1968-11-01

[Stage Direction]
29180-145}

[Stage Direction]
Friday, November 1, 1968

Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, lest there be any misunderstanding regarding my absence during the votes yesterday on the Farm Credit Act amendments I should like to point out that in my private office the bell does not sound. Hence I was unable to be present, not knowing the votes were being taken.



PRIVILEGE


Mr. Speaker:: Yesterday, after due notice to the Chair, the hon. member for Greenwood (Mr. Brewin) rose on a question of privilege alleging that the minister for external affairs was directly or indirectly disputing the accuracy of a statement made by the hon. member reporting on a statement made outside the House of Commons.
After hearing the hon. member and the minister, the Chair reminded hon. members of the well established rule that hon. members are bound to accept the word of another member. May I refer on this point to citation 145 of Beauchesne's fourth edition, which reads as follows:
[DOT] (11:10 a.m.)
It has been formally ruled by Speakers in the Canadian commons that a statement by an honourable member respecting himself and peculiarly within his own knowledge must be accepted, but it is not unparliamentary to temperately criticize statements made by a member as being contrary to the facts; but no imputation of intentional falsehood is permissible. A statement made by a member in his place, is considered as made upon honour and cannot be questioned in the house or out of it.
The Chair would like also to refer hon. members to citation 105, subsection 3, which reads as follows:
A dispute arising between two honourable members as to allegations of facts hardly fulfills the conditions of a privilege question-
Then I should like to refer to citation 113, which reads in part:
But a dispute arising between two members, as to allegations of facts, does not fulfill the conditions of parliamentary privilege.
The motion proposed by the hon. member based on his question of privilege is that this matter should be referred to the standing committee on external affairs and national defence. It seems to me that all aspects of the Nigeria and Biafra situation have been referred specifically by the House of Commons to this committee. If the hon. member considers that the discussion should be pursued further, this could be done in committee without the special reference proposed by the hon. member's motion.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Prime Minister arising out of reports that the Department of External Affairs or the Department of National Defence has a contingency plan to facilitate Canada's participation in Viet Nam peace keeping efforts. Would the Prime Minister indicate in general terms what this plan involves, and especially what is contemplated in terms of Canadian forces personnel? What contribution does the Prime Minister think would be made by Canada?


Right Hon.   P.-E. Trudeau@Prime Minister: I am not in a position to answer that question now. The plans are too vague to make any definitive statement. We take the position that if we are requested to participate in any peace keeping activities we will have to ascertain in advance, before answering, what they entail and under what conditions we would participate in such activities.


Robert Lorne Stanfield: May I ask a supplementary question. This proposal that has been made by the Secretary of State for External Affairs is conditional and limited by something which may seem to be appropriate to the government of Canada under the circumstances?
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Inquiries of the Ministry


Mr. Trudeau:: Well, this position is being taken only in very general terms and indicates that we did, in the past, pursue certain peace keeping or surveillance roles in the Vietnamese conflict. We do not reject the idea in advance. We would be prepared to contribute anything that would be possible and desirable.


Robert Lorne Stanfield: Would it be accurate to say the policy of the government of Canada would be to consider a possible role for Canada in peace keeping operations?


Pierre Elliott Trudeau: Yes, that would be a good expression of our position.


Robert Lorne Stanfield: I have just one further question, Mr. Speaker. Have there been consultations between the United States or the Secretary General of the United Nations and the government of Canada with regard to such a possible role for Canada?


Pierre Elliott Trudeau: Certainly none of which I am aware. If any have taken place they must be only in very general terms, because we have not discussed this as a matter of policy yet. We have just taken the general line I indicated, that we would consider any such request.


John George Diefenbaker: In connection with the momentous decision made last night by the President of the United States to discontinue the bombing of North Viet Nam, I should like to ask the Prime Minister whether there was any prior consultation with Canada before the announcement was made. Second, I should like to ask whether there was consultation with Australia, New Zealand and the United States concerning what action Canada might take in connection with providing not only an inspection corps in Viet Nam but also forces to preserve the peace in the event that agreement is arrived at in Paris.


Pierre Elliott Trudeau: In answer to the first part of the question, there was no consultation. This is a decision which the United States government has made without our overt help. In respect of the second part of the question I can only repeat what I said previously. We have not been the subject of any specific request yet. Until such a request is made I do not know what position we will take.


John George Diefenbaker: I note that the Prime Minister accentuated the words "specific request". Has there been any general request

DEBATES	November 1. 1968
that Canadians should be made available as a force to maintain the peace?


Pierre Elliott Trudeau: No, Mr. Speaker. There has been none that I know of, but like the readers of the press we surmise that something might develop on this front. We have been considering what we would do if such a request were made. But as I say there has been no specific request or no general assertion by any one country that they would want to see us in there. There has been nothing that has come to us in the form of a request.


Mr. Lome Nystrom (Yorklon-Melville):: Mr. Speaker, my question is addressed to the hon. Prime Minister. Would Canada consider making a contribution to peace in Viet Nam by ending Canadian complicity in this war?



NATIONAL SECURITY


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: I should like to ask a question of the Prime Minister arising out of the information he gave the house some time ago that he expected to meet with members of the royal commission on security. I think he said this would happen yesterday. Did the right hon. gentleman meet with them, and did he receive their report yesterday?


Right Hon.   P.-E. Trudeau@Prime Minister: Yes, I did meet with the members of the commission, I think it was Wednesday. I thanked the commissioners very much for the work they had done, very important work for the future of democracy in this country.
Hon. members will understand that the report is a classified document and contains information the publication of which would be detrimental to the security of Canada. For that reason, Mr. Speaker, only after careful study of the report will we decide what sections of it can be published. Until that time it would not be our intention to comment in any way on the report itself.


David Lewis: A supplementary question, Mr. Speaker. Do I understand, then, that the report has been received; and do I understand from the Prime Minister that, subject to those parts of the report which in the government's opinion it would be detrimental to publish, the government will consider publishing the parts which should be brought to the attention of parliament?
November 1, 19G8


Pierre Elliott Trudeau: Yes, Mr. Speaker, that is a correct interpretation of our intention. It was received only on Wednesday evening, and I sent it to the Governor General the next day. It is too soon to take a final position on the matter, but I can tell the house that what I hope will result is that we will be able to publish very substantial parts of it. I would hope that whatever expurgated version we did publish would have the certification of the commissioners themselves that they consider the deletions to be deletions that are made in the interest of national security only and for no other reason. As I say, Mr. Speaker, I should like this authority from them, but that of course will depend upon their own decision.


David Lewis: A further supplementary if I may, Mr. Speaker. The point the Prime Minister alluded to is one I had in mind, and I should like to put this question to him. Do I understand that the decision as to which parts are to be omitted when the report is published will be a decision of the government rather than a decision of the commission, although the commission will be consulted about it? Is that a fair summary of the Prime Minister's statement?


Pierre Elliott Trudeau: That is a fair summary, Mr. Speaker. This is because the commissioners are taking the position-I think it is the correct one to take-that their report is a whole report and they should not be asked to abridge it themselves. The report as submitted by them is their report to the government. Therefore we will have to take the initiative in making any abridgement. We will do it, of course, in consultation with any of the officials of the commission who can help us, but we will have to take the responsibility for making these abridgements. I hope that such abridgements, as I say, will carry some kind of authorization or statement of opinion by the commissioners, that the abridgements were made only in areas that affect national security, but of course I cannot speak for them. This is what I will seek.


John George Diefenbaker: A supplementary question, Mr. Speaker. As the direct responsibility for national security rests at all times primarily on the Prime Minister of the country, and in view of the fact that for six years I held the position of prime minister, as did Mr. St. Laurent from 1948 to 1957, will the expurgated portions of that report be made available
Inquiries of the Ministry to former prime ministers as privy councillors? Otherwise, Mr. Speaker, if they are not matters may be contained therein that should be subject to challenge. No former prime minister should be in the position of having only a selective or abridged report on matters connected with security during his period of administration. I ask the Prime Minister to make available to former prime ministers those portions of the report that deal in any way with their period of the prime ministership.


Pierre Elliott Trudeau: Mr. Speaker, I cannot make that commitment now, not having read the report. I do not know if there are any such portions.


John George Diefenbaker: I do not, either.


Pierre Elliott Trudeau: I do not know if there are any such portions which would cover such a situation. I know, and of course the right hon. gentleman knows, that there are a number of precedents in the United Kingdom for not publishing reports when they affect national security. I hope it will be apparent from any authorization or approval of the abridgement I may obtain from the commissioners that no deletions such as the right hon. gentleman suggests have been made. If there is no such approval I shall perhaps look at other ways to cover the point raised by the right hon. member.


John George Diefenbaker: I am not in any way criticizing the necessity for portions of the report being kept secret. I am referring to possibilities which, in years to come, could have a detrimental effect against any one prime minister with respect to matters of security.


Pierre Elliott Trudeau: I understand the concern of the right hon. gentleman. His concern I think is justified, and I shall try to meet that point as best I can.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I presume the report contains recommendations for parliament and the government. Can the Prime Minister tell us whether those portions, at any rate, will be made public?


Pierre Elliott Trudeau: In the same sense, Mr. Speaker, I cannot answer this because, not having read it, it is purely a hypothetical matter so far as I am concerned. I would hope any portions which might be concerned with parliament will be dealt with in the way I suggested any portions that are of concern to any former prime minister might be dealt with.
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Inquiries of the Ministry [Translation]



EXTERNAL AID


[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Abitibi):: Mr. Speaker,
I should like to put a question to the right honourable Prime Minister.
We know that a ship in the port of Halifax was loaded with food intended for the civilian population of Nigeria; can he tell us whether that ship has reached its destination, and what is its home port?


Right Hon.   P.-E. Trudeau@Prmie Minister: No, Mr. Speaker, I do not have that information.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, my question is directed to the honourable Minister of Transport.
Can he tell us whether he received a telegram from the Montreal Taxi Drivers Brotherhood, copy of which was supposed to have been sent to him, so as to offer a compromise in the situation which opposes Murray Hill and the brotherhood? If so, can he tell us whether he intends to revise the contract of Murray Hill Company with Dorval airport?

Kon. Paul Hellyer (Minister of Transport):
Mr. Speaker, I understand a telegram has been received. I will be glad to look at it and advise my hon. friend after a reply has been made.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington):: Mr. Speaker, may I direct a question to the Postmaster General. Since Remembrance day is but ten days away and the Colonel John McCrae memorial stamp has been oversubscribed in many post offices in Canada, many post offices being out of these stamps, will the minister make certain that more of these stamps are made available to the Canadian people?


Hon. Eric W. Kierans (Postmaster General):: Mr. Speaker, I will be glad to look into this. 
DEBATES	November 1, 1968



SHIPBUILDING


[Stage Direction]
On the orders of the day:
Mr. H. Russell MacEwan (Central Nova):: Mr. Speaker, my question is for the Minister of Defence Production. I believe on October 22 he said that either he or the Minister of Transport would make a statement to the house on the government's shipbuilding policy. Could either of these hon. gentlemen advise us when such a statement on this most important matter will be made here?


Hon. Donald C. Jamieson (Minister of Defence Production):: Mr. Speaker, this was a double barrelled request. Talks with elements in the shipbuilding industry, including some of the major construction concerns, are continuing. It is anticipated there will be several meetings, and we are listening to suggestions now. As soon as these have been resolved we will make a statement, but I cannot put a definite date on it in view of the way discussions are proceeding.



HIGHWAY SAFETY


[Stage Direction]
On the orders of the day:
Mr. Barry Maiher (Surrey):: I wish to ask the Minister of Transport a question. It has to do with the continual rise in traffic accidents on our highways and in our cities. I should like to know what is the situation in connection with the establishment of the long awaited public board to deal with all matters affecting traffic safety, an idea which was announced five thousand lives ago in this house.


Hon. Paul Hellyer (Minister of Transport):: The establishment of the board referred to by the hon. member has been delayed because it requires co-operation and participation by the provinces and their responsible ministers. The provincial ministers are meeting in Saskatchewan next week, I think, and I understand they have an item on their agenda which contemplates the initiation of a further conference involving the federal minister, at which time I hope we can agree on the composition of the board and get on with this important work.
November 1, 1968



AIR CANADA


[Stage Direction]
On the orders of the day:
Mr. Bernard Dumont (Frontenac):: Mr. Speaker, I would like to direct a question to the hon. Minister of Transport. It is an urgent question, Mr. Speaker, because it could prevent an unnecessary expenditure of about $10 million.
Can the minister assure this house that the government will take note of the reports of experts and fully respect the collective agreements concerning the gradual closing down, between now and 1973, of the Air Canada maintenance base at Winnipeg?


Mr. Speaker:: It seems to me that the hon. member cannot ask the hon. minister to make a rather general statement about his views and intentions. I do not think the question can be put in those terms. The hon. member might perhaps try to word it differently.


Bernard Dumont: Thank you, Mr. Speaker.
I will therefore ask the hon. minister to tell us if his department has refused to attend a meeting of the members of the Q.F.L. and to participate in the discussion I mentioned earlier?


Paul Theodore Hellyer: I do not think we have refused to meet with anyone on the subject. I am speaking from memory; I am not sure, because not all these requests come to my attention. This is a current problem of considerable importance. The previous prime minister made a commitment to the people of Winnipeg that the base there would continue in operation until the end of 1972 or that an equivalent solution would be found which would employ approximately the same work force and approximately the same skills presently being used in Winnipeg. A study is currently being undertaken to see whether some satisfactory solution can be reached.
With respect to reports of experts, there is the usual problem of getting information in the form which is intelligible to the layman-


An hon. Member:: And to you.


Paul Theodore Hellyer: I was including myself in that class-and in a form which would provide a basis of judgment satisfactory to the people involved.
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Inquiries of the Ministry


Mr. Stanley Knowles (Winnipeg North Centre):: I have a supplementary question, Mr. Speaker. I wonder whether I might direct it to the Minister without Portfolio, the hon. member for Winnipeg South. In view of charges that the minister and others are making efforts to maintain the overhaul and maintenance base at Winnipeg, can the hon. gentleman say what progress he is making toward this end?


Mr. Speaker:: I am not sure the question is properly directed to the Minister without Portfolio. I have some doubts about this.


Stanley Howard Knowles: Then may I direct the question to his superior, the Minister of Transport, and ask whether he can reply to these charges.


Paul Theodore Hellyer: I think the Minister without Portfolio could answer the question much more effectively than I can. But since I have been called upon to reply, I can say that the Minister without Portfolio as well as all the other members from the Winnipeg area are taking a very real interest in this question.


Stanley Howard Knowles: How
are we doing?


John George Diefenbaker: Is the minister taking an unreal interest?


Paul Theodore Hellyer: All I can say, Mr. Speaker, is that they are still in the game, but it is a very complicated and difficult question, as my hon. friend will appreciate. It is one of the problems receiving most active attention at the present time because we do want to get some acceptable solution and discuss it with the workmen directly involved, and hopefully to gain the maximum co-operation from all the diverse interests represented.


Georges-J. Valade: Mr. Speaker, I have a supplementary question for the Minister of Transport.
When does he intend to make a statement in the house so that we may be clearly informed as to the intentions of the government in that respect?


Paul Theodore Hellyer: Just as soon as a definitive decision has been taken, Mr. Speaker. I think my hon. friend will appreciate, however, that there are certain aspects which are completely within the control of the company and

November 1, 1968

Inquiries of the Ministry there are others of direct concern to the government. As soon as we can reconcile all the interests I will be able to make a statement.


John George Diefenbaker: Would the minister give an assurance to the people of Winnipeg, as well as to the employees in question, that the pledge given by Right Hon. Lester Pearson, then prime minister of Canada, is going to be carried out?


Paul Theodore Hellyer: Yes, Mr. Speaker. That commitment which was given by the former prime minister, and which was subsequently reiterated by me in Winnipeg, still stands.


Bernard Dumont: Mr. Speaker, I have a supplementary question for the Minister of Transport.
Could he tell us when the president of Air Canada will be appointed?


Paul Theodore Hellyer: Not precisely, Mr. Speaker.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the Minister of Transport. I gave him notice of it yesterday. Can the hon. gentleman advise as to the progress in the studies of the Canadian Transportation Commission dealing with less than carload rates for Atlantic Canada, and when we may expect action on such studies in parliament?


Paul Theodore Hellyer: We have been doing some internal studies on this question, Mr. Speaker, but in addition, as my hon. friend will recall, last year I asked the Atlantic premiers to put their heads together and come up with some recommendations which they felt would be useful to the Atlantic region. The reason I suggested this is that the criticism is often made that Ottawa is remote from the problems of the area, and the people living there are more intimately aware of the problems and as a result might suggest more effective solutions.
Up to this point I have not received any report from the Atlantic premiers. I hope this will be forthcoming soon, so that whatever input they have can be considered with our own studies in the very real hope that we can

get some policy which will be both reasonably economical in broad terms and more effective to maritime transportation.


Robert Jardine McCleave: As a supplementary question, do I understand from the minister's answer that the Canadian Transportation Commission has completed its side of the studies?


Paul Theodore Hellyer: I did not say completed, Mr. Speaker, but I understand that an internal paper has been forwarded for consideration by our department. Just how extensive it is I cannot say, because I have not yet seen it.


Mr. Robert C. Coates (Cumberland-Col-chester North):: As a supplementary question, Mr. Speaker, could the minister indicate whether it is the intention of the government to continue the rate freeze until such time as a transportation policy is produced for the Atlantic provinces?


Paul Theodore Hellyer: I do not think this would be a good morning for speculation on that point, Mr. Speaker. I would really prefer to give the government a chance to look at the over-all problem and decide what is the best solution compared with some others that might be offered.


Robert Carman Coates: Would the minister not agree that while a transportation policy is being considered it would be unfair for that area-


Mr. Speaker:: Order. The hon. member's supplementary question is argumentative.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. John Gilbert (Broadview):: Mr. Speaker, may I direct a question to the Minister of Transport, who is in charge of housing. Has the minister received the report and recommendations of the housing conference held recently in Toronto, sponsored by the Canadian Welfare Council? If so, what steps is the government going to take to implement those recommendations in order to solve the serious housing crisis?


Paul Theodore Hellyer: Mr. Speaker, I cannot say whether all the recommendations have been received, but I know if they have not they will be. A member of the federal task force, Dr. James Gillies of Toronto, was in attendance at most of the conference meetings and is to make a
November 1, 1968

report to the task force. I might add that many of the suggestions received are similar to those made by other bodies across the country. They will, of course, be studied in the context of our larger inquiry.


John Gilbert: Mr. Speaker, I wish to direct a supplementary question to the Prime Minister. Would he consider setting up a separate ministry of housing and urban development because of the difficulty that the Minister of Transport has in handling the heavy portfolios of both transport and housing?



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Rene Matte (Champlain):: Mr. Speaker, has the government considered insisting upon an adequate knowledge of French for immigrants going to Quebec and applying for Canadian citizenship?


René Matte: Mr. Speaker, I would like to ask the Prime Minister why he did not answer my question.


Mr. Speaker:: The hon. member can ask a question but he cannot, under the guise of a supplementary question, ask why no reply was given to his question. However, the Prime Minister might want to answer it now.


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I apologize to the hon. member, but I did not know he was putting his question to me. Only when he resumed his seat did I realize that he had not put it to anyone in particular, and I had not been listening.


René Matte: Could I ask my question again, Mr. Speaker?
Could the right hon. Prime Minister tell us whether the government has considered requiring that immigrants to Quebec who apply for Canadian citizenship have an adequate knowledge of French?


Pierre Elliott Trudeau: Mr. Speaker, this matter more specifically concerns the minister responsible for immigration but, with regard to the general policy of the government, I may say that we have not made a decision to this effect.
The hon. member can, if he wishes, put that question to the minister at the proper time.
Inquiries of the Ministry


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, may I direct a question to the right hon. Prime Minister. Will the right hon. gentleman arrange to have tabled a copy of the apology made by the head of state of Nigeria to Canada and other countries making up the observer team, for the intemperate remarks about the team made by Colonel Benjamin Adekunle?


Right Hon.   P.-E. Trudeau@Prime Minister: I shall consult with the Secretary of State for External Affairs on what the practice is in this regard, Mr. Speaker.


David Lewis: At the same time, Mr. Speaker, would the right hon. gentleman discuss with the Secretary of State for External Affairs the possibility of tabling the report which no doubt the department has received from General Milroy or the junior Canadian observer?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I shall consult with him about this also.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. John Lundrigan (Gander-Twillingale):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. Can the minister say whether his department is going to continue the payment of the salt subsidy to fish processors even though it has been discontinued to Atlantic fishermen?


