous principle. If political tribunals were to replace our judicial ones, what would become of justice? In my opinion, that is the sole question involved in this case. Again, it is not a matter of deciding whether the board of transport commissioners' decision suits us or not but if the government should take the place of a judicial body or, in other words, if it must set itself up as a court of appeal to review a legal finding. That is the meaning of the amendment proposed by the hon. member for Rosetown-Biggar and the meaning of the amendment to the amendment moved by the hon. leader of the opposition (Mr. Bracken).
I do not mean that I approve the increase granted by the board of transport commissioners. I must say that I am not much in favour of an increase which adds to the burden of taxation in our country and will enable certain companies to pay big dividends to foreigners. But that, may I say once again, is not the issue. The only reason why I cannot vote for the amendment and the amendment to the amendment is that they embody a principle which is contrary to the public interest, a principle whereby a political tribunal and not a judicial tribunal would deal with certain matters of general interest.

(Text):


Mr. ANTHONY HLYNKA (Vegreville):: Mr. Speaker, members of this group are not opposing any increase in freight rates if, as I said on April 5, an increase is necessary. But we certainly disagree with the principle that western Canada and the maritimes should pay the bulk of this increase.
For our immediate purposes the discussion on the subject of freight rates may be narrowed down to two major points. First there is the existence of discrimination in the scale of freight rates as between the two central provinces on the one hand and the four western provinces and the maritimes on the other. In other words, Ontario and Quebec have been favoured in the present freight rates, and the rest of Canada has been discriminated against.
To substantiate my argument, I need only refer to the figures given in exhibit 131 filed by the Canadian Pacific Railway Company at the hearing before the board of transport commissioners. The exhibit states that east of Fort William in the ten-year period from 1936 to 1945 $90-4 million of working expenses brought to the Canadian Pacific a net earning of $12-1 million, or 34-2 per cent of the total net earnings in the whole of Canada, while west of Fort William in the same ten-year period $90-0 million of working expenses brought net earnings to the Canadian Pacific of $23-3 million, or 65-8 per cent of the total net earnings. I think no further argument is necessary on that point.
The second major point is this: Will this discrimination be allowed to continue; will the federal government allow an additional burden to be imposed on western Canada by permitting a flat increase in freight rates of 21 per cent; and what does the federal government intend to do about the matter, if anything?
According to the statement of the Minister of Transport (Mr. Chevrier), the government has no intention of doing anything about this matter. It is evading its responsibility by putting forth the argument that the board of transport commissioners was set up by parliament for this very purpose. The minister stated that the board was charged with the responsibility of studying this question and rendering its decision. It has given its decision, and the government has accepted it.
The question is now: Where do we go from here? After listening to the speech of the Minister of Transport this afternoon, I was convinced more than ever that the protest of the west against any additional increase in freight rates upon the western provinces before the existing discrimination is removed is justified, without a doubt.

Freight Rates
The minister pointed out that the act provides that any person or persons or any province may make application to the board of transport commissioners for equalization of freight rates, and that it is up to the province to file such appeals, if it so desires. In other words, the government is endeavouring to wash its hands clean of the whole problem. In view of the government's stand on this issue, the western provinces should first of all satisfy themselves that they know exactly how this matter stands; secondly, that the federal government has decided not to do anything about it; thirdly, that the provinces should study and arrive at some decision as to the ways of solving this problem.
Touching on a few other points, first I should like to say that in spite of the explanation given to this house by hon. members from western Canada, in spite of the briefs which were prepared and circulated by the western provinces on this question, there still are those who persist in arguing that the railways need additional revenue and that, therefore, an increase in the freight rates in western Canada is justified. Let me make it plain once again that if it is shown to the west that the railways need additional revenue I am sure that no reasonable person would object to an increase in freight rates, but spread the load fairly over all parts of Canada. Why take a disproportionate share of the revenue from western Canada?
I am telling the minister that the government must take full responsibility for the 21 per cent increase and for the existing injustice of discriminatory freight rates. I say further that the people of western Canada are not going to take this lying down. If the government does not understand the pleas of the people of western Canada which have been expressed through their provincial governments and through their members of parliament the people of the west will have to adopt language which all political parties understand.
In his speech this afternoon the Minister of Transport paid a compliment to the hon. member for Calgary West (Mr. Smith) for putting freight rates above politics. Freight rates in western Canada are so high that no member from the west has a reach high enough to put anything above the present freight rates. However I agree with the minister that the question of freight rates should not be used as a political football.
Let me explain what I mean. I have in my hand a copy of the platform which was circulated in the constituency of Vegreville
and presumably throughout Alberta during the election of 1940 by the candidates of the party in power at the present time. The Liberals placed before the people of that province a program which reads in part:
Agriculture-Pool the freight on wheat.
Reconsider whole freight rate structure.
Lower the cost of agricultural machinery.
If the candidates of the Liberal party had not used freight rates as a political football it would never have been in politics. Under the circumstances we are asked by our constituents to do something about- these questions, because they say that the Liberal candidates told them that if they voted for them the government would do something about the matter. I agree with -the minister that questions of this sort should be solved in a non-partisan way. Many questions should be solved in a non-partisan way, but I hardly believe there -is another group in Canada that has been using these questions in politics to the extent to which government members and candidates have.
I wish to come back to this mistaken view that seems to have taken hold of some people who keep on repeating it. I want to make it clear beyond a shadow of a doubt just where this group stands on the question of freight rates. I believe that the majority of those who have opposed or who have criticized the minister take the same stand. The following editorial appeared in the Ottawa Journal of April 9, 1948:
Entirely sensible is the government's decision not to interfere with the increase in freight rates granted to the railways. The board of transport commissioners, after exhaustive inquiry, decided that increases were needed.
Then it goes on:
Opponents of freight rate increases say there are regional rate injustices which should be righted. Would it help to right such regional injustices, assuming that they exist, if we bankrupt our railways in the meantime?
Surely those people who look at these questions fairly will agree that no one from western Canada wants to starve our railways or see them bankrupt. But, as I said before, why take it out on western Canada and the mari-times? Why discriminate against those provinces which are politically weaker? It appears that the famous saying could be paraphrased in this case and we could say that where there is political might, there is right. That appears to be the way things are running in this ease.
I clipped out an article which appeared in the Ottawa Citizen of March 30 of this year
Freight Rates

