1950-06-02

[Stage Direction]
Second report of special committee on Bill No. 133, respecting national defence.-Mr. Campney.


[Stage Direction]
Mr, Sarlo Fournier (Maisonneuve-Rose-mont) presented the first report of the special committee on the Dominion Elections Act, 1938, and moved that the report be concurred in.
Motion, agreed to.


[Stage Direction]
Mr. Ralph Maybank (Winnipeg South Centre) presented the first report of the special committee on radio broadcasting, and moved that the report be concurred in.
Motion agreed to.


Hon. L. B. Pearson (Secretary of Stale for External Affairs):: I should like to lay on the
table three copies, in English and in French, of an agreement for facilitating the international circulation of visual and auditory materials of an educational, scientific and cultural character, signed by Canada on December 17-, 1949.


Mr. Graydon:: Is there any simple explanation of it?



ELECTRICITY INSPECTION ACT


Right Hon. C. D. Howe (Minister of Trade and Commerce) moved: the first reading of Bill No. 263 (from the Senate) to amend the Electricity Inspection Act, 1928.
Motion agreed to and bill read the first time.



GAS INSPECTION ACT


Clarence Decatur Howe: the first reading of Bill No. 264 (from the Senate) to amend the Gas Inspection Act.
Motion agreed to and bill read the first time.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. W. J. Browne (St. John's West):: Mr. Speaker, I should like to ask a question of the Minister of Transport, of which I have sent him a copy. Has any consideration been given to placing the employees of the Newfoundland hotel, at St. John's, Newfoundland, on the same rates of wages as those paid in other Canadian National Railway hotels, and if so, when will the new rates come into effect? Will they be retroactive to October 1, 1949?


Hon. Lionel Chevrier (Minister of Transport):: Mr. Speaker, if the hon. member sent notice of his question, I am afraid I did not receive it, although I was in my office all morning. The question involves a legal point which has been given consideration both by officers of the Canadian National Railways and by officials of the Department of Justice, I believe-although I am not too sure of the latter. I shall have to look into the question to ascertain the present position, and give a reply later.

The house in committee of supply, Mr. Dion in the chair.



DEPARTMENT OF TRANSPORT

[Stage Direction]
524. Board of Transport Commissioners for Canada -administration, maintenance and operation, $624,800.
Lionel Chevrier: Mr. Chairman, it is some months since there has been an opportunity in the House of Corrimons to have a full-dress debate on the subject of freight rates. The last time such a debate took place was on the occasion of a decision by the board of transport commissioners to increase freight rates by 21 per cent. Since that time of course there has been

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in the house intermittent discussion on the subject; but because of the rule of the house which states that all matters which are sub judice should not be open to debate, it has not been possible for the house to discuss the subject matter in the manner in which I am sure hon. members would have wanted to do.
I welcome this opportunity to take part in the debate. I realize that in a subject such as this, with both the political and economic ramifications it has, it is almost impossible to deal at length with the various aspects which are likely to come up. In the main all of the applications made by the Railway Association for Canada were of a financial nature, and the board regarded them as such. In the course of my remarks this morning I shall deal first of all with the position of the railways prior to these applications, and next with the applications themselves. I should like to make certain comments respecting these as I go along.
The financial position in which the railways of Canada have found themselves in the last few years can be properly viewed only in the light of the developments which took place during the war and prior to the war. Stated briefly, and without for the moment considering the causes, the costs of labour and material have increased sharply, and while many industries have been able to keep revenues in step with rising expenses, the railways have not been nearly as successful in a similar endeavour. They have, it is true, on two occasions made application for authority to apply a general increase in rates. These requests have been granted, in part on one occasion and in whole on another, after extensive argument and study, and after a considerable period of time.
It is common knowledge that during the war years from 1939 to 1945, the volume of traffic severely taxed all the carrying facilities of the railways. For example, in 1938, the last complete year before the war, the revenue ton miles on all Canadian railways stood at approximately 27 billion, and in 1944 they had reached a level of 66 billion. The passenger miles revenue rose from 1 [DOT] 7 billion to 6-9 billion. This was a period of very high operating revenue; but these levels of activity were not secured without the full extension of all available manpower and equipment facilities. This of necessity involved additional expense commitments, but, as is normal under conditions of rapid expansion, the rate of increase in revenue was for a time greater than the rate of increase in expenses.
This is self-evident when consideration is given to the operating ratio of our railways

in 1938 as compared with 1943. In 1938, in order to earn a dollar of revenue, the railways had to spend 88 cents; and in 1943 to earn a dollar in revenue the expense was 72 cents. The balance of revenues is in both cases the amount which is left available to pay fixed charges, surplus requirements, dividends and the like.
During 1944 and 1945 the rate of increase of expenses overtook the rate of increase in revenues, with the result that during 1946, with the declining level of traffic becoming more and more noticeable from month to month, there followed necessarily a decrease in operating revenues which was not accompanied by a proportionate decrease in expenses.
For the first eight months of 1946 the railways had to spend 88 cents for every dollar of revenue they earned. In other words the financial position of the railways as measured by the operating ratio had reverted to the position which existed before the war. This, in brief, was the financial position of the railways prior to October 9, 1946, when the Railway Association of Canada filed its first application for an increase in freight rates. That application sought a 30 per cent increase in tolls and freight tariffs, with certain exceptions, as I shall mention later.
In the application attention was drawn to the observations I have just made, namely that increasing costs and declining revenues had taken place in the field of railway operation. Mention was also made of the fact that the general level of freight rates had not been increased over the reduced level established by the board in 1922. In fact, it was stated that in some instances following 1922 there had been substantial important reductions in freight rates.
The application was put down for hearing at public sittings of the board, opening in Ottawa on February 11, 1947, and the final argument was not concluded until December 17, 1947. In addition to the sittings which it held in Ottawa, the board travelled from coast to coast and heard all parties interested in appearing before it in each of the nine provinces. The board handed down its decision in the 30 per cent application on March 30, 1948, by which it authorized an increase in freight rates of 21 per cent, horizontally, all across the board, with certain exceptions which I think are of extreme importance and which I should like to put on record:
First, a flat increase of 25 cents per ton was granted on coal and coke; second, the increase did not apply to rates on grain and grain products between points in western Canada; third, it did not apply to the agreed charges; fourth, it did not apply to grain and

flour moving from all points on all lines of railway west of Fort William to Fort William and Port Arthur and Armstrong; fifth, it did not apply to grain and flour moving from all prairie points on all lines of railway to Vancouver, Prince Rupert and other British Columbia coast points for export; sixth, it did not apply on international overhead and import and export traffic through Canadian ports moving at rates relating to rates in effect from and to the United States of America ports.
At this point I should like to draw attention to a statement which I made on the general debate which took place in 1948 and which will be found in Hansard of April 13 of that year. At that time I said that the decision in the 21 per cent case which had been handed down by the board, instead of affecting an estimated freight revenue of $492 million for the two main railways of Canada affected a freight revenue of approximately $262,500,000, thus eliminating from that judgment nearly $230 million of freight revenue. The reason for that is to be found in the exceptions which I have just enumerated. With the concurrence of the applicants and the respondent provinces, the Canadian Pacific Railway was used as a yardstick for measuring the need of the railways, and the decision indicated that the 21 per cent award would yield the Canadian Pacific Railway additional revenues in the amount of $30,345,000.
Here I want to interject that there was a decision by the government to make a general investigation into the freight rate structure following the decision of the board of transport commissioners in the 21 per cent case. By virtue of order in council P.C. 1487, dated April 7, 1948, the board was directed to undertake a general freight rates investigation with the object of eliminating unjust inequalities which might exist between different persons and between different localities. In July of that year the railways indicated to the board that they were assembling information and would prepare a plan or schedule of rates which in their opinion would accomplish the purposes envisaged by P.C. 1487. To date the plan and proposals of the railways have not been received, and the provincial governments have not made any submission with respect to the order in council.
The board of transport commissioners were of the opinion that the report and recommendations of the royal commission should be studied before completing their findings pursuant to P.C. 1487. In the meantime, however, the board had not lost time but was conducting investigations of its own. Its bureau of transportation economics, along with its traffic department, have had under way for several months a waybill study and analysis of freight matters. This study
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involves the assembly and examination of waybills covering the movements of freight on certain representative days over a period of twelve months. By representative days is meant days which after study and examination reflect a normal movement of freight traffic on the railways of this country. It is expected that the waybill study will furnish to the board, for the first time in its history, basic data with respect to the freight rate structure and its incidence upon various sections of the country. The approximate number of waybills which are being examined on the dates selected will total 250,000 shipments. When the study is completed and considered in the light of the recommendations made by the royal commission, the board of transport commissioners will then be in a position to appraise the value of the submissions made by the railways and other parties.
I have indicated already that no submissions have as yet been received by the board. I think in fairness to those concerned I should point out that both the time and energy of counsel, officials and experts of the railways and the provincial governments as well as the board have been so completely taken up with matters of freight rates and the royal commission that so far it has been impracticable for the board to pursue its investigation on the general freight rates by holding public hearings.
I come back now to the history of the period following the decision in the 21 per cent case. Following that decision, representations against the order of the board granting the 21 per cent increase were made on behalf of the seven provinces which had opposed the application, Ontario and Quebec not being included. A petition was made by those provinces to the governor in council on July 20, 1948, and on July 27 the Railway Association of Canada, on behalf of its member railway companies, again applied to the board of transport commissioners for authority to make another advance of 20 per cent on the freight rates in effect at that time.
The board concurred in the suggestion of the respondent provinces that this case should not be heard while the appeal of the provinces from the decision of March 30 was pending before the governor in council. The governor in council gave consideration to the appeal of the provinces, and by order in council P.C. 4678, of October 10, 1948, directed the board of transport commissioners to review its 21 per cent decision and to give consideration to a number of specific complaints made by the provinces at the time at which they dealt with the 20 per cent application of the railways.


Mr. Diefenbaker:: When did the last
increase in the United Kingdom take place?


Lionel Chevrier: Within the last month or two-quite recently. All in all, having regard to the circumstances as found at the time, I believe the decision of the board is one in keeping with the financial requirements of the railways.


Mr. Drew:: Mr. Chairman, discussion of this item presents the first opportunity that has been afforded to indicate the opinions that may be held by members of the house as to the sequence of events leading up to the most recent announcement by the board of transport commissioners. The Minister of Transport has reviewed the events of the past two years, when, for the first time since the war, the question of increases in freight rates has been dealt with in the way that he has outlined. In his concluding remarks he gave comparisons between increases in freight rates in the United Kingdom and in Canada, indicating that the over-all increase in Canada is not as great as in the United Kingdom or in the United States.
I submit that the problem is one which goes far beyond a mere question of comparison of
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Having said that, I submit that what the minister has given to us this morning is a review of confusion and incompetence which demonstrates that the main consideration before us at the moment is what is to be done with the board of transport commissioners, and the way in which we are going to deal with the whole, question. In using the word "incompetence" I do so in the strict dictionary meaning of the word. I wish to make it quite clear that I concede the earnestness and the desire of those who have been charged with certain responsibilities to give effective service. When I say the board is incompetent, I say that whatever the reasons may be, it has demonstrated itself to be incompetent by its own actions during this extended period. Therefore I submit that the discussion of this item necessitates the review of one of the most important considerations this house could have before it. Everyone will agree that at the present time, in the wider field of government, our relation to the outside world and our concern for international security must be the number one consideration; but as far as our daily lives here at home are concerned the major consideration of every Canadian is the maintenance of that economy upon which the daily lives of our people depend.
In the Canadian economy there is no single thing of such vital concern as the provision of effective transportation for our people and for the things we produce. That is in fact what we are considering when we discuss this item. This is the first opportunity that has been afforded to examine this subject; and as the minister has very appropriately pointed out, this is the first opportunity he has had to review in this way the events which step by step, since these discussions were actively undertaken two years ago this spring, have led to the present position.
In reviewing what has taken place the minister has gone back to the judgment of the board of March 30, 1948, authorizing a 21 per cent horizontal increase in freight rates throughout Canada. He has pointed out that this horizontal increase was subject

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to certain substantial exceptions which resulted in a smaller amount being charged for freight rates on an over-all basis than otherwise would have been the case. In spite of those specific exceptions, however, and the fact that they did involve substantial sums, that judgment, as in the case of the subsequent judgments, failed completely to deal with a subject that must be dealt with in the interests of the national economy- that is, the unfair differential in freight rates as between different parts of this country. Subsequent judgments have proceeded to deal with this problem on the same basis. The most recent judgment, which came into effect only last week, carried forward and confirmed this situation. If it becomes effective, that judgment fastens upon the Canadian economy an intolerable discrimination between different parts of the country. In the very nature of the proceedings that have already taken place it is not possible to imagine that the board as at present constituted and equipped can hope to solve this problem within any reasonable time. Therefore we must deal with the matter on the basis that, if this board is to continue as at present constituted and equipped, a situation has been created which will have most serious consequences for our whole economy.
I emphasize this because I am going to urge in the discussion of this item that the time has come when the government must take hold of this problem, that we can no longer permit this confusion to continue or this endless bickering back and forth between the board, the Department of Transport and the courts to make it impossible for producers, for the people generally and for the railway companies to know where they stand. Because I am going to propose that this subject be tackled I should like to indicate considerations which it seems to me have been regarded as fundamental in the examination of this whole question since this country became a nation.
The economy of our country, perhaps to an extent not equalled anywhere else, depends upon the ability of the railroads to carry people and, above all, freight, in a manner that will make the work of our people economically sound in every part of Canada. One might say that in the United States they have a parallel economy and that the situation there is similar. It is not. Even in the great grain growing areas of the western United States, to the south of our grain growing areas, they have very large urban communities within easy reach which consume a substantial portion of what is produced in the way of grain and livestock products. There

is also the fact that while nature has been generous to us, more generous than sometimes we recognize, nature has also established certain barriers in this country which challenge our ability to tackle our problems and find a solution of them for the common benefit of all our people, wherever they may live.
In the consideration of this problem and this particular duty of the board of transport commissioners, it is obvious that, on the one hand, there is the necessity to provide in Canada economic facilities for the transportation of our people and the products of our farms, forests, mines, waters and factories. There is also the duty on the part of the government, as representative of all the people, to provide the railroad facilities from time to time which are required for the development of the country, and to take such steps as may be appropriate to construct new lines and extend existing lines so that our development may not be impeded by a too rigid regard for the immediate cost of that development, as long as we can see that it is going to be a sound investment for the future.
Ever since we became a nation the duty of the government to take such steps as were necessary to assure efficient transportation has been regarded by this parliament as one of its paramount obligations. It is only necessary to go back to the debates shortly after confederation, and follow them through the succeeding decades in the history of this country, to realize that this was always well to the fore in the minds of those who were building this nation. While cost has always been a very important consideration, as it always must be in a world of sensible men and women, there are a great many examples which demonstrate that other considerations than cost have had a definite bearing on the construction of rail lines, and on the service offered. If cost alone had been the consideration, rail lines never would have been built to the west through the great rock belt north of lake Superior. Traffic would have moved south of lake superior by an easier route through the United States and back into Canada. There were different reasons why Canadians of those days, as represented by their members of parliament, decided that there would be a Canadian route. It was not national pride alone, although doubtless that had some bearing on the decision. It was the fact that one of the hallmarks of nationhood is that a country shall have, within its own borders, the means of moving its people and its goods.

At heavy cost, therefore, rail lines were constructed through the difficult rock barriers north of lake Superior, as well as through the mountain passes, and Canada was linked from sea to sea by a means of transportation without which this nation might not be one nation today. By various and quite legitimate devices, those who built the railroads were recompensed for that additional cost. The people of Canada approved the provisions which were made to assure construction that otherwise might not have been possible. The principles which applied at that time are principles which still apply to the problem of transportation, and that is the problem we are discussing.
The board of transport commissioners has many duties to perform. It must deal not only with railways and the problems of construction, maintenance, operation and rates, but also with telephone and telegraph lines, express companies, international bridges and tunnels, ships on the great lakes and the Mackenzie and Yukon rivers. It must deal with pipe lines to a limited extent; that is all it is allowed to do. These other obligations and duties however are, in comparison, not nearly so important as the requirement of assuring effective transportation which can carry heavy freight of every kind from one part of Canada to the other, and to the seaports so that it will move to the markets of the world.
In this case the board of transport commissioners has heard evidence over a period of more than two years. As the minister has indicated to us, the first award of 21 per cent was made on March 30, 1948. The second increase to which he has referred was made in September, 1949, and that award was an interim increase of 8 per cent. Subsequently on March 1, 1950, the board granted 16 per cent in substitution for the 8 per cent interim increase. As has been explained by the minister, the Supreme Court of Canada found that the board must not make such a decision, subject to a qualification of the kind which they imposed. That in itself reflects upon the ability of the board to deal with this question. Perhaps the limitation on the ability of the board may not be a limitation applied to individual members. It is perhaps a limitation under which they act. In any event, their decision was thrown out, and they were called upon to consider this whole subject again.
As I mentioned, an award was made on March 1 of this year, substituting 16 per cent for the interim 8 per cent award. Then comes the strangest incident of all. While the minister has pointed out the substantial grounds of appeal, what has not been pointed out is that the main ground of appeal was
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that the board had not been able to understand its own figures. Even assuming that their decisions were right as to the bases upon which they should make the awards, they were out a matter of $13 million in their conclusions because that is what the difference in percentage amounts to in dollars.
The most recent award of a further 3-4 per cent, bringing the total increase in the last stage up to another 20 per cent, is really a finding by the board that it did not know how to work out its own decision in terms of simple arithmetic. It is not for us to say who is to blame; that, in effect, is their .finding.
I submit, Mr. Chairman, that this house has no right to pass this item, which in effect constitutes approval of the continuance of the board as now constituted and under its present authority, when by its own most recent decision it has stated it cannot do its job. I go further and I submit that if the board, within more than two years and with all the evidence it has heard, can only deal with this problem on the basis of a uniform horizontal increase, except for the limited exceptions that were made, then once again I say that the board has demonstrated that, whether because of the procedure under which it operates, or the personnel, or by the lack of effective assistance it has in doing its work, it is not capable of functioning in the way it should function.
After all, this is something that relates to the day by day economy of the country. Changes in the value of the dollar, changes in international exchange, changes in the volume of production in different parts of the country, all have their effect. The enormous volume of freight that will move from Alberta, added to the wheat and other commodities that move from there, in itself affects the economic picture, and affects beneficially the cost structure in relation to capital obligations. So also do those great discoveries that have taken place throughout Canada. What we need is a board that is supplied with and supported by technical experts, who day by day can continue to examine the situation so that at any time the board may be in a position to make a decision that is consistent with the facts of the situation at the moment. What has happened, however, is this: Even if these decisions of the board were not in appeal for indefinite terms; even if we were not confronted with an appeal to the privy council, an appeal to the governor in council and possible appeals to the Supreme Court of Canada, the position in which we find ourselves is that the board's judgments alone are, at each stage, almost ancient history in

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a country with the dynamic and rapidly moving economy we have in Canada. We must have a board competent to deal week by week and month by month with the events in a country that, given the vigour and the vision that it should have, will grow faster in the years ahead than it has at any time since we became a nation.
We have no other way of stating during the present session our view that the need for action by the government is urgent, and that it must be action of the most decisive and sweeping character. After all, under the procedure as it now stands, the government must make the ultimate decision, subject of course to appeals to the Supreme Court of Canada on points of procedure, subject to the termination of an appeal now before the privy council, subject to other appeals that may occur; and I hope I am not being unfair when I say subject also to possible future miscalculations of the nature of the recent miscalculation which has just been corrected.


Mr. Low:: Better get them an adding machine.


George Alexander Drew: It would take a big adding machine to correct errors of that kind and on that scale. No; without any reflection on any individual member of the board, we have before us the most colossal blunder in simple arithmetic that this country has ever seen. Here at a time when children all over the country are being asked to pass examinations in ordinary arithmetic, we have the direct declaration by one of the most important agencies or boards set up by the government that it was not able to add its own figures to the tune of some $13 million.
I am not saying that in any sense of reflection upon individuals, but I would remind the government and the members of the house that this is something for which every hon. member must assume responsibility. This board was reorganized in a very limited way some two or more years ago. At the time that was done the then prime minister emphasized the fact that there must be changes in the board and in its functions if it was to be able to do its work. There has been no substantial change. All that has happened is that there have been minor changes in personnel. It may well be that the board is carrying on under an impossible set-up, and that to a considerable extent its metnbers may individually be placed in an unfair position. But that is something that the government must determine. That is something that the government must examine. After all, the government will very jealously guard its right to appoint the members of that board, no matter how it is constituted.

Therefore we can only examine the net results; we can only accept their own decision that they were not able to carry out their task; we can only see the confusion that is caused by this series of decisions, with their variations for one reason or another; and we can only see that in over two years this board has not been able to deal with the fundamental inequity of the freight rate structure across Canada.
I have no desire to discuss any matter outside the ambit of the immediate subject that is before us. But in view of the fact that I am presenting these arguments, and in view of the fact that I would not wish any of them to be examined upon a false premise, I do want to anticipate any suggestion that while I was in a position of responsibility, other than that which I now hold, I had an opinion different from that which I am expressing here this morning.
It has been suggested from time to time that the fact that the government of Ontario when I was its head did not participate in the appeals which were before the board indicated a lack of interest in the subject.


Mr. Mulch:: It surely did.


George Alexander Drew: That was not so. I could not help hearing from across the way, "it surely did". That merely indicates why it is important that I attempt, if it is humanly possible, to keep this discussion on the right track.
Whether rightly or wrongly, the government with which I was associated at that time did hold the view that the British North America Act, on the one hand, placed certain responsibilities in the hands of the provinces; and we insisted that those responsibilities be recognized. We took the view that, on the other hand, the British North America Act did impose certain responsibilities on the dominion government, and we thought that the control of railways was one of the subjects which had been most exclusively placed under the jurisdiction of the dominion government by the British North America Act. We in fact held the view, which has been frequently expressed on other occasions by this government, that in relation to dominion affairs every part of Canada is represented in this house by the members sent here from the different constituencies. Whether rightly or wrongly, but strangely enough in this case holding the same view that has been expressed on other occasions by the dominion government, we thought that Ontario, in relation to dominion matters, is fully represented in this house by members of the different parties who have been elected to represent the constituencies of Ontario. We therefore took the position,

rightly or wrongly, that this is a responsibility of the dominion government and of this parliament, and it is in accordance with that view that in this house this morning I am expressing the opinion that it is the obligation of members of parliament and of parliament itself to say what they think about the continuance of this board on the present basis.
I do not want any word that I have said to imply criticism of provinces which have launched appeals, because I recognize that they were in a most unfavourable position in relation to the central provinces. In spite of the views I have expressed, if those provinces had not expressed the opinions that they did express, some of the inequities that have occurred would not have been remedied to the extent that they have. I hope this morning, and later today, during the discussion of this matter, that we shall see evidence in this house that the provinces are effectively represented in federal matters by their representatives; that we shall hear members from every party express their opinions as to the conduct of the board and as to the present inequity of the freight rate structure of Canada and the necessity to end the discrimination which is so unfair to the maritime and western provinces. Unless we hear Liberal members, -as well as other members from the maritimes and western Canada, express their opinions, the contention of the dominion government that every province is fully represented by its membership here stands on very uncertain ground. I hope, if for no other reason than that, Liberal members will prove here in the house and to the people of Canada at large that every province is represented and that the views of those provinces are represented, that by their vote- and I am going to offer the opportunity to vote -they will indicate they believe the time has come for drastic action in this matter.
It is not now possible to move an amendment which calls for a reconstitution of the board, but on the present basis the board could be wound up and the government could carry on its activities with whatever staff is maintained, because they are assuming the ultimate obligation anyway to decide what is to be done.
There must be a board of some kind; there must be an independent body, and a very much more independent body than we have had, charged with the responsibility of carrying forward into our transportation problems those fundamental principles which guided the construction of our roads and the development of this country in the first place. Therefore I feel that the house will support the government in the setting up of any newly constituted body, and will pass whatever supplementary estimates are necessary to meet that
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purpose. It is my view, however, that the board as now constituted, in view of its own decision that it cannot work out the details from its own records, is not competent to proceed to deal with these tasks, and that the government now must assume direct responsibility for this situation. If the government deals with this matter, and if the government does grasp the nettle and really deal with the problem, I hope it will give to the board, however constituted and with whatever authority it is granted, technical and expert -advice at the very highest level which day by day will have available the changing statistics and changing considerations, thus making it possible for the board to act promptly in dealing with these matters-promptly not only in fairness to the people of Canada and to every part of Canada, but in fairness to the railways as well. They simply cannot operate except on a basis of sound economy. On a broad and balanced basis let the board make its award in such a way that the railways may operate soundly and effectively, and also that they may perform their services with full recognition of the right of every Canadian in every part of Canada jointly to receive benefit from the railways that this country supports-and it supports the private as well as the public railways-and so that there also will be available to them the very highest level of transportation in those areas which vision and good judgment tell us will open up rapidly in the years ahead.
For that reason, Mr. Chairman, and to give an opportunity to indicate to the government that the time has come for real and drastic action, I move:
That item No. 524 be reduced to the figure of one dollar.