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, my understanding is that the payment of the salt subsidy has been discontinued to all parties, the processors as well as the individual fishermen.



PROTECTION AGAINST COUNTERFEIT PRODUCTS-CRIMINAL PROCEEDINGS

[Stage Direction]
On the orders of the day:
Mr. J. M. Forresfall (Darlmouih-Halifax Easl):: Mr. Speaker, I wish to direct a question to the Minister of National Health and Welfare. Can he shed a little more light on the
November 1, 1968

Inquiries of the Ministry action being taken by his department and the food and drug directorate on the question of counterfeit drugs? I would bring to his attention, although I suspect that he already knows, that there have been further major seizures from firms involved in placing counterfeit drugs on the Canadian market.


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, I wish to advise the hon. member that the department has this latest incident under consideration at the present time, and I hope to be in a position to answer the question more fully next week.


J. Michael Forrestall: In considering it I wonder would the minister urge his colleagues in the department to consider seriously early court action about this whole situation. It is now seven or eight months since it started.


John Carr Munro: I would advise the hon. member that the department did take prompt action with respect to the previous incidents. All the counterfeit drugs were immediately removed from the market to our satisfaction. With respect to the latest incident-


J. Michael Forrestall: Nobody has been charged.


John Carr Munro: -the basis of the evidence is being assessed to determine whether a charge can be maintained. That is the only reason for the delay.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Colin D. Gibson (Hamilton-Wentworih):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. I have been advised that the Steel Company of Canada is moving its head office from Hamilton to Toronto. Can the minister enlighten us in respect of this matter, has he any information on this?


Some hon. Members:: Order.


Mr. Speaker:: Order, please. I fail to see the immediate urgency of the question. If there is urgency the hon. member might give me notice concerning such urgency; then it could be debated at the time of adjournment.


Stanley Howard Knowles: On a point of order, Mr. Speaker, I think the reason there were so many shouts of "order" is that this does not come under the Department of National Health and Welfare.
[Mr. Forrestall.l


Mr. Speaker:: That is also a good point. The hon. member for Winnipeg North Centre knows that when notice is given to the Chair the question is not necessarily accepted. It must be viewed in the light of the application of the rules generally.



INQUIRIES OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. J. Edward Broadbenl (Oshawa-Whii-by):: Mr. Speaker, this question is directed to the Prime Minister. Is it true that the government has reconsidered its social development tax and decided to lift the $120 ceiling, and further has decided to introduce a capital gains tax so that some approach to taxation based on even Liberal criteria for taxation justice-


Mr. Speaker:: Order, please.


John Edward Broadbent: -will be made in 1968?


Mr. Speaker:: Order. The hon. member knows that the house is currently engaged in discussion of the budget. This is the type of question which the hon. member might well ask when he makes his contribution to the debate.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I should like to ask the Postmaster General a question on this particular day in his life when several million people are interested in stamp designs. Has the minister given any thought to changing the existing design of the new stamp and having it edged with black to commemorate increased postal rates and the budget?


Some hon. Members:: Oh, oh.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Louis-Roland Comeau (South Western Nova):: Mr. Speaker, my question is for the Minister of Fisheries. Does the recent proposal to make loans and grants available to B.C. Indians for the construction of fishing vessels conflict with the decision to reduce subsidies on wooden ships?


Mr. Speaker:: Order. I do not think the question asked is in order. It would seem to be an argumentative type of question which cannot be accepted.
November 1, 1968	COMMONS DEBATES



THE MINISTRY


[Stage Direction]
On the orders of the day:
Mr. Speaker:: The hon. member for Nova Scotia.


Mr. Donald Maclnnis (Cape Breton-East Richmond):: Thank you, Mr. Speaker. I have a question for the Minister of Transport. I should like to ask the minister what was the basis for his statement outside the house, when he made a blanket charge of smear against members of this house?


Mr. Speaker:: Order. I doubt whether the question as asked by the hon. member for Cape Breton is acceptable. I apologize for calling the wrong name a moment ago. Certainly the horn member cannot ask questions in this way about statements made outside the house.


Donald MacInnis: Mr. Speaker, on a point of order I would appreciate, and I am sure the Minister of Manpower and Immigration would also appreciate, narrowing down Nova Scotia to Cape Breton and then to Cape Breton-East Richmond. I do not say this in a facetious way.
I should like to ask the Prime Minister if he would care to enunciate the government's position with regard to the code of ethics originally introduced into the house by the former prime minister.


Right Hon.   P.-E. Trudeau@Prime Minister: The question is very general. I have no particular-


Mr. Speaker:: Order. The question is rather general. If the Prime Minister wishes to make this kind of a statement it should be made on motions.


Mr. Thomas M. Bell (Saint John-Lancasier):: Continuing on the point of order, Mr. Speaker, I think we are entitled to ask, in view of recent developments, whether this code of ethics is still in effect. It was brought in by a former prime minister, and we want to know whether it is government policy today and whether the Prime Minister has investigated recent developments to see whether they come under that code of ethics.


Mr. Speaker:: The hon. member is attempting to ask a question which the Chair could not accept yesterday. I do not think he would want to do indirectly what has been ruled out of order directly.
Inquiries of the Ministry


Donald MacInnis: Does it not follow that when a minister of the crown makes remarks outside the house which reflect on all members of this house, this constitutes a question of privilege? If the Minister of Transport or any other minister has the intestinal fortitude to name names it could be cleared up.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: Mr. Speaker, I have a question which I should like to direct to the Minister of National Health and Welfare. Has the minister received a communication from the Saskatchewan Medical Association requesting immediate action to ensure adequate medical care for Saskatchewan Indians, and warning that a failure to act may force doctors to leave areas which have a large Indian population and completely deprive some Saskatchewan Indians of medical service.


John Carr Munro: I should like to take the question as notice.


Richard Russell Southam: I have a supplementary question, Mr. Speaker. When the minister-takes the question as notice will he take-action to meet the emergency in this province-which has the highest ratio of Indian population in Canada?


Mr. Speaker:: Order, please. I do not think the supplementary question is acceptable.



DOMINION-PROVINCIAL RELATIONS AGREEMENTS RESPECTING COLLECTION AND PAYMENT OF TAXES

[Stage Direction]
On the orders of the day:
Robert Lorne Stanfield: This question is directed to the Minister of Finance. At the meeting which I believe is to take place on Monday with provincial ministers of finance and provincial treasurers, is it the intention of the government of Canada to propose new agreements regarding the collection of taxes and payment of taxes that have been collected, or to simply extend the existing agreements?


Hon. E. J. Benson (Minister of Finance):: As
my hon. friend knows, the tax collection agreements run out at the end of December. We would be willing to continue with the tax
2302	COMMONS
Inquiries of the Ministry collection agreements if the provinces so wished.


Robert Lorne Stanfield: Is it the intention of the Minister of Finance to propose a continuation of these agreements and, if so, is there an intention to propose any changes with regard to them?


Edgar John Benson: Mr. Speaker, I think my hon. friend will have to wait until Monday to find out.


Robert Lorne Stanfield: Is it the intention of the Minister of Finance to make any concrete proposals to the provincial ministers with regard to establishing ceilings on shared cost programs?


Edgar John Benson: Mr. Speaker, my intentions will be made known next week when I meet with the provincial ministers of finance.



MOOSE JAW-REQUEST FOR EXTENDED WORK HOURS TO FACILITATE DRYING

[Stage Direction]
On the orders of the day:
Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, I should like to direct a question to possibly the Minister without Portfolio. In view of the expected arrival of 1,500,000 bushels of wheat at the Canadian government's elevator at Moose Jaw, starting today, would the minister give some indication to this house as to whether 24 hour, seven days a week shifts will be used to handle this grain drying, in order to expedite the movement of this damp grain?



AIRPORTS


[Stage Direction]
On the orders of the day:
John Gilbert: Mr. Speaker, I would like to direct this question to the Minister of Transport. In view of the angry and justified protests of the residents of the Mississagua area to the expansion of the airport facilities at Toronto, would the minister reconsider the plans for extension of the airport?


Mr. Speaker:: Order, please. The question is of a very general nature, and I think it should be placed on the order paper.

DEBATES	November 1, 1968



EXTERNAL AID


[Stage Direction]
On the orders of the day:
J. Michael Forrestall: Mr. Speaker, I would like to direct my question to the Prime Minister. Can the right hon. gentleman advise the house if the fourth Hercules aircraft that left for Nigeria in fact carried certain navigational equipment and aids; and in particular does the right hon. gentleman know whether it contained radar ground control equipment?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, I believe this question was asked last week, and answered.


J. Michael Forrestall: It was not answered last week.


Pierre Elliott Trudeau: But it was not asked of me.


J. Michael Forrestall: Aren't the people of Canada entitled to know? You talk about the safety of our pilots.


Mr. Speaker:: Order, please.


Louis-Roland Comeau: Mr. Speaker, I have a supplementary question for the Prime Minister. Has the government considered the shipment of salt fish or other fish products to needy countries such as Biafra?



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. In view of the recent dramatic drop in the number of child poisonings in the two control areas where the new type of plastic container has been used, would the minister investigate the possibility of requiring the use of this safety container for poisons and other noxious household products?


John Carr Munro: Yes, Mr. Speaker, the department does have that particular matter under consideration at the present time.
November 1, 1968



COMMONS DEBATES CANADIAN NATIONAL RAILWAYS


Edgar John Benson: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to authorize the Canadian National Railway to make capital expenditures including investment in securities of affiliated companies in the calendar year 1968 not exceeding in the aggregate $264,400,000, to make capital expenditures in the first six months of the calendar year 1969 not exceeding in the aggregate $75,000,000 for discharging obligations incurred prior to the 1st day of January, 1969, to enter into contracts prior to the 1st day of July, 1969, for equipment, additions and conversions requiring payments after the calendar year 1968 not exceeding $90,000,000, to borrow either from Her Majesty or by means of issues of securities guaranteed by Her Majesty an amount not exceeding $75,000,000 for investing in securities of Air Canada and a further amount not exceeding $16,000,000 for construction of branch lines; to authorize Her Majesty to make loans directly to Air Canada or to guarantee issues of securities of Air Canada not exceeding $130,000,000 for discharging obligations of the airline that become due and payable prior to the 1st day of July 1969; to authorize Her Majesty to continue to purchase until December 31st, 1969, Canadian National Railway Company 4 per cent preferred stock in an annual amount not exceeding 3 per cent of the gross revenues of the Company; to extend until December 31, 1969, the moratorium on interest on the loan of $100,000,000 to the Company authorized by the Canadian National Railways Capital Revision Act of 1952; to authorize Her Majesty to make loans to the Canadian National Railway Company and Air Canada to meet deficiencies in operating revenues to June 30, 1969, any such loans to be repaid from revenues of the Railway Company and Air Canada or, if revenues prove insufficient, by subsequent deficit appropriation by Parliament.
Motion agreed to and the house went into committee, Mr. Bechard in the chair.


Mr. H. E. Gray (Parliamentary Secretary to Minister of Finance):: Mr. Chairman, this resolution is similar to those which have in the past preceded the introduction of Canadian National Railways' financing and guarantee bills. These bills, including the present one, have been introduced annually with the exception of the 1963 bill which covered 1962 and 1963, and the 1966 bill which covered 1965 and 1966.

The present bill has seven main objectives, most of which had a similar form in previous legislation.

First, the bill would authorize capital expenditures by Canadian National Railways
Canadian National Railways not exceeding $264,400,000 during the 1968 calendar year, including $75 million for investment in Air Canada, This level of expenditures compares with $264,800,000 authorized previously for 1967, with $67 million included therein for investment in Air Canada. The bill also contains technical provisions authorizing Canadian National Railways to make expenditures not exceeding $75 million between January 1 and July 1, 1969, for obligations incurred prior to 1968, and to enter into contracts before July 1, 1969, for capital expenditures not exceeding $90 million for which payment will not come due until after 1968.
Second, the bill contains a new provision authorizing Canadian National Railways to borrow $16 million for financing all branch line construction. Up to the present each special statute for construction of a branch line has included authority for financing its construction, and branch lines not requiring special legislation have been financed out of selfgenerated funds. In addition to covering all branch lines, the provision in the resolution and the bill based upon it are consistent with the intent of reflecting in the financing and guarantee bill all the financing authorities which Canadian National Railways require.
Third, the bill would provide for the continued purchase by the Minister of Finance of Canadian National Railways' 4 per cent preferred stock through to the end of the calendar year 1969. This continues the practice of previous financing and guarantee acts. The 1967 financing and guarantee act extended to December 31, 1968, the expiry date of the authority granted by Canadian National Railways Capital Revision Act of 1952 for the purchase of such stock equivalent to 3 per cent of the company's gross revenue.
Fourth, and for the same reasons, the bill would extend until the end of 1969 the moratorium on interest on the government loan of $100 million to the railway company authorized by the capital revision act of 1952.
Fifth, as in previous years the bill would provide authority for the government to make temporary loans to Canadian National Railways and Air Canada to meet deficiencies in operating revenues up to June 30, 1969. Any such loan is repaid later from revenues of Canadian National Railways and Air Canada or, if these prove insufficient, the loans are written oil through parliamentary appropriation.
Sixth, the bill contains an option not previously included in financing and guarantee
2304	COMMONS
Canadian National Railways bills which would enable Air Canada to borrow $130 million either directly from Her Majesty or by means of a guaranteed public issue. The amount subject to this option does not include the amount of $75 million which it would borrow from Canadian National Railways.
Seventh, the bill would provide for the appointment of the firm of Touche, Ross, Bailey and Smart of the cities of Toronto and Montreal, chartered accountants, as auditor of Canadian National Railways for the calendar year 1969.
Finally, I would point out that the present bill makes no provision for enlargement of Canadian National Railways authority to refinance, which at present stands at $680 million and is considered adequate for the period covered by the bill. I would commend to the members of the committee the passage of this resolution.


Mr. Nesbitt:: Mr. Chairman, when this resolution is presented to the house it gives hon. members on all sides the opportunity to deal with very many aspects of railroading and air transportation. At this time I would like to touch very briefly on two problems which I think come under the purview of this bill. I will leave other matters to a more appropriate occasion when the estimates are before the house.
[DOT] (12 noon)
I am glad that one or two ministers other than the minister responsible are in the house, because some of my remarks will of necessity relate to the administration of other departments, particularly the Department of National Revenue. In this regard I am glad to see the Minister of National Revenue in the house.
Perhaps I might digress briefly. It is the understanding of hon. members that the minister will be hospitalized in the near future to undergo an operation. May I take this opportunity on behalf of all hon. members, I am sure, of wishing him well.
The first of the two items I want to deal with at this time during the general discussion at the resolution stage of the proposed bill relates to the presidency of Air Canada. The resolution before us outlines the large sums of money being requested by Air Canada; yet at the present time this corporation has no president. Air Canada has been operating for quite some time without a president, and the rumour factory in this regard around Ottawa and elsewhere has been

DEBATES	November 1, 1968
exceptionally busy. We hear on the one hand that this job is going to be divided into two parts or, like Gaul, into three parts, or maybe even four. I do not like to mention names so I shall not do so but we hear rumours that certain backroom politicians from Toronto will get preferment. We also hear that another from Montreal will get one of the positions in this divided presidency.


Gerald William Baldwin: Are there still some who have not got jobs?


Wallace Bickford (Wally) Nesbitt: As my house leader suggests, are there still some who have not got jobs? Perhaps that is what the government intends to correct. In any event I wish the government would decide what it is going to do and appoint somebody. Air Canada is facing a number of important long range decisions which have to be made soon, but the corporation at present is much like a large aircraft circling over Kennedy airport, not able to land. The government must make some decision.
The most often heard rumour is that the presidency of Air Canada is to be divided into two parts. Apparently there is to be a chairman of the board and a president. It is rumoured that the chairman of the board will be that prominent and able man from the city of Montreal, Mr. Saulnier. He is a man with great capacity and capability. We also hear that the executive vice president of Air Canada, Mr. Seagrim, is being considered for the position of president. Whatever the government is going to do apparently has not been decided.
There are two things I am sure the government must be considering. If someone is to be parachuted in as head of Air Canada the government must remember that the individual might be very capable in another field but not able to deal with many of the technical problems that face the administration of Air Canada. We have seen far too many examples of this type of thing. Many people are very successful in certain fields but when they are elected to this house it becomes obvious they are not capable here. We have seen people do very well here in the house but when they left they have not done so well in other positions.
It must be very discouraging for those people who are making a lifetime career with Air Canada to observe a practice of appointing politicians or friends of politicians to the top positions in Air Canada. These people may perhaps be eminent executives from
November 1, 1968

other fields, but it must be very demoralizing to people in Air Canada when they are put in over their heads. Many of the people now in Air Canada are very promising and have a great deal of ability. If they feel the government is going to engage in policies which prevent them from getting to the top they may very well leave. I hope the government will give some consideration to this aspect of the situation.
The most important thing is that the government make some decision. This situation has existed for some months and the rumours that have been circulating have not helped Air Canada's situation. The people of this country are entitled to know who is to be the head of Air Canada. If the government should decide to have a two-headed presidency, so to speak, we should know where buck-passing is to stop. I assume there are to be two heads of Air Canada, someone parachuted in from outside plus the executive vice president. Who will make the final decisions? The division of authority in this regard must be made very clear when the appointments are made.
Many decisions will have to be made by the new head or heads of Air Canada. The men who must accept the final responsibility must be made aware of that fact. An example of some of the things that the new presidency of Air Canada will face is the question of air freight and facilities. Most authorities on air transport agree that in the next ten years the amount of air freight will increase by 600 per cent. There must be very careful planning in relation to terminal facilities to allow for this tremendous increase, not to mention the increase in passenger traffic.
In this regard we must also consider container freight. This is a very important matter so far as railroads and shipping companies are concerned. It is also of importance in relation to air freight. About a year ago the use of containers for air freight commenced. In the last year this use has increased enormously and it is estimated that it will accelerate in the next year or two. With this increase there will be an increase in the number of problems the corporation will have to solve.
I have in mind customs clearance for international air freight. Various departments such as the Department of National Revenue will have to be consulted by the officials of Air Canada in order to speed up customs clearance of freight coming in by air. This in turn raises other matters, for instance, the use of computers to facilitate domestic as well as
Canadian National Railways international air freight. We must also consider the type of bills of lading which will be used and handled by computers. This whole situation requires a great deal of planning and careful study.
We must also consider the type of aircraft to be used. In the past Air Canada has had certain types of aircraft on order but by the time they were received they had virtually become outmoded. I refer particularly to the Vanguard. It is a good aircraft, although I understand it is not as economical as some others. I have been informed that Air Canada would have purchased more jet aircraft had they been available rather than Vanguards. I know that Air Canada has already taken an option on certain types of aircraft that are being developed. A decision will have to be made in this regard.
We must also consider the question of jumbo jet aircraft and their ability to carry standardized containers. There are some 200 containers registered for use on aircraft. This number may have to be reduced to about 17 under I.A.T.A. regulations. Consideration must be given to this fact. This is the kind of problem the new head of Air Canada will have to solve.
Consideration must be given to the size of airstrips in order that jumbo jet aircraft and perhaps the new supersonic jets which are in the testing stage will be able to land. How are these aircraft going to be landed in cities like Montreal and Toronto where there are residential sections in the areas of the air terminals? Perhaps consideration should be given to establishing terminals near the ocean where these new jets can land, and the use of smaller aircraft to transfer the passengers from such terminals to the major cities. These are the problems that are going to be faced by the new head of Air Canada, and the sooner an appointment is made the better.
[DOT] (12:10 p.m.)
The next question concerns passenger service on the Canadian National. Unlike the Canadian Pacific which has done everything possible to get out of passenger service to the detriment of the Canadian people, the Canadian National has not adopted this attitude. Canadian National has removed a number of passenger facilities, and I shall deal with that shortly. On the other hand, the Canadian National, to its credit, has made every effort to increase the frequency and speed of passenger service in the heavily populated areas. I could refer to the new Rapido between Toronto and
November 1, 1968

Canadian National Railways Montreal, as well as trains in other areas. This attitude is very commendable and will be a big help in future years when perhaps, because of crowded terminal facilities, railways may provide better service between major cities a few hundred miles apart than the airways will.
Some of the other activities of Canadian National in the field of passenger service are not so commendable. We have seen branch lines, not only in the area of passenger service but freight as well, and particularly in western Canada, abandoned. The most drastic action, of course, occurred in Newfoundland and I will be dealing with that in more detail later as will a number of my colleagues. I think the management of Canadian National, and even Canadian Pacific, must remember that railway transport in this country should not be provided merely on the basis of whether or not it pays. Railway service in Canada, particularly passenger service, is a service that is provided for Canadians just as the postal service and other means of communication such as radio and television are provided. In view of the peculiar geographical qualities of our country, I understand it has always been the policy of all Canadian governments to try to ensure to the best of their ability that Canadians shall not be penalized because of the part of Canada in which they live. A great many Canadians live in the area between Toronto and Windsor, around the city of Montreal and in the lower mainland of British Columbia. However, there are numbers of Canadians thinly spread out between those areas.
No branch of government, or indeed no quasi-branch of government such as a crown corporation, should try to deliberately discriminate against Canadians because of their geographical location. This is part of the price we have to pay for living in a country the size of Canada with such a small population. If we wish to maintain our independence and our identity, we have to pay for that. We have to subsidize communication services in this great country of ours. This applies not only to railway passenger service but to freight service and the like. One other thing should be remembered in connection with these branch lines which are being discontinued and that is that in many cases they would have helped to open up our country to a greater extent than has been done so far. I feel the most careful consideration will have to be given in the future before we permit any more branch lines to be removed.

