May 22, 1901

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The MINISTER OF FINANCE (Hon. W. S. Fielding).

Mr. Speaker, it has become the custom of lion, gentlemen opposite, at the close or near the close of the session, to present, from their own point of view, an examiniation, or shall I say an arraignment, of the financial policy of the government. My hon. friend, the leader of the opposition, undertook that task to-day, and while we are bound to disagree with him in some respects as to Ids statement of facts, and certainly as to his inferences, I am sure we will all have to admit that, considering the large range of subjects, he dealt with the matter very briefly, and in very moderate language. I shall endeavour to follow his good example in that respect. Let me say that so far as my hon. friend's object was to utter a word of warning as to the need of moderation in our expenditure, as to the need of looking to the future, I entirely sympathize with him and welcome that word, no matter from what quarter it may come. There is always a tendency, whether in personal or in national affairs, for men in times of great prosperity to forget the future, and it is always well that some cool head should be found to call attention to the conditions of the day, to the possible change of these conditions, and to the necessity of adapting our policy, not only to things as they are, but to things as they may be at no distant day. I am always glad to find any one calling attention to that phase of onr public affairs. So strongly impressed have I been with the necessity of at all times keeping that in mind, that in the various statements which it has been my privilege to present in the form of budget speeches, at the moment when we attained the greatest prosperity, I had deemed it well to call attention to the serious view which my lion. friend (Mr. Borden, Halifax) presented to-day. and which I have presented from time to tune, as to the necessity of looking to the future. But. while I agree with my hon. friend that there should he moderation and caution, yet, I do not advise that anybody should stand still. I do not propose to say to any business man in this country, that because it is well that he should be cautious and prudent he should stand still and merely do the same amount of business that he did in less prosperous years. I feel that

every business man in Canada, engaged in large concerns, is doing more business today than he was doing a few years ago. The fact that he is doing that greater business is not to be taken as an evidence of extravagance on his part. What 1 think my hon. friend the leader of the opposition has failed to take account of is the great change which has come over the conditions of our country within a few years. When he undertakes to measure the expenditure of to-day with the expenditure of 1896, and years about that period, he should take account of the vast strides which Canada has taken in the meantime. I do not mean to say-far be it from me to presume-that the words which I have uttered from time to time, and which my hon. friend was good enough to quote, have had any material influence upon the public mind in the way of prudence or caution, though it was well I should speak them occupying my official position. But, this I may say : that the same thought has been in the minds of others who were qualified to speak, and I think we may reasonably claim, as I did in the budget speech of the present session, that the great strides which Canada has made during the past few years have been made along sound and safe lines ; that there has been, both in our public affairs and in the general business of the country, a reasonable regard to the probabilities of the future, and that as a consequence, if the time shall come, as it may have to come with all countries, that a period of activity will be followed by a period of depression, we may reasonably conclude that Canada will be found to be in a very sound condition, and able to bear the change without any very serious falling back.

I have said that I would not advise business men to cease enlarging their business ; neither would I so advise, in the national life. I have said that every great business concern in Canada is doing more business to-day than before, and that we should not regard that as an evidence of extravagance. Neither should we regard it as an evidence of extravagance in our national life if our expenditures are large-larger than they were in 1890 and the years before. We have been carrying on large operations ; we have been developing our country in many ways. If the merchant who is enlarging Iris business is justified in increasing his expenditure, surely, on the same principle, our national government will be justified in increasing its national expenditure, providing it does so for useful public purposes. We are. after all. a great business establishment, this Dominion of Canada. We are carrying on business on what we hope will be found to be sound business principles, and we are enlarging operations in all directions. Take, if you will, as one illustration, the opening of the Yukon. We have added very largely to our budget, as our public accounts

Show, by our expenditure on account of the opening up of that territory. In doing so we place ourselves in the position that hon. gentlemen opposite are able to say to the House : See these large increases in the public expenditure. But then we call attention to the fact that on the other side of the account there is a sum larger than the expenditure; so that the enlargement of our business in the Yukon does not involve an increasing burden on the country, but is an evidence of our greater prosperity, and up to this moment has been an absolute source of profit, and not a source of expense to the Dominion treasury.