Mr. Coldwell:: Mr. Chairman, with very much of what the leader of the opposition (Mr. Drew) has said I find myself in agreement this morning. Frequently there is disagreement between us, but he has expressed a point of view in regard to the board of transport commissioners that most of us in the House of Commons should hold, after reviewing the judgments and the history of this board for the last few years.
He has made a direct attack upon the competence of the board, using the term "competence" in its dictionary meaning; and I believe that attack was thoroughly justified. One has only to look at the judgment of the board itself in the most recent application of the railways to realize how incompetent the board is.
The chief commissioner, the chairman of the board, Mr. Justice Archibald, has been gravely ill, and his health is impaired. He did have, in larger measure perhaps -than

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the discussion this morning indicates, the confidence of a very large section of the Canadian people. But the judgment handed down, signed by the acting chairman, Mr. Wardrope, and concurred in by Mr. MacPherson, fully justifies the criticism made by the leader of the opposition that the board overlooked elementary rules of simple arithmetic.
At page 6 of the judgment handed down we find these words:
I was in error when at the end of my judgment I used the following language:
"As the majority judgment of September 20, 1949, reviewed the decision in the 21 per cent case and determined1 that the latter should have been 15 per cent, and also incorporated such modification in the 8 per cent interim award, it is necessary to modify the above-stated deficiency accordingly."
And he went on to say:
In effect, quite unintentionally of course, this amounted to a further application of the 8 per cent formula, thus reducing the percentage of increase required to meet the deficiency.
Little remains to be said except that I regret the error and take full responsibility for it.
Just imagine a board upon which great responsibilities were placed by this parliament, in an important judgment affecting the welfare not only of the entire population of Canada, but more particularly of certain parts of Canada, admitting in a subsequent report-and having to admit it-that an error, the extent of which the leader of the opposition referred to a few moments ago, was made quite unintentionally!
I wonder why such an unintentional error was made. The hon. member for Victoria-Carleton, on Tuesday, March 14, 1950, asked for an order for return. If we look at that return, and look at the personnel of the board, and particularly the assistance the board has and the duties imposed upon it, we begin to understand why it is not competent to deal with these matters. The return indicates clearly, why the House of Commons should do what the leader of the opposition has said we should do-demand of the government that a board, with adequate staff facilities be constituted in which the house and country can have some confidence.
I do not want to go over ground that has been traversed this morning. I do wish to emphasize that these increases in railway rates are a serious matter, not only for the producers and consumers of this country, but also for the railways themselves. I have before me an extract from evidence given by an official of the Canadian National Railways. I should like to put it on the record, because it illustrates that these constant increases in rates will eventually make it impossible not only for the producers of Canada to ship their goods, but for the railways of Canada to compete and to earn sufficient revenue to

enable them to carry goods at reasonable freight rates without very substantial subsidies from this parliament.
Mr. MacPherson, counsel representing the province of Saskatchewan, was examining Mr. Fairweather, who is the development officer of the Canadian National Railways. I wish to put these brief questions and answers on record, because they confirm the statement I have just made that these increases in rates are likely to price the Canadian railways out of the transportation market altogether. This is the question by Mr. MacPherson.
Q. Mr. Fairweather, in volume 65 of the evidence at page 13646 during the cross-examination of Mr. Walker-*
Of the Canadian Pacific Railway:
-by Mr. Covert a question was asked and an answer given, and I want to read the question as put to Mr. Walker and Mr. Walker's answer and to ask you whether or not you agree with it. This was the question:
"Q. Now, I just wanted to ask you one question on this point. I think an article was read to you this morning by Mr. Campbell suggesting that the railways may be pricing themselves out of business in the United States. My understanding is that your view is that that is not the situation in Canada, that the railways have nowhere near reached, I think was the phrase you used-
A. That is my view, yes.
Q. -a rate level which would price the railways out of business?
A. Quite so."
Q. Do you agree with that statement of opinion by Mr. Walker?
A. No, honestly, I do not.
Q. Well, will you tell the commission why you do not agree with it, Mr. Fairweather?
A. Well, I think that the tenor of my evidence explains my doubts and my disagreement. I think when the rate adjustments presently in effect and in prospect before the board of transport commissioners, supposing they, were granted in full, are applied, and having regard to this canker of highway transportation which I say is growing bigger, I have a real fear that the productive economy of our country will be disturbed and that marginal producers will no longer be in a position to see enough profit in their operations to produce, and that they could easily start a snowballing effect. I am a development officer, and as I have said, I firmly believe that our high standard of living is keyed into the incentive that is present in the producers of our basic commodities. Those basic commodities historically have always enjoyed low rates, and the prospect of increasing the rates beyond the levels that are now in contemplation is something that, as a development man, I look on with a certain degree of reservation. It is made clear in Mr. Gordon's brief that there is a fear expressed there looking to the future that the railway might price itself out of its market.


Mr. MacPherson:: Thank you very much.
In spite of what the minister said about increases in rates in the United States and in Great Britain, to which I think the leader of the opposition gave an adequate reply, it must be remembered that those countries

are not comparable with Canada. There are great distances between the productive regions of this country. We have the maritime region divided by rock, lake, river and forest from the region of central Canada. We have central Canada divided from the region of the prairies by a thousand miles of lake, rock, swamp and forest. We have the region from Calgary or Edmonton to Vancouver and Prince Rupert divided by range after range of mountains. The conditions in the different countries are not comparable.
This nation was built up by bands of steel which bound the maritimes to the central provinces, to the prairies and the Pacific coast province. Anything which destroys the use or effectiveness or efficiency of our railways will jeopardize the whole Canadian economy, and perhaps in some respects the very continuance of confederation itself. Consequently this is one of the most serious problems with which we have to deal. I refer again to Mr. Fairweather's answer when he said that historically the basic commodities produced in this country have always enjoyed low rates, and that the prospect of increasing rates beyond the limits that are now in contemplation-being before the board of transport commissioners he had to say that-is something that as a development man he looked upon with a certain degree of misgiving.
The board of transport commissioners has not sufficient staff to go into all the factors that should be considered in dealing with these rates. The Canadian Pacific Railway has been taken as the yardstick to be used in setting rates in this country. When we look at the history of the Canadian Pacific Railway we find that all its assets originated from the railway part of its operations. Going back into history we find that the people of this country gave to the Canadian Pacific Railway-the leader of the opposition implied this, although he did not enumerate them-great concessions in order that we might have a band of steel across Canada.
There were 700 miles of railway which the Mackenzie government had completed between 1874 and 1878. There were 25 million acres of land in western Canada granted to the company, and $25 million in cash. Subsequently there were guarantees of bonds and further grants of land and other concessions by the provinces, particularly by British Columbia. As the minister indicated-I am not saying that he approves the statements made by the Canadian Pacific Railway-the Canadian Pacific Railway is attacking one of the fundamentals of our rate structure as it affects western Canada and British Columbia, the Crowsnest pass agreement.
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Let us remember that as certain concessions were given to the Canadian Pacific and other railways, in perpetuity and by statute; as large money grants and other valuable concessions were granted by the province of British Columbia, the Crowsnest pass rates were set and should not have been disturbed under any circumstances. But they have been disturbed. In 1925 the concessions which had been granted to the prairie provinces and British Columbia in the way of low rates on certain commodities-I am not going to list them again, because I did it some time ago in a similar debate-were removed. Under no circumstances must this parliament permit any further variation in the Crowsnest pass rates.
Of course when general increases are granted, on the discriminatory basis on which every decision of this railway board has been based, it causes not only anxiety and misgiving, but financial hardship, particularly when the prices of the commodities that have to be carried and for the carriage of which the producers must pay are likely to fall. Evidence was placed before the board of transport commissioners-not in the recent case, but I think in the 21 per cent increase case-to the effect that to move 100 pounds of petroleum products from Regina to Indian Head, a distance of fifty miles, would cost 26 cents; that to move 100 pounds of petroleum products the same distance in the province of Quebec would cost 10 cents, and in the province of Ontario 9J cents. There is an illustration of discrimination. Every time a horizontal increase in freight rates is made, the discrimination is greater. We have had three such discriminatory increases within the last two years. No wonder those of us representing prairie, British Columbia and maritime constituencies are alarmed at these sharp increases.
I am going to appeal to the government to do what I suggest again today. Long before this, in view of the incompetence of the board -and again I am using the word in its dictionary meaning-in view of the continuous discrimination in the granting of increases in rates, the government should have used its undoubted power under section 52 of the Railway Act and disallowed the coming into effect of these increases. The government has the power; I believe only once before was it used, many years ago; nevertheless the power is there.
There is injustice to the people of Canada generally, not merely to the people of the prairie provinces, British Columbia and the maritimes. Some of us thought that until the royal commission on transportation had

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reported, no further increases would be allowed. The royal commission has just completed the hearing of evidence and argument and has yet to make its report. It seems to me that the government has a responsibility to protect the people of Canada from the discrimination practised recently and in the past. In spite of the fact that the Minister of Transport indicated that an investigation is being made by the board of transport commissioners into the rate structure of the railways, having in mind the return asked for by the hon. member for Victoria-Carleton, and the multitudinous duties placed upon the board of transport commissioners with its inadequate staff, in my view the board cannot do the job expected of it.
The rate structure today is a crazy quilt affair, so much so that some large companies actually maintain special departments which are continuously engaged in going over the rate charges and pointing out errors. or charges under the wrong rate. I am told that these companies are collecting large sums of money from the railways, because even the people who charge the rates cannot follow the structure that has been handed to them and upon which rates must be based. These are the factors that make some of us most anxious about the present rate structure and the recent horizontal increases.
I want to go a step further and say to the Minister of Transport that, while a discussion of this kind is necessary, and while the criticisms that have been made this morning are sound, even if we have a more competent set-up of the board of transportation commissioners, and an adequate staff we shall not have got to the root of the railway problem. I think the house will have to consider how the transportation system of Canada can be modernized, how it can serve the people of Canada better, and how it can be integrated in order that it may accomplish the purposes for which it must be designed. This involves a great problem. In eastern Canada the railways are in competition with buses, trucks and water transportation, and that is the reason for the low rates. We have no water carriage on the prairies. We have very much less motor traffic, and therefore the prairie governments are not able to build the kind of roads which encourage truck transportation. The result is there is not the same competition in the prairies as there is in other parts of Canada.
It seems to me that here is the point at issue. While such competition has been valuable in a way to the people living in Ontario and Quebec, trucks pick up the profitable traffic and leave to the railways

the heavy, bulky, unprofitable traffic which must be carried, as Mr. Fairweather says, on a low freight rate. There is the problem in a nutshell. How we are going to deal with it is a matter that the house will have to consider. I have views about it that I have come to hold because of thought I have given to the matter. Necessarily my views are not the only views that may be held. The solution I have in mind may not be the only one that can be found. Nevertheless I say to the government, to the official opposition and to all other hon. members that the time has come when we must tackle this problem in a fundamental way. Otherwise either we are to have increases in rates that will cripple the economy of our country, or parliament will have to provide even more substantial subsidies for the railways than we have accorded to them in the past.
It is said sometimes that operating and maintenance costs have increased, and they have. It is said that labour costs have gone up, and they have; but so has every other factor in relation to the cost of living in this country. Increases in living costs have particularly affected the lower paid railway workers, of whom there are many thousands. I know it is fashionable to point to the earnings of the more highly paid railroad men, but as a matter of fact there are many thousands of low paid railway workers who in the past few years have found it most difficult to live.
In examining the evidence placed before the board in the recent application for increases, one is struck by several considerations. In the first place, why should not the revenues of the subsidiary bodies, the subsidiary economic activities of the Canadian Pacific Railway, like Consolidated Smelters, be considered as part of the revenue from its railway operations, when those assets arise out of those operations or out of public concessions? If they were included, the picture would not be satisfactory, but it would be much better than appears on the surface. Then if the board had a sufficient and a competent staff, even under this set-up it would have gone more completely into the operating and maintenance costs, particularly the latter, which were placed before the board by the Canadian Pacific Railway. I do not have the figures before me at the moment, but in the evidence it was stated that while the maintenance costs of the Canadian, Pacific in 1939 were some $49 million, those costs had risen last year to $150 million. What is the reason for that vast increase? I have been reliably informed, and I think this could be gathered from some of the evidence given before the board, that

what they call the reconditioning of rolling stock has been charged to maintenance. I have been told that at the end of the first war the railway reconditioned some of their older engines, which were rebuilt so they were good for twenty-five years, or until the end of the second war. I have been told also that since the end of the second war locomotives and other equipment have been rebuilt by the C.P.R. and that the cost of this work has been charged to current maintenance costs. In my opinion, if the lifetime of that equipment has been extended for fifteen or twenty years that cost should have been charged to capital account and depreciated over the new lifetime of the equipment.


Mr. Stick:: How much of the $150 million would be represented by that cost?


Major James William Coldwell: That is something the board should find out, and that is my complaint- that the board has neither the staff nor, apparently, the will to go into these factors, though counsel for the provinces did keep this point before the board.
So, Mr. Chairman, these rates and these increases represent an intolerable burden. I repeat that the railways are essential to the welfare and economy of this country; but the cost of carrying those railways should not be placed upon any particular section of our population. I believe the cost of carrying the railways could be drastically reduced by a proper integration of transportation facilities, by a modernization of our railways and all their equipment, and by a modernization of the entire outlook on railway transportation. After all, since the railways of this country were built by the Canadian people as a means of binding together the different parts of this country, our position is different from that of some other countries in regard to their railway services. To us railways are vital. They are vital to the continuance of our economic health and our national life.
So we must tackle this problem here in this parliament. We cannot continue as we have been going. Should there be any considerable fall in commodity prices, particularly in the price of wheat, the commodity many of us on the prairie provinces are particularly interested in, the result could be disastrous. We all remember that if the rates had been increased during the thirties, and particularly if we had not had the Crowsnest pass agreement, the freight rates on the grain that was produced would have exceeded and indeed in some instances did exceed the value of the grain. I believe that would have been altogether true in 1932. While I am not suggesting that there may be a drastic fall at the present time, I am suggesting that even if grain and flour freight rates
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are maintained substantially as they are, with the new increased rates, the increased cost of production, the increase in the rates on supplies, machinery all the rest of it, this will be a very serious imposition upon the producers in the prairie provinces.
One could raise a number of other points in connection with this matter, but I do not want to impose much further upon the time of the committee. I believe we have an opportunity of expressing an opinion by supporting the amendment introduced by the leader of the opposition. It is an old parliamentary custom in Britain. You do not want to wipe out the board of transport commissioners, but you do want to express your dissatisfaction with the board, its method of procedure, and its judgments. Had I been moving the amendment I would have done it rather differently. As a matter of fact I had it in mind; I would have moved not to reduce the amount to $1 but to reduce it by $1, which has the same effect but perhaps without the same implications. In spite of the implications, however, I believe we should support the amendment, because we want to express ourselves, and this is the only way it can be done. I had hoped to be able to raise this question earlier on going into supply, and I had an amendment already drawn for presentation at that time. However, owing to the fact that the Department of Justice considered that this should not be done while the board was actually sitting on the matter, and there having been no opportunity to do so since, we shall support the amendment of the leader of the opposition, in order that we may express the dissatisfaction we feel with the board of transport commissioners as to its competence, its lack of staff, its failure to go into various factors in connection with the Canadian Pacific Railway, and so on.
Before I sit down, I want to say that this house should also take into consideration, when the time comes, the suggestion made by the president of the Canadian National Railways that that railway be placed in a more competitive position by removing from it the tremendous overburden of capital which was inflicted upon it when this country took over a number of bankrupt railways after the first war.


Mr. Mclvor:: Mr. Chairman, I should like to ask the hon. member a question. It relates to the first part of his address. Does he consider it reasonable and just that the Canadian railways should get less in freight rates, or less in cash, for a longer haul than the railways of Britain receive for a short haul?


Major James William Coldwell: I said in the course of my remarks that conditions in the two countries

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were not comparable. My whole argument has been this; that the railways of Canada were built up in order to consolidate the country and make confederation possible, and that the discrimination in the rates that now exist imposes a burden on one part or two parts of the country, whichever way you look at it, which should be borne by the whole country. In some manner we have to arrive at a rate structure which would fairly distribute the burden. I will go a step further and say that, in view of the peculiar difficulties to which I have referred, if, after we have integrated our transportation facilities, the railways are still unable to haul commodities at reasonable rates, there should be a method of subsidizing the railways. But again I would not suggest subsidizing a privately owned railway system.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


Mr. Blackmore:: Mr. Chairman, first on behalf of the members of the Social Credit group I should like to commend the leader of the opposition on his excellent speech this morning in opening the discussion on the matter of freight rates. I was wondering whether I could recall any time since I came here in 1936 when any representative of an Ontario or Quebec constituency rose and had anything to say about the shameful, inadequate, inequitable freight rates which prevail from coast to coast in Canada. I am sorry to say I had not been able to recall any occasion until the leader of the opposition did it today. Therefore I look upon that speech as a fine augury of good things to conie.
Since coming to the house I myself have never failed in any one year to give at least one talk on the injustice which prevails in the Dominion of Canada in the matter of freight rates. For the Social Credit group I should like to say to the leader of the opposition that we propose to support his motion to reduce the appropriation for the board of transport commissioners.
I do not wish to say anything unkind about the board of transport commissioners, but I am very much afraid that they have very little excuse, very little explanation for the things that have been allowed to continue in this country over these many years.
On May 16, 1950 I made a speech dealing with the freight rate question, as reported at page 2537 of Hansard. Because it was sub judice I deemed it inadvisable to go very far into the subject, but I will continue that speech today.

My argument regarding freight rates is to be based on the freight rates as they obtained in Canada in the year 1938. Hon. members will then know that the abuses which I point out have been before the Board of Transport Commissioners for Canada long enough for any conscientious, open-minded group of people, desirous of seeing anything like justice in Canada, to have done something about this matter long ago.
There are five main general facts concerning the incidence of freight rates in Alberta with which I propose to deal. While these evils are observable in the other western provinces, they are not present to nearly as great an extent as they are in Alberta. We are at the apex of the costs going out, and we are at the apex of the costs coming in. They get us going and coming, and they all seem to think they have a perfect right to do anything they want to about Alberta. That is an astonishing thing, considering the fact that our province has never done anything that would justify anyone in supposing, so far as I know, that we do not propose to be an integral part of the Dominion of Canada, sharing the responsibilities of other Canadians and hoping to enjoy the privileges that are accorded to other Canadians.
In the first place, the ordinary consumers in Alberta are penalized for living in that province, so serious are the disadvantages of the freight rate structure as Alberta endures it.
Our primary producers in Alberta are inequitably handicapped by freight rates as compared with primary producers in other provinces of Canada. The freight rate structure in Alberta impedes ordinary economic development within the province more than it does that of any other province of Canada. Interprovincial trade between Alberta and British Columbia is hampered by inequitable freight rates, as is not the case in respect of interprovincial trade between any other two provinces of Canada, name whichever ones you desire to name. In effect a tariff wall has been erected around Alberta by freight rates, the object apparently being-designedly so, I fear-to keep Alberta products out of the markets of other provinces, and at the same time to open Alberta markets to the products of other provinces.
May I examine for a few minutes the statements which I have made in the light of facts that can be adduced?
First, as to the ordinary consumers of Alberta being penalized for living in Alberta, here are some figures which will startle anybody who gives them very much consideration. Flannelette blankets can be shipped from eastern Canada to Vancouver for $1.75 a

hundred. But if you take them off at Edmonton they will cost you $4,534 a hundred. Kalsomine can be shipped from eastern Canada to Vancouver for $1 a hundred; but take it off in Edmonton and you will pay I1.33J a hundred. Lard and cooking oil cost $1 from eastern Canada to Vancouver, but $1.98 to Edmonton; paints and varnishes, $1.25 to Vancouver and $1.98 to Edmonton; shoes, $2 to Vancouver and $3.03 to Edmonton; soap, $1 to Vancouver and $1.98 to Edmonton; wrought iron pipe, $0.70 to Vancouver, $1.98 to Edmonton.
If you were talking to the board of transport commissioners, or to either of the railway companies in Canada, Mr. Chairman, of course they would explain the discrepancy in these freight rates by this reason, that reason and the other reason, and four or five others; but the important fact is that it costs Alberta people the extra amount of money which I have indicated on most commodities because they live in Alberta. Attribute the discrepancy to discrimination, to any cause you desire; the simple fact is that there is injury done to the economy of Alberta, which is an injury to the Dominion of Canada as a whole. And any group of men, board of transport commissioners or managers of the Canadian Pacific Railway or the Canadian National Railways, who cannot see that, need to have something done to their mechanism upstairs. I think there is no doubt about this general statement.


An hon. Member:: Carried.


John Horne Blackmore: Yes, I know; you will
want it carried even more before we get much further. A lot of this should have been dealt with long ago. It has got worse all the time, until it is generally putrid now.
This statement, "The reduction for class rates is on a higher percentage in eastern Canada than in Alberta, or on movements from eastern Canada to Alberta", I take from a [DOT] document which I propose to refer to occasionally in the course of my remarks. This document was prepared by the Edmonton chamber of commerce as a submission to the royal commission on dominion-provincial relations in 1938, and dated February 10, 1938. The Edmonton chamber of commerce assert that they had at their disposal some of the most competent experts available in the matter of freight rates, and therefore they are completely confident that everything they say is not only accurate, but moderate and representative. I quoted from page 28 of the submission.
May I turn to the second statement which I make, that our primary producers are inequitably handicapped by freight rates in
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Alberta. Barbed wire, of which we use so much in Alberta, can be shipped from Montreal to Vancouver for 75 cents per 100 pounds, but to Edmonton it costs $1.98; wire fencing, $1.25 to Vancouver and $1.98 to Edmonton-all these figures are from Montreal; building paper and roofing, $1.25 to Vancouver and $1.98 to Edmonton; iron and steel bars 65 cents to Vancouver and $1.79 to Edmonton; nails, $1.50 to Vancouver and $1.98 to Edmonton; structural steel, bolts and nuts, $1 to Vancouver and $1.98 to Edmonton. This gets rather tedious after a while, does it not? Many other hardware items show similar discrimination in the matter of freight rates. Then twine, which we use in all our harvesting operations, $1.30 to Vancouver- where they do not need it-and $2,334 to Edmonton, where they do need it; window glass, $1 to Vancouver, and $1.98 to Edmonton; agricultural implements, which we use so generally in Alberta, $1.25 to Vancouver and $1.79 to Edmonton; galvanized or plain steel sheets, 60 cents to Vancouver and $1.44 to Edmonton. These figures can be found in the submission from which I am quoting, page 31.
All that is necessary is a very casual look at the list to satisfy any fair-minded person that something is most radically wrong in the building up of the freight rate structure in Canada, so far as Alberta is concerned. I am not arguing that any particular discrimination has been shown in favour of British Columbia. I believe that British Columbia is paying quite as much for freight rates as she needs to pay. But imagine what the feeling of British Columbians would be if they lived in Alberta and faced the figures I have just placed on record. As a matter of fact-


Mr. Murray (Cariboo):: May I ask the hon.
member a question?


John Horne Blackmore: Yes, a hundred of them, one at a time. Speak as loudly as you can so I may hear them.


George Matheson Murray: Why not quote the rates, not to Edmonton but to Dawson Creek, or to points up in the Peace river country?


John Horne Blackmore: Some of these days I will come in with a speech prepared to give those freight rates. But I did not come here today with the whole freight rate structure at my disposal.


George Matheson Murray: The hon. member's reference to British Columbia being given preference-


John Horne Blackmore: I did not say that British Columbia was being given preference.


George Matheson Murray: The most important farming area in British Columbia is the Peace river country contiguous to Dawson Creek.