Passenger service, I believe, falls into three categories from a financial point of view. First of all, there are those lines that do pay. It must be admitted that a great many passenger services do not pay. For reasons I have pointed out, most of these services must be maintained in order that Canadians may not be penalized and so the new parts of Canada will be opened up. It should not be the policy of this government, the Canadian National or anybody else to discriminate against those people living in the thinly populated areas; otherwise we will have a greater concentration of population in a few areas such as Toronto, Montreal and Vancouver. We would also lose the advantage of opening up our resources.
The second category of passenger traffic is that which is in the lucrative passenger areas. I have no doubt at all that even with the rather peculiar accounting and costing methods used by the Canadian National, some areas of passenger service such as Montreal to Toronto, Toronto to Hamilton, Toronto to London and Windsor, do pay a handsome profit. Then there is a third group of passenger service areas. Those are the areas where costs are met but more money could be made if the equipment were used for freight or other purposes. My understanding is that many passenger services, both on the Canadian National and Canadian Pacific, have been abandoned not because they have been losing money but because they did not make as much money as they would if the equipment were used in freight service.
I should like to make one specific observation. Recently the passenger service between the city of Toronto and the city of New York was discontinued. I do not believe there is any need to point out to members of this house the great deal of essential commerce that goes on between these two great cities. While we know that it was the Canadian Pacific that provided the passenger service to New York, I believe that the Minister of Transport could perhaps pass on to the president of the Canadian National suggestions made by members here. We feel that steps should be taken immediately to restore some sort of passenger service between Toronto and New York.
As most hon. members are aware, particularly in the spring, fall and winter months Kennedy airport in New York, which is used by both major air lines connecting Toronto and New York, is fogged in. This is true of both Kennedy and Laguardia airports. Air
November 1, 1968	COMMONS
travel, therefore, is not possible sometimes for several days at a time. In addition, there are a great many administrative problems that have arisen in connection with Kennedy airport. These make air travel very difficult and cause delays. For these reasons alone, there should be some means of travelling between these two great metropolitan areas when so much business is done between them. It would seem to me that some form of rail transportation, perhaps only one train a day, should be provided. I suggest that the Canadian National, if the Canadian Pacific is unable or unwilling, should take steps immediately to try to restore passenger service between these two great metropolitan areas.
I come now to the question of passenger service elsewhere. We have seen, of course, the discontinuance of many branch lines in the rural areas of Ontario, western Canada and other areas. Perhaps the part of Canada that has received the biggest kick in the teeth in this connection has been the province of Newfoundland. The decision to remove the passenger service in Newfoundland was made prior to the last election. Perhaps this had something to do with the results in Newfoundland, I do not know. Certainly, however, it seems very strange treatment of the people of Newfoundland, especially in view of the fact that ever since that province joined confederation the Liberal members from the area have always been ready, are ready, to act on behalf of the party. It seems strange indeed that both the present administration and the previous administration would give Newfoundland such rough treatment.
I know it has been said that Canadian National Railways will provide bus service in Newfoundland. Well, Mr. Chairman, any hon. member who has had the pleasure of visiting that great province will know that the central part is not heavily populated. In addition, since Newfoundland is an Atlantic province, it receives heavy snowfalls in the winter. All I can say is that I would hope the president of the Canadian National and some of his officials who are responsible for this decision will take a ride on a bus during the winter. Perhaps they would then find out what it was like. I cannot see why the people of Newfoundland should be given such poor and inadequate service.
[DOT] (12:20 p.m.)
I repeat, Mr. Chairman, that I do not think it necessarily matters in this country that in
DEBATES	2307
Canadian National Railways every case the costs of communication and travel be met, but I think we would all agree that the costs should be met as much as possible. Even the Postmaster General agreed the other day that there should be some sort of subsidy for such services. The Postmaster General was trying to cut down the amount of subsidy required for the post office. The same case applies to the railways. Although it depends on the kind of accounting we use, the claim is nevertheless made that a passenger service cannot make money. My point is that it is not necessary that it should. As I have said several times, the C.N.R. should provide a service to Canadians in view of the peculiar geographic qualities of our country.
Before I resume my seat, Mr. Chairman, I should like to make one last appeal on behalf of the people of Newfoundland in view of the treatment that they are presently expecting to receive. It has been rumoured-I realize there are always rumours circulating around this place-that some sort of deal has been made between the government, the C.N.R. and, I understand, the government of Newfoundland whereby, if the trans-Canada highway costs are met, railway passenger service would be discontinued in Newfoundland. If some kind of agreement or deal has been made, then I am sure that the present government is not bound by it and could withdraw from the position taken. It seems a sad thing that the people of Newfoundland who have recently joined Canada should be given such rough and unenviable treatment by the very government that brought them in.


John Leroy Skoberg: Mr. Chairman, in reading last year's resolution in connection with this same capital expenditure, issue of securities and so on, I find the following introduction:
That it is expedient to introduce a measure to authorize the Canadian National Railway Company to make capital expenditures and to supply the financial requirements of affiliated companies-
The resolution before us, Mr. Chairman, reads as follows:
That it is expedient... to make capital expenditures including investment in securities of affiliated companies-
There is a slight change of wording. The question I should like to put to the minister, and through him to those responsible for this resolution, is: Why is there a change in wording? It suggests to me that separate entities are being established as such. It will be much more difficult to secure the necessary information to enable the committee on transport and communications to discuss intelligently
November 1, 1968

Canadian National Railways the aspects of each in light of the change in wording of this resolution.
Personally, Mr. Chairman, I do not want to see the creation of an empire with the public of Canada supplying the necessary capital for investment in securities of affiliated companies without an opportunity being provided to the standing committee to scrutinize the financial statements of each. I concur with the remarks of the hon. member who preceded me when he suggested that the system of cost accounting used should be taken into consideration. We all know that it is most difficult to try to keep up with this particular system. I do not necessarily disagree that the required capital may have to be supplied for affiliated companies, but to invest in securities in these affiliated companies is a proposition that leaves me somewhat in doubt.
Another point with which I have been concerned for a long time is the outstanding bonds issued by the Canadian National Railways. I have asked in an inquiry of the ministry for certain information concerning these bonds, and possibly during the resolution stage the minister will be prepared to answer my questions. One of the questions dealt with who holds the existing C.N.R. bonds and where they are located. Another asked whether the C.N.R. has made any effort to get the bonds back and, if so, what action has been taken in this regard. The third question asked how many bonds the C.N.R. has bought back and how many are now held by the company. It has already been stated that many rumours circulate around this institution, but I understand that at the present time some people are attempting to buy old, outstanding bonds. I should like clarification in this regard.
It is completely ridiculous, in my opinion, that the taxpayers of Canada should provide a pleasant income for so many people, perhaps in all parts of the world, by permitting them to hold old bonds. It would be interesting to note the amount of interest return received by each bondholder. It is my opinion that these bonds should be bought back at the earliest possible date in order that the C.N.R. can clearly show its actual inputs and outputs in its operating budget without having to include interest paid on outstanding bonds. It is my thought that the C.N.R. itself would be most pleased if this were brought about.
I am pleased, in looking at the annual report of the C.N.R. for 1967, to note an

improved picture under the heading of passenger services as related to the use of facilities, and also to note the reasons given for this picture that appears in the annual report. For example, at page 5 of one of the annual reports an important part of this improvement is attributed to a positive, market-oriented approach to the passenger business. On page 11 of the same report the statement is made that the provision and effective promotion of new and improved train services in certain areas was also an important factor. I realize that Expo could have had something to do with the improved picture suggested in the report, but I must congratulate the management of the C.N.R. for their approach to the passenger market, other than the passenger market in Newfoundland.
I am certain that Canadians as a whole agree that with growing congestion on our highways and the increasing difficulty of obtaining air travel accommodations, rail passenger travel is both desirable and urgently needed at this time and particularly in the future. It is an absolute must that in the financing of the C.N.R. adequate provision be made to ensure that all parts of Canada will be serviced by rail passenger traffic. While I appreciate that there is a great push to get rid of uneconomic passenger services, I think it would be a disservice to the country if such services were discontinued. Certainly this is a problem with which the house should concern itself immediately, instead of waiting till it is too late.
I should like to quote a paragraph dealing with federal government payments to be found at page 6 of the annual report for 1967:
Provision is made for the railways to withdraw uneconomic passenger services or branch lines subject to the approval of the new Canadian Transportation Commission set up under the act. If the commission decides that an uneconomic passenger service or branch line should be maintained in the public interest, the railways will be compensated, in whole or in part, for losses in respect of each specific operation.
On page 11 of the report, under the heading "passenger services" the following paragraph appears:
The company continued to pursue a positive policy of concentrating on the provision of such passenger services as may be required in areas of profit or potential profit. Steps have been taken and will be taken to seek withdrawal from, or obtain public monetary support for, those unprofitable services which do not fit into that pattern; the objective being to eliminate the deficit in passenger operations.
No matter how one may wish to rationalize, when rail lines and services are eliminated an
November 1, 1968

immediate added cost is put on the public in the form of providing highways that are capable of handling the increased traffic load. Also, additional aircraft flights are required. I submit that it is absolutely unrealistic to compare the number of people who can be handled efficiently by air with the number who can be transported at this particular time along our roads and rail lines.
I have had experience of applications made to the railway commission when so-called uneconomic passenger line abandonments are up for consideration. I am sure that everyone in this house realizes that the slide rule artists are quite capable of changing a profit into a loss. Sometimes even a royal commission is unable to controvert the statements of these experts. I listened to a statement made by one expert in this field who told me that whether I wanted to show a profit or a loss he could give me what I wanted with the same set of figures. I am sure that anyone who has attended this sort of hearing appreciates the situation when he tries to figure out cost equations for this particular segment of the economy.
The communities of this nation are being hard hit to maintain viable economic units. We have recently seen many post office facilities closed down because of the stated policy that there should be a minimum of 30 families to warrant revenue post offices. No consideration appears to be given to the social elimination of post offices, just as it is true that no consideration is being given to the impact of the abandonment of passenger services and branch lines.
[DOT] (12:30 p.m.)
During the post office debate the question was raised whether the railways had asked to be relieved of the handling of revenue postal mail had the government itself suggested that the railways change their facilities and methods of transportation. The answer given was that, naturally, the railways had not asked to be relieved of the handling of that mail. Yet there must be a relationship between the social and economic needs of a community.
In C.N.R. financing matters and problems such as these must be given priority as it is our responsibility in this house to ensure that communities, which mean people, are given prior consideration. I am given to understand that at this very time a large staff is employed in preparing applications for the abandonment of branch lines and passenger services throughout Canada.
Canadian National Railways
I refer now to page 49 of the annual report of the Department of Transport for 1966-1967, "Transportation Policy and Research":
It was formed to undertake economic and technical research into all modes and forms of transportation; to assist in the development and formulation of transportation policies; and to advise on legislation in all fields of transportation. The branch is staffed by a group of professionals with training in the fields of economics, statistics, commerce, geography, business administration and engineering, with experience in railway, shipping, trucking, and air line companies.
I wonder whether any sociologists have been engaged by the department for this in depth study of the resultant consequence of any passenger train abandonment and/or branch line abandonment. I am certain we realize that an economist concerns himself with the best means of attaining a given end. He cannot concern himself with the social problems, nor with the end results of what effects abandonments will have on the people themselves.
A good example of this situation exists at the present time in the province of Newfoundland. No one needs to remind the house that it is the intention of the railway company to abandon the only passenger service in Newfoundland, trains 101 and 102. We have a responsibility to ensure that this passenger service is not eliminated. Surely, in the financing of this railway company and its affiliates, money must be allocated for necessary services. I do not know where else in Canada it is as absolutely necessary to retain and maintain a passenger service adequate to serve the needs of our citizens as in Newfoundland. This government will stand accused in the eyes of every man, woman and child in that province if they allow this cancellation of rail service to go through, and I think it is past time for this crown agency to accept its responsibility and to stop acting as a free swinging, corporate elite.
Another point of some concern to me is the discharging of obligations incurred by the C.N.R. I am certain that the minister must be aware of the claims made against the C.N.R. by certain contractors who were involved in the construction phase of the Great Slave Lake railway. It is a fact that the hon. member for Selkirk has made attempts to have this matter cleared up. He suggested that no additional sums of money should be allocated for any new branch line until some answers are received as to the manner in which C.N.R. engineers enforced contract provisions which resulted in many contractors being forced into bankruptcy on the construction phase of
2310	COMMONS
Canadian National Railways the Great Slave Lake railway. It would appear to me that this is a matter of urgency as this crown agency has an obligation to lead the way in proper contract supervision. It is expected that the minister will have a statement to make on the fair and just settlement with the contractors engaged in the construction of the Great Slave Lake railway.
I think it is only right at this time to remind the minister that he should be particularly cautious in his desire to save money when such saving can have the effect of creating hazardous conditions in rail operations. I refer specifically at this time to the elimination of maintenance of way employees and the cutting back of car inspections on through passenger and freight trains. No one needs to remind the minister that the first line of defence in the operation of the railroad is the section man who is required to keep track and roadbed conditions at their best at all times. I do not like hearing of failures because of washouts, broken rails, cave-ins, just to mention a few examples, as it invariably follows that these can all be chalked up to a lack of people to do the job necessary in coping with the high speed trains of today. It can be said that one can expect an act of God in some of these situations, but there have been far too many of these incidents to use that excuse in every failure that has occurred.
My second concern is the decreasing amount of car inspection that is being carried on at terminals by qualified car staff or carmen. I submit that there is far too great a desire on the part of company officers to decrease the work force and pay no attention to the dangers that are being created by such reduction. Trains today are travelling at speeds of 70 to 75 miles per hour in freight service and higher than that in passenger service, and even though the equipment has improved in the past number of years the need for frequent car inspections is an absolute necessity. I, personally, can relate many experiences where wrecks were averted because carmen found defects at intermediate terminals and the necessary repairs were made. I can assure you this is not idle talk, Mr. Chairman. These are true facts and evidence is easily available to substantiate them.
I now wish to say a brief word about the air lines, and I agree with my hon. friend's position with regard to the presidency of Air Canada. I will not repeat what he said. I can only say that the congestion at some of our airports makes one wonder how much needs

DEBATES	November 1, 1968
to be done to keep up with the ever-increasing air travel. The staff at these airports are doing an excellent job but too often the work load and the so-called automated system leave people stranded at airports without accommodation. This is happening, and when it does our image in so far as Air Canada is concerned is not improved. When one is in a service industry every effort must be made to serve and please the paying customer. I am sure hon. members agree with that concept.
A further and most important point to be drawn to the minister's attention concerns employees of the C.N.R. who are now on pension. It is well known that a pension which years ago would have seemed adequate to meet a bare standard of living is so inadequate today that these pensioners are living on a bare subsistence. Most hon. members know that the hon. member for Winnipeg North Centre has been waging an unsuccessful fight for people on fixed low pensions and everyone will accept the premise that his attempts are entirely justified.
In the resolution before us it should be recognized and accepted by the government that provisions must be included to expend moneys for the express purpose of alleviating the degrading situation of these pensioners. Surely we cannot continue to ignore one of the greatest problems before us today. People on fixed income or low wages deserve our sincere, immediate attention in raising their incomes to a level that will allow them to appreciate a few of the good things of our modern day living. After all, these are the pioneers of our country and the C.N.R. pensioners are the very people who made it possible for this crown corporation to be the success it is today. These C.N.R. pensioners, and in effect all pensioners, are entitled to due recognition. This party implores the government to take immediate steps now to rectify this deplorable situation.
@ (12:40 p.m.)
We will have more to say on the various clauses of the bill when it is introduced. At this time may I say that I agree with the statements some hon. members have made with regard to millions of dollars being spent for purposes of rail improvement and air traffic. At the same time the government across the line is becoming interested in making large investments in the most economic method of transport and is looking increasingly toward a greater use of rail passenger service. I implore the government not to abandon rail passenger traffic but to support
November 1, 1968

the most efficient system of transportation, which I am sure we can do in this case.
fTranslation]


Mr. Gauthier:: Mr. Chairman, I wish to say a few words on this resolution. Like other honourable members, we are quite happy to see the government introduce in the house at this time the legislation which reads as follows:
That it is expedient to introduce a measure to authorize the Canadian National Railway to make capital expenditures including investment in securities of affiliated companies in the calendar year 1968 not exceeding in the aggregate $264,400,000, to make capital expenditures in the first six months of the calendar year 1969 not exceeding in the aggregate $75,000,000 for discharging obligations incurred prior to the 1st day of January, 1969, to enter into contracts prior to the 1st day of July, 1969, for equipment, additions and conversions requiring payments after the calendar year 1968 not exceeding $90,000,000, to borrow either from Her Majesty or by means of issues of securities guaranteed by Her Majesty an amount not exceeding $75,000,000 for investing in securities of Air Canada-
Mr. Chairman, I want to take this opportunity to ask the minister whether he could not, when introducing this legislation, tell us what are the various affiliated companies to which he referred. Furthermore, we should like to know the nominal value of the holdings of each of these companies and, in particular, whether some of them are in the trucking business.
I think that most of the citizens in our area, as those in all Canada of course, would be extremely interested to know these details, so that we may appreciate better the importance of these companies, and mainly the services they can provide all across Canada, without any discrimination with regard to some areas.
Upon reading the sums of money which are mentioned in this resolution, and I quote:
-including investments not exceeding in the aggregate $264,400,000-
I think, of course, of my area, the Lac Saint-Jean area which is called Saguenay-Lac Saint-Jean where, according to the general opinion of the people we are certainly not assisted in the field of transportation in view of the fact that the Canadian National Railway Company certainly does not do everything it can to provide an adequate service.
We propose to try, when this legislation is introduced, to explain to the minister the needs of the Saguenay-Lac-Saint-Jean area, because we find that the railways made it possible for our region to grow. But if the
Canadian National Railways present situation continues, the railways will also be responsible for its economic slowdown. In fact, year after year, services are discontinued. Last year, for instance, the postal rail service was abandoned and replaced by the delivery by truck. I fail to see the advantage of that measure or the saving it represents, because it is much more expensive to deliver mail by truck than by rail.
I think that was done in a deliberate effort to take every possible source of income away from the railways in our region in order finally to abolish the freight service, and today there is talk of discontinuing the passenger service.
Even freight services were cancelled to be replaced by one train only. I have no objection, since this certainly means savings, but I think, Mr. Chairman, that besides the economic factor, we should take into consideration the service aspect of the matter. In fact, the railway service is first and foremost a service that has to be administered as economically as possible, but in our areas, consideration must also be given to the services given.
I especially draw the attention of the minister to our area where next year, even the passenger train between Chambord and Dolbeau might be cancelled.
If the Canadian National does that, it will be a retrograde step that will bring our people thirty years behind. It is alleged that such a cancellation is due to a slowdown in the transportation industry. I am not ready to admit that, Mr. Chairman. In my opinion, it is merely a lack of good will and reflection which may lead to the cancellation of this train.
I travel every week on that train. When we hear criticisms, Mr. Chairman, we realize that the lack of passengers is due to bad service. For example, we often hear a passenger from Montreal arriving in Dolbeau say: I have taken the train once, but I will never take it again, because the service is too poor, it takes 14 hours to come to Montreal from Dolbeau. I think that if the authorities of the C.N.R. had tried to improve the service-especially their railway service-the public would travel by the Canadian National Railways much more often than at the present time.
[DOT] (12:50 p.m.)
One can also read in the resolution and I quote:
-to borrow either from Her Majesty or by means of issues of securities guaranteed by Her Majestv an amount not exceeding $75,000,000 for investing in securities of Air Canada-
November 1, 1968

Canadian National Railways
Mr. Chairman, since Air Canada is part of the Canadian National Railways or affiliated to that company and since it will also benefit from this money-which I am quite happy about-I should like the minister to consider the possibility of Air Canada also serving our region. Up until now, our part of the country has been served by private companies, Quebec Air or Nordair, but in view of all the taxes we pay to the federal government, Air Canada should consider the possibility of running a service between, for example, Montreal and Quebec, Roberval, Bagotville and Seven Islands.
We are also entitled to benefit from the services provided by state owned companies. Private companies provide the best service they can but, since they do not have the advantages of the crown corporations, they naturally cannot serve our part of the country the way Air Canada could.
If we discontinue the railway service, we will have to get another means of transportation. In my opinion, transport by air would be much more efficient. We have in Roberval an airport which has been abandoned for more than two years and which is now used only by a few private planes; when this measure is introduced, that will be the ideal time to consider the possibility of investing a few millions in our region, in air services.
Mr. Chairman, I would like to draw the minister's attention on that point before giving the last touch to the measure, in order to try to give the people of Lac-Saint-Jean and Saguenay a better service, first through the C.N.R. then, through Air Canada, as requested by the whole people of the region.


