1966-09-06

NATURAL GAS


Hon. Jean-Luc Pepin (Minister of Mines and Technical Surveys):: Mr. Speaker, last Thursday the Prime Minister promised to table the press release dealing with the rejection by the government of a pipe line project submitted by the Trans-Canada Pipelines Limited. I am now tabling two copies in French and in English.


Mr. Speaker:: Order, please. I understand the minister is attempting to table this document on motions. Does the minister have leave to revert to motions for the purpose of tabling the document to which he has referred?


Some hon. Members:: Agreed.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Cenire):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Will the minister consider putting a motion on the order paper to reassemble the defence committee of this house with instructions to examine the state of affairs within the national defence department, and with permission to call witnesses including various senior officers who are bringing public attention to the fact that the minister's program of unification will be damaging to Canada's defence forces? I refer particularly to the public interest shown by Generals Simonds and Vokes and Admirals Brock and Landymore, is well as others who are finding fault with this program. I think the public interest requires that something be done in this regard.


Mr. Speaker:: Order, please. Will the hon. member please pose his question.


Gordon Minto Churchill: Will the minister take that action?


Hon. Paul Hellyer (Minister of National Defence):: No, Mr. Speaker. I do not think it would be desirable or in the public interest to do that at the present time. If hon. gentlemen will re-read the evidence given to the committee earlier this session I am sure they will come to the conclusion that the program is moving ahead very well, that it is accomplishing the goals that have been set out, and that it is really worthy of the support of members on all sides of the house.
It is very gratifying now to see a greater interest being taken in these matters than was the case at the time the committee met earlier this year. So it is my hope that when the legislation is presented to amend the National Defence Act, which I hope will be soon during the course of the current session, and is referred to the committee, there will be real public interest in the discussion that takes place at that time and a searching examination of all the various points of view.


Gordon Minto Churchill: A supplementary question, Mr. Speaker. May I ask the Minister of National Defence to do here in the House of Commons that which he has not yet done, namely, state what he means by unification of the forces. It was not disclosed in the report of the committee.


An hon. Member:: Order paper.


Paul Theodore Hellyer: I will be pleased to give my hon. friend definitions of each step at the time the legislation is being considered.


Gordon Minto Churchill: I want you to give it now.


Mr. Diefenbaker:: And unification has been proceeding all this time without legislation.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a supplementary question for the Minister of National Defence. I should like to ask him whether the statement attributed to General Allard, calling upon the people of Canada to support integration, was made with his knowledge and consent.


Paul Theodore Hellyer: No, Mr. Speaker, I did not see the speech before it was made, but I have
8054	COMMONS
Inquiries of the Ministry complete confidence in the chief of defence staff and I am sure that whatever he said would be in order.


Francis Andrew Brewin: A further supplementary
question, Mr. Speaker. Is there some different rule, then, in regard to the chief of staff than applied to Admiral Landymore, who was condemned by the minister for making a speech on this subject while he was still a serving officer?


Paul Theodore Hellyer: Yes, Mr. Speaker. The chief of defence staff decides who under his control may make public statements in respect of defence matters.


John George Diefenbaker: Does the minister say that he approves of the views expressed by General Allard regarding unification and that such expression of views is in keeping with the rule which the minister himself dealt with some months ago, namely that serving officers should not be giving opinions on controversial matters? Has that been changed, too? Has Mr. Lee given his approval to change?


Some hon. Members:: Oh, oh.


Paul Theodore Hellyer: Mr. Speaker, I resent the implication by my right hon. friend-


Some hon. Members:: Oh, oh.


Paul Theodore Hellyer: -and I think it is quite uncalled for from a parliamentarian of his standing. The chief of defence staff made a speech on his own responsibility, and he has the prerogative under the standing orders to do that.


An hon. Member:: Oh, no, he hasn't.


Paul Theodore Hellyer: I have complete confidence in him and in his staff, and I resent any reflection cast upon the chief of defence staff by my right hon. friend.


John George Diefenbaker: Smoke screens like that do not help the minister.


Some hon. Members:: Order.


John George Diefenbaker: I ask the minister this. Is it proper for any chief of defence staff or any other high ranking officer to express in public opinions on subjects that are controversial, that the minister has not brought before parliament, and with which parliament has had no opportunity of dealing?


Paul Theodore Hellyer: I cannot think of anyone better qualified to speak on this subject than the chief of defence staff.

DEBATES	Seplember 6, 1966


Mr. Eric A. Winkler (Grey-Bruce):: I should
like to return to the Minister of National Defence and ask the minister if he feels he is justified in proceeding with his program without having legislation before the house.


Paul Theodore Hellyer: Mr. Speaker, any of the actions that have been taken so far and all the actions contemplated in the immediate future are authorized by the National Defence Act
as passed by parliament.


John George Diefenbaker: Not at all.


Mr. J. M. Forrestall (Halifax):: I have a further supplementary question for the
Minister of National Defence. I wonder if the minister would advise the house whether it is true that all he needs by way of legislation to bring about total integration of our armed forces is an amendment to the act changing the name?


Mr. Speaker:: Order. This question is not in order.


J. Michael Forrestall: I am wondering what the law is.


Mr. Speaker:: This is exactly why the hon.
member cannot ask the question. He cannot ask what the law is.


John George Diefenbaker: I direct a question to the Acting Prime Minister, the source of all dependable information on occasion. Did the Acting Prime Minister receive a telegram from the tri-service identities organization requesting that parliament not recess without an opportunity being provided for full deliberation and consideration of the defence situation, and that before any definitive legislation is introduced for further reorganization a full and searching inquiry should be undertaken? Was such a telegram received? Will th Acting Prime Minister give an assurance to the house that before we leave now, not months hence but before this present portion of the session ends, this house will have an opportunity of dealing with the haphazard and excessive actions of the Minister of National Defence-


Mr. Speaker:: Order, please. The right hon. Leader of the Opposition knows very well that he cannot qualify his question in the way he has done.


John George Diefenbaker: I withdraw the qualifications, Mr. Speaker. I ask, will the Acting Prime Minister give such an assurance, that
September 6, 1966

we may know in the next few days just where Canadian defence is going, and that parliament will have an opportunity to give this matter consideration?


Hon. Paul Martin (Secretary of State for External Affairs):: Yes, Mr. Speaker, I
I have received a telegram from Mr. Hil-born. I propose to reply by telling Mr. Hilborn that the Minister of National Defence will be introducing legislation at this session to amend the National Defence Act and that this legislation will be referred to the committee on defence, where a full and searching examination can take place. In giving that reply I hope I have not destroyed the reputation for dependability which my right hon. friend was kind enough to attribute to me.


John George Diefenbaker: Mr. Speaker, I can only say to the hon. gentleman that he has not added to that reputation. I would ask the Acting Prime Minister whether, before we adjourn following discussion of the subject of inflation, this house is going to have the opportunity of dealing with this matter so the Canadian people can find out what is the situation and ascertain the true facts in connection therewith.


Mr. Martin (Essex Easi):: Mr. Speaker, I think my reply was as comprehensive as it could be at this moment. We will have to see what progress is made. When the legislation is introduced the Minister of National Defence does intend to see that the legislation is referred to committee, and it is clear that he is very anxious to have the most searching examination made of a policy which I think increasingly seems to commend itself to many people.


John George Diefenbaker: Is he going to amend another brief?


Hon. J. A. MacLean (Queens):: Mr. Speaker, I should like to address a question to the Minister of National Defence which is supplementary to an earlier question. Did I understand him correctly when he seemed to imply that evidence was given before the defence committee which would lead the committee to suggest that unification of the armed forces might be beneficial? I specifically say "unification"; I am not referring now to integration.


Paul Theodore Hellyer: No, Mr. Speaker. Although there may have been suggestions to that effect, I think what was shown to the satisfaction of most members of the committee
Inquiries of the Ministry was that the integration process has proceeded satisfactorily, that it is a good program, and that it is in fact a good foundation upon which to build a unified defence force for Canada.


John Angus MacLean: A supplementary question, Mr. Speaker. I disagree with the conclusion of the minister that unification-


Mr. Speaker:: Order, please. I invite the hon. member to ask his question.


John Angus MacLean: I will proceed now with my supplementary question and ask the minister if he could tell the house what General Allard meant when he said, "We realize what people are saying. We will go through w-th the program. It will make all Canadians proud of the Canadian forces." Is this meant to imply that Canadians have not been proud of the forces in the past?


Mr. Speaker:: Order, please. I suggest to the hon. member that this question is not proper. I do not think it is proper to ask what was meant by another's speech, or in a speech made outside this house by another person.


Gordon Minto Churchill: I rise on a point of order. May I draw the attention of the house to the fact that on August 30 I asked the Minister of National Defence who was responsible and in charge in h:s department. He replied, and I quote from page 7797 of Hansard:
I have to accept the responsibility for all the actions that were taken.
His chief of staff is now speaking on his behalf as a propaganda agent for unification, and the minister should take the responsibility.


Mr. Speaker:: Order, please. That is not a point of order. I have to so rule. I do not think the minister should reply to the question, because what the hon. member for Queens asked was what did it mean when this person made such and such a statement. Certainly that is not a proper question.


Paul Theodore Hellyer: On a question of privilege; I cannot allow my hon. and gallant friend to make a statement like that, reflecting, as it does on a gallant and dedicated officer of the Canadian armed forces in a way that I feel is quite uncalled for. I hope the hon. member will withdraw his statement.


Gordon Minto Churchill: On a point of privilege, Mr. Speaker, I thank the minister very much for talking about gallant officers. I know the
8056	COMMONS
Inquiries of the Ministry service of General Allard, and I hope he knows mine. But if the minister is going to be responsible for things that take place in his department he must be responsible for statements made by the chief of staff, and his point of privilege is not well taken.


Mr. Speaker:: Order, please. I suggest there is no question of privilege, just as there was no point of order.


J. Michael Forrestall: One further question to the Minister of National Defence. I would ask him whether during his forthcoming trip to the maritime command area, particularly to Halifax, Greenwood, Summerside and other points directly concerned, he intends to make opportunities available to all the men to express frankly their views on unification.


Paul Theodore Hellyer: Plans are being made which will permit a very large cross-section of the men and officers of all ranks to express their views freely.


John George Diefenbaker: The minister spoke of plans. Will he tell us what those plans are which will secure the opinions of the men and women serving in the ranks?


Paul Theodore Hellyer: The plan which the hon. gentleman was just talking about was for me to go and talk to them, and that is what I intend to do in two or three weeks.


John George Diefenbaker: Does the minister now say that his august presence among members of the armed forces will take the place of information of a dependable character?


Paul Theodore Hellyer: On the contrary. It will be that.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I should like to direct a question to the Minister of National Defence, of which I sent notice this morning. In view of the urgency of the situation and the importance of maintaining good public relations between the armed services and civilians, will the minister ask the commander at training command at Westwin, Manitoba, to use all legitimate influence to stop NCO's at Kingston moonlighting by driving cabs through the legal picket lines of some 800 employees at Millhaven Fibres in the Kingston area?

DEBATES	September 6. 1966


Paul Theodore Hellyer: I should like to take that question as notice, and hope to be able to give an answer tomorrow.



REPORTED CONTINUATION OF PICKETING AT RAILWAY YARDS

[Stage Direction]
On the orders of the day:
Mr. Raymond Langlois (Meganlic):: Mr. Speaker, I should like to address my question to the Acting Prime Minister or the Minister of Transport. In view of the goings-on that were manifested yesterday in some of the railway yards across the country by railroad workers, are any measures being taken to protect those who want to go back to work against those who are still doing some picketing at the main gates of different terminals? Are any security measures being taken to protect these workers?


Paul Joseph James Martin: Mr. Speaker, the return to work has been proceeding at a very satisfactory pace. There has practically been a return to normalcy, which I am sure is a fact that will be received with great gratification by the house generally.


Raymond Langlois: A supplementary question, Mr. Speaker. May I ask the minister especially about the situation that exists in respect of those who have taken spare time jobs and are not in a rush to go back to work. Will any legal measures be taken against those still picketing and causing a little bit of difficulty for the good natured or good hearted ones going back to work?


Paul Joseph James Martin: Mr. Speaker, I am sure my hon. friend recognizes that parliament has taken a decision. I hope he would agree that the reply I have already made is the kind of reply that is more conducive to a satisfactory disposition of this matter than anything that might be regarded as provocative.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Hon. E. D. Fulton (Kamloops):: I wish to direct my question to the minister of national resources. In the light of the fixing of May 23 as the date for the opening of the international conference on water for peace at Washington, is the minister now prepared to formulate and state the Canadian government's position on water policy; and in particular
September 6, 1966

will he say that the government will not enter into a discussion of sharing water on a continental basis at least until the national policy has been stated, debated and settled?


Jean-Luc Pepin: I apologize, Mr. Speaker, for not responding immediately to the hon. member's question, but I am not used yet to being addressed as the minister of national resources. My title has not been changed officially and I am still referred to as the Minister of Mines and Technical Surveys.
I will answer the hon. member's question by saying that we have been informed that the United States government plans to issue invitations to all governments with which it maintains diplomatic relations and to international organizations concerned with water questions. The government, however, has not as yet had the time and opportunity to explore fully the implications of this important initiative on the part of the United States. Considerable concern is felt, however, that such a conference, if it is to succeed, should engage the efforts of other countries not only in its execution but also in its planning. Indeed, the period of time envisaged by the United States for this important preparatory work is not very long if the conference is to be held in May of 1967.
The Canadian government will of course give careful and sympathetic consideration to the United States invitation when it is received. However, the invitation not having been received as yet it would not be proper for me to comment further on the announcement.
In answer to the second part of the hon. member's question let me say we are doing everything possible to develop a Canadian water policy. In Winnipeg recently my hon. friend and I had a very interesting public discussion on that subject. The press was pleased to report that we were very much in agreement on this matter.


Edmund Davie Fulton: I have a supplementary question, Mr. Speaker. I should like the minister to make a statement now clarifying the government's position so as to give him a basis upon which to make a stand.


Mr. Speaker:: Order, please. The hon. member's second question is argumentative. I suggest to him that his request to the minister should be made on motions if it is to be considered by the minister.
Inquiries of the Ministry Mr. Fulton: Mr. Speaker, I was really asking whether the minister will answer the second part of my question, namely, will the government make it clear that it will not enter into a discussion on the sharing of waters on a continental basis until a national policy has been stated, debated and settled?


Jean-Luc Pepin: That is the general position I
took in Winnipeg, at which time the hon. member seemed to agree with it.


Mr. H. W. Herridge (Kootenay West):: have a supplementary question, Mr. Speaker. Will the minister assure this house in a few brief words that the government of Canada will not undermine the desire of the Canadian people to protect their water resources?


Jean-Luc Pepin: Quite right.


Mr. G. H. Aiken (Parry Sound-Muskoka):: have a further supplementary question. In view of President Johnson's recent statement that war or pure water appeared to be the world's choice, does the government consider this philosophy of water or war has any application to Canada?


Mr. Speaker:: Order, please. I do not believe this is a question that can be asked at this time.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: My question is for the Secretary of State for External Affairs in his capacity as Acting Prime Minister. In view of the apparent announcement from London that the Queen has accepted an invitation to be present in Canada during the centennial celebrations next year, I wonder if the minister has any statement for the House of Commons on this very important matter.


Paul Joseph James Martin: Yes, Mr. Speaker, but I think it will perhaps be later in the week.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. George Hees (Northumberland):: I
should like to ask the Minister of Finance if
September 6, 1966

Inquiries oj the Ministry he is in a position now to advise the house what day this week he expects to introduce the debate on the economic situation existing in the country today.


Hon. Mitchell Sharp (Minister of Finance):: It is my understanding, Mr. Speaker, that this is the next order of business before the house. The sooner the house disposes of the transportation bill, the sooner I will be able to do that. I think it is the right order of business.



DOMINION-PROVINCIAL RELATIONS QUEBEC-REPLIES FROM PREMIER RESPECTING FEDERAL LEGISLATION

[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs in his capacity as Acting Prime Minister.
Would the minister tell the house if the federal government has heard from the premier of Quebec about the federal legislation on various constitutional matters, in reply to letters from the Prime Minister?


Paul Joseph James Martin: Mr. Speaker, I am not sure whether or not we did get replies. I will inquire and I might be able to give an answer tomorrow or Thursday.



HIGHWAY SAFETY


[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, in view of the senseless and record slaughter on our highways this last Labour day week end, and in view of the fact that President Johnson has put or is about to put his signature of approval on a highway and automobile safety bill recently passed through the congress of the United States, I would now ask the Minister of Industry whether the government is considering similar federal legislation in Canada to provide for the protection of the Canadian people?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, it is recognized that the United States has passed a bill in relation to safety features on motor cars. I am glad to say that [Mr. Hees.I

it appears, partly indeed as a consequence of the automotive agreement with the United States, that those features on cars for sale in the United States will also be available on cars for sale in Canada.


Raymond Langlois: A supplementary question which might be considered complementary. Once the government has brought in this legislation to provide for safer cars in Canada, will the minister also bring in a bill to provide for safer drivers in the country?


Charles Mills (Bud) Drury: Mr. Speaker, I think my hon. friend will agree with me that legislation respecting driving habits is a provincial, not a federal, responsibility.


Raymond Langlois: I know that; it is the individual's responsibility, too.


Mr. W. M. Howe (Wellinglon-Huron):: have a question for the Minister of Industry supplementary to the one asked earlier by the hon. member for Brome-Missisquoi. The minister indicated that the safety features which are to become compulsory in the United States will be available in Canada. Does this mean they are to be standard equipment on all Canadian cars, or will the consumer be required to pay extra for these particular devices which are to be available in the United States?


Charles Mills (Bud) Drury: I merely said that the safety items which will be available on cars manufactured in the United States will also be available on Canadian manufactured cars.


William Heward Grafftey: A supplementary question. I do not mean this to be argumentative in any way, but in so far as the United States legislation affects both imported and second hand cars does the minister not feel that specific Canadian legislation in the automobile safety field is now required?


Charles Mills (Bud) Drury: In relation to second hand cars, the hon. member is now suggesting, if I understood his question correctly, that a government program for the modification of existing cars be instituted. I do not think he really intends to suggest this. As to imported cars, I would point out that the vast bulk of the cars entering Canada enter from the United States.
September 6, 1966	COMMONS DEBATES	8059



AGRICULTURE


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to address a question to the Minister of Agriculture. I apologize for not giving him notice, but it might be some antidote for him to know that his activities to date have received very favourable comment in the agricultural press of British Columbia.
Now for my question. In view of the fact that I am informed that potato growers in British Columbia suffered some loss because of the failure of the government to apply the fixed value for duty earlier on certain products, would the minister inform the house if it is possible for officials of his department to keep a record of and close watch on the maturity of crops in the United States and in Canada, so this duty can be applied when required, to protect Canadian producers?


Mr. Speaker:: Order, please. I suggest to the hon. member that that is not a question to be asked at this time. The hon. member is making a suggestion for the consideration of the minister, which I assume will be taken into account.



CONFERENCE WITH PROVINCIAL MINISTERS RESPECTING DAIRY POLICY

[Stage Direction]
On the orders of the day:
Mr. H. W. Danforth (Kent (Onl.) ):: I wish to direct this question to the Minister of Agriculture. In view of the critical economic situation of the dairy farmers, especially in the provinces of Ontario and Quebec, can the minister tell the house if he has as yet had an opportunity either to meet or to set a date for a conference with the ministers of agriculture of these two provinces in regard to this most complex and important matter?


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, I agree that the problems of the dairy farmers, as well as those of other farmers in the country, should be subject to continuing review, and that we need to have continuing policies to improve their lot. Our present policy, which has raised the price of manufacturing milk from a national average of $2.76, which it was when we came to office, to $4 is a responsible step in this direction. To try to make it work more effectively I have arranged a meeting open to farm organizations, with the provincial ministers for this coming Friday.
Inquiries of the Ministry AIR TRANSPORT



INQUIRY AS TO BOARD HEARINGS ON REGIONAL POLICY

[Stage Direction]
On the orders of the day:
Hon. W. G. Dinsdale (Brandon-Souris):: have a question for the Minister of Transport. Can the minister inform the house whether, notwithstanding the fact that we have major transportation legislation before us at the moment, it is still the intention of the government to proceed with hearings on regional air policy in western Canada? Could the minister further inform the house when those hearings will take place?


Hon. J. W. Pickeisgill (Minister of Transport):: I am not quite sure of the precise dates on which the hearings with respect to the application of TransAir to be relieved of the requirement to fly certain lines in the prairies are to be held. I think it is in October some time, but I shall inquire and inform the hon. gentleman as soon as possible. There is no question but that these hearings should be held, and they will be held.


Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker. I take it that the date has not been decided upon?


John Whitney Pickersgill: I think it probably has been, but I do not carry it in my head.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Francis Andrew Brewin: I have a question for the Minister of Citizenship and Immigration, of which I have not given him notice. On July 8 the minister announced that a white paper on immigration, proposing changes in the regulations, would soon be tabled or be made available. Could he now say how soon that will be?


Hon. Jean Marchand (Minister of Citizenship and Immigration):: I think, Mr. Speaker, that I mentioned the white paper would be tabled in the very first days of the resumed session in October. That could mean the first, or second, or fifth or sixth day. I do not know the exact date, but I can assure the hon. member that it will be tabled soon because it is almost ready.
September 6, 1966

Inquiries of the Ministry [Translation]



REPORTED STATEMENT RESPECTING CANADIAN OFFICES IN FRANCE

[Stage Direction]
On the orders of the day:
Mr. Real Caouette (Villeneuve):: Mr. Speaker, I wished to direct a question to the Minister of Citizenship and Immigration (Mr. Marchand), but he has just left the house. I will therefore direct my question to the Acting Prime Minister (Mr. Martin).
Last night, on the television program "Aujourd'hui", the Minister of Citizenship and Immigration pointed out the differences between our immigration offices in England and in France, saying that our organization is perfect in England, while it is not in France.
Is the government taking steps in order that our immigration offices in France-there are three at the present time-may be improved and others may be established to interest French people in emigrating to Canada?


Paul Joseph James Martin: I beg your pardon; I thought that question was directed to the Minister of Citizenship and Immigration, but I think the answer is in the affirmative.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Having in mind today's reports from the United Nations that U Thant is being urged to reconsider his decision and to stand again for the position of secretary general, can the minister say what is Canada's position in regard to this move?


Paul Joseph James Martin: Mr. Speaker, the right hon.
Leader of the Opposition intimated that he was going to ask a question along this line. I might say in reply that Canada has stated, as [ mentioned last week, that it would wish to see the secretary general continue in that post. We have reaffirmed this desire since I replied to the question of the hon. member for Red Deer a few days ago.
The security council was to meet this week for the purpose of considering this matter. Wisely, I think, it has decided not to meet. I


sincerely hope it will be possible for the secretary general to accept the strong urgings of so many nations in the world that he continue in this important assignment.


John George Diefenbaker: A supplementary question, Mr. Speaker. I will say immediately that we wholeheartedly concur in the stand the minister has taken in this connection. Is it a fact that all the members of the United Nations are of the opinion that U Thant, because of the superlative capacity for leadership he has shown as secretary general, should continue; and that opinion having been conveyed to him, has he given any indication that he might reconsider his stand and accept an appointment, if not for the five year term for a two year term, in the interests not only of himself but of the world, for the preservation of peace?


Paul Joseph James Martin: I know of no nation that is opposed to U Thant continuing in office. He has not, however, given any indication as to whether he would accept a draft. Proposals have been made that he should be offered a five year term, a three year term and a two year term. There has been no decision taken on that question by the members of the United Nations nor, as I say, was there any indication by U Thant of an intention to reconsider his decision, as he said last week that he was not going to be a candidate.



PUBLIC SERVICE , REPORTED DISSATISFACTION RESPECTING RECLASSIFICATION

[Stage Direction]
On the orders of the day:
Mr. G. L. Chaiferlon (Esquimall-Saanich):: My question, Mr. Speaker, is for the Secretary of State. Is the minister aware of the widespread dissatisfaction among members of the civil service because of the circumstance under which some have been advised of reclassification and have received adjustment cheques, while others working in the same offices have heard nothing? What is being done to rectify this situation?


Hon. Judy V. LaMarsh (Secretary of State):: I thank my hon. friend for giving me notice of this question. I have looked into the matter he has raised. We at once referred it to the Civil Service Commission, which advised me that it did not know of any such situation as the hon. member refers to, since each department is sending out certificates on its own. It may be that there is a shortage in some
Sepiember 6, 1986	COMMONS
departments. The Civil Service Commission has advised me that it will look into the matter and report back, and I will advise my hon. friend immediately.


George Louis Chatterton: A supplementary question, Mr. Speaker. Does the minister mean to say that the Civil Service Commission is not aware of the fact that this situation was caused by a shortage of the conversion certificates, form 245?


Julia Verlyn (Judy) LaMarsh: That is correct. This is so because each department is handling the certificates itself.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: I should like to take this opportunity to answer a question directed to me the other day by the hon. member for Kootenay West having to do with the application by Cominco Limited to store an additional two feet of water in Kootenay lake under certain conditions set out in the order of agreement.
In answer to this question I would say that the governments of Canada, United States and British Columbia, subject to appropriate conditions, have registered no objection to the approval of the application. The question of upstream and downstream benefits was discussed during the hearings. Prior to the hearings, as the hon. gentleman knows, this was the subject of an intensive study by the government. In stating the conclusions reached as a result of this study, the representative of Canada said at the hearings that it was fully recognized that the granting of the Cominco application would produce substantial benefits both to Canada and United States on a basis which would do full justice to the interests of the two countries.
The government of Canada placed great weight on the fact that the period involved was only one year, and that renewal for any additional period would require an entirely new application to be made.


Herbert Wilfred Herridge: thank the minister for his answer. Should there be a renewal of this application, would the government of Canada then consider insisting on receiving downstream benefits?
DEBATES	8061
Inquiries of the Ministry NATURAL GAS



REQUEST FOR RECONSIDERATION OF PIPE LINE DECISION

[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Qu'Appelle):: My
question will be addressed to the Acting Prime Minister. Will the cabinet be reconsidering its decision of a few days ago not to allow Trans-Canada Pipe Lines to move western gas into eastern Canada to assure its markets there? Will the hon. gentlemen be reconsidering this stand?


Paul Joseph James Martin: The decision of the government has been announced.


Francis Alvin George Hamilton: I am afraid the Acting Prime Minister does not understand my question. I realize the government's decision has been announced. I am asking whether it is the plan of the government to reconsider its refusal.


Paul Joseph James Martin: I do not think so.


Mr. Starr:: Why not backtrack on that, too, and keep up the record?



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: I have a question to direct either to the Secretary of State for External Affairs or to the Minister of Fisheries, preferably to the one who can give me the most illuminating answer. I should like to know when we can expect to see established the base lines from which to measure our 12 mile fishing zones.


Hon. H. J. Robichaud (Minister of Fisheries):: I can assure the hon. member that my colleague the Secretary of State for External Affairs has been very active in getting the ground ready for early action to be taken in this regard.


Thomas Speakman Barnett: How much longer will we have to wait? May I ask the Minister of Fisheries whether this is the same sort of action we have experienced over the past two years?