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John Horne Blackmore: And I have just finished making a statement that should have warned the hon. member not to make the statement he has just made. Apparently he could not hear what I said. I suggest he listen to what I say from now on.
It is pointed out that many commodities might be shipped from Montreal to Vancouver, and then back to Edmonton-all those hundreds of miles extra-and then shipped out a distance of forty miles to a town called Holden, and sold more cheaply than if they were shipped directly to Holden from Montreal. What does that mean? It means that Alberta distributors are being deprived of the privilege of distributing goods to the people of Alberta. But apparently the freight rates were designed for that very purpose. And if they were not designed for that purpose it will take plenty of explaining on the part of the men who drafted those freight rates to clear themselves.
We come now to the third point: the freight rate structure in Alberta impedes ordinary economic development within the province more than does the freight rates structure in any other province in Canada. I shall quote a general statement from the Edmonton submission in this connection and leave the burden of proof upon them. These are their words as they appear at page 28:
Moreover, certain goods moving to or from points in other provinces enjoy a commodity rate that is not available on movements of the same goods to or from Edmonton and other Alberta points, which latter movements carry class rates.
I am sure that statement could be supported with figures just as striking as the ones I used in connection with the other point I made. But we will not take time to give too many figures, because it would weary the house.
The fourth point is this: interprovincial trade between Alberta and British Columbia is hampered toy inequitable freight rates in a way that in my judgment constitutes a scandal. If any province has any rights at all, economically, those rights ought to include the privilege of trading with the province next door in an unimpeded manner. But that is not so in respect of British Columbia and Alberta. Why? I am not going to go into that matter. It has been suggested, though, that long ago certain men in eastern Canada realized the tremendous productive potential of Alberta and British Columbia, and intended to see to it that never should those provinces reach the degree of industrial development of which they were capable, considering their resources; and the freight rates were simply one of the means whereby a guarantee was provided that such development would not take place. If that is so, and

if that was behind the freight rates, then I submit an outrage was committed against Canada. There was a betrayal of trust on the part of the men who had anything to do with planning those rates. There is an equal betrayal of trust on the part of the men who suffered those inequities to endure. I propose to quote again from the submission by the Edmonton chamber of commerce. At page 28 I find this:
Again, basic freight rates on movements between Alberta and British Columbia are much higher than on interprovincial movements in any other part of Canada.
I am going to leave once more the Edmonton chamber of commerce to support its case, and I am sure it can do so. Then again from page 28 I quote:
Similarly, movements from Vancouver to Winnipeg and eastern Canada are subject to a higher relative reduction for class rates than are movements from Vancouver to Alberta.
I now come to what is perhaps the most pernicious aspect of all, and that is that in effect a tariff wall has been erected against Alberta, through freight rates. Certain freight rates protect certain Ontario producers against competition from Alberta processed goods in any western Canadian market, and in the Ontario market. For example, live cattle carry a freight rate from Edmonton to eastern Canada of $1.14 per hundredweight. But fresh meat, the steer that has been killed and processed, thus giving Alberta people a little work to do, costs $1.88 per hundred as compared with $1.14, or 68 per cent more. Imagine any railroad charging, for a steer dead and dressed, something that requires no care or feeding or anything of that sort, 68 per cent more for shipment from Edmonton to Montreal than is charged to ship the same steer alive! Just contemplate that calmly and consider what it has done to the development of secondary industry in Alberta. Obviously the object has been to keep Alberta a primary producer or a hewer of wood and a drawer of water for the other areas of Canada, and permit those other areas to draw off the cream from the production of Alberta. The same inequity in freight rates exists in respect to live cattle and dressed beef shipped from Alberta to Vancouver. Whichever way the beef is going they have arranged matters so that Alberta loses much of the advantage of the livestock she produces.
No wonder the leader of the opposition had such scathing things to say about the board of transport commissioners; I am not sure that I should not say a few myself. Here are some more astonishing things. Certain freight rates expose the Alberta manufacturer to competition from Ontario goods in the Alberta market. In other words, certain

goods can be manufactured in Ontario and shipped many thousands of miles to be laid down in Alberta at prices permitting them to compete with advantage with Alberta products made right on the ground.
Here are some examples. Alberta butter is prevented from entering the Ontario market in the following way: To ship 400 boxes of Alberta butter from Edmonton to Toronto costs $764.82, exclusive of icing charges, while the same weight of Ontario condensed milk or other products shipped from Aylmer to Edmonton, a slightly greater distance, costs only $467.46. It costs just slightly over half as much to ship from Ontario to Alberta as it does to ship from Alberta to Ontario. If that is not erecting a tariff wall against Alberta, I do not know what it is.


Mr. Major:: You get the advantage of the cheaper food.


John Horne Blackmore: We may get lots of advantages, but until you live there and know more about it you cannot realize that these advantages are simply green pastures on the other side of the fence.


William Joseph Major: A figment of imagination.


John Horne Blackmore: A figment of imagination. Some people think that we in Alberta are living in a sort of paradise, and perhaps that is so compared with people in eastern Canada. Here are some more examples.


Mr. Laing:: You want to share it with British Columbia.


John Horne Blackmore: Vegetable oils, used in the preparation of shortening, can be shipped from Montreal to Edmonton for 90 cents per hundred pounds to compete with Alberta lard, but it cost $1.60 per hundred pounds to ship Alberta lard from Edmonton to Montreal. Ninety cents going one way and $1.60 going the other way.


Some hon. Members:: Oh, oh.


John Horne Blackmore: I think it would be well not to deal with this matter with too much levity because there has been too much levity connected with it already.


Mr. Goode:: How much lard has Alberta to ship to the east?


John Horne Blackmore: I am sure the hon. member realizes that no one could come down to the chamber with all the information necessary to answer any question that might be asked. Even the ministers cannot do it. But let me tell the hon. member that if Alberta has not the lard to ship it is because the producers have been discouraged from producing that product owing to abominations such as this that have occurred over the years. We could
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be producing a tremendous amount of these things, and if we are not, Canada is so much the poorer by reason thereof.
Now I come to fertilizers. To ship chemical fertilizers from Warfield, British Columbia, to eastern Canada costs 55 cents per hundred pounds but to ship stock fertilizers from Edmonton to eastern Canada, 363 miles shorter, costs 95 cents per hundred pounds. Can someone give me a reason for that difference? To ship fish oils from British Columbia coastal points to Toronto costs 65 cents per hundred pounds, whereas it costs $1.25 per hundred pounds to ship inedible tallow from Edmonton to Toronto, 60 cents per hundred pounds more. To ship edible tallow from Edmonton to Toronto costs $1.50 per hundred pounds, another 25 cents.
To ship lard and lard substitutes from Ontario to British Columbia points costs $1 per hundred pounds, whereas to ship the same products from Alberta to British Columbia, 2,000 miles less, costs 98 cents per hundred pounds. In this way the people who set up the freight rates are forbidding Alberta from selling her lard in British Columbia, this to the advantage of the eastern producer, although Alberta is 2,000 miles closer to British Columbia. To ship fish meal and scrap for animal and poultry feed from British Columbia coastal points to eastern Canada costs 85 cents per hundred pounds, but to ship packing house material, a competing product, from Alberta to eastern Canada, costs $1.33 per hundred pounds. The British Columbia producer is given an advantage of 48 cents per hundred pounds in shipping this commodity to eastern Canada. In effect that is a tariff wall against Alberta.
To ship hides and edible tallow from Vancouver to eastern Canada costs $1.25 per hundredweight, but from Alberta to eastern Canada the shipping cost is $1.50 per hundredweight, 25 cents per hundredweight more. That effectively shuts out Alberta from the eastern markets so long as British Columbia has the material to sell. I am not complaining about British Columbia, but I do complain against these outrageous inequities which obtain in the freight rate structure and from which western Canada has been suffering these many years.
To ship canned meat from eastern Canada to British Columbia costs 75 cents per hundredweight as compared with 98 cents to ship the same product from Alberta. On the one side we are shut out from the eastern Canadian market, and on the other side we are shut out from the British Columbia market. This is the result of the freight rates set-up and certain solemn and sanctimonious

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men representing the board of transport commissioners will stand up here and endeavour to argue that such rates are quite appropriate!
Such was the condition which obtained in 1938. Since that year, as the leader of the opposition pointed out this morning, we have had several horizontal advances, every single one of which aggravated the inequity and inequality by so much more. I should like to commend the leader of the opposition and the leader of the C.C.F. on the fine national point of view they assumed in their speeches this morning. I desire to assume the same national point of view. One of the things that amaze me is that Albertans have had to do so much fighting for the bare right to live. The assumption seems to have been that we did not need to live at all, that somehow or other we drew manna from heaven to supply our needs.
We want it understood that we too are anxious to see Canada become a great nation.
One of the serious difficulties from which we suffer in Canada is the loss of the very finest of our trained youth to the United States. Canadians spend tens of thousands of dollars a year to educate our boys and girls, and then they go to the United States and render service there. I am sure this constant migration over the years has constituted a drain on the Canadian economy. I wonder if there is any member in the house who desires to see that drain continue. If we are going to stop the exodus of youth from Alberta to the United States we must alter the conditions obtaining in the province so that when our splendid Alberta youth grow to maturity they will find the country attractive to live in. Every person who leaves Alberta to go to the United States is a distinct loss to Ontario, Nova Scotia, British Columbia and all the other provinces just as much as he or she is a loss to Alberta. Let us never forget that for one moment. Anything that hurts Alberta hurts all Canada.
I do not wish to spend all my time in criticism. I would much rather point out something that can be done about the situation because obviously a remedy is required.
I have three principles that ought to be accepted and implemented by the government immediately, starting today. These principles should constitute an interim policy, something that we can do while we are determining what else to do by way of a long range program. In the first place we should set up a commission consisting of three representatives from each province chosen by the province they represent whose first purpose would be, in conjunction with the [Mr. Blackmore.l
railways and the government in a round table, friendly, brotherly discussion, to determine an equitable freight rate structure for Canada. I do not wish to be sectional. I do not want to say anything that might offend my good friends from Ontario and Quebec because we depend on you for our welfare just as you depend on us. We want to get it into your minds that you depend on us for your market. If we are impoverished by inequities it impoverishes you at the next turn of the road. Let us get that into our minds clearly and fundamentally.
I noticed that most of the Ontario and Quebec members did not seem to be greatly impressed this morning when the hon. member for Rosetown-Biggar pointed out that it cost 26 cents to transport 100 pounds of petroleum a distance of fifty miles from Regina, while to transport the same amount of petroleum for the same distance in Quebec it cost only 10 cents, and in Ontario only 9i cents. I did not see the reaction of indignation and astonishment which I naturally expected hon. members to display when they contemplated a gross injustice like that being perpetrated on their fellow Canadians in one of the provinces of Canada. That is something that must be changed.
Using that as a point of departure, I want to ask any man from Ontario, Quebec, or any other part of the country if he thinks we can safely commit the setting of freight rates in Alberta to people representing Ontario and Quebec. History has indicated that we cannot safely entrust freight rates to them. There should be representatives of every province in the dominion sitting on the commission while rates are being drafted so that when the rates are agreed upon they are the result of the best brains that can be brought to bear on the problem.
I do not know whether I ought to say what I am about to say because I hesitate to say anything unkind. But if we just knew to what influences present members of the board of transport commissioners owe their appointment, to whose influence they owe their retention on the board, and whose influence governs their actions while members of the board; if those three questions could be answered now, I suspect that the answers would throw a whole lot of light on the freight rate structure of Canada. Let us have representatives from each of the provinces on the commission. Let the commission meet right away and talk the whole thing over just as though we were starting anew in a new land where nothing wrong had beer done.

Then let the commission go to work next on the problem of considering ways and means of financing such a freight rate structure.
I thought the point made by the leader of the opposition was very well taken when he said that there are two vast rocky wastes crossed every day by trains travelling from coast to coast. The one in northern Ontario is a thousand miles of waste where almost nothing but costs are entailed for a train travelling through there. Who pays for all that waste effort? In British Columbia the trains cross the great wastes of the Rockies. Who pays for that waste which gives no return? The next question is, who do you think ought to pay for it? Do you think the people of the three prairie provinces ought to pay the cost of these unprofitable expensive wilderness journeys? Can any man see any reason why that should be? Granted that we Canadians need a railroad to go through the rocky wastes, granted it is for the benefit of Ontario and Quebec as much as it is for the benefit of Saskatchewan, Manitoba, Alberta or British Columbia, let me ask in all simplicity who should pay for the waste? Certainly everybody in Canada should pay for it. Facing this question purely as a national problem, and remembering that we are concerned about the building of a great commonwealth where we can all be powerful and happy, will any man rise in this house and attempt to defend a situation where Ontario and Quebec pay 10 cents a hundred for petroleum transportation that costs Saskatchewan 26 cents a hundred? Will any man say that Ontario and Quebec are paying their share? Someone may ask if I am advocating an increase in the freight rates of those two provinces. I advocate nothing in that respect; I simply say let us turn that over to this commission and let them talk the thing through very carefully. Our two great railroads are a national asset and a national necessity. They must be supported, and the only people in the world to support them are the people of Canada. Can we devise a means whereby each and everyone in Canada can contribute equitably to the cost of supporting our railways? Then if we deem it inadvisable to raise freight rates in order to provide enough money to support the railroads, let us determine to what extent we must contribute subsidies from the national treasury of Canada to make up the amount necessary to maintain them.
That suggests a subsidy. I grant that; but let us turn the matter over to a commission which will be representative of all 55946-198
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the provinces, and let that commission determine whether as representatives of the people of Canada they would rather raise the money entirely from freight and passenger rates or only partly in that way and partly by means of a definite subsidy.


The Chairman:: Order. I am sorry to interrupt the hon. member, but he has exhausted his time. Has the hon. member unanimous consent to continue?


Some hon. Members:: No.


Some hon. Members:: Go ahead.


John Horne Blackmore: I can conclude in just a moment if the committee would permit me.


Some hon. Members:: No.


Some hon. Members:: Agreed.


Joseph-Alfred Dion: The hon. member may not continue without unanimous consent.


John Horne Blackmore: I do not want to continue if I have not unanimous consent.


Some hon. Members:: Go ahead.


Joseph-Alfred Dion: Has the hon. member
unanimous consent?


Some hon. Members:: No.


Some hon. Members:: Go ahead.


Joseph-Alfred Dion: The hon. member can see that he has not unanimous consent. I am sorry.


Mr. Arsenault:: Mr. Chairman, this question of freight rates is certainly one of the matters in which the people of Canada are most interested at the present time. After a careful study of this important matter, which carries with it the possibility of unpredictable repercussions upon the economic life of our nation, one would reach the conclusion that above the dollars and cents aspect a great principle is involved which cannot be overlooked by those of us who wish to maintain our present way of life.
There are at least two historic conceptions of how the subordination of the individual or of private enterprise to the common good is to be effected and maintained. One is that the state is the supreme entity and the people its instruments, in complete submission to its dictates and purposes. The other is that the people are supreme, that the state is the creation of their will and the instrument of their purpose to live together for the common good. A few years ago we ended the second world war fought to maintain this latter type of state and government. Our soldiers protected it from the enemies who would have destroyed it by force from without. Our task today is to protect it from

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shipping his goods five hundred miles have his rates increased by the same number of dollars and cents as would the man shipping his goods a thousand miles? That is the result of applying a maximum increase.
Railway rates should be at such a level that there is, after payment of expenses, an adequate return on the money invested in railway enterprises. Unless we are going to change our way of life, as I said a moment ago, this view must be true, whether the money invested is government money, as in the Canadian National Railways, or privately invested money, as in the Canadian Pacific Railway.
This committee knows that the Canadian National Railways has been able to pay its operating expenses but has not been able to pay its fixed charges, or provide a return on the investment in the railway property. In 1948 the Canadian Pacific Railway had a return of only 1.80 per cent on its investment in railway property; that is, the net investment after full deduction for depreciation. In 1949 the return on the net railway property investment of Canadian Pacific Railway was only 1.97 per cent. These figures can be secured from the evidence given by the Canadian Pacific Railway to the royal commission on transportation. Therefore, investors in the Canadian Pacific Railway have no guarantee that they will secure a return on their investment; but in prosperous times lor the railway to be able to earn only less than 2 per cent on its net rail property investment is obviously inadequate treatment of private investors.
Certainly no one will allege that Canadian railways are not efficiently managed. And no one will deny that the employees of such railways are good citizens, striving to do a good job and to give Canada outstanding service. I need merely point to the tremendous and efficient job performed by railway employees and railway management during the last war to prove that railway employees and management are industrious, resourceful and efficient.
The efficiency of Canadian railways can still be improved by the railways securing new types of locomotives, such as diesels and other modern machines, and rearranging their plants, such as their yard's, so that traffic can be handled more cheaply and more speedily. To carry out these improvements, railways require money. The only place, for example, the Canadian Pacific Railway as a private enterprise can secure that money is from private investors. For private investors to lend their money to the Canadian Pacific Railway, such investors must have a fair chance of a reasonable return on the money they lend.

In conclusion, may I quote an excerpt from the evidence of the chairman of the Canadian Pacific Railway, Mr. George A. Walker, before the royal commission on transportation on December 12, 1949, when he stated:
It has been the consistent policy of successive governments of our country and was recently reaffirmed by the Prime Minister of Canada that "the best way to maintain a high level of employment and to ensure prosperity is to provide the widest possible scope for private enterprise." No major political party in this country has ever adopted a contrary attitude.
As the first great enterprise in Canada, one which was an essential link in confederation itself and which is still the greatest single enterprise in this country, the Canadian Pacific may justly claim the benefit and protection of such a government policy in as full measure as, but no more than, industry generally throughout Canada.
Finally I would like to say this. Surely this committee will agree that it is not equipped to deal with freight rate details. Most of us will come to the conclusion that the board of transport commissioners should be left to handle this problem on- the evidence presented, and bring to bear their wide experience in arriving at a fair a-nd just conclusion for the common good of the whole Canadian community. Unless we are prepared to leave the matter to the board of transport commissioners we must, admittedly ill equipped, deal with it ourselves. Surely no one who has given any serious thought to the question would suggest that as a solution.
Canadian- railways must be allowed to live and to live dynamically. Let us support the experienced and qualified judgment of the board. Let us not hamper the railways from living by attempting to place our inexperienced judgment above that of the board of transport commissioners, to which parliament has given the task of seeing that the railways and the public are fairly and justly treated.
I sincerely hope that the house will agree that, through the board of transport commissioners, private enterprise, which is seeking no favours or special privileges but only fair and just treatment in this matter, will be fostered.


Mr. McCusker:: Mr. Chairman, the question of freight rates as applied to western Canada divides itself into two distinct compartments. In one compartment are the rates set by the Crowsnest agreement, which cannot be interfered with, and in the other compartment are the rates that vary.
In today's discussion we have heard the rates for Canada generally discussed, and very little has been said about the Crowsnest pass agreement. I think perhaps it might be wise at this time to say a few words in explanation to those who do not know the

reason for its existence and how it came about. In the early part of the settlement of western Canada we found ourselves with a completed trans-Canada railroad. In the prairie provinces there were about 300,000 people. They were discontented. There were high freight rates, and settlement was at a standstill. Eastern Canada itself had only about five million people.
It was decided that to develop the country a vigorous program of immigration must be introduced, that the people of eastern Canada must depend upon western Canada to purchase everything that they required to settle that country. The natural market for the prairie country lies to the south. The great lakes region prevented our coming east. The Rocky mountains prevented our going west; trade was naturally with the people to the south.
The Canadian Pacific Railway wanted to overcome this, and therefore built a line from Lethbridge to Nelson, so that it would get in and shut off the traffic which was going from southwestern Alberta and southern British Columbia into the United States. It had been promised then that immigration would be strongly supported. This road was built, and for that the Canadian government gave to the C.P.R. a subsidy of $3,404,000 and from British Columbia it received a land grant of 3,620,000 acres with the mineral rights, and 60 square miles of coal land. They obtained a monopoly on the transportation to southern Alberta, and therefore were in a most favourable position to control trade there.
We know what has resulted from this. The great Trail smelters have developed into one of the greatest sources of income for the C.P.R. today. For this what did the railway give? It gave the Crowsnest pass agreement which was an undertaking that it would reduce the rates on grain to the extent of three cents per hundred pounds shipped from prairie points to the lakes. It also agreed to bring settlers effects, machinery and other essential goods for settlement from eastern Canada at a favoured rate amounting to a reduction of from 10 to 33^ per cent. These rates were set up and were to constitute the maximum for all time. The C.P.R. set the rate that it would give.
Owing to competition from the Canadian National Railways, which came into Manitoba, an agreement was made whereby the maximum rate was not changed until 1918. In 1918 a Tory or union government at Ottawa did away with the Crowsnest pass agreement. This may be surprising to some Conservative members when they learn about it. But
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thanks to an alert senator, Senator Watson, the Senate did not approve of the -bill with the result that the rates were only suspended for three years. They rose above the maximum set by the Crowsnest pass agreement; but in 1922 a Liberal government again restored the rates on wheat and flour moving from the prairie provinces to Fort William. The rates on commodities moving west were restored in 1924.
Then arose a dispute as to the application of the agreement. The railways claimed that the rates applied only to points in existence when the act was passed, and that from any other points they could charge full rates. The submission to the royal commission on transportation by the pools in January of this year contains the following:
Upon reinstatement of the Crowsnest pass rates in their entirety, July 7, 1924, the C.P.R. for the first time took the position that the agreement only applied to shipping points which were in existence in 1897. It accordingly ignored the maximum set by the agreement in so far as all other points were concerned. The discrimination and confusion thus created brought about appeals to the board of railway commissioners, and the government alike. The board held that the provisions of the agreement had been overridden by the Railway Act and it, therefore, restored the rates in existence prior to July 7, 1924, which on westbound freight were at a level higher than the maximum set by the agreement.
The board's decision was reversed by the Supreme Court of Canada, which held that the Crowsnest agreement was binding upon the railroad and the railway commissioners, but only applied to shipping points in existence in 1897.
The Parliament of Canada in 1925 intervened by relieving the railway company of its obligations under the agreement with regard to all commodities shipped from eastern Canada to the west. Thereby it removed the ceiling set by the agreement on all such commodities. At the same time, parliament not only refused to relieve the railway company of its obligations with regard to grain and flour rates, but enacted that they should apply to all shipping points, irrespective of whether or not they were in existence in 1897.
It is as a result of this Crowsnest pass agreement that the Maritime Freight Rates Act was passed, giving a 20 per cent reduction in freight rates to the maritimes. It was also responsible for the removal of the mountain differential, which was first reduced and then completely abolished by a Liberal government.
The Winnipeg Free Press of November 3, 1924, reports Mr. Mackenzie King as having said: "The east is protected by waterways, the Pacific by the Panama canal and the west by parliament." It is just that protection from monopoly that we in the west are asking for today. We are forced to sell on the open market; we are forced to export principally through eastern Canada and British Columbia. I believe the Hudson Bay route has not been given a fair trial, and with modern radar

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equipment and a modern icebreaker I am confident that port could be kept open longer than it is now.
I discussed this matter with the wheat pool and asked them why they were not using the port to a greater extent. They said they could not ship grain from Canada until the consignment had been sold in England. I asked them what they did in winter in respect of consignments going abroad, and whether they could not build in England or Scotland a terminal elevator to which they could ship during the summer months and in which they could hold the wheat for delivery, just as they ship to Portland or Halifax or Saint John for winter delivery now. That would save us a considerable amount in freight rates, and! we have to look for every avenue of saving on freight rates if we are going to compete in the markets of Europe. Eastern Canada has profited greatly from this handling of grain. We do not complain about this, but what is our position when we come to buy? Our natural market lies to the south in Minneapolis and St. Paul and in the large implement houses in the midwest. Freights from there are much lower and we could obtain our farm implements at much lower prices. But, no. Although we are forced to sell on the open market, we must buy in a closed market and pay for the high protection that is necessary to develop industries in Canada as well as the long freight haul from eastern to western Canada. We did not complain about this until the rates became discriminatory, hut the recent rate increases have resulted in a difference of 15 per cent between the eastern and western rates. The real issue here is that of discrimination, not just freight rates.
I should like to refer to a suggestion made by Mr. Tucker, the leader of the opposition in Saskatchewan. He suggests that payment be made to the railroads from the federal treasury, by all the people of Canada, of an amount sufficient to take care of the cost of bridging the gap between the different settled areas of Canada, and then when that is done equalized freight rates should be established right across the country. Of course, close account would have to be kept of the railway operations and accounting systems.
We in western Canada feel that we have some protection in the Crowsnest pass agreement. We paid for it and it never should be abrogated. We almost lost it when the union government was in power, but Senator Watson picked it up in the Senate; otherwise we would not have any agreement today. When I hear someone talking about the reform of the Senate I am inclined to think that at that time it was probably a little 
brighter than the House of Commons. All the railway acts, all royal commissions, the board of railway commissioners now the board of transport commissioners, were brought into being or set up by Liberal governments. I fail to see any basis for the opposition amendment. As one representing a western constituency I call upon the government to exercise its authority and see that injustices are not permitted.
Before closing I should like to comment upon a few of the things said by a most inconsistent gentleman, the hon. member for Rosetown-Biggar. I am sorry he is not in his seat, but I am sure the hon. member for Cape Breton South will report what I am saying to him. Normally the hon. gentleman advocates state control, but this morning he was advocating keen competition among the railways. He protests that the freight rate increases are too great and should not be granted. I should like to quote an editorial that appeared in the Ottawa Journal of February 1, 1950, as follows:
Payment by somebody else
Three western grain organizations appeared before the royal commission on transportation this week to attack railway wage scales. They said the railways' payrolls were too heavy, that rail wages and salaries should be re-examined before attempt was made to increase rates on grain.
Too bad these western grain organizations (Manitoba pool elevators, Saskatchewan co-operative producers and the Alberta wheat pool) did not think of that before. For had they thought of it a year or so ago, when the railways, faced with higher wage demands, were saying that higher wages must mean higher freight rates, their thought might have meant something.
As it was, the railways were left to fight their own battle. The western grain organizations were silent. The provinces were silent. The politicians were silent.
As a consequence, this happened:	That when a
conciliation board decided the railway employees should get so much and the railway employees insisted on more, the dominion government, not hearing any protests from the western grain organizations nor from the provinces nor from anybody else, stepped in and said the employees must have more.
The railways agreed; they had no alternative. As Mr. Justice Rand put it in the supreme court some weeks ago, they (the railways) "paid what they had to pay." And when they paid, and the stage was necessarily set for higher freight rates (for how else were the railways to get the money to pay the new wage costs?) not a word came from the west. The government wasn't told that by compelling the railways to pay higher wages (higher even than a conciliation board held to be fair) it was incurring the danger of higher grain rates. If the thing was thought about at all, it apparently was thought of with the idea-so common these days-that payment would be by somebody else.
It will be remembered that this morning the hon. member for Rosetown-Biggar protested against any increase in rail rates. However, the railways have shown distinctly that

the increases in freight rates that were given have all been taken up by the payment of higher wages to the brotherhood of railway workers. Is the hon. member for Rosetown-Biggar opposed to those increases in wages to the brotherhood of railway workers?


