June 21, 1905

CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

The government issues bonds for $1,000,000. It may be that you get $950,000 for these bonds. The government is liable for $1,000,000 although there may be less than $950,000 worth of work done.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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IND

Leighton Goldie McCarthy

Independent

Mr. L. G MCCARTHY.

They have not paid that out.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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?

Mr. L. G.@

McCarthy. That is not the

fhehnn i ^e- a"sw,er is that the proceeds of the bond go into the hands of the Minister Mr. BARKER.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

They have signed the guarantee and the government are good for whatever they sign. I am not proposing to criticise this contract. It is not my business to do it. It is the business of the government of the country and if the hon. Minister of Justice or the right hon. Prime Minister says the government have considered that question and they are satisfied, I have nothing more to say. But, I consider it my duty to point out to the government that there is no safeguard here, that there is no limitation, as is usual with all contracts entered into by railway companies, reserving a percentage until'the final completion of the work. The Grand Trunk-Pacific Railway Company may issue bonds

for $50,000,000. The proceeds of these bonds may be $45,000,000. Of what advantage it is to the government that they are to receive and pay out theh $45,000,000 when perhaps less than that amount of work may have been done. The bank or somebody else who has advanced the money has their guarantee for $50,000,000 ? The government cannot say they are not responsible for it. They cannot confine their responsibility to the amount of the cash advanced on these bonds or make their responsibility conditional upon a final settlement of construction account. The moment the government put their guarantee on an issue of $1 .Ooo.OOO this country is liable for the whole $1,000,000. In the ordinary course the government of Canada with $100,000,000 certified by its engineer would only advance $85,000,000, or it would not guarantee more than that sum. But, under this arrangement the government guarantees the whole $100,000,000 unless there is something in these contracts that neither Mr. Chrysler nor the Minister of Justice was able to point out.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

The old form of agreement with the contractors was to issue interim bonds, but they found it difficult to negotiate these and they asked to exchange them for permanent bonds to which the government consented on the condition that when the bonds are issued they will get the cash for them.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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IND

Leighton Goldie McCarthy

Independent

Mr. L. G. MCCARTHY.

The government gets the cash.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

The government gets the cash for the whole of the bonds before they issue one dollar, and the obligation the government enters into is to pay them out as the work proceeds. My hon. friend (Mr. Barker) asks what guarantee they have that the work is done, when they issue the money, and he says that the certificate of an under engineer is all the authority there is to issue the bonds. But the fact is this: the Grand Trunk Pacific enter into'a contract with contractors to build the road, and the government only advances 75 per cent

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

Where do you find that?

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

Then the government have the security of the contract which the Grand Trunk Pacific makes with the contractor, and very likely that contract is that they will advance everything upon the work done except 15 per cent. Anyway if Mr. Sliepley's opinion is correct at all, the government may make the advance on such conditions as they please.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

He does not say that.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

He does, he says :

The mortgage provides that the proceeds o: these bonds as they are marketed from time to time are to be placed at the credit of the Minister of Finance and the Receiver General, anl paid out from time to time with certain safeguards as they are earned on construction work.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

It does not say what the safeguards are.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

John Graham Haggart

Conservative (1867-1942)

Mr. HAGGART.

Mr. Shepley says there are safeguards. After all, the government guarantee 15 per cent, and they get the whole money from the bonds into their hands. Then they pay out on the contract as it advances. The probability is that the Grand Trunk Pacific will not advance more than 85 per cent of the cost of construction to the contractor, and if Mr. Shepley is right, they can even then only advance it on such conditions and safeguards as the government may think fit.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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?

Mr. L. G.@

McCarthy. The fears of the hon. gentleman (Mr. Barker) ns to what the contract may permit are not well founded. Section 4, at page 15 of the Bill, states:

In proportion as the construction of the western division is proceeded with to the satisfaction of the government, according to the specifications agreed upon or to be agreed upon between the government and the Pacific Company, the government shall, out of the said proceeds and interest, pay to the Pacific Company or its nominees, in monthly payments as far as practicable, such sums as the chief engineer appointed by the government or such other officer as the government may appoint for thai purpose, may certify are earned, having regard to the cost, at the date of such certificate, of construction work as hereinbefore defined, and having regard to the proportion of the cost of construction which, under the scheduled agreements, is to he met by the proceeds of bonis guaranteed by the government.

That is consistent with wbat Mr. Chrysler said in the committee, that the matter was entirely in the hands of the government. The suggestion of the hon. gentleman (Mr. Barker) is that there ought to be some words in the contract leaving it in the hands of the government, but in the contract are these very words: That these contracts are to proceed according to specifications to be agreed upon between the company and the government, and the money is not paid out upon the progress estimates upon the certificate of a junior engineer, but ' on certificate of the chief engineer or some other officer specially appointed by the government for that purpose.' The matter is therefore entirely in the hands of the government to make the specifications in the form which they see fit. The chief engineer has it then absolutely in bis own hands to see that too much money is not paid out. He Is responsible to the government and the government to the people, that more money than is earned is not paid out. I believe that this is even more safe than the retaining of 15 or 20 per cent, as is usual when interim bonds are issued. Therefore, I would ask the hon. gentleman (Mr. Barker) to allow the Bill to go, if that is the only objection be has.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

Mr. Speaker

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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?

Some hon. MEMBERS

Carried.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

The lion gentleman from York (Mr. Campbell) may call 'carried' as usual, but before it is carried I want the responsibility of the government on this question, and not the responsibility of the member for Centre York.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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LIB
CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

If the First Minister is satisfied I have nothing more to say. I do not propose to accept the statement of the hon. member who introduces this Bill on behalf of the company as an answer to my question with regard to the protection of the country. I have no fault whatever to find with the hon. gentleman; he introduced this Bill on behalf of the company, not on behalf of the public. If the First Minister, or the Minister of Justice, or the Minister of Finance, says that he is perfectly satisfied. I have nothing more to say. If I am a guarantor, I want to see that there was ?100 worth of work done in respect to every 8100 I guarantee. If some responsible member of the government says he is satisfied, I do not raise any further question. It is not fair to the members of this House to throw into their hands on the morning that the question comes before the Railway Committee. 108 pages of agreements, and ask the members to pass upon them. I asked the question of the Minister of Justice and of Mr. Chrysler at the time, and I got no answer, but I am willing to accept the statement* of the First Minister in that regard.

ilr. FIELDING. I accept the view of my hon. friend (Mr. Barker) that it is not reasonable to expect any individual member of the House to make himself familiar with all the details of this very elaborate document. All that we can do in a case of that kind is to see that the various Points involved in the matter are considered as they arise, and that upon them we have the advice of competent legal authority that the rights and privileges of tin country are protected in every respect. My hon. friend wants some one to say on behalf of the government that we are satisfied that the interests of Canada, as represented by the government, are properly protected. The member's of the government have been advised by very careful and competent authority, and we are perfectly satisfied that at every point the interests of the government under this contract have been properly protected, and that the mortgage carries out to the fullest degree the intentions of parliament as expressed in this legislation.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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CON

Samuel Barker

Conservative (1867-1942)

Mr. BARKER.

The counsel expressly said that the terms of the contract as passed by parliament were being altered.

Mr. l. g. McCarthy.

Topic:   PRIVATE BILLS.
Subtopic:   GRAND TRUNK PACIFIC RAILWAY COMPANY.
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June 21, 1905