August 13, 1903

?

Some hon. MEMBERS

Hear, hear.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

They would have had the promises which have been repeatedly made to them and repeatedly broken, carried out. They would have had these promises implemented and carried out, or somebody would be made to suffer very severely in consequence. Therefore, I am surprised, I am extremely surprised that this railway which upon every possible ground of reason and common sense the people that are going to be served by it are entitled to get, I am surprised that it should be the one part of this proposition that is attacked with the utmost venom.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
LIB

Clifford Sifton (Minister of the Interior; Superintendent-General of Indian Affairs)

Liberal

Hon. Mr. SIFTON.

and that it is held up as being wholly indefensible and wholly absurd. If we were being asked in this House at the present time to build a branch line of the Intercolonial Railway into that part of the country; if we were being asked to subsidize another railway there, who would raise his voice in objection ? There is not a man on this side of the House, and there is. not a man on the other side of the House, who would raise the least objection to the construction of that line ; and if a single man did raise an objection, the railway history of the Dominion of Canada would be the answer to that objection.

References have been made in the press -I need not multiply them now-to cases in the province from which I come, in my own county, where there are railway lines ten, twelve, thirteen and fourteen miles apart. Nobody talks about the infamy of paralleling railway lines there; and we are getting on pretty well, and the railways are getting on pretty well too. Take the position in the province of Ontario, with the Canada Atlantic and the Grand Trunk running on the average not further apart than this line.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
LIB

Mahlon K. Cowan

Liberal

Mr. COWAN.

The Canadian Pacific from London to Windsor, for 110 miles, does not run more than two miles from the Grand Trunk, and we subsidized it to do that.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

We subsidized a portion of that line in this House, and was there a man who took the responsibility of dividing the House on the question or of saying that we were wrong ?

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. IIAGGART.

What part of it did you subsidize?

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

A jiart that runs not more than five miles from the Grand Trunk. I know that, because I scaled it on the map.

Hon. Mr. 1 TAGGART. When was it subsidized ?

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

Three or four years ago; I cannot give the exact date. I remember it being discussed in council, and I remember the subsidy being passed in this House. I cannot remember the local name of the line. Now, Mr. Speaker, consider a few more cases. It may seem that, we are wasting time on this point; but we are not wasting time when we are showing that the principal objection which has been raised to an important part of this scheme is an objection that is perfectly absurd, and has not a particle of foundation. The Grand Trunk Railway and the Canadian Pacific Railway parallel each other from Montreal to Toronto. How far are they apart ? I looked at the map the other day and scaled the distance, and I do not think they are more than forty miles apart anywhere.

They are not as far apart on the average as 62 miles. The Canada Atlantic and the Grand Trunk, running down from the Georgian bay are no further apart on the average than these two lines that we are speaking of. Why, when Mr. Booth built the Canada Atlantic Railway he was hailed as having achieved something which entitled him to be ranked as one of the great men of Canada, and I think that is right. I admire Mr. Booth because of his achievements, and I think he is entitled to respect and credit at the hands of the people of Canada for what he has done. But if Mr. Booth is entitled to credit for having built a railway to the Georgian bay paralleling the Grand Trunk to get a share of the same business, how is it that when you propose to build another railway in another part of the province you are infamous, and too much cannot be said against your proposition? I venture the statement that the longer that particular objection to this proposition is discussed, the more our hon. friends on the opposition side will wish they had never raised it.

I do not know whether we are safe in saying that the leader of the opposition party is against this contract or not. I have listened with some degree of care to the addressses which have been delivered, and I have not heard anything from the other side of the House in favour of the Quebec-Moncton line. I have heard a very great deal against it from the different gentlemen who have spoken, including the hon. ex-Minister of Railways and Canals. X do not suggest that he undertakes yet to speak for our hon. friends on the other side. From the hon. member for Jacques Cartier (Mr. Monk), from the hon. member for South Lanark (Hon. Mr. Haggart), from the hon. member from Hamilton (Mr. Barker), we have received word of what I take to be uncompromising opposition to the Quebec-Moncton line. Our hon. friend the leader of the opposition has not yet spoken clearly on that question. We invite him to speak.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

You will hear him all right.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

We invite him to say whether he, speaking as the responsible leader of the Conservative party, is prepared to endorse what the gentlemen sitting behind him have said, and what they are saying in the country with regard to this proposition. The people whom my hon. friend represents have a right to know where he stands* Sometimes, Mr. Speaker, there are difficulties and responsibilities in connection with the position of a leader of a great party which are very embarrassing; but my hon. friend will have to face the embarrassment, and he will have to tell us whether he elects to stand with the people of New Brunswick, the people of Nova Scotia and with the people, so far as the rest of Canada is concerned, who are supporting this government, or whether he elects to stand with those members of his party and a small remnant of the people of Canada who have undertaken to block a meritorious proposition. We shall listen with interest to what my hon. friend has to say on that point.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