The same thing may be said, though perhaps in a lesser degree, of the Intercolonial Bailway. In the main, the large increase in the working expenses of that road, which enables my hon. friend opposite to point to the total expenditure as increasing, has been very greatly met by increased receipts. The statement for the current year is not as good a one as we would like to have. There are exceptional reasons for that; but that Is the special business of my hon. friend the Minister of Iiailways, and I shall leave that to him. But my hon. friend opposite will note the fact that if we have largely increased expenses of management on the Intercolonial, we have largely increased receipts. I mention this in order that a distinction may be drawn between an enlargement of the public expenditure which increases the burden of taxation and an enlargement of expenditure which imposes no such burden.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

I quoted both sides of the account, showing the increased receipts as well as the increased expenditures.

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The MINISTER OF FINANCE.

My hon. friend's resolution at any rate deals with the increased expenditures, and it is these that we hear most about throughout the country. Now, we are increasing business in many ways. The merchant has his own method of developing his business, and we have our method of developing our trade. At one point it is by the construction of a line of government railway; at another point it is by the subsidizing of a line of railway ; at another point it is by the construction of a telegraph line; at another point it is by the construction of a breakwater to enable the poor fishermen to carry on their business without having their boats destroyed ; at another point it is by the construction of a public wharf; at another point it is by the construction of a canal. The different sections of the Dominion have their different interests, their different industries, their different needs; and it has been the policy of the government to adopt itself to those different conditions and needs; and if this has involved a very considerable expenditure, I deny that that is any evi-Mr. FIELDING.

deuce whatever of an extravagant government. On the contrary, it may be the best evidence that a government is alive to the needs of the situation and is meeting the demands of the time.

My hon. friend seemed a little alarmed at the statement for the current year, as shown in the ten days' financial statement from which he read. He was able to call attention to the fact that the customs receipts are somewhat less than they were at the corresponding date last year. The difference is not considerable; it is, however, worthy of observation. But we shall do well if we do not magnify either the amount or the significance of it. It is well that we should remember that the rate of duty imposed on goods is lower to-day than it was at the corresponding date a year ago, and that the reduced customs receipts are to some extent but the evidence of our reduced taxation. However, if the customs receipts are somewhat smaller to-day than they were at this date a year ago, other receipts are making up for them, and, on the whole, our financial statement for the current year up to the present is very satisfactory. I am glad to say that the trade statement up to this date is no less satisfactory. I do not wish to weary the House with any details on that point; but I am sure the House will be pleased when I state that the domestic exports of Canada for the period of ten months to the end of April last year, were $127,461,000, and that in the same period of the current year they have been $144,520,000. So that with regard to that most vital feature of our country's prosperity, the showing up to the present is a very satisfactory one indeed. And notwithstanding the falling off in the receipts from customs, to which any hon. friend referred, and notwithstanding the increase in expenditures in certain classes, I am glad to be able to say that I still entertain the opinion which I expressed several mouths ago, that at the close of this financial year, on the 1st of July next, we shall find ourselves with a very handsome surplus-not so large as the one of last year, of course, but still one of the largest surpluses in the history of the country.

My toon, friend in his resolution has totalled the votes of the present session, aggregating $07,326,000, as he makes the amount. I would like to call my hon. friend's attention to the fact that a very considerable portion of these votes is for the expenditure of the current year, and should not be mixed up with the expenditure of the coming year. True, it may be said that at the end of the next year w

Now, there are two answers to that. In the first place, it is important to remember the difference between appropriations and expenditures. Hon. members who have been in the House for many years know much better than I have known, that there is always an important difference between the amounts voted and the amounts expended. For various reasons it is not found possible to spend all the money that is voted. There are large sums lapsing from year to year. Thus a large proportion of the money which we are voting this session, and which my hon. friend has included in his total of $67,000,000, consists of revotes of moneys which were voted a year ago. My hon. friend who performed the duty of financial critic a year ago was able to quote these large appropriations against us at that time; and now, when the money is revoted, my hon. friend has the privilege of quoting them again; so that they do duty over and over again. So with the railway subsidies. A large portion of them are revotes of former appropriations. Hon. gentlemen in previous years were able to count those appropriations against us; and since they were not expended and are now revoted, they are again counted against us. It is well, therefore, to observe the distinction between the appropriations and the expenditures, and also that the expenditures of any given year always fall very considerably short of the appropriations for the year.