TRANSPORTATION


[Stage Direction]
The house resumed, from Friday, September 2, consideration of the motion of Mr. Pickersgill for the second reading of Bill No. C-231, do define and implement a national
[Stage Direction]
September 6, 1966
Transportation
transportation policy for Canada, to amend the Railway Act and other acts in consequence thereof and to enact other consequential provisions.
Mr. J. H. Horner (Acadia):: Mr. Speaker, I rise to take part in this debate with some hesitation because of my limited knowledge of the complex field of railway rates and transportation policy generally.
Bill No. C-231 was presented to the house by the minister last Thursday in the course of a very light and witty speech, a speech which caused me and, I believe, many members of this house concern because we had agreed to forgo the resolution stage of the bill in order to co-operate with the government in bringing the legislation forward. Clause 1 sets out the transportation policy and the remaining clauses, which are many in number, attempt to spell out how the government intends to enunciate and carry out that policy. In some respects the bill takes the wraps off the railroads and allows them to charge whatever is feasible, whatever is economically sound or, in some cases, whatever they can get away with.
[DOT] (3:20 p.m.)
Over a number of years we have had various transportation boards. This bill sets up one huge 17-man board encompassing all others. This immediately causes me some concern because how can 17 men reach a decision any quicker than the five members of the present Board of Transport Commissioners?
In considering a transportation policy for Canada we must do so with caution because today Canada is at the crossroads in many aspects. In recent years we have seen many policies which have done good but which have divided Canada. In looking back over the transportation history of this country we must realize that it was our transportation and railroad policies which brought Canada together in the very beginning. Those policies must remain sound and must remain fair and just to all parts of Canada or they will have a diversifying effect. You, Mr. Speaker, as well as other members of the house, know that there are too many diversifying elements in Canada today. As members of this house we must ensure that this bill will do nothing to diversify Canada further but will aid in uniting the country as the railway transportation policy did in the very beginning of Canada's history.

In first looking at the bill it seems to me that it is a monstrosity. I see nothing good in it for my part of Canada. This may alarm some members. This bill has been talked about a great deal as being a vast improvement over Bill C-120 which was brought before this house in 1964. How is it an improvement. The Minister of Transport says he would like to see this bill proceeded with with all haste so that the railways might be able to compensate themselves for the minimum wage increase which this house has just assured to the workers. This again causes me some concern because I immediately ask myself, where and how do the railways hope to compensate themselves for this wage increase?
Last week we were told that the wage increase would mean something like $7 million or $8 million for every 1 per cent of increase. We know now what this will mean. With a minimum wage increase of 18 per cent the railways will have to obtain approximately $144 million to $150 million in increased revenue. Where is this going to come from? We are told that the bill will give the railroads the privilege to collect this increased amount of money, and we are told we must proceed with the bill with all haste so that the railways can then start collecting. I think that we as members of parliament owe it to the people we represent to take a very close look at the bill.
First, what does it do? It sets up a 17-man board which, to say the least, will be unwieldly at times. Then it goes on to state what the board will be engaged in. It will be engaged in inquiries; in fact, there will be a continuous inquiry into the whole transportation policy. As the minister said in his opening remarks, the inquiry need not be made public but may be kept confidential. This is stated in the explanatory note on page 26 of the bill. So we have a board to be composed of 17 men which will inquire into all aspects of transportation in Canada and will make rulings as a result of such inquiry. In the past we have had adjustments in the transportation policy which have been arrived at as a result of independent inquiries at which the public could appear. Here we have a transportation board which may in the future carry on inquiries which will be confidential, the results of which may not be made public and which may in some cases be carried out by the very people who perhaps will be trying to substantiate results they have already arrived at. This gives me some concern.
September 6. 1966

It is not necessary that the inquiries of the board which is involved here be made public, nor is it necessary that the recommendations as a result of such inquiries be made public. Certainly I can see that the recommendations resulting from an inquiry will be made public whenever the Governor in Council agrees to carry out those recommendations, but if the Governor in Council should disagree with them I can readily see that those recommendations would not be made public. The bill states that they need not be made public.
In looking at other clauses in the bill we see that various shippers may appear before the board but then the right of appeal is right back to the same board. I see it is suggested that if the chairman is involved in the initial ruling the vice chairman shall preside over the appeal. This is a situation which does not appeal to me as a shipper who might be appearing before the board in argument.
Let us take a look at how the railways will obtain the $150 million increase in revenue which we are told this bill is going to give them the right to collect. First of all we are told that the railroads have not been able to meet their costs because rates have been frozen. We have been told that all freight rates have been frozen since 1959. Actually, only all class rates and non-competitive rates have been frozen since 1959. The railroads have been able to increase their agreed charges and their competitive rates. No ruling by this House of Commons has changed this.
What do these rates account for? What percentage of railroad revenue has been derived from the various rates? Class rates account for 4.7 per cent of their revenue. These figures are taken from the Dominion Bureau of Statistics way-bill analysis for 1964. Non-competitive rates accounted for 29.6 per cent of railway revenue. Therefore while rates were frozen on something like 33 or 34 per cent of railway revenue this bill will take the off wraps in a sense and allow the railways to increase them. In other words, it might well be said that the railways are going to increase these two classes of rates by such an amount that they will be able to collect the additional $144 million to $150 million.
For those who are concerned, I might also add that the statutory rates, which are the Crowsnest pass' rates, account for 13 per cent of railway revenue, competitive rates account for 27.3 per cent and agreed charge rates account for 25.2 per cent. Mind you, there has
Transportation
been no freeze on competitive and agreed charge rates. They have agreed to increase these and have increased them right along. Therefore, according to the 1964 way-bill analysis the railways have increased something like 52 per cent of their revenue in any case.
The other night the minister assured me that as long as he was Minister of Transport and as long as the present Prime Minister (Mr. Pearson) was Prime Minister of this country the statutory grain rates, the Crowsnest pass rates, will not be increased and will remain the same.
[DOT] (3:30 p.m.)
Let me return to my original analysis of this situation. The increased revenue which the railways must have and which hopefully will result from the passage of this bill will be derived from the movement of goods under the class and non-competitive rates. These account for 33 per cent of their present revenue. Now we come to the crux of the problem.
Where are most commodities shipped under class and non-competitive rates? I want every member of this house to take note of this situation, particularly those members from western Canada and the maritimes because those are the areas from which this increased revenue will be derived. What did Canada's transportation policy mean to the unification of Canada? The transportation policy was the Magna Carta of the west and a basic reason for confederation in the maritimes. This policy had a great deal to do with the uniting of Canada. What does this present bill do? It puts aside those historic facts and, to use a common expression, throws the maritimes and the western part of Canada to the wolves. It does not continue to help unite Canada but rather divides Canada in no uncertain terms. It will have the same effect in some parts of northern Quebec and Ontario.
Let us consider the evidence given before the committee on railways, canals and telegraph lines in 1964 and 1965 in order to find out the extent of the movement of goods under class and non-competitive rates in various parts of Canada. The table I refer to is printed in a report of the committee for March of 1965 and is dated 1963. It was the most recent table available at that time.
Referring to page 968 of that report we find that goods from western Canada to the maritimes which moved under class and non-competitive rates accounted for 60.7 per cent of

September 6, 1966
Transportation
freight between those areas. Sixty per cent of the movement of goods from western Canada to the maritimes was moved under class and non-competitive rates. This table indicates that 70 per cent of all goods moved from the maritime region to western Canada was moved under class and non-competitive rates. That figure appears at page 973 of this report.
Of all goods moved from western Canada to eastern Canada nearly 50 per cent, actually 44.4 per cent, was moved under class and non-competitive rates. Nearly half of all freight movement from western Canada to eastern Canada moved under these rates. These rates apply to all goods except grain, for example, and the wraps are to be removed to allow the railway companies to increase their revenue by x millions of dollars.


John Whitney Pickersgill: Would the hon. gentleman permit a question?


John (Jack) Henry Horner: I do not wish to lose my train of thought.


John Whitney Pickersgill: I hope to get the hon. gentleman's train back on the rails by asking this question. The hon. gentleman suggested that the wraps were to be removed from non-competitive and class rates. Does he not realize that the non-competitive rates are to remain under control and, if I understand what he means by "wraps", these rates are to be kept under wrap and will continue to be under control?


John (Jack) Henry Horner: I will deal with that point in a minute or two. It is interesting to
note the minister's thinking in this regard.


John Whitney Pickersgill: I asked a question.


John (Jack) Henry Horner: I will deal with that question before I complete my remarks. If I
do not perhaps the minister will ask the question again.
Let us consider the movement of goods from the eastern region to western Canada. This table in the same report indicates that 40 per cent of all goods from eastern Canada to western Canada, including the farm machinery we buy and the automobiles purchased by every Tom, Dick and Harry in western Canada, is shipped under class and non-competitive rates. There is a heavy movement of freight from western Canada to the maritimes and the rest of Canada under non-competitive and class rates.

Let us consider the movement of freight
within the maritime provinces. This same report at page 971 indicates that 55.8 per cent of the movement of all freight within the maritime provinces moved under class and non-competitive rates. That should be of particular interest to the members from the maritimes. The minimum increase in revenue of $150 million will result from the movement of freight now being moved under those rates.
Let us consider the movement of freight in the western region, in which area I have always felt there was a good network of highways. Of all freight movement in western Canada, excluding grain 22 per cent comes under class or non-competitive rates. In western Canada 39 per cent of all freight is moved under the statutory Crowsnest rate and agreed charges rates. Competitive rates apply to 38.4 per cent of all freight movement. The rates in respect of 22 per cent of all freight will be allowed to increase, those in respect of 39 per cent of all movement will remain frozen and the 38.4 per cent of freight movement under the competitive rates will remain relatively the same.
Let us deal with the non-competitive aspect mentioned by the minister when he said that non-competitive rates would remain the same.


John Whitney Pickersgill: I said they would remain under control.


John (Jack) Henry Horner: I am glad the minister has corrected me. Let us see under what control these rates will remain. Non-competitive rates will apply to shippers or areas designated as captive shippers or areas. What formula will be used and where will captive areas and shippers be found? I suggest they will be found in the prairies and the maritimes, and the formula that will be used is related to 150 per cent of variable costs. What is the situation regarding areas where competition is keen? This bill states, as was stated in the previous bill, that these rates must be compensatory in relation to variable costs only. In other words, the non-competitive rate will be 50 per cent higher than the competitive rate. We in the west and the people in the maritimes-I was going to suggest the minister also but he is very rarely in the maritimes-will have to pay 50 per cent higher freight rates than people in other areas of Canada.
At page 37 this bill sets out that in not later than three years the commission shall
September 6, 1966

make a study of the Crowsnest pass rates. What will the commission attempt to determine and why is the government suggesting that a study should be made? Surely the answer to that question is that the government hopes a deficiency area can be found in order that the railways can be compensated for their losses and thereby gain increased revenue.
[DOT] (3:40 p.m.)
I look at this particular clause of the bill and consider how it will affect me or any other member of the house in running an industry when we realize that within the next three years the government is going to have the commission make a study of that industry and ascertain how large a subsidy, if any, is to be paid after the three-year period has expired. I know what I would do. I would try to minimize my efficiency in the next three years. I would try to paint a picture of dire need of a subsidy as huge as I could logically expect to be paid. This clause is suggesting to the railways that they should be inefficient for the next three years and they will be compensated forever from that time onward.
This clause should be taken out of the bill completely. It is not necessary that it be there. If the government wants to have the commission to be set up make such a study, it can have it do so, but this is what I should like to know from the minister. Does the government feel that the Crowsnest pass rates, with the volume of grain that is being moved today, was moved last year and will be moved next year and in the future, are causing the railways to lose money? If this is what the government feels, let it say so. If it believes that railways will be losing money in the next three years, then it does not have too much confidence in the world wheat situation. I should like an answer to this question.


John Whitney Pickersgill: Mr. Speaker, the hon. gentleman asked me a question. Would he permit me to answer it right away?


John (Jack) Henry Horner: Yes.


John Whitney Pickersgill: My answer is that Mr. MacPherson and his commission agreed with the railways that they were losing money on these rates. After full examination we are not convinced of that claim. That is why we took out of the old bill the fixed amount that was to have been paid in respect of these losses and put in instead a provision that there should be an investigation to see whether
Transportation
there were any losses. We decided not to assume, as was assumed in the bill drawn up by the hon. gentleman's friends, which we inherited, and in the bill we introduced-I am not blaming the hon. gentleman's friends because they followed the commission and so did we-that there was a loss. We have now decided not to make any such assumption and to have an independent inquiry to see what the truth is. That is the difference.


John (Jack) Henry Horner: Once again the minister is getting a little ahead of me. I was going to deal later with this particular aspect of the report of the MacPherson commission, but I will deal with it right now. Before doing so I want to conclude my remarks with regard to the study of the crowsnest pass rates. I believe this clause is not necessary unless the government feels that today the Crowsnest pass rates are losing money or that within three years they will be losing money and will not provide a proper return for the railways. We must remember that the MacPherson commission report was based upon export shipments of 1958. This is one of the difficulties into which governments get from time to time. They set up commissions to study various questions but before they get around to acting on their reports they are out of date. This is true particularly of the report of the MacPherson commission with regard to the Crowsnest pass rates. I believe that in 1958 an independent study arrived at a figure of a loss of $2 million under the Crowsnest pass rates. This figure was arrived at in connection with moving something like 316 million bushels of wheat for export and a total volume of wheat, including that moved within Canada, of some 450 million bushels.
What did the railways move last year and what do they propose to move this year? The figure is well up in the region of 700 million bushels or 800 million bushels and may be 900 million bushels including coarse grain within Canada. We have nearly two and a half times the volume moved in 1958. How is this volume being moved? It is being moved on the same trackage and in some cases on less trackage. The railways are moving it with modernized equipment and greatly speeded up handling facilities in some cases, although in others there is still a dire need of improved handling facilities.
Therefore, Mr. Speaker, the MacPherson commission report is outdated with respect to the Crowsnest pass rates and the movement of grain, particularly in light of the increased modernization of handling facilities today. In

September 6, 1966
Transportation
fact, transportation and railway movement have undergone such a change since 1958 that we find optimism in the transportation industry rather than the pessimism that existed in that year because of the desire for wholesale rail abandonment. Today there is not the same desire. Many of those railway lines are paying and in fact I am sure the minister will agree that perhaps only a quarter of the proposed line abandonments are really necessary today in light of the movement of grain and other commodities. This only points up the changed outlook in today's railway movement and in transportation policy generally. We have the movement of potash, we have grain volume tripled, we have every commodity one could mention moving by rail and other transportation facilities in increased tonnages in comparison with the 1958 figures.
I am not going to deal with all the aspects of this bill. The whole rationalization question could be dealt with. The whole passenger question should be dealt with and perhaps will be before the passage of the bill. In summarizing what I have tried to put before the house, Mr. Speaker, I would say this. We are told by the government and the minister that the passage of this bill is important and he urges us to pass it quickly so the railways may begin increasing their revenues to offset the minimum increase in labour costs which they will have to face. I ask hon. members before they vote in favour of the bill to consider who is going to pay for it. Eighty per cent of the increased revenue will come from western Canada and the maritimes from freight movement either to or from or within those areas.


John Whitney Pickersgill: Mr. Speaker, I wonder whether the hon. gentleman would permit me to ask him one more question? He has asserted about four times now that extra revenue is going to come from the maritimes. Would he explain how this is going to be done, when all the maritimes' rates are specifically frozen in this bill?


John (Jack) Henry Horner: Perhaps a maritimes member will deal with this matter at greater length than I, but as I read the bill the maritimes rates are frozen for two years. What happens after that?
[DOT] (3:50 p.m.)


John Whitney Pickersgill: Read the bill.


John (Jack) Henry Horner: The minister says "read the bill". I think I have read it backwards and forwards. Perhaps my interest mainly lies in the increased cost to western

Canada. I do not deny this. However, I am fully convinced, and I would like to convince more hon. members, that this bill takes the wraps off the railroads by allowing them to increase class and non-competitive rates. This puts the burden mainly on those regions which were brought into consideration by a transportation policy involving subsidies. It is those areas which will be thrown to the wolves so far as increased rates are concerned. They will be paying the increased revenues to the railways when they use this legislation for this purpose.


David Réal Caouette: Mr. Speaker, Bill No. C-231 now under study indicates that the government is preparing to define a general transportation policy for Canada. This new piece of legislation will be known as the National Transport Act.
Now, Mr. Speaker, if we consider the principles of the bill, we realize that its primary purposes are the abandonment of uneconomic railway lines; the abolition of subsidies to railway companies and the removal of the ceiling on freight rates so as to enable the railway companies to increase their rates in order to meet higher current expenditures.
As a matter of fact, Bill No. C-230 passed last week authorized additional expenditures of $170 million by 1967 and of $148 million every subsequent year. This means that in 1968, 1969 and in the ensuing years, the national railway companies will have to anticipate additional expenditures amounting to about $148 million per year.
Mr. Speaker, I feel that this bill, as others which we have passed in other areas, will eventually bring about an increase in the cost of living. Eliminating subsidies to the railways and giving them power to increase their freight rates will clearly bring about an increase in freight rates of 10, 15 or even 20 per cent. The companies will not be paying such amounts. The consumers will. We will be paying more for our food, clothes, rents, lumber, materials, etc. In other words, everything will go up. Prices will increase again at a time when we are considering how to fight inflation pressures in Canada.
When the government gave subsidies to the Canadian National, we felt this was nonsensical, because private enterprise such as the trucking industry, for instance, was being taxed in order to subsidize a competitor called the Canadian National. It was complete
September 6, 1966

nonsense to tax private enterprise to maintain a state enterprise; it is neither honest, equitable, or decent toward . the trucking industry.
By eliminating subsidies, we are reverting to competition which, to my mind, is more equitable. This will force the railroads as I said to increase their freight rates. The result will be an increase of the cost of living.
Mr. Speaker, it is not by legislation of this nature that we are going to change the economic situation in Canada. We will be going full speed toward inflation if we pass bills of this nature. We legalize inflation by applying such legislation.
Mr. Speaker, we have been discussing for a long time here, in this chamber, all that legislation of the government seeking to give inflation a permanent hold. When we, Social Crediters, we, of the Ralliement creditiste, ask for increased income for labour, for the Canadian population as a whole, surely it is not through increased freight rates, nor through salary increases, which will have a direct impact on prices. Proof is that we are told that the 18 per cent to be granted to railway workers between now and next year will cost $160 million. The answer does not lie in the 18 per cent or 25 per cent increase, because this goes directly into product prices.
There is another way, which we suggest: It is not for the government to determine rates, no, but it is the government's responsibility to show at all times Canadian consumer requirements with regard to buying power for the purchase of products manufactured and existing in Canada. Legislation should be passed which is aimed at balancing the economic system, and not at further unbalance. We do not want an inflationary law.
When we suggest that the government should use the Bank of Canada to balance the Canadian financial system, this is completely different from what we see in Bill No. C-231, which authorizes a price increase while we propose to use new Bank of Canada credits, which do not figure in prices and which are distributed to each and every Canadian citizen. This means an increase in the income of Canadians enabling them to buy commodities made by Canadians. Seeing that prices are not affected by this additional income, it is therefore clearly anti-inflationary and "anti-deflationary" also. There would never be any danger either of deflation, where people would lack purchasing power to buy the production, or of inflation, i.e. a situation where
Transportation
people would have a purchasing power greater than the country's production.
The Minister of Transport (Mr. Pickersgill), the government and all the ministers are aware that our national production this year will reach some $55 billion. On the other hand, Canada's total national revenue will barely reach $42 billion.
How can $55 billion worth of national production be bought up by $42 billion? That is the actual problem; it is too often forgotten, and the government and its economists and advisers are not interested therein. Their main concern is to take away some of the purchasing power from those who do not have too much and give some to those who have even less; this is supposed to balance the economy.
The personal revenue of each individual is not a solution. It is not the Canadian millionaires who prevent the less well-to-do from making a living but the economic system. The millionaire does not eat his millions, he eats food for nourishment, wears clothes, and seldom puts on two suits at once; he wears one at a time.
The rich man also is not the one who prevents the poor man from making a living; it is the financial system which prevents each and every one from sharing in the wealth produced by the natural resources and industry in Canada.
Mr. Speaker, a bill is never introduced to balance purchasing power and national production in Canada. The bills that are introduced settle nothing, or will only help to increase the cost of living, so that the less wealthy will continue to suffer. We have seen this in the passing of Bill No. C-230 which complements or lays the foundation for Bill No. C-231. We do not give an 18 per cent salary raise because of the skill of the worker but because the cost of living has increased. The cost of living has gone up for the railway employee earning $2 an hour as well as for the employee earning $4 an hour. But the 18 per cent pay increase will give to the latter 72c over the next twelve months but only 36c to the former. So, once again, there is a difference, that is double between the salaries of the high and the low wage-earners. Again, the one getting the higher salary will be getting the larger share.
Therefore, a bill is being passed for the benefit of the high wage-earner. But, is the

September 6. 1966
Transportation
pound of butter not selling at the same price for the person earning $2 an hour as for the person earning $4? If the pay increase had been set at a fixed sum for everybody across Canada, it would not have doubled the salaries, for the difference in salary between those earning $2 or $1.50 or $1.25 an hour and those earning $4.25 or $3.75 would have remained the same. Employees would have continued to be paid according to their responsibilities. But this pay increase will not be the same for all the citizens, for all the railway employees, and this applies in any field; for instance, in the mining industry.
Therefore, Mr. Speaker, I sincerely believe that this Bill No. C-231 will cause the cost of living across Canada to rise.
Some members have mentioned uneconomic lines, railway lines which the government will be abandoning soon because they are not bringing in good returns.
[DOT] (4:00 p.m.)
In this case, the service question is involved, the requirements of railroad service or services in certain areas of Canada. There are in the eastern region, in Quebec, in Ontario some unprofitable railway lines; there are some out west, among the farmers of northern Saskatchewan, for instance; there are some in Manitoba. All are nevertheless necessary to serve a part of the population. At such times the Minister of Transport (Mr. Pickersgill) as well as the Minister of Finance (Mr. Sharp) and the government consider the question of dollars and cents. To maintain a line in operation no account is taken of the service rendered to the farmer who must ship his grain, nor of the services that must be given to the passengers who may not be in sufficient numbers to make a line profitable. But there again the dollars and cents factor is being considered instead of the social angle, the sheer service angle. A service for the Canadian people.
Mr. Speaker, I feel the government should be rather concerned with the possibility of passing proper legislation which will ensure service and make financially possible what is physically feasible.
We have been saying it over and over again for a long time. I know that deep inside most members understand the logic of this solution. But we are afraid, we fear to air it, we are afraid to deal with the

financial question. Everybody is being attacked; that is alright. Bills to lessen human beings, to reduce individual initiative, to reduce private enterprise, that is alright. But any legislation to bring finance face to face with the facts, to place finance at the service of such initiatives, those are things the government has no right to discuss. We speak of inflation, yes, but we blame it all on the worker, the manufacturer, the small businessman who has a hard time making ends meet under the present system. They are said to be the cause of inflation.
Mr. Speaker, did you hear the hon. Minister of Finance, or the hon. Minister of Transport, or the government, speak of the interest we pay solely on the Canadian national debt? Is this not a cause of inflation? And no one dares speak about it. Nobody mentions the fact, for instance, that a Canadian purchasing a small home, under the Central Mortgage and Housing Corporation Act, over a period of 25, 30 and even 35 years, will have paid the price of three homes, once his house is paid for, but received only one-at the end of 25 years, 30 years, he will have paid for three homes and, at that time, his home will no longer be of any value. That is inflation. And Bill No. C-231 is a step in that direction, just as all governmental organizations are.
Mr. Speaker, I do not want to take up any more of the time of the house, but I point out to you and to the hon. Minister of Transport the importance and the urgency of having a clean financial policy for Canada, taking into account realities, not obscure things. Let us be realistic and introduce legislation rendering financially possible that which is physically desirable and feasible.
Then, Mr. Speaker, we would have much less of those disastrous strikes in Canada and we would see a political, economic and social revival that would ensure to workers, farmers and everybody, economic security in individual freedom. That is what the Creditistes want for Canadians and that is what the Creditistes are asking for and demanding of the present government of Canada.


Herbert Wilfred Herridge: Mr. Speaker, I wish to make a few general observations on this bill at this time. We are told that the bill aims to promote the development of a transportation policy for Canada. In that connection I should like to quote briefly from
September 6, 1966

the explanatory note accompanying the bill.
It reads in part as follows:
The purpose of this bill is to define a national transportation policy, to spell out the objectives of that policy and provide the necessary statutory provisions for the achievement of these objectives.
After reading the explanatory note we can look forward with great hope to the accomplishments that will be attained as a result of the passage of this legislation. I am quite sure we all realize that the major work in connection with this bill will be done during the study undertaken by the committee appointed to deal with the legislation, when an opportunity will be afforded to hear representations from various groups in this country.
I may say, Mr. Speaker, that we are wondering whether the new transportation commission proposal in this bill will be a repetition of 1938. In that connection I want to quote from today's Globe and Mail what I think is a very appropriate article. It is by Robert Rice Globe and Mail reporter, and reads as follows:
[DOT] (4:10 p.m.)
Will the new transport board be a repeat of 1938?
"It shall be the duty of the board to perform the functions vested in the board . . . with the object of co-ordinating and harmonizing the operations of all carriers engaged in transport by railways, ships and aircraft ..."
-A clause in the 1938 act of parliament establishing the Board of Transport Commissioners to replace the Board of Railway Commissioners. "It is the duty of the commission to perform the functions vested in the commission . . . with the object of co-ordinating and harmonizing the operations of all carriers engaged in transport by railways, water, aircraft, extra-provincial motor vehicle transport and commodity pipe lines . . ."