You will hear it all right; do not be alarmed.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

I desire to refer to one criticism which my hon. friend the leader of the opposition made, and which requires to be mentioned and cleared up at some stage of the debate. My hon. friend referred with fine sarcasm to a provision in this contract which relates to the question of security. He read the clause with reference to the deposit of $5,000,000, and spoke somewhat sarcastically of this clause as a statesmanlike provision. I will quote his own words :

In other words, the company guarantees to build a railway as to which it receives a guarantee of $13,000 per mile for one portion of it and $30,000 per mile for the rest ; and it deposits with the government $5,000,000 as security that it will use the bonds guaranteed by this government.

If the company were depositing $5,000,000 as security that it was going to use the government guaranteed bonds, the sarcasm of my hon. friend would be perfectly justified. That would be not a statesmanlike provision, but a most absurd , a most futile, a most ridiculous proposition ; and I wonder that it did not occur to my hon. friend the leader of the opposition, in the hasty examination which he made of this contract, that it would be safer, In his preliminary criticism, to give the lawyers of this government, including my hon. friend the Minister of Justice, credit for a little common sense and a little brains in drafting the document which they submitted to the consideration of parliament. If the hon. gentleman would give, us credit for a little common sense and intelligence he would uot put that construction upon this document. The hon. gentleman read the clause and therefore could hardly claim that he was not aware of its contents. By reading the clause, he made this perfectly clear, that the $5,000,000 are put up for the- purpose of securing that the company shall build and equip the railway in accordance with the terms of the contract. What does that mean ? It means that the company shall use the bonds guaranteed by the government and the bonds guaranteed by second mortgage in order to procure money for the construction of the railway and also for its equipment to the extent of $20,000,000, and we shall have a mortgage on the whole. I leave my hon. friend to explain this discrepancy between his version of what the contract provides and the actual facts. An off-hand statement as to what a clause

in a contract means must be made with some degree of caution or serious mistakes will occur. It is not, I presume, a thing that cani be lightly passed over, that when a contract of this description is made, when the utmost care is taken in the drafting of its provisions, when legal counsel are employed to draft, with the utmost care, security clauses, and when a large and substantial security is being put up, a gentleman occupying the responsible position of the leader of the opposition should wholly distort and misconstrue the effect of this important provision. My hon. friend must remember that the great Conservative party throughout this country will look with respect to what he says on this question, and therefore he cannot afford to entirely mislead them in regard to one of its important phases.

I have tried, in the remarks I have made up to the present, to advert more particularly to what I consider the important feature of the contract. I spoke of the question of running powers, and I said that that was so important a feature of the contract that in all probability, if that provision had not been there, the contract would not have been concluded. There is another provision of equal importance. It is one to which reference lias been repeatedly made. I refer to the provision which relates to the question of routing traffic by Canadian ports. Certain criticisms have beeu addressed to that particular part of the contract. I may say that I agree largely in the view expressed by my hon. friend the Finance Minister, when he said that inasmuch as we were making a clear, distinct and unambiguous contract with a responsible company, with a respectable institution which might reasonably be expected to implement its obligations, we should have a good deal of confidence that every reasonable effort would be made by them to carry out the contract. There is much more to be said on the question, and I desire to call attention to the nature of the criticisms on this point. I think that the criticism of my hon. friend, the leader of the opposition, was perhaps the most reasonable. He said that this is a provision which you can evade and he left it there, except that he suggested that there was no penalty provided in case the Grand Trunk Railway failed to meet its obligations in this respect. Upon that I shall speak in a moment or two. Then my hon. friend and former colleague, the ex-Minister of Railways and Canals (Hon. Mr. Blair) suggested a most elaborate method of getting around the contract. He suggested that while the Grand Trunk Pacific Railway would not know that the contract was being violated, the Grand Trunk Railway would send up agents over the Grand Trunk Pacific Railway stations to induce people to route their traffic by the Grand Trunk Railway to Portland instead of to Quebec and St. John. That was the sug-Hon. Mr. SIFTON.