just before the release was made in connection with freight rates. One significant paragraph reads:
The decision equalizing east-west freight rate levels will take into account a present higher scale in the west estimated at about seven per cent above the eastern level. The dividing point is the head of the lakes.
It was understood the board's method of equalization would consist in withholding increases from certain rates in the west.
Even the newspapermen who were writing about this question before the decision was handed down felt that something should be done to equalize freight rates as between the east and the west. But what happened? When the decision was handed down we found there was to be a flat increase in freight rates for the entire country. Some hon. members have already pointed out that the west will have to carry an additional burden of something like eighteen per cent higher than the rest of the country. Surely that question must be faced by this government. The minister now promises that the board will go ahead and study the whole question again. As time goes by, it will render its decision on the equalization phase of this question. But why did not the government long before this ask the board to study this question? The government in their election platform in 1940 said they were going to do something about equalizing freight rates; but they have waited until this time, and surely now, after the board has studied the rate question for more than a year and a half it must have learned all the facts and need not take years to bring down its decision.
I do not think I have much more to add to what I have said tonight and what I said on April 5, except that I insist that the government shall not shirk its responsibility in connection with this problem. What the people of western Canada want is action, and action now, not later. When the next election rolls around, if this question is not settled before, the government will again use it as a political football and then, when the election is over, the whole thing will be forgotten. We want this question settled now. We do not want it to be involved in politics. Let us solve it now and then it will not be involved in politics.
It must be remembered that the majority of the people in western Canada are primary producers. This means that they have to pay freight both ways; they pay freight on everything they buy and on everything they sell. It is only the primary producer who is in that position. The manufacturer does not pay freight both ways. He has not to pay freight on everything he buys and on everything he sells. But the primary producer does, so in

reality multiply this increase by two and then you will be nearer the mark as to what the farmer of western Canada has to pay in increased freight rates.


Mr. T. L. CHURCH (Broadview):: Mr. Speaker, the old Grand Trunk railway which was a pioneer good road, made very good money in Ontario, and then what did they do? They went and built a third transcontinental from Moncton to Winnipeg, and the result was that the system got into such difficulties that in 1916-17 a royal commission to investigate the railway situation in Canada had to be appointed, consisting of Mr. A. H. Smith, president of the New York Central railway, Sir Henry Drayton, head of the railway commission as chairman, and Mr. Acworth, who was a leading executive of the Great Midland railway in England and had made a great success of that road. The city of Toronto and the Ontario government in 1918-19 opposed the railway rate increase, and we took an appeal on questions of facts to whom? To the governor in council, and they dismissed our appeal.
The province of Ontario, with the other great industrial province of Quebec, contributes more in taxes than any other province in this dominion. The province of Ontario gets little or nothing from governments and little or nothing from some railway corporations. But I do say that there should have been set up in this house long ago a committee to consolidate and revise the Railway Act. Thirty years ago, back in 1917 and 1918 there was a committee of the House of Commons appointed to revise and consolidate the Railway Act, which met for two years. I appeared before that committee as head of the Canadian Union of Municipalities, accompanied by the late Sir Adam Beck, and we proposed to the railway committee that the Railway Act, like the Bank Act, should be revised every ten years. There has been no revision of the Railway Act since 1917 or 1918. But the railway committee of that day sat for nearly two years and the city of Toronto had to have some of its chief officials appear before that committee for nearly two and a half years, because the Mackenzie interests had gone to nearly every legislature in the country and got charters for the building of a third transcontinental line. We had to watch them because the Sir William Mackenzie interests owned the old Toronto street railway with a thirty-year terminable franchise expiring in 1921. We had a clause put in the Railway Act at that time, after a long battle here, to protect the municipalities. It provided that a