Mr. Peddle:: May I suggest, Mr. Chairman, that we call it one o'clock?


The Deputy Chairman:: With the unanimous consent of the committee is this agreed?


Some hon. Members:: Agreed.


Albert Béchard: It being 1 p.m. I do now leave the chair until 2.30 p.m.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
The Chairman:: Order. The hon. member for Grand Falls-White Bay-Labrador.


Ambrose Hubert Peddle: Thank you, Mr. Chairman. Thank you also for finally getting the correct name of my constituency. My first comment is that I wish very much that the measure before the committee this afternoon, the financing of the C.N.R., could be one that required unanimous consent in order to be passed by the committee because I assure you if such were the case there would not be unanimous consent. Further, I should like to say to all members on both sides of the house that if they had any idea of the real meaning of the concept of confederation, passage of this resolution would be denied by both sides of the house. Of course I am referring to the discontinuance of rail passenger service in the province of Newfoundland.
I think there is no better way for me to commence my remarks than to refer to the very first item in the terms of union between Newfoundland and Canada. Item 1 says that on, from, and after the coming into force of these terms, hereinafter referred to as the date of the union, Newfoundland shall form part of Canada and shall be a province thereof to be called and known as the province of Newfoundland. In the decision of the so-called rail transport committee to approve of the discontinuance of passenger service I maintain there is a direct violation of the terms of union. The province of Newfoundland is being set up as the single province in Canada that does not need a rail passenger service.
As a result of a question asked of the Minister of Transport in this house by one of my colleagues the Minister of Transport said, mind you, that he regrets the inconvenience to Newfoundlanders because of the planned cancellation of the C.N.R.'s rail passenger service. One would not know but that he had rubbed against you coming off the elevator and had said, "Very sorry about that, buddy". He mentioned that some other small branch lines are being discontinued. But to the people of Newfoundland he says, "We are sorry to cause you inconvenience". He forgets that the province of Newfoundland has had this service for some 70, 80 or 90 years, long before confederation.
I should like to refer to another of the terms of union. It probably is not explicit enough. One could find loopholes in it. Naturally the C.N.R. is noted for finding loopholes. They are the most professional loophole finders in the country. Item 31 says that at the time of union or as soon as possible thereafter Canada shah take over the following services and will, from the date of union,
November 1, 19G8

relieve the province of Newfoundland of the public cost incurred in respect of each service taken over. Then the services are listed. The very first one is the Newfoundland railway, including steamships and other marine services.
In their national advertising Canadian National Railways refer to it as the escape route. They are certainly adopting an escape route in the province of Newfoundland and they are doing so with the approval of this government. With the approval of the Minister of Transport Newfoundland has been stabbed in the back by the present government and by that self-appointed so-called friend of Newfoundland, that $50,000 a year friend of Newfoundland, Jack Pickersgill, the chairman of the transport commission. As I say, we are being stabbed in the back.
The 1966 figures which accompany the application for the discontinuance of this service show that some 90,000 Newfoundlanders have used this service in the years up to 1966. One in every five Newfoundlanders has made use of this service. The railway very cleverly took the year 1966 as the year to make their application because, following the completion of the trans-Canada highway, a lot of people decided, naturally, because of the novelty alone, that they would travel by highway. We had never had a highway so they decided the novelty was too much to resist. The year following the completion of the highway Canadian National Railways brought forward their application for discontinuance of the rail passenger service.
[DOT] (2:40 p.m.)
The hon. member for St. John's East placed a question before the Minister of Transport just a few days ago and, as a matter of fact, on October 30 the answer was forthcoming. I refer to page 2201 of Hansard. The hon. member asked for some of the figures accompanying the C.N.R.'s application to discontinue the service. The answer by the Minister of Transport was that such figures did accompany the application but they were of a highly confidential nature and could not be disclosed. Regardless of that, I have come upon the figures that the hon. member requested and could not get because they were confidential. I have those figures before me.
Presumably Canadian National Railways suffered a deficit of some $900,000 in 1966. I say without any hesitation-and I have this very confidential report before me-that the analysis of variable expenses as they call
Canadian National Railways them, whatever that means, which the railway provided with their application is most definitely padded. There are in this analysis of variable expenses such things as depreciation. Good Lord, those facilities were depreciated 100 years ago. They have been depreciated six times over. But we have an item for the depreciation of cars in the amount of $97,697, and for depreciation on locomotives, $66,173.
We must bear in mind that the total deficit was $918,000. The next item in the financial report which accompanied the application of the railway is inside expenses, whatever that means, which amount to almost half the total deficit. The figure for inside expenses is $429,765. These figures are included in the financial report which the C.N.R. submitted to the transport commission in order to back up their request to discontinue the passenger service.
I suggest that the members of the transport commission, including Jack Pickersgill, still do not know what inside expenses are. I do not know what this expression means; it is a very vague term. However, inside expenses amount to almost half the total deficit of the railway. I do not think there is any need to repeat that when the chairman of the transport commission, refused, for personal reasons, to chair the meeting in St. John's he knew what he was doing. He did not want to come out in public and stab us in the back; he wanted to do it behind the curtains.
I remember that when I first came to the house just after the opening of the session an hon. member referred to a book that the Prime Minister had written, in which he said that Canada had paid dearly for Newfoundland's entry into confederation. It would seem to me, and to all Newfoundlanders, that he and his government now want their money back.


Some hon. Members:: Hear, hear.


Ambrose Hubert Peddle: Ninety thousand Newfoundlanders made use of this service in 1966, and this should not be used as a criterion for the action the railway has taken. I have noticed since coming to Ottawa that while the decision was made to discontinue the Newfoundland passenger service, when applications have been made to discontinue similar services-I refer to small branch lines on the mainland-there have been great meetings of the board in order to establish costs and criteria. Apparently none of this was needed in connection with Newfoundland. Apparently
November 1, 1968

Canadian National Railways the attitude was: These are the natives; use them as guinea pigs.
I do not need to read the very first item of the terms of union, and I do not think Newfoundland wants to be considered as a foreign country that is asking for foreign aid. But I would remind hon. members of this house that we are part of Canada; we became part of Canada in 1949 and we are to be considered as a province of Canada.
What is the proposal of this benevolent transport commission? They say there was a deficit of $918,000. I say that the figures they submitted to support their case were definitely padded.
There is one train in Newfoundland to which one passenger car is coupled. They hook on one car at the end of a long freight train. The railway, in the expenses set out in this financial report, even includes a proportion of the fuel used to pull that one, solitary car. They did not bring into the picture any part of the money they made on the 99 freight cars that went ahead of it but proportioned the expenses in connection with fuel used on that twice a week service. It is very easy to make any line in Canada a candidate for abandonment if you use supporting figures such as were used in this case.
In the report of the railway commission which sat in St. John's they say that one of the reasons they are discontinuing our passenger service is that the gauge is so narrow. The gauge is no narrower than it was in 1949. The commission also says there are curves, grades and so on in the line. There is not one single curve or grade that was not there in 1949, and the gauge is the same.
When we started to make a fuss about this matter, and only then, we were told the intention was to provide a fleet of 16 buses. Since we began to be heard on this matter we have been told the railway will provide, in addition, four super buses. We stopped reading comic books years ago. We do not care about super buses. This is almost like an advertisement for soap or a super detergent. They will provide Newfoundland with 16 buses and four super buses. I call this to the attention of the committee. God knows, we in Newfoundland should thank everybody for our blessings. Each bus will seat 39 passengers, will be air conditioned and equipped with a lavatory.


Some hon. Members:: Hear, hear.


Ambrose Hubert Peddle: I hope the air conditioning is working some stormy morning next February

when the bus starts to slide across Crooked Bog. Hon. members might not know what Crooked Bog is or where it is, but I hope the air conditioning is working. As somebody suggested this morning, I hope the general manager of the C.N.R. is on the bus at that time. Then it is said that the buses will be equipped with lavatories. Big deal! Perhaps they should not have spent the money because we have a very wooded country and the bus should just slow down.


Some hon. Members:: Oh, oh.


Ambrose Hubert Peddle: This is very magnanimous of the railway; it is wonderful. They have told us this in the newspapers and every news medium that I have read or heard. They will provide these buses with reclining seats, air conditioning and a lavatory. Thanks be to God, to Jack Pickersgill, Canadian National Railways and this government which promised us a just society. What do they offer the people of Canada? This is what they offer a part of Canada that needs aid. What do they offer to the rest of Canada? I have here some of the very colourful brochures put out by the railway. I think the committee would be interested to hear what these brochures say. In one brochure it states:
The case for CN "traveliving"! It's the most relaxing, most enjoyable and most rewarding way to travel. Comfort and pleasure all the way. Tempting meals. Tip-top service. On longer distance trains, hospitality hours, kiddies' hours, even bingo!
Scenic ... sophisticated ... satisfying. CN "traveliving"-the only way to go.
This is all for Canadians, but for Newfoundlanders we have 39 passenger buses with air conditioning, which we do not need, and lavatories, which we probably will not need. That is not all.


Some hon. Members:: Explain, e (2:50 p.m.)


Ambrose Hubert Peddle: That is not all, Mr. Chairman. We have two kinds of Canadians; Newfound-land-Canadians and Canadians. Here is a little booklet which was so kindly provided to me by the C.N.R. and it covers the train section by section. It states:
Deep spring seats by day, lower and upper berths with foam mattresses by night. Dormette accommodation is very similar.
That is very interesting. Then it states:
Roomette: Lots of room for one; foldaway bed and all facilities.
Then they have it in French, and while I am taking French now I will not risk reading
November 1, 1968

it. It then deals with a duplex roomette and states:
Compact comfort with bed and ail facilities.
The next one states:
Bedroom: Another type featuring full length day-sofa, folding armchair, upper and lower beds and all facilities.
It also states that the bedrooms have folding armchairs replaced by upper and lower beds at night, with all facilities. Then it refers to the club car and states:
Privacy or conversation-in comfort.
Apparently you can read all the latest magazines in deep-seated comfort. They have carpeting up to your ankles; you name it and they have it. Then the booklet refers to the cafe lounge and says:
A pleasant setting for hearty meals, snacks and refreshments.
Then we have the livingroom and the booklet speaks of lounging in sophisticated ease. It refers to the lounge-"soft lights and luxury in a modern mood." This is beautiful for Canadians. We then go to the diner where it speaks of fine meals, gleaming silver and impeccable service. That is the end of that one. Most Canadians enjoy these things, but these people spend our money to promote this stuff and at the same time deprive us of our comfortable travelling accommodation.
We then come to another pamphlet which starts off by saying "Why be a prisoner of the road"? It goes on to say:
There's no need to sentence yourself to hours of tension behind the wheel when you can travel relaxed on CN "traveliving" comfort and have the use of your own car at destination.
The brochure mentions all-weather reliability. This is something they should have taken into consideration in Newfoundland. I suggest the buses will not have all-weather reliability. The brochure also states, "No eating on the run". How in the name of heaven are you going to sleep and eat, play bingo and snakes and ladders and do these other things on a bus? This is fine for the rest of Canada. This is just my way of speaking but I am serious. Canadians nest in deep-seated comfort; they can sleep the miles away. They can go into the lounge and enjoy the friendship of their friends and can even meet new friends.
Another brochure suggests that one should not be bashful. You are not supposed to be bashful; you are supposed to speak to people and make new friends while enjoying carpets up to your ankles. You are supposed to have
Canadian National Railways a drink and make new friends with somebody in the lounge car, I suppose, while you play bingo. This is all for Canadians.
What do these people tell the Newfoundlanders? What do they offer to the people there? They offer a 39-seat bus with air conditioning, which we do not need, and a lavatory.


Some hon. Members:: Oh, oh.


Ambrose Hubert Peddle: Hon. members over there sound as though they approve of this. Maybe they were not here when I made my earlier remarks. They do not have any idea what confederation means.


An hon. Member:: Speak up, we are listening.


Ambrose Hubert Peddle: They should try to understand. We are supposed to be equal partners in confederation. The name of the outfit I am criticizing today is Canadian National Railways. That suggests to me that it is a national service rather than one available to nine provinces of Canada but not to the tenth. This is the point I am trying to make.


James Hugh Faulkner: Order, please. I am sorry to interrupt the hon. member but his time has expired.


Some hon. Members:: Carry on.


James Hugh Faulkner: Is it the pleasure of the committee to allow the hon. member to continue?


Some hon. Members:: Agreed.


Ambrose Hubert Peddle: I should like to thank you, Mr. Chairman, and those hon. members who have been so gracious. I hope they do not regard this as entertainment because it is not intended as such.


Mr. Mongrain:: Think about the amusement tax.


Ambrose Hubert Peddle: I have another pamphlet here from the C.N.R. which states:
CN "traveliving" is travel fun. Whether you're going to the next town or across Canada, you can relax, sit back in comfortable, friendly surroundings and enjoy traveliving "the way of the worry free''-by CN.
"Traveliving" means dollar-saving fares, fine food, good service, convenient schedules and hospitality .. . and the most beautiful scenery Canada has to offer right outside your picture window.
I might mention at this point that I took a ride on a train in Newfoundland recently.
November 1, 1968

Canadian National Railways They talk about looking out through the picture window. You could not look out the windows of that train because they have not been cleaned since confederation. You cannot see through the windows. This outfit from the day of confederation, when they whipped the linen off the tables and replaced it with little paper placemats, has deliberately downgraded the service. Now they are making a final move to withdraw it. I suggest that the people of Canada and the members of this house should not let them withdraw it.
Here is another little pamphlet entitled "Traveliving tips for milady from CN". It states:
Have a wonderful trip, milady. CN hopes you will enjoy traveliving-"the way of the worry free".
This outfit will even take you to Paris, the Paris of North America, Montreal. This article suggests that Montreal is the second largest French speaking city in the world and then states:
Not bad for a place that's just a few dollars away by CN. You'll enjoy getting there too.
I should like to point out that Newfoundlanders would like to go to Montreal too. We believe in biculturalism and bilingualism and everything else that will make this country one country, but we do not believe in moves like this which will divide this country in two.
Here is another clipping from a newspaper which says you can sleep overnight to Toronto. For the benefit of Hansard, it has six "z's". I do not know what that means but probably it means sleep. It then states:
Take the Cavalier any night to Toronto and leave the "rest" to CN. Don't worry about hotel accommodation.
One article suggests that C.N. is the escape route. That is the route that this company has taken in Newfoundland. It is trying to escape.
I am not alone in my criticism, Mr. Chairman. Let me refer to the remarks made by Mr. J. A. McDonald who is the vice president, production, of the C.N.R., whatever that means. In a speech he made a few weeks ago he said he could not possibly concede the superiority of air transport over intermediate distances, 125 to 750 miles, and that anyone who has experienced the miseries of peak congestion on the most modern 12-lane highway would recognize that road transport is not capable of providing adequately for all the needs of the travelling public. That is what a top man in the C.N.R. said. I do not

know what we in Newfoundland are supposed to accept but apparently we are supposed to accept almost anything. I have a picture of this 39-passenger bus with air conditioning and a lavatory.
[DOT] (3:00 p.m.)
However, Mr. Chairman, apparently there is not much that we can do about this situation. As I stand here today, I realize that the government of this country has the last say in a matter such as this. I appeal, sir, to the government and to every member of this house. I suggest that if they have any idea as to the meaning of confederation they will keep Canadian National Railways as Canadian National Railways and not as a railway that serves nine provinces in Canada while disregarding the needs of the tenth.


Mr. Carler:: My main purpose in speaking on this resolution, Mr. Chairman, is to add my support to those of my colleagues who have already spoken. I should like to point out again to the house, and indeed to Canadian National, the terrible injustice that is being perpetrated by the government, by Canadian National Railways and by the Canadian Transport Commission in abandoning the rail passenger service in my province of Newfoundland. I regret that the Minister of Transport is not here, nor is his colleague the Minister of Defence Production. I hope this is not indicative of their lack of interest in this very important subject because in my province it is a very important subject.
In my maiden speech before this house I referred to the actions on the part of the three bodies I have just mentioned as being the great train robbery. I believe I pointed out that the recent great train robbery in Great Britain, which was given so much publicity, was designed and planned by a bunch of kindergarten children compared to the scheme that was prepared by Canadian National and others to rob Newfoundland of its passenger train service. I say "rob", Mr. Chairman, because this is exactly what has happened. Newfoundland has been robbed of one of its rights; it is being robbed of its rail passenger service.
The Newfoundland railway, as my colleague mentioned, was built some 70 or 80 years ago by the proverbial blood, sweat and tears of the people of Newfoundland. It was built, sir, at great sacrifice by the people of our province, at that time a colony. Since that time it has served our people well. It was built because it was to give our people an
November 1, 1968	COMMONS
opportunity to communicate and to move about more freely in the colony. The railway was a very important facility. I am alarmed that 70 or 80 years later, when we have become a part of this great Canadian nation, a decision has been made and has been upheld by this government and by the Canadian Transport Commission to abandon this vital rail passenger service in Newfoundland. Our province, as most hon. members will recall, is sparsely populated. We have a very severe climate and, I might say, lots of snow. I make this point because the Canadian National intends, as my colleague pointed out, to replace the passenger train service with buses.
I must say that my colleague, the hon. member for Grand Falls-White Bay-Labrador, did an excellent job of describing the type of bus, the air conditioning, etc. Can you imagine, though, buses travelling right across Newfoundland, a distance of some 600 miles, under the most severe conditions imaginable and sometimes through a barren wilderness stretching in excess of 100 miles where in many places you see no sign of human life. There would be 39 passengers, men, women and children, crammed in that bus plowing its way along the trans-Canada highway in Newfoundland. It must be recalled that our trains have been blocked by snow in that area for as long as 70 hours. This is not too bad on a train where you can move around, where you have a dining car and so on. However, can you imagine people being stranded on an ordinary passenger bus for that length of time? I am suggesting that this will happen as sure as we are in this house today. It might not happen this winter but it certainly will happen, and it will happen on many occasions.
God forgive me for saying this, and I do not wish anything ill for anybody, but I should like to see the president of Canadian National and the former member of this house, Jack Pickersgill, come to Newfoundland and take a ride on that bus. Again, God forgive me, but I would not mind seeing them stuck for a few hours. I know such a thing should not happen to anybody, but if there is anybody in Canada who deserves that to happen I would highly recommend to the man above that these two or three men should be given top priority.


