William Pugsley
Liberal
Mr. PUGSLEY:
I think the Government is acting wisely in, increasing the rate of interest to four and one-half per cent. Investment in dry docks has not proven very attractive to capitalists.
A Dry-dock Act has been on the statute-book since 1882. Various attempts have been made to construct dry-docks under its provisions but no dock of the first class has been built. Under the Act as first passed the subsidy was at the rate of three per cent of the cost. It w,as afterwards increased to three and a half per cent, and then to four per cent. Even with the increases from time to time, there has been very little done in the way of taking advantage of the offer. Some docks of the second class have been constructed; for instance one at Collingwood. I think that
was followed by a second one of the second class. There is also a dock at Port Arthur. Then there is a floating dock at Montreal, and one at Prince Rupert. A graving dock of the first class is pretty expensive. The cost would run up to $4,000,000 or $5,000,000 and the capitalists have not found the proposition sufficiently attractive to take hold of it. In view of the high rate of interest to-day,. I should think that four .and a half per cent would be a reasonable rate of interest to prescribe. With regard to the other . change, that bonds may be issued when $1,000,000 has been expended, I observe by the Bill that the proportion is only 75 per cent. My experience was, when I was a minister that one of the serious drawbacks against capitalists taking hold of the proposition was that the investor felt that his security ought not to be dependent in any way on the ability o.f the company to operate the dock. Under the original statute it was provided that, if at any time the company should cease to operate the dock, the interest on the subsidy should cease. The matter was brought to the attention of the late Government when I was Minister of Public Works and Mr. Fielding was Minister of Finance. The Government recognized that objectionable feature of the statute and a change was made by which it was provided' that when the Government accepted the work and engaged to pay the interest that should be irrevocable and should continue for the period specified , whether the dry-dock was operated or not. Provision was made that the Government should take charge of the dry-dock and operate it, charging up any expenses of operation to the company, but notwithstanding, the paymeent of the subsidy should continue for the specified period. As I understand, the only change that is now made is that an agreement is made by you to pay the subsidy on what you might call progress estimates, no payment to be made until the expenditure has reached the sum of $1,090,000. I should suppose that the margin of 25 per cent ought to be reasonably .sufficient to ensure the full completion of the dry-dock, 'and also that it would be a desirable change make because you can understand how difficult it would .be for any company to finance the whole $5,000,000. It makes it an easier proposition if bonds on progress estimates can be financed during construction. On the whole I would think that the change is a reasonable one. The subsidy is limited to cases where, in the opinion of the Government, a dock of the first class is
necessary in the public interest. I very heartily approve of the Bill. I think there is one slight change that ought to be made.
Subtopic: SECOND READING OF BIRD.