Then, with regard to railway subsidies, if we put aside the question of revotes and deal only with the new subsidies, it would be exceedingly unfair to treat these as expenditures chargable to one year. Some of these will probably never be expended-not in the early future, at any rate, because, although assurances have been given to us that the roads will go on, it may happen as in the past that the companies will not be able to go on with them. In such cases the subsidies will not become actual expenditures at all; though in this instance, I am bound to say, we have tried to keep down to those which will be expended at an early day. We have scanned the list with that object in view. But this must be kept in mind, that railway subsidies granted in one year may extend over several years; and therefore, it is not fair to claim that those voted in one year are to be included in estimating our total expenditure for the year.

My hon. friend, I think, laboured under the mistake of assuming that the expenditures of Canada have been exceptionally high of late. Both in his speech and in his resolution he has referred to our high standard of expenditure; and I am sure the House will have received the impression- perhaps my hon. friend himself had the impression-that in that respect our expenditure is exceptionally high. That was the whole line of his argument. He may be surprised to learn-or at all events others will- that we have not any exceptionally high

standard of expenditure at present nor have we had any such standard in recent years. We have to consider the growth of the country since the years to which the hon. gentleman has referred. Because the expenditure to-day is larger than it was in 1896 by some millions, it does not follow that we have an exceptionally high standard of expenditure. The standard must be considered with idue regard to the growth of the country and population. Nobody imagines that the great improvements which have been made, the developments which have been carried on, could have been brought about without the expenditure of public money. The fair question, then, is whether that expenditure is reasonably keeping pace with the general growth of the country and especially the growth of population.

The total expenditure of last year on capital account and income account, on everything which could effect the debt of the country, amounted to $9.80 per head of the estimated^ population of Canada. That is somewhat larger than the usual expenditure for several years, but it is a mistake to treat it as an exceptionally high standard, as my hon. friend does. If he will turn back to the Public Accounts, he will find that in 1884, our total expenditure averaged $12.90 per head of the population against $9.80 this last year. And in case it might be thought that the year 1884 was a very exceptional year, let me point out that in 1885 the expenditure was $10.83 per head of the population, against $9.80 last year ; and in 1886 it was $13.47 per head against $9.80 in 1900. My hon. friend will no doubt reply that in those years they had to meet some very exceptional expenditures. True, they had. It was about that time that the cost of the North-west rebellion had to be paid. But we have had very exceptional expenditure to meet also since this government has been in office. In the first place, we had to pay considerable sums on old obligations of the late government. We had to pay a large sum to the province of Manitoba, arising out of a claim which did not occur in our day, but before we came into office. And if those hon. gentlemen had their own home war, which they themselves largely created, we have also had an exceptional expenditure during the past year in the very large sum we were called on to pay in order that Canada might do her duty to connection with the war of the empire in South Africa. The idea, therefore, that our expenditure has been exceptional under this administration is erroneous. True, we have spent more than the late government did in some years, but not higher than the record of the Conservative government, for during three years at least their outlay per capita was greater than ours.

In the matter of the increase in public debt, I am afraid that a reader of my hon. friends speech would assume that an ex-

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ceptional condition of affairs liad been created. He pointed out that our public debt has increased at the rate of $1,700,000 during four years. But is that an exceptional rate of increase ? Against that increase, we may point to the fact that in the whole eighteen years of Conservative administration, the annual increase of the public debt averaged six and a half million dollars. Therefore, X cannot see that my hon. friend was right in claiming either that we had an exceptionally high standard of expenditure or an exceptional increase of the public debt, unless indeed-and in that respect I admit it is exceptional-it is exceptional to have been able to carry on such large public works as we have been building, with such a small addition to the public debt.

My hon. friend, the leader of the opposition, expresses surprise that there should be any increase in the public debt at a time when we had a surplus of several millions. If he is really surprised at that, he will have to extend his surprise to nearly all the years of Conservative administration, because in may of their years they claimed surpluses over the ordinary expenditure, and yet in almost every one of these years they also added to the public debt. The surplus of any year consists in the amount of receipts which are in excess of the ordinary expenditure ; but over and above the ordinary expenditure, there are expenditures on capital and special account, which have to be taken into consideration, and which have always been regarded by Finance Minister's -and very correctly so-as something outside ordinary expenditure. There is nothing new, therefore, in our treatment of these matters. If we are conducting a mail service to a country village, we have to pay for it from year to year, and therefore it forms part of our annual expenditure. But if we build a railway we do not have to build it every year. Once you build a railway or cause one to be built by means of a railway subsidy, there the railway is, and it is no longer a charge on the country. The cost of building it or the subsidy therefore is a charge, not against annual income, but against capital account, and the amount has to be provided for in a special way. Such lias been the method of book-keeping in the past, and that method we have not changed. My hon. friend then has no occasion for surprise that there should be an addition to the public debt and at the same time a surplus in receipts over ordinary expenditure.