Stanley Howard Knowles: Jack would not freeze; he jumps around too much.
DEBATES	2317
Canadian National Railways


Walter C. Carter: Well, at $40,000 a year he can afford to jump around. I will give him credit for one thing; he knew when to leave Bonavista-Twillinga'te.
Getting back on a serious note, Mr. Chairman, I point out that while there may not be-this is debatable-a constitutional obligation on the part of the government to maintain our passenger service, in my opinion there is most definitely a moral obligation. In recent years in Newfoundland we have had a number of commissions set up to investigate transportation problems. There was the MacPherson commission on transport as well as the Newfoundland transportation commission. Both-I repeat both-recommended the upgrading of the rail service. It might be of interest to note, and I hope hon. members opposite will do so, that neither report recommended abandonment. I repeat that these two commissions, headed by highly qualified people, were well aware and quite familiar with the conditions that exist in Newfoundland and they recommended that the rail service be upgraded. They did not recommend that it be abandoned.
The irony of the situation is that, despite these royal commissions, the Canadian National has adopted the opposite policy. Some years ago the Canadian National deliberately set about downgrading the Newfoundland rail passenger service in order to discourage its use by the travelling public. Naturally this policy resulted in yearly losses, substantial losses some years. Of course, this fact was used to strengthen the argument of Canadian National in favour of abandoning the rail passenger service. The argument Canadian National is using is based on the fact that in 1966, I believe it was, Canadian National lost $916,000. This was a deliberate loss. If this is going to be the yard-stick C.N.R. will use in the future, then how many rail services will be allowed to continue? If I am wrong, I stand to be corrected, but I do not know of any service that is really making money. I am sure the loss of $916,000 on the Newfoundland service is not as heavy as other losses incurred on other rail services.
[DOT] (3:10 p.m.)
Canadian National's plan to steal our passenger service from us was a very well calculated one. Several years ago they commenced to downgrade the service, to take away from the Newfoundland people things to which we were accustomed. For example, we had a reasonably good dining car and, as
November 1, 1968

Canadian National Railways my hon. friend has mentioned, they replaced the linen with paper mats. This, I charge, was part of their over-all plan to incur losses with a view eventually to eliminating the service completely.
Canadian National's plan has been opposed by almost every Newfoundlander, with one or two exceptions. As I have already stated, the proposed action is contrary to the recommendations of two royal commissions on transport in Newfoundland. Almost every organized body in Newfoundland has objected to it. Our unions and our municipal councils have all voiced strong objection to the action of Canadian National.
The people of Newfoundland too are opposed to the withdrawal of rail passenger service, but their wishes are being completely ignored both by Canadian National and by the present government. I might inform this committee that dozens, even hundreds, of communities will be condemned to virtual isolation by this bureaucratic decision that has been taken in Ottawa. Let me inform the committee, the Minister of Transport and any other minister who is interested that, having removed itself from under the umbrella of colonial government, Newfoundland does not intend to become a colony of the bureaucrats in Ottawa.
I believe an hon. member has already remarked that rumours are rife here, but I heard a rumour that I am inclined to think has some foundation. It has been stated both publicly and privately that there was prior agreement between the present president of the Canadian Transport Commission and the Newfoundland government to discontinue our passenger train service. It has been alleged by a large number of people that in return for the federal government undertaking to assist substantially the Newfoundland government to complete the trans-Canada highway, our provincial government would not object to the elimination of the train passenger service. To the best of my knowledge, at no time has any member of the Newfoundland government, the chairman of the transportation commission, the Minister of Transport or indeed any member of the federal government denied this charge. Indeed, I will go a step further and here and now challenge the president of the Canadian Transport Commission, the premier of Newfoundland or any member of his government to answer the charge publicly by either admitting or denying it.
In recent months the Prime Minister has paid lip service to the so-called just society and the elimination of regional disparities. I would therefore urge him and his colleagues to join the people of Newfoundland in their desperate fight to obtain justice and equal rights in the matter of our rail passenger service. I suppose I should not say this, Mr. Chairman, because my colleagues might not approve, but if the Prime Minister of Canada and his colleagues were to join the people of Newfoundland and were to restore to us that which is ours, they would become heroes in Newfoundland. I ask him and his colleagues to join us in our fight to retain that which is rightly and traditionally ours.
In view of the remarks of the Prime Minister in connection with regional disparity and a just society, I would ask him and his government this afternoon to take whatever steps are necessary to set aside the decision of the Canadian Transport Commission and to instruct Canadian National that, while they may be allowed to keep their buses running along the roads, they are not going to be allowed to discontinue their rail passenger service.
For the benefit of other members who perhaps are not too familiar with the terms and conditions under which Canadian National is allowed to abandon rail services, let me inform them that 39 passenger buses were introduced into service. These buses are to operate in conjunction with the rail passenger service until April next year. If the service is successful then the C.N. has the right to discontinue its trains and to operate with buses.
In all sincerity and honesty, Mr. Chairman, I ask whether this is a fair trial. Can we take the winter of 1969 as a forerunner of the sort of winter that we will have in 1970, in 1971, in 1972 and thereafter? It has even been the case in Newfoundland that there has been a mild winter with not too much snow. In those conditions it is quite possible that a bus service would be reasonably successful, that the buses would not get stuck on the trans-Canada highway for 70 hours, thereby sparing the president of the Canadian National and president of the Canadian Transport Commission the inconvenience and bother of being stranded.
As I say, Mr. Chairman, if the Prime Minister is sincere in his aim and desire to create a just society, to put an end to regional disparity, then I plead with him to instruct the Canadian National to run their buses and also to keep their trains running for another

November 1, 1968
ten years. Let us have a ten year trial. Over that period we would be able to form a pretty good idea how successful buses will be on that long stretch of the Newfoundland highway, a large part of which, as I have said before, is barren wilderness.
I beg the Prime Minister and his government to heed what I am saying and to listen to the Newfoundland people. Surely to God the Newfoundland people have some right to be heard in this respect. They built the railway with their own money long before Newfoundland decided to join Canada. Why should they not be allowed to keep it?
I am sorry that our Newfoundland minister, who has expressed such concern for the Newfoundland people on this question, has not shown his interest by being in the house this afternoon to take part in this debate. I am also sorry that the Minister of Transport, under whose department the Canadian National falls, is not here. I hope this is not indicative of their lack of interest in this very important and serious question that is confronting Newfoundlanders today.
[DOT] (3:20 p.m.)
I close, Mr. Chairman, by asking the government and the Prime Minister, consistent with what he has said about the just society, to take whatever steps are necessary to set aside the decision of the Canadian Transport Commission and to give Newfoundland the train service to which it is entitled. May I say that the tourist industry is extremely important to Newfoundland and is becoming more important. Between Newfoundland and the rest of Canada is a 90-mile stretch of water which, so to speak, is very expensive. There is a ferry service from North Sydney to Port aux Basques and Argentia and I might cite some figures in relation to it. A male tourist with his wife and two children wishing to travel from North Sydney to Argentia and back must pay $262. The fare for the same family to Port aux Basques is, I believe, in excess of $100. I seriously recommend to the government that it consider abolishing that fare or reducing it substantially. Why should Newfoundland be penalized because it is separated from the rest of Canada by this 90-mile stretch of water?


James Hugh Faulkner: Order, please. I must
inform the hon. member that his time has expired.


Some hon. Members:: Continue.


James Hugh Faulkner: Is that agreed?
Canadian National Railways


Some hon. Members:: Agreed.


Walter C. Carter: I thank the committee. I reiterate my request that the minister seriously consider reducing the ferry fare from North Sydney to Port aux Basques and Argentia. This would help our tourist industry which is most important to Newfoundland's future.


Stanley Howard Knowles: Mr. Chairman, the things I should like to say on this resolution are not necessarily related to each other but they are all related to the general subject we are discussing this afternoon. Before this resolution carries I hope the parliamentary secretary to the Minister of Finance will answer some questions that are bothering me which have to do with the slight differences in wording that we find in this resolution compared with the wording of similar resolutions introduced on previous occasions.
The phrases in this resolution that give me cause for concern are those that refer to securities guaranteed by Her Majesty, to loans obtained in the capital markets, and so on. I notice that these references seem to apply with respect to assistance both to Canadian National Railways and to Air Canada.
Bearing in mind the information that has been given to us that a cabinet committee under the direction of the Minister without Portfolio, the hon. member for Winnipeg South, in studying the whole question of the ownership and operation of air lines in this country, I cannot but wonder whether these differences in the resolution forecast a change, the die for which may already be cast. I hope that is not the case and I hope the parliamentary secretary to Minister of Finance will say something to assure us on this point.
It is well known that some of us in this house have long been strong supporters of Air Canada, formerly Trans-Canada Air Lines, as a crown corporation owned by the people of Canada and operated for the service of our people. We do not like the suggestion that a change in the ownership of this corporation is even to be considered. I might as well be frank and say that we do not like the idea that a man with the connections the hon. member for Winnipeg South has had in the past has been given this assignment. He may have divested himself of his long string of directorships, but his statements in the past would not suggest impartiality on his part as between Canadian Pacific Airlines and Air

2320	COMMONS
Canadian National Railways Canada, and I plead strongly that we not be presented one of these days with a fait accompli under which the people of Canada may have lost their complete and exclusive ownership of this important and valuable air line.
In the early days when we were setting up what was then Trans-Canada Air Lines and were trying to make sure that it would be given the oportunity to become the company it is today, I remember the late Right Hon. C. D. Howe entering the debate at one point, and although his remarks were directed at some of us in this group his words none the less are appropriate today. He said that he hoped to make Trans-Canada Air Lines, as it was then, strong enough to withstand the attacks of its enemies and the support of its friends. I hope the present Air Canada is strong enough to withstand the attentions, or intentions-if you please-of some of its friends in the Liberal party.
Because of these differences in the wording of the resolution I hope the parliamentary secretary to Minister of Finance will give us a statement. Indeed, I think the Minister of Transport and the Minister without Portfolio, the hon. member for Winnipeg South, ought to have been here today to speak on this resolution and on this aspect of the matter.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: welcome the applause which I take it applies not only to the wish that these minister were here but to the idea that public ownership of this air line should continue. I regret that there did not seem to be any applause from the Liberal side of the house.


Mr. Guay (St. Boniface):: Hear, hear.


Stanley Howard Knowles: am glad to see that the hon. member for St. Boniface and a few others have broken the spell and indicated they take the same position.


Mr. Mackasey:: Perhaps the hon. member wants to know why I did not applaud his remarks. I did not particularly like his implication that the Minister without Portfolio from Winnipeg South could not act in an impartial manner with regard to any responsibilities given to him by the government. The words were not characteristic of the hon. member for Winnipeg North Centre. I do not think that type of implication ought to go unnoticed.


Some hon. Members:: Hear, hear.

DEBATES	November 1, 1968


Stanley Howard Knowles: The
hon. member for Winnipeg South and I are personal friends and what I said was not easy to say. But I think that when a man has had long connections with a privately owned air line business certain things ought to be said. Let me put it this way. A better choice could have been made of a man to conduct an impartial survey of the question as to what should be the ownership structure of the air lines industries in this country.
[DOT] (3:30 p.m.)
My second point relates to a matter which was again the subject of questions and answers on orders of the day this morning, that is, the position of the maintenance and overhaul base of Air Canada in the City of Winnipeg. The statement the Minister of Transport made this morning had a certain ring of reassurance about it. He told us on his own initiative that the former prime minister, Right Hon. L. B. Pearson, had made certain commitments to the City of Winnipeg and that those commitments still stand. But how long will they stand before they are implemented? This is a serious matter for Winnipeg, both in terms of the economy of the area and in terms of the employment of those who work at the base.
Negotiations seem to be going on. There appear to be talks about selling the operation there to some private company. The unions are concerned, but I find it is difficult for them to get into consultation with respect to this matter. To me, it is a shame that this kind of thing can be dragged on for so long, while in the meantime employees are forced to move or take other jobs. It has reached the point now where, when some of us ask that the maintenance and overhaul base be retained in Winnipeg, our friends in Montreal get up and suggest we are trying to take something away from Montreal which they think belongs to Montreal. I thought it was our base, and I think the government ought to move more quickly to get this issue settled on a satisfactory basis.
I join with others in expressing the hope that the question of the presidency of Air Canada will soon be settled. The delay is unfair to those who are concerned. It cannot but affect the morale of those who are running Air Canada that this long delay should take place with regard to filling the post which was occupied for so many years by Mr. Gordon McGregor, and I hope action will be taken soon.
November 1, 1968

There is another subject to which I should like to make reference, while we are dealing with this resolution. I have already said that I think the Minister of Transport and the Minister without Portfolio, the hon. member for Winnipeg South, should be here. But at this point I wish the Minister of Finance were here too. I do not place any blame on the parliamentary secretary for piloting this resolution; it is one of the things he was asked to do, and it is one of the duties for which parliamentary secretaries are paid. But the reason I wish the Minister of Finance were here is because he wears several hats. As Minister of Finance he is responsible for policy related to the question of the pensions paid to retired civl servants. Hon. members know the many altercations and exchanges I have had with him over this matter.
The resolution before us is also in the name of the Minister of Finance and it relates, among other things, to the C.N.R. The same problem arises there, namely that there are thousands of retired employees of the C.N.R., a company to which we are constantly voting or lending money, who are on pensions which are utterly inadequate to meet today's living costs, utterly inadequate in the light of today's living standards. Hon. members need not be surprised if I find my way back to this subject under various headings time and time again, because I think it is just about the most important question we face in the whole pension field. Unless we do something to make sure that people who go on pensions will have their standard of living protected throughout the years they are living on those pensions, our whole pensions system will fall into jeopardy.
Answering some questions of mine in this area on October 7, as reported on pages 846 and 847 of Hansard, the Minister of Transport indicated that there are still 388 retired employees of the C.N.R. whose pensions are less than $25 a month; still 2,241 on pensions of $25 a month, and another 3,002 whose pensions range from $25 to $50 a month.
This makes a grand total of 5,651 retired employees of the Canadian National whose pensions are less than $50 a month. Yet despite the fact that these pensions are so low, nothing has been done in the years since these men went on pension to effect any adjustment in the amount paid to them. We have accepted the principle of pension escalation, in part, in the adjustment which is made under the old age security legislation and under the Canada Pension Plan. Several
Canadian National Railways provinces have accepted it and other jurisdictions as well have done so. Quite a few private companies have done so-in most cases, it is true, when these matters are subject to collective bargaining, but not in all cases. Quite a few companies have accepted the principle that escalation has to be built into pensions so that the pensions might have some value in the years after those who draw them have retired. In the old days, when people retired at 65 or 70 and did not live very long afterwards, this problem was not so acute. Today, people are living longer and retiring earlier; costs and prices are rising more rapidly and thousands of people are left helpless as they watch the standard of living they enjoyed on retirement going down and down.
I submit that this is one of the most serious problems facing us in the pension field. We must start dealing with it somewhere, and that is why I wish the Minister of Finance were here today. There are two places where he can make a start. One is with respect to retired civil servants and the other is with respect to retired employees of the C.N.R.


James Hugh Faulkner: I hesitate to interrupt the hon. gentleman, who is an acknowledged expert on the rules, but standing order 59(2) does say that speeches in committee of the whole house must be directly related to the subject under consideration. Possibly I missed the hon. member's point of connection during his remarks about this resolution, which is essentially a financing resolution, and if I have, I apologize. In case I have not, I would appreciate it if the hon. member would return to the substance of the resolution.


Stanley Howard Knowles: Well, Mr. Chairman, I had just about finished making my plea on this occasion. But 1 would not want to be out of order. It is bad enough trying to get a response, without finding oneself out of order, and I do not believe I am. May I point out that the resolution relates to the financing of the C.N.R., and that in this connection you have permitted discussion
about running trains all over Newfoundland_
or not doing so-the question of bus services, and so on. It seems to me the debate has' ranged very far from the question of direct capital expenditure. This is a resolution by which we are making money available to the Canadian National Railways and if, at such a time, we can call upon the company to run trains in Newfoundland, or to redress other grievances, surely I have the right to appeal

Canadian National Railways to the government to take up with the C.N.R. this question of pensions paid to retired employees.
If you are satisfied, Mr. Chairman, that I am in order, I am prepared to leave the matter there in the hope that the Minister of Finance, his parliamentary secretary and others will take this matter up with the C.N.R. I still have the promise of the Minister without Portfolio, the hon. member for Winnipeg South, on this point. His last sentence in an adjournment debate on September 24, 1968, as reported in Hansard at page 441, was this:
I can assure the hon. member for Winnipeg North Centre that the government will continue to consult officials of the railways concerning the position of pensioners.
[DOT] (3:40 p.m.)
All the things we propose to do under this resolution are important-the business of financing the C.N.R. and Air Canada, the business of capital expansion, the business of construction. But, Mr. Chairman, so are people important. They are important not only while working for the C.N.R. but afterwards, and I think something must be done for the pension position of these people.


Gérard Laprise: Mr. Chairman, I should like to make a few general remarks on the resolution put before us this afternoon preceding a bill which doubtless will be passed by the house.
I shall not dwell on the operations of the Canadian National but instead I will turn to the fact that we are being asked to vote a total amount of almost half a billion dollars to finance the Canadian National Railways. I notice that this resolution comes back almost every year to provide the funds required for the operation of our railway transportation system.
Mr. Chairman, I fully agree that we need a public transportation system in Canada, but I must express my disapproval of the way in which we are financing our own transportation system. I shall not criticize this afternoon the administration of the C.N.R., because, from the report we get each year from the company, I see that on the whole it is well run since, for the past few years, or at least since 1962, the company has managed to accumulate an operational surplus. However, a careful study of these reports, shows a rather substantial deficit for each year, in spite of that surplus.
[Mr. Knowles (Winnipeg North Centre) .1
November 1# 1968
Mr. Chairman, this is due to the enormous debt of the C.N.R., which, in 1967, reached $1,800,000,000. In fact, in spite of a surplus of $29,200,000, the Canadian National still has a deficit of $35,900,000 after having paid $65,100,000 in interest on its debt.
Mr. Chairman, I say that if Canadian National has to present us with a report showing a debit balance, this in part is not due to its operation or administration, but rather to the poor administration of the government which has not been able to finance or to set up its own railway company on a sound and profitable basis.
In the annual report of the Canadian National for 1967, we can read at page 23, just at the beginning of the comments, and i quote:
For Canadian National, as for Canada as a whole, 1967 was a year of pride m past and cu rent achievement and of strengthened confidence in the future.
Mr. Chairman, we can be proud of that judgment concerning our railway system, but I think that we cannot be proud of the way m which it is administered and of the expenses it involves for the government.
If I look at the page concerning grants, I note that during 1967, we have paid $63,100,000 that is the estimated cost of interest on the debt of the Canadian National Railways. This is what I am driving at, Mr. Chairman. I wish to urge the government to find another method of financing that crown corporation. By so doing, it would not be compelled each year to return with such a motion asking us to vote the necessary estimates. For example, a sum of $75 million is mentioned to pay certain bonds; in fact, a loan is being asked to pay a debt which is due and I feel that will not settle anything.
One of the suggestions which I want to make at this stage of the consideration of the resolution is to ask the government to consider another method of financing that crown corporation which, in short, belongs to Canadians, so that it will not show a deficit on account of its financing system I am suggesting to the government to s^d,y the proposals the Ralliement Creditisie has been making in this house since 1935 and am sure that they will give him the solution which will enable Canadians to be proud of having a transportation system which is making money and serving all of Canada. When that happens we will no longer hear complaints such as those made this afternoon by the hon. members from Newfoundland who
November 1, 1968

were right to complain. I think, Mr. Chairman, that the whole problem of our public transportation system is due to poor financing by the government.
I do not think it is too late to solve this problem even though we paid, in interests only, during the last 25 years almost the present amount of the debt. In the last 25 years, we paid, according to the report presented to us, an amount of $1,275,499,000 in interests. If the Canadian National had been financed according to the method advocated by the Ralliement Creditiste, the debt would be almost paid up. The government would not have to come back every year, as I said earlier, with resolutions as the one now before us. I think that the government should seriously consider other methods of finding a solution to this problem.


John Howard Lundrigan: November 1, 1968

the nature of it, which has resulted in our losing our rail passenger service. Across Canada there has been tremendous expansion in many ways with regard to rail passenger service. There is the Alberta Resources Railway, the Great Slave Lake Railway, the Ontario commuter service, and in a bill which will come before the house there is an item for the expenditure of more than $50 million in respect of rail lines. This expenditure of Canadian National Railways has been financed jointly by the federal and provincial governments, mainly by the federal government; yet we have to suffer the loss of a vital service on the basis of less than $1 million.
We do not have a Canadian Pacific Railway to fall back on. We do not have the commuter service that they have in and out of Toronto. We do not have the large, luxurious railiners that the hon. member for Grand Falls-White Bay-Labrador mentioned today. We have one lonely, little piece of rail going across 500 miles of bog, barren land, forest and field in Newfoundland. We have one little railway which transports a considerable number of people and is not doing much damage to the Canadian economy. As a matter of fact, it is a great stimulus to our provincial economy. Our rail passenger service has been allowed to go downhill so much in the last year that Oliver Goldsmith would have been reluctant to include it in his Deserted Village.


Some hon. Members:: Hear, hear.


John Howard Lundrigan: Conditions in some of the way stations and stations generally across Newfoundland would not compare favourably with conditions during the Alaska gold rush, because the rail service in Newfoundland has been allowed to really go downhill. An hon. Liberal member is interrupting me again. Obviously he has not a railway in his constituency. I would like the hon. member and a good many other Liberal members in the house to stand up and speak on this issue, because they will be faced with the same kind of decision making if they are not careful. I believe a number of hon. members of the Liberal party are prepared to speak on this issue, and we hope they are given the opportunity to support us in our endeavour.


Thomas Miller Bell: They have not realized it yet.