A clause in the 1966 bill to establish the Canadian Transport Commission to replace the Board of Transport Commissioners, the Air Transport Board and the Canadian Maritime Commission.
It almost seems as if history is repeating itself.
Twenty eight years ago, Parliament gave the job of co-ordinating rail, ship and air transport to the Board of Transport Commissioners.
Six years later, in 1944, it spun off aircraft control and turned it over to the newly formed Air Transport Board. Three years after that, it set up the Canadian Maritime Commission to keep an eye on shipping operations.
And now, in 1966, it is being asked to start all over again and bring the three separate agencies together under one roof, with the added responsibility for inteprovincial trucking and commodity pipe lines.
Will this new move fare better than the ill-fated effort of 1938?
The answer rests with Parliament as it plunges into the intricacies of the government bill to create the Canadian Transport Commission and reform the railways.
Transportation
But assuming Parliament approves the bill largely in its present shape, the real answer will lie in the hands of the 17 members of the new commission.
It will be up to it to achieve the co-ordination and harmony that two royal commissions, almost everyone in the transportation industry, and the present Liberal government feel are essential if Canada is to achieve an efficient, low-cost system of moving goods and people.
I think that is an historically correct assessment of the situation and of the responsibilities that will rest on the 17 commissioners who will be appointed under this legislation.
This subject has been of great concern to the Canadian people over a long period of years. I remember, Mr. Speaker, that when I was elected vice president of the British Columbia Liberal Association the Liberal party at a convention adopted two resolutions which were of particular interest to me at that time. One was to provide for the nationalization of the banks in Canada, a resolution which was adopted at that convention by a majority vote. The second resolution was to provide for a rational transportation policy for Canada.
I must say in fairness that in both these instances the late Senator McGeer was a moving spirit, and I am sure that many of us remember his fight to obtain equitable freight rates for all regions in Canada. However, this revolutionary spirit in the Liberal party soon fizzled out and nothing was done about these two very important resolutions. Consequently, some time later I resigned from the acting presidency of the B.C. Liberal Association and joined the C.C.F. party. That was part of my progressive evolution, Mr. Speaker, if I may put it that way, in political affairs.
Then in 1931 we had the Duff commission which dealt with transportation problems. Then we had the Turgeon royal commission on transportation, which was appointed in 1948 and reported on January 9, 1951. Later we had the MacPherson royal commission, appointed in 1959, and its report lay on the minister's desk for years before any action was taken.
From the formation of the C.C.F. party, and since it has become known as the New Democratic Party, it has recognized the need for a national transportaion policy. I have heard this problem discussed at our national and provincial conventions over a long period of years. Very serious consideration was given to the matter by persons with some knowledge of economics, some knowledge of

September 6, 1966
Transportation
accounting and some knowledge of the requirements of the consumers whom the railways are supposed to serve.
To indicate that the government may be paying lip-service to one of our long-standing policies in the introduction of this bill, I will place on the record the program which was adopted by this party many years ago so that we will know where we stand in this respect. This is in brief the program for which we have stood for a long time. I have been a member of this house for 21 years and have heard this program placed before the house on numerous occasions when this party has urged upon the government the need for a national transportation policy. This is our program:
Transportation is the most important public utility in Canada. In our country of vast distances and widely separated communities, economic and efficient transportation for the bulky primary products of the land, mine and forests is also a factor in linking our various economic regions into one great nation. Narrow profit considerations and lack of a comprehensive transportation policy have helped to produce a complicated and inequitable freight rate structure that has created bitter dissensions between different parts of the country.
An over-all transportation policy based on broad considerations of national interest would integrate, as far as possible, rail, road, water and air services, establish non-discriminatory freight rate scales as a part of the whole transportation plan.
The C.C.F. will also provide federal financial aid to the provinces for highways of national and international importance, including a trans-Canada highway system.
I cite that because here is an indication that in the introduction of this bill the government is at least paying lipservice to the policies which we have advocated throughout the years.
In my opinion the government has missed two outstanding opportunities for the development of a national transportation policy in this country. First, they missed an opportunity at the conclusion of the second world war, when the experience gained in the winning of the war and in the administration of the industries of this country could have been easily used to promote a national transportation policy. I think that the second occasion when the government lost the opportunity was at the time of the building of the trans-Canada pipe line, a time when the government actually provided loans for the building of this very profitable enterprise. I think, Mr. Speaker, that on those two occasions the government would have been well advised to advance the policy they are now advancing in this legislation.
[Mr. Herridge.l
I listened with a great deal of interest to the speech of the minister on his introduction of the bill, in which he obviously demonstrated that he had a wide knowledge of the subject and of the need for a national transportation policy. He spoke for almost two hours without a note and I though he made an excellent speech. As I say, I listened to it with great interest. I think we can say that the minister knows very well all of the aspects of the problem, but we will have to see what happens in the future to ascertain how his knowledge has been applied with respect to this legislation. When listening to the minister's remarks I could not help but think that here we have a minister who rises so quickly to a point of order in the house but takes so many years to rise to recognize the need for a national transportation policy in Canada.
[DOT] (4:20 p.m.)
I also listened with great interest to the speech made by the hon. member for Qu'Appelle (Mr. Hamilton) who indicated a wide knowledge of his subject. I thought he made a most interesting contribution to this debate. It was obvious as one listened to him that he was able to speak from a wide experience so far as western farmers and western conditions are concerned.
The leader of the New Democratic Party, a former premier of Saskatchewan, spoke with full knowledge of the question and of the attitude of western people to the abandonment of lines, passenger services in some instances, and the effect of freight rates on producers. I think it is quite safe to say that no member of this house can speak with greater understanding of this problem, and of the effect it will have on the lives of the producers and people generally in Canada, than the leader of this group. I remember quite well that he was one of the pioneers in our movement who first saw the need for a national transportation policy and urged that need at our national and provincial conventions. It is not a question of getting up here, supporting the legislation that has been brought in, saying amen, and so on. I mention these things to indicate that our movement and our leader in this house were pioneers in promoting the need for a national transportation policy and building up support in the country for that policy.
I thought the hon. member for Medicine Hat (Mr. Olson) made a very interesting contribution. He delivered one of those very
September 6. 1966

earthy speeches of his which are always closely related to the soil and the needs of those who cultivate the land, and he demonstrated that he understood the attitude of western producers and their determination to make certain that we have a transportation policy that is fair to all sections of the country.
While the debate on second reading of the
bill has been interesting and informative to many of us-this is a very complicated question and I do not underestimate the difficulties at all; we realize that this is a very intricate, complicated and complex problem-I think we all realize that the real work in connection with this bill rests upon the shoulders of the committee to which the bill will be sent. The committee has a heavy task in this connection. It will have to hear representations. I urge that the committee take plenty of time to deal with this legislation and to get the opinions of those who are concerned.
In connection with the bill I want to make a few suggestions. We attended a very interesting briefing just before we came here. Questions were answered by the minister, the Minister without Portfolio, or by the depar-mental officials who were present, and we were very glad to have the opportunity of hearing the answers. I was a bit concerned about the replies given to some questions, especially those having to do with rationalization. I am just wondering what will become of the railways as a result of what is known as rationalization. I wonder whether rationalization will mean that the Canadian Pacific Railway will continue to operate the Kettle Valley railroad at a considerable profit and yet refuse to grant a daily passenger service, because passenger service alone, it is considered, must make a profit. I hope rationalization will not mean that, and I trust it will not mean the abandonment of certain lines where the freight rates are bringing a nice profit to the company and where a passenger service is required but can only be operated at a loss.
That sort of thing will have to be found out when the committee meets. The committee will have to find out what various terms in the bill mean. I am hopeful that when the bill has been dealt with by the committee and returned to the house the recommendations of the committee will be such that I shall enjoy the opportunity to ride on the first passenger train to run again on the Kettle Valley railway.


Mr. Gundlock:: Hear, hear.
Transportation


Herbert Wilfred Herridge: I see I have the support of my hon. friend from Lethbridge who is also interested in this question.
I emphasize again that one of the most profitable areas in the operations of the Canadian Pacific should not be denied passenger service simply because passenger service by itself operates at a small loss. I am looking forward to some support in this connection when the time comes to raise these matters before the committee. I am quite sure I can tell the minister that he has not heard the last of this question because our forces are being mobilized at this time in British Columbia.
May I make a few suggestions? I believe, Mr. Speaker, it is necessary that there should be further research into the requirements for freight and passenger service across Canada. When I talk of research I mean independent research. I am not talking about research carried on by the company itself but about independent research so that the facts may become known to the committee and to the public.
I suggest in that connection that we should have independent economists, independent accountants, independent engineers and all those other persons who are capable of undertaking this type of research. I am very hesitant about accepting the costs of operation placed by economists of the Canadian Pacific Railway before various organizations which have made protests about reduction or abandonment of various services. I think there must be further careful research into costs of operation and the costs of maintaining these services. The debate in this house has indicated the need.
A cost accountant can produce various results depending on how his task is undertaken and for whom. In this connection I want to quote briefly from the Financial Post of August 27 to indicate that this is a difficult question.
MacMillan Bloedel Ltd. changed certain accounting methods which had the effect of increasing 1965 net profit by $3 million.
In addition to these examples, some other factors may raise or lower reported earnings. The way a company reports reserves in its annual accounts may affect return on equity. Contingency reserves are frequently shown as a liability apart from shareholders' equity.
Analysts often include contingency reserves In shareholders' equity when calculating ratios- whether or not the company does so.
It goes on to indicate that company accounting may be carried on in various forms to produce the result required on occasions.

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Transportation
I am very much of the opinion that the C.P.R., when it has been presenting its case to local authorities and groups, has been utilizing the accounting which places the company's position in the best aspect possible for the company's argument. I therefore suggest it is most important that the costs of maintaining these services be determined by independent economists, accountants and such other persons who have the necessary knowledge of railroad operations, air line operations, or sea transportation. I think that is necessary and I believe it is only fair to the Canadian people.
If this bill is finally to meet the needs of the Canadian people when it is returned to the house, the people must participate. We must seek the co-operation of all the Canadian people if this legislation is to be effective. The people must participate by making representations to the commiittee through the various organizations in Canada that represent them at this time. That is why I suggest the committee has a heavy and long task ahead of it.
Without doubt, if this bill is to be effective we must have the co-operation of provincial and municipal governments on the basis of an understanding of the problem and the legislation. Various trade unions, employees of the transportation companies, farmers, industrialists and consumers as well as many other groups will wish to advance their views before the committee. I maintain, however, that this cannot be done effectively unless the various organizations representing the public are informed of the nature of the problem. This is not easy. There will have to be serious study of the situation by those who represent these groups in our society.
[DOT] (4:30 p.m.)
I suggest, therefore, that all organizations wishing to make representations before the committee should be provided with, (1), a copy of the bill, (2), copies of the issues of Hansard covering the present debate, because I think the reading of Hansard would be of value to those who wish to make representations before the committee and, (3), copies of all other statistical information likely to assist them in arriving at a clear knowledge of the facts related to the development of a national transportation policy in Canada. It is only fair that those who intend to make representations, especially on behalf of organizations which are not directly in touch with this subject from day to day, should have such information.
[Mr Herridge.l
I should like to hear from the ministers on this point, believing as I do that if our democratic society is to function productively there needs to be a great deal of participation by the people themselves and their organizations so that the measures passed by this house are the result of a process which can actually be called co-operative democracy. I am keen on this idea because I realize more and more how easily government can draw apart from the people and fail to understand the needs or the motives of the people. On many occasions I have urged the government in power to ensure the participation of the people directly concerned with legislation which comes before us.
I say with confidence that the success of this measure is likely to depend entirely on the degree of co-operation between the federal and provincial governments and upon the co-operation and participation of all those groups in our society who are concerned with the development of a national transportation policy.


Deane Roscoe Gundlock: Mr. Speaker, in my opinion the bill before us is lacking in concept. I do not wish to say this in an unduly critical way but, like so many members on this side of the house, I feel the measure should have been referred to a committee at an earlier stage than is now proposed. In these circumstances we have no alternative but to vote against the bill as it now stands on second reading.
I have said that the approach taken to the subject has been incorrect. I take this position because I find that the issue is based in a large degree on past experience, and when I say "past" I mean the comparatively recent past, even four or five years ago. In this connection I shall refer later to speeches which I have made in this house as late as the present year, 1966.
I am surprised that the government and the Minister of Transport (Mr. Pickersgill) in particular have not given the whole subject of this legislation much greater consideration because in my view a great deal more consideration is required. During the present debate a number of speakers have pointed out how rapidly the situation is changing. The concept of railroading is changing almost from day to day, particularly in the area of freight rates. As an example of changing patterns I merely draw attention to the fact that the movement of wheat has practically doubled in the past four or five years from 400 million to 800 million bushels. This in itself, it seems to me,
September 6, 1966

is reason enough why all those concerned should be allowed to present their views on the subject to a committee of parliament before this bill progresses further.
In this context I have in mind particularly the representatives of the labour organizations, those who represent the provinces and the municipalities, and those corporations from one end of this country to the other which are directly affected by transport legislation. Let us not forget that this bill does not merely affect certain parts of the nation. It affects western Canada, northwestern Ontario, northern Quebec, the whole country, in fact, with the exception of a relatively small area which may be indicated by drawing a line from Montreal to Windsor. I believe that an opportunity should be given to all concerned, right down to individuals, to express their views to a committee before the bill progresses to a point at which there is no recourse. We have accepted this principle in the case of other bills.
I appeal to the minister to consider seriously whether the course I have suggested cannot be taken. As I say, I do not wish to appear unduly critical. We who sit on this side of the house do not like to be criticizing continually without offering constructive alternatives. I say that the alternative is to send this measure to the committee first, not at some later stage, so that the house in reaching its conclusions may take into consideration the opinions of the people I mentioned earlier.
I enjoyed the reference by the hon. member for Kootenay West (Mr. Herridge) to the Kettle Valley because it is very close to my own constituency. We hear a great deal about the Crowsnest pass rates. For us, of course, the Crowsnest is part of the Kettle Valley line running from Lethbridge to Nelson and through the Kettle Valley to the coast.
I have suggested that this bill is preoccupied with the conditions of the past. In my opinion it should be based on the present and it should also look forward for a few years at least. It is most disappointing. I would point out again, as I did in a speech I made in this house on February 9, that when farmers move wheat, vegetables or other crops out of their areas they spend the money they receive on other goods produced, more often than not, in Canada.
[DOT] (4:40 p.m.)
I might refer specifically to the time nearly 25 years ago when I had a heating unit put in my farmhouse in Alberta. It was ordered
Transportation
from Montreal, and I think I can recall the actual address. I believe it was 242 Jarvis Street. I was reminded of this the other day when an hon. member of this house crossed the floor complaining in a sense about something like this. I thought that the rest of us showed much better sense many years ago than he was showing. As a matter of fact, this was at a time when he was a very young man I am proud of that fact and I simply present it to emphasize part of my argument.
Whenever we make a profit in western Canada the money immediately becomes available to the rest of Canada. We are proud of that. This is part of our argument; this is the reason we so often have seemed to demand a certain service. I pointed out too in the same speech that the railway service is the worst we have had in history. Many excuses were offered and there were even investigations instigated. On February 7, as a matter of fact, the Board of Transport Commissioners authorized a probe into customer service. The emphasis of the inquiry was on a move the C.P.R. had made to improve customer service in respect of box cars.
At that time I tried to point out that the service had not been improved. A probe was instigated and apparently it showed that this was not the case. On Tuesday March 1, I pointed out the same thing again. There was nothing much done about it. The minister who speaks for the Canadian Wheat Board had some statistics which showed that the quotas were higher than actually was the case. These were given to him no doubt by the railroad or by the Wheat Board, but they were not correct. A day later I again pointed out what these charges meant and what the lack of service meant. I hope the minister will consider this matter because in legislation such as this we are looking forward. If we are not looking forward more than we were four or five or 30 or 40 years ago, if we are not looking forward having in m'nd the facts of today, then in my opinion we are not looking forward far enough.
This may sound a little like a chronology, but on March 4 I received a letter from a prominent man in the farm union who had gone to Vancouver in an effort to see what was the matter out there. He looked into the whole problem. As we pointed out at that time, it was not wholly the fault of the railways, but we are reminded of all these things when we are faced with a bill like this.

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I am reminded also of passenger service, and if time permits I should like to go into that a little as well. On March 17 the statement was made that it seemed that the C.P.R. was not concerned about our area. It seemed that there were empty box cars going by local points to Calgary and Medicine Hat when the elevator companies had local orders for delivery to Calgary and Medicine Hat mills. I think these things should be brought to the attention of the committee and through the committee to the house.
I should like to go back to March 7 and a headline which reads, "Wheat Moves At Record Clip". This was a release by the C.P.R., as a matter of fact, which appeared in the Lethbridge Herald of March 7. This sounded good to me. As a matter of fact I even went to the telephone and called some people at home. It said, "the wheat growers are happy now." The answer was, "what are you talking about". I looked at the headline again. I began to look into it a little deeper. I looked at the profits of the C.P.R. and began to think that "clip" meant something other than speed. When you clip horses and cows for hair and sheep for wool and you come out with a record yield on clip, you have a record take. When I looked at the take of the C.P.R. generally and particularly in our area I rather enjoyed reading this headline, "Wheat Moves At Record Clip".
I do not make any claim to understand this bill as much as I should but, generally speaking, if the bill goes through with these increases I believe that the people in my area and those of northern Ontario, Quebec and the maritimes will take a very dim view of the people who represent them in this house. I think they would take a very dim view if we stood up, said our piece and then let the bill pass without opposition before we are assured there is full realization on the part of the minister and the government that railway shipping in particular is different from what it was four or five years ago and certainly much different from what it was 30 or 40 years ago.
[DOT] (4:50 p.m.)
I pointed out before the situation in respect of wheat. Hon. members have heard this before but I want to emphasize it. There are also the potash shipments, and in farming areas an increase in the volume of shipments has been brought about by mechanization and automation on the farm the application of new farming methods such as the utilization of fertilizer and things like that. As a prime example I might mention my own farm

which I have farmed for 30 years. In my area we have had a most abundant crop. I have seen many good crops. This harvest we have had a particularly good yield. It was 30 bushels more than anything I could possibly imagine as a result of my own experience. The high yield was prevalent throughout the area and related not only to grain but small crops such as peas, beans, corn, cucumbers and many others. This not only will apply to agricultural products in the west but to the production of primary products-iron ore, pulp, etc.-in the eastern areas mentioned before, Quebec and northern Ontario, as well as the hard goods manufactured and shipped from the industrial area.
There has been a tremendous increase in production throughout the country which has given a boost to the Canadian economy. When a government considers a major revision such as the one embodied in the bill now before us, one which will probably be with us for 50 or 60 years, it should keep all the factors I have mentioned in mind. The Canadian public is aware of this increase in our productivity as are the railway companies who are taking advantage of it. One need only consider the railway companies' returns, the increase in the value of their stock and their increased dividends.
Why have the minister and the government not considered fully all the factors involved? Why has this bill not been drafted in a way that would indicate that due consideration has been given to its intent? Surely it is reasonable to ask that we be given an opportunity to hear from witnesses who have something to say about transportation in Canada before this house deals with a measure of this magnitude. I realize that not every member is interested in this type of thing, and that is only human nature. Some of us are interested in the operations of railways, some of us are interested in the price of bread, butter, eggs and fish, while others are interested in the Canadian economy generally. I urge the minister and the members of this house to consider this bill in the proper light. I appreciate the time I have been allowed to speak in this house and I hope the minister will consider some of the matters I have raised.


Maurice Allard: Mr. Speaker, it is a pleasure for me to make a
September 6, 1966

few comments on Bill No. C-231 which is intituled:
An Act to define and implement a national transportation policy for Canada, to amend the Railway Act and other Acts in consequence thereof and to enact other consequential provisions.
By this bill the federal government seeks to set up a Canadian transport commission and to provide for all modes of transport which come under federal jurisdiction such as railways, trucks engaged in extra-provincial activities, aircraft, coastal and inland vessels and pipe-lines.
Mr. Speaker, there has been a terrific expansion of transportation in the past ten years or so. As far as shipping is concerned, the St. Lawrence seaway has enabled Canada to make great progress in the fields of transport and trade by waterways.
Air transport has been characterized by the same dynamism in the last six years since another carrier, Canadian Pacific Airlines, is now in operation besides Air Canada. Other routes have been inaugurated which make Canada justly proud of the air services it provides for its citizens and foreigners.
In addition, over the past ten years there has been obvious and noticeable progress in transportation, especially in motor vehicle transport. That advance, that progress is due to the Trans-Canada highway which now links Canada from coast-to-coast and which allows for the efficient and speedy transport of passengers and freight by road.
[DOT] (5:00 p.m.)
Ten years ago highway transportation between or within the provinces was faced with many problems.
Finally, we note that during that decade, the railways, which were up against a keener competition from increased water air and highway transportation, have nevertheless continued to develop thanks to the many subsidies granted by the federal government, and the yearly subsidies they have received, especially since 1960. This brief review shows that water, air and highway transportation have made inroads upon the monopoly of transport held almost exclusively by the Canadian railways a dozen years ago.
Of course, this bill is very important and it was actually time it was introduced in this house, since a royal commission had made very worthwhile recommendations and suggestions many years ago. I am speaking of the MacPherson commission.
Transportation
Of course, some reforms are called for and co-ordination and standardization regulations should be encouraged with regard to those four means of transportation, not to mention the field of pipeline transportation.
But, Mr. Speaker, if some reforms and standardization are advisable, this does not mean that everything must be changed overnight and that the useful contribution to the country of certain means of transportation, such as trucking, should not be retained. In all fairness to thousands of Canadians and several areas of the country, the characteristics of some areas must also be taken into account. The assistance which must be continued must promote the economic development of those particular areas. When I speak of areas, I think above all of the western provinces and the maritimes. We must continue to give assistance, not token assistance, or on a ridiculously low scale, but substantial assistance, because if we consider here in parliament an economically strong Canada, on the road to progress, not only as a whole, but in all its important parts-and the ten provinces are important economically-the federal government cannot afford, whatever the legislation, to pass drastic and expeditious measures which would put some areas of Canada at a disadvantage.
And when I hear the fears expressed by hon. members from the maritimes and western Canada, I congratulate them for taking a stand and warning the government, and the officials who will see to the administration of the new transport board of Canada, against proceeding too quickly in the administrative field with regard to unification and co-ordination. We will have to try to avoid serious discrimination, so that Canadians from coast to coast will not see in the field of transportation discrimination from one area to another or from one transportation system to another but will feel that throughout the country, whether they live in the west, in central Canada, in the maritimes or elsewhere, the laws of the central government do not discriminate against any Canadian because he lives in one province rather than in another.
Some recommendations of the MacPherson commission apply to uneconomic railway lines. For instance, in the notes which have been sent to us by the officials of the Minister of Transport (Mr. Pickersgill), it is indicated that the commission recommends that the railways should not be asked to

September 6, 1966
Transportation
subsidize their uneconomic services through their economic ones, that the freight services should not subsidize the passenger services. The commission also mentions that the railways must, in the public interest, operate uneconomic services; that is when the commission recommends that the costs be borne by the public treasury. Also, with regard to transportation by rail, the MacPherson commission mentions the Crowsnest pass rates and the rates applicable to export grain. It is understood that those rates must be maintained and that the losses suffered by the railways, if any, must equally be borne by the public treasury.
In the recommendations of the said commission, mention is made of special assistance to the Atlantic provinces, of the principle of special assistance to the Atlantic provinces which should be maintained and of a special study to be made so as to determine whether the principle could not be more efficiently implemented by other means.
Evidently, such Canadian transport commission must meet all the complex problems of Canada and that is why at this stage, I do not intend to say any more on the various viewpoints we could bring up on this bill. We know the legislation will be referred to a parliamentary committee; we trust, Mr. Speaker, that interested individuals will be called before the committee and that it will even be authorized to travel so as to observe the material, economic and equitable conditions of various methods of transportation in the various areas of the country.
To-day, I should like to state two points of view lingering in my mind with some concern. Involved is highway transport which the national commission would take over. My second remark, which I shall revert to in closing, bears on the future attitude of the railways toward highway transport.
Will the railways, like the C.N.R. for instance, be in a position to continue to intervene, by all kinds of direct and indirect means, with highway transport and compete with it in an underhanded way, particularly in relation to trucking?
When speaking of transport, Mr. Speaker, we refer, evidently, from the constitutional standpoint, to the British North America Act, especially to subsection 10 section 92 which stipulates the constitutional authority in the field of transport. Obviously, section 92 does not give in detail the modern means of transport because in 1867, there was no trucking,

no automobile transport, and the various aspects of transport could not be mentioned. That subsection 10 of section 92 reads as follows:
Local Works and Undertakings other than such as are of the following Classes:
Evidently, section 92, subsection 10, gives exclusive authority on local works and undertakings other than those mentioned in (a),
(b), (c).
This means that (a), (b) and (c) come under federal authority. Those exceptions in subsection 10 of section 92 are indicated as follows:
Lines of Steam and other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province.
Consequently, when the federal government and the minister introduce a piece of legislation, concerning, for instance, interprovincial, international or extra-provincial highway transport, the minister is in a very good constitutional position, since according to the letter and the spirit of the constitution, authority is conferred on the central government in the field of interprovincial transport. This was confirmed by the Privy Council in London in a decision rendered on February 22, 1954, in the Winner case.
May I be allowed, Mr. Speaker, to read the main paragraphs of that Privy Council's decision which enable us to reconsider together the position and the constitutional decisions rendered in the field of interprovincial transport.

The power of a province to control its own roads does not entitle it to interfere with connecting undertakings that fall within section 92(10) (a) of the British North America Act or impair Dominion jurisdiction in relation thereto. Legislation of a province which denies the use of provincial roads to such an undertaking or sterilizes the undertaking itself is an interference with exclusive Dominion authority. Whatever provisions or regulations a province may prescribe with regard to its roads, it must not prevent or restrict interprovincial traffic. It may, of course, prescribe traffic regulations but its legislation must be confined to such matters.
[DOT] (5:10 p.m.)
It is not desirable nor is it possible to define precisely the limits within which use of provincial highways may be regulated. Nor need the court be concerned with the question whether a province was entitled to plough up its roads and so make interprovincial connections impossible. So isolationist a policy was unthinkable. The roads existed here and in fact formed a connection with other provinces and with another country. It is immaterial
September 6, 1966

that the Dominion has not legislated in relation to a connecting undertaking. A province is precluded in any event from interfering with it.
Provincial legislation is ultra vires where it prohibits the operator of a particular connecting undertaking, namely an international and interprovincial bus line, from using provincial highways except as a means of passage from another country to another province, as where it purports to prohibit it from bringing passengers into the province or carrying passengers outside the province or between points within the province. Such legislation cannot be justified as traffic regulation.
Where an undertaking is in pith and substance interprovincial, and in its operations embraces, in the same way, both interprovincial and intraprovincial journeys, it is wrong to say that its intraprovincial operations are incidental and hence subject to provincial control. If the undertaking is in fact one and indivisible, then merely because it might have been operated differently by limiting its activities to activities within or without the province, does not make it any less an interconnecting undertaking. Hence, its intraprovincial operations cannot be severed for the purpose of committing them to provincial legislative jurisdiction.
Of course, a carrier who is substantially an internal carrier cannot put himself outside of provincial jurisdiction by starting his activities a few miles over the border. Such a subterfuge will not avail.
Quaere, whether the operator of the connecting bus line in this case could initiate a purely provincial bus service even though it was under the aegis of and managed by his present organization!

Those are very important and relevant provisions which, in my humble opinion, should be put on record for further reference during this debate or even during the discussions to be held or the studies to be made by the parliamentary committee.
As I was saying earlier, under the constitution, the minister and the federal government are empowered to act with regard to interprovincial, extra-provincial or international transport.
But it has happened, and this fact should be taken into account here in Ottawa, that for almost a century all legislation and even regulations in the field of interprovincial transport have been left to the provinces.
Indeed, the legislation recognizing this practice is included in the federal statutes themselves. With regard to these precedents, I should particularly like to point out to this house the federal legislation concerning extra-provincial transportation by motor vehicle, which is included in the Revised Statutes of Canada, chapter 59. This legislation was passed on June 26, 1954, therefore following the judgment given in February 1954 in a
Transportation
case heard by the Privy Council which recognized the constitutional authority of the central government. Here, however, in practice the central government of Canada referred the problem of interprovincial transport to the provinces, probably because transportation of that sort was not very important ten years ago on account of the lack of organization in the interprovincial system and because the Trans-Canada highway had not yet been built.
Now, this has always been done and is still being done, and that federal act of June 26, 1954, admitted it in its terms and provisions.
I want to remind the house in particular of subsection 2 of section 3:
The provincial transport board in each province can, at its discretion, deliver to a person a licence to operate an extra-provincial enterprise by entering the province or passing through it under the same conditions and in the same way as if the extra-provincial enterprise operated there was a local enterprise.
And also in section 4 of that same bill:
4. When, in a province, the tariffs and rates to be set by a local carrier for local transport are determined or regulated by the provincial transport board, the tariffs and rates to be set by a federal carrier for extra-provincial transport in that province can, at the discretion of the provincial transport board, be determined and regulated by the provincial transport board in the same way and under the same conditions as if extra-provincial transport in that province were local transport.
Therefore, the texts of that act clearly show that the federal government has until today delegated to the province; the power to legislate and regulate in the field of trucking.
And now, in the present bill setting up that federal transport commission, the federal government wants to recover its authority on interprovincial trucking and its administration as well.
The Department of Transport created in 1964, when considering that matter, a group of officials to study trucking in particular. It would seem that the federal government decided also to intervene in the field of trucking for three main reasons. Since 1954, interprovincial trucking has greatly increased thanks to the construction of the Trans-Canada highway, so that it has become truly competitive with regard to the railways. Trucking is becoming some kind of economic and commercial giant in the field of interprovincial transport, and there is no doubt it can harm the railways which are facing

September 6, 1966
Transportation
some difficulties. The railways and interprovincial trucking come into conflict quite often with regard to the delivery of permits and the initiative which should or should not be left to the railways to add to their services a trucking service to round out their obligations. In fact, it seems that the railways must use trailers or trucking systems to compete with the private trucking industry.
The Department of Transport also seems to think that it is a good thing to have the -trucking industry and the other means of -transport come under the same commission, because the MacPherson commission, which studied all those complicated problems, recommended it and, in the areas where competition between the various systems of transportation is particularly keen, it would be better that only one act, one set of rules apply to all transportation systems in Canada.
Finally, according to this study committee and certain declarations which were made previously by the hon. Minister of Transport, and the hon. Minister without Portfolio (Mr. Turner), who is with the Department of Transport, it appears that this would enable the central government to fulfil its obligations, as he says, to control economic development in Canada from sea to sea.
If the federal government is considering taking over highway transport, I believe this would be doing a certain injustice particularly toward the Canadian Trucking Association and the private truckers, and also toward the Quebec Trucking Association, Incorporated. Because, in hard times, say for the past ten years, while they extended further within the provinces, from one province to the other. Does the member for Levis (Mr. Guay) have some comments to make from his seat?