gestion given by the ex-Minister of Railways and Canals as a reason why he does not think this is a good or effective proposition. My hon. friend from Hamilton (Mr. Barker) lias another reason. He says that the Grand Trunk Railway would issue instructions to its officials not to interfere with the routing of the traffic but to let people route traffic at the same rates by St. John and Halifax, if they wanted to, but the Grand Trunk Railway would take care not to promote any official who would permit that to be done. Are the opponents of this measure driven to such absurd reasons as these against a provision of this kind in a solemn contract made between the government and the Grand Trunk Pacific Railway ? I would like to see my hon. friend the leader of the opposition or the ex-Minister of Railways and Canals sitting upon a bench, as the sole arbitrator between the government of Canada and the Grand Trunk Railway to adjudicate on a complaint that the contract was being violated under such circumstances. If evidence were given on behalf of the government that the agents of the Grand Trunk Railway went through the stations, communicated with the people, and induced them to send their traffic down to Portland, I would like to see the officials of the Grand Trunk Pacific getting up and declaring that they knew nothing at all about such proceedings. How long would a judge, with any common sense, listen to such an absurd, ridiculous plea. If it were a criminal case, there is not a court or a jury in Canada who would not convict the accused, of guilty knowledge. We cannot put upon the interpretation of the contract any suchi ridiculous reasoning. How great a penalty would the hon. gentleman want ? Would it do if we fine the company $1,000 ? Would it do if we fine them $10,000 ? Or would it do if we fine them $1,000,000 ? If hon. members will look at section 35, they will find the foilwing words :

For the purposes hereinafter in this paragraph respectively defined the company may and shall create mortgages to trustees as follows :-

Then, in subsection (c) :-

A mortgage which shall be a charge upon the rolling stock constituting the equipment of the eastern division next after the charge mentioned in paragraph 35 (a)

That is, our own mortgage, not another

-to secure to the government the rental payable in respect of the eastern division, the efficient maintenance and continuous operation of the said eastern division, and the observance and performance by the company of the terms of this agreement.

Upon that line of railway there is to be $5,000,000 of rolling stock under a mortgage to the government to secure tlie performance of the terms of the agreement.

Mr. BORDEN Halifax). May I ask my hon. friend (Hon. Mr. Sifton) a question ? I suppose he is very familiar with this con-

tract and could give me in a moment the information I want. Is there any provision in the contract which requires the Grand Trunk Company to own the rolling stock on the eastern division? Would it not be possible for it to merely lease it?

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

I will deal with that in a moment.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

I should be glad if the hon. gentleman would do so.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
?

The MINISTER OF THE INTERIOR.

The point referred to was one passing through my own mind, because it was adverted to, I believe, by my hon. friend from Hamilton though I did not hear him very distinctly. It is an important point to be considered. But just now I was calling attention to the fact that upon $5,000,000 worth of rolling stock the government of Canada has a mortgage expressly provided not only to secure the operation of the eastern division, but to secure the performance of the terms of this agreement. And one of the terms of this agreement is that this clause shall be fully and completely carried out. If it is a fine our lion, friends want, there is a fine provided, amounting to the respectable sum of $5,000,000. But I go further, I would not consider it at all advisable to put in this contract a penal clause, a clause that would provide, for iu-iustance, that a fine in the ordinary sense should be levied against the Grand TrunkRailway for the violation of the clause. It would not, in my judgment, be an appropriate or proper way of arriving at the end we desire to reach. In drawing this com tract, we are not making an amendment to the criminal law-, we are making a contract between parties. If the contract were between two private parties there would be no penal clause. Any lawyer will agree that while sometimes such a clause as a liquidated damage clause is inserted in a contract, yet, in ninety-nine cases out of a hundred, contracts between private parties simply state what the parties agree to and they are left to their ordinary remedies in the courts. In this case, the contract is being made between a great railway corporation and, in effect, the parliament of Canada. The parliament of Canada has plenary jurisdiction over the other party to the contract. TJiere is no body that has jurisdiction over the parliament and over the railway company too, and we cannot place ourselves in exactly the same position as that in which private parties stand. The company trusts in our good faitli that we will deal reasonably and properly with them, and they are perfectly safe in so doing. If there is any doubt about the meaning of any clause in this contract, they may fairly say to us: Do hot pass an Act of parliament to decide what this means, but submit the matter in some way to a judicial and impartial tribunal, in order that it may be decided. In such case, we should not

have the right to legislate upon a question that was fairly and reasonably a subject of dispute between us. But if we come to a clause which is absolutely clear, about the meaning of which there is no possible dispute, and a state of fact arises in which it is clear beyond doubt that the company is wilfully, deliberately violating the terms of this agreement, will the leader of the opposition, or will the ex-Minister of Railways and Canals,, tell this House that the parliament of Canada has no remedy in the circumstances? Sir, the proposition is the most absurd that could be brought before a deliberative body. It would be the duty of parliament, in case of such a state of facts arising, to apply every remedy within its power; and it cannot be doubted that its power is ample and complete with regard not only to the Grand Trunk, but with regard to the Grand Trunk Pacific. I can see no possible ground for argument that, in case of a wilful violation of this clause, parliament would not have power, properly and without the violation of good faith, or proper practice in the premises, to take any steps necessary, in the exercise of its supreme legislative jurisdiction, to enforce the carrying out of the terms of the contract.