Lionel Chevrier: That is the point.


Emmett Andrew McCusker: I am sorry the hon. member is not here to answer that question. Is that what he was supporting when he spoke in favour of the amendment moved by the leader of the opposition? He is rather inconsistent on that point. I should like to comment on the attitude taken this morning by the leader of the opposition, who has a friendly habit of giving the supporters of the government a lecture on their responsibilities as members and on the duty they owe to their constituents. I have no doubt that he finds these lectures useful and perhaps necessary as far as his own followers are concerned, but I assure him that we new members are fully aware of our responsibilities and we are accustomed to fulfilling our duties.
The leader of the opposition asks us to support his amendment and he says that this government has done nothing. Surely he realizes that every freight rate act was brought in by a Liberal government? Surely he realizes that if it had not been for a Liberal government we would have lost our Crowsnest pass rates? The appointment of royal commissions and everything else has been the work of Liberal governments. I simply wanted to state my reasons why I could not support the amendment, and I hope I have stated them clearly so that my friends may understand.


John George Diefenbaker: Mr. Chairman, I have listened with interest to the remarks of the hon. member for Regina City with regard to the freight rates situation and his reply to the leader of the opposition; but he did not discuss the point that this increase will accentuate the discrimination. Nothing has been said by any previous speaker supporting the government as to the removal of discrimination in the freight rate structure. As I listened to the minister speak I began to realize that there was no hope for western Canada and the maritime provinces at all for relief against the increase in discrimination against these areas brought about by continuing horizontal increases in railway freight rates. When the hon. member for Regina City dealt with this question and went back into the history of the Crowsnest rates instead of dealing with the resolution now before the house, I could only conclude that no member from the province of Saskatchewan or the other western provinces can
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deny the grave injustice that is being intensified by reason of allowing this further increase in railway rates. It is in no way a question whether the railways should be able to finance and return a profit. All of us believe that there must necessarily be an increase in railway rates in order to meet increased costs of operation, wages and the like, provided that the companies are able to establish the necessity for such increases.
What we from the prairie provinces object to-and this applies to the maritimes as well-is that the freight rate discrimination against the economies of two sections of Canada is being perpetuated and the unfair discriminatory rates that have continued over the years are being added to. By 1922 the normal level of freight rates in the western provinces was 15 per cent above that of Ontario and Quebec. So far as the Crowsnest rates are concerned, I join with the hon. member for Regina City, as I have done on many occasions in this house, in urging the maintenance of those rates. There is no question about that so far as members from any of the western provinces are concerned, regardless of political considerations. That is old straw. All are in favour of those rates and intend to press that they are maintained. No matter what political party one belongs to, if from western Canada you support those rates. I am surprised that the hon. member for Regina City did not raise his voice against the injustice of this increase coming as it does on top of the increase in March.


Emmett Andrew McCusker: On a question of privilege, I raised my voice against it. I clearly stated that I called upon the government to prevent this injustice taking place.


John George Diefenbaker: All right. Now that we have the voice let us also have the vote to support the voice.


Emmett Andrew McCusker: On another question of privilege, the vote will follow the voice-


John George Diefenbaker: All right.


Emmett Andrew McCusker: -but I will interpret it.


John George Diefenbaker: Mr. Chairman, in effect he says, I shall do evil and call it good.


Emmett Andrew McCusker: The hon. member usually does.


John George Diefenbaker: Of course that is no reply.


Lionel Chevrier: Nobody knows that better than the hon. member.


John George Diefenbaker: I am going to call as my witness the Saskatchewan Liberal party and a resolution that they supported in the provincial legislature a few weeks ago. I

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will also call as my witness a member of the government, Stuart Garson, the then premier of Manitoba.


Mr. Ross (Souris):: Hear, hear.


John George Diefenbaker: His was a voice for the western people when he was in the west, but that voice has not been raised since coming to the House of Commons. The voice that we used to hear from the premier of Manitoba, as he then was, is still. Oh for the sound of that voice once more-in parliament, where it would have the power to effect what it advocated in the legislature of Manitoba.


James Arthur Ross: Hear, hear.


John George Diefenbaker: I want to read from the resolution that was introduced in the Saskatchewan legislature on March 7, 1950, as reported in the Regina Leader-Post. I shall quote the Regina Leader-Post and the Saskatoon Star-Phoenix as well later on on the question of freight rates to show that this is a matter that knows no disunity of opinion among western Canadians, regardless of party consideration. In view of the fact that discrimination is taking place and is intensified by horizontal increases, the continuation of freight rates at their present level strikes at the economy of the western farmer and farmers of the maritimes as well. It strikes at the expansion of industry in western Canada as it does also in the maritimes. The horizontal increases have been imposed on the original unfair discriminatory rates of 15 per cent and as a result the provinces of Manitoba and Saskatchewan are now paying 21-78 per cent higher freight rates than are paid in the two central provinces of Ontario and Quebec. It was 15 per cent three or four years ago, and by reason of the horizontal increases the difference is now 21-78 per cent.
There was no division of opinion when the matter came before the Saskatchewan legislature on the 7th of March. There was a united front. The Minister of Transport must have received the resolution passed unanimously by the legislature and calling upon the federal government to act. The minister indicated today that the government cannot act and terminated his speech by saying in effect that with the case now sub judice and on its way to the privy council, in his opinion the increases were justified. That is not the attitude for a minister of the crown to take on a matter before the courts, thereby indicating that the government approves what has been done.
It is not a question of the railways' need for more income. If extra income is needed and rates must be increased no one will object, but what we do object to is that by

continuing to allow these increases, which have the result of increasing the discrimination against the western provinces and the maritimes. Precedent is piling on precedent until finally we will find ourselves in the position where we are discriminated out of existence, economically speaking. That is why there was no division of opinion in the Saskatchewan legislature on the 7th day of March. The motion was passed by all members. It was supported by Mr. Walter Tucker, K.C., leader of the Liberal party in Saskatchewan, in language that I am going to place upon the record of the house. The report in the Regina Leader-Post of March 7, 1950, reads:
A resolution calling on the federal government to disallow the recent 16 per cent freight rate increase pending completion of the report of the royal commission on transportation was given unanimous endorsation by the legislature Monday. Speaking in its support were Premier T. C. Douglas, opposition leader Walter Tucker and municipal affairs minister L. F. McIntosh.
The resolution read: "That this assembly strongly protests the recent increases in freight rates granted by the board of transport commissioners, and requests the Saskatchewan government to appeal the decision to the federal government, urging the said government to exercise its statutory power of disallowance under section 52 of the Railway Act, disallowing the latest increases pending the report of the royal commission on transportation."
That was not a Conservative motion. It was a motion moved in the legislature of Saskatchewan. Mr. Douglas pointed out that the increase in March and the recent increases during the past two years had resulted in the consumers of Canada having to pay an additional $131 million in freight rates. The amount has now been increased to approximately $144 million. Mr. Douglas is reported as saying:
We can be sure a heavy share of this burden fell on the people of the west and maritimes where lack of competition has allowed the railways to take full advantage of horizontal increases.
Further on:
"We propose to carry the matter to the federal government and ask them to disallow the 16 per cent increase under the veto power in section 52 of the Railway Act." . . . Opposition leader Walter Tucker complimented the premier for bringing forward a resolution on which there could be no political differences.
It is not very often you have compliments passing between those two gentlemen, but all difficulties were forgotten in the face of the needs of that province and the feelings of the people as a whole. Mr. Tucker had this to say in part:
"On this question of protecting the people of Saskatchewan from bearing an unfair share of railway freight increases the government has the determined and united support of the Liberal opposition. The government of Canada, having committed itself to the setting up of a royal commission

on transportation, must know that we are not going to let any increase come into effect until we get the findings of that commission."
There was the leader of the Liberal party in the province of Saskatchewan taking a most definite stand. He went on to say something more, and these are not my directions to the minister; they come from his former colleague in this house, now the leader of his party in Saskatchewan, who said:
The governor general in council was under no obligation, he believed-
That is Mr. Tucker.
-to permit the latest increase as long as it was not consistent with the over-all policy of the federal government.
In other words, in effect Mr. Tucker said there should be disallowance unless it was the view of the federal government that the discriminatory situation should be permitted to continue. Then he said something more; and while my own words may have no effect I should think the words of Mr. Tucker should be most effective in reply to those who take a different stand from that taken by the province of Saskatchewan. He said:
"There is no reason why the west should bear all the extra costs of a railroad system that is essential to the whole nation." It was also because of national tariff policy, he pointed out, that western Canada had to ship most of its goods from central Canada.
"These factors had left an economic gap between central Canada and the west, Mr. Tucker said, and in their brief to the board of transport commissioners the western provinces had established an 'unanswerable case' in favour of a national subsidy to close the gap."
Then he went on to set forth the situation in general, at considerable length. At that time he expressed the first and fundamental objection to this increase which is that it has the effect of intensifying the injustice that has prevailed over the years. We used to object when the rate was 15 per cent higher in western Canada than in Ontario and Quebec. Surely now we have a right to object when that difference has been increased by approximately 6-8 per cent. This latest increase, coupled with the previous increases, in time will have the result of crippling our western economy. Why should it be brought in at this time, with the Turgeon commission just having concluded its sittings, heard the argument and commenced to consider its report? Surely this piling on of discrimination against the western and maritime provinces should be discontinued. As far as I can see the government can advance no argument for disregarding the call from Macedonia by Mr. Tucker, when he said in effect "Disallow these increases or you will do harm to the economy of the prairie provinces".
Well, Mr. Chairman, there is another voice, that of the Minister of Justice, a clarion
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voice with which he used to call upon the western provinces to preserve their birthright against injustice. I read first from the Manitoba submission opposing any increase in freight rates, presented to the board of transport commissioners during the hearing of the application for a 30 per cent increase, in 1947. I am quoting from appendix C, "Submission by Premier Stuart Garson," in which he said:
May I, at this point, briefly recapitulate:
The prairie provinces are in the centre of Canada's railway system.
They are a heavy producer of export goods and a heavy consumer of Canadian manufactured goods.
They therefore provide the railways with their longest and most profitable type of freight haul.
They therefore are most adversely affected by a freight rate increase because they have to pay both coming and going over long hauls.
The prairie provinces already pay a disproportionate share of the cost of railway operation in Canada.
That was in 1947. Since then the rates have been increased by more than 40 per cent; but even in 1947 the premier of Manitoba said that the prairie provinces already paid a disproportionate share of the cost of railway operation in Canada. Surely, belonging to a government that has power to act, the voice of the crusader in 1947 should be translated into the actions of the statesman of 1950. Now I shall read from the foreword, also written by the present Minister of Justice, dated January 5, 1948, in which he sets out the facts in such a way that they cannot be challenged. Those facts were accepted by the province of Saskatchewan, as well as by Manitoba. This is what he said:
Since the early days of railroad construction in western Canada, Manitoba has always been in the forefront of those who have opposed the efforts of the railways to take advantage of their quasimonopolistic position in the prairies by imposing high freight rates which must be paid by the people of western Canada because they have no alternative transportation for the great bulk of the commodities which they buy and sell. Most of the people of western Canada are farmers, miners, fishermen and other raw material producers, or those whose interests are closely tied to this kind of primary production. This is the very group which would be harmed the most by high freight rates.
Let me repeat that statement:
This is the very group which would be harmed the most by high freight rates. For example, in the case of livestock products the return to the western farmer is the price at the market less the cost of getting the article to the market. On the other hand, in the case of manufactured goods, the manufacturer in eastern Canada, because of his tariff protection, is able to sell in western Canada at a price which is set by his factory price in eastern Canada plus the ccfst of shipping goods from the factory to the user. Thus, high freight rates are a burden upon western Canada both coming and going.
In view of these facts of economics and geography, the people of western Canada have always been quick to oppose any proposal that freight

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rates should he increased. Consequently, when on October 9, 1946, the Railway Association of Canada applied for authority to raise freight rates by 30 per cent with certain exceptions, Manitoba was quick to express its opposition and to prepare to state its position before the authorities charged with the responsibility of deciding the matter.
I shall read one further paragraph, in which the present Minister of Justice went on to say:
However, if residents of Manitoba paid that proportion of the increased cost of shipments in the western provinces that Manitoba's population bears to the population of the western provinces, then the additional cost to Manitoba resulting from a 30 per cent increase in freight rates would be over $800,000 per month or $9J million per year.
So that there be no mistake that we were discriminated against in 1947, and that our freight rates were so much higher than in eastern Canada, I quote these words from the Minister of Justice:
They have shown-
That is Manitoba and these provinces that were opposing these increases.
-that the average level of all effective freight rates is higher by at least fourteen per cent in the west than in the east and that although the total amounts spent for working expenses in the two areas are almost identical, nevertheless, profits in the west exceed profits in the east in the ratio of 2 to 1.
It is a tremendously important submission that was made, and it was supported by the outstanding leaders in agriculture in the province of Manitoba as well as the province of Saskatchewan. It is for that reason, sir, I ask the Minister of Transport not to treat this matter in the way he did this morning, as though nothing could be done. I do not believe in the political fixation of freight rates, but I do believe if we are to build a united Canada there cannot be two, three, or four different kinds of citizenship, according to the freight rate structure in the several parts of Canada. You cannot build a united Canada on the basis of freight rates that are unjust to some sections of the country. That is why this matter becomes of such transcendent importance. I repeat that this last increase, coupled with the other increases, means that the western provinces will be paying 21-78 per cent higher freight rates than are being paid in Ontario and Quebec. This cannot continue; the problem must be determined. The commission has been sitting, and while the commission sits to determine whether discrimination shall be allowed, the discrimination continues to mount.
I shall now read, sir, from the Winnipeg Free Press editorials on this subject. It has taken a very strong stand over the years. On March 3, 1950, that newspaper said this: This discrimination in rates is an old, old story, being the pith and substance of almost every major 
freight rate case since 1907. Some forty years of consistent and unremitting effort on the part of the western provinces has gone into the fight for justice in freight rates.
The discrimination arises as follows:
The editorial sets out what the result is, and then it points out:
Up to 1922, the transport board repeatedly moved to correct this discrimination by granting larger increases in rates in the east than in the west or by granting an increase in the east but none in the west.
Since 1922 the board of transport commissioners has done nothing such as it did prior to 1922 to prevent the increase in degree of discrimination. The article continues:
Thus the old discrimination against the west not only remains but is worsened1. The latest flat increase of 7-4 per cent applied to an eastern rate of, say, 85 cents is one thing. Applied to a western rate on the identical commodity of one dollar, it is another. The present differential of 15 per cent is increased.
When I hear praise of the transport board, these words come to me from the Winnipeg Free Press:
The opinion of the west will be that once again the transport board has been derelict in its duty to the detriment of this part of Canada.
These are not the words of a Conservative paper; these are not the words of the opposition in parliament; these are the words of the Winnipeg Free Press which, over the years, has fought a battle on behalf of the removal of the unjustly discriminatory system that has prevailed for years, and has been intensified in recent years. When the Minister of Justice was in Manitoba his freight rate conscience reposed in the Free Press. I ask him to bring to bear on the government to which he now belongs the force of the principles which he enunciated in 1947. They are even more true today, because the discrimination of that day has been added to by horizontal increases.
What should our attitude be? The attitude in Saskatchewan is shown by the editorials in every newspaper in that province. The Saskatoon Star-Phoenix of May 26 said this:
The board of transport commissioners has sanctioned another increase in freight rates. This time it is 3-4 per cent. But coming on top of three other increases in a little more than two years it will inevitably push some farm districts and some businesses in western Canada below the level of profitability.
This newspaper concludes that the increase is going to result in business and farm districts in certain localities being forced below the level of profitability. The editorial continues:
The things we sell and most of the things we buy must move by rail at some stage in their exchange. We have no waterways or other forms of transport

to restrain the insatiable appetite of the railways for more money. The west pays the full shot every time.
At the end of the article, this appears:
The present order perpetuates these errors in rate making. It is the third time these errors have been applied since the cabinet asked for a review. They are in a fair way to becoming established as precedents unless they are challenged. The provinces must appeal this order as they did the order of March 1, 1950. And when the appeal is launched, the government should hear the appeals before the new rate goes into effect. We think the new rate is unjust because it is based on rate-making rules that are unjust. The cabinet is our only remaining protection. We should have access to it immediately before any more damage is done.
Surely that challenges the Minister of Transport to speak otherwise than he did in his concluding words today, when in effect he gave approval to what has been done.
The Regina Leader-Post is equally definite. In an editorial on May 27 it said this:
With the latest award, rates have been increased by 45-2 per cent since 1948 to extract an estimated additional $144 million in revenue from the public. But this will not be the end.
Farther down it says:
The cabinet clearly has the authority to grant a stay in the application of the higher rates. The appeal already has been made to the cabinet following the March 1 award. But consideration was postponed until the board had completed its judgment on the application which was disposed1 of Thursday.
Then the editorial gives this reason for postponement until the report of this royal commission is brought down:
Since the main purpose in appointing the Turgeon commission was to endeavour to find a remedy for this situation, the fair and sensible course for the cabinet to take is to grant the provinces' appeals in the hope that shortly the commission's report will point a way to a solution of this knotty problem.
Sir, no matter where one goes in the western provinces, whatever the political faith may be of the individual, farmers and businessmen are saying, as I know the maritime people are saying, that because we live on the western plains, by reason of geographical location, this discrimination must cease. There is very little hope of its being stopped when the minister approaches the subject in the offhand, cavalier way he did this morning. He gave us history. It is- not history they want today. What they want is action. He places the responsibility directly upon the board of transport commissioners.
There is only one means by which the leader of the opposition could bring this matter to the attention of the country, and that is by the traditional method. I could go into the records of the old country to show where the same method has been used on occasion. Where there are boards, and the government takes the recommendations of 55946-1991
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the boards and has the power to disallow them and does not, the only way in which parliament can speak is through an amendment reducing the expenditure for the board in question to the sum of one dollar. That is the only way in which members of parliament can officially say-I speak for those in the western provinces-whether or not they accept what has been done.
It is all very well to say, when the session of parliament is over and we go home, that we were against the increase. It is so easy to say that. There is no other way. If anybody can tell me of any other way by which parliament can show that we from the western provinces and the other provinces of Canada are discriminated against, that we oppose this discrimination, that we do not believe an injustice can be removed by aggravating an existing discrimination, I will give him an opportunity to do so.
This debate is one which directly affects men and women everywhere in this dominion. As I said at the beginning, no one argues the need of private enterprise being able to pay a fair and reasonable return; no one argues that you want to see perpetuated a system whereby any government industry is constantly coming back to parliament for help. Fair rates will assure fair wages; proper rates will assure the discharge of the proper responsibilities in expenditure. But surely the answer to the railway problem of Canada is not to load discrimination on top of discrimination against certain areas within our country.
I could go further and quote from the present Minister of Justice when he was premier of Manitoba, who said in 1947 that if the eastern rates were raised to the equivalent of what the then western rates were any question of a deficit would be done away with. Whether that is the solution I am not saying. That is what the Turgeon commission is endeavouring to decide at the present time. Since the matter is before the commission I am asking through you, sir, that the minister shall heed the small voice-it must be small today because no one has heard it-of the Minister of Justice who, speaking in stentorian tones in 1947, said in effect, "This condition dare not continue." And since then it has not only continued but multiplied and increased while the minister has sat as a member of the cabinet.


Mr. Gillis:: Mr. Chairman, I have a few observations to make in this debate. I have listened with much interest to what has been said so far. In my opinion, what we are considering at this time is, first, whether the board of transport commissioners is competent or otherwise; second, whether the
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increased freight rates that are proposed can be justified. A royal commission is looking into the problem; but before I go into the details of a discussion of that kind I should like to say this to the hon. member for Regina City-he invited it. When he was speaking he made some critical observations with regard to what the hon. member for Rosetown-Biggar had to say this morning, and intimated that the hon. member for Rosetown-Biggar was departing from the position that he had taken on this question over the years.
I thought the hon. member for Rosetown-Biggar was clear -this morning. His whole protest was based on the inequality that exists with respect to freight rates as between the centre, the east and the west. The hon. member for Regina City charged that the deficits on the Canadian National Railways accrue particularly because of the increases in wages.


Emmett Andrew McCusker: On a point of privilege, I named no railroad.


Clarence Gillis: The hon. member's observations would not leave any doubt in anyone's mind.
Mr. Gauthier (Porineufk That is your opinion.


Clarence Gillis: First, he is wrong in the statement that the deficit on the Canadian National Railways accrues because of wages.


Emmett Andrew McCusker: Once again, on personal privilege, I made no such statement, nor did I insinuate it.


Clarence Gillis: The Canadian National is the only railway that has a deficit. The hon. member could not be talking about any other.


Emmett Andrew McCusker: Mr. Chairman, I was not speaking of deficits. The statement which I did make-and the hon. member would have heard it had he been listening-was that the railroads had stated that the allowable increase in freight rates had been taken up by increases in wages. I said nothing of deficits.


Clarence Gillis: The hon. member did make reference to the wage demands that are now before the different railroads, and so forth.


Emmett Andrew McCusker: The hon. member will see it in Hansard.


Clarence Gillis: He has already made the statement, and he can read it tomorrow or correct it tonight, if he wants to.


Emmett Andrew McCusker: I am not in the habit of doing that.


The Deputy Chairman:: The hon. member should not interrupt the member who has the floor-


Clarence Gillis: He wanted to know-


Louis-René Beaudoin: -unless he asks permission or raises a question of privilege. The hon. member raised a question which was not one of privilege. He replied to a statement made by the hon. member for Cape Breton South. According to Beauchesne, third edition, citation 235, an explanation can be given only with the consent of the hon. member who has the floor. If the hon. member who -has the floor does not give permission the explanation can be made after the termination of his speech.


Emmett Andrew McCusker: Mr. Chairman, on a question of privilege, I was quoted as having said that the reason for the deficits on the Canadian National was an increase in wages. I made no such statement.