Mr. Guay:: Indeed, his speech is so instructive at present. We shall see later.
[DOT] (5:20 p.m.)


Maurice Allard: Of course, the hon. member for (Levis gives the impression in this house of coming here more often than not just to wear out the seat of his pants. It is unfortunate, Mr. Speaker, that in this house, while we are seriously debating so important a piece of legislation, presented by the hon. minister, there should be members, that I shall call parasites who, instead of listening in silence in the house-and if someone has a speech or comment to make, we will be happy to listen to him-


Mr. Speaker:: Order. Would the hon. member resume consideration of the legislation presently before the house?


Raynald Joseph Albert Guay: He has nothing to say on this bill.


Maurice Allard: I accept your invitation with pleasure, Mr. Speaker, but I would also appreciate it very much if you pointed out to the member who keeps interrupting at untimely moments, the standing orders of the house according to which he must remain silent and let speak those who are seriously interested in legislation here in Ottawa.
Perhaps we may have the pleasure of hearing his comments, after my speech. We do not very often have the chance, in the house, to hear the hon. member for Levis seriously discuss important Quebec or Canadian issues.


Mr. Speaker:: Order.


Raynald Joseph Albert Guay: Mr. Speaker, on a question of privilege. Contrary to the impression that the hon. member for Sherbrooke (Mr. Allard) is giving, namely that I very seldom make a speech in the house, I am taking part in the debates of the house as actively as himself, and when I have a speech to make I will try to make it intelligently.


Some hon. Members:: Hear, hear.


Maurice Allard: Mr. Speaker, it is unfortunate that, in the house, there are members wasting their time-


Mr. Speaker:: Order.


Maurice Allard: -and who are applauded by their colleagues for such nonsense.


Mr. Speaker:: Order, please. I think the hon. member could now forget the intervention just made by certain members and revert to the more serious business of the bill before the house.


Maurice Allard: Mr. Speaker, I accept both your ruling and your invitation and I will go on with my remarks, while I wait for any light coming from the hon. member for Levis.
By placing interprovincial trucking under its own jurisdiction, the federal government is obviously hurting directly the interprovincial trucking industry. As a matter of fact, representatives of this industry, that is the Canadian Trucking Association and the Quebec Trucking Association, have already made representations to the government and to the minister in this regard.
September 6, 1966



Now, over those ten years, while highways within the province as well as the Trans-Canada highway were being constructed, carriers and road transport companies across the country have developed a trucking industry which is strongly competing with other means of transportation. They have shown a lot of aggressiveness and co-ordination in their efforts, in their activities, and have helped the country and the province of Quebec considerably, as far as the Quebec Trucking Association is concerned.
To-day, of course, those associations fear that by placing the road transport industry under the sole jurisdiction of the federal government the national transportation commission will be used as a means to permit the railways to carry on a competition which is becoming very difficult to meet. While the truckers and those involved in those companies succeed in spite of many difficulties in operating at a profit, they have to withstand the competition of the C.N. which operates with a deficit, of course, and which must deal with unprofitable services and with some branch lines, a situation which will apparently be corrected under the present legislation.
I should like to call the minister's attention to a paragraph of the Canadian Trucking Association brief on this subject. On page 3 of the brief presented, in January 1966, we read the following:
In the field of transportation, unrestricted competition will only bring back monopoly conditions. This should not blind us to the danger of excessive regulations or poor regulations. The standard is simply this: Are the regulations contributing to maintain transport services and continued competition?
At the present time, jurisdiction over trucking operations is split between the federal and provincial governments. Under current federal legislation, extra-provincial regulation policies are implemented by provincial boards completely without any co-ordination or even uniformity whatever between them.
Very little satisfaction is obtained from such a system by extra-provincial trucking contractors.
The present system under which extra-provincial truck transport is ruled by a certain number of individual regulatory boards, each operating under a different code and under provincial regulations is utterly impractical. The fact that they achieve a certain degree of effectiveness is a tribute to the common sense and intelligence of the members of the provincial boards. But to be practical-
And the brief continues with this conclusion:
What we need is uniform and co-ordinated regulations.


An hon. Member:: Be practical. Read further on.
Transportation


Maurice Allard: Do you want me to read seven or eight paragraphs more and waste the time of the house?


An hon. Member:: It would not be any more boring.


Maurice Allard: But any realist person here knows that it is possible to establish a set of rules to be more or less strictly applied. The essential point is to know whether the contradictions inherent in the system are likely to produce unfavourable results in the long run. To what extent may we rely on the individual capacity of provincial boards to overcome the fundamental weaknesses of the Motor Vehicle Transport Act? The very fact that the present system was set up to operate up to some degree since 1954 is all to the credit of our provincial regulating boards. After all, with regard to extraprovincial transport, they were instructed by parliament to regulate on extra-provincial trucking in the same way-and these are the exact words: "in the same way as for local trucking." Ten conflicting extra-provincial control systems have thus been set up. What we need are standard and co-ordinated regulations administered by the provincial boards, but under a new federal legislation.
The Canadian trucking industry feels it is possible, by taking regional problems into account, while preserving the role of provincial boards. But considering the national role of extra-provincial trucking companies, we also believe that when provincial boards are jointly interested in extra-provincial regulations, the federal legislation should group them together as a single board.
It should be pointed out that in its recommendation, the Canadian Trucking Association Inc. suggests standard and co-ordinated regulations administered by the provincial boards rather than by a single Canadian Transport Commission.
That is the whole difference, and that is the reason why, Mr. Speaker, I wish to call the attention of the hon. minister to this point of view of the Canadian Truckers Association. On page 1 of the memorandum which was distributed to hon. members of this house, by the hon. Minister of Transport, on the introduction of Bill No. C-231 we find the following:
Provision is also made for federal licensing and economic regulation of extra-provincial commodity pipelines and extra-provincial motor vehicle transport.
Licensing and economic supervision of these activities will be carried out by the new Commission as they may become necessary in the public interest.
The provisions with regard to these two modes of transportation will not come into force automatically, but will be proclaimed only when it is necessary to apply them and after consultation with the provincial authorities in the case of interprovincial highway traffic.
8080

September 6, 1966
Transportation
The greatest care is taken to avoid any interference with the jurisdiction of provincial legislatures respecting operations wholly within the boundaries of the several provinces.
These statements, which are clear enough, complete the text of Bill No. C-231 on the matter. However, as the trucking associations seem to suggest, the system could very well work if this licensing and this economic regulation were to operate according to the spirit embodied in this bill, but precedents were created that have become so powerful in this particular segment of interprovincial highway traffic that the administrative aspect or the constitutional aspect of this legislation is now being considered, and this sudden change is liable, according to the associations concerned, to create displeasure or frictions, even as regards the provincial governments. How will the provincial governments react to this recovery, by the federal government, of some authority in the field of interprovincial highway traffic?
[DOT] (5:30 p.m.)


John Whitney Pickersgill: Mr. Speaker, I wonder whether the hon. gentleman would permit me to ask him a question? I wonder whether he noticed that in the observations I made the other evening I said that while we were asking parliament in this bill, if the bill passes, to give the Canadian Transport Commission the authority to exercise jurisdiction over extraprovincial road traffic there was no intention of embarking upon this field immediately or quickly or without the fullest and most complete consultation with the provinces.
X think the hon. gentleman said "subite-ment", suggesting that we were suddenly going to do something. There is no intention of doing anything suddenly or without full consultation with the provinces, because 1 do not believe it would be possible to make the bill effective unless we were to do so. I should like the hon. gentleman to know that I agree with what he says on that point.


Maurice Allard: I wish to thank the minister for his explanation and for the assurance that the federal government does not intend to do that immediately, and that when it is done, there will be consultations with the provinces.
Well, I am now asking you this question: why have not the provinces been consulted before drafting of this bill, and before it was introduced in the house? There are not-


John Whitney Pickersgill: Mr. Speaker, perhaps on that point the hon. gentleman, who has been very courteous, would allow me to make another intervention to say that the Prime Minister, some time before this bill was introduced, wrote to the premiers of all provinces acquainting them with what we were proposing to do, asking for their views, seeking to arrange for consultations and assuring them that we had no intention of upsetting any existing arrangements in any sudden or precipitate manner.


Maurice Allard: This type of consultation is very commendable, and I hope it will be maintained in every area. What we would like to know, when the minister rises, is whether any provinces, when answering, have protested in any way or expressed some concern? I would be particularly interested to know if the government of the province of Quebec has, when answering, merely acquiesced wholeheartedly to the establishment of a Canadian transport commission which would include interprovincial road transport, and to the fact that the commission would make rules and regulations and also grant licences?


Mr. Deputy Speaker:: Order. I must advise the hon. member for Sherbrooke that the time allotted to him has expired.


Mr. H. Russell MacEwan (Pictou):: Mr. Speaker, I have a few remarks to make on this bill. In the period of time I shall be speaking I do not intend to go into all of the minute details because I hope and take it that when the time comes the bill will go to the committee. I will be sitting as a member on that committee and this will give me and other members a full opportunity to study this quite weighty bill, a most important one for all of Canada.
First of all I want to refer to Part I of the bill. In this regard I noted the remarks of the minister in the house on the matter of a national transport board. The last report of the Maritime Transportation Commission, volume 6, No. 4, referred to two speeches, one made by the minister on April 27 of this year in which he flew a few kites, and one by the Minister without Portfolio (Mr. Turner), who I believe was speaking in Montreal.
The Minister without Portfolio stated that the new board would be in a better position
September 6, 1966

to perform the administrative functions which parliament may authorize in regard to licensing, tariffs and economic regulation of transportation. I do not intend to go into what the minister said, but the bill certainly bears quite a resemblance to what he stated at that time, at least so far as some of its phrasing is concerned.
In speaking in the house the Minister of Transport (Mr. Pickersgill) put forward the possibility that a national transport board would perhaps coin for itself the appellation of "bureaucratic monster". I do not know about that but I believe that the hon. member for Sherbrooke (Mr. Allard), who has just spoken, referred to the Canadian Trucking Association who view it as a "bureaucratic colossus". I do not know whether that is the case, but in the minister's speech which opened debate on this bill he suggested that this was certainly not the intention of the legislation.
Some doubts are cast in this regard by the Maritime Transportation Commission and perhaps I might put them on the record at this time.
The idea of the establishment of a national transportation body is not new. The commission points out that the MacPherson royal commission in its 1961 report recommended the creation of a non-regulatory national transportation advisory council, a purely advisory council, not a regulatory one.
[DOT] (5:40 p.m.)
In the words of the MacPherson Royal Commission the council would be freed of regulatory responsibility, would be able to judge and assess the impact and effect of the decisions of all transport regulatory agencies and would be empowered to confer and consult with all interested parties and all levels of government. This advisory council would then recommend broad policies through the Minister of Transport.
I have already referred to the view of the truckers' association. The Maritime Transportation Commission says that obviously there is a need for some co-ordination in transportation policy in Canada and quotes the MacPherson commission report as follows:
-there exists nowhere below the cabinet level in Canada any organization or advisory body sufficiently broadly based to undertake the task of continually developing goals for national transportation policy or a broad outline of measures to achieve them.
23033-511J
Transportation
I hope the Minister of Transport was correct in what he said regarding this board. The Maritime Transportation Commission
went on to say:
Such a non-regulatory advisory council as recommended by the royal commission would in this commission's view meet an existing need and should perform a valuable service. The replacing of the existing regulatory boards by a super regulatory board, on the other hand, would appear to achieve nothing useful.
We shall have to wait and see, Mr. Speaker, whether this statement is correct. I hope this board will not be another bureaucratic colossus, as it has been referred to. I thought I ought to put that on the record. We hope that this board will not be another bureaucratic body. We hope that the minister's contention is correct and that what he has stated will be carried out.
Second, I wish to deal with another matter arising from the minister's remarks and which is contained in the bill. I refer to the Maritime Freight Rates Act. In the few minutes I have at my disposal perhaps I might refer to that act. As hon. members probably know, the act was passed in 1927 and provides a 20 per cent subsidy on all rail movements within the maritime region, which extends as far west as Levis and Diamond in the province of Quebec. Also, the original 20 per cent subsidy has been increased to 30 per cent on rail traffic-it does not apply to import traffic-moving from the maritime region to other parts of Canada on the portion of the rail rate earned east of Levis and Diamond. The act was passed in 1927 as a result of the Royal Commission on Maritime Claims and was intended to restore in a broad measure maritime rail rates to the position they held in relation to other Canadian rail rates prior to 1912. This was to continue into perpetuity.
What has happened is that this has not taken place. With the advent of competition by trucks, with the increase in rail rates and with trucking competition in other parts of Canada, the effect has been to distort the position in the maritimes. This has meant that the Maritime Freight Rates Act in its present form has been unable to maintain the relationship between Atlantic province rates and rates outside the region. This has taken place despite the fact that there has been an increase in subsidy under the Maritime Freight Rates Act.
The present legislation calls for a two-year freeze on maritime freight rates under the act. The only difficulty in my mind stems

September 6, 1966
Transportation
from reading subsection 2 of new section 335 which provides:
Subsection (1) shall be in force during the two years after the coming into force of subsection (1) and expires at the end of that period.
The only question in my mind is what happens after that two-year period? What happens after the study is completed? I wonder whether the government, after receiving the independent report by the Acres Company and another company which will take two years to prepare, will be able to give any guarantees? Is there any guarantee in this present bill, which says that parliament can then look at this matter, or will it mean that after the report is brought in the government of the day can then bring forward a policy which will be discriminatory and detrimental to the Atlantic provinces regardless of the Maritime Freight Rates Act? That bothers me.
After this bill is studied, brought back to the house and then becomes law, will it mean that the government of the day can go ahead and do that when the two years have expired? The bill does not say anything about the study. We know why the two-year freeze has been put on. Can the government then go ahead and decide to make all rates, including those in the maritime Atlantic provinces, compensatory? I suggest there should be some guarantee in the legislation that this will not be the case and that all interested parties, including members of parliament, will have an opportunity of being heard on the subject, perhaps by the matter being referred back to parliament, before any regulations or orders are put forward.
The matter was dealt with briefly in a recent editorial in the Saint John Telegraph-Journal of August 31 which had this to say:
A national transport regulatory agency can be a good thing-If it doesn't set up a stifling red-tape bureaucracy.
The editorial then refers to the Maritime Freight Rates Act and then continues:
In the simplest terms, the Maritime Freight Rates Act was intended to let this region's manufacturers compete at less transportation disadvantage in the Quebec and Ontario markets. It never produced the expected benefits entirely, and in recent years across-the-board freight rate increases have watered down its effect even further; nor has this area benefited from the intense rail-highway competition that has kept hauling costs down in more industrialized areas.
It then says:
But the new bill at least sets out to maintain such M.F.R.A. benefits as exist and a two-year freeze on maximum freight rates in the Atlantic

region is apparently designed to postpone final decision until the current regional transportation study ... is completed.
It goes on to say:
A national transportation policy based solely on "compensatory'' freight rates (i.e., keeping only profitable lines operating) could do immense harm to the maritimes. So far, Ottawa seems to be keeping this in mind. It will be up to the Atlantic provinces to be sure their interests are protected as parliament legislates in this crucial field.
I would hope that, as has been stated in oher legislation, more than a moral guarantee will be given to the Atlantic provinces. We would like something in writing, in black and white, rather than an oral agreement because, as suggested by an hon. member from Toronto, who quoted the late Silby Barrett, "an oral agreement is not worth the paper it is written on." There should be a change in the bill. I hope the Minister of Transport will consider this.
May I suggest with regard to this legislation that, even after the present study is made of the transport problems of the Atlantic provinces, a question similar to that which I asked one of the officials in committee, with respect to the Maritime Transportation Commission be kept in mind. At that time Bill C-120 was before us and I asked the official of the M.T.C. if he would like to view it, and at the same time to understand just what had occurred in the country, before making his final submission so far as the Atlantic provinces were concerned.
[DOT] (5:50 p.m.)
I think this bill, or whatever is finally brought forward, should be the subject of a full study by those who come from Atlantic provinces so that they may be able to find out how their region is affected before any final legislation is enacted for our area. I heard the minister say that all interested parties will have an opportunity to express their views. I take it this will include the Maritime Transportation Commission and other organizations of that nature. As I say, I hope to have the opportunity to sit on the committee and go further into a matter which is so vital to our area, since transportation, Mr. Speaker, is the lifeline of the Atlantic provinces.


Mr. R. W. Pritiie (Burnaby-Richmond):: Mr. Speaker, if the leader of the house or his representative do not wish to suggest a supper break I will carry on. I am afraid this is what I shall have to do.
September 6, 1966


John Whitney Pickersgill: It seems there are a number of hon. members who wish to speak and I think we should make use of the time allotted under the rules and go right ahead.


Eric Alfred Winkler: But I thought the original idea came from the Minister of Transport himself. Was there not some sort of agreement? I have no objection.


John Whitney Pickersgill: The Minister of Transport would benefit by having no dinner.


Eric Alfred Winkler: So would the Conservative whip. But what about other people?


Robert William Prittie: I am unlike the Minister of Transport in that connection. Often, Mr. Speaker, I hear it said that politics should be kept out of our discussions of transportation problems. There was, I believe, a suggestion to this effect in the Globe and Mail, from which newspaper the minister quoted in his speech. This, it seems to me, is a totally unrealistic approach, an approach based on a lack of understanding of the processes we use in this country and in this house.
I was interested in one sentence in that particular Globe editorial which posed the following question:
-or every time an unprofitable line is to be abandoned or an unreasonably low freight rate is to be raised, will the politicians leap to defend the local or group interest, forgetting the national interest?
I think the answer to that question is, yes. This is not to say there are not many subjects with which members of the House of Commons can deal in national terms, not merely in local terms. But it seems to me that the railways and freight rates are not among those subjects.
I suggest also that if members of parliament, particularly opposition members, did not express critical views of interest to their constituents they would be condemned by those same sources for merely acquiescing in everything the government tried to suggest. Incidentally, it seems to me that the railway bill with which we dealt last week was greatly improved as a result of the activities of opposition members.
The minister told us that Bill No. C-120, dealing with the same subject, was introduced in 1964 but did not pass. In the event, he told us, this was probably a good thing.
We have heard a good deal in Canada in recent years about minority government, whether it is good or bad, and I suppose one's views on this depend upon where one sits. If
Transportation
in 1964 the government of the day had possessed a majority, that bill would undoubtedly have gone through the house and become law. Yet the minister has admitted today that it was a poor bill in many respects and tells us we have a better bill before us today.
Many organizations in Canada made representations before the railway committee at that time, and the objects of some of their submissions have been incorporated in the present bill. It seems to me this ought to become a regular process, that the reputation of a government should not be at stake when a bill is first presented and that a certain amount of time should elapse in the course of which those of the public who are interested could express their views. When this had been done parliament could get down to the real work of legislation.
Compared with the bill presented in 1964 the measure now before us is greatly changed. The preamble begins with the words:
It is hereby declared that an economic and efficient transportation system making the best use of all available modes of transportation at the lowest total cost is essential to the economic well-being and growth of Canada;-
It then goes on to suggest means by which this objective can best be achieved.
It seems to me that a coherent national transportation policy could be more easily attained if both our major railway lines were under a single ownership and authority. We are dealing in fantasy if we imagine we can have a coherent and sensible transportation policy in Canada while a major link in the system is not subject to direct government authority. I am referring, of course, to the Canadian Pacific Railway. No doubt it is possible to make public policy felt, and have it implemented by indirect means. Nevertheless, this could be done more directly and more efficiently if ownership were vested in the people.
In this connection I am not speaking of the railways alone. I would remind the house that the two big railway companies in this country control in turn a great many trucking lines. I do not know what percentage of the interprovincial trucking business is controlled by the C.P.R. and the C.N.R. but it amounts to a large share. These two companies control telecommunications, water transport and air transport.
Thus, if we are to have a coherent transportation policy responsible to public opinion

September 6, 1966
Transportation
as reflected in this house, one necessary step, it would seem to me, would be to place both these large companies under public ownership.


John Whitney Pickersgill: Would the hon. gentleman permit a question? Does he think it would be desirable to have the trucking lines also owned by the government?


Robert William Prittie: Certainly not all the trucking lines. But I believe that if the government owned the two bigger systems together with the truckling lines which are now subsidiary to those systems it would exercise effective control over all major aspects of interprovincial transport.
The minister himself said this was a tenable point of view but that the cabinet had rejected it. It would have been helpful if when dealing with a subject as important as this one-and the present bill is supposed to deal with our transportation future for many years to come-the hon. gentleman had given some reasons for the government's rejection of the case for placing the Canadian Pacific under public ownership.
This issue will have to be faced one day, and I hope that later the minister will have something to say about the question. At any rate there is a growing demand in the country for action such as I have proposed. I recall that when the representatives of the National Farmers Union were before the railway committee two years ago they made such a demand. The National Farmers Union, I understand, has a reputation of being the more radical of the two major agricultural groups of the country and perhaps its views in suggesting something of that sort would not carry the same weight as the views of some other organizations. But I notice that in its submission to the government this year the Canadian Federation of Agriculture made the same point.
[DOT] (6:00 p.m.)
I should like to quote from page 18 of the presentation to the Prime Minister of Canada and members of the cabinet by the Canadian Federation of Agriculture on February 22, 1966, under the heading "Transportation Policy":
It is the view of the Canadian Federation of Agriculture that the nationalization of the rail enterprises of Canadian Pacific Railways would make possible a single integrated system of rail service that could most rationally, and with the public interest always paramount, serve the people of Canada. It recommends therefore that the C.P.R. rail services in fact be nationalized.

This point had been made earlier by the National Farmers Union. The same point was made by a number of members of this house last spring when the question of the cancellation of the Dominion passenger service was under consideration and when there was some unhappiness in respect of the speed at which the railways were carrying grain to coastal ports. At that time I heard, from unexpected quarters, members suggest it was time the second railway company in this country was under government control. Again the government has said it has not changed its view. I think many Canadians would like to know what are the reasons for that refusal.
There is another point which I think members of the committee on transport and communications would like to ask a great many questions about. Where are the railways to get all the extra revenue as a result of this bill? When the emergency legislation was before us we were told that if this bill were passed the railways would not have to come to parliament to get the money to pay the extra wages which they may be compelled to pay their employees either by parliament or as a result of negotiation. I think the members of the committee should do a great deal of questioning on this point so that we will know where the extra revenue will come from. We know that the rates for the Atlantic provinces are not to change for the next few years, so there will be no extra revenue there. The Crowsnest pass rates are to remain for the next few years, so there will be no extra revenue there.
It has been suggested that the railways can save a certain amount of money by rail line abandonment. I listened very carefully to the speech of the hon. member for Qu'Appelle (Mr. Hamilton) the other night and I listened to the answers which the minister gave him during his speech on the question of rail line abandonment or rationalization.
From the minister's statement at page 8034 of Hansard it seems that when we finish with the bill there will be very few rail line abandonments because the government is going to give an undertaking that large areas will be left alone. As a result of what the minister said I cannot see that there will be very many abandonments and therefore there will not be very much saving in that direction. Presumably extra revenue for the railways will come from those areas where there is competition in the transportation business and where the truck lines exist between major cities in areas such as southern Ontario, the St. Lawrence valley and certain
September 6, 1966

parts of the west. But according to the theory we hear the competition between the various modes of transportation, rail lines and trucking lines, should keep the rates down, so I do not see where the extra revenue will come in there.
I expect that in Canada in the future as in the past there will be a large amount of money coming from the public treasury to subsidize railway transportation. I do not think the Canadian people are shocked by this. It is something we always have had to do and likely will have to do in the future. I am not a member of the committee on transport and communications, but I suggest to the members of the committee that staff people should try to give them some rather concrete figures about where the extra revenue is to come from, if the various sectors I have just mentioned are to be excluded.
I am interested in the question of interprovincial trucking. The explanatory note on the page opposite page 14 of the bill reads:
Extra-provincial motor vehicle transport is, at the present time, regulated by the transport board of each province under the authority of the Motor Vehicle Transport Act. If it becomes desirable, in terms of the objectives of the national transportation policy, to regulate extra-provincial transport at the federal level, the new transport commission would be the regulatory authority. The necessary regulatory powers would be provided by this Part.
However, the minister has said that this will be done only if it is considered necessary. This is another question I have in mind. The Canadian Transport Commission will continue to set the rates for the railway lines in certain areas but they will not set them for the trucking lines. It seems to me less than sensible that if people are going to be engaged in the same sort of business in the same area the same board should not regulate the rates.
On the question of competition within a province let us take, for example, the line running from Windsor to, say, Kingston or Belleville which is all within a province but quite a good distance. You have the transport board of the province of Ontario setting trucking rates there and for the railway lines you have rates set by the Board of Transport Commissioners at the present time. If, because this is an area where competition exists, the railways are to be freed from having their rates fixed by the new transportation commission, what happens concerning trucking within that province? Will the Ontario Transport Board not regulate the rates for the truckers? Will they then be left to compete with the railways or will the transport
Transportation
board in Ontario set the rates for both the truckers and the railways in that sort of sector which is completely within a province?
Again, this is another question which comes to mind. A very good point in the bill, of course, which has been mentioned by other speakers, is the fact that a research agency will be established which will carry on continuous studies on the question of the economics of transportation in Canada. I hope the government will pay sufficiently well to get good people for this and then pay sufficient salaries to keep them. My fear is that we may get some people who will begin to understand the transportation economics of this country and will then be hired away perhaps by the C.P.R. or some other company in the transportation field. This certainly is a most important field. The hon. member for Qu'Appelle made reference to that the other night.
Frankly, Mr. Speaker, this is the sort of bill in respect of which I would rather not be called upon to vote on second reading. It is so complex and deals with so many subjects that it is difficult to comprehend them at one time. It seems to me it would have been more useful had we done what I believe happened in 1964 when the subject matter of the bill was referred to the committee and when, after views had been heard from various organizations and questions had been answered by experts, the matter then came back to the house. I think in this way members would be in a much better position to evaluate the legislation we have here, because it is so important and so very complex.
I should like to conclude with a reference to one other subject which I have mentioned from time to time. At earlier times I have suggested we should have a minister of civil aviation in this country. I suppose that idea does not stand up any more because we are to have this over-all transportation commission which is to regulate air as well as rail, water and road traffic. I have always felt, however, that the Department of Transport is such a large department with so many responsibilities that, as in the case of the Department of National Defence, there should be more than one minister. I know that at the present time on a temporary basis the Minister without Portfolio (Mr. Turner) is assisting the minister, but in view of the importance of the transportation life of Canada it seems to me the government should consider bringing in other legislation the next time the

September 6, 1966
Transportation
cabinet is reshuffled to provide for an associate minister of transport to share the duties in this very important field.
[DOT] (6:10 p.m.)


