August 1, 1904

CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

While it might be more convenient to the Auditor General and the department in some respects, because it would give them less trouble in going over the accounts, still it leaves in the hands of the Minister of Railways power to make the subsidy what he likes between $3,200 and $0,400 a mile, with the aid of the engineer, who is always available, and who can no doubt be got to make a certificate to suit the minister's purpose.

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

The hon. gentleman does not know the engineer.

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

The position is this. Under the law every subsidized railway is entitled to $3,200 a mile. If the cost of construction exceeds $15,000 a mile, it is entitled to an additional subsidy of one-half the cost exceeding $15,000 a mile, but potj to exceed in any ease $6,400 a mile. Assuming the road costs $18,000 per mile, that would entitle the contractor to $3,200 per mile and an additional $1,500. When the government enter into a subsidy contract, as provided ,by this section, the company will not get the whole of the subsidy until the whole of the road is completed. They will get the ordinary subsidy of $3,200 per mile and only 70 per cent of the extra subsidy, the 30 per cent being retained by the government. If the road costs the sum estimated by the chief engineer or an additional amount, the company then get the 30 per cent. Otherwise they forfeit the 30 per cent. The government make themselves absolutely sure, and I do not understand what benefit or advantage there is to the contractor in this measure.

Topic:   RAILWAY SUBSIDIES.
Permalink
CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

There is this, .that he has during his progress estimates so much more money from month to month.

Topic:   RAILWAY SUBSIDIES.
Permalink
CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

Is there not also this advantage ? Suppose the road cost $14,000 a mile, under the present law the contractor would get $3,200 and no more. But if the engineers' estimate was $18,000 per mile, he would be in pocket 70 per cent on the extra $1,500.

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

There is that possibility. If the engineer estimated the cost,

say $18,000 a mile, the contractor would get $3,200 a mile and 70 per cent of the extra $1,500. If on completion it was ascertained that the average cost was under $15,000 a mile, he would be in that 70 per cent.

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

That is if the estimates

were unreliable.

Topic:   RAILWAY SUBSIDIES.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

There is that danger, which possibly should be removed by providing that if the subsidies paid were after wards discovered not to be earned, the money should be recovered. Suppose the engineer estimated the cost at $18,000 and it afterwards turned out that the c.ost did not exceed $15,000 per mile.

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

It is possible. Does the contractor get his $3,200 per mile before the completion of the work ?

question. It does not depend upon circumstances which may afterwards arise.

Topic:   RAILWAY SUBSIDIES.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

I must confess I do appreciate very much the argument of the hon. gentleman. How he can say that it is in the interest of the department and the country to pay an additional subsidy of $1,500 per mile passes my comprehension. We are basing our arguments upon the case of a road estimated to cost $18,000, but which turns out to have cost $15,000 per mile. In one case the company is entitled to $3,200 of a subsidy, but in the other case it would be entitled to $4,700. Why pay the additional amount ?

Topic:   RAILWAY SUBSIDIES.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Then, you go on and pay a subsidy accordingly.

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB
LIB
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

He gets $3,200 per mile as the work progresses and then he gets 70 per cent of $1,500 per mile additional, assuming the road to cost $18,000 per mile. When you retain from him 30 per cent, do you retain it on the $3,200 as well as on the $1,500 ?

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB

Charles Fitzpatrick (Minister of Justice and Attorney General of Canada)

Liberal

Mr. FITZPATRICK.

No, he is entitled to the $3,200 absolutely.

Topic:   RAILWAY SUBSIDIES.
Permalink
CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Would it not be well to amend the statute so that the government would retain 30 per cent of the whole until they had the final statement of the chief engineer as to the cost ?

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

It seems to me that in the interests of the department this is a very desirable measure, because you fix the amount and there is something determined. It is not left to what I may term the haggling that results thereafter. I can very well understand that it is not merely in the interest of the contractor that you should fix a definite sum, but it is certainly in the interest of the country. The monied interest, the banks, are interested, and the fact that you have a subsidy determined in the first instance is based upon the theory that inquiry has been made by the chief engineer into the conditions and surroundings of the proposed road.

' Mr. CLANCY. I am afraid the hon. minister is taking some of the risks the bank would take under the present law.

Topic:   RAILWAY SUBSIDIES.
Permalink
LIB

Henry Robert Emmerson (Minister of Railways and Canals)

Liberal

Mr. EMMERSON.

By no means. For the department, through its engineer must have a thorough survey-the quantities and all the data-to enable them to fix the amount.

I recognize that it is advantageous to the department and to all concerned, but I think it is more to the advantage of the department really than it is to the others, because you can have the amount fixed beyond all 2584

Topic:   RAILWAY SUBSIDIES.
Permalink
?

Mr. R. L.@

BORDEN, gentleman is right

I think the hon.

Topic:   RAILWAY SUBSIDIES.
Permalink

August 1, 1904