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federal corporation could not run its line in, on, along, over or under a highway without the consent of the municipality. That was a blessing to the municipalities, which otherwise would have been ruined, with no control over their own streets. As I say, a committee should have been appointed long ago, directly after the war, to revise the Railway Act and bring it up to date, but that has not been done since 1919 up to the present time.
As to the present rate increase, the toll charges and rates should provide that there be no more political rate structure in Canada, setting one part of the country against the other, causing divisions and all that kind of thing. Ontario does not want that, nor does any other province that I know of. This particular application by the railways was considered by the board for nearly a year and a half. The board is a judicial body appointed under the Railway Act, which removed control of the railways from the old railway committee of the privy council, which used to consider all railway legislation down to the appointment of the board in 1903, when the late Hon. Mr. Blair, a former minister of railways, became first chairman of the railway board.
The board is a law court. I raised some question about the matter when the late Hon. Rodolphe Lemieux was Speaker of the house, and he ruled that the board was a law court. The then solicitor general, Mr. Cannon, had objected to some things that had been said in the debate and it was then that the Speaker ruled that the board was a court of law. The act gave the board very wide powers over any class of goods or persons or property of every description conveyed by the railways or by steamships connected with the railways.
Section 33 of the Railway Act gives the board powers equal to the powers of the supreme court. It has jurisdiction of its own volition. It does not need an application before it at all. It can go to work of its own volition and investigate express rates, freight rates and all that kind of thing. It is its function and duty to do so. This board did not do it. The province of Ontario wants nothing the other provinces do not get also from the country; it wants no hand-outs from the country and has never got any. Were it not for the resources of the province we would not be in the position in which we are today. Ontario is the greatest taxpaying province in the dominion. If it were not for this province in the past, the dominion would not be able to go into all this kind of thing and duplication.
They had big eyes in those days. Cox could not wait. We remember the old Grand 5849-187
Trunk Pacific which started to build a road from Moncton to Winnipeg and the railway board had no jurisdiction over it. They all had big eyes. Branch lines would have been built to the sun, to the moon and the stars if they had been allowed to carry on. After all this was done, the good old Grand Trunk in Ontario took the rap and became bankrupt. It had to be taken over by the country, which meant a serious loss to the country. The Canadian National Railways made all their money in Ontario out of the old Grand Trunk. There was an investigation into this situation, appointed by the gentleman I have named. The chairman of the board at that time was Sir Henry Drayton who was associated with Mr. A. H. Smith. What did the report find? The report found the following, that Canada had too much railway mileage for its population. It said:
The mileage of Canadian railways is very great in proportion to the population of the country. It has increased out of proportion to the increase of population.
Canada's natural waterways make railways less absolutely necessary than in other countries.
The net return is so low as to prove that more railways have been built than can be justified on commercial grounds under present conditions.
The public investment in railways is very large. The total amount of public capital involved in direct construction of government lines, and cash aid, land grants and guarantees to private companies is $958,451,900, not counting the value of lands still unsold.
They were not satisfied with that. They went to the provinces of Manitoba, Alberta, Saskatchewan and British Columbia and they got further hand-outs of millions of acres of land and right-of-way protection; so much so, that chaotic conditions were created. The report went on to say:
The development of Canada justified two transcontinental lines. It did not justify three. The Grand Trunk and Canadian Northern should have been amalgamated.
Then they recommended certain things to be done in regard to taking over of this railway. They did not consider that operations by a minister directly responsible to parliament would be in the public interest. They said:
It would not secure better service or lower rates.
They rejected the idea of direct government ownership and operation and they recommended that parliament not fix the rates. They recommended that the commission be appointed as a judicial body, and they could not be criticized here. They have the same jurisdiction and powers as a judge of the superior court or of any of the courts of this country. One of the cardinal principles of the
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British constitution is that the courts of our country are subservient to the legislature. That is a very good principle. They also report that the railway board be non-political, permanent and self-perpetuating. They said:
We give reasons for concluding that railways are not a proper subject for direct parliamentary control.
That is right. We have the same thing in connection with the Toronto transportation commission. The original bill consisted of sixty pages, and I boiled it down to a page and a half. That act has now been used as a model by the city of Ottawa. They recommended:
That the act of parliament provide that the operation of the company shall be on a commercial basis, and that the trustees make no general reduction in rates until the property earns a reasonable net return.
They also recommended that there be given to the trustees the widest powers in the management of their property, and that they take into account depreciation, overhead and all the rest of it, and to run the road from the commercial aspect. The Drayton report recommended that the authority of the railway commission be extended to include all government railways.
Mr. A. H. Smith, president of the New York Central, in an amending report said:
Amend the regulating policy so that the railway commission may have jurisdiction over all railroads in the matter of maximum and minimum rates, the issuance of securities, the building of new railways, or the extension of lines, and other matters properly within the scope of governmental supervision.
Create a board of trustees, consisting of two government officials and three private citizens to act for the government in the matters hereinafter proposed.
The commission in 1909 was appointed under the chairmanship of Mr. Justice Mabee who had tried to regulate railways and their rates, and he did make some substantial progress and was a strong chairman. I might refer to the application I had before them in connection with the coal subsidy. I believe that the national policy should be extended in railways to include bonuses, subventions and subsidies, because we had that regarding the coal situation, which has been carried on by an act of parliament outside the railway commission's authority. We had one or two other instances of that as well. The house will find that all set out in the coal debate on my national fuel policy in Hansard of Monday, March 19, 1923. It took six years to make it statutory as applying to the maritimes, and Alberta coal and coal from Wales, and it was a blessing to the people of this country.
I may say that before there was a railway commission, away back on the 11th of June,

1897, the Laurier government, which came into office in 1896, introduced a bill regarding British Columbia railways and the building of the Canadian Pacific to the Crowsnest pass. The bill was introduced in this house by the minister of railways of the Laurier government regarding a subsidy for the railway to the Crowsnest pass. There was a debate in this house. Mr. Ross Robertson, the then member for Toronto East, discussed the bill. I am reading from "The Economic Aspects of the Crowsnest Pass Rates Agreement, No. 13, of the McGill University economic studies, one of the national problems of Canada series," by Mr. Theodore Herbert Harris, M.A. Mr. Harris said that at the time the bill was passed discussion fell into three principal divisions: first, the advantages to be derived from the construction of the line; second, the terms under which the line was to be constructed, more particularly with reference to the subsidy which the Canadian Pacific Railway Company was to receive and, third, the feasibility of constructing the line as a government enterprise. Regarding the first, there was practically unanimous approval, the sole dissenting voice being that of a member for an Ontario constituency, Mr. Ross Robertson, who failed to see why so large a sum was being devoted to the development of British Columbia, while the province of Ontario was, in his opinion, being neglected. And it was neglected, with the result that we had not had the Temiskaming and Ontario system electrified in 1910-11-12. If wre had had that it would have been of great advantage to Ontario.
I stood at Fort Erie the other day watching the trains going down in that border town. I saw these magnificent new cars that they are using now on the subsidiary of the Canadian National Railways, the system they are using throughout Maine, New York and other places such as central Vermont and on all these other roads that are subsidiaries. I bring that to the attention of the hon. member for Simcoe North (Mr. Ferguson), because he is interested in the rates and rolling stock of the railroads up north in Ontario and all that kind of thing as well. This report goes on to say:
It was that section of the bill that dealt with the subsidies which the Canadian Pacific Railway Company was to receive that promoted the greater part of the discussion, leaving little time for the house to bear the pros and cons of the argument that the government undertake the work on its own behalf.
From the parliamentary debates on the terms of the Crowsnest act I quote the following:
Opposition to the subsidy granted the Canadian Pacific Railway Company under the terms of the bill came from many sources, but particularly from Mr. Ross Robertson. This mem-