Louis-René Beaudoin: Citation 235 of
Beauchesne, third edition, reads:
A member who, during a debate has spoken to a question may again be heard to offer explanation of some material part of his speech which has been misunderstood; but he must not introduce new matter or endeavour to strengthen by new arguments, his former position which he alleges to have been misunderstood, or to reply to other members. Here, again, a greater latitude is permitted in cases of personal explanation, where a member's character or conduct has been impugned in debate. The proper time for explanation is at the conclusion of the speech which calls for it. See also Beauchesne, third edition, citation 236.


Clarence Gillis: Thank you, Mr. Chairman. I
hope the hon. member understands that. I listened with a lot of patience to him while he made the statement, and did not interrupt him.
Of course, the propaganda that wage rates are responsible for all difficulties and deficits in every industry is not something new. I have heard it for the last thirty years, and it has been very prominent recently in the press. Editorial after editorial, chambers of commerce and so forth have been driving it home to the public. I am not surprised that my hon. friend fell for it. That is not the case, however. I think it is nearly time everyone understood that. I am thinking in terms of the Canadian National Railways, because I am particularly interested in them-and I suggest every member in the committee should be.
In the final analysis this whole question is not the responsibility of the board of transport commissioners or of any royal commission. The final responsibility rests with this House of Commons-and I say we should understand that. I would like to look at both

sides of this question. The railways render a public service and must be maintained, and in order to operate they must have money. The only place they can get money is from those who patronize the system. Let me say this, for the benefit of anyone who has not been looking into the operations of the C.N.R. particularly, that it has not been wages that have pulled them down, nor has it been ordinary operating costs which have brought about deficits.
Every year the Canadian National starts out with a deficit of $45 million in interest charges on loans from the government in respect of the bonds of old, defunct railroads that should have been called in and liquidated years ago. That $45 million about which we hear so much in the press and in the House of Commons should be understood. It does not accrue because of operating inefficiency or because of the wage debt but rather from fixed interest charges on dead services. The capital should be written off as interest-bearing capital and show in the books as equity capital, or it should be called in and written off altogether. I hope when hon. members are considering that feature of the system they will keep this debt load in mind.
Later on I shall deal with freight rates as such. However, let me speak briefly now on the question as to whether the board of transport commissioners is a competent body. As a result of the debates I have heard in the house respecting freight rates since 1945, setting out how the whole question has been handled, I would say there is something lacking in the personnel of that body.
A return in the name of the hon. member for Victoria-Carleton (Mr. Hatfield) to which reference was made this morning by the hon. member for Rosetown-Biggar (Mr. Coldwell), gives the names of the members of the board, and their previous occupations. I have not anything against anyone on the board, or any particular occupation; but I say that a body selected to handle the very difficult problem of fixing freight rates in Canada and of doing all the work the board has to do should consist of personnel highly trained for that position.
I shall not put any names on record. Hon. members may look at the document to which I have referred and they will find among the occupations listed there many lawyers, an undertaker, a real estate agent, car dealers and stenographers. Those particular callings do not give the qualifications, in my opinion, to handle a job of that kind.
Then, according to the return, the freight rate experts are all ex-employees of either the C.N.R. or the C.P.R. I do not know whether they are still working for those organizations. I think however it is the
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responsibility of the minister not to appoint a royal commission; if the board of transport commissioners are competent there should not have been a royal commission. If the personnel of the board had been selected carefully with full regard for their qualifications, and appointed on their merits, there should have-been no necessity to hire a royal commission- because the board is a royal commission, sitting continuously and reporting through the minister to the government.
Why should we at this late date, when we have got into this tangle about freight rates, have to go out and hire another body to examine into the organization that is supposed to be efficient and competent and equipped to deal with this matter from day to day? It does not make sense. No; there should not be a royal commission; but I think the minister's department should make a job valuation survey of the (board of transport commissioners, and take a look at the qualifications of the personnel. There are not too many of them; probably there are not enough. I believe there should be an examination of the qualifications of everyone on the board who has anything to do with the problems they have to handle. I believe there is ample justification for the accusation that they are not competent-at least they have not shown, to date, that they are.
Then, secondly, is there justification for the rates asked for? Taking a look at both sides of the question, and as one of the members who served on the committee on government-owned railways and shipping, and as one who had a chance to take a look at the balance sheet and to examine witnesses, from Mr. Gordon down, let me say that in my opinion, so far as the management of the Canadian National Railways is concerned-I do not know anything about the C.P.R., so I am not, going to talk about it-they are as efficient as could be found in this country. I believe-that in Mr. Gordon they have a man who is very competent and very determined to do-something about the disabilities of the system over which he presides. He has shown a clear grasp of the problem, and I think we have noquarrel so far as the management of the Canadian National Railways is concerned.
If we examine the justification for the freight rates, from the standpoint of the present financial position, they are justified. But, as I intimated earlier, the C.N.R. is in a false position; and unless we are able to correct that position by bringing about some adjustment in the capital structure of the national railways, we are going to continue to go on and on in this way-there will be no end to it.

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My opinion is that in respect of these freight rates for the C.N.R. and C.P.R., and their relationship to the whole economic set-up of the country, as well as to other industrial aspects of the problem, we are entering upon a new economic age. This country has reached the point where the old yardstick by which we measured things is no longer good enough. We have to do a lot of serious thinking and make a good many serious revisions in the whole economic structure of Canada, of which this is only one part.
The western part of this country has ample justification for complaining about the inequality of freight rates and the discrimination resulting therefrom. The maritimes also have ample justification for the same complaints. The 21 per cent increase in freight rates that was to be applied straight across the board was, to the best of my knowledge, never applied in Ontario-and if it was applied in Quebec, only to a limited extent. But it applied 100 per cent both east and west, The centre has direct competition, and their hauls are short, but in other parts of the country both east and west that is not so. On everything going either to the east or to the west, from the centre, higher rates were applied; on everything going out the same rates applied. Perhaps 80 per cent of the freight goes into those provinces and adds to consumer costs. Very little is shipped out of the maritimes except raw materials. It hits those who are shipping out, but the ultimate cost is passed on to the consumer. I submit that there is ample justification for the complaint that has been made.
No recommended solution has been offered so far by hon. members who have spoken, and I am going to make a few recommendations which are based upon the thinking of the people of the maritimes. There are one or two things I should like to clear up. Many people in central Canada consider that the maritimes are receiving a rebate or subsidy under the Maritime Freight Rates Act. I notice that some of the people appearing before the royal commission referred to that as a subsidy. I should like to put the record straight on that particular point.
The 20 per cent that is allowed under the Maritime Freight Rates Act is not a subsidy. In 1912 there was a general increase in freight rates of 55 per cent, but when that was applied to the maritimes it amounted to 92 per cent. We suffered under that injustice until the early twenties when the Duncan royal commission on maritime rights recommended that a 20 per cent rebate should be paid under the Maritime Freight Rates Act. We are still 17 per cent worse off than the rest of the country on a percentage basis. An
[Mr. Gillis.l
injustice was perpetuated under the terms of confederation and they still owe us 17 per cent on freight rates. I do not want to hear anyone calling it a subsidy because it is simply part payment of something that is owing to us and for which we are still pressing.
Unless recommendations are made there is not much to fasten to, and I should like to refer to some that have been made in the maritimes. They may not be all right, but also they may not be all wrong. I think the committee may be able to get something from them. These recommendations were put forward by the New Brunswick government and by the maritime transportation commission. By the way, that body has a very good grasp of the whole transportation problem across this country, including freight rates. The recommendations that were made were as follows:
1.	Lessen the impact of percentage-type freight rate increases-the kind awarded the railways since the war-on the long haul traffic typical of the maritimes.
2.	Restore rate relationships existing between Canadian ocean ports before the last series of increases.
3.	Preserve advantages guaranteed under the Maritime Freight Rates Act of 1927, which it is claimed have been partly nullified by transportation changes since then.
4.	Extend the application of the act to make its statutory rate reductions effective on rail-and-water shipments from points in the maritimes to those outside the area.
In addition New Brunswick went a step further and asked for a 50 per cent increase in the rates under the Maritime Freight Rates Act and a wider coverage as to traffic to which it would be applicable. That statute now provides for a 20 per cent rebate on rail traffic within the maritimes and on the maritimes part of westbound traffic originating in those provinces. New Brunswick asks that the rebate be increased by 30 per cent and that it apply on the maritimes section of eastbound traffic into the maritimes from points outside.


Mr. Macdonnell (Greenwood):: Were those recommendations made to the royal commission?


Clarence Gillis: Yes. There was some disagreement as to the last point on the ground that it might interfere with fair competition. I do not think that argument is valid because we do not manufacture anything in the maritimes that would be in competition with anything manufactured in Ontario or Quebec. As I said before, most of our exports are raw materials and our young people. Despite the fact that certain sections of the press disagreed with that recommendation, I believe it should receive consideration.

Prince Edward Island went a bit further and advocated the nationalization of the whole Canadian transportation system. I am not going to comment on that; I shall give Premier Jones an opportunity to explain what he means some time in the future. I believe that a solution is to be found in the submission by the president of the Canadian National Railways to the royal commission on transportation. Mr. Gordon summed it up very well when he asked that, there be a revamping of the capital structure of the system, a writing-off of the $45 million of fixed interest charges which the system is now carrying. I believe that if that were done, with the present management the system could be made efficient and in the future could be taken as the yardstick to be used. Unless that is done I do not know how the system can struggle along.
Last year the press was full of stories about the deficit of $42 million which the Canadian National Railways had incurred, but then elsewhere you would read that they had an operating profit of some $4 million. It is hard to understand these different editorials, one saying they had a profit of $4 million and the next one saying they had a deficit of $42 million. The people just do not understand that sort of thing.
I sat in this house as a member for a long time and voted for bills to wipe out deficits year after year. For a long time I thought that those were accumulated deficits from the previous year's operations, but then I began to dig through the books and finally found out the size of the load the system was carrying. I think it is rather unreasonable and unrealistic for the government to lend money to the Canadian National Railways and then have the system pay an interest charge of around $21 million a year. We pass a bill for $45 million, it goes to the C.N.R. and they pay back $21 million to the government. The principal is still there and goes on and on.
Old railroads representing $24 million in fixed interest charges were taken over. Under ordinary circumstances those roads would have gone into bankruptcy, but they were loaded on the Canadian National system. The bonds were transferred and the Canadian National carries all that deadwood, representing lines that produced practically no revenue, on which they pay a fixed interest charge of $24 million a year. It just does not make sense.
I do not think the proponents of free enterprise would expect that any free enterprise carrying on in that way can make money. I presume most hon. members are familiar with Mr. Gordon's submission to the royal commission on transportation. What it boils
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down to is that he simply asks them to do what I am suggesting. He asks the commission to take into consideration the possibility of taking the bonds and government loans and, instead of showing them on the balance sheet as interest-bearing bonds and loans, show them as equity capital bearing no interest, or that on the other hand the government should take a look at the whole thing, try to write it off and start the system off again with a clean sheet. Unless that is done, in my opinion freight rates will continue to go up. There is no way out of it unless we revamp the Canadian National system.
I think if we did so it would create stiff competition for the Canadian Pacific Railway, which would be a good thing for the country. It is my opinion that in the past a lot of the business that should have gone to the Canadian National has been deliberately swung in the other direction. I have noticed a proposal that freight from the maritimes should be shipped through Moncton to Saint John to the Canadian Pacific line, from there through the United States to Montreal, and that the provisions of the Maritime Freight Rates Act be applied. That cannot be done. The Maritime Freight Rates Act is not applicable unless it is a through haul. In addition it would just mean swinging more business from the C.N.R. to the C.P.R.
I do not want to be dogmatic about the question because my knowledge of it is not too great. I want to see the right thing done. I am absolutely sure in my own mind that, unless the C.N.R. can be relieved of the great debt it has been carrying since its inception, by revamping the whole capital structure, so far as the Canadian freight rate question is concerned we are going to go through the same thing year after year. As the hon. member for Rosetown-Biggar pointed out this morning, the future development of Canada depends on the railroad system. Unless it is efficiently maintained and properly routed throughout the country it is not possible to develop either the north or the south, the east or the west. We must have a good efficient transportation system.
I think we have an efficient transportation system. I do not think there is any better in the world. I know that since the war there has been a great improvement in rolling stock, and efforts are being made to repair lines. I know that in the maritimes, where it is badly needed, some work is being done. The Minister of Transport is pushing very strongly for the bridge across the strait of Canso. That is a part of the Canadian National system and will be of great importance to that section of the country. I had

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the privilege of attending the meetings of the sessional committee on the operations of the Canadian National Railways for four or five weeks and investigating their business. I believe the management is doing everything it can to bring about more economic operation and better service for the Canadian people. It is our job to help them. I was glad to see that the committee, after going over the whole structure of the C.N.R., inserted in its report to the house a recommendation that the government should seriously consider, along the lines suggested by Mr. Gordon, the complete revision of the whole capital structure.
I come to the amendment of the leader of the opposition. My view is that if it is passed it means the end of the board of transport commissioners. If you cut their money completely they cannot work. Nobody works for nothing. At the same time I believe a protest to the board of transport commissioners is in order as to the way in which they handled the whole freight rate question. When the hon. member for Rosetown-Biggar was speaking this morning he stated that he did not think we could move an amendment to the amendment. Our technical expert on Beau-chesne was absent at the time. The hon. member for Kootenay West substituted for him. He is much slower but he finally found a citation in the second edition of Beauchesne that would justify us in moving an amendment to the amendment, and I propose to do so at this time. I move, seconded by the hon. member for Rosetown-Biggar:
That the amendment be amended by striking out the word "to" and substituting therefor the word "by."
The amended amendment would then read:
That item 524 of the estimates of the Department of Transport be reduced by one dollar.
I notice that my ecclesiastical friend over here thinks I am wrong in saying "by". The leader of the opposition said "to one dollar". That would mean we would be wiping out all the money which would enable the board of transport commissioners to carry on its operation. The amendment to the amendment says, "by one dollar". That will not hurt them very much but at the same time it is a protest against the way in which the whole freight rate question was handled.


Mr. Fulton:: A mild protest.


Clarence Gillis: Many hon. members will say that they cannot vote to wipe out the board of transport commissioners but anyone who is interested in protesting can vote for the amendment to the amendment because it

merely means that they will be voting in protest against the way the whole freight rate question was handled.


James Arthur Ross: Make it $1.50.


Clarence Gillis: I merely want to re-emphasize that, in my opinion, if members of the house want to do something about freight rates and prevent this kind of discussion in the future the only way they can do so is to get behind Mr. Donald Gordon's program for the complete revision of the capital structure of the Canadian National Railways.


Emmett Andrew McCusker: I want to say a word by way of explanation. I think the hon. member for Cape Breton South misunderstood what I said this morning. I made no protest about increased wages. I merely expressed surprise that the hon. member for Rosetown-Biggar, in supporting the amendment of the leader of the opposition, should be so inconsistent as to protest that freight rate increases are too great and should not be granted. By so doing he was objecting to wage increases. In effect that is what he did. I know we all agree that the disparity in rates should not be allowed to exist. I quoted from an editorial in the Winnipeg Free Press to show what was being claimed. The editorial reads:
The extent to which the Canadian people paid for the past wage increases, in the form of higher freight rates, can easily be shown. During the war, price ceilings prevented the railways from raising rates to counterbalance the increased costs, mainly in wages, of wartime. But with the lifting of the ceilings the railways launched their campaign. In October, 1946, they applied for an increase in freight rates of 30 per cent.
This is what will interest the hon. member for Cape Breton South.
After a battle that lasted for eighteen months, the board of transport commissioners awarded them an increase of 21 per cent, costing the public about $70 million a year. But all this was immediately sucked away by the wage increase of 1948 which cost $73 million a year.
I referred to no railroad.


James Arthur Ross: May I ask what you are reading from?


Emmett Andrew McCusker: It is from page 3 of a reprint of editorials in the Winnipeg Free Press in April and May, 1950. The reprint is entitled, "The Railway Wage Dispute". I then asked, "Is he opposed to giving the brotherhood of railway workers an increase in wages?" That was my statement this morning; and I thank you, Mr. Chairman, for giving me an opportunity to correct the hon. member.


Major James William Coldwell: May I also have a moment to make my position clear. My whole speech

this morning was directed against discrimination in freight rates. As far as wages are concerned, in the course of my remarks I pointed out that many thousands of low paid railway workers were suffering from the high cost of living, and I went on to say that if the railways could not operate economically we should integrate our transportation system and if necessary subsidize the railways. I was not changing my position in any respect, as my hon. friend suggests.


Mr. Johnston:: Mr. Chairman, I should like to express a few thoughts on this subject before this discussion concludes. I was disappointed indeed in the remarks of the Minister of Transport this afternoon. He gave a fairly good resume of the applications of the railways for increased rates, but certainly he did not indicate any solution whatever for the problem facing this country, except to agree with the tremendous increase of some 45 per cent that has been granted. In effect he also agreed with the increased discrimination which has been created against the maritimes and the prairie provinces. He agrees with the continuation of this discrimination, which is making it very difficult for people in those areas to maintain themselves. The unfair differential in freight rates has placed the western provinces in a very serious position. Therefore I must agree entirely with the amendment moved by the leader of the opposition.
I am not quite so sure as the hon. member for Cape Breton South that the board of transport commissioners is so efficient; therefore I am not so enthusiastic about supporting his subamendment. I must say I have not very much confidence in a board which, having been in existence for so long and having investigated this problem so thoroughly, has permitted this great discrimination to continue for all these years. Particularly does my confidence in the board fail in the face of these tremendous increases in freight rates, which have been permitted in spite of the fact that the western provinces protested so vigorously.
I want to deal with this subject from a little different angle than those who have spoken previously. In my view the railways, as disclosed in their submissions to the royal commission-and I am referring now to the presentation made by the C.P.R.-were not so much interested in solving the difficulties presented by these tremendous increases and this discrimination as in showing that the trucking industry, their only effective competitor in western Canada at least, should be driven out of the field, though by their own actions the railways are pricing themselves 55946-199
Supply-Transport
out of competition. The fact is that they are now attempting to do away with competition and establish a monopoly in the field of transportation, and that is the phase with which I want to deal more particularly this afternoon.
I do not believe anyone would contend for a moment that the railways are not a national asset, or that they should not be kept in a sound position. As has been indicated many times this afternoon, the railways are intended to serve all Canada, and if they are to carry out that function they must be maintained in a strong position. That does not mean, however, that the railways should be maintained in a favoured position or that they should be permitted to drive out their only competitors and have the field to themselves. As I pointed out on another occasion in this house the people in central Canada have more or less effective competition in the form of water transportation. Even those living in British Columbia obtain the benefits of water competition. Rail rates are rising so rapidly that General Motors are using the only effective competition against the railways and are sending their automobiles by trailer trucks to Montreal, then by boat through the Panama canal to British Columbia, thereby saving more than $80 per automobile. That is effective competition, and as a result British Columbia is in a position to get a more favourable rate structure than those in the prairie provinces or the maritimes.
The only effective competition we have in western Canada is provided by trucks; and in their presentations to the royal commission the railways did everything they could to get rid of that competition. As a matter of fact the greater part of their presentations was directed to that point. One must not take the position that the railways are a private enterprise, for such is not the case. My remarks apply particularly to the C.P.R., and I would point out that the greater part of the presentation to the royal commission was made by that company. They were the puppets who were carrying the ball for the Canadian National and the government, so it was up to them to make the presentation, which they did somewhat reluctantly. These railways have not built themselves up to their present position solely by their own efforts. I think hon. members of this house should be reminded of that. A great deal of assistance has been given to the Canadian Pacific and the Canadian National as well.
In 1873 there was a grant of 50 million acres of land to the Canadian Pacific. The

Supp ly-Transp ort
oil and mineral rights went along with that grant, and will become extremely profitable before very long. On top of that land grant, as the member for Rosetown-Biggar pointed out this afternoon, there were tremendous cash grants given to both the Canadian Pacific and the Canadian National. These railways have been built up to their present status by these large grants of land and cash. In addition to that, the railways have received a large amount in subsidies. I should like to refer to subsidies for a moment. I am not against the principle of subsidizing the railways where necessary. I am just using this as an illustration to show that the railways have been subsidized to a great extent. There is a subsidy on one commodity which they use, and that is coal.
I have in my hand, Mr. Chairman, a report from the Canadian coal board. It gives a breakdown of the subsidies on coal received by the Canadian Pacific. With the permission of the house I should like to put this memorandum on Hansard, but before I do so I want to refer to it. These are the subvention payments made to the Canadian Pacific railway. In the calendar year 1939, there was no breakdown on coal for the railway's use, nor was there a breakdown on coal for domestic and industrial use. The total amount paid that year was $954,765.35. In the year 1940 there was no breakdown under those headings I have mentioned, and the total amount paid was $1,005,386.51. In 1941 there was no breakdown, but the total was $1,505,576.03. In 1942 there was no breakdown, but the total was $1,051,168.01. For 1943 there was no breakdown, but the total was $125,018.93. In 1944 there was a breakdown, and the subsidy paid to the Canadian Pacific on coal for their own use was $15,238.21; for domestic and industrial use it was $62,905.49, making a total of $78,143.70. In 1945, on coal for the railway's use the subsidy amounted to $97,997.83; on coal for domestic and industrial use it was $570,709.81, making a total for the year of $668,707.64. In 1946, on coal for railway use it was $156,752.55; on coal for domestic and industrial use, $577,736.08, making a total of $734,488.63. In 1947, on coal for railway use, it was $13,819.72; on coal for domestic and industrial use, $188,353.32, making a total of $202,173.04. In 1948, on coal for railway use it was $29,611.16; on coal for domestic and industrial use, it was $187,901.39, making a total of $219,512.55. This gives a total subsidy on coal for railway use at the end of 1948 of $313,619.47; on coal for domestic and industrial use, $1,487,606.09, making a total of $6,443,140.39.
This may seem to toe a tremendous amount, but I am going to give the figures for 1949 
to show how these subsidies to the Canadian Pacific have increased. The railway has been receiving a subsidy on coal for its own use, thus lowering its cost of operation. I do not know of any other industry to which a subsidy is granted to lower its cost of operation. May I say that these 1949 figures are subject to adjustment, because the board tells me the final figure is not available as yet, but this is as close to being accurate as they can get at the moment. The subsidy on coal for the railway's own use in this last year amounted to $231,642.56; on coal for domestic and industrial use, $233,975.09, making a total of $465,617.65. It will be noticed that the subsidy paid to the Canadian Pacific for hauling coal for domestic and industrial use was just about the same amount that was paid to the Canadian Pacific for hauling coal for its own use.
Mr. Chairman, before I start another branch of my argument, may I call it six o'clock?
At six o'clock the Speaker resumed the chair and the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


Mr. Matthew MacLean (for Mr. Winkler) moved: that the following bills be read the second time:
Bill No. 253, for the relief of Margaret Mary Hamel Whittaker.-Mr. Winkler.
Bill No. 254, for the relief of Lewis Benjamin Wyman.-Mr. Winkler.
Bill No. 255, for the relief of Edna Dora Tucker Conley.-Mr. Winkler.
Bill No. 256, for the relief of Dorothy Marguerite Lester McBride.-Mr. Winkler.
Bill No. 257, for the relief of Josephine Rood Trottier.-Mr. Winkler.
Bill No. 258, for the relief of Margaret Irene Sinden Brown.-Mr. Winkler.
Bill No. 259, for the relief of Camille Poulin. -Mr. Winkler.
Bill No. 260, for the relief of Elisa Macdonald Mitchell Brock.-Mr. Winkler.
Bill No. 261, for the relief of Theodore Levasseur.-r-Mr. Winkler.
Bill No. 262, for the relief of Mary Marguerite Harvie Fine.-Mr. Winkler.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Mr. Gagnon:: On division.


Mr. Speaker:: Carried on division.

Motion agreed to on division and bills read the second time.