With regard to the expenditure on public works, and noticeably on railways, my hon. friend says that we should have a definite plan of all such works to be aided in the future and place on the Table a map showing them. But a little reflection will show 1dm that such a policy is not practicable. It is all very well to talk of laying down general plans, but we have to learn from year Mr. FIELDING.

to year. Every year brings its own needs and its new sources of information, and we must expect in any given year to foreshadow a policy with regard to the particular public works to be constructed in the future. My hon. friend stated that we should have a definite declaration of policy on that point. But we have time and again; given such a definite declaration of policy, and let me repeat that now. Wherever there is found in any province of Canada a proposition to construct a railway, or a breakwater, or a wharf, or anything else which comes within the class of public works that this parliament usually deals with, and wherever it can be shown, to the satisfaction of the government, that the construction of that work will be of use to the public generally and assist in the development of the trade and commerce of the country, that undertaking this government are disposed to favourably consider. I think that is a sufficiently definite policy to satisfy the House and the country. My hon. friends, in their day and generation on this side, were never able to lay down these general lines of policy which we are now told should be laid down, and I do not believe that if they were in office they could lay down a policy any more definite than we are doing.

They say that we arc increasing the expenditure enormously, and by their resolution they call attention to this year's appropriations of $67,000,000. Well. $60,000,000 of that are already voted by this House, and of that $66,000,000 how much did these hon. gentlemen propose to strike out ? They have proposed to strike out one item of $16,000, and they did not even take the opportunity of putting themselves on record in that vote, for it was a motion made in committee, and the names were not taken down. I know that my hon. friend the leader of the opposition tliinks that it is no part of the business of the opposition to call attention to appropriations that are wrong. I must say that I do not agree with him in that. I agree with him that he cannot be expected to have a knowledge of every item in these estimates. But there are many of these amounts which are large and which would justify the hon. gentleman in making a personal study of them with a view to having a motion made to strike them out if they are not fair and reasonable. He has spoken particularly of that class of expenditures devoted to harbours and rivers. A considerable portion of that expenditure is in the province from which my hon. friend and I come. If we do not know about the expenditures outside, we may be expected to have some knowledge of the expenditures in our own province. A proportion of this expenditure is in the county which my hon. friend represents, and which I represented for many years in the local legislature. If he believed that any of these expenditures were

useless and wasteful, lie would move to liave them struck out. But lie knows, so far as he knows his county, that he would not be .iustified in taking any action of that kind. From his generai knowledge of that important constituency, he is aware that it has need of appropriations of this character. I think he might be charitable enough to assume that the knowledge that lie has of his own constituency is probably possessed by others with regard to their constituencies, and, if it would not be wise for them to move to strike out items relating to matters of which he has knowledge, it might not be wise for him to move to strike out those of which he has no knowledge. I think that if any large sum in these expenditures were unreasonable and improper, lion, gentlemen opposite would not shrink from moving to strike them out. I give them credit for great industry in these things. I know very well that they study the questions, and if they were able to successfully attack these items one by one in this House, they would do so-not down to fine details, but in dealing with many of the items. But when we find lion, gentlemen permitting these items to pass without any attempt to call them in question except in a general way-and, as my hon. friend the Minister of Trade and Commerce (Sir Richard Cartwright) reminds me, even asking for more-they are likely to have some difficulty in persuading the country that they are very strongly wedded to a policy of economy.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

I may say to my hon. friend (Hon. Mr. Fielding) that on looking over this list of appropriations to which he refers, I have been able to discover very few in my own constituency. I think that the hon. gentleman's constituency has fared better.

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The MINISTER OF FINANCE.

I think my hon. friend is mistaken. That is my impression-without having given the matter any close calculation. But if he thinks his county is not getting enough, I cannot quarrel with the argument.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

I merely meant that my own was so small.

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The MINISTER OF FINANCE.