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ber pointed out that as the total cost of constructing the 330 miles of railway was estimated at $7,000,000, and that as the government was subsidizing it to the extent of $11,000 a mile, the company was only required to find forty per cent of the funds necessary for the construction of a line which he believed would be a commercially successful enterprise from the very start. He deplored the fact that the public resources of British Columbia were being transferred to the Canadian Pacific Railway Company to the extent of 20,000 acres of land per mile, and felt also, that when the line was in operation, the people would be wholly at the mercy of the Canadian Pacific Railway.
Some further misgivings were entertained due to the fact that there had been guaranteed to the British Columbia and Southern Railway, a company incorporated under the laws of British Columbia, a land grant of 20,000 acres per mile in the event of that company constructing a railway line through the Crowsnest pass. "By the terms of ail agreement between the Canadian Pacific Railway Company and the British Columbia and Southern Railway, the former fell heir to a portion of this grant. The fact was made clear, however, that a considerable portion of the land which the Canadian Pacific was to obtain by virtue of its agreement with the British Columbia and Southern would be turned over to the dominion government.
Further debate on the subject was restricted to the usual parliamentary tactics of delay.
As a matter of fact, a considerable portion of the land which the Canadian Pacific Railway Company was to obtain in British Columbia in connection with the southern railway was returned to the dominion government. A further debate ensued and the Crowsnest Pass agreement was adopted. Then came the Manitoba agreement, which was submitted to the railway commission, and there was another one with respect to the Crowsnest Pass agreement, which was considered away back in 1924 when an application was made under the Railway Act. The matter was referred to the Supreme Court of Canada, and it was found that the Crowsnest Pass agreement applied only to the conditions that existed when it was originated and, I think, to the class of freight also.
I submit that there should be no more political rate structures in this country. The national railway is faced with a deficit of $23,000,000, notwithstanding the fact that it pays no taxes.
May I ask, Mr. Speaker, that hon. members observe some order in the chamber? I should like to get the attention particularly of some of my hon. friends from Ontario. I do not see why hon. members from Ontario should not follow this discussion with interest. I would ask them to pay some attention. I can wait until they are through talking. I am not in a hurry. I should like to get some order, at least on my own side of the house.
The people of this province generally, the farmers of Ontario are paying heavy taxes and 5849-187J
some are getting no service at all. Let me ask hon. members representing the districts around Haliburton and Frontenac and western and northern Ontario what service their people have been getting from the old Grand Trunk. We cannot get any steam suburban service in Toronto, which has contributed more revenue to the railways than has any other community in Canada. The Ontario members are afraid to stand up for their own province, as the members from some of the other provinces have done. We cannot get anything from any government. We have not had in the Toronto district a cabinet minister since 1935. Today we have this Canadian National deficit of $23,000,000 for one year and the people of Ontario will pay a considerable part of that deficit. The national system has many advantages which are not enjoyed by the other railway.
In my opinion this railway system should be operated on a commercial basis. One matter which I have raised, and which is not covered in the order for the present 21 per cent, has reference to the employees of the Canadian Pacific and the Canadian National from coast to coast. They were entitled to some kind of war bonus for what they did during the war. They worked day and1 night in the transportation of troops from Vancouver to Halifax. They worked long hpurs, some of them eighteen hours a day. Surely these men are entitled to some recognition from parliament, the same as some others who did less got.
So far as the province of Ontario is concerned, we have no support at all, and our Ontario members on all sides of the house are to blame. What have my friends representing Haliburton, Frontenac and Huron, and all these other places in western Ontario, to say with regard to the Canadian National services they have got? What have they received in return for the funds taken from the old Grand Trunk of Ontario and given to complete the "Cox can't wait" transcontinental from Moncton as far as Winnipeg?
I do not think there should be any political rate structures in Canada, and that is all we have ever had. No wonder the farmers of Ontario do not get anything. Their members are responsible. As I say, they are afraid to stand up for their province as the members from the prairie provinces, the maritimes and British Columbia have stood up for their provinces.
What has been responsible for the condition that has brought about appeals from seven of the provinces? Consider the extravagance condemned in the Drayton-Acworth report, attributable to the operation of three transcon-
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tinental railways. Some of the seven provinces now object to the rate structure of this country, and I am not here to support yet an increase in rates. Far from it. The appeal should have been allowed first. In my opinion sufficient material was submitted to the government for the government to decide. But some of the seven provinces who have been objecting were themselves largely responsible for the present state of affairs as a result of the overbuilding of railways and useless duplication in Canada. We had railway construction three times in excess of what the country could stand.
For example, there were three branch lines from Toronto to Belleville and the result was that one line of the tracks had to be ripped up. There were other sections of railroad in the other provinces which also had to be ripped up and abandoned, such was the overexpansion of railway construction in Canada. I do not say that all the provinces were to blame, but I suggest that the intention which was expressed at the time railway construction began in Canada should be carried out, and that is, that there should be no more political roads or political rate structure. The roads should be managed from the commercial point of view, after proper inquiry, and the facts should be allowed to speak for themselves.
I believe there should be a proper system of railway rates in Canada, and let me say in this connection that we in Ontario do not want anything from the other provinces of the dominion. I myself have always been in favour of the principle of confederation, that what is good for one province is good for the rest of the country. In other words, I believe in the old Cornish battlecry for confederation, "Each for all and all for each."
There is no doubt that there are inequalities in rates, nor is there any doubt of the fact that there is at present a very large Canadian National deficit, but I believe in the principle I put forward in 1923, of bonuses, subventions and subsidies granted after an inquiry along the lines of the coal investigation, in order to see that inequalities are wiDed out.
Finally, I suggest that the Railway Act should be revised every ten years, as the Bank Act is revised. The last Railway Act revision took place in 1917. Why should we wait thirty years for a revision of so important an act as the Railway Act? Two long wars and a heavy depression have intervened and we have had no revision of the Railway Act to check up on inequalities and to find out what, if anything, can be done.

I think the government of the day might have taken some steps after the seven provinces wrote them, after this order was passed. I have the order of the board here, and I have the opinion of Mr. Wardrope, who believes that the railways should have got another two per cent. That order was dated March 30, not so long ago; there was an appeal to the governor general in council, and the government should have allowed that appeal, because there is provision in the Railway Act for such an appeal on questions of fact. I was before the governor general in council myself at one time. We had a whole staff of accountants, lawyers and everything else. It was in connection with passenger rates and freight rates. We presented our brief to the railway commission and later took an appeal to the governor general in council.
I sympathize with the prairie provinces and the maritimes and have always favoured liberal -treatment to those parts of the country which have done so much for Canada. I am a great admirer of British Columbia which is not only rich in water power but generally has been a great blessing to confederation. So I think the Minister of Transport (Mr. Chevrier) might, after a request of seven provinces, have taken the initiative himself, because he has power under the act; and the governor in council should have heard the appeal. The operation of this order might have been postponed for two weeks or so in order to permit this to be done, and then the government could have given their decision. After all is said and done, the onus is upon the government to some extent, though the reports are the other way and the railway commission may be considered a court of law, as it is in fact. They are called commissioners, but that body is a successor of the old railway committee of the privy council, and the Railway Act says it is a court; I quoted the section a short time ago. The question as to whether or not the railways were entitled to a 21 per cent increase is a question of fact. The government could very well have postponed the application of the order for two or three weeks and heard any appeal from it. Then, after they gave their decision, I do not see what we could have done as members of parliament, bcause the railway board was appointed for a specific purpose: to find out what are reasonable rates.
I do not believe the increase is entirely justified. Perhaps ten per cent or more might have been more in line with what is required; but to give an increase of 21 per cent all at once after taking about eighteen months to hear the case, seems hardly fair. Surely after

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having taken that long the government could have taken a few days more before putting the judgment into effect. It was put through as a matter of policy, not as a matter of law. Instead of taking time to hear the appeal, however, the government announced the next day that they had no jurisdiction, though there is an appeal in law to the governor in council on questions of fact and to the Supreme Court of Canada on questions of law, or to the privy council in England. Nothing like that was done, and I am afraid to some extent the government was influenced by the action of the railways across the border and the interstate commerce commission.
These matters have to be considered. I believe the government might well have heard the appeal as I have suggested and then announced its decision.