John Howard Lundrigan: We have way stations, bystations and transportation conditions acrosss Newfoundland that are unbelievable. In the last two years things have been allowed to deteriorate and go downhill. It is amazing that people have used the service at all. I
Canadian National Railways have been writing letters for months on this subject and have received very little response from people with responsible positions in the Canadian National Railways.
The amazing thing is that Canadian National has tried to kill the service; but with regard to every little station across the island one could, if you presented the statistics- which I would if I had time today-prove that the service is being used more than ever. Despite the fact that the service has been allowed to go downhill, people on the island, and tourists, are using the service. Despite the lack of service, it is being used to a greater extent than in the past. Last year for example it was used to a great extent. If one reads the annual report of the C.N.R. he sees that the contention is that the service was used more last year because it was centennial year. But the service has been used to an even greater extent this year, and this is not centennial year. I have never in my life heard an argument presented by a group of individuals representing a company such as that presented by the railway in support of its contention.
It is unfortunate that the Minister of Transport is not with us today. However I beg his colleagues to bring this debate to the attention of the minister. I hope he will make a statement in the house on this question and will check up on what is happening in Canada with regard to rail transportation. A commission on railway costing conducted a study in the province of Manitoba and considered presentations of 3,000 pages. If one were to read in detail excerpts from the report it would be difficult to realize how an agency responsible for providing a basic service could still exist in Canada, with our present code of ethics and attitude toward providing these services.
A member of the Manitoba branch line retention association indicated that, with the present rail costing method used by Canadian National Railways, almost any line could be made a candidate for abandonment. There is no trouble justifying this statement if one is able to go into detail. I beg hon. members opposite and colleagues of the Minister of Transport to implore the minister to take issue with what has been happening in respect of transportation and communications in Canada.
We have great faith in the Minister of Transport. We have little faith in other people connected with transportion. I have heard a number of people referring to Jack
November 1, 1968

Canadian National Railways Pickersgill as still being the minister of transport. It is my understanding that Jack Pickersgill created a position which would rid him of the responsibility of that portfolio. I hope the Minister of Transport will take issue with the situation and will not allow "Sir" Jack to exercise the kind of authority he is noted as having exercised through the years.
In conclusion, Mr. Chairman, I say for God's sake let the Minister of Transport stand up and play his part as a great Canadian in dealing with this issue. Let him use the power given him in section 53 of the Railway Act, which empowers the minister and his colleagues to set aside or rescind a decision of any body with delegated power, such as the Canadian Transport Commission. For God's sake let the Minister of Transport take issue in this regard, set aside this decision and rectify the injustice perpetrated upon the people of Newfoundland.


Mr. Osier:: Mr. Chairman, I think the resolution we are considering, item No. 24 on the order paper, should be passed by the house. These two great Canadian corporations require money and should be given it by the house. By and large they serve the Canadian people well. I have been very much interested to hear the regional beefs of the Newfoundland members. We in western Canada have somewhat similar beefs with regard to regional situations about railways of both denominations, as it were. However, I do not wish to speak about that matter today.
As the member for Winnipeg South Centre,
I am convinced that my constituents would not want me to try to block the passage of this legislation. We are good Canadians; I believe we should do things to improve Canada's future. Obviously, as I say, the two corporations covered by the resolution need this money.
I do not think this afternoon should pass without reference being made to the second part of the resolution, which deals with Air Canada. Air Canada needs a considerable amount of money, $130 million and $75 million. I suggest to the government that while it might be fine for Air Canada to keep their aeroplanes in the air as much as they can, the appointment of the president of Air Canada should not be kept in the air any longer than it has to be. Major policy decisions, such as the one that bothers me and the people in my constituency, should not be left in the air either. Basically, we have had in Winnipeg an air base that is employing approximately 700 people at the moment. One can multiply that 

figure by two, because most of these employees have wives, and by two or three more because most of them have children. Therefore one could say that a great number of people are being kept in the air each hour of every day and night. Some of them are getting ulcers. Some of them are becoming worried and depressed because of this situation. I can vouch for this, Mr. Chairman, because I have spoken to them about the problem.
[DOT] (4:10 p.m.)
There was some suggestion that an effort be made to maintain the overhaul base at Winnipeg, but that it was economically impossible to do so. I do not believe in parliamentarians meddling in the affairs of crown corporations to the detriment of the efficient service they provide the general public. However, I do think it is a shocking thing that Air Canada has been allowed to say one thing and do another, and this is exactly what is happening today.
Air Canada has an overhaul base in Winnipeg that is being bled to death. The 700 people employed there are not working full days. They know this and so does everyone else. At the same time in Montreal there is a situation where the employees are working overtime and much of the work is being subcontracted. It does not make sense that in Winnipeg the workmen are not given the dignity of being allowed to put in an honest day's work, so the country as a whole can get an honest dollar's worth of work when their is work to be done.
If this base at Winnipeg is really not of any use, for God's sake why does not Air Canada say' so, and shut it down? I have seen no factual figures that would indicate this, but I challenge Air Canada to do this and the government of Canada to accept its reasoning. I am a member of the government party and I will vote for the bill which will follow this resolution, because we in Winnipeg are not small minded about the needs of this country.
This government has been saddled with the Pearson pledge, and I warn members that the unions are going to put up placards and bills all over the city repeating that pledge, if the government reneges on it. Mr. Pearson said that this base would be used until at least 1973, and that the government had no intention of allowing the airport itself to be diminished in any way. Obviously, if it is not to be diminished either Air Canada or a substantial substitute, such as Douglas or Lockheed-some company that knows what it is
November 1, 1968

doing-will have to take the place of Air Canada. From what I have seen, nothing is happening. I do not blame the Liberals any more than the Conservatives, because this has been a festering sore since 1948. I cannot allow the opportunity to pass without bringing the fact to the attention of the government that this is a festering sore for which 90,000 people in my constituency will blame the government, if it is not healed.
Now that Air Canada has come with hat in hand asking for $130 million, and another $75 million, politicians have a justification for meddling in the affairs of this crown corporation. I think it should be made abundantly clear to Air Canada that it has a duty to Canada as a whole, within the context of an air policy. It should be made clear that Air Canada cannot ignore Mr. Pearson's pledge, and that pledge has not been changed by any government or by the dirty infiltration that is taking place daily. This is the time for the government to speak up to Air Canada.
I will vote for this measure on the assumption that the government will have the good sense to do something now about this situation.


Mr. McGrath:: First of all I want to say how grateful the Newfoundland members of parliament are for the very kind and generous remarks of my colleague, the hon. member for Oxford. Notwithstanding the words we have said in the house today, which have been met with a certain amount of derision, laughter and humour, this does not in any way take away from the seriousness of the problem we are trying to outline to the house, at least so far as it affects the province of Newfoundland.
In that context, I consider it a matter of personal regret, as I am sure do the people of Newfoundland, to note the absence of the Minister of Defence Production who is our minister and our representative in the government of Canada. It is a matter of great disappointment to my colleagues that he did not show enough interest in this subject, which is on the lips of everybody in our province, to be in the house this afternoon.
I also note with regret the absence of the Minister of Transport. We had hoped he would be in his place today and that he would pay some attention to our plea. Obviously he must have anticipated this because we have been in constant touch with him since the election of June 25, by way of written communication, verbal communication and questions in the house.
Canadian National Railways
The second day of the sitting of this parliament I directed one of the first questions to the government, specifically to the Minister of Transport, and it related to this subject. My colleagues have referred at some length to the terms of the union, and the hon. member for Grand Falls-White Bay-Labrador quoted from term 31, which is what we might call the railway term. I should like to quote briefly from an order in council passed on April 1, 1949, P.C. -1514, which was a result of the terms of union. As a result of this order in council the governor general in council entrusted to the Canadian National Railway the operation and management of the Newfoundland railway. This order in council reads in part:
Therefore His Excellency the Governor General in Council under recommendation of the Minister of Transport is pleased to order that effective April 1st, 1949, the Newfoundland Railway including rights of way, wharves, drydocks and other real property, rolling stock, equipment, ships and other personal property the title to which is vested in His Majesty, be and they are hereby entrusted in respect of management and operation thereof to the company on the terms in the Canadian National Railways Act expressly specified, namely that such management and operation shall continue during the pleasure of the governor in council.
Both terms 29 and 31 leave no doubt in the mind of any objective observer as to what was intended. It was intended that the Canadian National Railways was being handed the Newfoundland railway in trust for the government of Canada to be operated by the C.N.R. for the people of Newfoundland and the people of Canada.
It is rather interesting to note that at the time of the hearing of the Canadian Transport Commission in St. John's there were a number of briefs presented on behalf of those who opposed this intention-the application of Canadian National Railways to discontinue the rail passenger service in Newfoundland. Among those who appeared before the commission was a cabinet minister representing the government of Newfoundland. He stated at that time that it was the opinion of the government of Newfoundland that the Canadian National Railways should continue to provide rail passenger service, that they should only be permitted to operate a bus service simultaneously with the rail passenger service, and that a trial period of several years should be permitted. The minister representing the Newfoundland government- the minister of justice, a senior member of the cabinet-suggested at that time that any alternative service inaugurated by the railway, a bus service, should be one that would
2328	COMMONS
Canadian National Railways discharge properly its responsibility or those of Canada to the people of Newfoundland as contemplated by the terms of union between Newfoundland and Canada.
There is no doubt what the minister had in mind. He was referring to the terms of union which have been referred to by my colleagues and to which I have briefly alluded. The minister was advocating, on behalf of the Newfoundland government, that neither Canadian National Railways nor the government of Canada had the right to discontinue rail passenger service. However, we wanted to be fair about it; we did not want to hang our rights on a legalistic argument. We were prepared, as reasonable people, to allow the railway to prove to us conclusively that a bus service would be more efficient and would, in fact, be accepted by the people of Newfoundland.
[DOT] (4:20 p.m.)
In order to do this, the Newfoundland government suggested to the commission that between the time of the inauguration of the bus service and the fall of 1970 the railway should maintain regular train passenger service. The minister, in summing up his evidence before the commission, stated that the province of Newfoundland feels it should not be required to accept, and these are his words, "a pig in a poke". In other words, the province of Newfoundland should not be required to accept some vague suggestion on the part of Canadian National, using it as a form of subterfuge to get out of their responsibility as the agency of the government of Canada at the time the railway was taken over in 1949.
I find very interesting this particular brief presented to the commission by the six Newfoundland members of parliament who were sitting in the last parliament. The new Minister of Defence Production, the hon. member for Burin-Burgeo, was included amongst the six. This brief was presented by the then member for St. John's West, Mr. Richard Cashin. The brief stated that Canadian National Railways should demonstrate by experience rather than by opinion-I subscribe to these submissions-that the bus service is workable and does, in fact, constitute a definite improvement over the existing train service. Mr. Cashin felt, and he was speaking for his colleagues at the time, including the hon. member for Burin-Burgeo, that this could only be accomplished by operating the two schemes concurrently for a

DEBATES	November 1, 1968
period of five years. He felt that only in that way could you prove the merits of the one over the other, and only in that way would the railway have the opportunity of gaining the necessary experience in operating a bus service across Newfoundland.
At the time, he also made the suggestion that the railway give consideration to operating a diesel rail dayliner. This suggestion was dismissed out of hand by the railway as being too expensive because of the large capital outlay involved. Mr. Cashin presented his brief to the commission with his usual eloquence, and was speaking for himself and his five colleagues. He felt that the trial period was essential in order to ensure that Canadian National Railways would provide what, in essence, was a more effective service and prove they could maintain this service under the weather and highway conditions which would prevail in Newfoundland.
I was rather interested to find, Mr. Chairman, and I am sure my colleagues were, that the Minister of Defence Production, the hon. member for Burin-Burgeo, sang a different tune when he joined the treasury benches and became a member of this government. I am referring to his remarks during the throne speech debate, which can be found at page 282 of Hansard. At that time he supported the abandonment of rail passenger service in Newfoundland, and supported it with the type of eloquence for which he is famous.
Now, Mr. Chairman, what happened to make him change his mind? Well, that is subject to opinion. Apparently the Minister of Defence Production now sees the situation quite differently, from the treasury benches, than he did when he was a private member of this house. I find it difficult to understand why the Canadian Transport Commission, with a haste that is certainly not characteristic of a tribunal hearing such an important brief, should make this decision. After all, we are not dealing with a spur line or a branch line; we are dealing with a provincial railway covering the province of Newfoundland. Why was there such haste in handing down a decision? It is rather interesting to note that the decision was handed down only after the election on June 25.
A great deal has been made of the operating deficit Canadian National incurred in maintaining the passenger service in Newfoundland. My colleague referred to this. The Canadian Transport Commission, during the course of its hearing, and in its report, referred to this deficit, but referred to it for
November 1, 1968

only one year. I find this rather intriguing, rather interesting. The commission only referred to the year 1966; this is the only year for which we have any statistics. The deficit in that particular year was $900,000.
My colleague, the hon. member for Gander-Twillingate, has referred to this. I am not going to repeat his argument because 1 do not believe $900,000 is that much, especially in view of the fact that the hon. member for Grand Falls-White Bay-Labrador said the railway carried 90,000 passengers that year. We are denied, however, the same type of statistical information for the years 1949 to 1966 inclusive. I should like to know, if we are to have the figures for 1966, why we could not have them for 1964, 1965 and so on.
While we are on the subject, I should like to see a comparison of that deficit with the deficit of Canadian National Railways in the province of Prince Edward Island. Surely it is reasonable to suggest that the Canadian National does not operate at a profit, and certainly not the rail passenger service in the province of Prince Edward Island. I should like to know also about the deficit in Nova Scotia in respect of providing rail passenger service. How much was the deficit incurred by Canadian National in operating rail service in the province of New Brunswick? I could go right across the country. How many rail passenger services in this country operate at a profit? Why single out the province of Newfoundland?
Well, Mr. Chairman, I suspect a little bit of skulduggery; I suspect a little collusion. This has been referred to by my colleagues. The government acted in this way in the province of Newfoundland because they thought they could get away with it. Indeed they felt it was politically expedient for them to do so. I submit to the Canadian National, through you Mr. Chairman and whatever minister in the house is answering for Canadian National, that this railway would not dare abandon the rail passenger service in Prince Edward Island because they know the government of Prince Edward Island would object so strenuously they would not get away with it.
I further submit the government would not dare abandon the rail passenger service in the province of Nova Scotia for the same reason, or the province of New Brunswick for the same reason. However, the same criteria could be used, the same argument could apply. Anyone who looks at the map of Prince Edward Island will be able to see readily that the Canadian National rail line
Canadian National Railways carrying passengers across that island parallels the highway. However, we did not hear of Canadian National abandoning their passenger service in favour of a bus service in Prince Edward Island.
[DOT] (4:30 p.m.)
They know they could not get away with it. The same argument would apply in Nova Scotia. Anyone who has travelled from Yarmouth to Sydney knows that the trans-Canada highway parallels the railway all along. Do we hear of the Canadian National Railways applying to the transportation commission to abandon their rail passenger service in the province of Nova Scotia and to substitute for it a bus service? No. The same applies in the province of New Brunswick. I am not too familiar with western Canada, Mr. Chairman, but I would suggest that the same argument applies to the western provinces as well.
Therefore I come back to my question: Why pick on Newfoundland? Why deprive us of what is the right of every other Canadian?
I do not think it unreasonable to say-and this is the sum total of our argument-that until the government and its agency brings in a general policy of abandoning rail passenger service right across the country, we in Newfoundland will oppose this measure with all the strength that we can muster.
I also hope, Mr. Chairman, that we will have an opportunity to question the officials of the C.N.R. about this matter. I would not want to be unreasonable; we genuinely want answers to our questions. I should like to question the Minister of Transport about the suggestion that there was a deal between the government of Canada and the government of Newfoundland, which was on a political hook in that it was committed to completing the trans-Canada highway in two years but did not have the wherewithal to complete it in ten years. It is said that the government of Newfoundland told the federal government that if it would get them off that hook and agree to complete the trans-Canada in Newfoundland, the Newfoundland government would acquiesce in any move the federal government might make to discontinue the railway in Newfoundland, as a result of which it would probably save $1 million a year.
We should like answers to these questions, Mr. Chairman. Newfoundland became a province of Canada in 1949. The parliamentary secretary need not smile at that; I am not talking about ancient history but about 20
2330	COMMONS DEBATES	November 1, 1968
Canadian National Railways
years ago. Perhaps he will remember that, possibly come out of such an incident. Per-When Newfoundland became a province of haps, Mr. Chairman, if that were to happen Canada in 1949 it had a first class railway and I say this in all sincerity-they would not system, albeit a narrow gauge railway but be so anxious to proceed with this plan to one which at least provided service to our deprive us of what we feel is our right as people. The railway was taken over by the Canadian citizens.
Canadian National, as was their responsibility The position of the province of Newfound-to do, whereupon they embarked upon a land has been stated by a senior member of deliberate policy of downgrading the service, the Newfoundland government, a man billed This was because they looked upon the people as the major rival of the Minister of Defence of Newfoundland as one big "Newfie" joke. It production to take the throne and wear the is a big Newfie joke, Mr. Chairman, because mantle of Joey. What did this man say to the in actual fact that laugh is on us at this commission, Mr. Chairman? His position was
particular time.
Although we cannot present statistical facts to support our argument, we nevertheless contend that from 1949 onwards Canadian National set out upon a deliberate policy of downgrading our passenger service and discouraging people from using it, as a result of which it was able to present arguments to the effect that the service was no longer justifiable.
There is one difficulty, Mr. Chairman, about this alleged deal to complete the trans-Canada highway; the highway in Newfoundland does not measure up to trans-Canada standards. The road goes from one end of Newfoundland to the other, 600 miles of narrow highway which I submit is one of the most hazardous highways in the world. As my hon. friend from Grand Falls-White Bay-Labrador said so eloquently, there are stretches on the highway where you can drive for 100 miles and not even find a logger's shack; where there is no sign of human habitation; where the winter conditions are the most severe in the world; conditions in which even the Canadian National Railways have experienced trains being stuck in the snow for days, 70 or 80 hours not being unusual.
I hope the president of the C.N.R. accepts the invitation put forward by the hon. member for Oxford and takes a trip across Newfoundland on a bus in January. I should like to see him joined by Mr. Pickersgill, the chairman of the Canadian Transport Commission. I should like to see the Minister of Transport, who is not in his seat today, also take that journey. I say the same of the Minister of Defence Production. And just for kicks, Mr. Chairman, I also include the premier of Newfoundland. Can you conceive in your mind's eye, Mr. Chairman, that motley group being stuck in the wilds of Newfoundland in the midst of a January blizzard! Words fail me to describe to you what might

to the effect that any alternative service inaugurated by the railway should be one that would properly discharge its responsibilities. In effect, he said that until such time as the railway could conclusively prove that a bus service would discharge the responsibility that was assumed under the terms of union, the government of Newfoundland was opposed to the submission made by the C.N.R.
I should also like to quote the words of Mr. C. Woodward in the report of the commission, in which it handed down its just judgment. These can be found at page 13 of the report, where Mr. Woodward said:
To sum up in a few words the feelings expressed in these briefs-
Here he is referring to the brief submitted in opposition to the railway's application.
-it would seem to be: Do not treat us, the people of Newfoundland, as second class citizens of Canada by forcing upon us a second class system of passenger service.
I subscribe to those words, Mr. Chairman, and I only regret that the Canadian Transport Commission did not subscribe to them.


James Hugh Faulkner: Order. I regret to inform the hon. member that his time has expired, unless it is the will of the committee that he continue his remarks.


Some hon. Members:: Agreed.


Some hon. Members:: No.


James Hugh Faulkner: The hon. gentleman must have unanimous consent to continue his remarks. Has he unanimous consent? The hon. member for St. John's East.


James Aloysius McGrath: Might 1 suggest to those who hesitate to give me unanimous consent, Mr. Chairman, that there but for the grace of God go they. Their province might be next.
The Canadian Transport Commission, in summing up their report, also summed up the essence of the opposition that was presented
November 1, 1968

by the people of Newfoundland. I should like to quote the words of the acting chairman of the commission and these are his words, not mine:
We as the youngest province in the confederation are entitled to treatment equal to that given the other provinces.
Second class citizens we will continue to be, Mr. Chairman, if we settle for less than equal treatment. As I said at the outset, Mr. Chairman, if we permit Canadian National Railways to embark piecemeal upon a program of abandoning their rail passenger services, and thereby the responsibilities of the government under the terms of union to provide such service to Newfoundland, then we are allowing ourselves to be treated as second class citizens. I repeat that I hope I will have the chance to direct questions to the officials of the Canadian National. After all, perhaps this is the beginning of a five year program, even a ten year program, to abandon rail passenger services all across Canada. I say to the committee that until it becomes the general policy of the government to permit Canadian National Railways to abandon passenger services all across the country we in Newfoundland will not-I repeat-will not permit ourselves to be used as second class citizens in this matter or in any other matter before this house.
[DOT] (4:40 p.m.)
Before resuming my seat I ask the President of the Treasury Board to give hon. members of this committee who are vitally interested in the subject an undertaking that when the estimates of the railway are being considered we shall have a chance to examine officials of the Canadian National with respect to this matter and other matters which vitally interest us. The absence of the Minister of Transport, the Minister without Portfolio who is responsible for the Minister of Transport, and the Minister of Defence Production, from Newfoundland, have been noted. Under the circumstances I do not think it unreasonable to ask for this undertaking.