I think the hon. gentleman is mistaken, and that the amount is by no means small. However, if he claims that these appropriations were not enough, that is a matter of consideration, for the county he represents is a large and important one. We are apt to think of Halifax as only the city ; but the hon. gentleman represents the whole county, which is 150 miles long ; and if he says that there should be more expenditure there, I am not going to quarrel with him on that score. But I shall quarrel with him for complaining of the total when added up. For a number of years we have

had an alarmist speech with regard to financial affairs, delivered from the opposition benches at the close of the session. I remember that the first session when it was my privilege to occupy a seat in this House, that is the summer session of 1890, the leader of the opposition of that time, Sir Charles Tupper, took very strong ground. We had hardly got fairly in our seats, the government had hardly brought down estimates of their own, but had merely accepted those of their predecessors, when Sir Charles Tupper declared that we were going to plunge the country into extravagance and debt, and that that year we should have a deficit of two or three millions. If we had done so, it would not have been very much our business, because the appropriations had been largely prepared by our predecessors ; but the fact was it was simply an alarmist speech, as were the speeches of a later day. At the end of the year, instead of a deficit of two or three million we had but the modest deficit of $519,000. Every year since then we have had this alarmist speech at the close of the session. We have had gentlemen engaged in adding up all possible items in order to show an enormous scale of expense, and to convince the country that the finances of the Dominion were going to the dogs. Yet, every year the facts have gone against these hon. gentlemen, as I believe they will go against them in the future. In our first year of full control of public affairs, we realized a surplus of $1,722,000. Yet, next year, we had the alarmist speeches of hon. gentlemen opposite -and at the end of 1899 we had a surplus of $4,837,000. And still we had the alarmist speech about the finances of the country-and when the end of the year 1900 came, we had a surplus of $8,000,000 and over. Now we are going to have, I am gratified to be able to repeat, a very satisfactory surplus during the current year. So, I am glad to be able to soothe the public mind with the statement that notwithstanding these alarmist speeches for four years, when the end of the year came round it has always been found that Canada had a very satisfactory balance-sheet to show.

Then, I would like to ask : Assuming that we on this side are disposed to be extravagant, are hon. gentlemen opposite the right ones to pose in the role of economists ? I will not speak much of the past, though I think that any one who would accuse the Conservative party of bygone years of being a party of economy would render himself liable to an action for libel by any Conservative in the country. But I would like to deal with the living present. We find that these hon. gentlemen deal simply with the total figures- You have increased the expenditure and therefore you have been extravagant.' I have shown with respect

to the amount of $07,000,000 which it put before the country to scare it, we have had hon. gentlemen opposite proposing to strike out only $16,000. But that is not all. 1 have never heard a proposal for economy come from the other side this session. But I have heard many proposals for a lavish expenditure. ' Economy ! ' cries the hon. member for West York (Mr. Wallace), echoed by the hon. member for East Grey (Mr. Sproule) who sits beside him. They are going to vote for this resolution in favour of economy, and declaring that we are extravagant. But the strongest charge these hon. gentlemen have made against us this session is that we will not spend more money by giving a bonus for the manufacture of beet-root sugar. My hon. friend from South Wentworth (Mr. Smith), who takes an intelligent interest in agriculture, will vote for this resolution. But the most severe arraignment that he has made of t)ie government this session is in the form of a demand to know why we do not spend more money in developing the cold storage system. My hon. friend from Pictou (Mr. Bell), whom I do not see in his place, will vote for this declaration that we are extravagant. But only a few days ago the hon. gentleman actually increased the price in real estate in Ottawa, I believe, by demanding that the government should buy more land for public buildings. My hon. friend the leader of the opposition (Mr. Borden, Halifax) is going to vote for this resolution which he has moved, but he did not seem overly anxious for economy wheu he advocated that we should put up new buildings for the public service and add enormously to the expenditure. I am not condemning these things at all, but I am pointing out that these hon. gentlemen are not advocates of economy but of more lavish expenditure than that in which we engage. And all over the House we find the same thing. My hon. friends from Toronto are great advocates of economy in other places ; but they are anxious to have us spend more money on Toronto harbour. My hon. friend from .Taeques Cartier (Mr. Monk) is going to vote for this resolution, in the name of economy he is going to condemn us for spending so much monev. But, only the other day, he led a deputation to the government asking that we should spend about $1,000,000 more in improving the St. Lawrence river.

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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

We are in favour of judicious expenditure.

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The AIINISTER OF FINANCE.