Mr. F. E. JAENICKE (Kindersley):: Mr. Speaker, with his great effort this afternoon the Minister of Transport (Mr. Chevrier) undoubtedly convinced or converted many of his followers who a week ago were sort of faltering on this question; but I am sorry to say he has not been able to convert me and that today I feel just as I felt the day we heard over the radio the announcement of the board's order. When the minister spoke this afternoon he more or less elaborated upon the argument he advanced in this house on April 5, when we had a debate on this freight rate question. This afternoon he again stated that he wanted to dispel some misconceptions. I may say there is no misconception in my mind. I should like to quote from what the minister had to say on that other occasion, as reported at page 2662 of Hansard:
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. . . . The board in this case was dealing with one specific matter, namely an application ... to the board of railway commissioners for an increase in freight rates.
With great respect I say to the minister that I think he was wrong, as I shall try to show in a moment. What he said is, of course, substantially what the board of transport commissioners said in their judgment; and in my opinion the board were also wrong. They held that discrimination was not in issue, and skilfully skated around that point. This afternoon the minister quoted from the decision of the board something which had some application to the argument I am about to make, but I am going to quote another paragraph from the judgment of the chief commissioner as it is found at page 81 of the mimeographed copy:
Wide latitude was given to the protestants in the development of their objections to the proposed increase. In a considerable number of instances the objections involved matters more appropriately to be dealt with under proceedings upon complaint and in other cases virtually amounted to an endeavour to have reheard various phases of some of our previous decisions. A case of this character is a poor vehicle for the adjustment of individual rates or for the elimination of preferences or unjust discrimination existing except where same may be outstanding. One reason is that no notice has been given to the public of the intention to try such unanticipated issues and many interested parties were therefore not before us and could not have been heard completely if they were.
I said, and I repeat, that I believe the board were wrong in their judgment when they said that in fact they had no jurisdiction; because I maintain that in any case before the board for approval of any tolls or rates, discrimination is always an issue. Let me refer to the act to make my point clear. The application was made under section 325 of the Railway Act, which reads:
The board may disallow any tariff or any portion thereof which it considers to be unjust or unreasonable or contrary to any of the provisions of this act, and may require the company within a prescribed time to substitute a draft satisfactory to the board in lieu thereof or may prescribe other tolls in lieu of the tolls so disallowed.
Then I wish to quote part of section 314, which deals with the matter of discrimination, part of which was also quoted this afternoon by the minister. The first subsection reads:
All tolls shall always under substantially similar circumstances and conditions, in respect of all traffic of the same description and carried in or upon the like kind of cars or conveyances, passing over the same line or route, be charged equally to all persons and at the same rate, whether by weight, mileage, or otherwise.
Subsection 2 reads:
No reduction or advance in any such rates shall be made either directly or indirectly, in favour of or against any particular person or company travelling upon or using the railroads.
Subsection 4 reads:
No toll shall be charged which unjustly discriminates between different localities.
In my opinion all the sections under this particular part of the act, including sections 314 to 321, are overriding sections and must be taken into consideration in any case of approval submitted under section 325. I think that in view of their decision, in the case before them, that they had no jurisdiction to deal with discrimination or equalization, the
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board were wrong in law. It might have been different if they had found as a matter of fact that there was no discrimination. But they did not do that; in fact they could not do that. As I said before, they skated around the point and they held that discrimination was not in issue.
In my opinion, therefore, they were wrong in law and perhaps an appeal by the provinces might lie to the Supreme Court of Canada. The government should at least have stayed the order until the provinces had sufficient time to decide upon an appeal or upon some further action. But it seems that some mystic power has more influence with the government than members of parliament from all parties who pleaded so forcefully and effectively on April 5 the cause of justice and non-discrimination.
Talking about discrimination, my mind goes back to the time we had the debate on the prohibition and restriction of imports, when a few months ago the Minister of Finance (Mr. Abbott) gave the house a lesson in non-discrimination when we were discussing this bill to prohibit and restrict imports. He told us that this government was all out for non-discrimination. He went so far as to say at one time to the committee that we were going to set an example to the world in nondiscrimination. It is true that this lesson referred to international relationships; but it now seems that when it concerns our own Canadian people not only is discrimination advisable, but it is quite right to enhance this discrimination if it is a matter of providing in perpetuity the necessary operating expenses and profits of the railways.
Many points were made on April 5 and again in this debate on the motion and on the amendment offered by my leader in connection with the matter of discrimination. I wish to mention only one example to show that there is very unjust discrimination. The example I have chosen is the one which has been referred to by the hon. member for Vegreville (Mr. Hlynka) this evening. I shall go a little farther than he went in pointing out the injustices of this discrimination, and that it is such an unjust discrimination as would come within the meaning of the act and the particular section I read a few moments ago. As was said by the hon. member, the evidence before the board showed in a statement from the Canadian Pacific that in the ten-year period between 1936 and 1945 the average of the gross earnings of the Canadian Pacific was $215 million a year. The working expenses to be paid out of that were approximately $180 million, so that the net earning in each year was