Mr. Macdonald (Rosedale):: Perhaps I might say a word on this matter, Mr. Chairman. There has been quite a bit of talk this afternoon about the Canadian Transport Commission. I point out to the hon. gentleman that the estimates of that particular board have already been referred to the transport committee. The estimates of the Department of Transport were not referred, at the request of the opposition, and are still before the house.
29180-148}
Canadian National Railways I will give an undertaking on behalf of the Minister of Transport that, by way of reference of the estimates of the forthcoming financial year or by way of reference of the financial report of the Canadian National, the hon. gentleman will have an opportunity to consider these questions in the committee, and an opportunity to examine senior officials of the railway.


Mr. Harding:: Mr. Chairman, the topic I shall stick to closely has to do with the erosion of passenger service in British Columbia. I listened with interest to hon. members from Newfoundland and the Atlantic provinces who complained about the erosion of transport facilities in their provinces. Our problems seem common. The problems of British Columbia to a greater or lesser extent are found in every province of this country.
I know the railways can always come before the Board of Transport Commissioners and present a pretty good case. I have engaged in several protests to the board and government over the abandonment of services, since it seems that over the years there has been a deliberate erosion of the service and the accommodation offered by various companies in this field of transport. This erosion is continuing.
It is simple for one of our national railways to make out a good case for the abandonment of a certain line. We saw that happen in the case of the Kettle Valley line in the Kootenay country. I will not spend much time on this.


Mr. McIntosh:: We have already heard a great deal about the Kettle Valley Railway.


Randolph Harding: I'll bet you have. Passenger service has been eliminated because the company in question greatly reduced the services which the public could obtain. First the sleeping accommodation went. I ask, who wants to travel for a day and a half without some kind of sleeping accommodation? Then the dining car service was taken off. Then, at stopovers, passengers had to get off the train and go to a hotel.
What was the result? After one or two years of this sort of thing the company went to the Board of Transport Commissioners with a bleak revenue picture saying, "Look, we can't make any money on this line. This is what's happening." I submit such a policy has been deliberately followed, and is continuing.
I will now protest the quality of service we are obtaining on our trans-Canada lines. The worst offender is the Canadian Pacific. The
2332	COMMONS
Canadian National Railways Canadian National has at least made an attempt to modernize and upgrade its service. But anyone seeking to go out west on one of the national lines will have great difficulty in obtaining sleeping accommodation. Reservations must be made two or three weeks in advance. Often you are turned down and, in desperation, you seek some other mode of travel. Neither the Board of Transport Commissioners nor this government apparently realizes what is going on when companies ask to have services discontinued. I know of instances where people who could not obtain accommodation on train had as a last resort to take an airplane, a bus or their own car. I can therefore understand the complaints which have been raised, since it seems that other provinces are having the troubles our own province suffers from.
I suggest that rail passenger service has a future in this country. Many people like to travel in a leisurely way and see this great country. If they were assured of reliable service, and accommodation at all times I am sure we should see a sharp upward trend in the number of passengers using trains. The people of British Columbia have never been too happy with this country's national transport policies. Nothing needs to be overhauled so much in this country as our national transport policies, which direct our various systems of transportation. Perhaps I might be permitted to speak of freight rates. The people of British Columbia feel that in the matter of freight rates they are grossly dis-ciminated against. The tendency has been for British Columbia trade to be driven north or south, and particularly south, rather than to the east. Many Canadian markets are barred to products from British Columbia because of the excessively high freight rates charged.
[DOT] (4:50 p.m.)
It seems to me this is one of the first markets which any government should look to and encourage. I know that the province has gone to the federal government and to the Board of Transport Commissioners on numerous occasions with good cases for freight rate assistance, and the need for changes in the old freight rate structure. This is a field in which the house should be keenly interested.
I want to point out that once passenger service lines are abandoned, abandonment of the freight lines is often the next step. This has happened in the area from which I come. Passenger service is discontinued, then comes an application to discontinue freight services to the rural areas. The first thing we know is

DEBATES	November 1, 1968
that a number of small rural industries go out of business. Here we are talking about an incentive program to build up the regions where there is a low level of income and employment, without fully realizing that one of the keys to the whole situation is transportation. If we are to build up industry in some of our rural sections, transportation is one of the keys to a successful program.
I urge the government to take another look at transportation as it affects the rural areas, because this has been overlooked in the past and it is bound to affect our efforts to encourage industry to locate in some of these less favoured areas, in order to bring a higher standard of living to those who live and work there.
Time is drifting on, and there is one more point I should like to make before I sit down. It concerns the air service to the Kootenay country. This is another example of the erosion of transportation services in some sectors of this nation. C.P.A. presently serves the Kootenay area and there is talk of withdrawing service from the Castlegar district. I presume this will apply to the Okanagan, and perhaps, to the east Kootenays, too. If such action is taken, smaller companies will no doubt move into the district; but in the overall picture our transportation facilities are gradually being reduced and this reduction is bound to have detrimental effects on the area.
I suggest to the house that this whole question of air transport, rail transport and road transport be looked into with a view to modernizing the system. These services can be integrated to a far greater extent than they are today.
It seems a tragic thing to me that Canada should have two transcontinental railways, each having trouble getting a sufficient volume of traffic to make its operations pay. Often we see the companies operating fleets of trucks in direct competition with their own rail lines. Often we see highways clogged with trucks carrying goods which could, quite possibly, be carried by railway waggons which are operating only at half capacity. This subject should be explored fully by the department, by the government and by this house. Surely we can improve on what we have.
There are a number of separate questions I should like to ask later, when another opportunity arises. I certainly sympathize with hon. members from Newfoundland and elsewhere who have spoken about the problems they are
November 1, 1968

experiencing in connection with transportation. The government should do something about it.


Gerald William Baldwin: I intend to make a few observations to back up what my hon. friend from Newfoundland has had to say, but before I do so I want to put a proposition before the committee, if this committee is capable of being propositioned. It may well be that before six o'clock arrives we can dispose of the resolution and then, by agreement if necessary, dispose of second reading and get into committee in order that the hon. member who has just spoken, and others, may be able to ask questions on the individual clauses. I am putting this forward as a suggestion. Possibly hon. members might give it some thought.
I support in every respect what hon. members from the province of Newfoundland have said. I come from a country where the railroads have been essential. It is through the construction of the railroads that the breath of life was injected into a new land. The tapestry of our country was brought together by the threads of the narrow bands of steel which came from Edmonton into the north. But within the last year and a half an application had been made to close the rail passenger service on about 500 miles of our system. So I appreciate the difficulties encountered by my hon. friends.
I might add that this service has not been operated by the C.N.R. alone; it is a joint operation between the C.N.R. and the C.P.R. They are lying down in the same bed, and I am sure the hon. member for Winnipeg North Centre will think that it is not to the advantage of the C.N.R. to do so-that the C.N.R. will not rise as pure as it was before it lay down with the C.P.R.
I first went into my part of the country almost 40 years ago, and what hon. members from Newfoundland have said about the quality of the railway there reminds me of the experiences we had. I remember taking a trip almost 40 years ago-getting up after the train had left Edmonton and looking out from the back of the train. As I did so, I saw the track and the ties spring upward as they were released from the weight of the train. So much for the type of construction. I remember, too, that when the waters of the Lesser Slave lake were in flood they had to tie the track to the telegraph poles to prevent its floating away.
I remember the type of construction, the grades, the curves. There is an interesting
Canadian National Railways story told about those days. At one time members of the railway unions operating in the north were intent to secure positions on the railway going into Fort McMurray. Positions on this line were sought almost as eagerly as was the job of toll operator on the Jacques Cartier bridge some years ago. The reason was that the grades were of such a nature that approaching these curves in the wilderness it was possible for the engineer to get out, lay a trap line across the neck of the curves and meet the train coming out the other side. Then on the return journey the fireman would get off, pick up the pelts caught in the traps and rejoin the train. It meant a very lucrative job, so much so that some of the running trades did not need the pensions about which the hon. member for Winnipeg North Centre has been talking.
[DOT] (5:00 p.m.)
I wish to support in every way I can the very reasonable, logical and impassioned pleas made by the hon. members from Newfoundland who, in an honest and impartial way, outlined the conditions which prevail in that province, and the great need to have the railway service sustained. If they speak as eloquently to the committee which will be examining both the estimates and the C.N.R. officials, I am sure and hope the government will give effect to their request that this service be maintained. I am sure I speak on behalf of all members in this party in assuring unanimous support to the Newfoundland members in their reasonable plea that this particular railway passenger service be sustained until a fair opportunity has been given for a try-out.


Herbert Eser (Herb) Gray: Mr. Chairman, members of the committee have raised a number of very important matters linked with the transportation policy of the country. Coming from a part of Canada which is often considered somewhat remote I can understand the concern expressed by some members with respect to changes in operations of our railway system. Concern about such changes has been expressed in my area in the past. On a number of occasions I myself have expressed concern in this chamber about some of the freight rate policies of our railways.
I am glad to echo the words of the government house leader when he pointed out that further opportunities will be available to continue this discussion on the issues that have been raised in perhaps a more focussed and meaningful way, particularly the discussion

Canadian National Railways with respect to the abandonment or elimination of passenger service in Newfoundland. I refer to the reference that will be made to the transportation committee of the annual report of the C.N.R., or something analogous to that.
I also refer to the reference already made by the house of the estimates of the transportation commission to this standing committee, and I refer also to the opportunity that will be made available to hon. members when the estimates of the Department of Transport will be before us in committee of the whole.
While there has been some latitude in today's discussion, actually we have been looking at a resolution designed to permit the house to give first reading to a bill similar to other bills of the same nature introduced in preceding years, to give authorization to the government to guarantee certain obligations of the Canadian National Railway and Air Canada and to authorize them to carry out certain types of capital expenditures, and so on.,
Some questions have been raised relating more strictly to the terms of the resolution itself. Making use of the offer made by the house leader of the official opposition I suggest that we might pass this resolution, so that we can move on to first and second reading of the bill based on it. Thus, when we get into committee of the whole on that bill, we will be able to examine its clauses in detail, and I shall attempt to the best of my ability to deal with these questions raised with reference to the resolution and the bill.


The Acting Chairman (Mr. Richard):: Shall the resolution carry?
November 1, 19G8


Mr. Gleave:: Mr. Chairman-


Some hon. Members:: Oh, oh.


Alfred Pullen Gleave: I am sorry to bore the people opposite, but then you know I too am sometimes bored by them. One of the members from Newfoundland has asked what about western Canada. The member from British Columbia who spoke gave some indication of what is happening in western Canada. A similar pattern of curtailment of service is evident on the prairies.
Agents are being removed from stations, and the result is poorer service. We are faced with proposed rail line abandonments. In my constituency one concerns a railroad which runs 70 miles north from Biggar to the town of North Battleford. Another concerns a line running about the same distance from east to west along the North Saskatchewan river. If 
these abandonment plans are carried out, that whole triangle will eventually be left without rail transportation.
Farmers will have to haul their produce anywhere from 30 to 35 or 40 miles. One may say that might not be any great hardship on them, but it means that municipal roads will have to be built and maintained to a standard that can stand the movement of heavy duty trucks. Ordinarily municipal roads can stand the movement of comparatively light farm trucks, but when one thinks in terms of trucks carrying upwards of 20 tons, then better road beds will have to be built. This means that local residents who pay the property taxes will have to bear the cost of building the extra roads.
When we argue against the abandonment of rail lines we are told that it is not economic to maintain the rail service. In the name of plain common sense is it good economy to abandon a railroad which can move bulk produce out of an area, and be forced to build roads to a standard that will move the same bulk produce? Yet this is the kind of economics which it is suggested we should accept in a great area of western Canada.
A question was raised in the house more than a couple of weeks ago about the managers of a potash plant in east central Saskatchewan who want to hire a fleet of trucks to move potash, a bulk product, south a distance of 200 miles across the United States border to a point where United States trains would start to haul it. How absurd can we get, as a country, when these sorts of things are proposed? Some of us talked to people at the potash company and they informed us that the rail freight on potash is $9 a ton. I have no way of knowing whether or not this is profitable to the railroads, but I suspect it is profitable because this is the rate they have set for the potash companies. The railroads move potash out of Saskatchewan to tidewater on the west coast, or alternatively a great deal of it goes south into the United States which is a large customer for Canadian potash. So, we have the situation where a main potash producer, one of the first to get into production in western Canada, is now proposing to move a bulk product like that by truck. Therefore I believe we should seriously consider not only the balance sheet but also the matter of how well we are serving the industries and the people who live in this region. After all, this is the reason the railroads were built. They were built to serve Canada as a nation, and of course to make a
November 1, 1968

profit for those who invested their money in the railroads. Surely these two reasons still exist. I do not believe that the need to make money has become the only end we should keep in mind.
[DOT] (5:10 p.m.)
Surely the type of service that was needed at the beginning to make us effective and competitive in the markets of the world is as important now as it was then. In the beginning, at least in western Canada, the whole basic design was to maintain an east-west flow of traffic. In fact in the original plans for the prairies there was a definite decision that we would not allow the building of any more north-south lines leading into the United States, but rather that the traffic would be east-west to move manufactured goods into western Canada and to move out whatever was produced there. In other words the considerations were profit, a sound economy, service to the people and a service for the industries and the things the people produced. I believe we should still have these things in mind if we are to have a viable economy, and if the railroads are to serve the people.
I do not intend to talk about passenger service, that has been well covered. I do want to make a plea, however, for a rational transportation system that will move the potash, the grain and the other things we produce efficiently and cheaply to where they are to be sold.
Resolution reported and concurred in.
Mr. Macdonald, Rosedale (for Mr. Benson)
thereupon moved for leave to introduce Bill No. C-124, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways System for the period from the 1st day of January, 1968, to the 30th day of June, 1969, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company and by Air Canada.


[Stage Direction]
Motion agreed to, bill read the first and second times, and the house went into committee thereon, Mr. Richard in the chair.
Jean-Thomas Richard: House in committee of the whole on clause 2.
On clause 2-Definitions.


Thomas Miller Bell: Mr. Chairman, you surprised me by calling clause 2. I suppose that is correct. I had intended earlier this afternoon to speak
Canadian National Railways along the lines followed by other hon. members, but when I saw the mood of the house and an indication that we would make progress I thought I would hold back my remarks until we reached the committee stage.
Of course, this is a routine financing bill. It is similar to those of other years, although there certainly is a great deal of new money being requested and some new ideas contained in it. I believe we should have some indication concerning the position of Air Canada. I am not necessarily speaking about the new appointments that may be made. I realize it probably would be proper to do so, but I do not believe this is the moment to go into that. At this stage I should like to ask what is happening in respect of the particular survey that was conducted into the possibility of Air Canada being made a public company. Also I would be interested to hear what the investment people who were consulted had to say about this possibility.
Without becoming involved in all the problems of Air Canada, I think I am in order in asking just what may be expected in so far as Air Canada is concerned. I realize the hon. member for Oxford had something to say about this this afternoon, and I believe he said it very well. I would like to have some indication of what can be expected so far as the financing of Air Canada is concerned, and whether it is to go public. What did the investment people who were consulted have to say about this; were they optimistic? I have been a member of the committee on transport and communications for a number of years. I am also one of those who believe that Air Canada should be given an opportunity to stand on its own two feet and be a separate entity, and that it should not be attached to the C.N.R. in the way it is, in respect of financial matters I would be grateful for a reply in this regard.


Herbert Eser (Herb) Gray: Mr. Chairman, all I can say in this regard is that if the bill is adopted by the house, in addition to authority for Air Canada to borrow $75 million from the C.N.R., Air Canada will have authority either to go to the market for an amount up to $130 million or borrow this amount indirectly from Her Majesty. This bill will give that option to Air Canada. I am not in a position, however, to say exactly how and to what extent this will be used.
2336	COMMONS
Canadian National Railways


Stanley Howard Knowles: Mr. Chairman, since I understand that the authority that is being given to Air Canada to borrow money in the market is new, can the parliamentary secretary say whether there is any relationship between this new authority and the study that is being made by a special committee under the chairmanship of the minister without portfolio.
[DOT] (5:20 p.m.)


Herbert Eser (Herb) Gray: Mr. Chairman, I am not in a position to say that. This bill merely extends the flexibility of Air Canada with respect to its financing. I am informed that if any change is to be made in the status of Air Canada, it must be done through parliament with parliamentary approval.


Stanley Howard Knowles: Mr. Chairman, could we be told whether this is the precursor of a change?


Herbert Eser (Herb) Gray: Mr. Chairman, I understand the interest of the hon. member in this question but I am afraid I cannot assist him by saying that, or anything further than I have said.


Stanley Howard Knowles: realize the limitation that may face the hon. member because he is only a parliamentary secretary; but could we receive an assurance about this at some point, even if it is on third reading, by a minister? It seems to me it is not without reason that I ask for this kind of assurance.


Herbert Eser (Herb) Gray: Mr. Chairman, I will be happy to look into the possibility as to what, if anything, can be done with regard to the hon. member's request. At the moment I can only repeat what I have said, that the changes in the ownership status of Air Canada would require, I am informed, parliamentary approval, and that the authorization being asked for in this bill is with respect to a broader and more flexible means of financing for Air Canada-I may add, more flexible financing for Air Canada in the corporate structure which it now has.


Jean-Thomas Richard: The
hon. member for St. John's East.


James Aloysius McGrath: Mr. Chairman, my question is not related to this subject, so if another hon. member has a question on the subject perhaps he should be given the floor.
(Mr. Gray.]
DEBATES	November 1, 1968


Mr. Crouse:: Mr. Chairman, I should like to pose a question to the parliamentary secretary. Could he elaborate on the $75 million required by Air Canada, and the use that will be made of it? It is my understanding that Air Canada is today rather frustrated because of the way the 1966 Pickersgill aviation policy has worked out internationally. I believe the company feels it has been frozen out of all international growth and it has been planning a major push to try to convince Ottawa that it must change the rules in order to allow it to fly into the Middle East, Africa, India, the coast of South America to Rio, and in due course around the world.
This is certainly desirable, and I am somewhat concerned that to date the government has not been able to appoint a president of this organization. This of course has resulted in corporate morale tumbling, if you will, to perhaps the lowest level within the corporation. This is not desirable in an organization of that size. Therefore, Mr. Chairman, I wonder whether the parliamentary secretary can elaborate just a little more on the future of Air Canada.
I agree with the hon. member for Saint John-Lancaster that Air Canada should stand on its own two feet. There is no reason, in my view, why it could not be a separate corporate entity and in this way make an even greater contribution to development in this country. But as long as we have this impasse wherein the Minister without Portfolio has been asked by the Prime Minister to determine whether there can be a corporate growth plan in which Canadian Pacific Airlines and Air Canada can be amalgamated, we are bound to continue having these frustrations within the management of Air Canada. I wonder whether the parliamentary secretary could throw a little more light on this subject and give us a better idea of exactly what is happening in this very important section of our transportation industry.


Herbert Eser (Herb) Gray: Mr. Chairman, the hon. member first of all asked what use will be made of the $75 million. Basically, it is for capital expenditure to supplement the self-generated funds arising out of the operations of the corporation. I believe the capital budget of Air Canada has been tabled in the house in the form of an order in council and is therefore publicly available. I would also say that the request in the bill to parliament to authorize this type of capital expenditure, and so on, should not, I think, really create any concern one way or
November 1, 1968

another. While one cannot say that this request will not preclude the possibility of further change, the bill is not making any change in the capital structure, form of ownership or management of Air Canada.
Basically, the bill is for the purpose of providing funds for capital expenditures, and if necessary for current operating expenditures of Air Canada in its present form, so that it may carry on what most people consider to be a very effective job in the interests of Canada.


J. Michael Forrestall: Mr. Chairman, would the parliamentary secretary be good enough to indicate to the committee whether the authority we will be approving has in way been used to date? In other words, have moneys been raised on the private market through the issue of debentures, securities or whatever other instruments Air Canada might choose?