Now, I have dealt with what seemed to me to be the main criticisms which have been addressed to this contract by our hon. friends on the other side. Looking over the trend of what has been said up to the present moment, I gather that hon. gentlemen opposite are opposed to this proposition, they are opposed to it with unanimity and, apparently, they oppose it with vigour. They have certain grounds upon which they base their opposition. First, they say that this railway is not a pressing necessity at this time. Second, they are opposed to the Quebec-Moncton branch-except my hon. friend the leader of the opposition (Mr. Borden, Halifax), and we shall hear from him later on. Third, they are opposed-and this is a point to which I wish to direct a little attention later on-to our construction of the Quebec-Winnipeg line. The hon. member for Jacques Cartier (Mr. Monk) tells us that the proper method of developing the outlying districts of the province of Quebec is by colonization railways running out from the older parts of the province, and my hon. friend from South Lanark (Hon. Mr. Haggart) expressly takes the position, so far as Ontario is concerned, that that province, he believed, would favour the development of the newer portion of the province, not by a through line, as we suggest, but colonization lines running out from lines already in existence. You will see, Sir, that I am trying to define the issue. As I understand, these hon. gentlemen take issue as to the necessity of this work, and as to the method, and say that their method would be better and more in accordance -with the necessities of the case. These are the issues between us. They say that

the road will not have enough business to justify its existence or its construction. And lastly-I think these three or four points that I mentioned would cover the main ground upon which they object to our proposition-lastly, they apparently decline to accept the reasoning which we have presented to them from this side of the House upon the financial phases of this scheme.

Our hon. friends opposite view apparently with some degree of amusement the reasoning which has been presented to them, and the statements which have been made in respect to the financial effects of this contract, and the amount of money which it will take to implement our obligations in regard to carrying it out. My hon. friend the Finance Minister-and I may perhaps ask that particular attention be given to this phase of the question, because I think it is the most important in the whole discussion-my hon. friend the Finance Minister took the provisions of this contract in so far as they relate to the financial features, and he went over it from end to end. He made a close, and a careful, and an exact calculation as to the amount of money which we should have to pay if the Grand Trunk Pacific carries out its contract. That was the nature of the calculation which was made by the Finance Minister. If the Grand Trunk Company carries out its contract, then there is no escape from the conclusion which was placed before this House by my hon. friend. You cannot get over it by laughing, you cannot meet the argument by jeering at it. There is only one way of meeting the argument that he presented to this House, and that is by showing that the Grand Trunk will not be able to carry out this contract. That is the only way you can meet it. If the Grand Trunk Company carries out its contract, then we will pay just what the Finance Minister said, not one dollar more not one dollar less. We have therefore to discuss the question upon that basis. I intend later to say a few words in regard to the question of traffic, but in the meantime I desire to point out one important consideration having reference to the question whether the government are taking sufficient guarantees that the company will carry out its obligations. In the first place, we have to consider what was well suggested by the hon. member for Brant (Mr. Heyd). who asked what would happen when the railway bonds mature. Upon that point I am not going to enter into a lengthy argument. because I do not think it is necessary. I will, however, say this, which I think will meet with the immediate assent of every member on this side of the House at least, and I hope of every member on the other side, that so far as the payment of the bonds at maturity is concerned, either upon the eastern section or upon the western section, we are perfectly satisfied that fifty years of development in

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink
LIB

Clifford Sifton (Minister of the Interior; Superintendent-General of Indian Affairs)

Liberal

Hon. Mr. SIFTON.

Canada will make that railway worth a great deal more than the face value of the bonds. Therefore we may dismiss from consideration, we need not bother our heads about the payment of the bonds. The railway will be able to do much more than take care of the principal and the bonds when it is called upon to do so.