approximately $35,000,000. The evidence also established that the lines east of Fort William showed an average gross earning each year of $102 million and working expenses of approximately $90,000,000, leaving net earnings in the east of $12,000,000. In the west, that is to say the lines west of Fort William, the Canadian Pacific had gross earnings of approximately $113 million, and the working expenses in the west are practically equal to those in the east, namely $90,000,000, leaving net earnings out of western lines of approximately, $23,000,000. In other words the net earnings of the Canadian Pacific in the west, on equal operating expenses, were almost double its net earnings in the east.
If we translate these figures to a per capita basis we find that the gross earnings in the east contributed about $3 per capita, and in the west about $5.40 per capita. If we take the net earnings of the Canadian Pacific in these years we find that the east contributed $2.52 per capita and the west contributed $4.83 per capita.
If we take this 21 per cent increase we shall find that, on the basis of these figures, the eastern people will contribute 35 cents per capita, while we in the west will have to contribute about $1.10 per capita, so that the Canadian Pacific can have these additional profits. The figures which I gave as to the company's earnings in eastern Canada also include the lines in the maritimes, where the people are also being discriminated against so far as freight rates are concerned. If we take into consideration this discrimination against the maritimes, the tremendous disparity which I have already pointed out as between east and west will be enhanced as between the two central provinces of Ontario and Quebec and the rest of Canada.
As I pointed out a minute ago, I compute this increase in the freight rates structure to be more than three times as great in the west as it will be in the east; and if we take into consideration the injustices done to the maritimes, this disparity will be even greater.
Surely such a disparity in rates which results in people in the west paying more than three times as much per capita as people in the east in order to supply these additional earnings for the railways is unjust discrimination within the meaning of section 314 of the act. As a matter of fact the government might be deemed to have admitted as much because of their contemplated investigation of this matter.
For a moment let me come back to the board and its attitude in the matter. The board's duties and powers are not clearly defined in the act. But, generally speaking, I would say that its duties and powers are to

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see that the provisions of the Railway Act are fairly enforced. I would say that, taking the act as a whole, the board's primary responsibility is the protection of the public. It is true perhaps that the board is there to protect the interests of the railways as well; but an act which grants extraordinary powers to the railways, such as the power of expropriation, is primarily an act for the protection of the public.
And may I suggest that in any decision the public ought to have the benefit of the doubt. The board knew of the grossly unjust disparity in freight rates already existing between the central provinces and the rest of Canada. However, instead of rectifying the situation, as it had power to do, it accentuated the situation by its judgment.
In my opinion the board had full power to reject the application of the railways, and to tell them to submit a new freight rates schedule for approval which would meet with their needs and which at the same time would be non-discriminatory. Why should the board or anyone else figure out a just, equitable and non-discriminatory freight rates structure for the railways. The way I read the act it is the duty of the railways to do that; and they should have been told to submit such a schedule for approval of the board, and to put their house in order.
I am of the opinion that the board has entirely misconstrued its duties and powers under the act, and that the people of Canada -certainly the people in the west-have lost faith in the competency of the board. For these reasons I believe that a royal commission or some other tribunal should be set up for the investigation of the freight rate structure as proposed by the minister. I believe that some of the provinces have already taken the same stand.
But let me again suggest that the onus of providing a fair and1 equitable freight rate tariff for the whole of Canada is, in reality and according to the provisions of the act, upon the railways themselves. The railways should be given to understand that the course of least resistance which they seem to have adopted this time when asking for an increase all across the board will not do. They should get busy and work out for the approval of the board or some other tribunal a schedule which will meet their needs and at the same time be just and non-discriminatory as far as the public is concerned.
I also plead with the minister, although I presume it is now too late, that the government reconsider the matter, suspend the board's order as they have the power to do and request the railways to submit a scheme which has
these just and non-discriminatory features. Not only would this course be fair and just, but may I suggest that it would also be in the interests of the government.
This afternoon the minister mentioned something about the political situation that might develop in connection with this railway rates dispute. I have here an editorial which appeared in the Saskatoon Star-Phoenix, a newspaper which warmly supports the government of the minister. They certainly do not do so in connection with this freight rate order. The editorial reads in part:
Some of the reasons why the Chevrier policy contains the seeds of a fatal error for the King government may be found in the judgment of the board of transport commissioners. No one objects to the railways getting more money. Everyone should object to them getting it as a discriminatory levy upon the west. The board, of course, may say that the effect of a rate increase is none of its business. The federal cabinet cannot say the same and expect to remain in office, and it is an incredible lapse of the ordinary political sagacity of the cabinet to find that any of its ministers think it can. Yet that is w'hat makes politics, and the consequences will unfold quickly. Another reason why the Chevrier proposal is bad is that the board of transport commissioners is unacceptable as the body to conduct a general inquiry into the rate structure. But meanwhile, a new generation of politicians seems sure to learn one of the basic facts of Canadian politics, that is, that freight rates are basically a political matter.
I suggest to the government that they had a grand opportunity to take this matter of freight rates out of politics.
Mr. HOWARD C. GREEN (Vancouver South): Mr. Speaker, the hour is growing late; but in view of the fact that the subamendment moved by the leader of the opposition fMr. Bracken) was seconded by myself, I should like to say a few words this evening. It contains two paragraphs, and I shall deal first with the second, which reads:
Further regrets that the government has refused the reasonable request of seven provinces that the imposition of increased freight rates recently authorized by the board of transport commissioners be delayed for thirty days until they could be heard.
As hon. members know, the judgment of the board was delivered on March 30. Almost at once the premiers of seven provinces of Canada wired or wTrote in to Ottawa requesting that it be suspended for at least thirty days. For the life of me I cannot understand why that request was refused. These were the premiers of the seven provinces that had cooperated with the government by entering into agreements within the last year or eighteen months. There was the Premier of British Columbia, my native province, and the
Freight Rates

Premiers of Alberta, Saskatchewan, Manitoba, New Brunswick, Prince Edward Island and Nova Scotia.
These were responsible men, men who were far closer to the people living in those provinces than the Prime Minister (Mr. Mackenzie King) or any dominion cabinet minister. They were men of all political shades. The Premier of British Columbia represented a coalition government of Liberals and Conservatives. The Premier of Alberta represented a Social Credit government. The Premier of Saskatchewan represented a C.C.F. government. The Premier of Manitoba represented a coalition government of Liberals, Conservatives and Social Crediters. The premiers of the three maritime provinces represented Liberal governments. I wonder that the government failed to heed the reasonable request of those seven premiers. In my opinion that was shabby treatment; treatment which should be condemned in no uncertain way by the members of this house. Therefore I approve strongly the wording of the second paragraph of the subamendment. The first paragraph reads as follows:
Regrets the government's failure to secure the removal of inequalities and discriminations in the Canadian railway freight rates structure before the imposition of a horizontal increase of twenty-one per cent-an increase which is bound to intensify the aforesaid inequalities and discriminations.
Hon. members will notice that the essence of that paragraph is the reference to inequalities and discriminations. No one can deny that such existed before the judgment of this board was handed down, and no one can deny that they have been intensified by the judgment of the board. It seems to me that the question of these inequalities and discriminations is vitally bound up in the whole freight rate situation; yet it is being cavalierly brushed aside by the Minister of Transport and those who have spoken in support of the government's stand.
I shall not attempt this evening to deal with the position in any other province than my own province of British Columbia. There our problem, and our complaint, for decades has been the mountain differential. It was explained neatly in the judgment of the British Columbia member of the board of transport commissioners, Mr. MacPherson, at page 84 of the board's judgment, and I propose to quote from Mr. MacPherson's explanation. He says:
During the progress of the hearing it was pointed out by counsel for the provinces on many occasions that in Canada we have different grades or steps in the freight rate structure, viz. . . .