Herbert Eser (Herb) Gray: I am informed that Air Canada has not before this had recourse to the private market. It has not had the authority to do so. It will have that authority only if the bill obtains the approval of the house.


Thomas Miller Bell: Mr. Chairman, I appreciate that the parliamentary secretary has said he cannot give us a complete answer as to what is planned for Air Canada with regard to it becoming public. However, I wonder whether the parliamentary secretary can give us any information-I notice that the President of the Treasury Board is present-as to whether any studies which have been held into this question, about which we are all concerned, show optimism in so far as concerns Air Canada being able to go its own way as a separate entity. Is it not a fact that some of the investment experts who have been involved in this question have said pointedly, in a pessimistic way, that there would have to be a considerable time lapse before the company would be in a position to put forward a complete balance sheet and the like?
I ask this question without going into the matter of the bond market in Canada having a problem at the present time, for reasons that will be unfolded next week. Can any of the ministers present, or the parliamentary secretary, tell us what in general terms has been the thinking about Air Canada going its own, separate way?
Canadian National Railways


Mr. Drury:: Mr. Chairman, the hon. member will appreciate that this is a rather complicated question with a great deal of importance given to value judgments. A number of opinions have been expressed, not all unanimously. Indeed, had the view been simple and unanimous, the answer would have been revealed a considerable time ago. It is because there is a lack of unanimity and the problem is a difficult one to resolve satisfactorily that the necessary time is having to be taken to make sure we get the right answer.
I do not think it would be helpful if I were at this juncture to try to, in effect, produce a graph of temperature changes of these studies. I hope the hon. member will be patient and wait until the final assessment is made.
[DOT] (5:30 p.m.)


Thomas Miller Bell: Mr. Chairman, I thank the minister for giving us at least that information. I ask the minister whether he can say that the general intention is to carry forward with a plan of bringing Air Canada into a fully competitive position with Canadian Pacific Airlines, and allowing it to have some sort of public image. While the details are difficult and the time may not be appropriate, certainly there is some agreement that we should proceed in an attempt to modernize Air Canada and give this company an even break. We should assist the officers of this corporation, regardless of who becomes president, who want to stand on their own feet and look to the future in a proper way. Perhaps this can be done by adopting an appropriate accounting and research system. I do not mean to imply that there is not a proper accounting system, but I am sure the minister will admit that there has been a particular type of operation.
If the minister made such a statement or assurance this might place those of us who have fought for many years to see that Air Canada gets an even break in a good frame of mind. This is particularly important in view of the inroads made by Canadian Pacific into the air business in Canada. Will the minister say that he personally favours Air Canada going public, or does he share the general feeling that this should be attained at some time in the near future?


Charles Mills (Bud) Drury: The hon. member has very considerable knowledge of the problems facing Air Canada. In the space of a couple of
2338	COMMONS
Canadian National Railways minutes he has reorganized this corporation from top to bottom and has asked me whether I agree with all the steps of his reorganization. I can only say that his statement is a little too comprehensive for me to agree with completely. I would hesitate to express a personal view now as to whether Air Canada should, to use his terms, go public. If a view was given it might be an uninformed one. The purpose of the studies now being made is to obtain an informed opinion. I am sure the hon. member would not want me to put forward something off the top of my head. This would serve no useful purpose other than to communicate my prejudices.


James Aloysius McGrath: Mr. Chairman, I hope my question will be in order. It has relation to a question I placed on the order paper and an answer which was given on October 30, to be found at page 2201 of Hansard. My question was:
What was the cost to Canadian National Railways for providing rail passenger service in Newfoundland for each year from 1949 to 1967 inclusive?
I will not read the minister's answer in its entirety, but in essence he refused to answer the question. The company took protection from the Railway Act, section 314 (3). I must confess that I have not read that, but I find it difficult to understand why this information should not be made available to members of the house. The government pulled one statistic for one year only, 1966, and the minister referred to that in his answer. He referred to an operating deficit of $918,000. My question is, why is this information not available to members of parliament.


Herbert Eser (Herb) Gray: Mr. Chairman, I can understand how this information is considered to be of some importance by the hon. gentleman. Let me suggest that the most effective vehicle for him to pursue this matter is the standing committee on transport and communications, which will take up the annual report of the C.N.R. The senior officials of the C.N.R. are customarily present at that time. I am sure this is a very effective way of raising these matters. At that time the hon. member will be in a very good position, I hope, to get satisfaction.


Mr. Thomson (Balileford-Kindersley):: Mr. Chairman, I understand that this financial measure in respect of Air Canada is an interim one. It is not a proposal to re-capitalize the corporation or anything like that. If the
[Mr. Drury.f
DEBATES	November 1. 1968
government decides that Air Canada should go public at some time in the future, will we have an opportunity to look at this matter again?


Herbert Eser (Herb) Gray: Yes, that is certainly correct. This bill does not involve anything in the way of recapitalization. It is designed to permit something that is done annually; that is to say, the authorization of steps required to provide Air Canada with the capital funds and if necessary amounts for operating deficits. I believe these have not been necessary recently.


Roderick J. (Rod) Thomson: There has been some discussion in the house in respect of the Roberts Bank situation, having regard to Canadian and United States transportation in Canada. Some suggestions have been made as to whether we should haul potash in Canada by Canadian or United States railroad companies. There has also been a great deal of coverage in the press about container shipping. Does the government have an over-all transportation policy which might cover this matter? Does it have any one plan or idea, or does it intend to deal with each issue at it arises?


Herbert Eser (Herb) Gray: The hon. member has raised a very important topic. May I suggest that this bill is not designed to afford an opportunity for general discussion on transportation policy. If I were in the hon. member's position I would take advantage of the opportunity provided by a debate on the estimates of the Department of Transport. This will take place in this house in the committee of the whole and they will be piloted by the Minister of Transport. The hon. member will have the opportunity then to go into this matter in detail. Perhaps he will want to pursue this topic when the estimates of the transport Commission are referred to the standing committee, or when the committee is considering the annual report of the C.N.R.
While I am not in any way trying to imply that the point raised by the hon. member is not important-because it is-at the moment we are looking at something more limited in respect of the transportation question, and that is the financing of the operations of the C.N.R. by the Canadian government.


Roderick J. (Rod) Thomson: I
accept the minister's statement. I should like to raise another matter dealt with in the
November 1, 19G8

following question placed on the order paper by the hon. member for Moose Jaw:
1. Who holds the existing C.N.R. bonds and where are they located?
This is question No. 542 on the order paper.


Herbert Eser (Herb) Gray: Mr. Chairman, let me refer the hon. member to the annual report of the Canadian National Railways for 1967. He will see there a rather detailed table under the heading "Long term debt". This gives the various issues of bonds, their rates, maturity, currency in which they are payable, the amount outstanding, transactions in the year 1967 and the amount outstanding at December 31, 1967. I do not know whether he really want me to put all this detail on record or prefers to look at it himself, together with the hon. member who raised the question. In any event, the detail as to who holds these bonds is very difficult to give specifically, since they are so widely held. I think the detail which would be responsive to the question asked can be found at page 34 of this annual report.


Gerald William Baldwin: Mr. Chairman I have a very simple question for the parliamentary secretary in relation to securities that may well be issued in respect of Air Canada and the C.N.R. Will he give an undertaking respectively, individually or collectively that the same degree of accuracy would prevail in a prospectus about securities sold as in connection with government issues sold earlier this year.


Charles Mills (Bud) Drury: I think I can give the assurance that the usual high degree of accuracy in prospectuses will obtain.


James Aloysius McGrath: Mr. Chairman, I am sure the parliamentary secretary knows of our interest in this matter of the annual report. Can he indicate more precisely whether he is referring to the 1967 annual report being referred to the committee? Would he indicate when it will be referred, because the committee on transport and communications at the present moment has nothing referred to it. That committee would like to proceed with this matter as soon as possible.
[DOT] (5:40 p.m.)


Donald Stovel Macdonald: If the hon.
member will look at today's order paper commencing at page 8, he will find there a list of the referrals to the various committees. In particular, on page 9, there is a reference to the
Canadian National Railways fact that the estimates of the transport commission have been referred to the standing committee on transport and communications. I point out, as I pointed out a few minutes ago, that it would have been the government's intention to have referred the estimates of the Department of Transport to the standing committee on transport and communications. However we did not do so, at the request of the opposition, who asked that these estimates be left in the house.
As to the explicit time and which of the annual reports, the past one or the one to come forward in the immediate future, will be referred to the standing committee, I can perhaps only say that this can be and will be a matter for discussion with the house leaders of the other groups. But I can say that I have given my undertaking a reference will be made or, if hon. members prefer, perhaps the estimates could be the vehicle to carry such discussion.


James Aloysius McGrath: May I just say, Mr. Chairman, that I stand corrected by the house leader, although I am half correct in assuming that to date nothing has been sent to the committee. Although I am not a member of the committee, I have been watching it carefully. I should like to say that, in so far as the specific area in which I am interested is concerned, the abandonment of the rail passenger service in Newfoundland, it is said that this is scheduled to take place on April 1 of next year. Conceivably, unless we get some specific time allotted for an examination of the Canadian National on this matter, we could be talking about referring the annual report to the committee some time next summer. This is the reason I am specifically interested in the time, because the matter is an urgent one so far as we are concerned.


Donald Stovel Macdonald: In answer to the hon. gentleman, I may say that the committee has met and set dates by arrangement with the co-ordinating committee. I would think the proper course would be for the committee to deal with the present order of reference, that is the revised estimates 1968-69. After that time, which will certainly be some considerable time before April next, the appropriate order of reference could be worked out with hon. gentlemen opposite. Then, as I have said, the senior officials of the company could appear and be examined.


John Howard Lundrigan: I have a very simple question. Has the Canadian National, to the
November 1, 1968

Canadian National Railways knowledge of the parliamentary secretary, abandoned any rail passenger branch lines in Canada this year? This is a beginning question.


Herbert Eser (Herb) Gray: Perhaps the hon. member would pose his other question while I inform myself.


Donald Stovel Macdonald: Perhaps I could add to my previous answer at this point. I understand that the estimates of the Canadian Transport Commission have been referred to the standing committee, and of course they will have to be dealt with before the end of this part of the session. At that time of course the chairman and other individuals on the commission will be appearing before the standing committee. While I do not know the Transport Act too well, I think it would then be germane to raise all aspects of this rail line abandonment question.


Thomas Miller Bell: There is some doubt in my mind as to a previous answer given by the parliamentary secretary. Am I right in understanding the parliamentary secretary to say that if there are new plans for Air Canada in the ways we have been talking about, then new legislation would come before parliament? However, in so far as the bill with which we are now dealing is concerned, there are some new sections as compared with the bill in other years.


Herbert Eser (Herb) Gray: It is, I suggest, a matter of interpretation whether or not you consider the changes in the bill in respect of Air Canada, considerable or new, as the hon. member has said. It is my understanding of the bill that no changes whatever will arise out of it with regard to the corporate structure, management and so on, that Air Canada basically has. The bill enables Air Canada, in its present structure, without prejudice to what, if anything, may come forward in the future, to go directly to the market or borrow directly from Her Majesty in the right of Canada for its financing needs. I hope I have clarified the matter sufficiently for my hon. friend.


Thomas Miller Bell: As I understand it, every year we have had what we have called the Canadian National financing bill. I admit that in other years it has gone through in a routine way. I recall one or two occasions when the opportunity was taken to bring forward current matters, such as has been done today and done very well by hon. members from Newfoundland. I merely want to be assured that this bill is, in every respect, the same bill as
[Mr. Lundrigan.l
the one which has been brought forward in other years for this financing. If it is not, I want to know what sections are different, what extra authority is being requested. It is quite simple.
If the bill is the same as last year, then I am happy and I will sit down. I have made my point about my hopes for the future, and the new plans that may be made for Air Canada. I merely want to know if the bill is even slightly different from previous years, and if the parliamentary secretary will tell me the clauses that are different and why they are different.


Mr, Gray:: I would say it is exactly the same, Mr. Chairman, as in preceding years, except that there are two changes to which I alluded in my remarks at the resolution stage. First, the bill would authorize Air Canada to go either directly to the market or to borrow directly from Her Majesty a sum up to $130 million. Second, it provides for a blanket authorization to the Canadian National to spend for the construction of branch lines up to $16 million. If the hon. member wants the exact clauses, perhaps we could wait until we come to them in our consideration and I would be happy to accommodate him.


Thomas Miller Bell: In other words, the parliamentary secretary confirms the fact that there is in this bill a step toward some independence for Air Canada, at least in so far as financing is concerned. However, if a giant new move for a separate Air Canada were to take place, then new legislation would be forthcoming.


Herbert Eser (Herb) Gray: It is my understanding that if the changes contemplated in the remarks of the hon. member were to be decided upon, new legislation would be necessary. I am not sure whether I am in a position to confirm or indeed comment upon a step to be taken. It is a matter of interpretation. I am not saying I agree or disagree with the interpretation.


Thomas Miller Bell: Has the parliamentary secretary not said that this year Air Canada can go separately to the money market, which as I understand it they have not been able to do?


Herbert Eser (Herb) Gray: Perhaps I could just deal with the point made by the hon. member. This authorization would only be until June 30, 1969 and would cover a total of $130 million. So, I perhaps could say in the terms suggested by the hon. member, that there is a broadening of the way Air Canada can operate, since it can now go directly to the money market.
November 1, 1968


John Howard Lundrigan: The question I asked the parliamentary secretary was, in effect, whether any rail passenger lines have been abandoned. Perhaps the question would be much easier to answer if I had asked whether any complete trans-provincial passenger lines have been abandoned in Canada?


Herbert Eser (Herb) Gray: The information I have available to me, Mr. Chairman, is that there has not been such an abandonment. Perhaps my hon. friend would really know more about this than I would, directly, being from the province concerned. Applications have been made with respect to abandonment, but it is my understanding of the law under which the transport commission operates that until the commission disposes of an application the rail line continues to operate.


John Howard Lundrigan: Obviously the answer is that there has been no abandonment of any transprovincial rail line in Canada. My next question is, does the Canadian National, the knowledge of the parliamentary secretary, plan to abandon any complete trans-provincial passenger rail line?


Herbert Eser (Herb) Gray: Not so far as I have knowledge of the matter. Again I suggest the hon. member might want to place this question directly to the officials of the Canadian National when they are before the transport committee, when that committee considers the annual report of the company.


Mr. O'Connell:: I should like to ask the parliamentary secretary the size of the equity presumably held by Canadian National in Air Canada? How much common stock is owned by the government? I have a second and related question: What is the nature of the $75 million invested in Air Canada? Is it in the nature of bonds or debentures or is it, in fact, in additional common stock?
[DOT] (5:50 p.m.)


Herbert Eser (Herb) Gray: Mr. Chairman, to deal with the second part of the question first, I believe the nature of the investment of the $75 million is in the form of bonds and debentures. In answer to the first part of the hon. member's question, a perusal of the annual report shows that the equity of shareholders in Air Canada is in the amount of $5 million and is completely held, I am informed, by the C.N.R.


John Howard Lundrigan: Mr. Chairman, I should like to ask the parliamentary secretary whether he is prepared to make a statement to the
Canadian National Railways house at some time, perhaps now, as to the cost of operating rail passenger services in the various provinces of Canada. We are already aware in a general way of the $35 million odd deficit of the C.N.R. on its rail passenger services, and it would be interesting to find out what is the situation across the nation, with a breakdown province by province.
We have already seen a very good argument presented by the transportation commission for the abandonment of one rail passenger service in Canada. We are anxious to find out what it costs the Canadian people in the various provinces so that we have some understanding of the decisions being taken in this regard.


Herbert Eser (Herb) Gray: Mr. Chairman, I regret I am not in a position to give such an undertaking and I strongly recommend to the hon. member that he make use of the several other means of parliamentary inquiry, such as the standing committee, which we have already discussed earlier in these proceedings.


John Howard Lundrigan: Could the parliamentary secretary through his officials give some indication of the revenue of the C.N.R. in the matter of passenger service this year? Last year, it appears from the little document of which we all have a copy, general revenue was up by $16.4 million. There is an indication throughout the annual report of the C.N.R. for 1967 that the reason for this increase was largely centennial year. We are not able to get statistics, but it is our feeling as a result of many conversations had with railway personnel in particular parts of Canada that there has been a great increase this year in rail passenger travel.
The auditor's report and the annual report both admit that one of the major reasons for the increased revenue was promotion by the C.N. of improved services in all parts of the country. Consequently one would think that if this policy is adhered to across the whole dominion an increase in revenue in every part of Canada could be anticipated. Could we have some reaction as to revenue from rail passenger services for the current year?


Herbert Eser (Herb) Gray: Mr. Chairman, I understand it will not be possible to make such information available until it is provided to the government in the annual report which will be presented by the C.N.R. However, it may well be that when the senior officials of the C.N.R. appear before the committee the hon. member
November 1, 1968

Canadian National Railways could ask them whether they could give him some indication as to what is likely to be in their annual report.


John Howard Lundrigan: One last question, Mr. Chairman. We are a little disappointed that the personnel is not available to assist us in answering our questions today, but we have to compliment the parliamentary secretary for his very brave efforts in trying to deal with these questions.
I should like to quote a statement that appears at page 6 of the annual report of the C.N.R. for 1967:
If the commission decides that an uneconomic passenger service or branch line should be maintained in the public interest, the railways will be compensated, in whole or in part, for losses in respect of each specific operation.
Is this Canadian National policy, and is it reflected in the decisions of Canadian National Railways throughout Canada?


Herbert Eser (Herb) Gray: I might inform my hon. friend that this statement appears to be a summary of the provisions of a law that was passed by this parliament, the National Transportation Act. Therefore it would be the obligation of the government to carry out the provisions of the act in the terms set forth in the C.N.R. annual report from which the hon. member quoted. The quotation is a summary, by whoever drafted the report, of the provisions in the National Transportation Act that was passed by this parliament.


John Howard Lundrigan: Would my hon. friend agree that the government of Canada ought to take issue with decisions which have been reached by the Canadian Transportation Commission in violation of this particular principle?


Herbert Eser (Herb) Gray: Mr. Chairman, I think it is the obligation of the government of Canada to carry out the responsibilities imposed upon it by this parliament under the terms of the National Transportation Act. I am confident that this has been, and will continue to be, the obligation of the government. One must recall the C.N.R. is not a department of government but a separate entity, a crown corporation with all that that means with respect to method of operation. Perhaps we can continue this further when the matter is next before the house.


[Stage Direction]
Clause agreed to.
Clauses 3 to 6 inclusive agreed to.

On clause 7-Loans to Air Canada out of C.R.F.
Thomas Miller Bell: May I just confirm, Mr. Chairman, that subclause (3) of this clause is new?


Herbert Eser (Herb) Gray: That is right.


J. Michael Forrestall: I was wondering what the necessity was for making this particular clause of the financing bill operative from January 1, 1968 inasmuch as we are now into November of 1968, some ten months later. Has Air Canada taken steps during the current year, in anticipation of this authority, to raise money for any particular purposes. I had in the back of my mind, for example, money required for expansion of operation in the Caribbean, or something like that.


Herbert Eser (Herb) Gray: Mr. Chairman, I am informed that there has certainly been no borrowing by the C.N.R. up to the present time under this type of provision.


J. Michael Forrestall: Then what is the explanation for dating the bill January 1, 1968, or is this normal practice? We are now in November 1968.


Herbert Eser (Herb) Gray: I gather, Mr. Chairman, that this is a relatively normal way to draft such a measure. At the time the bill was being drafted I gather there was no clear indication when this type of authority might need to be used.


[Stage Direction]
Clause agreed to.
Clauses 8 to 14 inclusive agreed to.
On clause 15-Auditors.
Stanley Howard Knowles: On
this clause, Mr. Chairman, I simply ask: Why not have the Auditor General of Canada do this work?
[DOT] (6:00 p.m.)


Herbert Eser (Herb) Gray: Mr. Chairman, the Canadian National Railways Act states that the C.N.R. auditor shall be an independent auditor appointed by parliament. Section 38(1) of the Canadian National Railways Act reads as follows:
A continuous audit of the accounts of National Railways shall be made by independent auditors appointed annually by Parliament who shall annually report to Parliament in respect of their audit.
I think I summarized the matter correctly.
November 1, 1968	COMMONS


Gerald William Baldwin: Is the firm auditing these books the firm that audited the books Company of Young Canadians?


[Stage Direction]
Clause agreed to.
Clause 1 agreed to.
Title agreed to.
Bill reported.
DEBATES	2343
Canadian National Railways
The Acting Speaker (Mr. Richard):: When shall the bill be read a third time?


Gerald William Baldwin: At the next sitting of the house.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, November 4, 1968