CANADA DAY ACT


[Stage Direction]
"dominion"
The house resumed, from Tuesday, April 25, consideration of the motion of Mr. Cote (Matapedia-Matane) for the second reading of Bill No. 4, respecting Canada day.
Mr. W. F. Carroll (Inverness-Richmond):: Mr. Speaker, I desire to say a few words on this bill. As I understand it, the intention of the bill is to change the name of our national day from "Dominion day" to "Canada day". I have heard no real reason given for this change; neither have I heard any definite reason against the idea that would appeal to me. I would prefer to wait until the public mind in the country is more in unison on this particular matter. That is, I would not like to see the name of our national birthday changed without there being unison or practical unanimity in the whole matter.
A year or two ago a similar bill passed this house, but it was killed in the other place. I did not have anything to do with parliament at that time, but I did follow the discussion that took place. The bill met with a considerable amount of opposition in this house, and with almost unanimous opposition in the other place, which is a clear indication to me that public opinion on the question is not close enough to unanimity to justify our passing it at this time, unless there has been a tremendous change in the feeling of the people of the country in the meantime.
So far as I am personally concerned, Mr. Speaker, I would be in favour of the bill if I felt that the people of Canada desired the change. I do not mean a hundred per cent, but if eighty or eighty-five per cent of the people desired this change I would certainly vote for a bill of this kind.
The words "Dominion of Canada", of course, have no legal significance either in the British North America Act or in any other act of this country. In dealing with the matter the British North America Act of 1867 put it this way:
It shall be lawful for the Queen, by and with the advice of Her Majesty's Most Honourable Privy Council, to declare by proclamation that, on and after a day therein appointed, not being more than six months after the passing of this act, the provinces of Canada, Nova Scotia, and New Brunswick shall form and be one dominion under the name of Canada; and on and after that day those three provinces shall form and be one dominion under that name accordingly.
Canada Day
Section 5 reads:
Canada shall be divided into four provinces, named Ontario, Quebec, Nova Scotia and New Brunswick.
There is the creation of Canada, not the Dominion of Canada. That was forcibly brought to my attention for the first time, though I never took any particular interest in the matter, on learning that when Sir Robert Borden-and no more staunch Britisher and no greater Canadian ever occupied the proud position of prime minister of this country than the same Sir Robert Borden- came to sign the treaty of Versailles, which was perhaps the first act of a wholly Canadian plenipotentiary, he did not sign it for the Dominion of Canada but for Canada. That was the first time it ever came to my attention that there was no such name by statute or otherwise as the Dominion of Canada.
I could go on and give various other examples of the same thing. However, by statute there is a Dominion day. It was in 1879, I think, that an act of parliament was passed which first introduced Dominion day, and this is the preamble and part of the act:
Whereas it was on the first day of July that the provinces of Canada, Nova Scotia and New Brunswick became one dominion under the name of Canada; and
Whereas Rupert's land and the northwestern territory and the province of British Columbia became part of the dominion in the month of July, and Prince Edward Island became part of the dominion on the first day of July; and
Whereas it is expedient that such important events should be commemorated:
Therefore Her Majesty, by and with the advice and consent of the Senate and the House of Commons of Canada, enacts as follows.
Then they created our national holiday, Dominion day. It will be noted that it makes reference there to the Senate and the House of Commons of Canada, not to the Dominion of Canada. As a matter of fact between 1867 and 1879 July 1 had always been commemorated as our national birthday. That was brought to the attention of the house at the time the act was passed, in 1879, by the Hon. David Mills, who said that Dominion day was, he believed, universally kept as a holiday; at least it was in western Canada; but it was not kept under the authority of any act of parliament.
I am not one who thinks that the changing of Dominion day to Canada day would make us any less British or any more Canadian. I do not think it would create any breach in the historic links that join us with the great mother country. I do not think that it would in any way make a breach in the long history of this country, since 1867; nor would it in my humble opinion impress any one

Canada Day
man in this broad dominion with the idea that because this change had taken place we had become less British and more Canadian. I say that because I do not think that we in Canada today can become much more Canadian than we have been for the last thirty, forty or fifty years.
My reason for wishing to see a change in the birthday of Canada is that, notwithstanding the provisions of the British North America Act, I do not think that we are any longer a dominion. We belong to a great commonwealth of nations, and with the same sovereignty I hope-sometimes I doubt it, of course-that the United Kingdom has.
I should think that Confederation day would be a far more appropriate name than would Canada day, and it would also take away any sting from the minds of those who are imbued with the idea that, because we want to call this day Canada day, we are going to be separated from the great mother country.
In this matter there cannot be said to be any flying in the face of tradition. How can we fly in the face of tradition by changing this day? Personally I cannot see how we could. Tradition is something based on a long series of historic events, brought down to us, perhaps not by the written word, but by various acts of omission, and more often acts of commission. These are incorporated into our country, not by the written word but by other means.
There is nothing in the traditions of this country that would be violated by changing the name from Dominion day to Canada day. There is nothing in this change which in any way would tend to separate us further from the great British traditions which we have held in the past and which I hope we shall always hold.
Having in mind that this question might be discussed, during the recess I visited various high schools in the city of Halifax and in my own constituency. On those occasions I discussed with the teachers and pupils in the higher grades this idea of Dominion versus Canada, or Canada versus Dominion. These were intelligent children in the tenth and eleventh grades which, in the old days, was looked upon as a higher educational grading. They knew their history well, although they did not know Canadian history, I am sorry to say, as well as they knew that of foreign countries. When I say that, I mean they did not have a background of the traditional history of this country to the point one might have liked to see. However, I never suggested to these boys and girls why I was discussing the matter with them.

While speaking to them I asked whether they did not feel * it would be better to describe our national birthday as Canada day rather than Dominion day. The general answer seemed to be along this line, "Well, we know what Dominion day is and, in our short lives, we have always celebrated it on July 1. We cannot see why we should now change and call it Canada day." That was the reaction indicated in about three of the schools I visited.
In two other schools, teaching pre-university eleventh and twelfth grades, I found two or three exceptionally bright and intelligent boys who, perhaps, were under a false impression as to the meaning of Empire day. It was their view that if there were going to be any change in the designation of July 1 it should be known as Empire day. I pointed out to them at once that we already had an Empire day. Their reply was that they knew that, but they felt this description of our national birthday would have the effect of cementing the links already existing between Canada and Great Britain.
I may be told that I did not choose a satisfactory source for advice on a matter of this kind. My reply would be that from many of those children I got a good deal of better advice-much of which I am not giving to the house this evening-than I could have given if I had been asked questions on the same subject.
Having regard to what took place in the House of Commons two years ago, and also having regard to the opposition I understand this measure will meet on this oocasion, my impression would be that perhaps we are somewhat premature in attempting to pass the bill. Because, when it comes to a matter of this kind, while it may not have any direct bearing on our relationship with the mother country, there are some aspects of the matter that might be considered in that light. In my view any change we make, whether along patriotic lines or otherwise, in the relations between Canada and the United Kingdom should have behind it a greater approximation to unanimity among members of the House of Commons, and throughout the country. I am in hopes that some time in the future a bill similar to this will meet with the unanimous approval of this house.
I think it was the hon. member for Mata-pedia-Matane (Mr. Cote) who brought this matter to the attention of the house before. At that time he did get the approval of the house. Perhaps I will be pardoned for referring to the debates that took place at that time, but on looking them over it struck me there was a lot of confusion among members who were in the house at that time. I hope I am not insulting anybody when I say that. They seemed to

be at cross purposes. One member would vote for the bill, and you would turn another page and find him voting against it. It seemed to me there was some political prejudice on the part of hon. members, perhaps on both sides of the house, but that would not be the fault of the hon. member for Matapedia-Matane.
That is the stand I take on this bill. If it comes to a vote the probabilities are that I will vote for the bill because I see no reason for voting against it. At the same time I think the bill is premature. The people of this country are not just in a state of mind at the present time to adopt legislation such as this and for that reason I hope the hon. member will withdraw his bill.


Mr. Humphrey Mitchell (Minister of Labour):: Mr. Speaker, I am going to vote
against this bill. I shall not delay the house very long to say what I want to say. Perhaps I can say to the hon. member who has just spoken and to my hon. friend who with the best intentions in the world has moved this motion that there is no more united nation on earth than the Dominion of Canada.


William F. Carroll: I never suggested anything
else.


Humphrey Mitchell: I was not referring to my
hon. friend; I was referring to the mover of the motion. I am British in the broadest sense of the word since my grandfather was a Frenchman on my mother's side, and on my father's side Irish. If you want anything better than that, take a look around you. I have travelled throughout the British commonwealth of nations and I have listened to crackpots who talk about empires. I have watched what the British people have done, and I speak again in the broadest sense of the word.
Our people have given the world a system of fairness and decency possessed by no other country since the dawn of history. The other day we listened to the Prime Minister of Pakistan pay a tribute to the family of nations. I think I am one of the few hon. members who have been to Pakistan and I know that tribute was well deserved. We have unity among all the racial groups that go to make up this great dominion. Recently I was in the state of Virginia and I noticed that they still call it the dominion of Virginia and they have a dominion network of radio stations. In Massachusetts where they tossed the tea into the harbour, where they said they would not have taxation without representation, they still call it the commonwealth of Massachusetts.


Mr. Cote (Malapedia-Maiane):: They had a tea party there.
Canada Day


Humphrey Mitchell: That may sound strange to
your ears, but they had a tea party. There has been a lot of loose talk about the crown, but I have found that the older you get the more sense you have. Of course some grownup people still believe in fairies and Christmas trees like the hon. member for Winnipeg North Centre (Mr. Knowles) who quoted Brock Chisholm the other day. I liked fairies and Christmas trees when I was a youngster and my children liked them and looked forward to Christmas. I think the world would be better off without the Brock Chisholms.


Some hon. Members:: Hear, hear.


Humphrey Mitchell: Looking over the world today you find that wherever there is a limited monarchy such as in Sweden, Norway, Holland, Belgium, Denmark and Great Britain you find a regeneration after the devastation of the last war which is unexcelled by most countries. It is one of those things that cannot be explained, but perhaps it is due to the leadership that is given, to the principles of decency that are practised. The crown today in its very essence represents decency in the life of the nation.
I think we are most fortunate in the British commonwealth in having a King and Queen who reflect the best there is in British life. I have often said that the province of my hon. friend may be the sheet anchor of freedom some day in the future.


Mr. Cole (Malapedia-Maiane):: It is not a
question of talk.


Humphrey Mitchell: It is a question of common sense.


An hon. Member:: He has none.


Humphrey Mitchell: It Is a question of vision, of taking the long view rather than the short view just for political reasons. As I say, that province may some day be the sheet anchor of freedom if things continue to travel the way they may well travel in this very difficult period in which we are living. I simply wanted to pay a tribute to our institutions, to our federal form of government, to our judiciary, to our school system, to our transportation system, to all the great things that this nation has built up in the last four or five hundred years. I say that without any mental reservation whatsoever.
I like the word "dominion". I hope I shall never live to see the day when we do not belong to the great family of nations known as the British commonwealth of nations. Every hon. member knows that during the zenith of its power there was very little trouble in the world. I think the world will be a better place in which to live if we still maintain and insist in this struggle

Canada Day
between two ideologies that the dominions retain their contact with the crown. I am not going into a theoretical exposition of that matter, although I could. I hope the house will vote the motion down. If I am the only member to vote against it I am going to vote against it.


Mr. Harkness:: You will have plenty of support.


Mr. Stanley Knowles (Winnipeg North Centre):: Like the Minister of Labour (Mr. Mitchell) I intend to be very brief. When this bill was before the house a few years ago I voted for it, and I still like the idea. But it is apparent that the chances of such a bill being dealt with and voted on in the limited time allotted to public bills are very slim. It is also apparent that if the bill were to come to a vote tonight it would in all likelihood be defeated, after the speech just made by the Minister of Labour. It seems to me that there is something to be said for the position that we should not make important changes like this in the one hour allotted to private and public bills, or even in two hours as might be the case considering that this measure was up once before.
On the other hand I always feel uneasy when the result of that argument is that a worthy idea is talked out or defeated altogether. I think the best thing that could be done for this bill and the idea that it contains would be to refer the subject matter to a committee of the house so that it might be discussed further. It is for that purpose that I propose to move the appropriate amendment. Before I do so, may I say that I fully realize the amendment I shall be moving has the effect of suspending any further consideration of the bill itself at this session. Nevertheless it will permit discussion of the subject matter of the bill by the committee to which the subject matter is referred. I can say to the hon. member who is the sponsor of the bill that I was greatly annoyed in 1947 when a bill of mine was treated in this manner, but I must say that in 1948 the subject matter of the bill which was treated that way in 1947 was incorporated in one of the statutes of Canada, namely the federal labour code. Annoying though these procedures may seem at times to the sponsor of a bill, it is not all bad. It can produce discussion and possibly some progress. With that explanation I move, seconded by the hon. member for Kootenay West (Mr. Herridge):
That Bill No. 4 be not now read a second time but that the subject matter thereof be referred to the standing committee on miscellaneous private bills.


Mr. Ralph Maybank (Winnipeg South Centre):: Mr. Speaker, I rise only to ask you for instruction and assistance. I was on the point of saying what I am about to say before the hon. member for Winnipeg North Centre (Mr. Knowles) moved the amendment. Point No. 1 is that I do not wish to leave my seat and go into the lobby when the vote comes. Point No. 2 is that I have not any opinion that I consider it worth while to register by voting one way or the other upon either the amendment or the bill itself. I do not really care very much whether we are called "Canada" or "Dominion of Canada". The word "dominion" joined with Canada does not indicate to me dominion over us or domination of us by some power outside of this country. It is my recollection that the name came to be given to us by reason of one of the fathers of confederation recalling a biblical phrase with reference to God having dominion from sea to sea. That is how the term came into common use. As long as there is great loyalty and complete unity of the people, as long as we are working to make this country more widely known as the great country it is, I do not care whether we call it "Dominion of Canada" or "Canada". I do not wish to leave my seat and go out into the lobby when the vote comes. Would you be good enough to instruct me as to what I should do, Mr. Speaker, inasmuch as I do not think my opinion is worth registering one way or the other?


Alcide Côté: Mr. Speaker I should like to refer to what was said by the hon. member for Winnipeg South Centre (Mr. Maybank). I want to point out to him that he has made a slight mistake. The first of July is not Dominion of Canada day; it is Dominion day. Which dominion is it? What dominion is it that celebrates the first of July? It is not Dominion of Canada day; it is Dominion day. For many years we have been a dominion in the British empire, and now it is called the commonwealth of nations. I suggest to a lawyer of the calibre of my hon. friend that there is a slight difference between dominion and Dominion of Canada so far as definition is concerned.


Ralph Maybank: One is shorter than the other.


Charles Delmar Coyle: Yes, and more simple, just as my hon. friend is. I will not quarrel with the hon. member for Inverness-Richmond (Mr. Carroll), a former judge in Nova Scotia. He is a learned judge and he has told the house what it is all about. Days ago we had a discussion about this

measure and it was talked out. We had a few arguments about it also. I will not even quarrel with the hon. member for Welland (Mr. Mitchell). I know his sentimental nature and that he could not be otherwise. Let us come back to reason. I have no intention of offering any further arguments in connection with the bill. When I proposed it I thought it was for the benefit of Canada so that Canada would have the proper sign on the door within Canada and the proper sign outside Canada. Dominion day does not mean anything. Any man who has travelled throughout Canada and outside the country will know that the words "Dominion day" do not identify our national holiday. I say to the hon. member for Welland that we should at least have a definition of the day. Of course the hon. member from Nova Scotia who defended the Senate a few days ago took somewhat the same line that the Senate took when the bill was passed by this house and they spoke for about five months on whether it should be called "Canada day" at a cost of several hundred thousand dollars. They were [DOT] ashamed of the name of their own country. Finally they came along with an amendment, but they did not send it back to this house in time to give us an opportunity to analyse it. I am not going to be one of those who support that kind of thing. I would prefer to go back home and look at my garden.
This is a very simple question, which is a fundamental principle of democracy and our parliamentary institutions. We passed that bill here and sent it over to the other place. They played with it for several weeks; they laughed at us-


Mr. Brooks:: No wonder.


Alcide Côté: My hon.
friend says it is no wonder. It is no wonder he is in the minority. We have had an election since then, and my hon. friend is not on this side of Mr. Speaker.


Alfred Johnson Brooks: I do not want to be as long as you are there.


Alcide Côté: If we pass a bill here on its merits, and give it three readings all in the one day, in the other house they should at least respect the vote of the people. After all, we are elected by the people and they are not. This is the principle. We have to decide-we, the commoners of this parliament-whether when we pass a law we believe in it, or whether we are to leave it in the hands of those in the other place and have them hold us up to ridicule before our electors and the world.
Canada Day


Mr. Speaker:: At the moment I am having a little difficulty in deciding whether or not the amendment is in order. Standing order 63 reads in part as follows:
At the commencement of each session, a special committee, consisting of five members, shall be appointed, whose duty it shall be to prepare and report, with all convenient speed, lists of members to compose the following standing committees of the house:
(c) On miscellaneous private bills, to consist of fifty members, fifteen of whom shall constitute a quorum.
Has the committee on miscellaneous private bills any power to consider a public bill of this nature? I doubt it very much; and unless I am persuaded to the contrary I think I must rule the amendment out of order.
The question is on the main motion.


Humphrey Mitchell: Mr. Speaker, I was paired with the hon. member for Waterloo South (Mr. Homuth). Had I voted, I would have voted against the motion.


An hon. Member:: Why?


Humphrey Mitchell: Because I have some sense; that is why.


Mr. Speaker:: The hour reserved for private and public bills having expired, the house will resume consideration of the matter under discussion at six o'clock.

The house in committee of supply, Mr. Beaudoin in the chair.



DEPARTMENT OF TRANSPORT

[Stage Direction]
Board of Transport Commissioners for Canada-
524. Board of Transport Commissioners for Canada -administration, maintenance and operation, $624,800.
Charles Edward Johnston: When the committee rose at six o'clock I was endeavouring to show how the railways, through their subsidies, were in a preferred position as compared with their competitors in the field of transportation. I want to refer to another instance in which the railways have preference over other types of transport, thus giving them a further advantage. In 1949 an order in council was passed, P.C. 8303, which altered the subsidy previously given to railways, steamships and trucks in the hauling of western feed grains and mill feeds to eastern Canada. By this order in council, P.C. 8303, a change was brought about in that subsidy whereby, if western feeds, western grains, and mill feeds were transported by rail they received a subsidy of $5.50; if hauled by water they received a subsidy of $4.15, but if hauled by truck the subsidy was withheld entirely. The evidence is clear in that case too that the railways, through government action, were given a very preferred position over that of trucks, and once again we find the government protecting their own railway business by government legislation.
Then, Mr. Chairman, we have the increase in freight rates granted to the railways just recently by the board of transport commissioners amounting to some 45 per cent, which

in effect increases the revenue of the railway. I am not saying whether that increase is justified or not, but it does undoubtedly put the railways in a preferred position.
On reviewing the evidence of the commission in regard to freight rates, the thing that struck me was that no endeavour was made to find out if there was an excess of overhead charges. It appears that any time the railways find themselves in difficulties, so far as revenue is concerned, all they have to do is to come to the government and apply for an increase in freight rates; and because one of the railways is government owned they have no trouble in getting all the increases they require. That is not true of the other competitors in this field of transportation.
As I indicated on another occasion, it was pointed out in the public accounts committee by one of the members of that committee that the over-all policy of the government was to give all their freight haulage to the railways or to water transport, and very little if any was to be given to trucks. That evidence seems to be borne out in all the things that I have indicated so far in my argument.
The railways are put in a preferred position by other government legislation. The house will remember that in 1938 legislation was passed which gave the railways the right to make agreed charges with business concerns which had freight to haul. That is, the railways could contract at a certain price to haul all or a portion of that company's freight, and thus the trucks were prevented from getting any of that business. Government legislation again gave the railways a very preferred position. I point out to you, Mr. Chairman, that several pieces of government legislation have discriminated against every other competitor of the railways so far as western Canada is concerned. This does not just merely happen; it is the policy of the government. There is no question about that, because they are the ones that are responsible for this legislation.
After the agreed charges were brought down, the judicial committee of the privy council recently decided that the effect of an agreed charge on the objecting carriers business and revenue is a relevant consideration for the transport board. The approval of an agreed charge has been withheld when it was shown to be unduly prejudicial to a water carrier who had participated in the carriage of a traffic and resulted in an undue or unfair advantage.
The Transport Act of 1938 gives to carriers by water and by air an opportunity to defend themselves but denies such an opportunity to carriers by motor vehicle.

There again, Mr. Chairman, we And that the board of transport commissioners very definitely make it impossible for motor transportation to take an appeal to that board no matter how unjust the action may be. It certainly goes without question that once again by legislation the government has placed facilities at the disposal of the railways and to the detriment of the only form of competitive transportation we have in western Canada, namely, the motor truck.
A while ago in regard to trucking I mentioned the national parks. I believe it was yesterday we talked about this matter when the Minister of Resources and Development (Mr. Winters) assured me that when the trans-Canada highway was built through national parks the highway would be made available to trucks hauling through those parks, and not only through Banff but through Jasper, Yoho and the Kootenays.
Up to the present time through transportation by way of these parks has been absolutely forbidden. The Minister of Resources and Development pointed out that that was a regulation by the parks management themselves. However, when one understands that the national parks are under the control of the dominion government, then there can be no doubt about it that the order comes directly from this government.
There could be no more effective way of turning that entire transport business over to the railways than by barring trucks from passing through our national parks. That is exactly what was done in western Canada. All that business went to the railways. In effect it put a stop to all motor transport business between Alberta and British Columbia. Once again we find the government interfering with private enterprise in favour of its own government-owned railway.
It is contemplated that the trans-Canada highway may take seven years before it is completed. One must keep in mind that that is a long time for the railways to possess a further monopoly on those transportation facilities. As the trans-Canada highway is now being proceeded with the railways are becoming more concerned than ever about their competitors. They are not trying to compete, in the ordinary sense that one branch of free enterprise competes with another. They are not trying to reform their transportation business so as to bring it up to date. No; they are trying to drive out their competitors so that they will have the field completely to themselves.
As the legal representative of the province of Alberta stated before the royal commission, the day that motor transports are put off the road in favour of the railways, on that very
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day we will see an increase in freight rates in western Canada. And, believe me, that is only too true.
What is the purpose of building the trans-Canada highway? The purpose is twofold; one is to convey tourists from one side of Canada to the other, and the other is to have a highway which will serve for truck transportation as well. The Minister of Resources and Development indicated the other day that that was the purpose for which this highway was being built. Of course, no sensible person would take issue with that. However, it would seem that the Department of Transport is not of that view. While I am speaking about the trans-Canada highway, and its relation to freight, may I read a portion of an editorial which appeared in the Western Producer of May 4, 1950. It has this to say:
Course of the highway across the west was never a very important issue, really. The big question was not where, but when the road would be built.
And then later:	.
It will be a strong link between the industrial east and the agricultural west and constitute a sound beachhead on the trade and geographic barrier separating the two. From the standpoint of national defence, the highway is imperative now that Canada is at the crossroads of world history.
The editorial points out that when this road is built it will constitute a sound beachhead on the trade and geographic barriers separating the east from the west. But if the railways had their way, certainly no such beachhead would be established; because it is only too well known that if it had not been for the railways trying to maintain a monopoly on the transportation of freight the trans-Canada highway would have been built years ago. I give the Minister of Resources and Development all the praise coming to him for pressing forward this work. It has been held too long in abeyance in order to help the privileged few.
Let us take note of the difference in the attitude taken by the United States government in the matter of highway traffic. It is true, as was pointed out this afternoon by the Minister of Transport (Mr. Chevrier), that freight rates in the United States are higher than they are in Canada. But that country is certainly taking the opposite view so far as general transportation is concerned!, and in its attitude toward free enterprise, because not only are they encouraging truck transportation, but they are building express highways for the purpose of the greater and faster movement of freight by highways. The railways are forced to compete with those highways.
I say that if our railways cannot compete in rendering a service at as reasonable a rate

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as is offered by motor transport, then they had better get out of the business because, if that is so, they are certainly becoming outmoded.
When the railways were presenting their evidence before the royal commission they made four general statements in regard to transportation. The first was that they wanted an amendment to the British North America Act to give to the federal government complete control over the highways. Now, what would be the purpose of the railways in wanting to turn over to the federal government the complete management of the highways? They know, without question, that that problem would be turned over to the board of transport commissioners and that then, as now, all the favours would go to the railways in order that they might maintain their complete monopoly.


George Matheson Murray: May I ask the hon. member a question?