My hon. friend from East York (Mr. Maclean), who is not in his seat, is going to vote for this resolution, I presume, which declares that we are spending too much money ; but the greatest crime he has laid to our charge this session has been that we would not appropriate a few hundred millions more to buy up the railways of the country. My hon. friend from South Lanark (Mr. Haggart),

who is enjoying this thing so much, is going to vote' for this resolution to condemn us for extravagance; and about the most important speech, and a very good one it was, that my hon. friend made this session, was a demand that we should take up the Georgian Bay canals, with its obligation of $75,000,000. My hon. friend from Jacques Cartier (Mr. Monk)-to come back to him-is going to vote for this resolution, condemning us for spending too much money, but his latest arraignment of the government is that we won't provide money for an expedition to search for the north pole.

I said I would follow the excellent example of the leader of the opposition in not extending my remarks to any length. We have reached a period of the session when I am sure we are all desirous of bringing the business of the House to a close. I want to say, in conclusion, that while this government has increased the public expenditure, it has simply increased the outlay in order that it might keep pace with the growing demands of the country. I say that the idea that these expenditures have been wasteful, have been extravagant, have been thoughtless, is not justified. Throughout the whole policy of the government there has been an effort, not to be too economical, not to translate the word ' economy ' to mean parsimony, or niggardliness ; but we understood economy to mean a wise expenditure of public money upon necessary works for the development of the country. We have been able to carry out that policy, we have provided liberally for every great need of the country. We are able to point to the fact that the finances of the Dominion were never in a better condition than they have been during the last few years, that the public credit of Canada never stood higher ; and that all these works have been accomplished with a reduction in the rate of taxation, which means that during the past four years, comparing the old tariff with the new, $6,000,000 have been left in the pockets of the people which would have been taken out of their pockets had the policy of hon. gentlemen opposite remained in force.

' Mr. BORDEN (Halifax). Before the hon. gentleman sits down, I would like to point out to him-and he will correct me if I am in error-that so far as grants to my own county are concerned, if the grants to the province were placed on the same basis, they would be reduced by more than 50 per cent.

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The MINISTER OF FINANCE.

My hon. friend forgets that his own county happens to have a railway, and if he will look up the appropriations in the Public Works and Railway Departments, he will discover that there is another side to the story.

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CON

Samuel Barker

Conservative (1867-1942)

Mr. SAMUEL BARKER (Hamilton).

58c9

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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

Eighty-four he says now, but 62 he told me the other day. He tells us that every one of these 62 locomotives in power and capacity is largely ahead of the average of the old ones, so that these 62 locomotives are equal to about 100 of the old ones. That is about 40 per cent increase in locomotive power in one year. Did any man ever hear of a railway manager daring to propose to his proprietors that he would increase his locomotive power by 40 per cent in one big jump ? Why, no one but a government railway administrator would dare to suggest such a thing as that. I quite admit that it is a prudent thing to procure heavy locomotives ; everybody is doing it, but they are not doing it at'this rate and they are doing it out of revenue. Let me show the Minister of Railways what the Grand Trunk Railway does in this matter. This is the Grand Trunk Railway report of the 30th June, 1898, and it says :

The number of engines and cars owned by the company is shown in the return of working stock. No additions to the stock have been made at the expense of capital during the last year. Sixteen engines have been sold or broken up and twenty new engines of modern type and increased capacity have been purchased on revenue account during the half year.

Yet on the Intercolonial Railwav of 1,500 miles, not one-half of the extent of the Grand Trunk Railway, the minister is increasing his locomotives by 62 and he has charged every one of them to capital. That is a very convenient thing for a railway administrator. It is a wonder that the hoii. gentleman can only show $62,000 surplus, when he is able to do that sort of thing. The report of the Grand Trunk Railway says :

There remains on the 30th of June, 1898, sixteen engines in excess of stock, all provided out of revenue.

W by is that ? It is because railway men who have not a government behind them know that locomotives like everything else in this world die out. You may repair a locomotive year after year, but the time will come when it will not pay to renew or repair that locomotive and when it is cheaper to send it to the scrap heap. And so, year after year these old engines are falling into the scrap heap, and the management keep ahead of their requirements so that when a locomotive is worn out they have another one to replace it. The Minister of Railways tells us that he keeps up his locomotives in an efficient condition, but then he keeps

ahead by buying <52 on capital account. Next year the cripples will be coming in, but the Minister of Railways will be safe from any trouble because he has already got new ones at the expense of capital.