By the way, the Minister of Transport made the same explanation this afternoon. The commissioner went on to enumerate the types of
rates:
The maritime rates (in preferred territory).
As I understand it, those are rates reduced by 20 per cent by reason of the Maritime Freight Rates Act. Next:
The competitive rates of Ontario and Quebec.
Which rates apparently are higher than the maritime rates. Next:
The prairie rates for Manitoba, Saskatchewan, and Alberta.
Which in turn are higher than the rates in Ontario and Quebec. The Minister of Transport will perhaps correct me if I am wrong in anv of my statements. Next:
The mountain scale or Pacific scale of rates.
These are higher again than the prairie rates. In other words, they are the highest of all four rates. They apply only to freight moving through the province of British Columbia.


Lionel Chevrier: May I interrupt the hon. gentleman at that point? Did not the commissioner whose judgment he now cites agree with the judgment of the chief commissioner?


Mr. GREEN:: I am at the moment citing only that portion of Mr. MacPherson's judgment which explains the four different types of rates in Canada.


Lionel Chevrier: Did he not agree with the judgment of the chief commissioner?


Howard Charles Green: Yes, he did agree, with the reservation which I am going to quote in a few minutes about the mountain differential. In effect this higher rate for freight in British Columbia means that we are being penalized for living in the mountains. It is very fine to live in the mountains. I would not want to live anywhere else. I was born there and it is where I like to live. But we should not be penalized right down through all the history of Canada. There is certainly no justification for a penalty of that type. What we really are being penalized for is that we live so far removed from Ottawa. We are in the province farthest away from the capital. We have always had a comparatively small number of members and we have not yet been able to get this mountain differential wiped out.
I cannot say too strongly that that mountain differential is unfair. It is opposed by everyone in the province of British Columbia and has been ever since I can remember, running back for many years. The reason used in support of it seems to have been that the Canadian Pacific Railway Company had heavy

Freight Rates
expenses in running their trains through the Kicking Horse pass, through that particularly mountainous portion of our province. But over thirty years ago one of the predecessors of the present Canadian National Railways was hauling its freight from Alberta to the coast through the Yellowhead pass, and, as the minister knows, the line goes through on a grade which is lower than the grade on the prairies. That in itself should have been sufficient to wipe out the mountain differential, but in spite of that fact we are still being penalized. Surely the whole basis of decision with regard to these higher rates should be that there is competition. We should have a rate that would meet the requirements of the Canadian National Railways. There is no reason why we should not get the benefit from the fact that its line of railway has gone through the mountains on such a good grade. Either the rates are being kept up to protect the Canadian Pacific Railway Company at the expense of the people of British Columbia, or the Canadian National Railways is getting rates to which it is not entitled. I suggest that the only fair basis would be to give us the _ benefit of the fact that the Canadian National Railways' has that lower grade.
I doubt also whether the Canadian Pacific Railway Company under present operating conditions is incurring more expense than it is incurring in running, for example, through the rocky country of northern Ontario. I believe that neither railway has ever been able to prove in the hearings before the board that it did cost them more to operate in British Columbia than in other portions of Canada.
The attitude of the British Columbia government in connection with the recent hearing was very reasonable. I must say I was amazed this evening to hear the hon. member for Vancouver North (Mr. Sinclair) try to place all the blame on the British Columbia government. I was amazed to hear a member of our province make an attempt of that kind. He did not do the British Columbia government justice at all. When their counsel appeared before the board, this was the stand taken; members will find it at page 57 of the judgment; the chief commissioner is citing the stand taken by British Columbia counsel, which was:
We say there should be no increase in rates wihdle the present inequality under which our people have been suffering remains.
That was the stand taken by Mr. Locke, who has since been made a justice of the Supreme Court of Canada, and was one of the most distinguished counsel in Canada. That was the stand taken by him on the opening of the inquiry eighteen months ago.


Lionel Chevrier: Will the hon. gentleman read the following sentence?


Howard Charles Green: I am quoting from the chief commissioner's statement. The next sentence is:
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.
The province of British Columbia was asking that there be no increase in rates until the question of discrimination had been dealt with, and that has been their position throughout, but it was misrepresented this evening by the hon. member for Vancouver North.
British Columbia is hit harder than any other province by this increase in freight rates. That is shown by Mr. MacPherson. I refer again to his judgment, where at page 84 he says:
The maritime rates which are covered by the statute, viz., the Maritime Freight Rates Act, carry a twenty per cent discount on all freight moving within the maritimes and as far west aa Levis, P.Q., and also cover freight consigned west of Levis originating' in the preferred territory.
In Ontario and Quebec, competitive rates are governed by water and truck competition, the latter being uncontrollable, resulting in some very low competitive rates.
The prairie provinces get the benefits of the Crowsnest pass grain rates and also truck competitive rates, this last to a degree. However, these truck rates are controlled by provincial highway boards and cannot be considered to be competitive to the same degree as the truck rates of Ontario and Quebec.
This is also true in British Columbia where the provincial public utilities board controls truck rates in certain areas.
Finally the paragraph I wish to emphasize:
Then lastly, there is the mountain or Pacific scale, which is commonly referred to as mountain differential, whereby one and one-quarter prairie miles equal one mile in Pacific territory for rate purposes. I am of the opinion that this situation, which amounts to an increase of 16 per cent over the prairie scale of rates, should be again reviewed at the earliest possible date.
I repeat that our province has been hit harder than any other province by this increase. You see, Mr. Speaker, railway rates are of vital importance to us because we are in the most remote province of Canada. Our goods, both those which are sold and those which are bought, have to come farther by rail in most cases than the goods of any other province. The proportion of our costs which is made up of freight rates is higher than in any other province. We are also in this position. Our province has been growing in population. We have had many thousands of splendid citizens come out from the prairie provinces, and many of the young men who
*
Freight Rates