Charles Edward Johnston: I would just as soon you
would wait. You will have another opportunity, and the time at my disposal is passing rapidly. In this connection I wish to quote from the Calgary Herald of December 15, 1949, to show that I am not the only one expressing this view. They say this in an editorial:
George A. Walker, chairman of the Canadian Pacific Railway, has suggested federal control of the highway trucking industry as one solution of the railways' difficulties. He has made this suggestion in the C.P.R.'s submission to the royal commission on transportation.
While we must accept the fact that the growth of truck competition is giving the railways cause for serious concern, we cannot agree with Mr. Walker that state regulation is the answer. It seems to us that a great number of other questions must be answered first.
It is customary for the railways to point out in this controversy-which, incidentally, has been going on for years-that while they move over permanent way which they have to maintain themselves at great expense, trucks move over highways which are built by the taxpayer. Therefore, they argue, trucks have a commanding competitive position.
But it seems to us that the question raised by this contention is not whether the state ought to regulate the trucking business, but whether trucks are paying their fair share of licence fees towards highway maintenance. So far as we know, very little serious research has been done into this problem.
If a heavy truck does more damage to highway surfaces in a year than is covered by its licence fee, then clearly that fee ought to be raised. There is no reason why trucks should be subsidized either by private motorists or by the general taxpayer.
May I interrupt there to say that they are not subsidized, but the railways are. The editorial continues:
But until it is established that trucks are being subsidized, it would be wrong to make any unsupported assumptions.

Now it is true that truck transport is often cheaper (and more convenient) than rail transport. Assuming that trucks pay their fair share of highway maintenance, this can only mean that for certain purposes truck transport is economically more efficient than rail transport.
And if this is so, there is no excuse whatever for regulating it into a position of lower efficiency- and that, whether we like it or not, would be the immediate effect of any control which forced trucks to charge as much as railways for carrying freight.
On some branch lines, and in some categories of freight, the railways apparently find it impossible to compete with trucks owing to their large fixed charges. There is no doubt that a healthy railway system is essential to the Canadian economy, but that cannot change the fact that where trucks can carry goods more cheaply and just as efficiently as railways, then trucks should get the business.
If, for strategic reasons, it is considered necessary to keep certain lines open despite the fact that they lose money in peacetime, then they should be maintained honestly and openly by direct subsidy as a charge against defence expenditures. But we do not see where further state control is going to help anybody.
May I endorse that statement as my own. I go on to the second submission by the railway which was: Eliminate highway services between railway points. That would have a terrible effect upon transportation particularly in western Canada. It would mean that trucks would not be able to operate between Calgary and Edmonton, between Edmonton and the Peace river, between Piegina and Saskatoon, between Toronto and Montreal or between Toronto and other points in Ontario. If that suggestion were followed it would mean that the railways would have a complete monopoly.	,
Then it is suggested that trucks should be restricted to hauls between 50 and 100 miles. When I was speaking the other day I indicated that that was the government's view as well and once again we see the Canadian Pacific carrying the ball for the government and the Canadian National.
The fourth submission was to eliminate highway subsidies by increasing user taxes. It seems to me that there the railway is getting into the realm of nazi dictatorship. What greater dictatorship would you want than evidence that they are trying to force their competitors out of business by increasing taxes on motor transport when at the same time they receive a government subsidy? The insinuation there is that trucks do not pay their way, but I should like to quote from an address by Mr. G. M. Parke, president of the Automotive Transport Association of Ontario Incorporated. The figures I intend to quote were taken from the statistics of the department of highways of Ontario so they must be correct. I quote:
Last year, commercial vehicles represented 18 per cent of the vehicles on our highways yet paid more than 50 per cent of the licence fees and in the neighbourhood of 40 per cent of the gas tax.

A study made two years ago revealed that the [DOT]owners of public commercial vehicles, although operating less than one per cent of the vehicles on our highways, paid approximately $6 million in licence fees and gas tax, or nearly 14 per cent of the total revenue collected by department of highways for 1947.
On the over-all picture of highway financing, department of highways statistics for the past ten years disclose receipts of $52 million in excess of the expenditure of $350,747,000. This expenditure not only included subsidies of some $77 million paid to counties, townships and towns and villages, as well as $4 million for roads in unincorporated townships and development roads under section IVB of the highway improvement act, but the complete cost of constructing and maintaining King's highways and development roads. A shining example is the construction of the Red lake road. The cost of $6,500,000 was paid out of current receipts.
That highway taxes in Ontario have been more than sufficient for the construction and maintenance of our fine highways is unquestionable. Suffice to say, commercial vehicle owners, paying close to 50 per cent of current highway costs, are more than paying their fair share.


Louis-René Beaudoin: I must inform the hon. member that he has exhausted his time.


Charles Edward Johnston: I am not able to conclude what I want to say on this occasion but later on I shall try to analyse the mental processes of the Minister of Transport in respect to competition with the railways and try to prove that they are in a very preferred position. I shall try to prove also that it is the intention of the government, particularly the Department of Transport, to eliminate all competition with the railways.


George Matheson Murray: Does the hon. member regard the Big Bend route for the trans-Canada highway as being in the national interest?


Charles Edward Johnston: That question could more properly be directed to the Minister of Resources and Development because he is spending $25,000 on a survey of that route. I could suggest quite a few changes, and that would be one of them.
(Translation) :


Mr. Maltais:: Mr. Chairman, the question of freight rates is causing a great deal of comment. However today's discussion has not clarified the situation to a very great extent. It has provided an opportunity for our Conservative friends to move a vote of confidence in the government.
This rate problem seems to have originated with the history of this country, and it has certainly widespread ramifications throughout the whole economic structure of this nation.
The western provinces, at least this is what I understood from the remarks of the hon. member from Lake Centre, have complained of discrimination, unfairness and injustice. The Canadian National can hardly meet its
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obligations on account of the tottering financial structure it has inherited from our successive governments and our political fancies. The Canadian Pacific, a private concern that makes every effort to provide the best service possible, can barely stand the competition of a government subsidized railway.
Our economic structure is therefore shaken and at times has difficulty in keeping its balance because of all the problems created by this situation.
This afternoon, the member for Regina City (Mr. McCusker) gave a short historical account of freight rates in western Canada. It seems they originated with the Crowsnest pass agreement, which goes back to 1897, I think, when certain maximum rates were set and guaranteed for the transport of grain and flour. Other conditions, for instance rates covering the transport of other commodities, were connected with this agreement.
As I see it, the agreement came about because western Canada had no choice in the matter of transport facilities, and was anxious to prevent the Canadian Pacific Railway from asking for a subsequent increase in its freight rates. On the other hand, those ceilings allowed the western provinces to ship a commodity vitally important to them. The rates set by the agreement have always been agreed to by the majority of the Canadian people, at the time of that decision as well as today.
This afternoon, the hon. member for Lake Centre championed the cause of all those who favour the maximum rates set in the agreement. I wish to remind him that around 1918 the Conservative party wanted to put aside that agreement and substitute therefor the authority of the board of transport commissioners. He seemed to have a good memory this afternoon. However, I would like to put on the record a brief account of what happened between 1922 and 1925 in connection with this problem. The following excerpt is taken from page 189 of the report of the royal commission on dominion-provincial relations, volume II-that is the Rowell-Sirois commission. I quote:
Between those who thought the Crowsnest Pass Agreement Act (which antedated the bill creating the board of railway commissioners by six years) should be repealed, leaving freight rates in the west to be fixed by the railways subject to appeals to the board, and those who held that these rates should be continued as a protection to an area which was not favoured with water competition, a conflict began in 1922 which was fought out in special parliamentary committees, in cases before the board of railway commissioners, in references to the supreme court, in appeals to the governor in council and in parliament itself. In the result,

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the principle that it was proper for parliament to put statutory limits to the powers of the railway commission was clearly established by the retention in the order in council of June 5, 1925, of the grain and flour provisions of the Crowsnest pass agreement.
Today, the Conservative party requests the abolition of the commission and poses as the great champion of the agreement that owes its survival to the Liberal party.
Naturally, in view of his party's previous position, I am only mildly interested in the invitation of the leader of the opposition (Mr. Drew) to support his amendment.
It will be seen, therefore, that since 1925 freight rates for grain and flour have remained the same and recent increases could not be brought into effect.
We are faced here with an important question. Whenever a preferential rate is provided for certain goods in the lower classes, should not freight rates on goods in the higher classes compensate for the loss sustained in the first case? I merely want to point out the matter now and will refer to it again in a moment.
At the other end of the country, that is to say, in the maritimes, new rates have been brought into effect under the Maritime Freight Rates Act.
The central provinces, that is Quebec and Ontario, seeing these means of transportation grow with amazing rapidity, were, in turn, faced with a problem, since competition began to appear between the various forms of transportation.
It was then that the C.N.R. and the C.P.R. were forced to revise their rates in order to meet this competition. Certain adjustments had to be made, which caused the maritimes to lose the advantage that the 20 per cent reduction had originally brought them.
There obtained then, in some regions, conditions which were bound to affect the economic stability of a group of provinces, endangered by the competition which had arisen in the central provinces, which were bound by an agreement with another part of the country where a maximum price was imposed because of the greater volume of transportable goods. It was therefore not easy to find a formula satisfactory to Canadians of all regions, without imposing too heavy a burden on the provinces of Ontario and Quebec in order to maintain the railway system which Canada now enjoys.
As I said at the beginning of my remarks, if there is a special rate for a certain class

of commodities, it is only normal that another class of commodities should compensate for the loss incurred. Otherwise, the government would be forced to subsidize the railways in order to compensate for the loss in revenue they would necessarily sustain. Then, who is going to assume these responsibilities? I have often heard that Quebec and Ontario are paying their substantial share.
I am asked if I have anything to suggest. Yes, I have something to suggest, though it is something which does not agree with the suggestion made by the leader of the opposition. As a matter of fact, the board of transport commissioners, with all its experience, is in my estimation the organization which is most likely to bring about the best solution. Perhaps, it might be advisable that it should undergo certain changes, but it is out of the question that it should be dispensed with completely.
It seems that, as the years go by, the tendency is to equalize the freight rates in so far as certain higher grades of commodities are concerned. It seems also that there is now a tendency to grant special rates on primary products when the particular economy of a district is affected. If it is the decision of this government to relieve the situation by way of grants, why not add them to the maximum prices of these products? We would thus be killing two birds with one stone, helping at the same time the economy of the district concerned and that of our railways.
I have not carefully considered the various reasons put forth in favour of the horizontal increase in rates but, to my mind, it stems from the financial position of the railways.
The plight of the Canadian National, whose financial structure is heavily burdened by all sorts of commitments and in some cases crippled by extravagance, is daily growing worse. The Canadian Pacific, a private company, has to compete with a government enterprise and does not earn enough revenue to meet this competition.
Naturally, I am against any increase in freight rates but I have reason to believe that it is safer and wiser to await the findings of the royal commission before overthrowing, by a single vote, what generations have tried to build, in the past few decades, in the field of transportation.
I will not mention the C.C.F. amendment. It is, in effect, a motion of non-confidence in

the government and I am not ready to accept their nationalization program that borders, if followed to its logical conclusion, on another doctrine which is not to my liking either.
(Text):


Alfred Johnson Brooks: Mr. Chairman, we have had a long discussion on freight rates today, and I do not intend to take much of the time of the committee. It is not my intention to discuss the merits or demerits of the amendment or the amendment to the amendment. Member after member has already discussed the incompetence of the board of transport commissioners. I will only say that if they are half as incompetent as the leader of the opposition and the hon. member for Rosetown-Biggar have accused them of being there is no reason why they should not go. I have heard railway rates discussed on many occasions in this chamber, and I took part when we were discussing the 21 per cent increase in freight rates in 1948. When it was instituted we of the maritime provinces did not oppose the increase as such, because we realized that railway rates had to be raised. What we did oppose was the method of the increase, and what we considered and believed was unjust discrimination against the maritime provinces. We felt then as we feel now, that increases in railway freight rates should be borne equally by all sections of the country and not as it is today.
There has been a 45 per cent increase since 1946. We believe that the horizontal method [DOT]-and I think anyone who studies it will come to the same conclusion-discriminates against the people of the three maritime provinces as it does against the people of western Canada. It is something that should be corrected. I do not think the board of transport commissioners has been considering the matter of railway freight rates from the the broad point of view that it should take, but rather from what might be termed a dollar and cents point of view. I think railway rates should be considered from the point of view of the development of trade in all sections of the country, the geographical position in which different sections of the country find themselves, and more particularly, as I think was the case in the early days, in the spirit of confederation.
Railways and railway freight rates have been a most important consideration for the people of the maritime provinces from the days when this country first became the Dominion of Canada. As a matter of fact the economic existence of the three maritime provinces depended to a great extent on the railways and on cheap freight rates. One of
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the main conditions under which the maritime provinces came into confederation was that we would be given satisfactory railway transportation, and that we would also be given satisfactory freight rates. To indicate just how the present rates are considered in my own province I should like to read an article which appeared in the Saint John Telegraph-Journal of March 2, and which I think expresses it far better than I could:
Another Freight Rate Blow
The latest horizontal increase in railway freight rates, authorized yesterday by the board of transport commissioners, is another blow at the economy of this part of Canada. It will make it more difficult for New Brunswickers to do business, will aggravate the unemployment problem, and will tend to advance the cost of living.
The high cost of transportation has always been a burden on this region and a factor calculated to retard industrial development. And whenever the freight rates are advanced on a flat percentage basis the position of this province becomes worse.
That is the way they are being advanced at the present time.
That's because we are far from the country's largest markets and its main sources of raw materials, and are up against long rail hauls.
Percentage increases obviously bear more heavily on long haul than on short haul shippers. Then, too, in central Canada rail rates are held down to meet truck and water competition. In New Brunswick the railways do not face such competition nearly as much, and are thus not compelled to reduce rates to hold the traffic . . .
In hearing the railway applications for higher rates, the board of transport commissioners contended that it could not consider the economic implications from the standpoint of the various regions. It held that this was not within its jurisdiction.
That is what I said a few moments ago, that this matter was considered from the dollar and cents point of view and not from the broad point of view, as I think it should have been.
The royal commission on transportation, set up by the federal government to consider all phases of the freight rate issue, has wider powers. Our best hope now seems to be that this tribunal will find a more equitable way of distributing the freight rate burden, so that while the railways will get the revenue they need, undue hardship will not be imposed on all provinces but Ontario and Quebec. Certainly, horizontal rate increases are wrong in principle, and not in the best interests of Canada.
As I said a short time' ago, Mr. Chairman, since the days of confederation we have realized that railways were one of our chief considerations. I shall not weary hon. members this evening with the history of the railway situation in the maritime provinces from the time of confederation, but I should like to mention just a few points. From 1867 to 1912 the maritime provinces were fairly well treated as far as freight rates were concerned. We in those provinces were left

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more or less to adjust our own freight rates. In 1912, however, when the Intercolonial railway was taken over, the first increase in rates was brought about. That increase amounted to 10 per cent, and I point out to hon. gentlemen that it applied in the maritime provinces only. In 1915 there was a 5 per cent increase, again only in the maritime provinces. Then in 1918 there was a 15 per cent increase, so the increases amounted to 30 per cent in a little over six years. The last increase, of course, applied to all Canada. These increases placed such an intolerable burden upon the economy of the maritime provinces that something had to be done. The condition was such that in 1925 members of parliament from the maritime provinces, Conservative and Liberal alike, joined in protest and presented to this house what was then called their claim for maritime rights. If I may say so, Mr. Chairman, I believe the action of the maritime province members in joining together in 1925 to urge what they felt were the rights of their provinces should set an example to the maritime province members of today. I hope all members from the maritimes will unite at this time to see if they cannot get our rights adjusted in this matter of rates.
The result of the agitation for maritime rights was the appointment in 1926 of what was known as the Duncan commission. Sir Andrew Rae Duncan as chairman made a survey of conditions in the maritime provinces and his 'commission made many recommendations, some of which have been implemented while others have not. I do not intend to go into those questions this evening, but as far as our railways were concerned it was recommended that this matter should be very carefully considered, and as a result a 20 per cent reduction on rail rates within the maritime provinces was brought about. The opinion is sometimes expressed in this house that this 20 per cent reduction in rail rates was given the maritime provinces because of the long rail haul, but that is not entirely true. After investigation, it was found that taking 100 as the index of operation at that time, the figure for the maritime provinces was 192 while the figure for the other parts of Canada was 155. So the 20 per cent reduction was not because of the long rail haul but because of this situation which had grown up over a period of years. It was also given us in order to encourage industry. We had lost much of our industry in the maritime provinces, and it was felt that if we were to compete with industry in other parts of Canada we must have some encouragement.
I was rather surprised to learn that there is some misunderstanding in New Brunswick

in reference to this 20 per cent reduction, and particularly as to the submission that has been made to the royal commission on transportation. I understand the government of New Brunswick has recommended that the 20 per cent reduction under the Maritime Freight Rates Act, which now applies only to transportation within the provinces and west out of the provinces, should apply also to freight coming east into the maritimes. I have not sufficient information to say whether this should or should not be done; I believe there are strong arguments on each side. It does seem to me, however, a sad commentary on the situation in our province that the government should feel that the days of industry and manufacturing in New Brunswick must be almost over. Now we can say to the manufacturers in other parts of Canada, "You shall have this 20 per cent increase on freight coming into our province because it looks as though the freight structure we have will mean there will be no more manufacturing in our province". It seems to me, Mr. Chairman, that must be the attitude which some of the people, and the government of our province, are taking at the present time. The hon. member for Cape Breton South spoke about the protection of our industries. He said that we only had a few industries in New Brunswick, and that may be true. He said that it did not make much difference, or words to that effect, whether or not those industries were saved. We know that the member for Cape Breton South is not in favour of private enterprise, and probably his remarks were coloured somewhat by that view.
I know personally that we have splendid industries in the maritime provinces. Over a period of years they have established a reputation for the excellence of their quality, and it is for that reason they are continuing. I could mention our boot and shoe industry in Fredericton; the enterprise foundry in Sackville; our chocolate industry, in both Halifax and St. Stephen; the Fawcett factory in Sackville; the Simms Brush Company in Saint John, and Stanfield underwear in Truro and others of the same quality and standing. Our industries have built a reputation for quality, Mr. Chairman, and it is for that reason more than any other that they have survived. It is not my intention to labour that point, but I do think it worth bringing to the attention of this house, that in the past the maritime provinces had a 20 per cent protection which built up our industries. With the loss of so many industries, with the high freight rates we now have, and the hopelessness which you will find if this situation continues-it will be difficult to

encourage new industry or retain the old. The only hope we shall have will be from our basic industries.
I feel that the maritime provinces are back to the position in which they were in 1926 when the Duncan commission reported on the maritime claim. I should like to read what the Duncan commission said about our claims in its report to the federal government:
The Intercolonial railway was completed in 1876, and it w.ould appear from the evidence we have received that from then until 1912 the interests of the maritime provinces were fairly well safeguarded.
I mentioned that a few moments ago.
The lower level of rates that prevailed on the Intercolonial railway system prior to 1912, is, in our view, rightly to be interpreted as the fulfilment by successive governments of the policy and pledges that surrounded the railway from its inception . . .
As I pointed out, the Duncan commission found that these confederation pledges had been followed. We had hoped that the injustice which had been done would be corrected. It was corrected, as I say, by the Maritime Freight Rates Act. Today the situation is as bad as ever. The Maritime Freight Rates Act came into force in 1928, just prior to the depression. We did hope there would be more industry attracted to the maritime provinces, and the province of New Brunswick, but as you know during the depression years very little industry was attracted to any part of Canada. The war followed the depression; and, so far as the Maritime Freight Rates Act is concerned, it really has not had an opportunity of operating in the maritime provinces to encourage industry.
I feel that the whole freight rate situation needs a complete overhaul. The disadvantages from a geographical point of view and other factors should receive every consideration. Every increase in the railway rates has meant less business in our province. We are in a different position today from what we were a number of years ago. Our overseas markets are lost. We do not sell our apples, for instance, in Great Britain as we did a few years ago. The apple producers have to turn to Toronto and Montreal, as well as the other parts of Canada, in order to sell their products. This means that the higher freight rates put another burden on the apple producers of the Annapolis valley and the Saint John valley. The same considerations apply, Mr. Chairman, to our lumber, our potatoes, our fish and other primary products.
The other day I noticed in one of the papers an article with which I quite agreed, to the effect we have too many miles of railway in Canada. By that I do not mean that in new territory, such as mining territory in the north country, where there are great natural
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resources, we should not have new lines of railway. In the various provinces, however, there are old branch lines which are not necessary. Trucks are carrying most of the freight, and buses are carrying most of the passengers. I hope this transportation commission will give careful study to the matter, and recommend the elimination of many of these lines which are today only a burden on the country.
The hon. member for Bow River spoke of truck transportation. This is a matter, of course, which will have to be given careful consideration. There is no question but what the trucks are in the transportation business to stay. I believe there is a place for the trucks in our transportation system, just as there is a place for our railways, our air transports, and our water transports. I believe this is something to which the royal commission should give careful study. I do not believe our transportation problems are such that they cannot be solved. I feel they can be solved in the best interests of all the people of Canada, and in a way that will make no section of Canada suffer. So far as this royal commission is concerned, I note that they are preparing their report and I do hope it will be a satisfactory one. I have great faith in that commission. The chairman of the commission, the Hon. Mr. Turgeon, is from my own province of New Brunswick. Perhaps that is one reason why I have faith in it. I have great faith that this problem of transportation will be solved, and that all sections of the Dominion of Canada will be properly served. No one could contemplate for one moment the loss of our railways. Canada would not be a nation long if that should happen. In my opinion the competition with which the railways have to contend must be controlled.
It is not my intention to speak any longer tonight. As I said a few moments ago, I do hope that justice will be done to all sections of Canada, whether it be in the matter of transportation, economic production or industry; that we will be protected and that every section will have the same opportunity for progress and prosperity.


Lionel Chevrier: I have listened with keen
interest to the various speakers in this debate. Some of the speeches which were made were of a constructive nature. I am sorry to say that others were not.
If I were asked who made the boldest speech on this subject I would say it was the leader of the opposition. I would say that because of the language which he used; I would say that because of the fact that he found everything about the board of transport commissioners incompetent; he found

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that the government had made a mess of the whole matter. He had little or nothing to offer other than the motion which he made, which will solve absolutely nothing.
If I were asked who made the mildest speech I would have to hesitate between the leader of the C.C.F. party and the hon. member for Cape Breton South, because their criticism was somewhat mild. In fact all they wanted was to reduce the estimate of the board of transport commissioners by one dollar.
If I were asked who made the loudest speech I would have no hesitation in answering that question. It would be the hon. member for Lethbridge. If I were asked who made the most indignant speech I would say it was the hon. member for Lake Centre.


Mr. Hansell:: May I suggest to the minister that there are still more speeches coming when he gets through.


Lionel Chevrier: Perhaps I shall have an
opportunity to reply to them.
I would say that the hon. member for Lake Centre had made the most indignant speech because, in his inimitable way, he shook his fist, pointed his finger and turned his head at this side of the house in a most critical way. I do not think he added a great deal in a constructive way to the debate. I am sorry that neither he nor the leader of the opposition is in the house because I propose to deal at some length with their remarks.
The leader of the opposition began his statement by saying that the comparison I had made with the United Kingdom and the United States did not hold water because conditions in Canada vis-a-vis the United Kingdom and the United States were entirely different. I said that the increases in freight rates in Canada amounted roughly to 45 per cent; whereas in the United States they amounted to something like 60 per cent and in the United Kingdom to 80 per cent. I made that statement because it has always been the practice to compare the level of freight rates in this country with the level of freight rates in the United Kingdom and in the United States. We did that before the war, and in so far as the level is concerned the position is not changed today from what it was prior to the war.
The reason. I wanted to put that on the record was to indicate that we are on the right path, since the percentage of the rise as between Canada and these two countries remains relatively about the same.
That is further borne out by an additional fact, namely, what the average revenue per ton mile is in Canada. The cost of transportation in Canada, as measured in terms of

average revenue per ton mile, is the lowest in the world with the exception of one or two countries. I intend to put on Hansard certain figures which will bear that out. If those figures are not correct I hope that the opposition will challenge them.


John Horne Blackmore: Will the minister permit a question? Will he tell the committee how the freight rates of Canada compared with those of Great Britain and of the United States before the increases occurred? Has the minister those figures?