I want to say a few words about the rolling stock generally, of the Intercolonial Railway. The Minister of Railways tells us in his report each year, that all his rolling stock is kept in an efficient condition. I find that in the report for the present year the hon. gentleman shows that he handed over from the year 1899-the election year when the hon. gentleman was cutting down his expenses by hook and by crook ; the year that he laid no rails-the hon. gentleman (turned over at the end of that year 528 cars and coaches and locomotives condemned as unfit for service. And during the year 1900 toe added 290 to this, making 824 condemned arbic'es of stock. Well, that is pretty good for the minister ; 824 condemned efficient locomotives and cars. The minister goes on in his report to show that out of the 528 and the 296, lie rebuilt 393. That is a very important statement, and if that statement had been strictly accurate it would have said a great deal in favour of the Minister of Railways. When I examined his stock list, and saw that 393 there as rebuilt, I thought that perhaps the stock list had not been as bad as it looked. Rut I turned to another part of this singular repo#t. There is hardly a page of it that you won't find varied a little by another page. I turn to page 62 of the report and 1 find that instead of rebuilding 393 the minister actually rebuilt only 33, namely, four locomotives, two box cars, eight platform cars, seventeen coal cars, and two Hangers, being 33 out of the 824. The inference is, that this is about all he could find that were worth rebuilding, because he was forced to buy out of revenue 360 new cars to make up his 393 rebuilt. But that would still leave the hon. minister 431 short and the question remained, how did the hon. gentleman get along with his traffic with 431 short ? It is a very serious withdrawal from traffic to have 431 taken away, and how did the Minister of Railways arrange it ? Why he bought on capital account 473.

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Some hon. MEMBERS

Hear, hear.

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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

The minister ought to have charged 431 out of that 473 to revenue of course, but not he. They all went to capital and the hon. minister went along making his profit out of that capital. I looked at page 59 of the report to see what the 473 cost him on the average, and I find that the average price was $1,212. Therefore, the 431 which the minister ought to have charged to revenue would have amounted to $522.000; but. then again, what would have become of his surplus if he ' did that. There, you see the difficulty the hon. gentleman was in. He had to get a surplus.

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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

and how could he get a surplus if he charged all this to revenue V

I might refer to other charges to capital, as, for instance, where the minister replaces buildings which have been burned, and charges them to capital ; so that, you have two charges against capital, and only one asset. I do not know how the minister is to balance his books by and by. It would puzzle an ordinary auditor of a railway company, but the minister may be capable of it.

Now, I have another charge to make, and, to my mind, it is a much more serious one. The figures are not quite so large as those I have been dealing with, but, they present a feature of the management of government railways which is a very serious one, indeed. Especially is it serious if the hon. member for East York (Mr. Maclean) is ever to be able to induce the government or the country to take up his idea of the ownership of government railways. If government railways are to be worked as I am about to show that the hon. gentleman has been working the Intercolonial Railway in 1899, the election year, I think the longer we put off the government ownership of railways the better. I would ask the hon. gentleman's attention to these figures, which demonstrate beyond question, that in the year 1899, the year upon the accounts of which the Minister of Railways and his colleagues were going to the country, the hon. gentleman deliberately and intentionally cut down his ordinary repairs of rolling stock by $154,000 ; and that if he had not done that, instead of a surplus of $62,000. he would, on that item alone, have been $90,000 to the bad. Now, I propose to show that : and I shall leave lion, gentlemen on both sides of the House to judge whether, on the figures 1 give, there can be any doubt at all about what I infer from them. To begin with. I may call the hon. gentleman's attention to the fact that during the four years 1897. 1898. 1899 and 1900, his revenue has been steadily increasing. The figures are as

follows :

1897 $2,866,000

1898 3,117,000

1899 3,738,000

1900 4,552.000

I will not detail the gross working expenses in each of these years. I will only say that, in 1807, the hon. gentleman had a deficit of $59,000. in 1S9S a deficit of $209,000, in 1899 a surplus of $62,645. and in 1900 a surplus of $120,667. The reason I mention these figures is this, that with steadily increasing traffic, it was reasonable to expect that the hon. gentleman would have shown some increase in his working expenses-not necessarily in proportion, but. a natural and steady Increase corresponding in some degree to the increase in the gross revenue. Now. working expenses are divided into two classes-those which are controllable by the hon. gentleman, and those

which are uncontrollable by him. There are three items which are not within the control of the hon. gentleman : the wages of drivers and firemen, fuel, and the wages of conductors ; and in these three items there were, as might have been expected, steady increases. The wages of drivers and firemen were as follows :