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I listened with interest to the remarks of the hon. member for Bumaby-Richmond (Mr. Prittie), particularly those about politics in transportation and government. The minister mentioned this subject originally and I think it is fair to discuss it now. I see nothing wrong with politics in transportation or politics in this house if you consider politics, as it is properly defined, to be the science of government. I believe that what the hon. member and the editorial which appeared in the Globe and Mail had in mind is that this government, with tremendous enthusiasm and zeal and great attention to detail, has in its inimitable way taken the science out of government.
Be that as it may, I feel, as does the hon. member who has just taken his seat, that we must be very cautious at this stage of this bill because of its great detail. I commend the government for reaching out toward a new concept which has been spoken of by royal commissions for many years, particularly because of the new and sensational innovations which are contemplated.
At this point I find it difficult to vote in favour of this measure on second reading and I must express my opinions at this time as being without prejudice. We must observe what develops as a result of committee hearings and we must be entitled to see what impact this policy may have in dollars and cents on various industries and various regions of the country before coming to any conclusion whether or not it will help to make a greater and better country.
I am sure we are going to receive a very considerable amount of expert evidence during our committee hearings. We will be able to ask factual questions and get factual answers. That is the forum where this should take place. If as a result the government's contentions are in fact borne out I can say without equivocation that I am prepared to forsake without prejudice my position and give support to the bill.
In any event I do have some reservations at this time and I think this is the proper opportunity to ventilate them. In that way I think I should remark upon the statement made by the minister during the course of the speech by the hon. member for

Qu'Appelle (Mr. Hamilton) and later on during the speech of the hon. member for Medicine Hat (Mr. Olson) as to the government's willingness to take a position of flexibility regarding this bill and to accept certain changes which the opposition may recommend. I realize that the government's experience in respect of collective bargaining dur-ig the last two or three months has not been happy, but I do hope it will adopt a collective bargaining attitude toward the opposition rather than use compulsory arbitration.
I wish to direct the major portion of my few remarks toward the subject of a super body or commission and its composition. At this time I am not prepared to take the firm position that the composition of the commission, being 17 members, is objectionable, but I do see some ground upon which one can argue that its forms and procedures are objectionable. I will reserve my judgment in this regard. We must wait until it has been in operation for some period of time before we know whether or not it can work efficiently.
At this time there are some aspects of this subject to which I think I can take exception. I am wondering whether it is proper to give appellate jurisdiction to the board, which is contrary to the present act. During the course of our very interesting discussion this morning, and I am happy the government made available some of its knowledgeable senior civil servants, there was a comment made to the effect that because of the variety of viewpoints which would be represented on the commission there would be a cross-fertilization of ideas. There was also mention made of research facilities and functions.
I fear that this research aspect of the commission will in the end result in such an impregnation of the entire commission, if I may carry on the analogy of cross-fertilization, that the ideas which will flow from it in the form of orders and recommendations to the government, ultimately to be reflected in legislative measures, will all be cut out of the same cloth and that there will not be within the four corners of the commission that variation of opinions or that new and completely distinct approach which any appellate division must have if it is going to carry out its functions successfully. In other words, not only the formal but informal discussions which will take place from time to time among the 17 members, having in mind the studies on which they will base their actions and orders, will be affected by this research
September G, 1966



aspect of the commission. There will not be, under those circumstances, that independent, free and objective attitude taken by some members toward decisions made by others. I hope I am wrong but 1 must say, having in mind my professional experience as a result of applications in courts and in argument presented to the Board of Transport Commissioners, that this appears at first blush to be a reasonable objection.
Let me follow up the question of the research aspect of the commission. I am wondering whether or not, as a result of the views regarding the entire ambit of transportation which will flow from this research unit, the government-I use that word with a small "g"-will become so imbued with them that any subsequent legislative proposals will not be likely to be changed or varied. If that happened the task of those who think they have a ligitimate objection to certain proposals would become very difficult indeed.
[DOT] (6:20 p.m.)
The minister has said there is a limited number of people in this country with the varied knowledge and background essential to be of assistance to the government of Canada. I think some consideration should be given to the establishment of a national transportation research institute, partly financed by federal and provincial governments, which would make its massive information and its opinions available to all people and governments. This would not prevent the national transportation commission or the government from having access to its own expertise. I think this suggestion has been discussed from time to time during the course of studies by royal commissions. As a matter of fact, Mr. Speaker, I thought it was original, but when one reads back one finds there is nothing original in this house or in politics. However, I suggest that the government give this matter consideration.
The second point that worries me at this time is that Bill No. C-231 incorporate certain provisions of the Railway Act of Canada. For example, the Board of Transport Commissioners has for a number of years taken the position that it is inhibited in its jurisdiction. It has taken a very narrow view of its powers because of what it feels are the statutory provisions under which it was created and operates. I shall not deal with all of them, but I have here the report of the Turgeon Royal Commission made some time ago. In the general review at page 23 of the report Mr. Justice Turgeon deals with the
Transportation
decision of the board in connection with an application for a 30 per cent freight rate
increase. He says:
In the first decision of the board filed in the 30 per cent application on March 30th, 1948, the position of the board with respect to its jurisdiction and powers to reduce rates to assist industry or to equalize,-
I think these are very important words:
-through the prescription of reduced rates, production costs, geographical location, or climatic conditions, was dealt with at considerablel ength. The following extracts from its decision indicate clearly the opinion of the board as to its own powers and as to the discretion left to the railways concerning these matters.
Running very briefly through some of them, they are:
"In other words, while members of the board may and do, as Canadians, sympathize with policies of economic development which may through increasing diversity lead to greater economic solidarity, it is not their general opinions but the powers conferred on them by the Railway Act which determine what they can do. Very wide powers, it is true, are given under the Railway Act; but the Railway Act is not to be construed as if it were a blank cheque to be filled in as members of the board see fit. It is not the board's function, as delegated by parliament, to make rates to develop business, but to deal with the reasonableness of rates either on complaint or of its own motion.''
The board said also:
"Railways are not required by law, and cannot in justice be required, to equalize natural disadvantages such as location, cost of production and the like."
The board said it did not have the power to compel them. And so on, Mr. Speaker. The first two pages of Mr. Justice Turgeon's report are simply littered with comments of this kind. My view is that the national transport commission, inheriting under the provisions of this bill the powers, jurisdiction and ability to make decisions on the principle of stare decisis, will be bound in this regard and will very probably take as narrow and as limited a view as the Board of Transport Commissioners. I think that somewhere in the bill there might be placed a section directing the commission to have regard to many of those factors to which the Board of Transport Commissioners said it was unable to give effect. 1 notice that the bill says in clause 1:
It is hereby declared that an economic and efficient transportation system making the best use of all available modes of transportation at the lowest total cost is essential to the economic well-being and growth of Canada-

September 6, 1966
Transportation
If that could be interpreted as meaning that the economic well-being and growth of Canada are based upon the economic wellbeing and growth of all regions of Canada, and that the commission is compelled to look at that aspect of it in its decision, I would be content. But I fear that, faced with the previous decisions of the Board of Transport Commissioners and based on a normal interpretation of this particular clause, the commission will not have this authority. Equally, the proposed new section 317, which is to replace the section dealing with the settling of rates and the right of any person to appeal, says, as will be found at page 33, clause 44 of the bill:
Any person, if he has reason to believe that any act or omission of one or more railway companies, or that the result of the making of rates pursuant to this act after the commencement thereof, may prejudicially affect the public interest in respect of tolls or conditions of carriage of traffic, may apply to the commission for leave to appeal the act, omission or result and the commission-
I do not think this very important section will cover the situation to which we might well come, and it has been referred to by other hon. members, namely, that the legitimate regional desires and requirements of various parts of Canada must be an aspect of any national transportation policy which is required to be put into effect.
Using those two phrases which I have quoted from the bill as being indicative of the probable result, I doubt that the commission proposed to be set up under the present bill will be able to go much farther than the Board of Transport Commissioners. It is true that the same rights of appeal are carried over into this bill, namely, the right of appeal from the commission as a whole to the Supreme Court and in certain instances the right of appeal to the cabinet, but when it comes to the question of regional development and policy we have the situation which the previous government took into consideration when it acted as it did with regard to the freeze on rates, and so on.
There is another question which I raised earlier. I refer to the very, very few cases where appeals have been made to the cabinet, to the governor in council, under the pertinent section of the Railway Act and have reached the point of being heard and disposed of. This indicates that the procedure is not too satisfactory and all too often what happens is that when appeals reach the cabinet, in due course the cabinet acts not on the appeal but some legislation is brought down

or a royal commission is appointed and the matter reaches an unsatisfactory conclusion in that way. If we are to have this concept of a new board and are to give it adequate authority, it should be given some additional authority to deal with certain questions of fairness and equity affecting regions in connection with equalization and regional discrimination which the former Board of Transport Commissioners was unable to deal with.
I should like to deal very briefly with several of the general positions which appear to be taken in the bill. The hon. member for Acadia (Mr. Horner) dealt with .the question of the Crowsnest pass rates. It is true that under clause 50 and by new sections 328 and 329 of the Railway Act the bill does propose that an inquiry be instituted and that during the course of the inquiry there should be a freeze on the existing statutory Crowsnest pass rates. Basically this is the position. But 1 am a little alarmed at the wording of proposed new section 329, first, because the period of three years is not definitely fixed. What the act will say, if it is passed in its present form, is "not later than three years after the commission shall inquire," and so on.
This could mean anything. It could mean that the commission could wait until the very last day of the third year to start its inquiry and conclude it at some period in the future. It could mean that the commission could start its inquiry the day after this bill becomes law and complete it within six months.
[DOT] (6:30 p.m.)
I do not think, or at least I hope, that the last of those two contingencies will be a fact. However, what does concern me is part of proposed new clause 329 which states that when the commission has established its inquiry, gathered all its evidence and reported to the government, then, in the words of the clause:
-the governor in council shall take such action as he deems necessary or desirable on the basis of that report to provide assistance to such railway companies.
I am not prepared to accept that in its present form. Having in mind the contention which has been held for so many years and the fact of which the hon. member for Qu'Appelle (Mr. Hamilton) spoke regarding the great variation between the original figures produced by the railway companies before the MacPherson commission, the
September 6, 1966

figures produced by the western provinces and finally the figures which were obtained by the royal commission from its own statistical studies-these were the people who obtained the very best expert assistance-it is to be noted that there is a very considerable difference between the figures I mentioned and the final figures.
Surely under those conditions-I am trying to approach this on a national basis-it would be very difficult to ask the western members and the people of western Canada to accept the fact that the government may act solely on the figures which the commission obtained and which are subsequently furnished to the government. My view is that when this matter is being considered, as probably has already been done by the government, thought should be given to replacing this phrase by the simple alternative sentence: "The governor in council shall refer the matter to parliament".


Mr, Pickersgill:: May I ask the hon. gentleman a question? Is the phrase he has suggested not implicit? The governor in council cannot appropriate moneys. Therefore it seems to me that all the governor in council can do in these circumstances is to suggest an appropriation in the estimates to give the railways this relief. I can assure the hon. gentleman that this was intended by the draftsmen, and if there is any doubt about its meaning this is something we would certainly want to resolve in committee. I want to make it very clear, if the hon. gentleman will be good enough to permit me to do it, that there is no thought whatever that this would empower the governor in council to recommend any change in the Crowsnest rates. All it would do would be to authorize the governor in council to recommend to parliament that some financial relief be granted to the railways if that seemed desirable to the governor in council after receiving the report.
In the case of the branch lines that are retained and of the passenger services, we have made it mandatory that the railways should be compensated for any losses, in one case for the full amount and in the other case for 80 per cent. All that is said here is that the governor in council may consider what should be done and that parliament might then be asked to take action. If the language is not sufficient to make that clear I can
23033-512*
Transportation
assure the hon. gentleman that we will entertain any reasonable amendment to make doubly sure that no other meaning will be read into that clause.


Gerald William Baldwin: I thank the minister for his explanation. I think it probably makes this clause a little more palatable. However, I must say that the words contained in the phrase, "and the governor in council shall take such action as he deems necessary or desirable on the basis of that report to provide assistance," lead to more than one interpretation.
I was glad to hear the minister say that only parliament can take action in this matter. Of course I have seen attempts at doing otherwise made in the past. However, I think the usual legislative approach might be better than appropriating moneys in the estimates which are of course debatable. Each estimate constitutes a parliamentary resolution. It must be studied, debated and passed by this house and by the Senate before it is enacted into law. However, in some cases difficulties arise. I hate to make accusations against this government but sometimes a large number of supplementary estimates are brought before the house in the dying days of the session. I think this is a fault common to most governments under our democratic system. The possibility arises that toward the end of a session the government may bring down estimates which include an item for $15 million or $20 million expressed in the form of a subsidy to the railways to compensate for the losses they are alleged to have sustained in hauling the grain of the western farmers under so-called statutory rates. I do not think that would be the right way to do it. I think the minister has indicated that he will consider this matter further and I believe it is very important that he should do so.
Then there is the question of a maximum rate control. Obviously this is one of the very detailed and complex aspects of the legislation. The hon. member for Qu'Appelle and other hon. members have referred to the question of costing. This is a tremendously important part of the issue and goes right to the heart of the problem. It was the subject of a great deal of discussion before the MacPherson royal commission and I am sure the officials in the minister's department have considered this matter and made their calculations. I will only say at this time that I am very doubtful whether the formula as it is expressed in the proposed new section 334 of

September 6, 1966
Transportation
the Railway Act will meet with my approval but it is possible that the minister and his officials may be able to satisfy my requirements. The onus will be on them to do so.
Finally I wish to speak on the question of the motor vehicle undertakings. I am concerned about the initial assumption that certain tolls may be fixed by the government. Of course the minister indicated at one time, and we heard the view expressed this morning, that there are conditions precedent to this coming about. The question of jurisdiction is not one which should be discussed in detail at the present time but it is certainly a very important factor. As I pointed out this morning, it is stated in clause 35 (c):
-the commission may make regulations (c) respecting the safety, protection, comfort and convenience of the persons availing themselves of the services of a motor vehicle undertaking;
During the question period today I pointed out that the difficulties in implementing this right are very great indeed. It is the provinces which are responsible for the construction of highways. They lay down the rules and regulations respecting the equipment of vehicles. They lay down the restrictions under which licences are granted to operators and they lay down certain regulations with regard to insurance.
It seems to me, at first glance, that this subclause could be struck out as being entirely unconstitutional. There is no doubt that this a matter on which there will be constant negotiations because if there is to be a national transportation policy it must be based upon the ability of the government in conjunction with the provincial governments to lay down and establish tolls which are in fact a part of the whole competitive structure. Without that ability it is very likely that the announced purposes of this legislation will be nullified. I am not suggesting that this new approach should not be undertaken but that there are grave weaknesses which will have to be explained satisfactorily in committee and later on in this house before it can be accepted.
[DOT] (6:40 p.m.)


John Whitney Pickersgill: I wonder whether the hon. gentleman would permit me to ask him a question? Probably, Mr. Speaker, if you were asked to rule on it you would rule it out of order because it is a hypothetical question. I do so only because the hon. gentleman is a very distinguished lawyer and I do not get the chance too often to ask lawyers for free advice.

My question is this. With respect to the particular section 35 (c) to which the hon. member referred, would it not be true to say that since the vehicle would be on a provincial road the regulations regarding safety, etc., made by the provincial legislature would have to be complied with but that it might be possible for parliament to insist upon additional precautions that were not in conflict with the basic laws in cases of vehicles that cross provincial lines?
I think that is all the draftsman had in mind. In no way would it be possible for us to say that a vehicle could go on provincial roads when the provincial laws said that it could not do so. However, we might insist that if the vehicle was going to cross from one province to another even more stringent regulations might apply. I would just put that to the hon. member.


Gerald William Baldwin: Mr. Speaker, as a result of such an appealing request by the minister I will break one of the first laws of our profession and give him free advice. After all, as I am speaking in the House of Commons this cannot be used against me at any subsequent professional trial.
This is somewhat like the situation which prevails in many provinces where there is conflict between municipal ordinances and provincial regulations. Some municipal ordinances are held to be valid so long as they do not conflict with the provincial law. As a matter of fact, I would hope that this might serve as a means whereby a more uniform approach can be taken over the whole country. If that can be done, then more power to the government, the minister and his officials. Whether or not the provinces are in that type of receptive mood now is another point, but a more rational and uniform approach to this whole question is certainly one which is worth working for.
Finally, Mr. Speaker, I take this general position. I hope that the minister and the house will understand that I do not say what I have said from any personal, regional or even constituency viewpoint. I think that the strength of this country must be maintained by paying attention to all parts of it. I hope that we in this country are now passing through the concluding stages of the argument whether or not there shall be two nations or two states in Canada. I hope this argument is reaching its conclusion. But for many years another argument has been raging as to whether or not there are also two parts of Canada, one the developed part and
September 6, 1966

one the other part which needs developing but which because of fiscal policy, transportation policies and other policies is not managing to achieve that measure of development, socially, economically and politically, that it should.
It do not think that you can have a strong country unless you have normal and proper growth in all regions. I think that our real problems of transportation will not disappear until this becomes the case, until you find secondary and tertiary industry coming into western Canada, coming into northern Ontario, coming into Quebec and coming into the Atlantic provinces. When this happens, then and only then will many of the problems which the government is trying to solve in this legislation really disappear. Any legislation which does not achieve or work to that desirable result is not good legislation.
We have heard a lot of talk about masters. I think that there was in one of the provinces at one time a "maitre chez-nous". I believe it was Abraham Lincoln who said: "As I would not be a slave, so would I not be a master". I think it is in that way and with that attitude only that the government and this parliament can make a national approach which will result in the development of all parts of the country in a normal manner. I think that anything short of that is insufficient.
[DOT] (6:50 p.m.)


Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker, at the outset of my remarks I should like to express all my admiration for the logical and the sound manner in which the previous speaker discussed the problems facing parliament. And it is an example that we, newcomers, will try to follow because he would naturally be inclined, and quite justifiably, to sharply criticize the government; but instead, as a serious-minded and very objective lawyer, he puts forward constructive arguments and, as an independent, I am glad to congratulate him personally. I must add that I am learning a great deal by listening to his contributions in this house.
Mr. Speaker, the bill under study is entitled:
An Act to define and implement a national transportation policy for Canada, to amend the Railway Act and other Acts in consequence thereof and to enact other consequential provisions.
I shall not make a complete review of the bill, first because it has already been done by more experienced colleagues and also, because I am one of those who find pieces of
Transportation
legislation totally tasteless and confusing and who sometimes wonder whether the drafters take pleasure in making them so, in order precisely that the laymen will not be tempted to scrutinize them too closely and to leave it to the lawyers to fiddle with them.
Besides, Mr. Speaker, pieces of legislation are so questionable. As a matter of fact, I must have listened to 10, 12 or 15 learned lawyers here who expressed different opinions in many cases, and I know that these learned lawyers and all their colleagues, in the coming centuries, will keep on arguing on the meaning of such and such a word or insist that part of a sentence means just the opposite of what laymen think.
Therefore, I shall not venture that far. I shall only make a few general remarks reflecting the opinion of what I consider as a layman who sees those pieces of legislation take form, who sometimes wonders with some concern whether the statutes he can hardly understand and which are so insipid actually promote the commonwealth, the common good of the people who are perhaps not as well protected.
I shall first remind the government that I voted for the bill introduced in this house to end the strike. I even urged my colleagues to do likewise without delay, because of the emergency that I found disastrous for the country's economy and which resulted every day in an increasing number of lay-offs throughout the country. We therefore voted for the bill, but I did so on one condition which I shall now state. I believed in the government's undertaking to take the required measures in order to settle the problems of railway workers and also to prevent the recurrence of such crises. I remember that on that occasion, we were told the bill would precisely remove, directly or in directly, a great number of the causes for disagreement and misunderstanding which give rise to strikes as unfortunate as the one experienced recently. I reminded the government that we fully expect that all these things will be done. I am speaking in a constructive, rather than a destructive way.
In my area, Mr. Speaker, in the constituency of Trois-Rivieres and in the whole area of Trois-Rivieres which is called the heart of Quebec, the railway workers returned to work on the very night the legislation was passed. The appeal I made over the radio not only in my constituency but in the whole area, asking the railway workers to set an

September 6, 1966
Transportation
example of observance of the law, was answered. They went to work within a few hours, the very night the legislation was sanctioned. I will not say that like many others throughout the country who were convinced that the legislation did not settle the whole problem, they returned to work with joy in their hearts. They returned to work precisely to show to the entire country that they were law-abiding citizens; they also returned to work because they believed in the government's undertaking which I, as an independant member, brought to them, telling them that I had reason to believe that the government would fulfil their undertaking. But now, these undertakings will have to be met, otherwise, some pleople will be most unhappy and they might have unfortunate reactions on occasion.
So, Mr. Speaker, even if I cannot find it in the first reading, after thorough scrutiny, I trust that, in the spirit of the legislation and in all provisions, means will be taken to ensure that this legislation will not protect solely the companies, but that it will also protect the workers. But before I get to the gist of my remarks, I should like to comment on some statements made in the house.
For instance, I have heard the hon. member for Villeneuve (Mr. Caouette) tell us that the net result of this legislation will be to increase the risk of inflation. I beg to differ. I am not quite sure of that. On the contrary, I believe that this legislation will be most helpful if it is to eliminate duplication of services, for instance, and eliminate useless and costly lines, in short if this legislation should encourage the railways to rationalize their operations, to adopt more modern and efficient methods to prevent operation at a reduced capacity when full capacity is needed, as was mentioned by an hon. member this afternoon. Indeed, all of us have occasionally made reservations and been told that no space was available, but on getting aboard the train we found that the reserved seats were only half full.
There is on that point an obvious lack of organization indicating that, within the railways, at least as far as the Canadian Pacific is concerned, methods which I would call mediaeval are still in use. I must say, Mr. Speaker, that I am under the impression that the Canadian National was more quickly modernized, that morale and service seemed better than on the Canadian Pacific. Nevertheless, there are still in operation methods

which I call medieval and I wonder whether the railways are not maintaining them because they are aware that when faced with huge deficits, they can turn to the government which will then fill the gap. So then, the hon. member for Villeneuve should give the matter some thought because if such modernization is resorted to, there are grounds for hope that the railways will become profitable.
He was right when he said that it was not quite logical to give an increase of 18 per cent across the board, as our friends say, because on the whole, those who are getting smaller wages will benefit less that those who are more highly paid, while the cost of living is the same for all.
I was also struck, Mr. Speaker, by the remarks of the Minister of Transport (Mr. Pickersgill) who, convinced as he is of the importance of his bill, said as reported on page 7994 of Hansard: "We are ready to stake our lives on that". That is not a verbatim quotation, but that is what he meant. Presumably, he will not have to do it, but I hope the Minister of Transport and all those who share with him the responsibility for the development of this legislation will nevertheless take into account all the comments made here and those that will be made at the committee on transport and communications and bring in some amendments which are obviously required.
An hon. member of the opposition also said that he noticed that morale was down among C.P.R. employees. He was perfectly right, and I do not see many members of this house who did not have an opportunity of seeing that for themselves during their frequent trips on trains.
One wonders whether the C.P.R. is not neglecting its passenger service simply to have the government allow them to get rid of that white elephant, now that they have taken off everything profitable in the concessions made to them by the country. Anyhow, I will return to this point a little later on.
The leader of the New Democratic Party (Mr. Douglas) gave us the history of the railways to remind us that they had received extraordinary and fantastic advantages from the Canadian people and he concluded by saying that the railway companies did not have today the logical reaction they should have by giving back to the people, at least to a certain extent, what the people gave them.
September 6. 1966

It is in that spirit, Mr. Speaker, that I will make some constructive criticism.
I hope that the Transport Commission will have teeth; teeth which will have enough bite to compel those in the railway companies to fill certain gaps, to remedy certain deplorable deficiencies. Once again, I do not wish to present a complete picture of the situation; I will rather proceed by means of illustrations.
Mr. Speaker, despite everything that can be said about the financial plight of the railways, I cannot see why most railway stations in Canada should look shabby and the surroundings neglected beyond belief; the responsible people seem to forget that this is the place which visitors from foreign countries, tourists, for instance, might regard as the face of Canada. Buildings are left in a dilapidated condition with inconceivable thoughtlessness. Some will say that this is because of adverse conditions but it is too important to show a proper face to our visitors to leave things as they are. I am thinking of Expo 1967 which will bring thousands of visitors. Those who travel by train or by car, and who approach railway stations, will find that one station out of five only is in good condition; it is reasonably modern, and painted, and does not look like a hovel or an abandoned house. This fact should be pointed out to those who have the responsibility in this matter.
Mr. Speaker, it is also my opinion that the passenger services are awfully neglected. This has been mentioned many times; I repeat it, because this service is a must; the commission should be specifically instructed to see to it that railways cease to neglect the travelling public, either by abolishing branch lines, which seem to be necessary because of a lack of passengers, or by a lack of deference towards passengers, or in discouraging people to take the train, so as to get rid of them.
It should be determined, Mr. Speaker, whether it is good, logical and morally right for the railways to have obtained their early concessions from Canada including land and natural resources and all sorts of things, in other words millions of dollars in grants and subsidies coming from the taxpayers and then, having invested in different companies all the proceeds from their concessions, isolate passenger service only and say: This is unreasonable; what is economic about our badly-financed organizations?
Transportation
That is incredible, Mr. Speaker. They did not make those distinctions when they asked the Canadian people to grant them all those concessions; they were ready to provide all sorts of services for Canadians and they did provide them then. Now, however, if other services are more paying than passenger service, part of this profit should be used to continue giving the Canadian people, who paid for it, the services to which they are entitled.
Mr. Speaker, the men, the employees, the railwaymen are also complaining about all sorts of things, particularly that they are not always treated in a humane way. I am not one of those who like to play the demagogue. On the contrary, I am of those who on occasion remind the workers that they not only have rights in society, but duties as well. We did it yesterday, on Labour Day; our workers hear that; they listen attentively and take it into account.
[DOT] (7:00 p.m.)
But someone must remind those people of their grievances once in a while. For example, train conductors tell me that they were away from home for two or three days and that they went to eat a good steak at noon-one knows how much a good steak costs; at least $2.75,	$3, $3.50; in some areas of the
country, where it is less expensive; in certain places, the best steak costs $4.50 and I suppose they are just as entitled to it as we are. And yet their expense account is cut down to $1.25 to $1.50 under false pretexts.
How can the morale of those workers be good, when they see the railway company make savings on the cost of their steak at noon, instead of making more eflective ones? Their morale certainly cannot be good.
Mr. Speaker, I have personally seen, for example, in Montreal and also in Toronto, under certain circumstances, railway employees who work outside their home towns and who can only visit their families on Saturdays and Sundays, forced to wait sometimes half a day because they cannot travel aboard any train; they can only ride on certain trains. They have to wait at the station, after having been away from their families for a week and they cannot take the train which would bring them back home as soon as possible. As a result, they hardly spend a day with their families, their wives and children.
How do you expect the morale of these people to be high?