Lionel Chevrier: I do not propose to deal with that because I have already given the reason why the comparison was made.
The figures that I intend to put on Hansard will indicate what the public pay for transportation in these various countries. I repeat that the average revenue per ton mile or, in other words, what the public pay in Canada to transport their goods, is .97 of one cent. In Australia it is 2.47 cents; in South Africa it is 1.59 cents; in Argentina it is 1.94 cents; in Great Britain it is 2.34 cents; in France it is 2.30 cents; in Germany it is 2.05 cents; in Italy it is 2.13 cents; in Belgium it is 2.11 cents; in Switzerland it is 4.95 cents and in Turkey it is 3.44 cents. I say I was justified because of the statement which I have now put on Hansard, in making the statement I did earlier in the debate. '
The next point made by the leader of the opposition was that the judgment of the board of transport commissioners failed to deal with the unfair differential. "In other words," said the leader of the opposition, "this judgment did not begin to deal with the most important question of discrimination." Of course it did not. It was never called upon to deal with it. It was not dealing with unfair discrimination between one part of Canada and the other. That wias not the responsibility or the duty of the board on these applications; neither on the 30 per cent application nor on the 20 per cent application was the board called upon, and no one knows it better than the members of the opposition; because counsel for the provinces repeatedly said: "This is not the place nor the time to deal with discrimination. We will deal with that later on. This is an application made for an increase in rates." In other words, it is a revenue case, as I stated earlier in the debate. Therefore it was never the intention that this should be what was implied by the leader of the opposition.
Then the leader of the opposition made his main point. He said: "The board is incompetent. It is responsible for the state of confusion and chaos in which the country finds itself today." He said: "The government should take over. There must be a board of course, but it should be constituted otherwise.

It is not functioning at this moment as it should, and it is not competent to assume its tasks; the government must assume the direct responsibility." He was followed in that charge by the leader of the C.C.F. party, by the hon. member for Cape Breton South, by the hon. member for Lake Centre and by other hon. members. I am not surprised at that attack on the board. That attack was exactly the same as the one in 1948, when the 21 per cent case was made-when the decision was made to increase the rates by 21 per cent. The resignation of all members of the board of transport commissioners was called for then. They said at that time that every member of the board should be dismissed, that they were useless, that they did not know their business, that they did not know what they were doing, and that neither did they know what they were finding.
I am glad that other people have a different view concerning the board of transport commissioners. I have confidence in the board of transport commissioners, and I deprecate the attempt of some members in this House of Commons in trying to undermine the confidence of the people of Canada in that body. I do not think it is indicative of constructive criticism to attack the board of transport commissioners in that way; neither do I think that it will lead to any solution of this problem.
Let us for a moment see Who are the members of this board. First there is the chairman, Mr. Justice Archibald. He is a lawyer, and a judge of standing. He acted as a member of the war labour board during the war-


Humphrey Mitchell: As chairman.


Lionel Chevrier: My colleague says that he was chairman. He brought down decisions which met with the full approval of members of this House of Commons, and which met with the approval of the people of this country, on many occasions. He is learned in the law, and I say he is well qualified to act as chairman of that board.
Then, the assistant chief commissioner is Mr. Hugh Wardrope. He is from Ontario, and equally learned in the law. I do not think that anyone would say that he is not competent to deal with any problem we put before him. He is there for a second term, and has had a wealth of experience in these questions.
Then, Mr. MacPherson is from British Columbia. He is on the board for a second term, and also has a great deal of experience.
Commissioner Chase came from the railway brotherhoods of this country. I think it has been shown many times that he 55946-200
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has the confidence of the people. The same is true of Mr. Patterson, who was premier of Saskatchewan. I do not think anyone in this House of Commons would dare to say that he does not know what the feelings of the people of Saskatchewan are. He has had a great deal of experience in public life, and I think he is competent to deal with the matter of freight rates.
Then the leader of the opposition (Mr. Drew) goes further and says that the government should step in and take over the responsibility. So did the hon. member for Lake Centre (Mr. Diefenbaker) who is coming into the house now. He, too, followed the same argument. Well, I say to him and I say to the leader of the opposition just this: That that sort of thinking is just about forty-five years old. That sort of thinking goes hand in glove with the thinking of the Conservative party across this country over a long, long period of time.
I say that because that is exactly what took place in 1903. In 1903 it was the responsibility of the governor in council and of the privy council to deal with matters affecting freight rates. In fact there was a subcommittee of the cabinet whose responsibility it was to fix rates. At that time, because of the difficulty of such a committee in dealing with matters of this kind, the government appointed Professor McLean, who had had a great deal of experience in matters concerning freight rates, and who had spent all his life studying the question.
After having made an investigation and having reported to the government, he gave the reason why the railway committee of the privy council was unable to do an efficient and effective job with reference to freight rates. I quote:
The committee has been unable, owing to its organization, to grapple effectively with the 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.
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

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shall receive salaries adequate to attract the most efficient, and who shall have a long tenure of office.
There is the result of a survey made by a man who, I suggest, compares favourably with any other, in so far as his experience and his technical and expert knowledge are concerned. And now we are attacked by certain members of the opposition; we are asked by them to do exactly what was being done prior to 1903. And that is why I say that their thinking is at least forty-five years old.
It never should be the responsibility of the governor in council to fix freight rates. It never should be the responsibility of the governor in council to determine the freight rate structure.


James MacKerras Macdonnell: Why, there is an appeal to you now.


Lionel Chevrier: I am coming to that. True, it has a responsibility under section 52 which is judicial in nature. And as far back as 1903 an order in council was passed setting out in detail what those responsibilities were. I have already placed them on Hansard in an earlier debate, and I shall not take time to repeat them now, because I have further things to say which I believe are at the moment of greater interest.
But I simply wish to repeat this, that it never was the intention since 1903, to date, that the governor in council should determine the freight rate structure in Canada. That it should exercise powers of a judicial nature?-yes. It has done that by way of hearing petitions by provinces. It will do it again with reference to petitions now before it. But that the governor in council should do those very things which were recommended against by Professor McLean would be, I say, a retrograde step, and one which I am sure the government would never think of taking.


James MacKerras Macdonnell: You have
done it on occasion.


Lionel Chevrier: The leader of the opposition goes on to say that it is the duty of the government to provide railway facilities and effective transportation facilities in Canada. Yes, of course. That is so, in theory. But what happens? A number of years ago I brought down a bill to build the Barraute-Kiask Falls line extending from the National Transcontinental Railway into the colonization lands of the province of Quebec. It was opposed by members of the opposition. Indeed, it was opposed by the hon. member for Greenwood, who is looking at me now, until I was able to establish to his satisfaction, and to that of the opposition, that the operation would be a profitable one.

Now, the leader of the opposition comes here and tells us that it is the duty of the government to provide effective transportation facilities in Canada, and on the other hand the members of his party oppose those things the very minute we propose them.
Then the leader of the opposition says that it is the duty of the board and of the government to provide effective railway transportation in Canada. No other country in the world has better railway transportation facilities than the Dominion of Canada. I say without fear of contradiction that we have here not only the most efficient but the cheapest transportation system in the world.
The leader of the opposition makes that statement, but what about his own followers who during the war and since have got up one after the other in their places to pay tribute to the Canadian National Railways and to the Canadian Pacific Railway for the excellent job they did during the war? Now we are told it is the duty of the government to provide effective railway transportation in Canada. I think that statement is somewhat farcical.
Then another point made by the leader of the opposition was that the board was in an impossible position, that it had an impossible task to deal with these matters. He then went on to explain why. I do not think that I quarrel too much with the statement that the board has a difficult problem, because it has a difficult problem to deal with in these applications that come before it and in equalizing freight rates across Canada. But the government recognized that and that is why under P.C. 1487 it directed the board to equalize rates and later decided that there should be a royal commission to investigate and advise the government.
When we give the opposition what they want, they criticize. When we do not give them what they want they still criticize. Will it ever be possible to satisfy hon. gentlemen on the opposite side of the house? The language used today by the leader of the opposition was entirely different from that which he has used on other occasions. I should like to quote from a statement he made earlier, and I quote from page 45 of Hansard of January 28, 1949, as follows:
Royal commissions have a very useful and very important function if they are given terms of reference which clearly define their responsibilities, and if they are given a task which can be performed in a way that will lead to some useful results. There is reference in the speech from the throne to a royal commission to deal with transportation, which at the present time is being used mainly for the purpose of diverting public attention

from the fact that this government has failed to deal effectively in any way with the problem of freight rates, something which should be dealt with by the government with the information now available instead of setting up a further inquiry into this very subject.
The leader of the opposition complained about the establishment of a royal commission, but that is exactly what the seven provinces wanted. The leader of the opposition said that it was a waste of time, but the premiers of the provinces came to Ottawa and that is what they demanded. When the government accedes to their request the leader of the opposition is critical. Then he complained about the terms of reference, but they are pretty much what was recommended by the provinces when they came to see us. Here again there was consultation with the provinces, and still we are criticized. If we consult the provinces, wq are found wanting. If we do not consult the provinces, we are told that we ride roughshod over them. I can come to no other conclusion than that the leader of the opposition is not happy because we consulted the wrong provinces.
I do not want to go into this point, but I think the leader of the opposition should be a little more cautious when he deals with royal commissions because his experience with royal commissions has not been too good. His experience with royal commissions in Ontario has certainly been far from what it should be. However, I do not think I should pursue that any further.
In his statement the leader of the opposition says that the government has failed to deal effectively with freight rates. It is not the responsibility of the government to deal with freight rates. That is the responsibility of the board of transport commissioners as was decided by this parliament when it passed the Railway Act as far back as 1903. This is the parliament that decided that it should be done that way, and not by the government. The only thing left to the government was the powers set out in section 52 which I say are of a judicial nature.
The leader of the opposition adopts the attitude that the government is responsible. But if he says that the government is responsible, which I deny and have denied several times already, then he will have no fault to find with me if I go back to ascertain what happened to freight rates under the Conservative regime. I hope that the hon. member for Lake Centre will listen to some of this because his mind is a little dusty-


John George Diefenbaker: What about Mr. Tucker and the Liberals in Saskatchewan?


Lionel Chevrier: -as to what happened under that regime. From 1903 to world war I there
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were no increases in freight rates in this country. The first general increase came in 1917 and I need not tell the committee who was in office then. That was known as the 15 per cent case and was made as a result of application to the board following the granting of a similar increase in the United States.


James MacKerras Macdonnell: After three years of war.


Lionel Chevrier: The second increase came in 1918 and was known as the 25 per cent case. Do you know how it was made? It was made by direction of the cabinet. The cabinet simply passed an order in council directing the board of transport commissioners to increase the rates by 25 per cent. What would the hon. member for Lake Centre or the hon. member for Greenwood say if anything like that were done today? What would the leader of the opposition, who so suddenly has taken an interest in freight rates and from whom we heard not a word when he was premier of the province of Ontario, do? I wonder what those hon. gentlemen would say if we adopted that sort of attitude today? I do not think we would have such indignant statements as were made by the hon. member for Lake Centre this afternoon if the hon. member had been in the house when action such as that was taken.
Then in 1920, still under a Conservative regime, there was an increase of 40 per cent in freight rates following an application by the Railway Association of Canada. It was not until a Liberal government came into office that the 40 per cent increase was reduced, first by 5 per cent in 1921, then again by 10 per cent in the same year, with a further decrease on August 1, 1922, leaving a net increase of 17J per cent in eastern Canada and 12J per cent in western Canada. I wonder what the leader of the opposition has to say with reference to the action taken in those years? I should like to quote a report in the Montreal Star of a statement made by the leader of the opposition on January 14, 1949, as follows:
The royal commission to investigate Canada's freight rate structure was tagged tonight (in Regina) by Hon. George Drew, Progressive Conservative leader, as a "waste of time." In a brief press conference on the second stop on his western tour, Mr. Drew said all essential data seemed to have been assembled and that the most important thing now was "determining the principle on which adjustment must be made of rates."
The leader of the opposition said that the royal commission was a waste of time. Still his party in convention passed a resolution in which they asked for that very thing. That is not the first time that the leader of the opposition has been in disagreement with

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certain of his members. Neither is it the first time that the hon. member for Lake Centre is not in agreement with his own leader. The leader of the opposition states that a royal commission is a waste of time but his party supports an investigation of freight rates. It is well known by all who have given any attention to the matter that the board of transport commissioners have no power of themselves to deal with discrimination affecting geographic, economic and industrial conditions. That is the very essence of the case for the provinces. Their whole brief was based on this argument. It has been held time and again that our rate-regulating commission has no right whatever to attempt to equalize geographic, climatic or economic conditions. They are simply and wholly concerned with questions having to do with the reasonableness of rates or tolls.


John George Diefenbaker: Who has the power?


Lionel Chevrier: The only conclusion I can
come to is that the language used by the leader of the opposition and the hon. member for Lake Centre is-


John George Diefenbaker: Who has the power?


Lionel Chevrier: Just a moment. I did not interrupt the hon. member when he made his speech, when he waxed so indignant. Let him allow me to carry on because there are a number of things that have not been said that need to be said.


John George Diefenbaker: It is a question that you cannot answer.


Lionel Chevrier: There are a number of things that have been said by the leader of the opposition about the board that I do not think should be said by the leader of any party. Be that as it may, the only conclusion I can come to is that the leader of the opposition and the hon. member for Lake Centre are careless in their language and in the attacks they make. In any event, if they are not careless in their language and in their attacks they are certainly careless about the method in which they rthink this matter can be disposed of. If the leader of the opposition is correct in moving his amendment to reduce the item of the board of transport commissioners to $1, let me ask, how does that in any way solve the problem? What is the policy of the members of the opposition? I should like to know what it is.


An hon. Member:: They haven't any.


Lionel Chevrier: Of course they haven't, and what is more they do not agree with each other. It is evident that the speech made by the hon. member for Lake Centre does not agree at all with that made by the leader of

the opposition. Anybody who listened to it, or who reads Hansard, can come to no other conclusion. They have no policy. Of course they have no policy and they will not have any policy. I do not say that because I think it is all right to make destructive criticism as was done by the leader of the opposition and by the hon. member for Lake Centre, with whom I should like to deal for a moment. He said that the latest decision will accentuate and increase the discrimination. That was the important statement made by the hon. member for Lake Centre. Of course if discrimination exists it is bound to be accentuated by an increase in freight rates. I do not think there can be any doubt about that.
Then he went on to say-and listen to this -that there must of necessity be an increase in rates because of the increase in wage rates and costs generally. He says that nobody will find fault with that but he insisted that the increase be held up pending the disappearance of the discrimination. How logical is that argument? If it were to be followed to its logical conclusion what would happen? The railways would never get the money with which to pay increased wage rates, increased material costs and increases in other expenses which must be met. The point boils down to this. You cannot have an increase in wages and a reduction in freight rates. It simply cannot be done.


John George Diefenbaker: You could remove the discrimination.


Lionel Chevrier: I will deal with that in a moment. Yes, you can have a removal of discrimination. True, you can have a removal of discrimination if it exists; but my hon. friend did not put one tittle of evidence on the record' to indicate that there was discrimination. The hon. member for Rosetown-Biggar did, and I want to deal with the example he gave.


John George Diefenbaker: I put Mr. Garson's statement on the record.


Lionel Chevrier: Yes, you called the Minister of Justice as a witness just as I called the leader of the opposition as a witness. The leader of the opposition became interested in freight rates after he became leader of his party. Until then we never heard about it from the leader of the opposition.


George Alexander Drew: That is nonsense.


Lionel Chevrier: I hope the hon. member will not distract me any longer because I should really like to deal with his argument. He took it for granted, as many others take it for granted, that there is discrimination. Yes there is, but to what extent? While it

is true that freight rates in Ontario and Quebec are generally lower than those in the maritimes and on the prairies, and on the Pacific coast they are somewhat lower than on the prairies, there has been no evidence since the case of 1927 to indicate wherein that discrimination lies. I wish the hon. member had put more evidence on the record than he- did. He did talk about the Crowsnest pass rates. He was very careful not to say that they had been suspended by a Conservative administration and that they had been raised during the time of a Con-servativ regime. He said that every member in the house should raise his voice and insist that the Crowsnest rates should never be touched. I ask you how then are you ever going to get revenue for the railways if freight rates are not going to go up?
There are only two ways in which it can be done. One is to amend the Crowsnest pass rates, and I know what would happen if any attempt were made to do that. I do not think there is any intention of doing so. Not only is there no intention but I personally would oppose it. The only alternative by which you can get revenue for the railways is to increase the rates on other commodities. I have made that clear on more than one occasion, and I think it is the only way. Then the hon. member for Lake Centre said, "What should our attitude be?" He went on to support the amendment of the leader of the opposition that item 524 foe reduced to $1. That does not deal with the problem. The problem is an important one, and no one realizes more than I do-and not in any cavalier fashion such as the hon. member for Lake Centre attributed to me-how important this question is not only economically but geographically and politically. That is why I have attempted to approach it from a constructive point of view.
Before concluding I should like to deal with one or two matters arising from the statements made by the hon. member for Rosetown-Biggar and the hon. member for Lethbridge. They said that the rate on 100 pounds of petroleum from Regina to Indian Head was 26 cents, while the rate in Quebec for the same product and the same distance was 10 cents and in Ontario 9i cents. That statement is not in accordance with the facts.


Major James William Coldwell: I took it right out of the evidence given before the board of transport commissioners, and it was not disputed.


Lionel Chevrier: I am disputing it now.


Major James William Coldwell: It was not disputed before the judicial body.
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Lionel Chevrier: I am disputing it, and I shall explain it. The 26 cent rate from Regina to Indian Head, a distance of 47 miles, is the normal rate which will become effective on June 16 next if these increases go into effect. The normal rate from Sarnia or Montreal for a similar distance will be 31 cents. However, an agreed charge from Sarnia and Montreal, to meet highway and water competition, of 8J cents and 9| cents respectively has been put into effect. A similar agreed charge exists in Alberta; and that charge, for the information of the hon. member for Lethbridge, from Calgary, Edmonton and Lloydminster is 10J cents, and is also to meet highway competition. So the rate is not 16 cents lower on that commodity in eastern Canada than in western Canada, but only 1 cent or 1J cents.
A condition of the agreed charge is that the industry entering into it with the railway undertakes to give the railway all its traffic. No such agreed charge is in effect at Regina. There is nothing to prevent those interested in arranging an agreed charge with the railway, but I am told the reason it has not been done is that it is the intention to give a' certain amount of the traffic to motor transport. Well, if that is the case certainly this cannot be used as an effective example of unjust discrimination, because I submit with deference that it is not.
Then the leader of the C.C.F. party said that now, when the western provinces apparently are faced with a decreased selling price for wheat, freight rates should not be increased. But these increases, the 20 per cent case and the 30 per cent case, do not apply to grain rates and were never intended to apply to them.


Major James William Coldwell: But they apply to the
machines and materials that enter into the cost of production. That is what I meant.


Lionel Chevrier: But that is not what the hon. member said. I say to the hon. member that freight rates on grain and grain products have not been increased since 1897 except as already stated. As a matter of fact those two decisions exempt grain products, whether going to the east by way of Fort William and Armstrong or to the west by way of Vancouver and Prince Rupert; and the hon. gentleman well knows the position in reference to the Crowsnest rate.
There are other matters with which I would like to deal, but let me summarize the position in this way. The amendment of the leader of the opposition will accomplish nothing. It does not begin to meet the problem. I submit that the problem can only be met, first toy the investigation being conducted by the board of transport commissioners with the object of

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equalizing rates where there is unjust discrimination, and second, by the findings of the royal commission. I think the committee should be reminded that discrimination exists in many parts of Canada. I do not think that can be denied; it has always been the case. It is unfair or unjust discrimination with which the board seeks to deal. The other method adopted by the government to meet this problem was the appointment of a royal commission on transportation to which terms of reference were assigned so that it might report and advise the government on these matters. Meanwhile the provinces have filed a petition. The government will hear that petition and give it the same careful consideration that was given an earlier petition.
I have not given any thought to the question of whether or not the subamendment is in order, but I submit that neither the amendment nor the subamendment, nor both together, could begin to solve the problem. This difficulty will not be overcome by moving an amendment of that sort and putting the board of transport commissioners out of existence. Of all the groups or organizations in Canada that might deal with the freight rate structure of our country, I believe the board of transport commissioners is the one to do it, because that board has the experience and knowledge. It has been said they have not the staff, but that is not so; they have the staff. In the first place they have a traffic department composed of some twenty experts. They have a bureau of transportation economics composed of some forty men, and in all they have some 130 people who are familiar with this whole subject.
I consider this amendment and the subamendment in the nature of a vote of want of confidence; and even if they were to carry- I know they will not, but if perchance they should-we would not have a solution to the problem. I say the only way to meet the difficulties facing us at the moment is the manner adopted by the government, first by directing the board to equalize the rate structure, and second by setting up the royal commission to advise the government on matters of policy. The attitude adopted by hon. gentlemen opposite is both critical and destructive, and would not begin to meet the problem in any way.


Solon Earl Low: Mr. Chairman, I would not-


Alcide Côté: Anticlimax.


Solon Earl Low: The anticlimax came when the vote was taken on the motion of the hon. member.


George Matheson Murray: Mr. Chairman, I speak for the Peace river country of British
[Mr. Chevrier.l
Columbia, and even before the minister spoke I rose to put forward the case for my people


Louis-René Beaudoin: The hon. member for Peace River tried to get the floor even before the hon. member for Bow River spoke this afternoon. Therefore in all fairness I think I should recognize him now.


Solon Earl Low: Thank you very much, Mr. Chairman. Certainly I do not wish to keep the hon. member for Cariboo from expressing his opinion on this matter. As a matter of fact I think every hon. member of this house should recognize the importance of this problem and have something to say about it.
Now, Mr. Chairman, the minister who just finished speaking began his address this evening in rather moderate tones. He proceeded to characterize the various speeches that had been made up to that time when he introduced his rebuttal. He classified them in this way; the boldest speech was made by the leader of the opposition; the mildest speech by the leader of the C.C.F. and his colleague from Cape Breton South; the most indignant speech by the member for Lake Centre; and the loudest speech by the member for Lethbridge. It is always wise for people who begin to classify contributions of others to take a little care with their own. Frankly, I would classify the minister's speech as the loudest of the day, the most excited, the most strident, the most raucous, and the most evasive. As a matter of fact, I was surprised that he allowed himself to be carried away by the sound of his own voice. At various stages of his address, he reminded me a great deal of a minister who had to yell like hell when his argument was weak.
I would not speak in this debate, Mr. Chairman, if I did not have a different approach from those who have spoken thus far. In the course of the case which I shall present I do not . intend to vilify anybody, to castigate the board of transport commissioners, or set myself up as the arbiter of the freight rate structure of this country. I do have a suggestion to make, and I hope it will be received in the spirit in which it is given. It is a constructive approach, and something that has not yet been brought to the attention of this house.
Before I launch into it, Mr. Chairman, I should like to say that during the course of the minister's address he said that no evidence since a certain date, I think it was 1925 or 1923, had been brought to show where discrimination lies. I believe he was speaking of the statement made by the member for Lake Centre that there was discrimination in Canada. It depends, of course, on how you

define discrimination. I am all too aware of the way that the board of transport commissioners, and of course the Minister of Transport, define discrimination. They take the position that there is no discrimination unless some individual considers himself to be aggrieved, or unless the railways charge someone in a certain region a rate that is different from that which they would charge some other person in the same region for the same haul.


Lionel Chevrier: Will the hon. member allow an interruption?


Solon Earl Low: Yes.


Lionel Chevrier: I merely wanted to say that the Railway Act defines discrimination, and the board is bound by what is set out in the act.


Solon Earl Low: That is very good, and it falls
right in with the case I want to present. There is discrimination as between region and region in this country, and the minister knows that such discrimination exists. Furthermore, he knows that the examples that were produced today by my colleague the member for Lethbridge were bona fide examples of discrimination as between region and region. I know full well that when the minister says the board of transport commissioners is not charged with the responsibility, at the moment, of removing regional discrimination, he speaks the truth. He says that all the board can do is to remove unjust discrimination, and that is true. The complaint we have, Mr. Chairman, is that the board of transport commissioners have not been given
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a directive from this government to remove regional discrimination, as well as unjust discrimination between persons within a region. It is that case I want to present when I start in earnest with my presentation.
It is so near eleven o'clock, Mr. Chairman, that I would not like to launch into the argument I wish to present, and then break it off in a minute or two. I wish you would allow me to adjourn the debate.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Mr. Speaker, on
Monday at eleven o'clock we shall take up the following small bills: Bill No. 252, to amend the Canadian Wheat Board Act, 1935; Bill No. 263, to amend the Electricity Inspection Act, 1928; Bill No. 264, to amend the Gas Inspection Act; and perhaps Bill No. 135, if time is left.
At three o'clock we shall ask to revert to motions, and the Secretary of State for External Affairs will make a statement on the conference held in London by the ministers of the nations signatory to the Atlantic pact. We shall then move to go into supply, and I understand there will be a discussion of external affairs. When this motion is carried, we shall call one item of the secretary of state to stand, and we shall proceed with the estimates of veterans affairs.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, June 5, 1950