1897 $267,000

1898 276,000

1899 317,000

1900 359,000

A steady increase, which was quite natural, and what everybody would expect, considering the increasing tonnage that was hauled. The expenditures for fuel were :

1897 $376,000

1898 388,000

1899 467,000

1900 601,000

This is a remarkable increase in cost of coal for 1900, to which I think the hon. gentleman's attention should be directed, though it forms no part of my present argument. I do not criticise that, as I have not gone into the question of the consumption of fuel. The wages of conductors amounted to :

1897 $255,000

1898..., 265,000

1899 317,000

1900 360,000

So. it will be seen that in every one of these items there is a steady regular natural increase. Now, I will come to the four items of expenditure that are peculiarly under the control of the management, and I propose to show an extraordinary discrepancy in what I call the election year of 1899. Take the repairs to engines, for which the hon. gentleman spent :

1897 $261,880

1898 276,068

1899 221,150

1900 316,999

The average of the four years is .$209,0(10 : yet, in the year 1S99. the hon. gentleman cut down the expenditure $18,000 below the average, and in the next year he went up to his average, and made up the $18,000 too. The hon. gentleman, by that method of cutting down repairs to his engines, made up a surplus in 1890 of $18,000. Here are the expenditures for repairs to his passenger cars :

1897 $ 84,793

1898 86,371

1899 74,687

1900 106,608

The average is $90,000 in the last two years, and so we have $10,000 in the election year below his average, and the next year $16,000 above his average. I think that the inference is very plain.

Take postal and baggage cars, which is a small item, but to which I refer to show that the thing has been done systematically

and not by accident. The expenditure on postal and baggage cars was as follows :

1897 $20,976

1898 22,276

1899 (the election year) 12,964

1900 27,565

The same comparison of figures shows that he cut down his repairs $7,500 in 1899.

Then take the freight cars. Well, he spent on freight cars as follows :-

1897 $231,203

1898 232,118

1899 (the election year) 172,634

1900 33S.202

The average for the later two

years was thus 255,418

So that the hon. gentleman cut down his expenditure below the average in 1899, and thus obtained $83,000 towards his surplus. The result of these four items is as follows:

Engine repairs $48,000

Passenger cars 16,000

Postal cars 7,500

Freight cars 83,000

Or $151,500 saved on ordinary repairs in that year,

I wonder were there any workmen in the shops along the Intercolonial Railway to whom that expenditure of $151,000 would have been a blessing that year if it had been spent among them. No doubt in the hard winter, these workmen would have been much more comfortable in their homes and families if that money had been spent as it ought to have been. There is nothing in the world to which the adage, 'a stitch in time saves nine ' applies more forcibly than a railway. The saving of $151,000 in 1899 probably cost this country half a million dollars in consequent waste and wreckage. So that the hon. gentleman, by the process called among railway men ' skimping repairs ' saved $154,000 and was thus able with the bookkeeping and other matters to which I have referred to show an apparant profit of $02,000 for the year 1899. No wonder the hon. gentleman had to carry 528 condemned cars over to the next year.

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The MINISTER OF RAILWAYS AND CANALS.

Was the hon. gentleman at all curious to ascertain how many cars were carried over during the several years preceding 1897 ?

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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

That very thought did occur to me. I did not want to do the hon. gentleman any injustice, and I looked away back to 1S96 to see whether this thing lay at the door of the hon. gentleman alone. 1 thought that perhaps the Hon. Mr. Haggart might have been doing this sort of thing also, and I looked back and will tell the hon. gentleman the result of my researches. On the 1st July, 1896, he took over the railway from Mr. Haggart, and the report of that year was made up, not by Mr. Haggart but by his successor the present hon. Minister of Railways.

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The MINISTER OF RAILWAYS AND CANALS.

Hardly.

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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

The report was not made up on the 1st July, and was not presented until the subsequent session, and no doubt the hon. gentleman's officers looked carefully into it.

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The MINISTER OF RAILWAYS AND CANALS.

The report was made up before I came Into the government.

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May 22, 1901