September 6, 1966
Transportation
Mr. Speaker, I have visited personally in the Ottawa area, railwaymen who work on railway construction and have to stay away from home for whole weeks on end. I went to see the cars in which they live and I may state that conditions regarding sanitation and cleanliness are repulsive. Such conditions are inadmissible in this era. For instance, to quote only one example, it seems to me that blankets should be washed more often than once every five or six months. To me that would appear to be elementary. The same applies to the sanitation. It would appear that it has not yet been understood that we no longer live in the era that we, older people, have known-where some of those sanitary services were lacking, where there was, especially for those coming from the country, only a pump and, sometimes, only a well in the yard to supply us with water, and where, for lack of other sanitary services, we sometimes had to take a walk to the back yard. Well, conditions are no longer like that; such a situation is not admissible in 1966, especially if one wishes to say that all possible measures are being taken to keep the railwaymen's morale high. Therefore, those people have complaints.
Next, there is the question of forthcoming automation; evidently, that is even more important but I shall not venture into it. However, I would ask hon. members to understand the anguish of those people who have spent 10, 15 or 20 years with the railways and who believe that by reason of automation, they will perhaps be dismissed, their training making them ill-prepared to secure employment elsewhere. They expect that the government, through its Canadian transport commission, or perhaps through the agency of the Department of Manpower, that is to be established, will guarantee to them a sort of rehabilitation, in short, a change of job inside the company if, eventually, automation should mean the loss of their livelihood.
Mr. Speaker, we must keep in mind, while we are revising the Railway Act-because not only the interest of the companies is to be considered, once again-that there is not only the financial interest to be considered, but that we must take into account the human aspect. We must not forget that.
At this stage, Mr. Speaker, I will make a more personal comment. I know that some members of this house will find that we are discussing this at right and wrong moments,

and I know that it will probably hurt certain members of this house. However, I wish to remind them that we have no intention of engaging in destructive criticism. If they feel hurt by my remarks, they should keep in mind that we were hurt for a long time when we were, shall I say, victims of certain omissions, certain errors. I am telling this to the hon. minister, knowing his good disposition, expecting that he will want to take measures so that errors will not be committed as they were before.
On page 3 of the bill, Clause 6, it is stated that a board of 17 members will be created. I ask myself immediately: will there be a reasonable number of competent persons among the 17 members, be they from the province of Quebec or elsewhere? Will there be any? I have been assured that there would be, Mr. Speaker, on another occasion when we were dealing with the National Arts Centre. I was told: there is no need for those things to be written in black and white in the act, because we mean well and this will be done.
I believe that this is generally the case. I feel parliament has dealt with the French Canadian element in Canada with probably more fairness than most of the previous parliaments. I am ready to state this in all frankness, but I must also say say that there are still a few things which worry me. I remember, in particular, when the corporation was created for the administration of the Ottawa station, I saw five English names and not one French name. I told myself: is it possible that there could not be a French Canadian in the 10 provinces who would possess the necessary qualifications to be a member of this corporation? And you will understand why this worries me.
I repeat this for the fourth or fifth time, and do not interpret my speech as being in any way separatist; I am one of those who wish to make a serious attempt at federalism and I am ready to make the necessary sacrifices; but I am telling those who do not believe we have a generation of young French Canadians who are angry, because they examine the history of confederation over the past century and they are not satisfied with the treatment they have received, and they are the first instigators of separatism, since they do not act with due fairness toward those people.
September 6, 1966

I will make another remark, Mr. Speaker, and, this time with probably more equanimity. I was shocked to see on page 39, section 329 of this bill, something that reads thus:
(1) In this section-
-the definition of eastern ports-
(a) "Eastern port" means any of the ports of Halifax, Saint John, West Saint John and Montreal and any of the ports on the St. Lawrence River to the east of Montreal;
I do not see the name of the harbour of Trois-Rivieres. It is classified among any of the ports. Mr. Speaker, the port of Trois-Rivieres is proportionately the most paying of all Canadian harbours for the National Harbours Board. It could have the honour of having its name in the bill. I take it for granted that the minister will not refuse me that pleasure.
And now, Mr. Speaker, I would like to raise another point. I would like to suggest to the hon. minister to invite representatives from the Canadian Federation of Mayors when this bill is discussed in committee. They have constructive remarks to make concerning the taxes the railway companies have to pay. And this point I make to you in the most constructive manner-I know since I was for several years on the executive of the Canadian federation of mayors. Mayors of Canadian communities where huge railway installations are located are dissatisfied with the treatment of the municipalities on the question of taxes.
It is not my intention to elaborate on this, but I suggest that they be called before the committee to make known their grievances. This is simply a constructive suggestion.
And finally, Mr. Speaker, I conclude with two remarks. There was reference a while ago to disputes which might arise between provinces. To my mind a desirable formula for the establishment of this transport commission, would have been for the federal government to invite each provincial transport commission to send a delegate to that federal commission. This would have been a way to show implicitly, even in a field of federal jurisdiction, that there is a desire for co-operation between the central government and the provinces.
And in conclusion I shall say this to the house. Mr. Speaker, I have a feeling that the requirements, the problems and the sacrifices of the trucking industry in Canada are not being fully taken into account. If it is true
Transportation
that the railroads have exerted a decisive influence on the economic development of this country, it is also true that the trucking industry with its own money, and against all comers has achieved something impressive, notwithstanding that it has to compete with the railways which are subsidized in the way we all know.
I think the trucking industry should enjoy special consideration; I would even go further, Mr. Speaker, and say that, in my opinion, the railroads should not be allowed to compete with the trucking industry with the taxpayers' money.
I believe the Canad'an trucking industry is capable of absorbing what the railways cannot carry. The trucking industry did it up to now with their own money, with their own means. What they have done should be recognized or at least government grants should not be used to create competition.
Mr. Speaker, I wish to say in conclusion that if, by setting up this transport commission, certain railway companies persist in wanting to make a profit on economic lines while refusing to spend some of it on uneconomic lines and to give the Canadian public the service to which it is entitled, well, I for one suggest then that we had better think about nationalization. I do not favour nationalization as a general rule. But in the case of such an important service, I think we should perhaps go ahead with it. But nationalization should not then be confined to means of transportation but also to all concessions made to the C.P.R. to everything the C.P.R. has invested in other companies which are extremely well off today; all that was given to those transport companies should be returned to the Canadian public for the benefit of the Canadian public.
This being said, Mr. Speaker, I nevertheless commend the government for the timeliness of this bill. It is timely and I know people have been clamouring for it for a long time. I also suggest-and I know the government has sense enough to do it-that some of the recommendations which will be forthcoming should be taken into account, that certain people, certain representatives, should be invited to appear before the transport committee and their recommendations heeded. May I mention in this respect the representatives of the Canadian Federation of Mayors and the representatives of the Canadian trucking industry and, of course, labour representatives who expect the government to finally settle the problem which it has started to

September 6, 1986
Transportation
settle by introducing the bill we passed the other day.
[DOT] (7:10 p.m.)


J. Michael Forrestall: I join with a number of speakers who have preceded me in extending to the minister my personal compliments on having given birth to this long-awaited baby-although it is not exactly a baby; it is probably one of the most far-reaching pieces of legislation ever to have come before this house.
I am a young man, but for the last ten or 15 years I have followed the progress of parliament and of the various governments of Canada in their pursuit of a national transportation policy which would embrace all forms of transportation and the general held of communications. What we have before us now for approval in principle is indeed the basis of worth-while legislation. I could go on to praise many aspects of it, but I am afraid that like most members of the house I have not yet had the opportunity to avail myself of expert opinion as to the effect it is likely to have on certain traditional positions.
As junior member for the constituency of Halifax it might be redundant for me to place on record the full extent of the effect this legislation in its present form is likely to have on the port of Halifax. It is difficult to describe in a few words the importance of transportation to the port, to the local economy and indeed to the entire province of Nova Scotia. Its role is a dominant one. Around our port and the movement of goods through the port, around our military and naval establishments centre all the hopes we have in Halifax, and that general area, for an advance at a pace "commensurate with the rest of Canada", to use a phrase from the bill itself. In this light it is obviously of importance that the consequences of this bill should be understood clearly and that at least one or two assurances should be forthcoming.
The provisions of this measure will affect, among others, longshoremen, customs and immigration staff, railway employees, freight workers and maintenance men together with a vast range of associated interests. It is probably true to say that from 25,000 to
30.000	people derive a livelihood from an occupation directly related to transportation.
In terms of tonnage, the general cargo volume has been running somewhere around
1.250.000	tons in the last year or two. Perhaps I should include the value to Halifax of bulk .cargo shipments which have a direct dollar

value to the port and to the local economy of at least $18 million each year-not an insubstantial sum by any means, and this estimate is probably a conservative one.
During the past two or three years we have seen a levelling off of the second major factor in our economy-the income deriving from the military role of the area. For many years there was a continuing increase in the effect of the military dollar upon our economy. This is declining every day. Indeed it is almost gone. But these are two factors which are directly associated with rail transportation, and because of our isolated position they must receive first and primary consideration in my mind as a representative of Halifax.
As I understand the bill before us, which we are being asked to approve in principle, no assurance is given beyond the stated two-year period, notwithstanding the valuable work now being carried out by the special Atlantic provinces study group, and the recommendations it may make to the government at some time in the future. There is nothing in the bill as far as I can see which would protect the traditional position of the maritimes, and if the Minister of Transport thinks otherwise perhaps he would be good enough to say so.


John Whitney Pickersgill: Since the hon. member was good enough to invite me to intervene perhaps he would allow me to draw his attention to the fact that the rates set under the Maritime Freight Rates Act are not altered in any way. The new protection which was introduced only in the last couple of years in connection with Atlantic and Eastern Grain rates is contained in this legislation, and no rates in the region can be changed at all for two years, and then only those which were frozen a very few years ago under the Freight Rates Reduction Act.


J. Michael Forrestall: I thank the minister for that reply but I am still not certain that what he has said is the assurance we are looking for. The minister knows as well as I do that our competitive position under the existing Maritime Freight Rates Act puts us into a very broad category and places us at a disadvantage of some 30 per cent compared with other areas. This has been the subject of many letters to the minister; he is familiar with it and I do not think I need elaborate. It will be difficult for me and for most maritime members to give the bill support in principle. It is not good enough for the minister to give assurances. It must be in the act.
September 6, 1966


An hon. Member:: Put it in the act.


John Whitney Pickersgill: Put what in the act?


J. Michael Forrestall: An assurance as to what is to happen at the end of the two-year period. I will not go into it further at this time. I think the minister well knows what I am talking about.
+ (7:20 p.m.)
The hon. gentleman is aware of the tremendous difficulty attaching to the shipment of goods from the maritimes to the western regions and from the western regions to the maritimes, as well as to the north. There is the problem of captive shippers. Quite frankly in respect of a captive shipper I think all shippers would be much better off if it were their decision to choose whether or not they were to be captive. It should be their choice and not that of the commission. In spite of the fact that the bill includes a broader definition of what a captive shipper is, it would seem to me on the surface that it would be much simpler and much more feasible if indeed the shipper himself, after recourse under this act, was able to elect whether or not he will be a captive shipper and come under the provisions and clauses in the act.
Just to refresh the minister's mind in respect of captive shippers, going back to 1963, shipments moving from the maritimes to western regions under class rates and noncompetitive commodity rates in 1963 accounted for 70.7 per cent of all movements. Back in 1949 this figure was 76.3 per cent. It has come down only 6 per cent in the 17 intervening years since 1949. Again, within the maritime region, as pointed out earlier by the hon. member for Acadia (Mr. Horner), under these two particular classifications, first the class rates and second, the non-competitive commodity rates, the total amount of movement by any standard in 1963 at least was 55.8 per cent. In 1949 it was 89.6 per cent.
I suggest these figures are significant, Mr. Speaker, because they do point out the tremendous number of people in the maritimes who fall into this broad category of captive shipper. It is at this point that I am sorry the minister has left the house. He knew what I was talking about and perhaps that is why he left. It is because of the large classification of people and the fact that it is so substantially large as compared to captive shippers in the central region, and because of the impact that any change in the freight rate is going to have on this large body that I must reiterate
Transportation
the necessity of incorporating in the act in terms which are clearly spelled out and which leave no doubt in the mind, just what is going to happen in respect of the two year period of freeze on the present structure.
The study being done by the Atlantic provinces transportation group is not due before the government until January 1 of next year. Because of its complexity I am a little sceptical about whether or not they will have a final recommendation for the government by that time. Indeed, a more likely date would be late spring or early summer. Because of this, because of the lapse of time which will take place between now and the time this information is available to us, plus the fact that we now have the government asking for approval in principle of this new bill, and because of this lack of time which is going to lead to further uncertainty and doubts, I suggest that unless something is done at this stage in the passage of this legislation the effect of this bill will be of deterioration and of disadvantage. Further, it will throw obstacles in the way of all economic communities with regard to planning of projects and of production capacities. They will not know where they stand. No businessman is going to enter into expansion ventures of any magnitude when there is doubt and perhaps more than doubt as to the position of the railways.
Perhaps the government does not know what it is going to do. Surely that is not so. Surely we can get some assurances built into this bill, some assurance that will let people plan and which will let them program a project or a proposition on a sound economic basis. It is not enough at today's pace to look two years into the future. Industry needs much more time, much better information and much more solid information upon which to base its projected economic expansion and planning.
Another point I should like to mention is the maximum rate control. It is important to know the definition of a captive shipper, but what is more important is the manner in which the maximum rate is to be calculated. It has been said before, and I will repeat it, that until such time as the actual basis upon which cost is founded becomes a matter of public knowledge, public understanding and public awareness, there will always be misgivings and doubts. An immediate example of this is to be seen in that fact that for years and years people in the maritimes have been

September 6, 1966
Transportation
wanting to know, lor example, between Toronto and which city, Saint John or Halifax, the compensatory rates have been based. If they were based upon the port of Saint John, then the subsidies must have been quite expensive to move goods to the port of Halifax. If, on the other hand, the rates were based on the port of Halifax, then the railways must have made themselves a small fortune on the movement of goods to the port of Saint John.
This is not a factor but rather a symptom in respect of the cause of the concern and unrest in the minds of the shippers. I have always been dissatisfied with our position under the Maritime Freight Rates Act. Indeed it has deteriorated; it is not the best in the world. As a matter of fact it is one of the worst, but what is worse would be to let this legislation in its present form go through. As I have suggested it will throw out planning; it will lead to further erosion in the port of Halifax and indeed in Saint John and all the other areas east of the river ports.
[DOT] (7:30 p.m.)
We have heard a great deal lately about what has been done regarding the so-called lag in the development of the economy of the Atlantic provinces in contrast with the rest of the country. The present consensus would appear to indicate that while our primary industries will become more efficient and productive they will not employ a greater number of people, and that consequently our greatest hope for employing and retaining the substantial majority of people growing up, being educated and establishing businesses in the Atlantic region today lies in those means which will lead to a satisfactory atmosphere of expansion and development of secondary manufacturing industry.
The cost of transportation to and from central Canada is the principal reason secondary manufacturing industry in the Atlantic region has not developed at the same rate as elsewhere. So long as this country and its trade tariff policies remain constituted as they are-and I doubt if there is anybody who could seriously argue with this-the cost of transportation will persist as a major economic problem to Halifax and the Atlantic region. Indeed, I suppose this could be said to be the major problem in the port of Halifax.
When navigation on the St. Lawrence, the St. Lawrence seaway and over other transportation developments which have taken place in other regions of the country, hold no

threat whatsoever to our export-import traffic, and if the principle of port parity can again be effectively incorporated in railway freight rates over land haul from eastern ports to central Canada, there will be an improvement.
The Maritime Freight Rates Act, as the minister knows, has no application to this type of traffic. We are freezing the Maritime Freight Rates Act, but we are not doing anything about this traffic. Indeed, it might be useful if the minister found an occasion to define clearly what are year-round ports, and if he were to bring back the principle of parity, declaring the port of Montreal and ports on the lower river, and coast to be equal. I am sure at that time the minister will find many friends in the Atlantic provinces, myself numbered among them.
The MacPherson royal commission called the Atlantic region an area of significant monopoly, and I have presented figures from the transport committee hearings of last year to substantiate that suggestion. One of the results has been a greater implementation here in the Atlantic region than in other parts of Canada of the several horizontal freight rate increases authorized during the 13 years immediately following the last war. One must consider that transportation has been and probably will be for many years much more intensively competitive in other parts of Canada.
It is difficult to believe that this development did not in some way have an adverse affect on the objectives of the Maritime Freight Rates Act. No government study so far appears to have considered this factor. It has been entirely overlooked. It is also difficult to believe that the objectives of the Maritime Freight Rates Act and the national policy it purports to implement do not require some revision, having regard to all that has taken place since they were originally conceived in 1947. No government study appears to have been made in this field.
It is true that extensive studies were made by the maritime transport commission prior to presentations being submitted to the MacPherson royal commission; but apart from the amendment to the Maritime Freight Rates Act in 1957 there appears to be little or no evidence that this excellent work received any attention at all, let alone the attention it merited.
Without reviewing it too extensively, the national policy for the Atlantic region, as
September 6, 1966



formally enunciated in 1927, was based primarily on the Duncan royal commission on maritime claims. The result of that was the passage of the Maritime Freight Rates Act, an act which sought to give statutory form and authority to certain of the conditions which, either implied or expressed, were nevertheless part of the agreement under which the maritimes joined with other British colonies to form Canada.
I am sure all hon. members have heard the words of Georges Etienne Cartier, and they are as worthy of repetition today as they will be in a thousand years. He said, and I read from a quotation to be found at page 956 of the committee reports for 1964-65:
It is as evident as the sun shines at noon that when the Intercolonial Railway is built-and it must necessarily be built if that confederation takes place -the consequence will be that between Halifax and Liverpool there will be steamers almost daily leaving and arriving at the former-in fact it will be a ferry between Halifax and Liverpool.
He was referring to Liverpool, England, not Liverpool, Nova Scotia. You might well ask me the point of this quotation. It is simply this: When serious matters concerning shippers in the Atlantic provinces have been raised and when studies have been made of these problems by independent groups, particularly the maritime transport commission, and it appears that no attention has been given to them, the words of Cartier not only become less and less true, they become nonsensical.
What Cartier was saying in principle was true 102 years, less six days ago, and it will be true a thousand years from now unless the government does something meaningful to bring the standards in the Atlantic area into parity with the rest of Canada. I could go on and outline a particular case for the port of Halifax and the people of the Atlantic region, but I think my point has now been made. The government must give some consideration to the position of the shippers and industries of the Atlantic provinces. Hopefully it will bring forth an amendment which will give assurance in respect of our requirements, if business there is to prosper during the next few years. This would remove the threat which now exists because of a lack of knowledge as to what will happen at the end of this freeze period.
I am compelled to say that as the situation now exists, notwithstanding the stated assurances of the minister and the hope of assurances and recommendations that will come
Transportation
from a special transportation study, the minister must act to put these assurances in the form of an amendment to the existing legislation, before I can approve of this bill in principle.
[DOT] (7:40 p.m.)
Before the time at my disposal runs out, Mr. Speaker, I wish to make a few comments in regard to an area that has not been dealt with in any detail. Again I am sorry the minister is not here, because he could probably set my fears at rest. My remarks deal with the incorporation under this broad bill of the Air Transport Board, and the Aeronautics Act under which in part the Air Transport Board operates. The bill deals very briefly with what is going to be done in connection with the Air Transport Board. It deals with what will happen to the chairman of the board and the commissioners. It deals with the employees of the board, and so on, but it does not tell us anything at all about the act. In an earlier part of the bill it is suggested that the regulatory powers provided under the existing statute will simply be transferred. I am not sure what this means. I am not sure what will happen between the word and the actual fact. What is to be transferred? Will there be an opportunity to review the existing regulatory powers under the Aeronautics Act?
For example, Mr. Speaker, will this bill provide an opportunity for members of the aviation industry in Canada to step in forcefully and hopefully, at the invitation of the minister, to express their views on general aviation matters? Will an opportunity be given for them to assist the minister in the formation of policy in this connection? Indeed, does the minister envisage any change in the present act or regulations? When are we to get a general aviation policy? When are we to get a regional aviation policy? Are we to draw any inference from the general theme of compensatory principles? Are we to draw the inference from the bill before us that passengers on air lines will travel on a basis compensatory to the carriers?
In this connection, what is to happen with regard to building up air freight lines? In recent years steps have been taken in this area not only in Canada but througout the world, and it has been seen that companies with faith in the growth and future of the country may in these circumstances experience some lean years. None of these matters

September 6, 1966
Transportation
are dealt with in this bill. We are left in vague, gray shadows in this regard. We are urged: Do not worry about it; everything will be all right. Members of the general aviation industry in Canada have not yet spoken out too loudly in this regard but I am certain that during the next 12 months-and I am sure it will not take that long to pass this mammoth piece of legislation before us, after a thorough discussion of its priciples-they will come forward with many questions of the minister. He could deal with these questions now, and set the minds of these people at ease, during our discussion of this bill.
Then, Mr. Speaker, what is the position with regard to appeal provisions in the bill? Under the existing regulatory powers appeals are held and dealt with in the final analysis in the minister's office. Surely nobody in the general aviation industry in Canada wants to appeal a matter to the minister's office and obtain a ruling under the act. However, the present act says that they must. In regard to every other form of transportation there is the right of appeal to a technical or legal board, but that does not apply here because the appeal is to the minister's office. Appeals taken in connection with other forms of transportation are not heard by the minister, and I hope these people are discouraged from running to his office every time they have a problem.
I ask the minister why this situation could not be changed and why something could not be spelled out in the bill to deal with these matters. The question of appeals alone has been the subject of many, many representations over a period of years. One of the major reasons for the hue and cry in the last ten years has been the lack of a definite regional and national air lines policy in Canada. Now that we have a transportation bill dealing in a broad way with these problems, why is this policy not laid down? Why must we wait until some vague, indefinite and unmentioned point in the future? Certainly this policy has to be changed. The present minister, and ministers before him, have assured this house on a regular basis, in response to questions from the floor and in reply to correspondence and inquiries from the industry generally, that we will get into this whole field of regional air policy soon. We have been told that we must devise a policy in this area. But now we have the bill before us and it contains nothing dealing with this subject.
Then there is the question of main fine domestic policies. Are they to remain the
[Mr. Forrestall.l
same? Will the same bodies bargain for us in connection with international air line routes? Will they bargain for us for extended freight routes? When will we get around to dealing with the question of the Aeronautics Act, which is left hanging and vague in this bill? The only persons protected are the members of the present board, and there does not seem to be any concern for other matters in this connection. Clause 82 of the bill says:
Upon the coming into force of Part I, a person who, immediately before the coming into force of that Part, was a member of the Air Transport Board becomes a member of the Canadian Transport Commission with like effect as though he had been appointed thereto under Part I on the day that he was last appointed to the Air Transport Board.
The same position will obtain with regard to the employees of the board. As I have said, the status of the chairman of the Air Transport Board is dealt with, and rightly so. But nothing else is spelled out; there is no indication of what will happen in other directions. Indeed there does not seem to be any great concern in this regard. In the field of private aviation there are many, many vital questions. Many of these questions deal with the utilization of privately owned aircraft, privately owned and operated airfields, the use of aircraft both private and commercial and the use of military airfields for commercial purposes. These are all matters under the purview of the Air Transport Board and the air services branch of the Department of Transport. They are important matters and many thousands of Canadians are vitally concerned with them; yet the minister has done nothing to explain to this important sector of our national economy, what it is intended to do, when it will be done or whether anything at all will change under this new bill.
One of the direct results of a lack of general aviation policy in Canada, particularly a regional air transportation policy, has been the extreme difficulty on the part of regional air carriers to provide an effective and economical service in the areas they attempt to serve. Again, here, the lack of further direction only tends to restrict them. It is difficult to plan unless you know under what authority and under what rules and regulations you are going to operate in the next few months or years. Without this knowledge this section of our economy remains at a disadvantage. Mind you, it has been at a disadvantage for a long time, but these regional air carriers are pretty stout
September 6, 1966

fellows who will probably button their lips for another few months. However, sooner or later they will rise and demand that the minister explain to them what their future will be.
[DOT] (7:50 p.m.)
This legislation has been promised to them for years. Now we have it and there is nothing in it. There can only be dismay, discouragement, bewilderment and wonderment over what the government is attempting to do. This is a broad and sweeping bill which deals mainly with railways. But railways are not the only communication media in Canada; these thoughts are very real in the minds of the regional air carriers, and they will bring those thoughts forward forcibly.
Mr. Speaker, in conclusion again may I urge the minister to give assurances and to spell out in clearly defined terms that the maritime shippers and the maritime industry will not suffer and will not be put at a disadvantage once this bill becomes law, and at the conclusion of the two-year freeze period.