served in British Columbia during the war have moved out there since. the termination of hostilities. This means that there must be many more jobs found in our province than in any other province at the present time. Yet our industries are handicapped by this heavy freight rate. It has been a drag on them from the time when the railway was first put through to the coast. Some of the industries are particularly hard hit. The Okanagan valley is our great fruit producing district. From there fruit is shipped to all parts of Canada, and also to the United States. Some is shipped to the coastal ports for export overseas. All the fruit that is moved out of that valley must go by rail, and we find a great protest coming from that Okanagan valley as a result of the increase. I hold in my hand a press dispatch of just a few days ago headed, "Okanagan Freight up $1 Million". This is from Kelowna and reads in part:
The 21 per cent rail freight boost may cost B.C.'s fruit industry $1,000,000 a year.
The estimate was made today by A. K. Lloyd, president and general manager of B.C. Tree-Fruits Ltd.
He foresaw a jump of 11 cents in the cost of shipping a box of apples or pears to main western markets. Charges for peaches, plums and prunes probably would go up five cents a box, he thought.
Said Mr. Lloyd:
"While at first sight the freight rate boost appears an additional burden for the consumer, it does not always work out that way.
When the laid-down value of produce exceeds a certain limit, the producer begins to feel the lag. He may have to take some of the squeeze in order to continue the free movement.
It comes down to a question of supply and demand, and too often additional freight rates reflect a reduction in the net amount to the producer."
Last summer the B.C. Fruit Growers' Association presented a brief to the board of transport commissioners, and a very reasonable brief it was, dealing with the effect of an increase in freight rates on their industry. They pointed out that, because of the loss of a market overseas, they were having to ship a far larger proportion of their fruit than ever before to Canada and to the United States, all of which involved freight rates. In the brief we find this paragraph:
Because of our geographical location and our great distance from large centres of population, the railways have secured, and continue to secure, long haul freight charges on practically every pound of fruit we produce. They also secure large revenues on practically all the supplies required by growers to produce the crop, eudh as fertilizers, insecticides, machinery, paper wraps, nails, pads, labels, strapping wire, salt, etc. We know of no other industry in Canada or United States from which the rail-

ways secure such a large share of the consumer's dollar. On a substantial portion of Ontario, Quebec and maritimes fruit the carriers receive no revenue whatever, and in the eastern and U.K. market we must compete with those provinces.
They point out that:
An increase of transportation costs is almost certain to result in decreased, instead of increased revenues to the carriers as our lower grades cannot, on a buyers' market (or heavy crop year) carry the burden of transportation costs, and they will, therefore, be left on the trees, or sent to processing plants.
I believe the situation is somewhat the same in the fishing industry. A large proportion of our fishery production has to be sent by rail east of the Rockies and the increase in rates will handicap that industry in a serious way.
This increase, with the mountain differential on which the increase is imposed, will hold up our development in the province. I hold in my hand an editorial from the Vancouver Sun, which is a supporter of the government. It is dated March 31, less than two weeks ago. The heading is: "Worse Than Ever." We find this paragraph at the end of the editorial:
The mountain differential is an artificial barrier to British Columbia's industrial expansion. By heightening the barrier, the transport board has heightened British Columbia's determination to smash it down entirely.
As the minister must know, the feeling in British Columbia about this mountain differential goes very deep. What is the remedy proposed? In his remarks this afternoon the minister said words .to the effect that now that the whole question was to be reviewed by the board of transport commissioners, they might find that the mountain differential should be dropped. He admitted that the chairman had told him that the hearings would take from six months to a year. My own opinion is that they are more likely to take from one year to two years, because there will be representations heard from all over the country. In any event, they will take a very long time.
Like some of the members on the minister's own side, such as the hon, member for New Westminster (Mr. Reid), I am doubtful of the results when the next judgment of the board is handed down. My own belief is that the question of the mountain differential will never be settled without government action. We have had this rate structure in Canada for many years. Part of it is the mountain differential, and the board of transport commissioners is very unlikely to do away with that. Judging by their actions in the past, I think it is very doubtful that they will take the step. The minister himself admitted that we have now vastly changed economic condi*

Freight Rates
tions. That is certainly true of British Columbia, and I suggest that there must be legislation brought in abolishing this mountain differential.
Here you have a clear-cut case for legislation by this parliament. There was legislation to set up the Crowsnest Pass agreement. That legislation met a situation which could be met only by parliament. There was also legislation to provide for the 20 per cent subsidy in the maritimes, and I am not questioning for a moment the wisdom of giving that subsidy, but I point out that the situation had to be met by legislation. The government has recognized these facts because, in the order in council of April 7, P.C. 1487, in which it directed that the board of transport commissioners review the whole freight rate structure, there appears the following:
The committee, accordingly, advise that the Board of Transport Commissioners for Canada be directed to undertake a general freight rates investigation along the lines indicated in the preceding paragraph, subject-
And this is the provision to which I draw attention particularly:
-to such special statutory provisions as affect freight rates.
The cabinet itself, in drawing up this order in council, has recognized that there are certain conditions which must be met by legislation. I submit that the mountain differential is another such situation and one which can be met only by legislation.
In British Columbia we are not asking for a rate that is lower than that given anyone else. We are asking that our rate be dropped to the level of the others. Surely there is
nothing unfair in that request. I cannot for the life of me understand why we should be singled out for the doubtful honour of paying the highest rates of any group of Canadians. It just does not make sense, nor does it make for unity in this nation.
The party of which I am a member stands for removing the mountain differential. My leader, speaking this afternoon, said that the mountain differential had to be removed. We believe that it must be removed by legislation, and we propose, Mr. Speaker, to see that it is removed.
On motion of Mr. Isnor the debate was adjourned.



BUSINESS OF THE HOUSE

[Stage Direction]
Mr. G'RAYDON: May I ask the acting leader of the government what the business will be tomorrow.
Lionel Chevrier: Tomorrow the government would like to proceed,with the motion, appearing under government notices of motions, in my name, to set up the committee on railways and shipping. That should not take very long. Next we should like to continue with this debate on the motion to go into supply and the amendment of the leader of the C.C.F. and the subamendment of the leader of the opposition. If this is disposed of, then the motion to set up the committee on human rights and fundamental freedoms, and legislation on other matters already announced but not yet disposed of.


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

Wednesday, April 14, 1948