As to the payment of interest in the meantime, what you have to consider is the immediate security the government has for the obligations which are incurred. The security which the government has for the fulfillment of these obligations is this : In the first place, the Grand Trunk Railway Company have to find the additional quarter of the money for the construction of the western section ; they find $20,000,000 for rolling stock, and they put that $20,000,000 under our mortgage ; they put under our mortgage $30,000,000 of their money which they provide as an additional security for the general purpose of carrying out this contract. I think, as my hon. friend the Finance Minister well said last night, when he so fully, so clearly, and so ably discussed the financial phases of this question, that no parliament, certainly not the parliament of Canada, was ever asked to assent to an important financial proposition which was so buttressed with security, so impregnably fortified toy all the securities that were required, as this proposition which we are dealing with at the present time. And yet, we are asked to believe that after a little while the Grand Trunk will fail to carry out its contract, and it won't go on. What does that argument amount to ? What ik the Grand Trunk going into this scheme for ? It is because it has a magnificent system of railways in the eastern portion of Canada, because there is an enormous and growing traffic in the west, and the Grand Trunk wants to get In there, and by means of this railway it is going to get in. Moreover, its thousands of miles of railway all over Canada are going to be connected with the growing trade in western Canada, and they are going to do a large and profitable business in consequence. Yet, Sir, the suggestion is made that after a little while, after they have got that trade built up, after they are making millions of dollars out of it, they are going to stop operations on this transcontinental road, throw it all up, and withdraw altogether from the business, as they will do, if they do not carry out the terms of this contract, and it is only by carrying out the terms of this contract that they can get any business from the west, or over the western line. So I think it must be clear that we may feel ourselves reasonably safe and reasonably well protected.

A word upon another point, and I would like my hon. friend from Lanark to direct particular attention to it; I would like him to give his view as to what is likely to happen as a result of this enterprise. I

would like my hon. friend, with his knowledge of this country, to say if lie does not himself know, and believe in his heart, that this is going to be a great and a successful enterprise. My hon. friend once had faith in the country, I do not know whether he has lost it or not. He told us some time ago, in fact, that he used to have faith in the Intercolonial and in its management, but that the management of the Intercolonial under the late minister had destroyed any prospects which might have once existed of advancement in the policy of government ownership of railways. Now, the real question on which we are at issue with our friends opposite is the necessity of this railway, the immediate necessity of it. My late colleague, the ex-Minister of Railways and Canals, entertained the House at some length in discussing this question of the immediate necessity of the railway. He said that if there had been any demands made for that road he would have heard them. Well, I thought if what my hon. friend said was true that he had not heard any demands made, that he must have been suffering from deafness even worse than I am myself. I thought he must have been emulating the example of that celebrated character Rip Van Winkle, he must have been asleep, and he must have been sleeping very soundly, or he would have heard the many and insistent demands, a very few of which I shall refer to, for the construction of a new railway to afford greater transportation facilities to the country in general.

But what I desire to advert to is not so much the attitude of the late minister, which was fairly well dealt with by the member for North Norfolk, but the attitude of our friends upon the other side, because, when the late Minister of Railways and Canals said there was no immediate necessity. for this railway, his remarks were received with the greatest of applause by hon. gentlemen on the other side of the House. We are, therefore, justified in assuming that they approve of the position taken by the late Minister of Railways and Canals, when he stated that there was not sufficient necessity for this road and that he had heard no insistent and strong demand for its construction. It is necessary that we should make our position upon that point clear. This is not a thing that can be passed over with a wave of the hand. It is a serious and important matter of business, and if the allegation is that twelve or thirteen members of the government have gone into the council chamber, locked the door, discussed this matter, and have, after a little talk with the railway managers, brought out a scheme for building a transcontinental railway involving an enormous expenditure of money, when the people do not want the road, and when there is no demand for it, it is a pretty serious allegation and it is an allegation that we have to meet. What are the facts in re-271

gard to that point ? I think the testimony will be found to be absolutely conclusive.

At one o'clock. House took recess.

House resumed at three o'clock.

Topic:   NATIONAL TRANSCONTINENTAL RAILWAY.
Permalink

ROYAL ASSENT.

LIB

Lawrence Geoffrey Power (Speaker of the Senate)

Liberal

Mr. SPEAKER.

I have the honour to inform the House that I have received the following letter from His Excellency the Governor General's secretary :

Sir.-I have the honour to inform you that His Excellency the Governor General will proceed to the Senate Chamber on Thursday the 13th instant at four o'clock p.m., for the purpose of giving assent to certain Bills which have passed the Senate and House of Commons during the present session.

I have the honour to be, sir,

Your obedient servant,

F. S. MAUDE. Major, Governor General's Secretary.

Topic:   ROYAL ASSENT.
Permalink

NATIONAL TRANSCONTINENTAL RAILWAY.


The House resumed adjourned debate on the motion of Sir Wilfrid Laurier for the House to go into committee on a certain proposed resolution respecting the construction of a national transcontinental railway.


August 13, 1903