Mr. Robert C. Coates (Cumberland):: Mr. Speaker, one has only to peruse Bill C-231 in order to arrive at the conclusion that a great many more questions arise from it than there are answers contained in it. It has been indicated in the debate today by a number of hon. members who have studied the bill and endeavoured to inform themselves to the best of their ability that they are left with a very significant question in their mind regarding their approach to this bill on second reading. It would be much simpler if the government were to refer the bill for study in the standing committee and allowed the experts in these various fields to appear before the committee, to enunciate their criticisms and express their views on how this bill can be improved,-if indeed it can be improved; some may believe it is perfect as it is. This would place members of this house in a better position to arrive at an informed conclusion on the bill. If the government forces hon. members to arrive at a definite conclusion without proper evidence being made available to them, it will place them in a difficult position.
I hope the government will not endeavour to get this bill through second reading before the standing committee has had time to consider the broad general philosophy behind it. If we are to leave shortly for the remainder of the recess with a clear understanding of what will happen in regard to a national
Transportation
transportation policy, then we should first send this bill to a committee for thorough consideration. I do not think that even if we spent the whole of this week debating this bill in its present form we would find ourselves in a position to make an educated estimation of its value. I hope the government will consider sending the bill to the standing committee before it obtains second reading.
I would now like to turn to some of the general questions which have arisen in my mind as a result of studying this legislation to the best of my ability in the short period of time available to me. First of all, transportation has always been of main concern in this country because our economy has evolved our trade patterns from east to west rather than from north to south. We in the maritimes or the Atlantic area are well aware of the complexities that will face us when this legislation is adopted.
The Maritime Freight Rates Act has dealt with the inequities in transportation which have developed between the maritimes and the central part of our nation. This act has been used to develop the philosophy of east-west transportation and to try to equalize transportation charges which must be borne by the people no matter where they live. The government is fully aware of the fears of the people of the maritime provinces regarding freight rates. I need only quote portions of an editorial which appeared in the Moncton Daily Times and which reads as follows:
The new legislation enunciates manifold changes, among these some of marked significance in what has heretofore been long observed transportation rules and regulations governing not only the railways but steamship and other shipping operations, and the air lines. The three federal regulatory bodies which have jurisdiction over the respective phases of the nation's transport-Board of Transport Commissioners, Canadian Maritime Commission, and Air Transport Board-are planned for consolidation into a single agency to be known as the Canadian Transport Commission. This body will have seventeen members.
Inasmuch as it is proposed to afford the railways greater measures of freedom from the presently governing rules and regulations, the Atlantic provinces in particular have especial interest in that important aspect of freight rate making. One of the proposed freedoms is that the railways will have more power in adjusting their freight charges to make these, where considered necessary, more compensatory.
In the consideration of this new legislation and in that part of it relating to the terms of the Maritime Freight Rates Act, the members of parliament from the Atlantic provinces must hold the government not only to preserving the rights given this seaboard region by the Maritime Freight Rates Act

September 6, 1966
Transportation
but to providing guarantees that there shall be no further erosions of such rights through blanket or any other type of increases in the freight tolls.
[DOT] (8:00 p.m.)
In the light of the sacrifices which the martime provinces have made toward maintaining the Canadian confederation in other ways, neither the government nor parliament should lose sight of such facts.
The Minister of Transport (Mr. Pickersgill) indicated a short while ago that we have a guarantee in the legislation that there will be absolutely no alteration in our rates for the next two years. For this, we are very thankful. I am sure that the fact the minister comes from the Atlantic area had a good deal to do with the recognition that fears must be allayed in the Atlantic provinces that the rights we have now will not be eroded in any way. I say to you, sir, there is another aspect which I should like to have the minister consider. It is the fact that if the government believes the Maritime Freight Rates Act is a fair act, a realistic act, in the development of a national transportation policy, should there not be the same consideration given to the Atlantic provinces in relation to other forms of transportation? I mention especially air transport and pipe lines which, for the first time, will be coming under the national act, as well as road transportation which we might as well admit has been a provincial responsibility up to the moment.
I believe that if the philosophy behind the Maritime Freight Rates Act is accepted by the government, then the government should indicate in this legislation, which to the best of my knowledge it has not done, that similar consideration will be available to the Atlantic provinces in these other fields, that similar recognition will be coming forward to the Atlantic provinces in connection with other forms of transportation. One result of such consideration may be that we would be able to progress at a much faster rate than is in evidence at the present time. Since I have been in this house, it has been obvious that transportation problems are at the core of many of our economic problems. It is in this field that we spend most of our time in our debates in this chamber.
I should like to mention only two or three examples. In Nova Scotia there is a good deal of discussion concerning the establishment of a second ferry between that province and the New England states. There is money being expended at the moment on the building of a causeway between New Brunswick and

Prince Edward Island to form a more satisfactory link and to make the products of Prince Edward Island more accessible to the remainder of Canada. In New Brunswick, as well as in Nova Scotia, there is a good deal of discussion about the building of a road through the state of Maine, so that we would have greater access to the markets of central Canada, or Ontario and Quebec, if you would rather have the area described that way, since people in those parts of Canada do not appear to like being told they are from central Canada.
Our problems are basic, and harken back to the problems of transportation, the getting of our goods to markets at the cheapest possible rate. We have a new conception determined by the MacPherson royal commission, and put into legislation on two occasions by this government. The legislation is so complicated that it takes more than a week for a layman to understand it. The government however is asking us to give approval to the principle of this legislation before we really have a good understanding of what the legislation will do for us or to us. It is the latter part that we in the maritimes fear more than anything else. I mentioned earlier the Maritime Freight Rates Act, and the assurance was given by the minister that nothing would be done for a period of two years. This is very specifically set out in the legislation. However, we have no assurance about what is going to happen after the two-year period. In the maritime provinces, we feel a little leery about leaving it up to this 17-man board to make the decision on their own after this two-year period.
I would think a satisfactory alternative would be to have the recommendations made when that study is completed brought back to parliament so that parliament may be able to make the decision about what should happen at the conclusion of those two years. I think we in the maritimes would be much happier if we thought, before any final decision was going to be made at the conclusion of the two years, that parliament would have an opportunity to hear from the members representing that area.
I refer to another section of the bill which will be of real concern unless some assurances are given by the government. I refer to what will be section 329A of the act and which deals with eastern rates as they are defined here for eastern ports. Since 1960 there has been a freeze on these rates. They are, and have been, of assistance in maintaining business at our eastern ports. We want
September 6, 1966

something in the way of an assurance from the minister about what kind of decision is going to be rendered in the future on these eastern rates. We want an assurance that our ports are going to be maintained at the highest possible level.
One who comes from the maritimes does not have to live in either Saint John, New Brunswick or Halifax, Nova Scotia to appreciate that the level of prosperity in those two areas has a good deal to do with the level of prosperity in the whole of the maritimes. Naturally, therefore, we are anxious to know more about what will be done with those eastern rates in the future. There are so many complexities in this bill, so many things to which we do not have the answer and may not for some time to come, that I do not really believe it is fair to ask a member to vote now. I think the bill should go to the standing committee, where it would receive scrutiny which would be of benefit both to it and to a national transportation policy. Members would then be in the position of making an educated assessment of the bill and would be able to make a determination as to whether or not it should receive their support.
[DOT] (8:10 p.m.)
By asking members to vote now I think the government is placing them in the position of being able to vote only one way, and that is against the bill. I say that because it is much safer to vote against something with regard to which you do not possess all the answers. One should be in the position of making a sensible and realistic assessment, one which would be of benefit to the nation as a whole. I do not think that any member of this house is anxious to vote against any legislation. We are here to endeavour to produce the very best legislation which can be made available to the nation. We are not "agin" anything. We are for reform, for the kind of reform that is going to be of benefit to our nation in its development. But at this stage it is hardly responsible procedure to ask members to indicate their views about a piece of legislation as complicated as Bill No. C-231.
Let us take a look at the history behind this bill so as to realize how complex it is; that is, if we are to judge from the length of time which the government had the MacPherson royal commission report before it before bringing in this legislation. Indeed, Mr. Speaker, had this bill been before parliament prior to last week this nation might very well not have been faced with a rail
Transportation
strike. The government and the minister considered the policy such a complicated and difficult one that they not only presented one bill which was then withdrawn, but have allowed this bill to come before the house only at a time of national crisis. I am not at all sure when the house would have got the bill had it not been for the rail strike. It may very well be that the minister would have brought it in this fall anyway; this is what he indicated; but the minister having found it possible to prepare the bill and bring it before us while a rail crisis was in progress, I cannot for the life of me see why he could not have brought it in before the recess. Had he done so it might very well have resulted in a negotiated settlement between the railways and the employees, and thus averted the damage that has been done to the economy by the strike that ensued.
I hope that the minister, who comes from the Atlantic area, or I should say, to be more specific, who represents a constituency in the Atlantic area, will give consideration to developing the same kind of philosophy as that embodied in the Maritime Freight Rates Act in regard to the various other forms of transportation that are becoming so important to the economy of the Atlantic area. There is today a tremendous development in the handling of freight by the air carriers. Here again we are in the position of having almost a monopoly situation, certainly with respect to transporting our goods from any part of the Atlantic provinces to any other part of Canada outside the province of Quebec. Surely if the government believes in the philosophy behind the Maritime Freight Rates Act it should be doing something to see that our advantages are equalized in the carriage of air freight just as much as in the carriage of rail freight.
While as yet we do not have the great benefit of pipe lines, I am sure that these will come. There again the same type of philosophy as embodied in the Maritime Freight Rates Act should be extended to the operation of pipe lines. So far as truck transportation is concerned, it is our only alternative today. Since the bill is to regulate this form of transportation in the future, surely this legislation should once again give us the same kind of protection and provide the same kind of philosophy for highway transportation as it recognizes for rail transportation.
I hope that the result of this legislation will be of real benefit to the Atlantic provinces. I hope it will spur our development and that

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we will progress at a faster rate than that
evidenced at the present time. But I think it is too early to predict what this legislation will do. I do not think we have available to us the kind of educated opinion that we need in order to arrive at a sane and sensible conclusion. Therefore, I would ask the minister to give consideration to withholding second reading at the present time and to allowing the committee immediately to go to work on this legislation, so that members are able to make an assessment which is in keeping with the gravity of the legislation when it does finally come before the house for second reading.


Harold Warren Danforth: Mr. Speaker, the news of the introduction of this transportation bill in the House of Commons was viewed with a great deal of real exhilaration on the part of the citizens of Ontario, especially those of southwestern Ontario. They felt that at last there was at least a chance and an opportunity to remove some of the restrictions and regulations in the government's transportation policy which have seriously curtailed and throttled the industrial expansion of that particular area.
[DOT] (8:20 p.m.)
For years industry, chambers of commerce, agricultural leaders and citizens of the area had petitioned, pleaded with and had interviews with the various governments concerned, but all in vain. Now, at last, with the entire proposition brought forward before parliament for consideration it was felt that an opportunity would prevail for views to be expressed on this most important legislation. There is one sad aspect to this, however. There was a growing feeling on all sides, that from the manner in which the railway strike was being handled by the present government a crisis was being deliberately fermented that might bring forth a climate which would be opportune for the passing of such legislation with strong public support.
On listening to the presentation by the Minister of Transport, and the various speakers who have taken part in the debate of this, the second reading, the magnitude and complexity of the bill is very, very evident. Those who are directly affected have found much to be concerned about, both in the clauses that pertain to their particular industries, and to the very principles that were either just mentioned in passing, or not dealt with at all.
Surely the people in Ontario have a great deal to be concerned about. Those in the area

I have the honour to represent, who are engaged in industry, are very much concerned to know what is meant by this equalization of freight rates; to know what is meant by a national policy. The farmers in my particular area want to know whether this will have any effect on the subsidies paid on freight with respect to western grains. How will they fare under a new bill?
The truckers too, are very much concerned. Will the action taken by this government in this transport legislation have the effect of removing the contentious subsidies the truckers have opposed for years? Will this enable them to compete on a more equitable basis? Will this provide the climate for competition and expansion they have sought for so long? Will this indeed be a national policy that will work toward the interests of all?
I was very much impressed when I heard the various participants in this debate talk of a national policy. Some expressed concern that this policy might break down into regional areas. Various members spoke of a particular problem that is of direct concern from a regional point of view.
Here in Ontario, and in Quebec, Mr. Speaker, how can we be expected to take any other course of action than we have, when we hear the suggestion that freight rates presently in operation, that is to say, government regulations in effect in the maritimes, will be untouched, that government regulations of direct concern to western grain producers will be untouched; that regulations concerning the Crowsnest pass will remain untouched?
When we hear this sort of thing being elaborated, when we hear the minister and various members of the government alluding to this bill as one which will enable the railways to be placed in a competitive position, one that will once and for all enable the railways to charge rates that will place them on an economic footing, why should those of us in Ontario and Quebec not become concerned?
We want to know where the money is to come from. We heard that the government at the present time is paying $100 million in subsidies. We heard that the increase in pay to the railway workers conceivably could add up to $30 million. We understand from the railway representations that the railways need more money in order to operate in the black. We are getting an uneasy feeling, Mr. Speaker, in Ontario, and I am sure in Quebec also, that if there is to be little change in the
September 6, 196G

maritime freight rates, if there is to be little change in the rates for the western provinces, any increase the railways may be allowed could conceivably come from Ontario, Quebec and British Columbia. If this is so, Mr. Speaker, certainly it will add a tremendous burden to every segment of industry in those areas I have mentioned. We begin to wonder if this money will come from us. Where is the money to come from? Where are we to get the needed additional revenue?


John Whitney Pickersgill: I wonder if the hon.
gentleman would permit me to ask him a question.


Harold Warren Danforth: Certainly.


John Whitney Pickersgill: I would be very interested to know whether, in expressing these fears, the hon. gentleman was speaking for his party?


Harold Warren Danforth: I think the minister knows, from long experience, that each member of the Conservative party is well able to speak for himself. I am speaking on behalf of the people I represent, who belong to an area, I think, that the minister has completely forgotten about. May I elaborate on that particular area, to give the house an idea of what I am talking about? We have been discriminated against. Certainly the Minister of Transport must know this. That is so partly because we are in the very centre of Canada, and partly because we are in that projection of Canada that juts down into the United States. As a matter of fact we are almost on the same parallel as New York city.
Because of this, the freight rates that we have to contend with are somewhat different from those prevailing in other parts of Canada. The area I refer to is comprised of five counties. In those counties, the value of agricultural and manufactured goods annually shipped is in excess of $1,250 million. The materials purchased in the area and shipped in represent a value of approximately $900 million. The annual payroll now exceeds $300 million. The number of employees is in excess of 80,000. This is the area that I assure the minister I am very much concerned about.
Why am I concerned, Mr. Speaker? What are some of the inequalities I speak of? Because of our geographic situation we are subject to two different types of freight rates. Anything we ship to the east is on the pound
Transportation
per mile shipping basis. May I give an example of what this means? When we ship 100 pounds of freight first class, let us say from Windsor to Halifax, the rate is around $4.15. The rate from Montreal to Halifax-Montreal is approximately 600 miles closer to the port of destination than Windsor-is approximately $2.59 less. We appreciate why this should be so. It is because Montreal, as I say, is 600 miles closer to the coast.
[DOT] (8:30 p.m.)
One would think that in shipping to the west we would have the advantage; but when shipping westward we are included in a zone which stipulates that goods shipped from Windsor to Winnipeg shall be subject to a rate of $5.89 per 100 pounds, though from Montreal, which is 600 miles farther east, we find that the rate is exactly the same. Why would industry be encouraged to establish itself in southwestern Ontario when by moving to Montreal it could get half the rate when shipping to the east and the same rate when shipping to the west? This is one of the inequalities of which I spoke.
Again we find ourselves handicapped when it comes to farm products, because of the policy laid down by the government. In our area there has been a tremendous expansion in the production of feed grain. Here, too, we are encountering a penalty. We find that when shipping to the maritimes we are penalized to the extent of almost $20 a ton compared with shipments from western Canada, and we see no reason why this should be so. When shipping to our traditional markets in the east we do not see why we should not be accorded a rate at least comparable to that given to the west.
These are some of the thoughts which occur to most people in southwestern Ontario. They know this is bound to be a complicated bill establishing a national policy. But they are uneasy. They feel that once more they will be asked to carry more than their fair share of the burdens of the transportation system.
Like many members who have spoken before me I had been hoping that the government would refer this bill immediately to the standing committee on transport. There is no question that such complicated legislation needs the best expert advice from whatever source. I had hoped the government would avail itself of the invitation to set up the committee immediately. I am asking the government now to entertain submissions which may be brought before such a body. Various

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segments of industry, including heavy industry, manufacturing, agriculture and trucking, not to mention the chambers of commerce and municipalities in the area which I represent, will wish to have the opportunity of placing their views before such a committee.
They would like to explain why the treatment to which they have been subject in the field of transportation has worked such undue hardship. These are the people who are likely to be asked, when there is any increase in the rates, to bear the economic burden and certainly they have a right to place before the committee any aspect of their understanding of the effect of this measure.


John Whitney Pickersgill: May I ask another question? Is the hon. gentleman not aware that it is the intention to give all interested parties the fullest opportunity to be heard before the committee when the bill is sent there?


Harold Warren Danforth: I wish to thank the minister for that statement, and I am certain he is sincere when he gives me that assurance. However, I cannot help remembering other occasions when delegations found the greatest difficulty in making their wishes known before committees set up by this government.
In the light of that assurance from the minister I will certainly convey to interested parties in my own area the understanding that an opportunity will be afforded them to make presentations before the standing committee, and I am sure they will avail themselves of this opportunity.
As I have said, this is complicated legislation, legislation which must deal with the needs of the nation as a whole. It is to be hoped that, when the bill finally passes, the citizens of Ontario and Quebec will be satisfied that they are not bearing more than their fair share of the cost of the development of a policy which will place Canadian transportation on an economic basis of operation.


Mr. Robert McCleave (Halifax):: I should like to say a few words to the house, more particularly perhaps to the Minister of Transport (Mr. Pickersgill) and to the Minister without Portfolio (Mr. Turner) who is basking at the feet of the old master. I said that slowly, Mr. Speaker, so that I would not fall into the trap into which the hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron) fell the other day by saying the wrong word. Perhaps before leaving the
lMr. Danforth.]
Minister without Portfolio, who is learning his lesson in excellent fashion for the warfare he faces in the days ahead with the Minister of National Defence (Mr. Hellyer), I should ask whether the Minister of Transport is also giving singing lessons.
When I first read the bill which is now before the house I was pleased with the provision dealing with the Maritime Freight Rates Act and term 32 of the terms of union of Newfoundland with Canada. Since then I have had some second thoughts because, really, we are dealing with two main transportation problems, not with one, and I would much prefer to have seen the whole national transportation policy spelled out, including those provisions dealing with Atlantic Canada rather than wait until some future time for special provisions dealing with Atlantic Canada to be written in.
This is the reason for my concern. As I say, there are two problems. There is the matter of effective and efficient transportation as related to manufacturing in Canada. Then there is the question of transportation as it affects our exports and imports.
In the second field, as a representative of Halifax I am bound to be concerned about the competitive position of my own area as compared with the competitive position of other areas, and I think the present bill may be defective in this regard inasmuch as it fails to come to grips with some of the problems of real concern to the area I represent.
[DOT] (8:40 p.m.)
There are certain developments in the field of winter works, for example on the St. Lawrence river, with which this bill cannot deal and yet which are vital in consideration of a national transportation policy. These developments are with us now. These specifically are the decisions of two conferences, the Canada-United Kingdom freight conference and the United Kingdom-Canada freight conference. They sound like tweedledum and tweedledee, but they are perhaps two sides of the same coin which are pressing for all-out winter navigation on the St. Lawrence river. Unless some measure is brought in to check this, the ports of Halifax and Saint John will be a matter of serious economic consequence to the Atlantic area. By the time these transportation studies are brought in the damage may become permanent. So, while I welcome the thought of the minister turning toward a national transportation policy-and I think he will recall that
September 6, 1966

I made that point, although it was rather an unpopular one, to many of my constituents during the emergency debate on the St. Lawrence seaway tolls-the national policy is not complete, because the Atlantic aspects of it are left out in the cold. I should like to express my doubts to the Minister of Transport and the Minister without Portfolio to the government, to the house and to the country as a whole.
I wish to deal briefly with one point and then get to the meat of my remarks. The port of Halifax commission has suggested to the minister I am sure over and over again that the only formula which can solve the problem I have just mentioned is to equalize the cost to the shipper of transportation between all Atlantic ports and the St. Lawrence ports. To carry out these purposes, I suggest that the Leader of the Opposition made a very sensible observation some weeks ago when he suggested that a high speed railway line be built diagonally across the province of New Brunswick. This should improve things for the ports of Halifax, Saint John and other maritime centres, as well as Newfoundland, and feed products into central Canada by a shortened and faster route.
The second problem has to do with the manufacturing business in Canada itself. Here I am going to present the results of two very thoughtful studies carried out by Professor Roy E. George of Dalhousie University, a man with experience as an area manager in the British coal Industry before coming to this country. He was a professor at St. Mary's University in Halifax before going to Dalhousie University. Professor George also has been commissioned to do special studies on Atlantic problems for various bodies. His points are germane to the problems of transportation.
Professor George's first study concerned the elements of costing of firms if they established in Atlantic Canada as opposed to firms established in central Canada. His findings have equal relevance, I suggest, to the prairie provinces because he was equating operations in central Canada against those on the periphery of the country. Instead of tackling this in a very theoretical way, Professor George tackled it in this manner. He found there were 27 firms which had manufacturing plants both in Nova Scotia and either Ontario or Quebec. This was in the year 1962. He wrote a series of communications to these firms to find out whether or not they would be interested in taking part in his study.
Transportation
Eighteen of those firms, or exactly two-thirds, replied that they were interested. So he proceeded, either by questionnaire or by seeing their executives directly, to ask questions so as to compare the various elements of costing.
I might say for the benefit of the minister that if he is not familiar with this study-and if he is not I will be pleased to provide it for him or any official in his department

that there were a number of factors involved such as labour, productivity, cost of the material, and other items; but for the purpose of this debate I shall confine myself to the study which relates to transportation. Of the 18 firms which co-operated in the study the breakdown is as follows: In the food group, two; in the metal group, five; in the chemical group, six; and in the miscellaneous group, five, making a total of 18. The value of their output per annum was as follows: In the food group, $1,500,000; in the metal group, $5,900,000; in the chemical group, $72,200,000; in the miscellaneous, $8,400,000 or a total of $88 million.
Of the various questions Professor George asked, one asked for the cost of materials to Nova Scotia factories as percentages of cost of similar materials in Ontario or Quebec. I repeat that here his figures were obtained from companies which had factories in Nova Scotia, Ontario and Quebec. The cost of materials to the food group was 105 per cent, to the metal group 104 per cent, to the chemical group 104 per cent and to the miscellaneous group 100 per cent. In respect of all firms the average cost of material to Nova Scotia factories as compared to factories in central Canada amounted to 102 per cent. You will notice, of course, the disparity.
Then he asked for the transportation cost in supplying all existing markets entirely from Nova Scotia, expressed as a percentage of the cost of supplying entirely from Ontario or Quebec. Perhaps the minister could cease his conversation long enough to listen to these, Mr. Speaker. These are the transportation costs involved in supplying all existing markets from Nova Scotia, expressed as a percentage of the cost involved in supplying entirely from Ontario or Quebec. In the food group it was 125 per cent, in the metal group 160 per cent, in the chemical group 141 per cent, and in the miscellaneous group 103 per cent or, for all firms, an average of 125 per cent.
Professor George makes this observation:
Taking all the firms together, had all existing markets been supplied from Nova Scotia, trans-

September 6, 1966
Transportation
portation costs would have been about 25 per cent higher than if those same markets had been supplied from Ontario or Quebec.
As transportation costs in the typical Nova Scotia plant made up 3 per cent of all its costs this increase would have inflated costs by about three quarters of one per cent.
[DOT] (8:50 p.m.)
These findings in themselves perhaps do not indicate that transportation is an alarming factor so far as dollars and cents are concerned, though the figures would be startling when one considers percentages upwards of 125 per cent.
In a second study by Professor George, carried out a few years ago, entitled "An inquiry into why the Atlantic provinces so often lose out to Quebec and Ontario in the battle for new industry", he made a sampling of 349 firms which had set up manufacturing plants in either Quebec or Ontario between 1959 and 1962. Perhaps I should say parenthetically that about 60 per cent of new manufacturing plants continue to be established in the industrial areas of the two central provinces.
Professor George found in his study that of the 349 firms, 279, or 79 per cent, had considered one province only, and that happened to be the province in which the new plants were actually established. He found that 56 firms or 15 per cent had considered both Quebec and Ontario but no other province; that 16 firms or about 5 per cent of the total had considered provinces other than Quebec and Ontario, nine of which considered western provinces and seven of which considered Atlantic provinces.
The professor looked for the reasons these firms ignored the possibility of establishing in provinces other than in central Canada and most of the firms supplied these reasons. The first factor against locating outside the central Canadian region was the cost of transporting the finished product to the customer, or as the professor puts it:
The cost of bringing in materials and transporting the finished products to their markets figured very prominently. This seems to be the main competitive disadvantage of the outlying areas and the one which governments which seek to influence the location of industry have to overcome.
Part of the reason relates to a psychological factor because people look at transportation in a very general way without delving into the situation to discover the disadvantages which one would not encounter when locating a factory in Nova Scotia, Prince Edward Island, New Brunswick, Newfoundland, the prairie provinces and British Columbia as

opposed to central Canada. Nevertheless, the transportation factor has a leaverage effect and, small as it may be, influences the decisions of executives in the location of new factories.
Let me point out again that these studies on transportation, helpful as they are and necessary as they may be, do not take into account a large part of the transportation problem which is so vital to Atlantic Canada. To have an effective national transportation policy, Atlantic Canada and its needs must be considered as soon as possible. Following the period of freeze we may find that some of our problems are solved, but that other problems have grown and become almost insurmountable.


Mr. E. Nasserden (Rosihern):: Mr. Speaker, in rising to take part in this debate I cannot help but recall the smile on the face of the Minister of Transport (Mr. Pickersgill) when he rose in this house with an assumed spirit of meekness to introduce this measure, in the hope that it would receive co-operation from all sides. Many years ago we on this side recognized the need for a national transportation policy in this country.
The minister referred to the fact that members in all parts of the house were responsible for the failure of this government to do anything about this matter during the last three years. I recall vividly the statements made by the minister in the house and across the country because in the course of a few months we had not acted on the initial MacPherson commission report. In contrast to those statements the minister paid tribute to the Leader of the Official Opposition (Mr. Diefenbaker) who, as prime minister, set up the MacPherson commission to study railway problems. Surely that is in contradiction to the many views expressed by those members when on this side of the house in criticism of the establishment of commissions set up to ascertain certain facts regarding problems facing this nation.
It is gratifying to see the Minister of Agriculture (Mr. Greene) in the house during the course of this discussion, because nothing is more important to those engaged in agriculture than transportation costs. Certain provisions of this bill will affect the costs of producing many things in Canada, but to a greater extent will affect the cost of agricultural production. This is more important because the increased costs faced by the agricultural industry as a result of certain
September 6, 1966

provisions in this bill cannot be passed on to someone else.
Transportation needs in this country have changed during the last several years, since the MacPherson commission was set up and since it presented its report, and this is particularly true of western Canada. Many of the rail lines which were designated by the companies as nominees for abandonment have proven to be worth while, and I am sure that the railway companies would hesitate at this time to proceed with these abandonment plans.
The great change that has taken place is only the forerunner of the change which will take place in the next few years. That is particularly true of the province of Saskatchewan, where there have been new developments in the production of minerals of one kind and another.
[DOT] (9:00 p.m.)
We cannot help but view this legislation not only with an eye on the effect it will have on our industry today but on the effect it might have on the industry we hope to have tomorrow. The title of the bill is, "An act to define and implement a national transportation policy for Canada", and no one will quarrel with that, "to amend the Railway Act and other acts in consequence thereof"-this will depend upon the amendments that are brought forward-"and to enact other consequential provisions." Knowing the Minister of Transport (Mr. Pickersgill), whose "other consequential provisions" are what bother me, because if they are not spelled out so that it is very clear for everyone to see, we in western Canada and on the prairies cannot help viewing with some concern a measure as vague as this.
The bill contains a clause referring to the Crowsnest pass rates and the minister has given us the assurance that these rates will be protected for western Canada. As I read the new sections 328 and 329, whether the minister really means what he said in this regard is a debatable question. I cannot help but remind him, as I suppose he has been reminded before in this debate and on other occasions also, that the Crowsnest pass rates are looked upon in western Canada as part of the Magna Carta of confederation, and we do not want to see written into any statute of this parliament legislation that will place these rates in a position where they can be eroded two, three, five or ten years from now when someone may come along and say that the basis of the rates has been changed and
Transportation
such-and-such action will be taken. I know there are those in the maritimes who look upon the Maritime Freight Rates Act in much the same way.
Looking at this bill and the explanations the minister has offered in regard to it, I should like to make the following comments. The minister referred to the subsidies which the royal commission recommended. They are three in number. I need not rehash them for the benefit of members of the house. The explanation goes on in this way:
The present bill takes into account many representations received in regard to these matters. In place of the three special subsidy funds, it provides for a transitional subsidy to the railways which will start at approximately the present level of railway subsidy payments, namely, $110 million per year; and commencing in 1968 will decline at the rate of 121 per cent of the present subsidy each year.
It does not say when this decline is going to end.


John Whitney Pickersgill: It is a simple matter of short division, Mr. Speaker. It is eight years.


Edward Nasserden: That is what worries us in western Canada and the prairies at the present time, because this freedom the minister seems so anxious to give to the railways can mean only one thing in dollars and cents for us, and that is increased costs for those of us in the part of the country which is so dependant upon agriculture for a livelihood. We are what I would call a captive industry because we have to speculate on a government in power at the present time that does not seem to do anything about the prices farmers receive for their products, at a time when farm costs are rising as they have never risen before.
This is a government that promised the farmers of western Canada that they would do something about the price of grain, not only wheat but other grains; yet on every occasion when the opportunity to do something in this regard has presented itself, they have failed utterly to do anything. We have seen the minister and some of his colleagues laugh this off as an election promise. This is one of the reasons we would like to see written into this legislation assurances that will be more than the fact that in eight years time the costs that go into producing the products of the farms in western Canada will have been increased by more than $110 million a year. This of course applies right across Canada.

September 6. 1966
Transportation


John Whitney Pickersgill: Mr. Speaker, I am sure the hon. gentleman does not want to misrepresent the situation. I did explain in my speech that a considerable part of these subsidies would in four or five years time be replaced by the specific subsidy in relation to branch lines that were retained and by another subsidy in relation to any passenger services that were retained. So that all subsidies are not going to disappear under this legislation. But we do think that the subsidization of railway wages is itself a very inflationary measure that adds to the costs of farmers and everybody else, and it is a tendency that ought not to be encouraged.


Some hon. Members:: Hear, hear.


Edward Nasserden: I see that the minister obtained some applause from that side of the house for his intervention. The only difference is that a subsidy is shared all across the nation when the charge is written into the law. That is why we are concerned about this legislation, because in the past we have seen the centralization of industry in certain areas of Canada at the expense of other areas. We saw this particularly in the years prior to 1956.
We in western Canada, and I believe this applies also to those in the maritimes, believe we are also part of this nation. We want to be able to build industrial plants in our areas as well, and we want to build those plants not only because of the wealth they will bring to our own areas but because they will help to sustain a population that will enable us to cut the cost of services to the people we have in the less populated areas of the country as compared with the more heavily populated areas along the St. Lawrence river basin.
In his summary, on page 4 the minister also referred to the so-called bridge subsidy across northwestern Ontario of $7 million a year. He said this would take place over a three-year period. I will leave that matter for other hon. members to deal with. I was very interested in one statement the minister made in introducing this bill. I found his speech most interesting. I say that for the benefit of the Minister of Agriculture (Mr. Greene) who is smiling. As reported at page 7988 of Hansard, the minister said:
I have the impression that something the Prime Minister (Mr. Pearson) said in connection with another measure might be appropriate. I am not going to quote him, because that would be against the rules, and I have forgotten his exact words, which is even more inhibiting. However, I believe I remember the sense very well, and it was this,

that there were some things that could be done in a crisis that could not be done in ordinary times.
We also saw those headlines in the newspapers prior to the strike, and one cannot help wondering whether this government wanted the strike in order to bring in railroad legislation that was unpalatable to many people in this country.


John Whitney Pickersgill: Mr. Speaker, I am sure
that the hon. gentleman on reflection will wish to withdraw that kind of imputation against any member of this house. I am sure he does not think that anyone in this house wanted to face the calamity of a railway strike in this country if there was any possible way of avoiding it.


Edward Nasserden: I might agree that no one would like to face that calamity, but one cannot help drawing the conclusion from what we have heard and seen from this government that they viewed with a sense lacking alarm the possibilities that might accrue from such an eventuality, provided they could get it over with in a certain length of time. I think that is a poor recommendation for a piece of legislation as important as this particular measure now before us.
[DOT] (9:10 p,m.)
The minister has been asked whether he would consider allowing this bill to be sent to a committee before receiving second reading. I do not know whether or not he has changed his mind in that regard. He shakes his head that he has not. I believe there is a very good reason for sending this legislation to a committee before giving it second reading because I am of the opinion that substantial changes might be proposed after the committee has had an opportunity to study it. After all, and in the minister's own words, this is perhaps the most important measure ever to have come before parliament. The minister will not suggest that it is not important.


John Whitney Pickersgill: Mr. Speaker, I do not think it is the most important measure ever to have come before parliament. I am much more modest than that.


Edward Nasserden: This is a modesty that frightens hon. members on this side of the house. We know the minister attaches a great deal of importance to this bill. I believe that to begin with he called this measure a revolutionary one. That was a year or two ago, at a stage when it was just hatching. There is no question, Mr. Speaker, that this is one of the most important pieces of legislation ever to
September 6, 1966

have come before this parliament, in view of its economic consequences in every part of this nation. This measure will affect people in every part of Canada and it will change the complexion of many of our communities.
Mr. Speaker, this legislation also deals with pipe lines. Recently we have witnessed the spectacle of the Energy Board approving the setting up of a pipe line which has been vetoed by the government. Many people in this country think that this decision will cost the consumers of gas in Ontario and Quebec several extra cents per cubic foot. This is one case which leads us to think that when this bill is sent to a committee which has been given the chance to hear representations and to consider them in the light of today's conditions, recommendations may be made amending certain clauses.
I should like to say a few words regarding rail rationalization. I know that there might be one or two railway lines which are uneconomic and can be abandoned. I believe that this has already been done by some of the railways as a result of the unkempt conditions of parts of the tracks. I know of one or two rail lines that were designated for removal in the area I represent, and yet I feel that these lines have been essential for the delivery of grain over the past few years.
This matter raises another question, and that is the effect which the removal or abandonment of lines will have on individual producers in the prairies. The Crowsnest pass rates are supposed to be the Magna Carta of confederation. The first settlers in those areas endeavoured to make Canada the grain bin of the empire, on the understanding that the Crowsnest pass rates would prevail. Now we are facing the prospect of the government, or a commission, taking that right away from them. I wonder whether there is some provision in this bill which would recompense these people for the losses they must bear.


John Whitney Pickersgill: I should like to ask a question of the hon. member, for my information. Is he seeking, by the statement he just made, to imply that under this legislation the Crowsnest pass rates will be changed in any way? The fact is they are not altered in any way under this legislation, and this government has no intention whatsoever of doing so or of supporting any alteration of them in any way whatever.


Edward Nasserden: Well, Mr. Speaker, I accept
the minister's assurance, but the fact remains that regardless of whether the Crowsnest pass
Transportation
rates are altered or not, when a rail line is abandoned the farmer has to haul his grain perhaps 40 miles instead of 7 or 8, as a result of which his costs are raised, because of an action taken by the government of Canada. There is no question about it. The minister laughs. This proves that the minister never in his life hauled a bushel of grain.


John Whitney Pickersgill: I hauled grain before the hon. gentleman was born.


Edward Nasserden: I would hope there was some progress in every generation.


John Whitney Pickersgill: I did not have a truck to do it with either; we had horses.


Edward Nasserden: I was wondering whether it might not have been in the days of the oxen.
I do not wish to take up any more time of the house. But I do bring to the attention of the minister the fact that people in the farming communities of western Canada are not happy with the prospect of having to haul grain 40 miles instead of 7 or 8 miles.
The minister mentioned that improved roads might take the place of rails. I hope this meant that the federal government or the proposed transport commission will be prepared to enter into agreements with the provinces in those areas where lines are abandoned to provide for the construction of better highways, which would take the heavier load which will be placed on them owing to the abandonment and dislocation of certain railway lines. I want to assure the minister that western Canada is not as unreasonable as some newspapers have indicated in the last few days. We know the budget of the railways has to be considered; but nowhere in this bill is it stated how the railways are to find the money to pay the increased costs.


John Whitney Pickersgill: The hon. gentleman seems to agree with the president of the C.P.R.


Edward Nasserden: This might be the first time. After having seen the transformation which took place following the discussions between the great champion of the farmers of western Canada, the Minister of Agriculture (Mr. Greene), and the president or maybe the vice president of the C.P.R., I am glad to announce to you, Mr. Speaker, that I have not had any interviews with the president of the C.P.R. and I will avoid having one with him.

September 6, 1966
Transportation
I was about to conclude when the minister's intervention distracted my attention. I spoke of our hope that the federal government or the proposed transport commission will provide some assistance in the construction of highways in areas where railway lines are to be abandoned. This would only be fair, in view of the importance which the people in western Canada place on Crowsnest pass rates. I therefore hope the minister will allow this bill to be studied in committee before second reading. I am sure that there may be some amendments. The minister admitted that there has been some haste with regard to the preparation of the bill, and it seems that would be the proper course to follow.
[DOT] (9:20 p.m.)


Mr. Lawrence E. Kindt (Macleod):: I shall not speak too long on this particular bill, Mr. Speaker, but there are some things which I have been hearing in the west which I should like to place before the minister. I just came from there, landing here tonight about 7.15. I feel I should put these matters on the record, and I am glad of this opportunity to do so.
First of all, I should like to refer to branch line abandonment. Some time ago I attended a meeting at Glenwoodville, southwest of Macleod. The hall was filled. The meeting was concerned with the abandonment of the line from Glenwoodville to Cardston. The people were worried or the hall would not have been filled. They were worried about what a railroad bill might do to them. I see the minister is laughing, but I shall take him to task before I am through if he does not take that laugh off his face. This is no time to be laughing. This is a serious matter and it is dead serious.
The people at that meeting were greatly exercised about what would happen to their line from Glenwoodville to Cardston. The agent for the Canadian Pacific in Lethbridge let word slip that this line was one slated for abandonment. This was the reason for holding the meeting. Even the Hutterites in that area, people who seldom attend meetings, were out in force. The meeting organized an association to present their case at the proper time. I suggested this course to them and told them they should get their brief prepared. I am sorry the former minister of finance, the hon. member for Davenport (Mr. Gordon) has left the chamber because he has done many cost studies. I wonder if the Minister of Transport ever made a cost study? I wonder

if he ever had to work on a study and set the capitalization for a corporation? I wonder if he would know how to do it, if he were charged with the responsibility of this commission that is being set up?
In other words, this legislation is expecting the commission to do costing work which they are not able to do. I doubt if there is anyone in this room who can do a capital study or a proper costing study for a railroad. I have made many costing studies for railways and other companies. I do not hesitate for one minute to say that, whatever costing studies are made by the officials of the Canadian Pacific, they will not be acceptable to those upon whom the decision about abandonments is to be placed. Upon whom are you going to depend? You may call it rationalization, but before you can rationalize you have to have some figures. What rate of interest are you going to charge in your costing study? Are you going to charge 1 per cent, 5 per cent, 2 per cent or 6 per cent? I will tell you this much, you can make any branch line in this country appear to lose money by charging 6 per cent or 7 per cent interest. This commission has got to decide the interest rate to be charged in a costing study. Is the minister prepared to stand behind some fictitious interest rate that may be pulled off the shelf, and applied, to show whether a branch line needs a subsidy or whether the rails should be pulled up and the line abandoned? Legislation predicated upon that type of approach will never satisfy the people of Canada because it just cannot be done.
All you have to do to satisfy yourself about that is to talk to the Board of Transport Commissioners. I had many opportunities of talking to them when we were dealing with the disruption of passenger service between Medicine Hat and Lethbridge and between Lethbridge and Calgary. The Canadian Pacific ran a little car up and down that line, you know. They said they were losing money. We challenged the figures presented by the railway company. We asked them to let us in on how they made their computations, what their interest rates were and what capitalization they took into consideration. Did they take into consideration also all of the subsidiaries that had been set up by Canadian Pacific? Had they drawn off all the money and put it into other things? Were the income and capitalization of these subsidiaries taken into consideration in calculating the
September 6. 1966

capital structure or computing the interest rate? No, not on your life.
The lawyers appearing before the MacPherson commission for the Canadian Pacific argued that the hauling of grain or the hauling of any particular commodity should rest upon its own feet. It should not be considered a part of that great transportation system. They wanted to calculate the interest rate and capitalization of the particular equipment the Canadian Pacific used in transporting that grain or that particular commodity. Now, those are the fallacies basic in this legislation, and the minister should know these things if he knows anything about costing.
I will tell the minister what is going to happen. The commission will get a great many figures which neither they nor anybody else will understand and, in the end, they will have to guess. This is what will happen in connection with the abandonment of lines. They will not fool anybody. This legislation is going to force the commission to do just that. I say that it is bad legislation when you place any honest, government workers in a position of trying to bring together these figures. They can prove what they have done in the way of costing, and you can see it all. Somebody else can make the same calculations but the answers will be vastly different. In all probability, with different costing the railway might pay. It depends on what their pre-conceived notion is.
I have done costing studies on the cost-benefit ratios connected with flood control on some of the big projects across the line. Congress used these studies to decide whether or not the projects would be undertaken. The cost-benefit ratio means a consideration of the costs that go into the project as related to the benefits that would come out of it. I have done lots of these studies and I can say to the Minister of Transport that you can make these studies biased in any way you want.


John Whitney Pickersgill: Is that what the hon. gentleman did?


Lawrence Elliott Kindt: Never mind what the hon. gentleman did. I followed the basic pattern. I will tell you this, that when they were finished I do not care what member of parliament or what congressman looked at them, he could not understand them. I am honest about that. It is too complicated for the minister to understand or he would not laugh. It is too complicated for the average citizen to understand. Unless you are a
23033-513J
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trained accountant, unless you are schooled in costing, you would not be able to get the basis of the criticism of the figures which the commission would put forward. The minister can say that these are the best we can possibly get and that we will base our decisions upon them; but those who are familiar with the situation know full well that the results which have been produced are not worth the paper they are written on.
[DOT] (9:30 p.m.)
I say this, Mr. Speaker, in all seriousness. There is a place for cost accounting. Let it not be said that I am throwing cold water on cost accountants. But the cost accounting required for the railroads is very elaborate; and even though you do the best you can it will satisfy no one-unless, perhaps, the minister.
This particular legislation permits greater freedom to the railroads to set rates, a matter which is worrying the people of western Canada. I have just come from there, and those who have not been harvesting and have been reading the newspapers realize the problem. They see that something is hidden behind the smile of the Minister of Transport. He can shake his head in denial, but we have seen that head shake before and are not fooled.
In all seriousness, Mr. Speaker, this legislation will permit the railroads to set rates in competitive areas. In this regard the wording of the bill is vague. I was not satisfied by the answer given me by the minister the other night on the question of coal shipments. No competition exists in rates between the Crownest pass and Port Moody. The C.P.R. charges $5.30 a ton to transport coal from the Crowsnest pass to Port Moody, from where it goes to Japan. That, incidentally, was a recommendation of mine which was followed by the government and put into effect. Initially it cost $4.50 a ton subvention to send coal to Japan. Since then, because of a change in the value of the dollar the subsidy is down to $2.73. The coal miners and operators in the Crowsnest pass want that subsidy removed, whenever economically possible. If it were removed they could step up production of coal from 800,000 tons to a couple of million tons and export it to Japan; and the Japanese would buy it.
When these coal shipments to Japan were negotiated and a subvention placed on the shipments, our original thought was that perhaps after one year, two years or even five or six years the C.P.R. would run a commuter train from the Crownest pass to Port Moody, in a similar fashion to the commuter trains in

September 6. 1966
Transportation
the United States, and lower their rates to almost halt the present rate ot $5.30 a ton. So the thought originally was that this enterprise would be able to stand on its own teet.
The proposition then was that the C.P.R. would cut $1 or perhaps $1.50 oft the rate. The loading service at Port Moody would cost a little less, the shippers of the coal to Japan, whether in Japanese bottoms or somebody else's, would reduce their rates slightly; and perhaps the Japanese would pay a little more for the coal, in which event the shipments of coal to Japan, which keep hundreds of people in the Crowsnest pass employed, would be able to move forward without any government subsidy. This is what the miners and operators want, but they are now being held back owing to the failure of the C.P.R. to consider putting on a commuter train. They load a car of coal at Coleman which will then sit on a side line, to be hooked on to a train of mixed freight, at some indefinite time later, and pulled to Port Moody.
A boat at Port Moody may be waiting to load coal, but the coal shippers are required to pay a demurrage charge for the delay, which runs to about $2,000 a day. These are matters the operators are up against in shipping coal to Japan, and that is why they are asking the C.P.R.,-which above all should be willing to consider running a commuter train to reduce costs-to take some action. Instead of hooking coal shipments on to a general freight train, which takes a long time to reach the coast, they could run a commuter train which would transport this coal in a matter of one day from the Crownest pass to Port Moody, where it would be unloaded and the commuter train would then return. This would cut costs. But you cannot calculate the cost of coal shipments to Port Moody the way things are now.
Last year these rates went up 15 cents a ton. The C.P.R. solemnly promised when these coal shipments were commenced that when their volume increased-and as I say, they are now runnnig at about 800,000 tons -they would cut the rates. After all, this is good business for the C.P.R. and you would expect them to lower the rates. Instead of that they were raised 15 cents per ton. What are they going to do from now on? This is no laughing matter, Mr. Speaker. The people in the west are worried, as should be the Minister of Industry (Mr. Drury) and the Minister of Transport. These people are asking questions about this matter; they want to

know what is going to happen, because they have commitments.
If the railroads are freed from all government regulations and supervison they are in the position of making or breaking the people in the Crowsnest pass overnight. They are in the position of making ghost towns out of the whole area. This the C.P.R. can do by raising their freight rates. Therefore you can understand why these people are worried. I was in the area last week and talked to them about this matter, and both the miners and the operators are exercised about it.
Likewise, if the freight rates on farm machinery, foodstuffs and thousands of miscellaneous items like cars, and so on, are increased, then how on earth are the farmers of western Canada to meet the cost-price squeeze? For example, no farmer is in the position of being able to say that the price of his grain will go up 18 per cent, 10 per cent, 5 per cent or 4 per cent.
[DOT] (9:40 p.m.)
I am sure the Minister of Transport knows of the reasons why this should be so. The reason is simply this. In our economy farmers, as a group, are in the most perfect competition. They are the most perfectly competitive producers in the world. One farmer does not know that he is producing against another farmer, and that the sum total of the production has anything to do with prices. In other words, the farmers are in such perfect competition with one another that they are not conscious of the fact that they are competing with one another. This is vastly different from the Gary dinners of the United States steel corporations when they get together and talk about prices. Nothing is published about that, but there is discussion.
We have in our economy, therefore, on the one hand the steel industry which gets together with its Gary dinners, to talk, and on the other hand, perfect competition. A man such as a farmer, who cannot say what the price of his product will be, is the man who is in perfect competition. He has nothing to say about the price of his product, and the only protection he has is from government regulations and from parliament. I am speaking of the Canadian farmers.
If you are going to remove every bit of regulation from the railways, in order to allow them to put the costs of production up for the farmer, where will that lead to? You will have trouble, just as surely as the Minister of Transport sits there. You will
Sepiember 6, 19GS



have people coming here, and I suggest that the minister will not be Minister of Transport for very long. Unless this problem is met he will not be Minister of Transport. You can see it coming over the horizon.


An hon. Member:: Through the fog.


Lawrence Elliott Kindt: As I mentioned before, you must have competition, and there is not sufficient competition to force the railroads to set proper rates.
Some time ago I made some studies for the establishment of a big steel corporation which would involve $100 million. I thought that the plant should be located in a certain place, and I discussed this with my principals. I went to New York, and there I completed my studies concerned with financing. I do not mind telling the minister that the reason, in the end why we could not recommend that the plant be located in a certain spot was that the people in New York would not finance the plant. They would not finance one where there was not a competitive railroad line.
You run into the situation all over western Canada of not having competing lines. Is this government going to allow railroads to raise rates indiscriminately?


John Whitney Pickersgill: We are not.


Lawrence Elliott Kindt: Are you going to allow them to raise rates at all? The minister could not say that last week when I asked him about coal shipments. He said that the matter would be studied in committee, and he kept repeating that it would go to the committee, and how gracious and farsighted this committee is going to be.
That is not satisfactory to the people in the west who are thinking this thing through, and who have to live with it. They want to develop their country. They do not want to put their earnings out on transportation charges.
I do not intend to talk for much longer. Already I have talked far longer than I had intended, and I would not have done so were it not for the fact that this is one of the most far-reaching pieces of legislation ever to be placed before this parliament, so far as western Canada is concerned. I know that this legislation has affected the east, as well as other places. But we in the west will be very, very careful of what goes into the legislation, and how it will be carried out.
My colleague has already talked about the Crownsnest pass agreement, and the minister
Transportation
has given the assurance, and it is worth repeating, that those rates with respect to grain are not to be disturbed. Now the minister says-and this is provided for in the legislation-that studies will be made by the commission to see how much money is being lost on grain.


John Whitney Pickersgill: If any.


Lawrence Elliott Kindt: Well, the commission is going to cost study this matter. Whose figures will it take? I am talking about costing. Whose figures are to be taken? You see, the government is going about it the wrong way. The figures you will get on costing, and then take money out of the public treasury to support, are not those which should be used in arriving at what should be paid under any Crowsnest pass agreement-because that agreement is supposed to remain the way it stands. We have talked about that for years.
The people settled in western Canada along the railroad lines because they had transportation, and because they were encouraged to do so by the Canadian Pacific Railway Company and the government. If you are going to increase the rates for those people who have spent their lives there building up the area, forcing them to pay additional rates-


John Whitney Pickersgill: We are not.


Lawrence Elliott Kindt: They will have to pay additional rates on many thimgs, which will enter into their cost of production. The rates are to be left to competition between the trucking lines, and the railroads.


John Whitney Pickersgill: And air.


Lawrence Elliott Kindt: There is competition from trucking, of course, but that may not provide the answer in maintaining and keeping the good will with respect to the bargain made with the farmers, when they went into the west and homesteaded that country. They are there, and they have done a good job, but they will not sit idly by and let some minister of transport permit the railways to pull up the tracks, or to set rates that will increase the cost of production which, in turn, will raise the costs to all the people of the west. If the railways do that, those people will be down here, talking to the minister.
As for the air lines, I must say that they would improve with competition. I am a great believer in competition. If even the

September 6, 1966
Transportation
Minister of Transport were to compete with someone, he would smarten up.


Gordon Minto Churchill: Hear, hear.


Lawrence Elliott Kindt: Let me talk about air lines and competition, and in particular about Air Canada, with no competition. During the strike, when Canadian Pacific Airlines was stopping at Calgary, you could board Air Canada at Calgary and go to Winnipeg, and to Toronto, at almost any time. Air Canada was putting extra flights on at Calgary. They were special flights. I came down today on a special flight. I actually came down from Calgary to Toronto. But when it came to getting from Toronto to Ottawa, I had to stand in line. Seventeen others could not get on the aircraft, because there were no seats. There was no competition from Canadian Pacific Airlines, or from any other line, on the run from Toronto to Ottawa. Where Air Canada does not have competition, it could well do with some.
[DOT] (9:50 p.m.)
We should take a hard look at this competitive aspect. I have always been a supporter of Air Canada and I still am, but the time is coming when we shall have to consider introducing a little competition. I think competition is the lifeblood of industry and I hope the Minister of Industry will agree with me. I am sure he will. Unless there is competition, no company will put its best foot forward. If there is, they will look at the pattern for which they are trying to provide a service and place their facilities at the points where they must meet competiton and where it is evident that competition is a factor. I do not know how long we can continue without admitting the necessity for competition if we are to maintain freedom of enterprise.
I had hoped the minister would permit this bill to go to committee even before second reading, so that representatives of agriculture and industry from all over Canada could make recommendations and suggestions. Once this bill has been given second reading, how many changes will the minister be willing to make? I am sure he will find all the arguments under the sun for not changing it. He will bring these people to Ottawa from western Canada, and then he will say to them: Yes, you have a good idea, but the bill has been given second reading by parliament and we cannot change it now.
Legislation of this kind will not go down at all. I hope when the bill does go to commit-

tee, people from all parts of Canada who are affected by it will be in a position to make suggestions for changes and that those suggestions, if they are good ones, will be incorporated in the legislation when it is finally passed.
It may be that the whole process should be started again, from the beginning. The minister has had certain ideas about railroad abandonment, and so on, which are expressed in this bill. I am not too sure he is on the right track. We will have to consider that aspect. I feel strongly that the arrangements proposed are not likely to be in the public interest or, indeed, in the interest of anybody. They will satisfy no one. I feel, therefore, we are bound to take a hard look at it before this legislation is enacted into law.


John Whitney Pickersgill: It appears there are a number of other hon. members who wish to speak. I wonder, therefore, if I might make the usual motion in order to give hon. members additional time in which to express their views on this bill.


Gordon Minto Churchill: You would not give a supper adjournment hour so do not try to squeeze us now.


John Whitney Pickersgill: I could, of course make the usual motion and let ten hon. members stand up, but I do not wish to embarrass hon. members opposite.


William Heward Grafftey: We do not embarrass easily.


John Whitney Pickersgill: I should like to say that
the hon. member for Qu'Appelle (Mr. Hamilton) in the most co-operative way suggested we should get over this general debate and let the measure go before a committee, where all these questions could be answered. I hope this is still the spirit of the party opposite and that nothing has happened to change it.


Gordon Minto Churchill: Instant legislation.


Mr. W. H. A. Thomas (Middlesex West):: have a few brief remarks I should like to make on the second reading of this bill. They have to do with the terms upon which railways are abandoned, what should happen to the right-of-way, and how these abandonments ought to be dealt with when they take place.
I had a bill on the order paper in 1962, and again in 1963, dealing with this subject. I hope that now, when the Railway Act is to be overhauled, the government will see fit to
September 6, 1966

incorporate in its legislation a provision to cover the problem to which I intend to refer. The idea is to provide the Board of Transport Commissioners with both the authority and the responsibility to specify the conditions upon which any railway line may be abandoned, and my remarks spring from an experience in my own constituency as well as from experiences of this kind in several adjoining constituencies in recent years.
The MacPherson commission has forecast the abandonment of 8,000 miles of uneconomic railway branch lines in Canada. Lack of patronage indicates that these lines are no longer required. These branch lines served a pressing need in the days of horse-drawn vehicles 50 years ago, but they cannot possibly compete with the modern motor transport for either short haul passenger service or freight service. On the grounds of economy they should be abandoned, but the government through the Board of Transport Commissioners should accept responsibility for the manner in which abandonment takes place.
Many interests are involved. There is displacement of labour; new jobs must be found; business is disrupted; rail-tied investments are sometimes jeopardized; agricultural delivery points are eliminated, and there are problems connected with the rehabilitation of the abandoned right of way.
It is this aspect of the problem which concerns me this evening. Abandonment can be carried out as an orderly transition if it is done in an orderly manner. If left unplanned and uncontrolled, however, it can become a very disagreeable experience for many of the people involved.
Transportation
As a good instance of unplanned and uncontrolled abandonment, I would draw attention to the developments following the abandonment, in 1960, of the Courtright branch of the New York Central railway, which extends from St. Thomas westwards through the counties of Lambton, Middlesex and Elgin. Train service had almost disappeared from the line. Business disruption was slight, but the abandonment of the right of way created serious and very irritating problems. The rails and ties and any useful culverts remaining were torn out, leaving an unsightly mess. The fences, which had been neglected for some years pending abandonment, were left in deplorable condition. I suppose one cannot blame a railway company for not keeping up a line which it intends to abandon.
Mr. Speaker, may I call it ten o'clock?


John Whitney Pickersgill: The hon. gentleman seems to have a very short speech and I wonder whether we should not try to get it all in one issue of Hansard?


William Howell Arthur Thomas: If there were unanimous consent I would be prepared to continue.


John Whitney Pickersgill: There is consent on this side of the house.


Mr. Deputy Speaker:: Is there unanimous consent for the hon. member to continue?


Gordon Minto Churchill: Ten o'clock.


An hon. Member:: Not so.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Wednesday, September 7, 1966